Ontario – standard of correctness applies to arbitrator’s decision on solicitor-client privilege – #155

In Saskatchewan v. Cricket, 2019 ONSC 18, Mr. Justice Peter Bawden considered challenges to evidentiary decisions taken by the arbitrator regarding solicitor-client privilege, hearsay and the impact of a prior but quashed arbitral award between the same parties. In dismissing each challenge, Bawden J. provided helpful albeit brief guidance on how to deal with similar post-award challenges.

The award in question stemmed from an arbitration between Saskatchewan Cricket Association (“SCA”) and Cricket Canada (“CC”) conducted under the Sport Dispute Resolution Centre of Canada’s Canadian Sport Dispute Resolution Code (the “Code”).

Bawden J. had earlier been called upon to sort out disagreements between the same parties regarding costs, issuing his reasons in Bilal Syed v. Cricket Canada, 2018 ONSC 5637. The latter decision is the subject of a prior ArbitrationMatters note “Ontario court holds that costs award in domestic arbitration subject to reasonableness standard”.

SCA filed a notice of application seeking judicial review of the award. Bawden J. commented that “it is extremely difficult to identify the grounds for this application from that document” but listed issues which “appear to be the grounds”:

The arbitrator’s decision with respect to the facts and the law was contrary to the evidence presented at the hearing;

The arbitrator erred in finding that solicitor-client privilege precluded the applicant from calling counsel for Cricket Canada, Mr. Steven Indig, as a witness at the arbitration hearing;

The arbitrator erred in admitting hearsay evidence by allowing witnesses to testify concerning legal opinions which they had received from Mr. Indig;

The arbitrator failed to consider the public policy considerations arising out of a previous arbitrator’s finding of misconduct by the Board of Directors of Cricket Canada; and

The arbitrator failed to identify any exceptional circumstances which would justify ordering $5,000 in costs against the applicant.

Bawden J. addressed each in turn.

Factual findings – Bawden J. reminded that section 46(1) of Ontario’s Arbitration Act, 1991, SO 1991, c 17 provides a list of those grounds on which to set aside an award and added that “[d]isagreement with the arbitrator’s findings of fact is not an enumerated ground.

Though he ventured that it might be open to a party to apply for review of an unreasonable finding of fact under section 46(1)(6) – “The applicant was not treated equally and fairly, was not given an opportunity to present a case or to respond to another party’s case, or was not given proper notice of the arbitration or of the appointment of an arbitrator” – Bawden J. held that SCA had identified no “dubious factual findings”.

Bawden J. dismissed this ground, determining that the there was no basis to find that the factual determinations were anything other than reasonable.

Privilege – Respondent accepted that the standard of review on an issue of privilege was correctness. CC had refused to waive privilege and allow its legal counsel to testify concerning legal advice he had given. Bawden J. reviewed the issues provided to the arbitrator which included SCA raising an issue with legal advice CC had received and on which CC’s board had acted. He determined that the arbitrator was correct in precluding SCA from calling CC’s legal counsel to testify.

The arbitrator quite correctly recognized the potential breach of solicitor-client privilege if Mr. Indig was to be called as a witness. There is nothing in the record to suggest that Mr. Indig had any relevant evidence to give apart from matters which would clearly fall within the privilege.

Hearsay – Bawden J. identified the passages in the award in which the arbitrator recorded testimony confirming statements received by a CC board member and the action taken by the board following receipt. Bawden J. did not accept qualifying the evidence as hearsay and determined that the arbitrator was “correct” in identifying the evidence as admissible, non-hearsay testimony.

The value of the evidence did not lie in the truth or falsity of Mr. Indig’s statement but rather in the effect of his advice on Mr. Joshi. The issue in this arbitration was not the legal correctness of Mr. Indig’s advice to CC but rather the validity of the applicant’s allegations of corrupt practice against the respondent.

Public policy – SCA argued that the arbitrator had failed to demonstrate that he was bound by a finding in another arbitration between the same parties in which another arbitrator had determined that the CC board had allegedly acted in an improper manner. That decision had been quashed by Madam Justice Freya Kristjanson in Cricket Canada v Bilal Syed, 2017 ONSC 3301. The arbitrator in the current arbitration had invited both SCA and CC to provide submissions as to whether that ruling had any relevance to their current arbitration. Neither SCA nor CC argued that it did. As well, Bawden J. noted that any impact of that earlier arbitral award was “extinguished by the successful challenge to the arbitrator’s jurisdiction”.

The previous arbitrator found that there had been a failure to adhere to the by-laws of the corporation but he did not find that this involved any corrupt practice on the part of the Board of Directors. Professor McLaren did not find any corrupt practices in this case and there is nothing in the record to suggest that he should have. There is no evidence to support a finding that there were any issues of public policy at stake in these proceedings.

Costs – Noting that the Code at section 6.22 provides a list of considerations available to the arbitrator if and when the arbitrator whether to order costs, Bawden J. held that the SCA was “mistaken” that an award of costs requires “exceptional circumstances”.

[17] The awarding of costs involves the interpretation of the Code which governs the arbitration hearing itself. This is clearly within the field of expertise of the arbitrator and the appropriate standard of review is reasonableness. The record demonstrates that the arbitrator was aware of the appropriate test, considered the criteria which were relevant to the case before him and made an order which fell within the range of acceptable outcomes which were open to him. There is no basis for this court to interfere with the costs order.

Bawden J. dismissed the SCA’s application for judicial review, inviting the parties to provide written submissions on costs of the application.