COURT OF APPEAL FOR ONTARIO

DATE: 2001530

DOCKET: C34390

RE: EVERPLAY INSTALLATION INC., ROLF HUBER, MAX HUBER (Applicants/Appellants) v. ROGER GUINDON (Respondent)

BEFORE: OSBORNE A.C.J.O., DOHERTY and MACPHERSON JJ.A.

COUNSEL:

Robert K. Stephenson

for the appellants

Sheldon C. Vanek

for the respondent

HEARD: May 17, 2001

On appeal from the order of Justice Patricia H. Wallace dated May 26, 2000.

E N D O R S E M E N T

[1] The parties were in business together. Like many business people, they agreed that any disputes between them would be settled by binding arbitration, no doubt, in anticipation that this forum would provide a quick, relatively inexpensive method of resolving any disagreements. Disputes did arise and the appellants tried to convene an arbitration board pursuant to the terms of the agreement to resolve these disputes. After some delay, an arbitration board was convened in the summer of 1998. The disputes between the parties, however, remain unresolved some three years later.

[2] It is unnecessary to recite the lengthy history of this matter. A few dates are, however, important:

• September 1, 1998: The arbitration board made an interim order enjoining the respondent from competing against them pending resolution of the arbitration. The order provided that either party could move to vary the order. No challenge was made to this order within the time allotted under the Arbitration Act.

• April 1, 1999: Crane J., on application made by the appellants, ordered that the interim order of the arbitration board may be enforced as an order of the court. Crane J. also directed that the parties could go back to the arbitration board to vary his order. No appeal was taken from this order.

• June 1999: Counsel for the respondent wrote to the arbitration board seeking dates to bring a motion to vary the board’s order of September 1998. He suggested dates in August and September.

• June 1999: The appellants commenced contempt proceedings claiming that the respondent has not complied with the order of Crane J. and continued to compete with the appellants.

• December 1999: The respondent brought this motion seeking an order declaring the order of the arbitration board void and an order setting aside the order of Crane J.

[3] Wallace J. set aside the order of Crane J., declared that the arbitration was terminated, but left the interim order made on September 1, 1998 in place. She further held that the interim order could be varied by way of application to the Superior Court.

[4] Wallace J. had to first satisfy herself that she could set aside the order of Crane J. She could do so only in very limited circumstances. In concluding that his order should be set aside, she observed that the order was not meant to be a final order but was meant to be subject to variation by the arbitration board. Wallace J. reasoned that as the respondent had no funds and was an undischarged bankrupt, he could not gain access to the arbitration board because it would not reconvene unless the respondent paid what he owed for services already rendered by the board. She held that he could not do so because he was an undischarged bankrupt. She concluded that the arbitration board’s refusal to grant the respondent an audience was a new material fact arising after the judgment of Crane J. which justified setting aside his order.

[5] Assuming without deciding that Wallace J. was correct in holding that a refusal by the arbitration board to hear a variation application would justify setting aside the order of Crane J., there is no evidence in this record that the arbitration board refused to hear an application for a variation.

[6] The respondent did nothing to seek a variation of the September 1998 order until June 1999. In June, counsel for the respondent wrote to the arbitration board indicating that he wanted to bring an application to rescind or vary the interim order. Counsel suggested hearing dates in August and September. He said nothing about the length of the proposed hearing, nothing about any proposed payment of any outstanding account, and nothing about the respondent’s financial situation. It is fair to assume that if the respondent was serious about obtaining dates to vary the interim order, he had some means to pay the costs associated with obtaining that order.

[7] Although the respondent had made a voluntary assignment into bankruptcy some time before June 1999, he obviously had access to sufficient resources to permit him to retain counsel who was prepared to conduct a hearing before the arbitration board in the late summer of 1999. The respondent was also represented by counsel in the proceedings before Wallace J. and in this court. Without some explanation, it cannot simply be assumed that he did not have the means to pay the costs associated with an application to vary the order of the arbitration board. If a party was truly intent upon putting this matter back before the arbitration board in June 1999, he or she would have at least addressed the question of any outstanding accounts and his or her financial situation at the time the application to vary was brought. The respondent chose to do neither.

[8] The respondent took no further steps to bring his application to vary on before September 2, 1999. By this time, counsel for the appellants had written to the board asking that the board schedule a hearing on the outstanding costs matter. In September, counsel for the respondent advised the board that his application to vary and the costs hearing would take some five days. He said nothing about any outstanding accounts or the respondent’s financial circumstances.

[9] Mr. Reid, the chairman of the arbitration board, wrote to counsel for both parties on September 7, 1999. He advised that while he had certain dates open on his schedule, he had not yet agreed to make himself available to the parties. Obviously, Mr. Reid wanted some indication of how and when the board might be paid for its work before he would commit any more time to the arbitration.

[10] The respondent did not answer this letter. Nothing was done to bring the matter back before the arbitration board prior to December 1999. In December 1999, counsel brought this motion forward apparently having decided to abandon any attempt to appear before the arbitration board.

[11] Based on this record, it is speculation to conclude that the respondent could not have brought an application to vary before the arbitration board. The respondent had to do much more than send two letters to the arbitration board requesting dates, neither of which addressed the question of outstanding accounts or his financial means, before he could take the position in the Superior Court that the arbitration board had closed its doors to him.

[12] As there was no evidence that the arbitration board had refused to hear an application to vary or that the respondent could not bring an application to vary, there was no basis upon which to set aside the order of Crane J. Wallace J. should not have set aside that order.

[13] The appeal is allowed, the order of Wallace J. is set aside and the order of Crane J. is restored. The appellants are entitled to their costs here and before Wallace J.