Indexed As: Murphy v. Amway Canada et al. Federal Court of Appeal Nadon, Gauthier and Trudel, JJ.A. February 14, 2013.

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1 Kerry Murphy (appellant) v. Amway Canada Corporation and Amway Global (respondents) (A ; 2013 FCA 38) Indexed As: Murphy v. Amway Canada et al. Federal Court of Appeal Nadon, Gauthier and Trudel, JJ.A. February 14, Summary: The plaintiff was registered as an independent business owner under the umbrella of the defendant wholesaler. The registration agreement included an arbitration agreement and incorporated the defendant's Rules of Conduct. The arbitration agreement was governed by the Ontario Arbitration Act (the OAA). The plaintiff began a proposed class proceeding against the defendant, claiming violations of the Competition Act. He sued for damages of $15,000 under s. 36 of the Competition Act, and moved for certification. The defendant moved to dismiss or permanently stay the action and to compel arbitration on the ground that the Federal Court had no jurisdiction as the matters raised in the statement of claim were subject to compulsory arbitration under the arbitration agreement. The Federal Court, in a decision reported at 401 F.T.R. 18, stayed the class proceeding. The arbitration agreement applied and served to bar the initiation of a class proceeding for any amount exceeding $1,000. The plaintiff appealed. Questions raised were: (1) whether s. 7(6) of the OAA barred the appeal; and (2) whether the issues raised by the statement of claim were indeed arbitrable. The Federal Court of Appeal dismissed the appeal. "[T]he OAA has no force of law before this Court." There was no basis to conclude that claims brought under s. 36 of the Competition Act could not be determined by arbitration. The plaintiff's private claim "must be sent to arbitration as the parties intended when they entered into the Arbitration Agreement." Arbitration - Topic 5 General principles - Arbitration v. class action - [See Arbitration - Topic 102]. Arbitration - Topic 102 Right to arbitration - What matters arbitrable - The plaintiff began a proposed class action, claiming that the defendant's business practices violated the Competition Act - The defendant successfully moved to stay the action and to compel arbitration on the made it clear that express legislative language in a statute is required before the courts

2 Arbitration - Topic Stay of proceedings - Jurisdiction - [See Arbitration - Topic 2525]. Arbitration - Topic 2505 Stay of proceedings - Arbitration clause - Effect of - [See Arbitration - Topic 102]. Arbitration - Topic Stay of proceedings - Bar to stay - Class proceedings - [See Arbitration - Topic 102]. Arbitration - Topic 2525 Stay of proceedings - Appeals - The parties' arbitration agreement was governed by the Ontario Arbitration Act (the OAA) - A judge granted the defendant's motion to stay the plaintiff's class proceeding and to compel arbitration - The plaintiff appealed - The first issue for determination was whether s. 7(6) of the OAA barred the appeal; more particularly, whether the parties could, by incorporating the OAA, oust the court's jurisdiction found in s. 27(2) of the Federal Courts Act - The Federal Court of Appeal viewed s. 7(6) in the context of the entirety of s. 7, and concluded that "an appeal from the Judge's decision lies to this Court" - The court was not bound by the terms of the OAA - "[T]he OAA has no force of law before this Court" - The parties could not prevent the court from exercising its jurisdiction to hear the appeal - Consequently, "the question which we must determine is whether the Judge's conclusion on the arbitrability of the matters raised in the Statement of Claim is correct or not." - See paragraphs 25 to 37. Courts - Topic 4117 Federal Court of Canada - Jurisdiction - Federal Court of Appeal - Bars - Contracting out - [See Arbitration - Topic 2525]. Practice - Topic Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - [See Arbitration - Topic 102]. Trade Regulation - Topic 506 Competition - General - Civil remedy (Competition Act, s. 36) - [See Arbitration - Topic 102]. Cases Noticed: Seidel v. Telus Communications Inc., [2011] 1 S.C.R. 531; 412 N.R. 195; 301 B.C.A.C. 1; 510 W.A.C. 1; 2011 SCC 15, appld. [paras. 16, 46 et seq.]. Fowler v Ontario Ltd., [2010] O.T.C. Uned. 779; 2010 ONSC 779, refd to.

3 [para. 28]. Huras v. Primerica Financial Services Ltd. (2000), 137 O.A.C. 79 (C.A.), refd to. [para. 28]. Mantini v. Smith Lyons LLP et al. (2003), 174 O.A.C. 138; 64 O.R.(3d) 505; 228 D.L.R. (4th) 214 (C.A.), refd to. [para. 28]. Brown v. Murphy (2002), 159 O.A.C. 75; 59 O.R.(3d) 404 (C.A.), refd to. [para. 28]. Lamb v. AlanRidge Homes Ltd. et al. (2009), 464 A.R. 46; 467 W.A.C. 46; 2009 ABCA 343, refd to. [para. 28]. Halterm Ltd. v. National Harbours Board (1984), 55 N.R. 118 (F.C.A.), refd to. [para. 28]. General Motors of Canada v. City National Leasing - see City National Leasing Ltd. v. General Motors of Canada Ltd. City National Leasing Ltd. v. General Motors of Canada Ltd., [1989] 1 S.C.R. 641; 93 N.R. 326; 32 O.A.C. 332 (S.C.C.), refd to. [para. 41]. Dell Computer Corp. v. Union des consommateurs et al., [2007] 2 S.C.R. 801; 366 N.R. 1; 2007 SCC 34, refd to. [para. 43]. Muroff v. Rogers Wireless Inc., [2007] 2 S.C.R. 921; 365 N.R. 177; 2007 SCC 35, refd to. [para. 43]. Desputeaux v. Editions Chouette (1987) inc., [2003] 1 S.C.R. 178; 301 N.R. 220; 2003 SCC 17, refd to. [para. 43]. Jean Estate et al. v. Wires Jolley LLP (2009), 265 O.A.C. 1; 96 O.R.(3d) 171; 2009 ONCA 339, refd to. [para. 43]. Bisaillon v. Concordia University, [2006] 1 S.C.R. 666; 348 N.R. 201; 2006 SCC 19, refd to. [para. 50]. GreCon Dimter Inc. v. Normand (J.R.) Inc. et al., [2005] 2 S.C.R. 401; 336 N.R. 347; 2005 SCC 46, refd to. [para. 50]. Statutes Noticed: Arbitration Act, S.O. 1991, c. 17, sect. 7 [para. 25]. Federal Courts Act, R.S.C. 1985, c. F-7, sect. 27(2) [para. 32]. Counsel: Éric Lafrenière and André Lespérance, for the appellant; Claude Marseille and Adam Tobias Spiro, for the respondents. Solicitors of Record: Lauzon Bélanger Lespérance Inc. and Trudel & Johnston, Montreal, Quebec, for the appellant; Blake, Cassels & Graydon LLP, Montreal, Quebec, for the respondents. This appeal was heard at Montreal, Quebec, on November 7, 2012, before Nadon, Gauthier and Trudel, JJ.A., of the Federal Court. In reasons written by Nadon, J.A., the Court delivered the following judgment at Ottawa, Ontario, on February 14, Appeal dismissed.

4 Editor: E. Joanne Oley Arbitration - Topic 5 General principles - Arbitration v. class action - The plaintiff began a proposed class action, claiming that the defendant's business practices violated the Competition Act - The defendant successfully moved to stay the action and to compel arbitration on the made it clear that express legislative language in a statute is required before the courts Arbitration - Topic Stay of proceedings - Jurisdiction - The parties' arbitration agreement was governed by the Ontario Arbitration Act (the OAA) - A judge granted the defendant's motion to stay the plaintiff's class proceeding and to compel arbitration - The plaintiff appealed - The first issue for determination was whether s. 7(6) of the OAA barred the appeal; more particularly, whether the parties could, by incorporating the OAA, oust the court's jurisdiction found in s. 27(2) of the Federal Courts Act - The Federal Court of Appeal viewed s. 7(6) in the context of the entirety of s. 7, and concluded that "an appeal from the Judge's decision lies to this Court" - The court was not bound by the terms of the OAA - "[T]he OAA has no force of law before this Court" - The parties could not prevent the court from exercising its jurisdiction to hear the appeal - Consequently, "the question which we must determine is whether the Judge's conclusion on the arbitrability of the matters raised in the Statement of Claim is correct or not." - See paragraphs 25 to 37. Arbitration - Topic 2505 Stay of proceedings - Arbitration clause - Effect of - The plaintiff began a proposed class action, claiming that the defendant's business practices violated the Competition Act - The defendant successfully moved to stay the action and to compel arbitration on the

5 made it clear that express legislative language in a statute is required before the courts Arbitration - Topic Stay of proceedings - Bar to stay - Class proceedings - The plaintiff began a proposed class action, claiming that the defendant's business practices violated the Competition Act - The defendant successfully moved to stay the action and to compel arbitration on the made it clear that express legislative language in a statute is required before the courts Courts - Topic 4117 Federal Court of Canada - Jurisdiction - Federal Court of Appeal - Bars - Contracting out - The parties' arbitration agreement was governed by the Ontario Arbitration Act (the OAA) - A judge granted the defendant's motion to stay the plaintiff's class proceeding and to compel arbitration - The plaintiff appealed - The first issue for determination was whether s. 7(6) of the OAA barred the appeal; more particularly, whether the parties could, by incorporating the OAA, oust the court's jurisdiction found in s. 27(2) of the Federal Courts Act - The Federal Court of Appeal viewed s. 7(6) in the context of the entirety of s. 7, and concluded that "an appeal from the Judge's decision lies to this Court" - The court was not bound by the terms of the OAA - "[T]he OAA has no force of law before this Court" - The parties could not prevent the court from exercising its jurisdiction to hear the appeal - Consequently, "the question which we must determine is whether the Judge's conclusion on the arbitrability of the matters raised in the Statement of Claim is correct or not." - See paragraphs 25 to 37. Practice - Topic Persons who can sue and be sued - Individuals and corporations - Status or standing - Class or representative actions - Procedure - Pre-certification matters (incl. particulars, production, pleadings, etc.) - The plaintiff began a proposed class action, claiming that

6 the defendant's business practices violated the Competition Act - The defendant successfully moved to stay the action and to compel arbitration on the ground that the matters raised in the statement of claim were subject to compulsory arbitration under the parties' arbitration agreement - The Federal Court of Appeal dismissed the plaintiff's appeal - The plaintiff's private claim for damages under s. 36 of the Competition Act was capable of being the subject of arbitration, on the principles stated in Seidel v. Telus Communications Inc., (2011) (S.C.C.) - "The Supreme Court has made it clear that express legislative language in a statute is required before the courts will refuse to give effect to the terms of an arbitration agreement. In that regard, the Competition Act does not contain language which would indicate that Parliament intended that arbitration clauses be restricted or prohibited. More particularly, there is no language in the Competition Act that would prohibit class action waivers so as to prevent the determination of a claim by way of arbitration.... [I]t is only where the statute can be Trade Regulation - Topic 506 Competition - General - Civil remedy (Competition Act, s. 36) - The plaintiff began a proposed class action, claiming that the defendant's business practices violated the Competition Act - The defendant successfully moved to stay the action and to compel arbitration on the ground that the matters raised in the statement of claim were subject to compulsory arbitration under the parties' arbitration agreement - The Federal Court of Appeal dismissed the plaintiff's appeal - The plaintiff's private claim for damages under s. 36 of the Competition Act was capable of being the subject of arbitration, on the principles stated in Seidel v. Telus Communications Inc., (2011) (S.C.C.) - "The Supreme Court has made it clear that express legislative language in a statute is required before the courts will refuse to give effect to the terms of an arbitration agreement. In that regard, the