Smith Estate et al. v. National Money Mart Co. et al., (2008) 243 O.A.C. 173 (CA)

• Judge: Winkler, C.J.O, Sharpe, Gillese, Blair and MacFarland, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: October 17, 2008
• Jurisdiction: Ontario
• Citations: (2008), 243 O.A.C. 173 (CA);2008 ONCA 746

Smith Estate v. Nat. Money Mart (2008), 243 O.A.C. 173 (CA)

MLB headnote and full text

Temp. Cite: [2008] O.A.C. TBEd. NO.002

Kenneth Smith, Estate Trustee of the Last Will and Testament of Margaret Smith, deceased, and Ronald Adrien Oriet (plaintiffs/respondents) v. National Money Mart Company and Dollar Financial Group, Inc. (defendants/appellants)

(C49114; C49116; 2008 ONCA 746)

Indexed As: Smith Estate et al. v. National Money Mart Co. et al.

Ontario Court of Appeal

Winkler, C.J.O, Sharpe, Gillese, Blair and MacFarland, JJ.A.

November 3, 2008.

Summary:

The plaintiffs brought a class action against a company and its parent (the lenders) which were in the payday loan business, seeking damages because the lenders were allegedly charging a criminal interest rate. The lenders, despite having litigated the issue unsuccessfully to the Supreme Court of Canada renewed a request to have proceedings stayed and the class proceeding decertified on the basis of class action waiver clauses in their payday loan agreements which provided for arbitration of disputes (i.e., arbitration clauses). The lenders argued that two subsequent decisions of the Supreme Court of Canada in cases from Quebec (Dell Computer Corp. v. Union des consommateurs and Rogers Wireless Inc. v. Muroff), changed the law in Ontario and that they were entitled to the benefit of that change. The plaintiffs moved for summary judgment.

The Ontario Superior Court, in a decision reported [2008] O.T.C. Uned. B73, dismissed both the lenders' and the plaintiffs' motions. The lenders appealed.

The Ontario Court of Appeal dismissed the appeal.

Arbitration - Topic 102

Right to arbitration - What matters arbitrable - [See Arbitration - Topic 2505 ].

Arbitration - Topic 2505

Stay of proceedings - Arbitration clause - Effect of - The plaintiffs brought a class action against lenders in the payday loan business who were allegedly charging a criminal interest rate - The lenders, despite having litigated the issue through to two unsuccessful applications for leave to appeal to the Supreme Court of Canada, renewed a request to have proceedings stayed on the basis of arbitration clauses in their payday loan agreements - The lenders argued that two subsequent decisions of the Supreme Court of Canada from Quebec (the Dell Computer Corp. and Rogers Wireless Inc. cases), changed the law in Ontario thus requiring the court to stay a class proceeding in the face of a consumer agreement providing for arbitration, and that they were entitled to the benefit of that change - A motions judge refused to grant the stay on the basis of issue estoppel - The lenders appealed - The Ontario Court of Appeal dismissed the appeal - The court held that even if Dell and Rogers changed the law of Ontario, and even if the Consumer Protection Act, 2002 provisions that rendered the waiver of the right to bring an action invalid did not have retroactive effect (matters which the court did not decide), the motions judge properly exercised his discretion to apply the doctrine of issue estoppel and deny the lenders' motion to stay and decertify the class proceeding.

Arbitration - Topic 2514.1

Stay of proceedings - Bar to stay - Class proceedings - [See Arbitration - Topic 2505 ].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - [See Arbitration - Topic 2505 ].

Cases Noticed:

Dell Computer Corp. v. Union des consommateurs et al., [2007] 2 S.C.R. 801; 366 N.R. 1, refd to. [para. 2].

Muroff v. Rogers Wireless Inc., [2007] 2 S.C.R. 921; 365 N.R. 177, refd to. [para. 2].

Huras v. Primerica Financial Services Ltd. (2000), 137 O.A.C. 79 (C.A.), refd to. [para. 29].

Jones (M.J.) Inc. et al. v. Kingsway General Insurance Co. et al. (2003), 178 O.A.C. 351; 68 O.R.(3d) 131 (C.A.), refd to. [para. 30].

Mason (V.K.) Construction Ltd. v. Canadian General Insurance Group Ltd. (1998), 116 O.A.C. 272; 42 O.R.(3d) 618 (C.A.), refd to. [para. 31].

Danyluk v. Ainsworth Technologies Inc. et al., [2001] 2 S.C.R. 460; 272 N.R. 1; 149 O.A.C. 1, refd to. [para. 33].

Angle v. Minister of National Revenue, [1975] 2 S.C.R. 248; 2 N.R. 397, refd to. [para. 36].

Toronto (City) v. Canadian Union of Public Employees, Local 79 et al., [2003] 3 S.C.R. 77; 311 N.R. 201; 179 O.A.C. 291, refd to. [para. 40].

Minott v. O'Shanter Development Co. (1999), 117 O.A.C. 1; 42 O.R.(3d) 321 (C.A.), refd to. [para. 41].

Hockin et al. v. Bank of British Columbia et al. (1995), 57 B.C.A.C. 255; 94 W.A.C. 255; 123 D.L.R.(4th) 538 (C.A.), dist. [para. 47].

MacKinnon et al. v. National Money Mart Co. et al., [2008] B.C.T.C. Uned. C28; 293 D.L.R.(4th) 478 (S.C.), leave to appeal granted [2008] B.C.A.C. Uned. 88; 295 D.L.R.(4th) 304 (C.A.), refd to. [para. 54].

Frey v. Bell Mobility Inc. - see Frey et al. v. BCE Inc. et al.

Frey et al. v. BCE Inc. et al. (2008), 329 Sask.R. 42; 2008 SKQB 79, refd to. [para. 54].

Counsel:

F. Paul Morrison, Mahmud Jamal and Christopher M. Hubbard, for the appellants;

Harvey T. Strosberg, Q.C., David Stratas and Trevor Guy, for the respondents.

This appeal was heard on October 17, 2008, by Winkler, C.J.O, Sharpe, Gillese, Blair and MacFarland, JJ.A., of the Ontario Court of Appeal. The following decision of the court was delivered on November 3, 2008, by Sharpe, J.A.