In Schreiner v Vistas at Callaghan Ltd, 2022 ABQB 472,1 the Alberta Court of King's Bench recently considered, among other things, whether a homeowner should be granted leave to appeal an arbitrator's decision on the basis that the arbitrator misapprehended the applicable legislation.
The Court held that section 44(3) of the Arbitration Act2 provides that no appeal lies on a question of law expressly before the arbitrator.3 In addition, whether the arbitrator correctly applied the law to the facts is not subject to appeal as it is a question of mixed fact and law. Specifically, the underlying arbitration agreement in this case did not provide for an appeal on questions of mixed fact and law.4 The Court dismissed the application for leave to appeal, in part, for reasons that the issue "was a matter squarely before the Arbitrator and decided by her".5
Ultimately, this decision, coupled with the Alberta Court of Appeal's recent decision in Esfahani v Samimi, 2022 ABCA 178 (for which you can find our previous blog post here) reinforces the narrow grounds for appeal of an arbitral award in Alberta, including questions of law.
The Defendant Builder, Vistas at Callaghan Ltd. (the "Builder") constructed a home for the Plaintiff Homeowner (the "Homeowner"). As part of the building contract, the Builder provided the "Builder Warranty set forth in detail in the Warranty Certificate" ("Warranty Certificate"). The Warranty Certificate included two separate warranties – a limited one-year warranty against defects ("Defect Warranty"), and the Alberta New Home Warranty Program ("Program") which provided a limited four-year warranty against structural defects ("Structural Warranty").6
On September 27, 2012, the Homeowner took possession of the home at issue. On August 24, 2017, claims under the Structural Warranty were made.7 Then on September 13, 2017, a Claims Assessor for the Program conducted an inspection and determined that none of the claims advanced by the Homeowner fell within the scope of the Structural Warranty.8
On October 17, 2017, the Homeowner filed an application to arbitrate. The arbitrator requested that the parties provide a final list of issues for arbitration on July 15, 2018.9
In May of 2019, the Homeowner and the Program agreed to resolve some of the Homeowner's claims (the "Warranty Claims"). A release was signed ("Release").10
Following the settlement, the Homeowner took the position that she still had the right to pursue some of the claims that had initially been advanced under the Structural Warranty.11 The arbitrator directed the Homeowner to provide a list of remaining issues. The Homeowner provided the list on November 22, 2019.12
The Homeowner sought to pursue those claims that were not accepted as Warranty Claims as general contractual claims (the "Contractual Claims").13 The arbitrator determined she had jurisdiction to decide the Contractual Claims, but found that they were out of time, having been made more than two years after the damage was first identified by the Homeowner.14 Moreover, the arbitrator found the Release was broad enough to relieve the Defendant Builder from liability for the Contractual Claims.15
Position of the Parties on the Application for Leave to Appeal
The Homeowner argued, among other things, that the arbitrator failed to consider section 6 of the Limitations Act16 in her decision.17 Section 6 provides that where the impugned claim was made as part of a prior claim, the limitation period does not foreclose the litigation of those claims in subsequent litigation.18 The Homeowner alleged that the Contractual Claims had been advanced earlier in the proceedings, even if then characterized as claims covered under Structural Warranty.19
The Builder argued, among other things, that the limitation issue was a matter placed directly before the arbitrator and was therefore immune from appellate review pursuant to section 44(3) of the Arbitration Act.20
The Arbitration Act
Section 44(3) of the Arbitration Act provides that "a party may not appeal an arbitration award to the court on a question of law that the parties expressly referred to the arbitral tribunal for decision."21
With respect to the Homeowner's argument that the arbitrator failed to consider the relevant provisions of the Limitations Act in her decision, the Court held that the arbitrator did, in fact, consider how the Limitations Act should apply to the Contractual Claims advanced by the Homeowner.22 The arbitrator found that some of the claims advanced by the Homeowner were made "long after the expiration of the limitation period".23
The Court concluded that the issue of whether the Contractual Claims of the Homeowner had been brought within the prescribed limitation period was a matter squarely before the arbitrator and was decided by her.24
Section 44(3) of the Arbitration Act is an appeal requirement that is unique to Alberta. No other provincial or federal arbitration statute contains an equivalent provision. Of note, a report published by the Alberta Law Reform Institute in 2013 concluded that the case law was sharply divided on the scope of the application of section 44(3), resulting in both wide and narrow interpretations.25 The former interpretation is that the provision bars all subsidiary questions of law that must be answered in order to answer questions that were expressly referred to the arbitrator for decision.26 The narrow interpretation is that it bars only discrete, specific questions of law which were expressly posed to the arbitrator for decision.27
Following the Court's decision in this dispute, the once divergent interpretations appear to be converging in the jurisprudence. The current trend in the case law favours the narrow interpretation on the basis that, to be meaningful, section 44(3) must be given a narrow interpretation or else it would contradict the legislative objectives of section 44(2) of the Arbitration Act, rendering it meaningless.
1. Schreiner v Vistas at Callaghan Ltd, 2022 ABQB 472.
2. Arbitration Act, RSA 2000, c A-43.
3. Supra note 1 at para. 23.
5. Supra note 1 at para. 29.
6. Ibid at para. 2.
7. Ibid at para. 3.
8. Ibid at para. 4.
9. Ibid at para. 5.
10. Ibid at para. 6.
11. Ibid at para. 7.
13. Ibid at para. 8.
16. Limitations Act, RSA 2000, c L-12, s. 6.
17. Supra note 1 at para. 9.
20. Arbitration Act, RSA 2000, c A-43, s. 44(3).
22. Supra note 1 at para. 21.
24. Supra note 1 at para. 22.
25. Arbitration Act: Stay and Appeal Issues, September 2013, Alberta Law Reform Institute at p. 46-47.
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