Nova Scotia – court’s use of test for new evidence in judicial review also useful in arbitration – #050

In Sorflaten v. Nova Scotia (Environment), 2018 NSSC 7, the Nova Scotia Supreme Court dismissed an attempt to add facts to the record to decide a judicial review application.  The court’s reasoning in part lends itself to commercial arbitration challenges when a full record of the arbitral proceeding was either not made or not preserved. 

Applicants sought judicial review of a Nova Scotia Minister of Environment’s decision to approve a pilot project for burning recycled tires at a cement plant owned by one of the respondents.  All parties agreed that the applicable standard of review for the decision would be “reasonableness”.

For the upcoming judicial review hearing, applicants sought leave to introduce evidence which was not already part of the record.  The evidence would consist of expert opinion evidence relating to certain environmental aspects of the approved plan.   The report had not yet been drafted but would be drafted and filed if and once the court authorized doing so.  The reasons for judgment reproduce the ten (10) issues which the report wanted to address.

The evidence qualified as ‘new’ evidence and Madam Justice Denise M. Boudreau of Nova Scotia’s Supreme Court was seized with deciding the application.

The case will be of interest to administrative law practitioners.  Boudreau J.’s reasons set out the Nova Scotia courts’ approach to deciding motions to adduce new evidence on a judicial review.  She distinguishes between different approaches to such motions and lists the four categories of new evidence permitted to be added to the record: lack of jurisdiction; bias; breach of procedural fairness; fraud.  She held that the ‘new’ facts did not address any of those four categories and were considered on their own merits.

Her analysis draw attention to a 1980 Ontario Court of Appeal case which might inform practitioners how to present post-arbitration challenges when the evidentiary record of their arbitrations is neither created nor preserved.  That case, Re Keeprite Workers’ Independent Union et al. and Keeprite Products Ltd., 1980 CanLII 1877, mentions how to correct for an “evidentiary vacuum” and Boudreau J.’s short excerpt of that reasoning is worth reproducing here.

[20] In Keeprite, a hearing was held before a labour arbitrator. The central issue before him was whether two employees had engaged in a “fight” on company premises; if a fight had occurred, the employees needed to be terminated, as per the collective agreement. Evidence of the altercation was presented during the hearing; however, the proceedings were not recorded. In his decision, the arbitrator found that a fight had, indeed, occurred.

 [21]  The applicant on judicial review argued that there was no evidence before the arbitrator that would have allowed him to make that finding. Unfortunately, given that there was no record of the proceedings, it was impossible to know what evidence had been put before the arbitrator.

 [22]  It was therefore decided that in those circumstances, evidence could be presented to the reviewing court, to clarify what evidence had in fact been placed before the arbitrator. The purpose of this “new” evidence was simply to clarify what had been before the arbitrator in the first place:

 10  I should make it clear at this point that the material filed with the Divisional Court was directed to showing what the evidence was that was given before the arbitrator and was not fresh evidence of what happened on May 31, 1979 [ i.e. the day of the alleged “fight”]. As is usual, no verbatim record was made of what transpired before the arbitrator.

 [23]  The Keeprite exception, therefore, is meant to address such areas of “evidentiary vacuum”. Subsequent case law has made it clear that it is inappropriate to go beyond the strict boundaries of the exception.

Keeprite noted that the labour arbitration proceedings had not been preserved through recording.  The evidence adduced was not to offer the proof to be reconsidered by the court but as a way to demonstrate that the proof had been before the arbitrator.

On the particular facts of the case before her, Boudreau J. refused to grant leave to add the proposed expert opinion evidence to the record. The evidence:

– did not qualify as an attempt to address the evidentiary vacuum by establishing evidence that was before the Minister but is now unclear or absent;

– tried to address issues which the applicants wanted the Minister to have dealt with but which he did not address; and,

– sought to prove that the Minister failed to make the “correct” decision but overlooked that the agreed upon test was “reasonableness”.

Judicial review hearings share some similarities with post-final award challenges common in commercial arbitration.  For appeals on questions of fact or mixed fact and law, allowed by the parties’ arbitration agreement and applicable domestic arbitration legislation, new evidence is resisted.  Domestic arbitration legislation in several provinces, excluding Québec, allow arbitral parties to agree to appeal final awards on questions of fact and of mixed fact and law as well as on law.  See for example Nova Scotia’s Commercial Arbitration Act, SNS 1999, c 5 (“CAA”), section 49 (not to be confused with its Arbitration Act, RSNS 1989, c 19).

In such cases, Keeprite serves to remind commercial arbitration practitioners how to accommodate for gaps in the record they might require for such appeals.  Instead of defaulting at the onset to more costly approaches to preserving a full record of the entirety of the facts adduced at the arbitral hearings, parties might consider that a Keeprite solution may well be sufficient.

Keeprite does not attempt to speak to that type of evidence needed for challenges based on grounds which go to confidence in the fairness or integrity of the arbitration process.  Overlapping with the four categories in judicial review cases listed by Boudreau J. above, such grounds are listed in domestic arbitration such as section 49 of Nova Scotia’s CAA or in Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted by the United Nations Conference on International Commercial Arbitration in New York (1958) (“New York Convention”) (reproduced as Schedule A to Nova Scotia’s International Commercial Arbitration Act, RSNS 1989, c 234.

Those grounds anticipate that parties will bring to court facts which, for example, may not have been before the arbitrator or which were not relevant to the underlying dispute which triggered the arbitration.  Those facts should not require an application for leave to adduce new evidence.  Rather, those facts would be relevant and admissible to the extent that they tend to prove an unfair arbitration process and not merely re-litigating either side’s position on the dispute per se.