In Brazeau (County) v Drayton Valley (Town), 2022 ABQB 443, Justice Davidson considered the timeliness of an application for judicial review of both an arbitrator’s preliminary ruling on jurisdiction and the final award. The issues raised on the application are relevant beyond the statutory tribunal regime under the Municipal Government Act, RSA 2000, c M-26 (the “MGA”) and have broader significance. Of most interest is: (1) Justice Davidson’s determination that the limitation period for a challenge to an award begins to run only once there has been compliance with the statutory formalities of an award, including the requirement that it be signed; and (2) Justice Davidson’s conclusion that an application for ”judicial review” of an arbitrator’s preliminary jurisdiction “ruling” must be made within 30 days after it is released, and cannot be challenged as part of a review of the final award, even if it is sent to the parties again as an attachment to the final award. It is not part of the final award.
This dispute arose because the Town of Drayton Valley (the “Town”) and the Municipal District of Brazeau (the “County”) were unable to reach an agreement with respect to an intermunicipal collaboration framework under the MGA. An arbitrator was appointed pursuant to the MGA.
The County sought a preliminary ruling on whether the arbitrator had jurisdiction to determine one of the matters in dispute – whether a childcare service offered by the Town should be subject to cost sharing. On September 2, 2021, the arbitrator ruled that he had jurisdiction to determine that issue.
The arbitration took place from December 13 to 16, 2021. The arbitrator issued a final award on January 20, 2022. There were two deficiencies with respect to the award. The first was that it was said to attach as Schedule “A”, but did not attach, a copy of the preliminary jurisdictional ruling. The second was that the award was not signed; it was sent by email. These deficiencies were corrected in March 2022.
The County brought an application, “for leave to appeal the Arbitrator’s Award, seeking an order setting aside the Arbitrator’s decision” and a “motion seeking judicial review”, alleging errors in fact, law, and jurisdiction. The Town argued that no appeal was permitted under the MGA and that only judicial review of the jurisdiction issue was permitted. It also argued that the application had been brought too late in any event. Ultimately, Justice Davidson allowed the application for judicial review of the final award to proceed, as it was not out of time. However, the application for judicial review of the preliminary ruling as to jurisdiction was too late.
When does the limitation period start to run? Justice Davidson considered the requirement under the MGA that the application for judicial review “must be made” within 60 days of the issuance of the award in light of the deficiencies in the award.
He found that the arbitrator’s failure to attach Schedule “A” to the final award, even though it was said to be attached, did not affect whether the January 20, 2022 award was “final”. He found this was a “mere oversight, akin to a typographical error, given that the parties already had a copy of the decision and the preliminary decision had already been made”, which the arbitrator had the authority to correct under s. 43(1) of the Alberta Arbitration Act, RSA 2000, c. A-43.
However, he found that the arbitrator’s failure to sign the award was more “problematic” because s. 38 of the Alberta Arbitration Act, requires that the award be signed. Justice Davidson noted that the Court had no authority to correct this deficiency. He could find no authority on the issue of whether an arbitral award must be signed to be an “official decision”. However, he found that the legislative history of the Arbitration Act demonstrated that the requirements of writing, signature, and delivery of the award were the “foundation for legal rights” and ensured that parties knew what their rights were and that these formalities were necessary so that the award could be taken to the court to be enforced or set aside. Therefore, he found that the time limit for challenging the award did not start to run until it was signed.
Because the application for judicial review was brought within 60 days of delivery of the corrected final order in March 2022, it was not out of time.
What is the limitation period for a court review of the preliminary jurisdiction ruling? Justice Davidson noted that the MGA and the Alberta Arbitration Act set out different limitation periods for bringing an application to the Court to review a decision on jurisdiction. Therefore, the limitation period for reviews of preliminary jurisdiction decisions depends on which of the two limitations periods governs. The MGA provides that in the event of a conflict between the two Acts, the MGA applies.
He set out the two relevant provisions:
“ Under s 17 of the Arbitration Act, “[a]n arbitral tribunal may rule on its own jurisdiction to conduct the arbitration and may in that connection rule on objections with respect to the existence or validity of the arbitration agreement”: s 17(1). A party who objects that an arbitrator is exceeding his or her jurisdiction must do so as soon as the matter alleged to be beyond the arbitrator’s jurisdiction is raised during the arbitration: s 17(6). An arbitrator may then rule on the objection when it is raised or may deal with it in an award: s 17(8).
- If an arbitrator makes a preliminary decision about an objection relating to jurisdiction, any party may apply to the Court to decide the matter within 30 days of receiving notice of the ruling: Arbitration Act, s 17(9).
- At the same time, under s 708.48(4) of the MGA:
Except as provided in this Part, every award of an arbitrator is final and binding on all parties to the award and shall not be questioned, reviewed or restrained by any proceeding in the nature of an application for judicial review or otherwise in any court.
- Under s 708.48(5), a party may apply to the Court to review an arbitration award about an intermunicipal collaboration framework on a question of jurisdiction only.”
Justice Davidson found that there was some ambiguity about whether an arbitrator’s preliminary decision constitutes an “award”, in which case the MGA would govern. However, he reasoned, the Arbitration Act gives the arbitrator the power to issue “awards” (sections 37, 38, and 41), while s. 17 gives the arbitrator the power to make “rulings”. Further s. 17 itself refers to both “rulings” and “awards” and thereby distinguishes the two. Section 17(8), in particular, states that the arbitral tribunal may “rule” on an objection to jurisdiction as a preliminary question when it is raised or may deal with it in an “award”. As a matter of statutory interpretation, when the legislature uses different words, it intends different meanings. Therefore there was no inconsistency in the two pieces of legislation and the MGA does not preclude a court review of a preliminary “ruling” on jurisdiction within 30 days under s. 17(9) of the Alberta Arbitration Act.
In this case, the arbitrator’s preliminary ruling was attached as Schedule “A” to the corrected award, but was not part of the final award and was not subject to challenge as part of the final award. Therefore, the challenge to the preliminary jurisdiction ruling was out of time:
“ Under s. 17 of the Arbitration Act, a party who challenges the jurisdiction of an arbitrator must do so as soon as possible: ss 17(4), (6). The party must also bring a timely objection to any decision by the arbitrator about their jurisdiction: s 17(9). In other words, the emphasis of the provision is on quickly raising and resolving the issue of whether an arbitrator has jurisdiction to decide an issue.
- Ultimately, allowing a party to choose whether to apply for a Court review of an arbitrator’s decision on jurisdiction when it is made or as part of a final award would run contrary to the objective of efficiently resolving arbitral proceedings. It would suggest that the issue of jurisdiction could be argued twice over – preliminarily and after the award. This cannot have been the intent of the Legislature.
- Accordingly, I find that the County was required to bring its application for review of the preliminary ruling under s 17 of the Arbitration Act and that it needed to do so within 30 days of that ruling. The County was not entitled to wait to challenge the Arbitrator’s jurisdiction under s 708.48 of the [MGA].
- It is up to an Arbitrator to determine whether he or she will reserve a decision as to jurisdiction for inclusion in the final Award. However, when jurisdiction is put into dispute by a party and the Arbitrator renders a decision on jurisdiction prior to the final Award, the limitation period for judicial review of that interim decision commences immediately on delivery of the decision of the ruling”.
First, the meaning to be given to s. 17(9) of the Alberta Arbitration Act and equivalent provisions in other provincial arbitration legislation has created much uncertainty in the case law. It reads: “If the arbitral tribunal rules on an objection as a preliminary question, a party may, within 30 days after receiving notice of the ruling, may make an application to the court to decide the matter”. Here, Justice Davidson distinguished between a “ruling” under this provision and an “award”, both of which are found in the legislation but not defined. Other courts have grappled with the meaning of the words that allow the court to “decide the matter” and the process the court will follow in such a review. Here, the application was framed as an application for judicial review. For a recent Case Note which addresses the Ontario equivalent provision, see Case Notes: Lisa’s 2021 Top Pick: Ontario – Russian Federation v Luxtona Limited (Part 1) – #564 and Lisa’s 2021 Top Pick: Ontario – Russian Federation v Luxtona Limited (Part 2) – #568. Domestic arbitration legislation reform anyone?
Second, Justice Davidson found that the application, brought as an application for leave to appeal, was “erroneously framed” but allowed it to proceed. The MGA provides that every award of an arbitrator is final and binding on the parties and cannot be questioned, reviewed, or restrained by an application for judicial review or otherwise in any court, except as provided in the MGA, which allows for a review by the Court of Queen’s Bench on a question of jurisdiction only. However, because the relief sought was consistent with that which may be granted on a judicial review, he treated the application as one seeking judicial review, relying on Alberta Rules of Court, Alta Reg 124/2020, Rule 3.2(6) (“If an action that is started in one form should have been started or should continue in another the Court may make any procedural order to correct and continue the proceeding and deal with any related matter”), Patrus v WCB, 2014 ABCA 117, and Pierce v Alberta (WCB), 2019 ABQB 443. In any event, the County had amended its notice of application to seek judicial review. He did explicitly not decide the effect of MGA, which limited the judicial review to jurisdictional questions only.
Third, Justice Davidson noted that under the MGA, an application to review a decision of an arbitrator on jurisdiction “must be made within 60 days after the award is made”. He considered whether the application for judicial review must be “before the court” within the 60-day limitation period or whether it was sufficient for the application to have been filed with the court within that time, even if the return date of the application fell outside the limitation period. He found that most applications could not be heard within that time frame and that, “[t]o insist that the matter be heard in that time frame would be to make substance the slave of form and would be an absurd result.” An applicant can only control when the application is filed; the court determines when it is heard. Here, the application was filed within 60 days of the arbitrator’s delivery of the corrected final award, which was within the required time period.