Standard of Review Remains Elusive in Family Law Arbitrations

Family law arbitration continues to find acceptance in British Columbia, although its welcome has been a slow, albeit steady trajectory. One of the benefits of arbitration is its private nature, and lawyers and arbitrators only hear of this alternative dispute resolution process when a party to an arbitration appeals the award. JEA v. VJA 2022 BCSC 171 is one of those cases.

The parties, who began their relationship in 2008 and separated in 2014, had one child. They initially engaged in mediation which was unsuccessful, and in 2018 agreed to adjourn their scheduled trial in favour of a med/arb process. Three mediation sessions were held in the summer of 2018 where the parties resolved some parenting issues and child and spousal support. The remaining issues included how disagreements on parenting would be resolved; the parenting schedule; the timing of a Views of the Child report; and various issues relating to the valuation of family property and excluded property. 

The parties agreed with the arbitrator’s suggestion that he conduct an evaluative med/arb; that the arbitrator would choose between the parties’ last final offers; and he would provide summary reasons. Both parties were represented until the last step when final offers were presented, and at that point the husband was self-represented. 

Shortly after the final offers were submitted, the arbitrator granted the wife’s application to reopen the arbitration to amend her final offer to reflect new information about remedial work required on the family property that impacted its value. Both parties amended their final offers several months after the mediation concluded and the arbitrator issued his award with summary reasons in December 2018, preferring the wife’s last final offer. 

In February 2019 the husband filed his Petition appealing the arbitrator’s decision and Mr. Justice Myers began the hearing on October 15, 2019 but was unable to conclude it before the court day ended, however, not before ordering him to pay costs of $2,000 to his spouse prior to rescheduling his Petition. He was also ordered to provide within 14 days “full cogent argument as to what he is challenging in his Petition to the court”.

The husband provided his argument in November 2019 but advised in January 2020 that he would not pay the costs order. The proceeding stalled until March 2021 when the husband reset the hearing by requisition and also paid the costs order of $2,000.

The primary issue raised by the petitioner related to the family home and farm, the value of the petitioner’s excluded property, the value of his geoduck license, and the increase in value of the respondent’s property. The arbitrator concluded that the family farm was family property to be shared as tenants in common. The petitioner was permitted to buy out his wife’s interest for $320,000, failing which the property would be sold.

The Petition was then heard by Mr. Justice Steeves on July 22 and 23, 2021, and the petitioner remained self-represented. 

Steeves J. first considered the statutory framework noting that since the arbitration was commenced in 2018 the Arbitration Act applied rather than the  arbitration sections of the Family Law Act. Section 31 (3.1) of the Arbitration Act permits a party to appeal an arbitration award on “any question of law, or any question of mixed law and fact. 

The standard of review was considered a settled question in British Columbia based on McMillan v. MacMillan 2015 BCSC 2177, however, the law is now in flux, or as described by the Court of Appeal in family law case Nolin v. Ramirez 2020 BCCA 274 is “an issue currently percolating in courts across the country” in light of the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov 2019 SCC 65. The issue was further complicated by the Supreme Court of Canada’s decision in Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District 2021 SCC 7, where the court declined to opine on this “obviously important question” as it was not necessary to the outcome of the appeal. 

The most recent judicial opinion in British Columbia on the standard of review comes from Madam Justice Griffin in Lululemon Athletica Canada v. Industrial Color Productions Inc. 2021 BCCA 108,  who noted that the correct standard of review from an arbitrator’s decision is “unsettled at the appellate level, post Vavilov and post-Wastech”.

Justice Steeves agreed with the approach in Nolin, Wastech and Lululemon, stating that generally, issues of law that are not necessary to a resolution of an appeal should not be decided. He said:

“It is particularly important to abide by this principle when submissions on a complex legal issue are relatively brief, occurring over only a small portion of a two-day petition where one party was self-represented. Further, this approach is consistent with that the British Columbia Court of Appeal adopted in Nolin (at para. 39)”

Ultimately, Mr. Justice Steeves decided that the Petition must be dismissed whether the standard of review was reasonableness, palpable and overriding error, or correctness. 

The petitioner’s complaints centred on the process employed by the arbitrator including the last final offer arbitration style and the summary reasons. Judge Steeves noted that the last final offer mode of arbitration has been accepted as “fair” by courts in Canada in McLaren v. Casey 2016 BCSC 169 and Kroupis-Yanovski v. Yanovski 2012 ONSC 5312. With respect to the summary reasons, the parties’ med/arb agreement prescribed this form of reasons and the parties signed the med/arb agreement with their respective counsels’ advice.

The court also concluded that the arbitrator committed no errors in law and while the reasons did not refer to any authorities the nature of summary reasons precluded that.

Finally, the court reiterated its view that it need not decide the “complex issue of the standard of review to be applied to the arbitration award” because, as in other recent decisions, on any standard of review, the Petition failed. 

Whether the standard of review will be decided by an appellate court in Canada remains to be seen, as presently the only appellate court who has accepted the challenge is the Northwest Territories Court of Appeal who decided that Vavilov applies to statutory appeals of commercial arbitration decisions. (Northland Utilities Limited v. Hay River 2021 NWTCA 1.) Currently, the judges of the Northwest Territories Court of Appeal are appellate judges from the Yukon, NW Territories, Nunavut and Alberta.  

***This article was first published in The Lawyers Daily, a publication of Lexis Nexis Canada.