Newfoundland and Labrador Archives

November 21, 2023November 23, 2023

Newfoundland and Labrador – Set-aside application denied where award meets Vavilov reasonableness test – #793

In Zenda Mount Pearl Square Enterprises Limited Partnership v MP TEI Realty Limited Partnership, 2023 NLSC 142, the Applicant/Respondent in the arbitration applied to set aside an arbitral award arising from a dispute involving the contractual entitlement to refinancing proceeds that the Applicant/Respondent received as a result of a rogue transfer of funds. Section 14 of the Newfoundland and Labrador Arbitration Act, RSNL 1990, c A-14 (the “Arbitration Act”) gives the Court the authority to set aside an arbitral award if it finds that there was Arbitrator misconduct or the award was improperly procured. The Court held that the burden is on the applicant to show that the award is improper as a matter of fact, law, or mixed fact and law, and that the award falls outside out any potential reasonable outcome. The Court’s analysis and reasons looked at whether the decision of the Arbitrator was reasonable, applying Layman v Layman Estate, 2016 NLCA 13 (“Layman”). Focusing, in part, on the Arbitrator’s application of the principles of contract interpretation set out in Creston Moly Corp. v Sattva Capital Corp., 2014 SCC 53 (“Sattva”), the Court concluded that the Arbitrator’s decision to divide the proceeds equally between the parties was reasonable based on the terms of the parties’ agreements. The Court dismissed the set-aside application on the basis that the decision of the Arbitrator, in respect of all of the grounds reviewed by the Court, was reasonable. This case has application to the review (including on set-asides) of arbitration decisions on the basis of reasonableness and the contractual interpretation of commercial agreements.

August 29, 2022August 29, 2022

Newfoundland and Labrador – Objections to litigation to be raised early (even if tentative) – #655

In 55668 Newfoundland and Labrador Limited v. Sullivan, 2022, NLSC 127, a franchisor-franchisee dispute arose between the parties. The Franchise Agreement contained an arbitration clause, however, the Plaintiffs proceeded by way of Statement of Claim. The Defendants did not take the position that the dispute was to be referred to arbitration in their original pleading, relying upon the Statement of Claim, which referred to conduct that occurred after the Franchise Agreement had been terminated. Later, the Plaintiffs corrected their pleading to provide that the impugned conduct occurred pre-termination. The parties disputed whether the arbitration clause terminated with the termination of the Franchise Agreement, and also whether the dispute fell within the scope of the arbitration clause. At trial, the Defendants argued that they had been prejudiced by the pleading amendment, which they asserted clearly gave them the right to arbitration. Justice Knickle held that, assuming the dispute fell within the terms of the arbitration clause, arbitration may have been the available option. However, the Defendants knew from the beginning of the litigation that the facts that were relevant to the dispute covered the period both before and after the termination; their failure to plead their right to arbitration in their Statement of Defence meant that they were out of time to object.

April 14, 2022April 12, 2022

Newfoundland and Labrador – No attornment to court jurisdiction where arbitration mandatory under treaty – #605

In Newfoundland and Labrador v Nunatsiavut Government, 2022 NLCA 19, the Court of Appeal of Newfoundland and Labrador (the “Court”) allowed the Province’s appeal of a trial decision in respect of a dispute pursuant to the Labrador Inuit Land Claims Agreement(the “Treaty”). The Court found that the parties were required to arbitrate their dispute, even though this issue was raised for the first time on appeal. At first instance, the trial judge agreed with the claim of the Nunatsiavut Government (“Nunatsiavut”) against the Province for a share of revenue related to the exploitation of land subject to the Treaty. On appeal, the Province challenged, for the first time, the jurisdiction of the Supreme Court of Newfoundland and Labrador (the “Superior Court”) to have adjudicated the matter in light of the requirement for mandatory arbitration under the Treaty. Central to the Court’s finding on appeal was its determination that the parties could not “attorn” to the Superior Court’s jurisdiction despite the fact that the Province did not raise the issue of jurisdiction before the trial judge. The Court found that “[56] [g]iven the clear language of the treaty that the parties must proceed to arbitration to resolve the disputes over revenue sharing, the parties cannot ‘attorn’ to the jurisdiction of the Court because the jurisdiction of the provincial Superior Court has been removed by these terms.”

December 3, 2021May 4, 2022

Newfoundland and Labrador – Labour Arbitrator’s Collective Agreement Interpretation Passes Vavilov Reasonableness Muster – #559

In Pennecon Maintenance Services Limited v. Fish, Food & Allied Workers, 2021 NLSC 141, Justice Knickle ruled that a labour arbitrator reasonably interpreted a collective agreement in light of the precepts laid down in both Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 [Vavilov] and Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 [Sattva]. Although arising from an application for judicial review, Justice Knickle’s analysis provides relevant insights applicable to private arbitration disputes as they relate to contract interpretation.

October 28, 2021May 4, 2022

NL – Pre-judgment attachment order granted re possible damages payable from arbitration -#548

In Sandford v Astaldi, 2021 NLSC 130, the plaintiffs sought a pre-judgment attachment order pursuant to s. 27 of the Newfoundland and Labrador Judgment Enforcement Act on the exigible property of defendant Astaldi Canada Inc. They also asked that defendants Muskrat Falls Corporation (“MFC”) and Nalcor Energy be prohibited from dealing with Astaldi property they hold in a manner that would be likely to hinder the plaintiffs in the enforcement of any judgment they may obtain against Astaldi in their litigation. The exigible property at issue was: (a) monetary damages which Astaldi hoped to receive as a result of a private commercial arbitration against MFC and Nalcor; and (b) proceeds held by MFC and Nalcor from the sale of equipment owned by Astaldi. The issue on the application was whether there were reasonable grounds to believe that Astaldi “is dealing” or “is likely to deal” with its exigible property otherwise than for the purpose of meeting its reasonable and ordinary business expenses; and, if so, whether the manner of it so dealing would likely seriously hinder the plaintiffs in enforcement of a judgment. Justice Thompson granted the pre-judgment attachment order on the ground that Astaldi was no longer conducting business at all in the province, which meant that it was not dealing with its exigible property at all, nor meeting its expenses.

January 24, 2021January 24, 2021

N.L. – court’s efforts to case manage procedure and focus dispute overlap with arbitration’s benefits – #417

To assist the parties to reach the merits and perhaps resolve related issues not squarely before the court, Mr. Justice Glen L.C. Noel in Oleynik v. Kachanoski, 2021 NLSC 4 wielded four (4) different procedural tools when adjudicating a procedural dispute: (i) assume case management; (ii) encourage elimination of preliminary procedural initiatives; (iii) ‘direct’ alternative dispute resolution; and, (iv) caution costs. Only (i) and (iv) were within Noel J.’s express jurisdiction to order. Lacking jurisdiction under (ii) to prevent Respondent altogether from presenting its preliminary application or (iii) to impose mediation, Noel J. did expressly urge or “direct” consideration of the options. Noel J.’s efforts reflect the courts’ genuine interest in assisting parties to either reduce or focus their disputes and incur less time and cost. Those efforts overlap with the benefits commonly expected in arbitration and expressly urge litigants to seek out those benefits.

September 5, 2020January 4, 2021

N.L. – agreement to arbitrate renewal option’s financial terms ensures lease is enforceable – #369

In Copper Stop Limited v. Parkland Fuel Corporation, 2020 NLSC 114, Madam Justice Kendra J. Goulding had to resolve a lease dispute which arose when the lessee sought to exercise an option to renew but for which the lease provided no specific term governing the method or time within which to exercise that option. Despite lessor’s argument that the lease was enforceable, Goulding J. held that the option to renew was enforceable as the financial terms of the renewal option were capable of being made definite through imposition by the arbitrator. The ability to arbitrate if negotiations failed made the lease’s renewal option more than just “an agreement to agree”.

July 21, 2019January 3, 2021

N.L. – city lacks authority to impose arbitration unrelated to legislation’s purpose/intent – #207

In St. John’s (City) v. 10718 Nfld. Inc., 2019 NLCA 41, Newfoundland and Labrador’s Court of Appeal upheld a first instance decision declaring that the City of St. John’s (the “City”) cannot require mandatory arbitration in an agreement as a term of approval of development as doing so is acting beyond its jurisdiction under its enabling legislation. See the earlier Arbitration Matters note “Newfoundland and Labrador court holds that a municipality has authority to agree to arbitration but not to impose it as a condition of regulatory approval“

March 20, 2019January 3, 2021

N.L. – ‘legislative language to the contrary’ provides option of court proceedings or arbitration – #176

In Dewey v. Corner Brook Pulp and Paper Limited, 2019 NLCA 14, Newfoundland and Labrador’s Court f Appeal held that the applications judge had erred in ordering a stay of a proposed class action when he found that the dispute could only be resolved by mandatory arbitration. Based on its interpretation of the legislation first introduced in 1915 and amended subsequently, the Court held that the legislation, from the onset and despite amendments, provided for the option of arbitration or court proceedings. The Court identified the result as an exception, based on “legislative language to the contrary”, to courts enforcing mandatory arbitration.

March 12, 2019January 3, 2021

N.L. – reciprocal enforcement of court judgment enforcing awards not opportunity for collateral attack of awards – #170

In Shoppers Drug Mart Inc. v. Retirement Home Specialists Inc., 2019 NLSC 44, Mr. Justice Robert P. Stack upheld an ex parte Newfoundland and Labrador court decision registering as its own judgment an earlier Ontario court decision enforcing awards. In dismissing defendants’ contestation as a collateral attack on the awards, Stack J. listed alternative procedural steps which might have provided plausible opportunity to challenge the awards. Stack J. underlined the limited role of the Ontario court enforcing an arbitration award under its Arbitration Act, 1991, SO 1991, c 17, and the Newfoundland and Labrador court providing reciprocal enforcement of another province’s court judgments under the Reciprocal Enforcement of Judgments Act, RSNL 1990, c R-4.