Alberta – Court of Appeal discourages serial challenges, notes certain litigation environments make experienced arbitrators bias-resistant – #109

In Driscoll v. Hautz, 2018 ABCA 272, Mr. Justice Frans Slatter discouraged serial challenges to arbitration awards and distinguished dissatisfaction with an award from valid grounds justifying a court’s intervention. Slatter J.A. also reassured litigants that arbitrators experienced in family law disputes, like judges, could resist falling into bias if ever exposed to “exaggerated or extravagant allegations of misconduct”. In the underlying arbitration, the arbitrator had merely recorded mention of an isolated pair of exchanges made and gave no indication of having been influenced by either of the allegations.

Applicant had brought two (2) unsuccessful applications to the Alberta Court of Queen’s Bench to appeal an arbitration award determining his and respondent’s division of property after nine (9) years of cohabitation. The applications resulted in two (2) distinct decisions. The first, Driscoll v. Hautz, 2017 ABQB 168, dismissed Applicant’s application for leave under section 44(2) of Alberta’s Arbitration Act, RSA 2000, c A-43 for leave to appeal on a question of law. The second, Driscoll v. Hautz, 2018 ABQB 426, dismissed Applicant’s attempt to set aside the award under section 45(1)(h) on the basis of a reasonable apprehension of bias.

Applicant applied to the Court of Appeal under section 48 of the Arbitration Act for leave to appeal the second decision. Slatter J.A. dismissed Applicant’s application.

At paragraphs 2-5 of his reasons, Slatter J.A. sketched the procedural history of Applicant’s post-award court activity and identified the limited routes set out in section 44 for challenges. At paragraph 4, Slatter J.A. listed the three (3) challenges made by Applicant under section 44(2) and Madam Justice Jolaine Antonio’s answer to each. At paragraph 5, Slatter J.A. listed the three (3) challenges made by Applicant under 45(1) and Madam Justice Kim D. Nixon’s answer to each. (See an earlier ArbitrationMatters note on the latter decision, “Alberta court dismisses second attempt to challenge award for breach of natural justice”).

Slatter J.A. summarized Applicant’s challenges before Nixon J., and the results, as follows:

(a) The application was out of time, because it was not brought within 30 days of the receipt of the award, as required by s. 46(1). The applicant could not attach his application under s. 45 to set aside the award to the previous application for permission to appeal that was brought under s. 44(2), as “apprehension of bias” was not mentioned in the previous proceedings.

(b) The issue was res judicata. The applicant had raised issues of “natural justice” in his first application to appeal under s. 44, and any allegation of a reasonable apprehension of bias should have been raised at that time.

(c) There was, in any event, nothing that would raise a reasonable apprehension of bias in the mind of an informed, impartial observer.

Slatter J.A. noted that, in Applicant’s latest leave to appeal materials, Applicant raised “a number of arguments” challenging the validity of the arbitration award due to errors of fact or errors in applying the law to those facts. Slatter J.A. acknowledged Applicant’s arguments but dismissed them as irrelevant at the current stage. Rather, the only issues on which Applicant could rely before Slatter J.A. were those involving “reasonable apprehension of bias” and justifying a set-aside under section 45.

After setting the scope of what would be relevant for his analysis, Slatter J.A. paused to observe that “[a]rbitrations are intended to be an efficient method of resolving disputes without resort to the courts”. Referring readers to the Kawchuk v. Kovacs, 2016 ABCA 210, Slatter J.A. See Kawchuk v. Kovacs, para. 21 as well as Nilsson v. Alberta, 1999 ABCA 340, para. 4, for the four (4) considerations. The Court of Appeal in Kawchuk v. Kovacs cautioned that none of the considerations “alone, is conclusory” while Nilsson v. Alberta concluded its earlier listing of the four (4) conditions with the mention that “are all weighty considerations, though we do not suggest that each of the four is an absolutely necessary condition.

Following the numbering and sequence of the three (3) arguments identified by Nixon J., Slatter J.A. briefly dealt with the first pair.

The applicant has not shown any obvious error in the ruling that his application to set aside the award was not commenced in time. He has also not set out a reasonable argument explaining why he did not raise all of his challenges to the award in the first stage of the proceedings, and why he should be allowed to mount serial challenges to the award.

Not only must the Applicant as an unsatisfied arbitration party show obvious error by the application’s judge that his application was not timely, he must raise all his challenges in the first stage of his challenge. Absent a “reasonable argument explaining” why he did not do so, the Applicant was not allowed to “mount serial challenges to the award”.

Slatter J.A. willingly proceeded to deal with the third ground, assuming for the sake of analysis that Applicant’s application had been commenced in time and that res judicata did not apply to the issue raised. Slatter J.A. held that, even assuming Applicant could convince the Court of having overcome those other grounds, Applicant failed to show any reasonably arguable error by Nixon J. that there was no reasonable apprehension of bias.

Applicant based his claim of apprehension of bias on the fact that the arbitrator had received negative comments made by his spouse’s attorney regarding certain out-of-court statements e-mailed by Applicant to non-parties. The arbitrator had mentioned Applicant’s e-mail in the costs award to the arbitration and Applicant, leading Applicant to claim that the arbitrator had been “inappropriately influenced” by those comments. Nixon J. at para. 30 of her reasons dismissed the arbitrator’s mention of them as merely a single, neutral statement of the facts.

Having summarized Applicant’s arguments and Nixon J.’s analysis of those arguments in first instance, Slatter J.A. then provided two (2) observations.

First, Slatter J.A. reassured litigants that judges and family law arbitrators can resist falling into bias given that they are experienced in the cut-and-thrust available in family law litigation.

[10] Family law litigation is, unfortunately, often tainted by exaggerated or extravagant allegations of misconduct. Judges and family law arbitrators are used to carefully considering such allegations to ensure that they are not given more weight than they deserve. There is no air of reality to the suggestion that this arbitrator would immediately have become biased against the applicant, merely because counsel for the respondent alleged misconduct in her letter. There is nothing unusual or sinister about the arbitrator referring in passing to these circumstances in the costs award. A reasonable observer, fully informed of the facts, would not have a reasonable apprehension of bias.

His comments ought to lend themselves to other defined scopes of disputes in which the arbitrators, experienced in those areas, can sift wheat from chaff.

Second, Slatter J.A. characterized Applicant’s argument of bias as an indirect challenge to findings of fact. In particular, Applicant argued that the actual result in the award was evidence of bias. He brushed this approach aside, separating dissatisfaction with a result from a plausible argument justifying court intervention.

[11] The applicant also argues that the very outcome of the arbitration demonstrates bias. He argues that the division of property is unbalanced, “ridiculously one-sided”, and a miscarriage of justice. Errors in assessing the evidence and credibility of the parties, the findings of fact, and the law applied by the arbitrator reflect such significant error that “a rational observer would . . . see bias in the ruling”. This is just an indirect attempt to appeal findings of fact, and reargue the errors of law alleged in the previous appeal. The applicant is obviously disappointed with the outcome of the arbitration, but there is no plausible argument about bias to be made.

In closing, Slatter J.A. also resisted Applicant’s argument that leave should be granted because of the precedential value the Court’s reasons could have in family law litigation. Slatter J.A. disagreed, mentioning only that the “law respecting “apprehension of bias” is, however, very well established, and any decision on appeal would merely apply that established law to the specific facts.