Ontario – Stay Granted where Competing Arguable Interpretations of Scope of Arbitration Agreement – #648

In Biancucci v Buttarazzi, 2022 ONSC 4054, Justice Myers followed the analytical framework for a stay application under s. 7 of the Arbitration Act, 1991, S.O. 1991, c. 17  (the “Act”) as set out in Haas v. Gunasekaram, 2016 ONCA 744. The arbitration agreement at issue was contained in a settlement agreement, and interconnected litigation and arbitration taking place over a decade made analysis of the scope of the arbitration agreement complex. Ultimately, Justice Myers confirmed that there were competing arguable interpretations of scope and granted the stay, leaving jurisdiction to be ultimately determined by the arbitral panel.

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Ontario: Stay ordered as promissory note captured by separate arbitration agreement – #643

In Pioneer Cannabis Corp. v. 2715615 Ontario Inc., 2022 ONSC 3998, the Plaintiff’s action was stayed pursuant to s. 7(1) of Ontario’s Arbitration Act, 1991 (the “Act “) and the parties’ arbitration agreement found in their “Master Cannabis Agreement” (the “MCA”). The Plaintiff Pioneer Cannabis Corp (“Pioneer”) commenced an action alleging that the Defendants 2715615 Ontario Inc and Mr. Sangha owed money pursuant to a promissory note. The parties had entered into a number of agreements relating to cannabis retail consulting and brand licensing services including the MCA, a Retail Services Authorization Agreement (the “RSAA”), and a promissory note. On its motion to stay, the Defendants argued that the Plaintiff’s claim fell within the arbitration clause in the MCA. The Plaintiff, however, argued since its claim wass based solely on the promissory note, which should be viewed as a standalone instrument, it fell outside the scope of the arbitration clause. Associate Justice Robinson disagreed with Pioneer, found the arbitration agreement covered the promissory note, and granted the stay. As outlined below, in reaching his conclusion, Associate Justice Robinson applied the five-part test established by the Court of Appeal for Ontario in Haas v Gunasekaram, 2016 ONCA 744  (“Haas”)at paragraph 17 to determine whether an action should be stayed in favour of arbitration (the “Haas Test”). 

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Ontario – Arbitration clause not consideration; provides only detriment to contracting party – #641

In Goberdhan v Knights of Columbus, 2022 ONSC 3788, Justice Harris dismissed the Defendant’s motion to stay the Plaintiff’s wrongful dismissal action in favour of arbitration. The parties signed three employment contracts over a period of 8 years; the last two each contained a mandatory arbitration clause. The Plaintiff argued that there was no consideration for the second and third contracts, so he was entitled to sue. The Defendant argued that the arbitration clause itself was consideration and that a stay should be ordered because it was “arguable” that the dispute fell within the terms of the arbitration agreement. Justice Harris rejected the Defendant’s argument. He found that the last two contracts lacked consideration because there was no benefit flowing to the Plaintiff; essentially, he gave up his right to sue, which was a detriment, and gave him nothing in return. Therefore, because the main contract failed for lack of consideration, so too did the arbitration clause.

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British Columbia: – Court partially stays class action related to videogame “loot boxes” – #639

In Petty v Niantic Inc., 2022 BCSC 1077, Justice Mayer stayed a proposed class action in favour of arbitration, except in respect of claims advanced under B.C.’s Business Practices and Consumer Protection Act [BPCPA]. He rejected the Representative Plaintiffs’ arguments that the arbitration agreements were null and void for unconscionability and/or violating B.C. public policy. He also applied the competence-competence principle, holding the arbitral tribunal should decide first as to its jurisdiction over claims based on the Competition Act where the parties’ contract provided for California law.

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Québec – Light touch to determining arbitration clause application (except to the non-signatory, maybe!) – #638

In Cannatechnologie inc. c. Matica Enterprises Inc., 2022 QCCA 758, the Québec Court of Appeal (Justices Bélanger, Rancourt and Moore) affirmed the principle that a court should limit itself to a prima facie assessment of whether or not a dispute comes within the scope of an arbitration clause. If it does, a court proceeding regarding the dispute should be stayed so that the arbitrator can rule on his or her own jurisdiction.

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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.

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