Advocacy tip Archives - Page 2 of 3

July 5, 2022July 14, 2022

British Columbia – Effect of consent orders staying proceedings in favour of arbitration – #636

Williams v. Audible Inc., 2022 BCSC 834 (“Audible”) is the second of two decisions by Justice Horsman extending stays of proceedings in favour of arbitration under s. 15 of the former Arbitration Act, R.S.B.C. 1996, c. 55 in the context of class proceedings. The first, Williams v. Amazon.com Inc., 2020 BCSC 300 (the “Amazon Stay Decision”), concerned a separate class proceeding, brought by the same representative plaintiffs as in Audible, alleging similar causes of action, but against Amazon. That decision is under appeal. In this case, Justice Horsman granted the stay sought by Audible. Following the principles in Seidel v TELUS Communications Inc., 2011 SCC 15, the parties agreed to a consent stay of proceedings in favour of arbitration in respect of the plaintiff’s non-consumer protection legislation claims because of the arbitration clause in the relevant contracts. On this application, Justice Horsman found that, because the representative plaintiffs’ non-consumer claims were stayed by virtue of a consent order, there was no proceeding in which to advance the claims of the other possible class members, whose claims related to a period of time when Audible’s contracts did not contain arbitration clause. Therefore, she granted an extension of the stay of those proceedings to cover those claims too.

June 17, 2022June 27, 2022

Ontario – Arbitrator’s notes not a substitute for transcript – #627

In Aquanta Group Inc. v Lightbox Enterprises Ltd, 2022 ONSC 3036, Justice Morgan was asked to appoint an arbitrator when the parties could not agree. The Respondents opposed all arbitrator candidates on the Applicants’ list and requested the appointment of an arbitrator who was previously appointed by the parties in an earlier arbitration involving the same parties and the same agreements. The Respondents argued that this would facilitate costs and time savings by allowing the arbitrator to use his notes from the earlier arbitration because there was no transcript of that arbitration. The Applicants had challenged the award arising from the earlier arbitration and opposed the appointment of the same arbitrator on the basis of reasonable apprehension of bias. Justice Morgan rejected the Respondents’ request to appoint the same arbitrator and found that their proposal, among other things, violated the principle of deliberative secrecy. In the alternative, the Respondents agreed to the appointment of certain candidates on the Applicants’ list. Justice Morgan chose one of those, “resort[ing] to the entirely arbitrary approach of going in alphabetical order”.

April 25, 2022April 25, 2022

Ontario – Arbitrators can decide non-legal business disputes, but not in this case – #608

The case 1107051 Ontario Ltd. v. GG Kingspa Enterprises Limited Partnership, 2022 ONSC 1847 concerned the jurisdiction of an arbitrator to decide a business dispute that was not legal in nature. The Applicant, 1107051 Ontario Ltd. (“110”), applied to “set aside” a decision of an arbitrator to assume jurisdiction over a dispute about whether a major real estate development project at King Street West and Spadina Avenue in Toronto (the “Project”) should include a hotel component when the parties were deadlocked on the issue. Section 17(8) of the Ontario Arbitration Act allows a party to apply to the Court to “decide” a jurisdictional issue if, as here, an arbitrator decides it as a preliminary question, as opposed to with the merits. Justice McEwen granted the “set aside”. He agreed with the arbitrator that the dispute was of a business nature and not legal and, further, that parties could arbitrate such non-justiciable disputes if they clearly and specifically intended to do so. In this case, although the arbitration clause was described as broad, the dispute was beyond its scope because the dispute was required by the clause to arise “under this Agreement”. That meant the dispute had to be about more than just anything to do with the Project. It had to concern the rights and obligations of the parties under the Agreement. Although a hotel was contemplated as part of the Project, it was not a required component. Further, express authorization to determine a business issue would have been necessary.

April 22, 2022April 22, 2022

Ontario – Best practices: pre-appointment communications and application to appoint arbitrator – #607

In Magna International Inc. v Granite Real Estate Inc., 2022 ONSC 2200, Justice Myers granted the application of Magna, the tenant in a lease agreement, for an order appointing an arbitrator to fix the rent for a renewal term of the lease. The parties agreed that the tenant had validly renewed the lease, but could not agree on the rent for the renewal period. Respondent Granite, the landlord, opposed the appointment of the arbitrator for two reasons: (1) the evidence in support of the application was insufficient; and (2) the arbitration clause in the lease was invalid because it contained permissive, rather than mandatory, language and was too vague because it did not specify either the seat or the applicable rules of the arbitration. Justice Myers set out the preferred approach for both communicating with the proposed arbitrator in circumstances in which the parties are not cooperating and the kind of evidence that should be adduced on an application for a court order appointing the proposed arbitrator, using the analogy of the process for the court appointment of a receiver/trustee in bankruptcy. Also, he found that the issues relating to the validity of the arbitration clause were to be referred to the arbitrator under the competence-competence principle.

April 1, 2022May 4, 2022

Québec – Expert opinion unenforceable; not an arbitral award – #601

In 9429-1143 Québec inc. c. Mishmash — Collectif expérientiel, 2022 QCCS 351, Justice Collier declared that a decision issued by an accounting firm did not constitute an arbitration award in the circumstances of the case and could therefore not be homologated. He concluded that the parties did not intend to submit a question for final determination by the accounting firm and that the latter had not exercised quasi-judicial functions.

March 3, 2022May 4, 2022

Ontario – No issue estoppel regarding arbitrator’s findings in later litigation – #591

In The 6^th Line Mofos Limited v Stewart, 2022 ONSC 520, Justice Healey dismissed a summary judgment motion brought by parties to court proceedings, who argued that issue estoppel applied to prevent the court from making findings that were inconsistent with those made in a previous arbitration. The plaintiffs, who were adverse in interest in the arbitration, sued a land appraiser whose report was central to their dispute and which the arbitrator found did not meet the requisite professional standards. The plaintiffs argued that this finding was sufficient to establish the negligence of the defendant appraiser and they sought in damages recovery of the costs they had incurred in relation to the arbitration. Justice Healey disagreed and found that two elements of issue estoppel could not be met: (1) the same question was not before both the court and the arbitrator; and (2) the defendant appraiser was a witness in the arbitration and was not a party or its privy.

February 15, 2022May 4, 2022

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.

December 22, 2021May 4, 2022

Julie’s 2021 Top Pick: B.C. – Allard v The University of British Columbia – #567

Costs results in domestic commercial arbitrations are often based on, or consistent with, the norms of international commercial arbitration and can differ greatly from what is expected based on standard litigation practice. This can be an unpleasant surprise for counsel and their clients who are unfamiliar with this. In Allard v The University of British Columbia Justice Douglas confirmed that the “starting point” for an award of costs in domestic commercial arbitration is that the winner is entitled to its reasonable legal fees and disbursements, or what is referred to in litigation practice as “solicitor client costs” or “indemnity costs” and not “party party” costs, which many litigators would expect. There are, of course, exceptions to this “normal rule” for assessing costs. Alberta’s Arbitration Act, RSA 2000, c A-43 perhaps provides one, as is discussed below.

August 31, 2021May 4, 2022

Québec – confidentiality order denied in court proceedings; parties reminded of confidential arbitration as an alternative – #526

In Douville v St-Germain, 2021 QCCS 3374, Justice Daniel Urbas denied a Defendant’s application for a confidentiality order in a defamation action, but reminded the parties that they could submit their dispute to arbitration, which would afford them the protection sought. Justice Urbas found that the applicant failed to establish a serious risk to an important public interest, but that a further application could be made in due time to seek the protection of specific exhibits or information.

August 6, 2021May 4, 2022

Québec – case referred to arbitration despite some parties and some claims possibly not covered by the arbitration agreement – #517

In Césario v Régnoux, 2021 QCCS 3009, Justice Johanne Mainville granted Defendants’ application to the Court to decline jurisdiction and refer the parties to arbitration (declinatory exception). Justice Mainville held that the record did not allow her to rule on the Court’s jurisdiction because of unanswered questions regarding the relationship between the parties and their conduct prior to executing the arbitration agreement. The arbitrator must therefore first rule on its own jurisdiction, even though Justice Mainville noted that some parties and some claims were possibly not covered by the arbitration agreement.