



COURT OF APPEAL FOR ONTARIO

CITATION: Leeds Standard Condominium Corporation No. 41 v.
    Fuller, 2019 ONCA 987

DATE: 20191213

DOCKET: M50718 (C67233)

Pepall, Tulloch and Benotto JJ.A.

BETWEEN

Leeds Standard Condominium Corporation No. 41

Plaintiff (Appellant/Responding Party)

and

Simon
    Fuller
,
Tall Ships Landing
    Developments Inc.

and the Corporation of the City of Brockville

Defendants (Respondents/
Moving Parties
)

Nadia J. Authier
,
    for the moving parties

Antoni Casalinuovo
, for the responding party

Heard: November 12, 2019

On
    appeal from the order of Justice Sandra Nishikawa, of the Superior Court of
    Justice, dated June 24, 2019, with reasons reported at 2019 ONSC 3900.

REASONS FOR DECISION

[1]

This is a motion to quash an appeal. The appeal
    arises from a decision of the motion judge, staying the appellants action in favor
    of arbitration. We allowed the motion to quash with reasons to follow. These
    are those reasons.

[2]

The underlying dispute is an action by the
    appellant, Leeds Standard Condominium Corporation No. 41 (Leeds), claiming
    oppression and breach of contract against the respondents, Tall Ships Landing
    Developments Inc. (Tall Ships) and Simon Fuller. The parties entered into two
    agreements relating to a condominium development in Brockville: a Shared
    Amenities Agreement (SAA) and a Shared Facilities Agreement (SFA). Both
    agreements relate to the joint use and sharing of costs of certain facilities,
    improvements and amenities around the development, and contained identical
    arbitration clauses.

[3]

In June 2018, Leeds brought an action against
    Tall Ships and Simon Fuller, seeking a declaration that the defendants were or
    threatened to be oppressive, unfairly prejudicial and/or unfairly disregarded
    the interests of Leeds in carrying out the SAA and SFA. It sought damages for
    breach of contract and duty of care, disclosure of documents, and renegotiation
    of the SFA and SAA. The respondents brought a motion to stay the action in
    favour of arbitration under the arbitration clauses in both agreements.

[4]

Nishikawa J., the motion judge, allowed the
    respondents motion and stayed the action in favour of arbitration, under s.
    7(1) of the
Arbitration Act, 1991
, S.O. 1991,
    c. 17. She found that the dispute arguably fell within the scope of the
    arbitration clauses in the SFA and SAA, and therefore should be sent to
    arbitration. The arbitrator should determine its own jurisdiction, according to
    the competence-competence principle.

[5]

The appellant, Leeds, seeks to appeal this
    decision at this court, and the respondents, Tall Ships and Simon Fuller, move
    to quash the appeal on the basis that it is barred by s. 7(6) of the
Arbitration
    Act.

[6]

We agree that the appeal is barred by s. 7(6) of
    the
Arbitration Act
. That section provides
    that there is no appeal from a decision under s. 7(1) of the
Arbitration
    Act

to stay a proceeding in favour of arbitration. The
    motion judges decision was made under s. 7(1) to stay the proceeding below in
    favour of arbitration, and there is no appeal from it.

[7]

The appellant makes several arguments why s.
    7(6) of the
Arbitration Act

should not bar the
    appeal in this case. First, it submits that it was denied natural justice in
    the proceedings below because it was not given proper notice that the
    respondents would move to stay under the
Arbitration Act
. Because of this, the motion judge erred in relying on the
Arbitration
    Act
in her decision to stay. Second, it submits that the
    pith and substance of its claim is oppression under the
Condominium
    Act, 1998,
S.O. 1998, c. 19, and that the arbitration
    clauses cannot preclude its access to this statutory remedy.

No denial of natural justice

[8]

We do not agree that the appellant was denied
    natural justice at the proceeding below. Leeds relies on the fact that the
    respondents, in their notice of motion below, referred to r. 21.01 of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194,

but not to the
Arbitration
    Act
as grounds for the motion to stay. Leeds argues that
    because the notice of motion did not mention the
Arbitration Act
, it did not have sufficient notice of this argument and was unable
    to properly respond to it.

[9]

There was no denial of natural justice in this
    case.In their notice of motion, the respondents relied on Rule 21.01(3)(a).  That
    Rule provides that an action may be stayed for lack of jurisdiction.  Moreover,
    the notice of motion recited the arbitration provisions in the SFA and the SAA.
    It was also clear in the respondents factum that they were relying on the
Arbitration
    Act
, and Leeds was served with this factum 13 clear days
    before the motion below. Leeds had the chance to respond to this argument both
    in its own factum and in oral submissions on the motion below. Furthermore, at
    no point during the proceedings below did Leeds argue that it had been taken by
    surprise by this argument or seek an adjournment of the motion. Its surprise
    seems to have emerged retrospectively in response to this motion to quash.

Motion judge correctly applied the test to
    determine whether the disagreement fell within the scope of the arbitration
    clauses

[10]

We also do not agree that the motion judge erred
    in ordering a stay under s. 7(1) of the
Arbitration Act
. Leeds argues that the pith and substance of its claim is
    oppression under s. 135 of the
Condominium Act
,
    and this is a statutory remedy that cannot be precluded by the arbitration
    clauses in the SFA and SAA. However, the motion judge considered this argument
    and determined that Leeds claims were arguably within the scope of the
    arbitration clauses.

[11]

The motion judge correctly applied the test from
Haas v. Gunasekaram
, 2016 ONCA 744, 62 B.L.R.
    (5th) 1 in deciding whether to stay the proceeding in favour of arbitration.
    She considered Leeds argument that its claims were, in pith and substance,
    oppression, and notwithstanding, determined that the claim arguably fell within
    the scope of the arbitration clause. To the extent that the arbitrators
    jurisdiction was still arguable, it was up to the arbitrator to determine the
    scope of its own jurisdiction.

[12]

The motion judge cited the comments of Mew J.,
    who decided a related proceeding between the same parties, that courts should
    guard against allowing the mere invocation of an oppression remedy under s. 135
    to avoid the consequence of an arbitration clause. She also noted that, in a
    different proceeding covering similar issues between the same parties, Leeds
    itself had taken the position that similar issues were
not

oppression and were properly
    submitted to arbitration.

[13]

We see no reason to depart from the
    determination of the motion judge on how to characterize the appellants
    claims. Leeds has not established that the pith and substance of its claim is
    oppression and falls outside the scope of the arbitration clauses. As counsel
    for the respondents observed, Leeds still has the opportunity to raise the
    proper characterization of its claims in front of the arbitrator, and the
    arbitrator shall then determine its own jurisdiction.

[14]

In conclusion, the motion to quash is granted.
    There is no appeal from the motion judges decision to stay the proceeding
    below under s. 7(1) of the
Arbitration Act
,
    because it is barred by s. 7(6) of the
Act
.
    There was no denial of natural justice, and no error in the motion judges
    decision to stay the proceeding in favour of arbitration, that would render s.
    7(6) inapplicable.

Costs

[15]

We allow the motion to quash and award costs to
    the moving parties fixed in the amount of $15,000, inclusive of disbursements
    and applicable taxes.

S.E.
    Pepall J.A.

M.
    Tulloch J.A.

M.L.
    Benotto J.A.


