Ontario – Defendant to stayed action may commence arbitration – #684

In Star Woodworking Ltd. v. Improve Inc., 2022 ONSC 5827, the defendant condominium corporation sought an order that the Court appoint an arbitrator to hear and resolve the plaintiffs’ claims against it. The plaintiffs had originally commenced actions in the Ontario Superior Court of Justice, and a number of claims were stayed as they were required to be brought in arbitration pursuant to the Condominium Act, 1998, SO 1998, c 19, and the Arbitration Act, 1991, SO 1991, c 17. Justice Myers rejected the plaintiffs’ argument that they could not be forced to be claimants in an arbitration if they did not wish to do so. Justice Myers held that the arbitration was properly commenced pursuant to section 23 of the Arbitration Act, 1991

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Newfoundland and Labrador – Objections to litigation to be raised early (even if tentative) – #655

In 55668 Newfoundland and Labrador Limited v. Sullivan, 2022, NLSC 127, a franchisor-franchisee dispute arose between the parties. The Franchise Agreement contained an arbitration clause, however, the Plaintiffs proceeded by way of Statement of Claim. The Defendants did not take the position that the dispute was to be referred to arbitration in their original pleading, relying upon the Statement of Claim, which referred to conduct that occurred after the Franchise Agreement had been terminated. Later, the Plaintiffs corrected their pleading to provide that the impugned conduct occurred pre-termination. The parties disputed whether the arbitration clause terminated with the termination of the Franchise Agreement, and also whether the dispute fell within the scope of the arbitration clause. At trial, the Defendants argued that they had been prejudiced by the pleading amendment, which they asserted clearly gave them the right to arbitration. Justice Knickle held that, assuming the dispute fell within the terms of the arbitration clause, arbitration may have been the available option. However, the Defendants knew from the beginning of the litigation that the facts that were relevant to the dispute covered the period both before and after the termination; their failure to plead their right to arbitration in their Statement of Defence meant that they were out of time to object.

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B.C. – Leave to appeal threshold not overcome by strategic drafting – #645

In MDG Contracting Services Inc. v. Mount Polley Mining Corporation, MDG sought leave to appeal an arbitral award on the basis of section 30 (errors of law) and to set aside the award on the basis of section 31 (failing to observe the rules of natural justice) of the former B.C. Arbitration Act, RSBC 1995, c 55. Justice McDonald dismissed MDG’s petition on the basis that it failed to meet the threshold requirement for granting leave in cases where there is a “clearly perceived and delineated” question of law, or, a rare extricable question of law. Rather, MDG’s arguments raised questions of mixed fact and law by submitting that despite the Arbitrator making a correct statement regarding the law, when properly applied, it should have resulted in a different outcome. The court also rejected MDG’s argument that the Arbitrator failed to observe the rules of natural justice when he failed to explain how he reached a “summary conclusion”, as the Award contained ample detail regarding the Arbitrator’s findings.

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Alberta – Appeal process under s. 44(2) of the Arbitration Act clarified – #623

In Esfahani v. Samimi, 2022 ABCA 178, the Court of Appeal for Alberta set out the procedure to be undertaken by the Court of Queen’s Bench when an arbitral award is appealed under s. 44(2) of the Arbitration Act, RSA 2000, c A-43. It states that if the arbitration agreement does not provide that the parties may appeal an award to the court on a question of law, a party may, with the permission of the court, appeal an award to the court on a question of law. The Court of Appeal held that the procedure is as follows: (a) an appeal does not exist unless permission to appeal is granted; (b) if parties do not make the required election in their arbitration agreement, permission to appeal is required and will be granted on questions of law only, subject to s 44(3) of the Arbitration Act (which provides that a party may not appeal an award to the court on a question of law that the parties expressly referred to the arbitral tribunal for decision); and (c) an application for permission to appeal must be heard and decided first, and separately, not contemporaneously with the appeal of the arbitral award.

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Nova Scotia – Self-inflicted compliance issues no basis to object to arbitration – #604

In Install-A-Floor Limited v. The Roy Building Limited, 2022 NSSC 67, the applicant, Floors Plus, sought an order appointing an arbitrator pursuant to the dispute resolution provision of its contract with the respondent, the Roy. The respondent opposed the application on two grounds: (1) the applicant lost its right to pursue arbitration as the limitation period had expired; and (2) the applicant did not adhere to certain contractual requirements and as such was disentitled to apply for the appointment of an arbitrator. Justice Norton granted the relief sought and ordered the arbitrator be appointed pursuant to the parties’ contract. On the evidence before him, Justice Norton found that the arbitration was commenced in compliance with the applicable limitation period. He also found that there was nothing in the parties’ contract to indicate that the respondent was relieved of its contractual obligations to participate in the dispute resolution process, and further, that the respondent could not rely on compliance issues created by its own conduct to object to arbitration. 

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B.C. – No breach of dispute resolution clause, no damages where party refused communication to resolve dispute – #584

In JM Bay Properties Inc. v Tung Cheng Yuen Buddhist Association, 2022 BCSC 81, Justice Walker found that a contract’s dispute resolution clause which provided that “parties shall make all reasonable efforts to resolve their dispute by amicable negotiations and agree to provide, without prejudice, frank, candid and timely disclosure of relevant facts, information and documents to facilitate these negotiations” was not breached in circumstances where a party decided not to engage in any further communication with the other party to resolve a dispute between them. Justice Walker noted that the party alleging breach did not raise its complaint about the dispute resolution clause at the time of the contract’s termination. Finally, he held that even if the party were in breach, the party alleging the breach failed to establish that it had suffered any damages.

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