In Bélanger c Beauchamp, 2024 QCCS 3118, the Court homologated several awards rendered in the context of a dispute between two co-owners of an undivided property concerning the location and size of their parking spaces. The Defendant contested the homologation of one of the awards based on public policy grounds, alleging that the award violated a municipal by-law. The Court ruled that any violation of the municipal by-law that would result from the award did not amount to a public policy violation that justified refusing homologation, because it would not be a violation that offends the fundamental values underlying Québec public policy. The Court also decided that an award rejecting one of the parties’ applications for recusal of the arbitrator did not constitute an award within the meaning of the Québec Code of Civil Procedure (“CCP”), and so could not be homologated. This latter issue is not addressed in this case note.
Background – The case arises from a disagreement between two co-owners of an undivided property regarding the location and size of their respective parking spaces on the undivided property. One of the co-owners, the Defendant in the homologation action, initiated an arbitration before a sole arbitrator.
On November 23, 2021, the sole arbitrator rendered a first award, which determined, among other things, the location and size of the Defendant’s parking space (the “First Award”). It referenced an applicable municipal by-law, which set out minimal dimensions for parking spaces. However, importantly to the case, the arbitrator appeared to have misstated the dimensions set out in the by-law when making the award.
The arbitrator also reserved her jurisdiction to determine further disputes regarding compliance with the First Award.
On December 17, 2021, Defendant delivered a “Request for the Arbitrator’s Intervention”, which asked the Arbitrator to re-examine her award.
On February 17, 2022, the other co-owner, Applicant seeking homologation of the award, submitted to the arbitrator an Exception to dismiss the Defendant’s Request for Intervention as well as an Application for a declaration of an abuse of procedure (“Declaration of Abuse”).
On February 21, 2022, the parties consented to be bound by the same terms of reference as the original arbitration that gave rise to the First Award.
On April 24, 2023, the arbitrator rendered three further awards:
- Dismissing an application by Defendant for recusal of the arbitrator (“Second Award”);
- Granting the Application to Dismiss the Request for Intervention (“Third Award”); and
- Granting the Application to declare an abuse of procedure (“Fourth Award”) and likely ordering the Defendant to pay certain amounts to the Plaintiff (although this is not clear from the decision).
The Applicant sought homologation of all four awards because the Defendant had refused to pay sums it had been ordered to pay by the arbitrator.
Issue in Dispute – The Defendant contested the application for homologation of the First Award and argued that there had been a violation of public policy. The Defendant alleged that the First Award misstated the minimum dimensions for a parking space that were set out in the applicable by-law. The Defendant stated that it would be impossible to park in the space designated in the First Award while remaining compliant with the applicable by-law. The Defendant also alleged that parking in conformity with the First Award would cause their vehicle to encroach (slightly) on an alleyway (public space), and so violate the applicable by-law. The Defendant supported these arguments with a surveyor’s report, but this report had not been submitted to the arbitrator..
Court’s decision on Homologation of the First Award– The Court cited Desputeaux v Editions Chouette (1987) inc, 2003 SCC 17 as authority for the public policy justification to refuse homologation of an arbitral award. It found that to refuse homologation based on a public policy violation, the moving party must establish that the result is incompatible with public order and that it was not sufficient that the arbitrator had misapplied a rule of public order.
Applying these principles, the Court homologated the First Award, rejecting the Defendant’s contestation for the following reasons.
First, the Court found that the Defendant had essentially asked for a re-determination of the merits, relying on new evidence (the surveyor’s report) that it had not submitted to the arbitrator. The Court held that a review of the merits of the decision is prohibited in homologation proceedings, based on art. 645(2) CPC, which reads:
“The court seized of an application for the homologation of an arbitration award cannot review the merits of the dispute. It may stay its decision if the arbitrator has been asked to correct, supplement or interpret the award. In such a case, if the applicant so requires, the court may order a party to provide a suretyship” [Emphasis added.]
Second, evidence submitted to the arbitrator had established that, for a period of 18 years prior to the dispute, the co-owners had agreed to park their vehicles in a similar manner to that ordered by the arbitrator. This arrangement similarly created a potential violation of the bylaw; however, the by-law had never been enforced. In the Court’s view, this indicated that any violation of the municipal by-law that would result from the implementation of the First Award was not so severe as to offend fundamental values underlying Québec public policy. This was therefore not a public policy violation that justified refusing homologation.
Contributor’s Notes:
First, it is interesting to note that the Court relied on evidence establishing that the applicable by-law had not previously been enforced with respect to the parking space in determining that any such violation did not offend the fundamental values underlying Québec public policy.
Second, the Court was not swayed by fresh evidence submitted in the context of the homologation hearing that had not been submitted to the arbitrator. The Court rather found that the Defendant sought another kick at the can, by a re-examination of the merits, which is prohibited under the art. 645(2) CPC. This is consistent with the tendency to interpret very restrictively the grounds available to contest the homologation of an arbitral award (or to seek annulment of the award via art. 648 CPC).
Third, the Court’s decision confirms that, to justify a refusal to homologate, the public policy violation must amount to more than misapplication of the law. This decision is consistent with the case law according to which courts avoid intervening in arbitral decisions, except in exceptional cases.