dario j

3.68: Court options to deal with significant deficiencies

Case Summary

The Respondent (Lafarge) entered into a contract with the Applicant (the City) to supply storm sewer pipe. A contractual dispute arose, and Lafarge commenced an Action against the City for breach of contract. The City argued that the contract was subject to mandatory arbitration proceedings, and that Lafarge had failed to commence such proceedings in a timely manner; thus, pursuant to the Arbitration Act, RSA 2000 c A-43 (the Act), the limitation period had expired. Essentially, the City’s position was that the Claim could not proceed in Court as a result of the arbitration clause, and could no longer proceed by way of arbitration since the limitation period for commencing arbitration had expired: the Claim was dead.

Dario J. noted that Section 7 of the Act required the Court to stay a Court proceeding where the parties had agreed to submit to arbitration, unless one of the exceptions set out in section 7(2) of the Act applied. The Court reviewed the facts and relevant case law and determined that none of the exceptions applied. The Court also referred to HOOPP Realty Inc v AG Clark Holdings Ltd, 2014 ABCA 20 (CanLII), wherein the Court of Appeal held that, if the parties did not commence arbitration within the limitation period, the Court’s supervisory role was over, and the Court therefore would not evaluate the circumstances in section 7(2) of the Act. The Action would be struck, pursuant to Rule 3.68, since it was statute barred. Justice Dario noted that Rule 3.68 permits a Court to strike a Claim or stay proceedings where the Court has no jurisdiction. Further, Rule 3.68 was the successor to former Rule 129 which required that an Action be struck or dismissed where the parties agreed to mandatory arbitration.

Dario J. held that the supervisory role of the Court was over, and that the Action should be struck pursuant to Rule 3.68.

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