



COURT OF APPEAL FOR ONTARIO

CITATION: Toronto Standard Condominium Corporation No. 2130
    v. York Bremner Developments Limited, 2014 ONCA 809

DATE: 20141117

DOCKET: M44092 (C58349)

Hoy A.C.J.O., Epstein and Hourigan JJ.A.

BETWEEN

Toronto Standard Condominium Corporation No. 2130

Applicant (Respondent)

Moving Party

and

York Bremner Developments Limited, The Cadillac
    Fairview Corporation Limited and York Bremner Hotel Leaseholds Limited

Respondents (Appellants)

Responding Parties

APPLICATION UNDER sections 10 and
    23 of the
Arbitration Act,

1991
, section 132 of the
Condominium
    Act,

1998
, section 17 of the
Ontario New Home Warranties Plan
    Act
, Rule 14.05(3)(d) and (h) of the
Rules of Civil Procedure
,
    and the inherent jurisdiction of this court.

Richard Macklin and Neil G. Wilson, for the moving party

Catherine Francis, for the responding parties

Heard: November 5, 2014

On appeal from the judgment of Justice Wendy M. Matheson
    of the Superior Court of Justice, dated January 8, 2014.

ENDORSEMENT

[1]

Toronto Standard Condominium Corporation No. 2130 (the Condominium
    Corporation) moves to quash the appeal by York Bremner Developments Limited (the
    Declarant), The Cadillac Fairview Corporation Limited and York Bremner Hotel
    Leaseholds Limited (the Appellants) of the January 8, 2014 judgment of the
    application judge appointing an arbitrator in connection with the arbitration
    commenced by the Condominium Corporation.

[2]

The Condominium Corporation argues that there are two bases for doing
    so. First, s. 10(2) of the
Arbitration Act, 1991
, S.O. 1991, c. 17
    precludes any appeal of the application judges decision. Second, the
    Appellants have attorned to the jurisdiction of the arbitrator.

[3]

We agree that s. 10(2) of the
Arbitration Act, 1991
precludes
    an appeal of the application judges judgment. The appeal is accordingly
    quashed. Given our conclusion regarding the effect of s. 10(2), it is
    unnecessary to address the parties arguments on the issue of whether the
    Appellants have attorned to the jurisdiction of the arbitrator.

The Background

[4]

It is helpful to briefly set out the background in this matter.

[5]

The Condominium Corporation is the condominium corporation for a
    residential condominium in a complex called Maple Leaf Square. The Declarant
    owns the commercial and retail lands at Maple Leaf Square. York Bremner Hotel
    Leaseholds Limited (Leasing) holds a leasehold interest in a hotel in Maple
    Leaf Square. The Cadillac Fairview Corporation Limited is described as the
    Declarants agent, appointed to be the common facilities manager of Maple Leaf
    Square.

[6]

The Declarant, Leasing and the Condominium Corporation entered into an
    agreement called the Complex Reciprocal Agreement (the CRA). The CRA relates
    to the management of the common facilities, areas and services of the
    condominium development. The CRA contains a broad arbitration clause. It
    provides that [S]hould any dispute, difference or question arise between or
    among the Parties arising out of, or in connection with, [the CRA] then such
    dispute, difference or question is to be submitted to and resolved by
    arbitration.

[7]

A number of disputes arose between or among the parties and the
    Condominium Corporation sought to initiate arbitration proceedings under the
    CRA. It also commenced overlapping proceedings in court.

[8]

In accordance with the CRA, the Condominium Corporation issued a notice
    of arbitration on May 17, 2013, seeking arbitration pursuant to, amongst other
    things, the CRA and the
Arbitration Act, 1991
. Clause 22.02 of the CRA
    required the Declarant and Leasing  the Responding Party in the language of
    clause 22.02  to give notice to the Condominium Corporation within 10 days
    advising whether or not they accepted the proposed arbitrator. Clause 22.02 also
    provides as follows:

Within 10 days after receipt of such notice, the Responding
    Party shall give notice to the Initiating Party advising whether the Responding
    Party accepts or does not accept the arbitrator proposed by the Initiating
    Party. If such notice is not given within such 10 day period, the Responding
    Party shall be deemed to have accepted the arbitrator proposed by the
    Initiating Party. If the Responding Party does not accept the arbitrator
    proposed by the Initiating Party and the Parties cannot agree upon a single
    arbitrator within such 10 day period, either the Initiating Party or the
    Responding Party may apply to a judge of Superior Court of Ontario for the
    appointment of a single arbitrator.

[9]

The Appellants did not respond to the Condominium Corporations notice
    within 10 days but refused to move forward with the arbitration.

[10]

The
    Condominium Corporation brought an application seeking the appointment of an
    arbitrator. The grounds for its application included s. 10 of the
Arbitration
    Act, 1991
. The Condominium Corporation argued that one of two persons
    should be appointed as arbitrator pursuant to the CRA and should rule on his
    own jurisdiction.

[11]

At
    para. 7 of her reasons, the application judge noted that the Appellants took no
    issue with the process of proposing an arbitrator. She also noted that at the
    outset of the hearing the Appellants indicated for the first time that they
    were not objecting to the individuals proposed by the Condominium Corporation
    to act as arbitrator. Rather, the Appellants argued that none of the issues in
    the Condominium Corporations notice of arbitration fell within the ambit of
    the arbitration agreement in the CRA and were accordingly outside the
    jurisdiction of the arbitrator. Therefore, there was no point in appointing an
    arbitrator.

[12]

The
    application judge disagreed. At para. 20 of her reasons, she cited
Dancap
    Productions Inc. v. Key Brand Entertainment
, 2009 ONCA 135, 55 B.L.R.
    (4th) 1, for the principle that [a] court will decline to have the arbitrator
    determine his or her jurisdiction only when it is clear or obvious that there
    is no jurisdiction.  She concluded that, since at least one issue arguably
    fell within the jurisdiction of the arbitrator, the arbitrator should be
    appointed and determine his jurisdiction.

[13]

The
    application judge also accepted that the Condominium Corporation had commenced
    the overlapping court proceedings to protect against limitation period problems
    and because the relief that it seeks under s. 113 of the
Condominium Act,
    1998
, S.O. 1998, c. 19 must be pursued in court.

[14]

The
    judgment of the application judge describes the Condominium Corporations
    application as for an Order appointing either Gary Caplan or Larry Banack as
    arbitrator for an arbitration to be conducted pursuant to sections 10 and 23 of
    the
Arbitration Act, 1991
, section 132 of the
Condominium Act,
    1998
, section 17 of the
Ontario New Home Warranties Plan Act
and
    [the CRA] Pursuant to the judgment, the court ordered that Larry Banack is
    appointed as arbitrator in connection with the arbitration commenced by a
    Notice of Arbitration issued on May 17, 2013, as amended on December 17, 2013.

[15]

After
    the arbitrator was appointed, the Condominium Corporation put the Appellants on
    notice that it would argue that the Appellants had attorned to the jurisdiction
    of the arbitrator if they did not move to stay the arbitration proceedings. The
    Appellants responded that they would not be able to establish that they would
    suffer irreparable harm if the stay were not granted, could therefore not
    succeed in obtaining a stay, and would accordingly not move for a stay.

[16]

Before
    the arbitrator considered the question of his jurisdiction, the Condominium
    Corporation withdrew 13 of the issues in its notice of arbitration. The
    arbitrator determined that he had the jurisdiction to determine the remaining
    six issues. In his award on the issue of jurisdiction, the arbitrator noted
    that the Appellants explicitly stated that they did not seek a stay of the
    arbitration proceedings, including the jurisdiction motion.

[17]

The
    arbitrator has since determined two of the six issues over which he asserts
    jurisdiction. The Condominium Corporation has withdrawn one of the six issues,
    and a further issue regarding HST has been adjourned, to permit the Condominium
    Corporation to pursue relief through the Canada Revenue Agency. A hearing in
    respect of the final two issues is scheduled for January of 2015.

[18]

The
    Appellants have participated actively in the proceedings before the arbitrator.
    Facta have been filed, submissions made and witnesses cross-examined. The
    Appellants have also paid costs awarded by the arbitrator. By August 5, 2014,
    the parties had spent more than $100,000 on the arbitrators fees. The
    Condominium Corporation (and presumably the Appellants) have incurred
    additional costs for counsel, experts and disbursements.

[19]

The
    Appellants have launched an appeal of the arbitrators ruling on his
    jurisdiction to the Superior Court of Justice.

[20]

On
    their appeal to this court, the Appellants propose to argue that the
    application judge erred in law in referring all the issues in the notice of
    arbitration to the arbitrator. They would argue that she was required to assess
    each of the issues raised in the notice of arbitration and to refer only those
    that she determined were arbitrable or at least potentially arbitrable under
    the arbitration agreement.

Analysis

[21]

As
    we indicated above, the Condominium Corporations grounds for the appointment
    of the arbitrator included s. 10 of the
Arbitration Act, 1991
. Section
    10(1) provides that:

Appointment of Arbitral Tribunal

10. (1) The court may appoint the arbitral tribunal, on a
    partys application, if,

(a) the arbitration agreement provides no procedure for
    appointing the arbitral tribunal; or

(b) a person with power to appoint the arbitral tribunal has
    not done so after a party has given the person seven days notice to do so.

[22]

The
    Appellants accepted that s. 10(1) entitled the application judge to appoint an
    arbitrator. They did not take issue with the Condominium Corporations reliance
    on s. 10(1) in putting the matter before the application judge. They only took
    issue with the scope of the matters to be referred to the arbitrator. In our
    view, it is not open to the Appellants to argue at this stage that the
    arbitrator was not appointed under s. 10(1) of the
Arbitration Act, 1991
.

[23]

Accepting,
    as we do, that the arbitrator was appointed by the application judge under s.
    10(1) of the
Arbitration Act, 1991
, s. 10(2) bars the Appellants
    attempt to appeal the application judges judgment. That section provides as
    follows:

No appeal

(2) There is no appeal from the courts appointment of the
    arbitral tribunal.

[24]

This
    case is very different from
Brennan v. Dole
(2005), 11 B.L.R. (4th)
    169 (Ont. C.A.), where an appeal from a court order appointing an arbitrator
    was allowed because this court held that the purported arbitration agreement
    was not enforceable by the respondents against the appellants.

[25]

The
    Appellants are not without a remedy. They have  as they were entitled to 
    appealed the arbitrators ruling on the issue of jurisdiction to the Superior
    Court of Justice pursuant to s. 17(8) of the
Arbitration Act, 1991
.

Disposition

[26]

The
    appeal is accordingly quashed.

[27]

The
    Condominium Corporation shall be entitled to costs of the appeal and the motion
    to quash, fixed in the amount of $20,000, including disbursements and HST.

Alexandra Hoy A.C.J.O.

G.J. Epstein J.A.

C. W.
    Hourigan J.A.


