Court File and Parties

COURT FILE NO.: CV-17-573372 DATE: 20170530 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

CRICKET CANADA Applicant – and – BILAL SYED Respondent

COUNSEL: Jordan Goldblatt, for the Applicant No One appeared for the Respondent

HEARD: May 24, 2017

REASONS FOR JUDGMENT

KRISTJANSON J.

[1] This is an application by Cricket Canada under section 46(1) (3) of the Arbitration Act, 1991, S.O. 1991, c. 17 (the “Act”) to set aside severable parts of an arbitration award made by Arbitrator Ross C. DuMoulin of the Sport Dispute Resolution Centre of Canada (“SDRCC”). The arbitration concerned allegations made by the respondent, Bilal Syed (“Syed”), a failed candidate in an election process, that Cricket Canada’s internal election process was tainted by fraud, discrimination, bias, and a failure to follow its own corporate by-laws. While granting a part of the respondent’s claim and directing a new election in which the respondent participated, the Arbitrator went on to direct Cricket Canada to amend its by-laws to put in place specific internal governance measures and prospective policy changes that he viewed as appropriate. I find these portions of the award were outside the scope of the arbitration agreement, and set aside those portions of the Arbitrator’s decision as ultra vires his mandate.

FACTS

The Parties

[2] The respondent, Bilal Syed, unsuccessfully sought election to the Cricket Canada Board of Directions (the “Board”) in May, 2016, and subsequently commenced the disputed arbitration.

[3] The applicant Cricket Canada is a government funded not-for-profit corporation, without share capital, incorporated under the Canada Not-for-Profit Corporations Act, S.C. 2009, c. 23 (the “NFP Act”). Cricket Canada is the National Sports Organization (“NSO”) for the sport of cricket in Canada. The federal government, through Sport Canada, recognizes such national sports organizations, establishing eligibility for funding and the ability to create a national team. Sports Canada requires, as a condition of funding, that NSOs are required to submit certain sports related disputes to arbitration.

Cricket Canada’s Corporate Structure and Governance

[4] Cricket Canada’s affairs are governed by the NFP Act and its by-laws, which were approved by the Board on September 11, 2015 (the “By-laws”). In accordance with the By-laws, Cricket Canada’s Board alone has the power to “make policies and procedures or manage the affairs” of Cricket Canada in accordance with the NFP Act and the By-laws.

[5] The internal process for amending or repealing by-laws is stipulated by the By-Laws: (Article IX, s. 9.1). Any amendment to or repeal of a by-law may be made by ordinary resolution at a meeting of the Board and then submitted to the members of Cricket Canada for ratification.

[6] Under s. 2.1 of the By-Laws, Cricket Canada has one category of membership, “Provincial Members”, also known as Provincial Sports Organizations (“PSO”). A PSO is a provincial cricket association that is responsible for organized cricket within a province. The “Voting Privileges” provision of the By-laws provides that the number of votes a PSO may cast in any meeting of members co-relates to the number of teams run by that PSO so that the more teams in a PSO’s jurisdiction, the more votes it will control at a meeting of members (By-Laws, s. 3.13).

[7] Cricket Canada’s By-laws require it to hold an annual general meeting at least every fifteen months, but not later than six months after the end of its preceding financial year. The Cricket Canada Board is comprised of a President, Vice-President, Secretary, Treasurer and three at-large directors. The election of the directors must take place at each annual general meeting of members.

[8] The By-laws require the Board to appoint a Nominations Committee, tasked with soliciting nominations for the election of directors, and performing an initial screening of individuals who seek to win election to the Board. Individuals interested in running for the Board can contact the Nominations Committee directly to request that their name be added to the ballot.

The May, 2016 Annual General Meeting (the “May, 2016 AGM”)

[9] Cricket Canada’s 2016 annual general meeting (“AGM”) took place on March 19 and 20, 2016. The portion of the AGM convened to elect new directors was adjourned until May, 2016 as the Board had not yet formed the Nominations Committee.

[10] The Vice-President of Cricket Canada directed the General Manager of Cricket Canada to assemble a Nominations Committee. After appointing the General Manager to the Nominations Committee, the Vice-President resigned that post so he could run for President at the May, 2016 AGM.

[11] On May 13, 2016, the respondent Syed contacted the Nominations Committee by email and requested that his name be placed on the ballot for the Board elections. After vetting by the Nominations Committee, his name was included on the ballot presented to members. He did not succeed in gaining office.

[12] Cricket Canada has a dispute resolution policy (the “Dispute Policy”) which permits the submission of certain disputes to binding arbitration before the Sport Dispute Resolution Centre of Canada (“SDRCC”). In October, 2016, Syed commenced an SCRCC arbitration regarding his failure to secure a position on the Cricket Canada Board.

Sport Dispute Resolution Centre of Canada

[13] The SDRCC provides dispute resolution services, including mediation and arbitration for sports disputes in Canada. It is established under section 9 of the Act to Promote Physical Activity and Sport, S.C. 2003, c. 2. Sport Canada mandates that as a consequence of funding, NSOs, such as Cricket Canada permit parties access to the SDRCC’s dispute resolution services for sports-related disputes.

[14] SDRCC’s rules of procedure are set out in the Canadian Dispute Resolution Code (the “Code”). The Code generally applies in respect of “Sports-Related Disputes”. Article 2.1 of the Code provides that the SDRCC will “administer the Code to resolve Sports-Related Disputes”.

[15] The Code defines “Sports-Related Disputes” in Article 1(mm) as follows:

“Sports-Related Dispute” … means a dispute affecting participation of a Person in a sport program or a sport organization. Such disputes may include (but are not limited to) those related to: (i) team selection; (ii) a decision made by a NSO board of directors, a committee thereof or an individual delegated with authority to make a decision on behalf of a NSO or its board of directors, which affects any Member of a NSO; (iii) any dispute affecting participation of a Person in a sport program or a sport organization, for which an agreement to conduct an SDRCC Mediation, Arbitration or Med/Arb or use the services of the Resolution Facilitator of the SDRCC has been entered into by the Parties; and (iv) any dispute arising out of the application of the Anti-Doping Program.

[16] Article 3 of the Code sets out the availability of the SDRCC’s dispute resolution processes as follows:

The dispute resolution processes of Resolution Facilitation, Mediation, Arbitration or Med/Arb under this Code are available to any Person in connection with the resolution of a Sports-Related Dispute…

[17] Article 6.24 of the Code provides that the law applicable to SDRCC arbitrations is the law of the Province of Ontario and the Arbitration Act, 1991.

The Arbitration

[18] On October 11, 2016, Syed submitted a ‘Claimant’s Request’ under Article 3.4 of the Code (the “Request”).

[19] Syed’s Request asserted that he was disputing the legitimacy of Cricket Canada’s May 19, 2016 election results on the following grounds:

“Election fraud, failing to follow the procedure as laid out in the bylaws or approved guideline of CCA

Discrimination and Racism making a decision which was influenced by bias, lack of neutrality, to such an extent that decision maker is unable to consider others views.

Deliberate concealment exercising its discretion for an improper purpose.”

[20] In respect of the description of the decision to be appealed, Mr. Syed stated:

“Election was illegal and unfair

compromised election committee no proper process was adopted

unauthorized voter was used

discrimination and deliberate concealment”

[21] In respect of the remedy he was seeking, Syed stated:

“Find out the election process. Screening, scrutinizing and voter eligibility criteria who was eligible for vote in 2016 election and how? Revoke illegal election results May 19 th , 2016.

Fair re-election of cricket Canada through proper process and under the supervision of neutral body to condemn politics.

Forensic audit of cricket Canada for last ten years to reveal corruption and conspiracy

Equal opportunity to all Canadians to participate in election without discrimination in Cricket Canada”

[22] Cricket Canada submitted a response to Syed’s Request (the “Answer”), stating among other things that its elections were “carried out in accordance with [Cricket Canada] Bylaws and guidelines.”

[23] While Cricket Canada’s Dispute Policy contemplated that a formal arbitration agreement would be entered into upon the commencement of the SDRCC proceeding, no formal arbitration agreement was ever completed, although the Arbitrator was appointed and a four day arbitration was held.

The Arbitrator’s Decision

[24] The Arbitrator delivered reasons for his decision on March 15, 2017. The Arbitrator made nine specific awards, ultimately directing that new Board elections take place.

[25] The Arbitrator held that the elections in some respects were conducted in a proper manner, and in others were improperly conducted. He held that Cricket Canada officials communicated adequately with Syed, and provided him with the necessary information. He found that the “Nomination Committee fulfilled its function in a proper manner throughout the election process.” While Syed had alleged discrimination, the Arbitrator found that there was no evidence of discrimination.

[26] The Arbitrator determined that Cricket Canada had erred in permitting the province of Saskatchewan’s vote to be carried by its former President, not its President who was properly in office as at the date of the May, 2016 AGM, and ordered a new election. Cricket Canada does not seek to set aside that decision.

[27] The Arbitrator went on to find other “improprieties” with the elections, including that individuals who sat on boards of PSOs could also run for election to the Board of Cricket Canada; that individuals seeking election to the Board could discuss with voting members what portfolios they might be given in exchange for their vote; and that individuals seeking election to the Board could determine the composition of the Nominations Committee. On the basis of these findings, the Arbitrator made the following awards, which are the portions of the award which Cricket Canada seeks to set aside. He directed that:

(1) any person having a role in the selection of the members of the Nomination Committee shall be prohibited from running in elections;

(2) any provincial Director, or any other person with voting rights by virtue of their position, who intends to run in the elections must resign from his or her position before the elections are held;

(3) any offer, suggestion or promise of a benefit by a person running in the elections to a voter in the election is prohibited, and

(4) since these awards were not provided for under Cricket Canada’s By-laws or rules, “all necessary amendments to the bylaws shall be made to achieve complete compliance with the Canada-Not-for-profit-Corporations Act and with the findings of this award”.

[28] The above awards are collectively referred to as the “impugned decisions”.

The Arbitration Act

[29] This Application is brought under Section 46(1) of the Arbitration Act, 1991 (the “Act”), which provides that a party may apply to set aside portions of an arbitration award. Section 46(1)3 of the Act provides jurisdiction to this Court to set aside an arbitration award if “[t]he award contains a decision on a matter that is beyond the scope of the [arbitration] agreement.” Section 46(2) of the Act provides that a party may apply to set aside only certain parts of an award as follows:

(2) If paragraph 3 of subsection (1) applies and it is reasonable to separate the decisions on matters covered by the arbitration agreement from the impugned ones, the court shall set aside the impugned decisions and allow the others to stand.

ISSUES

[30] This application raises the following issues:

(1) What is the standard of review with respect to setting aside a portion of an arbitrator’s award on the grounds that it contains a decision on a matter that is beyond the scope of the arbitration agreement?

(2) Were the impugned decisions beyond the scope of the arbitration agreement, and if so, should they be set aside?, and

(3) Is Ontario the proper jurisdiction, and should this application proceed?

ANALYSIS

Issue #1: Standard of Review

[31] On the question of whether a portion of an arbitrator’s award should be set aside on the grounds that it contains a decision on a matter that is beyond the scope of the arbitration agreement, and thus not subject to arbitration, the standard of review is correctness.

[32] In Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53, the Supreme Court of Canada applied the standard of review framework established in New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9, [2008] 1 S.C.R. 190 to commercial arbitrations, noting at para. 105:

[J]udicial review of administrative tribunal decisions and appeals of arbitration awards are analogous in some respects. Both involve a court reviewing the decision of a non-judicial decision-maker. Additionally, as expertise is a factor in judicial review, it is a factor in commercial arbitrations: where parties choose their own decision-maker, it may be presumed that such decision-makers are chosen either based on their expertise in the area which is the subject of dispute or are otherwise qualified in a manner that is acceptable to the parties. For these reasons, aspects of the Dunsmuir framework are helpful in determining the appropriate standard of review to apply in the case of commercial arbitration awards.

[33] In Smyth v. Perth and Smiths Falls District Hospital, 2008 ONCA 794, the Court of Appeal held that where an arbitrator makes a determination in respect of the scope of his or her jurisdiction, the standard of review is correctness, holding at para. 17:

[A]n arbitrator must address the issues, and only the issues, referred to him in the arbitration agreement. In this case, the respondent's position was that the Arbitration Agreement set out two specific issues for resolution and did not authorize the arbitrator to go beyond those questions in order to determine whether the board of the Hospital should accept or reject the respondent's application for reappointment. In my view, the respondent's position raised a jurisdictional issue within the description above in Dunsmuir. Accordingly, the application judge's review of the arbitrator's decision on this issue on a correctness standard was appropriate.

[34] There has been an evolution in the standard of review jurisprudence with respect to jurisdictional issues in administrative law since 2008. This application is brought under s. 46(1) (3) of the Arbitration Act, 1991 on the grounds that the award contains decisions on matters that are beyond the scope of the arbitration agreement. It is clear that a private arbitrator has no jurisdiction to make any decisions except those granted to him or her under the arbitration agreement. As a result, this challenge under the Arbitration Act, 1991 raises a true question of jurisdiction to which the correctness standard applies. Even if the standard is reasonableness, I find that the Arbitrator’s impugned decisions are unreasonable, within the meaning of Dunsmuir, for the reasons set out below.

Issue #2: Scope of Arbitrator’s Jurisdiction and the Agreement to Arbitrate

[35] In order for this Court to determine whether the impugned decisions are outside the scope of the agreement to arbitrate, it must first determine the limits of the agreement to arbitrate. An arbitrator’s jurisdiction is circumscribed by the terms of the arbitration agreement. A privately-appointed arbitrator has no inherent jurisdiction. His or her jurisdiction comes only from the parties’ agreement: Advanced Explorations Inc. v. Storm Capital Corp., 2014 ONSC 3918 at para. 57; Piazza Family Trust v. Veillette, 2011 ONSC 2820 (Div. Ct.) at paras. 63-65.

[36] As the parties did not execute a formal arbitration agreement as required by the Dispute Resolution Policy, I must determine the content and scope of the arbitration agreement. Section 1 of the Act defines an arbitration agreement as “an agreement by which two or more persons agree to submit to arbitration a dispute that has arisen or may arise between them.” Cricket Canada submits that the arbitration agreement was reflected in three documents: the provisions of the SDRCC Code providing for arbitration of ‘Sports-Related Disputes’, the Request and the Answer. I agree.

[37] Under the Code, Article 2.1(b) and (c), the arbitration is to consider only matters in respect of a dispute “affecting the participation of a Person in a sport program or a sport organization.” It clearly contemplates issues affecting specific individuals. Cricket Canada submits that at no point did the parties submit to arbitration whether the general By-laws and policies of Cricket Canada should be amended as the Arbitrator ordered. Cricket Canada submits that there was no lis between the parties to the arbitration in respect of what By-laws Cricket Canada should adopt—indeed, Cricket Canada further submits that what was at issue was the participation by Mr. Syed, not future internal corporate governance issues which are to be set by the members.

[38] The Arbitrator erred in creating jurisdiction for himself to dictate future Cricket Canada policies and internal governance requirements. I review each of the impugned decisions, separately, and determine that they were all outside of the arbitration agreement.

Decision #1: Limitation on Director Eligibility for Election

[39] The Arbitrator determined that, in the future, members of PSOs who seek election to the Board of Cricket Canada must resign their positions with the PSOs, and that the By-laws be amended in accordance with this award.

[40] The By-laws define who is eligible to serve as a Director, making no distinction in respect of whether the individual also serves on the board of a PSO. Section 126 of the NFP Act also limits the eligibility of directors. There is no reference to conflict of interest in terms of positions held with other organizations. Section 126 provides:

126 (1) The following persons are disqualified from being a director of a corporation:

(a) anyone who is less than 18 years of age;

(b) anyone who has been declared incapable by a court in Canada or in another country;

(c) a person who is not an individual; and

(d) a person who has the status of a bankrupt.

(2) Unless the by-laws otherwise provide, a director of a corporation is not required to be a member of the corporation.

[41] Syed did not seek the relief granted in his Request. Syed was not a member of Cricket Canada, and he was not a member of a board of a PSO when he sought election to the Board. The question of whether there would always be a disqualifying conflict in respect of a PSO board member also serving on the Board of the NSO was entirely ultra vires the dispute in respect of the particular election in issue. No evidence was presented in respect of whether PSO board members could serve capably as NSO board members. This was clearly outside the scope of the arbitration agreement, and was not a ‘sports related dispute’.

[42] Robert’s Rules of Order are incorporated by reference into the By-laws. Robert’s Rules provide that members may vote for themselves for an office in which they seek election. The Arbitrator held holding that this must change, stating at para. 75:

The fact that the Robert’s Rules of Order referenced in the By-laws state that a member is not prevented from voting for himself for any office is all the more reason to make sure that Provincial Directors do not get into the position of being able to run in the elections while retaining their substantial voting power by not resigning.

[43] The issue of Director eligibility is prescribed by s. 4.2 of the By-laws. While the Arbitrator could consider the By-laws as they affected Syed’s candidacy, he had no jurisdiction to tell Cricket Canada that they should be changed. There may be perfectly sound reasons why members may want consistent representation between PSOs and NSOs. Indeed, the By-laws expressly grant weighted voting in favour of PSOs who have more teams. Eligibility to stand for election is a core issue of internal governance, outside the scope of the arbitration agreement, which was beyond the jurisdiction of the Arbitrator.

Decision #2: Nominations Committee Limitations

[44] Section 4.3 of the By-laws provides that the Nominations Committee is to be appointed by the Board. The Arbitrator found that the Nominations Committee in this case discharged its obligations appropriately, but went on to decide that in the future, an individual who stood for election could have no role in putting in place a Nominations Committee.

[45] The decision of the Arbitrator, if carried through, would require that anyone involved on the Board who seeks re-election cannot be involved in appointing a future Nominations Committee.

[46] If the members wish to limit which directors may be involved in constituting a Nominations Committee, then it is the members who ought to exercise such power. There was no real suggestion in Syed’s Request that anything untoward occurring with regard to the role of the Vice-President in selecting the Nominations Committee, which committee received, vetted and approved Syed’s request to stand for election. There is simply no basis for the Arbitrator to determine for the future, regardless of the wishes of the members, who may and may not determine how nominations for the Board should be vetted. This is a core issue of Board governance, outside the scope of the arbitration agreement, which was beyond the jurisdiction of the Arbitrator.

Decision #3: Communications by Candidates

[47] The Arbitrator determined that “any offer, suggestion or promise of a benefit by a person running in the elections to a voter in the election is prohibited”. Nothing in the By-laws or the NFP Act limits the types of communications that can be made by a candidate to electors. The issues that Syed sought to have determined were procedural in nature—i.e., were the Cricket Canada rules followed, and was there fraud, discrimination, or some other matter of procedural fairness/natural justice which made the election result unfair to Syed. The question of communications between members and candidates—and imposing a future limit on all such communications – simply was not before the Arbitrator as a “sports related dispute” and is a limitation that if desired, should be made by the members and not the Arbitrator.

[48] The plain language of the decision would limit candidates from being able to speak to members about why his or her candidacy would be beneficial, which is important in a democratic system. Given the central role of expressive activity in the democratic process, any limitations on speech within the context of an election must be approached very carefully, especially when those limitations have not been considered or accepted by the members. This, again, is a core issue of internal governance, outside the scope of the arbitration agreement, which was beyond the jurisdiction of the Arbitrator.

Decision #4: Direction to Amend By-Laws

[49] The Arbitrator directed that the By-laws be amended to implement his decision. Cricket Canada concedes that if the Arbitrator determined that its actions were not consistent with the By-laws, the Arbitrator could require compliance, and that if the By-laws did not comply with the NFP Act, then the Arbitrator could require Cricket Canada to bring itself into compliance. Cricket Canada also submits that the Arbitrator’s direction to amend the By-laws creates uncertainty within Cricket Canada, including what would occur if the members of Cricket Canada, at any time in the future, chose to vote against these amendments.

[50] Generally, an arbitrator must show deference and should not interfere with a corporation’s ability to govern itself in accordance with the decisions of the members and the choices they make in their by-laws: Saskatchewan WTF Taekwondo Assn. Inc. v. Taekwondo Canada, 2015 ONSC 2296 at para. 21. This is a not-for-profit organization. As held by Nordheimer, J. in Lee v. Lee’s Benevolent Assn. of Ontario at para. 12:

Non-profit organizations such as the Association should not be required to adhere rigorously to all of the technical requirements of corporate procedure for their meetings as long as the basic process is fair. Nor should the court be too quick to grant relief in such circumstances that may only serve to encourage a disgruntled member of such an organization to seek such relief. Absent some demonstrated evidence that any irregularities went to the heart of the electoral process or lead to a result which does not reflect the wishes of the majority, the court should be loathe to interfere in the internal workings of such groups.

[51] Under the By-Laws, the authority to make, amend and repeal by-laws is within the authority of the members. It is for the members to decide on changes to Cricket Canada’s By-laws, policies and procedures. Such changes are properly the subject of negotiation, consultation and input from all stakeholders and votes by the members, and not the unilateral decision of an arbitrator in a sports-related dispute regarding the participation of an individual in an election: see University of Toronto Graduate Students’ Union v. Canadian Federation of Students, 2016 ONSC 4503 at para. 51.

[52] The Arbitrator’s impugned decisions deal with significant internal and Board governance issues which are properly to be determined by the members of the corporation. They are outside the scope of the arbitration agreement pursuant to s. 46(1) (3) of the Act, and pursuant to s. 46(2) of the Act I set aside the four impugned decisions made as part of the Arbitration Award rendered March 15, 2017. The four impugned decisions are severable, and the remainder of the award stands.

Issue #3: Jurisdiction and Decision to Proceed

[53] I address two issues: the jurisdiction of this court on the application, and the decision to proceed in the absence of Syed.

[54] I agree with Cricket Canada that Ontario is the appropriate forum for determination of this dispute. The Code directs that “the applicable law for Arbitrations shall be the law of the Province of Ontario and the arbitration legislation in place in Ontario shall be the law of SDRCC Arbitrations.” Syed, a Saskatchewan resident, subjected himself to the jurisdiction of the courts of the province of Ontario in bringing his Request under the Code. Cricket Canada’s head office is in Ontario therefore, any changes to its By-laws without member approval would be made at its head office.

[55] Syed was personally served with the Notice of Application on April 18. Cricket Canada’s counsel also mailed a cover letter to Syed advising him that the Rule of Civil Procedure require that he deliver a Notice of Appearance, and inquired about dates. Syed did not deliver a Notice of Appearance. E-mail correspondence he sent to Cricket Canada and its counsel since being served makes it clear he is aware of this proceeding. On April 25, Mr. Goldblatt advised Syed that the Arbitrator’s decision held that the current Board may stay in place until June 30, 2017, the only court availability was late May, and informed him of the return date. Even though Syed was not entitled to any further notice of the application, on May 12 Cricket Canada commendably chose to provide him with a courtesy copy of the application materials. On May 12, Syed wrote Mr. Goldblatt indicating that “Legal Aid is not available for hearing”, and requesting that it be rescheduled. Mr. Goldblatt indicated that Legal Aid Ontario is not available for civil proceedings, and Syed replied: “You misunderstood again. I never said legal Aid Ontario.”

[56] In light of the importance of regularizing the election procedures and any challenges to the election, and in light of the failure of Syed to file a Notice of Appearance or any evidence that he has applied to or is eligible for Legal Aid in Saskatchewan, or that Saskatchewan Legal Aid would cover an Ontario civil proceeding, I proceeded with the scheduled hearing. I note that Syed was an unsuccessful candidate in an election conducted in observance of the Arbitrator’s decision. Even without Syed’s attendance or participation, the burden was on Cricket Canada to satisfy the Court that the impugned decisions should be set aside, and it has discharged that burden.

Kristjanson J.

Released: May 30, 2017