Court File and Parties
COURT FILE NO.: CV-18-591969 and CV-18-600196
DATE: 20221014
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Star Woodworking Ltd. et al., Plaintiffs
-and-
Improve Inc. et al., Defendants
BEFORE: FL Myers J
COUNSEL: Andrea Lusk, for York Region Standard Condominium Corporation No. 1311 Derrick M. Fulton, for the plaintiffs Noah Improve Inc., Star Woodworking Ltd., 2274461 Ontario Inc., and Maryam Khaleghi
HEARD: October 12, 2022
ENDORSEMENT
The Issue and Outcome
[1] The condominium corporation asks me to appoint an arbitrator to hear and resolve the plaintiffs’ claims against it pursuant to my order dated July 14, 2022. The plaintiffs represented by Mr. Fulton submit that they have not yet commenced an arbitration on their claims against the condominium corporation and they may never do so. They ask me to refrain from appointing an arbitrator as they cannot be forced to be plaintiffs in an arbitration if they do not wish to do so.
[2] For the reasons that follow, Mr. L. Leslie Disgun is appointed arbitrator of the claims made by the plaintiffs against the condominium corporation. It is for him to determine the process under which the arbitration will be constituted and carried.
The Litigation
[3] There are four lawsuits in which two groups of plaintiffs allege that they were misled by a developer to buy commercial condominiums in what later became YRSCC No. 1311. The plaintiffs also advance related claims against the condominium corporation. In essence the plaintiffs claim that the condominium corporation adopted unlawful bylaws and rules as a result of the misconduct of the developers. In addition, the plaintiffs allege that since the turnover, the condominium corporation has used common areas improperly and it has illegally enforced some of the improper rules and bylaws against the plaintiffs.
[4] The condominium corporation moved for a stay of the claims against it in favour of arbitration of the plaintiffs’ claims. In an endorsement dated July 13, 2021, reported at 2021 ONSC 4940, I held that the plaintiffs’ claims against the condominium corporation were required to be resolved through arbitration pursuant to the Condominium Act, 1998, SO 1998, c 19 and the Arbitration Act, 1991, SO 1991, c 17. The operative language of my endorsement says:
[61] Accordingly, I stay the claims against the condominium corporation only pleaded in paras. 2, 68 to 73, and 81 to 85 of the current version of Mr. Fulton’s clients’ statement of claim. I stay the claims against the condominium corporation only alleged in paras 2, 52 to 56, and 62 to 65(a) in the current version of Mr. Sherkin’s clients’ statement of claim.
[62] The stay will remain in place until an arbitration of the stayed allegations is finally resolved including any appeals or applications to review the outcome. The stay may also be lifted by an order of this court in the event that no arbitration proceeds within a reasonable time or a decision is made in an arbitration that renders the continuation of the stay unnecessary in whole or in part
[5] Despite over a year passing, neither set of plaintiffs has proceeded with an arbitration. Rather than seeking to dismiss the claims against it, the condominium corporation seeks to bring on the arbitrations. To that end, it proposed three arbitrators to the plaintiffs’ counsel earlier this year.
[6] In the absence of agreement on an arbitrator, the condominium corporation brought a case conference before me on July 14, 2022. Mr. Fulton and Ms. Lusk participated. Mr. Sherkin is counsel for the other set of plaintiffs. He was unavailable and did not attend the case conference. I made the following endorsement:
Mr. Sherkin is directed to advise the counsel above of his clients' choice of arbitrator on or before July 29, 2022. If Mr. Sherkin's clients do not want any of the three on Ms. Lusk's list, then he may submit three names of his own to me and I will choose from the two lists. Counsel for the three sides in the proposed arbitrations may also send one page of submissions objecting or stating a preference for any proposed arbitrator with point form reasons. I am to receive counsels' submissions, if any, by August 5, 2022.
Counsel will then discuss scheduling of the arbitrations in light of the status of the actions. The arbitrator will decide any issues regarding the process for the arbitrations. I may be contacted regarding the actions as needed.
[7] I did not receive any communication from counsel by August 5, 2022.
[8] It seems to me that I have already decided that if counsel did not agree on an arbitrator, I would appoint one.
[9] Section 23 of the Arbitration Act, 1991 provides that either side may commence an arbitration.
Commencement of arbitration
23 (1) An arbitration may be commenced in any way recognized by law, including the following
A party to an arbitration agreement serves on the other parties notice to appoint or to participate in the appointment of an arbitrator under the agreement.
If the arbitration agreement gives a person who is not a party power to appoint an arbitrator, one party serves notice to exercise that power on the person and serves a copy of the notice on the other parties.
A party serves on the other parties a notice demanding arbitration under the agreement.
[10] The condominium corporation sent the plaintiffs notice to participate in the appointment of an arbitrator to hear the plaintiffs’ claims last spring. The plaintiffs have advanced arbitrable claims and the condominium corporation has commenced the arbitration.
[11] I am not forcing the plaintiffs to be plaintiffs in an arbitration that they do not want to bring. They sued and made claims against the condominium corporation. Those claims can only be pursued in arbitration. Their claims remain extant although they are stayed in this action. The plaintiffs have not chosen to abandon their claims. While the claims exist, the condominium corporation is entitled to try to push forward with the claims made against it to try to clear its name (or status certificate).
[12] The process to be adopted in the arbitration is entirely within the jurisdiction of the arbitrator. I have no idea whom he will designate as “plaintiff”. Perhaps the condominium corporation will be the moving party seeking to negate the claims asserted by the plaintiffs. That will be up to the parties to work out with the arbitrator.
[13] Mr. Fulton suggested that this question should be argued in a fuller process. Had Ms. Lusk sought the dismissal of the claims in the action due to the failure of the plaintiffs to proceed with the arbitration or had either side sought to lift the stay, I would have agreed. But considering my decision in July, there is nothing remaining for argument now.
[14] The time to raise a concern with the appointment of the arbitrator was in July. As Mr. Sherkin was not present that day, I made a specific provision for him to take a contrary position. I wrote:
If Mr. Sherkin has any concerns with the direction, I can be contacted to re-convene with counsel opposite before July 29, 2022.
[15] I have received no objection to the process or to Mr. Disgun’s appointment as arbitrator. As he is a well-known, senior, respected counsel and an experienced arbitrator/mediator, I find that he is an appropriate person to appoint to arbitrate the claims made by the plaintiffs against the condominium corporation identified and stayed in para. 61 of my July 13, 2022 endorsement.
FL Myers J
Date: October 14, 2022