Domestic Archives - Page 15 of 27

December 1, 2022December 1, 2022

Supreme Court – Peace River v Petrowest Part 2: no conflict between arbitration, bankruptcy law – #687

In Peace River Hydro Partners v Petrowest, 2022 SCC 41, the central issue was whether a receiver/trustee in bankruptcy may disclaim the arbitration clause in a contract and sue in the courts when it seeks to enforce the debtor’s contractual rights against third parties. The case concerned the tension between the court’s supervisory power over all proceedings brought by a receiver/trustee under the Bankruptcy and Insolvency Act (BIA) RSC 1985, c. B-3, and party autonomy to contract out of the courts. Section 15 of the British Columbia (former) Arbitration Act, RSBC 1996 c. 55 required a stay of proceedings where a party to an arbitration agreement has commenced a court proceeding in respect of a matter to be submitted to arbitration, unless the arbitration agreement is “void, inoperative, or incapable of being performed”. The Supreme Court of Canada dismissed the stay application of the defendant sued by the receiver/trustee, but split 5-4 on the reasons. The majority found that the arbitration clauses at issue were “inoperative” because enforcing them would compromise the orderly and efficient resolution of the receivership. This authority arises from the statutory jurisdiction conferred on provincial superior courts under ss. 243(1) and 183(1) of the BIA. It found that this interpretation of the stay provision ensures that provincial arbitration legislation and federal bankruptcy legislation are not in conflict. The minority found that the specific language of the “template” Receivership Order authorized the Receiver/Trustee to disclaim the arbitration agreements, rendering them inoperative.

November 21, 2022November 22, 2022

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.

November 17, 2022November 17, 2022

Supreme Court – Peace River v Petrowest Part 1: Separability Clarified? – #682

Most of the commentary about the Supreme Court of Canada’s decision of Peace River Hydro Partners v Petrowest, 2022 SCC 41, is about the interplay between arbitration law and bankruptcy/insolvency law – and my next Case Note will address that issue. However, perhaps a more important issue for arbitration law was the Court’s consideration of the doctrine of separability (although it was not relevant to the outcome). The scope of its application in Canada was uncertain following the 2020 decisions of the British Columbia Court of Appeal under appeal, Petrowest Corporation v Peace River Hydro Partners, 2020 BCCA 339, and the Supreme Court of Canada in Uber Technologies Inc. v Heller, 2020 SCC 16 (“Uber”).

November 7, 2022March 8, 2023

Québec – Fragmentation of shareholders dispute stayed pending appeal on jurisdiction – #678

In Istanboulian v Kalajian, 2022 QCCA 1259, Justice Cournoyer granted leave to appeal from a judgment of the Québec Superior Court, which had referred part of a claim to arbitration. He found that the judgment under appeal caused irremediable injury to the Applicants by possibly preventing them from being heard in the appropriate forum and that it was in the interest of justice to immediately get to the bottom of the jurisdictional issue.

October 26, 2022October 26, 2022

Alberta – Action brought to require payment ordered in award – #676

In Tomalik v Enthink Inc., 2022 ABCA 302, the Court dismissed an appeal of the decision of Justice Gill of the Alberta Court of King’s Bench, who ordered the Appellant companies to buy out the Respondents’ shares in the companies pursuant to a Unanimous Shareholders Agreement (“USA”) and a valuation done by the second of two valuators. The Respondents argued that the first valuation was too low and pursued arbitration, as result of which the arbitrator found the first valuation deficient and ordered a second valuation, which was even lower. The arbitrator ordered the Appellants to purchase the shares at the second valuation amount. When they refused to pay, the Respondents sued the Appellants for breach of contract and, in a separate action, the second valuator in negligence for failing to arrive at a fair valuation. The two actions were permitted to proceed; by accepting the valuation as binding upon them in the first action and challenging it in the second, the Respondents were not seeking “inconsistent and mutually exclusive rights”.

October 25, 2022April 5, 2023

Ontario – Domestic arbitration statutes can supplement industry-specific arbitration schemes – #675

In Neuhaus Management Ltd v. Huang, 2022 ONSC 5548, the Ontario Divisional Court (Firestone RSJ, Stewart, and Akhtar JJ.) examined how Ontario’s domestic arbitration statute can be incorporated into and be read together with an industry-specific statutory arbitration scheme, the Ontario New Home Warranties Plan Act, R.S.O.1990, c.O.31 (the “Ontario New Home Warranties Act”).

October 25, 2022October 25, 2022

Ontario – Limitations defence not a matter of arbitral jurisdiction – #674

In Cruickshank Construction Ltd. v The Corporation of the City of Kingston, 2022 ONSC 5704, Justice Myers allowed an application to appoint an arbitrator, providing his views on the method for that appointment. He also dismissed the Respondent’s cross-application for a declaration that the notice of arbitration was limitation-barred and that the Applicant had not complied with preconditions to arbitration in the parties’ agreement. Justice Myers held that there was no basis in the Ontario Arbitration Act, 1991, SO 1991, c 17 (“Arbitration Act”) to permit the court to grant the cross-application and the grounds raised were not matters of arbitral jurisdiction.

October 24, 2022January 10, 2023

Quebec – The broad powers of an arbitrator as “amiable composer” – #673

In Investissements immobiliers MB inc. c. SMP Direct inc., 2022 QCCS 3315, Justice Godbout affirmed the broad jurisdiction that an arbitrator has to grant remedies in oppression claims, especially when empowered as an ‘amiable composer’. An ‘amiable composer’ may make a binding decision based on equity (rather than law) and without procedural formalities. It is a role that has its roots in civil law (“amiable compositeur”).

October 20, 2022October 20, 2022

Ontario – Does an appeal of a costs award require leave? – #672

In Schickedanz v Wagema Holdings Ltd., 2022 ONSC 5315, Justice Ramsay dismissed the motion by Wagema Holdings Ltd (Respondent on appeal) to quash Appellant Schickedanz’s appeal of a costs award. Wagema argued that leave was required under s. 133(b) of the Ontario Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) and so the appeal was also out of time. Justice Ramsay was not persuaded that Wagema would prevail when the issue was determined by the appeal judge. First, the parties’ arbitration agreement contained a broad appeal process, without a leave requirement for costs appeals. Second, there is nothing in s. 45 of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17 that requires leave to appeal a costs award or imports the leave requirement set out in the general costs appeal provision in s. 113(b) of the CJA. Third, the parties could contract out of the appeal provisions in s. 45 of the Arbitration Act pursuant to s. 3. Imposing a leave requirement to appeal a costs award would amount to judicial interference with the parties’ right to contract, which was recognized by the Supreme Court of Canada in TELUS Communications Inc. v. Wellman, 2019 SCC 19. Ultimately, it would be up to the judge hearing the appeal to decide whether leave was required and, if so, whether the appeal was out of time and whether the appeal had merit.

October 13, 2022October 17, 2022

Québec – Solidary liability allegation no bar to referral to arbitration for one defendant – #671

In Nantel v Gonzalez (not reported), Justice Buchholz stayed an action as against one defendant of a group and referred its dispute with the Plaintiffs to arbitration, even though the Plaintiffs alleged solidary (joint) liability as against all Defendants.