Case: La Française IC 2 v. Wires, 2024 ONCA 171 (CanLII)

Keywords: international commercial arbitration; abuse of process; re-litigating

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The Appellant commences an arbitration in London, England against the Respondent to obtain payment for the pursuit of a claim and recovery of damages under a “Bespoke Funding Agreement”. (See para. 2).

The Arbitrator awards the Respondent security for costs. The Appellant does not pay, as ordered. Shortly thereafter, the Appellant challenges the appointment of the Arbitrator before the Stockholm Chamber of Commerce (“SCC”) – requesting their removal for reasonable apprehension of bias. The SCC dismisses the challenge. (See para. 3).

The Respondent then seeks a dismissal of the arbitration and costs, which the Arbitrator grants. (See para. 4). In Ontario, the Respondent obtains a decision from an Application Judge(Cavanagh J.) recognizing and enforcing the Arbitrator’s decision. (See para. 1).

The Appellant appeals to the Court of Appeal (van Rensburg, Roberts, and Gomery JJ.A.), arguing that the Application Judge’s decision should be set aside, among other reasons, on the basis that it found the Appellant was ‘re-litigating’ the issue and thereby creating an abuse of process. (See para. 5).

The Court of Appeal finds no basis for appellate intervention. (See para. 6).

Importance:

The Court of Appeal provided a detailed description of abuse of process.

Last year, in National Industries Inc. v. Kirkwood, 2023 ONCA 63 (CanLII), Paciocco J.A. included abuse of process among the “re-litigation doctrines” together with res judicata and issue estoppel, sourcing a description of the doctrine from the Supreme Court of Canada’s decision – i.e., our‘SCC’ – in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 (CanLII). (See National Industries Inc. v. Kirkwood, 2023 ONCA 63 (CanLII) at paras. 1, 23).

While the Court of Appeal made no reference its prior decision in National Industries Inc., the description of abuse of process remains relatively stable. Much as the Court of Appeal had previously held in Canam Enterprises Inc. v. Coles, 2000 CanLII 8514 (ON CA), abuse of process is again described as a “flexible doctrine” which “serves as an adaptable judicial tool to address circumstances that threaten the fairness and integrity of the court’s process and the administration of justice”. However, citing the more recent Supreme Court of Canada decision in Behn v. Moulton Contracting Ltd., 2013 SCC 26 at paras. 39-41, the Court of Appeal also noted that abuse of process is not “restricted to preventing the re-litigation of issues” but is engaged to prevent the misuse of court procedures “in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute.” (See para. 8).

In the circumstances of this case, the Court of Appeal determined that the Appellant’s concerns with respect to the Arbitrator’s independence and impartiality “seems to have arisen more from his dissatisfaction with the arbitrator’s security for costs order than from a real concern about the [A]rbitrator”. (See para. 9). The Court of Appeal made reference to the SCC’s determination that the Appellant’s allegations were “brought out of time and not well-founded”, and that the Appellant could have sought a remedy earlier – including by appealing the SCC’s decision before the English courts. (See para. 9).

Ultimately, the Court of Appeal determined there was support for the Application Judge’s conclusion that “relitigating the challenge would amount to an abuse of process”. (See para. 9).

Counsel for the Appellant: Paul Michell (Lax O’Sullivan Lisus Gottlieb, Toronto)

Counsel for the Respondent: Myriam Seers (Agora Law, Toronto)

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