TELUS Communications Inc. Appellant v. Avraham Wellman, 2019 SCC 19

SUPREME COURT OF CANADA Citation: TELUS Communications Inc. v. Wellman, 2019 SCC 19, [2019] 2 S.C.R. 144 Appeal Heard: November 6, 2018 Judgment Rendered: April 4, 2019 Docket: 37722 Between: TELUS Communications Inc.

Appellant and Avraham Wellman Respondent - and - Attorney General of British Columbia, ADR Chambers Inc., Canadian Chamber of Commerce, Public Interest Advocacy Centre, Consumers Council of Canada, Canadian Federation of Independent Business, Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic and Consumers’ Association of Canada Interveners Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe and Martin JJ.

Reasons for Judgment: (paras. 1 to 105) Moldaver J. (Gascon, Côté, Brown and Rowe JJ. concurring) Dissenting Reasons: (paras. 106 to 172) Abella and Karakatsanis JJ. (Wagner C.J. and Martin J. concurring) TELUS Communications Inc . v. Wellman, 2019 SCC 19, [2019] 2 S.C.R. 144 TELUS Communications Inc. Appellant v. Avraham Wellman Respondent

and Attorney General of British Columbia, ADR Chambers Inc., Canadian Chamber of Commerce, Public Interest Advocacy Centre, Consumers Council of Canada, Canadian Federation of Independent Business, Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic and Consumers’ Association of Canada Interveners Indexed as: TELUS Communications Inc. v. Wellman 2019 SCC 19 File No.: 37722. 2018: November 6; 2019: April 4.

Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe and Martin JJ. on appeal from the court of appeal for ontario Civil procedure — Stay — Class actions — Consumer and non-consumer claims — Arbitration clause — Customer filing class action for damages alleging cell phone service provider engaged in deceptive practices — Class consisting of both consumers and non-consumers — Cell phone service provider’s standard terms and conditions containing mandatory arbitration clause — Arbitration clause invalidated by provincial consumer protection legislation with respect to claims by consumers — Cell phone service provider relying on arbitration clause to seek stay of proceedings with respect to non-consumers’ claims — Whether provincial statute governing arbitration grants court discretion to refuse to stay non-consumers’ claims — Arbitration Act, 1991, S.O. 1991, c. 17, s. 7 — Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch.

A . W filed a proposed class action for damages against TELUS on behalf of about two million Ontario residents who entered into mobile phone service contracts with TELUS during a specified timeframe. The class consists of both consumers and non-consumers (business customers). W alleges that TELUS engaged in an undisclosed practice of rounding up calls to the next minute such that customers were overcharged and were not provided the number of minutes to which they were entitled.

The standard terms and conditions of the service contracts included an arbitration clause stipulating that all claims arising out of or in relation to the contract, apart from the collection of accounts, must be determined through mediation and, failing that, arbitration. This clause was invalidated by the Consumer Protection Act to the extent that it would otherwise prevent class members who qualify as consumers from pursuing their claims in court.

However, since the business customers do not benefit from this protection, TELUS sought to have the proceeding stayed with respect to the business customer claims, relying on the arbitration clause. The motions judge dismissed TELUS’s motion for a stay and certified the action. She held that s. 7(5) of the Arbitration Act, 1991 grants the courts discretion to refuse a stay where it would not be reasonable to separate the matters dealt with in the arbitration agreement from the other matters, thereby allowing all of the matters to proceed in court.

She was of the view that this discretion may be exercised to allow non-consumer claims that are otherwise subject to an arbitration clause to participate in a class action, where it is reasonable to do so. The Court of Appeal dismissed TELUS’s appeal. Held (Wagner C.J. and Abella, Karakatsanis and Martin JJ. dissenting): The appeal should be allowed and the claims of the business customers stayed. Per Moldaver, Gascon, Côté, Brown and Rowe JJ.: Section 7(5) of the Arbitration Act, 1991 does not grant the court discretion to refuse to stay claims that are dealt with in an arbitration agreement.

The protections afforded by the Consumer Protection Act allow the consumers to pursue their claims in court, but the business customers remain bound by the arbitration agreements into which they entered. Accordingly, the latter are exposed to a stay under s. 7(1) of the Arbitration Act, 1991 . Since the only potential exception to the general rule under s. 7(1) relied on by W does not apply, the business customer claims should be stayed.

In keeping with 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, s. 6 of the Arbitration Act, 1991 signals that courts are generally to take a hands off approach to matters governed by that statute.

Section 7(1) of the Arbitration Act, 1991 establishes the general rule that where a party to an arbitration agreement commences a proceeding in respect of a matter dealt with in the agreement, the court shall, on the motion of another party to the agreement, stay the court proceeding in favour of arbitration. This general rule reaffirms the concept of party autonomy and upholds the policy underlying the Arbitration Act, 1991 that parties to a valid arbitration agreement should abide by their agreement.

Section 7(2) lists five exceptions to the general rule under s. 7(1) where it would be either unfair or impractical to refer the matter to arbitration. Section 7(5) provides a further exception to the general rule under s. 7(1) and consists of two main components. First, s. 7(5)(

a) and (

b) set out two preconditions. The first precondition is met if the agreement deals with only some of the matters in respect of which the proceeding was commenced. That is, the proceeding must involve at least one matter that is dealt with in the arbitration agreement and at least one matter that is not dealt with in the arbitration agreement. The second precondition is met if it is reasonable to separate the matters dealt with in the agreement from the other matters.

Second, if both preconditions are satisfied, then instead of ordering a full stay, the court may allow the matters that are not dealt with in the arbitration agreement to proceed in court, though it must nonetheless stay the court proceeding in respect of the matters that are dealt with in the agreement. If the preconditions are not met, then the discretionary exception under s. 7(5) is not triggered as s. 7(5) can have effect only if the two preconditions are satisfied.

At that point, unless one of the exceptions listed in s. 7(2) applies, the general rule under s. 7(1) would apply, meaning that the proceeding must be stayed. Policy considerations cannot be permitted to distort the actual words of the statute, read harmoniously with the scheme of the statute, its object, and the intention of the legislature, so as to make s. 7(5) say something it does not. While policy analysis has a legitimate role in the interpretive process, the responsibility for setting policy in a parliamentary democracy rests with the legislature, not with the courts.

This is particularly so given that the Ontario legislature has already spoken to some of these policy concerns by shielding consumers from the potentially harsh results of enforcing arbitration agreements contained in consumer agreements, which often take the form of standard form contracts, through the Consumer Protection Act . The legislature made a careful policy choice to exempt consumers — and only consumers — from the ordinary enforcement of arbitration agreements.

That choice must be respected, not undermined by reading s. 7(5) in a way that permits courts to treat consumers and non-consumers as one and the

same. While there can be no doubt as to the importance of promoting access to justice, this objective cannot, absent express direction from the legislature, be permitted to overwhelm the other important objectives pursued by the Arbitration Act, 1991 . To do so would undermine the legislature’s stated objective of ensuring parties to a valid arbitration agreement abide by their agreement, reduce the degree of certainty and predictability associated with arbitration agreements, and weaken the concept of party autonomy in the commercial setting.

It would expand the opportunities for parties to a valid arbitration agreement to avoid their agreement and seek relief in court. Furthermore, this case is not about debating the merits and demerits of enforcing arbitration clauses contained in standard from contracts. Rather, it is about the proper

interpretation of s. 7(5) of the Arbitration Act, 1991 . And, while distinguishing between consumers and non-consumers may be a difficult exercise in certain cases, that difficulty does not bear on the proper

interpretation of s. 7(5). Sorting between consumers and non-consumers may be cumbersome in certain cases, but this inconvenience does not permit the court to recast the legislation as it sees fit in order to avoid such difficulties. Permitting non-consumers to tag along with consumers on the basis that it would be cumbersome to sort between the two would also allow commercial entities to find the inside of a courtroom despite having agreed to arbitration, even where the arbitration agreement was fully negotiated.

This would reduce the degree of certainty and predictability associated with arbitration agreements and permit parties to those agreements to piggyback onto the claims of others. Lastly, where the application of an Ontario statute, properly interpreted, leads to a multiplicity of proceedings, the court must give effect to the will of the legislature. Section 7(5) of the Arbitration Act, 1991 expressly contemplates bifurcation of proceedings, as it permits the court to order a partial stay, thereby potentially resulting in concurrent arbitration and court adjudication.

The sole matter at issue in the proceeding commenced by W is alleged overbilling. This matter is dealt with in the arbitration agreements into which the consumers and business customers entered. Therefore, because there is at least one matter in the proceeding that is dealt with in the arbitration agreements, the general rule under s. 7(1) of the Arbitration Act, 1991 would ordinarily require a stay of the proceeding as a whole, leaving both consumers and business customers locked out of court.

But, s. 7(5) of the Consumer Protection Act renders the arbitration agreements entered into by the consumers invalid to the extent that they would otherwise prevent the consumers from commencing or joining a class action of the kind commenced by W. The business customers, however, do not qualify as consumers and as such they cannot invoke the protections that the consumers enjoy. The only potential exception to s. 7(1) of the Arbitration Act, 1991 sought to be invoked on behalf of the business customers in this case, the partial stay provision under s. 7(5), offers no assistance.

This is because the sole matter at issue in the proceeding is dealt with in the arbitration agreements into which the consumers and business customers entered, such that the first precondition set out in s. 7(5)(

a) is not met. Consequently, the general rule under s. 7(1) is left intact insofar as the business customers are concerned and the proceeding must be stayed. However, this stay must be restricted to the parties who are legally bound by an arbitration agreement — namely, TELUS and the business customers. In sum, the motions judge and the Court of Appeal erred in law by interpreting s. 7(5) of the Arbitration Act, 1991 incorrectly and refusing to order a stay that, under s. 7(1) , was mandatory. Section 7(5) of the Arbitration Act, 1991 does not permit the court to ignore a valid and binding arbitration agreement.

Per Wagner C.J. and Abella, Karakatsanis and Martin JJ. (dissenting): The appeal should be dismissed. Where a proceeding includes matters covered by an arbitration agreement and other matters that are not, s. 7(5) of the Arbitration Act, 1991 gives a judge discretion to allow the entire proceeding to continue in court, even if some parties would otherwise be subject to an arbitration clause. Section 7(5) of the Arbitration Act, 1991 reflects an explicit legislative intention to override an otherwise applicable arbitration clause.

The words of the provision state that “the court may stay the proceeding with respect to the matters dealt with in the arbitration agreement and allow it to continue with respect to other matters”. This means that the court can either stay the arbitrable matters before it or allow them to proceed. Logically, a discretionary ability to grant a partial stay also includes the power to refuse a partial stay. The only

interpretation that gives meaningful effect to the discretionary language of s. 7(5) is one that confers on judges the ability to allow both arbitrable and non-arbitrable disputes to proceed in court. An assertion that a court can never stay arbitrable matters under s. 7(5) renders the opening phrase — “may stay the proceeding with respect to the matters dealt with in the arbitration agreement” — superfluous. By interpreting the provision to apply only to non-arbitrable matters, s. 7(5) adds nothing to a judge’s existing discretion.

Ontario’s Arbitration Act, 1991 was enacted to allow parties to design their own settlement processes and resolve their disputes outside the courts. It anticipated two or more parties freely negotiating their arbitral process. To ensure expedient resolution and lower litigation costs, the Arbitration Act, 1991 limited court intervention in arbitrable disputes. But it also gave judges discretion to permit court proceedings in certain limited circumstances, such as where the arbitration agreement was manifestly unfair.

Where a proceeding includes both matters covered by an arbitration agreement and other matters that are not, s. 7(5) gives a judge discretion to allow the entire proceeding to continue in court, even if some parties would otherwise be subject to an arbitration clause. Since 2002, the Ontario Court of Appeal has interpreted s. 7(5) as granting the discretion to stay matters that would otherwise be subject to arbitration.

Similarly, for nearly a decade, the Ontario Court of Appeal has interpreted s. 7(5) as permitting otherwise arbitrable matters to be joined with class actions in the public interests of avoiding duplicative proceedings, increased costs, and the risk of inconsistent results. This

interpretation aligns with the text and scheme of the provisions and is consistent not only with the purposes motivating the enactment of the Arbitration Act, 1991 but also with the purpose of s. 7(5) itself. The overall purpose of the Arbitration Act, 1991 was to promote access to justice. Its chosen means of achieving that goal was to promote accessibility by giving parties the choice of resolving disputes outside the court system. The reason for creating this option was a recognition that the court system could be costly and slow.

The courts’ discretion to intervene in arbitrable matters was therefore narrowed to further the goals of expedient dispute resolution. Arbitration was intended to be a means by which parties on a relatively equal bargaining footing chose to design an alternative dispute mechanism. One cannot talk about “equal bargaining power” and “party autonomy” if the very nature of the contract reveals that one party has exclusive contractual authority. Parties to mandatory individual arbitration clauses cannot reasonably be said to have “come to the table” and bargained, since there is no bargaining table.

That individuals and companies sign these contracts is a function not of bargaining choices, but of an absence of choice. All of TELUS’s clients — both business and consumer — signed the same, non-negotiable standard form agreement. TELUS’s individualized arbitration clause effectively precludes access to justice for business clients when a low-value claim does not justify the expense. And its mandatory nature illustrates that the animating rationales of party autonomy and freedom of contract are nowhere to be seen. By inserting the reasonableness requirement in s. 7(5) (

b) of the Arbitration Act, 1991 , the provincial legislature clearly contemplated that in certain circumstances, it would be unreasonable to separate the matters dealt with in the arbitration agreement from the other matters. The availability of judicial discretion in s. 7(5) does not require judges to allow a class action including arbitrable claims to proceed: it simply lets them decide when it is reasonable to do so. Eliminating judicial discretion, on the other hand, effectively eliminates access to justice. In this light, s. 7(5) must be interpreted to give judges the discretion to refuse to stay arbitrable claims if it is unreasonable to separate them from non-arbitrable claims. This

interpretation applies with equal force whether the proceeding is between two or more named parties, or is a class action. An

interpretation of s. 7(5) of the Arbitration Act, 1991 which permits otherwise arbitrable matters to be joined with class actions in the public interest of avoiding duplicative proceedings, increased costs, and the risk of inconsistent results aligns with the text and scheme of the provisions and is consistent not only with the purposes motivating the enactment of the Arbitration Act, 1991 but also with the purpose of s. 7(5) itself.

TELUS’s

interpretation would result in costly and time-consuming factual inquiries on how to divide the arbitrable and non-arbitrableclaims even where the substance of both claims is identical, as in this case. Both parties acknowledged the potential difficulties associated withdrawing the line between a “consumer” as defined by the Consumer Protection Act, who is exempt from arbitration, and a business customer, who isnot.

This distinction may be especially difficult to determine for those individuals who use their cell phone for both personal and business purposes.For these individuals, determining whether they fall within the scope of the exception in the Consumer Protection Act adds unnecessary complexity. The purpose of the Arbitration Act, 1991, was to facilitate the ability of parties to negotiate their own process for resolving disputesoutside of the courts, on the premise that access to justice had as much to do with access to a result as with access to a judge.

To impose arbitration onunwilling parties violates the spirit of the Arbitration Act, 1991 and the arbitral process. This operates as an invisible but formidable barrier to a remedyand presumptively immunizes wrongdoing from accountability contrary to our most fundamental notions of civil justice. Section 7(5)(

b) of theArbitration Act, 1991 gave the motions judge discretion to consider whether it was reasonable to separate the matters dealt with in the agreement(claims of business customers) from the other matters (the consumer claims). The discretion was properly exercised in this case to allow the businessclaims to be joined with the consumer class action dealing with the same issues. Cases Cited By Moldaver J. Considered: Griffin v. Dell Canada Inc., 2010 ONCA 29, 98 O.R. (3d) 481; Seidel v. TELUS Communications Inc., 2011 SCC 15, [2011]1 S.C.R. 531; referred to: Corless v.

Bell Mobility Inc., 2015 ONSC 7682; Bisaillon v. Concordia University, 2006 SCC 19, [2006] 1 S.C.R. 666;Canadian National Railway Co. v. Canada (Attorney General), 2014 SCC 40, [2014] 2 S.C.R. 135; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2S.C.R. 235; Radewych v. Brookfield Homes (Ontario) Ltd., , aff’d 2007 ONCA 721; Johnston v. Goudie (2006), (ON CA), 212 O.A.C. 79; Penn-Co Construction Canada

(2003) Ltd. v. Constance Lake First Nation (2007), 66 C.L.R. (3d) 78, aff’d 2008ONCA 768, 76 C.L.R. (3d) 1; Frambordeaux Developments Inc. v. Romandale Farms Ltd., ; New Era Nutrition Inc. v. Balance BarCo., 2004 ABCA 280, 357 A.R. 184; Griffin v. Dell Canada Inc. (2009), (ON SC), 72 C.P.C. (6th) 158; Dell Computer Corp. v.Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801; Rogers Wireless Inc. v. Muroff, 2007 SCC 35, [2007] 2 S.C.R. 921; GreCon Dimterinc. v. J.R. Normand inc., 2005 SCC 46, [2005] 2 S.C.R. 401; Desputeaux v.

Éditions Chouette (1987) inc., 2003 SCC 17, [2003] 1 S.C.R. 178; BellExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; Re Rootes Motors (Canada) Ltd. and Wm. Halliday Contracting Co., (ON SC), [1952] 4 D.L.R. 300; Ontario Hydro v. Denison Mines Ltd., 1992 CarswellOnt 3497; Astoria Medical Group v. HealthInsurance Plan of Greater New York, 182 N.E.2d 85 (1962); Re Arbitration Act (1964), (AB KB), 47 W.W.R. 544; Haas v.Gunasekaram, 2016 ONCA 744, 62 B.L.R. (5th) 1; Inforica Inc. v.

CGI Information Systems and Management Consultants Inc., 2009 ONCA 642, 97O.R. (3d) 161; Alberici Western Constructors Ltd. v. Saskatchewan Power Corp., 2016 SKCA 46, 476 Sask. R. 255; Briones v. National Money MartCo., 2013 MBQB 168, 295 Man. R. (2d) 101, aff’d 2014 MBCA 57, 306 Man. R. (2d) 129; MDG Kingston Inc. v. MDG Computers Canada Inc., 2008ONCA 656, 92 O.R. (3d) 4; Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87; Heller v. Uber Technologies Inc., 2019 ONCA 1. By Abella and Karakatsanis JJ. (dissenting) Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27; Griffin v.

Dell Canada Inc., 2010 ONCA 29, 98 O.R. (3d)481; Griffin v. Dell Canada Inc. (2009), (ON SC), 72 C.P.C. (6th) 158; Radewych v. Brookfield Homes (Ontario) Ltd., , aff’d 2007 ONCA 721; Johnston v. Goudie (2006), (ON CA), 212 O.A.C. 79; Penn-Co Construction Canada

(2003) Ltd. v.Constance Lake First Nation (2007), 66 C.L.R. (3d) 78, aff’d 2008 ONCA 768, 76 C.L.R. (3d) 1; Frambordeaux Developments Inc. v. RomandaleFarms Ltd., ; New Era Nutrition Inc. v. Balance Bar Co., 2004 ABCA 280, 245 D.L.R. (4th) 107; R. v. Alex, 2017 SCC 37, [2017]1 S.C.R. 967; Rosedale Motors Inc. v. Petro-Canada Inc. (1998), (ON SC), 42 O.R. (3d) 776; Brown v. Murphy (2002), (ON CA), 59 O.R. (3d) 404; Seidel v. TELUS Communications Inc., 2011 SCC 15, [2011] 1 S.C.R. 531. Statutes and Regulations Cited Arbitration Act, 1991, S.O. 1991, c. 17, ss. 1 “arbitration agreement”, 6, 7.

Class Proceedings Act, 1992, S.O. 1992, c. 6. Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A, ss.1 “consumer”, “consumer agreement”, “supplier”, 7, 8. Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 106, 138.

Interpretation Act, R.S.O. 1990, c. I.11, s. 10. Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 1.03(1) “proceeding”. Authors Cited Alberta. Institute of Law Research and Reform. Report No. 51. Proposals for a New Alberta Arbitration Act. Edmonton: Institute of Law Research andReform, 1988. Alberta Law Reform Institute. Final Report No. 103. Arbitration Act: Stay and Appeal Issues. Edmonton: Alberta Law Reform Institute, 2013. Casey, J. Brian. Arbitration Law of Canada: Practice and Procedure, 3rd ed. Huntington, N.Y.: Juris, 2017. Driedger, Elmer A. Construction of Statutes, 2nd ed.

Toronto: Butterworths, 1983. Estlund, Cynthia. “The Black Hole of Mandatory Arbitration” (2018), 96 N.C. L. Rev. 679. McEwan, J. Kenneth, and Ludmila B. Herbst. Commercial Arbitration in Canada: A Guide to Domestic and International Arbitrations. Aurora, Ont.:Canada Law Book, 2004 (loose-leaf updated December 2018, release 16). McGill, Shelley. “The Conflict Between Consumer Class Actions and Contractual Arbitration Clauses” (2006), 43 Can. Bus. L.J. 359. Ontario. Legislative Assembly. Official Report of Debates (Hansard), 1st Sess., 35th Parl., March 27, 1991, pp. 245, 256. Ontario. Legislative Assembly.

Official Report of Debates (Hansard), 1st Sess., 35th Parl., November 5, 1991, p. 3384. Pavlović, Marina, and Anthony Daimsis. “Arbitration”, in John C. Kleefeld et al., eds., Dispute Resolution: Readings and Case Studies, 4th ed.

Toronto: Emond Montgomery, 2016. Sullivan , Ruth. Statutory

Interpretation , 3rd ed. Toronto: Irwin Law, 2016. Sullivan, Ruth. Sullivan on the Construction of Statutes , 6th ed. Markham, Ont.: LexisNexis, 2014. Uniform Law Conference of Canada. Arbitration Amendment Act (2002) (online: https://www.ulcc.ca/en/uniform-acts-new-order/drafting-conventions/117-josetta-1-en-gb/uniform-actsa/arbitration-act/1108-arbitration-act-amendment; archived version: https://www.scc-csc.ca/cso-dce/2019SCC-CSC19_2_eng.pdf ). Uniform Law Conference of Canada.

Uniform Arbitration Act (1990) (online: https://www.ulcc.ca/images/stories/Uniform_Acts_EN/Arbitrat_En.pdf; archived version: https://www.scc-csc.ca/cso-dce/2019SCC-CSC19_1_eng.pdf ). APPEAL from a judgment of the Ontario Court of Appeal (Weiler, Blair and van Rensburg JJ.A.), 2017 ONCA 433 , 138 O.R. (3d) 413, 413 D.L.R. (4th) 684, 100 C.P.C. (7th) 1, [2017] O.J. No. 2800 (QL), 2017 CarswellOnt 8100 (WL Can.), [2017] AZ-51397363 , affirming a decision of Conway J., 2014 ONSC 3318 , 63 C.P.C. (7th) 50, [2014] O.J. No. 5613 (QL), 2014 CarswellOnt 16562 (WL Can.).

Appeal allowed, Wagner C.J., Abella, Karakatsanis and Martin JJ. dissenting. D. Geoffrey G. Cowper , Q.C. , Andrew D. Borrell , Alexandra Mitretodis and Alan Dabb , for the appellant. Joel P. Rochon , Peter R. Jervis , Golnaz Nayerahmadi and Eli Karp , for the respondent. Jonathan Eades and James L. Maxwell , for the intervener the Attorney General of British Columbia. Michael Eizenga , Andrew Little , Ranjan Agarwal and Charlotte Harman , for the intervener ADR Chambers Inc. Brandon Kain , Adam Goldenberg and Ljiljana Stanić , for the intervener the Canadian Chamber of Commerce.

Mohsen Seddigh and Daniel Hamson , for the interveners the Public Interest Advocacy Centre and the Consumers Council of Canada. Anthony Daimsis , for the intervener the Canadian Federation of Independent Business. Marina Pavlović and Cynthia Khoo , for the intervener Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic. Daniel E. H. Bach , Tyler J. Planeta and Michael Sobkin , for the intervener the Consumers’ Association of Canada. The judgment of Moldaver, Gascon, Côté, Brown and Rowe JJ. was delivered by Moldaver J. — I.

Overview [ 1 ] This appeal requires the Court to decide what happens when a series of arbitration agreements, the Ontario Arbitration Act, 1991 , S.O. 1991, c. 17 (“ Arbitration Act ”), [1] the Consumer Protection Act, 2002 , S.O. 2002, c. 30, Sch.

A (“ Consumer Protection Act ”), and a consumer/non- consumer class action collide. [ 2 ] This collision occurred when the respondent, Avraham Wellman, filed a proposed class action in Ontario against the appellant, TELUS Communications Inc. (“TELUS”), on behalf of about two million Ontario residents who entered into mobile phone service contracts with the company during a specified timeframe. The class consists of both consumers and non-consumers, the latter being business customers.

The action centres on the allegation that TELUS engaged in an undisclosed practice of “rounding up” calls to the next minute such that customers were overcharged and were not provided the number of minutes to which they were entitled. [ 3 ] The contracts in question, which were not negotiated, contain standard terms and conditions drafted by TELUS, including an arbitration clause which, broadly speaking, stipulates that all claims arising out of or in relation to the contract, apart from the collection of accounts by TELUS, shall be determined through mediation and, failing that, arbitration. [ 4 ] By virtue of the Consumer Protection Act , however, this arbitration clause is invalid to the extent that it would otherwise prevent class members who qualify as “consumers” from commencing or joining a class action of the kind commenced by Mr.

Wellman. Indeed, as we shall see, the Consumer Protection Act expressly shields consumers from a stay of proceedings under the Arbitration Act . Consequently, they are free to pursue their claims in court. The business customers, however, do not benefit from these protections. So where does this leave them? [ 5 ] The answer, Mr. Wellman says, lies in s. 7(5) of the Arbitration Act which, read alongside s. 7(1) , provides as follows: Stay 7

(1) If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding. . . . Agreement covering part of dispute

(5) The court may stay the proceeding with respect to the matters dealt with in the arbitration agreement and allow it to continue with respect to other matters if it finds that,

(

a) the agreement deals with only some of the matters in respect of which the proceeding was commenced; and (

b) it is reasonable to separate the matters dealt with in the agreement from the other matters. [ 6 ] In Mr. Wellman’s submission, s. 7(5) grants the court discretion to allow all of the class members, consumers and business customers alike, to pursue their claims together in court, provided it would not be reasonable to separate their claims. This is so, Mr. Wellman maintains, despite the fact that the business customers contracted to resolve their claims through arbitration and would otherwise be bound by that agreement. The courts below, following Griffin v.

Dell Canada Inc. , 2010 ONCA 29 , 98 O.R. (3d) 481, leave to appeal refused, [2010] 1 S.C.R. viii, agreed with Mr. Wellman. [ 7 ] TELUS sees things differently. It contends that under s. 7(5), a court has no authority to refuse to stay claims that are subject to an otherwise valid and enforceable arbitration agreement. Rather, it says that the only exceptions to the general stay provision under s. 7(1) are found in s. 7(2), and unless one of those exceptions applies, claims that are subject to arbitration must be stayed — full stop.

It submits that since none of these exceptions applies, the business customer claims must be stayed. [ 8 ] For reasons that follow, I am of the view that s. 7(5) of the Arbitration Act does not grant the court discretion to refuse to stay claims that are dealt with in an arbitration agreement. To borrow the language from this Court’s decision in Seidel v. TELUS Communications Inc. , 2011 SCC 15 , [2011] 1 S.C.R. 531, it is not “a legislative override of the parties’ freedom to choose arbitration” (para. 40).

Instead, as I will develop, when the s. 7 framework is considered along with the protections afforded by the Consumer Protection Act , it becomes clear that while the consumers remain free to pursue their claims in court, the business customers do not. Rather, they remain bound by the arbitration agreements into which they entered, thereby leaving them exposed to a stay under s. 7(1) of the Arbitration Act . The only potential exception to s. 7(1) sought to be invoked on behalf of the business customers in this case, the partial stay provision under s. 7(5), offers no assistance.

This is because the sole “matter” at issue in the proceeding — alleged overbilling — is dealt with in the arbitration agreements into which the consumers and business customers entered, such that the first precondition set out in s. 7(5)(

a) is not met. Consequently, the general rule under s. 7(1) is left intact insofar as the business customers are concerned. [ 9 ] I would therefore allow the appeal and stay the business customer claims accordingly. II. Background A. TELUS Mobile Phone Service Contracts [ 10 ] Mobile phone services arrived in Canada in the mid-1980s. For about a decade, the main service providers, including TELUS, billed customers on a per-minute basis.

TELUS then started offering per-second billing but returned to per-minute billing in 2002. [ 11 ] Throughout the relevant period, TELUS’s monthly plans included a fixed number of minutes for a set fee, with additional charges for excess usage. For example, TELUS offered a plan giving customers 50 minutes of service plus 50 local minutes for $30, with a charge of 30 cents for each additional local minute. Usage was calculated by rounding up call length to the next minute.

So, for example, a call lasting one minute and one second was rounded up to two minutes. [ 12 ] Each customer who signed up for a per-minute plan entered into a written contract incorporating TELUS’s standard terms and conditions, including an arbitration clause which, broadly speaking, stipulates that all claims arising out of or in relation to the contract, apart from the collection of accounts by TELUS, must be determined by private and confidential mediation and, failing that, private, confidential, and binding arbitration. B. Mr. Wellman’s Class Action [ 13 ] In 2006, Mr.

Wellman entered into a per-minute plan with TELUS. Years later, he filed a proposed class action in Ontario against TELUS [2] alleging that between 2002 and 2010, TELUS’s standard terms and conditions made no mention of the practice of rounding up. The action consists of some two million Ontario residents who entered into per-minute plans with TELUS between August 2006 and July 2010. Seventy percent of the class members (about 1,400,000) are consumers who purchased plans for personal use, while 30 percent (about 600,000) are non-consumers who purchased plans for business use. [ 14 ] Mr.

Wellman, who pleads that he qualifies as a consumer, alleges that TELUS’s undisclosed practice of rounding up accelerated the depletion of the fixed number of minutes class members purchased and prematurely subjected them to excess usage charges. Consequently, he says, class members were overcharged and were not provided the number of minutes to which they were entitled. On this basis, he asserts three causes of action: breach of contract, breach of the Consumer Protection Act , and unjust enrichment. He claims $500 million in damages and $20 million in punitive damages on behalf of the class. [ 15 ] Mr.

Wellman brought a motion to have the action certified as a class action under the Class Proceedings Act, 1992 , S.O. 1992, c. 6 (“ Class Proceedings Act ” ) . [3] In response, TELUS brought a motion to have the proceeding stayed with respect to the non-consumer claims, relying on the arbitration clause contained in its standard terms and conditions. III. Statutory Provisions [ 16 ] Two statutes lie at the heart of this appeal: the Arbitration Act and the Consumer Protection Act . The key sections of these two pieces of legislation are set out below. As it happens, there is some overlap in terms of

section numbers, so care must be taken to keep in mind which statute is being discussed when a

section number is referred to in these reasons. Arbitration Act, 1991 , S.O. 1991, c. 17

Definitions

1 In this Act, “arbitration agreement” means an agreement by which two or more persons agree to submit to arbitration a dispute that has arisen or may arise between them; . . . Court Intervention Court intervention limited 6 No court shall intervene in matters governed by this Act, except for the following purposes, in accordance with this Act: 1. To assist the conducting of arbitrations. 2. To ensure that arbitrations are conducted in accordance with arbitration agreements. 3. To prevent unequal or unfair treatment of parties to arbitration agreements. 4. To enforce awards. Stay 7

(1) If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding. Exceptions

(2) However, the court may refuse to stay the proceeding in any of the following cases: 1. A party entered into the arbitration agreement while under a legal incapacity. 2. The arbitration agreement is invalid. 3. The subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law. 4. The motion was brought with undue delay. 5. The matter is a proper one for default or

summary judgment. Arbitration may continue

(3) An arbitration of the dispute may be commenced and continued while the motion is before the court.

Effect of refusal to stay

(4) If the court refuses to stay the proceeding, (

a) no arbitration of the dispute shall be commenced; and (

b) an arbitration that has been commenced shall not be continued, and anything done in connection with the arbitration before the court made its decision is without effect. Agreement covering part of dispute

(5) The court may stay the proceeding with respect to the matters dealt with in the arbitration agreement and allow it to continue with respect to other matters if it finds that, (

a) the agreement deals with only some of the matters in respect of which the proceeding was commenced; and (

b) it is reasonable to separate the matters dealt with in the agreement from the other matters. No appeal

(6) There is no appeal from the court’s decision. Consumer Protection Act , 2002 , S.O. 2002, c. 30, Sch. A No waiver of substantive and procedural rights 7

(1) The substantive and procedural rights given under this Act apply despite any agreement or waiver to the contrary. Limitation on effect of term requiring arbitration

(2) Without limiting the generality of subsection (1), any term or acknowledgment in a consumer agreement or a related agreement that requires or has the effect of requiring that disputes arising out of the consumer agreement be submitted to arbitration is invalid insofar as it prevents a consumer from exercising a right to commence an action in the Superior Court of Justice given under this Act. . . . Non-application of Arbitration Act, 1991 (5) Subsection 7 (1) of the Arbitration Act, 1991 does not apply in respect of any proceeding to which subsection (2) applies unless, after the dispute arises, the consumer agrees to submit the dispute to arbitration. Class proceedings 8

(1) A consumer may commence a proceeding on behalf of members of a class under the Class Proceedings Act, 1992 or may become a member of a class in such a proceeding in respect of a dispute arising out of a consumer agreement despite any term or acknowledgment in the consumer agreement or a related agreement that purports to prevent or has the effect of preventing the consumer from commencing or becoming a member of a class proceeding.

IV. Decisions Below A. Ontario Superior Court (Conway J.), 2014 ONSC 3318 , 63 C.P.C. (7th) 50 [ 17 ] Before the motions judge, Conway J., TELUS conceded that s. 7(2) of the Consumer Protection Act shielded the consumers from the effect of the arbitration clause. It maintained, however, that the claims of the business customers, who enjoy no protection under the Consumer Protection Act , had to be stayed because they were subject to a valid and binding arbitration agreement. [ 18 ] The motions judge disagreed.

Relying on the Ontario Court of Appeal’s decision in Griffin , she held that s. 7(5) of the Arbitration Act grants the courts discretion to refuse a stay where it would not be reasonable to separate the matters dealt with in the arbitration agreement from the other matters, thereby allowing all of the matters to proceed in court. She added that pursuant to Griffin , “this discretion may be exercised to allow non-consumer claims (that are otherwise subject to an arbitration clause) to participate in a class action, where it is reasonable to do so” (para. 89).

She rejected TELUS’s contention that Griffin had been overruled by this Court’s decision in Seidel . [ 19 ] She then turned to the application of s. 7(5) of the Arbitration Act .

She found that it would not be reasonable to separate the consumer claims from the business customer claims, observing that: • the consumer claims represented 70 percent of all claims; • the liability and damage issues for both consumers and business customers were the same; • group arbitration was not permitted for the business customer claims; and • separating the two proceedings could lead to inefficiency, risk inconsistent results, and create a multiplicity of proceedings. [ 20 ] Given her finding that it would not be reasonable to separate the consumer claims from the business customer claims, the motions judge declined to stay the business customer claims.

Further, she applied the five-part test for certification and concluded that it had been met, certifying the action accordingly. TELUS appealed her dismissal of the stay application. [4] B. Ontario Court of Appeal (Weiler, Blair and van Rensburg JJ.A.), 2017 ONCA 433 , 138 O.R. (3d) 413

(1) Majority Reasons (van Rensburg J.A., Weiler J.A. Concurring) [ 21 ] Justice van Rensburg, writing for herself and Justice Weiler, stated that the “sole issue” on appeal was whether Griffin had been overtaken by Seidel (para. 97 ). She answered “no”.

She considered that Griffin was “consistent in principle with Seidel but was decided in a different legislative context” (para. 59), adding that “[t]he outcomes in the two cases were driven, not by competing attitudes toward arbitration as a dispute resolution mechanism, but by the specific legislative framework in each jurisdiction respecting arbitration and consumer protection” (para. 60).

She reasoned that while Seidel recognizes the value and importance of private arbitration and affirms that arbitration clauses will generally be upheld, Griffin “does not contradict the general principle that contractual arbitration clauses presumptively will be enforced” (para. 62). [ 22 ] Having determined that Griffin remained good law, she described the s. 7 regime as follows: While s. 7(1) of Ontario’s Arbitration Act provides that a court “shall” stay a court proceeding commenced by a party to an arbitration agreement on the motion of another party to the agreement, this is subject to the exceptions set out in s. 7(2).

The exceptions confer a discretion on the court to intervene (1) where a party entered into the agreement while under a legal incapacity, (2) where the arbitration agreement is invalid, (3) where the subject matter of the dispute is not capable of being the subject of arbitration under Ontario law, (4) where the motion was brought with undue delay and (5) where the matter is a proper one for default or

summary judgment . . . . Section 7(5) of the Arbitration Act is an extension of the court’s discretion and operates where an action has been commenced and the arbitration agreement covers some, but not all, claims. In such a case, the court may grant a partial stay, but only where it is “reasonable to separate the matters dealt with in the agreement from the other matters”. Section 7(5) anticipates that when an action contains claims that are subject to an arbitration agreement and claims that are not, bifurcated proceedings will result when it is reasonable to impose a partial stay.

When a partial stay is not reasonable, the proceedings will not be bifurcated. In Ontario, accordingly, courts have the discretion to refuse to enforce an arbitration clause that covers some claims in an action when other claims are not subject to domestic arbitration. It is this legislative choice that drives the analysis. [paras. 71-73] [ 23 ] She went on to consider two further arguments advanced by TELUS. First, relying on this Court’s decision in Bisaillon v.

Concordia University , 2006 SCC 19 , [2006] 1 S.C.R. 666, TELUS maintained that the procedural device of a class action proceeding does not alter the parties’ substantive right to choose arbitration. Second, TELUS claimed that s. 7(5) cannot be read as conferring jurisdiction over claims that the parties have agreed to submit to arbitration and that such claims are subject to the mandatory stay under s. 7(1). [ 24 ] Justice van Rensburg rejected both of these arguments.

She stated that TELUS had misinterpreted Seidel and ignored its main teaching: “. . . the enforceability of an arbitration clause depends on the legislative context and whether the legislature intended to limit the freedom to arbitrate” (para. 81). She added that Seidel did not characterize the issue as one of jurisdiction, nor did it speak in terms of procedural versus substantive rights. Instead, the issue was one of statutory

interpretation. She also saw nothing in the Arbitration Act suggesting that an arbitration clause removes or ousts the court’s jurisdiction over a dispute, adding that “injecting the question of jurisdiction into the discussion of whether a partial stay of proceedings can be granted under Ontario’s Arbitration Act is both unnecessary and misleading” (para. 86). [ 25 ] In the result, the Court of Appeal dismissed the appeal and upheld the motions judge’s decision to refuse a stay.

(2) Concurring Reasons (Blair J.A.) [ 26 ] In brief concurring reasons, Blair J.A. agreed in the result but arrived at this outcome “on a more restricted basis” (para. 100). He agreed that Griffin had not been overtaken by Seidel and that Griffin was dispositive of the issue before the court. However, he expressed “reservations about the correctness of the decision in Griffin as it relates to a partial stay of the non-consumer claims” (para. 101). In particular, he raised two questions which he said were not addressed in Griffin but which “may warrant further consideration” (para. 103).

[27] First, he asked, “as a matter of statutory

interpretation, may the words ‘other matters’ in s. 7(5) of the Arbitration Act, 1991 — whenconsidered in the context of s. 7 as a whole and the purposes of that Act — be read in a way that cross-pollinates the partial-refusal-to-stay power froma single arbitration agreement context to other arbitration agreements involving different parties and containing arbitration clauses that are otherwisevalid and enforceable? Or do ‘other matters’ refer to other matters arising between the same contracting parties but that are not covered by thearbitration agreement between them?” (para. 104).

He observed that s. 7 of the Arbitration Act “appears to address circumstances relating to a singlearbitration agreement, and not the interconnection between a number of such agreements involving different parties” (para. 104). [28] Second, he asked, “more generally, ought litigants be entitled to sidestep what would otherwise be substantive and statutoryimpediments to proceeding in court with an arbitral claim by the simple expedient of adding consumer claims (which cannot be stayed, by virtue ofthe Consumer Protection Act), to non-consumer claims (which generally are subject to a mandatory stay) and wrapping all claims in the cloak of a classproceeding?

Put another way, may the Class Proceedings Act (a procedural rights statute) be used to override the provisions of the Arbitration Act,1991 affording contractual parties the right to agree to binding arbitration (a substantive right)?” (para. 105). V. Issue [29] In the context of a proposed consumer/non-consumer class action where only the non-consumer claims are subject to an otherwisevalid and binding arbitration agreement, does s. 7(5) of the Arbitration Act grant the court discretion to refuse to stay the non-consumer claims? VI. Analysis A. Standard of Review [30] The issue on appeal is one of statutory

interpretation and is therefore properly characterized as a question of law (see CanadianNational Railway Co. v. Canada (Attorney General), 2014 SCC 40, [2014] 2 S.C.R. 135, at para. 33). As such, the standard of review is correctness(see Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8). B. Key Precedents [31] The two main jurisprudential pillars on which the parties’ arguments rest are Griffin and Seidel. The relationship between these twodecisions was at the heart of the courts’ decisions below. Accordingly, as a preliminary matter, it will be useful to provide a brief overview of thesetwo key decisions.

(1) Griffin [32] Griffin involved a proposed class action brought in Ontario on behalf of purchasers — both consumers and non-consumers[5] — ofallegedly defective Dell computers. Dell’s standard form agreement contained a mandatory arbitration clause. The plaintiff brought a motion to certifythe action as a class proceeding, to which Dell responded with a motion for a stay under s. 7 of the Arbitration Act. The motions judge refused Dell’srequest for a stay and granted certification. Dell appealed. [33] Justice Sharpe, writing for a unanimous five-member panel, dismissed the appeal.

First, he held that s. 7(2) of the ConsumerProtection Act applied such that the arbitration clause did not bar the consumer claims from proceeding in court. He then considered whether a stay ofthe non-consumer claims should be granted. He set out the general approach to the enforceability of arbitration agreements as follows: Contracting parties often specify that any disputes arising from their relationship are to be arbitrated rather than litigated in the courts. When theydo, they are ordinarily entitled to have their chosen method of dispute resolution respected by the courts.

The modern approach, reflected by [DellComputer Corp. v. Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801], is to require parties to adhere to their choice and to view arbitrationas an autonomous, self-contained and self-sufficient process, presumptively immune from judicial intervention: [Inforica Inc. v.

CGI InformationSystems and Management Consultants Inc., 2009 ONCA 642, 97 O.R. (3d) 161], at para. 14. [para. 28] [34] Turning to the relevant statutory provisions, Sharpe J.A. interpreted s. 7(5) of the Arbitration Act as “confer[ring] a discretion togrant a partial stay where an action involves some claims that are subject to an arbitration and some claims that are not” (para. 45). He stated that suchan order may be made where it would be reasonable to separate the matters dealt with in the arbitration agreement from the other matters.

He alsoreferred to a line of cases in which courts refused a stay and allowed the action to proceed on the basis that only some of the litigants were bound by anarbitration clause and the claims were so closely related that it would be unreasonable to separate them (see Radewych v. Brookfield Homes (Ontario)Ltd., (S.C.J.), aff’d 2007 ONCA 721; Johnston v. Goudie (2006), (ON CA), 212 O.A.C. 79; Penn-CoConstruction Canada

(2003) Ltd. v. Constance Lake First Nation (2007), 66 C.L.R. (3d) 78 (S.C.J.), aff’d 2008 ONCA 768, 76 C.L.R. (3d) 1;Frambordeaux Developments Inc. v. Romandale Farms Ltd., (Ont. S.C.J.); New Era Nutrition Inc. v.

Balance Bar Co., 2004ABCA 280, 357 A.R. 184 (involving a provision in the corresponding Alberta legislation that is equivalent to s. 7(5) of the Arbitration Act)). [35] On the facts, he concluded that it would not be reasonable to separate the consumer claims from the non-consumer claims, noting(among other things) that: (1) 70 percent of the claims were consumer claims and would be litigated in the class proceeding; (2) the liability anddamages issues were the same for consumers and non-consumers; and (3) group arbitration was not permitted, so the non-consumer claims would haveto be arbitrated on an individual basis.

He considered that granting a stay would lead to inefficiency, a potential multiplicity of proceedings, and addedcost and delay. He also stressed that it was clear on the record that staying any claims would not result in those claims being arbitrated because, as themotions judge put it, it was “fanciful to think that any claimant could pursue an individual claim in a complex products liability case” (para. 1, citingGriffin v. Dell Canada Inc. (2009), (ON SC), 72 C.P.C. (6th) 158 (Ont. S.C.J.), at para. 92).

Thus, he stated, “[t]he choice is notbetween arbitration and class proceeding; the real choice is between clothing Dell with immunity from liability for defective goods sold to non-consumers and giving those purchasers the same day in court afforded to consumers by way of the class proceeding” (para. 57). [36] In the result, the Court of Appeal dismissed the appeal. This Court denied Dell’s application for leave to appeal.

(2) Seidel [37] Seidel, which came not long after Griffin, involved a proposed class action filed in British Columbia against TELUS. As in thepresent case, the dispute arose out of mobile phone service contracts containing an arbitration clause. The representative plaintiff, a consumer, asserteda variety of claims, including (but not limited to) statutory causes of action under the B.C. Business Practices and Consumer Protection Act, S.B.C.2004, c. 2 (“BPCPA”), alleging that TELUS falsely represented to her and other consumers how it calculates air time for billing purposes.

Section 172of the BPCPA contains a remedy whereby a person other than a supplier may bring an action to enforce the statute’s consumer protection standards,while s. 3 stipulates that any agreement between the parties that would waive or release the protections afforded by the BPCPA is void. [38] The plaintiff brought an application to have the action certified as a class proceeding. In response, TELUS applied for a stay, relying

on the arbitration clause and s. 15 of the B.C.

Commercial Arbitration Act, R.S.B.C. 1996, c. 55 (now the Arbitration Act), which provides that if aparty to an arbitration agreement commences proceedings against another party to the agreement in respect of a matter to be submitted to arbitration,then a party to the proceeding may apply for a stay, and the court must grant that stay unless the agreement is void, inoperative, or incapable of beingperformed. [39] The application judge denied TELUS’s application for a stay, holding that it would be premature to determine whether the actionshould be stayed before dealing with the certification application. The B.C.

Court of Appeal allowed TELUS’s appeal, staying the action in its entirety.The plaintiff appealed. [40] Justice Binnie, writing for a five-justice majority, allowed the appeal in part and lifted the stay in relation to the plaintiff’s claimsunder s. 172 of the BPCPA. At the outset of his reasons, he described the proper approach to determining the validity and enforceability of arbitrationclauses contained in commercial contracts: The choice to restrict or not to restrict arbitration clauses in consumer contracts is a matter for the legislature.

Absent legislative intervention, thecourts will generally give effect to the terms of a commercial contract freely entered into, even a contract of adhesion, including an arbitration clause. The important question raised by this appeal, however, is whether the BPCPA manifests a legislative intent to intervene in the marketplace to relieveconsumers of their contractual commitment to “private and confidential” mediation/arbitration and, if so, under what circumstances. . . . Respectfully, I believe the Court’s job is neither to promote nor detract from private and confidential arbitration.

The Court’s job is to giveeffect to the intent of the legislature as manifested in the provisions of its statutes. [paras. 2-3] [41] Justice Binnie acknowledged that “[t]he virtues of commercial arbitration have been recognized and indeed welcomed by ourCourt” (para. 23, citing Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, [2007] 2 S.C.R. 801; Rogers Wireless Inc. v. Muroff, 2007SCC 35, [2007] 2 S.C.R. 921; Bisaillon; GreCon Dimter inc. v. J.R. Normand inc., 2005 SCC 46, [2005] 2 S.C.R. 401; Desputeaux v. ÉditionsChouette (1987) inc., 2003 SCC 17, [2003] 1 S.C.R. 178).

He noted, however, that from the perspective of the BPCPA, private, confidential, andbinding arbitration would “almost certainly inhibit rather than promote wide publicity (and thus deterrence) of deceptive and/or unconscionablecommercial conduct” (para. 24), and several provincial legislatures had intervened by placing limitations on arbitration clauses contained in consumercontracts. Accordingly, he stated, the substantive question on appeal was “whether, as a matter of statutory

interpretation, s. 172 ofthe BPCPA contains such a limitation and, if so, its extent and effect on Ms. Seidel’s action” (para. 26). [42] After performing a textual, contextual, and purposive

interpretation of s. 172 of the BPCPA, Binnie J. concluded that the provision“constitutes a legislative override of the parties’ freedom to choose arbitration” (para. 40), emphasizing that it “stands out as a public interest remedy”(para. 36). He observed, however, that this “legislative override” was incomplete — unlike in certain other provinces, “the B.C. legislature sought toensure only that certain claims proceed to the court system, leaving others to be resolved according to the agreement of the parties” (para. 40).

Hestressed that it was “incumbent on the courts to give effect to that legislative choice” (para. 40). [43] He further clarified that this result was not inconsistent with Dell and Rogers, where the Court denied an attempt by consumers inQuebec to pursue class actions arising out of product supply contracts in the face of arbitration clauses. In those cases, he said, “[t]he outcome turnedon the terms of the Quebec legislation” (para. 41); the B.C. legislation was different and supported a different result.

In this regard, he stated that “therelevant teaching of Dell and Rogers Wireless is simply that whether and to what extent the parties’ freedom to arbitrate is limited or curtailed bylegislation will depend on a close examination of the law of the forum where the irate consumers have commenced their court case.

Dell and RogersWireless stand . . . for the enforcement of arbitration clauses absent legislative language to the contrary” (para. 42 (emphasis in original)). [44] In the result, the majority allowed the appeal in part, permitting the plaintiff to pursue her claims under s. 172 of the BPCPA butupholding the stay of her other claims pursuant to s. 15 of the Commercial Arbitration Act.

While Binnie J. recognized that this could lead to bifurcatedproceedings in the event the claims falling outside the scope of s. 172 proceed to arbitration, he noted that “[s]uch an outcome . . . is consistent with thelegislative choice made by British Columbia in drawing the boundaries of s. 172 as narrowly as it did” (para. 50). [45] Justices LeBel and Deschamps, writing on behalf of four dissenting justices, were not persuaded that s. 172 of the BPCPAconstituted a legislative override of the parties’ freedom to choose arbitration (para. 161). [46] The central theme emerging from Seidel, consistent with its predecessors Dell and Rogers, is that arbitration clauses, even thosecontained in adhesion contracts (at para. 2), will generally be enforced “absent legislative language to the contrary” (para. 42 (emphasis deleted)).Accordingly, this Court’s task is to apply the relevant principles of statutory

interpretation and determine whether s. 7(5) of the Arbitration Act, whichhas no equivalent in the B.C. legislation at issue in Seidel, contains language overriding the principle that arbitration clauses will generally be enforced. C.

Interpretation of

Section 7 of the Arbitration Act [47] The proper

interpretation of s. 7 of the Arbitration Act falls to be determined by applying the modern approach to statutoryinterpretation: “. . . the words of

an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the schemeof the Act, the object of the Act, and the intention of the Parliament” (E. A. Driedger, Construction of Statutes (2nd ed. 1983), at p. 87; Bell ExpressVuLimited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26). To be clear, while my colleagues Abella and Karakatsanis JJ. maintainthat the following analysis “represents the return of textualism” (para. 109), I respectfully disagree.

Rather, the approach set out below starts with thepurpose and scheme of the Arbitration Act and reads the text of s. 7 in light of its full context, in a way that is both conscious of and consistent with thepolicy choices made by the legislature in the Arbitration Act itself and in other relevant statutes such as the Consumer Protection Act and the ClassProceedings Act. This is no “return to textualism”; instead, it is a careful reading of the statute, considered in its full context. With that in mind, I turnto the purpose and scheme of the Act.

(1) Purpose and Scheme of the Arbitration Act [48] Throughout the better part of the 20th century, Canadian courts displayed “overt hostility” to arbitration, treating it as a “second-class method of dispute resolution” (Seidel, at para. 89, per LeBel and Deschamps JJ., dissenting (but not on this point)). Courts guarded theirjurisdiction jealously and “did not look with favour upon efforts of the parties to oust it by agreement” (Seidel, at para. 93, citing Re Rootes Motors(Canada) Ltd. and Wm. Halliday Contracting Co., (ON SC), [1952] 4 D.L.R. 300 (Ont. H.C.J.), at p. 304).

The prevailing view wasthat only the courts were capable of granting remedies for legal disputes and that, as a result, any agreement by the parties to oust the courts’jurisdiction was contrary to public policy, regardless of the nature of the substantive legal issues (see Seidel, at para. 96). This judicial hostility,coupled with a lack of modern legislation supporting arbitration, inhibited the growth of arbitration in Canada (see Seidel, at para. 89, citing J. B.Casey and J. Mills, Arbitration Law of Canada: Practice and Procedure (2005), at pp. 2-3).

[49] It was against this backdrop that, in 1991, the Ontario legislature enacted the Arbitration Act, which was based on the UniformArbitration Act adopted by the Uniform Law Conference of Canada a year earlier (online) (see J. K. McEwan and L. B. Herbst, CommercialArbitration in Canada: A Guide to Domestic and International Arbitrations (loose-leaf), at pp. 1-9 to 1-15). The purpose and underlying philosophy ofthe Arbitration Act was discussed by Blair J. (as he then was) in Ontario Hydro v. Denison Mines Ltd., 1992 CarswellOnt 3497 (WL Can.) (Gen.

Div.): The Arbitration Act, 1991 came into effect on January 1, 1992. It repealed the former Arbitrations Act, R.S.O. 1980 c. 25, and enacted a newregime for the conduct of arbitrations in Ontario . . . . It is designed, in my view, to encourage parties to resort to arbitration as a method of resolvingtheir disputes in commercial and other matters, and to require them to hold to that course once they have agreed to do so.

In this latter respect, the new Act entrenches the primacy of arbitration proceedings over judicial proceedings, once the parties have entered into anarbitration agreement, by directing the court, generally, not to intervene, and by establishing a “presumptive” stay of court proceedings in favour ofarbitration. [paras. 8-9] [50] During legislative debate on the bill that later became the Arbitration Act, the Attorney General of Ontario stated that one of the“guiding principles” of the Arbitration Act is that “the parties to a valid arbitration agreement should abide by their agreements” (Legislative Assemblyof Ontario, Official Report of Debates (Hansard), 1st Sess., 35th Parl., March 27, 1991, at p. 256).

He later emphasized that under the new legislation,“the law and the courts will ensure that the parties stick to their agreement to arbitrate” (Legislative Assembly of Ontario, Official Report of Debates(Hansard), 1st Sess., 35th Parl., November 5, 1991, at p. 3384). [51] Issuing a stay of court proceedings is one of the ways in which courts may give effect to the policy that the parties to a validarbitration agreement should abide by their agreement.

As the authors of Commercial Arbitration in Canada: A Guide to Domestic and InternationalArbitrations explain, a stay of court proceedings is simply “an indirect method of enforcing an arbitration agreement” (McEwan and Herbst, at p. 3-29). They continue: Traditionally it has been said that the courts will not order specific performance of arbitration agreements, in the sense that they will not order partiesto proceed to arbitration. Courts do not compel arbitration; enforcement is negative in that they stay the court proceedings in specified circumstances . .. .

A party is refused the alternative of having the disputes settled by a court of law, i.e., that party is left in the position of having no remedy other thanto proceed by arbitration. [Footnotes omitted; p. 3-29.] [52] The policy that parties to a valid arbitration agreement should abide by their agreement gives effect to the concept of partyautonomy — which, in the arbitration context, stands for the principle that parties should generally be allowed to craft their own dispute resolutionmechanism through consensual agreement (see J. B.

Casey, Arbitration Law of Canada: Practice and Procedure (3rd ed. 2017), at pp. 49, 51 and 195;Alberta Law Reform Institute, Final Report No. 103, Arbitration Act: Stay and Appeal Issues (2013), at para. 10). Consensual arbitration and partyautonomy are inseparable — an arbitration agreement is “a product of party autonomy . . . [and] crystallizes the parties’ consent” to private disputeresolution (M. Pavlović and A. Daimsis, “Arbitration”, in J. C. Kleefeld et al., eds., Dispute Resolution: Readings and Case Studies (4th ed. 2016), atp. 485).

It “is essentially a creature of contract, a contract in which the parties themselves charter a private tribunal for the resolution of their disputes”(Astoria Medical Group v. Health Insurance Plan of Greater New York, 182 N.E.2d 85 (N.Y. 1962), at p. 87, as quoted in Re Arbitration Act (1964), (AB KB), 47 W.W.R. 544 (Alta. S.C.), at p. 555). [53] Of course, the concept of party autonomy, which is always engaged to at least some extent where arbitration agreements areinvolved, may speak more or less forcefully depending on the context.

For example, party autonomy has weaker force in the context of non-negotiated,“take it or leave it” contracts than it does in the context of fully negotiated agreements.

It is not surprising, therefore, that legislatures across Canadahave put in place various statutes shielding consumers — the weakest and most vulnerable contracting parties (Dell, at para. 90) — from the potentiallyharsh results of enforcing arbitration agreements contained in consumer agreements, which often take the form of standard form contracts. [54] That said, in the years since the Arbitration Act was passed, the jurisprudence — both from this Court and from the courts ofOntario — has consistently reaffirmed that courts must show due respect for arbitration agreements and arbitration more broadly, particularly in thecommercial setting.

For example, in Desputeaux, LeBel J. observed “the trend in the case law and legislation . . . to accept and even encourage the useof civil and commercial arbitration” (para. 38).

In Seidel, Binnie J. noted that “[t]he virtues of commercial arbitration have been recognized and indeedwelcomed by our Court” (para. 23), and he stated that “absent legislative language to the contrary” (para. 42 (emphasis deleted)), “the courts willgenerally give effect to the terms of a commercial contract freely entered into, even a contract of adhesion, including an arbitration clause” (para. 2).More recently, the Ontario Court of Appeal observed that “[t]he law favours giving effect to arbitration agreements. This is evident in both legislationand in jurisprudence” (Haas v.

Gunasekaram, 2016 ONCA 744, 62 B.L.R. (5th) 1, at para. 10). [55] The policy that parties to a valid arbitration agreement should abide by their agreement goes hand in hand with the principle oflimited court intervention in arbitration matters. This latter principle finds expression throughout modern Canadian arbitration legislation (see McEwanand Herbst, at pp. 10-7 to 10-11; Casey, at p. 319) and has been described as a “fundamental principle underlying modern arbitration law” (AlbertaLaw Reform Institute, at para. 19).

This principle is embedded most visibly in ss. 6 and 7 of the Arbitration Act, which are both contained in the part ofthe Act labelled “Court Intervention”.

Section 6 reads: Court intervention limited 6 No court shall intervene in matters governed by this Act, except for the following purposes, in accordance with this Act: 1. To assist the conducting of arbitrations. 2. To ensure that arbitrations are conducted in accordance with arbitration agreements. 3. To prevent unequal or unfair treatment of parties to arbitration agreements.

4. To enforce awards. [ 56 ] Stated succinctly, s. 6 signals that courts are generally to take a “hands off” approach to matters governed by the Arbitration Act . This is “in keeping with 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” ( Inforica Inc. v. CGI Information Systems and Management Consultants Inc . , 2009 ONCA 642 , 97 O.R. (3d) 161, at para. 14 ). [ 57 ] This brings us to the focal point of this appeal: s. 7 of the Arbitration Act .

(2) Section 7 of the Arbitration Act (

a) Text [ 58 ] The text of s. 7 of the Arbitration Act , which governs stays, is reproduced above in the “Statutory Provisions”

section of these reasons. It is also worth noting that the term “arbitration agreement” is defined in s. 1 as “an agreement by which two or more persons agree to submit to arbitration a dispute that has arisen or may arise between them”. The words “matter” and “proceeding” are left undefined, though “proceeding” is defined in r. 1.03(1) of the Ontario Rules of Civil Procedure , R.R.O. 1990, Reg. 194 , as “an action or application”. (

b) Parties’ Positions [ 59 ] TELUS takes the position that s. 7(1) establishes a general rule: if a party to an arbitration agreement commences a proceeding, and one or more of the matters in respect of which the proceeding was commenced is dealt with in the arbitration agreement, then the court shall, on the motion of another party to the agreement, stay the proceeding. TELUS further submits that while s. 7(5) permits the court to allow matters that are not dealt with in the arbitration agreement to proceed in court, it does not grant the court discretion to refuse to stay matters that are dealt with in the agreement — those matters must be stayed. In support of its proposed

interpretation, TELUS relies primarily (though not exclusively) on Seidel and Alberici Western Constructors Ltd v. Saskatchewan Power Corp. , 2016 SKCA 46 , 476 Sask. R. 255 (interpreting an equivalent provision in the corresponding Saskatchewan legislation). [ 60 ] By contrast, Mr.

Wellman contends that if the arbitration agreement in question deals with only some of the matters in respect of which the proceeding was commenced, and it would not be reasonable to separate the matters dealt with in the arbitration agreement from the other matters, then s. 7(5) grants the court an independent, freestanding discretion that is entirely separate from s. 7(1) and (2) to refuse to stay the matters dealt with in the arbitration agreement. In a nutshell, Mr.

Wellman submits that s. 7(5) offers a choice between staying some of the matters (i.e., ordering a partial stay) and staying none of the matters (i.e., refusing to order any stay). In support of his proposed

interpretation, he relies primarily (though not exclusively) on Griffin , New Era Nutrition (interpreting an equivalent provision in the corresponding Alberta legislation), and Briones v. National Money Mart Co. , 2013 MBQB 168 , 295 Man R. (2d) 101, aff’d 2014 MBCA 57 , 306 Man.

R. (2d) 129, leave to appeal refused, [2014] 3 S.C.R. ix (interpreting an equivalent provision in the corresponding Manitoba legislation). [ 61 ] Although the parties lock horns over whether s. 7(5) of the Arbitration Act grants the court discretion to refuse to stay claims that are otherwise subject to a valid and binding arbitration agreement, they agree on several key points, including the following: (1) arbitration clauses contained in commercial agreements will generally be enforced absent legislative override; (2) the business customer claims are dealt with in an arbitration agreement; (3) by virtue of the Consumer Protection Act , the consumers are entitled to pursue their claims in court; and (4) if the two conditions identified in s. 7(5) of the Arbitration Act are satisfied, then the court may stay the proceeding with respect to the matters dealt with in the arbitration agreement and allow it to continue with respect to other matters. [ 62 ] These points of agreement narrow the focus of this appeal, placing it squarely on the following issue: Does s. 7(5) of the Arbitration Act grant the court discretion to refuse to stay the business customer claims?

With that in mind, I would interpret s. 7 as follows. (

c) Section 7 Framework (i) Section 7(1) — General Rule [ 63 ] First, s. 7(1) establishes a general rule: where a party to an arbitration agreement commences a proceeding in respect of a matter dealt with in the agreement — that is, at least one matter in the proceeding is dealt with in the arbitration agreement — the court “shall”, on the motion of another party to the agreement, stay the court proceeding in favour of arbitration. The use of the word “shall” in s. 7(1) indicates a mandatory obligation (see Haas , at paras. 10-12 ; see also R. Sullivan, Statutory

Interpretation (3rd ed. 2016), at p. 90). This general rule reaffirms the concept of party autonomy and upholds the policy underlying the Arbitration Act that parties to a valid arbitration agreement should abide by their agreement. [ 64 ] However, as I will explain, this general rule is not absolute. (ii) Section 7(2) — List of Five Exceptions [ 65 ] Section 7(2) lists five exceptions to the general rule under s. 7(1).

Where any of the following conditions are met, the court “may” refuse to stay the proceeding: (1) a party entered into the arbitration agreement while under a legal incapacity; (2) the arbitration agreement is invalid; (3) the subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law; (4) the motion was brought with undue delay; or (5) the matter is a proper one for default or

summary judgment. These are “all cases where it would be either unfair or impractical to refer the matter to arbitration” ( MDG Kingston Inc. v. MDG Computers Canada Inc. , 2008 ONCA 656 , 92 O.R. (3d) 4, at para. 36 ). (iii) Section 7(5) — Partial Stay Provision [ 66 ] Section 7(5) provides a further exception to the general rule under s. 7(1). Structurally, s. 7(5) consists of two main components:

(1) Preconditions — Section 7(5)(

a) and (

b) set out two preconditions: (a) “the agreement deals with only some of the matters in respect of which the proceeding was commenced” and (b) “it is reasonable to separate the matters dealt with in the agreement from the other matters”.

(2) Discretionary exception — If both of these preconditions are satisfied, then the court “may stay the proceeding with respect to the

matters dealt with in the arbitration agreement and allow it to continue with respect to other matters”. [ 67 ] Starting with the two preconditions, the first precondition is met if “the agreement deals with only some of the matters in respect of which the proceeding was commenced”.

Put differently, the proceeding must involve both (1) at least one matter that is dealt with in the arbitration agreement and (2) at least one matter that is not dealt with in the arbitration agreement. [ 68 ] The second precondition is met if “it is reasonable to separate the matters dealt with in the agreement from the other matters”.

Naturally, the “other matters” to which this precondition refers are the matters that are not dealt with in the arbitration agreement, as there are only two categories of “matters” contemplated by s. 7(5): those that are dealt with in the arbitration agreement, and those that are not . [ 69 ] If both preconditions are satisfied, then instead of ordering a full stay, the court “may” allow the matters that are not dealt with in the arbitration agreement to proceed in court, though it must nonetheless stay the court proceeding in respect of the matters that are dealt with in the agreement.

To illustrate, where the parties to an arbitration agreement have chosen to include “A” but not “B” in their agreement, s. 7(5) allows the court, where the two preconditions are met, to hear a court proceeding in respect of “B”, despite the fact that the proceeding must be stayed in respect of “A”. Because it gives effect to the parties’ agreement to submit only certain types of disputes to arbitration, this

interpretation reaffirms the concept of party autonomy and upholds the policy underlying the Arbitration Act that parties to a valid arbitration agreement should abide by their agreement. [ 70 ] However, if the preconditions are not met, then the discretionary exception under s. 7(5) is not triggered. This follows as a matter of logic: s. 7(5) can have effect only “if” the two preconditions are satisfied, so if those preconditions are not met, then s. 7(5) has nothing to say. In those circumstances, unless one of the five exceptions listed in s. 7(2) applies, the general rule under s. 7(1) would apply, meaning that the proceeding must be stayed. [ 71 ] This

interpretation finds support in the academic/practitioner commentary. In Arbitration Law of Canada: Practice and Procedure , J. B. Casey, commenting on equivalent provisions in the relevant Alberta statute, writes: Section 7(1) sets out the basic provision that if a party proceeds with the court action with respect to matters governed by an arbitration agreement the court “shall” stay the proceeding.

Section 7(5) then grants a partial exception to this general provision by providing that the court may allow proceedings to continue with respect to matters not covered by the arbitration agreement provided it is reasonable to separate those matters from the matters that are covered by the arbitration agreement. Nothing in the words of section 7(5) appears to give the court jurisdiction to allow the entire action to proceed where it is not reasonable to separate the matters in dispute and then say section 7(4) permits a stay of the arbitration.

Section 7(5) provides that the court may permit those matters not covered by the arbitration agreement to continue to be litigated if it is reasonable to separate those matters from those which are being arbitrated. It does not deal with the reverse situation; that is where the court finds that the matters cannot reasonably be separated. In such a case, it is sub

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