CITATION: Singh v. Maple Leaf, 2016 ONSC 1434
COURT FILE NO.: CV-15-4815-00; CV-15-5066-00; CV-15-3461-00
DATE: 2016 03 01
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Hardath Singh, Ramkali Mohan and 1415006 Ontario Ltd.
Applicants
v.
Maple Leaf Wheelchair Manufacturing Inc. and Ralph Mohan
Respondents
And Between
Ralph Mohan
Applicant
v.
Maple Leaf Wheelchair Manufacturing Inc., Hardath Singh and Ramkaly Mohan
Respondents
And Between
Maple Leaf Wheelchair Manufacturing Inc.
Plaintiff
v.
Gavin Mohan, Ralph Mohan, My Life Wheelchair Inc. and Ripe Entertainment aka Ripe Resolution
Defendants
BEFORE: Bloom, J.
COUNSEL: Jacob Wilson and Eric Brousseau for Ralph Mohan
John Russo for Ramkali Mohan, Hardath Singh, and 1415006 Ontario Ltd.
Jeff Cook for Maple Leaf Wheelchair Manufacturing Inc.
HEARD: February 24, 2016
E N D O R S E M E N T
I INTRODUCTION
[1] In substance the matter before me is the application by Hardath Singh, Ramkali Mohan, and 1415006 Ontario Ltd. supported by Maple Leaf for an order to stay the Notice of Arbitration dated January 27, 2016 and for an order that all matters in the Notice of Arbitration proceed by way of action in the Superior Court of Justice.
II FACTS
[2] Ramkali Mohan, Hardath Singh, and Ralph Mohan are shareholders of Maple Leaf. They and Maple Leaf are parties to a Shareholders Agreement providing in Article 15.1 that “All disputes or matters in difference in relation to this Agreement shall be referred to arbitration….”
[3] Maple Leaf Wheelchair commenced an action on July 27, 2015 against Ralph Mohan and other Defendants in proceeding CV-15-3461-00. Ralph Mohan has delivered a Notice of Arbitration, the latest amended form of which is an Amended Notice of Arbitration dated January 27, 2016; he seeks to arbitrate an oppression claim. In proceeding CV-15-5066-00 he seeks to have an arbitrator appointed pursuant to Article 15.1 of the Shareholders Agreement. The third proceeding, CV-15-4815-00, is the proceeding by which Hardath Singh, Ramkali Mohan, and 1415006 Ontario Ltd. supported by Maple Leaf seek to stay the Notice of Arbitration.
III APPLICABLE LEGAL PRINCIPLES
[4] I will now review the applicable legal principles. First, as noted in Geoff R. Hall, Canadian Contractual Interpretation, 2nd ed., LexisNexis: Markham, 2012, at p.225, “arbitration clauses are to be given a large and liberal interpretation.”
[5] Second, the competence-competence principle provides that arbitrators are allowed to first rule on the issue of their own jurisdiction, unless it is clear that the dispute is outside the terms of the arbitration agreement.
[6] Third, an arbitration agreement gives an arbitrator jurisdiction only over parties to the arbitration agreement. The arbitrator cannot give an arbitral award which disposes of the rights of non-parties to the agreement.
[7] Fourth, as Justice Glithero observed in Paul Wurth Inc. v. Anmar Mechanical and Electrical Contractors Ltd., 2016 ONSC 7166, where a dispute is subject to an arbitration clause and a court proceeding based on closely related facts is also ongoing and would not be subject to the clause, both matters should be ordered to proceed before the court. Where the matters are not based on closely related facts, the two matters would proceed on their separate tracks.
IV APPLICATION OF THE PRINCIPLES IN THE CASE AT BAR
[8] The parties seeking the stay of the Notice of Arbitration argue first that the arbitration clause does not cover the dispute sought to be arbitrated because the numbered company, 141, is not a party to the Shareholders Agreement and arbitration clause, yet relief is sought against it. Ralph Mohan undertook to abandon the relief in question save “ a declaration that Maple Leaf is the beneficial owner of 51% of 141” to be sought by derivative claim on behalf of Maple Leaf.
[9] Since that remaining claim would not involve 141 as a party to the arbitration, I see no merit in the argument that the arbitration clause cannot apply to 141 as a non-party. If the claim for derivative relief were successful, shares in 141 would be awarded to Maple Leaf; it, not 141, would be a necessary party to the arbitration, and it is subject to the arbitration clause as a party to the Shareholders Agreement. I recognize that the competence-competence principle would still permit an arbitrator to make a ruling on his or her jurisdiction; at this point I simply rule that the fact that 141 is not a party to the arbitration clause is no roadblock to the arbitration.
[10] The other argument by those seeking the stay is that the oppression claim sought to be arbitrated and the ongoing action have such a high degree of common factual underpinnings that the stay ought to be granted, and the oppression claim litigated in court along with the ongoing action. Indeed, in recognition that this outcome was possible, a counterclaim replicating the oppression claim has already been delivered; that fact is agreed by the parties to be simply a contingent measure not to affect the outcome of the issues before me.
[11] The policy behind the legal principle sought be invoked is the prevention of a multiplicity of proceedings and inconsistent findings of fact. I am satisfied that there is a real danger that there will be overlapping evidence and inconsistent findings of fact. The ongoing action, moreover, is not merely a stratagem to circumvent the arbitration clause by invoking this principle against separating closely related matters.
[12] For those reasons, I find that the policy favouring the enforcement of arbitration agreements is outweighed in the circumstances; and I grant an order to stay the Notice of Arbitration and a further order that the matters in the Notice of Arbitration proceed in the Superior Court of Justice, no doubt employing the counterclaim to which reference has already been made.
V. COSTS
[13] I will receive written submissions as to costs of no longer than 3 pages, excluding a bill of costs. Hardath Singh, Ramkali Mohan, 1415006 Ontario Ltd., and Maple Leaf Wheelchair Manufacturing Inc. will serve and file their submissions within 2 weeks of release of these reasons. Ralph Mohan will serve and file his submissions within 2 weeks of service of the last of those submissions.
Bloom, J.
DATE: March 1, 2016
CITATION: Singh v. Maple Leaf, 2016 ONSC 1434
COURT FILE NO.: CV-15-4815-00; CV-15-5066-00; CV-15-3461-00
DATE: 2016 03 01
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: RE: Hardath Singh, Ramkali Mohan and 1415006 Ontario Ltd.
Applicants
v.
Maple Leaf Wheelchair Manufacturing Inc. and Ralph Mohan
Respondents
And Between
Ralph Mohan
Applicant
v.
Maple Leaf Wheelchair Manufacturing Inc., Hardath Singh and Ramkaly Mohan
Respondents
And Between
Maple Leaf Wheelchair Manufacturing Inc.
Plaintiff
v.
Gavin Mohan, Ralph Mohan, My Life Wheelchair Inc. and Ripe Entertainment aka Ripe Resolution
Defendants
BEFORE: Bloom, J.
COUNSEL: Jacob Wilson and Eric Brousseau for Ralph Mohan
John Russo for Ramkali Mohan, Hardath Singh, and 1415006 Ontario Ltd.
Jeff Cook for Maple Leaf Wheelchair Manufacturing Inc.
ENDORSEMENT
Bloom, J.
DATE: March 1, 2016