Court of Appeal for Ontario

Date: 2019-12-12 Docket: C66745

Judges: Simmons, Pardu and Nordheimer JJ.A.

Between

Christina Eggiman and Christina T.H. Corp. Plaintiffs (Respondents)

and

Shawn Daniel Martin, Trisha Dollie Martin, TS Martin Inc., and the TDL Group Corp./Groupe TDL Corporation Defendants (Appellants)

Counsel

Andy Seretis, for the appellants

Todd D. Storms and Zach Flemming-Giannotti, for the respondents

Heard: November 8, 2019

On Appeal

On appeal from the order of Justice Wolfram Tausendfreund of the Superior Court of Justice, dated February 27, 2019, with reasons reported at 2019 ONSC 1388.

Reasons for Decision

A. OVERVIEW

[1] The motion judge dismissed the appellants' motion seeking a stay of the underlying action. The appellants sought the stay pursuant to an arbitration agreement they had entered into with the respondents. For the following reasons, we conclude that the appeal from the motion judge's decision is barred by statute. The appeal is therefore dismissed.

B. BACKGROUND

[2] The appellants and respondents are parties to an arbitration provision that is part of the contractual arrangements by which the appellants operate two "Tim Hortons" franchises on behalf of the respondents. The Operating Agreements each contain broadly-worded arbitration provisions in the following terms:

All matters in difference between the parties in relation to this Agreement shall be referred to the arbitration of a single arbitrator appointed by TDL, which shall either be an employee of TDL or a third party arbitrator, at TDL's discretion. The award and determination of the arbitrator shall be binding upon the parties and their respective heirs, executors, administrators and assigns.

[3] The respondents purported to terminate the Operating Agreements after becoming aware of certain conduct of the appellant, Shawn Martin. The respondents then commenced the within action against the appellants and the other defendant in which they seek damages for breach of contract, intentional interference with economic relations, and conversion.

[4] In response, the appellants brought their motion to stay the action in favour of the arbitration process. The motion judge dismissed their motion. In doing so, the motion judge recognized that the action could only be stayed against the appellants and not the other defendant, who was not subject to the arbitration clause. The motion judge held that a partial stay was not a reasonable result since it would lead to a multiplicity of proceedings. The motion judge also noted that the other defendant, TDL, actually had the authority, under the arbitration clause, to appoint the arbitrator. The motion judge held that this unique aspect of the case also led to the potential for unfairness in the arbitration process.

[5] The appellants appeal from the motion judge's decision. They contend that s. 7(1) of the Arbitration Act, 1991, S.O. 1991, c. 17, requires that the action be stayed and that none of the exceptions to that mandatory stay, set out in s. 7(2), apply in this case. The appellants also say that the motion judge erred in finding that s. 7(5) of the Arbitration Act, 1991, permitted him to refuse to grant a stay on the grounds that it would lead to a multiplicity of proceedings.

C. ANALYSIS

[6] At the conclusion of the hearing, the court directed the parties to file written submissions on whether this court had jurisdiction to hear an appeal from the motion judge's order in light of s. 7(6) of the Arbitration Act, 1991. This issue was raised by the respondents, for the first time, at the hearing. Section 7(6) reads simply: "There is no appeal from the court's decision."

[7] We have now received and reviewed the parties' submissions on this point.

[8] There is no appeal to this court from the order of the motion judge. Section 7(6) is very clear on this point. If it is determined that the arbitration provision applies to the issue that is raised in the proceeding, and thus s. 7 is invoked, then s. 7(6) precludes any appeal from the decision rendered respecting the motion to stay, whether that order grants or refuses the stay: Brown v. Murphy (2002), 59 O.R. (3d) 404 (C.A.), at para. 8.

[9] This same point is made in Radewych v. Brookfield Homes (Ontario) Ltd., 2007 ONCA 721, where the court said, at para. 4: "[The motion judge's] decision … falls squarely within s. 7(5) of the Arbitration Act and as such, s. 7(6) of that Act applies and renders his decision unappealable."

[10] As a consequence, this appeal must be dismissed. In reaching that conclusion, we are not to be seen as agreeing with the analysis engaged in by the motion judge. Rather, we simply do not reach his analysis as any review of it is precluded by s. 7(6).

[11] The respondents are entitled to their costs of the appeal fixed in the agreed amount of $6,500 inclusive of disbursements and HST.

"Janet Simmons J.A." "G. Pardu J.A." "I.V.B. Nordheimer J.A."