Install-A-Floor Limited v. The Roy Building Limited, 2022 NSSC 67

SUPREME COURT OF Nova Scotia Citation: Install-A-Floor Limited v. The Roy Building Limited , 2022 NSSC 67 Date: 20220311 Docket: Hfx No. 511886 Registry: Halifax Between: INSTALL-A-FLOOR LIMITED , carrying on business as FLOORS PLUS COMMERCIAL Applicant v. THE ROY BUILDING LIMITED Respondent DECISION ON APPLICATION TO APPOINT ARBITRATOR Judge: The Honourable Justice Scott C. Norton Heard: March 2, 2022, in Halifax, Nova Scotia Decision: March 11, 2022 Counsel: William L.

Mahody, Q.C., for the Applicant Harry Thurlow, for the Respondent By the Court: Introduction [ 1 ] The Applicant (“Floors Plus”) seeks an Order appointing Augustus Richardson, Q.C. as Arbitrator pursuant to the dispute resolution provisions of its contract with the Respondent (“the Roy”). The Respondent opposes the motion on two grounds: (1) that the Applicant lost its right to pursue arbitration as the limitation period has expired; and, (2) 10 days after the Roy communicated its refusal to pay the claim or mediate, the arbitration clause in the contract became non-binding.

Facts [ 2 ] Floors Plus and the Roy are parties to a CCDC-17 Stipulated Price Contract (the “Contract”) for the supply and installation of flooring to the Respondent’s residential condominium project at 1650 Granville Street in Halifax, Nova Scotia (the “Premises”). [ 3 ]

Part 8 of the Contract addresses the parties’ agreement on “Dispute Resolution”. A plain reading of the contents of General Condition (GC) 8.1 discloses that the parties intended all disputes to be resolved by the dispute resolution provisions in GC 8.2.

Those provisions say: 8.2.2 A party shall be conclusively deemed to have accepted a finding of the Construction Manager or the Consultant under GC 2.2 – ROLES OF THE CONSTRUCTION MANAGER AND THE CONSULTANT and to have expressly waived and released the other party from any claims in respect of the particular matter dealt with in that finding unless, within 15 Working Days after receipt of that finding, the party sends a Notice in Writing of dispute to the other party, the Construction Manager and the Consultant , which contains the particulars of the matter in dispute and the relevant provisions of the Contract Documents .

The responding party shall send a Notice in Writing of reply to the dispute within 10 Working Days after receipt of such Notice in Writing setting out particulars of this response and any relevant provisions of the Contract Documents .

8.2.3 The parties shall make all reasonable efforts to resolve their dispute by amicable negotiations and agreed to provide, without prejudice, frank, candid and timely disclosure of relevant facts, information and documents to facilitate these negotiations. 8.2.4 After a period of 10 Working Days following receipt of a responding party’s Notice in Writing of reply under paragraph 8.2.2, the parties shall request the Project Mediator to assist the parties to reach agreement on any unresolved dispute.

The mediated negotiations shall be conducted in accordance with the Rules for Mediation and Arbitration of Construction Disputes as provided in CCDC 40 in effect at the time of bid closing. 8.2.5 If the dispute has not been resolved within 10 Working Days after the Project Mediator was requested under paragraph 8.2.4 or within such further period agreed by the parties, the Project Mediator shall terminate the mediated negotiations by giving Notice in Writing to the Owner, the Trade Contractor and the Construction Manager . 8.2.6 By giving a Notice in Writing to the other party and the Construction Manager , not later than 10 Working Days after the date of termination of the mediated negotiations under paragraph 8.2.5 either party may refer the dispute to be finally resolved by arbitration under the latest edition of the Rules of Mediation and Arbitration of Construction Dispute as provided in the CCDC 40 in effect at the time of bid closing.

The arbitration shall be conducted in the jurisdiction of the Place of the Project. 8.2.7 On expiration of the 10 Working Days , the arbitration agreement under paragraph 8.2.6 is not binding on the parties and if a Notice in Writing is not given within the required time, the parties may refer the unresolved dispute to the courts or to any other form of dispute resolution, including arbitration, which they have agreed to use. [ 4 ] A dispute arose between the parties as to whether additional compensation would be payable to Floors Plus for floor preparation work of a value exceeding the allowance of $300,000 allowed for under the Contract.

Around the same time, a dispute also arose between the parties as to the Roy’s failure to pay Floors Plus amounts certified as owing for April 2019 Monthly Progress Billing, under Floors Plus Invoice #042519R. [ 5 ] Pursuant to the Contract, EllisDon Corporation (“EllisDon”) was the Contract’s Construction Manager. According to GC 6.6 of the Contract, EllisDon was responsible for considering any requests for changes to the Contract Price. [ 6 ] On or about April 25, 2019, Floors Plus submitted a request for a change to the Contract Price to EllisDon.

Progress Invoice #23 (also known as Invoice #0425192) requested an additional $457,458.87 plus HST for floor levelling work allegedly carried out by Floors Plus at the Premises. [ 7 ] On June 6, 2019, Chris Clark of EllisDon denied Floors Plus’s request on behalf of The Roy by issuing a notice on behalf of The Roy that the floor preparation work was part of the Contract and that there was no basis for a claim for extra costs. [ 8 ] In response to EllisDon’s June 6 denial, on June 18, 2019 Floors Plus sent a “Notice in Writing” of dispute to EllisDon regarding the floor levelling work as required by paragraph 8.2.2.

It is noteworthy that this paragraph provides that unless such a Notice is sent, the party “shall be conclusively deemed to have accepted a finding of the Construction Manager … and to have expressly waived and released the other party from any claims in respect of the particular matter dealt with in that finding.” [ 9 ] Paragraph 8.2.2 required the Roy to send “a Notice in Writing of reply to the dispute within 10 Working Days after receipt” of the Notice in Writing of dispute, “setting out particulars of this response and any relevant provisions of the Contract Documents ”. [ 10 ] “Notice in Writing” is defined in the Contract to mean: Notice in Writing A Notice in Writing , where identified in the Contract Documents , is a written communication between the parties or between them and the Construction Manager or the Consultant that is transmitted in accordance with the provisions of

Article A-7 of the Agreement – RECEIPT OF AND ADDRESSES FOR NOTICES IN WRITING. [ 11 ] There is no evidence that a Notice in Writing of reply was ever delivered by the Roy as required by 8.2.2. [ 12 ] On June 20, 2019, Floors Plus sent another Notice in Writing to EllisDon requesting that the matter proceed to dispute resolution pursuant to

section 8 of the Contract. On July 12, 2019 Floors Plus sent a Notice in Writing of default in respect of the disputed invoice related to the April progress billing.

On July 16, 2019, Floors Plus sent to the Roy further correspondence requesting that the matter proceed immediately to dispute resolution. [ 13 ] On July 19, 2019, Floors Plus wrote to the Roy confirming that despite the Notices in Writing of Dispute, Floors Plus would complete its scope of work as well as any deficiencies for which it was responsible so as to not prejudice the owner. [ 14 ] On August 8, 2019, representatives of the Parties met to discuss various issues. Floors Plus representatives again raised Progress Invoice #23 and the possibility of dispute resolution.

Simon Wilbee, owner’s representative for the Roy, attested in his affidavit that at this meeting representatives of the Roy confirmed that Progress Invoice #23 was disputed, would not be paid and that the Roy was not interested in mediation. [ 15 ] On June 25, 2020, counsel for Floors Plus sent correspondence to counsel for the Roy regarding the Notice of Dispute.

By written reply on July 29, 2020, counsel for the Roy advised: …it does not appear that mediation would be very effective in this case. … I believe we are well out of the time period with which arbitration would be considered mandatory (if it can be considered mandatory under a CCDC contract). [ 16 ] On June 21, 2021, Floors Plus emailed a copy of a Notice of Arbitration and Statement of Claim to counsel for the Roy.

Counsel for the Roy once again responded to Counsel for Floors Plus, reiterating that the matter was out of time for mandatorymediation and was past the limitation date for litigation. ISSUES [17] No issue was taken by the Roy with the name of the arbitrator proposed by Floors Plus. [18] The Application and Notice of Contest establish the following issues for determination: 1. Should this Court exercise its authority to appoint an arbitrator? a. Is the arbitration barred by the passage of time? b. Is the arbitration no longer mandatory under the Contract as of June 21, 2021?

Limitation [19] It is agreed between the parties that arbitration of disputes arising in relation to the Contract are subject to the CommercialArbitration Act, SNS 1999, c.5 (“CAA”).

Section 54 of the CAA says: 54

(1) The law with respect to limitation periods applies to an arbitration as if the arbitration were an action and a matter in dispute in thearbitration were a cause of action. [20] The limitation period for an action is “two years from the day on which the claim is discovered” pursuant to

section 8 of theLimitation of Actions Act, SNS 2014, c. 35, (“LOAA”). Subsection 8(2) provides as follows as to the discoverability of a civil action:

(2) A claim is discovered on the day on which the claimant first knew or ought reasonably to have known (

a) that the injury, loss or damage had occurred; (

b) that the injury, loss or damage was caused by or contributed to by

an act or omission; (

c) that the act or omission was that of the defendant; and (

d) that the injury, loss or damage is sufficiently serious to warrant a proceeding. [21] The limitation issue before me turns on the

interpretation of s. 8(2)(d). Floors Plus says that it should be interpreted such that aloss cannot be sufficiently serious to warrant a proceeding where it is not yet possible to commence a proceeding because of a mandatoryarbitration provision. The Roy asserts that Floors Plus “discovered” its claim at the latest on June 6, 2019 when Chris Clark of EllisDondenied the claim for floor levelling work. The Roy says the amount of the claim was significant and by the fact that Floors Plus filed aNotice of Dispute shows that it felt that amount was sufficiently serious to warrant a proceeding. [22] Floors Plus argues that s. 8(2)(

d) is analogous to subparagraph 5(1)(a)(iv) in the Ontario Limitations Act, which states: (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it;and [23] Floors Plus relies upon the analysis of this provision by the Ontario Court of Appeal. That Court’s most recent commentary onthis provision is found in Dass v. Kay, 2021 ONCA 565, leave to appeal to SCC refused, (SCC).

Justice Millersummarized the jurisprudence as follows: [24] Although the Limitations Act, 2002 essentially codified the existing discoverability principle (Grant Thornton LLP v.

NewBrunswick, 2021 SCC 31, at para. 35), s. 5(1)(a)(iv) added a new factor to that analysis – the appropriateness of bringing a proceeding.This factor is central to this appeal. [25] This court’s jurisprudence interpreting s. 5(1)(a)(iv) was recently distilled into three principles by Hourigan J.A. in Sosnowski v.MacEwan Petroleum Inc., 2019 ONCA 1005, 441 D.L.R. (4th) 393, at paras. 16-19. [26] First, the determination of whether a proceeding is an appropriate means to seek to remedy [of] an injury, loss, or damagedepends on the factual and statutory context of each case: Sosnowski, at para. 16. [27] Second, this court has recognized two non-exclusive factors that can operate to delay the date on which a claimant would knowthat a proceeding would be an appropriate means to remedy a loss: (

i) when the plaintiff relied on the defendant’s superior knowledgeand expertise, particularly where the defendant has taken steps to ameliorate the plaintiff’s loss; and (ii) “where an alternative disputeresolution process offers an adequate remedy, and it has not been completed”: Sosnowski, at para. 17. [28] Third, “appropriate” means that it is legally appropriate to bring a proceeding, rather than practically advantageous.

This thirdprinciple excludes from consideration many practical and tactical reasons a claimant might have for not commencing a proceeding at anearlier time when it was legally appropriate to do so, such as the belief that the claim might be difficult to prove. Put differently,“[a]ppropriate does not include an evaluation of whether a civil proceeding will succeed”: Sosnowski, at paras. 18-19. [24] In PQ Licensing SA v.

LPQ Central Canada Inc., 2018 ONCA 331, the Ontario Court of Appeal addressed an appeal from anarbitrator’s decision on a preliminary issue, in which the arbitrator determined that the limitation period of two years under the OntarioLimitations Act had not expired.

[25] In dismissing the appeal, the Court explained: [3] The arbitrator’s decision that the arbitration was not time-barred was reasonable. It was based on his reasonable conclusions that (

i) the parties’ agreement provided for mediation as a precondition to arbitration; (ii) the requirement to mediate “in Delaware” could be severed from the parties’ agreement; and (iii) applying s. 5(1)(a)(iv) of the Limitations Act , the two year limitation period for arbitration commenced on the date that mediation was deemed completed. [26] The dispute resolution process in PQ Licensing was established under a franchise agreement, which provided for the mediation, then arbitration, of disputes.

The franchisee delivered a Notice of Rescission on August 11, 2009, asserting the franchisor breached its disclosure obligations. On October 8, 2009, the franchisor disputed the validity of this Notice of Rescission. On October 6, 2011, the franchisor commenced an action in the Superior Court. The franchisor objected, on the basis of the mandatory dispute resolution provisions of the franchise agreement. The action was then dormant until administratively dismissed for delay in 2013.

When the franchisee tried to revive the action, the franchisor relied on the franchisee’s failure to commence arbitration, which it asserted was then out of time. The court stayed the action on the basis of the dispute resolution provisions and directed that the limitation period issue be determined by the arbitrator. [27] In finding that the arbitration was not time barred, the arbitrator noted that the parties plainly agreed in the applicable agreement to a comprehensive scheme for the resolution of their disputes, which included both mediation and arbitration.

He interpreted the ADR provisions to require mediation of the parties’ dispute as a precondition to arbitration. [28] The Court of Appeal then explained: [14] In determining the limitations issue, the arbitrator concluded that arbitration was not “appropriate” within the meaning of s. 5(1) (a)(iv) of the Limitations Act until after the mediation regime in s. 31.03 had been complied with. [15] The arbitrator explained, at para. 164: I find that a condition precedent to litigation has the effect of suspending the running of the limitation period under Section 5(1)(a)(iv) of the Limitations Act with the result in this case that because

Section 31.03 of the party’s agreement creates such a condition precedent, the limitation period was suspended until the party’s obligations under that clause were met. In this instance, the Franchisee refused to engage in mediation at or about January 16, 2012. [ 29 ] The Appellant argued that the arbitrator erred by finding that a proceeding was not “appropriate” until after mediation had failed because the franchisee must have known a proceeding was appropriate when it started a legal action in 2011.

However, the Appeal Court rejected this argument, referencing another recent decision of the Ontario Court of Appeal in 407 ETR Concession Company Limited v. Day , 2016 ONCA 709 , in which Laskin J.A. stated: [40] First, under s. 5(1)( a )(iv) of the Limitations Act , 2002 , the date a proceeding would be an appropriate means to recover a loss must have “regard to the nature of the . . . loss”. So, in fixing the appropriate date, it may not be enough that the loss exists and the claim is actionable .

If the claim is the kind of claim that can be remedied by another and more effective method provided for in the statute, then a civil action will not be appropriate until that other method has been used .

Here, a claim will not be appropriate until 407 ETR has used that other method, without success. [Emphasis added] [ 30 ] Applying this principle, the Appeal Court held that the determination of when a proceeding was “appropriate” turned on the parties’ choice to have their disputes resolved by arbitration if mediation, as a precondition, was unsuccessful. [ 31 ] The Franchisor attempted to characterize the question on appeal as “whether a limitation period can be tolled for almost four years from the accrual of a cause of action on that basis that the claimant did not notionally discover its claim until a mediation clause it had eschewed and denied had been pursued.” The Court rejected this: [38] This characterization is inaccurate.

What happened here was not a “tolling” of a limitation period, but the application of the criteria of discoverability under s. 5 of the Limitations Act , and in particular s. 5(1)(a)(iv), to the parties’ circumstances, including the franchise agreement which provided the mechanism for the resolution of their disputes. [ 32 ] The Court also approved the arbitrator’s rejection of the appellant’s argument that the mediation could not reasonably be a precondition to the arbitration for disputes under the agreement because it would result in the franchisee being able to indefinitely extend the period for the commencement of arbitration, and that there would be a lack of certainty for the running of a limitation period. [ 33 ] The Court explained: [47] The question was not when the appellant knew it had a claim, or even that legal action was appropriate (the issue in Hamilton ), but when the franchisee knew or ought reasonably to have known that arbitration, which was the dispute resolution proceeding the parties had bargained for, was the appropriate means to resolve the dispute.

The arbitrator reasonably concluded that the answer to this question depended on the ADR Provisions and the parties’ agreement to a dispute resolution mechanism which required an attempt at mediation before arbitration could be commenced. As the appeal judge noted, the determination of when a proceeding was “appropriate” turned on “the parties’ choice to have their disputes resolved by arbitration if mediation as a precondition [was] unsuccessful.” Under this

interpretation, the parties would only know that arbitration was appropriate when the mediation requirement had been exhausted. [ 34 ] This type of analysis has been undertaken by Ontario courts in other similar circumstances: L-3 Communication SPAR Aerospace Limited v. CAE Inc ., 2010 ONSC 7133 ; Maisonneuve v Clarke, 2021 ONSC 1960 , upheld on appeal 2022 ONCA 113 . In Maisonneuve , the Court granted an application to appoint an arbitrator pursuant to a release, adding to the line of decisions finding that “where the parties have agreed to exchange information, negotiate or mediate prior to arbitration, the limitations clock does not begin to

run until they have done so”. [ 35 ] Does this reasoning apply to the wording in the LOAA ? [ 36 ] The Roy argues that a plain language reading of these two provisions demonstrates that they are distinct. Subparagraph 5(1)(a) (iv) of the Ontario Act asks if a proceeding is “an appropriate remedy.” Comparatively, paragraph 8(2)(

d) of the LOAA asks about the seriousness of the injury, loss or damage alleged. The former is a question of timing: it is not appropriate to commence an action if you are not yet able to under an agreement. The latter is not concerned with time, but rather the gravity of the injury: the phrase “sufficiently serious to warrant a proceeding” suggests that one discovers the claim the moment it is apparent that the loss is serious enough to warrant pursuing by legal means. LOAA paragraph 8(2) (d), does not ask about whether it is appropriate to file at the time of discovery or not.

It is simply concerned with whether the size of a potential claim can be ascertained. Whether the proceeding can be filed on that day or sometime later is not relevant. [ 37 ] In the context of a contractual dispute involving an agreed upon resolution process, when is a loss “sufficiently serious” to “warrant a proceeding”?

While the language employed in these two acts is different, the purpose appears to be the same: that a claim is only discovered once it is known that the loss warrants a proceeding. [ 38 ] The word “warrant”, as a verb, is defined by The Canadian Oxford Paperback Dictionary (Donn Mills: Oxford University Press, 2000), page 1188, as meaning: Justify; make necessary or appropriate in the circumstances [Emphasis added] [ 39 ] The effect is also the same: there must be a reasonable basis to believe that a proceeding could be commenced to address the loss. [ 40 ] Had Floors Plus commenced an action or filed a Notice of Arbitration on June 21, 2019, the Roy could have obtained a stay of the proceeding on the basis that Floors Plus had agreed to be bound by the dispute resolution process in

Part 8 of the Contract. Thus, a proceeding was not “warranted” or “appropriate” until Floors Plus knew or ought to have known that the Roy was not going to comply with the mediation process. On the evidence, I find that this ought to have been known by Floors Plus as of the August 8, 2019 meeting at which the Roy made clear that it was not interested in mediation. [ 41 ] Floors Plus served its Notice of Arbitration on the Roy on June 21, 2021, and under

Part II of CCDC 40 Rules of Arbitration, the arbitration was deemed to commence on this date. For the limitation defence to bite, Floors Plus must have discovered the claim prior to June 21, 2019. As I have found that the claim was not “discovered” until the meeting of August 8, 2019, the limitation period was not breached and the Notice of Arbitration is not statute barred. [ 42 ] I conclude that the Notice of Arbitration was served and the arbitration was commenced in compliance with the applicable limitation period.

No Valid Arbitration [ 43 ] On this ground, the Roy argues that Floors Plus has disregarded the timelines in the Contract, and as a result, is disentitled to apply for an arbitrator to be appointed. [ 44 ] The Roy says that while Floors Plus met the contractual requirements in paragraph 8.2.2, they did not adhere to the remaining contractual requirements.

The Roy says that Floors Plus did not request a project mediator as required by paragraph 8.2.4, and in fact, after requesting that the matter proceed to dispute resolution in July 2019, they took no further action to pursue arbitration until June 2021 when they served the Notice of Arbitration. [ 45 ] The Roy says that by virtue of paragraph 8.2.7 of the Contract, any agreement to arbitrate became non-binding 65 days after the notice from EllisDon on June 6, 2019. [ 46 ] Floors Plus argues that the Roy should not, by their own failure to follow the Contract requirements, now claim that they are not bound by the dispute resolution provisions of the Contract.

Strict compliance was prevented by the Roy’s conduct, and both the CAA and Lorneville Mechanical Contractors Ltd. v. Clyde Bergemann Canada Ltd. , 2017 NSSC 119 , support the position that the Roy cannot now rely on compliance issues to object to the agreed upon process. Strict compliance is not necessarily required to be able to proceed with arbitration. [ 47 ] In Lorneville , upheld on appeal, the trial court addressed issues of technical non-compliance with a comparable arbitration agreement from a CCDC contract between sophisticated parties.

Though done in the context of assessing whether a dispute should proceed through arbitration or litigation, the court found that failure to comply with the technical requirements set out in the arbitration agreement should not act to prevent the parties from proceeding with arbitration as agreed to. Smith J. explained: [51] The decision of Muise J. in IWK Health Centre v. Northfield Glass Group Ltd , 2016 NSSC 281 (“IWK Health Centre”), concerned the issue of alleged delay in following the timelines in an arbitration clause between IWK and Northfield.

IWK sought the appointment of an arbitrator in its dispute with Northfield, a general contractor for a construction project. Northfield alleged that delay by IWK, both before and after signalling its intention to arbitrate, acted as a bar to arbitration. Muise J. found that IWK’s approach to the dispute, which fell outside the strict timelines of the dispute resolution agreement, was an accommodation on its part and did not preclude IWK from pursuing a dispute resolution process in the contract between the parties.

The comments of Muise J. at paragraphs 88-92 of his decision are apt to this case: [88] IWK’s lawyers conducted themselves in a professional manner, understanding and respecting the situation the lawyers for

Northfield and Intact found themselves in. As a result, they, in my view, were appropriately flexible and cooperative in their dealings with those lawyers. They did all they could to attempt to resolve outstanding issues without having to resort to the courts. In my view, that is an approach that ought to be commended and encouraged. [89] It is also consistent with the direction in Paragraph 8.2.3 of the Trade Contract that “[t]he parties shall make all reasonable efforts to resolve their dispute by amicable negotiations” . Paragraph 8.2.3 is placed between the consultant and mediation provisions.

That suggests that it envisioned much tighter timelines than occurred in this case. However, in my view, IWK’s approach complied with the spirit of the requirement to attempt to resolve disputes amicably . [90] If such accommodation related delay were to result in IWK losing its right to mandatory ADR it would cause lawyers in the future to take an inflexible and uncooperative approach. In addition, it would reward Northfield, which was responsible for the bulk of the delay and received the benefit of IWK’s accommodating approach.

In my view, both of those would be undesirable results and contrary to public policy. [52] As was the case in IWK Health Centre , the Subcontract contained a clause (8.2.2) that provided that “the parties shall make all responsible efforts to resolve their dispute by amicable negotiations and agree to provide, without prejudice, frank, candid and timely disclosure of relevant facts, information and documents to facilitate these negotiations.” I agree with counsel for Lorneville that it would be perverse for the Court to fail to give primacy to the arbitration clause in favour of litigation on the basis that the parties did not adhere to the timelines set out in the dispute resolution provisions . [Emphasis added] [ 48 ] The Contract in the present case contains the same provision 8.2.3 that was considered by Muise J. in IWK Health Centre. [ 49 ] Under paragraph 8.2.7, the arbitration agreement only becomes non-binding upon the expiration of the 10 Working Days referred to in paragraph 8.2.6.

This

section clearly does not apply to render the agreement non-binding in these circumstances, as the mediated negotiations under paragraph 8.2.5 were never commenced, let alone terminated under paragraph 8.2.6, which is the sole trigger for the commencement of the 10 working-day period referenced in paragraph 8.2.7. There is nothing in

Part 8 of the Contract to indicate that the Roy is no longer subject to its contractual obligations to participate in the dispute resolution process. [ 50 ] In IWK Health Centre , supra, the contract at issue had a similar dispute resolution process to the Contract before me. Northfield (as The Roy does here) argued that the dispute resolution process was no longer binding because the IWK failed to comply with the technical procedures and conditions required to trigger mandatory arbitration.

Northfield attempted to rely on the Alberta Queens Bench decision in Millennial Construction v. 1021120 Alberta Ltd. , 2005 ABQB 533 , to support their argument that where a party fails to provide Notice of Arbitration within 10 days of the termination of mediation under s. 8.2.6 the arbitration agreement is no longer binding under s. 8.2.7. However, Justice Muise concluded that Millennial was distinguishable: [43] The circumstances of the case at hand are different from those in Millennial. In the case at hand, neither party has started an action.

IWK has been requesting that the dispute be resolved through the ADR process from the beginning. None of the three ADR stages have been completed. Therefore, the 10 Working Days provided for in Clause 8.2.7 have not yet started to run. As a result, it is still possible to meet that deadline (assuming the consultant and/or mediation stages of ADR are not passed over).

Consequently, the ratio in Millennial does not apply in the case at hand so as to remove IWK’s right to arbitration under the Trade Contract. [ 51 ] This case is similar to the facts in IWK : as mandatory mediation under the applicable contracts was never commenced, let alone terminated by the project mediator under s. 8.2.6, the 10 working days provided for in s. 8.2.7 has not yet commenced. [ 52 ] Like the IWK, Floors Plus did not consent to the mandatory mediation stage of the ADR process being “passed over”.

Although the Roy eventually communicated that it was unwilling to proceed with the mandatory mediation, the Roy has not offered any authority to support their position that the 10-working day period commenced upon this unwillingness being communicated to Floors Plus. Paragraph 8.2.6 is clear that the 10-working day period only commences upon termination of the mandatory mediation by the project mediator appointed under the Contract.

As the mandatory mediation was never commenced, let alone terminated by the project mediator, and Floors Plus did not consent to dispensing with this requirement, paragraph 8.2.7 does not apply to remove the right of Floors Plus to arbitration under the Contract. [ 53 ] On the basis of IWK , the Roy asserts that Floors Plus should be prevented from proceeding with arbitration due to general delay in advancing the claim to arbitration, and the prejudice the Roy alleges it will suffer if the arbitration proceeds despite this delay.

The prejudice argument is based on the deterioration of the relationship between the Roy and EllisDon. [ 54 ] The deterioration of the relationship between the Roy and EllisDon occurred prior to the addition of EllisDon to an Action in January 2020. Up until and subsequent to that point, Floors Plus was pursuing the prerequisite Notice in Writing from the Roy in order to allow them to move the dispute resolution process forward, as required under the Contract. [ 55 ] The Roy has failed to demonstrate that it has suffered any actual prejudice in relation to the deterioration of the relationship with EllisDon.

The Affidavit of Simon Wilbee characterizes the prejudice as being, The Roy can no longer obtain consultation and advice from its project consultant, witnesses and documents will likely be difficult to obtain and additional cost will be incurred due to the various legal proceedings each time EllisDon is required to participate in this matter if it is allowed to proceed. [ 56 ] The Roy has not provided any evidence to support the claim of alleged prejudice.

There is no evidence to indicate what specifically the Roy requires from EllisDon that they will have trouble acquiring, or that EllisDon has communicated an unwillingness to

provide information or documentation related to this matter. [ 57 ] I also note that had Floors Plus commenced an Action instead of giving Notice of Arbitration, the Roy would be in the same position regarding its defence with no basis to argue prejudice. [ 58 ] Strict compliance with the dispute resolution process was prevented by the Roy’s conduct. The Roy cannot now rely on compliance issues to object to the agreed upon process. Strict compliance is not necessarily required to be able to proceed with arbitration. [ 59 ] The motion is allowed.

I order that Augustus Richardson, Q.C. be appointed Arbitrator pursuant to the CCDC-17 Stipulated Price Contract between Floors Plus and the Roy, dated November 15, 2017. [ 60 ] The Roy shall pay costs to Floors Plus. If the parties are unable to agree on the quantum of costs, I will hear them by correspondence with each party providing me with their position in writing within 30 calendar days of the date of this decision. [ 61 ] Order accordingly. Norton, J.