V. Simkic

Following reasons staying an application under s. 7(1) of the Arbitration Act, 1991 and referring the dispute to arbitration, the successful parties sought partial indemnity costs of over $169,000.

The opposing parties argued that most pre‑hearing work related to issues that would ultimately be determined in arbitration and requested that costs be limited to $7,500.

The court rejected those submissions, holding that parties who refuse to narrow the scope of a hearing cannot later complain about the extent of pre‑hearing work undertaken.

Applying Rule 57, proportionality, and appellate guidance on fixing reasonable costs, the court reduced certain unexplained factum‑drafting time but otherwise accepted the bill of costs.

Costs of $155,292.66 inclusive of disbursements and HST were awarded.

Majority shareholders sought a stay of an oppression application brought by minority shareholders and related parties, relying on a broad arbitration clause in a shareholders’ agreement.

The court applied the competence‑competence principle under the Arbitration Act, 1991 and held that where it is arguable a dispute falls within the arbitration clause, the matter should be referred to arbitration for determination of jurisdiction.

Most claims, including oppression allegations, employment termination disputes, and share purchase issues, were closely connected to the shareholders’ agreement and therefore subject to arbitration.

Claims against non‑signatories and ancillary allegations were also stayed under the Courts of Justice Act as they depended on the core disputes.

The only exception permitted to proceed in court was a wrongful dismissal action by an employee who was not a party to the shareholders’ agreement.