June 19, 2025
Legislatures make law by passing statutes. Judges are said to “make law” by deciding cases in new and creative ways that hopefully reflect changing times.
THE ISSUE
But what about arbitrators? Can they “make law”?
THE CASE
An Ontario Superior Court judge says that the answer is “no” in Burwell et al v. Wozniak. This case arises from an arbitration over the consequences of a relationship breakdown between the parties. The issue was whether an email from Mr. Burwell to Ms. Wozniak entitled her to 50% of the value of Mr. Burwell’s corporate shares.
The arbitrator applied the principles of “proprietary estoppel” to find in favour of Ms. Wozniak. However, prior to this time, proprietary estoppel in Canada has been restricted to promises to transfer land, and did not include other property such as shares. So, the arbitrator was in effect “making law” by deciding that the principle applied in this case.
The judge hearing the appeal considered section 31 of Ontario’s Arbitrations Act,1991 which states that “[a]n arbitral tribunal shall decide a dispute in accordance with law, including equity, and may order specific performance, injunctions and other equitable remedies”.
As the judge points out, this section both empowers arbitrators, and limits that power. The judge quotes an earlier decision, affirmed by the Court of Appeal, which stated that the Act “does not confer jurisdiction to ignore or rewrite the law…”.
In the judge’s view, extending proprietary estoppel to shares was rewriting the law, particularly because in the leading Supreme Court of Canada case, the court expressly decided not to decide whether proprietary estoppel applied to anything other than land. The Ontario Court of Appeal has consistently stated that the test for proprietary estoppel requires an interest in land.
TAKEAWAYS
- Arbitration may not be the best route where you hope to have law applied to a novel issue, or in a novel way.
- The powers of arbitrators are limited by statute, as interpreted by judges.
- Unless and until a court, probably an appeal court, holds that proprietary estoppel extends to property other than land, we must assume that the doctrine only applies to land.
WHAT WEILERS LLP CAN DO TO HELP YOU
At Weilers LLP we have experience in mediation, and in litigation, and extensive knowledge of equitable principles such as proprietary estoppel. We have often advised clients on the best choice for their situation. If you want advice on your best option, give us a call, we might be the right lawyers for you.