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Law times • SEPTEMBER 8, 2008 FOCUS PAGE 11 Inc. v. Muroff, the defendant relied on an agreement to arbi- trate and a specific prohibition on the customer from com- mencing or participating in a class action, and was successful. These decisions extended the Supreme Court's strong pro-ar- bitration stance from commer- cial to consumer actions. Andrew Little, who has re- cently moved to Bennett Jones LLP in Toronto from Calgary, has been following the issue as the provincial courts decide whether to apply the decisions or not. "It's the hardest question that's before the courts right now. Two points have come out of Dell and Rogers that the Ontario courts are decid- Union des consommateurs (Dell), the online retailer of computer equipment made a computer glitch that allowed some com- puters to be listed at a very low and erroneous price. Dell promptly blocked access to the pages but some consumers used a "deep link" to order over 500 computers at the artificially low prices. Dell offered a substantial price reduction but refused to honour the orders, and a class action application ensued. Dell made an application for a stay on the grounds that the plaintiffs were bound by an ar- bitration clause in the terms and conditions listed on the web site. The majority of the Supreme Court found that the arbitra- tion clause was enforceable and referred the claims to individual arbitration. They found that un- less there is a clear legislative pro- vision to the contrary, the right to proceed by way of class action can be waived by an arbitration agreement because it is a proce- dural choice and not a right. Similarly, in Rogers Wireless he Supreme Court of Canada has had a good look at agreements to ar- bitrate and found they can pre- clude class actions, even under online contracts, giving busi- nesses a tool to limit class action risk. But many lawyers are ques- tioning whether the decisions apply outside Quebec, particu- larly in provinces where legisla- tion preserves the right to class actions against all comers. In Dell Computer Corp. v. The supremacy of the agreement to arbitrate T BY JUDY VAN RHIJN For Law Times ing whether to apply. "Firstly, when there's a challenge to the arbitrator's jurisdiction in court, whether in a class action or not, the courts have to decide whether the court is the right place to deal with it or whether it is in the bailiwick of the arbitrator," he says. "The Supreme Court says that in almost all cases the arbitrator makes the first de- cision on that. The excep- tions, which the majority and minority divided on, occur when the challenge is based solely on a question of law, or a mixed question of law and fact if the facts require only a superficial consideration," he says, adding, "There are also exceptions if the court action is commenced for tactical rea- sons to create delay. Secondly, what is the interaction with provincial legislation that pre- clude any attempt to contract out of class actions?" Four decisions have been in the legislation as a contract where one party is an individ- ual buying goods and services. "In those contracts it is clear in Ontario that there is noth- ing you can put in to stop a class action," says Mark. "You simply know that you can't preclude class actions and you suffer the consequences." This definition excludes busi- ness transactions, where you can still have mandatory arbitration clauses, leaving one arena in which the Supreme Court de- cisions will apply. "I presume if the Supreme Court is prepared to hold individuals to arbitration agreements they will also hold businesses to it," says Mark. Meanwhile, over in the 'There are some long and pretty compli- cated decisions, but they address good issues to appeal,' says Andrew Little. rendered in which the Supreme Court decisions have been considered — one in Ontario, two in British Columbia, and one in Saskatchewan. In Smith Estate v. National Money Mart Co. (2008) in the Superior Court of Ontario, Justice Paul Perell took a lengthy 91 pages to de- termine that he was not bound by the cases. Decisions that are consistent with this, though not so lengthy, have been made in MacKinnon v. National Money Mart (2008) and Seidel v. Telus Communications Inc. (2008). "The Ontario court decided that Dell and Rogers do not apply to overrule any previous case law,' explains Little. "Dell and Rogers are both out of Quebec and only interpret Quebec law. The differ- ences between Ontario and Que- bec law are deemed to be suffi- cient to allow Ontario to go its own way in interpreting Ontario law until told differently." As well as the case law, there is it comes to the Supreme Court cases is that the Ontario Con- sumer Protection Act 2002 trumps the Supreme Court de- cisions," says Mark. "Ontario's legislation was in place before Dell. The equivalent legislation in Quebec, the Consumer Pro- tection Act, was amended while the case was being heard." A consumer contract is defined Inc., and Telus all joined Bell Mobility and other telecom companies in seeking a stay of the claim brought on behalf of their customers who were sub- ject to an arbitration clause. On Feb. 20, Justice William Gerein made a short decision of 14 paragraphs that accepted that he was bound by Dell. Court of Queen's Bench of Saskatchewan, in the well- known case of Frey v. Bell Mobility Inc. (2008), Rogers Wireless Inc., Fido Solutions Trust [ provincial legislation to consider — legislation that limits the en- forceability of arbitration clauses and no-class-action stipulations in consumer contracts. Alan Mark, who is Chairman of the Toronto litigation group of Ogilvy Renault LLP, which represented the inter- venor in Dell, has also been ob- serving the recent series of cases. "The common view when Aleks Mladenovic Marketplace EMPLOYMENT WANTED SERVICES - Available law clerk. Proficient in estates, real estate, litigation, ADR, corporate/commercial and labour and employment. Part/full time. Messages 416-621-2485. FOR RENT EXCLUSIVE - Office for Rent - lovely second floor office (approx. 300 sq. feet) located in charming Victorian style three-storey house huge win- dows overlooking mature tree-lined street right next door to Yorkville available October 1, contact Clayton Ruby or Mandy Machin at 416-964-9664 or mandy@ruby-edwardh.com. To advertise call 905-841-6481 Untitled-4 1www.lawtimesnews.com 8/18/08 10:21:02 AM | Richard Halpern | Sloan Mandel For over 70 years Thomson, Rogers has built a strong, trusting, and collegial relationship with hundreds of lawyers across the province. As a law firm specializing in civil litigation, we have a record of accomplishment second to none. With a group of 30 litigators and a support staff of over 100 people, we have the resources to achieve the best possible result for your client. Moreover, we are exceptionally fair when it comes to referral fees. We welcome the chance to speak or meet with you about any potential referral. We look forward to creating a solid relationship with you that will benefit the clients we serve. THOMSON, ROGERS Barristers and Solicitors 416-868-3100 Toll free 1-888-223-0448 www.thomsonrogers.com YOUR ADVANTAGE, in and out of the courtroom preme Court decisions and said: "They are authority for the proposition that a binding arbitration clause removes a dis- pute from the jurisdiction of a superior court and of necessity precludes participation in a class action. In addition, the validity of the arbitration clause must be referred to an arbitrator in first instance. I am bound by the cited decisions. Consequently, my decision that the class action prevails cannot stand." "Ontario and Saskatchewan leg- Gerein referred to the Su- islation are substantially the same, being quite closely aligned with the Uniform Law Conference of Can- ada model law," says Little. "B.C.'s legislation, having been introduced first, has some differences." In B.C., one decision has been appealed and Little will be surprised if the Ontario decision is not appealed as well. "There are some long and pretty com- plicated decisions, but they ad- dress good issues to appeal. There will be a conflict if the courts of appeal uphold the lower court decisions, but it's hard to know if it's an issue of public importance warranting the Supreme Court's attention. Personally, I'd say there's something to resolve." LT Every time you refer a client to our firm, you're putting your reputation on the line. It's all about trust well placed.