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Client Work

Supreme Court of Canada Upholds Principles of the Arbitration Act

Fasken
Reading Time 2 minute read Subscribe
Client

TELUS Communications Inc.

In TELUS Communications Inc. v. Wellman, the Fasken team of Geoff Cowper, Andrew Borrell, Alexandra Mitretodis, Gerry Ranking and Paul Martin secured an important victory in the Supreme Court of Canada reinforcing the statutory and judicial policy in favour of enforcing arbitration agreements except where there is an express legislative override. The issue was an important victory for the client, for business and for the arbitration bar.

Mr. Wellman brought a class proceeding on behalf of 1.4 million consumer customers and 600,000 business customers of TELUS in Ontario in relation to an issue regarding TELUS’ billing practices.

All TELUS customers were subject to an arbitration provision that applied to the dispute in issue. While the Ontario Consumer Protection Act provides an exemption for consumer customers by which arbitration agreements are not enforceable, business customers have no such stator exemption. TELUS applied to stay the claims of business customers but the lower courts refused a stay. Applying long standing Ontario authority, the courts concluded that section 7(5) of the Ontario Arbitration Act gave the court discretion to refuse the stay where the consumer and business claims were joined in one proceeding and it was not reasonable to separate them.

At the Supreme Court of Canada, TELUS argued that the lower court’s interpretation of the Ontario Arbitration Act was inconsistent with Supreme Court of Canada authority that an arbitration agreement was enforceable absent and express statutory override and that properly interpreted section 7(5) permits the court to either stay the entire proceeding or permit the non-arbitrable matters to proceed in court, but did not confer any discretion to refuse to stay arbitrable matters. The Court reaffirmed the modern approach that sees arbitration as an autonomous, self-contained, self-sufficient process pursuant to which the parties agree to have their disputes resolved by an arbitrator, not by the courts. The only exception arises where the Arbitration Act itself or other legislation provides a clear legislative override of the contractual right to arbitration. This result could not be avoided by piggybacking business claims in a proceeding brought by consumers.

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