Ontario – applicant seeking court appointment of arbitrator ordered to pay security for costs

In Rayman Tiger Inc. v. Unger Tiger Inc., 2020 ONSC 691, Master Michael P. McGraw ordered that an arbitral party, applying for the appointment of an arbitrator, file security for costs related to its application.  Having insufficient assets in Ontario or any reciprocating jurisdiction, the party had to post security in order to engage the court’s assistance for its arbitration.  In ordering $15,000.00 rather than the $37,714.01 sought by respondents, Master McGraw distinguished the complexity of issues and facts of the eventual arbitration from those raised by the narrower application to appoint an arbitrator.

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Manitoba – court relies on arbitral award to qualify award amount as debt surviving bankrupt’s discharge

Relying on findings made in an arbitral award, Madam Justice Colleen Suche in Bannerman Lumber Ltd. et al. v. Goodman, 2020 MBQB 76 declared that a bankrupt’s debt disputed in arbitration survived his discharge because the debt resulted from “obtaining property or services by false pretences or fraudulent misrepresentation”.  Though the arbitration proceeded without pleadings and the issue of fraud was not advanced in the arbitration, the arbitrator’s findings permitted Suche J. to determine that the bankrupt “lacked an honest belief in the truth of his statements” which were reckless and qualified as false pretences under section 178(1)(e) of the Bankruptcy and Insolvency Act, RSC 1985, c B-3.

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Nova Scotia – umpire owes duty of procedural fairness, breaches it when deviating from own procedure

In New Dawn Enterprises Limited v. Northbridge General Insurance Corporation, 2020 NSSC 150, Mr. Justice Joshua M. Arnold agreed that an umpire’s failure (i) to share information obtained and relied on or (ii) to give a party the opportunity to respond breached the principle of audi alteram partem. Acknowledging that an umpire does not conduct an arbitration or provide an adjudicative process, Arnold J. determined that the umpire’s exercise of discretion in choosing his own procedure had created legitimate expectations and that, by deviating from that procedure, breached the duty of fairness.

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Ontario – adequate reasons serve to justify/explain result so losing party knows why it lost

In Wawanesa Mutual Insurance Company v. Renwick, 2020 ONSC 2226, Ontario’s Divisional Court determined that inadequate reasons fell short of their “very important purpose”, namely that “they justify and explain the result so that the losing party knows why they have lost and interested members of the public can satisfy themselves that justice has been done”.  The Court prioritized that purpose, listing it ahead of the more oft-cited purpose of allowing for meaningful review by a court.  Though not all parties prevail in their dispute resolution, they are entitled to know that their evidence and arguments were considered and why they did not prevail. As the Divisional Court added, “[h]owever, this does not mean that the decision maker must refer to every bit of evidence or argument before him. To be adequate, reasons do not have to be long or perfect”.

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Québec – attorney’s lack of knowledge of arbitration clause justifies late request for referral to arbitration

In 9107-7719 Québec Inc. v. Constructions Hub Inc., 2020 QCCQ 1706, Madam Justice Johanne Gagnon readily extended defendant’s delay to apply for referral to arbitration.  The 45 day delay was not a strict one and extending it was justified by explanations given by defendant’s attorney, including attempts to settle, an intervening holiday break and being unaware that the contract contained an agreement to arbitrate.  Gagnon J. accepted defendant’s application filed 77 days after service of the action and, having considered it, granted it but declined to declare plaintiff’s action abusive.

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Québec – agreement to arbitrate cannot exclude parties from court’s jurisdiction over breach of public order legislation

In Bois Marsoui GDS Inc. v. Directeur des poursuites criminelles et pénales, 2020 QCCS 1327, Mr. Justice Carl Thibault held that an agreement to arbitrate contained in a contract signed with a government entity/agency did not allow merchants to exclude themselves from application of public order environmental legislation. Thibualt J. held that public order provisions aimed at protecting public well-being would lose their utility if parties could derogate from them by contract. Though not stated, the reasons would also support the conclusion that a government entity/agency lacks sufficient authority to contract out of the court’s jurisdiction to resolve disputes involving penal provisions related to laws of public order.

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Alberta – decision to initiate litigation rather than mandatory arbitration qualifies as “injury”

In HOOPP Realty Inc v. Emery Jamieson LLP, 2020 ABCA 159, Alberta’s Court of Appeal underlined the importance of initiating arbitration instead of litigation when bound by a mandatory arbitration agreement.  In considering appeals from motions for summary disposition of actions filed by a client against two (2) law firms, the Court held that a lawyer’s omission to serve the notice to arbitrate qualified as an “injury” to the client within the meaning of section 1(e) of the Limitations Act, RSA 2000, c L-12.  The Court further held that the current law firm’s knowledge of the omission by the former law firm could be imputed to the client in order to trigger the commencement of the limitation period and that the Limitations Act focused on knowledge of facts and not applicable law or chances of success.

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B.C. – questions of mixed fact and law by definition involve aspects of law

In Gormac Developments Ltd. v. Teal Cedar Products Ltd., 2020 BCSC 712, Madam Justice Elizabeth McDonald cautioned that great care be taken to distinguish between arguing that (i) a legal test has been altered in the course of its application and (ii) application of the legal test should have resulted in a different outcome. McDonald J. also acknowledged the need for caution when determining questions of law given that questions of mixed fact and law “by definition, involve aspects of law”.  In addition, an arbitrator is not required to refer to every submission, statutory provision or piece of jurisprudence in the award, there being no requirement to make specific findings on each constituent element for the award to be reasonable.

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B.C. – a stay is not a dismissal

In Clayworth v. Octaform Systems Inc., 2020 BCCA 117, B.C.’s Court of Appeal held that interpretation of the scope of an agreement to arbitrate is a question of mixed fact and law, not a question of law.  As such, the courts are to apply the “arguable case” test whereby jurisdictional issues relating to the scope of the arbitration agreement are to be resolved in first instance by the arbitrator. The Court also emphasized the distinction between a stay and a dismissal. A stay simply holds proceedings in abeyance until the arbitrator completes the work which the parties agreed should be arbitrated. If the arbitrator determines the dispute is not one referred to arbitration or there are matters which remain unresolved after arbitration, a stay could be lifted upon application.

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Ontario – lawyer’s duty of candour not limited to appearances in court, extends also to arbitration

To address a scheduling issue in court, Mr. Justice Marvin Kurz in Haaksma v. Taylor, 2020 ONSC 2656 relied on rules of professional conduct which expressly stipulate that a lawyer’s duty of candour in ex parte proceedings applies not just to courts but also to arbitrators, mediators and others who resolve disputes, regardless of their function or the informality of their procedures.  Kurz J. emphasized that an exchange can qualify as ex parte even if the other party is aware of the exchange but, due to circumstances, cannot adequately respond or make submissions due, for example, to insufficient notice.  The duty of candour requires lawyers to take particular care to be accurate, candid and comprehensive in presenting a client’s case so as to ensure that the decision-maker is not misled. 

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