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<xTITLE>Canada: Interim Procedural Orders “Immune from Review” During Arbitration Even When Titled “Award”</xTITLE>

Canada: Interim Procedural Orders “Immune from Review” During Arbitration Even When Titled “Award”

by Daniel Urbas
July 2020 Daniel Urbas

In Hristovski v. Hristovski, 2020 ONSC 4021, Madam Justice Francine Van Melle held she had no jurisdiction to hear an appeal of an arbitrator’s pre-merits hearing denial of further document disclosure. Despite use of the term “award” to title the decision, Van Melle J. determined that the denial was an interim procedural order. Unlike an award which disposes of disputes between parties, the order was not eligible for appeal, being “immune from review” under the Arbitration Act, 1991, SO 1991, c 17.  Van Melle J.’s reasons do not assert that interim decisions cannot later be challenged when appealing the final award if an interim decision impacts on the result. As neither party argued whether leave had to be sought/obtained, Van Melle J. made no comment on the issue.

Following initiation of litigation in November 2014, the spouses, S and W, signed a March 17, 2017 mediation/arbitration agreement.  Following an August 2017 hearing, the arbitrator issued a December 6, 2017 decision on the validity of their marriage contract (“Decision”).  The issue of the contract’s validity had earlier been severed by May 25, 2016 court order. In the Decision, the arbitrator did not deal with whether the spousal support provision in the marriage contract should be set aside.

Following the Decision, S and W prepared for the arbitration hearing on the merits scheduled for September 23, 2019.  As part of her preparations, S sought disclosure of documents requested April 29, 2019 by her expert in order to determine W’s income for support purposes.  In a July 21, 2019 decision entitled “Arbitration Endorsement Award”, the arbitrator denied S’s motion for disclosure.

S appealed the Arbitration Endorsement Award, relying on section 45 of the Arbitration Act, 1991, SO 1991, c 17:

“Section 45 (1) If the arbitration agreement does not deal with appeals on questions of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that,

(a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and

(b) determination of the question of law at issue will significantly affect the rights of the parties.  1

(2) If the arbitration agreement so provides, a party may appeal an award to the court on a question of law”.

S argued that the terms of S’s and W’s mediation/arbitration agreement permitted her to appeal from any arbitral award on issues of law, fact or mixed law and fact, without leave.  The relevant terms dealing with appeals were as follows:

“28. The parties shall have the right to review the Arbitration Award in accordance with s. 46 of the Arbitration Act and such right to appeal the Award on a question of law, with leave, as provided in s. 45 of the Arbitration Act and the Family Statue Law Amendment Act.

29. In addition to the appeal rights provided in s. 45(1) of the Arbitration Act, a party may appeal any Award. Such appeal shall be on (check where appropriate):

x a question of law (without leave);

x a question of fact;

x a question of mixed fact and law”.

S characterized the denial of further disclosure was “a grave mistake”.  She argued that denying her access to information she required meant “being deprived of her right to natural justice”.  W disputed the merits of S’s request, asserted that S had all the disclosure required and claimed that S’s appeal was “yet another attempt” to “delay the hearing date”.

Titles – The arbitrator’s use of the term “Award” to title his decision on the motion for disclosure as Arbitration Endorsement Award did not influence Van Melle J.  Despite that title, she held that “it is clear that it is an interlocutory decision”.  Van Melle J. determined that “[i]t is procedural in nature and does not dispose of the disputes between the parties”.

Van Melle J. still looked at the strength of the decision made to deny S’s request.  In doing so, she highlighted that the request was identified as the “FIFTH PRODUCTION LETTER” and sought approximately 33 items. Van Melle J. added that the arbitrator had been involved in the arbitration since March 2017, dealt with each with “considered reasons” allowing some and denying others.  “He was in the best position to determine which disclosure requests were relevant and which were not”.

Van Melle J. at para. 18 agreed with S regarding the importance of disclosure, especially in family law cases, but acknowledged that the arbitrator “felt that considering all the circumstances, the required disclosure had been made and it was time to get on with the arbitration itself”.

Van Melle J. determined that, despite the wide scope given to the mediation/arbitration agreement by S, certain limits applied.  In addition to it not qualifying as an award, despite its title, she had no jurisdiction to hear an appeal of an interim procedural order.  She relied on and followed two (2) prior, recent Ontario Superior Court decisions (neither of which appear yet online) regarding the court’s limited jurisdiction.  The passage is short and worth reproducing in full:

“[19] The wording in the Mediation/Arbitration Agreement is identical to the wording in the arbitration agreement in the case of Hutchinson v. Mullin, 2019 ONSC 6209. In that case Justice Lemon quoted Justice McGee with approval, in Mull v. Mull, 2018 ONSC 2427 where she said:

11 The court’s jurisdiction to intervene in an arbitration process is limited. The modern approach sees arbitrations as autonomous, self-contained, and self-sufficient processes within which parties have agreed to resolve their dispute through the services of an arbitrator, and not by the courts.

12 In keeping with that modern approach, there are no appeals from interlocutory Orders. Similarly, procedural decisions, such as the interim production of disclosure are immune from review under the Arbitration Act.

13 There are sound policy reasons for courts not intervening in interlocutory Arbitration Awards: it can undermine the purposes of an arbitration process, making it less useful to disputants, and it could constitute a serious reproach to the ability of our system of arbitration to serve the needs of its users”.

As neither party addressed the issue, she noted, but did not analyse, whether leave to appeal ought to have been sought and obtained prior to her hearing S’s appeal.  “Given that I find that I have no jurisdiction, I make no comment on the issue of leave”.

urbitral note – First, despite appearing to weigh, if only in order to express agreement with, the merits of the arbitrator’s decision, Van Melle J. may have sought to address the issue of natural justice.  Van Melle J.’s comments address and determine S’s argument on natural justice all the while asserting that she had no jurisdiction to entertain the appeal, leave granted or not.

Second, stating that such decisions are “immune from review” does not mean that they are beyond any review.  Rather, objections to interim decisions may surface once the final award issues. A party dissatisfied with the final award may seek leave to appeal and identify an interim decision as a denial of natural justice affecting that party’s ability to present its case or defend against the other’s.  Following the approach taken in Mullin v. Mullin and Mull v. Mull, such challenges to interim decisions should be made when challenging the final award, not before, so as not to undermine the purposes of the arbitration process.

Third, titles given to decisions are not decisive of the status of the decision.  An arbitrator’s use of one title instead of another – “Decision” vs “Award” – may disclose her view of what she was asked to determine but does not bind the court.  A document’s title is earned from what the arbitrator determines.  An award disposes of a dispute, however small or large the scope of that “dispute” may be for the purpose of that award.  An award can resolve a small dispute and a decision, despite a significant impact, does not dispose of the dispute but only organizes the parties in their preparations aimed at resolving their dispute(s).

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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