Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, 2008 ONCA 768

CITATION: Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, 2008 ONCA 768

DATE: 20081114

DOCKET: C48409

COURT OF APPEAL FOR ONTARIO

Rosenberg, Sharpe and Blair JJ.A.

BETWEEN:

Penn-Co Construction Canada (2003) Ltd.

Plaintiff (Appellant)

and

Constance Lake First Nation, Constance Lake Education Authority, Donald Courtnage, Paul Allan Seguin c.o.b. as Anokii & Associates, Anokii & Associates, Eric Leat and The Attorney General of Canada representing The Minister of Indian Affairs and Northern Development

Defendant (Respondents)

Counsel:

Colin MacArthur, Q.C. and James Mercury for the appellant

Francis Thatcher and Stephen Tatrallyay for the respondent Constance Lake First Nation, Constance Lake Education Authority

Heard and released orally: November 12, 2008

On appeal from the order of Justice Pierce of the Superior Court of Justice dated September 20, 2007.

By the Court:

[1] The appellant and the respondents are parties to a standard form Canadian Construction Documents Committee Stipulated Price Contract for the construction of a school. A dispute arose concerning delay in completion of the contract and the respondents issued a notice of default and terminated the contract. The appellant attempted to invoke the dispute resolution provisions of the contract providing for mediation and arbitration. The parties initially agreed on a modified form of arbitration, namely a “peer review” process. However, that agreement was never carried into effect, it would appear, because of inaction on the part of the respondents.

[2] The appellant thereupon commenced the current action naming not only the respondents but several other parties and claiming in addition to damages under the agreement against the respondents, other damages and relief against the respondents not arising under the agreement, general damages against the other parties, and aggravated punitive and exemplary damages against all named defendants. The appellant also claimed an interlocutory mandatory order or specific performance requiring the respondents to proceed to mediation and the modified form of arbitration previously agreed to and an interlocutory injunction restraining the respondents from engaging a third party to complete the construction.

[3] The proceeding giving rise to this appeal is the appellant’s motion for a mandatory order requiring the respondents to proceed with the contractual dispute resolution process and an interlocutory injunction restraining them from engaging a third-party to complete the construction. The motions court judge denied both remedies. The appellant appeals to this court only from the denial of a mandatory order requiring the respondents to proceed to arbitration.

[4] We see no error on the part of the motions judge that would entitle this court to intervene. The appellant concedes that there is no authority in the Arbitration Act, S. O. 1991 for the relief it seeks. The appellant invokes the Courts of Justice Act, ss. 101 and 106. Those sections confer a broad discretion upon the motions judge to grant a mandatory order “where it appears to a judge of the court to be just or convenient to do so” (s. 101) and to stay a proceedings, “on such terms as are considered just” (s. 106). It is well-established that the risk of multiplicity of proceedings, the avoidance of cost and inconvenience and the risk of inconsistent results are factors to be taken into account in the exercise of the discretion conferred by these sections.

[5] The motions judge assessed the claim being advanced by the appellant in the action. She found that the appellant had claimed relief against the respondents beyond the scope of what was identified in the agreement as being arbitrable and that involved several other parties who are not contractually bound by the arbitration clause. The motions judge concluded that when the appellant’s claim as a whole was considered, to permit arbitration of some claims against the respondents and stay the other claims would involve duplication of effort, cost and inconvenience, and give rise to the risk inconsistent results. She exercised her discretion and declined to order the respondents to proceed to arbitration.

[6] The appellant could have simply sought to invoke and enforce the arbitration provisions of the agreement. However, by bringing this action, the appellant defined the parameters of its dispute with the respondents more broadly that it could have under arbitration. The appellant has cast a broad net by commencing the action and, in our view, cannot escape the consequences. Any right the appellant may have to arbitrate certain aspects of its dispute with the respondent must now be considered in the light of the claim it has advanced in the action.

[7] The dispute as defined by the appellant’s statement of claim involved not only claims that might have been arbitrated under the agreement but also other claims and other parties that plainly could not be arbitrated. In these circumstances, it was open to the motions judge to conclude that the desirability of having all aspects of the appellant’s dispute with the respondents and other parties resolved under the umbrella of a single proceeding prevailed over the appellant’s claim to have one part of the dispute arbitrated. We see no error of principle that would entitle us to interfere with her assessment that hiving off one portion of the dispute for arbitration would not be in the interests of justice.

[8] Accordingly the appeal is dismissed. Costs to the respondents fixed at $10,000 inclusive of disbursements and G.S.T.

“M. Rosenberg J.A.”

“Robert J. Sharpe J.A.”

“R.A. Blair J.A.”

RELEASED: November 14, 2008