B.C. – application for stay required for court to consider role of arbitration at certification stage

Tasked with deciding whether or not to certify an action as a class proceeding, Madam Justice Veronica Jackson in Matthews v. La Capitale Civil Service Mutual, 2020 BCSC 787 declined to consider whether to stay the proceedings on the basis of mandatory arbitration agreements contained in several of the agreements.  Despite contesting certification, Jackson J. noted that Defendants had not filed an application for a stay under section 15 of the Arbitration Act, RSBC 1996, c 55 and therefore the issues “were not squarely before me and were not argued on this application”.  “At this time”, she could not conclude arbitration of disputes involving potential class members was required.  See the earlier Arbitration Matters note “Stay granted despite anticipation that arbitrator applying U.S. law might not be able to grant claims”.

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Ontario – settlement rescinded based on innocent misrepresentation of material fact unknown to Defendant

In Deschenes v. Lalonde, 2020 ONCA 304, Ontario’s Court of Appeal upheld rescission of a settlement on the basis of Defendant’s innocent misrepresentation regarding a fact material to Plaintiff’s decision to settlement.  Defendant’s actual or constructive knowledge that the representation was false was unnecessary.  The Court distinguished rescission based on innocent misrepresentation from rescission based on unilateral mistake. Despite the strong presumption favouring finality of settlements, the Court reiterated that the ways to “upset” a settlement are the same as those applicable to other contracts, including fraud, misrepresentation, duress, undue influence, unconscionability, or mutual or unilateral mistake.

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Ontario – parties’ signature of arbitrator’s terms does not overwrite appeal process in original agreement

In 547131 Ontario Limited v. MPI Torgan, 2020 ONSC 3186, Madam Justice Carole J. Brown disagreed that terms submitted by the arbitrator and signed by the parties overwrote the parties’ initial agreement in their main contract regarding appeals of any arbitral award.  The arbitrator’s terms covered conflicts, compensation, the services of an arbitral secretary, cancellation policy, confidentiality, immunity and administration issues. Brown J. identified no indicia that the arbitrator’s terms altered the initial agreement that the award would be “final and binding” and not subject to appeal, even on a question of law with leave of the court.

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Québec – use of confidential mediation exchanges permitted to prove fraud vitiating settlement consent

In Viconte inc. v. Transcontinental inc., 2020 QCCQ 1475, Madam Justice Céline Gervais recognized that that the exception to settlement privilege applies to permit a party to adduce confidential exchanges made in a mediation to prove the existence or scope of a transaction but she saw no principle under which that exception did not also apply if a party challenged the validity of a transaction and not its existence or scope.  The party resisting homologation of a settlement sought to prove that the other party had given false information or allowed it to be retained, thereby vitiating consent and justifying annulment of the settlement.  Gervais J. cautioned that her decision was only a preliminary one and did not consider the difficulty a party may have at trial to prove its allegations.

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Québec – post-mediation dispute over existence/terms of agreement permits disclosure of confidential exchanges

In Bisaillon v. Bouvier, 2020 QCCA 115, the Québec Court of Appeal applied the exception to confidentiality of mediation, confirmed in Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35, [2014] 1 SCR 800, allowing disclosure of confidential exchanges necessary to prove (i) that an agreement resulted from mediation or (ii) the scope of the agreement which the parties acknowledged making. The parties could but did not tailor their mediation to eliminate that exception. Absent a clear, express statement of their intention to prevent subsequent disclosure, the exception applied to permit disclosure. The mediator’s summary of the agreement was only a simple writing, reflected his understanding of the agreement’s terms and did not bind the parties unless signed by them.

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Alberta – communication of privileged offers after award but before clarification/costs insufficient to raise bias

In Clark v. Unterschultz, 2020 ABQB 338, Madam Justice June M. Ross dismissed a challenge to an award on the merits, holding that one party’s communication of privileged settlement offers after the award and before the costs award were insufficient to meet the high threshold required to find real or perceived bias.  Ross J. determined that a reasonable person, viewing the matter realistically and practically, and knowing that the hearing had concluded and the substantive award had issued, would be unlikely to conclude that the arbitrator would not decide the remaining matters fairly.

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Québec – crossclaim triggers arbitration though agreement to arbitrate silent in that regard

Relying on the contracts and the parties’ respective claims, Mr. Justice Éric Dufour in Kolinar Real Estate Inc. v. Cadieux, 2019 QCCQ 7183 determined that Defendants’ crossclaim triggered the parties’ particular agreement to arbitrate unless the claim fell within the $15,000.00 level for Small Claims division’s jurisdiction.  Defendants’ crossclaim exceeded that level and Dufour J. held it was not dilatory.  Without express mention of Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (CanLII), [2007] 2 SCR 801, Dufour J. effectively determined jurisdiction first by “only superficial consideration of the documentary evidence in the record” and applied the approach, familiar in many court rules, which allows a crossclaim to impact jurisdiction set by amount of claim.

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Ontario – consent order prompts agreement to arbitrate to complete it and fresh litigation over vague term

In Lokhandwala v. Khan et. al., 2020 ONSC 3209, Mr. Justice William M. LeMay determined that an offer received for a property qualified as “reasonable” according to a consent order agreed to by the parties in an earlier hearing.  That consent order also included an agreement to arbitrate, if need be, the choice of real estate agent to list the property.  LeMay J.’s reasons illustrate the care needed by parties to disputes when drafting terms to resolve their disputes so that today’s resolution does not inadvertently sow seeds for future, new disputes.  The reasons also include helpful references to case law on judicial notice and the pandemic.

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Québec – tardy litigation, due to attorneys’ failure to file post-award proceedings, resists dismissal

Acknowledging Plaintiffs’ eventual challenges at trial with a lapsed prescription (limitation) period, Mr. Justice Martin Castonguay in Truong v. Brunelle, 2020 QCCS 55 refused to dismiss procedures stemming from a June 23, 2009 arbitral award.  Filed June 25, 2019, Plaintiffs’ litigation sought both homologation and damages stemming from non-compliance with aspects of the award, but the motion to dismiss eventually focused on only the damage action. Castonguay J. held that Plaintiffs’ attorneys’ failure to finalize and file relevant pleadings justified exercising discretion to allow their case to proceed.  His reasoning applies equally to late applications to homologate awards.

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Alberta – stay of BIA order lifted, enabling trustee to investigate transactions preventing execution of award

On application by a successful arbitral party, Mr. Justice Brian O’Ferrall in Pacer Holdings Construction Corporation v. Richard Pelletier Holdings Inc, 2020 ABCA 47 lifted a stay imposed by the appeal filed by the losing arbitral party against the order putting it in bankruptcy.  The successful arbitral party challenged certain transactions by the losing arbitral party which “stripped” the latter of all its assets. O’Ferrall J.A. was “not yet convinced” to interpret the Bankruptcy and Insolvency Act, RSC 1985, c B-3 to mean that a “dormant shell” corporation was not a “debtor” or “insolvent person”.  Lifting the stay enabled the trustee to exercise powers ordinary creditors do not have, including collection of information relevant to ordering transferees of property of the bankrupt arbitral party to pay to the difference between the value of the consideration the bankrupt gave and the value transferees received.

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