Ontario Civil


Arbitration

STAY OF PROCEEDINGS
Not appropriate to deny stay simply because of wrongful dismissal claim

Defendant retained plaintiff for sales and marketing services as independent contractor, but plaintiff eventually purchased shares and became employee. Plaintiff’s employment was terminated, and plaintiff alleged defendant misled him about nature of employment and value of shares. Plaintiff commenced action seeking to have purchase transactions and shareholders agreement set aside and declared void, and wrongful dismissal damages. Shareholders agreement contained clause stating any dispute about interpretation or implementation of provisions was to go to arbitration. Motion by defendant to stay all causes of action other than wrongful dismissal on basis they fell under agreement to arbitrate. Motion allowed. Dispute not clearly outside scope of arbitration agreement. Claims for declaration of value of shares, and order requiring defendants to purchase or redeem shares held by plaintiff would require interpretation of provisions of shareholders agreement, and plaintiff also sought to set agreement aside. Not appropriate to deny stay simply because of wrongful dismissal claim. While wrongful dismissal claim involved similar facts, it was different cause of action in context of distinct contractual agreement only between parties. Action, other than wrongful dismissal claim, stayed pending determination by arbitrator of whether matters were subject to arbitration.

Moffatt v. Maher (Oct. 21, 2013, Ont. S.C.J., Chiappetta J., File No. 13-CV-478808) 235 A.C.W.S. (3d) 19.

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