25/04/2019 – Jurisdiction Ontario
Part 66 published on 01/06/2019
Court process stayed in favour of mandatory ADR under Shared Facilities Agreement
This was a dispute in relation to rights and responsibilities of parties under a Shared Facilities Agreement, but also included other claims and other parties. The Shared Facilities Agreement included provision for Alternative Dispute Resolution (in relation to disputes under the agreement), and the question for the Court was whether or not the Court process should be stayed in favour of the ADR procedures under the Shared Facilities Agreement.
The Court held that the Court process should be stayed and that the dispute should proceed in accordance with the ADR provisions of the Shared Facilities Agreement. The Court said:
Where the essence of the dispute is the oppression remedy, which, under s. 135 of the Condominium Act, falls within the exclusive jurisdiction of this court, a stay in favour of arbitration proceedings would be inappropriate: TSCC No. 1628, at paras. 57 and 69.
On the other hand, courts should guard against allowing the mere invocation of an oppression remedy under s. 135 to avoid the consequence of an arbitration clause in an agreement: MTCC No. 965 v. MTCC No. 1031, 2014 ONSC 5362 (CanLII), at para. 18.
In pith and substance the application before me addresses issues of compliance or noncompliance with the SFA. While Mr. Fuller’s affidavits make all sorts of negative comments about the manner in which LSCC 41 and its representatives have conducted themselves, and relief is sought in the form of a compliance order under s. 134 of the Condominium Act (which is also the preserve of this court), Mr. Fuller himself puts it best in paragraph 135 of his 22 February 2019 affidavit in which he says that “[t]he present Application raises very discreet issues: who is to manage the Shared Facilities and whether LSCC 41 is bound by the management agreement”.
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Where it is doubtful whether claims against individuals who are not parties to an arbitration agreement would be sustainable once claims that are arbitrable have been resolved by arbitration, the arbitration should be allowed to proceed: Novatrax International Inc. v. Hägele Landtechnik GmbH, 2016 ONCA 771 (CanLII), 2016, 132 O.R. (3d) 481, 271, 410 D.L.R. (4th) 36, at para. 25.
Indeed even if, after resolution of the “discreet issues” between the applicant and LSCC 41, claims against EOPMG or Mr. Budde were to remain, I would venture to suggest that, as a practical matter, they might not be worth pursuing from a cost-benefit point of view.
Tall Ships Landing Developments v. Leeds Standard Condominium Corporation No. 41, 2019 ONSC 2600