SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

CV-13-10373-00CL

RE: Blind Spot Holdings Ltd. (formerly J & M Munro Investments Ltd.), John Munro, Sheri Munro and The Munro Group, Applicants

AND:

Decast Holdings Inc., Silvio DeGasperis, Carlo DeGasperis, Michael DeGasperis, The TACC Group and Carlo Vitali, Respondents

CV-13-10359-00CL

RE: Munro Ltd. and Decast Holdings Inc., Applicants

AND:

Blind Spot Holdings Ltd. and John Munro, Respondents

BEFORE: D. M. Brown J.

COUNSEL: P. Healey and V. Simkic, for Blind Spot Holdings Ltd. (formerly J & M Munro Investments Ltd.), John Munro, Sheri Munro and The Munro Group

C. Stevenson and D. McConville, for the Decast Holdings Inc., Munro Ltd., Silvio DeGasperis, Carlo DeGasperis, Michael DeGasperis, The TACC Group and Carlo Vitali

HEARD: February 25, 2014

REASONS FOR DECISION

I. Motion and application under the Arbitration Act, 1991 to stay a proceeding

[1] Utopia, Ontario is the home of Munro Ltd. (the “Company”). A dispute has arisen amongst the shareholders of the Company and others. Decast Holdings Inc. is the registered holder of 74.5% of the shares of the Company. Blind Spot Holdings Ltd. - previously known as J & M Munro Investments Ltd. - a company controlled by John Munro, is the registered holder of 25.5% of the shares of the Company. Decast, Blind Spot, the Company and John Munro are parties to a June 9, 2006 shareholders’ agreement.

[2] On December 9, 2013, the Company and Decast Holdings Inc. (the “Decast Applicants”) commenced an application (CV-13-10359-00CL, the “Decast Application”) seeking (i) certain injunctions “until arbitration” and (ii) an order appointing a retired judge of this Court as arbitrator of any and all issues in dispute between the parties.

[3] Four days later, on December 13, 2013, Blind Spot Holdings Ltd., John Munro, Sheri Munro and The Munro Group (the “Munro Applicants”) commenced an application (CV-13-10373-00CL, the “Blind Spot Application”) seeking various orders under section 248 of the Ontario Business Corporations Act and other relief.

[4] On December 23, 2013, the Decast Applicants initiated a motion to stay the Blind Spot Application under section 7 of the Arbitration Act, 1991 and section 106 of the Courts of Justice Act.

[5] By order made January 31, 2014, McEwen J. directed that the following issues were to be dealt with at the February 25, 2014 hearing, “subject to judge’s direction”: (i) arbitration clause; (ii) whether John Munro could attend board meetings; (iii) interim compensation for John Munro; and, (iv) documentary production.

[6] For the reasons set out below, I grant the motion to stay the Blind Spot Application, save that I permit Sheri Munro to deliver a Statement of Claim in respect of her wrongful dismissal claim.

II. Background facts

A. The Company and the Shareholders’ Agreement

[7] The Company manufactures and sells concrete underground products for construction projects. Founded by John Munro’s family, in 1994 Decast purchased an interest in the Company. Carlo, Michael and Silvio DeGasperis are the principals of Decast which owns 74.5% of the Company’s shares, with John Munro’s company, Blind Spot Holdings Ltd., owing the rest. In 2010 or 2011 the Company hired John Munro’s wife, Sheri Munro, as its in-house counsel.

[8] In 2006 the shareholders entered into the Shareholders’ Agreement. John was appointed President and entitled to receive an annual salary of $600,000 “for as long as any member of the Munro Group is a Shareholder”; Blind Spot qualifies as a “member of the Munro Group”. Of the four Board directors, Decast was entitled to appoint three, and Blind Spot one. The Shareholders’ Agreement identified certain decisions which would require unanimous approval, including contracts between the Company and persons related to a shareholder and increases in salaries to shareholders or related persons.

[9] As is the case with many shareholders’ agreements, the one in the present case included restrictions on the transfer of shares (Art. 8), rights of first refusal in the event of a third party offer to acquire shares (Art. 9), a buy/sell mechanism (Art. 10), and an “exit strategy” (Art. 11) which involved a shareholder soliciting an offer from an arm’s length third party to buy all shares of the Company.

[10] The Shareholders’ Agreement contained an “entire agreement” clause (13.04), and section 13.13 set out the agreed-upon arbitration clause:

If any dispute shall occur between the parties hereto relating to the interpretation or implementation of any of the provisions of this Agreement, such dispute shall be resolved by arbitration. Such arbitration shall be conducted by a single arbitrator if the parties can agree upon one, failing which such arbitrator shall be appointed by a Judge of the Superior Court of Justice, on application by any of the said parties and the said Judge shall be entitled to act as such arbitrator, if he so desires. The arbitration shall proceed in accordance with the provisions of the Arbitrations Act, 1991 (Ontario). The decision arrived at by the board of arbitration, howsoever constituted, shall be final and binding and no appeal shall lie therefrom.

As can be seen, the language of the arbitration clause is very broad.

B. The emergence of the dispute

[11] The materials filed by the parties recounted, in conflicting ways, the history since 2010 of certain loans made by the Company to John Munro, as well as loans made to him by Silcorp Holdings Inc., a company controlled by Silvio DeGasperis, and by Decast. They also recounted discussions amongst the shareholders since 2012 concerning the desire of John to sell part of his shareholdings in the Company.

[12] The present dispute was precipitated by events in early December, 2013. Silvio deposed that he learned of loans made to John by the Company about which he and other Board members had not been aware. John deposed that the other Board members had known of and consented to the loans. On December 4, 2013, the majority of the directors directed the Company not to make any further payments to John or Sheri, or John’s ex-wife, Cathy. That prompted John to call Silvio from Europe on December 6; the discussion was not a constructive one.

[13] By letters dated December 7, 2013, the Company terminated the employment of John and Sheri for cause, ultimately alleging the misappropriation of Company funds. Those letters were sent by email to John on December 9. That same day the Company and Decast commenced the application seeking the appointment of an arbitrator.

[14] The Munro Applicants commenced the Blind Spot Application on December 16, 2013.

[15] The Company and Decast prepared and served a Submission to Arbitration dated January 10, 2014 in which they seek certain relief against John and Blind Spot.

[16] Following the initial 9:30 attendance on December 16, 2013, the parties re-attended at several more 9:30 appointments at which issues were raised about the adequacy of documentary production and the propriety of certain passages in an affidavit sworn by John. The parties could not agree on whether all personal belongings of John and Sheri had been returned to them or whether adequate documentary production had been made.

[17] John filed extensive responding affidavits in which he vigorously denied the allegations of financial misappropriation levelled against him by Decast, and he gave his version of the events surrounding efforts to buy-out part of his shareholdings in the Company, including his position that monies he had taken from the Company were in partial satisfaction of the purchase price Decast had agreed to pay for some of his shares. Sheri did not file an affidavit.

III. Governing legal principles

[18] Section 7 of the Arbitration Act, 1991 provides, in part, as follows:

7. (1) If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding.

(2) However, the court may refuse to stay the proceeding in any of the following cases:

1. A party entered into the arbitration agreement while under a legal incapacity.

2. The arbitration agreement is invalid.

3. The subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law.

4. The motion was brought with undue delay.

5. The matter is a proper one for default or summary judgment.

(5) The court may stay the proceeding with respect to the matters dealt with in the arbitration agreement and allow it to continue with respect to other matters if it finds that,

(a) the agreement deals with only some of the matters in respect of which the proceeding was commenced; and

(b) it is reasonable to separate the matters dealt with in the agreement from the other matters.

(6) There is no appeal from the court’s decision.

[19] Section 17(1) of the Arbitration Act, 1991 states:

17. (1) An arbitral tribunal may rule on its own jurisdiction to conduct the arbitration and may in that connection rule on objections with respect to the existence or validity of the arbitration agreement.

[20] Although courts possess the jurisdiction to determine whether a dispute is subject to arbitration, Ontario courts apply an approach based on the competence-competence principle, which was described by the Court of Appeal in Ontario Medical Association v. Willis Canada Inc. as follows:

That principle gives precedence to the arbitration process and holds that “arbitrators should be allowed to exercise their power to rule first on their own jurisdiction”: Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801, at para. 70.[1]

[21] How to apply the competence-competence principle to a particular case was described by the Court of Appeal in Dalimpex Ltd. v. Janicki, a case dealing with the International Commercial Arbitration Act:

It is my view that the proper approach to be taken by the court on a motion pursuant to article 8 is that set out by Hinkson J.A. of the British Columbia Court of Appeal in Gulf Canada Resources v. Arochem International (1992), 1992 4033 (BC CA), 43 C.P.R. (3d) 390. That case was decided under the British Columbia International Commercial Arbitration Act, S.B.C. 1986, c. 14 of which ss. 8 and 16 are substantially identical to articles 8 and 16 of the Schedule to the Ontario statute. Hinkson J.A. wrote at p. 397:

Considering s. 8(1) in relation to the provisions of s. 16 and the jurisdiction conferred on the arbitral tribunal, in my opinion, it is not for the court on an application for a stay of proceedings to reach any final determination as to the scope of the arbitration agreement or whether a particular party to the legal proceedings is a party to the arbitration agreement, because those are matters within the jurisdiction of the arbitral tribunal. Only where it is clear that the dispute is outside the terms of the arbitration agreement, or that a party is not a party to the arbitration agreement, or that the application is out of time should the court reach any final determination in respect of such matters on an application for a stay of proceedings.

Where it is arguable that the dispute falls within the terms of the arbitration agreement or where it is arguable that a party to the legal proceedings is a party to the arbitration agreement then, in my view, the stay should be granted and those matters left to be determined by the arbitral tribunal.[2]

The Court of Appeal recently re-confirmed that such an approach applied to the issue of jurisdiction under the Arbitration Act, 1991.[3]

[22] The approach based on the competence-competence principle received strong endorsement by the Supreme Court of Canada in Dell Computer Corp. v. Union des consommateurs[4] and more recently in Seidel v. TELUS Communications Inc., so that absent legislated exception, any challenge to an arbitrator’s jurisdiction over a dispute should first be determined by the arbitrator, unless the challenge involves a pure question of law or one of mixed fact and law that requires for its disposition only superficial consideration of the documentary evidence in the record.[5]

IV. Analysis

[23] Applying the competence-competence principle to the present case, the question then becomes: Is it arguable that the disputes asserted by the Munro Applicants in the Blind Spot Application fall within the terms of the arbitration clause in section 13.13 of the Shareholders’ Agreement?

A. The main claims

[24] From a review of the Notice of Application and supporting affidavits in the Blind Spot Application, it is clearly arguable that the overwhelmingly majority of the issues put in dispute by the Notice of Application fall within the terms of the arbitration clause. In his December 12, 2013 affidavit John described the key disputes – i.e. (i) whether he had concluded an agreement with Silvio under which Decast would buy 50% of his shareholdings and (ii) the lawfulness of the termination of his presidency and management of the Company – as ones engaging sections 7.07, 7.08 and 11 of the Shareholders’ Agreement. The link between many of the various heads of relief set out in paragraph 1 of the Notice of Application and the Shareholders’ Agreement was apparent on the face of the notice and can be illustrated by the following table:

Notice of Application

Issue/Relief sought

Provision of Shareholders’ Agreement engaged

1(a)(ii)

Declaration of the shareholdings of John/Blind Spot

s. 2.01; Schedule A

1(a)(iii)

Declaration of John’s entitlement to continue to receive his $750,000 annual salary

ss. 7.04 and 7.08

1(a)(iv); 1(b)(iii); 1(c)

Declaration of the continuation of John’s employment and his re-instatement, or damages for wrongful termination[6]

ss. 7.04 and 7.08

1(a)(v)(vi); 1(b)(iii)(iv)

Whether John is entitled to de facto control of management of the Company, was improperly excluded from management and should be reinstated

ss. 7.04 and 7.08

1(a)(vii); 1(b)(iii); 1(i)

Declaration of the existence of a binding agreement to purchase 50% of John’s shareholding in the Company and a requirement to complete the purchase or, alternatively, the purchase of all of John’s shareholdings in the Company

s. 11

[25] The Munro Applicants advanced various allegations that the respondents had wrongfully taken Company property to which the applicants were entitled and had failed to return personal property: Notice of Application, paras. 1(a)(ix); 1(b)(viii). To the extent those allegations concern John’s personal property, they rest on the factual matrix surrounding his termination and therefore arguably are linked to his claim for wrongful termination in breach of the Shareholders’ Agreement.

[26] The Munro Applicants seek a variety of relief relating to the operations of the Company, including access to the Company’s books and records, an investigation into its affairs, limits on the respondents’ ability to enter into certain transactions, an accounting of profits, and the removal of the remaining directors: Notice of Application, paras. 1(b)(i), (v), (vi), (ix), (x). The books and records specified by John in paragraph 72 of his Supplementary Affidavit deal with past efforts to sell Company shares, valuation scenarios and financial projections, all of which arguably relate to the issue of an alleged share purchase agreement and the valuation of the shares of the Company. All those allegations rest on John’s assertions that Decast had agreed to buy some of his shares and that he was wrongfully removed from the presidency and day-to-day management of the Company in violation of the Shareholders’ Agreement and therefore arguably are linked to the claims he is asserting in that respect. John also asserted a need for the production of extensive historical information about the Company’s performance, the relevance of which was not apparent, at least at first instance.

[27] All of the claims or dispute in the Blind Spot Application identified in paragraphs 24 through to 26 above arguably fall within the scope of the broad arbitration language contained in section 13.13 of the Shareholders’ Agreement and therefore would engage the requirement to stay contained in section 7(1) of the Arbitration Act, 1991.

[28] I give no effect to John’s argument that since most of the allegedly oppressive conduct about which he complains concerned the conduct of the individual respondents in their capacities as officers and directors of the Company against himself as an officer and director, and not as shareholders, the arbitration clause clearly did not apply. On the contrary, the Shareholders’ Agreement dealt extensively with the powers of the signatory shareholders and their principals as officers and directors of the Company, so complaints about the exercise of those powers, including ones couched in the language of the oppression remedy under OBCA s. 248, arguably constitute “dispute[s]…relating to the…implementation of any of the provisions of” the Shareholders’ Agreement.[7]

[29] Nor do the facts of this case resemble those in Deluce Holdings Inc. v. Air Canada.[8] There the court found that Air Canada’s efforts to create a situation which would trigger a limited arbitration clause were oppressive, especially given that “the real subject matter of the dispute, in the circumstances, is not a matter which the parties have agreed to submit to arbitration…”[9] The present case involves a very broad arbitration clause, and it is certainly most arguable that the “real subject matter of the dispute” falls within the language of that clause.

B. Arguments dealing with additional claims

[30] The Munro Applicants advanced several other arguments about why a stay of the Blind Spot Application should not issue.

B.1 Attornment

[31] First, the Munro Applicants argued that by including a request for interim injunctive relief in the Decast Application, the Decast Applicants had attorned to the jurisdiction of this Court and therefore were precluded from seeking to send the disputes to arbitration. There is no merit to that submission. Paragraph 1(a) of the Notice of Application in the Decast Application clearly specified that the interim relief sought was “until arbitration”; the Decast Applicants obviously included that request for relief pending the Court’s determination of the main relief they sought – the appointment of an arbitrator. In the result, the Decast Applicants did not pursue that claim for interim relief.

[32] Nor do I give effect to the argument of the Munro Applicants that attornment resulted from the participation of the Decast Applicants in cross-examinations. My scheduling order of December 16, 2013, in effect, put in place a parallel track process for the stay motion and the Blind Spot Application; the Decast Applicants simply followed the directions of this Court. Nor do I recall counsel for the Munro Applicants stating at the December 16 attendance that such an order would result in the Decast Applicants forgoing the right to the very relief which they sought to schedule.[10]

B.2 Claim against Vitali

[33] Second, John contended that a stay was not appropriate because he was seeking relief against Carlo Vitali, a financial advisor to the DeGasperis family, for breach of fiduciary duty. Based upon my review of the “Grounds” portion of the Munro Applicants’ Notice of Application, their allegations against Vitali appeared to be two-fold: (i) he knew of the arrangement alleged by John under which he was entitled to withdraw Company funds in satisfaction of the price Decast had agreed to pay for some of his shares; and (ii) Vitali participated in a “campaign of harassment” against him with the other respondents which led to John’s termination in December, 2013. Those allegations would make Vitali a potential witness with relevant evidence. The Notice of Application offered no explanation, legal or factual, as to how a fiduciary relationship existed between Vitali and John. Put another way, the Notice of Application was silent on material facts necessary to establish any legal claim against Vitali, so it is difficult to see from a reading of the Munro Applicants’ pleading the nature of their legal claim against Vitali. Lumping Vitali into a group of respondents against whom an oppression claim was advanced did not help, since the Munro Applicants did not plead that Vitali held any position at the Company.

[34] In any event, whatever legal claim the Munro Applicants ultimately may be able to fashion against Vitali, I adopt and apply the reasoning of the Court of Appeal in Dalimpex on this issue:

On this point, the Divisional Court simply concluded as follows at para. 33:

Since the main protagonists in this dispute are Dalimpex and Agros, the claims against other parties in this action should also be stayed pending the determination of the Court of Arbitration: Boart Sweden AB v. NYA Stromnes AB (1988), 41 B.L.R. 295 at 304 (Ont. H.C.).

Dalimpex did not advance any credible argument to dispute the correctness of this conclusion. In my view, it is obvious from the pleadings that its action against the other two respondents will stand or fall on the merits of the action against Agros. I see no basis to interfere with the order of the Divisional Court extending the stay of the action to Janicki and Agropol.[11]

[35] Accordingly, I stay the Blind Spot Application against Vitali pursuant to section 106 of the Courts of Justice Act.

B.3 John’s defamation claim

[36] In paragraph 1(c) of the Notice of Application in the Blind Spot Application John claimed damages for libel and slander. Against whom John was asserting that claim for damages was not stated precisely in the Notice of Application. In the “Grounds” section (para. (aa)(iv)) and in his December 12, 2013 affidavit (para. 31), John complained about statements made by Silvio and Vitali. Is John’s claim for defamation damages against only those two individuals? or against them and Decast? One cannot tell; the pleading is sloppy.

[37] Nor did the Notice of Application plead with precision the statements alleged to have been defamatory. Proceeding on the basis that the offending statement was that John “had taken significant company money without authorization”, the truth or falsity of that statement is tied inextricably to one of the key issues arguably subject to the arbitration clause. Again, I adopt and apply the reasoning of the Court of Appeal in Dalimpex and stay that claim pursuant to section 106 of the Courts of Justice Act, without prejudice to John advancing that claim in the arbitration if his claim for damages actually targets one of the parties to the Shareholders’ Agreement, which I cannot ascertain because of the imprecision of his pleading.

B.4 Claims in respect of Utopia Land Holdings Inc. and damages for a potential tax liability

[38] In their February 18, 2014 Application Record the Munro Applicants included draft Amended Notices of Application. They had not secured leave to amend, and the respondents were not consenting to the amendments.

[39] Some of the proposed amendments simply tweaked previous claims of those applicants. The Munro Applicants proposed to add two new claims: (i) a claim requiring Decast to pay Blind Spot a fair value for its shareholdings in Utopia Land Holdings Inc. and Utopia Land Holdings II Inc.; and (ii) a claim by John for damages for an amount equal to the tax liability that Blind Spot would have suffered had shareholder advances to it not been retired in 2012. In a sense these prayers for relief were “claims hanging in the air” because the “Grounds” section of the proposed Amended Notice of Application made no mention of them.

[40] Although John made brief mention of Utopia Land Holdings Inc. in paragraph 48 of his Supplementary Affidavit, he gave no evidence-in-chief about what legal dispute existed in respect of that corporation, either in that affidavit or in the one he swore on February 6, 2014. The most I could find in the record on this topic was the argument contained in the February 18, 2014 factum of the Munro Applicants at paragraphs 31 to 33 which alluded to an alleged breach of fiduciary duty.

[41] John filed no evidence-in-chief to explain his claim for damages in respect of a tax liability.

[42] As to both proposed additional claims, I am not prepared to grant leave to amend given the baldness of the pleading and the lack of material facts to enable an understanding of the nature of the legal claim. The tax liability claim relates to John/Blind Spots status as a shareholder of the Company and any dispute in respect of that tax liability arguably falls within the scope of the arbitration clause and should be considered by the arbitrator. Since the Munro Applicants did not plead material facts in support of their “hanging in the air” claim regarding the Utopia Land Holdings companies, yet pointed to such potential claims as a reason to resist going to arbitration, I can only conclude that the last minute addition of that claim was tactical in nature and designed to furnish an additional argument to resist going to arbitration. That is not a proper use of the pleadings amendment process.

B.5 Claims by Sheri

[43] The Munro Applicants also contended that no stay should issue against the Blind Spot Application because one of the applicants, Sheri Munro, who was not a party to the Shareholders’ Agreement, had asserted claims for wrongful dismissal and defamation.

[44] In paragraph 1(e) of the Blind Spot Application Notice of Application Sheri claimed damages for $1.5 million for libel and slander. The “Grounds” portion of the Notice of Application did not refer to this claim and did not plead the material facts necessary to found a cause of action in defamation. Sheri did not file an affidavit. Notwithstanding the claim in paragraph 1(e) of the prayer for relief, Sheri has not placed a reasonable cause of action before this Court. I therefore give no effect to the Munro Applicants’ argument on this point.

[45] In paragraph 1(f) of the Blind Spot Notice of Application Sheri claimed damages for wrongful termination. I do not regard the existence of that claim as a basis for denying a stay. First, I query whether a wrongful dismissal claim by an employee who was not a shareholder, director or officer of the Company could be brought by way of notice of application under OBCA s. 248.[12] Second, it is patently obvious that there are material facts in dispute in respect of the claim; an application was not the proper form of originating process for Sheri’s claim. Third, the “rightness” or “wrongness” of Sheri’s termination is inextricably linked with the issues surrounding the dispute over John’s termination. Fourth, by coupling her personal employment claim with the claims of her husband and his holding company, Blind Spot, which most arguably fall within the scope of the arbitration clause, Sheri risked attracting a motion to stay her claim. That was her tactical litigation choice. But a claim such as hers cannot operate to bar a stay against claims which most arguably fall within the consensual arbitration clause. To allow such litigation tactics to trump the dispute resolution agreement consented to by the main protagonists would improperly undermine the workings of arbitration clauses.

[46] I would have been prepared on this issue to again adopt and apply the reasoning of the Court of Appeal in Dalimplex set out in paragraph 34 above, but the Decast Applicants stated that they were prepared to have Sheri’s claim proceed in court. Accordingly, I will not stay her wrongful dismissal claim but, pursuant to section 7(5) of the Arbitration Act, 1991, I direct that her claim proceed by way of action and that she deliver a Statement of Claim for her wrongful dismissal claim by April 30, 2014; any Statement of Defence shall be delivered 30 days thereafter; any Reply shall be delivered 20 days thereafter. I will case manage that proceeding on the Commercial List.

B.6 House construction claims by John and Sheri

[47] In paragraph 1(g) of the Blind Spot Notice of Application John and Sheri claimed damages for the delay and added construction costs for the construction and renovation of their house. No details or evidence were adduced in support of this claim. In any event, it relates directly to John’s claim that the Company wrongfully terminated his compensation and that Decast wrongfully failed to buy-out some of his shares and therefore arguably, in respect to his claim, falls within the scope of the arbitration clause. As to Sheri’s component of this claim for damages, I adopt and apply the reasoning of the Court of Appeal in Dalimplex set out in paragraph 34 above and I stay Sheri’s personal claim in this regard pursuant to section 106 of the Courts of Justice Act.

C. Summary

[48] By way of summary, I stay the Blind Spot Application pursuant to section 7(1) of the Arbitration Act, 1991, save that I permit Sheri to deliver a Statement of Claim in respect of her wrongful dismissal claim in accordance with the directions given in paragraph 46 above.

[49] The parties agreed that should a stay issue, then the Court should appoint The Honourable Colin Campbell as arbitrator pursuant to section 13.13 of the Shareholders’ Agreement. I so order. It follows from this order that:

(i) I need not deal with the other three issues identified by McEwen J.: (i) the production of documents relevant to the dispute between the parties; (ii) the ability of John to attend the Company’s monthly Board meetings and weekly operational meetings; and (iii) the reinstatement of John’s salary;

(ii) Nor do I need to deal with the further request of the Munro Applicants to conduct additional examinations of Silvio and Vitali or their request to strike certain paragraphs from Silvio’s affidavit;

(iii) Nor do I need to address the issue of whether certain emails attached to Silvio’s affidavit (which I did not read) contained privileged communications.

Those issues and the contested evidence were not relevant to the question of whether a stay of the Blind Spot Application should be granted by reason of the arbitration clause contained in section 13.13 of the Shareholders’ Agreement. The arbitrator can deal with those issues relating, as they do, to interim relief tied to the disputes under the Shareholders’ Agreement and procedural matters concerning those disputes. Although the parties agreed that John could attend Board meetings, they could not agree on whether John could bring counsel with him. Given the lack of overall agreement on the issue, I make no formal order and leave that matter to the arbitrator.

[50] The Decast Applicants sought an order striking out portions of John’s Supplementary Affidavit as scandalous. In light of the stay which I have granted, I need not rule on that point; further argument can be made before the arbitrator if John wishes to rely on that evidence at the arbitration. In their factum the Munro Applicants submitted that two sets of rules should not apply to the parties, and they complained about allegedly scandalous assertions contained in the affidavits filed by Silvio. Given the sensitive personal information contained in the impugned paragraphs and their lack of relevance to these court proceedings given the stay order, I will order all materials filed in the Decast Application and Blind Spot Application sealed until further order of the Court.[13] That will protect the privacy interests of both sets of parties while they arbitrate their disputes.

V. Costs

[51] I would encourage the parties to try to settle the costs of this motion to stay. If they cannot, the Decast Applicants may serve and file with my office written cost submissions, together with a Bill of Costs, by April 4, 2014. The Munro Applicants may serve and file with my office responding written cost submissions by April 22, 2014. The costs submissions shall not exceed three pages in length, excluding the Bills of Costs.

D. M. Brown J.

Date: March 20, 2014