Case: Leon v. Dealnet Capital Corp., 2023 ONCA 744 (CanLII)
Keywords: mandatory arbitration; employment law; test for leave to intervene; leave to appeal stage
This case is about a motion to intervene as a friend of the court, pursuant to Rule 13.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg 194. The motion for intervention arises in the context of an employment dispute, in which Leave is now being sought to the Court of Appeal.
The Appellant, Mr. John Leon, is an employee of the Respondent, Dealnet Capital Corp. Following Mr. Leon’s resignation, a dispute arises relating to his performance bonus. The employment contract contains a binding arbitration clause and a “Governing Law” clause, which provides:
- the contract is subject to the Employment Standards Act, 2000, S.O. 2000, c. 41; and
- that “if the employee is entitled to any rights or payments under that legislation which are not referenced in this Agreement or which exceed the amounts payable under this Agreement, the provisions of that legislation shall supersede the provisions of this Agreement.” (See para. 2).
Mr. Leon brings a civil claim, rather than pursue arbitration. The question, then, is whether Mr. Leon’s civil claim to recover a portion of the performance bonus is a matter which has to be resolved by arbitration. The Respondent brings a motion under s. 7(1) of the Arbitration Act, 1991, SO 1991, c 17 to have the matter stayed, relying on the arbitration clause. McAfee A.J. stays the action. (See para. 3).
Mr. Leon then appeals to Divisional Court, which finds the appeal is barred by s. 7(6) of the Arbitration Act (i.e., a provision which provides no appeal of a s. 7 stay decision). (See para. 3). The proposed intervenor herein, Parkdale Community Legal Services (“PCLS”), is granted intervenor status by the Divisional Court. (See para 3). Mr. Leon next seeks Leave to the Court of Appeal.
PCLS seeks to intervene to intervene at the Leave stage. The Court of Appeal dismisses PCLS’ motion for intervention, but notes that PCLS is not foreclosed from seeking Leave to intervene on the appeal, should Leave be granted to Mr. Leon. (See para. 15).
The underlying case for Leave is interesting.
Mr. Leon maintains that the questions raised herein “transcend the rights of the parties and engage issues of public importance relating to the enforceability of mandatory arbitration clauses in the employment agreements.” (See para. 6).
For example, Mr. Leon says s. 7(6) of the Arbitration Act does not properly bar his claim because the arbitration clause constitutes an impermissible attempt to contract out of the Employment Standards Act. Accordingly, as stated in the Leave factum, Mr. Leon argues the Court of Appeal could settle the following key question: “whether s. 7(6) of the [Arbitration Act] can apply to bar an appeal of a decision made on a motion pursuant to s. 7(1) of the [Arbitration Act], but to which the [Arbitration Act] does not apply”. (See para. 4).
As to PCLS’ participation at the Leave stage, it is notable that the Parties consented or did not oppose the motion for intervention. (See para. 10). However, as noted by the Court of Appeal, interventions made in support of a Leave application should be considered “exceptional” and “should not be encouraged”. (See para. 11; see also McFarlane v. Ontario (Education), 2019 ONCA 641, at para. 3).
As to the applicable test for intervention, the Court of Appeal observed that the PCLS was obliged to address whether Mr. Leon’s proposed appeal raises an issue of public importance (i.e., following the well-known framework in Re Sault Dock Co. Ltd. v. City of Sault Ste. Marie (1973), 1973 CanLII 493 (ON SC)). (See para. 12). In this case, the Court of Appeal found that the Parties’ submissions left the Court “well equipped to determine if the motion meets the test for granting leave to appeal, which includes consideration of, but is not limited to, the public importance of the issue”. (See para. 13). In other words, PCLS did not meet “the high onus of establishing that their contribution is necessary at this stage”. (See para. 14).
Therefore, while the Court of Appeal would not “rule out the possibility that extraordinary circumstances may arise where an intervenor could assist with the question of public interest”, “this is not one of those very rare cases”. (See para. 14).
Counsel for the Intervenor: Ruth Wellen (Kastner Lam LLP, Toronto)
Counsel for the Appellant: Craig Colraine and Freeman Choi (Birenbaum, Steinberg, Landau, Savin & Colraine LLP, Toronto)
Counsel for the Respondent: David Vaillancourt (Affleck, Greene, McMurtry LLP, Toronto)