[:en]In Meszaros v. 464235 B.C. Ltd., 2018 BCSC 2033, Madam Justice Linda A. Loo dismissed a self-represented arbitral party’s attempt to set aside a final award based on arbitral error involving alleged failure to observe the rules of natural justice. The alleged arbitral errors were rather the results of decisions taken by the self-represented party to ignore the arbitrator’s directions and the party’s obligations under the Domestic Commercial Arbitration Rules of Procedure applicable to the arbitration administered by the British Columbia International Commercial Arbitration Centre. It is not the arbitrator’s function or duty to tell parties how to prove their cases or, after the close of the case and closing arguments, to inform a party that it had holes or weaknesses in its case.
The dispute stemmed from a contract of sale by 464235 B.C. Ltd. (“235”) to Petitioner of shares in Pioneer Engineering Consultants Ltd. (“Pioneer”), a corporation which provided certified and non-certified services for building codes and safety matters for clients primarily in the construction industry.
235 and Petitioner agreed in an August 31, 2015 Share Purchase Agreement (“SPA”) that the purchase price was an amount equal to the accounts receivable which they defined as “accounts receivable and other notes receivable owing to the Company as at the Closing Date or invoiced within thirty (30) days of the Closing Date”. The Closing Date was also August 31, 2015.
The initial version of Pioneer operated and controlled by or through 235 was referred to as “Old Pioneer”. The post-sale version operated and controlled by Petitioner was referred to as “New Pioneer”.
During the negotiations leading to the SPA, 235 was represented by a lawyer. Despite a recommendation from 235 that he do so, Petitioner chose not to have legal representation and did not seek independent legal advice. During the sale he was self-represented.
235 initiated arbitration on May 16, 2016. The arbitration was administered by the British Columbia International Commercial Arbitration Centre (“BCICAC”) and conducted under its Domestic Commercial Arbitration Rules of Procedure (“Rules”). Petitioner represented himself in the arbitration.
After amendments, at the date of the hearing, 235 as Claimant claimed at total of $251,684.88 comprised of four (4) separate amounts: (i) $119,114.88 for Accounts Receivable; (ii) a promissory note sum of $48,000.00; (iii) a deferred payment sum of $76,000.00; and, (iv) a CRA rebate of $8,570.00.
Petitioner as Respondent claimed $309,612.47 in fee deposits.
During the lead up to the hearing on the merits, and as prompts to two (2) postponements of the merits hearing ordered by the arbitrator as a result, Petitioner failed or refused to provide documents deemed relevant to the facts applicable to both 235’s and Petitioner’s claims. The give-and-take of the procedural timeline and solutions attempted appear at paras 27-37 of Loo J.’s reasons. The reasons set out opportunities given to accommodate Petitioner and allow him to meet requests endorsed by the arbitrator. Petitioner’s responses which were insufficient, tardy or both.
By a 34 page July 12, 2017 award, the arbitrator granted most of 235’s claims in the amount of $294,364.73, dismissed Petitioner’s counterclaim but awarded him $7,121.23, a sum nominal in relation to Petitioner’s full claim. Extracts of the arbitrator’s award, reproduced at paras 45-46, 52 and 71-73 demonstrate a thorough consideration of various issues of fact and law.
The sum of $294,364.73 awarded to 235 comprised the following:
a) $161,398.33 regarding accounts receivable provisions of the purchase price;
b) $48,000.00 for the promissory note claim;
c) $9,966.40 plus interest for CRA rebates; and,
d) $75,000.00 plus interest in respect of deferred payments.
The $7,121.23 awarded to Petitioner comprised the following:
e) $5,705.49 plus interest for the extension of insurance coverage;
f) $1,000.00 plus interest for time spent obtaining password information; and,
g) $415.74 plus interest in respect of a deposit made to 235, which belonged to New Pioneer.
Petitioner applied to the B.C. Supreme Court to set aside the arbitration award under section 30(1) of the Arbitration Act, RSBC 1996, c 55. Petitioner alleged that the arbitrator had committed an arbitral error within the meaning of section 1(d) by failing to follow the rules of natural justice and that the award should be set aside.
“30(1) If an award has been improperly procured or an arbitrator has committed an arbitral error, the court may
(a) set aside the award, or
(b) remit the award to the arbitrator for reconsideration.
(2) The court may refuse to set aside an award on the grounds of arbitral error if
(a) the error consists of a defect in form or a technical irregularity, and
(b) the refusal would not constitute a substantial wrong or miscarriage of justice.
(3) Except as provided in section 31, the court must not set aside or remit an award on the grounds of an error of fact or law on the face of the award.
(4) Nothing in this section restricts or prevents a court from changing, suspending or terminating all or part of an award, in respect of a family law dispute, for any reason for which an order could be changed, suspended or terminated under the Family Law Act.”
Loo J. noted that the test for obtaining leave is not easily met, pointing readers to the 2015 statement by the B.C. Court of Appeal in 0927613 B.C. Ltd. v. 0941187 B.C. Ltd., 2015 BCCA 457 which, at para. 7 itself simply asserted as much and referred its readers onto Sattva Capital Corp. v. Creston Moly Corp.,  2 SCR 633, 2014 SCC 53. See paras 38-40 of Sattva Capital Corp. v. Creston Moly Corp.
Petitioner raised five (5) principal arbitral errors which he alleged the arbitrator committed. In her reasons, Loo J. summarized first Petitioner’s submissions and then 235’s reply, grouping them under the five errors as stated by Petitioner. In providing her summaries, Loo J. included a variety of authorities useful to supporting similar arguments for and against the alleged errors, provided the facts justify making them. The alleged errors fall broadly into two (2) categories: an arbitrator’s handling of the parties’ evidence and how the arbitrator might articulate his or her handling of the evidence in the award; and, the arbitrator’s role when a party is self-represented.
Later in her reasons, Loo J. set the table with a more fulsome look into the reasoning in B.C. Court of Appeal in 0927613 B.C. Ltd. v. 0941187 B.C. Ltd., which spoke to the application of the rules of natural justice to self-represented arbitral parties.
Loo J. excerpted paras 59-60 and 64-65 from 0927613 B.C. Ltd. v. 0941187 B.C. Ltd. which confirmed that no special rules of procedure applied for self-represented parties in an arbitration other than procedural fairness and a reasonable opportunity to be heard.
“ There are no special rules of procedure for a self-represented party in an arbitration proceeding beyond the basic procedural requirements for any arbitration: an impartial arbitrator, procedural fairness of notice, and a fair or reasonable opportunity to make submissions and to respond to the other side’s case. As this Court noted in Burnaby (City) v. Oh, 2011 BCCA 222 (CanLII) at para. 36, self-represented litigants do not have “some kind of special status” that allows them to ignore rules of procedure. In Murphy v. Wynne, 2012 BCCA 113 (CanLII) at para. 16, Madam Justice Neilson, relying on comments of Mr. Justice Chiasson in Stark v. Vancouver School District No. 39, 2012 BCCA 41 (CanLII), 2012 BCCA 41 (in Chambers) and Shebib v. Victoria (City), 2012 BCCA 42 (CanLII), 2012 BCCA 42 (in Chambers), observed that “[w]hile it is important unrepresented litigants have a full opportunity to avail themselves of our court processes, all litigants must keep within the bounds of those processes.” These comments in my view apply equally to an arbitration forum that has been chosen by the parties for the resolution of their dispute.
 In the context of a court proceeding, the Canadian Judicial Council in its Statement of Principles on Self-Represented Litigants and Accused Persons, (Ottawa: Canadian Judicial Council, 2006) mandates fairness so as to ensure “equality according to law” in the sense of giving every litigant a fair opportunity to present their case. It also, however, imposes an obligation on self-represented parties to be respectful and familiarize themselves with the relevant practices and procedures of the court process. These principles, in my view, apply equally to the arbitration process. While some latitude is to be given to self-represented parties who may not understand or be unfamiliar with the arbitration process, an arbitrator, like a judge, is not required to ensure that a self-represented party participate in a proceeding if that party chooses not to do so. In short, an arbitrator does not have any special obligations to a self-represented party beyond the natural justice requirements owed to any party. The overarching test is fairness.”
Following her reference to those passages from 0927613 B.C. Ltd. v. 0941187 B.C. Ltd., Loo J. at para. 84 then identified and reproduced extensive excerpts of BCICAC’s Rules under which the arbitration was conducted: 18 “Pre-hearing meeting”; 19 “Conduct of the Arbitration”; 21 “Exchange of Statements”; 23 “Production of Documents”; 26 “Hearings and Evidence”; 33 “Legal Principles Apply”; and, 34 “Closure of Hearings and Termination of the Proceedings”.
She held that there was no suggestion Petitioner was unaware of his obligations under the Rules or the arbitrator’s directions, including that Petitioner was required to prove the facts on which he relied and produce documents relevant to his claims.
The parties’ submissions and Loo J.’s analysis and rulings can be grouped as follows:
1. reversal of the burden of proof – Loo J. summarized the parties’ respective submissions at paras 50-59 and addressed them at paras 87-91
Loo J. held that Petitioner’s argument had more to do with a challenge to the arbitrator’s interpretation of the SPA and findings of fact which were not reviewable. That interpretation and the findings did not amount to a failure to observe the rules of natural justice.
2. application of different standards of proof to each party – Loo J. summarized the parties’ respective submissions at paras 60-61 and addressed them at para. 92
Loo J. determined that Petitioner’s complaint went to the weight the arbitrator gave to the evidence and did not give rise to a breach of natural justice.
3. refusal to admit evidence – Loo J. summarized the parties’ respective submissions at paras 62-69 and addressed them at paras 93-94
Loo J. held that Petitioner’s document production was not timely despite the Rules.
“ Mr. Meszaros cannot lie in the weeds and withhold all of his documents in the hopes that he might gain some tactical advantage by not disclosing them. Instead, Mr. Meszaros chose to ignore the disclosure rules and he cannot complain that the arbitrator breached the rules of natural justice in not allowing him to produce his timesheets when it was too late; it would have been unfair and prejudicial to 235.”
4. incorrect and unfair application of an adverse inference – Loo J. summarized the parties’ respective submissions at paras 70-78 and addressed them at paras 95-98
“ There are no special procedural rules for a self-represented litigant in an arbitration. I am unable to conclude that the arbitrator breached the rules of natural justice by not informing Mr. Meszaros that he was considering drawing an adverse inference against him for not calling Helen Low. It was not his function or duty to tell the parties how to prove their cases.”
5. failure to clarify Petitioner’s evidence – Loo J. summarized the parties’ respective submissions at paras 79-81 and addressed them at paras 99-100
“ It was for Mr. Meszaros to prove his case, and not for the arbitrator, after the close of the case and closing arguments to inform a party that he or she had holes or weaknesses in his or her case, and to provide that party with an opportunity to “fix up” their case. It requires “exceptional circumstances” for an arbitrator to re-open a hearing, and there are no exceptional circumstances here.
 I cannot find that the arbitrator’s failure to ask Mr. Meszaros to further clarify his evidence is a breach of the rules of natural justice.”
Loo J. refused Petitioner’s characterization of his challenge as a failure by the arbitrator to observe the rules of natural justice. She described Petitioner’s submissions as “complicating what the real issue is in this case”. The real issue, she wrote, involved construing the terms of the parties’ contract and leave is rarely granted on questions of contractual interpretations especially where the interpretation is of importance only to the parties.
Loo J. dismissed Petitioner’s application.[:]