Court File and Parties

Court File No.: CV-23-705402, CV-23-710466

Date: 2025-09-12

Superior Court of Justice – Ontario

Re: 2501373 Ontario Inc., John Gouda and Greenflow Environmental Services Inc., Applicants

And: Brian Selfe and Mark Wiedener, Respondents

Before: Schabas J.

Counsel:

• Vinayak Mishra, for the Applicants
• Jordan Moss and Trent Howard, for the Respondents

Heard: September 9, 2025

Reasons on Applications

Overview

[1] There are two applications before me arising from the decisions of an arbitrator in a commercial dispute.

[2] 2501373 Ontario Inc. ("250"), John Gouda ("Gouda") and Greenflow Environmental Services Inc. ("Greenflow", and collectively the "Gouda parties") seek to appeal the arbitrator's Partial Award (as will be described below) on questions of law pursuant to s. 45(1) of the Arbitration Act, SO 1991, c 17. In the alternative, the Gouda parties seek to set aside the arbitrator's Partial Award on the basis that they were not treated equally or fairly in the arbitration, pursuant to s. 46(1)6 of the Arbitration Act.

[3] Brian Selfe ("Selfe") and Mark Wiedener ("Wiedener", and collectively the "Selfe parties") have brought a separate application seeking a judgment enforcing the arbitrator's Partial Award and Final Award. The Gouda parties do not oppose this application other than through their own application which, if granted, would prevent a judgment relating to the Partial Award.

[4] For the reasons that follow, I find that no appeal lies from the Partial Award and that there is no basis to set it aside pursuant to s. 46(1)6 of the Arbitration Act. Accordingly, the Gouda parties' application is dismissed. It follows that the Selfe parties' application should be granted, and judgment entered in accordance with both arbitration awards.

Background

[5] The Selfe parties are former owners of Greenflow. In accordance with a Share Purchase Agreement (the "SPA"), signed in February 2020, the Selfe parties sold their shares in Greenflow to 250, which is owned by Gouda.

[6] 250's purchase of the shares of Greenflow closed on April 1, 2020. After closing, disputes arose over the payment of the balance of the share purchase price, the performance of the parties' contractual obligations under the SPA, and the termination of Wiedener's employment by Greenflow.

[7] In early 2021 the parties agreed to arbitrate their dispute, but in April 2021 the Gouda parties commenced an action alleging breaches of the SPA. The Selfe parties brought a motion to stay the action in favour of arbitration in May 2021, and in July 2022 the Selfe parties brought an application seeking the appointment of Joel Richler ("Richler") as arbitrator.

[8] The parties ultimately agreed to arbitrate all disputes relating to breaches of the SPA, with Richler acting as arbitrator. The arbitration proceeded pursuant to Terms of Appointment signed by all parties and Richler in August 2022.

[9] Following the exchange of pleadings, affidavits, expert reports and legal submissions, the arbitration hearing took place between March 20, 2023, and March 23, 2023. Following the hearing, further written submissions were provided to Richler.

[10] On August 4, 2023, Richler issued what is called the "Partial Award", a 56-page written decision in which he awarded the Selfe parties damages of $767,944.65 and dismissed the Gouda parties' claims. On October 3, 2023, Richler issued the "Final Award", a six-page written decision in which he awarded the Selfe parties $313,297.76 (inclusive of taxes) in costs and disbursements.

Issues

[11] The issues contested before me arise from the Gouda application:

(a) whether the Gouda Parties should be granted leave to appeal the Partial Award pursuant to s. 45(1) of the Arbitration Act; and

(b) whether the Partial Award should be set aside pursuant to s. 46(1)6 of the Arbitration Act.

Section 45(1) of the Arbitration Act

[12] Section 45(1) of the Arbitration Act states 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 importance 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.

The Agreements Bar an Appeal

[13] It is a pre-requisite to an appeal, therefore, that the arbitration agreement "not deal with appeals on questions of law." Put another way, if the arbitration agreement addresses and prevents appeals on questions of law, then neither party can appeal.

[14] In this case, I find that the arbitration agreements between the parties deal with appeals on questions of law and bars them.

[15] Article 7.10 of the SPA addresses arbitration in the event of disputes. It provides in Article 7.10(a) that "all disputes arising between the parties in respect of this Agreement or any document delivered pursuant to this Agreement shall be settled by arbitration according to this Article." Article 7.10(d) provides as follows:

The decision of the Arbitrator shall be final and binding upon the parties and not subject to appeal either on an issue of law or an issue of mixed fact and law. Judgment upon the award or decision rendered by the Arbitrator may be entered in any court having jurisdiction.

[16] The wording of Article 7.10 is very clear. The decision "shall…not be subject to appeal…on an issue of law." Further, the words "final and binding" have long been regarded as being similar to a privative clause barring any review: Yorkville North Development Ltd. v. North York, paras. 7 & 8 (C.A.). In the arbitration context, it has been held that "an arbitration agreement which states that the parties agree to 'final and binding' arbitration does not necessarily preclude judicial review, but it does reflect an intention to exclude a right of appeal: 2101516 Ontario Inc. et al v. Radisson Hotels Canada Inc., 2019 ONSC 3302 at para. 22.

[17] The Gouda parties, however, argue that the arbitration before Richler was not an arbitration under Article 7.10 of the SPA. Counsel points to subparagraphs (c), (d) and (f) of Article 7.10 which impose short time limits for the appointment and completion of the arbitration which were not met here, and which allow either party to "cancel the appointment." They also note that subparagraph (c) contemplates an arbitrator awarding costs, but not counsel fees as were awarded by Richler.

[18] The Gouda parties say, instead, that the arbitration agreement is contained solely in the Terms of Appointment (the "Terms") entered into by the parties and Richler in August 2022. They note that the Terms provides for a longer, drawn out procedure, more than the 90 days provided for in the SPA and is silent on appeal rights. The Gouda parties say that the Terms creates an entirely different agreement which does not oust appeal rights.

[19] I disagree. The opening paragraph of the Terms provides that the parties have submitted their "disputes arising from or in relation to the Share Purchase Agreement…to arbitration…pursuant to section 7.10 of the SPA." Paragraphs 2 and 3 state that the parties "agree to waive" the 90 day time limit in subparagraph (c) of Article 7.10 and the right to cancel the appointment in subparagraph (f). Paragraph 8 of the Terms states that "[n]otwithstanding s. 7.10 of the SPA, the Parties agree that the Arbitrator has discretion to award costs of the Arbitration pursuant to s. 54 of the Arbitration Act." No other provisions of Article 7.10 are waived or varied.

[20] The Terms contain several other provisions dealing with the terms of the retainer of the arbitrator and other procedural matters that one would expect to see in such documents.

[21] In my view, a plain reading of the Terms makes clear that it is dealing with an arbitration under Article 7.10 of the SPA. The Terms state that both parties have submitted their disputes to arbitration pursuant to the SPA, and the arbitrator's jurisdiction over the dispute stems from the SPA and Article 7.10 in particular. The Terms does not change the jurisdiction over the substantive dispute. Rather, three paragraphs of the Terms simply vary certain terms in Article 7.10 – removing a time limit and the right to withdraw if that time limit is not met, and permitting the arbitrator to decide all costs, not just some of them – but leaves the balance of Article 7.10 intact. These provisions do not change the fact that the arbitration is about disputes under the SPA and that the arbitration process, and the arbitrator's jurisdiction, originates with Article 7.10 of the SPA.

[22] The Gouda parties' reliance on Shinder v. Shinder, 2022 ONSC 181 at paras. 34-38, is of no assistance. That case simply confirms that an arbitrator's jurisdiction stems from the agreement, or agreements, between the parties. To give effect to the Gouda parties' submission would mean that any variation of an arbitration clause would require an entirely new agreement, which is unreasonable and unnecessary.

[23] Although not pressed orally, the Gouda parties submitted in their factum that by dealing with Wiedener's claim for wrongful dismissal damages, the arbitration went beyond the disputes arising under the SPA. This is incorrect. Article 7.10(a) of the SPA provides that the arbitrator has jurisdiction over "all disputes arising… [from] any document delivered pursuant to" the SPA. Article 6.4 of the SPA required an employment agreement to be entered into between Greenflow and Wiedener, which was in fact made the same day as the SPA and signed before closing. A breach of that employment agreement is therefore arbitrable under Article 7.10 of the SPA.

[24] There are other reasons for rejecting this argument about the employment agreement.

[25] The termination of Wiedener's employment arose from the fact that he had raised with Gouda his entitlement to receivables in accordance with the SPA; it had nothing to do with his performance as an employee, but was about Wiedener's claims under the SPA.

[26] Additionally, the Gouda parties never objected to the arbitration dealing with the wrongful dismissal claim even though, as the Gouda parties' factum notes, "a significant issue in the arbitration was Mr. Wiedener's claim for wrongful dismissal damages." This complaint was not raised in the Notice of Application in this proceeding issued two years ago but was raised for the first time in their factum served six days before the hearing of this application.

[27] Section 17(5) of the Arbitration Act states that "[a] party who has an objection that the arbitral tribunal is exceeding its authority shall make the objection as soon as the matter alleged to be beyond the tribunal's authority is raised during the arbitration." The Gouda parties failed to do so, and one can infer that the continued failure to do so for over two years after the arbitration was concluded was because they accepted that the wrongful dismissal issue was, as I have found, within the arbitrator's mandate. As Richler stated at para. 188 of his Partial Award when reviewing the litigation history, "[t]he Parties agreed that all issues between the Parties would be arbitrated, save for the Non-Competition Claim."

[28] Lastly, Gouda has sworn an affidavit in this application stating that "[a]t no time during the negotiation of the SPA did I turn my mind to the waiver of appeal rights on questions of law or mixed fact and law", and that it was his "understanding that any decision made by an arbitrator would be subject to review." But Gouda is not unsophisticated. The SPA is a lengthy document on which he ought to have received legal advice. The wording of Article 7.10(d) is very clear, and he is bound by it. As Faieta J. stated in response to a similar assertion by an unsuccessful party to an arbitration, Gouda's "subjective view regarding the meaning of that phrase [final and binding] is irrelevant for purposes of interpreting its meaning": 108 Media Corporation v. BGOI Films Inc., 2019 ONSC 880 at para. 27.

No Questions of Law Alone Are Raised

[29] The agreement to ban an appeal is enough to dispose of the application for leave to appeal under s. 45(1) of the Arbitration Act. However, I also find that the Gouda parties have failed to raise a question of law alone in their criticism of Richler's decision.

[30] Recently, the Supreme Court of Canada in Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20 at para. 28, reiterated that "courts should 'be cautious in identifying extricable questions of law in disputes over contractual interpretation' because ascertaining the objective intention of the parties, which is the prevailing goal of contractual interpretation, is an 'inherently fact specific' exercise", citing its prior decisions in Housen v. Nikolaisen, 2002 SCC 33 at para. 36 and Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at paras. 54-55.

[31] In Ontario Minister of Transportation v. Link 427 General Partnership, 2025 ONSC 2375, Kimmel J. referred to this jurisprudence in the context of an appeal from an arbitration, stating, at paras 17 and 18:

The Supreme Court in Earthco makes it clear that an appellate review should not be treated as an invitation to look for extricable questions of law in decisions involving contractual interpretation. It has long been recognized that where an appeal is limited to questions of law, it will be rare that the court can extricate a purely legal question, especially in contractual interpretation cases: see Sattva, at para. 55.

This admonition not to strain to find extricable questions of law on an appeal is equally, if not more, applicable in the appeal of arbitration decisions, where the deference to be afforded to the factual findings of the parties' chosen decision-maker is heightened. Judicial intervention in commercial arbitrations is the exception, not the rule …. This is also consistent with the principles of finality in commercial arbitration and deference to factual findings. [citations omitted; emphasis added]

[32] In oral argument, counsel for the Gouda parties raised three issues which he submitted raised questions of law alone. However, in my view they are not questions of law alone but, at best, questions of mixed fact and law.

[33] The argument that the Selfe parties failed to comply with Articles 3.30 and 3.37 of the SPA is a question of mixed fact and law. As Richler's reasons disclose at paras 124 and 125, he in fact found a breach of Article 3.30, but explained that it had not consequence. So he did consider both the facts and the law in reaching a conclusion on which, in any event, he made no error.

[34] As to the assertion that Selfe failed to disclose material changes respecting customers, contrary to Articles 3.13 and 3.16 of the SPA, Richler's findings on this issue, at para. 117 of the Partial Award, are clearly findings of fact. As with Article 3.30 and 3.37 raised in the insurance argument, Richler did not misinterpret or render Articles 3.13 and 3.16 meaningless; rather, he found that the facts did not support the Gouda parties' submission.

[35] The third asserted question of law raised by the Gouda parties is that Richler erred in finding Wiedener to be a long-term employee for purposes of calculating reasonable notice and damages. The Gouda parties argue that there was a gap in his employment in the summer of 2020 following the SPA being executed. Although Wiedener continued to work at Greenflow, the Gouda parties say that his employment following the acquisition only commenced in August 2020.

[36] However, Richler considered this argument, including the factual matrix and law, at paras. 166-175 of the Partial Award. This included the evidence that Wiedener continued to work during a transition period following the closing of the SPA, as well as the provisions of the SPA itself which included, in Article 6.4, that Wiedener would remain as a full-time employee during the transition period and would enter into an employment agreement within 30 days of closing the SPA. All of this provided ample grounds, in fact and law, and not just law alone, for Richler to reach his conclusion on the appropriate notice period and damages for wrongful dismissal.

[37] Given my findings on the arbitration agreement and the lack of any questions of law, it is not necessary to address the balance of the requirements in s. 45(1) of the Arbitration Act, namely, the importance to the parties of the matters at stake in the arbitration and whether the determination of any question of law will significantly affect the rights of the parties. Accordingly, the application by the Gouda defendants for leave to appeal pursuant to s. 45(1) of the Arbitration Act is dismissed.

Section 46(1) of the Arbitration Act

[38] In their Notice of Application issued in September 2023, the Gouda parties asserted that Richler was biased, or that there was at least a reasonable apprehension of bias. They did not pursue this argument. Instead, in their factum filed just six days before the hearing of this application, the Gouda parties framed their argument differently. Relying on s. 46(1)6 of the Arbitration Act, the Gouda parties assert that they "were not treated equally and fairly or were not given an opportunity to present a case or to respond to another party's case."

[39] Counsel for the Gouda parties did not make any oral submissions on this issue, and said he was content to rely on his factum. This was prudent, as the arguments have no merit. The complaints set out in the factum are almost entirely about adverse findings of fact. One issue, that Richler did not permit Gouda to provide full answers during his cross-examination, is not supported by the transcript, in which the arbitrator asked him to answer a question to which he had not provided a clear response.

[40] There simply is no basis for an application to set aside the Partial Award based on s. 46(1)6 of the Arbitration Act, and that application is also dismissed.

Conclusion and Judgment

[41] Having dismissed the Gouda parties' application, the application by the Selfe parties for judgment should be granted in accordance with the draft judgment provided by their counsel, which accords with the findings in the Partial and Final Awards. Summarized, this means:

• 250 and Gouda shall pay $169,536.59 to Selfe;
• 250 and Gouda shall pay $162,888.09 to Wiedener;
• 250, Greenflow and Gouda shall pay $12,533.85 to Selfe and Wiedener;
• Greenflow shall pay $422,986.12 to Wiedener;
• Post-judgment interest on the above amounts shall accrue at a rate of 6% per annum from August 4, 2023;
• 250, Greenflow and Gouda shall pay Selfe and Wiedener $313,297.76, together with post-judgment interest at 7% per annum from October 3, 2023.

[42] If the parties are unable to agree on costs, they shall provide me with written submissions, not exceeding 3 pages double-spaced not including attachments. The Selfe parties shall deliver their submissions within 30 days of the release of these reasons and the Gouda parties' response shall be delivered no later than 15 days after delivery of the Selfe parties' submissions.

Paul B. Schabas J.

Date: September 12, 2025