Ontario – no appeal from Master’s order to stay litigation in favour of arbitration – #468

In Wang v. Mattamy Corporation, 2021 ONSC 2635, Ontario’s Divisional Court in brief reasons refused to vary or set aside a judge’s decision in Wang v. Mattamy Corporation, 2020 ONSC 7012 to dismiss an appeal from a Master’s order granting a stay of their litigation in favour of arbitration. In determining that Applicants had failed to demonstrate an error of law or palpable and overriding error of fact, the Court agreed that section 7(6) of Ontario’s Arbitration Act, 1991, SO 1991, c 17 is “a complete bar to the appeal” which provides that is no appeal from a decision of the court staying an action on the basis of an arbitration clause. For an opposite result in first instance on an appeal of a Master’s decision based on interpretation/application of Alberta rules of court and legislation, see the Arbitration Matters note “Alberta – court rules permitting appeal of Master’s stay decision consistent with section 7(6) of Arbitration Act – #412” regarding Agrium, Inc v. Colt Engineering Corporation, 2020 ABQB 807.

See the earlier Arbitration Matters note “Ontario – application to extend time to file appeal denied because review of stay decision precluded – #394” regarding Wang v. Mattamy Corporation, 2020 ONSC 7012 in which Mr. Justice Michael A. Penny dismissed Plaintiffs’ application to extend the delay in which to appeal a Master’s decision staying their action in favour of arbitration. As part of his decision making, he had to determine the merits of their proposed appeal.  Based on section 7(6) of Ontario’s Arbitration Act which prohibits appeals of decisions under section 7, he held that the Master’s decision “falls squarely” within section 7 and “it is not appropriate for the court to engage in an analysis of the Master’s decision because any review of it is precluded” by section 7(6).

In dismissing Applicants” motion under section 21(5) of the Court of Justice Act, R.S.O. 1990, c. C.43, to review Penny J.’s decision, the Court relied on Paulsson v. The Board of Trustees of and for The University of Illinois, 2018 ONSC 6928 para. 8.  The Court also endorsed Penny J.’s determinations.

[7] On this motion, the moving parties focus primarily on the merits of their claim against the responding parties and on the merits of their proposed appeal from the Master’s order. The merits of the action or the appeal are irrelevant to the issue of whether this court has jurisdiction to hear an appeal from the Master’s order.  I agree with the motion judge that, based on section 7(6) of the Arbitration Act, 1991, the proposed appeal is devoid of any merit”.

urbitral notes – First, for an opposite result in first instance on an appeal of a Master’s decision based on interpretation/application of Alberta rules of court and legislation, see the Arbitration Matters note “Alberta – court rules permitting appeal of Master’s stay decision consistent with section 7(6) of Arbitration Act – #412” regarding Agrium, Inc v. Colt Engineering Corporation, 2020 ABQB 807 in which Madam Justice Nancy Dilts held that unsuccessful applicants could appeal to a justice of the court a Master’s decision refusing a stay under section 7(1) of Alberta’s Arbitration Act, RSA 2000, c A-43

Dilts J. held that the legislated right of appeal from a Master’s decision under the Alberta Rules of Court, Alta Reg 124/2010  does not contradict the policy decisions underlying the Arbitration Act. The Court of Queen’s Bench Act, RSA 2000, c C-31creates layers of decision making authority” and section 7(6) did not intend to render Master’s decisions on stay applications “unappealable”.  Section 7(6) should “not be read in a manner that would be inconsistent with that legislated right”. Having jurisdiction to hear the appeal, Dilts J. held that she retained jurisdiction under section 7(1) to consider waiver and attornment notwithstanding expiry of a limitation period in which to commence arbitration.

Second, for the Arbitration Matters note on Eggiman v. Martin, 2019 ONCA 974, see “Ontario – very clear” that Court of Appeal lacks jurisdiction to hear appeal of order granting/refusing stay – #252”.  In that case, Ontario’s Court of Appeal dismissed an attempt to appeal a motion judge’s decision refusing to stay an action under section 7(1) of Ontario’s Arbitration Act.  The Court held that section 7(6) was “very clear” that there was no appeal from an order under section 7(1), whether that order grants or refuses the stay, if the arbitration agreement applies to the issue raised in the proceeding. The Court paused to mention that it was not to be seen as agreeing with the analysis engaged in by the motions judge.  For the earlier Arbitration Matters note on the decision in first instance, Eggiman v. Martin, 2019 ONSC 1388, see “Ontario – arbitrator appointment procedure in franchise agreement risks “absurd and likely unfair result”” – #178”.

Third, for a more in-depth look at how and whether section 7(6) applies to limit appeals, see the equally recent Court of Appeal decision in Toronto Standard Condominium Corporation No. 1628 v. Toronto Standard Condominium Corporation No. 1636, 2020 ONCA 612 and the related Arbitration Matters note “Ontario – appeal court reaffirms jurisdiction for appeal of stay decision where decision holds arbitration agreement does not apply – #385“.

Fourth, for guidance on the limits to section 7(6)’s application, see Paulpillai Estate v. Yusuf, 2020 ONCA 655 and the Arbitration Mattes note “Ontario – no appeal lies from an order refusing a stay whether order was made or not – #384”. In that case, Ontario’s Court of Appeal held that it lacked jurisdiction to hear an appeal of a motion judge’s order regarding a stay in favour of arbitration.  No formal motion had been made to refer the dispute to arbitration, the motion judge’s dispositive order was silent on the issue of arbitration and any comments on waiver of arbitration were merely obiter.  Even assuming that an order might have been made, the Court held it lacked jurisdiction because section 7(6) of the Arbitration Act stipulated no appeal lay from a decision under section 7.