On application by a successful arbitral party, Mr. Justice Brian O’Ferrall in Pacer Holdings Construction Corporation v. Richard Pelletier Holdings Inc, 2020 ABCA 47 lifted a stay imposed by the appeal filed by the losing arbitral party against the order putting it in bankruptcy. The successful arbitral party challenged certain transactions by the losing arbitral party which “stripped” the latter of all its assets. O’Ferrall J.A. was “not yet convinced” to interpret the Bankruptcy and Insolvency Act, RSC 1985, c B-3 to mean that a “dormant shell” corporation was not a “debtor” or “insolvent person”. Lifting the stay enabled the trustee to exercise powers ordinary creditors do not have, including collection of information relevant to ordering transferees of property of the bankrupt arbitral party to pay to the difference between the value of the consideration the bankrupt gave and the value transferees received.
Continue reading “Alberta – stay of BIA order lifted, enabling trustee to investigate transactions preventing execution of award – #324”Ontario – applicant seeking court appointment of arbitrator ordered to pay security for costs – #323
In Rayman Tiger Inc. v. Unger Tiger Inc., 2020 ONSC 691, Master Michael P. McGraw ordered that an arbitral party, applying for the appointment of an arbitrator, file security for costs related to its application. Having insufficient assets in Ontario or any reciprocating jurisdiction, the party had to post security in order to engage the court’s assistance for its arbitration. In ordering $15,000.00 rather than the $37,714.01 sought by respondents, Master McGraw distinguished the complexity of issues and facts of the eventual arbitration from those raised by the narrower application to appoint an arbitrator.
Continue reading “Ontario – applicant seeking court appointment of arbitrator ordered to pay security for costs – #323”Manitoba – court relies on arbitral award to qualify award amount as debt surviving bankrupt’s discharge – #322
Relying on findings made in an arbitral award, Madam Justice Colleen Suche in Bannerman Lumber Ltd. et al. v. Goodman, 2020 MBQB 76 declared that a bankrupt’s debt disputed in arbitration survived his discharge because the debt resulted from “obtaining property or services by false pretences or fraudulent misrepresentation”. Though the arbitration proceeded without pleadings and the issue of fraud was not advanced in the arbitration, the arbitrator’s findings permitted Suche J. to determine that the bankrupt “lacked an honest belief in the truth of his statements” which were reckless and qualified as false pretences under section 178(1)(e) of the Bankruptcy and Insolvency Act, RSC 1985, c B-3.
Continue reading “Manitoba – court relies on arbitral award to qualify award amount as debt surviving bankrupt’s discharge – #322”Nova Scotia – umpire owes duty of procedural fairness, breaches it when deviating from own procedure – #321
In New Dawn Enterprises Limited v. Northbridge General Insurance Corporation, 2020 NSSC 150, Mr. Justice Joshua M. Arnold agreed that an umpire’s failure (i) to share information obtained and relied on or (ii) to give a party the opportunity to respond breached the principle of audi alteram partem. Acknowledging that an umpire does not conduct an arbitration or provide an adjudicative process, Arnold J. determined that the umpire’s exercise of discretion in choosing his own procedure had created legitimate expectations and that, by deviating from that procedure, breached the duty of fairness.
Continue reading “Nova Scotia – umpire owes duty of procedural fairness, breaches it when deviating from own procedure – #321”Ontario – adequate reasons serve to justify/explain result so losing party knows why it lost – #320
In Wawanesa Mutual Insurance Company v. Renwick, 2020 ONSC 2226, Ontario’s Divisional Court determined that inadequate reasons fell short of their “very important purpose”, namely that “they justify and explain the result so that the losing party knows why they have lost and interested members of the public can satisfy themselves that justice has been done”. The Court prioritized that purpose, listing it ahead of the more oft-cited purpose of allowing for meaningful review by a court. Though not all parties prevail in their dispute resolution, they are entitled to know that their evidence and arguments were considered and why they did not prevail. As the Divisional Court added, “[h]owever, this does not mean that the decision maker must refer to every bit of evidence or argument before him. To be adequate, reasons do not have to be long or perfect”.
Continue reading “Ontario – adequate reasons serve to justify/explain result so losing party knows why it lost – #320”Québec – attorney’s lack of knowledge of arbitration clause justifies late request for referral to arbitration – #319
In 9107-7719 Québec Inc. v. Constructions Hub Inc., 2020 QCCQ 1706, Madam Justice Johanne Gagnon readily extended defendant’s delay to apply for referral to arbitration. The forty-five (45) day delay was not a strict one and extending it was justified by explanations given by defendant’s attorney, including attempts to settle, an intervening holiday break and being unaware that the contract contained an agreement to arbitrate. Gagnon J. accepted defendant’s application filed 77 days after service of the action and, having considered it, granted it but declined to declare plaintiff’s action abusive.
Continue reading “Québec – attorney’s lack of knowledge of arbitration clause justifies late request for referral to arbitration – #319”Québec – agreement to arbitrate cannot exclude parties from court’s jurisdiction over breach of public order legislation – #318
In Bois Marsoui GDS Inc. v. Directeur des poursuites criminelles et pénales, 2020 QCCS 1327, Mr. Justice Carl Thibault held that an agreement to arbitrate contained in a contract signed with a government entity/agency did not allow merchants to exclude themselves from application of public order environmental legislation. Thibualt J. held that public order provisions aimed at protecting public well-being would lose their utility if parties could derogate from them by contract. Though not stated, the reasons would also support the conclusion that a government entity/agency lacks sufficient authority to contract out of the court’s jurisdiction to resolve disputes involving penal provisions related to laws of public order.
Continue reading “Québec – agreement to arbitrate cannot exclude parties from court’s jurisdiction over breach of public order legislation – #318”Alberta – decision to initiate litigation rather than mandatory arbitration qualifies as “injury” – #317
In HOOPP Realty Inc v. Emery Jamieson LLP, 2020 ABCA 159, Alberta’s Court of Appeal underlined the importance of initiating arbitration instead of litigation when bound by a mandatory arbitration agreement. In considering appeals from motions for summary disposition of actions filed by a client against two (2) law firms, the Court held that a lawyer’s omission to serve the notice to arbitrate qualified as an “injury” to the client within the meaning of section 1(e) of the Limitations Act, RSA 2000, c L-12. The Court further held that the current law firm’s knowledge of the omission by the former law firm could be imputed to the client in order to trigger the commencement of the limitation period and that the Limitations Act focused on knowledge of facts and not applicable law or chances of success.
Continue reading “Alberta – decision to initiate litigation rather than mandatory arbitration qualifies as “injury” – #317”B.C. – questions of mixed fact and law by definition involve aspects of law – #316
In Gormac Developments Ltd. v. Teal Cedar Products Ltd., 2020 BCSC 712, Madam Justice Elizabeth McDonald cautioned that great care be taken to distinguish between arguing that (i) a legal test has been altered in the course of its application and (ii) application of the legal test should have resulted in a different outcome. McDonald J. also acknowledged the need for caution when determining questions of law given that questions of mixed fact and law “by definition, involve aspects of law”. In addition, an arbitrator is not required to refer to every submission, statutory provision or piece of jurisprudence in the award, there being no requirement to make specific findings on each constituent element for the award to be reasonable.
Continue reading “B.C. – questions of mixed fact and law by definition involve aspects of law – #316”B.C. – a stay is not a dismissal – #315
In Clayworth v. Octaform Systems Inc., 2020 BCCA 117, B.C.’s Court of Appeal held that interpretation of the scope of an agreement to arbitrate is a question of mixed fact and law, not a question of law. As such, the courts are to apply the “arguable case” test whereby jurisdictional issues relating to the scope of the arbitration agreement are to be resolved in first instance by the arbitrator. The Court also emphasized the distinction between a stay and a dismissal. A stay simply holds proceedings in abeyance until the arbitrator completes the work which the parties agreed should be arbitrated. If the arbitrator determines the dispute is not one referred to arbitration or there are matters which remain unresolved after arbitration, a stay could be lifted upon application.
Continue reading “B.C. – a stay is not a dismissal – #315”