SNC-SNAM, G.P. v. Opron Maritimes Construction Ltd. et al., (2011) 386 N.B.R.(2d) 1 (CA)

• Judge: Turnbull, Robertson and Richard, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: November 25, 2010
• Jurisdiction: New Brunswick
• Citations: (2011), 386 N.B.R.(2d) 1 (CA);2011 NBCA 60

SNC-SNAM v. Opron Maritimes (2011), 386 N.B.R.(2d) 1 (CA);

    386 R.N.-B.(2e) 1; 999 A.P.R. 1

MLB headnote and full text

Sommaire et texte intégral

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2012] N.B.R.(2d) TBEd. AP.024

Renvoi temp.: [2012] N.B.R.(2d) TBEd. AP.024

SNC-SNAM, G.P., a Partnership Between SNC-Lavalin Inc. and Snamprogetti Canada Inc. (applicant/appellant) v. Opron Maritimes Construction Ltd. and ICS State, a Division of the State Group Inc. (respondents)

(80-10-CA; 81-10-CA; 2011 NBCA 60)

Indexed As: SNC-SNAM, G.P. v. Opron Maritimes Construction Ltd. et al.

Répertorié: SNC-SNAM, G.P. v. Opron Maritimes Construction Ltd. et al.

New Brunswick Court of Appeal

Turnbull, Robertson and Richard, JJ.A.

July 14, 2011.

Summary:

Résumé:

SNC-SNAM, G.P., and Opron Maritimes Construction Ltd. had entered into a subcontract agreement which contained a dispute resolution clause requiring arbitration. In a number of actions, SNC sought to enforce that clause and have Opron's proceedings stayed pending arbitration. A judge of the Court of Queen's Bench, in both a motion and an application, ruled the dispute resolution clause was not applicable. With leave, SNC appealed those decisions. It was now common ground that the basis upon which the judge excluded the application of the dispute resolution clause was no longer valid. One of the appeals raised a separate issue: whether a cross-claim was allowed in an action under the Mechanics' Lien Act. A threshold issue was whether the judge's decisions could be appealed in light of s. 7(6) of the Arbitration Act, which provided that "[t]here is no appeal from the court's decision."

The New Brunswick Court of Appeal concluded that, since the judge's decision fell outside the scope of s. 7 of the Act, s. 7(6) had no application in this case. The court allowed both appeals, set aside the decisions and ordered a new hearing of both the motion and the application. Regarding the other issue, the judge's ruling that a cross-claim may be made in a mechanics' lien action was correct. Cross-claims were no longer precluded under the Mechanics' Lien Act or the jurisprudence. The court therefore dismissed that ground of appeal.

Arbitration - Topic 2507

Stay of proceedings - When available - [See fourth Arbitration - Topic 2525 ].

Arbitration - Topic 2525

Stay of proceedings - Appeals - Section 7 of New Brunswick's Arbitration Act allowed a court to stay proceedings in respect of a matter the parties had agreed would be submitted to arbitration - The New Brunswick Court of Appeal considered the effect of s. 7(6) of the Act, which provided that "[t]here is no appeal from the court's decision" - "Section 7(6) must be considered in light of the object of the Arbitration Act, which is to give effect to the intentions of the parties in choosing to submit to arbitration. It must also be considered in context. ... The legislative intent reflected in s. 7 is unambiguous: the court must stay a proceeding if the conditions in s. 7(1) are met, unless at least one of the criteria enumerated in s. 7(2) exists. If a motion judge stays a proceeding on the grounds the conditions in s. 7(1) are met, there can be no appeal from that decision. Similarly, if a motion judge concludes that at least one of the criteria contained in s. 7(2) is met, and, as a result, refuses to stay the proceeding, there can be no appeal from that decision. Further, if a motion judge makes a determination under s. 7(5) of the Act, there can be no appeal from that decision either. In each of these instances, the motion judge would be exercising powers that are exclusively reserved for the Court of Queen's Bench." - See paragraphs 30 to 32.

Arbitration - Topic 2525

Stay of proceedings - Appeals - SNC and Opron had entered into a subcontract agreement which contained a dispute resolution clause requiring arbitration (s. 36) - SNC sought to enforce that clause and applied for a stay of various mechanics' lien actions brought by Opron, sub-subcontractors and sub-sub-subcontractors - A judge of the Court of Queen's Bench ruled, on the basis of s. 36.5 of the subcontract ("excluded disputes"), that there was no arbitration agreement upon which the proceedings could be stayed - A threshold issue on these appeals was whether the judge's decisions could be appealed in light of s. 7(6) of the Arbitration Act, which provided that "[t]here is no appeal from the court's decision" - The New Brunswick Court of Appeal stated that, since the judge's decision fell outside the scope of s. 7 of the Act, s. 7(6) had no application in the present case - The judge did not make any of the determinations he might be called upon to make under s. 7: the judge did not stay the proceedings on the basis of a finding that the conditions set out in s. 7(1) were met; he did not refuse a stay on any of the grounds listed in s. 7(2); and, he did not make any determination under s. 7(5) - See paragraph 34.

Arbitration - Topic 2525

Stay of proceedings - Appeals - The New Brunswick Court of Appeal considered the effect of s. 7(6) of the Arbitration Act, which provided that "[t]here is no appeal from the court's decision" - The court noted that the provision was not unique to New Brunswick - The court reviewed decisions of other courts of appeal and found their reasoning "compelling" - The Ontario cases persuaded the court to conclude that "if a motion judge stays a proceeding on the grounds the conditions in s. 7(1) are met, there can be no appeal from that decision. Similarly, if a motion judge concludes that at least one of the criteria listed in s. 7(2) is met, and, as a result, refuses to stay the proceeding, there can be no appeal from that decision. Likewise, if a motion judge makes a determination under s. 7(5) of the Act, there can be no appeal from that decision. On the other hand, if the motion judge holds there is no applicable arbitration agreement upon which the proceedings could be stayed, or, in other words, if the judge does not make any of the determinations he or she might be called upon to make under s. 7 of the Arbitration Act, then s. 7(6) cannot be successfully invoked to bar an appeal" - See paragraphs 36 to 40.

Arbitration - Topic 2525

Stay of proceedings - Appeals - SNC had entered into a subcontract with Opron for the construction of a number of buildings - The agreement contained a dispute resolution provision requiring arbitration (s. 36) - The work or provision of services and materials under the subcontract eventually became the subject of various liens under the Mechanics' Lien Act - Invoking s. 7(1) of the Arbitration Act, SNC sought a stay of Opron's cross-claims in each of the actions brought by the lien claimants (sub-subcontractors and sub-sub-subcontractors), and a stay of Opron's action claiming a mechanics' lien against SNC and others - A judge of the Court of Queen's Bench held the matters were not subject to arbitration because s. 36.5 of the subcontract excluded disputes involving sub-sub-subcontractors - He did not, however, explain how that exclusion might be relevant to the action in which Opron was the plaintiff - The New Brunswick Court of Appeal stated that "[n]evertheless, whether or not he was right in his ruling is now of no moment. The admission of the parties before this Court, that there is no longer any basis to apply s. 36.5 of the Subcontract, makes it clear the judge's decision is now wrong. The admission of the parties should be considered as 'fresh evidence' admitted by consent, and, on the basis of that admission, I conclude the judge's decision must be set aside" - The court rejected Opron's argument that the matters be returned to the judge - "The powers of the Court of Appeal, articulated in Rule 62.21(7) of the Rules of Court, allow us to set aside a decision appealed from and order a new hearing. In my view, this is a case for the exercise of that power" - See paragraphs 41 to 43.

Mechanics' Liens - Topic 8008

Practice - General - Availability of set-off, counterclaim and third party procedure - [See all Mechanics' Liens - Topic 8060 ].

Mechanics' Liens - Topic 8060

Practice - Pleadings - Defence - Counterclaim (incl. cross-claim) - The applicant unsuccessfully sought a stay of cross-claims made against it in various mechanics' liens actions - On appeal, the applicant argued that: (1) Atlantic Paving Co. Ltd v. Cameron Properties et al. (1956) (N.B.C.A.) stood for the proposition that counterclaims were not permitted in mechanics' lien actions; and (2) it necessarily followed that cross-claims ought not to be allowed - The New Brunswick Court of Appeal held that it was not necessary to address those arguments because the 1992 amendments to the Mechanics' Lien Act made the decision in Atlantic Paving on that point no longer valid - See paragraphs 44, 55 to 64 - The court added, however, that it did not agree with the contention that because counterclaims might not have been allowed, the same would apply to cross-claims - "Cross-claims are very different from counterclaims. Rule 29.01 of the Rules of Court, which governs cross-claims, provides that '[a] defendant may cross-claim against a co-defendant who is, or may be, liable to him for (a) all, or any part, of the claim of the plaintiff, or (b) any other relief relating to the subject matter of the main action ' ... On the other hand, the scope of a counterclaim can be much broader. Rule 28.01(1) provides that '[a] defendant may assert, by way of counterclaim, any right or claim which he may have against the plaintiff.' Thus, a counterclaim is not limited to the subject matter of the main action" - See paragraphs 44 to 46.

Mechanics' Liens - Topic 8060

Practice - Pleadings - Defence - Counterclaim (incl. cross-claim) - The New Brunswick Court of Appeal considered the effect of the 1992 amendments to the Mechanics' Lien Act on the precedential significance of Atlantic Paving Co. Ltd v. Cameron Properties et al. (1956) (N.B.C.A.) - The amendments came into force on June 1, 2002 - "In sum, since June 1, 2002, Atlantic Paving no longer stands as authority to prevent counterclaims in mechanics' liens actions. Counterclaims, cross-claims and third party claims are governed by the Rules of Court, which, by virtue of s. 33 of the [Mechanics' Lien] Act, apply to mechanics' lien actions. These rules all have safeguards to ensure judges stand as guardians against unscrupulous parties who may attempt to foil the objects of the Act by bringing claims that are unrelated to the subject-matter of the main action or which would unduly complicate or delay the matter. ... In my view, the application judge was correct in holding that s. 43(1) empowers him 'to determine all questions that arise' in the action, and that this provision allowed him to entertain a cross-claim." - See paragraphs 64 and 65.

Mechanics' Liens - Topic 8060

Practice - Pleadings - Defence - Counterclaim (incl. cross-claim) - A judge of the Court of Queen's Bench ruled that a cross-claim might be made in a mechanics' lien action - In the view of the New Brunswick Court of Appeal, "that conclusion is correct. Amendments to the Mechanics' Lien Act have brought the mechanics' lien procedure more in line with proceedings under the Rules of Court, and cross-claims are no longer precluded under the Act or the jurisprudence. The Rules contain safeguards to ensure judges can appropriately manage mechanics' lien actions to ensure the object of the Act is respected. Moreover, the object of the Act is consistent with the object of the Rules: 'to secure the just, least expensive and most expeditious determination of every proceeding on its merits' (Rule 1.03(2))" - See paragraph 3.

Mechanics' Liens - Topic 8092

Practice - Stay of action - Arbitration - [See fourth Arbitration - Topic 2525 ].

Practice - Topic 1791

Pleadings - Cross-claim - General - [See second Mechanics' Liens - Topic 8060 ].

Practice - Topic 1798

Pleadings - Cross-claim - Stay of - [See second Mechanics' Liens - Topic 8060 ].

Practice - Topic 1821

Pleadings - Counterclaim and set-off - Counterclaim - General - [See second Mechanics' Liens - Topic 8060 ].

Arbitrage - Cote 2507

Suspension des procédures - Conditions d'ouverture - [Voir Arbitration - Topic 2507 ].

Arbitrage - Cote 2525

Suspension des procédures - Appels - [Voir Arbitration - Topic 2525 ].

Privilège de constructeur - Cote 8008

Procédure - Généralités - Possibilité d'invoquer la compensation, la demande reconventionnelle et la mise en cause - [Voir Mechanics' Liens - Topic 8008 ].

Privilège de constructeur - Cote 8060

Procédure - Plaidoiries - Exposé de la défense - Demande reconventionnelle (y compris demande entre défendeurs) - [Voir Mechanics' Liens - Topic 8060 ].

Privilège de constructeur - Cote 8092

Procédure - Suspension de l'action - Arbitrage - [Voir Mechanics' Liens - Topic 8092 ].

Procédure - Cote 1791

Plaidoiries - Demandes entre défendeurs - Généralités - [Voir Practice - Topic 1791 ].

Procédure - Cote 1798

Plaidoiries - Demandes entre défendeurs - Suspension - [Voir Practice - Topic 1798 ].

Procédure - Cote 1821

Plaidoiries - Demande reconventionnelle et compensation - Demande reconventionnelle - Généralités - [Voir Practice - Topic 1821 ].

Cases Noticed:

Atlantic Paving Co. Ltd. v. Cameron Properties et al. (1956), 37 M.P.R. 271 (N.B.C.A.), dist. [paras. 25, 46].

Rosedale Motors Inc. v. Petro-Canada Inc. (1998), 87 O.T.C. 180 (Gen. Div.), refd to. [para. 33].

Hammer Pizza Ltd. v. Domino's Pizza of Canada Ltd., [1997] A.J. No. 67 (Q.B.), refd to. [para. 33].

Radewych v. Brookfield Homes (Ontario) Ltd. et al., [2007] O.T.C. Uned. D70 (Sup. Ct.), affd. [2007] O.A.C. Uned. 403; 2007 ONCA 721, refd to. [para. 33].

MacKay v. Applied Microelectronics Inc. et al. (2001), 197 N.S.R.(2d) 270; 616 A.P.R. 270; 2001 NSSC 122, refd to. [para. 33].

Huras v. Primerica Financial Services Ltd. (2000), 137 O.A.C. 79 (C.A.), refd to. [para. 36].

Houston v. Exigen (Canada) Inc. (2006), 299 N.B.R.(2d) 113; 778 A.P.R. 113 (C.A.), refd to. [para. 37].

Brown v. Murphy (2002), 159 O.A.C. 75 (C.A.), refd to. [para. 38].

Griffin v. Dell Canada Inc. (2010), 259 O.A.C. 108; 2010 ONCA 29, refd to. [para. 38].

Hnatiuk et al. v. Court et al. (2010), 251 Man.R.(2d) 178; 478 W.A.C. 178; 2010 MBCA 20, refd to. [para. 39].

J.L. Simms & Sons Ltd. v. Vigneron (1955), 19 N.B.R.(2d) 426; 30 A.P.R. 426 (Q.B.), refd to. [para. 49].

Lanier Construction Ltée v. Noel (1982), 44 N.B.R.(2d) 513; 116 A.P.R. 513 (Q.B.), refd to. [para. 49].

Entreprises Croussette ltée v. St-Onge (1983), 50 N.B.R.(2d) 414; 131 A.P.R. 414 (T.D.), refd to. [para. 49].

Jenkins Insulators and Accoustics Ltd. v. Marteau (1985), 66 N.B.R.(2d) 297; 169 A.P.R. 297 (T.D.), refd to. [para. 49].

David T. Williams Ltd. v. Green, [1990] N.B.J. No. 955 (Q.B.), refd to. [para. 49].

Jean v. Diamond (1996), 180 N.B.R.(2d) 313; 458 A.P.R. 313 (T.D.), refd to. [para. 49].

AMEC Americas Ltd. v. AV Nackawic Inc. (2009), 345 N.B.R.(2d) 201; 889 A.P.R. 345; 2009 NBQB 42 (T.D.), refd to. [para. 49].

Statutes Noticed:

Arbitration Act, S.N.B. 1992, c. A-10.1, sect. 7 [para. 31].

Mechanics' Lien Act, R.S.N.B. 1973, c. M-6, generally [para. 1].

Authors and Works Noticed:

Bristow, David I., Glaholt, Duncan W., Reynolds, R. Bruce, and Wise, Howard M., Construction, Builders' and Mechanics' Liens in Canada (7th Ed. 2005), (Looseleaf), vol. 2, pp. 10-50, ss. 10.14.21 [para. 35]; 10-31, 10.11 [para. 61]; 10-36, 10.12 [para. 62]; 10-37, 10.12 [para. 62].

Counsel:

Avocats:

David M. Norman, Q.C., and Rodney E. Larsen, for the appellant;

David N. Rogers, for Opron Maritimes Construction Ltd.;

Andy W. Lodge, for ICS State, a Division of The State Group Inc.

These two appeals were heard together on November 25, 2010, before Turnbull, Robertson and Richard, JJ.A., of the New Brunswick Court of Appeal. In reasons written by Richard, J.A., the Court of Appeal delivered the following judgment in both official languages, on July 14, 2011.