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).
On May 27, 2014, the parties, whose business relationship had broken down, entered into a detailed agreement to separate their business interests and financial affairs though a three-stage mediation and arbitration process.
In the first stage, the parties were required to refer certain issues (not articulated in the decision) for resolution to arbitration. In accordance with the parties’ wish to resolve things expeditiously, the arbitrator was required to provide his award within 48 hours; no written reasons were required. That award was released on May 30, 2014.
In the second and third stages, the parties agreed to conduct a mediation before a different person and, if that was unsuccessful, the mediator would arbitrate the dispute. The parties held a three-day mediation and, on the third day, October 30, 2015, entered into a settlement agreement to separate their business interests. However, the terms of the settlement agreement were never recorded in writing and the parties never prepared or signed minutes of settlement. The settlement agreement was recorded in an exchange of emails between counsel, and provided that the parties “will endeavour to prepare a more detailed settlement agreement to memorialize this agreement but that will not detract from or affect the agreement herein”, which was said to be a “binding agreement”. The emails also provided that the mediator/arbitrator was to resolve any disputes relating to the settlement. No other settlement agreement was prepared.
The parties disagreed on the terms of settlement, specifically, whether the defendants were to transfer their interests in a certain property to the plaintiff. The settlement agreement required the mediator/arbitrator to appoint an independent valuator to value the parties’ interests in the property within 30 days of the settlement agreement. However, the valuator was not appointed until March, 2016, well outside the 30-day period. Thereafter, the property was sold.
On July 5, 2018, the defendants challenged the appraisal on the basis that it was too late and that it did not comply with professional standards in the industry. The plaintiff accepted the appraisal and argued that the mediator/arbitrator had no jurisdiction to decide the allocation of the proceeds of sale. He therefore sought a court order seeking payment of the proceeds due to him based upon the valuation. The court stayed the proceedings to allow the mediator/arbitrator to determine if he had jurisdiction. An appeal of this decision was filed, but did not proceed. On July 16, 2019, the mediator/arbitrator determined that he had jurisdiction.
The mediator/arbitrator held a one-day hearing on December 2, 2019, on the issue of the allocation of the proceeds of sale of the property. He released his award on May 15, 2020.
The plaintiff sought leave to appeal the May 15, 2020, award on a question of law pursuant to s. 31 of the (now repealed) B.C. Arbitration Act, RSBC 1996, c. 55. On January 18, 2021, Justice Edelman of the B.C. Supreme Court granted leave to appeal. He found that the mediator/arbitrator “effectively created a new agreement for the parties and failed to apply the correct legal test to [the defendants’] challenge to the Appraisal”. On June 25, 2021, the appeal was scheduled to be heard on October 22, 2021.
The defendants appealed the leave decision to the B.C. Court of Appeal and a hearing date was scheduled for November 29, 2021.
On September 10, 2021, the defendants filed this application to stay the October 22 appeal of the award on the ground that the appeal of the leave decision should be heard first. They argued that if the Court of Appeal were to overturn the leave decision, the appeal of the arbitration award would be moot.
The plaintiff took the position that the appeal of the arbitration award should be heard first.
Justice MacNaughton denied the stay of appeal. She found that the appeal was not frivolous or vexatious; Justice Edelman had granted leave to appeal the award on the basis that he thought there were errors in it. Moreover, any additional cost associated with allowing the appeal of the award to proceed before the appeal of the leave decision would not be excessive. The parties had already filed all material in support of the appeal of the award, which was scheduled for one day. She was also critical of the defendants for waiting months to raise this issue. Further, she predicted another appeal:
“[54] In this case, I think it is entirely likely that, given the acrimonious history of the parties’ dispute, and the conduct of this litigation to date, the party that loses on the appeal of the Arbitration Award will appeal to the Court of Appeal. The appeals can then proceed at the same time.
[55] In my view, 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.”
Editor’s Notes:
First, for an earlier Case Note on Justice Edelman’s decision on the application for leave to appeal at 2021 BCSC 220, see Case Note #435: B.C. – expert determination not conducted in accordance with dispute resolution process may be error in law.
Update (Feb 11, 2022) – The appeal was dismissed at 2022 BCCA 30.
Second, although the parties wanted an expedited ADR process, it took over four years and two arbitrations and did not resolve their dispute. The parties have since then been embroiled in a further three years of litigation (so far). Despite the apparent complexity of the parties’ business relationship and the significant amounts at issue, the parties reached a settlement which contemplated a formal agreement which was never prepared and whose terms were later disputed. They also agreed to a process in which they received a first award without reasons, and a second 15-paragraph award which apparently included one page of analysis and conclusions:
“[53] Further, the appeal of the Arbitration Award is … with respect to a single issue, which [the mediator/arbitrator] decided in his Arbitration Award consisting of about six pages. The first four-and-a-half pages of the Arbitration Award set out the history of the parties’ relationship, leading up to the Settlement Agreement. Half a page sets out the parties’ positions, and the final page sets out [the meditator/arbitrator’s] analysis and conclusion.“