Manitoba court voids arbitration clause between courier and SkipTheDishes

There was no arbitration agreement in place when the plaintiff commenced the action, court said

Manitoba court voids arbitration clause between courier and SkipTheDishes

The Court of King’s Bench of Manitoba has refused to recognize an arbitration clause in a courier agreement between a restaurant delivery company and a Manitoba resident.

In Pokornik v. SkipTheDishes Restaurant Services Inc., 2022 MBKB 178, the defendant is a large corporation with operations in more than 100 cities across Canada. It connects customers to couriers who complete food delivery orders through an internet application. Meanwhile, the plaintiff is a Manitoba resident licensed to use the defendant’s internet application.

In 2014, the plaintiff and the defendant entered an original courier agreement. The original courier agreement contained no arbitration clause. However, they agreed to the Manitoba courts’ jurisdiction for all issues arising from the agreement.

On July 4, 2018, the plaintiff spoke to a lawyer regarding her plan to file an action against the defendant. On July 19, 2018, the defendant notified the plaintiff by email that it was implementing a new courier agreement which would take effect a week later or on July 26, 2018. The email also included highlights of the new courier agreement, including an arbitration clause for any disputes not resolved through informal negotiations. It indicated that if the plaintiff did not agree to the new courier agreement, she would not be allowed to continue working.

On July 25, 2018, the plaintiff filed an action with the Court of King’s Bench against the defendant. She sought various relief, including a declaration that she is an employee of the defendant and not an independent contractor and an order certifying the action as a class action proceeding.

The defendant moved for an order staying the action in favour of arbitration. It argued that s. 7(1) of the Arbitration Act requires the court to stay a proceeding involving a dispute the parties have agreed to resolve through arbitration. Meanwhile, the plaintiff alleged that the defendant had not met its onus under s. 7(1) because there was no arbitration agreement, as the terms of the original courier agreement governed them.

The Court of King’s Bench agreed with the plaintiff and dismissed the defendant’s motion for a stay of the action.

To resolve the matter, the court determined which courier agreement governs the relationship between the defendant and the plaintiff under s. 7(1), and whether there was an arbitration agreement between them.

The court found no arbitration agreement in place when the action commenced on July 25, 2018, because at that time, the original courier agreement was in force. Therefore, s. 7(1) does not apply, as the action commenced before the new courier agreement came into force.

“Moreover, the arbitration clauses at paras. 17 and 18 of the new courier agreement cannot be construed as applying retroactively to an earlier period,” Justice Gerald Chartier wrote. “It is true that clause 26 includes disputes ‘arising from or related to this agreement or any previous agreement.’ However, it does not refer to previously initiated and existing actions as we have in this case. Clause 26 does not by its terms purport to extend to pre-existing actions.” 

The court also found no arbitration agreement between the parties because the plaintiff did not accept the terms of the new courier agreement. Thus, the original courier agreement governs their relationship.  

According to the court, the plaintiff initially emailed the defendant on July 30, 2018, and was told she had to sign the new courier agreement to keep working. She then sent another email to the defendant on July 31, 2018, stating that she did not agree with the terms of the new courier agreement but would click the “I Agree” button, so she could continue to work. She further indicated she was doing this under protest. Although the defendant had previously responded to the plaintiff’s initial email, the defendant did not respond to her second email.

“The defendant initially responded to the plaintiff by way of email dated July 30, 2018, but then decided not to respond to the plaintiff’s subsequent July 31, 2018 email,” Justice Chartier wrote. “The defendant, therefore, can be said to have acquiesced to the plaintiff’s position, whether as an employer or as a party to a contract with an independent contractor.”

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