Court File and Parties

Court File No.: CV-19-00633143-0000 CV-20-00638195-0000 Date: 20210224 Superior Court of Justice - Ontario

Re: ZENITH ALUMINUM SYSTEMS LTD., Applicant And: 2335945 ONTARIO INC. cob as MOMENTUM DEVELOPMENTS, Respondent

And Re: 2335945 ONTARIO INC. cob as MOMENTUM DEVELOPMENTS, Applicant And: ZENITH ALUMINUM SYSTEMS LTD., Respondent

Before: Justice Glustein

Counsel: Adam Wainstock, for Zenith Aluminum Systems Ltd. Sandra Johnston, for 2335945 Ontario Inc. cob as Momentum Developments

Heard: February 9, 2021

Reasons for Decision

Nature of Hearing and Overview

[1] In Court File No. CV-19-00633143-0000 (the Zenith Application), Zenith Aluminum Systems Ltd. (Zenith) brings an application under s. 50 of the Arbitration Act, 1991, S.O. 1991, c. 17, to enforce:

(i) the arbitral award of Glenn Ackerley (the Arbitrator) dated August 31, 2019 (the Arbitral Award), in which the Arbitrator ordered 2335945 Ontario Inc. cob as Momentum Developments (Momentum) to pay $339,000 ($300,000 plus HST) to Zenith, and

(ii) the arbitral award of the Arbitrator dated November 26, 2019 (the Arbitral Interest and Costs Award), in which the Arbitrator ordered Momentum to pay $24,969.91 in pre-judgment interest and $51,774.71 in costs to Zenith.

[2] I refer to the Arbitral Award and the Arbitral Interest and Costs Award collectively as the Arbitral Awards.

[3] Zenith brought the arbitration claim for a determination as to the scope of its contract with Momentum to provide window-wall systems to be used in the construction of a condominium known as One Victoria, located at 445 King Street West in Kitchener, Ontario (the “Project”).

[4] The Arbitrator held that (i) the contract did not include a requirement that Zenith provide guardrails or privacy screens, and (ii) as such, Momentum was required to pay the $300,000 plus HST it wrongfully withheld from Zenith.

[5] Momentum acknowledges that the Arbitral Awards are final and that the court should issue judgment on both awards. Momentum states in its factum that it “consents to enforcement” of the Arbitral Awards.

[6] However, Momentum brings its own application in Court File No. CV-20-00638195-0000 (the Momentum Application), under s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C. 43, and under Rule 20.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for an order staying the execution of the Arbitral Awards pending disposition of a breach of trust action brought by Zenith against Momentum and its directors in Court File No. CV-17-00575407 (the Breach of Trust Action).

[7] In the Breach of Trust Action (i) Zenith claims damages against Momentum and its directors (primarily for the holdback amount), and (ii) Momentum brings a counterclaim for damages for costs of delay and deficiencies allegedly arising from Zenith’s work on the Project.

[8] I heard both applications together. For the reasons that follow, I do not stay execution of the Arbitral Awards pending disposition of the Breach of Trust Action.

Facts

The Parties

[9] Zenith provides services including aluminum window-wall systems for construction projects in southern Ontario.

[10] Momentum was the developer and registered owner of the Project.

The Final Budget Quotation

[11] In late 2013, Zenith entered into negotiations with Momentum and its construction manager, Melloul-Blamey Construction Inc. (Melloul), to determine the requirements for the window-wall systems to be used in the construction of the Project.

[12] Zenith’s final budget quotation No. 2403-B to Momentum was dated June 9, 2014 for a price of $2,997,500 plus HST to supply and install the window-wall system for the Project (the FBQ), in accordance with the requirements as detailed by Momentum and Melloul.

[13] Momentum accepted the FBQ by email from Melloul.

Background Leading to the Arbitration

[14] A dispute arose as to Zenith’s scope of work on the Project. Zenith took the position that (i) the FBQ did not require Zenith to supply or install guardrails or privacy screens, and (ii) as such, Zenith never priced that work into the FBQ. Momentum took the position that the guardrail and privacy screen work was included in the FBQ.

[15] The parties met to discuss this issue on May 11, 2015, at which time Momentum advised that it wanted to arbitrate the issue of whether the guardrails and privacy screens were included in the FBQ (the Railing Dispute). Momentum held back $300,000 plus HST, the approximate value of the railing contract, from Zenith’s draws on the Project pending resolution of the Railing Dispute.

[16] The parties were unable to resolve the Railing Dispute. On May 9, 2016, Zenith served Momentum with a notice of arbitration for the Railing Dispute.

[17] The parties agreed upon Glenn Ackerley as the arbitrator for the Railing Dispute. An arbitration date was scheduled for November 2016, but then subsequently rescheduled for April 2017. Prior to this rescheduled date, a dispute arose between the parties regarding the pre-arbitration steps to be taken and, as a result, no arbitration agreement was signed at that time.

[18] In the interim, Zenith expressed concerns that the limitations period would expire in relation to the Railing Dispute. Consequently, Zenith advised that if the parties did not enter into a tolling agreement, Zenith would commence an action in the Ontario Superior Court of Justice.

[19] Momentum agreed to the tolling agreement, which it signed and provided to counsel for Zenith by email on May 15, 2017. The agreement was inadvertently diverted to a “junk” email folder, which resulted in Zenith issuing the Breach of Trust Action against Momentum and its directors for the amounts owed under the Railing Dispute and other amounts allegedly owed by Momentum to Zenith.

[20] On June 29, 2017, Momentum served Zenith with its statement of defence and counterclaim in the Breach of Trust Action. Momentum claims damages of $2,116,520.40 for an alleged delay “of at least six months”, as well as a claim for alleged deficient work which required repair and replacement, including $27,212.35 to repair the glazing.

[21] On May 22, 2018, Zenith brought an application for a direction to compel Momentum to submit to arbitration of the Railing Dispute. By decision dated July 7, 2018, C. Brown J. held that the parties had agreed to arbitrate the Railing Dispute and ordered the parties to proceed to arbitration before Glenn Ackerley in accordance with that agreement.

[22] C. Brown J. did not order a stay of the Breach of Trust Action. She held that “the statement of claim clearly deals with the same subject matter as the contemplated arbitration, adding Momentum’s directors, given that it is a breach of trust action arising from construction”: Zenith Aluminum Systems Limited v. 2335945 Ontario Inc., 2018 ONSC 4199, at para. 14. To avoid the risk of “unnecessary duplication of resources”, C. Brown J. held that “the parties are not precluded from attending before me as regards a stay of the litigation pending the arbitration hearing”: at para. 15.

The Arbitration

[23] After the decision of C. Brown J., the parties proceeded with the arbitration, pursuant to an arbitration agreement dated February 19, 2019. The parties preserved their rights to seek or oppose a stay of enforcement of the Arbitrator’s award. The agreement provides, in part:

The parties agree that the Award of the Arbitrator shall be final, binding and not subject to appeal. The parties agree that the final and binding nature of the Award does not preclude either party from raising any issues in Superior Court Action CV-17-588632 [1] regarding the enforcement of the Award of the Arbitrator.

[24] The arbitration of the Railing Dispute proceeded before the Arbitrator on February 20 and 22, 2019.

[25] The Arbitrator released the Arbitral Award on September 3, 2019 and released the Arbitral Interest and Costs Award on November 26, 2019.

[26] Momentum has not satisfied the Arbitral Awards. Momentum agrees that the Arbitral Awards are final.

Analysis

[27] There are three issues before the court on these applications:

(i) Does s. 50 of the Arbitration Act preclude the court from staying a final arbitral award?

(ii) If the court is not precluded under s. 50 of the Arbitration Act from staying a final arbitral award, should the court stay the Arbitral Awards under s. 106 of the CJA?

(iii) If a stay is not available under s. 106 of the CJA, is a stay otherwise available under Rule 20.08 of the Rules of Civil Procedure?

[28] I address each of these issues below.

Issue 1: Does s. 50 of the Arbitration Act preclude the court from staying a final arbitral award?

[29] Zenith submits that s. 50 of the Arbitration Act precludes the court from staying a final arbitral award.

[30] Zenith relies on the following provisions of the Arbitration Act:

(i) Section 50(5), which provides that the court may stay the enforcement of an award “[i]f the period for commencing an appeal, application to set the award aside or application for a declaration of invalidity has not yet elapsed, or if such a proceeding is pending…”; and

(ii) Section 50(3), which requires the court to enforce an arbitral award unless (a) the “thirty-day period for commencing an appeal or an application to set the award aside has not yet elapsed; (b) there is a pending appeal, application to set the award aside or application for a declaration of invalidity; (c) the award has been set aside or the arbitration is the subject of a declaration of invalidity; or (d) the award is a family arbitration award.”

[31] Zenith submits that a reading of the above provisions leads to the conclusion that the court cannot grant a stay of a final arbitral award unless the limited conditions of s. 50(5) are met, since the court is required to enforce an arbitral award under s. 50(3) unless those same conditions for a stay under s. 50(5) exist.

[32] I do not agree.

[33] Sections 50(3) and 50(5) must be read together with s. 50(8), which provides the court with “the same powers with respect to the enforcement of awards as with respect to the enforcement of its own judgments”. It is s. 50(8) which treats final arbitral awards in the same manner as final judgments.

[34] The court’s powers with respect to the enforcement of final judgments include the power to stay a final judgment under s. 106 of the CJA. That provision permits the court to stay “any proceeding in the court on such terms as are considered just”.

[35] Zenith’s interpretation of s. 50 is inconsistent with the principal decision upon which Zenith relies to oppose a stay: i.e. 1247902 Ontario Inc. v. Carlisle Power Systems Ltd., [2003] O.J. No. 6300 (Div. Ct.) [Carlisle Div. Ct.]; aff’d 1247902 Ontario Inc. v. Carlisle Power Systems Ltd., [2005] O.J. No. 118 (C.A.) [Carlisle CA].

[36] In Carlisle Div. Ct., the appellant submitted that “s. 106 CJA does not confer on the court jurisdiction to stay enforcement of a final judgment absent an appeal or a counterclaim” and that “a court must be expressly given jurisdiction to prevent or limit a judgment creditor’s right to enforce”: at para. 3.

[37] The Divisional Court rejected the appellant’s argument and held that “in very rare circumstances there is discretion under s. 106 of the CJA to stay the enforcement of a final judgment”: at para. 10.

[38] Similarly, the Court of Appeal in Carlisle CA did not decline jurisdiction over a stay of a final judgment, although it made no finding as to whether the Divisional Court test or the three-part test for a stay in RJR—MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, should be applied to a final judgment, given the court’s finding that the evidence failed to satisfy either test for a stay: at para. 4.

[39] Consequently, I do not accept Zenith’s submission that the only circumstances in which an arbitral award can be stayed are those set out in s. 50(5). The requirement under s. 50(5) that the court enforce an arbitral award does not preclude a stay of execution under s. 106 of the CJA. Section 50(8) renders a final arbitral award the same as a final judgment, permitting a stay under the analysis in Carlisle.

Issue 2: If the court is not precluded under s. 50 of the Arbitration Act from staying an arbitral award, should the court stay the Arbitral Awards under s. 106 of the CJA?

[40] I rely on the decisions in Carlisle and do not stay the Arbitral Awards under s. 106 of the CJA.

[41] I review both of the Carlisle decisions in detail below and then apply the principles from each to the present case.

1. Carlisle Div. Ct.

[42] In Carlisle, the Divisional Court heard an appeal from the decision of the motions judge who had stayed the enforcement of a final judgment against the respondent in the amount of $54,748.83.

[43] The final judgment had been assigned to the appellant, such that the appellant became the judgment creditor. There was pending litigation between the appellant and the respondent which related to “a dispute between the parties over entitlement to certain lands”. The motions judge held that “a stay was required to preserve the equities in the ongoing matters”: at para. 1.

[44] In the pending litigation, Marshall J. had ordered a trial of the issue of the dispute over the lands, concluding that there “was an issue to be tried regarding entitlement to the land in question”: at para. 11.

[45] The Divisional Court reversed the decision of the motions judge and held that the final judgment should not be stayed pending the ongoing litigation.

[46] Cunningham A.C.J. affirmed the importance of the finality of judgments, holding that that a judgment creditor’s right to enforce a final judgment should not be stayed in the absence of evidence that the judgment creditor acted in an oppressive manner, at para. 7:

It has always been fundamental that a judgment is final and that there is no jurisdiction in the court to prevent or limit the exercise of a judgment creditor’s right to enforce, in the absence of such power being expressly conferred. However, since the enactment of s. 106 CJA, in one case, Zanetti Estate v. Roltford Developments Ltd., [1990] O.J. No. 2584 (Ont. S.C.); (appeal dismissed Zanetti Estate v. Roltford Developments Ltd., [1992] O.J. No. 1430 (Ont. C.A.)) a stay was granted to prevent execution of a final judgment. In that case, the motions judge granted the stay because he determined the actions of the execution creditor to be oppressive. That differs from the present case where no such finding was made by the motions judge. Moreover, in Zanetti (supra) the motions judge did not base his decision on an examination of the equities, as appears to have been the case here. [Emphasis added.]

[47] A.C.J. Cunningham adopted the following test from Epstein J. (as she then was) in Gruner v. McCormack (2000), [2000] O.T.C. 143, 45 C.P.C. (4th) 273, at para. 30 (S.C.), cited at para. 8 of Carlisle Div. Ct.:

To justify a stay, the defendant must satisfy the Court that a continuance of the action would work an injustice because it would be oppressive or vexatious or an abuse of the process of the Court and that the stay would not cause an injustice to the plaintiff.

[48] Consequently, the Divisional Court limited stays of final judgments to “very rare circumstances”, “to be used very sparingly and only in circumstances where it could be found that not only would it be oppressive or vexatious or an abuse of process of the court, but also in circumstances where it would not cause an injustice to the plaintiff”: at para. 10. Cunningham A.C.J. held, at paras. 9-10:

There is good reason for the bar to have been set so high. As the earlier authorities have so often stated, judgments ought to be considered final and creditors should have unencumbered rights of enforcement. For a defendant to be able to raise equitable grounds at that stage would derogate from the notion of finality. It would frustrate commercial enterprise and needless to say would encourage a whole new area of litigation. Moreover, a stay could result in real unfairness to a particular creditor as it would not prevent the emergence of other legitimate creditors who are not stayed. Furthermore, there would always be the potential that under a stay the value of an asset might be affected and indeed diminished by way of mortgaging or tax arrears.

Accordingly, we have concluded that in very rare circumstances there is discretion under s. 106 of the CJA to stay the enforcement of a final judgment. This discretion ought to be used very sparingly and only in circumstances where it could be found that not only would it be oppressive or vexatious or an abuse of process of the court, but also in circumstances where it would not cause an injustice to the plaintiff. [Emphasis added.]

[49] The court held that the motions judge erred by considering the equities in the context of the final judgment. Cunningham A.C.J. stated, at para. 11:

In the present case, the decision of Marshall J. would not be frustrated if execution were permitted. Marshall J. simply concluded there was an issue to be tried regarding entitlement to the land in question. He did not say that the respondent herein was entitled to keep the land. Indeed, all a stay would accomplish in the present case would be to delay the Inevitable [sic]. Having found the actions of the judgment creditor not to have been oppressive, the learned motions judge erred in considering the equities. Accordingly, the appeal is allowed, and the decision of Morissette J. is set aside. [Emphasis added.]

[50] Finally, the court rejected the respondent’s argument that the three-part test in RJR—MacDonald should apply to a stay of a final judgment. The court held that the RJR—MacDonald test applied to interlocutory stays of pending matters, and that “we do not agree that RJR-MacDonald (supra) stands as authority for the application of the three-part test to stays of final judgments”: at paras. 12-13.

2. Carlisle CA

[51] The Court of Appeal upheld the decision of the Divisional Court. The court did not opine on whether the three-part RJR—MacDonald test or the stricter Divisional Court test should apply because it held that even on the less restrictive three-part test, a stay of the final judgment should not be granted. The court’s brief oral endorsement is set out in its entirety below:

Assuming, without deciding, that RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 applies, on the first branch of that test, there is no serious issue to be tried with respect to the proceeding, which is execution on the default judgment. The default judgment, which was for about $57,000, stands unchallenged. In more than twelve years, Mr. Kuiper has brought no motion to set it aside. It must be assumed that even Mr. Kuiper accepts the facts underlying that judgment.

On the second branch of the RJR-MacDonald test, irreparable harm will not result if a stay is refused. Mr. Kuiper can simply pay the outstanding unchallenged judgment and thereby maintain the property. Counsel acknowledges that there is no evidence of any particular vulnerability on Mr. Kuiper's part that suggests any inability to otherwise satisfy the default judgment. Moreover, as found by the motion judge, a finding upheld by the Divisional Court, the execution creditor has not engaged in oppressive conduct. Satisfaction of the default judgment would not render the issues in other outstanding litigation moot.

Finally, the balance of convenience favours a refusal of the stay. The importance of the court's process, being final and enforceable, supports such a refusal.

Accordingly, whatever the appropriate test may be determined to be in other cases, in this case, on any test, the appellant is not entitled to a stay. We see no error in the result reached by the Divisional Court, and agree with that court, that the motion judge failed to give adequate weight to the appropriate factors.

The appeal is dismissed with costs to the respondent fixed in the amount of $7,500, plus disbursements and G.S.T. [Emphasis added.]

3. Application of Carlisle to the Present Case

[52] Regardless of whether the “oppressive, vexatious, or abuse of process” test in Carlisle Div. Ct. or the three-part RJR—MacDonald test is applied, a stay of the Arbitral Awards should not be ordered.

[53] I now apply both tests to the facts of the present case.

(i) The Test Applied by the Divisional Court

[54] There is no evidence that enforcing the Arbitral Awards would be oppressive, vexatious or an abuse of process.

[55] The issue before the Arbitrator was only whether the FBQ included the guardrails and privacy screens. If so, Momentum properly held back the $300,000. If not, Momentum improperly held back the $300,000. The Railing Dispute was not related to delay or deficiency. It is not oppressive, vexatious, or an abuse of process for Zenith to enforce the Arbitral Awards.

[56] The claim before the Arbitrator was not a claim for payment for work done on the contract, which could have been defended by a deficiency or delay claim related to the work. It was an independent claim limited only to the interpretation of the FBQ.

[57] Momentum submits that Carlisle can be distinguished because Zenith has brought the Breach of Trust Action. Momentum submits that it would be oppressive to order execution of the Arbitral Awards while (i) Zenith seeks judgment in the Breach of Trust Action against Momentum and its directors and (ii) Momentum has brought its counterclaim for delay and deficiencies. I do not agree.

[58] The Breach of Trust Action does not render the enforcement of the Arbitral Awards oppressive, vexatious, or an abuse of process. The trust claim is a separate cause of action from the contract claim. It is not necessary for Zenith to establish a breach of trust as a prerequisite to being entitled to execution on and satisfaction of its contract claim in the Breach of Trust Action, of which the Arbitral Awards constitute the most significant part of the damages claimed.

[59] The contractual issue before the Arbitrator was straightforward and unrelated to any issue of delay or deficiencies. The Arbitrator was required to determine whether the guardrails and privacy screens were included in the FBQ.

[60] The Breach of Trust Action was brought to protect against the expiry of a limitation period in circumstances where Zenith mistakenly believed there was no signed tolling agreement. The claim is insurance to hold the principals accountable for the construction proceeds received or else there would be no repercussions for a corporate defendant who absconds with construction proceeds to the detriment of those entities it retained.

[61] Consequently, while a judgment against Momentum under the contract is a required element for the breach of trust claim, which has now been obtained through the Arbitral Awards, that judgment does not establish personal liability of the directors until a breach of trust is established.

[62] There is no evidence that Momentum would be prejudiced by being required to satisfy a judgment in contract already made against it. Payment by Momentum would cause the vast majority of the trust claim to fall away, leaving only a small balance that would remain claimed in contract and breach of trust that was not part of the Arbitral Awards.

[63] Momentum remains able to pursue its counterclaim for damages and seek execution if successful. There is no evidence of Zenith being unable to pay any such judgment.

[64] Staying the Arbitral Awards would “frustrate commercial enterprise and…would encourage a whole new area of litigation”: Carlisle Div. Ct., at para. 9. Rather than paying amounts owed under the terms of a contract, a party could improperly withhold funds, bring an arbitration, wait for the result, and then decide to litigate delays and deficiencies from the project in order to delay execution if the party is dissatisfied with the result of the arbitration. Such an approach is contrary to the reasons of the Divisional Court in Carlisle, since “a stay could result in real unfairness to a particular creditor as it would not prevent the emergence of other legitimate creditors who are not stayed”: Carlisle Div. Ct., at paras. 7, 9.

[65] Momentum relies on the decision of the Supreme Court of British Columbia in 665530 B.C. Ltd. v. Casino Tropical Plants Ltd., 2006 BCSC 1512 [665530]. In 665530, the purchaser, seeking enforcement of the arbitration award, had obtained judgment for $209,817.42 ($240,234.81 with further arbitral awards for interest and costs) “to adjust the value of the inventory from the estimated value under the Purchase Agreement”: at paras. 13-14. However, at the same time, the purchaser admitted to owing the respondent vendor the amount of $178,095 on a liquidated claim for an earn-out (a difference of approximately $62,140) and that there would “likely be a further earn-out amount payable to the respondents for the fiscal period ending January 31, 2007, just a few months hence”: at para. 18.

[66] In 665530, both the subject-matter of the arbitration (cost of inventory acquired by the purchaser) and the subject-matter of the civil set-off claim (earn-outs due to the vendor) were claims for adjustments owed under the same purchase agreement, with the only difference being that the inventory issue was required to be addressed by arbitration. The court stayed an arbitration award made in favour of the purchaser (for overpayment of the inventory) pending disposition of outstanding litigation for amounts owed by the purchaser to the vendor for earn-outs.

[67] Consequently, even if the court in 665530 had applied the Carlisle test, it may have been “oppressive or vexatious or an abuse of the court” to permit execution of the arbitral award before determination of the civil action, as all adjustments were to be determined under the agreement and the purchaser admitted owing the earn-out.

[68] In any event, the decision in 665530 does not alter the test to be applied on a stay of a final arbitration decision. As I discuss in more detail in my analysis of the third issue below, the court in 665530 relied on its general equitable discretion to grant the stay without considering either the Divisional Court or RJR—MacDonald approaches from Carlisle, which apply under Ontario law.

[69] For the above reasons, I do not agree that the decision in 665530 supports Momentum’s position that a stay of the Arbitral Awards is appropriate.

(ii) The Three-Part Test in RJR—MacDonald

[70] Even if the three-part RJR—MacDonald test was to apply to staying a final judgment (which was not decided in Carlisle CA), the test would not be met in the present case.

[71] Applying the approach of the court in Carlisle CA (quoting verbatim where indicated), I find:

(i) “[O]n the first branch of that test, there is no serious issue to be tried with respect to the proceeding, which is execution on the” Arbitral Awards. The Arbitral Awards “stand…unchallenged”: at para. 1;

(ii) “On the second branch of the RJR-MacDonald test, irreparable harm will not result if a stay is refused”. Momentum led no evidence of any irreparable financial harm if required to pay the Arbitral Awards or of any inability to pay. “[T]here is no evidence of any particular vulnerability” on Momentum’s “part that suggests any inability to otherwise satisfy” the Arbitral Awards. There is no basis to find that satisfaction of the Arbitral Awards would “render the issues in other outstanding litigation moot”: at para. 2.

The evidence before the court, filed by Zenith, is that Momentum no longer owns any property related to the Project or at all in Ontario. However, such evidence does not establish that Momentum cannot pay the Arbitral Awards, let alone that it would suffer irreparable harm if required to do so. It was Momentum’s obligation to satisfy the court of this condition for a stay, and it failed to do so.

“Moreover…the execution creditor has not engaged in oppressive conduct”: at para. 2; and

(iii) “[T]he balance of convenience favours a refusal of the stay. The importance of the court’s process, being final and enforceable, supports such a refusal”: at para. 3.

[72] Consequently, under either the Divisional Court test or the RJR—MacDonald factors discussed in Carlisle CA, Momentum has not satisfied the court that the Arbitral Awards should be stayed pending the Breach of Trust Action.

Issue 3: If a stay is not available under s. 106 of the CJA, is a stay otherwise available under Rule 20.08 of the Rules of Civil Procedure?

[73] Momentum submitted that if the test for a stay in either Carlisle Div. Ct. or the three-part test in RJR—MacDonald could not be met, the court should apply Rule 20.08, which provides:

Where it appears that the enforcement of a summary judgment ought to be stayed pending the determination of any other issue in the action or a counterclaim, crossclaim or third party claim, the court may so order on such terms as are just.

[74] Momentum offered no case law in Ontario to support its submission that the test under Rule 20.08 could be applied to stay the execution of a final arbitration award.

[75] I do not agree that Rule 20.08 can be applied to stay the Arbitral Awards.

[76] The Arbitral Awards were not summary judgment decisions. Under s. 50(8) of the Arbitration Act, an arbitral award is to be treated by the court with the same enforcement powers “as with respect to the enforcement of its own judgments”. The Arbitral Awards are treated as final judgments, determined after a full hearing on the merits.

[77] The Arbitrator was not asked to determine whether there was a genuine issue requiring a trial, as would have been the test for summary judgment under Rule 20.04. To the contrary, the Arbitrator was asked to conduct the trial of the Railing Dispute, which he did.

[78] Further, unlike a stay sought under Rule 20.08, there is no “other issue in the action or a counterclaim, crossclaim or third party claim” remaining in the same action for the arbitrator to decide. The less restrictive test for a stay under Rule 20.08 is based on the risk that there could be some unfairness if execution is permitted of a summary judgment, on part of an action, in favour of a plaintiff when judgment may be rendered against that plaintiff or any other co-defendant or third party after trial in the same matter. That concern does not arise with the Arbitral Awards, as the only issue before the Arbitrator was the Railing Dispute.

[79] For the above reasons, I find no basis to apply the test under Rule 20.08 to the stay of a final arbitral award which is to be treated under s. 50(8) as a final judgment.

[80] Momentum again seeks to rely on 665530 for its submission that the Rule 20.08 test should be applied to the stay of a final arbitral award. However, as I discuss above, the court in 665530 applied the general discretion test, consistent with other stay requests from cases involving arbitration decisions (see Greenside Properties Inc. v. 8458429 Holdings Inc., 2001 BCSC 983, at para. 12) or summary judgments, as there is no specific stay rule for summary judgments in British Columbia: see Clearly Canadian Beverage Corp. v. Remic Marketing and Distribution Inc. (1992), 22 C.P.C. (3d) 387) (B.C. S.C.)).

[81] In none of the British Columbia cases relied upon by Momentum do the courts suggest that a different standard from the general discretion test (let alone a less restrictive standard) should be applied to stay an arbitral award.

[82] Consequently, I find no merit in Memorandum’s position that the Rule 20.08 test for a stay on summary judgment enforcement should apply to a stay of a final arbitral award. Such an approach would be inconsistent with s. 50(8) and with Rule 20.08 itself, and is not established by the British Columbia cases relied upon by Momentum.

Order and Costs

[83] For the above reasons, I grant the Zenith Application and I dismiss the Momentum Application.

[84] At the hearing, both parties agreed that partial indemnity costs of $13,000 (inclusive of taxes and disbursements) would be appropriate for the successful party. I agree that the proposed amount is reasonable, given the motion material, factums, and research required to prepare for the applications, as well as the importance of the issue to the parties.

[85] Consequently, I order costs fixed at $13,000 (inclusive of taxes and disbursements), payable by Momentum to Zenith within 30 days of this order.

GLUSTEIN J. Date: 20210224

COURT FILE NO.: CV-19-00633143-0000 CV-20-00638195-0000 DATE: 20210224 ONTARIO SUPERIOR COURT OF JUSTICE ZENITH ALUMINUM SYSTEMS LTD. Applicant AND: 2335945 ONTARIO INC. cob as MOMENTUM DEVELOPMENTS Respondent AND RE: 2335945 ONTARIO INC. cob as MOMENTUM DEVELOPMENTS Applicant AND: ZENITH ALUMINUM SYSTEMS LTD. Respondent

Reasons for Decision Glustein J. Released: February 24, 2021

[1] The reference to CV-17-588632 is to the application brought before C. Brown J. She had held that the parties could return to her to address “a stay of the litigation pending the arbitration hearing” (at para. 15), although there was no reference to any potential stay of a future arbitral award. In any event, the parties agree that this provision in the arbitration agreement does not preclude (i) Momentum from seeking a stay of execution of the Arbitral Awards pending the Breach of Trust Action, nor (ii) Zenith from seeking enforcement of the Arbitral Awards and opposing an application by Momentum for a stay.