NEWMARKET COURT FILE NO.: CV-17-130076-00 and CV-17-131115-00

DATE: 20180205

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

KHAWAJA SOHAIL MANSOOR and GOLD INTERNATIONAL INC.

Applicants

– and –

MUSHARRAF IQBAL

Respondent

L. Sandhu, Counsel for the Applicants

Musharraf Iqbal, Self-represented

AND BETWEEN:

MUSHARRAF IQBAL

Applicant

-and-

KHAWAJA SOHAIL MANSOOR and GOLD INTERNATIONAL INC.

Respondents

Musharraf Iqbal, Self-represented

L. Sandhu, Counsel for the Respondents

HEARD: February 1, 2018

REASONS FOR DECISION ON APPLICATION TO APPEAL THE DECISION OF DONALD R. CAMERON, Q.C. DATED JANUARY 25, 2017

MULLIGAN J.:

[1] The applicant, Khawaja Sohail Mansoor (Mansoor), brings an application seeking leave to appeal the arbitration award of Donald R. Cameron, Q.C. dated January 25, 2017. The respondent, Musharraf Iqbal (Iqbal), opposes the relief sought and brings a separate motion to confirm the Arbitrator’s award pursuant to s. 50 of the Arbitrations Act, 1991, S.O. 1991, c. 17.

[2] Mansoor was represented by counsel both at the arbitration hearing and upon these motions. Iqbal was represented by counsel at the arbitration hearing. He was self-represented at these motions. Both parties filed Factums and Books of Authority with respect to the issues before the court.

Background

[3] In February of 2004, Iqbal as plaintiff, commenced an action against Mansoor as defendant. He claimed for possession of certain property said to be known municipally as 18 Craneborne Chase in the Town of Whitchurch-Stouffville. He also claimed for expenses and general and punitive damages. A Certificate of Pending Litigation was sought and obtained.

[4] By order of Sutherland J. on June 15, 2016, the matter proceeded to arbitration on consent of the parties.

[5] The parties mutually agreed to the use of an arbitrator through ADR Chambers. Donald R. Cameron, Q.C., was chosen as Arbitrator. They agreed to the ADR Chambers Arbitration Rules which provided in part:

The arbitration shall be conducted under the Law of the Arbitration. In the event that any provision of these rules or the agreement of the parties with respect to the conduct of the arbitration is in conflict with any provisions of the Law of Arbitration from which the parties cannot derogate, the provisions of the Law of Arbitration will prevail.

Section 3.6 provided:

Amendments may be made to the Notice of Arbitration or the respondent’s short answer that at any time prior to the appointment of the Arbitral Tribunal. Thereafter, amendments would be made with the consent of the Arbitral Tribunal.

Para. 17.4 provided:

An award or interim award made under the provisions of these Rules shall be treated as a final award for the purposes of recognition and enforcement by a judicial authority and shall not be subject to any appeal to the courts or otherwise, unless the Parties have otherwise agreed that the Law of Arbitration requires.

[6] As noted, there is no right of appeal in the Arbitration Rules that the parties accepted. However, the Rules do refer to the Law of Arbitration. It is useful to review the Arbitration Act, 1991 S.O. 1991, c. 17, which provides at para. 45(1) as follows:

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 important 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.

[7] As to questions of mixed fact in law, the Act provides at para. 45(3), “If the Arbitration Agreement so provides, a party may appeal an award to the court on a question of fact or on a question of mixed fact in law.” I am satisfied that that subsection has no application here because the Arbitration Rules agreed to by the parties do not provide for an appeal on a question of fact or on a question of mixed fact in law.

[8] I am satisfied that no appeal lies on questions of fact. But there is a right to seek leave to appeal on questions of law.

The Arbitrator’s Decision

[9] The arbitration proceeded as a two-day hearing before Donald R. Cameron, Q.C. on November 28 and 29, 2016. At the conclusion of the hearing, both parties made written submissions about the issues in question. The Arbitrator then issued a detailed 60-paragraph decision on the 25th day of January, 2017.

[10] The Arbitrator made factual findings, determining that the parties entered into an agreement in writing with respect to a real estate construction project. He set out the essential terms of the agreement and noted that the property at 18 Craneborne Chase was purchased by Mr. Iqbal in trust and transferred to Mr. Mansoor’s corporation. Difficulties arose between the parties and Mr. Iqbal, as plaintiff, commenced his action. The Arbitrator found that this was an agreement to develop property, therefore the Real Property Limitations Act, R.S.O. 1990, c. L.15 had application to this case. The claim was not statute-barred. The Arbitrator found at para. 50, “Iqbal acquired an interest in the Property on starting work on the project. Accordingly, the RPL Act applied and the limitation period is ten years. The action is not statute-barred.”

[11] The Arbitrator then turned to the issue of quantification of damages. The Arbitrator itemized the claims for expenses sought and found that Mr. Mansoor was liable for sixty percent of these costs or $55,431. Certain other expenses of Mr. Iqbal were denied by the Arbitrator.

[12] The Arbitrator then assessed Mr. Iqbal’s general damages at $200,000 “for Mansoor’s wrongful termination of the contract”.

Submissions to the Arbitrator

[13] Both parties, through their counsel, made extensive written submissions to the Arbitrator after the hearing. Mr. Iqbal, as applicant, made submissions dated December 1, 2016, requesting compensation for expenditures totaling $313,096, together with an additional $400,000. Mr. Mansoor’s written submissions dated December 9, 2016, responded to these issues, submitting that the claim was not subject to the Real Property Limitations Act. Further, he took issue with the damages sought, providing at para. 12, “No credible evidence that Mr. Iqbal spent $315,000 on construction of his own money. No bank statements are produced by Mr. Iqbal.” The submissions conclude by saying, “His claim has no credible basis and he failed to prove his damages.”

Standard of Review

[14] In Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, 2014 S.C.C. 53, the Supreme Court of Canada had an opportunity to review appeals of commercial arbitration awards under British Columbia’s Arbitration Act. Rothstein J., speaking for the Court, stated at para. 38:

Appeals from commercial arbitration decisions are narrowly circumscribed under the [Arbitration Act of British Columbia] under subsection 31(1), appeals are limited to either questions of law where the parties consent to the appeal or questions of law where the parties do not consent but where leave to appeal is granted.

[15] As to the threshold issue, the Court stated at para. 41, “In order for leave to be granted from a commercial arbitral award, a threshold requirement must be met: leave must be sought on a question of law.”

[16] As to deference to courts and tribunals, the Court further provided at para. 52:

Similarly, the Court in Housen found that deference to fact-finders promoted the goals of limiting the number, length, and cost of appeals, and of promoting the autonomy and integrity of the trial proceedings. These principles also weigh in favour of deference to first instance decision-makers on points of contractual interpretation. The legal obligations arising from a contract are, in most cases, limited to the interest of the particular parties. Given that our legal system leaves broad scope to tribunals’ first instance to resolve issues of limited application, this supports treating contractual interpretation as a question of mixed fact in law.

[17] In Highbury Estates Inc. v. Bre-Ex Limited, 2015 ONSC 4966, B.W. Miller J. ruled on an application under the Arbitration Act, where an order was sought granting leave to appeal the decision of the Arbitrator. In denying the leave to appeal application, His Honour found that, “The purported errors of law enumerated in the Notice of Application are not errors of law. What is at issue are questions of contractual interpretation.” His Honour reviewed the principles in Sattva and quoted from the Ontario Court of Appeal’s decision in Inforica Inc. v. CTI Information Systems and Management Consultants Inc., 2009 ONCA 642. In Inforica, Sharpe J.A. stated at para. 14:

It is clear from the structure and purpose of the Act in general, and from the wording of s. 6 in particular, that judicial intervention in the arbitral process is to be strictly limited to those situations contemplated by the Act. This is in keeping with the modern approach that sees arbitration as an autonomous, self-contained and self-sufficient process pursuant to which the parties agree to have their disputes resolved by an arbitrator, not the courts…The Act encourages parties to resort to arbitration “requires them to hold to that course once they have agreed to do so”, and entrenches the primacy of arbitration over judicial proceedings. [Citations omitted.]

[18] I am satisfied that this court does have jurisdiction to grant leave to appeal under the limited circumstances contemplated in s. 45(1) of the Arbitration Act. The parties agreed to arbitration. They agreed to the Arbitration Rules. Those rules did not provide for any route of appeal. However, the Arbitration Act does allow a party to seek leave to appeal, but only as to questions of law.

[19] I am satisfied in the circumstances here that the Arbitrator made no error with respect to the law. In his reasons, he dealt with two global issues.

(a) The Real Property Limitations Act

[20] The Arbitrator heard two days of evidence and received subsequent written submissions from both parties through their counsel. He made factual findings as to the agreement between the parties and the real property in question. I am satisfied that he made no error in determining that this claim was not statute-barred and fell well within the time limits set out in the Real Property Limitation Act, 2002.

(b) Damages

[21] The Arbitrator heard evidence about the allegations of damages from Mr. Iqbal. He heard evidence concerning Mr. Iqbal’s claim, and submissions that he was entitled to over $300,000 in expenses. After carefully reviewing those expenses, made an award of $55,431. He also considered submissions from Mr. Iqbal about his claim for $400,000 and made an award of general damages of $200,000.

[22] I am not satisfied that the Arbitrator made an error of law with respect to his assessment of damages, an assessment which the parties asked him to do by agreeing to binding arbitration. The Arbitrator’s decision with respect to the facts found, leading to the award of damages, are entitled to substantial deference and fall well outside the scope of an application for leave to appeal the Arbitrator’s award.

[23] In subsequent submissions, the Arbitrator also sought and received submissions with respect to costs and awarded Mr. Iqbal $20,000 for costs.

[24] The motion seeking leave to appeal is dismissed.

Motion to Grant Judgment in Favour of Mr. Iqbal to Enforce the Arbitrator’s Award

[25] The Arbitration Act provides at para. 50(1), “A person who is entitled to enforcement of an award made in Ontario or elsewhere in Canada may make an application to the court to that effect.” The Leave to Appeal application brought by Mr. Mansoor having been dismissed, I am satisfied that the arbitral award of Douglas Cameron, Q.C. is a proper arbitration award to which the Arbitration Act applies and is binding on Mr. Mansoor. It is ordered that Mr. Mansoor shall pay to Mr. Iqbal the sum of $275,431, broken down as follows:

Expenses $ 55,431 General Damages $200,000 Costs $ 20,000 Total $275,431

Costs

[26] If the parties cannot agree on the amount of costs for these proceedings, they may provide written submissions, not exceeding five pages, together with a brief Bill of Costs. Mr. Iqbal shall serve and file his written submissions within 20 days of the date of this decision. Mr. Mansoor shall then serve and file responding submissions of a similar length within 10 days thereafter.

MULLIGAN J.

Released: February 5, 2018