Lisa C. Munro

November 4, 2021May 4, 2022

B.C. – Parties’ “expeditious” settlement process led to 2 arbitrations and multiple court proceedings over 7 years – #549

In Grewal v Mann, 2021 BCSC 1995, Justice MacNaughton denied the defendants’ motion to stay the plaintiff’s appeal of an arbitral award to the B.C Supreme Court, pending determination of their appeal of that Court’s leave decision to the Court of Appeal. She found that there was no prejudice to the defendants and that the lengthy history of the parties’ dispute and their acrimony made it likely that the decision on the appeal of the award (which was to be heard by the B. C. Supreme Court under s. 31 of the former B.C. Arbitration Act, RSBC 1996, c. 55) would be appealed to the Court of Appeal and that both appeals could be heard together. She found that, “it would be more efficient to allow matters to proceed to conclusion in the BC Supreme Court and then, for the parties to decide what appeals they wish to take to the Court of Appeal”. By this point, the parties were seven years away from their 2014 agreement to sever their business relationship “expeditiously”. They agreed to a three-stage mediation and arbitration process that led to a mediated settlement agreement (the terms of which were not memorialized and became contentious), two arbitrations (one which required no written reasons and one which resulted in one page of reasons), one stay of proceedings, and two appeals (so far).

October 28, 2021May 4, 2022

NL – Pre-judgment attachment order granted re possible damages payable from arbitration -#548

In Sandford v Astaldi, 2021 NLSC 130, the plaintiffs sought a pre-judgment attachment order pursuant to s. 27 of the Newfoundland and Labrador Judgment Enforcement Act on the exigible property of defendant Astaldi Canada Inc. They also asked that defendants Muskrat Falls Corporation (“MFC”) and Nalcor Energy be prohibited from dealing with Astaldi property they hold in a manner that would be likely to hinder the plaintiffs in the enforcement of any judgment they may obtain against Astaldi in their litigation. The exigible property at issue was: (a) monetary damages which Astaldi hoped to receive as a result of a private commercial arbitration against MFC and Nalcor; and (b) proceeds held by MFC and Nalcor from the sale of equipment owned by Astaldi. The issue on the application was whether there were reasonable grounds to believe that Astaldi “is dealing” or “is likely to deal” with its exigible property otherwise than for the purpose of meeting its reasonable and ordinary business expenses; and, if so, whether the manner of it so dealing would likely seriously hinder the plaintiffs in enforcement of a judgment. Justice Thompson granted the pre-judgment attachment order on the ground that Astaldi was no longer conducting business at all in the province, which meant that it was not dealing with its exigible property at all, nor meeting its expenses.

October 22, 2021May 4, 2022

Alberta – Award was “abbreviated” to save time and costs – #544

In Alvarez v Alvarez, 2021 ABQB 717, Justice Malik denied leave to appeal an arbitrator’s award on a question of law pursuant to section 44(2) of the Arbitration Act, RSA 2000, c. A-43. He found that no question of law was raised. However, the case raises issues concerning s. 44(1) of the Act, which allows a party to ask the tribunal to “correct typographical errors, errors of calculation and similar errors in the award” and s. 40, which permits a party to ask the tribunal to “explain any matter” in the award. The arbitrator issued an Award, and later at the request of the applicant, a Corrected Award, which included a “nominal correction”. It also addressed the applicant’s requests for correction, but made no changes to the Award. Before Justice Malik, the applicant argued (unsuccessfully) that the Award and Corrected Award contained errors of law. Justice Malik noted that the, “[a]rbitrator acknowledged that the Award was abbreviated to save time and costs, that just because he had not set out every fact or argument did not mean he had not considered them, and that a party could request additional reasons should they wish to pay the additional cost.” The applicant argued on the application for leave to appeal that the arbitrator had not explained his Award sufficiently. The decision does not indicate whether the parties requested an abbreviated award to save time and costs. The Award was issued 8 months after the close of hearings.

October 15, 2021May 4, 2022

Ontario – Challenge to arbitrator’s integrity to be determined using bias test – #543

In Farmer v Farmer, 2021 ONSC 5913, the appellant wife appealed three arbitral awards arising out of a five-day family arbitration pursuant to s. 45(6)(a) of the Ontario Arbitration Act, 1991, SO 1991, c. 17. The wife’s grounds for appeal included that the arbitrator’s reasons were deficient and that the arbitrator’s “Clarification/Explanation Award” rendered after the parties complained that he had omitted certain issues in his first award, was an “after-the-fact” justification for the first award. The arbitrator admitted that he had had difficulty with his dictaphone when he had drafted the first award so that certain portions of it were inadvertently omitted, but said in the “Clarification/Explanation Award” that all issues had been considered. Justice Finlayson found that the “presumption of integrity” which applies to judges also applies to arbitrators and that the wife had to meet a test “similar to” the “reasonable apprehension of bias test” to rebut that presumption. She did not do so and this ground of appeal was dismissed. Justice Finlayson also concluded that the arbitrator’s reasons were insufficient, and substituted his own decision on one issue.

October 7, 2021May 4, 2022

Ontario – Award enforcement application met with merits arguments in leave to appeal/set aside cross-application #539

In Fogler, Rubinoff LLP v Houle, 2021 ONSC 5626, Justice Vermette heard two applications following an arbitration concerning the assessment of two accounts rendered by applicant, Fogler, Rubinoff LLP, to its clients, respondents Conrad and Sheila Houle. The arbitrator issued an award requiring the respondents to pay. After they did not do so, Foglers brought an enforcement application pursuant to s. 50 of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17. Upon such application, the court “shall” grant judgment so long as the requirements of s. 50(3) are not met – the appeal/set aside deadline has not yet elapsed, there is a pending appeal/set aside application, or the award has been set aside or the arbitration is the subject of an award of a declaration of invalidity. In other words, the merits of the award are not relevant. The respondents did not initially appeal the award, but then brought a cross-application – challenging both jurisdiction and the merits – seeking to set aside the award pursuant to s. 46(1)3 of the Arbitration Act or, in the alternative, leave to appeal the award under s. 45(1). Justice Vermette found that the set aside application was really a request to review the substance of the award on the basis that the arbitrator’s decision was unreasonable or incorrect. She also dismissed the motion for leave to appeal on the ground that it did not raise a question of law. Whether the facts met the required legal test was a matter of mixed fact and law. Therefore, given the dismissal of the respondent’s cross-application, she granted the Foglers enforcement application.

September 30, 2021May 4, 2022

Ontario – Stay motion denied: case was a proper one for summary judgment, but summary judgment not sought – #538

In Jencel 407 Yonge Street Inc. v. Bright Immigration Inc., 2021 ONSC 6030, Justice Akbarali dismissed the Defendant’s motion to stay the action in favour of arbitration. The Plaintiff argued that the stay motion should be dismissed because the action was a proper one for summary judgment, relying upon s. 7(2)5 of the Arbitration Act, 1991, S.O. 1991, c. 17. Justice Akbarali agreed. The key facts were uncontested and the Defendant’s position in the action, which consisted mostly of “bald assertions and unarticulated legal and factual arguments”, did not give rise to any genuine issue requiring a trial. However, the Plaintiff did not move for summary judgment.

September 29, 2021May 4, 2022

Ontario – Participating party in arbitration not granted leave to intervene in appeal/set aside application – #537

In Baffinland Iron Mines v Tower-EBC, 2021 ONSC 5639, the parties were engaged in a dispute about a project to build a railway to transport ore in Nunavut. They entered into two contracts which contained an arbitration clause. After delays in the project, one party terminated the contracts; the other claimed breach of contract and commenced an arbitration for its own losses and the losses of its sub-contractor, which participated in the hearing and had counsel present. However, that participation expressly did not constitute an agreement that the sub-contractor was a party to the arbitration. The tribunal issued a Final Partial Award finding that the contract had been wrongfully terminated, however, the tribunal was split on whether the innocent party was also entitled to recover the damages of the sub-contractor. The innocent party brought an application to set aside the award pursuant to s. 46 of the Arbitration Act, 1991, S.O. 1991, c. 17, and for leave to appeal the award under s. 45(1) of the Act. The sub-contractor sought leave to intervene in the application on the ground that it had an interest in the subject matter of the proceeding and would be adversely affected by the judgment. Justice Pattillo dismissed the motion, in part, because “courts are reluctant to permit third parties to intervene in purely private and commercial litigation” and that this is “more so where private arbitration is involved.”

September 24, 2021May 4, 2022

B.C. – Stay motion: pleadings sufficient for “arguable case” that arbitration clause applies, despite contrary evidence – #534

In Beck v Vanbex Group Inc., 2021 BCSC 1619, Justice Fleming granted a partial stay of a proposed class action under s. 7 of the Arbitration Act, S.B.C. 2020, c. 2. The issue before her was whether the Defendants had any evidentiary burden to meet to establish an “arguable case” that they were both proper parties to the arbitration agreement, thereby warranting a stay. The Plaintiffs argued that although one of the Defendants was not a signatory to the business agreement upon which they were suing and which contained the arbitration clause, both corporate Defendants were essentially alter egos of one another and both were liable to them. However, they argued that the Defendants’ stay application must be dismissed in the face of the Defendants’ evidence that the two corporate Defendants were entirely separate and one of them was not a proper party to the arbitration agreement. The Defendants agreed that, in the arbitration or at trial, their position would be that one of the Defendants was not a party to the arbitration agreement; however, they were entitled to a stay because: (1) if the Plaintiffs were correct, the action should be stayed; and (2) if the Plaintiffs were not correct, the Plaintiffs had no claim against the non-party Defendant anyway and the action would be dismissed. Justice Fleming agreed that the issues pleaded by the Plaintiffs demonstrated that it was arguable that both corporate Defendants were proper parties, notwithstanding the evidence adduced by the Defendants to the contrary.

September 16, 2021May 4, 2022

B.C. – Leave to appeal on question of law; arbitrator’s error must be “material to result” and appeal must have “arguable merit” – #533

In Escape 101 Ventures Inc. v March of Dimes Canada, 2021 BCCA 313 Justice DeWitt-Van Oosten granted, in part, the Plaintiff’s application for leave to appeal the arbitrator’s award dismissing the Plaintiff’s claims brought pursuant to an asset purchase agreement. The Plaintiff argued that the arbitrator committed errors of law in interpreting the terms of the agreement. Justice DeWitt-Van Oosten found that the arbitrator had misapprehended the evidence, which underlay his conclusions and “laid the foundation for an extricable error of law”. Further, even where an applicant demonstrates that there is an extricable question of law, a court should consider the reasons of the arbitrator as a whole in assessing that error and deny leave unless satisfied that the error was material to the result and the appeal has arguable merit. Justice DeWitt-Van Oosten was satisfied that both these criteria were met. Further, the amount of money at issue met the requirement for leave to appeal in s. 59(4) of the B.C. Arbitration Act, S.B.C. 2020, c. 2, that, “the importance of the result of the arbitration to the parties justifies the intervention of the court”.

September 10, 2021May 4, 2022

B.C. – Statutory arbitrator’s award set aside on basis that it was “arbitrary and irrational” – #529

In Shahcheraghi v Divangahi, 2021 BCSC 1576, Justice Horsman set aside the award of an arbitrator of the Residential Tenancy Branch (“RTB”) and remitted the matter back to the RTB for a new hearing, either by the same arbitrator or someone else assigned by the RTB. She found that the arbitrator’s reasons were inadequate for the parties to understand the rationale for the decision:

“[53]… I wish to be clear that my concern with the Arbitrator’s decision is the reasoning process, which in my view is insufficient to serve the basic function of reasons in allowing the parties to understand why the decision was reached…The point is that [certain] issues are unexplored in the Arbitrator’s decision. It is not the role of the reviewing court to re-write the Arbitrator’s reasons so as to arrive at a new rationale that might support the outcome.”