July 24, 2023
THE ISSUE
There is a reason why most of our case comment articles feature cases from the Ontario Court of Appeal or even the Supreme Court of Canada. Decisions of the Superior Court of Justice, as much as they can be interesting and informative, are subject to being overturned on appeal.
THE CASE
This is the situation that we find ourselves in with the case of
Tall Ships Landing Devt. Inc. v. City of Brockville, the subject of an article that focused on the remedy on appeal to the Superior Court from an arbitrator. The case had sufficient novelty that the editors of the Ontario Reports, the publication that notifies all Ontario lawyers of the most interesting or important Ontario cases- usually four or five a week- published it.
As chance would have it, the Court of Appeal allowed the appeal, and upheld the arbitrator’s decision, reminding us all that for appeals under the Arbitrations Act, only an error of law is appealable – the unsuccessful party does not get a second chance to argue the facts, or even a mixed question of fact and law. The Court points out that:
judges should not be too ready to characterize particular issues as issues of law because doing so may render the point of consensual arbitration nugatory is of particular importance when, as here, the impugned terms form a relatively small part of a large and complex arbitration decision. As the Supreme Court has stated, “the circumstances in which a question of law can be extricated from the interpretation process will be rare” [citations omitted].
In Tall Ships, they find that this was not one of those rare situations.
TAKEAWAYS
Not all arbitrations are subject to the same rights of appeal – the arbitration agreement or submission to arbitration may set different rules for what may be appealed – so this applies mainly to arbitrations that rely on incorporation of section 45 of the Act. However, in a recent decision, the Court of Appeal also took a very limited view of the scope of appeals under section 46 of the Act.
Moral of the story is that if you want broad appeal provisions for your arbitration, you must explicitly say so in your arbitration agreement or submission to arbitration.
In our experience, most “off the shelf” arbitration clauses or agreements provide very limited appeal rights, so all the more reason to pay attention to these clauses in agreements and not to shrug them off as “just boilerplate”.
A right to appeal on questions of law alone is more limited than the usual right of appeal from a Superior Court judge to an appeal court. In those situations, mixed questions of fact and law may be appealed. If you want similar rights of appeal from the arbitrator, you must say so.
Because the Court of Appeal overturned the Superior Court decision, the ruling by the Superior Court judge that the case had to be reheard by a different arbitrator also is overturned. However, the Court of Appeal does not specifically comment on that aspect of the Superior Court decision, so it continues to exist in a sort of limbo. Our previous article may still be of interest to some readers, but must be approached with caution.
As we said in that article:
Arbitration is attractive for many reasons, including cost and time saving. Unfortunately, this cautionary tale teaches us that sometimes these efforts backfire. A fair hearing is at the heart of justice, and that need may trump all other considerations.
These observations are still accurate, despite the Court of Appeal determining that in the specific case, a fair hearing was held before the arbitrator.
At the end of the story, we see the Court of Appeal continuing to emphasize, as we have written about before, that:
- arbitration is here to stay;
- that it is a valid alternative to the court process; and
- most arbitration results will be final.
WHAT WEILERS LLP CAN DO TO HELP YOU
Our role begins before the dispute arises, at the start of your relationship with the other party to a contract. Our commercial drafters are familiar with the range of options available for arbitration agreements and can help draft the clause that suits your needs.
If you find yourself facing a dispute that is subject to arbitration, the alternative dispute resolution lawyers at Weilers LLP can provide you with guidance and representation in attempting to resolve your disputes in a cost effective and sound manner. We not only know that decisions are mainly about the facts, but we also know how to identify the evidence to prove the facts you need.
If an appeal is possible, we have the knowledge to advise and represent you on appeal.