Federal Appeal


No basis to conclude that claims could not be determined by arbitration

Appellant appealed Federal Court Judge’s decision staying action. Appellant was a small business owner registered as independent business owner under umbrella of respondent. Appellant signed registration agreement that included arbitration agreement where parties agreed to submit any possible claims to arbitration. Appellant commenced proceedings in Federal Court of Canada pursuant to s. 36 of Competition Act (Can.) (“CA”). Appellant began proposed class action against respondent claiming that business practices were in violation of ss. 52, 55 and 55.1 of CA. Respondent filed motion to dismiss or stay action and to compel arbitration. Judge first determined that substantive issue raised by motion had to be determined by Federal Court and not by arbitrator. Federal Court Judge concluded that arbitration agreement was applicable, enforceable and served to bar initiation of class proceeding for any amount exceeding $1,000. Appellants class proceeding was stayed. Appeal dismissed. Appeal from judge’s decision lay to Federal Court of Appeal. By incorporating the Arbitration Act, 1991 (Ont.), into their bargain parties could not oust Federal Court of Appeal’s jurisdiction found in s. 27(2) of Federal Courts Act (Can.). Private claim for damages brought under s. 36 of CA was arbitrable. Supreme Court of Canada made it clear that express legislative language was required before courts would refuse to give effect to terms of arbitration agreement. CA did not contain language that would indicate that Parliament intended that arbitration clauses were to be restricted or prohibited. There was no basis to conclude that claims brought under s. 36 of CA could not be determined by arbitration. Appellant’s claim under s. 36 of CA must be sent to arbitration as parties intended when they entered into arbitration agreement.

Rhodes v. Cie Amway Corp. (Feb. 14, 2013, F.C.A., Nadon, Gauthier and Trudel JJ.A., File No. A-487-11) 223 A.C.W.S. (3d) 770.

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