B.C. Archives - Arbitration Matters

November 8, 2024November 8, 2024

B.C. – Stay motion test and the “brick wall framework” – #874

In Wiederhold v Aspen Technology, Inc., 2024 BCSC 1731, the Court declined to grant a stay application under s. 7 of the Arbitration Act, SBC 2020, c. 2 [Act], on the basis that the arbitration clause was unenforceable for lack of consideration, contrary to public policy, and unconscionable. It applied the “brick wall framework” described in Spark Event Rentals Ltd. v Google LLC, 2024 BCCA 148 at paragraphs 19 ss.

October 21, 2024October 18, 2024

B.C. – Court adopts award-centric review for questions of law – #869

In Desert Properties Inc. v. G&T Martini Holdings Ltd, 2024 BCCA 320, the Court rejected challenges to a liability award and an interest award in disputes stemming from a major property development. The Court dismissed applications for leave to appeal and cross-appeal for failure to demonstrate extricable errors of law in the liability award. The Court also ruled there was insufficient merit in a proposed appeal from a BCSC decision which had declined to set aside the interest award. Both parties have kept the B.C. courts busy with multiple challenges to these arbitral awards, generating three Case Comments in recent months. It can be argued that the Court’s mode of analysing extricable errors of law for the purposes of appeal has changed (perhaps ever so slightly) since its decision in Escape 101 Ventures Inc. v. March of Dimes Canada, 2022 BCCA 294, in which it found that misapprehensions of evidence that go the core of the outcome of a case are extricable errors of law.

October 7, 2024October 4, 2024

B.C. – Stay of action fails where party first brought motion to strike – #866

Montaigne Group Ltd. v St. Alcuin College for the Liberal Arts Society, 2024 BCSC 1465 concerns the issue of whether the Court should grant a stay of domestic proceedings in favour of arbitration after the defendant who sought the stay, St. Alcuin, first brought a motion before the court to strike the claims. Because this involved seeking substantive relief from the Court, it held that the defendant had attorned to the Court’s jurisdiction and waived its right to arbitration and also taken steps that rendered the arbitration clause inoperative. Therefore, the stay of proceedings was denied under section 7(2) of the Arbitration Act, S.B.C. 2020, c. 2.

August 16, 2024August 12, 2024

B.C. – Questions of issue estoppel not always extricable questions of law – #855

In Magnum Management Inc. v Chilliwack Hangar Corp., 2024 BCCA 212 [Magnum Management], the Court dismissed an application for leave to appeal an arbitration award. The applicant sought leave on the basis that the arbitrator had failed to apply, or misapplied, the legal principle of issue estoppel, had misapprehended another arbitrator’s reasons in a prior arbitration involving the same contractual clauses, and had not anchored the award in either party’s submissions. The Court found that the applicant had failed to identify an extricable question of law under s. 59(3) of British Columbia’s Arbitration Act, SBC 2020, c. 2 [“Act”].

July 22, 2024July 25, 2024

B.C. – Insufficiency of Reasons Breached Due Process – #848

In Sound Contracting Ltd. v Campbell River (City), 2024 BCSC 933, the court allowed the set- aside challenge of an arbitral award and remitted the matter to the arbitrator on the basis that the arbitrator had failed in his duty under natural justice to provide adequate reasons. The arbitrator concluded that the arbitration was time-barred but did not explain why he had reached that conclusion. In so doing, the court treated the set-aside challenge as akin to an appeal, where insufficient reasons amount to an error of law. In so doing, the court applied principles in the civil (appeal) and administrative (judicial review) contexts to the set aside of an arbitral award. This stands in contrast to how this issue has been treated internationally, where the matter of whether insufficiency of reasons is a breach of procedural fairness is not well-settled.

July 5, 2024July 2, 2024

B.C. – Danger of Bifurcated Proceedings – #846

In G & T Martini Holdings Ltd. v. Desert Properties Inc., 2024 BCSC 828, the Court dismissed a petition under s. 58(1)(c) of the Arbitration Act, S.B.C. 2020, c. 2 (“Arbitration Act”) to set aside an arbitral award after a bifurcated arbitration. The Petitioner claimed that the Arbitrator had changed the rationale of the earlier liability award and was precluded from calculating damages in the manner it did at the damages stage after the Arbitrator’s earlier award on liability. The Court found that the Arbitrator did not improperly change his decision on liability in the damages award, but instead merely elucidated upon his rationale for the decision he made in the liability award.

June 21, 2024June 21, 2024

B.C. – Court strictly enforces arbitration rules to foreclose leave to appeal award – #843

In Bollhorn v Lakehouse Custom Homes Ltd., 2024 BCCA 192, the Court dismissed an application by the Appellant/Plaintiff Robert Bollhorn for leave to appeal an award of an arbitrator. This outcome resulted from the Court’s application of Rule 27 of the Vancouver International Arbitration Centre (“VanIAC”) Domestic Arbitration Rules (the “Rules”) and Section 59(3) of the Arbitration Act, SBC 2020, c 2. The former operates to foreclose appeals where the award is issued under the Expedited Procedures of the Rules, which the Court found applied to the case. The latter provides that there can be no appeal on a question of law where the arbitration agreement – in this case the parties’ adoption of the Rules – expressly disallows it.

June 3, 2024May 30, 2024

B.C. – BCCA goes deep and wide on partial stays – #838

Davidson v. Lyra Growth Partners Inc., 2024 BCCA 133 concerns whether there is jurisdiction under s. 7 of the Arbitration Act, S.B.C. 2020, c. 2 (“Arbitration Act”) to grant a partial stay of court proceedings concerning only those matters arguably agreed to be arbitrated by the parties or whether a court is required to stay the entire action. The Court confirmed that partial stays are available under the Arbitration Act where the court action raises some non-arbitrable matters despite there being no express language permitting non-arbitrable matters to proceed in Court – unlike other provincial legislation. It set out factors that should be considered by a court of first instance in determining whether to grant a partial stay or a complete stay. It also emphasized, however, that a stay of those matters arguably agreed to be arbitrated is mandatory if the requirements of s. 7 are met. In this case it had been argued that a stay could be refused as the “essential nature” or “pith and substance” of the court proceedings related to matters not covered by the arbitration agreement. The Court confirmed that there is no “residual” jurisdiction to deny a stay on that basis. This decision aligns with the Supreme Court of Canada’s guidance in TELUS Communications Inc. v Wellman, 2019 SCC 19 (“Wellman”) concerning the mandatory nature of stays of court proceedings that relate to any matter arguably reserved for arbitration.

May 8, 2024May 10, 2024

B.C. – No arbitrator bias where prima facie merits and credibility determinations made – #833

In Johnston v. Octaform Inc., 2024 BCSC 537, the Court dismissed a petition to have an arbitrator removed from an ongoing arbitration on the basis of an alleged reasonable apprehension of bias. The circumstances relied on by the petitioners arose from the arbitrator’s issuance of a freezing order and other procedural directions, in a hard fought and contested arbitration. The fact that the freezing order required the arbitrator to make findings of credibility and preliminary merits determinations did not give rise to bias. Also, the trigger for the 15-day period to challenge an arbitrator for bias is not an “open and fluid concept”.

April 24, 2024April 19, 2024

B.C. – Consumer protection claim survives stay application through last-minute amendment – #830

Polanski v Vancouver Career College (Burnaby) Inc. concerns a defendant’s stay application brought under s. 7 of the Arbitration Act, SBC 2020, c 2 (“Arbitration Act”). The Court dismissed the application to stay certain claims made under s. 172 of the British Columbia Business Practices and Consumer Protection Act (“BPCPA”). The Court, relying on various appellate cases, held that s. 172 restricted the parties’ ability to agree to arbitrate and that the policy objectives of s. 172 would not be served by private and confidential arbitration. Why did the court need to re-articulate this well-established principle? Perhaps because the defendant needed to pivot after it had initially brought the application in response to the plaintiffs’ changing positions. The plaintiffs only added the s. 172 claims in the face of the stay motion and then only consented to the stay of the remainder of their claims for damages, including under s. 171 of the BPCPA, at the hearing of the application – no doubt, to the dismay of defence counsel who were facing a moving target. (A brief refresher for those in need it: s. 172 provides for private enforcement of consumer protection claims in the public interest, while s. 171 provides for a private remedy for damages or loss.)