In Centre de santé dentaire Gendron Delisle inc. c. La Personnelle, Assurances générales inc., 2021 QCCS 3463, Justice Davis reaffirmed that a valid arbitration clause will be enforced and cannot be avoided by the Plaintiff bringing a class action. In this matter, the Plaintiff sought authorization to bring a class action against various insurance companies under various insurance policies and to be appointed as representative Plaintiff on behalf of dental clinics which claimed business interruption losses caused by the COVID-19 pandemic. Justice Davis dismissed the request for authorization on the basis that it did not meet the requirements of Article 575(2) of the Code of Civil Procedure. However, he said that had he granted authorization, those insured dental clinics covered by an insurance contract containing a valid arbitration clause would have been excluded from the group covered by the class action and referred to arbitration.
Continue reading “Québec – Arbitration clause cannot be avoided by bringing a class action – #531”B.C. – Leave to appeal denied where alleged legal errors did not reflect arbitrator’s reasoning – #530
In Ecoasis Resort and Golf LLP v Bear Mountain Resort & Spa Ltd., 2021 BCCA 285, the Applicants (Bear Mountain and related companies) argued on leave to appeal that the arbitrator committed four extricable errors of law relating to whether it was an implied term of a lease that the lessees would have access to limited common property. The Arbitration Act, S.B.C. 2020, c. 2, like the previous Act, allows appeals on questions of law alone provided they satisfy certain other conditions. Two of the alleged extricable legal errors concerned whether the arbitrator implied a term based on a wrong principle; the third concerned whether the arbitrator, in interpreting the lease, allowed the factual matrix to overwhelm the words of the contract; the fourth concerned whether the arbitrator misapplied the law of the duty of good faith by implying a term into the agreement. On examination, Justice Bennett concluded that none of the alleged errors reflected the arbitrator’s reasoning and, further, “all of the so-called legal issues raised by the applicant, fall into the category of mixed fact and law. I do not see any extricable question of law arising from the reasons of the arbitrator” (para. 49). Leave to appeal was denied.
Continue reading “B.C. – Leave to appeal denied where alleged legal errors did not reflect arbitrator’s reasoning – #530”B.C. – Statutory arbitrator’s award set aside on basis that it was “arbitrary and irrational” – #529
In Shahcheraghi v Divangahi, 2021 BCSC 1576, Justice Horsman set aside the award of an arbitrator of the Residential Tenancy Branch (“RTB”) and remitted the matter back to the RTB for a new hearing, either by the same arbitrator or someone else assigned by the RTB. She found that the arbitrator’s reasons were inadequate for the parties to understand the rationale for the decision:
“[53]… I wish to be clear that my concern with the Arbitrator’s decision is the reasoning process, which in my view is insufficient to serve the basic function of reasons in allowing the parties to understand why the decision was reached…The point is that [certain] issues are unexplored in the Arbitrator’s decision. It is not the role of the reviewing court to re-write the Arbitrator’s reasons so as to arrive at a new rationale that might support the outcome.”
Continue reading “B.C. – Statutory arbitrator’s award set aside on basis that it was “arbitrary and irrational” – #529”Ontario – Partial stay; oppression claim arbitration to precede related family law action – #528
In Pezo v Pezo, 2021 ONSC 5406, the applicant Elma Pezo brought two claims: a family law claim against her spouse Kabir Pezo; and an oppression remedy claim against Kabir and his friend Hadis Kozo regarding a business they had all operated together. Kazo sought a stay of all claims against him on the basis that the parties had entered into a Shareholders’ Agreement with respect to the business that contained a mandatory arbitration clause. However, Elma argued that it was invalid because the two claims intersected and had to be heard together, but the arbitration clause did not meet the requirements for a family law arbitration set out in Ontario Regulation 134/07 of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17. Justice Kraft disagreed. She found that the arbitration clause covered only the oppression remedy claims and that she had the discretion to grant a partial stay under s. 7(5) of the Arbitration Act because its two pre-conditions had been met: (a) the agreement dealt with only some of the matters in respect of which the proceeding was commenced; (b) it was reasonable to separate the matters dealt with in the agreement from other matters. She stayed the family law claims an ordered an arbitration with respect to the oppression claims to proceed before the action so that the findings of the arbitrator on issues that could affect the family law claim would be before the court.
Continue reading “Ontario – Partial stay; oppression claim arbitration to precede related family law action – #528”Ontario – “Cumulative series of events” complaint does not extend deadline for raising arbitrator bias – #527
In Spivak v. Hirsch, 2021 ONSC 5464, Justice Jarvis heard a motion to remove an arbitrator pursuant to sections 13 and 15(1) of the Arbitration Act, 1991, S.O. 1991, c. 17 on the basis that the arbitrator demonstrated a reasonable apprehension of bias, actual bias and had not treated the applicant fairly and equally. The applicant raised concerns which she said, cumulatively, constituted bias. Essentially, the applicant argued bias on the basis of awards issued against her and that she was not being afforded the same litigation latitude as the respondent. The court dismissed the application. A reasonable person, when considering the applicant’s concerns in the context of the entirety of the arbitration proceedings, would not think this amounted to bias. In any event, the applicant was out of time. Section 13 of the Arbitration Act makes it mandatory that a person who wishes to challenge an arbitrator must do so within 15 days of becoming aware of the grounds for challenge. There is no discretion to extend the time to take into account earlier incidents of alleged bias.
Continue reading “Ontario – “Cumulative series of events” complaint does not extend deadline for raising arbitrator bias – #527”Québec – confidentiality order denied in court proceedings; parties reminded of confidential arbitration as an alternative – #526
In Douville v St-Germain, 2021 QCCS 3374, Justice Daniel Urbas denied a Defendant’s application for a confidentiality order in a defamation action, but reminded the parties that they could submit their dispute to arbitration, which would afford them the protection sought. Justice Urbas found that the applicant failed to establish a serious risk to an important public interest, but that a further application could be made in due time to seek the protection of specific exhibits or information.
Continue reading “Québec – confidentiality order denied in court proceedings; parties reminded of confidential arbitration as an alternative – #526”B.C. – Whole award to be considered when examining for patent unreasonableness – #525
In Potherat v, Slobodian, 2021 BCSC 1536, Justice Crabtree of the British Columbia Supreme Court found that the decision of an arbitrator of the B.C. Residential Tenancy Branch was neither patently unreasonable nor wrong when read as a whole. In determining whether a decision is patently unreasonable, the court is required to examine both the reasons and the outcome. Justice Crabtree quoted extensively from the arbitrator’s reasons; while sentences or paragraphs are sometimes quoted by courts when reviewing arbitral awards, it is rare that large portions of the arbitrator’s reasons are quoted. Justice Crabtree followed Sherstobitoff v. British Columbia (Workers’ Compensation Appeal Tribunal), 2019 BCSC 1659, which held that that reasons “are to be read as an organic whole, not parsed or dissected in search of error”. Justice Crabtree found that the petitioner’s submissions were a parsing of the decision.
Continue reading “B.C. – Whole award to be considered when examining for patent unreasonableness – #525”B.C. – Under new B.C. Act, third party may apply to arbitrator OR court to set aside subpoena issued by arbitrator – #524
In Terrace Community Forest LLP v Skeena Sawmills Ltd., 2021 BCSC 1522, Justice Milman dismissed an application brought by the petitioner, Terrace Community Forest LLP (TCF), for an order under s. 29(4) of the new British Columbia Arbitration Act, S.B.C 2020, c. 2, to set aside a subpoena requested by the respondent, Skeena, and issued by the arbitrator. The subpoena required TCF to produce documents in an ongoing arbitration under the Act. TCF was not a party to the arbitration, but was a third party and was alleged to have documents that were relevant to the arbitration. Justice Milman’s decision turned on the meaning of the word “or” in s. 29(4), which provides that a subpoena issued to a third party may be set aside on application by the person named in the subpoena to the arbitral tribunal “or” the Supreme Court. Justice Milman held that the word “or” in this context was to be read exclusively, rather than inclusively, because: (a) by its plain meaning, s. 29(4) contemplates an application by the third party in the first instance to either the arbitrator or the court, but not both, and the Legislature could not have intended that a third party could make sequential applications to set aside the same subpoena if dissatisfied with the first answer it received (b) there is no provision in the Act for the third party to bring an appeal or seek a review of an arbitrator’s decision under s. 29(4) and (c) s. 4 of the Act precludes any review of an arbitrator’s order by the court except as provided in the Act.
Continue reading “B.C. – Under new B.C. Act, third party may apply to arbitrator OR court to set aside subpoena issued by arbitrator – #524”B.C. – Scope/excess of authority when arbitrator considers variation of award made based upon incorrect facts – #523
In Marchetti v Lane, 2021 BCSC 1259, Justice Tucker dismissed an application brought by the respondent (Lane) to “change or set aside” an arbitral award under s. 19.18 of the Family Law Act, S.B.C. 2011, c. 25. The case has application to commercial arbitration awards and, indeed Justice Tucker looked to the set aside provisions of the International Commercial Arbitration Act, R.S.B.C. 1996, c. 233 (“ICAA”) to determine whether the award should be set aside on jurisdictional grounds. Lane argued, among other things, that the arbitrator had acted outside the scope of the submission to arbitration and outside her authority in varying an earlier “final” award. He argued that the arbitrator had previously declined to clarify or correct the initial award, so it was final and binding upon the parties and subject only to the statutory right of appeal. The parties had agreed to have all their issues in dispute resolved by arbitration and the award which was the subject of this application related merely to one issue. After considering s. 34 of the ICAA, Justice Tucker found that the first award had been based upon facts that turned out not to have been correct and was therefore incapable of being implemented. In varying that award, the arbitrator did not “purport to correct or clarify the award, but determined the application to vary brought before her while her jurisdiction over the matter remained extant under the terms of the submission to arbitration and the applicable statute”.
Continue reading “B.C. – Scope/excess of authority when arbitrator considers variation of award made based upon incorrect facts – #523”Ontario – Court application stayed; jurisdictional issues required analysis of contract’s factual matrix, should be decided by arbitrator – #522
In 743584 Ontario Inc. v. LAC Otelnuk Mining Ltd., 2021 ONSC 5255, Master Jolley stayed a court application in favour of arbitration. Applying the competence-competence principle and the general rule adopted by the Supreme Court of Canada in Dell Computer Corporation v. Union des consommateurs 2007 SCC 34, she held that the question of the arbitrator’s jurisdiction should be decided by the arbitrator, except if the challenge to jurisdiction is based solely on a pure question of law or a question of mixed fact and law that requires only a superficial consideration of the documentary evidence in the record. She stayed the application in favour of arbitration, because the jurisdictional issues raised were questions of mixed fact and law that could not be determined on superficial consideration of the evidence.
Continue reading “Ontario – Court application stayed; jurisdictional issues required analysis of contract’s factual matrix, should be decided by arbitrator – #522”