Agrium v Orbis Engineering Field Services<\/em><\/a>, 2022 ABCA 266 (Agrium v Orbis<\/em><\/strong>), is a case involving statutory interpretation of section 7(6) of Alberta\u2019s Arbitration Act<\/em><\/a>, RSA 2000, c A-43 (the \u201cAct<\/strong>\u201d). Section 7 of the Act allows a court to stay court proceedings in light of an arbitration agreement. Section 7(6) specifically states: \u201cThere is no appeal from the court\u2019s decision under this section.<\/em>\u201d Agrium v Orbis<\/em> considers whether or not the court can hear appeals of an application to stay proceedings in favour of arbitration.<\/p>\n\n\n\n By reasons filed on August 8, 2022, the majority of the three member panel of the Court of Appeal (Crighton, Ho, JJA) held that a party may appeal from a master (now applications judge, but referred to in this article as a master for consistency with the reasons for decisions) to a Court of King\u2019s Bench justice under section 7 of the Act. The dissenting member of the panel of the court (Wakeling JJA) held that there is no right to appeal from a master\u2019s decision under section 7(6) of the Act.<\/p>\n\n\n\n In 2013, the Appellant Agrium Inc. (\u201cAgrium<\/strong>\u201d) separately engaged Respondent Orbis Engineering Field Services Ltd. (\u201cOrbis<\/strong>\u201d) and Respondents Elliott Turbomachinery Canada Inc. and Elliott Company (collectively, \u201cElliott<\/strong>\u201d) to provide work and services relating to the upgrade of one of its production facilities. Agrium drafted the purchase orders that governed the work (the \u201cAgrium Contract<\/strong>\u201d), which contained the following mandatory arbitration provision relating to the resolution of disputes (emphasis added):<\/p>\n\n\n\n 28. Proper Law and Dispute resolution:<\/p>\n\n\n\n \u2026 Any dispute relating to [the Agrium Contract] shall be resolved by arbitration in Calgary, Alberta, Canada, pursuant to the UNCITRAL Model Law and Rules<\/em>.<\/strong> The courts having exclusive supervisory jurisdiction with respect to the matters relating to [the Agrium Contract] shall be the courts of the Province of Alberta.<\/p>\n\n\n\n A failure occurred at the production facility on March 22, 2014. Nearly two years later and on the eve of the limitation period, Agrium filed a statement of claim suing Elliott and Orbis and seven other defendants for its loss. None of the agreements with the seven other defendants contained a mandatory arbitration provision.<\/p>\n\n\n\n By the time Agrium served its claim on Orbis and Elliott, the parties agreed that the time limit for commencing an arbitration proceeding had long expired. Orbis and Elliott defended the claim on the basis of non-compliance with the dispute resolution provision. In March 2019 and January 2020, Orbis and Elliott respectively took steps to stay or strike the action pursuant to section 7(1) of the Act.<\/p>\n\n\n\n By reasons reported at Agrium, Inc v Colt Engineering Corporation<\/em><\/a>, 2020 ABQB 53, the master dismissed Orbis and Elliott\u2019s application to strike the action, concluding that it had discretion to determine if Orbis and Elliott had waived reliance on the mandatory arbitration provision and attorned to the jurisdiction of the court. The master noted that although Orbis and Elliott took two years, and two years and three months, respectively, to move to strike, the extent of delay is simply a factor to be considered.[1]<\/a><\/p>\n\n\n\n Orbis and Elliott appealed the decision to a justice of the Court of Queen\u2019s Bench (now Court of King\u2019s Bench, but referred to in this article as Queen\u2019s Bench for consistency with the reasons for decisions) and Agrium applied to strike both appeals on the grounds that section 7(6) of the Act barred appeals from the master\u2019s decision. In Agrium Inc v Colt Engineering Corporation<\/em><\/a>, 2020 ABQB 807, the court held that, first, section 7(6) did not bar an appeal from a master\u2019s decision. Second, that Elliott and Orbis did not waive reliance on the mandatory arbitration provision in the Agrium Contract. The chambers justice allowed Orbis and Elliott\u2019s appeal from the master, struck the claim, and dismissed Agrium\u2019s application to strike the appeals.<\/p>\n\n\n\n Agrium appealed the court\u2019s decision. Among other issues, Agrium argued that the chambers justice did not have jurisdiction to hear the appeal of Orbis and Elliott from the decision of the master. The Court of Appeal therefore addressed whether s 7(6) of the Act bars an appeal from a master in chambers to a justice of the Court of Queen\u2019s Bench.<\/p>\n\n\n\n The parties did not dispute or disagree on the following points:<\/p>\n\n\n\n The Court of Appeal reviewed the Act, the Court of Queen\u2019s Bench Act<\/em>, RSA 2000, c C-31, the Interpretation Act<\/em>, RSA 2000, c I-8, and the Alberta Rules of Court<\/em>, Alta Reg 124\/2010.<\/p>\n\n\n\n The court set out the following relevant statutory provisions:[2]<\/a><\/p>\n\n\n\n The court cited several principles of statutory interpretation. As the appeal involved several pieces of legislation, the court cited the presumptions of consistency and coherence. The court noted that: \u201cIn the context of statutory interpretation, conflict is a narrow concept meaning the two acts under review cannot stand together and cannot both operate without interfering with the other<\/em>.\u201d[3]<\/a><\/p>\n\n\n\n Moreover, legislation is presumed to be enacted in compliance with the constitution.[4]<\/a> The court noted that decisions of a master in Alberta have always been subject to review by a section 96 judge (i.e. a superior court justice), who hear appeals on a de novo<\/em> basis.[5]<\/a> The constitutional jurisdiction of a master and a justice could not be changed by an \u201cimplied amendment to a provincial statute<\/em>.\u201d[6]<\/a><\/p>\n\n\n\n Further, even if section 12 of the Court of Queen\u2019s Bench Act<\/em><\/a>,<\/em> which confers a right of appeal from a master to a justice of the same court, conflicts with the statutory prohibition in section 7(6) of the Act, the court did not agree with Agrium that the Act is the more specific provision that would override the right of appeal in the Court of Queen\u2019s Bench Act<\/em><\/a>. Rather, the provision that specifically addresses the right of appeal is that in the Court of Queen\u2019s Bench Act<\/em><\/a>.[7]<\/a><\/p>\n\n\n\n The court noted that an appeal is not<\/em> available pursuant to section 7(6) of the Act where the decision of a master was not appealed, the time for doing so has expired, or a justice of the Court of Queen\u2019s Bench decided the issue.[8]<\/a> The majority held that this interpretation of section 7 of the Act respects the constitutional limitations on the master\u2019s decision, the statutory right of appeal in the Court of Queen\u2019s Bench Act<\/em>, and the legislative intention that arbitration matters not be subject to multiple levels of appeal.[9]<\/a><\/p>\n\n\n\n Wakeling J.A. in dissent would have allowed the appeal, noting that a master\u2019s decision is a decision of the Court of Queen\u2019s Bench of Alberta and it is \u201ccrystal clear\u201d that \u201cno appeal\u201d means \u201cno appeal\u201d.[10]<\/a> He further noted that section 7(6) of the Act deprives a party a further right to appeal, but would not preclude applying for permission to appeal to the Supreme Court of Canada or applying to a justice of Court of Queen\u2019s Bench for judicial review.[11]<\/a><\/p>\n\n\n\n Section 7 of the Act allows the court to stay a proceeding where a party has commenced a court action in the face of a mandatory arbitration agreement. This issue often arises when a party has not followed the contractual dispute resolution process and has proceeded to file an action in court in ignorance or in an attempt to, perhaps, meet or preserve its limitation date. When that happens, the opposing party to the arbitration agreement can bring an application under section 7 of the Act to stay the proceedings. Section 7(6) of the Act states that, \u201cthere is no appeal from the court\u2019s decision under this section<\/em>.\u201d Even so, the law in Alberta is that appeals from applications judge\u2019s decisions under this section are permitted.<\/p>\n\n\n\n It is interesting to briefly place this case within the broader context of commercial arbitration and what the Supreme Court of Canada has emphasized is the central aim of commercial arbitration – \u201cefficiency and finality<\/em>.\u201d[12]<\/a> To the extent that Agrium v Orbis<\/em> permits a further appeal from an applications judge, it arguably challenges those twin aims set out by the Supreme Court.<\/p>\n\n\n\n Despite that, practically, parties and their counsel should engage in a detailed review of the governing contractual provisions in the initial stages of a dispute to ensure that they are not bringing a court action in the face of a mandatory arbitration agreement or provision. Doing so carries risk that a court may dismiss the court action. This may then mean that the plaintiff is without legal recourse because they may similarly be unable to commence arbitration proceedings after the passage of some time.<\/p>\n\n\n\n For further questions about this area of law, the applicability of the Agrium v Orbis<\/em> decision, or the pursuit or defence of legal action when a mandatory arbitration provision is present, please contact Miller Thomson\u2019s Commercial Litigation<\/a> Group.<\/p>\n\n\n\n [1]<\/a> Agrium, Inc v Colt Engineering Corporation<\/em>, 2020 ABQB 53, para 38<\/p>\n\n\n\n [2]<\/a> Agrium v Orbis Engineering Field Services<\/em>, 2022 ABCA 266 at paras 17-22.<\/p>\n\n\n\n [3]<\/a> Agrium v Orbis<\/em> at para 29.<\/p>\n\n\n\n [4]<\/a> Agrium v Orbis<\/em> at para 30.<\/p>\n\n\n\n [5]<\/a> Agrium v Orbis<\/em> at para 30.<\/p>\n\n\n\n [6]<\/a> Agrium v Orbis<\/em> at para 30.<\/p>\n\n\n\n [7]<\/a> Agrium v Orbis<\/em> at para 32.<\/p>\n\n\n\n [8]<\/a> Agrium v Orbis<\/em> at para 33.<\/p>\n\n\n\n [9]<\/a> Agrium v Orbis<\/em> at para 33.<\/p>\n\n\n\n [10]<\/a> Agrium v Orbis<\/em> at para 53.<\/p>\n\n\n\nBackground facts<\/h2>\n\n\n\n
Master (now Applications Judge\u2019s) decision: Agrium, Inc v Colt Engineering Corporation<\/em>, 2020 ABQB 53<\/h2>\n\n\n\n
Court of Queen\u2019s Bench decision: Agrium Inc v Colt Engineering Corporation<\/em>, 2020 ABQB 807<\/h2>\n\n\n\n
The analysis by the Court of Appeal<\/h2>\n\n\n\n
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Takeaways<\/h2>\n\n\n\n
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