Court File and Parties

Court of Appeal for Ontario Date: 2024-12-23 Docket: M55421 (COA-24-OM-0273)

Between: The Joseph Lebovic Charitable Foundation, The Dr. Wolf Lebovic Charitable Foundation, The Estate of Joseph Lebovic and Wolf Lebovic Applicants (Appellants/Responding Parties)

And: Jewish Foundation of Greater Toronto and Joseph and Wolf Lebovic Jewish Community Campus Respondents (Respondents/Moving Parties)

Before: Favreau, Monahan and Gomery JJ.A.

Counsel: Matthew P. Gottlieb, Andrew J. Winton and Xin Lu (Crystal) Li, for the moving parties Krista R. Chaytor and Lia Boritz, for the responding parties

Heard: In writing

Reasons for Decision

[1] The moving parties bring this motion to quash the responding parties’ motion for leave to appeal on the basis that this court does not have jurisdiction. We agree that the court does not have jurisdiction to deal with the responding parties’ motion.

[2] In 2005, the responding parties entered into a donor agreement with the moving parties. The responding parties agreed to make a donation to the Jewish Foundation of Greater Toronto through their charitable foundations, in exchange for which a campus in Vaughan would be named after individual members of the Lebovic family. The funds were to be donated in installments.

[3] The parties have had a long-standing dispute arising from the donor agreement. In May 2015, the moving parties commenced an arbitration concerning the proposed sale of a portion of the campus lands named after the Lebovics. This led to a consent order. In April 2021, the moving parties initiated an arbitration raising various issues arising from the donor agreement and the consent order. The responding parties brought a counterclaim in the arbitration.

[4] After the initiation of the April 2021 arbitration proceedings, including service of the responding parties’ counterclaim, the responding parties retained new counsel and raised concerns over the arbitrator’s jurisdiction. Before the hearing of the arbitration on the merits started, the arbitrator heard arguments on whether he had jurisdiction over the issues raised in the arbitration. The arbitrator reserved his decision on jurisdiction. After the parties presented their evidence on the arbitration but before they made their closing submissions, the arbitrator released a decision dated March 15, 2023, in which he concluded that he had jurisdiction over the issues raised in the arbitration. The arbitrator then decided the merits of the arbitration in a separate award dated July 27, 2023.

[5] The responding parties initiated two separate proceedings in the Superior Court. The first was an application to review the arbitrator’s jurisdiction decision, and the second was an appeal from the July 27, 2023 arbitration award.

[6] Akbarali J. (the application judge) dealt with the first issue in a decision dated August 8, 2024. She dismissed the application, finding that the responding parties had waived their right to object to the arbitrator’s jurisdiction.

[7] The responding parties have commenced a motion for leave to appeal from the application judge’s order to this court. The moving parties move to quash the motion for leave to appeal on the basis that this court does not have jurisdiction to hear an appeal from the application judge’s order.

[8] We agree with the moving parties. It is plain from s. 17(9) of the Arbitration Act, 1991, S.O. 1991, c. 17, that there is no appeal from the application judge’s decision. Section 17(8) provides that: “If the arbitral tribunal rules on an objection as a preliminary question, a party may, within thirty days after receiving notice of the ruling, make an application to the court to decide the matter.” Section 17(9) states: “There is no appeal from the court’s decision” (emphasis added).

[9] We do not accept the responding parties’ argument that the arbitrator’s jurisdiction decision was not a ruling “on an objection as a preliminary question” and therefore that it was not made under s. 17(8) of the Arbitration Act, 1991. It is evident that the issue of jurisdiction was argued as a preliminary question before the arbitrator; he did not wait to deal with this issue in the award, but instead issued a separate, preliminary ruling: see s. 17(7) of the Arbitration Act, 1991. While he may have delivered his ruling after the parties had already commenced the hearing of the arbitration on the merits, this does not alter the fact that the issue was raised and decided as a preliminary question: Iris Technologies Inc. v. Rogers Communications Canada Inc., 2022 ONCA 634, at paras. 7-8.

[10] Moreover, the responding parties treated the jurisdiction decision as a ruling on a preliminary question by bringing a stand-alone application to review the arbitrator’s jurisdiction decision, and a separate application in respect of the arbitrator’s July 27, 2023 award. In the circumstances, we have no doubt that the application to review the arbitrator’s jurisdiction decision was brought under s. 17(8) of the Arbitration Act, 1991, and that any appeal from the application judge’s order is precluded by s. 17(9).

[11] Accordingly, we find that this court does not have jurisdiction over the appeal. The motion for leave to appeal is quashed.

[12] The moving parties seek costs on a substantial indemnity basis in the amount of approximately $26,500. It is clear from the relevant sections of the Arbitration Act, 1991 and the circumstances leading to the responding parties’ proposed motion for leave to appeal that this court does not have jurisdiction. A motion to quash should not have been required. However, the amount sought by the moving parties for their substantial indemnity costs is excessive given the discrete issue to be decided on this motion. Accordingly, we award costs to the moving parties in the amount of $15,000, inclusive of disbursements and HST.

“L. Favreau J.A.” “P.J. Monahan J.A.” “S. Gomery J.A.”