Court File and Parties

COURT FILE NO.: CV-22-691249 and CV-23-694271 DATE: 20230317 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Derek Van Doorn, Applicant AND: Loopstra Nixon LLP, Respondent

BEFORE: C. J. Brown J.

COUNSEL: Lidia Yermakova, for the Applicant Kris Borg-Olivier, for the Respondent

HEARD: March 6, 2023

Endorsement

[1] The applicant moves pursuant to s. 10 of the Arbitration Act, 1991, S. O. 1991, c. 17, seeking to have this Court appoint an arbitrator to arbitrate an underlying law firm partnership dispute between the applicant, a lawyer and his professional corporation, and the respondents, the law firm of Loopstra Nixon LLP and its principals.

[2] The applicants proposed as arbitrator, The Honourable Frank J.C. Newbould, K.C., while the respondents have proposed either Jeffrey Leon or Douglas Harrison.

[3] The dispute, which arose in November 2022, concerns intra-partnership issues that ultimately resulted in a vote of the firm’s partnership to expel the applicant and his professional corporation from the firm. The dispute arises from the alleged misappropriation of the applicant’s partnership interest in the firm, specific breaches of the partnership agreement and equitable claims for breach of fiduciary duty and unjust enrichment, as well as punitive damages.

[4] As regards arbitration of disputes arising from the partnership agreement, the partnership agreement contains an arbitration clause, as follows:

11.01 Arbitration

All disputes and questions whatsoever which shall arise between the Partners or between the Partners and the personal representatives of the Principal, a Partner or Partners touching this Agreement or the construction or application thereof or any clause or thing herein contained or any account, valuation or division of assets, debts or liabilities to be made hereunder or as to any act, deed or omission of any Partner or as to any other matter in any way relating to the Partnership business or the affairs thereof or the rights, duties or liabilities of any person under this Agreement shall be referred to arbitration in accordance with and subject to the provisions of the Arbitrations Act (Ontario) in force as amended from time to time.

[5] The partnership agreement is silent as regards the procedure for appointing an arbitrator or the type of arbitrator to be appointed.

The Candidates

[6] The Honourable Mr. Newbould is currently counsel to the firm of Thornton Grout Finnegan LLP, Toronto. He is an arbitrator with Arbitration Place. He has conducted many arbitrations involving commercial disputes and partnership disputes. He is a member of the London Court of International Arbitration Users Council, a panel member of the International Centre for Dispute Resolution (ICDR) of the American Arbitration Association, a panel member of the Singapore International Arbitration Centre, a panel member of the BVI Arbitration Centre, a member of the ICC Canadian Arbitration Committee, a panel member of P.R.I.M.E. Finance, a member of INSOL International (International Association of Restructuring, Insolvency and Bankruptcy Professionals), and a member of the International Insolvency Institute.

[7] The Honourable Mr. Newbould was a partner with the law firm of Borden Ladner Gervais (“BLG”) in Toronto with a broad litigation and arbitration practice. In 2006, he was appointed a Justice of the Ontario Superior Court of Justice, and served on the bench through 2017. He was the head of the Commercial List Court in Toronto from 2013 to 2017.

[8] The Honourable Mr. Newbould has experience in adjudicating partnership disputes in the context of law firms. He presided over a trial involving a partnership dispute. His decision was upheld on appeal, and has recently been cited in legal articles.

[9] Jeffrey Leon is currently a partner at Bennett Jones LLP in Toronto. He has a broad litigation practice. His firm biography describes his practice as acting in “complex, ‘bet the company’ business litigation and class actions, cross-border securities, commercial, corporate, product liability, professional negligence and healthcare proceedings”. He has represented multiple provinces in disputes with the tobacco industry, acted as counsel to the review committee of the National Hockey League Players’ Association, acted for numerous Canadian and international companies in commercial litigation and arbitration matters, acted for accounting and law firms in tax litigation, acted for beneficiaries of significant estates in estates litigation, acted for employers or employees in employment litigation, and acted for defendants in class proceedings.

[10] He is the recipient of numerous awards and has served in a number of important and prestigious volunteer roles.

[11] Mr. Leon currently acts as arbitrator with Arbitration Place and has, according to his website biography, “for a number of years… been an active arbitrator and mediator of international and domestic disputes”. He is a fellow of the Chartered Institute of Arbitrators, is a past president of the American College of Trial Lawyers and has been recognized by Canadian and international legal rankings.

[12] Mr. Harrison is currently an arbitrator with Arbitration Place. According to his website biography, Mr. Harrison’s recent arbitration mandates include disputes involving breach of contract or negligence in energy, pharmaceutical, financial services and construction industries. Mr. Harrison also acts as counsel in select matters. He is the chair of the Toronto Commercial Arbitration Society, a member of the International Arbitration Institute and a member of the London Court of International Arbitration. He is a Fellow of the Chartered Institute of Arbitrators, member of the CPR Panel of Distinguished Neutrals, Chair of the Toronto Commercial Arbitration Society, Director of the Toronto Commercial Arbitration Society’s Gold Standard Course on Commercial Arbitration and Member of the International Arbitration Institute, the London Court of International Arbitration and the Executive Committee of the ICC Canada Arbitration Committee.

[13] He practised at the law firm of Stikeman Elliott for over 30 years and has been recognized by Canadian legal rankings.

[14] There is no evidence before me to indicate that either Mr. Leon or Mr. Harrison has had any experience arbitrating partnership disputes in the context of law firms, although Mr. Harrison has acted as a mediator in such a dispute.

The Law

[15] Section 10(1)(a) of the Arbitration Act, 1991, provides that “the court may appoint the arbitral tribunal, on a party’s application, if… the arbitration agreement provides no procedure for appointing the arbitral tribunal.” In this instance, there is no procedure set forth in the partnership agreement such that the court has jurisdiction to appoint an arbitrator of the dispute pursuant to the Arbitration Act.

[16] The Arbitration Act, 1991, further does not provide considerations for the court to apply on an application under s.10(1)(a). While the court’s discretion to appoint a suitable arbitrator is broad, the Canadian jurisprudence provides some guiding principles.

[17] The court’s task, where there are several qualified candidates, is to select an arbitrator “best qualified by a profession or occupation to decide the matter in issue”: Graham Building Services v. Saskatoon (City), 2015 SKQB 99, para. 12. Stated another way, the court must determine “who would be best suited for the role of arbitrator given the nature of the questions that arise for determination and the factual matrix in which the issue arises: see Plaza 88 Retail Limited Partnership v. First Capital Realty Inc., 2014 BCSC 2453, para. 38.

[18] In selecting an arbitrator, the court must ensure that the arbitrator is impartial and possesses sufficient qualifications to arbitrate the dispute: Kolupanowicz v. Cunnison, 2009 CarswellOnt 2247 (Ont. S.C.J.), paras. 91-100; GRP Holdings Ltd. v. 101251372 Saskatchewan Ltd., 2015 SKQB 272, para. 7. Among other secondary factors to be considered in selecting the best candidate are accreditation and experience as an arbitrator; expertise; availability and location; and cost: Kolupanowicz v. Cunnison, paras. 91-93, GRP Holdings, para. 8.

[19] Relative experience adjudicating disputes is often a decisive consideration: see Plaza 88; GRP Holdings Ltd. v. 101251372 Saskatchewan Ltd., 2015 SKQB 272 at paras. 23-24.

[20] Expertise in the technical subject matter of the dispute, without more, is not sufficient: Plaza 88, paras. 23, 39; Graham Building Services v. Saskatoon (City), para. 14.

[21] An arbitrator must be independent of the parties and act impartially. In this case, none of the arbitrators has a conflict. Moreover, all are available for this arbitration.

Analysis

[22] In this case, there is no question that all three proposed arbitrators are well recognized in the field of arbitration and are generally qualified.

[23] This Court is tasked with selecting the best candidate for the specific facts and issues involved in this case.

[24] The applicants submit that The Honourable Mr. Newbould is the better candidate for this specific dispute, given his long experience in arbitration and in adjudication, as an arbitrator, a judge, as well as his experience in partnership disputes including law firm partnership disputes, as well as his experience determining the lawsuit of Springer.

[25] It is the position of the respondents that Messrs. Leon and Harrison are the better choices, given that they have more recent experience in law firm partnerships and partnership governance, being partners of firms more recently themselves, than does The Honourable Mr. Newbould.

[26] I am not satisfied that this more recent experience as partners in law firms makes them better candidates. I find that the adjudication and arbitration experience of the parties is more relevant. I note that all three candidates have had experience as partners in law firms. I am not satisfied and do not accept that the partnership disputes of today are significantly different from those that arose when The Honourable Mr. Newbould was a partner, as urged by the respondents.

[27] Having taken into consideration the applicable legal principles, I find The Honourable Mr. Newbould to be the best arbitrator for this specific case. He has more experience as an adjudicator, both as a judge and as an arbitrator with Arbitration Place. Prior to his appointment as a judge with the Ontario Superior Court of Justice, he also acted as an arbitrator in the context of his legal practice with BLG. He has had 20 years of combined adjudicative experience. It is unclear from the evidence, the years of adjudicative experience of the other two candidates, Mr. Leon and Mr. Harrison. Mr. Newbould has experience adjudicating partnership disputes, including those involving law firm partnerships as an arbitrator and as a judge (see Springer v. Aird & Berlis LLP; Springer v. Aird & Berlis LLP, 2010 ONCA 287). The issues in that case were similar.

[28] As stated in Matrix SME, the question is who is in the better position to “hit the ground running” with little, if any, introduction to the subject matter of the dispute: Matrix SME Canada, ULC v. North Atlantic Refining Limited.

[29] All three candidates are partners of large law firms. While I accept that Messrs. Leon and Harrison have more recent experience as law firm partners, I do not find that to be the necessary or most important factor in adjudicating this dispute. I find the Honourable Mr. Newbould to have greater adjudicative and arbitral experience, including in partnership disputes. I am of the view that The Honourable Mr. Newbould has the depth of experience necessary for this dispute.

[30] I find The Honourable Mr. Newbould to be the best candidate to be arbitrator in this dispute and am satisfied that the parties will be well served by him. I appoint The Honourable Frank Newbould as arbitrator of the dispute in this case.

Costs

[31] I strongly urge the parties to agree upon costs to be paid in this application, and understand from the parties that they are willing to do so. In the event that they are not able to arrive at an agreement, I direct them to provide me with their bills of costs in three pages or less within 60 days.

C.J. Brown J. Date: March 17, 2023