Alberici Western Constructors Ltd. et al. v. Saskatchewan Power Corp. et al., 2016 SKCA 46

• Judge: Richards, C.J.S., Caldwell and Whitmore, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: October 23, 2015
• Jurisdiction: Saskatchewan
• Citations: 2016 SKCA 46;(2016), 476 Sask.R. 255 (CA)

Alberici v. Sask. Power (2016), 476 Sask.R. 255 (CA);

    666 W.A.C. 255

MLB headnote and full text

Temp. Cite: [2016] Sask.R. TBEd. AP.022

Saskatchewan Power Corporation (appellant/defendant) v. Alberici Western Constructors Ltd. and Balzers Canada Ltd. (respondents/plaintiffs) and Technical Heat Treatment Services Ltd. and Grace Instrumentation and Controls Ltd. (respondents/defendants)

(CACV2686; 2016 SKCA 46)

Indexed As: Alberici Western Constructors Ltd. et al. v. Saskatchewan Power Corp. et al.

Saskatchewan Court of Appeal

Richards, C.J.S., Caldwell and Whitmore, JJ.A.

April 1, 2016.

Summary:

"SaskPower" entered into a construction contract with "AB Western". The contract contained an arbitration clause. A dispute arose. AB Western served a notice of arbitration and, as a matter of caution, a statement of claim. The claim named SaskPower, Tech Heat and Grace as defendants. The notice of arbitration and the statement of claim advanced effectively identical claims. SaskPower applied to stay the arbitration, taking the position that, to avoid a multiplicity of proceedings, the dispute between it and AB Western should be resolved through litigation. AB Western applied to stay its action so the arbitration could proceed.

The Saskatchewan Court of Queen's Bench, in a decision reported at (2015), 464 Sask.R. 1, stayed the action commenced by AB Western and dismissed SaskPower's application to stay the arbitration. "[T]he current scheme of private arbitration law in Canada recognizes primacy of arbitration over litigation where parties have bound themselves by contract to resolve their disputes accordingly." SaskPower appealed on the ground that the chambers judge made basic errors in his interpretation and application of the relevant provisions of the Arbitration Act and the Queen's Bench Act.

The Saskatchewan Court of Appeal dismissed the appeal. "At the end of the day, the Arbitration Act is clear. When a claim comes within the terms of an arbitration agreement, a court 'shall' stay the action with respect to that claim [s. 8(1)]. The only exceptions are the limited ones enumerated in s. 8(2). This will doubtless sometimes create inefficiencies in resolving disputes where a contract does not include an appropriate multi-party arbitration clause. Costs might be duplicated. There could be a risk of inconsistent findings of fact or law. However, this is the inevitable and foreseeable consequence of the way the Arbitration Act is worded."

Arbitration - Topic 6

General principles - International Commercial Arbitration Act - Interpretation - [See fourth Arbitration - Topic 2514 ].

Arbitration - Topic 105

Right to arbitration - International Commercial Arbitration Act - [See fourth Arbitration - Topic 2514 ].

Arbitration - Topic 2504

Stay of proceedings - Arbitration clause - Enforcement of - The Chambers judge found the considerations set out in s. 8 of the Arbitration Act "helpful, if not mandatory" in guiding his exercise of discretion under s. 37 of the Queen's Bench Act to stay the proceeding - The Saskatchewan Court of Appeal stated that the Chambers judge "was entirely correct to let himself be guided largely by the terms of the Arbitration Act in the situation here. The matter before him was not just any application for a stay. It was an application for a stay brought against the close background of the Arbitration Act and brought by a party to an arbitration agreement desirous of moving forward with that proceeding. In these circumstances, it was incumbent on the Chambers judge to ensure his decision fit coherently with both the spirit and the particulars of the Arbitration Act. It would have been a mistake for him to have done otherwise." - See paragraphs 31 to 35.

Arbitration - Topic 2514

Stay of proceedings - Arbitration clause - Bar to stay - Multiplicity of proceedings - A party to an arbitration agreement applied for a stay of the court proceeding it had commenced - The Chambers judge granted the stay - He did not refer to s. 29 of the Queen's Bench Act (the avoidance of a multiplicity of proceedings) - The Saskatchewan Court of Appeal held that the Chambers judge's focus on the Arbitration Act was entirely appropriate - Section 29 of the Queen's Bench Act "is not a generalized and free-standing directive to Queen's Bench judges telling them, in all contexts, to do whatever is necessary to avoid or eliminate a multiplicity of proceedings. Rather, it is focused on the remedies granted at the end of proceedings. ... Further, ... s. 29 is a general provision which speaks generically about avoiding a multiplicity of proceedings. On the other hand, the Arbitration Act is particular, at least in relative terms. As per the well-established principle, the particular should prevail over the general. ... [N]otwithstanding s. 29, the Chambers judge's assessment of the multiplicity of proceedings issue had to fit coherently with the dispute resolution architecture put in place by the Legislature through the terms of the Arbitration Act." - See paragraphs 36 to 39.

Arbitration - Topic 2514

Stay of proceedings - Arbitration clause - Bar to stay - Multiplicity of proceedings - The Chambers judge stayed the action commenced by AB Western and dismissed SaskPower's application to stay the arbitration in favour of litigation - Third party claims fell outside the scope of the arbitration clause - The Saskatchewan Court of Appeal rejected SaskPower's contention that a multiplicity of proceedings was a kind of unfairness within the meaning of s. 7(c) of the Arbitration Act - Section 7(c) was aimed at ensuring the internal integrity of the arbitration proceedings, not at displacing such proceedings in favour of litigation - The arbitration clause was negotiated by two very sophisticated parties - There was no "unfairness" in the circumstances at hand - "Requiring SaskPower to resolve its dispute with AB Western by way of arbitration requires it to do nothing more and nothing less than what it freely negotiated to do. The prospect of third-party type proceedings outside the scope of the arbitration clause was obviously foreseeable by parties of the experience of SaskPower and AB Western. They chose not to address this issue in the Agreement." - See paragraphs 41 to 44.

Arbitration - Topic 2514

Stay of proceedings - Arbitration clause - Bar to stay - Multiplicity of proceedings - The central issue concerned when and if a court should enter a stay to prevent a multiplicity of proceedings when a dispute was both litigated and arbitrated - Section 7(c) of the Arbitration Act provided that "No court shall intervene in matters governed by this Act, except ... to prevent unequal or unfair treatment of parties to arbitration agreements;" - The Saskatchewan Court of Appeal stated that "[Section] 7(c) must be read in tandem with s. 8 of the Act. Section 8(2) sets out the limited circumstances where a judge is not required to direct a stay of court proceedings concerning an issue which is also subject to arbitration. Significantly, those circumstances do not include the risk of multiple proceedings or the prospect of third-party claims falling outside the scope of the arbitration. ... Section 8(5) is also worth emphasizing in this regard. It specifically contemplates that a court can stay those aspects of a litigation proceeding dealing with matters subject to arbitration and allow the litigation to continue with respect to the rest of a claim. The only restriction on this authority is that, as per s. 8(5)(b), it is reasonable to separate the matters subject to arbitration from the other matters. In the present context, this is significant because it shows the Legislature was alert to the possible difficulties posed by a multiplicity of proceedings but chose not to address them by way of giving the courts a residual discretion to prefer the litigation process over arbitration." - See paragraphs 49 and 50.

Arbitration - Topic 2514

Stay of proceedings - Arbitration clause - Bar to stay - Multiplicity of proceedings - Section 7(c) of the Arbitration Act provided that "No court shall intervene in matters governed by this Act, except ... to prevent unequal or unfair treatment of parties to arbitration agreements;" - The Saskatchewan Court of Appeal, in discussing the application of s. 7(c), underlined the case law concerning the UNCITRAL Model Law on International Commercial Arbitration - "It does not contain a provision exactly like s. 7 of the Arbitration Act but, nonetheless, the theme of the jurisprudence it has generated is of some assistance here. In this regard, it is useful to note Article 8(1) of the Model Law [Arbitration agreement and substantive claim before court] ... . Overall, the decisions dealing with Article 8 are to the effect that the prospect of a multiplicity of proceedings is not a valid reason for refusing to refer the parties to arbitration. Rather, the clear theme of the case law is that the risk of parallel or overlapping proceedings is not a basis for refusing to refer a dispute to arbitration for the simple reason that the Model Law does not identify it as such." - See paragraphs 52 and 53.

Statutes - Topic 526

Interpretation - General principles - Consistency with comity of nations or international law - [See fourth Arbitration - Topic 2514 ].

Statutes - Topic 1446

Interpretation - Construction where meaning is not plain - Aids or methods to determine meaning - By reference to other provisions in the same Act - [See third Arbitration - Topic 2514 ].

Statutes - Topic 2607

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Special provision versus general provision - [See first Arbitration - Topic 2514 ].

Statutes - Topic 2614

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Legislative or statutory context - [See third Arbitration - Topic 2514 ].

Statutes - Topic 4512

Operation and effect - Where two or more statutes apply - [See first Arbitration - Topic 2514 ].

Counsel:

Deron Kuski, Q.C., and Joshua Morrison, for the appellant;

Murray Sawatzky, Q.C., and Alison Cathcart, for the respondents.

This appeal was heard on October 23, 2015, before Richards, C.J.S., Caldwell and Whitmore, JJ.A., of the Saskatchewan Court of Appeal. In reasons written by Richards, C.J.S., the Court delivered the following judgment, dated April 1, 2016.