Babey et al. v. Greer et al., 2016 SKCA 45

• Judge: Richards, C.J.S., Caldwell and Herauf, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: April 01, 2016
• Jurisdiction: Saskatchewan
• Citations: 2016 SKCA 45;(2016), 476 Sask.R. 244 (CA)

Babey v. Greer (2016), 476 Sask.R. 244 (CA);

    666 W.A.C. 244

MLB headnote and full text

Temp. Cite: [2016] Sask.R. TBEd. AP.021

Kenneth Greer, Western Ag Global Inc. and Western Ag Innovations Inc. (appellants/defendants) v. Darryl Babey, Babco Properties Ltd. and Babco Soil Services Ltd. (respondents/plaintiffs)

(CACV2753; 2016 SKCA 45)

Indexed As: Babey et al. v. Greer et al.

Saskatchewan Court of Appeal

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

April 1, 2016.

Summary:

The plaintiffs' action encompassed two claims. One claim related to a share subscription agreement and alleged oppression within a Saskatchewan corporation. The other related to a franchise agreement between the plaintiff Babco Soil, a North Dakota corporation, and the Saskatchewan corporation (the North Dakota claim). In the North Dakota claim, Babco Soil alleged that it relied on certain representations by the Saskatchewan corporation in a Licensed Business Partner Agreement (LBPA) and otherwise to purchase a North Dakota franchise. Asserting that the representations were not true, Babco Soil took the position that the LBPA was void ab initio and claimed damages. The defendants applied for a stay of proceedings regarding the North Dakota claim, asserting that it should be adjudicated in North Dakota. Alternatively, the defendants applied to stay the North Dakota claim under the International Commercial Arbitration Act (ICAA) in accordance with the arbitration agreement in clause 16.3 of the LBPA.

The Saskatchewan Court of Queen's Bench, in a judgment reported (2015) 473 Sask.R. 119, dismissed the applications. The trial judge held that allowing the North Dakota claim to proceed to arbitration under the ICAA would result in a multiplicity of proceedings, which was to be avoided. The defendants appealed only the ICAA decision.

The Saskatchewan Court of Appeal allowed the appeal. The ICAA did not allow a court to refuse to refer a dispute to arbitration merely because doing so would result in parallel or overlapping proceedings. The court ordered that the matter proceed to arbitration.

Arbitration - Topic 2504

Stay of proceedings - Arbitration clause - Enforcement of - The plaintiffs' action encompassed two claims - One claim related to a share subscription agreement and alleged oppression within a Saskatchewan corporation - The other related to a franchise agreement between the plaintiff Babco Soil, a North Dakota corporation, and the Saskatchewan corporation (the North Dakota claim) - In the North Dakota claim, Babco Soil alleged that it relied on certain representations by the Saskatchewan corporation in a Licensed Business Partner Agreement (LBPA) and otherwise to purchase a North Dakota franchise - Asserting that the representations were not true, Babco Soil took the position that the LBPA was void ab initio and claimed damages - The defendants applied to stay the North Dakota claim under the International Commercial Arbitration Act (ICAA) in accordance with the arbitration agreement in clause 16.3 of the LBPA - The trial judge dismissed the application - Where parties had freely entered into arbitration agreements, the court should generally give effect to the agreement - However, here, to give effect to the agreement would necessarily entail a multiplicity of proceedings - An added complication was the plaintiffs' claim that the LBPA was void ab initio - The prospect of inconsistent findings was real as was the prospect that this could delay resolution of the entire matter - The Saskatchewan Court of Appeal allowed the defendants' appeal and ordered that the claim proceed to arbitration - The ICAA was engaged, because although the plaintiffs' and defendants' "place of business" was in the same "state" (Saskatchewan), a substantial part of the commercial obligations were to be performed outside Canada (North Dakota) - The question of the arbitrator's jurisdiction to deal with the substance of the claim was for the arbitrator to decide - The ICAA did not allow a court to refuse to refer a dispute to arbitration merely because doing so would result in parallel or overlapping proceedings - The court "shall" refer the parties to arbitration unless it found the arbitration agreement to be null and void, inoperative or incapable of being performed - There were no such findings, so the trial judge was required to refer the matter to arbitration - See paragraphs 12 to 44.

Arbitration - Topic 2507

Stay of proceedings - When available - [See Arbitration - Topic 2504 ].

Arbitration - Topic 2514

Stay of proceedings - Arbitration clause - Bar to stay - Multiplicity of proceedings - [See Arbitration - Topic 2504 ].

Counsel:

Kimberly Visram, for the appellants;

Deron Kuski, Q.C., and Milad Alishahi, for the respondents.

This appeal was heard on January 12, 2016, before Richards, C.J.S., Caldwell and Herauf, JJ.A., of the Saskatchewan Court of Appeal.

On April 1, 2016, Richards, C.J.S., delivered the following judgment for the Court of Appeal.