Law Times

PAGE 4 NEWS COA expands jurisdiction BY ROBERT TODD Law Times a seemingly unrelated arbitration provision, says a lawyer who worked on the case. The court in Dancap Productions Inc. v. Key T Brand Entertainment, Inc. ordered a stay in pro- ceedings due to an arbitration clause in a contract between the two companies. "It's important because what the Court of Ap- peal said was that if there is an arbitration provi- sion in any of the documentation between parties, and it's even arguable that the arbitration attaches to some part or another of a relationship, then ev- erything gets passed over to the arbitrator," says James Morton of Steinberg Morton Hope & Israel LLP, who acted for Dancap in the case. "It's consistent with other law, but it does extend it," he says. "Because what we had in Dancap was a relationship explicitly governed by a contract that did not have an arbitration provision in it. There were some subsidiary agreements which did have an arbitration agreement in them, and effectively the court read them up into the main agreement." Says Morton: "It was a fairly powerful state- ment of just how much deference they're going to pay to arbitrators." While acknowledging the decision went against his client in the case, Morton says, "The only danger is there can be situations where peo- ple think they have agreed to arbitrate a narrow part of a relationship, while preserving the court's jurisdiction generally, and they could be sur- prised to discover the courts have given a broader interpretation of the arbitration agreement than they would have thought." But aside from the specifi c facts of this case, says Morton, the decision is generally positive. "It's important that when people agree to ar- bitrate, they be held to their agreement," he says. "Otherwise, what's the point of an arbitration agreement at all." Counsel for Key Brand Entertainment, Inc. was unable to respond by press time to Law Times' request for comment. According to the appeal court's decision, written by Justice Robert Sharpe for justices Robert Arm- strong and David Watt, Dancap and Key Brand he Ontario Court of Appeal has expand- ed the jurisdiction of arbitrators with a recent decision that effectively "read up" created a preliminary term sheet that outlined the general conditions of Key Brand's acquisition of assets, including two Toronto theatres, the Canon Theatre and the Panasonic Theatre. An additional rights agreement (ARA) also was signed, and set out the companies' plan to negotiate in good faith to wrap up the management deals. The ARA includes an arbitration clause stating that "[a]ny dispute, controversy, or claim arising out of or relating to" the deal, apart from equitable claims, go to arbitration, wrote Sharpe. It also con- tains a forum selection clause giving United States district courts in California exclusive jurisdiction. The term sheet, noted Sharpe, does not include arbitration or forum selection clauses. But after the acquisition of the assets by Key Brand and before the management agreements were fi nalized, Key Brand sold the Toronto theatres to Ed Mirvish Enterprises Ltd., which was a respondent in the case, noted Sharpe. Toronto-based Dancap held that its claims were relevant under the term sheet and not the ARA, and brought the matter for damages and injunctive relief in Ontario, wrote Sharpe. The New York-based Key Brand, meanwhile, said a large part of Dancap's claims were related to the ARA arbi- tration and forum selection clauses, and requested a stay. The motion judge denied Key Brand's motion, after which the company received an order from the Federal District Court in California calling on Dancap to go to arbitration over the core issue in the Ontario action, wrote Sharpe. Sharpe found that the issues at appeal hinged on the motion judge's refusal to grant a stay of Dancap's action based on the arbitration clause or the forum selection clause in the ARA. "I conclude that it is at least arguable that the ARA arbitration clause governs the core issue raised in the action," wrote Sharpe. "That issue was prop- erly identifi ed by the District Court judge as being whether Key Brand has the right to terminate any management rights to the theatres that Dancap may have obtained under either the term sheet or ARA upon the sale of the theatres to Mirvish." The court went on to write that, with the mat- ter currently referred to an arbitrator in Califor- nia, "Both as a practical matter and as a matter of law, costly parallel proceedings that run the risk of inconsistent results are to be avoided . . . . As matters presently stand, it is diffi cult to see how any order other than a stay of the Ontario action could avoid duplicative proceedings." LT February 23, 2009 • Law Times Public better served by private bar: report BY ROBERT TODD Law Times cases rather than three Criminal Law Offi ces operated by Legal Aid Ontario, says the County and District Law Presidents' Association. CDLPA last week released O to the public its analysis of the CLOs, which began as a federally fi nanced pilot project in 2004 at locations in Barrie, Brampton, and Ottawa. The offi ces continue to operate, and LAO is expected to decide on their future this year, a spokesman tells Law Times. CDLPA's report was com- piled using an April 2008 report on the CLOs that was commis- sioned by LAO. Highlights of the analysis include a fi nd- ing that "the average cost per case per CLO over the last two years is 65 per cent to 85 per cent more costly than the pri- vate bar," according to CDLPA. Further, said the association, the analysis shows that the pri- vate bar could deal with almost 15 times as many cases as the Ottawa CLO, nearly 30 times as many as the Brampton of- fi ce, and more than double the Barrie offi ce. CDLPA chairman Randall Bocock says the association un- dertook the analysis because, "Fundamentally, the Criminal Law Offi ces, when they take up legal aid certifi cates, are doing a job or a task which historically and primarily is undertaken by the practising bar. "As a competitor, in that front, it's interesting and required to ntario taxpayers are bet- ter served when the pri- vate bar handles legal aid know which of these two service providers do the most effi cient and effi cacious job." A spokesman for the LAO says comparisons between the CLOs and the private bar should be avoid- ed. "It's like comparing apples and oranges," says Kristian Justesen. LAO and the Ministry of the Attorney General received CDL- PA's report late last year. LAO is considering it and other feedback on the CLOs, says Justesen. "I don't know how they ar- rived at their conclusions," he says when asked whether LAO agrees with CDLPA's analysis. Our management strategy is to be accountable and transparent in everything we do with taxpayers' money. "Our management strategy is to be accountable and trans- parent in everything we do with taxpayers' money," says Justesen. "So it is very important to us." Bocock says CLOs can serve a purpose in the delivery of legal aid services, but suggests having the offi ces compete with the pri- vate bar is an ineffi cient way of spending public money. "Where there's competition, Looking for the right talent? (Haystack not included) and on a much more expensive basis, those certifi cates are ser- vicing and providing a lot less legal service because they're a lot more expensive based on the cost model, then there's fewer dollars to deliver legal aid and that effectively detracts from the legal aid dollars going where it belongs, which is providing le- gal services to members of the public who qualify for legal aid certifi cates," he says. Noting that the LAO is an in- dependent agency, the Ministry of the Attorney General issued the following statement to Law Times regarding the CDLPA analysis: "We understand that LAO has received the fi nal evalu- ation of the Criminal Law Offi c- es as well as the County and Dis- trict Law Presidents' Association's analysis of the cost effectiveness of Criminal Law Offi ces, and is taking it into consideration in its review," read the statement. "The ministry will continue to support and work with LAO as it determines the most effec- tive means of providing high quality legal services to low-in- come Ontarians." LT REPRINTS The right fit for your practice. Kent Legal's unique experience and superior technology ensures it is business as usual by matching your practice with the right legal support. Our highly trained recruiters possess impressive first-hand experience in the legal industry. They abide by a strict code of integrity, trust and excellence that has made Kent Legal one of Canada's most reputable legal recruitment firms today. For more information call (416) 363-7227 or visit kentlegal.com www.lawtimesnews.com Been in Law Times? Want a record of it? We provide a color PDF and unlimited reproduction rights. For more information or to order reprints, please e-mail Gail Cohen at: gcohen@clbmedia.ca LAW TIMES

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