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<xTITLE>Canada - Appointing Authority’s Breach of Appointment Provisions Raise No Reasonable Apprehension of Bias</xTITLE>

Canada - Appointing Authority’s Breach of Appointment Provisions Raise No Reasonable Apprehension of Bias

by Daniel Urbas
October 2020 Daniel Urbas

This article first appeared on Urbas Arbitral, here.

In Grey v. Whitefish Lake First Nation, 2020 FC 949, Madam Justice Cecily Y. Strickland dismissed challenges to an arbitrator’s decision, applying correctness as the standard of review for questions of procedural fairness, including those which encompass issues of bias.  Despite the appointing authority’s breach of the “clear and unambiguous” regulations for appointing the arbitrator, the breach was not raised on appeal and did not affect the procedural fairness of the arbitration.   The arbitrator’s previous appointment did not give rise to a reasonable apprehension of bias.

Applicant applied for judicial review of a decision of an Election Appeal Arbitrator (“Arbitrator”) which dismissed Applicant’s appeal of an April 13, 2018 election (“Election”).  Though Applicant had run unsuccessfully for election for a band Councillor position, he appealed the election result regarding the position of Chief.  The rules applicable to arbitration of an election and the role of the arbitrator set out in the Customary Election Regulations excerpted below in the notes.

In advance of the April 13, 2018 election, Whitefish Lake First Nation #459 (“WLFN”) wrote the Arbitrator on March 9, 2019 to confirm that WLFN retained him to act as the appeal arbitrator for the upcoming election.

After the election, Applicant challenged the result of the election on grounds summarized at para. 4 of Strickland’s reasons.  The Arbitrator’s decision followed a May 8, 2018 hearing at which Applicant and WLFN called witnesses and made oral submissions.  Strickland J. outlines the Arbitrator’s reasons at paras 9-11.

On appeal, Applicant alleged two (2) issues regarding the Arbitrator’s decision: reasonable apprehension of bias; and, reviewable errors arising from the Arbitrator’s assessment of evidence and analysis.  Strickland J. dismissed Applicant’s appeal regarding both issues.

(1) Standard of review – Strickland J. held that the standard of review is the presumptive standard of reasonableness, citing Canadian Pacific Railway Company v. Canada (Attorney General), 2018 FCA 69 (CanLII), [2019] 1 FCR 121 and Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65.  Citing Vavilov para. 99, Strickland J. observed that reasonableness required the court to ask whether the decision “bears the hallmarks of reasonableness — justification, transparency and intelligibility — and whether it is justified in relation to the relevant factual and legal constraints that bear on the decision”.

Strickland J. nuanced this standard when considering issues which touched on procedural fairness:

[15]  In my view it is clear that the standard of review for questions of procedural fairness, which encompasses issues of bias, is correctness (Canada (Citizenship and Immigration) v Khosa, 2009 SCC 12 at para 43; Mission Institution v Khela, 2014 SCC 24 at para 79; Johnny v Adams Lake Indian Band, 2017 FCA 146 at para 19; Nadeau v. Canada (Attorney General), 2018 FCA 203 at para 11 [Nadeau]; Hill v Oneida Nation of the Thames Band Council, 2014 FC 796 at para 45). And, as stated by the Federal Court of Appeal in Oleynik v Canada (Attorney General), 2020 FCA 5 [Oleynik FCA] at para 39, referencing its decision in CPR at para 54, judicial review for procedural fairness is “best reflected in the correctness standard”. No deference is afforded to the underlying decision maker on questions of procedural fairness (Del Vecchio v Canada (Attorney General), 2018 FCA 168 at para 4)”.

(2) Grounds invoked regarding alleged reasonable apprehension of bias – Applicant asserted three (3) grounds which he argued gave rise to a reasonable apprehension of bias.

(i) ex parte communications and a lack of separation between the Arbitrator and WLFN’s counsel – Strickland J. addressed this ground at paras 18-55.  Strickland J. determined that the communications were “primarily concerned with the practicalities of the administration of the Appeal, in particular, giving notice and posting the Notice of Appeal, setting an Appeal hearing date and determining a suitable venue for the hearing, and the communication of this information to WLFN members”.  She held that, given the individuals’ roles prescribed by the Customary Election Regulations, they would “necessarily communicated with each other”.  Their communications involved implementing the Customary Election Regulations’ procedural requirements and administration of the appeal.

(ii) the marital relationship between the Arbitrator and a member of WLFN’s counsel’s law firm – Strickland J. addressed this ground at paras 56-74.   Her review of the case law resisted concluding that a reasonable apprehension of bias arises simply because of a personal relationship between the individuals involved.

[70] In this matter, whether the Arbitrator and his spouse were actually married as of the date of the hearing is not particularly relevant if they were in a serious relationship at that time. However, there is no evidence before me on that point. And, even if it is reasonable to assume that they were in a serious relationship, there is no evidence that the Arbitrator’s spouse had a direct or indirect financial interest in the outcome of the Appeal. In fact, the evidence of the Applicant indicates that [WLFN’s counsel’s law firm] was counsel for WLFN before the subject Election and Appeal. Therefore, the solicitor-client relationship pre-existed the events giving rise to this application, and there is no evidence or basis to infer that the continuation of the solicitor-client relationship was in any way dependant on the outcome of the Arbitrator’s decision in the Appeal”.

(iii) a prior retention of the Arbitrator by WLFN – Strickland J. addressed this ground at paras 75-93.  She held that, on the facts, the WLFN had breached the “clear and unambiguous” section 7.6 which excluded appointment of an arbitrator who had been retained previously by the First Nation.  That said, she also held that Applicant was not challenging WLFN’s appointment of the Arbitrator but submitted, instead, that the Arbitrator’s previous retainer lead to a reasonable apprehension of bias.

Strickland J. noted that section 7.6 did not address the real issue raised by Applicant’s challenge and, as such, was not a full answer to the issue.

[84] In my view, s 7.6 was very likely intended to avoid precisely this situation, being an allegation of apprehended bias on the part of an arbitrator. However, in these circumstances, the question remains whether an informed person, viewing the matter realistically and practically – and having thought the matter through – would think that it is more likely than not that Arbitrator, whether consciously or unconsciously, would not decide fairly. In my view, the mere fact that WLFN’s appointment of [the Arbitrator] breached s 7.6 does not address that question”.

On the facts, Strickland J. held that Applicant’s arguments were speculative.  The Arbitrator’s prior retainer was limited to a single day service in a polling station serving as Deputy Assistant to the Ratification Officer.

When cross-examined on his affidavit, the Applicant stated that he was not familiar with the role of deputy assistant to the ratification officer, other than he was supposed to be working with the ratification officer. Based on the retainer letter, it seems reasonable to infer that [the Arbitrator’s] role was a one-day appointment that required him to impartially count the referendum votes, as witnessed by specified councillors, and to record and certify his count”.

Strickland J. dismissed this ground. Despite the breach of section 7.6, she determined that the facts demonstrated that the Arbitrator had not been appointed in a solicitor role to provide services to WLFN and therefore Applicant had established no previous solicitor-client relationship.

(3) Alleged reviewable errors regarding assessment of evidence and analysis – Strickland J. identified the limits imposed by the Customary Election Regulations to the post-decision challenges.  Challenges were restricted to matters of procedural fairness and the Customary Election Regulations precluded Applicant from challenging the merits.

(4) Costs – Though Applicant was unsuccessful on the appeal, he sought costs.

[96] The Applicant submits that this is an appropriate case to award solicitor-client costs or, alternatively, a lump sum costs award on an elevated scale. Further, that where a First Nation is paying the legal fees of one party, it is appropriate for the other party to also have their legal fees paid by the First Nation. The Applicant also notes that this Court has shown sensitivity to the power imbalance between an applicant and their First Nation, which has greater resources, and that there can be a public interest indemnifying members of a First Nation when they bring litigation to address important matters. Finally, given his motivation in bringing this application for judicial review, he should be awarded costs in any event of the cause”.

Strickland J. awarded no costs.  She pointed out that: (i) the application would not have arisen had WLFN not appointed the Arbitrator in breach of section 7.6 of the Customary Election Regulations; (ii) Applicant’s allegations of bias “were weak and largely speculative”; and, (iii) the Applicant had not raised a matter of public importance.

urbitral notes – First, the Customary Election Regulations provide the following for the appointment of the Arbitrator:

7.1  Appointment – At least thirty-five (35) days prior to the date selected as the Election day, the Council shall, by Resolution in the prescribed form set the date of the Election, appoint an Electoral Officer and an Election Appeal Arbitrator for the purpose of conducting the Election pursuant to these Regulations.

7.6  Qualifications of Election Appeal Arbitrator – The Election Appeal Arbitrator shall be a retired Judge or a lawyer who is not or has not been retained by the First Nation or any Member of the First Nation, other than as an Election Appeal Arbitrator”.

In addition to imposing certain formalities on how notice of the Election Appeal hearing is to be given, the Customary Election Regulations provide the following “powers” to the Arbitrator:

16.14 Appeal Arbitrator Powers – The Election Appeal Arbitrator has the following powers:

16.14.1 to determine the time, place and date of the appeal hearing;

16.14.2 to determine whether the appeal hearing is open to Members and who may or may not attend the appeal hearing;

l6.14.3 to determine questions or law arising in the course of the appeal hearing;

16.14.4 to rule on any objections made in the appeal hearing;

16.14.5 to order production of documents which are material and relevant to the appeal;

16.14.6 to determine the procedure to be followed having regard for fairness and equality between the parties to the hearing;

l6.14.7 to determine the manner in which evidence is to be admitted; and

16.14.8 the Arbitrator is not bound by rules of evidence and has the power to determine admissibility, relevance and weight of any evidence”.

Under the Customary Election Regulations, an Arbitrator has three (3) options:

(i) deny the appeal on the basis that the evidence did not “fully and properly establish the grounds necessary” for an appeal: (ii) uphold the appeal but allows the election results to stand because “the infraction did not materially affect the result”; or, (iii) uphold the appeal and call for a new election or run-off election.

Second, section 76(1) of the Indian Act, RSC 1985, c I-5 Governor in Council can make orders and regulations with respect to band elections including election appeals at section 76(1)(d).  See also First Nations Elections Act, SC 2014, c 5 which serves to establish a regime, alternative to the one under the Indian Act, to govern the election of chiefs and councillors of certain First Nations.  The FNEA allows First Nations to withdraw from the regime by adopting a written code that sets out the rules regarding the election of the members of their council.

Third, see the earlier decision in Whitefish Lake First Nation v. Grey, 2019 FCA 275 which dismissed the challenge to extending the time within which applicant could seek judicial review.  That decision dismissed the appeal from the January 22, 2019 decision allowing the extension.  That decision in first instance is not yet posted online.
 

Biography


Daniel Urbas is an experienced litigator, arbitrator and mediator with over 25 years of dispute resolution experience. He has earned a variety of repeat, annual peer recognitions including “Leading Lawyer” in “Commercial Arbitration” in the 2019 edition of the Lexpert ® / American Lawyer Guide to the Leading 500 Lawyers in Canada, “Most Frequently Recommended” in the 2019 edition of The Canadian Legal Lexpert® Directory for Commercial Arbitration, “Thought Leader” in 2019 edition of Who’s Who Legal – Litigation and AV® Preeminent™ by Martindale-Hubbell®.
 

Daniel focuses exclusively on serving as an arbitrator and mediator.  As arbitrator, Daniel serves as a sole arbitrator, as chair or as party-nominated member of three (3) member arbitration tribunals. His appointments have been made by individual parties, by the parties jointly on consent, by court orders and by various administering institutions including ICC, CCAC and IATA.
 

A Fellow of the Chartered Institute of Arbitrators (“CIArb”) based in London, UK, as well as a founding Director of the CIArb’s Canada Branch, Daniel is listed on various rosters including general commercial rosters organized by the ICDR, CIETAC and BCICAC and on more specialized, industry/activity specific rosters such as the Canada Transport Agency’s roster.

 

Daniel’s dispute resolution experience spans a variety of commercial and civil matters, intellectual property (including anti-piracy and anti-counterfeiting litigation) and information technologies, energy (wind, bio), natural resources (mining, forestry, fishing), shareholder disputes, real estate and lease disputes, product liability, construction, distribution and franchise, Aboriginal law matters including treaty and land claims litigation and dispute resolution of agreements relating to governance and natural resource development on native peoples’ territories.

 

He handled trial and appellate advocacy, as well as urgent and extraordinary applications. He has appeared before the provincial and federal courts, including the Supreme Court of Canada, as well as before arbitration tribunals and various administrative tribunals. Fluently bilingual in both English and French with degrees in both Common Law and Civil Law, Daniel is an active member of the Barreau du Québec, the Law Society of Ontario and the Law Society of British Columbia.  At his former national law firm, up until June 2017, Daniel served as Regional Leader of the International Trade Litigation and Arbitration group and Regional Leader of the Intellectual Property Litigation group. Formerly, Daniel was also Regional Leader of the Commercial Litigation group and National Leader of the Intellectual Property Litigation group.



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