Despite ambiguity in the award’s use of a “short-form reference” to refer to the winning party, B.C.’s Court of Appeal in Macdonald Realty Ltd. v. Metro Edge Holdings Ltd., 2020 BCCA 272 declined to refer the parties back to the arbitration panel to clarify the name as doing so would be an “unnecessary expense to the parties and would not change the result”. The Court held that, despite the variation in the legal name, the award and decision in first instance validly identified the winning party. The Court also readily dismissed post-award challenges, in first instance and on appeal, limited to contesting the facts in dispute. The court reminded challengers that such an approach is misdirected given that an application to recognize and enforce an award is not a hearing on merits of the arbitrated dispute.
Macdonald Realty Ltd. (“Macdonald Realty”) and Metro Edge Holdings Ltd. (“Metro Edge”) are both members of real estate boards which are themselves members of the British Columbia Real Estate Association (“Association”). Macdonald Realty and Metro Edge disputed payment of a real estate commission related to a particular transaction. Further to the Association’s arbitration rules for commission disputes between members, Macdonald Realty and Metro Edge undertook inter-board arbitration before a three (3) member panel. Following the hearing, the panel issued an award requiring “Metro Edge Realty” to pay Macdonald Realty $19,592.35 (“Award”).
Despite time and opportunity to pay, Metro Edge did not and Macdonald Realty applied to enforce the award under section of the former Arbitration Act, RSBC 1996, c 55 (“Former Arbitration Act”). For the new legislation in effect as of September 1, 2020, see Arbitration Act, SBC 2020, c 2 and section 61 for its recognition and enforcement provisions for arbitral awards made in arbitrations with a place of arbitration in Canada.
Macdonald Realty applied to enforce the award as judgment of the court, under the Former Arbitration Act. Metro Edge brought no application for leave to appeal the Award or to set it aside. In brief oral reasons, Madam Justice Nitya Iyer granted the application on October 11, 2019. The reasons are not yet posted online.
Iyer J. relied on MSI Methylation Sciences, Inc. v. Quark Ventures Inc., 2019 BCSC 440, affirmed on appeal 2019 BCCA 448 and declared that she was satisfied on the evidence that the Award “has been perfected”.
“There are no outstanding issues between the parties that the arbitrator or arbitration panel has indicated that they will be addressing in the future. Proper processes were followed in obtaining the award, and the time for appeal has run.”
Addressing the legislative basis for the application before her, Iyer J. reminded that section 29 is “not a hearing on the merits of the arbitrated dispute, and in significant part Mr. [J]’s submissions related to the merits, which are not before me”.
Iyer J. recognized that the representative for Metro Edge had other related proceedings which “concern the same facts, the same transaction as the arbitral award” but spoke to the representative about the binding nature of the Association’s rules and the now past opportunity to prevail itself of valid challenges to the Award under the Former Arbitration Act. Iyer J. observed that:
“the Rules provide for resolution of commission disputes by arbitration. That is what happened. You told me you did not appeal that decision, so it is not open to you now to try and tell me that there was something wrong with the decision. You had that opportunity and it passed”.
On appeal, the Court excerpted paras 85-86 of the decision in first instance in MSI Methylation Sciences, Inc. v. Quark Ventures Inc.:
“[85] The fact that leave is required makes it clear that an award is not entitled to automatic status as a judgment of the court. Rather, the court must exercise its supervisory power in determining whether it is appropriate to permit an award to be enforced as a judgment of the court. See Bekar v. TD Evergreen, 2006 BCCA 266, at paras. 37-38. The application for leave may be adjourned, or leave may be refused, if: the award is not “perfected,” such as where there are outstanding issues between the parties that the arbitrator had indicated he or she will or must address; if proper processes were not followed in obtaining the award; or where the award is still subject to appeal. See Bekar, at para. 38; and The Owners, Strata Plan BCS 3165 v. KBK No. 11 Ventures Ltd., 2014 BCSC 2276, at para. 96
[86] An application under s. 29 is not a hearing of the merits of the arbitrated dispute. See: J. Brian Casey, Arbitration Law of Canada: Practice and Procedure, 3rd ed. (New York: JurisNet, 2017), at p. 534”.
The Court quickly identified Metro Edge’s mistaken approach to the appeal before it and in first instance.
“[11] It is clear that the thrust of Metro Edge’s appeal is that it ought not to have lost the arbitration on the facts of the dispute. The factum does not identify any errors of law and does not allege there was any error in any determination made by the chambers judge.
[12] The opening statement in Metro Edge’s factum is that it does not owe any money to Macdonald Realty. The factum goes on to rely on Metro Edge’s version of the facts surrounding the underlying commission dispute from the sale of real property”.
A further review of Metro Edge’s factum confirmed that Metro Edge did not challenge the arbitration panel’s jurisdiction, the status of Macdonald Realty or the arbitration process. To the extent it had to emphasise the nature of the post-Award procedures in court, the Court reiterated the nature of the post-Award application before the court in first instance and on appeal. To reiterate the limited scope of the post-Award challenges available to Metro Edge, the Court included the following remarks:
At para. 16: “What Metro Edge fails to appreciate is that its approach of contesting the facts surrounding the commission dispute is not the correct approach on appeal and was not the correct approach before the chambers judge”.
At para. 17: “The application below was not a review or appeal of the arbitration result, so the judge cannot be criticized for not accepting the arguments of Metro Edge that were framed as an appeal of the findings of fact of the arbitration panel”.
The Court did record other facts raised by Metro Edge and its arguments regarding the other dispute resolution options Macdonald Realty could or should have undertaken as well as Metro Edge’s own options. Having done so, the Court dismissed their role as irrelevant to the issues before it.
A useful practice point, applicable in other arbitrations, involved the identity of the entities to the Award and the post-Award proceedings in court. See para. 4 and paras 20-26. Iyer J.’s decision approved a court judgment in favour “Macdonald Realty Ltd.” against “Metro Edge Holdings Ltd.”
At para. 21, the Court spoke to the evidentiary link, absent in the record in first instance, regarding the relationship between “Macdonald Realty”, the entity named in the Award, and “Macdonald Realty Ltd.”, the entity which sought to enforce the Award. (At para. 4, the Court also noted that “Metro Edge Realty” is a registered sole proprietorship, owned by Metro Edge. In its reasons, the Court referred to Metro Edge Realty as “Metro Edge”. The variances in Metro Edge’s name did not appear to be an issue.)
On appeal, Macdonald Realty applied to file certain documents, which served to initiate the arbitration, as fresh evidence about the entities involved in the arbitration. The Court referred to the criteria in Palmer v. The Queen, 1979 CanLII 8 (SCC), [1980] 1 S.C.R. 759 relied on by Macdonald Realty, as well as Petrelli v. Lindell Beach Holiday Resort Ltd., 2011 BCCA 367 paras 49-61.
The Court accepted the additional evidence filed by Macdonald Realty to identify the entities involved in the arbitration. It treated Macdonald Realty’s filing of those documents “much like putting pleadings before the Court”. Filing the documents created no controversy and simply clarified the procedural history.
As a next step, the Court had to decide whether to exercise its discretion and refer the parties back to the arbitration panel to have the arbitration panel clarify Macdonald Realty’s identity.
“[25] While an available option is to send the matter back to arbitration to clarify the name of the winning party, I am of the view this would be an unnecessary expense to the parties and would not change the result. I am satisfied that the fact that the arbitration award referred to Macdonald Realty was simply a short‑form reference meant to be Macdonald Realty Ltd. It was clear on the documents initiating the arbitration and clear to Metro Edge that Macdonald Realty Ltd. was the party that initiated the arbitration and was the winning party. There is no ambiguity in this regard.”
The Court identified no basis to challenge the decision in first instance approving a judgment in the name of Macdonald Realty Ltd.
urbitral notes – First, the Court referred to Bekar v. TD Evergreen, 2006 BCCA 266 and cited paras 37-38 which, with para. 36, merit reproducing here for ease of reference:
“[36] TMR argued that an application for registration, recognition or enforcement of a foreign judgment did not result in any substantive rights being granted and was merely a post-judgment proceeding which, in its submission, fell within the jurisdiction of a prothonotary. The Court disagreed, stating that the effect of the order was to give the foreign judgment creditor the same rights as if the judgment had been obtained in Canada, thus making the order more akin to a judgment, than to a post-judgment proceeding.
[37] In my view, a similar analysis applies in this case. Although the Award in favour of Evergreen was made by a domestic, rather than a foreign, tribunal, it is analogous to the foreign judgment in TMR in the sense that it did not have the imprimatur of the domestic court unless and until it was properly filed pursuant to s. 29 of the CAA [Arbitration Act, RSBC 1996, c 55, Former Arbitration Act]. In that regard, the submission of counsel for Evergreen that the registration of an award under s. 29 of the CAA amounts to little more than “rubber-stamping” by the court cannot be sustained. The fact that leave is required makes it clear that an award is not entitled to automatic status as a judgment of the court.
[38] In my view, the purpose of the requirement for leave under s. 29 is to permit the court to exercise its supervisory power in determining whether it is appropriate to permit an award to be enforced as a judgment of the court. The authorities to which I earlier referred indicate that leave may be refused, for example, where the award is still subject to appeal (as was the case here), where all matters of importance under the arbitration have not been resolved, or where proper processes were not followed in obtaining the award”.
Second, the Court also referred to Hassall v. Children’s Women’s Health Centre of British Columbia, 2001 BCSC 1399 and The Owners, Strata Plan BCS 3165 v. KBK No. 11 Ventures Ltd., 2014 BCSC 2276 as precedents for requiring that an award be “clear and unambiguous”. The decisions, at paras 1 and 96 respectively, further held that an application for recognition and enforcement may be premature when outstanding issues remain between the parties which the arbitrator has indicated remain to be addressed.