In Z v. M, 2020 BCSC 568, Mr. Justice Leonard S. Marchand declined to enforce in B.C. costs awards which issued from an arbitration conducted in Alberta under Arbitration Act, RSA 2000, c A-43. Instead, he directed the applicant to obtain first an order from the courts in Alberta recognizing and enforcing those awards and then apply to the B.C. courts under B.C.’s Court Order Enforcement Act, RSBC 1996, c 78. By express provision in their arbitration legislation, some other provinces do away with this two-step process and B.C. will do so also in its soon-to-be-in-force updated legislation.
Z and M married and lived in Alberta. After their separation, Z moved to B.C. On July 4, 2016 they entered into a Mediation/Arbitration agreement which, with the arbitrator’s assistance, lead to a July 28, 2016 agreement on several issues. The arbitrator issued two (2) interim awards, dated July 28, 2016 and December 30, 2016, as well as two (2) costs awards dated March 2, 2017 and May 8, 2017.
Further unresolved disputes were brought to the court by way of additional proceedings including those issues resolved by Marchand J. in his first decision, Z v. M, 2020 BCSC 417. Those issues included a number of which the parties themselves resolved during the course of the trial and handful of unresolved issues which remained for Marchand J. to determine. One unresolved issue was the enforceability in B.C. of the costs awards made by the arbitrator in Alberta. Z filed the costs award in the B.C. court proceedings.
Marchand J. recorded Z’s request to enforce costs awards made by the arbitrator but deferred it to a later date.
“[57] [Z] seeks to enforce costs awards made in her favour by the arbitrator in Alberta. She was unable to locate any authority on point. As an apparent case of first impression, it will take me some additional time to consider [Z]’s submissions. Rather than delay the parties’ ability to move forward with the most critical aspects of my decision, I am issuing a partial decision now. I will issue a further decision regarding the arbitration costs issue relatively soon”.
Regarding the costs of the judicial proceedings, Marchand J. offered his preliminary view that success was divided and each party ought to bear its own costs. He did invite the parties to make submissions to the contrary and provided them a deadline in which to do so.
In his second decision, Marchand J. issued reasons in which he addressed the arbitrator’s costs awards.
Marchand J. held that Z could not seek enforcement of the awards directly before the B.C. Instead, Z would have to obtain judgment on the awards in Alberta and then seek enforcement by way of would have to proceed by way of Court Order Enforcement Act, RSBC 1996, c 78.
At paras 5-12, Marchand J. summarized the terms of the parties’ agreement to arbitrate. The agreement was expressly entered into pursuant to section 5 of Alberta’s Arbitration Act, RSA 2000, c A-43. He noted that the agreement was “generally silent with respect to costs”.
“[9] Section 6.1 of the arbitration agreement gave the parties a choice of having the arbitration conducted in accordance with the law of Alberta (and the law of Canada as it applies in Alberta), or the law of another Canadian jurisdiction (and the law of Canada as it applies in that other jurisdiction). The parties did not indicate their selection of jurisdiction, but the course of proceedings and the arbitrator’s decisions make clear that the arbitration was conducted in accordance with the law of Alberta”.
In her argument to Marchand J. in the subsequent hearing, Z pointed to the terms of B.C.’s Arbitration Act, RSBC 1996, c 55, urging that the definition of “dispute’ stipulated that it “includes a family law dispute” whose own definition had “the same meaning” as in the Family Law Act, SBC 2011, c 25. She added that section 29 of the Arbitration Act does not require leave to enforce an arbitration award made in respect of a family law dispute and referred to Rule 2-1.2 of the Supreme Court Family Rules, BC Reg 169/2009.
Marchand J. readily acknowledged the B.C. courts’ willingness to hold M to the obligation to pay the sums ordered by the costs awards. “The only issue is how”.
He disagreed with the approach submitted by Z. He found the broad definition of “family law dispute” to be too broad.
“[21] … On Ms. [Z]’s interpretation, the BC FLA would apply to family disputes arising anywhere in the world relating to parenting issues, property division, child support, spousal support, children’s property and protection from family violence, including those arising in non-reciprocating jurisdictions.
[22] In my respectful view, such a broad interpretation presents a host of concerns, including that the courts in British Columbia could be used to enforce awards made in foreign jurisdictions which have regressive laws and/or do not abide by the rule of law”.
He held back from using the parties’ dispute over costs to define the “full scope” of a “family law dispute” under B.C. legislation. “It is sufficient for me to simply find that the parties’ dispute over those costs is a dispute respecting a matter related to the laws of Alberta, not British Columbia. As a result, Ms. Zonruiter may not rely on s. 29 of the BC Arbitration Act or Rule 10-5 to enforce the Alberta arbitration costs awards”.
Marchand J. relied on a comparison of the different language used in arbitration legislation in Canada.
“In particular, I note that the arbitration legislation in provinces such as Alberta and Ontario includes terms that expressly permit the enforcement of arbitration awards made “elsewhere in Canada”. Though not applicable to family law disputes, a similar provision will be included in new arbitration legislation in British Columbia [Arbitration Act, SBC 2020, c 2] that has received Royal Assent but has not been brought into force. If the legislative assembly wished to provide a similar avenue for the enforcement in British Columbia of family law arbitration awards made “elsewhere in Canada”, the legislation would surely expressly reflect that”.
Proceeding through B.C.’s arbitration legislation was therefore “unnecessary” Marchand J. observed, explaining that “there is already a fairly straightforward process in place” to enforce costs awards. He referred to the terms of the parties’ agreement to arbitrate which contemplated file consent orders with respect to any awards made by the arbitrator which included in his view the costs awards. “If [M] does not cooperate with respect to the filing of a consent order regarding the costs awards, the arbitration agreement and s. 49 of the Alberta Arbitration Act enable [Z] to apply to enforce the costs awards”.
Once that Alberta court order issues, Z could then apply to register and enforce that order in B.C. under B.C.’s Court Order Enforcement Act, RSBC 1996, c 78 given that Alberta qualified as a reciprocating jurisdiction under section 37 of that B.C. legislation.
urbitral note – First, the requirement to pursue enforcement by way of Alberta and the B.C. court orders will soon no longer form part of B.C.’s approach. Arbitration counsel should still examine if and when their domestic arbitration awards would be subject to similar two-step processes when moving execution of their awards from one province to another.
Second, in addition to jurisdictions mentioned by Marchand J., the relevant provisions in Québec’s Code of Civil Procedure, CQLR c C-25.01 simplify the recognition and enforcement of arbitration awards made outside of Québec. The terms of article 652 C.C.P. make no distinction on the nature of such awards, commercial or otherwise.
“Article 652 C.C.P. – An arbitration award made outside Québec, whether or not confirmed by a competent authority, may be recognized and declared to have the same force and effect as a judgment of the court if the subject matter of the dispute is one which could be submitted to arbitration in Québec and if recognition and enforcement of the award are not contrary to public order. The same applies for a provisional or safeguard measure.
The application for recognition and enforcement must be accompanied by the arbitration award or measure concerned and the arbitration agreement and by a translation certified in Québec of those documents if they are drawn up in a language other than French or English.
Consideration may be given, in interpreting the rules in this matter, to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on International Commercial Arbitration at New York on 10 June 1958”.
Third, section 50(1) of the Ontario Arbitration Act, 1991, SO 1991, c 17 provides for enforcement of an award made elsewhere in Canada.
“Section 50 (1) – A person who is entitled to enforcement of an award made in Ontario or elsewhere in Canada may make an application to the court to that effect”.