PDF version: Appealing the Remedy Granted by an Arbitration Award

Case considered: Fuhr Estate v. Husky Oil Marketing Company, 2010 ABQB 495

This decision by Mr. Justice Don J. Manderscheid answers a novel question: whether section 49(7) of the Arbitration Act, R.S.A. 2000, c. A-43 allows an applicant to appeal the remedy awarded by an arbitrator without raising a question of law or seeking leave to appeal under section 44? Section 49(7) provides, in part, that “[i]f the award gives a remedy that the court . . . would not grant in a proceeding based on similar circumstances, the court may . . . grant a different remedy requested by the applicant. . .”. In Fuhr Estate v. Husky Oil Marketing Company, the applicant, Mrs. Fuhr, did not want the damages awarded her; she wanted specific performance. She argued she could by-pass the appeal provisions of the Arbitration Act and rely on section 49(7) alone for the remedy she wanted. It seems that section 49(7) has not previously been subjected to judicial scrutiny, even though an identical provision appears in the domestic arbitration legislation of Manitoba, New Brunswick, Ontario and Saskatchewan. Neither does the section appear to have been considered in the literature; the standard texts usually merely repeat what section 49(7) states. While the decision is also noteworthy because Justice Manderscheid adopts a rather unorthodox interpretation of section 44, this comment will focus on the section 49(7) issues.

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PDF version: Pre-emptive attack on arbitration succeeds

Case considered: Suncor Energy Products Inc. v. Howe-Baker Engineers, Ltd., 2010 ABQB 310

Instead of asserting an ordinary limitation period defence in the ordinary course of an arbitration proceeding, Suncor chose to attempt a pre-emptive attack in the Court of Queen’s Bench, asking the court to assume jurisdiction and strike the arbitration proceedings that were barely underway. The court did so, rather than dismissing Suncor’s application or requiring Suncor to respond to the request for arbitration so that the parties’ arbitrator could decide the limitation period issue. It is this aspect of the judgment -the “who decides?” aspect - that I will focus on in this comment. The court’s decision appears to undermine the legitimacy of domestic arbitration.

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PDF version: Much Ado about Little: The Supreme Court’s Decision in Yugraneft Corp. v. Rexx Management Corp.

Case considered: Yugraneft Corporation v. Rexx Management Corporation, 2010 SCC 19

An Alberta company, Rexx Management Corporation, was ordered to pay an almost $1 million US arbitration award in favour of a Russian company, Yugraneft Corporation. Yugraneft waited more than three years before applying to the Alberta Court of Queen’s Bench for recognition and enforcement of that arbitration award. When Yugraneft failed to gain recognition from the Court of Queen’s Bench, it appealed to the Alberta Court of Appeal and, when unsuccessful again, was granted leave to appeal and did appeal to the Supreme Court of Canada. Thirteen judges have now heard the case and all thirteen judges have agreed: the two-year limitation period in section 3 of Alberta’s Limitations Act applied to Yugraneft’s application for recognition and enforcement and thus Yugraneft acted too late. With that degree of unanimity, one has to wonder what all the fuss in the international commercial arbitration community has been about. The case was monitored closely as it wound its way through the courts and several arbitration institutions intervened at the Supreme Court of Canada.

In this post, after briefly setting out the facts and procedural history, I will focus on one of the issues dealt with by the Supreme Court, the threshold issue. The key decision by all the levels of court that considered the matter was the decision that domestic legislation imposing any kind of limitation period was applicable. I will then deal with the question of which limitation period: ten years, six years or two years? After this discussion of the case itself, I will comment on two matters. The first is the question of whether this case really is a case of public importance. The second is speculation about what action proponents of international commercial arbitration might take now, following their loss in the Supreme Court. Read the rest of this entry »

PDF version: No Dower Act Consent? Is the Transaction Void or Voidable?

Case considered: Charanek v. Khosla, 2010 ABQB 202

The question of whether failure to comply with the Dower Act’s requirements results in the transaction being void or voidable occurs with some frequency in Alberta (and not simply on our December Property Law examinations). This is odd because the relevant provisions of the Act have not changed since 1948 and the courts have addressed the consequences of the failure to comply with its requirements for consent quite often. Nevertheless, when Master in Chambers Jody L. Mason conducted a thorough review of the relevant legislation and case law in Charanek v. Khosla and concluded (at para. 61) that “the consequence of noncompliance with the consent requirements of the Dower Act remains an open question,” she was correct. She was also echoing a conclusion reached 50 years ago by Wilber Fee Bowker (former U of A Faculty of Law Dean and first Director of the Alberta Law Reform Institute), in “Reform of the Law of Dower in Alberta” (1960) 1 Alta. Law Rev. 501 at 502 where he observed:

From 1917 until today the courts and legislature and the legal profession too have wrestled with the question - what is the effect of the disposition of the homestead made without consent, properly given and executed?

Thirty-four years later, that very question continues to be with us. . . .

The crux of the problem is that the Supreme Court of Canada said in Meduk and Meduk v. Soja and Soja, [1958] S.C.R. 167 that the transaction was void and the Alberta Court of Appeal, in Schwormstede v. Green Drop Ltd. (1994), 22 Alta. L.R. (3d) 89, 116 D.L.R. (4th) 622, held that the transaction was voidable, but without mentioning the Supreme Court of Canada case.

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PDF version: There is Rarely Compensation for the Wrongful Filing of Caveats

Case considered: Singh v. 862500 Alberta Ltd., 2010 ABCA 117

This case may be of interest to some because judgments considering claims for compensation for wrongly filed or maintained caveats under section 144 of the Land Titles Act, R.S.A. 2000, c. L-4, are not common in Alberta - only a handful seem to have been reported over the years. This case would have been more interesting had the claim succeeded, as successful lawsuits for compensation for wrongly filed or maintained caveats appear to be even rarer. The reason for the rarity of success appears to be the test for compensation in the Land Titles Act and the courts’ interpretation of that test. Section 144 requires that, in order for compensation to be awarded for the wrongful filing or maintaining of a caveat, the caveat must be filed or continued “without reasonable cause.” In Singh v. 862500 Alberta Ltd., the Court of Appeal determined that, because the appellant’s position regarding the interpretation of his purchase agreement was not “entirely unreasonable,” no compensation should be awarded for what did turn out to be a wrongful filing of a caveat. Granted, the test in section 144 is not whether the caveat is upheld but whether the caveator had reasonable cause to file a caveat. Nevertheless, in Singh v. 862500 Alberta Ltd., the bar seems to be set quite low, with “no reasonable cause” being equated to “not entirely unreasonable.”

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Case considered: Flock v. Beattie, 2010 ABQB 193

PDF version: Doubts about Arbitrator Immunity

Can arbitrators be sued if they perform their duties negligently? Can they be sued if they breach their contract with the disputing parties? These questions were recently asked and answered in Flock v. Beattie, heard by Justice Earl C. Wilson of the Alberta Court of Queen’s Bench. It is usually assumed that the law granting arbitrators’ immunity to actions in tort and contract is well settled; the case cited for that proposition is the old English case of Pappa v. Rose (1872) LR 7 C.P. 525 (Ex Ch.). Despite this complacency, Justice Wilson’s decision appears to be a rarity in Canada with its express grant of immunity to an arbitrator. In this post, I contend that the precedent-based argument in favour of extending the doctrine of judicial immunity to arbitrators is a weak one, the statutory argument against extending such immunity needs to be addressed, and the policy arguments on the no-immunity side have yet to be examined.

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Cases considered: Karaha Bodas Company, L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 2010 ABQB 172 and Flock v. Beattie, 2010 ABQB 193

PDF version: Arbitration for the Quick and Final Resolution of Disputes? Hardly.

At first glance, these two cases have almost nothing in common. One concerns a multimillion dollar Indonesian geothermal energy project dispute. The other involves a matrimonial property dispute following a marriage breakdown in Alberta. What they have in common is that both of them are cautionary tales for arbitration - tales of slow, expensive processes that include numerous court applications. The dispute in the former case arose in 1998 and notice of arbitration was given that same year. The dispute in the latter case arose in 1999, and the parties agreed to arbitrate in 2002. Yet we have two 2010 court decisions arising out of those arbitrations. What went wrong?

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Case considered: Nelson v. 1153696 Alberta Ltd., 2010 ABQB 164

PDF version: Locating Road Boundaries under the Doctrine of Dedication

What is the proper basis for fixing the physical boundaries of a road dedicated to public use under the common law doctrine of dedication? In an earlier decision, Justice Andrea Moen had determined that the road known as the Rabbit Hill Road, which passes through private land owned by the respondents, the Nelsons, and the appellant, 1153696 Alberta Ltd., had been “dedicated” as a public road by a previous owner of the land: see Nelson v.1153696 Alberta Ltd., 2009 ABQB 732. As a result of that 2009 judgment, the Nelsons hired a land surveyor so the precise geographic location and physical dimensions of Rabbit Hill Road could be determined. The surveyor provided for a 66 foot wide road. The appellant took issue with that width and the amount of private property that it thereby lost to the public road. The width of the driving surface of Rabbit Hill Road was usually only 45 feet, which meant that the 66 foot width included more than the road itself. Is a public road dedication confined to the actual driving surface of the road or does it include roadside ditches and slopes? It seems that this issue about the scope of a dedication has never been specifically addressed by a Canadian court. English courts have addressed the issue, but Justice Moen refused to follow those precedents.

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Case considered: Polis v. Edwards, 2010 ABCA 59

PDF version: A custodian of a lawyer’s practice is not a “mere warehouseman”

There are few written decisions on the rights, liberties, powers and immunities of custodians appointed by the court to wind up or manage another lawyer’s practice pursuant to the Legal Profession Act, R.S.A. 2000, c. L 8, section 95. Polis v. Edwards, 2010 ABCA 59 adds to that small body of law, although its ability to do so was limited by the fact the appellants were self-represented - and apparently not very well self-represented at that. The Court of Appeal notes (at para. 4) that there were at least 23 different issues or grounds of appeal set out in the appellants’ joint factum and, although there might have been more, they were incomprehensible in law. Nevertheless, one legal question of interest to more than the parties was squarely before the Court of Appeal and that was the question of whether a custodian is entitled to tax the accounts of the member of the Law Society of Alberta (LSA) whose legal business they were appointed to manage or wind up. That question was, not surprisingly, answered in the affirmative.

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Case considered: Community Credit Union Ltd. v. Transamerica Life Canada, 2009 ABQB 704

PDF version:   The Availability of Relief from Forfeiture for Non-Payment of a Life Insurance Premium

This is a well-researched and clearly written decision by Justice Keith Yamauchi on an unresolved issue in insurance law. The question is whether relief from forfeiture is available when a life insurance policy lapses for non-payment of premiums. Since 1994, the usual approach of the courts confronted by this question has been to merely assume relief from forfeiture was available and decide on the easier basis that, even if it was available, it was not appropriate to grant it on the facts of the case before them. In this decision, however, Justice Yamauchi decided the legal point and determined that relief from forfeiture was not available. This decision has several points of interest from a property law perspective, which is the perspective I am adopting for these comments. The aspects of this decision that interest me the most are two. The first is the perceived tension between statutorily regulated life insurance contracts and the body of law known as equity, also known as the classic tension between certainty and justice in the individual case. The second is the sharp line drawn, obliterated, and then re-drawn between property and contract.

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