B.C. – no special rules for self-represented parties in arbitration beyond natural justice

In 0941187 B.C. Ltd. v 0927613 B.C. Ltd., 2019 BCSC 1649, Mr. Justice Gregory T.W. Bowden dismissed a litigant’s attempt to dispute claims on the basis of an alleged estoppel arising from an earlier arbitral award.  Bowden J.’s brief treatment of the estoppel argument underlines that awards only resolve the issues submitted in the arbitration in which the awards was made.  The decision also refers back to an earlier decision of the Court of Appeal, involving the same parties, which held that, despite some latitude, no special rules apply for self-represented arbitral parties beyond basic natural justice requirements of an impartial arbitrator, notice, an opportunity to tender evidence, make representations and to respond to the other side’s case.

0941187 B.C. Ltd. (“187”), 0927613 B.C. Ltd. (“613”) and third corporation entered into a joint venture agreement (“JVA”) for the acquisition, development and eventual sale of townhouses on three (3) lots is B.C.  Disputes arose including (i) 187’s entitlement to an increased percentage interest and (ii) 613’s obligation to transfer a portion of its interest under an amendment to the JVA.

The parties undertook arbitration of disputes (i) and (ii) but 613 did not participate as its sole shareholder, officer and director did not participate.  The arbitrator issued an award (“Award”) which ordered that 613 transfer 41 1/65 of its ownership in Lot 1 and Lot 2 to 187 plus costs.  

In subsequent litigation, which resulted in the decision of Bowden J., 187 claimed that 613 was estopped in the new litigation from claiming a share of expenses because that issue was before the arbitrator who issued the initial Award.  Bowden J. dismissed this argument, holding that estoppel did not apply because the issue of the payment/allocation of expenses for the joint venture was not before the arbitrator.  Rather, the issue resolved in the Award concerned the determination of 187’s interest in the joint venture.  Bowden J. then proceeded to adjudicate the dispute placed before him.

Bowden J.s reasons are of additional interest because they resurrect two (2) earlier decisions from 2014 and 2015 and whether the rules of natural justice are somehow different for self-represented parties.

613 successfully appealed that Award in 0927613 B.C. Ltd. v 0941187 B.C. Ltd., 2014 BCSC 2672 but the B.C. Court of Appeal overturned that decision in 0927613 B.C. Ltd. v. 0941187 B.C. Ltd., 2015 BCCA 457.

The decision in first instance granted 613’s application to set aside the Award on the alleged basis that the arbitrator had committed arbitral error by failing to follow the requirements of natural justice.  The judge in first instance had decided that (i) there were special natural justice requirements for self-represented parties engaged in arbitration and (ii) the arbitrator had breached those requirements by not providing sufficient guidance and assistance to that self-represented party.

The Court of Appeal overturned that decision.  The Court held that, on the facts before it, the self-represented party had been given every opportunity to participate in the arbitral process, to present evidence, to make submissions and to respond to the other party’s case, but chose not to do so.

[64] There are no special rules of procedure for a self-represented party in an arbitration proceeding beyond the basic procedural requirements for any arbitration: an impartial arbitrator, procedural fairness of notice, and a fair or reasonable opportunity to make submissions and to respond to the other side’s case. As this Court noted in Burnaby (City) v. Oh, 2011 BCCA 222 (CanLII) at para. 36, self-represented litigants do not have “some kind of special status” that allows them to ignore rules of procedure. In Murphy v. Wynne, 2012 BCCA 113 (CanLII) at para. 16, Madam Justice Neilson, relying on comments of Mr. Justice Chiasson in Stark v. Vancouver School District No. 39, 2012 BCCA 41 (CanLII) (in Chambers) and Shebib v. Victoria (City), 2012 BCCA 42 (CanLII) (in Chambers), observed that “[w]hile it is important unrepresented litigants have a full opportunity to avail themselves of our court processes, all litigants must keep within the bounds of those processes.” These comments in my view apply equally to an arbitration forum that has been chosen by the parties for the resolution of their dispute.

[65] In the context of a court proceeding, the Canadian Judicial Council in its Statement of Principles on Self-Represented Litigants and Accused Persons, (Ottawa: Canadian Judicial Council, 2006) mandates fairness so as to ensure “equality according to law” in the sense of giving every litigant a fair opportunity to present their case. It also, however, imposes an obligation on self-represented parties to be respectful and familiarize themselves with the relevant practices and procedures of the court process. These principles, in my view, apply equally to the arbitration process. While some latitude is to be given to self-represented parties who may not understand or be unfamiliar with the arbitration process, an arbitrator, like a judge, is not required to ensure that a self-represented party participate in a proceeding if that party chooses not to do so. In short, an arbitrator does not have any special obligations to a self-represented party beyond the natural justice requirements owed to any party. The overarching test is fairness.

While the reasons in first instance and in appeal provide a more robust list of applicable facts and how the arbitrator handled the procedural progress of the arbitration, the Court of Appeal does close its reasons with its own list of the key steps taken by the arbitrator.

[66] In this case, the evidence established that the arbitrator followed the Rules set out by the Centre. He ensured that: (i) each party received notice of the arbitration proceeding; (ii) each party was given the opportunity to present their case by imposing dates for the parties to exchange their respective Statements of Position and Submissions; (iii) he consulted with both parties in setting a timely hearing for the determination of the dispute on the merits; (iv) he acted within the jurisdiction accorded to him under the Rules by deciding the matters remitted to him for determination; (v) the respondent was aware of the issues to be determined which he had outlined in his petition; (vi) the respondent was notified in writing of the hearing date after Mr. Sangha had failed to attend the second case management conference; (vii) his reasons for the Awards were based on the evidence presented; and (viii) the Awards were delivered to each of the parties in a timely way.

urbitral note – The earlier decision of the Court of Appeal provides useful touchstones for evaluating whether a party, represented or not, has been afforded natural justice.  While the 2015 reasons concerned whether and how a self-represented party should be given different or additional measures, the Court of Appeal’s list can equally apply to arbitrations in which parties are represented by counsel.