Canada: Decision that Rings a Dell

Last Updated: August 5 2010
Article by Shaun E. Finn, Miranda Lam, Sean S. Smyth and Dana M. Peebles

Most Read Contributor in Canada, September 2018

Griffin v. Dell Canada Inc and the Interplay between Arbitration and Class Actions

Can consumer and non-consumer contracts that contain an arbitration clause be made subject to class proceedings? Yes, according to a recent decision by the Court of Appeal for Ontario.


This appeal involves a proposed class action arising from the sale of allegedly defective Dell notebook computers between March 2003 and May 2005. The terms and conditions of sale contained a mandatory arbitration clause for any claim to be resolved by arbitration and administered by the National Arbitration Forum (NAF).

The first representative plaintiff leased his Dell notebook through his business, and therefore did not qualify as a "consumer" under the Consumer Protection Act, 2002 (CPA). The CPA bans mandatory arbitration clauses in consumer agreements. A second representative plaintiff, one who did qualify, was then added. This plaintiff had purchased his computer after the CPA came into effect on July 30, 2005.

Dell appealed both the Ontario Superior Court of Justice's decision refusing Dell's request for a stay in favour of arbitration, and the court's decision refusing to reconsider its original decision in light of new developments in the jurisprudence. It must be noted that since these decisions were rendered by the motions judge, NAF has ceased to function with respect to consumer disputes following allegations of serious impropriety.


Accordingly, the Court of Appeal had to decide whether (i) the demise of NAF rendered Dell's appeals moot, (ii) the CPA was applicable, and (c) a partial stay of the non-consumer claims should be granted.


The Court of Appeal concluded that the agreement in question did not name NAF as the arbitrator and that therefore Section 16(5) of the Arbitration Act, 1991, which provides that the court has no power to appoint a substitute arbitrator, did not apply. NAF will no longer accept consumer arbitrations, so it will not exercise its power to appoint an arbitrator, and thus the court will be able to do so under Section 10(1)(b) of the Act. Furthermore, when an order refusing to grant a stay is based on grounds that the matter is not subject to arbitration, an appeal is not precluded by Section 7(6) of the Act.

Concerns about the unfairness of mandatory arbitration clauses led the Ontario legislature to enact the CPA provisions outlawing mandatory arbitration clauses in consumer agreements. According to the Court of Appeal, it has been determined that sellers regularly insert arbitration clauses in order to defeat claims, not because they truly wish to arbitrate disputes with consumers. These disputes are often small claims that only become viable when aggregated by way of a class proceeding.

The second representative purchased his computer prior to the coming into force of the CPA, but his computer allegedly failed afterwards, in 2007. As the Supreme Court explained in Dell Computer Corp. v. Union des consommateurs, [2007] 2 S.C.R. 801, the legislation governed despite the fact that the contract was concluded prior to the effective date. Until the failure of the computer there was no claim, but rather "an ongoing legal situation," and the application of the arbitration clause was not yet triggered.

Finally, under the assumption that Dell applies in Ontario, the Court of Appeal found that non-consumer claims should proceed by way of arbitration. However, Section 7(5) of the Arbitration Act confers discretion to grant a partial stay where an action involves some claims that are subject to arbitration and some that are not. In this case, a partial stay was refused to allow all the claims to proceed under the class proceeding, as it would not have been reasonable to separate the consumer from the non-consumer claims. Granting a stay of the non-consumer claims would have led to inefficiency, a potential multiplicity of proceedings, and additional costs and delays, contrary to the Courts of Justice Act.

The liability and damages issues to be litigated are the same for both consumer and non-consumer claims. As the consumer claims dominate (70 per cent), it was reasonable that the remaining claims should follow the procedural route of the consumer claims. In this case, it is clear that the staying of any claims advanced would not result in any of the claims being arbitrated. Moreover, Dell's arbitration clause precludes any possibility of class arbitration. Dell's position may have been more persuasive had this option been available.

The court also found that it did not need to decide on the application of Dell in Ontario and preferred to await the Supreme Court's decision in Seidel v. Telus Communications Inc., [2009] 5 W.W.R. 466 (B.C.C.A.).

McCarthy Tétrault Notes

Companies doing business in Ontario should be aware that both consumer and non-consumer contracts containing an arbitration clause can, for reasons of efficiency and judicial economy, be included in the same class proceedings. Moreover, a clause that explicitly prohibits class-wide arbitration can create a rebuttable presumption that an arbitration clause is designed to thwart, rather than encourage, the resolution of disputes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions