Québec – court enjoins reluctant arbitral party to abide by earlier court decision enforcing award – #174

In SDC Habitations Saint-Maurice phase III v. Raymond Chabot Administrateur, 2019 QCCS 636, Madam Justice Jocelyn Geoffroy summarily dispensed with a Respondent’s persistent refusal to abide by an award which had been recognized and enforced as a judgment of the Québec Superior Court.   The application to the court prompted a seldom needed level of court intervention in support of arbitration.  The court’s brief reasons reflect that respect for a resolution of disputes is rooted in a respect for the rule of law.

To resolve their disagreements over defective condominium thermal window elements, the parties engaged in arbitration under Québec’s Regulation respecting the guarantee plan for new residential buildings, CQLR c B-1.1, r 8. Following an arbitration administered by the Canadian Commercial Arbitration Centre, the arbitrator issued a March 22, 2017 award (“Award”) which ordered that corrective work be undertaken.  The Award required Respondent to return to the condominium and, after verifications, undertake work stipulated in compliance with two (2) specific, detailed administrative decisions which had issued during the course of the parties’ dispute.  The Award’s dispositive is excerpted at paras 2-3 of Geoffroy J.’s reasons. 

Following the Award,  Defendant clearly announced in a September 21, 2017 letter its intention not to comply with the Award, for reasons it claimed justified Defendant’s resistance.  Despite the clarity of the terms of the Award, Defendant challenged the need to undertake the corrective work. 

Upon application, the Superior Court homologated the Award on June 28, 2018.  (No reasons have been released on line for that June 28, 2018 judgment.)

Faced with the June 28, 2018 court order obliging it to comply with the Award, Defendant conducted its verifications as ordered and, on October 15, 2018, reiterated the position taken prior to arbitration and refused to undertake the corrective work.

Plaintiff then applied again to the Superior Court , this time for an order enjoining Defendant to abide by the terms of the Superior Court judgment.  It argued the Defendant refused to abide by the Award and applied for an order to facilitate execution of the June 28, 2018 court judgment.

Defendant argued that, following the verifications it was ordered to undertake, it had taken a new decision on October 15, 2018 and that an entirely new, dispute resolution process had to be conducted for that decision. 

Geoffroy J. did not have to cite case law, balance competing doctrinal analyses of applicable standards of review or reconcile gaps left by the intersection of arbitral practice and court orders.  After having set the table, Geoffroy J. referred directly to Article 657 C.C.P. of Québec’s Code of Civil Procedure, CQLR c C-25.01 (“C.C.P.”) which pointed to the courts’ authority to “facilitate execution” of court judgments.

Article 657 C.C.P. After the judgment, the court may issue any order to facilitate execution, whether forced or voluntary, in the manner that is most advantageous for the parties and most consistent with their interests.

Coupled with the clarity of the Award, Geoffroy J. promptly resolved the application before her.

informal translation ‘[10] Le court observes that defendant is not in agreement with the March 22, 2017 arbitral decision.  That decision has been homologated by the Superior Court June 28, 2018 and now has executory force.’

informal translation ‘[11] Is it necessary to point out that Canada is a state of law?  That implies the obligation to respect the laws, the regulations and the judgments which flow from them whether one is in agreement with them or not.  It is at the homologation of the decision that defendant and the third-party impleaded could have made their arguments to prevent the arbitral decision from becoming executory.’

informal translation ‘[12] The facts giving rise to this decision go back to 2014, being about five years.  It is time that this saga ends.  There is now res judicata.  The court will thus grant the request.

Geoffroy J. issue a mandatory order against Defendant ordering compliance with the Award, referring to the same dispositive section of the Award by only page number and conclusion numbers.