Julie Hopkins, Author at Arbitration Matters

February 24, 2025February 24, 2025

B.C. – Court finds pre-condition to competence-competence – #895

The competence-competence principle is well established in Canadian law. It requires that issues relating to an arbitrator’s jurisdiction are generally first to be determined by the arbitrator instead of the court. In ONE Lodging Holdings LLC v American Hotel Income Properties REIT (GP) Inc., 2024 BCSC 2179, the Chambers Judge identified what amounts to a pre-condition, or exception, to the application of the competence-competence principle beyond those previously recognized by the Supreme Court of Canada in cases such as Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (“Dell”) and Uber Technologies Inc. v. Heller, 2020 SCC 16. Those recognized exceptions are: (1) where the jurisdictional issue is a pure question of law or a question of mixed fact and law requiring only a cursory review of the documentary record, or (2) where there is a “real prospect” that the arbitrator may not be able to resolve the jurisdictional challenge due to practical barriers. Here, the Chambers Judge found that the competence-competence principle also does not apply when there is a dispute as to the existence of an arbitration agreement, as opposed to a dispute about the validity or scope of an existing arbitration agreement.

December 30, 2024December 16, 2024

Julie’s 2024 Hot Topic – Exceptions to Competence-Competence Litigated in Appellate Courts in 2024 – #883

In 2024, for the first time, two appeal courts considered the “brick wall” exception to competence-competence set out in Uber Technologies Inc. v. Heller, 2020 SCC 16 (“Uber”).

October 23, 2024October 25, 2024

Federal Court – Section 46(1) of Marine Liability Act gives claimant option to avoid arbitration – #870

Crosby Molasses Company Limited v. Scot Stuttgart (Ship), 2024 FC 1358 highlights a little-known provision in Canadian maritime law that is being interpreted in a way that ignores arbitration law principles and overrides arbitration clauses in the context of international maritime carriage of goods. The provision, section 46(1) of the Marine Liability Act, SC 2001, c 6 (“Marine Liability Act”) states that, “if a contract for the carriage of goods by water provides for the adjudication or arbitration of claims… in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada...”

August 12, 2024August 9, 2024

Ontario – Partial Summary Judgment Test Applied on Recognition of Foreign Award Motion – #853

In Shanghai Investment Co. Ltd. V. Lu et al., 2024 ONSC 2762 the Chambers Judge concluded that to grant a motion asking that a foreign award be “domesticated” (that is, recognized and made enforceable as a judgment of the Ontario Court), the motion must also meet the additional requirements for partial summary judgment. In this case, the recognition of the foreign award was pleaded as a threshold issue and formed part of a larger enforcement action. As a result, if the motion for recognition were granted, it would bifurcate the action. Although the Ontario Court of Appeal in cases like Butera v. Chown, Cairns LLP, 2017 ONCA 783 (“Butera”) has held that partial summary judgment should rarely be granted as it usually not efficient nor cost effective, the Chambers Judge determined that it was appropriate in this case. Among other factors she noted was that the recognition portion of the action was distinct from the rest and there was no risk of inconsistent findings.

June 3, 2024May 30, 2024

B.C. – BCCA goes deep and wide on partial stays – #838

Davidson v. Lyra Growth Partners Inc., 2024 BCCA 133 concerns whether there is jurisdiction under s. 7 of the Arbitration Act, S.B.C. 2020, c. 2 (“Arbitration Act”) to grant a partial stay of court proceedings concerning only those matters arguably agreed to be arbitrated by the parties or whether a court is required to stay the entire action. The Court confirmed that partial stays are available under the Arbitration Act where the court action raises some non-arbitrable matters despite there being no express language permitting non-arbitrable matters to proceed in Court – unlike other provincial legislation. It set out factors that should be considered by a court of first instance in determining whether to grant a partial stay or a complete stay. It also emphasized, however, that a stay of those matters arguably agreed to be arbitrated is mandatory if the requirements of s. 7 are met. In this case it had been argued that a stay could be refused as the “essential nature” or “pith and substance” of the court proceedings related to matters not covered by the arbitration agreement. The Court confirmed that there is no “residual” jurisdiction to deny a stay on that basis. This decision aligns with the Supreme Court of Canada’s guidance in TELUS Communications Inc. v Wellman, 2019 SCC 19 (“Wellman”) concerning the mandatory nature of stays of court proceedings that relate to any matter arguably reserved for arbitration.

March 13, 2024March 7, 2024

New Brunswick – Party autonomy includes ability to contract out of award – #821

The decision in Purrestore Management Services Inc., Gordon Gamble and Jason Reis v. Doiron, 2023 NBCA 110 concerns whether an arbitration clause in a franchise agreement that allowed a party to seek a de novo court trial if an arbitration award exceeded $100,000, conflicted with the mandatory provisions of the New Brunswick Arbitration Act, LRN-B 2014, c 100 (“Arbitration Act”). The franchisor had obtained an arbitration award against the franchisees for over $100,000 (“Arbitral Award”). The franchisees then sought a de novo trial, while the franchisor applied for judgment to enforce the Arbitral Award under s. 50 of the Act. The application judge affirmed the franchisees’ right to a de novo trial and dismissed the application for judgment. The franchisor appealed, arguing that the Arbitration Act provided that s.50 could not be contracted out of and, therefore, in the absence of an appeal or an application to set aside the Arbitral Award the franchisor was entitled to judgment. The Court of Appeal dismissed the appeal, concluding that the arbitration clause was not contrary to the Act as the Act permitted parties to contract out of s. 37, which provides that “an award binds the parties, unless it is set aside or varied under section 45 (appeal) or 46 (set aside)”. To obtain a judgment to enforce an award under s. 50, a binding award under s. 37 was required but the parties had contracted out of 37 with their agreement.

November 6, 2023November 3, 2023

Ontario – Appeals combined where stay of proceedings impacts class certification – #788

In Davis v Amazon Canada Fulfillment Services, ULC, 2023 ONCA 634 the Court combined two appeals initiated in two different courts arising from a single decision that concerned two interrelated motions. One was an appeal of a stay of proceedings in favour of arbitration granted pursuant to s. 7 of the Arbitration Act, 1991, S.O. 1991, c. 17 (“Arbitration Act”) and the other was an appeal of a decision denying class certification. The Plaintiff appealed the decision denying class certification to the Divisional Court, as required by the then applicable version of the class proceedings legislation [Class Proceedings Act, 1992, S.O. 1992, c 6 (“CPA”)] and appealed the stay decision to the Court of Appeal. The Plaintiff then applied to the Court of Appeal to transfer the class certification appeal from the Divisional Court to the Court of Appeal and join it to the stay appeal. The Court granted the application. It concluded that to do so was in the interests of the administration of justice. The Court found that, as some of the proposed class members (although not the representative plaintiff) were alleged to be subject to arbitration agreements, “the appeal of the stay decision goes directly to who may be class members and is completely premised on certification being under consideration” (para. 14). The Court was of the view this finding weighed strongly in favour of the appeals being combined “so that they can be managed, sequenced, considered, and decided taking into account and specifying the effect a decision in one may have on the other” (para. 13).

September 12, 2023October 23, 2023

B.C. – Arbitration clause in contract of adhesion not unconscionable/against public policy – #772

In Williams v. Amazon.com Inc., 2023 BCCA 314 the Court upheld a partial stay of a proposed class action in favour of arbitration. It found that the Chambers Judge did not err when she concluded that an arbitration clause that formed part of a contract of adhesion was not unconscionable or against public policy. In doing so, the Court distinguished the case from the Supreme Court of Canada decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 (“Ledcor”) on the issue of the applicable standard of review. In Ledcor, the Supreme Court determined that correctness standard applies when reviewing the interpretation of standard form contracts. Here, the British Columbia Court of Appeal found that a deferential standard was applicable because of the highly contextual and fact specific analysis required for determining unconscionability/public policy issues. The fact that a contract of adhesion was involved did not change that conclusion. The Court also distinguished this case from the Supreme Court of Canada decision in Uber Technologies Inc. v. Heller, 2020 SCC 16 (“Uber”), where the Supreme Court found an arbitration clause in a contract of adhesion invalid on the basis of unconscionability and, in concurring reasons, as against public policy. The Court distinguished Uber because of, among other things, the “profound” differences that it noted in the two cases between the arbitration clauses at issue and the vulnerability of the plaintiffs.

July 20, 2023July 17, 2023

Ontario – When is an appeal of a stay decision barred? – #757

In Leon v Dealnet Capital Corporation, 2023 ONSC 3657, the Appellant, John Leon, appealed an order that stayed his action for breach of an employment contract in favour of arbitration, pursuant to section 7(1) of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17 (“Arbitration Act”). Section 7(6) of the Arbitration Act provides that there is no appeal from stay decisions under section 7. However, the Appellant argued that section 7(6) did not apply in this case based on the recent decision of Goberdan v. Knights of Columbus, 2023 ONCA 327 (“Goberdan”) and the line of cases cited therein. Those cases stand for the proposition that if there is no arbitration agreement, the Arbitration Act does not apply and section 7(6) does not bar an appeal. In Goberdan, the motions judge concluded that there was no arbitration agreement because there had been no consideration for the contracts and therefore no contracts. As there was no arbitration agreement, the Court of Appeal found that the Arbitration Act including section 7(6) did not apply to bar the appeal. Here, it was argued that section 7(6) did not apply because the employment agreement, and therefore the arbitration clause, were void ab initio because the contract contracted out of the Employment Standards Act, 2000, S.O. 2000 c. 41 (“ESA”) contrary to the Ontario Court of Appeal decision in Heller v. Uber Technologies Inc., 2019 ONCA 1 (“Heller CA”). Heller CA held, among other things, that an arbitration clause in an agreement between a presumed employer and employee was invalid as it constituted an illegal contracting out of the ESA.

May 11, 2023May 8, 2023

Ontario – No appeal where parties agree dispute “finally settled” by arbitration – #737

In Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2023 ONCA 245, Baffinland Iron Mines LP (“BIM”) appealed a decision of Justice Laurence A. Pattillo dismissing its application for leave to appeal an arbitral award. Justice Pattillo had dismissed the application on the basis that the relevant arbitration agreements precluded appeals. BIM then sought to appeal that decision. Tower-EBC G.P./S.E.N.C (“TEBC”) moved to quash the appeal on the basis that there is no right to appeal from a denial of leave to appeal. The Court of Appeal dismissed the application to quash, holding that BIM’s appeal fell within a “narrow category of cases” that are an exception to the rule that there is no right to appeal from a denial of leave to appeal. Those are ones where it is alleged, as here, that the application judge mistakenly declined jurisdiction to consider the leave issues. The appeal itself, however, was also dismissed. The Court of Appeal found that the application judge’s interpretation of the arbitration agreements was correct. The Court concluded, among other things, that in the dispute resolution clause the phrase “finally settled” (used in relation to an arbitration) meant the same as the phrase “final and binding” (used in relation to decisions of a Dispute Arbitration Board, the “DAB”). Both resulted in there being no further recourse from the arbitral award by way of appeal.