Crossroads Law Successful at Court of Appeal defending $25,000 Costs from Arbitration

By Marcus Sixta, Calgary family lawyer and mediator and Vancouver family lawyer

We are pleased to announce our recent victory at the Alberta Court of Appeal in which we successfully defended an appeal of a $25,000 costs award from an arbitration decision in a family law case.

In Alanen v. Elliot 2019 ABCA 290, the Appellant, Alanen, had sought an adjournment in arbitration just weeks before a final hearing was set to be heard. This hearing had been booked five months prior and was set to deal with child support, spousal support and the division of matrimonial property, including businesses. Due to the high net-worth of the parties and their businesses, financial experts had been retained to provide business valuations and child support guideline income assessments.  

The Appellant sought the adjournment because his said his financial expert was now not available due to being needed to testify in another matter. It was clear however that all involved would have known about the arbitration dates for months. The adjournment would also have been the fourth adjournment of this arbitration, and the Respondent, Elliot, had argued that all of these adjournments were the fault of the Appellant because of his failure to disclose and his intentional delays of the process.

The arbitrator granted the adjournment citing section 19 of the Arbitration Act which requires an arbitral tribunal to treat the parties equally and fairly, and that each party shall be given an opportunity to present a case and respond to the other parties’ case. The arbitrator also likely took this cautious approach because the Appellant had previously appealed a number of decisions in this family law case.

However, the arbitrator granted the adjournment on the condition that the Appellant pay costs of $25,000 to the Respondent for her thrown away costs related to the preparation work done by her family lawyer and financial expert that would need to be duplicated and her missed days at work. The Appellant immediately appealed.

The Appellant appealed to the Calgary Court of Queen’s Bench but the Chambers judge declined to stay or set aside the award of costs, finding insufficient evidence before him to do so. However, he advised the Appellant that he had the right to bring the application back at a future point with more evidence. Instead the Appellant chose to appeal this family law case to the Alberta Court of Appeal.   

The Appellant sought leave for two applications to the Court of Appeal. He applied for permission to appeal the Chambers judge’s decision not to set aside the interim arbitration award and he applied for permission to appeal the arbitrator’s interim award directly to the Court of Appeal. 

The Alberta Court of Appeal applied section 44 of the Arbitration Act which allows appeals to the Court of Queen’s Bench and section 48 which allows a further appeal to the Court of Appeal only with permission from a justice of the Court of Appeal. It also Applied Rule 14.5(1)(e) of the Alberta Rules of Court which allows appeals of costs awards only with leave of the Court.

Importantly for family law cases, the Alberta Court of Appeal held that it is very difficult to set aside arbitration decisions and stated at paragraph 30:

Kawchuk held that it is the policy of courts to encourage dispute settlement: para 38. This policy militates against setting aside an arbitration award except in the most compelling of cases. In light of the history of this arbitration, granting permission to appeal will not encourage dispute resolution. Further, there are no compelling reasons to grant permission to appeal in this case.

The Court of Appeal also held that it is difficult to set aside a costs order stating that “Permission to appeal costs orders under Rule 14.5(1 )(e) should be granted sparingly Bun v Seng, 2015 ABC A 165 at para 4.”

Moreover, the Alberta Court of Appeal found that the Court of Appeal does not have jurisdiction to grant permission to appeal an arbitration award directly to the Court of Appeal. In other words, an arbitration decision must be first appealed to the Alberta Court of Queen’s Bench. On this the Alberta Court of Appeal stated at para 34:

I am not convinced that this Court has jurisdiction to grant permission to appeal an arbitration award outright. Only appeals of Court of Queen's Bench decisions pursuant to sections 44, 45 and 47 of the Arbitration Act may be appealed to this Court, and then only with permission: Anand V Anand, 2018 ABCA 259 at para 10. Sections 44,45 and 47 concern applications to appeal the award, to set aside the award, and to declare the arbitration to be invalid. The statute then only entertains an appeal of a decision per those sections to this Court. Here, the chambers judge declined to deal with the appeal. As such, I agree with my colleague Justice O'Ferrall's comments that there is no jurisdiction for this Court to directly hear an appeal of an arbitration award, and so I decline to grant permission on that basis: Anand at para 10.

Therefore, the Court of Appeal applied the law under both statutes and dismissed the appeal by the Appellant and the Respondent was successful in retaining her $25,000 in costs. The Appellant in this family law case was also ordered to pay the Respondent’s costs of this failed appeal to the Alberta Court of Appeal.

If you are dealing with a high conflict family law case, the Calgary family lawyers or Vancouver family lawyers at Crossroads Law can help. We have experience and a history of success in the Court of Appeal. Contact us for a free consultation about your separation or divorce.

The information contained in this blog is not legal advice and should not be construed as legal advice on any subject. The information provided in this blog is for informational purposes only.