Ontario Superior Court of Justice

Court File No.: CV-20-00635983 Date: 2020-11-09

Between: Lori Abittan, Applicant

• and - Karrilyn Wilcox, Respondent

Before: F.L. Myers J.

Counsel: Blair W.M. Bowen, for the applicant Karrilyn Wilcox, on her own behalf

Heard: November 6, 2020

CASE CONFERENCE endorsement

This Application

[1] Ms. Abittan applies to enforce awards made by an arbitrator finding that a Letter of Intent between the parties is legally binding and awarding the applicant approximately $46,000 in costs of the arbitration.

[2] Ms. Abittan advises that the parties have now gone their separate ways so she is no longer seeking to enforce the term of the Arbitrator’s award that required Ms. Wilcox to comply with the LOI. The applicant seeks only recognition of the declaration that the LOI is binding and enforcement of the costs award.

[3] Under s. 50(3) of the Arbitrations Act, 1991, SO 1991, c 17, as long as certain procedural conditions are fulfilled, like their being no appeal brought and the time for doing so has expired, the court is required to enforce arbitration awards. In fact, the Court of Appeal has held that in an application to enforce an arbitration award under s. 50, the court has no jurisdiction to refuse to enforce the award except in the limited circumstance set out in that section of the statute. See: BGOI Films Inc. v. 108 Media Corporation, 2019 ONCA 539, at para. 5.

[4] Ms. Wilcox did not seek leave to appeal or apply to set aside either of the arbitrator’s awards under ss. 45 and 46 of the statute. Over 18 months have elapsed since the final award. None of the conditions that could allow the court to refuse to enforce an award under s. 50 (3) are present.

Subsection 50 (7) of the Arbitration Act

[5] Ms. Wilcox submits that s. 50 (7) of the statute applies in this case and is a basis for the court to refuse to enforce at least the Arbitrator’s costs award.

[6] Subsection 50 (7) provides:

Unusual remedies

(7) If the award gives a remedy that the court does not have jurisdiction to grant or would not grant in a proceeding based on similar circumstances, the court may,

(a) grant a different remedy requested by the applicant; or

(b) in the case of an award made in Ontario, remit it to the arbitral tribunal with the court’s opinion, in which case the arbitral tribunal may award a different remedy.

[7] Mr. Wilcox submits that para. 12 of the LOI deprived the Arbitrator of jurisdiction to award costs of the arbitration against her. It says:

12. Costs: Karrilyn and Lori will each bear their own expenses in connection with this LOI.

[8] The Arbitrator considered and rejected this submission at para. 35 of his Final Award:

[35] Ms. Wilcox submits that each party should bear her own costs of the arbitration and 50% of the Arbitrator's fees. She relies on clause 12 of the LOI which provides that "Karrilyn and Lori will each bear their own expenses in connection with this LOI". In my opinion, the expenses referred to in clause 12 of the LOI are the expenses of negotiating, preparing, executing and implementing the terms of the LOI. In my view, clause 12 does not apply to the costs of the arbitration to determine whether the LOI is binding on the parties and enforceable.

[9] Ms. Wilcox submits that the Arbitrator failed to consider that the words “in connection with this LOI” used in para. 12 are words of the widest import which encompass the costs of any arbitration arising under the terms of the LOI. She notes that the applicant submitted to the court that the arbitration arose under the LOI. This, she submits, supports her view that the costs award associated with the arbitration were costs in connection with the LOI as described in para. 12..

[10] Ms. Wilcox extrapolates that since the Arbitrator had no jurisdiction to order costs under the LOI, this court too lacks jurisdiction to do so. Alternatively, she argues that in light of the treatment that she received by the applicant during their failed business venture, the court “would not grant [costs] in a proceeding based on similar circumstances” and should therefore decline to enforce the costs award under s. 50 (7).

[11] In a final fallback submission, Ms. Wilcox asks that any costs awarded to Ms. Abittan be set off against amounts that she claims Ms. Abittan should owe her in relation to the disputes that led to the arbitration and later to their separation.

Analysis

[12] I have read carefully Ms. Wilcox’s detailed affidavit and exhibits. Her factum presented very thorough legal research. She explains numerous bases on which she believes she has been harmed, impoverished, oppressed, and wrongly deprived of government grants and other funds by Ms. Abittan. She explains in some detail the facts, evidence, and her conclusions demonstrating her commitment, determination, and belief in the justice of her positions and the injustice of the Arbitrator’s decisions.

[13] In my view however, the Legislature has decided that none of Ms. Wilcox’s concerns may be properly raised with the court in this enforcement proceeding under s. 50 of the statute. The parties chose to arbitrate. The Arbitrator made awards. He interpreted the parties’ LOI in a way that Ms. Wilcox believes is erroneous and led to an unjust outcome. The LOI did not prevent appeals. Therefore Ms. Wilcox was entitled to seek leave to appeal on a question of law had she wished to do so. She thought about it. She discussed appealing with her lawyer at the time and decided against it for her own reasons.

[14] Peoples’ decisions to resolve their disputes by arbitration have consequences. One consequence is that, unless they agree otherwise in their arbitration agreements, they cannot come to the court when they feel aggrieved by the arbitrator’s decisions except in the very limited circumstances set out in the statute. The court has no ability to reconsider the findings of fact or law made by the arbitrator in this proceeding.

[15] Subsection 50 (7) is a very narrowly drafted section that has no application to this case. I respectfully disagree with the submissions made by Ms. Wilcox that s. 50 (7) provides an additional appeal route (with no leave to appeal requirement as in s. 45). Neither is it a safety valve through which the court can impose its own views on the justness or adequacy of the findings of facts and law made by the Arbitrator.

[16] In Fuhr Estate v. Husky Oil Marketing Company, 2010 ABQB 495, Manderscheid J. provided the following analysis of the equivalent section in the Alberta statute. (Section 49 of the Alberta law is the same as s. 50 of our statute):

[42] In my view, the headings are one indication that s. 49(7) is not intended to be a provision under which a person can seek to appeal the remedy granted by the Arbitrator. The Applicant’s submission that seeking a different remedy under the enforcement provision is not an appeal is not tenable. The Arbitrator awarded one remedy and Mrs. Fuhr is seeking another remedy, one which the Arbitrator expressly chose not to award. That is an appeal. The heading of s. 49 is “Enforcement”; if the Court orders a remedy that is fundamentally different than that of the Arbitrator, it is not enforcing it, it is substituting its award for the Arbitrator’s.

[44] In my view, s.49(7) read within the context of the entire section must relate to granting an order that is consistent with both the intent of the arbitral award and with the Court’s jurisdiction. The entire tenor of the section is devoted to give effect to the award, and in fact, ss. 49(3)

and (4) are mandatory. The Court must grant an order enforcing the award if the prerequisites are met. It is inconsistent to interpret s. 49(7) as giving the Court discretion to change the remedy substantively at the same time as mandating it to make an order.

[55] These three sections [ ss. 45, 46, and 48 in Ontario] set out the legislature’s intention to limit the Courts’ review of arbitral decisions to questions of law and jurisdiction. It would render the scheme incoherent and inconsistent to interpret s. 49(7) as including a broad and complete authority for the Court to substitute its own remedy when it disagreed with the arbitrator’s decision in the circumstances. Mrs. Fuhr asks this Court to read s. 49(7) as permitting it to inquire into all the factual circumstances that lead [sic] to the Arbitrator’s decision to award damages rather than specific performance, and to also interfere in her assessment of damages. These are both very fact specific applications of the law. It would be absurd to suggest that the Court, which can only hear an appeal on questions of law, could under the guise of “enforcing” the remedy grant the remedy the Arbitrator expressly refused to grant, or to interfere with her findings of fact regarding the assessment of the damages.

[56] In my view, the section is limited to situations where either there is no jurisdiction to grant the remedy (for example a Quebec civil code remedy) or a remedy that is contrary to Alberta public policy (child support or custody that is contrary to the best interests of the child). In such situations, the Court may grant a court order that, as close as possible within the Alberta legal framework, gives effect to the arbitration award.

[57] I conclude that the Applicant cannot seek to replace the remedy awarded with a different remedy under s. 49(7), and her application must be resolved under ss. 44 and 45.

[17] I do not need to decide if the precise limits adopted by Manderscheid J. in para. 56 of Fuhr define the full scope of s. 50 (7). Whatever its scope may be in a proper case, I agree with him that it would be wholly inconsistent with limited role of the court intended by the statutory scheme to interpret s. 50 (7) to allow a court to conduct a review of the merits of an arbitral award in an enforcement application.

[18] The Arbitrator’s decisions are final and binding on the parties. He had jurisdiction to grant a costs order under s. 54 of the statute. Ms. Wilcox disagrees with the Arbitrator’s interpretation of para. 12 of the LOI which, she says, prevented a costs award. She relies upon the decision of the Divisional Court in Yonge-Eglinton Building Lid. v. TTC (1997), 97 O.A.C. 205 in which the court confirmed that that parties may allocate costs of future arbitration proceedings in their arbitration agreements.

[19] In Yonge-Eglinton, the costs clause dealt clearly and expressly with both the costs incurred in negotiating the contract and the costs of any future arbitration. In this case, the Arbitrator held that para. 12 dealt only with the former and not the latter. That decision is not open for challenge in this proceeding. Neither is his quantification of costs.

[20] Ms. Wilcox argues that the court would not make a costs order against her on her view of the justice or injustice of the case. While I do not question the sincerity of her view, the Arbitrator made findings to the contrary. Ms. Wilcox would also like to assess the Arbitrator’s fees. He made findings that the breadth of Ms. Wilcox’s arguments caused his fees to mount. Ms. Wilcox had an opportunity to assess the Arbitrator’s fees under s.56 (1) of the statute and did not take it. Whether she can still do so now is a matter for a different proceeding.

[21] Ignoring the merits of the Arbitrator’s decisions, as I must, and considering only the nature and form of remedy granted, I find that a costs award is indeed a remedy which a court has jurisdiction to grant and would grant in a proceeding similar to this one. I can see no basis to intervene under s. 50 (7) of the statute.

[22] I note for completeness that Ms. Wilcox also questioned the inclusion of interest in the arbitral awards. Section 57 of the statute authorizes awards to include prejudgment and postjudgment interest on the same basis as court orders.

[23] Ms. Wilcox’s setoff argument also cannot succeed. The Arbitrator dealt with the issues before him. I am in no position in this proceeding to determine whether Ms. Wilcox may have oppression or other claims against Ms. Abittan. Her claims may be well-founded if they are ever acted upon. But the existence of possible claims by Ms. Wilcox against Ms. Abittan is not a basis to decline enforcement of the arbitral awards under the mandatory terms of s. 50 (3) of the statute.

Outcome

[24] The application is therefore allowed.

[25] Ms. Abittan may deliver no more than three pages of costs submissions by November 13, 2020. Ms. Wilcox may respond with no more than three pages of costs submissions by November 20, 2020. All submissions shall be accompanied by Costs Outlines and copies of any offers to settle on which a party relies. No copies of any law or case law are to be sent to me. Rather, references to statutory material and case law are to be made by hyperlinks embedded in the parties’ submissions. Submissions shall be delivered to the opposite party and to my Judicial Assistant as OCR searchable PDF attachments to an email.

F.L. Myers J.

Date: November 9, 2020