Alberici Western Constructors Ltd. et al. v. Saskatchewan Power Corp. et al., (2015) 464 Sask.R. 1 (QB)

• Judge: Elson, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: March 06, 2015
• Jurisdiction: Saskatchewan
• Citations: (2015), 464 Sask.R. 1 (QB);2015 SKQB 74

Alberici Western v. Sask. Power (2015), 464 Sask.R. 1 (QB)

MLB headnote and full text

Temp. Cite: [2015] Sask.R. TBEd. AP.010

Alberici Western Constructors Ltd. and Balzer's Canada Inc. (plaintiffs) v. Saskatchewan Power Corporation, Technical Heat Treatment Services Ltd., and Grace Instrumentation Controls Ltd. (defendants)

Technical Heat Treatment Services Ltd. (plaintiff) v. Saskatchewan Power Corporation, AB Western Constructors, Alberici Western Constructors Ltd. and Balzer's Canada Inc. (defendants)

(2014 QB No. 64; 2014 QB No. 20; 2015 SKQB 74)

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

Saskatchewan Court of Queen's Bench

Judicial Centre of Estevan

Elson, J.

March 6, 2015.

Summary:

The underlying actions arose from a dispute over a construction project at a dam. The general contractor, "AB Western", applied for stays of both the action it had commenced, as well as the action taken against it by the subcontractor "Techeat". AB Western submitted that the matters should be referred to arbitration pursuant to the arbitration clauses in both the contract and the subcontract. The defendant owner of the dam, "SaskPower", applied to stay the arbitration proceeding. Techeat applied for summary judgment in respect of its action against both AB Western and SaskPower.

The Saskatchewan Court of Queen's Bench granted AB Western's application for a stay of both actions. "[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." The Court dismissed SaskPower's application to stay the arbitration as well as Techeat's application for summary judgment.

Arbitration - Topic 2504

Stay of proceedings - Arbitration clause - Enforcement of - A general contractor applied to stay its own action in favour of arbitration pursuant to the arbitration clause in the parties' contract - The defendant contended that, by a plain reading of s. 8(1) of the Arbitration Act (Sask.), the Legislature expressly limited the right to apply for a stay to a party other than the one that commenced the litigation - The Saskatchewan Court of Queen's Bench disagreed - "In my view, the interpretation of s. 8 must be drawn from the context of the statute as a whole, as well as from its history. ... The new statute must be seen as the Legislature's response to its dissatisfaction with the prevailing status quo, where arbitration proceedings did not have the desired 'primacy' over judicial proceedings. In this context, s. 8 should not be seen as a provision to determine standing as much as it sets out the circumstances in which a court is not merely empowered to direct a stay, but is obliged to do so. I believe my reading of the provision is reinforced by viewing the statute, as a whole and, in particular, the adjacent provisions to s. 8." - See paragraphs 29 to 37.

Arbitration - Topic 2510

Stay of proceedings - Bar to stay - General - A general contractor applied to stay its own action in favour of arbitration pursuant to the arbitration clause in the parties' contract - The defendant "SaskPower" argued that a stay would cause it unfairness with respect to confidentiality, which the court should consider pursuant to s. 7(c) of the Arbitration Act - The Saskatchewan Court of Queen's Bench disagreed - The vigour of SaskPower's opposition to arbitration, for reasons entirely unrelated to confidentiality, signaled that confidentiality was not a significant concern - The confidentiality clause did not impose obligations on the parties as much as it imposed them on the mediator or arbitrator - Had SaskPower agreed to arbitration when asked to do so, it would have been able to maintain the confidentiality it now claimed to covet - The Court rejected the contention that the claimed "unfairness" was covered by s. 7(c) - If unfairness or prejudice was to be factored at all, its consideration had to be confined to the Court's discretion to direct a stay of proceedings under s. 37 of the Queen's Bench Act - See paragraphs 50 to 55.

Arbitration - Topic 2510

Stay of proceedings - Bar to stay - General - "AB Western" wished to proceed to arbitration pursuant to the parties' arbitration clause - In addition to the notice of arbitration, it also issued a statement of claim, naming "SaskPower" and subcontractor/lien claimant "Techeat" as defendants - AB Western applied for stays of both the action it had commenced as well as the action taken against it by Techeat - Techeat submitted that it never agreed to arbitration in its subcontract, and was not provided with a copy of the main contract between AB Western and SaskPower - The Saskatchewan Court of Queen's Bench rejected the argument - The wording of the subcontract implicitly invited Techeat to become aware of the dispute resolution process in the main contract so as to determine the process available to it - While AB Western did not take the necessary steps to provide Techeat with the agreement, the failure to do so did not vitiate the effectiveness of the dispute resolution process in the subcontract - "[Unlike the application on AB Western's action, this application must be considered under s. 8(1) of the Arbitration Act ... [O]nce it is found that Techeat is party to an arbitration agreement, the court is required to direct a stay of its action. The only basis for the court to do otherwise is if the case falls within one of the exceptions in s. 8(2)." - See paragraphs 76 to 79.

Arbitration - Topic 2510

Stay of proceedings - Bar to stay - General - "AB Western" wished to proceed to arbitration pursuant to the arbitration clause in the agreement between it and "SaskPower" - In addition to the notice of arbitration, it also issued a statement of claim, naming "SaskPower" as a defendant - AB Western applied to stay the action - SaskPower argued that AB Western was estopped from pursuing arbitration, having agreed to mandatory negotiation - The negotiation provision obliged the parties to "make all reasonable efforts to resolve all disputes and claims by negotiation ... " - The Saskatchewan Court of Queen's Bench rejected the argument - There was no stipulated time within which negotiation was to take place - Further, SaskPower's detriment had not been made out: the issuance of the statement of claim did not breach the agreement's confidentiality provisions - Moreover, "I fail to see how forcing AB Western to litigate, rather than arbitrate, honours the representation to negotiate." - See paragraphs 64 to 69.

Arbitration - Topic 2513

Stay of proceedings - Bar to stay - Waiver - The plaintiff applied to stay its own action in favour of arbitration pursuant to the arbitration clause in the parties' contract - The defendant ("SaskPower") argued that, by issuing the statement of claim, the plaintiff had waived any right it had to invoke the arbitration clause - The Saskatchewan Court of Queen's Bench first observed that the two cases relied on by SaskPower "appear to predate the more modern arbitration legislation, which has entrenched the primacy of arbitration over litigation. Secondly, while both of these decisions found that the issuance of a statement of claim demonstrated a waiver of arbitration, it is noteworthy that the waiving parties had not, at the time of the waiver, actually expressed their intention to proceed to arbitration rather than to litigate. ... [T]he decisions cited by SaskPower do little more than illustrate the long-standing proposition that, for a waiver to be effective, one of its requirements is proof of an unequivocal intention to forego a process or a right to which the waiving party is otherwise entitled. ... In the circumstances before the court, there is no evidence of the intention necessary to establish waiver. Indeed ... there is compelling evidence to the contrary. Under these circumstances, SaskPower's argument on the point reflects an undue emphasis of form over substance, and cannot succeed." - See paragraphs 57 to 61.

Arbitration - Topic 2513

Stay of proceedings - Bar to stay - Waiver - The plaintiff ("AB Western") applied to stay its own action in favour of arbitration pursuant to the arbitration clause in the parties' contract - The defendant ("SaskPower") argued that, by issuing a statement of claim, AB Western had waived any right it had to invoke the arbitration clause - SaskPower challenged the need for AB Western to be as cautious as it was in protecting itself over residual matters that might not be covered by arbitration - It raised a number of arguments to suggest that AB Western's fears of a statute barred claim were unjustified, and that the decision to issue a statement of claim should therefore be seen as evidence of waiver - The Saskatchewan Court of Queen's Bench held that, in the final analysis, "it does not matter. Whatever the reasons were, and whether unduly cautious or not, AB Western had clearly and unequivocally signified its intention to pursue arbitration of its dispute with SaskPower. ... [T]hat was all that was necessary." - See paragraphs 62 and 63.

Arbitration - Topic 2514

Stay of proceedings - Arbitration clause - Bar to stay - Multiplicity of proceedings - A general contractor applied to stay its own action in favour of arbitration pursuant to the arbitration clause in the contract - The defendant argued that a stay would increase the risk of duplicate proceedings such that the court was obliged to exercise its discretion, under s. 37 of the Queen's Bench Act (Sask.), against directing a stay - It contended that the general purpose of s. 8 of the Arbitration Act, read as a whole, was to avoid a multiplicity of proceedings - The Saskatchewan Court of Queen's Bench disagreed - The underlying theme of the current legislation was that "arbitration, freely chosen, takes primacy over litigation. Against the backdrop of this theme, s. 8(1) sets out the circumstances which oblige a court to direct a stay. This obligation is subject only to s. 8(2), meaning that the presence of one or more of the exceptions listed in s. 8(2) is the only basis on which a court is permitted to refuse a stay of the litigation. It is noteworthy that a risk of multiple proceedings or the prospect of third party proceedings are not listed among the exceptions that would permit a court to decline a stay." - See paragraph 47.

Arbitration - Topic 2515.1

Stay of proceedings - Bar to stay - Proper matter for default or summary judgment - A mandatory arbitration provision required that any dispute between "AB Western" and "SaskPower" be resolved exclusively by arbitration - In addition to the notice of arbitration, AB Western issued a statement of claim, naming SaskPower and the subcontractor/lien claimant "Techeat" as defendants - Techeat issued a statement of claim naming AB Western and SaskPower as defendants - AB Western applied to stay both actions - Techeat submitted that its case was "a proper one for default or summary judgment", within the specific exception described in s. 8(2)(e) of the Arbitration Act - The Saskatchewan Court of Queen's Bench held that the exception had not been made out - Techeat's action was fundamentally a creature of statute - Priority was equal between lien claimants in the same class, and Techeat was obliged, under s. 88 of the Builders' Lien Act, to name each lien claimant who had registered a claim - There were other lien claimants - No evidence had been presented with respect to the suitability, or not, of their claims for summary judgment - See paragraphs 80 to 84.

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 Arbitration - Topic 2504 ].

Statutes - Topic 1450

Interpretation - Construction where meaning is not plain - Aids or methods to determine meaning - Legislative history - Reference to prior versions or amendments - [See Arbitration - Topic 2504 ].

Words and Phrases

On the motion of another party to the arbitration agreement - The Saskatchewan Court of Queen's Bench considered the phrase "on the motion of another party to the arbitration agreement", as used in s. 8(1) of the Arbitration Act, S.S. 1992, c. A-24.1 - See paragraphs 29 to 37.

Cases Noticed:

Boychuk Construction (Sask.) Ltd. v. St. Paul's R.C. Separate School District No. 20 (1966), 56 D.L.R.(2d) 722 (Sask. Q.B.), refd to. [para. 24].

Parsons and Whittemore Pulpmills Inc. v. Foundation Co. of Canada Ltd. (1970), 73 W.W.R.(N.S.) 300 (Sask. C.A.), refd to. [para. 24].

Seidel v. Telus Communications Inc., [2011] 1 S.C.R. 531; 412 N.R. 195; 301 B.C.A.C. 1; 510 W.A.C. 1; 2011 SCC 15, consd. [para. 25].

Hopkins v. Ventura Custom Homes Ltd., [2013] 9 W.W.R. 481; 294 Man.R.(2d) 168; 581 W.A.C. 168; 2013 MBCA 67, consd. [para. 25].

Momentous.ca Corp. et al. v. Canadian American Association of Professional Baseball Ltd. et al. (2010), 270 O.A.C. 36; 103 O.R.(3d) 467; 2010 ONCA 722, affd. [2012] 1 S.C.R. 359; 428 N.R. 141; 290 O.A.C. 202; 2012 SCC 9, consd. [para. 25].

Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation et al., [2007] O.T.C. Uned. L48; 66 C.L.R.(3d) 78 (Sup. Ct.), affd. [2008] O.A.C. Uned. 533; 76 C.L.R.(3d) 1; 2008 ONCA 768, consd. [para. 30].

Tricin Electric Ltd. v. York Region District School Board et al., [2009] O.T.C. Uned. B19; 82 C.L.R.(3d) 237 (Sup. Ct.), refd to. [para. 30].

Prince Albert Pulp Co. v. C-I-L Inc. (1986), 48 Sask.R. 76 (Q.B.), refd to. [para. 34].

Ontario Hydro v. Denison Mines Ltd., 1992 CarswellOnt 3497 (C.J.), refd to. [para. 35].

Advanced Construction Techniques Ltd. v. OHL Construction Canada et al., [2013] O.T.C. Uned. 7505; 27 C.L.R.(4th) 213; 2013 ONSC 7505, consd. [para. 38].

New Era Nutrition Inc. v. Balance Bar Co. (2004), 357 A.R. 184; 334 W.A.C. 184; 245 D.L.R.(4th) 107; 2004 ABCA 280, disagreed with [para. 43].

Lamb v. AlanRidge Homes Ltd. et al. (2009), 463 A.R. 1; 309 D.L.R.(4th) 214; 2009 ABQB 170, refd to. [para. 43].

645639 Alberta Ltd. v. Co-Operators General Insurance Co. et al. (2013), 573 A.R. 156; 2013 ABQB 627 (Master), refd to. [para. 43].

Karlsen Shipping Co. v. Sefel J. & Associates Ltd., [1977] 3 W.W.R. 122; 4 A.R. 242 (T.D.), dist. [para. 57].

Ruhrkohle Handel Inter GmbH et al. v. Fednav Ltd. et al., [1992] 3 F.C. 98; 144 N.R. 70 (F.C.A.), dist. [para. 57].

Western Canada Investment Co. v. McDiarmid (1922), 15 Sask. L.R. 142 (C.A.), refd to. [para. 60].

T.D.L. Petroleums Inc. v. Montreal Trust Co. et al. 2001 SKQB 360, affd. (2002), 223 Sask.R. 276; 277 W.A.C. 276; 2002 SKCA 91, refd to. [para. 65].

Montreal Trust Co. v. Williston Wildcatters Co. - see T.D.L. Petroleums Inc. v. Montreal Trust Co. et al.

Carson Welding & Maintenance Ltd. et al. v. Herc Oil Corp. et al. (1996), 147 Sask.R. 211 (Q.B.), refd to. [para. 74].

Dewshaf Investments Inc. v. Buckingham Hospitality Inc., 2005 CarswellOnt 8585 (Sup. Ct.), refd to. [para. 81].

407 ETR Concession Co. v. Ontario (Minister of Transportation), [2004] O.T.C. 953; 2004 CarswellOnt 4495 (Sup. Ct.), refd to. [para. 81].

Smith Estate et al. v. National Money Mart Co. et al., [2008] O.T.C. Uned. B73; 2008 CarswellOnt 4495 (Sup. Ct.), refd to. [para. 81].

Balancing Pool v. TransAlta Utilities Corp. (2009), 492 A.R. 344; 18 Alta. L.R.(5th) 284; 2009 ABQB 631, refd to. [para. 81].

Statutes Noticed:

Arbitration Act, S.S. 1992, c. A-24.1, sect. 7, sect. 8 [para. 23].

Builder's Lien Act, S.S. 1984-85-86, c. B-7.1, sect. 91 [para. 23]; sect. 91(2) [para. 73].

Queen's Bench Act, S.S. 1998, c. Q-1.01, sect. 37 [para. 23].

Counsel:

Murray Sawatzky, Q.C., and Allison Cathcart, for the plaintiffs/defendants, Alberici Western Constructors Ltd. and Balzer's Canada Inc.;

Deron Kuski, Q.C., for the defendants, Saskatchewan Power Corp.;

Nathan Phillips, for the defendant/plaintiff, Technical Heat Treatment Services Ltd.;

Ahmed Malik, for the defendant, Grace Instrumentation Controls Ltd.;

William Preston, Q.C., for Safway Group (a lien claimant).

These applications were heard before Elson, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Estevan, who delivered the following judgment, dated March 6, 2015.