Difederico v. Amazon.Com, Inc.

Difederico v. Amazon.Com, Inc.
Court (s) Database
Federal Court Decisions
Date
2022-09-06
Neutral citation
2022 FC 1256
File numbers
T-445-20
Notes
Reported Decision
Decision Content
Date: 20220906
Docket: T-445-20
Citation: 2022 FC 1256
Toronto, Ontario, September 6, 2022
PRESENT: The Honourable Madam Justice Furlanetto
PROPOSED CLASS PROCEEDING
BETWEEN:
STEPHANIE DIFEDERICO AND JAMESON EDMOND CASEY
Plaintiffs
and
AMAZON.COM, INC., AMAZON.COM.CA, INC., AMAZON.COM SERVICES LLC, AMAZON SERVICES INTERNATIONAL, INC., AND AMAZON SERVICES CONTRACTS, INC.
Defendants
ORDER AND REASONS
[1] This is a motion brought under paragraph 50(1)(b) of the Federal Courts Act, RSC 1985, c F-7 [Federal Courts Act] to stay the claim the representative Plaintiff, Stephanie Difederico, seeks to advance in this proposed class action as it relates to her purchases made on Amazon.ca stores, on the basis that it is subject to binding arbitration.
[2] For the reasons that follow, I find that a stay in favour of arbitration should be ordered, as there is an arbitration agreement in place that would cover Ms. Difederico’s purchases on the Amazon.ca stores. Ms. Difederico has not made out any exceptional grounds on which to deny a stay, including on the basis of public policy or unconscionability and any challenge to the jurisdiction of the arbitrator or the validity of the arbitration clauses should be referred to the arbitrator.
I. Background [3] Ms. Difederico is an individual residing in Windsor, Ontario. On April 1, 2020, Ms. Difederico filed this proposed class action against Amazon.com, Inc, Amazon.com.ca, Inc, Amazon.com Services LLC, Amazon Services International, Inc, and Amazon Services Contracts, Inc [collectively, Amazon] as Defendants [Claim]. The Claim alleges that certain provisions, namely a competitive pricing provision in effect from 2010 to March 2019, and a related subsequent fair pricing policy, constitute criminal price fixing contrary to section 45 of the Competition Act, RSC 1985, c C-34 [Competition Act].
[4] The Claim was amended to include an additional proposed class representative, Jameson Edmund Casey, on September 30, 2020. Ms. Difederico seeks to represent the proposed Amazon E-Commerce Class of purchasers. Mr. Casey proposes to represent two other classes of purchasers, neither of which are at issue in this motion. The Amazon E-Commerce Class is defined in the amended Claim as:
All persons or entities in Canada who, from 1 June 2010 to the present (the “Class Period”), purchased products on Amazon.ca or Amazon.com. Excluded from the Amazon E-Commerce Class are the defendants and their parent companies, subsidiaries, and affiliates.
[5] The Defendant Amazon.com, Inc. operates as a retailer with headquarters in Seattle, Washington. The Defendant Amazon.com.ca, Inc. and the other Defendants are subsidiaries of Amazon.com, Inc. Amazon.com.ca, Inc. operates the online stores www.amazon.ca [Amazon.ca].
[6] Both Amazon.ca and the online stores operated by Amazon.com Services, LLC [Amazon.com] have terms and conditions for the use of their services called “Conditions of Use”. Customers are required to agree to the Conditions of Use when they create an account with Amazon.ca and Amazon.com and each time they make an order under that account with these online stores.
[7] Ms. Difederico has accounts with both Amazon.ca and Amazon.com, and purchased products through each of these accounts. In 2016, she created her account on Amazon.ca and subsequently by June 23, 2021 had placed over 285 orders with Amazon.ca for various products. Such orders continued to be placed after the underlying action was commenced and this motion was filed.
[8] From October 24, 2014 until March 30, 2022, the Conditions of Use for Amazon.ca [2014 Conditions of Use], included the following dispute resolution and arbitration clause [2014 Arbitration Clause]:
DISPUTES
(Not applicable to Quebec consumers) Any dispute or claim relating in any way to your use of any Amazon.ca Service, or to any products or services sold or distributed by Amazon.ca or through Amazon.ca Services will be resolved by binding arbitration, rather than in court, except that you may assert claims in small claims court if your claims qualify. The U.S. Federal Arbitration Act and U.S. federal arbitration law apply to this agreement.
There is no judge or jury in arbitration, and court review of an arbitration award is limited. However, an arbitrator can award on an individual basis the same damages and relief as a court (including, injunctive and declaratory relief or statutory damages), and must follow the terms of these Conditions of Use as a court would.
[...]
We each agree that any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated or representative action. If for any reason a claim proceeds in court rather than in arbitration we each waive any right to a jury trial. We also both agree that you or we may bring suit in court to enjoin infringement or other misuse of intellectual property rights.
[9] The 2014 Conditions of Use also included a choice of law clause that read as follows:
APPLICABLE LAW
(Not applicable to Quebec consumers) By using any Amazon.ca Service, you agree that the U.S. Federal Arbitration Act, applicable U.S. federal law, and the laws of the state of Washington, United States, without regard to principles of conflict of laws, will govern these Conditions of Use and any dispute of any sort that might arise between you and Amazon.ca.
For Quebec consumers: These Conditions of Use and any dispute of any sort that might arise between you and Amazon.ca shall be governed by the laws of the Province of Quebec, without reference to its conflict of laws provisions, and the laws of Canada applicable therein, and any disputes will be submitted to the courts of competent jurisdiction of the District of Montreal (Quebec). [...]
[10] Similar dispute resolution and choice of law clauses were found in the Conditions of Use applicable to Amazon.com until May 3, 2021. As of May 3, 2021, there is no longer a dispute resolution clause providing for arbitration as part of the Conditions of Use for Amazon.com.
[11] Amazon originally filed this motion to stay the action in favour of arbitration on April 6, 2021. The original notice of motion sought to stay Ms. Difederico’s claims against both Amazon.ca and Amazon.com because of the arbitration provisions included in the dispute resolution clauses contained in the Conditions of Use for both of these online stores.
[12] On April 13, 2021, this Court ordered the stay motion to be heard prior to the certification motion in the underlying action [Sequencing Order]. The Sequencing Order was not appealed.
[13] Ms. Difederico moved to vary the Sequencing Order after becoming aware that the arbitration provision had been removed from the Amazon.com Conditions of Use. The motion to vary was dismissed on August 13, 2021 [Motion to Vary Order], and is currently under appeal.
[14] On November 3, 2021, the Federal Court of Appeal dismissed a motion by Ms. Difederico to stay the effect of the Sequencing Order and Motion to Vary Order pending determination of their appeal.
[15] The notice of motion relating to the present motion was amended on June 28, 2021 to relate only to Ms. Difederico’s proposed claim relating to her purchases on Amazon.ca.
[16] Each side filed significant evidence on this motion, including from expert witnesses; however, none of the affiants were subject to cross-examination.
[17] The Defendants submitted two affidavits from Larry Matthew Raibourn, the Category Leader of Amazon.ca’s Consumer Electronics business at the Defendant Amazon.com.ca Inc. The first affidavit was sworn April 2, 2021 [First Raibourn Affidavit] and the second affidavit was sworn June 4, 2021. They also provided an expert affidavit from George A. Bermann, Professor of Law at Columbia University Faculty of Law in New York, and two affidavits from Vaughn R. Walker, an arbitrator and mediator with Federal Arbitration Inc., and former Judge on the United States District Court, Northern District of California. The first Walker affidavit was sworn June 4, 2021 [First Walker Affidavit], and a supplementary affidavit was sworn September 24, 2021 [Supplemental Walker Affidavit].
[18] For the Plaintiff, Ms. Difederico submitted her own affidavit, sworn May 6, 2021. She also provided an expert affidavit from Lea Brilmayer, Professor at Yale Law School, sworn May 7, 2021 [Brilmayer Affidavit]. Additionally, there were two expert affidavits from Eric A. Posner, Professor at the University of Chicago Law School; the first affidavit was sworn June 1, 2021, and a supplementary affidavit was sworn August 24, 2021 [Supplemental Posner Affidavit]. There were also two affidavits from Krupa Shah, a lawyer with Orr Taylor LLP, solicitors for the Plaintiffs; the first affidavit was sworn May 7, 2021, and a supplementary affidavit was sworn August 26, 2021.
[19] The motion was initially heard on February 3, 2022 and was taken under reserve.
[20] On March 30, 2022, after this motion was heard, Amazon.ca made amendments to its 2014 Conditions of Use [Amendments]. The Amendments included changes to the dispute resolution and choice of law clauses. The new dispute resolution and arbitration clause [2022 Arbitration Clause] and choice of law clause read as follows (changes underlined):
DISPUTES
Any dispute or claim relating in any way to your use of any Amazon.ca Service, or to any products or services sold or distributed by Amazon.ca or through Amazon.ca Services will be resolved by binding arbitration, rather than in court, except that (1) you may assert claims in small claims court if your claims qualify and (2) if an applicable law in your province of residence gives you the right to resolve your dispute or claim before the courts of that province notwithstanding your agreement to arbitration, you may elect either to do so or proceed in arbitration.
There is no judge or jury in arbitration, and court review of an arbitration award is limited. However, an arbitrator can award on an individual basis the same damages and relief as a court (including, injunctive and declaratory relief or statutory damages), and must follow the terms of these Conditions of Use as a court would.
[...]
We each agree that any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated or representative action. If for any reason a claim proceeds in court rather than in arbitration we each waive any right to a jury trial. We also both agree that you or we may bring suit in court to enjoin infringement or other misuse of intellectual property rights.
APPLICABLE LAW
By using any Amazon.ca Service, you agree that the U.S. Federal Arbitration Act, applicable U.S. federal law, and the laws of the state of Washington, United States, without regard to principles of conflict of laws, will govern these Conditions of Use and any dispute of any sort that might arise between you and Amazon.ca, except to the extent Canadian federal or provincial law says otherwise.
[21] On June 17, 2022, a case management conference [CMC] was convened to discuss the Amendments. At the CMC, it was determined that the parties should be provided with the opportunity to make further written and oral submissions as to the impact, if any, of the Amendments on the pending stay motion. During the CMC, neither party submitted that additional evidence was required.
[22] The parties filed additional submissions and a further oral hearing was held on July 29, 2022.
[23] In her written materials and orally, the Plaintiff argued that because of the Amendments, the motion should be dismissed or provision should be made to require an amended notice of motion, further evidence and still further submissions.
[24] On August 3, 2022, the parties were advised that the Court would not be implementing a further schedule to provide for the filing of additional materials beyond those already provided in connection with the Amendments. As Ms. Difederico’s request arose as part of her supplementary responding submissions, the parties were advised that the court would formally address the request in its order and reasons on the stay motion.
II. Preliminary Issues [25] As part of her submissions on the initial motion, Ms. Difederico argued that this motion should be deferred until after certification because of the removal of the arbitration clause from Amazon.com. After the Amendments, Ms. Difederico repeated her argument that the motion should be dismissed or deferred because of the more recent Amendments. As a preliminary matter, I will deal with each of these arguments.
A. Should a decision from the motion be deferred until after certification because of removal of the arbitration clause from Amazon.com? [26] Ms. Difederico asserts that the stay Amazon seeks will have little impact on the certification motion as Ms. Difederico may continue in her role as a representative plaintiff notwithstanding the Court staying her individual claims relating to Amazon.ca purchases.
[27] Amazon argues that Ms. Difederico’s request to adjourn is an abuse of process and a collateral attack on the Sequencing Order and the Motion to Vary Order. It asserts that the Court should not entertain this argument; I agree.
[28] As set out in Wilson v The Queen, [1983] 2 SCR 594 at 599, a court order stands and is binding and conclusive unless it is set aside on appeal or lawfully quashed; it may not be attacked collaterally in a manner other than where the specific object is the reversal, variation or nullification of the order. Collateral attacks circumvent appropriate review procedures and constitute an abuse of process: Wild v Canada, 2006 FC 777 at para 20.
[29] As set out above, Ms. Difederico did not appeal the Sequencing Order. Ms. Difederico moved to vary the Sequencing Order; however, her request was dismissed. The Motion to Vary Order is already under appeal and will be determined in due course. A request to stay the effect of the Sequencing Order and Motion to Vary Order pending determination of the appeal was heard and dismissed by the Federal Court of Appeal for failure to establish irreparable harm.
[30] The following summary was provided by LeBlanc JA in his decision (2021 FCA 214) on the stay motion:
[4] On July 16, 2021, the appellants sought to set aside or vary the Sequencing Order pursuant to Rule 399(2)(a) of the Federal Courts Rules, SOR/98-106 (the Rules) on the ground that the respondents, subsequent to said order, had modified the Conditions of Use agreements for customers who purchase products from the Amazon.com platform so as to allow disputes arising from the use of that platform to be resolved in litigation, instead of arbitration, and amended their stay motion accordingly to narrow it to disputes arising from the use of the Amazon.ca platform, which remained subject to binding arbitration. According to the appellants, this change, which arose subsequent to the making of the Sequencing Order, would have prevented the relief sought by the respondents in their original motion for stay. This was so, for two reasons. First, there was no longer a potential to stay the claims of the entire Amazon e‑commerce class and to narrow the class proceeding in the manner originally proposed by the respondents. Second, this change in circumstances would now require the Federal Court to delve into the composition of the class members of the Amazon e‑commerce class, thereby further complicating the issues on the stay motion, with the inevitable increase in costs or delay.
[5] On August 13, 2021, the Federal Court dismissed the applicants’ motion to vary the Sequencing Order. Although it was satisfied that the change in the Conditions of Use agreements for customers who purchase products from the Amazon.com platform was, as required by Rule 399(2)(a) of the Rules, a “matter” not discoverable with reasonable diligence prior to the making of the Sequencing Order, the Federal Court found that this new information would not have had a determining influence on the Sequencing Order. In particular, it ruled that said Order could still have the effect of significantly narrowing issues before certification, which is not scheduled to be debated until October 24, 2022, by eliminating all purchases made on the Amazon.ca platform, thereby streamlining the certification motion and saving time and costs.
[31] The motion was dismissed for failure to establish irreparable harm:
[12] ....I fail to see how the alleged harm, which stems from an alleged error in the exercise by the Federal Court of its authority to manage the proceeding before it, qualifies as unavoidable or incurable harm. If the present appeal is granted, then the alleged harm would be cured as it would have been an error on the part of the Federal Court to allow the respondents’ amended stay motion to proceed ahead of certification. If, on the other hand, the appeal is dismissed on its merits, then there could be no harm in having the respondents’ stay motion proceed ahead of certification, as this course of action would have been permitted by the court order of a procedural nature upheld on appeal as having resulted from a valid exercise of discretion. ... There is always the possibility that the respondent’s amended motion could proceed before the underlying appeal is heard. To avoid or mitigate the potential issues associated with that possibility, the appellants could always seek that their appeal be expedited, something they could have – but have not – done in their stay motion’s materials.
[13] The appellants refer to Heller v. Uber Technologies Inc., 2021 ONSC 5518, [2021] O.J. No. 4316 (QL/Lexis) for the proposition that the determining rights in the absence of a lis between the parties constitutes irreparable harm. However, I note from that judgment that Uber brought a motion to have the proposed class proceeding stayed in favour of arbitration. That motion was brought, as was done in the present matter, as an interlocutory motion in the proposed class proceeding and appears to have been fully debated on its merits up to the Supreme Court of Canada (Heller at paras. 41-45). Heller is of no assistance to the appellants for the purposes of the present motion.
[32] The Plaintiff’s argument relating to the Amazon.com amendment is nothing more than a repeat of the argument already made and determined on the motion to vary, and pending before the Federal Court of Appeal. Ms. Difederico’s request for deferral on this basis is a collateral attack on the Court’s earlier decisions and is denied.
B. Should the motion be dismissed or deferred because of the Amendments? [33] Ms. Difederico further asserts that the motion should be dismissed or deferred because of the more recent Amendments to the 2014 Conditions of Use. She argues that the Amendments create uncertainty as to which arbitration and choice of law clauses are in effect, and over what time period. She asserts that as a matter of procedural fairness, Amazon should be required to amend its notice of motion and the parties provided with the opportunity to file further evidence and submissions to address the Amendments.
[34] Amazon argues that the changes to the arbitration and choice of law clauses are immaterial to the issues on the motion as the operative parts of those clauses remain consistent and the relief requested on the motion remains unchanged. It asserts that the Amendments do nothing more than expressly state the law that was already in effect. As set out further below, I agree with this contention.
[35] When the Amendments were brought to the Court’s attention, the Court convened a CMC with the parties to discuss next steps. On agreement of the parties, the Court allowed each party to file further submissions to address the Amendments as well as to make submissions at a further oral hearing. At no time during the CMC and this initial scheduling did either party indicate that they would be seeking to file further evidence to address the Amendments. Nor was any further motion brought with such request.
[36] In the Plaintiff’s written submissions and at the oral hearing, the Plaintiffs argued that as a matter of procedural fairness, Amazon should be required to file an amended notice of motion and that a further schedule should be implemented allowing for evidence from the parties, additional submissions and a further oral hearing, beyond that already provided.
[37] The Defendants argued that an amended notice of motion and further schedule was not required as the request for relief had not changed, nor had the legal basis for the stay requested. Further, the Defendants did not propose to file any new evidence and aside from the Plaintiff arguing that the Defendants should be compelled to do so, the only additional evidence that the Plaintiff proposed she might file was a possible fact affidavit to establish that she made a purchase under the new Conditions for Use.
[38] However, the Plaintiff did not establish how any proposed evidence from Ms. Difederico would affect the issues to be determined on the motion, or that such evidence would change the result: Scott v Cook, 1970 CanLII 331 (ON SC), [1970] 2 OR 769; 671122 Ontario Ltd v Sagaz Industries Canada Inc, 2001 SCC 59. This was particularly so in view of Amazon’s agreement that the Court consider the language of the Amendments as part of its reasons.
[39] As a full opportunity to provide further submissions both orally and in writing was provided to the parties, in my view, there has been procedural fairness.
[40] The Plaintiff’s request to compel an amended notice of motion and for a further schedule allowing for evidence and further submissions to be filed in connection with the Amendments is accordingly denied.
III. Issues [41] The following issues are raised by this motion:
(a)What is the appropriate approach for considering whether a stay should be granted?
(b)Should a stay be granted?
IV. Analysis A. What is the appropriate approach for considering whether a stay should be granted? [42] As argued by the Defendants, there is a well-settled policy in Canada that compliance with commercial arbitration agreements is to be enforced by the courts to the extent such agreements are not null, void, inoperative, or incapable of performance: Nanisivik Mines Ltd v F.C.R.S. Shipping Ltd, [1994] 2 FC 662, 1994 CarswellNat 274 (FCA) [Nanisivik] at para 8. The Supreme Court has consistently held that Courts should give effect to arbitration agreements absent legislative intervention: Seidel v TELUS Communications Inc, 2011 SCC 15 [Seidel] at para 2; TELUS Communications Inc v Wellman, 2019 SCC 19 [Wellman] at para 46.
[43] This includes arbitration agreements that apply to proceedings for damages under section 36 of the Competition Act: Murphy v Amway Canada Corporation, 2013 FCA 38 [Murphy]; Seidel. The Federal Court of Appeal rejected an argument that competition law by its nature should never be the subject-matter of arbitration: Murphy at paras 65.
[44] Amazon contends that this policy is reflected in the United Nations Foreign Arbitral Awards Convention Act, RSC 1985, c 16 (2nd sup) [UNFAACA], which they assert, applies to this motion. The UNFAACA incorporates into Canadian law, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 330 UNTS 3, adopted by the United Nations Conference on International Commercial Arbitration in New York on June 10, 1958 [Convention]. Article II(3) of the Convention states:
The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.
[45] Similar legislation implementing the Convention has been passed by provincial legislatures either implementing the Convention in substance but not form (British Columbia, see Seidel at paras 17 and 28), or adopting it directly (Ontario, International Commercial Arbitration Act, 2017, SO 2017, c 2 Sch 5 [ICAA]).
[46] The Defendants assert that the Court has no residual discretion under paragraph 50(1)(b) of the Federal Courts Act to refuse a stay in favour of arbitration under Article II(3) of the Convention, where the dispute arguably falls within an arbitration agreement that is not null, void, inoperative or incapable of being performed: Nanisivik at paras 8-15; William C Graham, “The Internationalization of Commercial Arbitration in Canada: A Preliminary Reaction” (1987) 13:1 Can Bus LJ 2 at p. 26.
[47] Ms. Difederico contends that the UNFAACA does not apply to this motion. Rather, she asserts that the Court must only consider paragraph 50(1)(b) of the Federal Courts Act, which provides the Court with discretion to stay proceedings where it is in the interests of justice:
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 :
[. . .]
[. . .]
(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.
[48] Ms. Difederico argues that it is not in the interests of justice to grant a stay here because there is no contractual relationship on the dispute resolution clauses, the dispute resolution clauses violate public policy by barring access to justice, the dispute resolution clauses are unconscionable, and the balance of harm weighs against the stay.
[49] In order for me to frame the analysis, I will accordingly determine at the outset whether the UNFAACA applies.
(1) Does the UNFAACA Apply? [50] Subsection 4(1) of the UNFAACA states that “the Convention applies only to differences arising out of commercial legal relationships, whether contractual or not.”
[51] The Defendants argue that the ordinary and legal meaning of the term “commercial relationship” and the legislative intention underlying the enactment of the UNFAACA support an interpretation that the relationship between Amazon and Ms. Difederico falls within the UNFAACA.
[52] Ms. Difederico asserts that Amazon and Ms. Difederico’s relationship is not commercial; rather, when consumers purchase goods on Amazon they are buying goods for consumption.
[53] There is no definition of “commercial relationship” within the UNFAACA or the Convention. Nor has the Court given any interpretation to this phrase of the UNFAACA.
[54] Amazon argues that conventional dictionary definitions support its argument that the relationship between the parties would fall within the meaning of a commercial relationship. It refers to the definitions of “commercial” in Black’s Law Dictionary, which include “[o]f, relating to, or involving the buying and selling of goods” and “[r]esulting or accruing from commerce or exchange”: Bryan A. Garner et al., eds, Black’s Law Dictionary, (St. Paul, MN: Thomson Reuters, 2019) [Black’s Law Dictionary] sub verbo “commercial”. It similarly points to the definition of “e-commerce”, a term used by the Plaintiffs in the name of the proposed class at issue. E-commerce is defined in Black’s Law Dictionary as “[t]he practice of buying and selling goods and services through online consumer services and of conducting other business activities using an electronic device and the Internet”.
[55] Amazon further relies on a number of cases where consumer relationships have been found to be “commercial” in certain legal contexts (i.e., under tax law, a search violating the Charter, and tort respectively): Marcantonio v Minister of National Revenue, [1991] 1 CTC 2702, 1991 CarswellNat 472 (TCC.) at para 10; R v Plant, [1993] 3 SCR 281 at 294; Stevenson v Clearview Riverside Resort, [2000] OJ No 4863, 2000 CarswellOnt 4888 (ON SC) at para 21. However, none deal with the same legal context at issue here.
[56] The modern approach to statutory interpretation provides that “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”: Wellman at para 47.
[57] The Convention defines its scope broadly as applying to the recognition and enforcement of arbitral awards “arising out of differences between persons, whether physical or legal” (Article I(1)), and agreements to arbitrate “all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration” (Article II(1)).
[58] However, the Convention also provides that signatories may limit the application of the Convention to “legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration” (Article I(3)), an option which Canada exercised in subsection 4(1) of the UNFAACA.
[59] The Supreme Court has interpreted the purpose of the Convention as “to facilitate the enforcement of arbitration agreements by ensuring that effect is given to the parties’ express intention to seek arbitration”: GreCon Dimter inc v JR Normand inc, 2005 SCC 46 at para 43.
[60] Ms. Difederico refers the Court to the decision in Uber v Heller, 2020 SCC 16 [Uber]. In Uber, the Supreme Court needed to determine whether the ICAA applied to the facts of that case. Subsection 5(3) of the ICAA provided that the Model Law applied to “international commercial arbitration agreements and awards made in international commercial arbitrations.” At paragraphs 22-27, the Supreme Court provided its approach to considering this issue, which focussed on the nature of the dispute rather than the nature of the relationship between the parties:
[22] Section 5(3) of the ICAA states that the Model Law applies to “international commercial arbitration agreements and awards made in international commercial arbitrations”. The meaning of “commercial” in this section of the ICAA must be the same as the meaning of “commercial” under the Model Law, as the latter states that it “applies to international commercial arbitration” (art. 1(1)).
[23] While the Model Law does not define the term “commercial”, a footnote to art. 1(1) provides some guidance:
The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other
forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.
(Model Law, art. 1(1), fn. 2)
[24] The Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration: Report of the Secretary-General further explains that “labour or employment disputes” are not covered by the term “commercial”, “despite their relation to business”:
Although the examples listed include almost all types of contexts known to have given rise to disputes dealt with in international commercial arbitrations, the list is expressly not exhaustive. Therefore, also covered as commercial would be transactions such as supply of electric energy, transport of liquified gas via pipeline and even “non-transactions” such as claims for damages arising in a commercial context. Not covered are, for example, labour or employment disputes and ordinary consumer claims, despite their relation to business.
(United Nations Commission on International Trade Law, Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration: Report of the Secretary-General, U.N. Doc. A/CN.9/264, March 25, 1985, at p. 10 (emphasis added); see also p. 11.)
[25] Two points emerge from this commentary. First, a court must determine whether the ICAA applies by examining the nature of the parties’ dispute, not by making findings about their relationship. A court can more readily decide whether the ICAA applies (or an arbitrator can more readily decide whether the Model Law applies) by analysing pleadings than by making findings of fact as to the nature of the relationship. Characterising a dispute requires the decision-maker to examine only the pleadings; characterising a relationship requires the decision-maker to consider a variety of circumstances in order to make findings of fact. If an intensive fact-finding inquiry were needed to decide if the ICAA or the Model Law applies, it would slow the wheels of an arbitration, if not grind them to a halt.
[26] The second point to draw is that an employment dispute is not covered by the word “commercial”. The question of whether someone is an employee is the most fundamental of employment disputes. It follows that if an employment dispute is excluded from the application of the Model Law, then a dispute over whether Mr. Heller is an employee is similarly excluded. This is not the type of dispute that the Model Law is intended to govern, and thus it is not the type of dispute that the ICAA is intended to govern.
[27] This result is consistent with what courts have held (Patel v. Kanbay International Inc., 2008 ONCA 867, 93 O.R. (3d) 588, at paras. 11-13; Borowski v. Fiedler (Heinrich) Perforiertechnik GmbH (1994), 1994 CanLII 9026 (AB QB), 158 A.R. 213 (Q.B.); Rhinehart v. Legend 3D Canada Inc., 2019 ONSC 3296, 56 C.C.E.L. (4th) 125, at para. 27; Ross v. Christian & Timbers Inc. (2002), 2002 CanLII 49619 (ON SC), 23 B.L.R. (3d) 297 (Ont. S.C.J.), at para. 11). It is also consistent with the Model Law’s reference to “trade” transactions, which, as Gary B. Born observes, “arguably connot[es] involvement by traders or merchants, as distinguished from consumers or employees” (International Commercial Arbitration, vol. I, International Arbitration Agreements (2nd ed. 2014), at p. 309). Further, one could draw a negative inference from the definition’s omission of “employment” relations (p. 309, fn. 454). It seems unlikely to us that the drafters of the Model Law would have included such a thorough list of included commercial relationships and not considered whether to include “employment”.
[61] Ms. Difederico asserts that Uber established that employment disputes and consumer claims are not commercial.
[62] Amazon asserts that Uber is of no assistance in interpreting the meaning of “commercial” within the context of the UNFAACA. However, even if the Court were to consider the dispute between the parties, Amazon asserts that it would conclude that it is a commercial dispute. I agree.
[63] While the FCA has interpreted the remedies available under the Competition Act as private rather than public claims (Murphy at para 66), in my view the nature of the claims made by Ms. Difederico have a uniquely commercial character. Although the harms Ms. Difederico alleges she has suffered are those of an ordinary consumer – overpaying for goods purchased in consumer transactions – the conduct resulting in that harm has a uniquely commercial character.
[64] The thrust of Ms. Difederico’s claims is that Amazon conspired with third-party sellers to fix the prices for products that are sold to consumers on Amazon platforms in breach of the Competition Act. In my view, Amazon has properly characterized the pith and substance of the dispute as allegations of anti-competitive conduct related to Ms. Difederico’s purchases of products online, including from Amazon.ca.
[65] Ms. Difederico’s claims center around allegations that Amazon has entered into commercial agreements with third-party sellers on its sites regarding the pricing of goods. In my view, these purported agreements are commercial transactions between business entities akin to a “trade transaction for the supply or exchange of goods or services” or “distribution agreement” like the examples of commercial relationships listed in the footnote to the Model Law: Uber at para 23.
[66] Although Ms. Difederico is a consumer, in my view the claims she has made have a commercial foundation.
[67] Considering the words of the UNFAACA in context, and in their grammatical and ordinary sense, with the scheme of the Act, the object of the Act, and the intention of Parliament, along with the relationship between the parties and the nature of the dispute between the parties, in my view favours a definition of commercial in which the UNFAACA would apply.
[68] As a framework for determining stay motions under the UNFAACA has not yet been articulated by this Court, Amazon contends that the same five-part analysis that Ontario courts have used when considering stay motions under the Arbitration Act, 1991, SO 1991, c 17 and the ICAA should apply such that the following questions are addressed (Haas v Gunasekaram, 2016 ONCA 744 at para 17):
(i) Is there an arbitration agreement?
(ii) What is the subject matter of the dispute?
(iii) What is the scope of the arbitration agreement?
(iv) Does the dispute arguably fall within the scope of the arbitration agreement?
(v) Are there grounds on which the court should refuse to stay the action?
[69] As applicable to this case, whether or not a stay should be granted, in my view, conflates into the following three questions: 1) is there an arbitration agreement in place; 2) does Ms. Difederico’s claim arguably fall within the scope of the arbitration agreement; and 3) are there any grounds on which to deny the stay.
B. Should a stay be granted? (1) Is there an arbitration agreement in place? [70] With respect to the first question, I agree with Amazon, there can be no serious debate that that an arbitration agreement is in place.
[71] Ms. Difederico argues there is no binding arbitration agreement as she did not receive adequate notice of the dispute resolution terms, the dispute resolution clause on Amazon.ca is irreconcilable with the Conditions of Use on Amazon.com and any agreement is made non‑mandatory by the Amendments to the dispute resolution clause. However, none of these arguments is persuasive as set out further below.
(a) Did Ms. Difederico have adequate notice of the arbitration agreement? [72] Ms. Difederico relies on Tilden Rent-A-Car Co v Clendenning (1978) 18 OR (2d) 601, 1978 CanLII 1446 (ON CA) [Tilden] to argue that there was no meeting of the minds because Amazon failed to bring the 2014 Arbitration Clause to Ms. Difederico’s attention.
[73] In Tilden, the affected party defendant signed a contract for automobile insurance coverage for damages when renting a car at the airport. The outstanding issue was whether the defendant was liable for damage caused to the automobile because of exclusionary provisions in the contract. In that case, the Court held that a party submitting a standard form printed contract for signature is responsible for taking reasonable measures to draw any unusual, stringent and onerous provisions to the attention of the party signing the contract (at paras 32-34).
[74] In my view, the circumstances here are distinct from those in Tilden.
[75] As noted by Judge Walker, click-through purchase contracts that provide notice that clicking constitutes acceptance of a hyperlinked agreement are a valid type of agreement under US law (Supplement