Lisa C. Munro

March 10, 2022May 4, 2022

Ontario – Start of limitation period determined by interpretation of stepped arbitration clause – #592

In Maisonneuve v Clark, 2022 ONCA 113, the Ontario Court of Appeal interpreted the language of an arbitration agreement to determine the applicable limitation period. It found that the application judge’s interpretation of that language was entitled to deference and that the palpable and overriding error standard of review applied. The application judge found that the following language in the arbitration clause made an attempt at informal resolution a pre-requisite to arbitration: “[i]f the parties are unable to resolve the Excluded Issue as between them, then the Excluded Issue shall be fully and finally referred to the Arbitrator for resolution”. The application judge found that the word “then” made the clause “both temporal and conditional”, after considering the wording of the arbitration clause and the factual matrix. The Court of Appeal found no palpable and overriding error and dismissed the appeal. Maisonneuve’s application to appoint an arbitrator was not time-barred; he had brought his application within two years of the date when he knew that a negotiated resolution was not possible.

March 3, 2022May 4, 2022

Ontario – No issue estoppel regarding arbitrator’s findings in later litigation – #591

In The 6^th Line Mofos Limited v Stewart, 2022 ONSC 520, Justice Healey dismissed a summary judgment motion brought by parties to court proceedings, who argued that issue estoppel applied to prevent the court from making findings that were inconsistent with those made in a previous arbitration. The plaintiffs, who were adverse in interest in the arbitration, sued a land appraiser whose report was central to their dispute and which the arbitrator found did not meet the requisite professional standards. The plaintiffs argued that this finding was sufficient to establish the negligence of the defendant appraiser and they sought in damages recovery of the costs they had incurred in relation to the arbitration. Justice Healey disagreed and found that two elements of issue estoppel could not be met: (1) the same question was not before both the court and the arbitrator; and (2) the defendant appraiser was a witness in the arbitration and was not a party or its privy.

February 25, 2022May 4, 2022

BC- Decision not to make a decision on jurisdiction grounds, not a “decision” barred by “no appeal” provision – #587

In Terrace Community Forest LLP v Skeena Sawmills Ltd., 2022 BCCA 37, the Court of Appeal for British Columbia started its reasons with, “this appeal is about the meaning of the word or. It is also about the goals of legislated regimes and the role of courts in protecting the interests of non-parties to arbitration proceedings”. Section. 29(4) of the B.C. Arbitration Act, S.B.C. 2020, c. 2 provides that a subpoena issued by an arbitrator to a non-party can be set aside on an application “to the arbitral tribunal or the Supreme Court”. The parties to this court application disputed whether the word “or” was inclusive (A or B or both) or exclusive (A or B, but not both). The Court of Appeal agreed with the judge below, Justice Milman, that “or” is to be given an exclusive meaning. Because the non-party asked the arbitrator to set aside the subpoena first, the court had no jurisdiction under s. 29(4). Therefore, Justice Milman declined to apply s. 29, and an appeal of his decision was not prohibited under s. 29(10). The appeal was dismissed.

February 15, 2022May 4, 2022

Ontario – Statute gives unintended economic incentives to avoid mandatory arbitration – #585

In Metropolitan Toronto Condominium Corporation No. 1171 v Rebeiro, 2022 ONSC 503, Justice Myers granted a stay of an application brought by a condominium corporation to require the respondent unit holder to comply with the condominium by-laws and rules, and ordered the dispute to go to mediation and arbitration. Justice Myers found that the condominium corporation had deliberately framed its relief to avoid the provisions of the Ontario Condominium Act, 1998, S.O. 1998, c. 19, which require mediation and arbitration pursuant to the Ontario Arbitration Act, 1991, S.O. 1991, c. 17, if certain relief is sought. Significantly, he found that the Act provides economic incentives to the condominium corporation to seek relief from the courts rather than to go mediation and arbitration. First, the Act states that if the condominium corporation wins damages or costs in court, its full legal costs can be added to the owner’s common expenses. Second, it allows the condominium corporation to demand payment of ongoing legal costs, such as for lawyers letters, in the midst of the dispute. If the unit holder refuses to pay, the condominium corporation may file a lien against the unit, which escalates the existing dispute and creates a new one.

February 9, 2022May 4, 2022

Québec – Statutory tribunal chair disqualified for bias for comments made in presence of witness during hearing break – #582

In Terrebonne Police Brotherhood Inc. v Truchon, 2022 QCCS 34, Justice Poulin granted, in part, the plaintiff union’s application for judicial review of a decision rendered by a three-person statutory tribunal. The tribunal had dismissed the union’s motion for an order disqualifying the entire tribunal based upon comments made by the chair, which were overheard by a witness and an observer during a break in the hearing. Justice Poulin set aside the tribunal’s ruling and found that those comments demonstrated both a lack of impartiality and a lack of open mind on the part of the chair, which warranted his disqualification. However, the other two members of the panel were not disqualified, even though they contributed to the unanimous decision dismissing the union’s motion. The chair’s comments could not be imputed to them.

February 3, 2022October 19, 2022

B.C. – Claims against non-party to arbitration agreement stayed with claims against parties – #581

In Goel v Dhaliwal, 2021 BCSC 2382, Justice MacDonald dismissed as premature a motion to lift a stay of court proceedings in favour of arbitration for the limited purpose of allowing the plaintiffs to file an amended Statement of Claim with respect to claims against a defendant who was not a party to the arbitration. The parties did not agree on whether these claims were new or not. The arbitration had not yet concluded and the proposed amendments appeared to raise issues that overlapped with those which were before the arbitrator. Justice MacDonald found that the extent of the overlap, if any, would be clearer after the arbitration was concluded. In addition, the plaintiffs had also brought an application for judicial review of a Partial Final Award issued by the arbitrator which had not yet been disposed of. Justice MacDonald found that it was not clear whether the plaintiffs would pursue the amendments if they were successful on the judicial review application.

January 27, 2022May 4, 2022

Québec – Arbitration 101: parallel proceedings, multiple arbitration clauses, competence-competence, arbitrability, separability, waiver – #577

In Specter Aviation v Laprade, 2021 QCCA 1811, the Court of Appeal faced circumstances in which both the court and an arbitral tribunal found that they had jurisdiction over the parties’ dispute. The applicant/appellant Specter and related corporation third-party/appellant United Mining Supply appealed the order of Justice Castonguay, who dismissed their request to stay the defendants’/respondents’ defence and counterclaim for lack of jurisdiction on the basis of an arbitration clause in one of the parties’ agreements. At about the same time, an arbitral tribunal ruled that it had jurisdiction over the parties’ dispute. Justice Sansfaçon, for the Court of Appeal, granted the appeal and stayed the counterclaim pending determination of the parties’ dispute by arbitration.

January 12, 2022May 4, 2022

Ontario – Fresh evidence test the same on set aside applications on fairness grounds and judicial review applications – #572

In Vento Motorcycles Inc. v United Mexican States, 2021 ONSC 7913, Justice Vermette set out the test for when fresh evidence may be adduced to support a set aside application on lack of fairness or natural justice grounds. The test is the same as that which applies on a judicial review; the record is restricted to what was before the decision-maker, except where there are natural justice or fairness issues raised that cannot be proven by reference to the existing record and that could not have been raised before the decision-maker.

January 4, 2022May 4, 2022

Lisa’s 2021 Top Pick: Ontario – Russian Federation v Luxtona Limited (Part 2) – #568

In Part 1 (case update #564), I reviewed the decision of Russian Federation v Luxtona Limited, 2018 ONSC 2419, 2019 ONSC 7558, and 2021 ONSC 4604 on the standard of review to be applied on an application to the court pursuant to Model Law Article 16(3) “to decide the matter” where the tribunal has decided jurisdiction “as a preliminary question” and what evidence is admissible on such an application. In this, Part 2, I discuss the interplay between Articles 16(3) and Art 34(2)(a)(iii). So far as I have been able to determine, this issue does not seem to have been categorically resolved anywhere under the Model Law.

December 16, 2021May 4, 2022

Lisa’s 2021 Top Pick: Ontario – Russian Federation v Luxtona Limited (Part 1) – #564

A review of the 2021 case law shows that the appropriate standard of review of an arbitral award remains uncertain. Russian Federation v Luxtona Limited is interesting because it did not involve an appeal of an arbitral award or a set-aside application, in respect of which there are many court decisions. It considered the standard of review by a court where a tribunal has ruled “as a preliminary question” that it has jurisdiction pursuant to Article 16(3) of the Model Law. It provides that following such a determination by the tribunal, any party may apply to the court to “decide the matter”, which decision shall not be subject to appeal. Comparable provisions also appear in domestic legislation. The question is the role of the reviewing court asked to “decide the matter”. Confusion exists as to whether such a hearing is a “review” or hearing de novo and whether that determination has any bearing upon the standard of review of the arbitral tribunal’s preliminary jurisdiction determination.