Woodlands (County) v Whitecourt (Town), 2024 ABKB 388 (“Woodlands”) and Brazeau (County) v Drayton Valley (Town), 2024 ABKB 445 (“Brazeau”)
The Alberta Court of King's Bench ("Court") addressed the reasonableness review of an arbitrator's jurisdiction in Woodlands and Brazeau. In Woodlands, the Court applied the reasonableness standard from Vavilov for administrative tribunals, as the Arbitrator's role under Part 17.2 of the Municipal Government Act ("MGA") was akin to that of a tribunal. In Brazeau, the Court reaffirmed that jurisdictional determinations made by an arbitrator are reviewed for reasonableness, barring the exceptions outlined in Vavilov.
Woodlands
In Woodlands, the Court dismissed Woodland County's application for judicial review, varying the Arbitrator's Award on one point arising from authority decided after the Arbitrator issued her award. The dispute involved amounts each municipality should pay for shared infrastructure and services and who possessed statutory authority to impose capital costs on municipalities. Whitecourt is in Woodlands County, and they share common boundaries. Under Part 17.2 of the MGA, municipalities with common boundaries, but not members of the same growth management board, are required to create an intermunicipal collaboration framework ("ICF") by April 1, 2020.
The parties struggled to negotiate their legislatively mandated ICF. Under Part 17.2, Division 2 of the MGA, disagreements arising in the context of creating or revising an ICF must be referred to an arbitrator. The Arbitrator was appointed, and the parties agreed on the Arbitrator's authority to decide the matters in dispute. The County brought an application for judicial review of the award seeking relief in the form of declarations that the Arbitrator was unreasonable or incorrect in her interpretation of "intermunicipal services," that those determinations fell outside her jurisdiction and an order setting aside material portions of the Award.
The MGA precludes any appeal of an arbitrator's award issued under Part 17.2. It permits a party to apply for judicial review by the Court on a question of jurisdiction only. The County challenged the Arbitrator's interpretation of "intermunicipal services" and three aspects of the directions in the Award. The Court determined that the Arbitrator's authority to bind the parties was derived from her authority to make determinations regarding intermunicipal services under Part 17.2 of the MGA. The Court found that the Arbitrator's jurisdiction was constrained by Part 17.2 and the remainder of the MGA.
In considering a threshold issue of the standard to be applied to the Arbitrator's decisions, the Court held that while the law on the standard of review in these cases was not previously settled, the standard of review for administrative tribunals set by the Supreme Court of Canada in Vavilov applied. The Court found that because the arbitration process was imposed by statute and the Award concerned public law, the absence of an alternative administrative tribunal to hear disputes concerning ICFs put the Arbitrator, functionally, in the position of an administrative tribunal. Further, Part 17.2 of the MGA provides an arbitrator with discretion to make determinations on jurisdiction, a "deemed expert" designation, no statutory right of appeal and limited judicial review. Review of the Arbitrator's jurisdictional determinations was therefore subject to the reasonableness standard.
The Court turned to a determination of which of the impugned decisions were ones of jurisdiction. The Court noted:
"[w]hat is a question of jurisdiction, as opposed, for example, to a question of law or mixed fact and law made within a tribunal's jurisdiction? And were the issues raised by the County "jurisdictional"?"
In distinguishing jurisdictional questions from questions of law or mixed law and fact, the Court identified three aspects of jurisdiction:
- Authority to hear a matter
- Authority to decide
- Authority statutorily confined
Given that the Arbitrator's discretion to define and make determinations and directions regarding intermunicipal services and funding for same came solely from the language of Part 17.2 of the MGA, those determinations were jurisdictional issues and therefore subject to deference from the Court.
Following the release of the Arbitrator's Award, the Alberta Court of King' Bench released a separate decision that found library services were not within the scope of intermunicipal services covered in an ICF. While that precedent was not available to the Arbitrator at the time the award was issued, the decision applied at the time of judicial review. The Arbitrator's findings on her jurisdiction to make directions, and her directions regarding library services in the ICF, were quashed.
Brazeau
In Brazeau, decided shortly after Woodlands, Brazeau County sought judicial review of an arbitral award granted pursuant to the provisions at Part 17.2 of the MGA and in connection with a disputed ICF. Brazeau County argued that the Arbitrator exceeded his jurisdiction by selecting an effective date for the ICF that pre-dated the Award. The Court dismissed the application because the Arbitrator's jurisdiction regarding the effective date was not put to him at first instance, so there was no decision to review.
Although not in reliance of the finding of the Court in Woodlands that the reasonableness standard of Vavilov was to be applied, the Court in Brazeau emphasized Vavilov, highlighting that the Arbitrator's determinations of jurisdictional questions are reviewed on a reasonableness standard unless exceptions require a correctness review.
What does this mean?
In Alberta, where an arbitrator exercises statutorily delegated authority in a manner akin to an administrative tribunal, on judicial review the arbitrator's decision on questions of jurisdiction must be reviewed on a reasonable standard unless the question is an exception that rebuts the presumption established by Vavilov.
When attempting to set aside an Arbitrator's award issued under Part 17.2 of the MGA, the applicant should focus on the statutory language that provides for the matters which the arbitrator has authority to hear and decide, and the limits of the exercise of that authority in respect to those matters. Where the decisions of the arbitrator can be defined as questions of jurisdiction, any award is subject to challenge on a reasonableness standard.
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