





CITATION:
Secure Solutions
          Inc. v. Smiths Detection Toronto Ltd., 2011 ONCA 337





DATE:
          20110503



DOCKET: C53347



COURT OF APPEAL FOR ONTARIO



Goudge, Gillese and Watt JJ.A.



BETWEEN



Secure Solutions Inc.



Plaintiff/Respondent



and



Smiths Detection Toronto Ltd. and Smiths Detection
          Montreal Inc.



Defendants/Appellants



Gideon Forrest and Zohaib Maladwala, for the appellants



Jonathan C. Lisus and Andrew J. Winton, for the respondent



Heard:
April 21, 2011



On appeal from the order of Justice Gray of the Superior Court
          of Justice, dated February 16, 2011.



ENDORSEMENT



[1]

This is an appeal from the order of Gray J. declining
    to stay the respondents action.

[2]

The appellants primary argument is that there is an
    agreement between the parties containing an arbitration clause that encompasses
    the issues raised in the litigation and, as a consequence, the litigation
    process must defer to arbitration.

[3]

The first issue is whether there is arguably an
    arbitration clause in whatever contract continues to exist between the parties.
    The motion judge appeared very sceptical that there was any such contract.
    However, for the purposes of the motion before him, he was prepared to proceed
    on the assumption that such a contract existed. He did not decide that issue.

[4]

In our view, it is not arguable that whatever contract
    existed between the parties in 2009 and 2010 (when the events that triggered
    the litigation took place) it included an arbitration clause. Over the 13 years
    of continuous dealings between the parties there was a written contract in place
    for only two 12 month periods:  the 2005 contract and the 2007 contract. Only
    in those two contracts is there reference to arbitration. By its terms, the
    second of these, the 2007 contract, expired on July 17, 2008. It was not
    renewed, as the appellants clearly have acknowledged. In 2009, the appellants
    took the policy decision that their disputes with the respondent would not be
    arbitrated. While the parties continued to do business after July 2008, the
    terms of any oral agreement reflecting the issues on which they were
ad idem
, could only be gleaned from
    their conduct. There was nothing in writing. In the face of taking the position
    in 2009 that they did not want their disputes arbitrated but litigated, and
    having clearly communicated that to the respondent, it is very difficult to see
    how the appellants could establish a meeting of the minds to the effect that
    their disputes would be arbitrated. In our view, that position is simply not
    arguable. If there is no arbitration provision contracted for at the relevant
    time, that ends the matter.

[5]

Based on the assumption of an arbitration provision,
    the motion judge went on to decide that it was an implied oral one, not one in
    writing as required by the clear language of s. 5(3) of the
International Commercial Arbitration Act
and thus the provincial
Arbitration Act
applied. He found that the claims of breach of trust, breach of fiduciary duty,
    conspiracy and unjust enrichment did not remotely come within that clause and
    that it was inappropriate to grant a partial stay of any remaining issues. All the
    issues should be decided in one proceeding. Finally, he found that, as a matter
    of fact, there was no forum selection clause in any oral agreement between the
    parties, and in any event, Ontario is the more convenient forum for the
    litigation.

[6]

The appellants attack each of these findings. Despite
    Mr. Forrests vigorous and thorough advocacy, we do not agree that the motion
    judge erred in disposing of any of these issues. Indeed, we agree with him. His
    reasons are persuasive and we would adopt them.

[7]

The appeal must be dismissed. Costs to the respondent
    fixed at $15,000 inclusive of disbursements and applicable taxes.

S. T. Goudge J.A.

E. E. Gillese J.A.

David Watt J.A.


