Alberta’s Court of Appeal in Funk v. Funk, 2018 ABCA 210 dismissed an application to extend the time to appeal an arbitration award because the appeal had no reasonable chance of success. The Court held, among other things, that it did not have authority to extend the time period to appeal set out in the Arbitration Act, RSA 2000, c A-43 and that any remedy to challenge the award ought to be heard by arbitration as the parties had agreed.
The parties’ dispute involves a disagreement over a settlement negotiated in their matrimonial litigation. The procedural history is lengthy, relegated by the Court in its reasons to an itemized chronology attached as an appendix.
Three separate actions related to the division of the matrimonial property were consolidated on consent for trial beginning in April 2016. Two claims, originating in B.C. but transferred to Alberta, were filed by two sets of beneficiaries of a trust set up by Applicant prior to the marriage with Respondent. After 26 days of trial, the hearing was continued for a further two weeks in January 2017.
Just prior to the resumption of the trial, Applicant and Respondent settled their matrimonial property proceedings and signed a two page Memorandum of Understanding (“MoU”) which included a payment by Applicant to Respondent of $16.5 million. The parties cancelled the continuation of the trial.
Applicant and Respondent were unable to convert the MoU into a formal agreement and agreed in September 2017 to mediation. By November 2, 2017, Applicant and Respondent signed a Settlement Agreement (“SA”). The latter included several terms which the parties began to execute on, if only in part.
On the same day they signed their SA, Applicant and Respondent also signed a mediation/arbitration agreement identifying and appointing a specific attorney to serve as arbitrator for any matters arising out of the SA. The arbitrator issued a November 29, 2017 award incorporating the entire SA (“Award”).
On December 1, 2017, counsel for Applicant, Respondent and the two sets of beneficiaries attended in court and, further to representations made by Respondent and one set of the beneficiaries related to Respondent, the court agreed to incorporate the terms of the November 29, 2017 Award into a court judgment. On December 8, 2017, the trial judge provided them with a copy of the December 1, 2017 judgment to which was attached the Award and SA.
On December 29, 2017, the 30 day appeal period for the Award expired. On January 2, 2018, the 30 day appeal period for the Judgment expired.
The Court of Appeal dealt with activity stemming from the next two steps taken by Respondent.
“ On January 5, 2018, the applicant filed an appeal of the December 1, 2017 Judgment with this court.
 On January 22, 2018, the applicant filed an Originating Application in the Court of Queen’s Bench seeking to appeal the Arbitral Award.”
Respondent argued that Applicant sought to appeal a consent order and therefore leave of the Court of Appeal was required under Rule 14.5(1)(d) of the Alberta Rules of Court, Alta Reg 124/2010.
The Court’s reasons rest on the criteria developed in Alberta to grant or deny applications to extend the time to appeal. Applicant had applied to extend the time to appeal. Despite the having been three days beyond the first delay, Respondent’s application was dismissed as it failed to meet the criteria.
Pe Ben Oilfield Services v WCB, 2018 ABCA 139 para. 4, citing Cairns v. Cairns, 1931 CanLII 471 (AB CA)  4 DLR 819 at 826-827 (Alta SC (AD), reiterated that an application to extend the time must meet the following four (4) criteria:
“i. that there was a bona fide intention to appeal while the right to appeal existed, and that there was some special circumstance that would excuse or justify the failure to appeal;
ii. an explanation for the delay and that the other side was not so seriously prejudiced by the delay that it would be unjust to disturb the judgment, having regard to the position of both parties;
iii. that the appellant has not taken the benefits of the judgment from which the appeal is sought; and
iv. that the appeal would have a reasonable chance of success if allowed to proceed.”
The criteria apply to applications involving appeals of arbitration awards and the Court’s application, albeit brief, of the criteria to the facts is no doubt helpful to arbitration practitioners. The Court deals with the first two criteria in summary fashion. It devotes a single paragraph to each component of the first criteria and a single sentence and a few paragraphs to the two components of the second criteria.
The Court’s analysis concluded with the last criteria, namely whether Applicant’s appeal had a reasonable chance of success if leave was granted. The Court found four (4) reasons to hold that, no, the appeal did not have a reasonable chance.
First, to appeal a consent order, Applicant needed to convince the Court that (a) there is an important question of law or precedent; (b) there is a reasonable chance of success on appeal; and, (c) the delay will not unduly hinder the progress of the action or cause undue prejudice. The Court referred to and noted that the test is “generally more onerous that obtaining an extension to appeal”. On this point, the Court held that Applicant failed to meet the test.
Second, Applicant invoked fraud as part of the grounds to set aside the December 1, 2017 judgment and SA. The Court’s analysis of the role of ‘fraud’ at paras 39-42 refresh the Court’s statement of the applicable principles. Citing Canadian Centre for Ethics in Sport v. Russell, 2007 CanLII 20978 at para. 34, the Court observed that proof of fraud required evidence that the fraud must not be known at the time of the trial to the party seeking to rely on it to set aside the judgment and that the fraud, if proven, must be material and “go to the foundation of the case”.
Third, even if Applicant could appeal the December 1, 2017 judgment, Applicant still had to deal with the Award. The Court noted two obstacles for Applicant. (a) Alberta’s Arbitration Act does not provide for extending time and even invoking fraud still requires that Applicant file within a 30 day delay once the fraud is discovered as per section 46(2). (b) the Rules of Court do not give the Court authority to extend an appeal period set out in a statute. See B.W. v. G.R., 1989 ABCA 205. In that case, the court identified the limits on what a court could do when legislation set out a particular time line:
“ Since the time for appeal in this case is statutory, and not contained in the Rules of Court, the provisions of the Rules of Court permitting a court to extend time for appeal have no application. The court is without power to extend the time for appeal which has been fixed by the Legislature. Thus, when the appeal from the adoption order of December 18, 1987 was filed on July 11, 1988, it was many months out of time and was of no force and effect. We are obliged to strike out that Notice of Appeal as invalid.”
Fourth, the Court held Applicant to the bargain made with Respondent.
“ Fourth, the parties agreed to arbitration and any remedy for fraud should be sought through arbitration. Section 7(1) of the Arbitration Act provides:
If a party to an arbitration agreement commences a proceeding in a court in respect of a matter in dispute to be submitted to arbitration under the agreement, the court shall, on the application of another party to the arbitration agreement, stay the proceeding.
 Canadian courts are clear that the remedy is through arbitration, not the courts. As this court stated in EPCOR Power LP v Petrobank Energy and Resources Ltd, 2010 ABCA 378 (CanLII) at para 16, 499 AR 193, “As a matter of law and policy, the role of the courts in relation to arbitration has been one of non-intervention”. Similarly, the Ontario Court of Appeal in Haas v Gunasekaram, 2016 ONCA 744 (CanLII), 62 BLR (5th) 1, stated at paras 39, 41, “[I]n cases involving arbitration agreements, fraud does not necessarily vitiate everything. It is a matter of interpretation . . . the jurisprudence plainly expect that the determination of jurisdiction will be made by the arbitrator, not the court”.”
The Court dismissed the application to extend the time.