Ontario – costs award in domestic arbitration subject to reasonableness standard – #120

In reviewing a challenge to a costs award issued in a domestic arbitration, Mr. Justice Peter Bawden in Bilal Syed v. Cricket Canada, 2018 ONSC 5637 held that the standard of review of such costs award under Ontario’s Arbitration Act, 1991, SO 1991, c 17 is on a reasonableness standard. His ability to consider applicant’s challenge the costs portion of the award was enhanced (a) by respondent’s decision to complete the record before the court with substantial materials not offered by applicant and (b) by reference to criteria for costs awards contained in the Canadian Sport Dispute Resolution Code (the “Code”), a robust set of arbitration rules applicable to the dispute issued by the Sport Dispute Resolution Centre of Canada (“Centre”).

The dispute involved a disagreement between Mr. Bilal Sayed and Cricket Canada over a May 19, 2016 election for a position with Cricket Canada. Their dispute went to arbitration under the Centre’s Code. The arbitrator issued a March 15, 2017 award in which he dismissed Mr. Sayed’s complaints, imposed orders on Cricket Canada to amend its by-laws and, after lengthy reasons explaining why, ordered no costs against either party.

Though created by Federal legislation, Physical Activity and Sport Act, SC 2003, c 2, the Centre is not an agent of the Crown, a departmental corporation or a Crown corporation within the meaning of the Financial Administration Act, RSC 1985, c F-11.  The Centre’s mission is to provide to the sport community a national alternative dispute resolution service for sport disputes and expertise and assistance regarding alternative dispute resolution. A “sport dispute” includes disputes among sport organizations and disputes between a sport organization and persons affiliated with it, including its members.

A panel appointed under the Code has no jurisdiction to award damages, compensatory, punitive or otherwise, to any party. Each party is responsible for its own expenses subject to section 6.22(c) which provides:

6.22(c) The Panel shall determine whether there is to be any award of costs and the extent of any such award. When making its determination, the Panel shall take into account the outcome of the proceedings, the conduct of the Parties and their respective financial resources, intent, settlement offers and each Party’s willingness in attempting to resolve the dispute prior to or during Arbitration. Success in an Arbitration does not mean that the Party is entitled to be awarded costs.

On a prior application by Cricket Canada under section 46(1)(3) of the Arbitration Act, Madam Justice Freya Kristjanson in her May 30,2017 decision in Cricket Canada v. Bilal Syed, 2017 ONSC 3301 set aside parts of the award. She held that those parts contained a decision on a matter that was beyond the scope of the agreement. Though she found that the applicable standard of review was correctness, Kristjanson J. held that even on a reasonableness standard the arbitrator’s award had to be set aside in part. The parts set aside addressed internal and Cricket Canada Board governance issues which were properly to be determined by Cricket Canada members and were outside the scope of the arbitration agreement. As the impugned orders were severable, the remainder of the award stood.

On a subsequent set-aside application in November 2017, Mr. Sayed argued that: (a) the arbitrator had erred in failing to award him costs on substantial indemnity basis; and, (b) Saskatchewan was more appropriate than Ontario as a forum in which to review the decision.

Mr. Sayed claimed “that he “won” the arbitration hearing as is evidenced by the fact that Cricket Canada was obliged to apply to this Court to review certain aspects of the decision” and that “he, as an impecunious litigant, is entitled to the entirety of his costs for having revealed the nature and extent of the wrongdoing”. His allegations in the arbitration concerned reproaches about the election process in which he was an unsuccessful candidate. The arbitrator disagreed with Mr. Sayed’s complaints but, in an excess of jurisdiction addressed by Kristjanson J. in her May 30, 2017 decision, issued orders to correct for nine (9) aspects of Cricket Canada’s by-laws, including an order to amend them.

Dealing with Mr. Sayed’s application to set aside the arbitrator’s cost award, Bawden J. first looked at the result of the arbitration between Mr. Sayed and Cricket Canada as presented by the arbitrator in the award, as well as Mr. Sayed’s own conduct in the arbitration.

[6] The arbitrator’s decision does not even remotely support the submission made by Mr. Syed. The arbitrator dismissed the essence of Mr. Syed’s complaints and found that Cricket Canada had acted in good faith at all times. The arbitrator also found that Mr. Syed’s conduct in the course of the hearing had been obstructive and that Mr. Syed only escaped having costs awarded against himself because of the few points that were decided in his favour. All of those points were subsequently found to have been ultra vires of the arbitration agreement by Justice Kristjanson.

Bawden J. held that the determination of costs was squarely within the arbitrator’s jurisdiction and that the applicable standard of review for the arbitrator’s award on costs was reasonableness. Considering the criteria in section 6.22 of the Code, he held that “that standard was obviously met here.

The arbitrator gave fulsome and cogent reasons for his decision not to award any costs in the matter and, based on his comments concerning Mr. Syed’s conduct during the hearing, one might conclude that Mr. Syed was fortunate that costs were not ordered against him”.

Bawden J. applied the standard of reasonableness to the arbitrator’s award on costs and held that the decision “was a reasonable one which was well supported by the record”.

The close of the reasons was anticipated in the opening comments. In the case before him, Bawden J. began his reasons by thanking Cricket Canada for having completed what Bawden J. characterized as “a sparse application”.

The Notice of Application is the only document that Mr. Syed filed in support of the application. Notwithstanding the failure of Mr. Syed to provide materials to support his application, the respondent has filed transcripts of the arbitration hearing, a factum, an application record and a Book of Authorities. Those materials have been extremely helpful and I am grateful to counsel for Cricket Canada for his diligence in preparing such a fulsome response to a sparse application.

The court’s ability to determine whether the costs award was reasonable was enhanced, if not made possible, by Cricket Canada as the responding party deciding to complete the record.

Regarding Mr. Sayed’s other ground for challenge, Bawden J. endorsed Kristjanson J.’s handling of the issue and made specific reference to para. 54 of  her reasons as a valid resolution:

[54] I agree with Cricket Canada that Ontario is the appropriate forum for determination of this dispute. The Code directs that “the applicable law for Arbitrations shall be the law of the Province of Ontario and the arbitration legislation in place in Ontario shall be the law of SDRCC Arbitrations.” Syed, a Saskatchewan resident, subjected himself to the jurisdiction of the courts of the province of Ontario in bringing his Request under the Code. Cricket Canada’s head office is in Ontario therefore, any changes to its By-laws without member approval would be made at its head office.

Bawden J. made no reference to costs of the application before him when he dismissed it.