A class action was brought against a telecommunications provider on behalf of approximately two million Ontario residents who alleged they were overcharged through an undisclosed call-rounding practice.
The class consisted of both consumers (protected from arbitration by the Consumer Protection Act, 2002) and non-consumer business customers bound by a mandatory arbitration clause in standard form contracts.
The majority held that s. 7(5) of the Arbitration Act, 1991 does not grant the court discretion to refuse to stay claims that are dealt with in an arbitration agreement, and that the first precondition under s. 7(5)(a) was not met because the sole matter in dispute — alleged overbilling — was dealt with in the arbitration agreements.
The business customer claims were therefore stayed, as only the consumers benefited from the Consumer Protection Act's override of the arbitration clause.
Four judges dissented, holding that s. 7(5) confers a discretion to allow the entire proceeding including arbitrable claims to continue in court where it would be unreasonable to separate them.
