Lin v. Uber Canada Inc.

Lin v. Uber Canada Inc.
Court (s) Database
Federal Court Decisions
Date
2024-06-24
Neutral citation
2024 FC 977
File numbers
T-538-23
Decision Content
Date: 20240624
Docket: T-538-23
Citation: 2024 FC 977
Montréal, Quebec, June 24, 2024
PRESENT: Mr. Justice Gascon
PROPOSED CLASS PROCEEDING
BETWEEN:
ARTHUR LIN
Plaintiff
and
UBER CANADA INC. UBER TECHNOLOGIES, INC. UBER PORTIER CANADA INC. UBER CASTOR CANADA INC. JUST ORDER ENTERPRISES CORP. FAN TUAN HOLDING LTD. FANTUAN TECHNOLOGY LTD.
Defendants
ORDER AND REASONS
I. Overview
[1] The Defendants Uber Canada Inc., Uber Technologies, Inc., Uber Portier Canada Inc., and Uber Castor Canada Inc. [together, the Uber Defendants or Uber] bring a motion to stay the proceeding initiated by the Plaintiff, Mr. Arthur Lin, a consumer who is acting as a potential representative plaintiff in this proposed class action. Relying on subsection 7(1) of Ontario’s Arbitration Act, 1991, SO 1991, c 17 [Ontario Arbitration Act] or, alternatively, paragraph 50(1)(b) of the Federal Courts Act, RSC 1985, c F-7 [Federal Courts Act], the Uber Defendants submit that the Plaintiff’s claims against them are subject to a mandatory arbitration agreement found in the user terms and conditions of the Uber platform [Arbitration Clause], and must therefore be resolved by way of arbitration.
[2] The proposed class action underlying this stay motion is being brought against the Uber Defendants and three other Defendants, namely, Just Order Enterprises Corp., Fan Tuan Holding Ltd., and Fantuan Technology Ltd. [together, the Fantuan Defendants], pursuant to section 36 of the Competition Act, RSC 1985, c C-34 [Competition Act], for alleged breaches of section 52 relating to misleading representations. However, the stay motion does not concern the Fantuan Defendants.
[3] The Plaintiff opposes the stay motion on the basis that Uber’s user terms and conditions constitute an adhesion contract and that the Arbitration Clause is unenforceable for three reasons: 1) the Arbitration Clause is invalid under the legal framework governing the contract between the parties; 2) there is a physical impediment to applying the Arbitration Clause; and 3) the Arbitration Clause is “void” because it is unconscionable.
[4] For the reasons that follow, the stay motion will be granted.
II. Background
A. The alleged anticompetitive conduct [5] The underlying nature of the claim being brought against the Uber Defendants and the Fantuan Defendants by way of this proposed class action involves alleged breaches of section 52 of the Competition Act, which prohibits various forms of false or misleading representations. The Plaintiff used the Uber Eats Food Delivery Service [Uber Eats] and the Fantuan Food Delivery Service to acquire food in Canada, and he claims that he had to incur additional charges for food delivery services, including a delivery fee and/or service fee. More specifically, the Plaintiff alleges that the Uber Defendants and the Fantuan Defendants employed the deceptive marketing practice of “drip pricing”, now prohibited under subsection 52(1.3) of the Competition Act, and made representations of a price for their respective food delivery services that was not attainable due to additional charges besides taxes or other governmental charges.
[6] The Uber Eats platform connects customers ordering food or other items with restaurants and merchants offering food and other items for sale, and allows those restaurants and merchants to offer delivery options for their products, including through third-party service providers.
[7] Section 52 of the Competition Act prevents, both directly and indirectly, a person from knowingly or recklessly making representations to the public of false or misleading promotional materials. Subsection 52(1.3) of the Competition Act prohibits drip pricing, which is defined as “the making of a representation of a price that is not attainable due to fixed obligatory charges or fees”.
[8] In his proposed class action, the Plaintiff notably seeks damages, pursuant to section 36 of the Competition Act, resulting from the alleged prohibited misleading representations made by the Uber Defendants and the Fantuan Defendants.
B. The Arbitration Clause
[9] The Arbitration Clause is found in every version of Uber’s website terms and conditions [Uber Terms and Conditions] applicable after July 1, 2021.
[10] According to article 6 of the Uber Terms and Conditions, the laws of Ontario (or Quebec, if the consumer is a Quebec resident) govern the contract between Uber and its customers. All versions of the Uber Terms and Conditions that have been in force since July 1, 2021 have included an Arbitration Clause substantially similar to the following:
7. DISPUTE RESOLUTION
IMPORTANT: PLEASE READ THE FOLLOWING ARBITRATION REQUIREMENT CAREFULLY. YOU WILL HAVE TO RESOLVE DISPUTES THROUGH ARBITRATION. YOU WILL NOT BE ELIGIBLE TO GET MONEY OR OTHER RELIEF THROUGH A COURT PROCEEDING.
ARBITRATION REQUIREMENT
You are free to get advice or representation from a lawyer about this arbitration requirement.
Unless prohibited by law, all disputes arising out of or relating in any way to: i) these Uber Eats Terms, ii) the Delivery Services, or iii) advertisements, promotions or oral or written statements related to the Delivery Services will be finally and conclusively adjudicated and resolved by arbitration under the Arbitration Rules (“ADRIC Rules”) of the ADR Institute of Canada, Inc. (“ADRIC”), except as modified here. The arbitration will be in English or French as you choose. The arbitration may be held anywhere the arbitrator considers appropriate, including remotely by telephone or Internet.
The ADRIC Rules are available by, for example, searching <www.google.ca> to locate “ADRIC Arbitration Rules” or by clicking here. You can also contact ADRIC at 1-877-475-4353 or <www.adric.ca>.
You will have to pay some fees to arbitrate, as described in the ADRIC Rules.
However, before beginning the arbitration, the party with the claim will first try to informally negotiate with the other party, in good faith, a resolution of the dispute for not less than 30 days but no more than 45 days unless extended by agreement. During the negotiation period, any otherwise applicable limitation period will be tolled (temporarily suspended). …
[11] Article 7 of the Uber Terms and Conditions highlights the dispute resolution framework of the contract — and more specifically, the arbitration requirement, which is the only form of recourse available to the contracting parties. Article 7 forms the basis of the Arbitration Clause. It provides that all disputes arising from the Uber Terms and Conditions, Uber services, access to Uber applications, and advertising or promotions of Uber products and applications must be finally and conclusively adjudicated and resolved under the Arbitration Rules [ADRIC Rules] of the ADR Institute of Canada [ADRIC]. Furthermore, the clause states that the customer will have to “pay some fees to arbitrate, as described in the ADRIC Rules”. However, the Arbitration Clause does not explicitly specify those fees.
[12] Under the ADRIC Rules referenced in the Arbitration Clause, a person alleging damages of $10,000 or less must pay a commencement fee of $350, and a defendant must pay a case service fee of $75 (Schedule B of the ADRIC Rules). ADRIC Rule 4.23 provides that, in some circumstances, a party may be required to pay a deposit as an advance for possible costs arising out of the arbitration. Rule 5.3 also stipulates that an arbitrator may award costs to the winning party in relation to the arbitration. Arbitration hearings and meetings may be held in a location the arbitral tribunal considers necessary, including by telephone, email, or videoconference (Rule 4.1 of the ADRIC Rules). Finally, an arbitral tribunal may rule on its own jurisdiction, including on any objections about the existence or validity of the arbitration agreement (Rule 4.8 of the ADRIC Rules).
[13] Customers who use the Uber Eats platform and application cannot place an order on Uber Eats if they do not first agree to the Uber Terms and Conditions. Therefore, the Plaintiff had to agree to the Uber Terms and Conditions, including the Arbitration Clause found therein, in order to receive Uber Eats’ food delivery services.
[14] There is no dispute in this case that the Plaintiff agreed to the Uber Terms and Conditions. The Plaintiff accepted these terms and conditions (and thus the Arbitration Clause) on May 19, 2022 (and did not use the Uber Eats platform between July 1, 2021 and May 18, 2022). Thereafter, he accepted a later version of the Uber Terms and Conditions by continuing to use the Uber Eats platform.
C. The relevant legislative provisions
[15] For ease of reference, the relevant statutory provisions are reproduced here. The relevant provision of the Ontario Arbitration Act is subsection 7(1). It reads as follows:
Stay
Sursis
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.
7 (1) Si une partie à une convention d’arbitrage introduit une instance à l’égard d’une question que la convention oblige à soumettre à l’arbitrage, le tribunal judiciaire devant lequel l’instance est introduite doit, sur la motion d’une autre partie à la convention d’arbitrage, surseoir à l’instance.
[16] The relevant provision of the Federal Courts Act is subsection 50(1), which reads as follows:
Stay of proceedings authorized
Suspension d’instance
50 (1) The Federal Court of Appeal or the Federal Court may, in its discretion, stay proceedings in any cause or matter
50 (1) La Cour d’appel fédérale et la Cour fédérale ont le pouvoir discrétionnaire de suspendre les procédures dans toute affaire :
(a) on the ground that the claim is being proceeded with in another court or jurisdiction; or
a) au motif que la demande est en instance devant un autre tribunal;
(b) where for any other reason it is in the interest of justice that the proceedings be stayed.
b) lorsque, pour quelque autre raison, l’intérêt de la justice l’exige.
[17] Finally, as will be discussed below, section 7 of Ontario’s Consumer Protection Act, 2002, SO 2002, c 30, Schedule A [Ontario Consumer Protection Act] is also highly relevant to this stay motion and is reproduced as follows for convenience:
No waiver of substantive and procedural rights
Aucune renonciation aux droits substantiels et procéduraux
7 (1) The substantive and procedural rights given under this Act apply despite any agreement or waiver to the contrary.
7 (1) Les droits substantiels et procéduraux accordés en application de la présente loi s’appliquent malgré toute convention ou renonciation à l’effet contraire.
Limitation on effect of term requiring arbitration
Restriction de l’effet d’une condition exigeant l’arbitrage
(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.
(2) Sans préjudice de la portée générale du paragraphe (1), est invalide, dans la mesure où elle empêche le consommateur d’exercer son droit d’introduire une action devant la Cour supérieure de justice en vertu de la présente loi, la condition ou la reconnaissance, énoncée dans une convention de consommation ou une convention connexe, qui exige ou a pour effet d’exiger que les différends relatifs à la convention de consommation soient soumis à l’arbitrage.
III. Submissions of the parties
[18] The Uber Defendants first argue that the Arbitration Clause is enforceable due to its content and the fact that since July 2021, it is “materially different” from the arbitration clause that was deemed invalid by the Supreme Court of Canada [SCC] in Uber Technologies Inc v Heller, 2020 SCC 16 [Heller SCC]. The Uber Defendants maintain that the Ontario Arbitration Act and the Federal Courts Act permit a stay, that Uber meets the technical prerequisites for the approval of a stay in favour of arbitration, that no statutory exceptions apply, that the Ontario Consumer Protection Act does not invalidate the Arbitration Clause, and that recent jurisprudence, such as Heller SCC and Douez v Facebook, Inc, 2017 SCC 33 [Douez SCC], concerning the invalidity of certain arbitration clauses, does not apply to the present case.
[19] Furthermore, the Uber Defendants posit that their position is at least arguable — the standard they deem necessary to prove that their request for a stay in favour of arbitration is well founded — and that the stay should consequently be granted to allow an arbitrator to address the jurisdictional issues under the competence-competence principle.
[20] Finally, the Uber Defendants submit that this Court and the Federal Court of Appeal [FCA] have repeatedly confirmed that claims made under the Competition Act are arbitrable. To this effect, they cite Murphy v Amway Canada Corporation, 2013 FCA 38 [Murphy FCA] and Difederico v Amazon.com, Inc, 2023 FCA 165 [Difederico FCA], which both expressly determined that claims made under the Competition Act can be arbitrated (Murphy FCA at para 64; Difederico v Amazon.com, Inc, 2022 FC 1256 at para 127 [Difederico FC], aff’d Difederico FCA at para 77).
[21] In support of their position, the Uber Defendants further argue that stays in favour of arbitration where the parties have a mandatory arbitration clause are inherently in the interests of justice. Indeed, as pointed out by the Uber Defendants, the SCC in Peace River Hydro Partners v Petrowest Corp, 2022 SCC 41 [Peace River SCC] has stated that valid arbitration clauses must be enforced and that arbitrators should generally decide if they have jurisdiction under the competence-competence principle (Peace River SCC at paras 39–41).
[22] The Plaintiff responds that the Arbitration Clause is unenforceable, and consequently, invalid. To this effect, he raises three key arguments.
[23] First, the Plaintiff asserts that the Arbitration Clause is invalid under the legal system that the Uber Defendants have selected to govern the Uber Terms and Conditions. This legal system is that of Ontario. The Plaintiff claims that appellate courts across Canada have determined that arbitration clauses cannot be invoked against consumers covered by Ontario’s consumer protection laws (TELUS Communications Inc v Wellman, 2019 SCC 19 at paras 4, 97 [Telus SCC]; Difederico FCA at para 80; Williams v Amazon.com Inc, 2023 BCCA 314 at para 174 [Williams BCCA]). Alternatively, section 25 of the Federal Courts Act would, in any event, ensure that this Court retains jurisdiction to adjudicate cases relating to federal laws.
[24] Second, the Plaintiff submits that there is an apparent physical impediment to applying the Arbitration Clause, as the arbitration institution selected by the Uber Defendants cannot hear class actions. Whereas a class action is not contractually prohibited in the Uber Terms and Conditions, the ADRIC is not able to hear class actions. As such, the Plaintiff claims that the Arbitration Clause, even if found to be valid, is “incapable of being performed”.
[25] Finally, the Plaintiff alleges that the Arbitration Clause is unconscionable, as it does not explicitly indicate the costs associated with arbitration, but simply states that consumers “will have to pay some fees to arbitrate”.
IV. Analysis
A. Preliminary issues
[26] Before addressing the substantive issues raised by the parties, I first need to address three preliminary matters.
(1) Other Uber defendants
[27] In his submissions to the Court, the Plaintiff indicated that two other legal entities, Uber B.V. and Uber Portier B.V., should be added as defendants in this proceeding. The Plaintiff noted that the Uber Terms and Conditions effective from March 17, 2021 (i.e., the start of the proposed class period) to June 30, 2021 identified these two Uber entities which are not defendants.
[28] With respect, the Plaintiff’s request on this front has no merit. While it may be true that the names of other Uber entities appear in the Uber Terms and Conditions, this is irrelevant to this stay motion. The Plaintiff has not filed any motion to add any other defendants. Moreover, the Plaintiff has provided no evidence on purchases made during the proposed class period that would justify adding the new Uber defendants they have identified.
(2) Uber Canada
[29] The Plaintiff also submits that Uber Canada Inc. [Uber Canada] is not a party to the Uber Terms and Conditions or to the Arbitration Clause, and therefore, could not benefit from the stay motion sought by Uber.
[30] The Plaintiff claims that the Uber Defendants failed to explain how Uber Canada could, on the one hand, not be expressly named in the Uber Terms and Conditions and not enter into contracts with the putative class members but, on the other hand, be subject to the Arbitration Clause. While the Plaintiff acknowledges that, in limited circumstances, a person not named in an arbitration agreement, such as a corporate subsidiary, may claim the benefit of arbitration, he argues that the Uber Defendants have failed to provide any evidence to raise an arguable case that Uber Canada is a corporate subsidiary that would be entitled to be covered by the arbitration agreement through or under the other Uber defendants. According to the Plaintiff, the Uber Defendants even expressly asserted that Uber Canada does not enter into contracts with the putative class members. He therefore asks the Court to exercise its residual discretion to refuse any stay application for Uber Canada as this entity is not a party to the Arbitration Clause.
[31] I am not persuaded by the Plaintiff’s argument.
[32] The Uber Terms and Conditions include the Uber affiliates and repeatedly recognize and benefit these affiliates. The Arbitration Clause thus applies to claims against Uber Canada — an Uber affiliate —, even though it is not expressly named in the Uber Terms and Conditions. In addition, pursuant to the Arbitration Clause contained at section 7 of the Uber Terms and Conditions, the Plaintiff (and any other Uber Eats customers) agreed to arbitrate, among other things, “all disputes arising out of or related in any way to … the Delivery Services, or … advertisements, promotions or oral or written statements related to the Delivery Services”. There is no doubt that this captures the Plaintiff’s claims in this proposed class action, including those made against Uber Canada. Finally, any claims against Uber Canada would be closely intertwined with the claims made against the other Uber Defendants and would arise from the same factual matrix and the same alleged conduct. In such circumstances, it is preferable to avoid endorsing multiple proceedings and risking inconsistent decisions, which militates in favour of including Uber Canada in the arbitration agreement (Kwon v Vanwest College Ltd, 2021 BCSC 545 at para 50).
[33] In sum, I agree with the Uber Defendants that there is at least an arguable case that Uber Canada benefits from the Arbitration Clause.
(3) The Fantuan Defendants
[34] The last preliminary issue relates to the Fantuan Defendants.
[35] The Plaintiff appears to suggest that their presence as defendants may have a bearing on this stay motion. It does not. There is no doubt that the Arbitration Clause does not apply to the Fantuan Defendants and that the Uber Defendants have nothing to do with them. The claims against the Uber Defendants are factually distinct from the claims against the Fantuan Defendants and the conclusions reached by the Court on this stay motion will not affect the latter. Nor does the presence of the Fantuan Defendants as parties to this proceeding modify the issues raised by this stay motion with respect to the Uber Defendants, or their treatment by the Court.
B. The approach for assessing a request for a stay in favour of arbitration
[36] This stay motion is made primarily pursuant to section 7 of the Ontario Arbitration Act. This provision requires any court — including this Court — to stay a proceeding where one party to an arbitration agreement commences a proceeding in respect of a matter the parties have agreed to submit to arbitration, subject to limited exceptions. Since the Arbitration Clause is a mandatory arbitration agreement between Uber and the Plaintiff (and many other customers) that is governed by Ontario law, the Ontario Arbitration Act evidently applies.
[37] I underline that subsection 7(1) of the Ontario Arbitration Act is mandatory. The Court does not have discretion to deny a motion to stay in favour of arbitration. As is the case for many other arbitration legislations in other provinces, the use of the word “shall” in the provision represents a clear policy choice favouring the enforcement of arbitration agreements.
[38] In Peace River SCC, the SCC reaffirmed the “legislative and judicial preference for holding parties to arbitration agreements” (Peace River SCC at para 10). It is now well accepted that stays in favour of arbitration where the parties have a mandatory arbitration clause are inherently in the interest of justice, and that Canadian courts will only consider challenges to the jurisdiction of an arbitrator or the enforceability of an arbitration agreement in exceptional circumstances. The SCC has repeatedly confirmed that valid arbitration clauses must be enforced and that, under the competence-competence principle, arbitrators should generally decide if they have jurisdiction (Peace River SCC at paras 39–41; TELUS SCC at paras 46, 54; Seidel v TELUS Communications Inc, 2011 SCC 15 at paras 2, 23, 42 [Seidel SCC]). This was expressly endorsed by the FCA with respect to federal matters brought before this Court (Difederico FCA at paras 34–35, 52).
[39] The competence-competence principle gives precedence to the arbitration process (Dell Computer Corp v Union des consommateurs, 2007 SCC 34 at para 70 [Dell SCC]). It mandates that jurisdictional challenges to arbitration or to the scope of arbitration agreements are to be resolved in the first instance by the arbitrator, and not by courts, unless certain exceptions apply (Peace River SCC at para 39).
[40] I pause to emphasize that the outcome in Peace River SCC — where the SCC refused the stay in favour of arbitration — is an exception to the fundamental principle of competence-competence which directs the courts to allow arbitrators to rule first on their own jurisdiction. In Peace River SCC, the SCC emphasized that it was only the particular policy objectives of the insolvency legislation at stake in that case that justified sidestepping the arbitration agreements at issue (Peace River SCC at paras 9–10).
[41] In other words, the general approach in cases where the validity of an arbitration agreement or the jurisdiction of the arbitrator is challenged is to refer the issue to the arbitrator, subject to limited exceptions (Dell SCC at paras 84–86; Difederico FC at para 96). The courts will only consider adjudicating challenges to arbitration agreements when such challenges raise either: 1) a pure question of law; or 2) a question of mixed fact and law that only requires a superficial consideration of the record (Dell SCC at paras 84–86; Difederico FCA at para 35; Spark Event Rentals Ltd v Google LLC, 2024 BCCA 148 at paras 15–18, 41 [Spark BCCA]). In Heller SCC, the SCC set out a third competence-competence exception, stating that a court should not refer a bona fide challenge to the validity of an arbitration agreement or to an arbitrator’s jurisdiction to the arbitrator if doing so would make it impossible for one party to arbitrate or for the challenge to be resolved (Heller SCC at paras 38–46; Difederico FC at paras 96–97).
[42] Outside of those situations, the competence-competence principle requires that the matter be referred to the arbitrator.
[43] In Peace River SCC, echoing these general principles, the SCC articulated a two-part process to determine whether a proceeding should be stayed in favour of arbitration (Peace River SCC at paras 76–84; General Entertainment and Music Inc v Gold Line Telemanagement Inc, 2023 FCA 148 at para 30 [Gold Line FCA]). These two interrelated, though distinct, components for a mandatory stay of proceedings are known as the “technical prerequisites” and the “statutory exceptions”.
[44] Under the first component, the Court must be satisfied that four technical prerequisites exist in order to invoke an arbitration clause. They are: (i) an arbitration agreement must exist; (ii) the court proceeding must have been commenced by a party to the arbitration agreement; (iii) the court proceedings must be in respect of a matter the parties agreed to submit to arbitration in the arbitration agreement; and (iv) the party seeking the stay must apply before taking any step in the court proceeding (Peace River SCC at paras 81–86; Gold Line FCA at paras 30, 31, 39; Difederico FC at para 68).
[45] The party seeking the stay does not need to establish these technical prerequisites on the usual balance of probabilities standard. It must simply establish an “arguable case” that the prerequisites are met. If there is an arguable case, the Court must stay the action and let the arbitrator decide the jurisdictional issue, subject to statutory exceptions (Peace River SCC at paras 84–85). When all the technical prerequisites are met, the mandatory stay provision is engaged and the Court should then move on to the second component of the analysis.
[46] Turning to the second component of the two-part process, the Court must determine whether there are any statutory exceptions that would prevent staying the proceeding in favour of arbitration. These statutory exceptions encompass more substantive reasons to object to or invalidate an arbitration clause, including the arbitration agreement being “null, void, inoperative, or incapable of performance”, other legislative interventions, or instances where the subject matter of the dispute is incapable of being the subject of arbitration (Peace River SCC at paras 86–87). If there are no statutory exceptions, the Court must grant a stay and cede jurisdiction to the arbitrator (Peace River SCC at para 79).
[47] At this second stage of the analysis, the party resisting arbitration (here, the Plaintiff) bears the onus of proof and the usual balance of probabilities standard applies. If the party resisting arbitration does not meet that burden, a stay in favour of arbitration is mandatory. Moreover, the competence-competence principle requires that where “the invalidity or unenforceability of the arbitration agreement is not clear (but merely arguable), the matter should be resolved by the arbitrator” (Peace River SCC at paras 88–89; see also Spark BCCA at paras 13–18). Stated differently, it must be clear on the record that deferral to arbitration raises a real prospect that there would be a denial of access to justice, and a mere possibility is not enough to overcome the competence-competence principle (Difederico FC at para 112). As mentioned above, since arbitration clauses are presumptively valid, a clear case is needed to reverse this presumption (Peace River SCC at para 89).
C. The technical prerequisites
[48] In the present matter, the four technical prerequisites are not really in dispute, and there is no doubt that they are met.
[49] First, an arbitration agreement obviously exists as the Arbitration Clause is clearly part of the Uber Terms and Conditions. Second, the Plaintiff, as a party bound by the Uber Terms and Conditions, commenced this class action proceeding. Third, the proposed class action in this case relates to Uber Eats’ food delivery services and covers a matter subject to the Arbitration Clause. Finally, the Uber Defendants have not taken any steps in this proceeding. In April 2023, counsel for the Uber Defendants accepted service and asked Plaintiff’s counsel to confirm they would not take steps to note the Uber Defendants in default. Plaintiff’s counsel responded that statements of defence should be filed within the timeline under the Rules, subject to a reasonable extension. On May 15, 2023, the Plaintiff served his Notice of Motion for certification. The Notice of Motion confirmed that the Plaintiff did not require statements of defence until after certification. On May 19, 2023, counsel for the Uber Defendants advised Plaintiff’s counsel of Uber’s intention to bring this motion for a stay in favour of arbitration.
D. The statutory exceptions
[50] At issue in this stay motion is whether the Plaintiff has demonstrated, on a balance of probabilities, the existence of any statutory exceptions preventing the Court from referring the matter to an arbitrator.
[51] Under this second component of the two-part test, the Plaintiff offers three reasons why a stay in favour of arbitration should not be granted despite the satisfaction of the technical requirements : 1) two statutes override any enforcement of the Arbitration Clause; 2) the Arbitration Clause is “incapable of being performed” in the sense that the chosen arbitration institution, namely ADRIC, cannot adjudicate disputes of the type raised by the Plaintiff; and 3) the Arbitration Clause is “void” in the sense that it is unconscionable.
[52] For the reasons that follow, I find that in the circumstances of this case, these three arguments are all without merit.
(1) Legislative overrides
[53] In this instance, the Plaintiff submits that there are two clear legislative overrides of the Arbitration Clause, namely, section 7 of the Ontario Consumer Protection Act and section 25 of the Federal Courts Act. Each will be dealt with in turn.
(a) The Ontario Consumer Protection Act
[54] The Plaintiff claims that sections 7 and 8 of the Ontario Consumer Protection Act ban arbitration altogether and guarantee the access of aggrieved consumers to the courts. In support of this position, the Plaintiff relies on the text of the legislation, court precedents, and the remedial objective of these provisions.
[55] The Plaintiff first argues that the actual text of the Arbitration Clause states that “[u]nless prohibited by law”, all disputes under the Uber Terms and Conditions are to be referred to arbitration. The Plaintiff contends that the Arbitration Clause is prohibited by Ontario law and that Uber is asking the Court to ignore the precondition set out in its own Arbitration Clause and to read in an exception to allow enforcing, in this Court, what is a prohibited clause. The Plaintiff maintains that section 7 of the Ontario Consumer Protection Act expressly states that “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 …” [emphasis added].
[56] According to the Plaintiff, the rules of statutory interpretation require the Court to take into account the context of the legislation. Such relevant “context” for the Ontario Consumer Protection Act includes the fact that the Ontario legislature would have known that the statute was a “complete code” and that there would be no other consumer causes of action or consumer remedies that the Ontario Consumer Protection Act does not touch upon. It also includes, says the Plaintiff, section 6 of the legislation, which specifically provides that “[n]othing in this Act shall be interpreted to limit any right or remedy that a consumer may have in law”, thus recognizing and affirming the rights and remedies that a consumer already has in common law and statutory law, which necessarily includes applicable federal statutes such as the Competition Act.
[57] The Plaintiff maintains that what he describes as Uber’s “technical” interpretation of the Ontario Consumer Protection Act would have the absurd consequences of defeating the Ontario legislature’s intent to outlaw mandatory arbitration clauses in consumer agreements.
[58] In addition, the Plaintiff argues that court precedents actually support his interpretation of section 7 of the Ontario Consumer Protection Act. He claims that Gupta v Lindal Cedar Homes Ltd, 2020 ONSC 7524 [Gupta ONSC] — a precedent relied on by the Uber Defendants — is inconsistent with appellate guidance across Canada, including the SCC. The Plaintiff maintains that appellate courts have mentioned, either in obiter dicta or directly, that in Ontario, the legislature has generally precluded mandatory arbitration agreements in the consumer context. For instance, says the Plaintiff, the British Columbia [BC] Court of Appeal [BCCA] stated that “Ontario, Quebec and Saskatchewan have expressly prohibited mandatory arbitration agreements and class waivers” (Williams BCCA at para 174). For its part, the FCA ruled that “[s]ome provinces have reacted to this reality by adopting legislation protecting consumers from the potential unfairness of such adhesion contracts. For example, in Ontario, section 7 of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A, declares mandatory arbitration clauses invalid” (Difederico FCA at para 80). Finally, the Plaintiff maintains that the SCC itself determined that “the [Ontario] Consumer Protection Act expressly shields consumers from a stay of proceedings under the Arbitration Act” (Telus SCC at para 4), that the provisions of the Ontario Consumer Protection Act “render 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” (Telus SCC at para 97), and that section 7 of the Ontario Consumer Protection Act can be seen as a “legislative override” of any consumer arbitration agreement (Telus SCC at para 97).
[59] The Plaintiff also relies on Griffin v Dell Canada Inc, 2010 ONCA 29 [Griffin ONCA], where the Ontario Court of Appeal noted that one of the very purposes of the enactment of section 7 of the Ontario Consumer Protection Act was to prevent “[c]lauses that require arbitration and preclude the aggregation of claims [which] have the effect of removing consumer claims from the reach of class actions” (Griffin ONCA at para 30). Finally, the Plaintiff refers to Union des consommateurs c Bell Canada, 2018 QCCS 1927 [Bell QCCS], where the Superior Court of Quebec similarly rejected a strict interpretation of a provincial statute as it would only serve to defeat the legislative intent to ensure that limitation periods are tolled, and the flexible and generous interpretation of class action legislation (Bell QCCS at paras 2, 23).
[60] The Plaintiff claims that Uber’s interpretation would have the effect of defeating the Ontario legislature’s intent to ensure access to justice for consumers, undermining the remedial purposes of the Ontario Consumer Protection Act. Such interpretation also could not be “in the interest of justice” as provided in paragraph 50(1)(b) of the Federal Courts Act.
[61] With respect, I disagree with the Plaintiff’s arguments. I instead find that the Plaintiff puts forward a tortuous, inaccurate, and meritless reading of both the Ontario Consumer Protection Act and the case law he attempts to rely on.
(i) The wording of subsection 7(2) of the Ontario Consumer Protection Act
[62] I will first deal with the legislative provision.
[63] I accept that section 7 of the Ontario Consumer Protection Act constitutes a specific legislative override. However, both the provision itself and the precedents having interpreted it clearly establish that this legislative override is limited in scope.
[64] Indeed, the Ontario Consumer Protection Act invalidates arbitration clauses only to a limited extent. Subsection 7(2) invalidates an arbitration clause in a consumer agreement or related agreement only “insofar as it prevents a consumer from exercising a right to commence an action in the Superior Court of Justice given under the [Consumer Protection Act]” [emphasis added]. Subsection 8(1) further provides that 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”.
[65] The language of subsection 7(2) is crystal clear: it does not protect consumers from arbitration in every transaction they enter. Nor does consumer protection legislation invalidate an arbitration clause for all purposes, contrary to what the Plaintiff suggests (Telus SCC at para 97; Seidel SCC at paras 31–32, 40, 50). Subsection 7(2) of the Ontario Consumer Protection Act protects only some statutory causes of action commenced before the Ontario Superior Court of Justice under the Ontario Consumer Protection Act.
[66] The references to “Superior Court of Justice” and “Class Proceedings Act, 1992” in sections 7 and 8 of the Ontario Consumer Protection Act indicate that the Ontario legislature only intended to protect access to Ontario courts, but not to other courts of coordinate jurisdiction, such as this Court or a superior court of another province.
[67] The Plaintiff, with his argument and proposed interpretation, simply ignores and turns a blind eye to the last part of subsection 7(2). The Plaintiff may not like it, but it is obvious that courts “cannot disregard the actual words chosen by [the legislature] and rewrite the legislation to accord with [their] own view of how the legislative purpose could be better promoted” (Canada (Information Commissioner) v Canada (Minister of National Defence), 2011 SCC 25 at para 40).
[68] I pause to underline that, since the Plaintiff’s sole cause of action is based on sections 36 and 52 of the Competition Act, he could have decided to bring his class action proceeding before the Ontario Court of Justice, as a recovery of damages pursuant to those provisions may be brought before “any court of competent jurisdiction”, including this Court. Stated differently, this Court and the superior courts of the provinces have concurrent jurisdiction regarding recourses in damages pursuant to sections 36 and 52 of the Competition Act. However, the Plaintiff elected to bring this proposed class action proceeding before this Court, and he must live with his choice of forum.
[69] The principles applicable to statutory interpretation are well known. The SCC has repeatedly affirmed that “there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament” (Rizzo & Rizzo Shoes Ltd (Re), [1998] 1 SCR 27 at para 21 and Bell ExpressVu Limited Partnership v Rex, 2002 SCC 42 at para 26, both quoting Elmer A. Driedger, Construction of Statutes, 2nd ed (Toronto: Butterworths, 1983) at 87). Statutory interpretation is the art of inferring what words mean. Sometimes, the meaning is obvious because of the clarity of the language used by the legislator and of its relationship to the legislative intent and the policy objectives of the statutory scheme. This is precisely the case here. The intent is found in the express wording and the plain language