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Arbitration - Stay

. Paulpillai Estate v. Yusuf

In Paulpillai Estate v. Yusuf (Ont CA, 2020) the Court of Appeal held that it had no appeal jurisdiction over a refusal of a stay under the Arbitration Act:
[47] Even if the motion judge is viewed as having exercised discretion because of undue delay under s. 7(2)4 of the Arbitration Act to refuse to stay the court proceeding and refer the dispute to arbitration — despite the silence of the order on this point — this court would still lack appellate jurisdiction over this aspect of the order. Section 7(6) of the Arbitration Act provides: “There is no appeal from the court’s decision.” The appeal bar in s. 7(6) applies to any decision under s. 7, including a decision to refuse a stay under s. 7(2): see TELUS Communications Inc. v. Wellman, 2019 SCC 19, [2019] 2 S.C.R. 144, at para. 91; Toronto Standard Condominium Corporation No. 1628 v. Toronto Standard Condominium Corporation No. 1636, 2020 ONCA 612, at paras. 62, 66-68, and 95.
. Toronto Standard Condominium Corporation No. 1628 v. Toronto Standard Condominium Corporation No. 1636

In Toronto Standard Condominium Corporation No. 1628 v. Toronto Standard Condominium Corporation No. 1636 (Ont CA, 2020) the Court of Appeal addressed an awkward issue from the Arbitration Act. The Act provides that when a party commences a civil proceeding with respect to a matter that should be, by contract, arbitrated - that the court shall stay the proceeding in favour of the arbitration. It also says there is no appeal from the stay order. But in this appeal the stay order was denied because the respondent asserted that some of the issues were arbitrable and some not. A prior case, Huras v. Primerica Financial Services Ltd. (2000) (Ont CA, 2000), that dealt with this situation was being challenged (the challenge lost):
[1] Toronto Standard Condominium Corporation No. 1628 (“Condo 1628”) moves to quash an appeal brought by Toronto Standard Condominium Corporation No. 1636 (“Condo 1636”), Soho Grand Condominiums Inc. (“Soho”), and Soinco Ltd. (“Soinco”) from the order of the motion judge refusing to stay a court proceeding in favour of arbitration. Condo 1628 claims this court lacks jurisdiction because the appeal is barred by s. 7(6) of the Arbitration Act, 1991, S.O. 1991, c. 17 (“Arbitration Act”).[1]

[2] Subject to certain exceptions under ss. 7(2) and 7(5), s. 7(1) of the Arbitration Act provides that if a party to an arbitration agreement commences a court proceeding about a matter they agreed would be submitted to arbitration, the court shall, on the motion of another party to the arbitration agreement, stay the court proceeding. Under s. 7(5), when arbitrable and non-arbitrable matters are combined in a single court proceeding, if certain conditions are met, the court may stay the proceeding with respect to the matters dealt with in the arbitration agreement and allow it to continue with respect to the other matters. Section 7(6) decrees: “There is no appeal from the court’s decision.”

[3] This motion concerns the scope of s. 7(6). Condo 1628 asks this court to overrule 20 years of its jurisprudence on when s. 7(6) bars an appeal.

[4] This court’s leading decision interpreting s. 7(6), Huras v. Primerica Financial Services Ltd. (2000), 2000 CanLII 16892 (ON CA), 137 O.A.C. 79 (C.A.), held that if a motion judge decides that an arbitration agreement does not apply to the dispute before the court, then the Arbitration Act also does not apply, including the bar on appeals in s. 7(6). Huras has been followed by this court in seven unanimous decisions, including by two five-judge panels, and adopted as persuasive authority by the appeal courts of three other provinces with provisions identical to s. 7(6) in their arbitration statutes.

[5] Condo 1628 invites this court to overrule the Huras line of cases and quash this appeal based on the Supreme Court of Canada’s decision in TELUS Communications Inc. v. Wellman, 2019 SCC 19, [2019] 2 S.C.R. 144. In Wellman, Moldaver J. for the majority held that s. 7(5) “does not grant the court discretion to refuse to stay claims that are dealt with in an arbitration agreement”: at para. 8. He ruled that s. 7(5) “does not … permit the court to ignore a valid and binding arbitration agreement”: at para. 103. Wellman overturned this court’s contrary interpretation of s. 7(5) in Griffin v. Dell Canada Inc., 2010 ONCA 29, 98 O.R. (3d) 481, leave to appeal refused, [2010] S.C.C.A. No. 75, which had construed s. 7(5) as granting a motion judge discretion to refuse to stay claims dealt with in an arbitration agreement.

[6] As I elaborate below, although Wellman overturned Griffin on the interpretation of s. 7(5), it did not disturb the Huras line of cases on the interpretation of s. 7(6). In my view, the Huras line of cases was correctly decided.

[7] I also conclude that s. 7(6) does not bar an appeal from the motion judge’s order in this case. The motion judge found that the proceeding before the court combines matters that are dealt with in the arbitration agreement with other matters that are not dealt with in the arbitration agreement. Because the motion judge did not have the benefit of Wellman at the time of his decision, he applied this court’s decision in Griffin, refused to stay any part of the proceeding under s. 7(5), and allowed the entire proceeding to continue before the court. But as Wellman later confirmed, s. 7(5) does not grant the court discretion to refuse to stay claims that are dealt with in an arbitration agreement, and does not permit a court to ignore a valid and binding arbitration agreement. Because the motion judge granted relief that was unavailable under s. 7(5) or elsewhere in s. 7, he did not make a decision under s. 7, so an appeal is not barred by s. 7(6). And because this was a final order — terminating potential proceedings before the arbitrator and overriding a substantive contractual right to arbitrate — an appeal lies to this court under s. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43.



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