SCC File No.: 37722 IN THE SUPREME COURT OF (ON APPEAL FROM THE COURT OF APPEAL FOR )

BETWEEN:

TELUS COMMUNICATIONS COMPANY, TELE-MOBILE COMPANY and TELUS COMMUNICATIONS INC. APPELLANTS (Appellants) -and-

AVRAHAM WELLMAN RESPONDENT (Respondent)

REPLY (AVRAHAM WELLMAN, RESPONDENT) (Pursuant to the Order of Justice Martin, dated August 16, 2018)

ROCHON GENOVA LLP SUPREME ADVOCACY LLP 900-121 Richmond Street West 340 Gilmour St., Suite 100 Toronto, ON M5H 2K1 , ON K2P 0R3

Joel P. Rochon Marie-France Major Peter Jervis Tel.: (613) 695-8855 Golnaz Nayerahmadi Fax: (613) 695-8580 Tel.: (416) 548-9874 Email: [email protected] Fax: (416) 363-0263 Email: [email protected] Agent for Counsel for the Respondent [email protected] [email protected]

MORGANTI LEGAL 1 Yonge Street, Suite 1506 Toronto, ON M5E 1W7

Eli Karp Tel: (647) 344-1900 Fax: (416) 352-7638 Email: [email protected]

Counsel for the Respondent

FASKEN MARTINEAU DUMOULIN LLP FASKEN MARTINEAU DuMOULIN LLP 550 Burrad Street, Suite 2900 55 , Suite 1300 Vancouver, BC V6C 0A3 Ottawa ON, K1P 6L5

D. Geoffrey Cowper, Q.C. Sophie Arseneault Gerald L. R. Ranking Tel.: (613) 236-3882 Andrew Borrell Fax: (613) 230-6423 Alexandra Mitretodis Email: [email protected] Tel: (604) 631-3131 Fax: (604) 631-3232 Agent for the Appellants Email: [email protected] [email protected] [email protected]

Counsel for the Appellants

BENNETT JONES LLP BENNETT JONES LLP One First Canadian Place World Exchange Plaza Suite 3400, PO Box 130 1900-45 O'Connor Street Toronto, Ontario M5X 1A4 Ottawa, Ontario K1P 1A4

Michael A. Eizenga Mark Jewett Andrew Little Tel: (613) 683-2328 Ranjan Agarwal Fax: (613) 683-2323 Charlotte Harman E-mail: [email protected] Tel: (416) 863-1200 Fax: (416) 863-1716 Agent for Counsel for the Intervener, ADR E-mail: [email protected] Chambers Inc.

Counsel for the Intervener, ADR Chambers Inc. MCCARTHY TÉTRAULT LLP GOWLING WLG (CANADA) LLP Suite 5300 2600 - 160 Elgin Street Toronto Dominion Bank Tower P.O. Box 466, Stn. A Toronto, Ontario M5K 1E6 Ottawa, Ontario K1P 1C3

Brandon Kain Matthew Estabrooks Adam Goldenberg Tel: (613) 786-8695 Ljiljana Stanic Fax: (613) 563-9869 Tel: (416) 601-8200 E-mail: [email protected] Fax: (416) 868-0673 E-mail: [email protected] Agent for Counsel for the Intervener, Canadian Chamber of Commerce Counsel for the Intervener, Canadian Chamber of Commerce SOTOS LLP CAZASAIKALEY LLP 180 Dundas Street West 220 avenue Laurier Ouest Suite 1200 Ottawa, Ontario Toronto, Ontario M5G 1Z8 K1P 5Z9

Mohsen Seddigh Alyssa Tomkins Daniel Hamson Tel: (613) 565-2292 Tel: (416) 572-7320 Fax: (613) 565-2087 Fax: (416) 977-0717 E-mail: [email protected] E-mail: [email protected] Agent for Counsel for the Intervener, Counsel for the Intervener, Consumers Consumers Council of Canada, Public Council of Canada, Public Interest Interest Advocacy Centre Advocacy Centre

CANADIAN FEDERATION OF UNIVERSITÉ D'OTTAWA INDEPENDENT BUSINESS (CFIB) Common Law Section National Affairs and Partnerships 57 Louis Pasteur St. 1202 - 99 Metcalfe Street Ottawa, Ontario K1N 6N5 Ottawa, Ontario K1P 6L7 David Fewer Anthony Daimsis Tel: (613) 562-5800 Ext: 2558 Tel: (613) 562-5800 Ext: 2558 Fax: (613) 562-5417 Fax: (613) 562-5124 E-mail: [email protected] E-mail: [email protected] Agent for Counsel for the Intervener, Counsel for the Intervener, Canadian Canadian Federation of Independent Federation of Independent Business Business

SAMUELSON-GLUSHKO CANADIAN UNIVERSITÉ D'OTTAWA INTERNET POLICY & PUBLIC Common Law Section INTEREST CLINIC 57 Louis Pasteur St. University of Ottawa, Faculty of Law Ottawa, Ontario K1N 6N5 57 Louis Pasteur Street Ottawa, Ontario K1N 6N5 David Fewer Tel: (613) 562-5800 Ext: 2558 Marina Pavlovic Fax: (613) 562-5417 Tel: (613) 562-5800 Ext: 2675 E-mail: [email protected] Fax: (613) 562-5417 E-mail: [email protected] Agent for Counsel for the Intervener, Samuelson-Glushko Canadian Internet Counsel for the Intervener, Samuelson- Policy and Public Interest Clinic Glushko Canadian Internet Policy and Public Interest Clinic

SISKINDS LLP MICHAEL J. SOBKIN 100 Lombard Street 331 West Suite 302 Ottawa, Ontario Toronto, Ontario K2P 0J8 M5C 1M3 Tel: (613) 282-1712 Daniel Bach Fax: (613) 288-2896 Elizabeth deBoer E-mail: [email protected] Tyler Planeta Tel: (416) 594-4376 Agent for Counsel for the Intervener, Fax: (416) 594-4377 Consumers’ Association of Canada E-mail: [email protected]

Counsel for the Intervener, Consumers’ Association of Canada

ATTORNEY GENERAL OF BRITISH NOËL & ASSOCIÉS COLUMBIA 111, rue Champlain 1001 Douglas Street, 3rd floor Gatineau, Quebec J8X 3R1 Legal Services Branch Victoria, British Columbia V8W 9J7 Pierre Landry Tel: (819) 771-7393 Jonathan Eades Fax: (819) 771-5397 James Leo Maxwell E-mail: [email protected] Tel: (250) 387-2789 Fax: (250) 953-3557 Agent for Counsel for the Intervener, E-mail: [email protected] Attorney General of British Columbia

Counsel for the Intervener, Attorney General of British Columbia

TABLE OF CONENTS Page

PART I – OVERVIEW ...... 1 PART II – STATEMENT OF ARGUMENT ...... 2 PART III – TABLE OF AUTHORITIES ...... 6 PART I – OVERVIEW

1. In the main, the interveners’ submissions do not challenge the correctness of the lower courts’ interpretation of s. 7(5) of the Ontario Arbitration Act, 1991 as conferring a broad discretion to stay, or refuse to stay, arbitrable matters in any proceeding, including a class proceeding. Rather, their submissions are directed primarily at the factors to be considered in the exercise of that discretion. The exercise of the motion judge’s discretion is not at issue on this appeal, nor was it at issue before the Court of Appeal.1

2. The sole issue on appeal is a question of law: does s. 7(5) grant the court a broad discretion to either stay, or refuse to stay, matters subject to an arbitration agreement, when those matters are advanced in the same proceeding as “other matters” that are not subject to an arbitration agreement?

3. The answer to this question is unequivocally “yes”. The discretion conferred by s. 7(5) is binary: the court may stay the matters subject to an arbitration agreement if it is reasonable to separate these matters from other non-arbitrable matters in the proceeding, or the court may refuse to separate those arbitrable matters from the other matters in the proceeding, thus permitting all matters to proceed for adjudication by the court.2

4. Section 7(5) manifests an express legislative intent to defer this determination to the court. The sole restriction on the court’s exercise of discretion under s. 7(5) is that the separation of arbitrable and non-arbitrable matters be “reasonable”.

1 Wellman v. TELUS Communications Company, 2017 ONCA 433 at para. 20. 2 The Factum of the Interveners Public Interest Advocacy Centre and Consumers Council of Canada at para. 5 (“Public Interest Advocacy Centre”), the Factum of the Intervener ADR Chambers Inc. at paras. 15 and 17 (“ADR Chambers”), and the Factum of the Intervener Canadian Federation of Independent Businesses at para. 8 (“CFIB”) expressly support the Respondent’s interpretation. See Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, [2007] O.J. No. 3940, 66 C.L.R. (3d) 78 (ONSC), affirmed Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, 2008 ONCA 768; Radewych v. Brookfield Homes (Ontario) Ltd., 2007 ONCA 721; Shaw Satellite G.P. v. Pieckenhagen, 2011 ONSC 4360, aff’d Shaw Satellite G.P. v. Pieckenhagen, 2012 ONCA 192; Rosedale Motors Inc. v. Petro-Canada Inc., 42 O.R. (3d) 776 (ON SC). 2

PART II – STATEMENT OF ARGUMENT

5. Section 7 and indeed the entire Arbitration Act, 1991 are silent as to the specific factors that the court may or shall consider in determining whether it is reasonable to separate arbitrable and non-arbitrable matters in a given proceeding. The legislature has not narrowed the application of s. 7(5) based on the nature of the proceeding, the number of, or the relationship between, the parties to the proceeding.3 These are not lacunae in the law. These are legislative choices that attract deference.

6. Notably, none of the interveners support the highly restrictive interpretation of s. 7(5), proffered by the Appellant, that the discretion conferred by s. 7(5) is limited to a choice between a mandatory stay of any matter in the proceeding subject to an arbitration agreement, or a stay of all matters in the proceeding, including those that are not subject to an arbitration agreement. This interpretation would preclude the adjudication, in any forum, of matters that are not subject to an arbitration agreement in circumstances where a stay of all matters is ordered. This would result in legal absurdity.

7. Section 7(5) was enacted to address the reasonableness of separating matters subject to valid arbitration agreements from the other matters in the proceeding. The discretion conferred by s. 7(5) and its equivalents has been exercised by courts in a myriad of procedural contexts, including multi-party and class proceedings involving businesses.4 It is erroneous to suggest that s. 7(5) is presumptively inapplicable to proceedings that involve valid arbitration agreements.5

3 While the Arbitration Act, 1991 does not define “proceeding”, Rule 1.03 of the Rules of Civil Procedure, RRO 1994, Reg 194, defines a “proceeding” in the Superior Court of Justice as an “action” or an “application”. 4 See, e.g., New Era Nutrition, Inc., v. Balance Bar Company, 2004 ABCA 280 at paras. 30-39, 44-47; Briones v. National Money Mart Co. at al., 2014 MBCA 57 at paras. 40-42; Briones v. National Money Mart Company et al., 2013 MBQB 168 at paras. 58-62; Dragonfly Games Division Inc. et al v., 2017 MBQB 183 at paras. 8-23; Radewych v. Brookfield Homes (Ontario) Ltd., 2007 ONCA 721; Toronto Community Housing Corporation v. Thyssenkrupp Elevator (Canada) Limited, 2011 ONSC 4914; Graves v. Correactology Health Care Group Inc., 2018 ONSC 4263; Canadian Natural Resources Limited v Flatiron Constructors Canada Limited, 2018 ABQB 613. 5 Factum of the Intervener Canadian Chamber of Commerce at paras. 2-6, 8, 20, 23, and 26 (“Chamber of Commerce”). 3

Such an interpretation would render s. 7(5) redundant, as s. 7(2) expressly grants the court discretion to refuse to stay a court proceeding if a purportedly binding arbitration agreement is in fact invalid.6

8. The policy factors driving the interveners’ submissions are not relevant to the interpretation of the scope of the discretion conferred by s. 7(5), which must be determined by a plain and ordinary interpretation of that provision, in light of the scheme of s. 7 and the Arbitration Act, 1991.

9. Properly considered, factors such as party autonomy, freedom of contract, legitimacy of arbitration, inequality of bargaining power, and the nature and value of consumer and business claims are relevant only to the exercise of the discretion conferred by s. 7(5). They inform the analysis of the reasonableness of separating the arbitrable matters from the non-arbitrable matters in the proceeding under s. 7(5)(b). The interveners’ submissions should therefore be understood as only offering a non-exhaustive list of factors to be considered under s. 7(5)(b). They amount, effectively, to reading into s. 7(5) the following provision illustrated below:

Agreement covering part of dispute

7 (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.

(5.1.) In determining whether it is reasonable in a proceeding to separate and stay the matters dealt with in the agreement from the other matters, the court may consider, among other things:

6 Section 7(2) of the Arbitration Act, 1991 provides that, on a motion to refer a proceeding before the court to arbitration, the “court may refuse to stay the [court] proceeding” when, inter alia, the “arbitration agreement is invalid”. 4

(a) access to procedural and substantive justice;7 (b) freedom of contract and party autonomy;8 (c) the role of ADR in the administration of justice;9 (d) the overlap or intersection between consumer and non-consumer matters in a proceeding (the so-called “hybrid consumers” or “prosumers”);10 (e) consumers’ and business consumers’ bargaining power;11 (f) the importance of commercial certainty;12 (g) the relative size and value of arbitrable claims;13 (h) the presumptive enforceability of arbitration clauses, including in contracts of adhesion; 14 and, (i) the prospect that arbitrable matters will actually be arbitrated, and not merely held in abeyance.15

10. These factors and others, while not specified in the legislation, were considered and weighed by the motion judge and by the Court of Appeal in Griffin.16 In fact, courts in Ontario, Alberta, and Manitoba routinely consider these factors in determining whether it is reasonable to stay, or refuse to stay, arbitrable claims that are advanced alongside non-arbitrable claims in a proceeding.17

11. No single factor is paramount or determinative in the exercise of the discretion under s. 7(5) in every case. Factors such as party autonomy and primacy of arbitration should not be used

7 Factum of Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic at paras. 13 and 26 (“Samuelson-Glushko Clinic”); Public Interest Advocacy Centre at paras. 5, 10-12, 23, and 25. 8 ADR Chambers Inc. at paras 2, 9, 12, 13, and 24-25; Chamber of Commerce at paras. 2, 4, 8, 10, 11, 18, 20, and 26. 9 Factum of the Appellant at paras. 80, 94-95; ADR Chambers Inc. at paras. 2-3, 5-8, 14, 22, 23, and 24. 10 Public Interest Advocacy Centre at paras. 9, 10, 19, 20, 22, and 27; Samuelson-Glushko Clinic at paras. 1, 9, 21-23, and 28. 11 ADR Chambers Inc. at paras. 12-13, and 21-22; Chamber of Commerce at paras 8, 14, and 31; Samuelson-Glushko Clinic at paras. 7 and 25. 12 Chamber of Commerce at paras. 8, 20 and 31. 13 Public Interest Advocacy Centre at para. 10. 14 Chamber of Commerce at paras. 4 and 7. 15 Public Interest Advocacy Centre at paras. 25 and 27. 16 Wellman and Corless v. TELUS and Bell, 2014 ONSC 3318 at paras. 88-91; Wellman v. TELUS Communications Company, 2017 ONCA 433 at paras. 56-64; contrary to the Chamber of Commerce at para. 26. 17See, e.g., Radewych v. Brookfield Homes (Ontario) Ltd., 2007 ONCA 721 at paras. 3-4; 2296423 Ontario Limited v. FOF Franchise Corp., 2014 ONSC 4038; T. Films S.A. v. Cinemavault Releasing International Inc., 2015 ONSC 937. 5

as barriers to access to justice. These factors must give way to access to justice considerations where, as here, the evidence demonstrates the inequality of bargaining power, freedom of contract exists only in theory for all class members, and the size of the individual claims makes access to arbitration improbable, even for business customers.

12. The motion judge’s determination that it would be unreasonable to separate arbitrable claims from the non-arbitrable claims was a discretionary determination grounded in the circumstances of this case and the evidence before the court. This is not an issue on this appeal, nor was it before the Court of Appeal. There may well be class actions where the value of the individual claims is relatively large, where the size of the class is substantially smaller or where the class members’ claims raise different questions of law. In such circumstances, the court may exercise its discretion and determine that it is reasonable to separate and stay the arbitrable matters, while allowing the other matters to proceed in court.

13. The legitimacy and future of arbitration are not at stake on this appeal. In fact, there is no evidence that any of the arbitrable matters could ever be arbitrated. All evidence points to the opposite conclusion: that absent this class proceeding, the claims of hundreds of thousands of business customers will effectively be extinguished given the relative costs of ADR and the low individual claim value.

6

PART III – TABLE OF AUTHORITIES

Cases Authority Paragraph Wellman v. TELUS Communications Company, 2017 ONCA 433, 1, 10, 12 http://canlii.ca/t/h41d3 Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, 3 [2007] O.J. No. 3940, 66 C.L.R. (3d) 78 (ONSC)

Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, 3 2008 ONCA 768, http://canlii.ca/t/21j81

Radewych v. Brookfield Homes (Ontario) Ltd., 2007 ONCA 721, 3, 7, 10 http://canlii.ca/t/1tbqg Shaw Satellite G.P. v. Pieckenhagen, 2011 ONSC 4360, 3 http://canlii.ca/t/fmb7q Shaw Satellite G.P. v. Pieckenhagen, 2012 ONCA 192, 3 http://canlii.ca/t/fqqnp Rosedale Motors Inc. v. Petro-Canada Inc., 42 O.R. (3d) 776, 1998 CanLII 3 14721 (ON SC), http://canlii.ca/t/1vvl6 New Era Nutrition, Inc., v. Balance Bar Company, 2004 ABCA 280, 7 http://canlii.ca/t/1hv60 Briones v. National Money Mart Co. at al., 2014 MBCA 57, 7 http://canlii.ca/t/g79gr Briones v. National Money Mart Company et al., 2013 MBQB 168, 7 http://canlii.ca/t/fzpsp Dragonfly Games Division Inc. et al v., 2017 MBQB 183, 7 http://canlii.ca/t/hp0m2 Toronto Community Housing Corporation v. Thyssenkrupp Elevator 7 (Canada) Limited, 2011 ONSC 4914, http://canlii.ca/t/fmng1 Graves v. Correactology Health Care Group Inc., 2018 ONSC 4263, 7 http://canlii.ca/t/hsxlj Canadian Natural Resources Limited v Flatiron Constructors Canada 7 Limited, 2018 ABQB 613, http://canlii.ca/t/htk3w Wellman and Corless v. TELUS and Bell, 2014 ONSC 3318, 10 http://canlii.ca/t/gfd9x 2296423 Ontario Limited v. FOF Franchise Corp., 2014 ONSC 4038, 10 http://canlii.ca/t/g82nx 7

T. Films S.A. v. Cinemavault Releasing International Inc., 2015 ONSC 937, 10 http://canlii.ca/t/gg964

Legislation

Authority Rule/Section Paragraph Rules of Civil Procedure, RRO 1994, Reg 194 English: 1.03 5 French: 1.03 English: 7(2), 7(5) 1-9, 11-12 Arbitration Act, 1991, S.O. 1991, c. 17 French: 7(2), 7(5)