CITATION: Ontario v. Imperial Tobacco Canada
          Limited, 2011 ONCA 525

DATE: 20110720

DOCKET: C52576

COURT OF APPEAL FOR ONTARIO

Goudge,
          Gillese and Juriansz JJ.A.

BETWEEN

Her Majesty the Queen in Right of Ontario

Appellant

and

Imperial
          Tobacco Canada Limited and The Ontario Flue-Cured

Tobacco
          Growers Marketing Board

Respondents

John Kelly and Lise G. Favreau, for the
          appellant

Alan Mark and Orestes Pasparakis, for
          Imperial Tobacco Canada Limited

William V. Sasso, for The Ontario
          Flue-Cured Tobacco Growers Marketing Board

Ronald G. Slaght, Q.C. and Peter J. Osborne, for the
          intervener Her Majesty the Queen in Right of Canada

Heard: February 17, 2011

On appeal from the judgment of Justice R.C. Gates of
          the Superior Court of Justice dated July 26, 2010.

Juriansz J.A. (Dissenting in part):

OVERVIEW
[1]

The issue in this appeal is whether the motion
    judge erred by staying the application brought by Her Majesty the Queen in
    Right of Ontario in the Superior Court because he concluded an arbitration
    process should be followed. The appeal raises again the scope of the exceptions
    to the general rule stated in
Dell Computer
    Corp. v. Union des consommateurs
, [2007] 2 S.C.R. 801 that in any
    case involving an arbitration clause, a challenge to the arbitrators
    jurisdiction must be resolved first by the arbitrator.
[2]

The application brought by Ontario in the Superior
    Court has to do with a settlement of litigation between Imperial Tobacco Canada
    Limited (ITCAN) on one side and the governments of Canada and the provinces
    on the other. The governments had brought an action against ITCAN and its
    subsidiaries for their role in the smuggling of tobacco across the Canada-U.S.
    border between January 1, 1985 and December 31, 1996. The parties entered into
    a Comprehensive Settlement Agreement (the Agreement) dated July 31, 2008.
    Under the Agreement, ITCAN agreed to pay up to $350 million to the governments
    in annual payments over 15 years in exchange for a release from future actions,
    the terms of which I will discuss in detail later in these reasons.
[3]

Subsequently, on December 2, 2009, the Ontario
    Flue-Cured Tobacco Growers Marketing Board (the Tobacco Board) and four
    tobacco farmers commenced a $50 million class action against ITCAN on behalf of
    growers and producers who were required to sell tobacco through the Tobacco
    Board between 1986 and 1996. The Tobacco Board claims on its own behalf and on
    behalf of growers and producers the difference between the lower export price
    paid by ITCAN to the Tobacco Board for tobacco exported from Canada and the
    higher price that should have been paid for tobacco for domestic use, in
    respect of tobacco which was first exported from Canada and then smuggled back
    into Canada.
[4]

Claiming to rely on provisions of the Agreement,
    ITCAN gave notice on March 29, 2010 that, commencing April 30, 2010, it would
    pay the settlement funds due to Ontario under the Agreement into an escrow
    account pending the resolution of the class action. Ontario brought an
    application for declarations that ITCAN was not entitled to withhold annual
    payments to Ontario, which the motion judge dismissed so that the arbitration
    process in the Agreement could be followed.
[5]

Ontario has appealed the motion judges decision to
    this court, arguing that the dispute between Ontario and ITCAN does not fall
    within the arbitration clause, or in the alternative, that this court should
    determine its application in any event to avoid a multiplicity of proceedings
    and the possibility of inconsistent results.
[6]

I would dismiss the appeal and uphold the motion
    judges stay of Ontarios application and confirm his referral of the parties
    to the arbitrator so that the arbitration process set out in the Agreement may
    be followed.
FACTUAL CONTEXT
The Release in the Comprehensive Agreement
[7]

The Agreement is central to the resolution of the
    issues. The Agreement is made between Canada and the provinces on one side and
    ITCAN and its Affiliates on the other.
[8]

Section 15 of the Agreement deals with the release.
    The terms Releasing Entities, Released Entities and Released Claims are
    important to understanding s. 15. The Agreement defines those terms as
    follows:
(a) Releasing
    Entities means: Her Majesty in Right of Canada and in Right of the Provinces
    and includes for greater certainty the Canada Revenue Agency and the Canada
    Border Services Agency.
(b) Released
    Claims include,
inter alia
, all
    civil claims that may be allowable to the Releasing Entities relating to or
    arising out of the smuggling of tobacco or any failure on the part of ITCAN to
    pay taxes, duties, excise, customs or excise taxes or duties or amounts payable
    on account of smuggled or imported tobacco.
(c) Released Entities include ITCAN and
    related companies.
[9]

Section 15 provides that the Releasing Entities
    absolutely and unconditionally fully release and forever discharge the Released
    Entities from the Released Claims. Section 15 does not stop there, however.  It
    goes on to provide that if a Releasing Entity does bring a Released Claim
    against a Released Entity, the release may be pleaded as a complete defence and
    may be relied upon as a complete estoppel to dismiss the claim.
[10]

Because of its importance, I set out s. 15 in full:
RELEASE
15. The
    Releasing Entities hereby, without any further action on the part of such
    Releasing Entities, absolutely and unconditionally fully release and forever
    discharge, the Released Entities from the Released Claims. Without in any way
    limiting the generality of the foregoing, the Releasing Entities further agree
    that:
(a) in the
    event that a proceeding, claim, action, suit or complaint with respect to a
    Released Claim is brought by Releasing Entity against a Released Entity, this
    release may be pleaded as a complete defence and reply, and may be relied upon
    in such a proceeding as a complete estoppel to dismiss the said proceeding; and
(b) in the
    event of (a), the Releasing Entity that initiated the proceeding shall be
    liable for all reasonable costs, legal fees, disbursements and expenses
    incurred by the Released Entity as a result of such proceeding.
The Right to Escrow Payments in Section 7 of the Agreement
[11]

Section 7 of the Agreement gives ITCAN additional
    rights in the event that it incurs monetary liabilities in any way relating
    to, arising out of or in connection with any Released Claims or Claims Over.
    If ITCAN does incur such monetary liabilities, it has the right to reduce the
    amount of the payments it must make to the government concerned under the
    Agreement. In addition, upon ITCAN learning of the existence of any claim that
    might give rise to such liabilities, it has the right, after giving 30 days
    notice, to begin paying any funds due to a government under the Agreement into
    an escrow account.
[12]

In my view, as this case turns on contrasting the
    rights of ITCAN under s. 7 with its rights under s. 15, I examine those rights
    carefully. Section 7 provides:
Without prejudice to any other rights or
    remedies as provided in paragraphs 15, 16, 17, 18 and 19 of this Agreement, in
    the event that monetary liabilities (including all fees, expenses and
    disbursements on a full indemnity scale) are incurred by Released Entities in
    any way relating to, arising out of or in connection with any Released Claims
    or Claims Over made by a Releasing Entity or an Entity claiming through or on
    behalf of a Releasing Entity (and for the avoidance of doubt including such
    Governments crown-controlled corporations or crown agencies) (a Responsible
    Government), the amount of the Payment due in the fiscal year in which the
    monetary liabilities are incurred, and Payments due in subsequent fiscal years,
    shall be reduced by such amounts incurred. Upon learning of the existence of
    any claim, action, suit, or proceeding that could give rise to such
    liabilities, ITCAN may, upon giving 30 days notice to the Responsible
    Government, begin paying any funds which are then or thereafter due into an
    interest-bearing escrow account, up to the amount claimed in such claim,
    action, suit, or proceeding pending its resolution. The amount by which the
    Payments shall be so reduced or escrowed shall not exceed the then-remaining
    Responsible Governments share of the Payments (as set out in Schedule C
    hereto).
[13]

Certain features of s. 7 must be noted. First,
    while s. 15 provides ITCAN the right to assert a defence to certain claims, s.
    7 provides ITCAN the right to reduce or escrow the payments it must make under
    the Agreement if faced with certain claims. Second, s. 7 applies to a broader
    range of claims than does s. 15. While both sections apply to claims brought by
    a Releasing Entity, s. 7 also applies to claims made by an Entity claiming
    through or on behalf of a Releasing Entity, a term which includes a
    governments crown-controlled corporations and crown agencies. Third, s. 7
    applies to give ITCAN the right to reduce or escrow payments regardless of
    whether it has or asserts a defence to the claim under s. 15. This is clear
    because s. 7 applies when ITCAN actually incurs monetary liabilities, a
    situation that could not arise if it had a defence under s. 15.
[14]

Additionally, s. 7 introduces the term Responsible
    Government. It provides ITCAN with the right to set off against the annual
    payments it makes under the agreement monetary liabilities:
[I]n any way
    relating to, arising out of or in connection with any Released Claims or Claims
    Over made by a Releasing Entity or an Entity claiming through or on behalf of a
    Releasing Entity (and for the avoidance of doubt including such Governments
    crown controlled corporations or crown agencies) (a Responsible Government).
[15]

The parties seem to take this phrase as defining
    an Entity claiming through or on behalf of a Releasing Entity to be a
    Responsible Government. They therefore identify the question disputed as
    whether the Tobacco Board is a Responsible Government. I digress to explain why
    I am uncomfortable with the short form terminology used by the parties. I think
    it is preferable to state the question as whether the Tobacco Board is an
    Entity claiming through or on behalf of a Releasing Entity, and not whether it
    is a Responsible Government.
[16]

I say so because additional references to Responsible
    Government in s. 7 cast doubt on the parties characterization of the dispute.
    Section 7 goes on to provide for ITCAN giving 30 days notice to the
    Responsible Government of its intention to set off its monetary liabilities.
    Section 7 also provides that the amount of money that ITCAN places in escrow
    shall not exceed the then-remaining Responsible Governments share of the
    payments (as set out in Schedule C hereto). The Entity claiming through or
    on behalf of a Releasing Entity does not have a share of the payments and does
    not get notice that such payments are being placed in escrow. The payments
    under Schedule C are made to Canada and the provinces.
[17]

These additional references to Responsible
    Government lead me to think that the term Responsible Government may refer to
    the government responsible for the Entity claiming through or on behalf of a
    Releasing Entity and not the Entity itself. That is why I prefer to articulate
    the question as whether the Tobacco Board is an Entity claiming through or on behalf
    of a Releasing Entity, and not whether the Tobacco Board is itself a
    Responsible Government. However, in my review of the parties documents, I need
    quote their language referring to the Tobacco Board as potentially a
    Responsible Government.
Actions Taken by the Parties
[18]

Relying on s. 7 of the Agreement, ITCAN served
    notice on March 29, 2010, alleging that the claims by the Tobacco Board arise
    out of and are in connection with the Released Claims, and that the Tobacco
    Board and the Farm Products Marketing Commission are Responsible Governments,
    and that commencing with the annual payment due on April 30, 2010, ITCAN would
    pay the funds due to Ontario into an escrow account up to the amount of $50
    million, which is the amount claimed in the class

action brought by the
    Tobacco Board.
[19]

On April 30, 2010, Ontario commenced an application
    pursuant to Rules 14.05(3)(d) and (h) of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194 for declarations that:
(a) the claim
    in the class action commenced by the Tobacco Board, on its own behalf and on
    behalf of growers and producers who sold tobacco through the Tobacco Board for
    the years 1986 to 1996 against ITCAN, is not a Released Claim by a
    Responsible Government for purposes of the Agreement;
(b) the Notice
    served by ITCAN on March 29, 2010, under s. 7 of the Agreement, is therefore
    invalid, and ITCAN is not entitled to withhold payments owing to Ontario
    pursuant to the Agreement; and
(c) ITCAN is required to pay to Ontario any
    payment due to Ontario on April 30, 2010, and annually thereafter, together
    with interest on any overdue payments at the interest rate prescribed under
    Part XLIII of Regulations of the
Income Tax
    Act
, R.S.C. 1985, c. 1.
[20]

ITCAN responded to Ontarios application on June
    16, 2010, by bringing a motion to dismiss or, alternatively, permanently stay
    Ontarios application on the basis that the matters raised in the application
    are subject to arbitration under the Agreement. The arbitration process is
    dealt with in ss. 32 to 36 of the Agreement.
The Arbitration and Dispute Resolution
    Provisions
[21]

Section 32 of the Agreement provides that [i]t is
    the intention of the Parties to settle consensually, by negotiation or
    agreement, any disputes with respect to performance, procedure and management
    arising out of this Agreement.
[22]

Section 33 provides for the delivery of a notice of
    dispute by ITCAN or Canada only. It reads:
Any notice of dispute shall be delivered by
    ITCAN or Canada (as the case may be) to the other in writing and shall be dealt
    with in the first instance for Canada by the Director General, Excise and
    GST/HST Rulings Directorate, Legislative Policy and Regulatory Affairs Branch,
    Canada Revenue Agency and for ITCAN by the Vice President of Law, or
    equivalent, who shall promptly discuss and attempt to resolve the dispute.
[23]

The Agreement does not contain any provision for
    the giving of notice by or to Ontario or any of the provinces or by or to any
    of ITCANs Affiliates or other Released Entities.
[24]

Section 34 is the heart of the arbitration
    provisions. It provides that a dispute that remains unresolved 90 days after
    the date of the notice of dispute may be referred to arbitration. Section 34
    provides:
Any dispute between the Parties to this
    Agreement arising out of or relating to this Agreement or any breach,
    clarification, or enforcement of any provision of this Agreement or any conduct
    contemplated herein, that remains unresolved 90 days after the date of the
    notice of dispute, may be referred to arbitration in accordance with the
Commercial Arbitration Code
(the Code),
    being a schedule to the
Commercial
    Arbitration Act
, R.S.C. 1985, c. 17 (2
nd
Supp.).
    Arbitrations shall be with a sole arbitrator. The Parties will select a
    mutually agreeable arbitrator within 30 days of the delivery of the notice of
    dispute who shall serve as arbitrator in respect of any disputes hereunder,
    unless and until he or she becomes unable or unfit to act as arbitrator (in
    which case the Parties shall immediately appoint a successor arbitrator within
    30 days). If the Parties are unable to agree on the arbitrator, he or she shall
    be appointed, upon the request of a Party, by the court or other authority
    specified in article 6 of the Code.
[25]

I emphasize that s. 34 refers to any dispute
    between the Parties to this Agreement that arises out of or in relation to
    the Agreement, or any breach, clarification, or enforcement of any provision
    of this Agreement or any conduct contemplated herein.
[26]

Section 35 gives the arbitrator under the Agreement
    all the jurisdiction of a Superior Court judge of a province to grant both
    legal and equitable remedies.
[27]

Section 36 requires that arbitration proceedings remain
    confidential and prohibits the parties from disclosing the nature and scope of
    the proceedings to any third party. No amicus curiae or friend of the court
    briefs may be filed in the arbitration proceedings. The arbitrator shall
    provide the rules of the proceeding. The arbitrators award shall be
    exclusively enforceable in the Federal Court, and any action to compel
    arbitration shall be commenced in the Federal Court.
Notice of Arbitration
[28]

ITCAN served a Notice of Arbitration (the Notice)
    dated June 15, 2010 on Canada under s. 34 of the Agreement. The Notice refers
    to the class action commenced by the Tobacco Board, and sets out ITCANs
    position that the class action falls within the application of s. 7 of the
    Agreement and Ontarios position that it does not. The relief the Notice seeks
    from the arbitrator are declarations that:
(a) the
    Tobacco Boards action is a Released Claim by a Releasing Entity or a
    Responsible Government, as defined by the Agreement;
(b) ITCAN may,
    starting April 30, 2010, pay fines owing to Canada under the Agreement, up to
    $50,000,000, into an interest-bearing escrow account pending resolution of the
    Tobacco Boards action, in accordance with s. 7 of the Agreement; and
(c) the amount of funds owing to Canada,
    starting on April 30, 2010, shall be reduced by the amount of monetary
    liabilities incurred by ITCAN in any way relating to, arising out of or in
    connection with the Board Action, in accordance with s. 7 of the Agreement.
[29]

The Notice also states that it constitutes a notice
    of dispute for the purposes of the arbitration clause. Neither ITCAN nor
    Canada nor Ontario has delivered a separate notice of dispute under s. 33 of
    the Agreement.
[30]

As noted, ITCANs response to Ontarios court
    application was to move for a stay.
Decision of the Motion Judge
[31]

On July 26, 2010, the motion judge granted an
    interim stay of Ontarios application pending the conclusion of the
    arbitration. He issued supplementary reasons dated September 20, 2010, stating
    that it would be up to the arbitrator to control his/her own process including
    the issue of who should have standing to participate as well as to rule on the
    issues between the parties.
ISSUES
[32]

The issue in this appeal is whether the motion
    judge erred by staying Ontarios application so that the arbitration process in
    the Agreement could be followed. This will require a consideration of the
    following two questions:
(1)       Whether
    the case falls within the exceptions to the general rule of systematic referral
    to an arbitrator; that is, whether Ontarios challenge to the arbitrators
    jurisdiction is based solely on a question of law or on a question of mixed
    law and fact where the questions of fact require only superficial
    consideration of the documentary evidence in the record; and
(2)       Whether
    referring the parties to arbitration gives rise to a multiplicity of
    proceedings and a risk of inconsistent findings, and if so whether the court
    has a residual discretion to decline ordering a stay.
ANALYSIS
The General Rule and the Exceptions
[33]

The arbitration statute that applies in this case,
    as stipulated by the Agreement, is the
Commercial
    Arbitration Code
(the Code). The Code is a schedule to the federal
Commercial Arbitration Act
, R.S.C. 1985,
    c. 17
.
The Code is based on the
    Model Law on International Commercial Arbitration adopted by the United Nations
    Commission on International Trade Law on June 21, 1985 (the Model Law). The
    Code simply restates the Model Law and any additions or substitutions to the
    Model law are in italics. References to Canada, Parliament, and to the
    Code are italicized. Except for these adaptations to customize it for Canada,
    the Code replicates the Model Law.
[34]

The Model Law itself was modeled after the
Convention on the Recognition and Enforcement of
    Foreign Arbitral Awards
, 10 June 1958, 330 U.N.T.S. 3, Can. T.S.
    1986 No. 43 (entered into force June 1959) (the New York Convention).
[35]

In the discussion that follows, I will refer to the
    Code as the Model Law. Doing so emphasizes that international jurisprudence is
    helpful in the interpretation and application of the statute. In
Dell Computer
, Deschamps J. reviewed the
    international law and paid considerable attention to the international
    consensus in rejecting the interventionist approach and adopting the general
    rule of systematic referral to arbitration.
[36]

The rule of systematic referral to arbitration
    rests on art. 8(1) of the Model Law, which requires courts to refer any matter
    subject to an arbitration agreement to arbitration subject to limited
    exceptions. The article provides:
A court before which an action is brought
    in a matter which is the subject of an arbitration agreement
shall
, if a
    party so requests not later than when submitting his first statement on the
    substance of the dispute,
refer the parties to arbitration
unless it
    finds that the agreement is null and void, inoperative or incapable of being
    performed. [Emphasis added.]
[37]

Article 8(1) operates in conjunction with art.
    16(1), which provides in part: The arbitral tribunal may rule on its own jurisdiction,
    including any objections with respect to the existence or validity of the
    arbitration agreement.
[38]

Pursuant to arts. 8(1) and 16(1), a court should
    not itself rule on the scope of an arbitration agreement, but should leave the
    issue to the arbitrator. Deschamps J. laid down the general rule in
Dell Computer
that in any case involving
    an arbitration clause, a challenge to the arbitrators jurisdiction must be
    resolved first by the arbitrator.
[39]

Deschamps J. did, however, carve out two exceptions
    to the rule of systematic referral to the arbitrator:  A court may depart from
    the rule of systematic referral to arbitration if the challenge to the
    arbitrators jurisdiction is based solely on a question of law, or on a
    question of mixed law and fact where the question of fact requires only
    superficial consideration of the documentary evidence in the record.
[40]

These exceptions must be carefully applied.
    Deschamps J. immediately added that even when considering one of the
    exceptions, the court might decide that to allow the arbitrator to rule first
    on his or her competence would be best for the arbitration process. Before
    applying an exception, the court must be satisfied that the challenge to the
    arbitrators jurisdiction is not a delaying tactic and that it will not unduly
    impair the conduct of the arbitration proceeding.
[41]

More recently, in
Seidel
    v. TELUS Communications Inc.
, 2011 SCC 15, the Supreme Court
    confirmed the application of the
Dell
    Computer
framework in cases in which the arbitration statute
    reflects the provisions of the New York Convention and the Model Law. Binnie
    J., writing for the majority, said at para. 29:
[A]bsent legislated exception, any
    challenge to an arbitrators jurisdiction over Ms. Seidels dispute with TELUS
    should first be determined by the arbitrator, unless the challenge involves a
    pure question of law, or one of mixed fact and law that requires for its
    disposition only superficial consideration of the documentary evidence in the
    record.
[42]

Thus, it is necessary to begin the analysis by
    characterizing Ontarios challenges to the jurisdiction of the arbitrator. Do
    Ontarios challenges involve pure questions of law, or questions of mixed fact
    and law that require only superficial consideration of the documentary evidence
    in the record for their disposition?
Ontarios first challenge: that it is not a party to
    the arbitration agreement
[43]

Ontario bears the burden of establishing that its
    challenge to the arbitrators jurisdiction is based solely on a question of
    law, or on a question of mixed law and fact where the question of fact requires
    only superficial consideration of the documentary evidence in the record.
[44]

Ontario first argues that the arbitration
    provisions of the Agreement apply only to disputes between ITCAN and Canada,
    and not to disputes between ITCAN and Ontario. Ontario advances this argument,
    not as an exception to the systematic rule of referral, but submits that the
    court can and should decide whether the dispute between Ontario and ITCAN is
    arbitrable before deciding whether to grant a stay.
[45]

I do not agree. The argument that a party is not
    subject to the arbitration agreement is simply one species of challenge to the
    arbitrators jurisdiction. The general rule of systematic referral applies,
    unless on only superficial consideration of the documentary evidence in the
    record or on a pure question of law, the applicant establishes it is not a
    party to the arbitration agreement.
[46]

Ontario points out that s. 33 of the Agreement
    provides for the delivery of a notice of dispute only by ITCAN or Canada.
    Ontario also argues that when the arbitration and dispute resolution provisions
    are read in the context of the entire Agreement, it is clear that the parties
    to the Agreement did not intend to authorize Canada to act as agent for and on
    behalf of the provinces in resolving disputes between ITCAN and one of the
    provinces.
[47]

Ontario submits that this demonstrates that none of
    the other parties to the Agreement have the right to have a dispute dealt with
    under s. 33. It follows, Ontario submits, that none of the other parties to the
    Agreement are able to refer an unresolved dispute to arbitration under s. 34.
    Therefore, Ontario would have the court conclude that s. 34s arbitration
    provision does not apply to Ontario.
[48]

Canada, as intervener, supports Ontarios position.
    Canada and Ontario both submit that Canada has no interest in the dispute
    between ITCAN and Ontario, as Canada will receive all of its settlement funds
    due to it under the Agreement. Therefore, Canada has no reason to engage in
    arbitration with ITCAN.
[49]

On the other hand, there is much to support the
    argument that the arbitration provision does apply to Ontario. The provision is
    broadly worded and states quite plainly that [a]ny dispute between the Parties
    to this agreementmay be referred to arbitration. Section 1 of the Agreement
    defines Parties as ITCAN and the Governments. Governments is defined to
    mean Canada and the provinces. The title of the Agreement states that it is
    made between ITCAN and the Queen in right of Canada and The Province listed on
    the signature pages attached hereto. The Agreement was executed by the
    Attorney General of Ontario immediately below the sentence that reads [t]his
    Agreement constitutes a valid and binding agreement of the Province of Ontario
    and is enforceable in accordance with its terms. Section 28 of the Agreement
    provides that it is binding upon the Parties. In s. 3 of the Agreement, each
    government warrants that it has obtained all approvals and authorizations to
    execute the Agreement and make it binding upon it. Each government further
    warrants that the Agreement constitutes a legally binding obligation of the
    government and is enforceable against it in accordance with its terms. There is
    no doubt that Ontario is a party to the Agreement.
[50]

While Ontario is a party, it cannot give any notice
    under the Agreement. Nor can any of the other provinces. Nor can any of ITCANs
    Affiliates or any of the other Released Entities. The Agreement has a detailed
    definition of Affiliate and its definition of Released Entity includes the
    48 tobacco corporations listed in Schedule B.
[51]

Despite the involvement of all these entities, s.
    38 provides that
All notices
under this Agreement (emphasis added)
    shall be made to ITCAN or to Canada at specified addresses. Nowhere in the
    Agreement does it provide for the provinces to directly receive notice from
    ITCAN or any of the Affiliates on any matter. Nor does it make any provision
    for any Affiliate to give or receive notice.
[52]

The central role of Canada in the administration of
    the Agreement is made apparent by several provisions. For example, s. 39
    provides [a]ll payments shall be made to Canada. Section 5 is more specific.
    It provides that ITCAN shall pay to Canada, for Canada, and on behalf of and
    as agent for the Provinces the settlement funds provided for in the
    Agreement. Sections 10 and 11 provide that ITCAN shall provide certain
    certificates to Canada for Canada, and as agent for and on behalf of the
    Provinces each year.
[53]

In short, ITCAN can point to many features of the
    Agreement to support its submission that it is structured so that the two
    corresponding parties are ITCAN and Canada, thus avoiding the need for any
    entity to deal with a multiplicity of parties. Certainly, the fact that Canada
    receives and distributes the settlement funds and various documentation as
    agent for the provinces can be taken to suggest that Canada administers the
    Agreement, including the arbitration provisions, on their behalf.
[54]

Ontario, relying on
Bell Canada v. The Plan
    Group
(2009), 252 O.A.C. 71 (C.A.), submits that
the
    interpretation of the Agreement is a pure question of law, and the court should
    determine that it is not a party to the arbitration clause. In my view, Ontario
    misreads
Bell Canada
.
[55]

In
Bell Canada
, Blair J.A. noted at
    para. 20 that [
t]he historical view is that the interpretation of a
    contract is a question of law, and reviewable on the standard of correctness.
    However, the standard of appellate review in matters of contractual
    interpretation is not as straightforward as it once appeared to be He
    generally approved of the comments of
Steel J.A. at para. 36
    of
Prairie Petroleum Products Ltd. v. Husky
    Oil Ltd.
(2008), 295 D.L.R. (4th) 146 (Man. C.A.)
:
The proper interpretation and application
    of the principles of contractual interpretation is a question of law. A trial
    judges determination of the factual matrix, consideration of extrinsic
    evidence and consideration of the evidence as a whole is a question of fact.
    Finally, the application of the legal principles to the language of the
    contract in the context of the relevant facts, or a question involving an
    intertwining of fact and law, is a question of mixed fact and law.
[56]

It must be remembered that the issue Blair J.A.
    discussed in
Bell Canada
was the
    standard of review to be applied on an appeal of a trial judges interpretation
    of a contract and not whether the interpretation of the contract itself
    involved a question of mixed fact and law per se. That perspective led him to
    comment that Feldman J.A.s conclusion
in
Casurina Limited Partnership v. Rio Algom Ltd.
(2004),
    181 O.A.C. 19 (C.A.), at para. 34, that [t]he construction of a written
    instrument is a question of mixed fact and law did not mean that a deferential
    standard of appellate review must always be applied to the interpretation of a
    contract.
The view Blair J.A. expressed in
Bell Canada
is that contractual interpretation is an
    exercise that generally falls much more towards the error of law end of the
Housen
spectrum once the issues relating
    to the factual matrix of the contract have been resolved or are not in dispute.
[57]

In my view, the interpretation of a contract,
    especially where the determination of the surrounding factual matrix is
    significant to its meaning, should be regarded as a question of mixed fact and
    law for the purposes of the general rule of systematic referral to arbitration.
    The very purpose of art. 8 (1) of the Model Law is to give the arbitrator the
    jurisdiction to determine disputes about the existence and scope of the
    arbitration agreement. This seems to be the view that Sharpe J.A. adopted in
Dancap Productions Inc. v. Key Brand Entertainment,
    Inc.
(2009), 246 O.A.C. 226 (C.A.).
[58]

In this case, as the above review of the Agreement
    makes plain, what the parties
intended by the language of the Agreement,
    viewed objectively, in the circumstances in which the Agreement was made
can only be assessed after a careful review of the surrounding factual matrix.
    The comments of Sharpe J.A. in
Dancap
at para. 40 about the arbitration clause in that case could equally be made
    about the Agreement in this case:
The determination
    of the scope of [
the agreement
] and the
    arbitration clause will require a thorough review of the parties complex
    contractual discussions, understandings, expectations and arrangements, an
    inquiry that clearly calls for much more than a superficial consideration of
    the documentary evidence in the record. I conclude, therefore, that on this
    record, the motion judge erred in refusing to stay Dancaps action on account
    of the arbitration clause.
[59]

Returning to this case, it is worth repeating that
    the arbitration provision applies to any dispute between the Parties to this
    Agreement that arises out of or in relation to the Agreement or any breach,
    clarification, or enforcement of any provision of this Agreement or any conduct
    contemplated herein. Ontarios application in the Superior Court is replete
    with questions about the Agreement. It seeks declarations about what is or is
    not a Released Claim by a Responsible Government for the purposes of the
    Comprehensive Agreement; it seeks a declaration that ITCAN is not entitled to
    withhold payments pursuant to the Comprehensive Agreement; and it seeks a
    declaration that ITCAN is required to make the payments under the
    Comprehensive Agreement.
[60]

While the ultimate determination of Ontarios
    challenge that it is not a party to the arbitration clause will be up to the
    arbitrator, this language must be considered in the context of this courts
    conclusion in
Canadian National Railway
    Company v. Lovat Tunnel Equipment Inc.
(1999), 174 D.L.R. (4th) 385,
    at para. 20, approving of Blair J.s statement in
Onex Corp. v. Ball Corp
. (1994), 12 B.L.R. (2d) 151 (Ont.
    Gen. Div.), at p. 160 that where the language of the arbitration clause is
    capable of bearing two interpretations, and one of those interpretations fairly
    provides for arbitration, the courts should lean towards honouring that
    option.
[61]

I conclude that whether Ontario is subject to the
    arbitration provisions involves a question of mixed fact and law. I also
    conclude that Ontario has not established that that question can be determined
    on only a superficial consideration of the documentary evidence in the record.
    Very much to the contrary, a superficial consideration of the documentary
    evidence in the record indicates that it is arguable that the arbitration
    provision applies to Ontario. It is for the arbitrator, in deciding on his or
    her own jurisdiction, to determine the matter conclusively.
Ontarios second challenge: that ss. 7 and 15 of the Agreement are not
    subject to the arbitration clause
[62]

Ontario argues that disputes about the application
    of ss. 7 and 15 of the Agreement could not have been intended to be arbitrable
    for two main reasons: (1) s. 15 requires that the question about whether the
    Tobacco Boards class action is a Released Claim is to be determined by a
    court with jurisdiction over the action; and (2) since s. 7 also requires a
    determination of whether the claim is a Released Claim, any determination in
    relation to the validity of a notice provided by ITCAN under s. 7 must also be
    made by the Superior Court.
[63]

It is not necessary to evaluate
    these contentions and their tacit premises because my reasoning regarding
    Ontarios first challenge applies to this challenge as well. These questions
,
    assuming that the dispute raises them, are not questions of law alone. The
    scope of the arbitration clause and whether it applies to ss. 7 and 15 of the
    Agreement requires a careful review of the factual matrix surrounding the
    making of the Agreement. It is important to understand the process of negotiation
    of the Agreement, the respective roles of Canada and each of the provinces, the
    reasons for the Agreements unique structure, the process by which Canada acts
    as agent for the provinces and the context surrounding the Releasing
    Provisions.
[64]

It is the arbitrators function to consider and
    determine the questions Ontario raises, on a complete record.
Conclusion
[65]

I conclude that Ontarios challenges to the
    arbitrators jurisdiction do not involve pure questions of law or questions of
    mixed law and fact that can only be decided on a superficial review of the
    evidence in the record. As such, the exceptions to the general rule of
    systematic referral to arbitration do not apply. Ontario, however, advances
    another argument.
Will a stay order in favour of arbitration
    lead to a multiplicity of proceedings and risk of inconsistent results?
[66]

Ontario advances the additional argument that the
    court possesses a residual discretion to decline to refer parties to
    arbitration in order to avoid a multiplicity of proceedings and a risk of
    inconsistent results and that this court should exercise that discretion in
    this case. First I explain why I conclude that the court does not possess such
    discretion under the Model Law. Second, if I am incorrect, I explain why, in
    this case, there is no appreciable risk of multiple proceedings and
    inconsistent results that would warrant exercising such residual discretion.
[67]

Ontario cites a number of decisions
[1]
that do indeed state that the court has the discretion to decline to refer a
    matter to arbitration in order to avoid a multiplicity of proceedings and risk
    of inconsistent results. These cases say that it is preferable, where there are
    claims subject to the arbitration agreement as well as claims against other
    parties that are plainly not subject to the arbitration agreement, to have all
    claims determined under the umbrella of a single proceeding before the court.
[68]

The wrinkle is that all the cases Ontario cites are
    cases decided under Ontarios domestic
Arbitration
    Act, 1991
, S.O. 1991, c. 17. Section 7 of that Act gives the court
    considerable latitude to refuse a stay of proceedings in favour of arbitration.
    Section 7 expressly addresses the situation in which the arbitration agreement
    deals with only some of the matters in respect of which the court proceeding
    was commenced.
[69]

By contrast, the Model Law, which is adopted by
    both Ontarios
International Commercial
    Arbitration Act
, R.S.O. 1990, c. I-9 and the

federal
Commercial Arbitration Code
that applies in this case, does not have
    an equivalent provision. The lack of an equivalent provision is perhaps
    understandable in the context of international arbitration. International
    arbitration may well raise issues not found in domestic arbitration cases. For
    example, in international arbitration, the likelihood of multiple proceedings
    and inconsistent results could arise if the courts of different states adopt an
    interventionist approach and take jurisdiction. I pause to note that this case
    involves the federal government and all ten provinces, and many of the Released
    Entities in Schedule B of the Agreement are foreign companies. If the courts of
    the jurisdictions where some parties are located adopt an interventionist
    approach, it seems to me that there would be an elevated risk of inconsistent
    results. The Model Law on international arbitration was designed to avoid this
    very prospect.
[70]

The question of the existence and scope of a
    courts discretion to decline to refer parties to arbitration under the Model
    Law to avoid the possibility of multiple proceedings has been considered by the
    courts of appeal in Alberta and British Columbia. Before turning to those
    cases, it is worth recalling that art. 8(1) of the Model Law provides that a
    court shallrefer the parties to arbitrationunless it finds that the
    agreement is null and void, inoperative or incapable of being performed.
[71]

In
Kaverit Steel
    and Crane Ltd. v. Kone Corp.
(1992), 85 Alta. L.R. (2d) 287 (C.A.),
    a distributor brought an action against a licensor and others. The agreement
    the distributor had with the licensor contained an arbitration clause.
    The licensor sought a stay of the action on the ground that the dispute should
    be referred to arbitration.  The trial judge refused to stay the court
    proceedings for the reason that the action added parties that were not part of
    the arbitration agreement and part of the claim alleged liability outside the
    contract.  The Alberta Court of Appeal allowed the licensors appeal and
    directed the distributor and licensor to arbitration while allowing the action
    to proceed against the other defendants.  Kerans J.A., writing for the
    unanimous court said:
[47]
    The power to grant or withhold a reference under the
International
    Commercial Arbitration Act
is very limitedFor the purpose of argument, I
    accept the possibility (albeit I suspect very slim) of two suits at the same
    time, and even contradictory findings. Nevertheless, that is the method chosen
    by the parties. The
Act
directs me to hold them to their bargain.
    Section 2(1) of the
International Commercial Arbitration Act
makes the
Convention
part of the law of Alberta. It says that the
Convention
applies in the
    Province. The
Convention
Article II s. 3 provides that:
3. The court of a Contracting State
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. [Emphasis in original.]
[48]     The
    learned chambers judge relied upon the qualifying words. He held that an
    inconvenient reference was an inoperative one. I do not agree. It may not
    operate conveniently, but it cannot be said to be inoperative. The view taken
    by the learned chambers judge adds a gloss to the word that it cannot, in all
    the circumstances, reasonably bear.

[51]     In modern
    commercial disputes, it is almost inevitable that many parties will be involved
    and very unlikely that all parties will have an identical submission. The
    problem of multiple parties, which drove the decision of the chambers judge
    here, will exist in almost every case. There is no question that proliferation
    of litigation is a possibilityIn any event, the
[
Model Law] cannot
    reasonably be taken as having abandoned any attempt at arbitration when this
    problem arises.
[72]

The British Columbia Court of Appeal dealt with a
    similar issue in
Prince George (City) v.
    McElhanney Engineering Services Ltd
., [1995] B.C.J. No. 1474 (C.A.),
    leave to appeal refused, [1995] S.C.C.A. No. 467. The City of Prince George
    had brought an action against a construction company for delay in construction,
    breach of contract and negligent work.  The Citys contract with the
    construction company had an arbitration clause. The City also sued the
    engineering consultant on the project for damages in the design and supervision
    of construction of the work done by the defendant construction company. The
    City had no arbitration agreement with the engineering consultant.
[73]

The construction company brought a motion to stay
    the Citys action against it so that the dispute between it and the City could
    be arbitrated. The motion judge refused the application on the basis that:
    (1) the arbitration clause was inoperative or incapable of being performed
    because the Citys action raised broader issues against the engineering
    consultant that were interrelated with the arbitrable issues between the City
    and the construction company; and (2) there was a risk of multiple proceedings
    and inconsistent results.
[74]

The construction companys appeal was allowed by
    the British Columbia Court of Appeal, which directed a stay of the proceedings
    against the construction company in favour of arbitration.  The Citys
    action against the engineering consultant could proceed. Cumming J.A., writing
    for the court, canvassed international and Canadian decisions as well as the
    literature, before concluding at para. 37 that:
These authorities establish that, as a
    general principle, the mere fact that there are multiple parties and multiple
    issues which are inter-related and some, but not all, defendants are bound by
    an arbitration clause is not a bar to the right of the defendants who are
    parties to the arbitration agreement to invoke the clause.
[75]

The authors cited by the court included M.J.
    Mustill & S.C. Boyd,
The Law and Practice
    of Commercial Arbitration in England
, 2d ed. (London: Butterworths,
    1989), who state at 464-65 that the fact that issues in the arbitration
    overlap issues in proceedings between parties who are not bound by the
    arbitration agreement does not make the agreement inoperative, and J.B.
    Casey,
International and Domestic Commercial
    Arbitration
(Carswell, 1993) who states at 4-14 that [i]t is not
    sufficient to say that because the court action raises issues outside the scope
    of the arbitration agreement per se, or because the action involves some
    parties that are not parties to the arbitration agreement, that the agreement
    should be considered inoperative.
[76]

While the question has not been decided by the
    Court of Appeal for Ontario, it was considered by Campbell J. of the Ontario
    High Court in
Boart Sweden A.B. v. N.Y.A.
    Stromnes A.B.
(1988), 41 B.L.R. 295 (Ont. H.C.). Campbell J. allowed
    an application for a stay of proceedings pending arbitration where there were
    multiple issues and multiple parties, not all subject to the arbitration
    agreement. Campbell J. said at 302-303:
Public policy carries me to the
    consideration which I conclude is paramount having regard to the facts of this
    case, and that is the very strong public policy of this jurisdiction that where
    parties have agreed by contract that they will have the arbitrators decide
    their claims, instead of resorting to the Courts, the parties should be held to
    their contract.

To deal with
    all these matters in a single proceeding in Ontario instead of deferring to the
    arbitral process in respect of part of the action and temporarily staying the
    other parts of the action, would violate that strong public policy.
It would also fail to give effect to the
    change in the law of international arbitration which, with the advent of art. 8
    of the Model Law and the removal of the earlier wide ambit of discretion, gives
    the Courts a clear direction to defer to the arbitrators even more than under
    the previous law of international arbitration.

I conclude
    that nothing in the nullity provisions of art. 8 prevents this Court from
    giving effect to the clear policy of deference set out in the article.
To conclude otherwise
    would drive a hole through the article by encouraging litigants to bring
    actions on matters related to but not embraced by the arbitration and then say
    that everything had to be consolidated in Court, thus defeating the policy of
    deference to the arbitrators.
[Emphasis in
    original.]
[77]

These Canadian decisions are consistent with
    international jurisprudence under the Model Law. For example, Cumming J.A. in
Prince George
cited
Lonrho Ltd. (U.K.) v. Shell Petroleum Co. (U.K.)
(1978) 4 Y.B. Comm. Arb. 320 (New York Convention). Two other decisions that
    have noted and stressed the different extent of curial intervention the courts
    can exercise under the Model Law or New York Convention rather than under
    domestic arbitration statutes when faced with applications to stay court
    proceedings in the face of an arbitration agreement are
Car & Cars Pty. Ltd. v. Volkswagen AG (Germany)
(2009),
    34 Y.B. Comm. Arb. 783 (SIAC) and
ABI Group
    Contractors Pty. Ltd. v. Transfield Pty. Ltd.
(1999), 24 Y.B. Comm.
    Arb. 591 (New York Convention).
[78]

This jurisprudence interpreting the Model Law
    prompts me to conclude that the court possesses no residual discretion outside
    the parameters of art. 8(1) of the Model Law to decline to stay court
    proceedings in the face of an arbitration agreement involving the Model Law to
    avoid multiple proceedings. Rather, the parties to the arbitration agreement
    must be held to their bargain.
[79]

In any event, I am satisfied that in this case
    there is no appreciable possibility of a multiplicity of proceedings. I reach
    that conclusion on a cursory review of the Agreement and the documents in the
    record. I stress that it is not the courts function to interpret the Agreement
    and these documents. That is a matter for the arbitrator. However, in order to
    assess Ontarios argument it is necessary to take a preliminary view of these
    matters. The preliminary view leads me to conclude that Ontario has not
    established any real prospect of a multiplicity of proceedings or a risk of
    inconsistent results.
[80]

Ontario argues that the question whether the Tobacco
    Board is a Releasing Entity will arise before both the arbitrator in the
    arbitration and the court in the class action, and the question could be
    answered differently. In my view, the question will not arise in both venues,
    and if it did, there is no appreciable risk it would be answered differently.
[81]

First, on my preliminary reading of the Agreement,
    the Tobacco Board does not fit within the definition of a Releasing Entity. The
    Tobacco Board is not Her Majesty the Queen in Right of Ontario. No other part
    of the definition could conceivably apply. I consider it extremely unlikely
    that the Tobacco Board would be found to be a Releasing Entity by the
    arbitrator or by the court (assuming the court could be and was called upon to
    address the issue).
[82]

Second, the dispute between Ontario and ITCAN has
    to do with the application of s. 7 of the Agreement and not s. 15. It is s. 15
    that provides ITCAN with a defence to a claim brought by a Releasing Entity.
    Section 7 recognizes that entities may still bring claims against ITCAN that
    result in actual monetary liabilities, but allows ITCAN to set those
    liabilities off against the payments it must make under the Agreement.  Both
    Ontario and ITCAN, in their documents that I review below, characterize their
    dispute not as whether the Tobacco Board is a Releasing Entity, but rather
    whether it is a Responsible Government.
[83]

As I explained earlier, I prefer to characterize
    the question as whether the Tobacco Board is an Entity claiming through or on
    behalf of a Releasing Entity, but in reviewing the parties documents, I need
    quote their language.
[84]

In the notice dated March 29, 2010 that ITCAN
    served on Canada under s. 7 of the Agreement, I see no claim that the Tobacco
    Board is a Releasing Entity or that s. 15 applies. The notice refers to the
    class action commenced by the Tobacco Board, sets out that the regulations made
    under the
Farm Products Marketing Act
,
    R.S.O. 1990, c. F-9 required that the Tobacco Board obtain the prior written
    consent of the Farm Products Marketing Commission before commencing any civil
    proceeding, and then claims that [b]oth the Commission and the Board are
Responsible
    Governments
within the meaning of section 7 of the Comprehensive Agreement
    (emphasis added).
[85]

Similarly, ITCANs Notice of Arbitration dated June
    15, 2010 does not mention s. 15 of the Agreement at all. Rather, as set out
    above, ITCAN claims in the Notice the right to start setting off payments to
    Canada on behalf of Ontario because [t]he amount of funds owing to Canada,
    starting on April 30, 2010, shall be reduced by the amount of monetary
    liabilities incurred by ITCAN in any way relating to, arising out of or in
    connection with the Board Action, in accordance with s. 7 of the Agreement.
    This language specifically contemplates that ITCAN may incur monetary
    liabilities as a result of the Tobacco Boards action, which will proceed
    regardless.
[86]

I recognize that the Notice of Arbitration does say
    that the Board Action is a Released Claim made by a Releasing Entity or a
    Responsible Government. I do not take this to be a claim that the Tobacco
    Board is a Releasing Entity. When the Notice is read as a whole, it is clear to
    me that ITCAN, while it uses the composite term found in s. 7, is asserting its
    position that the Boards action is made by a Responsible Government, (i.e.
    an Entity claiming through or on behalf of a Releasing Entity).
[87]

Ontario seems to have understood full well that
    ITCANs position is that the Tobacco Board is a Responsible Government, because
    its application in the Superior Court seeks a declaration that the Tobacco
    Boards class action is not a Released Claim
by a Responsible Government

    for purposes of the Comprehensive Agreement (emphasis added).
[88]

Thus, it seems to me that the question in dispute
    between Ontario and ITCAN is whether the Tobacco Board is an Entity claiming
    through or on behalf of a Releasing Entity, not whether it is a Releasing
    Entity itself.
[89]

That question is for the arbitrator to decide, not
    the court. I do observe, however, that the Tobacco Board has not a whit of
    interest in whether or not it is found to be an Entity claiming through or on
    behalf of a Releasing Entity. The Tobacco Boards interest is in obtaining the
    damages it claims in the class action it has brought on behalf of itself and
    the growers and producers. The Tobacco Boards right to damages would be
    unaffected by a finding that it is an Entity claiming through or on behalf of
    a Releasing Entity. Whether or not it is such an Entity, the Tobacco Board can
    still press ahead with its class action, and if successful, can enforce any
    judgment it obtains against ITCAN. The only consequence of the Tobacco Board
    being such an Entity is that ITCAN can set off the money it pays to the Tobacco
    Board as damages against the annual payments it makes to Canada on behalf of
    Ontario.
[90]

Thus, as I see it, there is no likelihood of
    multiple proceedings and a risk of inconsistent results. The Tobacco Boards
    class action will proceed and be determined in the Superior Court. The Superior
    Court will determine whether ITCAN has incurred monetary liabilities to the
    Tobacco Board. The arbitrator will determine whether ITCAN can set off those
    monetary liabilities against the payments it makes to Canada on behalf of
    Ontario under the Agreement. The arbitrator will also decide whether ITCAN is
    entitled to begin paying the monies it may set off into an interest-bearing
    escrow account until the Superior Court has determined the class action.
[91]

On my reading of the documents, the issue whether
    the Tobacco Board is a Releasing Entity is not part of the dispute. If that
    issue is raised, the question of where and by whom it is decided may have to be
    addressed. Wherever it is addressed, I see scant likelihood that the Tobacco
    Board would be found to be a Releasing Entity.
[92]

For these reasons, I conclude that no possibility
    of a multiplicity of proceedings or a risk of contradictory findings exists in
    this case.
Additional Considerations
[93]

Ontario alleges that ITCAN did not properly comply
    with the arbitration and dispute resolution provisions and that as a result,
    the Notice of Arbitration is invalid. As such, Ontario argues that there was no
    arbitration process to which the dispute could be referred by the motion judge.
[94]

Whether ITCAN complied with the arbitration and
    dispute resolution provisions is not a question that this court needs to
    decide. This argument is part and parcel of Ontarios overall challenge to the
    arbitrators jurisdiction. If necessary, the arbitrator can address this issue,
    as well as the many procedural questions that Ontario raised on this appeal.

[95]

I have read the reasons of my colleague Goudge J.A.
    but I am not dissuaded from the result I would reach or the reasoning supporting
    it. I agree with him that the arbitrator cannot determine the rights of the
    Tobacco Board. If my colleague is correct that whether the Tobacco Board is a
    Releasing Entity is a live issue before the arbitrator, the arbitrators ruling
    will not be binding on the Tobacco Board in the class proceeding. ITCAN has not
    pleaded the Release as a defence in the class action, i.e. that the Tobacco
    Board is a Releasing Entity. If it does eventually raise that defence in the
    class action, the merits of that defence will ultimately be determined by the
    Superior Court hearing the class action.
[96]

A decision by the arbitrator as to whether the
    Tobacco Board is a Releasing Entity, would be binding on Ontario and ITCAN, but
    not on the Tobacco Board. Such a decision would resolve the current dispute
    between Ontario and ITCAN, namely whether ITCAN can begin to pay the annual
    payments due to Ontario into an escrow account. As well, such a decision may
    affect disputes that might arise in the future between Ontario and ITCAN, such
    as what eventually happens to the escrowed funds. Such a decision, though,
    would not be binding on the Tobacco Board in the class action.
[97]

The Tobacco Board does have an interest in whether
    the Release of ITCAN by Ontario applies to its class action. However, no one
    puts forward that the Tobacco Board is a party to the arbitration agreement and
    must arbitrate, and so I dont see Sharpe J.A.s comment in
Dancap
, on which Goudge J.A. relies, as
    applying. The Tobacco Board did not bring the application stayed by the motion
    judge, Ontario did. The Tobacco Boards class action will proceed and its
    rights will be determined by the court in that class action whether Ontarios
    application is stayed or whether the arbitrator proceeds. Consequently, the Tobacco
    Board does not require that Ontarios application proceed in order to have the
    court decide its interests. The extraordinary step of declining to stay
    Ontarios action is not necessary to protect the Tobacco Boards rights.
[98]

The fact that a preliminary view of the issue, on a
    cursory review of the record, makes it doubtful the arbitrator could find the
    Tobacco Board to be a Releasing Entity lends additional reason for staying
    Ontarios application.
[99]

I add a couple of further observations. First,
    declining to stay Ontarios application does not necessarily lead to greater
    efficiency. Because the Agreement, as Goudge J.A. agrees, must be interpreted
    in the light of the factual matrix in which it was negotiated, the court
    hearing Ontarios application will have to admit evidence of that factual
    matrix. Since allowing Ontarios application to proceed does not prevent the
    arbitration from proceeding, the parties may have to call evidence about the
    factual matrix in two separate proceedings. As I see it, it would be more
    efficient to stay Ontarios application, recognizing that the issues between
    Ontario and ITCAN will be resolved by arbitration as they agreed, and awaiting
    the determination of the Tobacco Boards rights in the class action.
[100]

Second, I note that the parties provided that the
    federal
Commercial Arbitration Act
applies to arbitrations under their Agreement, and chose the Federal Court as
    the forum in which applications to name an arbitrator must be brought. The
    approach my colleague takes opens the door to any of the courts in the home
    jurisdiction of any of the many parties to the Agreement to assert the right to
    make binding interpretations of the Agreement.
[101]

Finally, I express my view that permitting parties
    to bring applications such as Ontarios to court would not be best for the
    arbitration system.  As Kerans J.A. observed in
Kaverit Steel
and as is manifest in the international
    jurisprudence, modern commercial disputes involve many parties. Allowing parties
    to resort to the court system in the face of an arbitration agreement simply by
    including in the proceeding non-parties to the agreement will provide
    encouragement for others who seek to evade their arbitration agreement. Such an
    approach will not only diminish the competence-competence principle but will result
    in added cost, complexity and delay to the arbitration process.
CONCLUSION
[102]

It is arguable that the dispute between ITCAN and
    Ontario is a dispute that falls within the arbitration agreement and that
    Ontario is a party to that agreement. According to the general rule, this
    matter should be referred to arbitration unless there are exceptions to justify
    the court retaining jurisdiction over the matter. No such exceptions exist in
    this case. T
he challenge to the arbitrators jurisdiction
    is based on a question of mixed law and fact. The question of fact cannot be
    determined based solely on a superficial review of the evidence in the record.
[103]

Furthermore, there are no real concerns about a
    multiplicity of proceedings or a risk of inconsistent findings in this case. While
    Ontario named the Tobacco Board as a party to its application, the application
    is not necessary to determine the Tobacco Boards rights.
[104]

For these reasons, I would conclude that the motion
    judge did not err in ordering a stay of Ontarios application in favour of
    arbitration. Accordingly, I would dismiss the appeal and refer the matter to
    the arbitrator to rule on his or her own jurisdiction.
R.G. Juriansz J.A.

Goudge J.A.:
[105]

I have had the benefit of reading the clear and
    comprehensive reasons for judgment of my colleague Juriansz J.A., and I agree
    with much of what he writes. However, I part company with him on several
    important issues. As a result, I reach a different conclusion. For the reasons
    that follow I would allow the appeal in part.
[106]

I begin with a brief review of the chronology,
    using the same short form references as my colleague.
[107]

On December 2, 2009, the Tobacco Board commenced
    its class action against ITCAN. The Tobacco Board is a corporation without
    share capital established by regulation under the
Farm Products Marketing Act
, R.S.O. 1990,  c. F.79. It entered
    into annual agreements with tobacco manufacturers including ITCAN which, among
    other things, set the prices paid by ITCAN to tobacco growers for the tobacco
    they sold to ITCAN. The Tobacco Boards class action is brought on behalf of
    tobacco growers against ITCAN claiming $50,000,000 damages because ITCAN paid
    less than contract prices to the growers for their tobacco. Ontario is not a
    party to the class action and will not receive any of the amounts claimed
    therein if the action is successful.
[108]

On March 29, 2010, ITCAN gave notice to Canada in
    accordance with s. 7 of the Agreement that, commencing April 30, 2010, it would
    pay into escrow the funds then or thereafter due to Ontario under the
    Agreement, up to $50,000,000, pending resolution of the class action. The
    notice sets out ITCANs position that the claim in the class action is a
    Released Claim and the Tobacco Board is a Responsible Government.
[109]

On April 30, 2010, Ontario commenced an
    application, to which ITCAN and the Tobacco Board are parties, seeking a
    declaration that the claim in the class action ...is not a Released Claim by
    a Responsible Government
for the purposes of the Agreement
 [emphasis
    added].
[110]

The application also seeks relief consequent upon
    the declaration, namely that ITCAN is not entitled to withhold payments to
    Ontario owing under the Agreement, and that ITCAN is required to make those
    payments.
[111]

On June 15, 2010, ITCAN served a Notice of
    Arbitration on Canada under s. 34 of the Agreement seeking a declaration in
    almost identical terms to that in the Application, namely that the claim in the
    class action is a Released Claim by a Releasing Entity or Responsible
    Government as defined by the Agreement. Similarly it also seeks relief
    consequent upon the declaration, namely that ITCAN may pay up to $50,000,000
    into escrow pending resolution of the class action, and that what it owes under
    the Agreement is reduced correspondingly.
[112]

On June 16, 2010, ITCAN brought a motion to stay
    the application brought by Ontario on the basis that the matters raised in the
    application are subject to arbitration.
[113]

Both Ontario and the Tobacco Board opposed the
    stay. They sought to have the application proceed, arguing that the
    arbitrators jurisdiction under the Agreement does not extend to the question placed
    before the court by the application.
[114]

On July 26, 2010, the motion judge granted the stay
    of the application, saying that the arbitration process should be followed.
[115]

This is the appeal from that order.
[116]

To reiterate the language in the declaration sought
    in the application, the question is whether the Tobacco Boards claim in the
    class action is a Released Claim by a Responsible Government for the purposes
    of the Agreement. Because of the definition of Released Claim in the
    Agreement, this requires scrutiny of whether the claim in the class action is a
    civil claim allowable to a Releasing Entity, namely the Tobacco Board. It also
    requires scrutiny of whether the Tobacco Board is a Responsible Government. And
    both analyses must be done for the purposes of the entire Agreement.
[117]

I therefore do not agree with my colleague that the
    question before the court that ITCAN says is subject to arbitration can be
    confined to whether the Tobacco Board is an Entity claiming through or on
    behalf of a Releasing Entity. Nor do I agree that it can be confined to the
    purposes of s. 7 of the Agreement.
[118]

That said, this is clearly a case that engages the
    principles in
Dell
. ITCAN says
    the question raised for the court in the application is subject to arbitration.
    Both Ontario and the Tobacco Board challenge the arbitrators jurisdiction to
    deal with that question. This engages the rule of systemic referral to
    arbitration referred to in
Dell
,
    requiring the arbitrator to be the one to resolve these challenges, unless the
Dell
analysis permits an exception
    allowing the court to do so.
[119]

My colleague has ably set out the principles
    applicable in the
Dell
analysis.
    In describing this legal framework I would only add the following from para. 32
    of
Dancap Productions Inc. v. Key Brand Entertainment
    Inc.
, (2009) 246 O.A.C. 226 (C.A.). It was decided by this court
    after
Dell
and in light of the
    principles
Dell
sets out:
It is now
    well-established in Ontario that the court should grant a stay under art. 8(1)
    of the Model Law where it is arguable that the dispute falls within the terms
    of an arbitration agreement. In
Dalimpex
    Ltd. v. Janicki
(2003), 64 O.R. (3d) 737 (C.A.), at para. 21,
    Charron J.A. adopted the following passage by Hinkson J.A. in
Gulf Canada Resources Ltd. v. Arochem International
    Ltd.
(1992), 66 B.C.L.R. (2d) 113 (B.C.C.A.), at paras. 39-40, as
    the proper approach to art. 8(1):
it is not for the court on an application
    for a stay of proceedings to reach any final determination as to the scope of
    the arbitration agreement or whether a particular party to the legal
    proceedings is a party to the arbitration agreement because those are matters
    within the jurisdiction of the arbitral tribunal.  Only where it is clear that
    the dispute is outside the terms of the arbitration agreement
or that a
    party is not a party to the arbitration agreement
or that the application
    is out of time should the court reach any final determination in respect of
    such matters on an application for a stay of proceedings.
Where it is arguable that the dispute falls
    within the terms of the arbitration agreement or where it is arguable that a
    party to the legal proceedings is a party to the arbitration agreement then, in
    my view, the stay should be granted and those matters left to be determined by
    the arbitral tribunal. [Emphasis added.]
[120]

I agree with my colleague that in this case, the
Dell
analysis turns on a careful
    examination of the distinctions between s. 7 and s. 15 of the Agreement.
[121]

I begin with s. 7. It is useful to reproduce it
    here for ease of reference:
Without
    prejudice to any other rights or remedies as provided in paragraphs 15, 16, 17,
    18 and 19 of this Agreement, in the event that monetary liabilities (including
    all fees, expenses and disbursements on a full indemnity scale) are incurred by
    Released Entities in any way relating to, arising out of or in connection with
    any Released Claims or Claims Over made by a Releasing Entity or an Entity
    claiming through or on behalf of a Releasing Entity (and for the avoidance of
    doubt including such Governments crown-controlled corporations or crown
    agencies) (a Responsible Government), the amount of the Payment due in the
    fiscal year in which the monetary liabilities are incurred, and Payments due in
    subsequent fiscal years, shall be reduced by such amounts incurred. Upon
    learning of the existence of any claim, action, suit, or proceeding that could
    give rise to such liabilities, ITCAN may, upon giving 30 days notice to the
    Responsible Government, begin paying any funds which are then or thereafter due
    into an interest-bearing escrow account, up to the amount claimed in such
    claim, action, suit, or proceeding pending its resolution. The amount by which
    the Payments shall be so reduced or escrowed shall not exceed the
    then-remaining Responsible Governments share of the Payments (as set out in
    Schedule C hereto).
[122]

This section provides ITCAN with two separate rights.
    The first arises where ITCAN learns of an action that could give rise to its
    monetary liability that is in any way relating to, arising out of, or in
    connection with any Released Claims or Claims Over made by a Releasing Entity
    or an Entity claiming through or on behalf of Releasing Entity. If that
    precondition is met, ITCAN has the right, on notice, to begin to escrow the
    Payments then or thereafter due to the Responsible Government up to the amount
    claimed in the action, pending the resolution of that action.
[123]

As applied to the present circumstances, if the
    Tobacco Boards action against ITCAN meets the precondition, ITCANs right to
    escrow arises. It would be entitled to begin to pay into escrow the Payments
    then and thereafter due to the credit of Ontario up to the maximum of
    $50,000,000. Those funds would remain in escrow until the Tobacco Boards
    action is resolved. However, if the circumstances permit ITCAN to exercise this
    s. 7 escrow right, that can have no impact whatsoever on the Tobacco Board, on
    the presentation of its class action, or its right to fully recover from ITCAN
    if its action succeeds.
[124]

The second right s. 7 gives to ITCAN arises if and
    when an action against ITCAN succeeds in monetary liability against it that
    meets the precondition, (that is, being in any way relating to, arising out
    of, or in connection with a Released Claim or Claim Over by a Releasing Entity
    or an Entity claiming through or on behalf of a Releasing Entity), ITCAN then
    has the right to reduce its present and future Payments required under the
    Agreement, by the amount of the monetary liability.
[125]

As applied to the present circumstances, if the
    Tobacco Boards action succeeds against ITCAN, thus imposing a $50,000,000
    liability on it, and if the precondition is met, ITCAN can reduce its present
    and future Payments due to the credit of Ontario by $50,000,000. ITCANs
    escrowed funds would be returned to it. If the Tobacco Boards action failed or
    if it succeeded but the monetary liability thereby imposed on ITCAN did not
    meet the precondition, ITCANs escrowed funds would be paid out to the credit
    of Ontario. However, like ITCANs escrow right, any exercise by ITCAN of its s.
    7 right to reduce Payments can have no impact whatsoever on the Tobacco Board
    or the prosecution its class action or its right fully to recover from ITCAN if
    its action succeeds.
[126]

In summary, the answer to the question raised in
    the application has the consequence, for the purposes of s. 7, of determining
    whether, in the circumstances, ITCAN has a right to pay into escrow or a right
    to reduce its payments. Ontario has a significant stake in both questions. The
    Tobacco Board has none.
[127]

On the other hand, s. 15 is quite different. It is
    also helpful to reproduce it:
The Releasing
    Entities hereby, without any further action on the part of such Releasing
    Entities, absolutely and unconditionally fully release and forever discharge,
    the Released Entities from the Released Claims. Without in any way limiting the
    generality of the foregoing, the Releasing Entities further agree that:
(a)       in
    the event that a proceeding, claim, action, suit or complaint with respect to a
    Released Claim is brought by Releasing Entity against a Released Entity, this
    release may be pleaded as a complete defence and reply, and may be relied upon
    in such a proceeding as a complete estoppel to dismiss the said proceeding.
[128]

This section gives Released Entities an absolute
    and unconditional release by the Releasing Entities from the Released Claims.
    It also gives the Released Entities the right to rely on that release as a
    complete defence to any action that meets the condition of being an action
    brought by a Releasing Entity with respect to a Released Claim.
[129]

As applied to the present circumstances, if the
    Tobacco Boards action is found to meet the precondition, ITCAN has a complete
    defence to it.
[130]

In summary, the answer to the question raised in
    the application has the consequence, for the purposes of s. 15, of determining
    whether, in the circumstances, ITCAN has a complete defence to the Tobacco
    Boards action. The Tobacco Board has a significant stake in that question.
[131]

I now turn to the challenges to the arbitrators
    jurisdiction raised by Ontario and the Tobacco Board in response to ITCANs
    motion to stay the application because the question raised for the court is
    subject to arbitration.
[132]

My colleague deals first with Ontarios challenge
    that the arbitration provisions of the Agreement apply only to disputes between
    ITCAN and Canada. Ontario says these provisions do not apply at all to disputes
    between ITCAN and Ontario. It argues that the arbitrator therefore has no
    jurisdiction to decide the question raised by the application.
[133]

For the reasons given by my colleague, I agree that
    this argument fails. I agree with him that the argument that a party is not
    subject to the arbitration provisions of the Agreement is simply one species of
    challenge to the arbitrators jurisdiction. In this case, the argument raises a
    question of mixed fact and law, namely whether in light of the factual matrix
    in which the arbitration provisions of the Agreement were negotiated, these
    provisions extend to disputes between Ontario and ITCAN. Determining the
    necessary facts cannot be done on the basis only of a superficial consideration
    of the documentary evidence in the record. This challenge to the jurisdiction
    of the arbitrator must be addressed first by the arbitrator.
[134]

Ontario also challenges the jurisdiction of the
    arbitrator to decide the question posed to the court because it says the
    dispute set out in the application does not fall within the arbitration
    provisions of the Agreement. Ontario argues that the Agreement requires that
    the question in the application, posed for s. 7 purposes, be answered by the
    same forum as is required when it is posed in the s. 15 context, namely the
    court rather than arbitration.
[135]

Finally, Ontario challenges the arbitrators
    jurisdiction because it says two parties to the legal proceeding, namely
    Ontario and the Tobacco Board, are not parties to the arbitration provisions of
    the Agreement. The Tobacco Board joins in this challenge on the basis that it
    is a party to the legal proceeding, has a vital interest in the question before
    the court, but is not a party to the Agreement or its arbitration provisions.
[136]

In my view, these remaining challenges must be
    analysed separately, first in the context of s. 7 of the Agreement and then in
    the context of s. 15, to determine if the challenges must be dealt with first
    by the arbitrator or whether the application can proceed.
[137]

First section 7. Ontarios challenge based on the
    nature of the dispute is that the Agreement requires that the question of
    whether the claim in the class action is a Released Claim by a Responsible
    Government must be answered for s. 7 purposes in the same forum as for s. 15
    purposes. That is clearly a question of mixed fact and law. A determination of
    the factual matrix in which the Agreement was negotiated is clearly required. A
    superficial consideration of the documentary evidence is not enough.
[138]

Turning to the challenge based on not being parties
    to the arbitration provisions, the question raised in the application, when
    posed in the s. 7 context, affects only Ontario and ITCAN. Whether the Tobacco
    Board is a party to the arbitration provisions in the Agreement is irrelevant
    to the arbitrators jurisdiction over the question posed in the s. 7 context.
    In addition, as I have indicated, whether Ontario is a party to the arbitration
    provisions of the Agreement is an issue that must be dealt with first by the
    arbitrator. This is so just as much so for the question raised in the
    application for s. 7 purposes as it is for the question of whether Ontario is a
    party to the arbitration provisions at all.
[139]

In summary, I would conclude that, for the purposes
    of s. 7, the challenges to the arbitrators jurisdiction to resolve the
    question raised in the application must fail. To that extent the application
    was properly stayed.
[140]

However, I reach a different conclusion when the
    context is changed to s. 15. I need deal with no more than the challenge to the
    arbitrators jurisdiction raised by both Ontario and the Tobacco Board, that
    the Tobacco Board is not a party to the Agreement or its arbitration
    provisions.
[141]

As was said in
Dancap
,
    where it is clear that a party to the legal proceedings is not a party to the
    arbitration agreement, the court can reach a final determination rather than
    require that the arbitrator first determine a jurisdictional challenge brought
    on that basis. In the language of
Dell
,
    when no more than a superficial examination of the documentary evidence is
    required to determine this challenge, the court can do so rather than require
    the arbitrator to do so first.
[142]

Here, no one contends that the Tobacco Board is a
    party to the Agreement and its arbitration provisions. A superficial review of
    the record is enough to reach that conclusion. There is equally no doubt that
    the Tobacco Board is a party to the legal proceedings that ITCAN seeks to stay
    in favour in arbitration. Nor is there any doubt that the Tobacco Board has a
    vital interest in the question raised by the application, for the purposes of
    s. 15. The answer could provide ITCAN with a complete defence to its action, or
    could eliminate that possibility. The application directly implicates the
    Tobacco Boards rights, not just those of Ontario and ITCAN. The arbitrator
    cannot resolve that question posed by the application because the Tobacco Board
    is not a party to the Agreement or its arbitration provisions. The arbitrator
    has no jurisdiction to determine the Tobacco Boards rights. The question asked
    of the court must, for the purposes of s. 15, be determined in a forum in which
    the Tobacco Board has the right to participate. Hence the application should
    not be stayed in preference to arbitration so far as the question is posed for
    the purposes of s. 15.
[143]

I would therefore dismiss the appeal so far as the
    application seeks the declaration for the purposes of s. 7. I would allow the
    appeal and lift the stay so far as the declaration sought is for the purposes
    of s. 15.
[144]

Ontario has been only partially successful on
    appeal. The Tobacco Board succeeded in its main argument. I would therefore
    award Ontario significantly less in costs than it sought, and the Tobacco Board
    most of what it sought. Both are awarded costs on a partial indemnity basis
    fixed at $7,000 each, inclusive of disbursements and applicable taxes.
RELEASED:
    JUL 20 2011 (S.T.G.)
S.T. Goudge J.A.
I agree. E.E.
    Gillese J.A.

[1]

Penn-Co Construction Canada (2003) Ltd. v. Constance Lake
    First Nation
, [2007] O.J. No. 3940 (Sup. Ct.), affd [2008] O.J. No. 4523 (C.A.);
Frambordeaux Developments Inc. v. Romandale Farms
    Ltd.
, [2007] O.J. No. 4917 (Sup. Ct.);
Radewych v. Brookfield Homes (Ontario) Ltd
., [2007] O.J. No.
    2483 (Sup. Ct.), affd [2007] O.J. No. 4012 (C.A.).


CITATION:
O'Sullivan v. Hamilton
          Health Sciences Corporation
(Hamilton General Hospital Division), 2011 ONCA
          507

DATE: 20110711

DOCKET: C53119

COURT OF APPEAL FOR ONTARIO

OConnor A.C.J.O., Cronk and Rouleau JJ.A.

BETWEEN

Lois
          OSullivan, Tara OSullivan and Michael
          OSullivan

Plaintiffs (Appellants)

and

Hamilton
          Health Sciences Corporation (Hamilton General Hospital Division),
John Doe
          Detachable Balloon Manufacturer
, Dr. John Doe #1, Dr. John Doe
          #2, Dr. Jane Doe #1, Dr. Jane Doe #2, John Doe Nurse #1, John Doe Nurse
          #2, John Doe Nurse #3, John Doe Nurse #4, Jane Doe Nurse #1, Jane Doe Nurse
          #2, Jane Doe Nurse #3 and Jane Doe Nurse #4

Defendants (Respondent)

Paul R. Sweeny, for the appellants

Emily McKernan, for the respondent

Heard and released orally: July 6, 2011

On appeal from the order of Justice
          Wendy L. MacPherson of the Superior Court of Justice, dated December 15,
          2010.

ENDORSEMENT

[1]

We see no basis on which to interfere with the
    motion judges discretionary decision to refuse the pleadings amendment
    requested by the appellants.

[2]

The motion judge directed herself to the
    applicable test for the determination of a motion to amend a pleading to
    correct an alleged misnomer in the naming of a defendant, as set out in
Ormerod v. Strathroy Middlesex General
    Hospital
, 2009 ONCA 697.  Although
    the appellants argue that the motion judge erred by failing to expressly
    consider the question of prejudice to the respondent arising from the proposed pleadings
    amendment, the motion judge indicated that she had undertaken a balancing of
    the interests of the parties engaged on the motion.  Further, she expressly stated that her
    decision was based on her review of the evidence before her and the
    circumstances of the case, both of which specifically included allegations of
    actual prejudice to the respondent and the appellants submissions as to the
    absence of non-compensable prejudice to the respondent.  There is no reason to conclude that the
    motion judge did not proceed precisely in the fashion that she described.

[3]

In these circumstances, the motion judge did not
    err by taking into account the appellants essentially unexplained significant
    delay in moving to amend their pleading after learning of the correct name of
    the defendant and the public policy reasons supporting adherence to established
    limitation periods.  She also noted,
    properly in our view, that the respondent had no notice of the appellants
    potential claim against it for about five years after the date of the incident.

[4]

On the facts before the motion judge, these
    circumstances established that the alleged mistake in naming the defendant
    involved far more than a mere irregularity.  It was therefore open to the motion judge, in the exercise of her
    residual discretion under rule 5.04(2), to refuse the requested pleadings amendment.  As this court noted in
Ormerod
, at para. 33, this discretion was that of the motion judge,
    not that of this court, to exercise.

[5]

The appeal is dismissed.  The respondent is entitled to its costs of
    the appeal, fixed in the amount of $4,279.00, inclusive of disbursements and
    all applicable taxes.

D. OConnor A.C.J.O.

E.A. Cronk J.A.

Paul Rouleau J.A.


CITATION:
R. v. Blair, 2011
          ONCA 513

DATE:20110711

DOCKET: C50477

COURT OF APPEAL FOR ONTARIO

Rosenberg, Cronk and Watt JJ.A.

BETWEEN

Her Majesty The Queen

Respondent

and

Andre Blair

Appellant

Mark C. Halfyard, for the appellant

Jennifer Woollcombe, for the respondent

Heard and released orally: June 27, 2011

On appeal from the conviction entered by Justice Ian
          Nordheimer of the Superior Court of Justice, sitting with a jury, dated June
          23, 2008.

ENDORSEMENT

[1]

The first ground of appeal concerns the manner in which
    Mr. Clark gave evidence. It is apparent and was conceded by counsel that
    experienced defence counsel chose not to seek a mistrial but, rather, sought to
    make use of the manner in which Mr. Clark gave evidence to undermine his assertion
    that he lied to the police out of fear. This was a reasonable tactical decision
    and defence counsel made it clear in his jury address how the manner in which
    the witness gave evidence could be used.

[2]

However, it was important that the jury understand that
    Mr. Clarks gratuitous personal opinions could not be used as evidence. The
    trial judge did make this clear in his charge to the jury in virtually the identical
    terms suggested by defence counsel. The appellant now submits that this
    direction would have led the jury to disregard the manner in which Mr. Clark
    gave evidence in assessing his credibility.

[3]

We do not agree. The jury was told that they could use
    the manner in which witnesses gave evidence in evaluating credibility. As a
    matter of common sense, the jury would have understood that this instruction
    would especially apply to Mr. Clark. We are satisfied that the trial judges
    instructions on this issue were correct.

[4]

The second ground of appeal concerns a single question
    asked by Crown counsel in re-examination of the appellants uncle. We are
    satisfied that this was a proper question given defence counsels extensive
    cross-examination of the witness about the purpose of the Windsor trip. In any
    event, even if the question was improper, no substantial wrong or miscarriage of
    justice was occasioned. The question merely pointed out the notorious and
    obvious fact that Windsor is a border city. The defence was not caught by
    surprise by the question. As we have said, counsel had extensively cross-examined
    the uncle on the purpose of the trip in the obvious effort to blunt the
    possible prejudicial effect of the trip to Windsor shortly after the killing.

[5]

Finally, we note that there was no objection to the
    question and the trial judge refused Crown counsels request to give a post
    offence conduct instruction based on the evidence of the Windsor trip.

[6]

We would not give effect to this ground of appeal.

[7]

Accordingly, the appeal must be dismissed.

Signed:           M Rosenberg J.A.

E.
    A. Cronk J.A.

David
    Watt J.A."