B.C. – arbitration remains mandatory despite option given to only one party to waive arbitration – #503

In Malcolm Drilling Company Inc. v. The Graham-Aecon Joint Venture, 2021 BCSC 1136, Madam Justice Shelley C. Fitzpatrick issued a stay of proceedings despite plaintiff’s objection that only defendant had a peremptory right to refuse arbitration in response to plaintiff’s request to arbitrate. Fitzpatrick J. held that arbitration was mandatory if (i) either party requested it and (ii) arbitration was requested by plaintiff and defendant did not exercise its peremptory right to “waive” arbitration. Fitzpatrick J. also cautioned against an uncritical application of the “dated” approach to jurisdictional issues taken by decisions released prior to Seidel v. TELUS Communications Inc., 2011 SCC 15 (CanLII), [2011] 1 SCR 531, noting that “the persuasiveness of those decisions must be viewed with some skepticism given the more modern approach to arbitration”.

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Ontario – on appeal, court raises legislation neither party pleaded in arbitration, reversing arbitrator’s definition of key term – #502

On an appeal of an arbitration award, Mr. Justice Frederick L. Myers in Her Majesty the Queen in Right of Ontario (Minister of Government and Consumer Services) v. Royal & Sun Alliance Insurance Company of Canada, 2021 ONSC 3922 raised the application of the Legislation Act, 2006, SO 2006, c 21, Sch F which neither party had argued in the arbitration and, having invited and heard argument, held that it governed and served to reverse the interpretation of a key term in the arbitration. Myers J. also noted that he followed Ontario precedent that Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 applied to appeals in statutory arbitrations but he limited the scope of that precedent, adding that it “cannot to be taken as standing for a broader proposition that Vavilov applies generally to all appeals from commercial arbitrations in Ontario”.

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Québec – addition of potential claim to existing court action deemed abusive when arbitration of claim not completed – #501

In Raymond Chabot Administrateur provisoire Inc. du plan le garantie La Garantie Abritat Inc. v. 7053428 Canada Inc., 2021 QCCS 1039, Madam Justice Dominique Poulin qualified as abusive an attempt by Plaintiff to add a second claim to its existing court proceeding despite that claim still being subject to a pending arbitration. Plaintiff argued that its approach favoured efficiency by merely adding a second claim which it argued was related to a first claim already confirmed by prior arbitration and the object of the existing court proceeding.  Poulin J. held that Plaintiff could not add a claim which remained uncertain and indeterminate and which Plaintiff had not yet paid, thereby lacking legal standing.  Poulin J. reminded Plaintiff that the notice of arbitration served to interrupt prescription (limitation).  Despite Defendants’ claim for damages for the abuse of procedure, Poulin J. ordered no damages, observing that Plaintiff’s approach stemmed from either a misunderstanding of its rights or a motivation to facilitate the process and not to abuse it.

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Ontario – court assists parties with stay of action, referral to arbitration, certificate against land and injunction regarding public hearing – #500

In Ghods Builders Inc. et al. v. Sedona Place Co-Ownership Inc. et al., 2021 ONSC 1938, Madam Justice Jasmine T. Akbarali demonstrated the Ontario court’s assistance to parties disputing land subject to an option agreement by (i) granting Defendants’ application to stay the action, (ii) referring the parties to arbitration to resolve the option agreement dispute, (iii) issuing a certificate of pending litigation against the land disputed in the arbitration and (iv) enjoining any interference with a public hearing involving Plaintiffs’ development plans regarding the disputed land. Akbarali J. preserved the opportunity for the arbitrator to resolve the merits of the parties’ dispute involving their option agreement and the local planning tribunal process which would consider Plaintiffs’ development plan regarding the land subject to arbitration.

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Québec – residence of arbitrator in same region as parties not a criteria for deciding neutrality – #499

In Madysta Constructions Ltée v. Maskicom Inc., 2021 QCCS 2101, Mr. Justice Jocelyn Geoffroy dismissed as unfounded and subjective the concern voiced by defendant that plaintiff’s proposed arbitrator resided in the same region of the province as the parties and the municipalities involved in the dispute.  [informal translation] ‘If such a criteria regarding the residence of an arbitrator or a judge was retained, virtually no arbitrator or judge could sit in a judicial district in which they lived because it is generally in that same district in which the parties they will hear also reside’.  Geoffroy J. also dismissed defendant’s concern that plaintiff’s counsel had alone contacted the arbitrator prior to proposing him.  Geoffroy J. reproduced the brief response from the arbitrator which confirmed his acceptance of the nomination and the absence of conflict.

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B.C. – adverse inferences and undocumented terms thwart proof of binding settlement alleged in mediation – #498

In Govorcin Fisheries Ltd. v. Medanic Fisheries Ltd., 2021 BCSC 1092, Mr. Justice Frits E. Verhoeven dismissed Defendants’ claim that the parties had entered into a binding, verbal settlement agreement, determining that Defendants failed to meet the elements of an enforceable settlement set out in  Apotex Inc. v. Allergan, Inc., 2016 FCA 155.  Despite the complexity of the issues and disputed amount, the parties did not document the terms which Defendants alleged formed the parties’ agreement concluded during mediation.  “This case illustrates the difficulty of attempting to prove that a settlement agreement was reached verbally at a mediation, where nothing was signed by the parties signifying their agreement to a settlement, and, further, where there was no consensus between them that a settlement had been achieved”.  At the hearing to enforce the alleged settlement agreement, Verhoeven J. also drew adverse inferences based on the “unexplained” absence of “obviously a key material witness” who participated on Defendants’ behalf in the mediation and could have attended to challenge the facts adduced by Plaintiff.

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