Buffalo Point First Nation v Buffalo Point Cottage Owners Association Inc, 2025 MBCA 72 was the first appellate court to decide that the standard of review set out in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 for reviews of decisions of administrative tribunals does not apply to appeals of commercial arbitration awards. Instead, the “reasonableness” standard of review, which was established in Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53 and affirmed in Teal Cedar Products Ltd v British Columbia, 2017 SCC 32, applies. In other words, Vavilov did not overturn Sattva. The fact that domestic arbitration legislation provides an appeal right does not mean that the same “appellate standards” apply in this context. The Court applied the reasonableness review analysis set out in Vavilov, except it found that a greater level of deference might be owed to an arbitrator’s expertise given the purpose of commercial arbitration; namely, giving effect to the parties’ desire for that method of dispute resolution. In other words, this standard of review reflects the reasonable expectations of the parties.
Background facts: Most of the facts are not relevant to the standard of review issue, so I provide here a very brief summary.
In 1974, the Buffalo Point First Nation (“the First Nation”) surrendered land from its reserve to the Crown to allow a lease with Buffalo Point Development Corp. Ltd. (“the Corporation”) and the development of a recreational community through long-term sub-lease agreements with individual cottagers, who created the cottagers association (“the Association”). In 2008, the Association, the Corporation, and the First Nation entered into a Co-Management Agreement to deal with the allocation of local services and costs. It contained a broad arbitration clause. In 2011, the First Nation decided to pursue a transition to the taxing of local property pursuant to its legislated right under the First Nations Fiscal Management Act, SC 2005, c. 9. The Co-Management Agreement was not terminated or amended.
In July, 2012, the Association commenced an arbitration, arguing that the First Nation had breached the Co-Management Agreement by implementing the property tax regime. Ultimately, the parties entered into minutes of settlement dated June 19, 2015, which they agreed would be entered as a judgment of the court.
There was a further dispute about the First Nation’s ability to implement one of the terms of settlement, during which the First Nation proposed changes to the minutes of settlement. The arbitrator decided that he had the jurisdiction to amend the minutes of settlement and did so. The First Nation sought leave to appeal this award.
The appeal before the Court of King’s Bench: The judge granted the First Nation leave to appeal. The issue was whether the arbitrator had erred in amending the settlement terms. The judge decided that the appeal raised questions of law, in respect of which the standard of review was correctness. He concluded that the arbitrator had erred.
The appeal before the Court of Appeal: The Court of Appeal granted leave to appeal. The sole issue was whether the appeal judge had identified the correct standard of review and applied it correctly.
The Court relied on Teal Cedar, in which the majority of the Supreme Court of Canada, at para. 74, stated that:
“In an arbitral context like this one, where the decision under review is an award under the Arbitration Act, Sattva establishes that the standard of review is “almost always” reasonableness (para. 75). This preference for a reasonableness standard dovetails with the key policy objectives of commercial arbitration, namely efficiency and finality. In Sattva, Rothstein J. emphasizes that in “commercial arbitration, where appeals are restricted to questions of law, the standard of review will be reasonableness unless the question is one that would attract the correctness standard” (para. 106). He suggests that this may arise only in rare circumstances, such as where a constitutional question or a question of law of central importance to the legal system as a whole and outside the adjudicator’s expertise is at issue (paras. 75 and 106).”
The Court noted that this view was not challenged until the Supreme Court of Canada’s decision of Vavilov, “where the Court expressed its views as to the proper approach to judicial review of administrative decisions.” In Vavilov the Supreme Court of Canada moved away from the previous context-based test for determining standard of review and instead set reasonableness as the default standard of review unless the legislature indicated a different standard of review should apply, for example, by prescribing for a statutory appeal, thereby signaling that the appellate standard of review enshrined in Housen v Nikolaisen, 2002 SCC 33 would apply, at paras. 36 to 38:
“[T]he standard of review analysis requires courts to give effect to the legislature’s institutional design choices to delegate authority through statute. In our view, this principled position also requires courts to give effect to the legislature’s intent, signaled by the presence of a statutory appeal mechanism from an administrative decision to a court, that the court is to perform an appellate function with respect to that decision.
It should therefore be recognized that, where the legislature has provided for an appeal from an administrative decision to a court, a court hearing such an appeal is to apply appellate standards of review to the decision. This means that the applicable standard is to be determined with reference to the nature of the question and to this Court’s jurisprudence on appellate standards of review.”
The Court noted that Vavilov did not mention Sattva or Teal Cedar.
However, the issue of the applicability of Vavilov to commercial arbitration awards arose in the Supreme Court of Canada decision of Wastech Services Ltd. v Greater Vancouver Sewerage and Drainage District, 2021 SCC 7. The majority chose not to decide the issue, in part, because it had received no submissions on the question. The minority, however, stated that Vavilov applied because the legislature had provided for a statutory right of appeal in arbitration legislation.
The Court found that the reasonableness standard of review applies to appeals of commercial arbitration awards for the following reasons.
First, Vavilov did not expressly overrule Sattva or Teal Cedar. Commercial awards are not administrative decisions, which are generally recognized as decisions emanating from a government entity. They are the product of contractual agreements between parties who have chosen to reach a resolution of their own making. Key policy objectives of arbitration are efficiency and finality. Stare decisis should apply to determine the right standard of review. Sattva and Teal Cedar are still good law on this issue until directed otherwise. The majority decision in Wastech supports this view.
Second, the presumption of consistency does not apply here. The presumption is an interpretive tool by which the legislature is presumed to use language such that the same words have the same meanings both within a statute and across statutes. The presumption applies to statutes dealing with the same subject matter and does not apply where the contrary is indicated or rebutted by other principles of interpretation. A different approach to the word “appeal” in the Manitoba Arbitration Act, CCSM c A120, dovetails with the key policy objectives of arbitration.
Therefore, the reasonableness standard of review as set out in Sattva and Teal Cedar applies. The appeal judge’s decision was not unreasonable and was upheld.
Editor’s notes:
First, the Court applied the Vavilov reasonableness analysis in the context of review of a commercial arbitration award, “save only to remember that a greater deference might be owed to an arbitrator’s expertise given the avowed purpose of commercial arbitration; namely, giving effect to the parties’ desire for that method of dispute resolution.” For a comprehensive summary of the principles to be applied to conduct a reasonableness review, see paragraphs 53 to 58 and 78.
Second, William G. Horton and Terence F. Young published a paper in on this subject: “The Inapplicability of Vavilov’s Presumption of Consistent Expression in Commercial Arbitration” The Advocates’ Quarterly (2025), Vol. 56 Adv. Q. 1. Their paper was submitted for publication in March, 2025, but was published a few weeks after the decision was released. Their analysis is on all fours with the Court’s, but is more detailed. I can only summarize the key points it makes:
- It is beyond debate that Vavilov did not mention Sattva and did not directly overrule it. Sattva was a unanimous decision of the Supreme Court of Canada and must be considered a “correct” summary of the law on the standard of review of arbitral awards on appeal. The correctness standard of review is problematic if the same court that is divided on standard of review can overturn it.
- The majority of the Court in Vavilov viewed the case as an “opportunity to re-examine its approach to judicial review of administrative decisions”; where a legislature has provided for an appeal right, it has subjected the administrative body it created to court oversight and has expressed the intention that such scrutiny is to be done on an appellate basis. In that context, Vavilov ascribed a particular and consistent meaning to the word “appeal”. Contextual differences between commercial arbitration and administrative law are important. They were not considered in Vavilov.
- There is no authority for the view that the interpretive presumption of consistent expression across legislation is based on legislature intent. A textual comparison of the word “appeal” across statutes shows that it serves different objectives. The tests for leave to appeal and the appeal procedure vary significantly across statutes. Standards of review have been judicially created.
- Private commercial arbitration tribunals are not created by the legislature. They are created by the parties, on consent and not from the coercive power of the state. A primary objective of arbitration is to limit court involvement. The reasonableness standard supports the contractual expectations of the parties to have their dispute decided by their chosen decision maker. A correctness standard, with the ostensible goal of producing “correct” results made by a decision maker unknown to the parties, defeats those expectations.
Third, to date, the only other appellate court to decide the standard of review issue is Northland Utilities (NWT) Limited v Hay River (Town of), 2021 NWTCA 1. It reached the opposite conclusion. The decision cited (at para. 70) the following article written by Arbitration Matters contributor James Plotkin: James Plotkin and Mark Mancini, “Inspired by Vavilov, Made for Arbitration: Why the Appellate Standard of Review Framework Should Apply to Appeals from Arbitral Awards” Can J Comm Arb (2021) 2:1: Volume 2 Issue 1.pdf.
For Arbitration Matters case notes on this decision see for example: Alberta – Alberta never bound by Sattva and Teal Cedar – #705 – Arbitration Matters; James’s 2021 Top Pick: B.C. – Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District – #565 – Arbitration Matters; and Ontario – Court weighs in on standard of review post-Vavilov (and decides) – #879 – Arbitration Matters. For the Manitoba Court of Appeal’s brief comment on this case, see para. 45.