COURT FILE NO.: 155/05

DATE: 20060214

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

O’DRISCOLL, MCCARTNEY AND SWINTON JJ.

B E T W E E N:

FRESHWAY SPECIALTY FOODS INC.

Applicant

• and -

FRUIT AND VEGETABLE DISPUTE RESOLUTION CORPORATION

Respondent

Vivian Chiang, for the Applicant

Sophie Vlahakis, for the Respondent

HEARD at Toronto: February 14, 2006

O’DRISCOLL J.: (Orally)

1The applicant, Freshway, located in Richmond, British Columbia, voluntarily joined the Fruit and Vegetable Dispute Resolution Corporation, (hereafter DRC), which has offices located in Ottawa, Ontario and agreed to abide by the arbitration rules of DRC. DRC, the materials shows, has some 1,300 members.

2DRC is not a statutory body and does not arbitrate disputes. It administers an arbitration process that members such as Freshway agree to submit to.

3The International Commercial Arbitration Act, R.S.O. 1990, c.I.9 (hereafter ICAA) applies to arbitration administered by DRC. Freshway was a party to a DRC supervised ICAA arbitration. The other party was MAP, located in Arizona, U.S.A.

4The arbitration award, dated January 26, 2005, ordered Freshway to pay U.S. $12,414.00 to MAP within thirty (30) days. Article 29 of the DRC rules provides that: (subject to Article 34 of the ICAA), the arbitration award is final. Freshway did not pay. By letter dated February 28, 2005, the DRC advised Freshway that failure to pay the award if the default continued would result in a suspension of Freshway’s membership in the DRC. Payment was not made and DRC suspended Freshway on March 2, 2005.

5Freshway commenced litigation in the Supreme Court of British Columbia on February 21, 2005. The particulars of which are set out in the material but need not be recounted here except to say that none of the outstanding cost orders in B.C. against Freshway have been paid.

6On April 21, 2005, Freshway commenced an application for judicial review in the Divisional Court in Ontario. The application states as follows:

“The applicant makes an application for:

(1) an Order setting aside the arbitral award made on January 26, 2005, by the Respondent concerning a matter between the Applicant and MAP Produce LLC (“MAP”), pursuant to Section 34 of the International Commercial Arbitration Act, R.S.O. 1990, C.I.9 (the “ICAA”);

(2) a Declaration that the Respondent acted unfairly, and contrary to natural justice, in that the applicant was not given an opportunity to seek judicial review or be heard before the Respondent suspended the Applicant.

7DRC brought a motion to quash the judicial review and this motion was returnable on May 9, 2005. The motion was heard by Mr. Justice Carnwath and after hearing submissions, there was a brief recess and he returned and gave his reasons which appear in the Motion Record at page 12. He said as follows:

“I find I have no jurisdiction to hear this matter for the following reasons:

(a) The Judicial Review Procedure Act has no application to this matter. The Fruit and Vegetable DRC is an association of voluntary members who choose to join in an arbitral scheme. The DRC does not preside over arbitrations.

(b) The Applicant agreed that any dispute between members would be resolved by arbitration, and that no one could resign while an arbitration award remained unsettled.

(c) Had I taken jurisdiction, I would have found no urgency requiring the matter to be disposed of by a single judge of the Divisional Court.

(d) The Applicant voluntarily bound itself to a procedure whereby any attempt to set aside an arbitration award has to be brought in the Ontario Superior Court of Justice.

Applicant denied, costs to the Respondent fixed on a partial indemnity basis at:

Fees: $9,000.00 + GST

Disbursements: $1,000.00 + GST

Payable 30 days. Order no costs to MAP. Signed by Mr. Justice Carnwath.”

8Indeed, Freshway did commence an application in the Superior Court of Justice against DRC, returnable on August 22, 2005. However, the application was never served and was abandoned by Freshway on June 13, 2005.

9After the appearance before Carnwath J., Freshway then purported to appeal to the Court of Appeal for Ontario from Carnwath J.’s order. After three unsuccessful appearances before the Court of Appeal, Freshway has returned to the Divisional Court under s.21(5) of the Courts of Justice Act, R.S.O. 1990, c.43 to “set aside or vary” the May 9, 2005, order of Carnwath J., who held that because of ICAA, Freshway was in the wrong Court and should be in the Superior Court of Justice for Ontario.

10We agree with the reasons given and the order made by Carnwath J. on May 9, 2005. Only the Superior Court of Justice of Ontario has jurisdiction under s.6 and s.34 of the ICAA to set aside the arbitration award.

11Moreover, judicial review does not apply to DRC as it is a voluntary organization, not exercising any function set out in the Judicial Review Procedure Act.

12Moreover, Rule 61.16(6) requires that a motion such as this motion is to be served “within four days after the order is made”. Here, the Notice of Motion was served on DRC on November 2, 2005. It was not until a “Commended Notice of Motion” appeared on November 12, 2005 that we find in paragraph [7] a request asking for “an extension of time to file and serve the motion”. There have been no grounds put forward that would justify such an extension. The motion should be dismissed also for failure to comply with Rule 61.16(6).

13With the concurrence of my colleagues, I have endorsed the back of the Motion Record of the Applicant as follows: “This application is dismissed for the oral/recorded reasons of even date. We have heard submissions as to costs. Counsel for DRC has submitted a draft bill for the total of $4,320.00 plus $304.40 (GST), for preparation, $1,000, counsel fee at $511.46, disbursements, for a total of $6,135.86. We would fix costs at $5,000, all in, for this application to set aside or vary the order of Carnwath J. This sum is payable within 30 days of this date, February 14, 2006.”

O’DRISCOLL J.

MCCARTNEY J.

SWINTON J.

Date of Reasons for Judgment: February 14, 2006

Date of Release: March 21, 2006

COURT FILE NO.: 155/05

DATE: 20060214

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT