Ontario Archives - Page 14 of 32 - Arbitration Matters

November 25, 2021May 4, 2022

Ontario – Appeal of award dismissed after party refused to participate – #557

In Vanhof & Blokker Ltd. v Vanhoff & Blokker Acquisition Corp., 2021 ONSC 7211, the Respondents/Appellants on Appeal (“the Sellers”) sold the assets of their horticultural and garden supply business to the Applicants/Respondents on Appeal (“the Purchasers”) pursuant to an Asset Purchase Agreement dated December 29, 2014. The Sellers alleged that the Purchasers breached the terms of the Asset Purchase Agreement and they therefore refused to make payments under the Agreement, claiming that they were induced to enter into the Agreement by fraudulent and negligent misrepresentations made by the Purchasers. The Sellers refused to participate in an arbitration of the dispute and then appealed the final award. Justice Pollack dismissed the appeal, relying upon s. 27(3) of the Arbitration Act, 1991, S.O. 1991, c. 17, on the basis that the Sellers had been advised of the date for the arbitration and had filed material, but had failed to participate. They were obliged to raise their objections about the arbitrator’s jurisdiction before the arbitrator at the hearing, rather than by letter.

November 24, 2021May 4, 2022

Ontario – Historic arbitration decision is not probative evidence in interpretation of a Treaty – #556

In Restoule v. Canada (Attorney General), 2021 ONCA 779, the Ontario Court of Appeal discussed the evidentiary value of an arbitration record – from an arbitration between Canada, Ontario and Quebec over responsibility for annuity payments under a Treaty with First Nations signed forty years before the arbitration – in the context of present-day litigation between the Treaty beneficiaries and the Province of Ontario over increases in those annuities. Because of the lack of temporal proximity between the historic arbitration and Treaty formation, and the fact that the evidence at that arbitration was entirely given by potential payors under the Treaty, the arbitration record needed to be viewed with caution. It was not helpful post-Treaty evidence in interpreting the intentions of the parties at the time of Treaty formation.

October 26, 2021May 4, 2022

Ontario – Court of Appeal does not address whether Vavilov changed the standard of review – #546

In Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2021 ONCA 592, Justice Jamal (as he then was), writing for the Court of Appeal, found that it was unnecessary to address whether Vavilov changed the standard of review analysis in Sattva and Teal Cedar in an appeal from a commercial arbitration decision. Justice Jamal held that the parties’ disagreement as to how the applicable principles of contractual interpretation should be applied to the contractual facts is, absent an extricable error of law, an exercise of contractual interpretation by a first-instance decision maker on a matter of mixed fact and law that attracts appellant deference. Further, the Court should refrain from deciding issues of law that are unnecessary to the resolution of an appeal.

October 15, 2021May 4, 2022

Ontario – Challenge to arbitrator’s integrity to be determined using bias test – #543

In Farmer v Farmer, 2021 ONSC 5913, the appellant wife appealed three arbitral awards arising out of a five-day family arbitration pursuant to s. 45(6)(a) of the Ontario Arbitration Act, 1991, SO 1991, c. 17. The wife’s grounds for appeal included that the arbitrator’s reasons were deficient and that the arbitrator’s “Clarification/Explanation Award” rendered after the parties complained that he had omitted certain issues in his first award, was an “after-the-fact” justification for the first award. The arbitrator admitted that he had had difficulty with his dictaphone when he had drafted the first award so that certain portions of it were inadvertently omitted, but said in the “Clarification/Explanation Award” that all issues had been considered. Justice Finlayson found that the “presumption of integrity” which applies to judges also applies to arbitrators and that the wife had to meet a test “similar to” the “reasonable apprehension of bias test” to rebut that presumption. She did not do so and this ground of appeal was dismissed. Justice Finlayson also concluded that the arbitrator’s reasons were insufficient, and substituted his own decision on one issue.

October 14, 2021May 4, 2022

Ontario – Court denies stay of order authorizing CCAA sale process despite ongoing arbitration – #542

In Urbancorp Toronto Management Inc. (Re) 2021 ONCA 613, Justice Miller refused to grant a stay pending appeal of an order in a CCAA proceeding authorizing the sale of an interest in a property development. The moving party unsuccessfully argued that the sale should be postponed until the conclusion of an ongoing parallel arbitration, the outcome of which would materially impact the value of the interest. If the sale process was not postponed, the moving party argued, the ongoing arbitration would chill the sale process and it would be impossible to know if a higher sale price could be achieved. Justice Miller held that he could not substitute his own evaluation of the efficacy of the sale process over that of the lower court judge, who had dismissed as speculative the argument that the sale process would suffer a chilling effect.

October 7, 2021May 4, 2022

Ontario – Award enforcement application met with merits arguments in leave to appeal/set aside cross-application #539

In Fogler, Rubinoff LLP v Houle, 2021 ONSC 5626, Justice Vermette heard two applications following an arbitration concerning the assessment of two accounts rendered by applicant, Fogler, Rubinoff LLP, to its clients, respondents Conrad and Sheila Houle. The arbitrator issued an award requiring the respondents to pay. After they did not do so, Foglers brought an enforcement application pursuant to s. 50 of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17. Upon such application, the court “shall” grant judgment so long as the requirements of s. 50(3) are not met – the appeal/set aside deadline has not yet elapsed, there is a pending appeal/set aside application, or the award has been set aside or the arbitration is the subject of an award of a declaration of invalidity. In other words, the merits of the award are not relevant. The respondents did not initially appeal the award, but then brought a cross-application – challenging both jurisdiction and the merits – seeking to set aside the award pursuant to s. 46(1)3 of the Arbitration Act or, in the alternative, leave to appeal the award under s. 45(1). Justice Vermette found that the set aside application was really a request to review the substance of the award on the basis that the arbitrator’s decision was unreasonable or incorrect. She also dismissed the motion for leave to appeal on the ground that it did not raise a question of law. Whether the facts met the required legal test was a matter of mixed fact and law. Therefore, given the dismissal of the respondent’s cross-application, she granted the Foglers enforcement application.

September 30, 2021May 4, 2022

Ontario – Stay motion denied: case was a proper one for summary judgment, but summary judgment not sought – #538

In Jencel 407 Yonge Street Inc. v. Bright Immigration Inc., 2021 ONSC 6030, Justice Akbarali dismissed the Defendant’s motion to stay the action in favour of arbitration. The Plaintiff argued that the stay motion should be dismissed because the action was a proper one for summary judgment, relying upon s. 7(2)5 of the Arbitration Act, 1991, S.O. 1991, c. 17. Justice Akbarali agreed. The key facts were uncontested and the Defendant’s position in the action, which consisted mostly of “bald assertions and unarticulated legal and factual arguments”, did not give rise to any genuine issue requiring a trial. However, the Plaintiff did not move for summary judgment.

September 29, 2021May 4, 2022

Ontario – Participating party in arbitration not granted leave to intervene in appeal/set aside application – #537

In Baffinland Iron Mines v Tower-EBC, 2021 ONSC 5639, the parties were engaged in a dispute about a project to build a railway to transport ore in Nunavut. They entered into two contracts which contained an arbitration clause. After delays in the project, one party terminated the contracts; the other claimed breach of contract and commenced an arbitration for its own losses and the losses of its sub-contractor, which participated in the hearing and had counsel present. However, that participation expressly did not constitute an agreement that the sub-contractor was a party to the arbitration. The tribunal issued a Final Partial Award finding that the contract had been wrongfully terminated, however, the tribunal was split on whether the innocent party was also entitled to recover the damages of the sub-contractor. The innocent party brought an application to set aside the award pursuant to s. 46 of the Arbitration Act, 1991, S.O. 1991, c. 17, and for leave to appeal the award under s. 45(1) of the Act. The sub-contractor sought leave to intervene in the application on the ground that it had an interest in the subject matter of the proceeding and would be adversely affected by the judgment. Justice Pattillo dismissed the motion, in part, because “courts are reluctant to permit third parties to intervene in purely private and commercial litigation” and that this is “more so where private arbitration is involved.”

September 15, 2021May 4, 2022

Ontario – Courts decide consent to arbitration de novo, without deference to arbitral tribunal – #532

In Hornepayne First Nation v. Ontario First Nations (2008) Limited Partnership, 2021 ONSC 5534, Justice Fitzpatrick held that a court hearing an application to “decide the matter” of arbitral jurisdiction must decide the question de novo. This was an application to the court under section 17(8) of the Ontario Arbitration Act, 1991. That section provides that, if an arbitral tribunal finds as a preliminary question that is has jurisdiction, any party may apply to the court to “decide the matter”. Justice Fitzpatrick followed the Divisional Court’s decision in Russian Federation v. Luxtona, 2021 ONSC 4605, which interpreted a similar provision in Article 16(3) of the Model Law. He held that the court’s role on such an application is to decide de novo whether the arbitral tribunal had jurisdiction.

September 2, 2021November 29, 2022

Ontario – Partial stay; oppression claim arbitration to precede related family law action – #528

In Pezo v Pezo, 2021 ONSC 5406, the applicant Elma Pezo brought two claims: a family law claim against her spouse Kabir Pezo; and an oppression remedy claim against Kabir and his friend Hadis Kozo regarding a business they had all operated together. Kazo sought a stay of all claims against him on the basis that the parties had entered into a Shareholders’ Agreement with respect to the business that contained a mandatory arbitration clause. However, Elma argued that it was invalid because the two claims intersected and had to be heard together, but the arbitration clause did not meet the requirements for a family law arbitration set out in Ontario Regulation 134/07 of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17. Justice Kraft disagreed. She found that the arbitration clause covered only the oppression remedy claims and that she had the discretion to grant a partial stay under s. 7(5) of the Arbitration Act because its two pre-conditions had been met: (a) the agreement dealt with only some of the matters in respect of which the proceeding was commenced; (b) it was reasonable to separate the matters dealt with in the agreement from other matters. She stayed the family law claims an ordered an arbitration with respect to the oppression claims to proceed before the action so that the findings of the arbitrator on issues that could affect the family law claim would be before the court.