The Appellant appealed a Chambers Decision striking out the Statement of Claim pursuant to Rule 3.68 of the Alberta Rules of Court, on the basis that it was plain and obvious that the claim could not succeed. The dispute between the parties arose as a result of a design build agreement whereby the Respondent was obliged to build a warehouse for the Appellant. The warehouse was completed, but there were issues with dust from the floor that arose shortly after the completion of the project. The Appellant sued the Respondent in the Court of Queen’s Bench for breach of agreement and negligence.

The Chambers Judge struck the Statement of Claim as it was plain and obvious that the Action would not succeed for two reasons. First, the agreement had a mandatory arbitration clause. Second, the limitation period for arbitrating the dispute had expired before any party had taken steps to commence an arbitration.

The Court of Appeal held that the Chambers Judge correctly interpreted and applied the decision in Agrium Inc v Babcock & Wilcox Canada Ltd, 2005 ABCA 82. The Court further held that parties who agree to mandatory arbitration as a remedy must arbitrate the dispute and cannot begin a civil suit. In the event that a party files a Statement of Claim within the limitation period for arbitration, and the arbitration has not commenced, the Court will strike the claim. The Court dismissed the Appeal.