Ontario – Does an appeal of a costs award require leave? – #672

In Schickedanz v Wagema Holdings Ltd., 2022 ONSC 5315, Justice Ramsay dismissed the motion by Wagema Holdings Ltd (Respondent on appeal) to quash Appellant Schickedanz’s appeal of a costs award. Wagema argued that leave was required under s. 133(b) of the Ontario Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) and so the appeal was also out of time. Justice Ramsay was not persuaded that Wagema would prevail when the issue was determined by the appeal judge. First, the parties’ arbitration agreement contained a broad appeal process, without a leave requirement for costs appeals. Second, there is nothing in s. 45 of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17 that requires leave to appeal a costs award or imports the leave requirement set out in the general costs appeal provision in s. 113(b) of the CJA. Third, the parties could contract out of the appeal provisions in s. 45 of the Arbitration Act pursuant to s. 3. Imposing a leave requirement to appeal a costs award would amount to judicial interference with the parties’ right to contract, which was recognized by the Supreme Court of Canada in TELUS Communications Inc. v. Wellman, 2019 SCC 19. Ultimately, it would be up to the judge hearing the appeal to decide whether leave was required and, if so, whether the appeal was out of time and whether the appeal had merit.

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Alberta – Successful enforcement of right to arbitrate attracts triple “tariff” costs  – #659

In Barrel Oil Corp v. Cenovus Energy Inc., 2022 ABQB 488, Justice M.H. Hollins granted a Respondent who successfully defended an application to stay an arbitration the Respondent had commenced, triple “tariff” costs, equating to just over 40% of the Respondent’s out of pocket costs. The Court rejected the Respondent’s plea of full indemnity costs, finding they were inappropriate in this case.

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Ontario – Costs in both arbitration and court guided by same principles – #630

In Electek Power Services Inc. v. Greenfield Energy Centre Limited Partnership, 2022 ONSC 2437, Justice Perell held that when awarding costs, the discretion of both an arbitrator and the court are the same: both are guided by reasonableness and the fair and reasonable expectations of the unsuccessful party.

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Ontario: Award set aside for “trickery and injustice” – #624

In Campbell v. Toronto Standard Condominium Corp. No. 2600, 2022 ONSC 2805, Justice Perell of the Ontario Super Court of Justice set aside an arbitral award for “constructive fraud” pursuant to s. 46(1), para. 9 of the Ontario Arbitration Act, 1991. The arbitral award ordered the Campbells, who were condominium owners (the “Owners”), to pay $30,641.72 to the Toronto Standard Condominium Corporation No. 2600 (the “Condo Corp.”), which represented the costs of their arbitration. The matter began as a dispute regarding the Owners’ alleged non-compliance with the rules of the Condo Corp, including noise complaints and short-term rentals. However, the Owners were led to believe that the arbitration would be limited to the reasonableness of Condo Corp.’s legal costs in enforcing compliance up to and including the arbitration. Justice Perell held that the Owners were “tricked” intothe arbitration because it was actually an arbitration on the non-compliance issues.While Justice Perell found that the Condo Corp. was not deceitful, he found that “[2] it misled, outmanoeuvred, and outsmarted the [Owners]” such that “[t]he court should not countenance the trickery and the injustice.” As a result, the arbitral award was set aside.

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Julie’s 2021 Top Pick: B.C. – Allard v The University of British Columbia – #567

Costs results in domestic commercial arbitrations are often based on, or consistent with, the norms of international commercial arbitration and can differ greatly from what is expected based on standard litigation practice. This can be an unpleasant surprise for counsel and their clients who are unfamiliar with this. In Allard v The University of British Columbia Justice Douglas confirmed that the “starting point”  for an award of costs in domestic commercial arbitration is that the winner is entitled to its reasonable legal fees and disbursements, or what is referred to in litigation practice as “solicitor client costs” or “indemnity costs” and not “party party” costs, which many litigators would expect. There are, of course, exceptions to this “normal rule” for assessing costs. Alberta’s Arbitration Act, RSA 2000, c A-43 perhaps provides one, as is discussed below.

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Québec – partial award may determine scope of arbitration agreement for final award – #563

In Maïo v Lambert, 2021 QCCS 3884, Justice Castonguay denied an application to annul in part and modify a final award. He found that the arbitrator did not exceed the scope of his mandate, including in how he ruled on matters that had been circumscribed in a prior partial award, and that the applicant was essentially seeking an improper review of the merits of the dispute.

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