3.68: Court options to deal with significant deficiencies
6.14: Appeal from master’s judgment or order

Case Summary

This was an Appeal from a Master’s Decision pursuant to Rule 6.14. The Appeal concerned a construction dispute between the Plaintiff and two Defendant companies that were contracted to assist in the upgrade of one of the Plaintiff’s facilities. The contracts between the Plaintiff and Defendants included mandatory arbitration clauses.

The main question on Appeal was whether the Master had erred in refusing to strike out the Statement of Claim pursuant to Rule 3.68 in light of the Plaintiff’s failure first to pursue resolution by arbitration. The Defendants raised s. 7(1) of the Arbitration Act, RSA 2000, c. A-43 (the “Arbitration Act”) which requires that an Action be stayed by the Court pending submission to arbitration. As the limitation period for commencing arbitration had passed, the Defendants argued that Plaintiff’s claim was barred and must be struck. A secondary question was raised as to whether s. 7(6) of the Arbitration Act operated to preclude application of Rule 6.14 and bar an Appeal from the Master’s Decision.

Addressing the secondary question first, the Court held that the Arbitration Act did not operate to preclude application of Rule 6.14. In particular, the Court held that while s. 7(6) of the Arbitration Act bars an Appeal from “the [C]ourt”, a proper reading of that section indicates that “the [C]ourt” comprises both Masters and Justices. However, Rule 6.14 allows an Appeal of a Master’s Decision as of right, and Justice Dilts held that the wording of s. 7(6) of the Arbitration Act did not serve to make a Decision of a Master “unappealable”. Accordingly, while the Arbitration Act may operate to preclude Appeal of the decision of a Court of Queen’s Bench Justice, no such bar exists in respect of Appeal from a Master.

In addition, the Court held that the Arbitration Act would be ineffective to bar Appeal from the Master’s Decision to the extent that the Decision rested upon exercise of the Court’s residual discretion. Since it was somewhat unclear from the Decision on what basis the Master reached his conclusion, the Court indicated the possibility that any preclusion of Appeal may be unavailable on this basis.

In considering the main question on Appeal, the Court concluded that the Plaintiff had failed to establish that the Defendants had attorned to the Court’s jurisdiction, as argued. Contrary to the Master’s conclusion, the Court held that the Defendants’ conduct could not reasonably be seen as attorning to the jurisdiction of the Court, but rather was consistent with a prudent strategy of defence in keeping with the requirements and timelines set out in the Rules. The Court further held that considerations as to fairness, as articulated by the Master, were not sufficient to deny the Defendants of their defence under s. 7(1) of the Arbitration Act.

Accordingly, the Plaintiff’s Statement of Claim was struck as against the Defendants, pursuant to Rule 3.68.

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