In Allen v. Renouf, 2020 ABQB 98, Mr. Justice C. Scott Brooker held that an arbitral party which ignores an opportunity to present its case cannot argue that it was treated manifestly unfairly. Brooker J. dismissed Applicant’s attempt to challenge a costs award which he categorized as a discretionary decision but equally disagreed with Respondent’s argument that costs were a discrete legal issue expressly submitted to the arbitrator and shielded from appeal under section 44(3) of Alberta’s Arbitration Act, RSA 2000, c A-43. He did acknowledge that costs awards may raise a question of law if the discretion was not exercised judicially.
Though Brooker J.’s decision resolves a family law dispute, his reasons have wider application. After initiating divorce and matrimonial litigation, Applicant and Respondent agreed in December 2015 to undertake mediation and arbitration (“Mediation/Arbitration Agreement”) further to which the arbitrator issued an April 28, 2017 award on the merits (“Main Award”) and a later February 14, 2018 award on costs (“Costs Award”). Applicant applied to appeal the Costs Award.
Brooker J. notes that “[b]etween the date of the Main Award and the Costs Award, the Arbitrator made approximately 30 further directions, ancillary awards, or orders. It would appear that the arbitration process was prolonged, difficult and at times acrimonious.”
The Mediation/Arbitration Agreement contained no provision allowing for appeals. Therefore Brooker J. noted that section 44(2) of Arbitration Act applied and permitted the court to grant leave if the conditions in section 44(2.1) were met.
Applicant argued that the Costs Award should be set aside under:
(i) section 45(1)(f) – because she had been unfairly treated and denied natural justice. She alleged that the arbitrator had refused to grant her a further adjournment to file written submissions on costs and then issued the Costs Award without having heard her; and,
(ii) sections 44(2) and 44(2.1)(a)-(b) – because the arbitrator made several errors of law. Relying on Chemerinski v. Richter, 2010 ABQB 388, Applicant argued that costs awards can raise questions of law. See para. 13 and the reference to Chapter 9.1.9 in J. Brian Casey and Janet Mills, Arbitration Law of Canada: Practice and Procedure (New York: Juris Publishing, 2005). In addition, referring to Driscoll v. Hautz, 2017 ABQB 168, she added that a public interest component should not apply in domestic disputes.
Respondent disputed the allegations of unfair treatment, arguing that Applicant had been given ample opportunity to present her arguments on costs. Respondent added that a costs award is a question of mixed fact and law and their Mediation/Arbitration Agreement contained no provision for appeals on such questions contrary to section 44(1)’s requirements. In addition, the Mediation/Arbitration Agreement at clause 9(iv) listed “costs” as an issue to be arbitrated and therefore section 44(3) applied to prevent appeals. Even if Applicant could invoke section 44(2), Respondent argued that she did not meet the “strict” requirements of section 44(2.1), citing Alberta Medical Association v. Alberta Health Services, 2019 ABQB 82. (The latter involved voluntary, binding interest arbitration).
Brooker J. identified two (2) issues for decision: (i) should the Costs Award be set aside under section 45(1)(f); and, (ii) if not, should Applicant be granted permission to appeal the Costs Award under section 44?
He introduced his analysis by referring to and reproducing sections 44 and 45 and excerpting clauses 7, 9 and 10(d) of the Mediation/Arbitration Agreement.
“7 In the event an agreement is not reached through the mediation process, we agree that [the arbitrator] will become the binding arbitrator of the issues we jointly put before him within the meaning of the Arbitration Act of Alberta.”
“9(iv) iv) costs (a payment ordered by the Arbitrator to be made from one party to the other if one party has been primarily successful).”
“10(d) We give [the arbitrator] the ability to make any necessary decisions about procedural matters should we be unable to agree.”
Issue (i) should the Costs Award be set aside under section 45(1) – paras 22-31
Brooker J. disagreed that Applicant had been treated unfairly. The facts lead him to determine that she had had ample time to present her case and, despite an initial extension, had “simply ignored” the new deadline. He further distinguished the case before him from the authority submitted by Applicant, namely Ritchie v. Ritchie, 2014 ABQB 219. Other than characterizing the facts in that case as “unique”, Brooker J. determined that the issues of costs in the case before him were, unlike Ritchie v. Ritchie, “not a critical issue central to the arbitration as a whole”.
“ In the present case, the matter at hand was the issue of costs, which is itself a discretionary matter and not a critical issue central to the arbitration as a whole, as was the case in Ritchie. I am of the view that the Applicant could have submitted a reply. She made no attempt to reply within the deadline imposed or later. She also did not attempt to get an extension for reply based upon her suggestion that she received the Respondent’s submission late.”
Issue (ii) should Applicant be granted leave to appeal the Costs Award under section 44 – paras 32-56
Brooker J. referred readers to Alberta (Workers’ Compensation Board) v. Appeals Commission, 2005 ABCA 276 para. 21 for the distinction between questions of law and questions of mixed fact and law which summarized it as follows:
“ There is a well-recognized distinction between questions of law and questions of mixed fact and law. In Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., 1997 CanLII 385 (SCC),  1 S.C.R. 748 at paras. 35-37, the Supreme Court noted that questions of law are about the correct legal test, whereas questions of mixed fact and law are about whether the facts satisfy the legal test. A general proposition with precedential value might qualify as a principle of law, but not its application to particular facts or circumstances.”
He added that questions of mixed fact and law involve different enquiries such as whether the facts satisfy the legal test, the arbitrator’s interpretation of the evidence as a whole or the application of the correct legal test to the evidence.
Brooker J. disagreed with Respondent’s argument that the issue of costs was caught by section 44(3) of the Arbitration Act which stipulates that a party may not appeal an award to the court on a question of law that the parties expressly referred to the arbitral tribunal for decision. That section, Brooker J. expanded, applied only to prevent appeals where a specific legal question had been expressly referred to the arbitrator, citing Alberta Medical Association v. Alberta Health Services paras 58-59.
He added that awarding costs is not a discrete legal issue and is “generally regarded as discretionary” though he referred to a decision which mentioned court costs. See British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71 (CanLII),  3 SCR 371, para. 42.
Brooker J. acknowledged that the courts have accepted that awarding costs could raise a question of law if that discretion was not exercised judicially. See Chemerinski v. Richter, 2010 ABQB 388, paras 12-13. That said, he saw no legal errors in the manner in which the arbitrator exercised his discretion. The arbitrator in his reasons identified the factors which he would consider, including degree of success, any settlement offers and conduct of the parties which might have reduced costs or time. See para. 41.
Other reproaches made by Applicant were challenges to fact findings made by the arbitrator and not errors of law required to authorize intervention.
Brooker J. closed with considering whether Applicant met the “very high standard” set by section 44(2.1) which required that a court shall grant leave under 44(2) only if it is satisfied that (a) the importance to the parties of the matters at stake in the arbitration justifies an appeal, and (b) the determination of the question of law at issue will significantly affect the rights of the parties. He referred to paras 66-70 of Alberta Medical Association v. Alberta Health Services which “compiled a helpful survey of the authorities consideration of the criterion of subsection 44(2.1)(a)” and to paras 77-80 for the equally “high threshold” set by section 44(2.1)(b).
Having determined that the arbitrator had committed no breach of sections 45(1)(f) or 44(2) and that she had not met the requirements of section 44(2.1)(a) or (b), Brooker J. dismissed Applicant’s application.
urbitral note – First, the reference at para. 12 of the reasons to Driscoll v. Hautz is worth highlighting as much for its comment on the role of public interest as for its comments on the precedential value of arbitral decisions.
“ Finally, there has been some conflict as to whether para 44(2.1)(a) incorporates a public interest component. It is now settled that it does not: ([Capital Power Corporation v. Lehigh Hanson Materials Limited, 2013 ABQB 413] at para 35. This provision requires a somewhat awkward weighing of dissimilar things. Normally, where an appeal must be justified, it is done by considering, amongst other things, whether the issue is of general importance such that a pronouncement by an appellate court is warranted (see eg Supreme Court Act, RSC 1985, c S-26, ss 40(1) and 43(1), Park Avenue Flooring Inc v EllisDon Construction Services Inc, 2016 ABCA 327 at para 3). These tests can be viewed as a question of whether the public resources of the appellate process should be invested in a question of significance to the public. Even under these regimes, it is possible to justify an appeal where there is an arguable case and the practical effect on the parties and the result in the particular case is important (eg Jeerh v Yorkton Securities Inc, 2005 ABCA 64 at para 21).
 By contrast to a judgment of a court, a decision by an arbitrator has no precedential value and is unlikely to be publicly accessible. Therefore, any appeal can only be justified by the importance of the matter to the parties. The [Arbitration Act, RSA 2000, c A-43] imposes “a very high standard when considering whether the importance to the parties of the matters at stake in the arbitration justifies an appeal” (Capital Power at para 35). Any party who seeks leave to appeal must feel that his or her matter is important enough to justify continuing – or in the case of those who pursued arbitration, entering – the litigation process. For consistency within s 44 and with the scheme of the Act, I conclude that para 44(2.1)(a) requires the applicant to show that the matters at stake are of greater importance to the parties than may be expected in a typical leave application, and are of sufficient importance to justify engaging the appellate process. As with para 44(2.1)(b), this standard will be neither easy nor impossible to satisfy. Most applications will not meet it.”
Second, an arbitrator does not treat a party manifestly unfairly when the arbitral party ignores an opportunity to present its case.