In Farmer v Farmer, 2022 ONSC 2410, Justice Alex Finlayson found that he had discretion to consider an issue on appeal that had not been raised before the arbitrator as an error to be corrected or amended pursuant to s. 44(1) of the Ontario Arbitration Act, 1991, SO 1991, c. 17. Justice Finlayson found that there was a “dearth” of authority on this issue and set out principles to be considered when deciding whether a court should exercise its discretion. Here, the issue raised was one that was intertwined with an issue that was properly before the court on the appeal, there was no prejudice to the parties, and the error was discovered by the court after the expiry of the 30-day period under s. 44(1) for seeking correction or amendment of the award from the arbitrator.
The parties were involved in a five-day family arbitration under the Ontario Arbitration Act, 1991, SO 1991, c. 17, which resulted in three Awards dated February 12, 2019 (“First Award”), March 3, 2019 (“Clarification Award”), and July 28, 2019 (“Costs Award”). The Wife appealed all three awards. These appeals were covered previously by Arbitration Matters. See Case Note # 543 “Ontario –Challenge to arbitrator’s integrity to be determined using bias test”. Justice Finlayson’s Judgment at 2021 ONSC 5913 addressed most of the issues on appeal, but left certain issues relating to spousal support and costs to be decided later after additional submissions from the parties. These additional issues were dealt with in this Supplementary Judgment. It deals with both substantive and procedural issues.
This Case Note addresses only one of the procedural issues.
It arose because Justice Finlayson discovered, when his original Judgment on the appeal was on reserve, that the arbitrator had made a calculation error as to the Husband’s expected retirement age/duration, which had the effect of reducing the lump sum payment (net of taxes) he ordered the Husband to pay the Wife for spousal support. Justice Finlayson invited counsel to address this additional issue in further submissions.
The Wife argued before Justice Finlayson that the Husband could not raise this issue on appeal; he could have, but did not, bring this issue back to the arbitrator under s. 44(1) of the Ontario Arbitration Act, 1991. It provides that, “an arbitral tribunal may,…. at a party’s request made within thirty days after receiving the award, (a) correct typographical errors, errors of calculation and similar errors in the award; or (b) amend the award so as to correct an injustice caused by an oversight on the part of the arbitral tribunal.” The Wife argued that the Husband was required to exhaust all statutory remedies before raising the issue on appeal.
Justice Finlayson ultimately declined to give effect to this argument. He noted that there is a “dearth of case law” that considers the interrelation between the rights under s. 44(1) of the Act and the right to appeal. He said that he found only three cases of potential relevance (only one of which was a family law decision): Myers v. Vickar, 2012 ONSC 5004; Freedman v. Freedman Holdings Inc., 2020 ONSC 2692; and Thompson v. Thiessen, 2001 CarswellOnt 2003 (S.C.J.). None of them stand for the proposition that a party must return to the arbitrator to correct an award before bringing an appeal.
Therefore, Justice Finlayson took guidance from the “mistake” court procedural rules, including Rule 59.06(1) of the Ontario Rules of Civil Procedure, which provides that an order that contains an error arising from an accidental slip or omission or requires amendment in any particular on which the court did not adjudicate may be amended on a motion in the proceeding. He reviewed the following cases: Alaychec v. Alaychec, 2021 ONSC 1251 (Div. Ct.); Ketelaars v. Ketelaars, 2011 ONCA 349; Holman v. Holman, 2015 ONCA 552; Hamilton-Wentworth District School Board v. Fair, 2015 ONSC 220 (Div.Ct.); and Gray v. Gray, 2017 ONCA 100. Justice Finlayson held that the latter case “left the door open for some discretion” and articulated the principles he took into account in deciding to exercise discretion in this case:
 The more recent cases from the Ontario Court of Appeal say there is some discretion, perhaps a narrow discretion, in the appellate court to entertain a request on appeal even where there was another option in the court below. By analogy, I would extend that interpretation to arbitrations and to the operation of section 44(1). While I conclude that where section 44(1) is an available remedy one should normally seek relief before the arbitrator before taking an appeal, I find that there is still discretion in the appellate court to entertain the request. In deciding whether to exercise discretion in this case, I take into account:
(a) the policy rationale behind holding the parties who have agreed to an alternative dispute resolution process like a family arbitration to that process;
(b) the reasons for failing to pursue the remedy under section 44(1), such as because the error was not discovered before the expiry of the timeline in the section;
(c) the reasons for not discovering the error;
(d) the positions of the parties;
(e) any prejudice to parties;
(f) whether there is already an appeal pending;
(g) whether the matter sought to be corrected otherwise forms part of the larger subject matter of the appeal or is interrelated with it; and
(h) whether the matter sought to be corrected may also be dually characterized as an error that properly forms part of the subject matter of the appeal.”
Justice Finlayson considered the fact that the parties had chosen arbitration to resolve their disputes and that militated in favour of holding the parties to their remedies under the Arbitration Act, 1991, before seeking court relief.
However, he found that the Wife’s submissions were “overly formulaic and technical” and that if he were to give effect to them, it would perpetuate a calculation error that flowed from his decision to overturn the property award, which was the subject of the Wife’s appeal. In other words, this issue and the Wife’s appeal were intertwined. The retirement age/duration issue had to be corrected.
Justice Finlayson also noted that a remedy under s. 44(1) of the Act must be sought within 30 days and there is no jurisdiction to extend the timeline. In this case, however, the retirement/duration issue was a “minute detail” that was “not easily noticeable” and was only discovered (by Justice Finlayson himself) after the 30-day period. Therefore, he found that the Husband’s appeal of this issue was properly before him and was in fact subsumed in the Wife’s own ground of appeal on the retirement issue.
Further, there was no prejudice to the Wife. Each party was given the opportunity to make submissions on this issue in a process that was fair to both sides.
Finally, Justice Finlayson said that this ground of appeal could also be said to be the arbitrator misapprehending the evidence, which was properly raised on an appeal. The point at which a calculation error amounts to a misapprehension of the evidence “can become blurred”.
Therefore, Justice Finlayson exercised his discretion to consider this ground of appeal and, in fact, it was one reason that he substituted the arbitrator’s award of a lump sum payment of spousal support (which was net of taxes) to the Wife, with his own.
First, a previous Case Note, summarized Alvarez v Alvarez, 2021 ABQB 717, which addressed the comparable Alberta provision in the Arbitration Act, RSA 2000, c. A-43 and also explained the meaning and purpose of these provisions. See Case Note #544: Award was “abbreviated.”
Second, see also Article 33 of the UNCITRAL Model Law, which is comparable except that the tribunal has no jurisdiction to make a correction unless a party requests that it do so. Article 38 of the UNCITRAL Arbitration Rules provides that any such corrections shall be in writing and shall form part of the award and therefore must be supported by reasons.
Third, note that under s. 45(4) of the Ontario Arbitration Act, 1991, on an appeal, the court may require the tribunal to explain any matter, which may be another way to raise this issue.