The plaintiffs, purchasers of pre-construction homes, commenced an action against the defendant developers claiming rescission of their agreements of purchase and sale or damages, alleging undue influence and unconscionability.
The defendants brought a motion to stay the action pursuant to s. 7(1) of the Arbitration Act, 1991, relying on an arbitration clause in the agreements.
The plaintiffs argued the arbitration agreement itself was invalid as unconscionable and obtained by undue influence.
The court applied the four-part test for unconscionability and the test for undue influence, finding that the arbitration agreement was neither unconscionable nor obtained by undue influence.
The court granted the defendants' motion and stayed the action in favour of arbitration.