Law Times

November 21, 2016

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Page 2 November 21, 2016 • Law Times www.lawtimesnews.com NEWS THE SCENIC ROUTE IS ENJOYABLE BUT NOT IF YOU'RE PRESSED FOR TIME. Start with Practical Law Canada. Take the most direct route with proven Practical Law Canada resources. You can save time with up-to-date, straightforward how-to guides, annotated standard documents, checklists, and more. Our expert team of lawyer-editors creates and maintains practical resources across a broad array of practice areas to match the needs of practitioners in each area: • Capital Markets & Securities • Commercial Transactions • Competition • Corporate & Commercial Litigation • Corporate and M&A • Employment • Finance • Personal Injury Litigation Sign up for a FREE TRIAL now at practicallaw.ca © 2016 Thomson Reuters Canada Limited 00234QL-A53133-NK "This decision has the effect of distilling those principles into one handy test." Alderson and Andrew Ot- taway, the lawyers representing Haas, say they are seeking in- structions to apply for leave to the Supreme Court of Canada. Ottaway says the Court of Appeal's decision is forcing Haas to litigate on two differ- ent fronts, which could impact timely and affordable access to justice. "It's all well and good that the Court of Appeal wants to promote arbitration, but I think what we're saying is well that should also be considered along- side the equally or more impor- tant goal of access to justice," Ot- taway says. LT Superior Court Justice Suhail Akhtar, refused to stay the ac- tion, taking what he called a "pith and substance" approach to the dispute. "The bulk of Haas' claims fall outside the arbitration clause," Akhtar wrote in his decision. "It makes little sense to or- der a partial stay referring the minority of the allegations to arbitration but permitting the rest to continue as an action par- ticularly when each case would be founded on the same factual matrix." Michael Osborne, a lawyer with Aff leck Greene McMurtry LLP, says he found Akhtar's de- cision surprising. "There's law now in Ontario that says an oppression claim can be arbitrated," says Osborne, who was not involved in the case. "There's very little now that cannot be subjected to an arbi- tration." The Court of Appeal found Akhtar's approach was in error as he assumed that tort claims fell outside of the scope of the arbitration agreement. The Court of Appeal found Akhtar was wrong to refuse to stay the entire action because of parts of it. "It helpfully said you shouldn't just allow the whole arbitration clause to fall away just because part of it might need to be dealt with in litiga- tion," Wisner says of the deci- sion. David Alderson, one of the lawyers representing Haas, says the Court of Appeal decision, however, will force the parties to proceed in two forums — in arbitration and court — which he says could lead to increases in cost, complexity and delays. "The decision in this case results in a situation that does frustrate the access to justice policy objectives," says Alder- son, who is counsel at Gilbert- son Davis LLP. The court said Akhtar also erred by assuming that a fraud claim spoils an arbitration agreement and by "failing to ad- vert the law's policy of enforcing arbitration agreements." Raffaele Sparano, who rep- resented the appellants, says if parties agree to arbitration, they should be kept to their agree- ment, especially in situations with broad clauses, like that in the shareholder agreement in question. "If you have an arbitration agreement that's broad in scope, you go through arbitration or let the arbitrator decide," says Sparano, who is a lawyer at Sol- mon Rothbart Goodman LLP. In its decision, the Court of Appeal set out a framework of five steps to determine wheth- er stay should be granted in such matters. These included whether there was an arbitra- tion agreement, the scope of the agreement, the subject matter of the dispute, whether the dispute falls in the scope and whether there are grounds for refusal of stay. Max Shapiro, of Blake Cas- sels & Graydon LLP, says the de- cision helps bring clarity to this area of the law. "Before, there wasn't so much a clear test but general principles that were applied to certain cases and not others," says Shap- iro, who was not involved in the case. Continued from page 1 Decision on arbitration agreement brings clarity: lawyer lawyers nominated by the par- ties: AJPO pick Linda Rothstein and government selection Roy Filion. After failing to reach an agreement, LeSage and Roth- stein authored a majority re- port in March 2015, calling for a 16.4-per-cent rise over four years, doubling the 8.2-per-cent rise JPs were automatically due in accordance with Ontario's In- dustrial Aggregate Average. That would take JP pay to more than $135,000 from about $116,000 at the end of 2014, the last full year covered by the commission. According to the Divisional Court decision, LeSage and Rothstein concluded JPs' cur- rent rate of pay "was not fair and reasonable," and that the "signifi- cant" increase they recommend- ed was justified by the increasing complexity of the work they do. However, Filion's minority report concluded that no further rise was necessary beyond the 8.2 per cent required by the in- dustrial average, because work- ing conditions for JPs had not changed "sufficiently" to war- rant a greater increase, the Divi- sional Court decision said. In its response to the reports, the government adopted Filion's recommendation, claiming the majority's findings about the in- creasing complexity of JPs' work were not well founded. The gov- ernment report took note of a previous increase of 23 per cent awarded over three years in 2007, the fact that charge numbers had declined and that reforms had taken place to streamline work carried out by JPs, adding that any increase in workload was modest. In addition, the government report pointed out that the prov- ince had no problem attracting applicants at the current salary level, and it denied JP pay was unreasonable compared with other judicial officers, consider- ing the lack of legal training nec- essary to qualify. The government also rejected the majority's recommendation to give JPs credit for 1.5 days of work for every day worked on a weekend and statutory holiday, noting that the current prac- tice of awarding a day off in lieu matched the policy for judges. The AJPO's lawyer, Tom Curry, a partner with Lenczner Slaght Royce Smith Griffin LLP, argued that the government had failed to meaningfully explain its reasons for disagreeing with the majority's conclusions on the complexity of work carried out by JPs, but the Divisional Court disagreed, noting that the gov- ernment had no obligation to defer to the commission. Its job, wrote Ontario Superior Court Justice Katherine Swinton for the unanimous court in her Oct. 25 decision, was to determine whether the government had a reasonable factual foundation for its conclusions. "The LGIC disagreed not only with the significance of any increase in complexity in the work of justices of the peace. It also disagreed with the weight given to economic and fiscal fac- tors by the Majority," Swinton wrote. "In conclusion . . . there was a rational basis for the gov- ernment's response to the salary recommendation." There was some joy for the AJPO, however, on the issue of proposed changes to benefits and post-retirement insured benefits that would bring JP en- titlements in line with changes to other public sector workers an- nounced part-way through the commission. All three commis- sioners agreed the issue should be deferred to the next commis- sion on JP remuneration as there was no time for hearings on the issue, but the government an- nounced its plans to implement the changes anyway. Justice Swinton ordered the government to row back on that decision until a new com- mission studies the issue after concluding its unilateral action "does not withstand scrutiny." Curry tells Law Times that while he had been "hopeful we would be able to succeed on a broader basis," he was "pleased the court agreed" with his sub- missions on the benefits issue. Brendan Crawley, a spokes- man with the Ministry of the Attorney General, said in a state- ment that he could not comment on the decision because the ap- peal period had not passed. Morton says that JPs' work is becoming more complex. "They really do have to deal with things that are just as com- plicated as some that come be- fore Superior Court justices," he says. LT Benefit changes halted Continued from page 1

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