Alberta – Former arbitrator, now judge/facilitator in same matter not biased – #730

In Shannon v Shannon, 2023 ABCA 79, the Appellant appealed the final consent order of  a judge of the Alberta Court of Queen’s Bench (as it then was), which was made after a Binding Judicial Dispute Resolution (“BJDR”) process under the  Alberta Rules of Court, AR 124/2010 and AR 194/202. The parties signed a Resolution Agreement dated February 16, 2021, which disposed of all the issues in dispute and whose terms were incorporated into a consent order. Both parties had counsel during the BJDR process, but not on the appeal. The Appellant challenged the consent order on the bases that: (1) there was a reasonable apprehension of bias on the part of the judge who facilitated the BJDR process because she had previously acted as arbitrator in the same matter before she was appointed to the Bench; and (2) the Appellant was not competent to enter into the Resolution Agreement that led to the consent order, which should be set aside as null and void. The Court of Appeal dismissed the appeal because it found that the Appellant had consented to having the judge who had previously sat as arbitrator facilitate the BJDR process, but also that a reasonable apprehension of bias allegation could not be established – there is a high burden to show that a superior court judge would not disabuse her mind of anything learned on a prior occasion and there is also a strong presumption that a judge will act judicially. 

The Appellant argued that the overall the process was unfair and relied upon the following grounds of appeal:

1.  The judge should have recused herself from acting as the parties’ BJDR judge because she was not able to approach the parties’ case with an impartial and open mind as a result of her previous role as the parties’ arbitrator before her appointment to the Bench, which gave rise to an objectively reasonable apprehension of bias: and

2.  All agreements and determinations made by the judge at or arising from the BJDR process were invalid and void because the Appellant was not competent to participate and did not have the capacity to understand her lawyer’s recommendations or to enter into agreements because of a panic attack she suffered that day.  

The Court referred to the Alberta Rules of Court, AR 124/2010 and AR 194/202, which provide the framework pursuant to which the judge conducted the BJDR process. The relevant provisions are in Part 4, Division 3, subdivision 2 (Dispute Resolution by Agreement) and specifically Rules 4.17 to 4.21. Their purpose, “is to provide a party-initiated framework for a judge to actively facilitate a process in which the parties resolve all or part of a claim by agreement” and the Rules emphasize that the process is only to be done with the consent of the parties. The Rules are clear that a consent order may result from the process and that the judge may “actively” facilitate the BJDR process.

With respect to her second ground of appeal, the Appellant advanced numerous arguments in support of her position that the BJDR process was unfair and the Court undertook a detailed analysis of the Appellant’s alleged lack of consent and found that there was no evidence of it. The Court found that the Appellant’s counsel had both ostensible and actual authority to settle the dispute. 

With respect to the first ground of appeal, the Appellant alleged that because the judge (in her capacity as arbitrator) had “issued three Consent Arbitration Awards and a detailed 25-page Arbitration Award in which she made numerous findings of fact and made orders…”, she had “formed impressions and opinions about the parties and their claims in the course of acting as their arbitration (sic)”. Therefore, the Appellant argued that the judge could not approach her role as BJDR Judge with an open mind. 

The Court rejected the Appellant’s argument that these circumstances gave rise to a reasonable apprehension of bias because:

1.  Merely because the judge – as arbitrator and dispute resolution judge- were the same person does not give rise to a reasonable apprehension of bias. The Rules provide that a judge who conducts a dispute resolution process cannot sit on a trial without the consent of the parties, but ”the context in this case was different”

2. There is a high burden to establish that a superior court judge would not disabuse her mind of anything learned on a prior occasion. This case involved the preparation of a consent order under the supervision of the judge.

3. There is also a strong presumption that a judge will act judicially: “It is hardly likely that [the judge] would not understand the difference between an arbitration and a Judicial Dispute Resolution let alone the difference between a trial and a Judicial Dispute Resolution” (para. 51). What is required in all situations is that the judge approach each case with an open mind, free from inappropriate and undue assumptions.

4. The test for whose “reasonable apprehension” is involved is a test of whether a reasonable and informed person, with knowledge of all the relevant circumstances, viewing the matter realistically and practically, would conclude that the judge’s conduct gives rise to a reasonable apprehension of bias. This test was not met.

5. In any event, the Appellant waived any concern about bias and consented to the judge’s role as facilitator of the dispute resolution process:

[57] The appellant argues that she should not be taken to have waived objection to the participation of [the judge] because the Resolution Agreement did not say so expressly. This is an unpersuasive submission on this record. We have no reason to think that if [the judge] was asked to stand aside from the case she would have refused. [The judge] could not be clairvoyant about unexpressed reservations of the appellant even assuming they existed at the time of the Resolution Agreement or at any other time prior to the Final Order.

[58] Moreover, it does not appear likely that either party had any unexpressed reservations at all about [the judge’s] involvement at any point prior to the Final Order. Indeed, the record is clear that the parties specifically requested [the judge]. The parties obviously consented to [the judge] as a practicing lawyer to be involved multiple times. That they requested [the judge’s] subsequent involvement as JDR judge precisely because of their familiarity with, and confidence in, her is understandable. The time for objection to [the judge] participating in the Resolution Process was before entering into the Resolution Agreement, not after the Final Order..

Ultimately, the Court found that the Appellant’s complaint about the consent order concerned alleged miscalculations of amounts to which she was entitled, which if she was right resulted in a “modest shortfall”. The Court dismissed the appeal.

Editor’s Notes:

First, the Court acknowledged that this case was different from that in which a judge conducts the dispute resolution process and then sits as the trial judge: ”the context in this case was different”. Therefore, although it is not expressly stated in the decision, the Court seems to have made a distinction between the judge’s role in the court proceeding (as facilitator of a dispute resolution process leading to the settlement) and in the arbitration (as decision maker). As arbitrator, she had a clear duty to independent and impartial. The Court seems to have accepted that the parties were also entitled to a facilitator (mediator) who was impartial. This is not controversial. See, for example, the ADR Institute of Canada Code of Conduct For Mediators Art. 2.1(b) and 4.1, which requires a mediator to be “wholly independent; and wholly impartial; and free of any personal interest of other conflict of interest”. The Court seems to have found that just because the same person sat as arbitrator and then as facilitator, this did not alone give rise to a reasonable apprehension of bias or a lack of independence or impartiality. There had to be more.

The Court then identified the presumptions in favour of judges where there is an allegation of bias. The judge was entitled to the strong presumption that she would be able to disabuse herself of any information she learned during the arbitration and benefitted from the presumption she would act judicially. However, the cases the Court relied upon all involved judges in their decision-making or adjudicative capacity, not as facilitators of a settlement process.  

In fact, this case is all about consent, so it is not clear why the Court addressed the presumptions at all. If a party may consent to the mediator/facilitator later serving as trial judge/arbitrator, surely parties can consent to the reverse. Ultimately, the decision turned on the Court’s finding that the Appellant had consented to having the same person serve as facilitator after she had acted as arbitrator in respect of the same dispute. We see these issues arise in a med/arb process, in which process an arbitrator must only cease to act if he/she develops doubts as to his/her ability to remain impartial and independent as a result of mediation. This was an arb/med process?

Second, this decision about proper procedure is a departure from the principle established by the same Court in Esfahani v Samimi, 2022 ABCA 178, which held that leave to appeal must be granted before the Court of Appeal will hear an appeal. See earlier Case Note: Alberta – Appeal process under s. 44(2) of the Arbitration Act clarified – #623.

Here, although the Appellant failed to seek leave to appeal in this case, the Court found that this was not an impediment because it found that the appeal had no merit. The Court may have made allowances for the fact that the parties were self-represented. 

The Court heard and dismissed the appeal.