Alberta – Court of Appeal blocks attempts to create shortcuts on challenges to arbitration awards – #106

In Anand v. Anand, 2018 ABCA 259, Mr. Justice Brian O’Ferrall identified a series of dead ends for arbitral parties expecting shortcuts to the Court of Appeal from Court of Queen’s Bench decisions issuing from the “Remedies” chapter of Alberta’s Arbitration Act, RSA 2000, c A-43. A series of applications strained to persuade O’Ferrall J.A. to involve the Court of Appeal prematurely in existing court challenges to an arbitration award. O’Ferrall J.A. dismissed all of them, identifying the Court’s lack of jurisdiction, unless and until the Court of Queen’s Bench had completed its own statutorily-granted appeal role under any one of sections 44, 45, 47 and 49. The Court of Appeal had a role as an appellate court and not an alternative court sought by the unsatisfied arbitral party.
The underlying dispute involved what O’Ferrall J.A. introduced as “a long-standing, high-conflict family law dispute”. Applicant, husband, and Respondent, wife, had agreed in March 2017 to submit some of their differences to mediation and arbitration. Mediation resolved some of those differences and the balance were determined by arbitration, with an arbitration award issuing January 15, 2018 (the “Award”).

In their submission to arbitration, Applicant and Respondent had agreed, pursuant to section 44(1) of the Arbitration Act, that either “may appeal an award to the court on a question of law, on a question of fact or on a question of mixed law and fact.” O’Ferrall J.A. specified that the Arbitration Act at section 1(1)(c), in particular 1(1)(c)(ii), defined the term “court” as “the Court of Queen’s Bench”.

Their submission agreement also included a provision, clause 18.2, which spoke to cost consequences of any application to the court to enforce an award.

[i]n the event that it is necessary for either party to bring an application to enter such an Order [Consent Order or enforcement Order], if successful, the party applying shall be entitled to their solicitor and client costs of that application.

Applicant appealed the Award and the appeal was scheduled for hearing in December 2018. After appealing to the Court of Queen’s Bench, Applicant applied to the Court of Queen’s Bench for an order to stay certain portions of the Award pending the outcome of his appeal. Respondent applied to the Court of Queen’s Bench to have the Award made an order of the court.

On March 15, 2018, the chambers judge dismissed Applicant’s stay application and, pursuant to section 49(5), ordered enforcement of the Award pending the appeal. That section reads as follows:

49(5) If the period for commencing an appeal, an application to set the award aside or an application for a declaration of invalidity has not yet elapsed, or if such a proceeding is pending, the court may

(a) enforce the award, or

(b) order, on such conditions as the court considers just, that enforcement of the award is stayed until the period has elapsed without such a proceeding being commenced or until the pending proceeding is finally disposed of.

The chambers judge also ordered Applicant to pay Respondent costs of the applications on a solicitor-client basis.

Following those orders by the chambers judge, on April 19, 2018 Applicant applied to the Court of Queen’s Bench for a stay of both orders pending his appeal of those orders to the Court of Appeal. His application was dismissed.

The ensuing procedural steps may cause confusion simply by the overlap in the use of the term “appeal”. The term “appeal” is used to mean (a) the initial step taken by the arbitral party to challenge an arbitration award before the Court of Queen’s Bench and (b) the step taken by litigants who have suffered a perceived set-back in first instance and apply to the Court of Appeal to correct for that set-back. This note strives to keep the context clear enough to allow for overlapping uses of the term “appeal”.

In the Court of Appeal, Applicant applied for leave:

(i) “rather unusually” to have the Court of Appeal hear his appeal of the Award and not the Court of Queen’s Bench;

(ii) to appeal the dismissal of his application to stay portions of the Award pending his appeal of that award; and,

(iii) to appeal the chambers judge’s March 15, 2018 order that he pay solicitor-client costs.

Applicant argued that, because the Court of Queen’s Bench had issued orders enforcing the Award pending his appeal under article 44(1), it had no jurisdiction to hear his appeal. Applicant relied on section 49(3) which “appears to prohibit the court from giving a judgment enforcing an award if an appeal is pending”.

49(3) The court shall give a judgment enforcing an award made in Alberta unless

(a) the 30‑day period for commencing an appeal or an application to set the award aside has not yet elapsed,

(b) an appeal, an application to set the award aside or an application for a declaration of invalidity is pending, or

(c) the award has been set aside or the arbitration is the subject of a declaration of invalidity.

O’Ferrall J.A. rejected this argument. First, O’Ferrall J.A. pointed out that the Arbitration Act governing Applicant’s appeal assigned jurisdiction to the Court of Queen’s Bench and not the Court of Appeal for appeals of arbitration awards. Second, he referred to the express provision in section 49(5) that authorizes the court, namely the Court of Queen’s Bench, pending an appeal of an award to enforce the award by signing orders confirming the award’s terms. He resisted the invitation to interfere with the procedure established by the Arbitration Act.

Again, as indicated above, the applicant has appealed portions the arbitration award and the hearing of that appeal is scheduled to be heard in December in the Court of Queen’s Bench. For this Court to interfere with that statutorily-prescribed process would be wrong.

O’Ferrall J.A. viewed that he had no jurisdiction to grant leave to appeal directly to the Court of Appeal so long as the Court of Queen’s Bench had not completed its consideration of the appeal under section 44(1) and issued a decision.

He stated that only decisions under sections 44, 45, and 47 of the Arbitration Act can be appealed to the Court of Appeal and then only with leave, as per section 48. He looked at each in turn and explained why none of the three provided Applicant with an early path to the Court of Appeal.

(i) Section 44 provides jurisdiction for the Court of Queen’s Bench to “confirm, vary or set aside” an award or remit it to the arbitral tribunal with directions on the arbitration’s conduct. The Court of Queen’s Bench had not yet issued any decision. The Court of Appeal had no jurisdiction to hear an appeal of a decision not yet taken.

(ii) Section 45 provides grounds for setting aside an award but which O’Ferrall J.A. held did not apply on the circumstances.

(iii) Section 47 allows non-parties to the arbitration to apply at any stage during or after to grant a declaration that the arbitration is invalid on one or more of the grounds listed in 47(a), (b), (c) or (d). O’Ferrall J.A. held that his section did not apply on the circumstances.

From reading those three sections of the Arbitration Act, I am of the view that there is no jurisdiction in the Court of Appeal to hear an appeal which, by statute, is required to be heard by the Court of Queen’s Bench. But even if there is such jurisdiction, I would not grant permission to appeal because the Court of Queen’s Bench is in a much better position than this Court of assess the grounds of appeal advanced by the applicant. The applicant’s application to have his appeal of the arbitrator’s decision heard by the Court of Appeal is dismissed.

O’Ferrall J.A. considered other aspects to Applicant’s appeal, including whether leave was required or not. For some, he elected to deny leave even if he had jurisdiction, based on some of the application being either unmerited or premature.

He did offer additional guidance on the Court of Appeal’s jurisdiction – or lack thereof – to grant leave to appeal a Court of Queen’s Bench order under section 49(5)(b). He found no express provision in the Arbitration Act addressing appeals to the Court of Appeal from a Court of Queen’s Bench’s decision on a stay application under section 49(5)(b). See para. 17.

Regarding the chambers judge’s order that Applicant pay Respondent’s costs on a solicitor-client basis, O’Ferrall J.A. held the Applicant to the wording he agreed to include when negotiating the submission agreement. His review of the court file satisfied him that it was reasonable for the chambers judge to conclude that Respondent was required to bring an application to enforce the orders, thus triggering section 18.2 of the submission agreement.

O’Ferrall J.A. went further. Even if Respondent had not filed her own application to enforce the Award, he offered that Respondent’s contestation of Applicant’s “might” qualify to apply section 18.2.

“[21] Under the Arbitration Act, when an appeal of an arbitration award is pending and a party applies to enforce the arbitration award, the court may either enforce the award (s. 49(5)(a)) or stay the award pending appeal (s. 49(5)(b)). In this case, the chambers judge, after signing the orders and hearing from the parties, ultimately decided to enforce the award and deny the stay. Pursuant to clause 18.2 of the arbitration agreement he awarded solicitor-client costs to the respondent who successfully sought to enforce the arbitration award. Even if the respondent had not filed a separate application to enforce the arbitration award, the respondent’s successful opposition to the applicant’s stay application might properly have been characterized as being necessary to obtain enforcement of the arbitration award, thereby entitling the respondent to solicitor-client costs.”

Arbitration practitioners can conclude that such wording on costs, negotiated and included in arbitration and submission agreements, will be given effect by the courts when exercising their authority to grant costs. They should also anticipate that the courts may apply such agreements to situations not expressly identified in the wording but caught by the spirit.