SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: FS-12-18244
DATE: 20130705

RE: MARIA ALIDA FERREIRA, Applicant

A N D:

JOHN C. ESTEIREIRO, Respondent

BEFORE: MESBUR J.

COUNSEL:
Jeanie DeMarco, for the applicant
Judith Nicoll, for the respondent

HEARD: July 4, 2013

E N D O R S E M E N T

Nature of the Motion:

[1] Applicant moves for leave to appeal the decision of an arbitrator. Under the terms of the parties’ arbitration agreement, and section 45 the Arbitration Act, an appeal lies to this court only on a question of law, and only with leave. Leave will be granted if and only if the court is satisfied:

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

b) A determination of the questions of law at issue will significantly affect the rights of the parties.[^1]

[2] The applicant takes the position the Arbitrator made “many errors of law”, and that the two conditions above have also been satisfied.

[3] For his part, the respondent says if the Arbitrator made any error, it was an issue of fact, or, at best, a question of mixed fact and law. As such, he takes the position no appeal is possible. Even if it were, the respondent says the applicant has failed to meet the test in s. 45(1). Last, if the court grants leave, the respondent seeks an order requiring the applicant to provide security for costs in the sum of $50,000 before being permitted to proceed with any appeal.

Some history:

[4] The parties were married. When they separated they entered into a separation agreement that required the respondent to pay the applicant spousal support of $12,500 per month until one or more of the following occurs:

a) Maria [the applicant] remarries or enters into a relationship resembling marriage;

b) John [the respondent] dies, subject to paragraph 7, or

c) The last payment is made on February 1, 2020, at which time Maria shall be deemed to be essentially self sufficient.[^2]

[5] The separation agreement also contained a comprehensive dispute resolution clause.

[6] The respondent continued to make the required payments until June, 2012 when he stopped. He took the position the applicant had entered into “a relationship resembling marriage”, and was therefore no longer entitled to support.

[7] The applicant’s response was an application in this court for judgment for the unpaid amounts of support under the separation agreement for “the months of July 2012, August 2012 and thereafter.”[^3] She also sought an injunction to prevent the respondent from unilaterally terminating her support in the future without a court order or amended agreement.

[8] The matter came on before Perkins J on a first case conference on September 28, 2012. Respondent took the position the court had no jurisdiction and the issues must go to mediation and then arbitration under the terms of the separation agreement. Perkins J agreed. He decided the application must be stayed and the parties must appoint a mediator/arbitrator within 14 days “with a view to an expedited hearing.” He framed the issue as determining whether the termination provision “relating to A’s entering into a relationship has occurred”. He went on to say that the issue of whether the respondent was required to continue to pay spousal support was a matter for the mediator/arbitrator.

[9] The parties then retained Cheryl Goldhart as their mediator/arbitrator. The matter eventually required arbitration before her.

The arbitration:

[10] The Arbitrator eventually determined a terminating event had occurred with effect in June 2010. She ordered the applicant to repay to the respondent the sum of $287,500 representing spousal support he had overpaid, net of the tax benefit to him.

[11] The applicant seeks to appeal this decision. In order to do so, she must first show the Arbitrator made an error of law. Only if she can do this, are the secondary provisions of s. 45(1) of the Arbitration Act engaged.[^4]

The motion for leave to appeal:

[12] The applicant’s motion for leave to appeal asks for leave to appeal “on the grounds of error of law on the basis that:

a) The importance of the matters to the applicant justifies the appeal;

b) The determination of the multiple questions of law at issue will significantly affect the rights of the parties.”

[13] The notice of motion refers to, but does not particularize “multiple questions of law at issue”. The affidavit in support of the motion is an affidavit of counsel’s assistant. It attaches a copy of the arbitration decision, a copy of the parties’ separation agreement, correspondence between counsel at various dates, documentation filed in connection with certain witnesses, and an investigation report obtained by the respondent prior to the arbitration hearing. It does not point to any errors of law in any of these documents, or otherwise.

[14] The applicant’s factum[^5] seems to identify the “errors of law” as including:

a) The case is a breach of contract case. The Arbitrator misdirected herself as to the test and wholly ignored the fundamental principles of contract interpretation, and rules relating to the ambiguity of contracts;

b) The Arbitrator made “fatal flaws relating to the admissibility of the evidence of Mr. Muzzo”

c) The conduct of the Arbitrator and respondent’s counsel resulted in “a reasonable apprehension of bias against Ms. Ferriera contributing to a denial of natural justice for the reasons as set out above.”

[15] Nowhere does applicant point to anything in particular in the transcripts of the hearing or the Arbitrator’s decision to support these propositions. They are simply bald allegations.

[16] When I look at each party’s statement of issues presented to the Arbitrator, and the Arbitrator’s reasons, I can only conclude that the issue the parties presented to the Arbitrator for adjudication was whether there had been a terminating event under the provisions of the separation agreement. This is echoed as well in Perkins J’s endorsement at the first case conference.

[17] The applicant’s statement of issues put it as: “there has been no terminating event.” The respondent’s statement of issues described it as: “has there been a termination event”. The Arbitrator said: “The central and most critical issue is whether a terminating event has occurred pursuant to paragraph 5(a)(i) of the separation agreement allowing John to terminate the payment of spousal support to Marlita.”

[18] From all of this I infer the issue was not about breach of contract at all, but instead about determining whether a terminating event under the contract had occurred. Nowhere in the outline of issues does the applicant set out the Arbitrator was to determine whether there was a breach of contract. Nowhere does the applicant suggest the contract contained any ambiguity. I therefore conclude contract interpretation was not an issue before the Arbitrator. There can be no error of law relating to an issue the Arbitrator was not to adjudicate.

[19] As to the issue of admissibility of evidence, again the applicant does not specify precisely what errors she suggests were made, or identify exactly what they are. I fail to see how this kind of bald allegation can support the proposition there had been a pure error of law.

[20] Allegations of bias and denial of natural justice must be supported by some kind of evidentiary basis for the court to entertain granting leave to appeal on these grounds. The applicant has provided none. A factum is not evidence. A factum that does not even refer to the evidence before the Arbitrator to support such serious allegations is completely insufficient for the court to consider this ground for leave to appeal.

[21] This leaves the question of whether it can be said the Arbitrator’s decision that the terminating event had occurred was a pure question of law. The court can only grant leave to appeal if the alleged error is a pure question of law.

Question of law?

[22] Questions of law are questions about what the correct legal test is. Questions of fact are questions about what actually took place between the parties. Questions of mixed law and fact are questions about whether the facts satisfy the legal test.[^6]

[23] As I see it here, the question the Arbitrator had to decide is whether a terminating event had occurred. This required her to determine whether the applicant had “lived in a relationship resembling marriage”. Doing so required the Arbitrator to consider all the facts to support such a finding, and all the facts that militated against such a finding. Regardless of whether deciding whether a terminating event had occurred was a question of law, it could not be determined without answering the question of whether the facts satisfied the legal test of “living in a relationship resembling marriage.”

[24] Because fact finding was integral to the Arbitrator’s ultimate determination of the issue, I must conclude at the very least it was an issue of mixed law and fact. Indeed, the Arbitrator herself headed paragraphs 63 to 80 of her reasons as “Application of Facts to Legal Test.” This confirms my view the central issue was one of mixed law and fact.

[25] Similarly, even if there were some indication of particular errors the Arbitrator is alleged to have made regarding the admissibility of evidence, as I see it that too is a question of mixed law and fact. I say this because the Arbitrator would have to apply legal principles to the evidence before her, thus considering whether particular facts satisfied the legal test of admissibility.

[26] The applicant has not satisfied the first branch of the test for leave to appeal, in that the question or questions are not a questions of law alone, but rather questions of mixed law and fact. Leave to appeal must therefore be denied.

[27] The respondent brought a cross motion for security for costs if leave to appeal were granted. Since I have not granted leave, there is no need for me to address the motion for security for costs.

Disposition:

[28] The motion for leave to appeal is therefore dismissed. The respondent is entitled to his costs of the motion. The parties provided me with their costs outlines for this motion. The applicant’s was about double that of the respondent. This suggests to me the respondent’s bill of costs is more than reasonable. The applicant will therefore pay the respondent his costs of the motion on a partial recovery basis, fixed at $9,500 all inclusive.

MESBUR J.

Released: 20130705

[^1]: Arbitration Act, 1991, S.O. 1991, c. 17, s. 45(1)

[^2]: Paragraph 5.1(a) of the parties’ separation agreement

[^3]: Box 50 of applicant’s application.

[^4]: See, for example, Italiano v. Toronto Standard Condominium Corp. No. 1507, [2008] O.J. No. 2642 (S.C.J.)

[^5]: Paragraph 38 of applicant’s factum

[^6]: Canada Director of Investigations and Research, Competition Act) v. Southam Inc. (1997), 1997 385 (SCC), 144 D.L.R.(4th) 1 (S.C.C.)