I like your point about s. 11 of the Ontario Act. I had done a quick search of Ontario case law to see if an Ontario court had interpreted that section and didn’t find any such case, but thought perhaps there was something in a law reform commission report or in the discussion in the legislature that narrowed the application of the suspension provision to post-dispute arbitration agreements. If Ontario’s s. 11 does apply to pre-dispute arbitration agreements, it will have an extremely wide scope given all the standard form arbitration agreements in consumer, construction and other contexts.

It follows that had Suncor in its court application sought a declaration that any claim against it was statute barred by the Limitations Act, 2002 - and if that issue was properly a matter of summary judgment - then the Court could have dealt with that application on the merits (or viewed differently, relying on section 7(2)(e) could have rejected any cross-motion to stay). The end result is thus consistent with the idea in 7(2)(e) that if a matter is clear enough a court can deal with it rather than deferring to arbitration.
That being said as the judge did not refer to 7(2)(e) this is more an argument that the result (as opposed to the analysis) is correct or at least defensible.
As a practitioner I also note that the judge’s holding that section 11 of The Ontario Act (the provision that talks - rather unclearly - about suspending the limitation period) only applies to arbitration agreements made after disputes have arisen is an issue that last time I looked had never been dealt with by an Ontario court. Our newish limitations act is a minefield of unanswered (and perhaps unanswerable) questions. It is a bit odd that an Alberta judge thought the issue to be entirely clear when I doubt that many lawyers in Ontario who have thought about the issue have any idea what the correct answer is.

As I indicated, I am not sure that the change from an exception for challenges to an arbitrator’s jurisdiction to an exception for threshold issues was recognized an expansion of the exception in Dell by the Court of Appeal. Justice Slatter first indicated (at para 2) that the court was “satisfied that the very existence, as opposed to the scope, of the arbitration clause falls within the exception in Dell . . . at para. 84” (emphasis added). However, that is immediately followed by Justice Slatter’s formulation of the exception in the following words: “Where there is a pure question of law on a threshold issue the chambers judge is not compelled to send it to the arbitrator.”

In Dell itself, paragraph 84 includes the key sentence: “A court should depart from the rule of systematic referral to arbitration only if the challenge to the arbitrator’s jurisdiction is based solely on a question of law” (and see also para 87, again referring to “the exception under which a court may rule first on questions of law relating to the arbitrator’s jurisdiction, . . .”). In this part of its judgment, the Supreme Court was considering the scope of the exception to systematic referral to arbitration set out in the Quebec Code of Civil Procedure, art. 940.1, an exception based on a court finding the arbitration agreement “null.” The Supreme Court refused to read the “null” exception literally. Instead, it noted (at para. 83) that art. 940.1 was adopted in the context of the implementation of the New York Convention which include, in art. II(3) the wording of “null and void, inoperative or incapable of being performed.” In that broader context, the Supreme Court set out to develop “a test for reviewing an application to refer a dispute to arbitration that is faithful to art. 943 C.C.P. and to the prima facie analysis test that is increasingly gaining acceptance around the world.” The Supreme Court was therefore consciously and carefully fashioning an exception to the courts’ duty to refer disputes to arbitration.

The actual challenge in Dell — the challenge characterized a challenge to the arbitrator’s jurisdiction — was an assertion that the arbitration agreement was prohibited by Quebec legislation and therefore contrary to public order. In Quebec, “[d]isputes over the status and capacity of persons, family matters or other matters of public order may not be submitted to arbitration,” to quote from art. 2639 in the chapter on arbitration in Book Five of the Civil Code of Québec. Such challenges are usually not characterized as challenges to the arbitrator’s jurisdiction but as challenges to the “arbitrability” of the dispute.

Arbitrability, or more properly non-arbitrability, is the idea that there are limits to the types of disputes that can be decided by arbitration and these limits cannot be altered by the parties’ agreement. Some disputes are not arbitrable because the parties cannot agree to submit them to arbitration: Janet Walker, “Arbitrability: Are There Limits?” (LCIA Synposium, 4 October 2004, Montreal) at 2. Article 2639 of the Civil Code of Quebec is a prime example of legislation stating that the specified matters of public order cannot be decided through arbitration, no matter what the parties agree to.

The scope of non-arbitrability is therefore quite narrow. Arbitrability is certainly a threshold issue, but it is only one type of threshold issue. A threshold issue is an issue that will decide a matter, a minimum requirement for further action. In arbitration, threshold issues usually include issues that relate to whether the parties are bound by an arbitration agreement, in addition to questions of whether disputres are arbitrable: Michael W. Bühler and Thomas H. Webster, Handbook of ICC Arbitration: Commentary, Precedents, Materials (Sweet & Maxwell, 2005) at 6-84, 6-85. So, for example, the question of whether a party is bound by an agreement containing an arbitration clause has been held to be a threshold question, as has the issue of whether the agreement had expired. The issue in Autoweld was similar as it was about whether or not an arbitration clause had been incorporated by reference into the parties’ settlement agreement. These may be threshold issues, but they are not issues of arbitrability. To extend the idea of threshold issues to defences such as limitation periods as Justice Hawco did is to expand the scope of court intervention even more.

An extended and thoughtful discussion of the scope of the exception in Dell, albeit in the context of international commercial arbitration, can be found in Jean Estate v. Wires Jolley LLP (2009), 96 O.R. (3d) 171 (C.A.). The client — the estate trustee and sole beneficiary of the estate — entered into a fee agreement with a law firm that contained a contingency fee of 10 percent of the value of the assets of the estate for success in connection with litigation over the estate. The client and law firm also agreed that disputes in relation to the contingency fee would be resolved by arbitration. When the parties could not agree on when to value the estate’s assets, the law firm served notice of arbitration. The client applied to strike out the notice on the basis that the agreement to arbitrate was unenforceable for reasons of public policy, i.e., for non-arbitrability. Even though the case was squarely about arbitrability, the court divided 2:1 on whether the issue should have been dealt with in arbitration, rather than by the court, with the two judgments emphasizing different passages from Dell.

In Dell, the Supreme Court indicated there are two opposing schools of thought about the degree of judicial scrutiny of an arbitrator’s jurisdiction under an arbitration agreement: the interventionist and the prima facie approaches. Justice Hawco’s decision in this case and Justice Slatter’s decision in Autoweld both adopt an interventionist approach, an approach clearly disapproved of in Dell and its predecessor, Desputeaux v. Éditions Chouette (1987) inc., [2003] 1 S.C.R. 178, 2003 SCC 17. So, to finally answer your question, no, I don’t think either is an appropriate expansion of the law.

Jonnette