Inadequate Reasons Grounds for Family Arbitration Appeal

GeorgiaLeeLang100The parties in Nolin v. Ramirez 2019 BCSC 934 engaged in family law arbitration over a period of several days over several months. In the first days of the arbitration the issues included argument regarding the bonafides of the parties’ divorce several years previously, and whether the divorce was legitimate or contrived; and a myriad of financial issues, including division of property, excluded property, corporate property, and child and spousal support.

The parties signed an Agreement to Participate in Family Law Arbitration and each was represented by counsel. The agreement to arbitrate provided that the arbitrator would only provide Summary Reasons, unless prior to the commencement of the arbitrator’s preparation of reasons one of the parties requested fuller reasons.

Apparently neither party had reason to believe that the arbitrator’s Summary Reasons would not suffice and neither party initially requested more comprehensive reasons. That changed, however, after the arbitrator released his Summary Reasons and Mr. Nolin wished to appeal portions of the arbitrator’s award.

Mr. Nolin took the position that the arbitrator’s Summary Reasons were not sufficient to ascertain the rationale of the arbitrator’s decision and requested more expansive reasons. Unfortunately, having spent a large sum on a lengthy arbitration, including a later arbitration that focused on parenting issues, the arbitrator’s request for an additional retainer was beyond his means.

Mr. Nolin filed an appeal by Petition of certain aspects of the arbitrator’s award to the British Columbia Supreme Court in accordance with the provisions of the Arbitration Act.

One of his central grounds of appeal was that in respect of the arbitrator’s valuation of certain chattels, including vehicles and other recreational chattels, and his award of lump sum spousal support, the arbitrator’s Summary Reasons were inadequate.

Relying on Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817 he argued that adequate reasons foster better decision making by ensuring that issues and reasoning are well articulated and, therefore, more carefully thought out. Reasons also allow parties to see that the applicable issues have been carefully considered and are invaluable if a decision is to be appealed or questioned.

Because family law arbitration is a relatively new concept in British Columbia, Mr. Nolin argued that standards of practice are relatively undeveloped at this juncture but submitted that explanatory reasons for an Award are necessary and ought to be mandatory. An Award is incomplete if the Arbitrator does not provide a reasoned written decision.

He also said that it was appropriate to recognize that, in certain circumstances, including when the decision has important significance for the individual, or when there is a statutory right of appeal, the duty of procedural fairness will require a written explanation for a decision. Comprehensive reasons are required given the profound importance of the arbitration award to those affected.

Finally, he submitted that reasons also relate to the fairness of the process. Particularly in a difficult case where hard choices have to be made, they may provide a modicum of comfort, especially to the losing party, that the process operated fairly, in the sense that the arbitrator properly considered the relevant issues, applied the appropriate principles, and addressed the key points of evidence and argument submitted.

With respect to the value of the chattels, the arbitrator’s reasons were as follows:

“47. Evidence as to the value of the vehicles was problematic.

48. I was not prepared to accept the values attributed by [Mr. Nolin] as they were patently lower than reasonable. The photographs depicted vehicles in excellent shape.

49. As well, I was not prepared to accept that the ski boat had been beneficially owned by [Mr. Nolin’s] mother and inherited by [Mr. Nolin]. It, too, showed well in the photographs and videos.

50. Doing the best I could with the evidence, I estimated the value of all his vehicles, recreational vehicles and equipment to be $150,000.

51. I estimated the value of [Ms. Ramirez’s] vehicle in a similar fashion and have concluded that it should be valued at $15,000.”

Ms. Ramirez argued that the reasons were sufficient and could not be a stand-alone basis for quashing a decision. Mr. Justice Grauer disagreed saying:

“In my view, the arbitrator’s reasons, even as summary reasons, are not sufficient. This is because they set out no explanation whatsoever of why, on the evidence, the arbitrator concluded that an appropriate value was $150,000, as opposed to $70,000 (the amount for which Mr. Nolin contends). The number is found nowhere in the evidence, either as a specified amount or as part of an estimated range, and appears to have been plucked out of thin air (see Schenker v Scott, 2014 BCCA 203 at paras 54–57, concerning the importance of relating findings of fact to the assessment of damages). Mr. Nolin is left without a clue as to how and why the arbitrator arrived at that conclusion, other than the knowledge that his own evidence was not accepted.”

Mr. Justice Grauer reviewed the evidence before the arbitrator with respect to spousal support noting that neither party had advanced arguments in favour of lump sum support but the arbitrator determined that this was a case that “cried out for lump sum support”.

Mr. Justice Grauer held:

“In our case, we are dealing not with a trial judge but with an arbitrator providing summary reasons for his award. Nevertheless, where the arbitrator is departing from what was, consistent with the parties’ expectations, the default position, some explanation was required. All the arbitrator said was that the case “cries out for lump sum spousal support”. But why? What was it about the case that made it so? In my view, it was incumbent upon the arbitrator to give a brief description of the factors that inspired him to come to his conclusion. As it is, the parties (and particularly Mr. Nolin) are in the dark as what factors were weighed by the arbitrator in arriving at his decision, and are unable to evaluate how he exercised his discretion. The exercise of discretion is not, after all, an arbitrary exercise.”

Referring to section 31(4) of the Arbitration Act, the Supreme Court concluded that the appropriate remedy was to set aside the findings on the value of chattels and lump sum support and remit the two matters to the arbitrator for reconsideration and further award, based upon reasons that comply with the principles referred to.

Lawdiva aka Georgialee Lang

Lying Litigants Wasted Valuable Court Time

Photo by Pixabay on
Litigants are expected to come to court and tell the truth and mostly they do, but in the case of Sidhu v. Sidhu 2019 BCSC 946 the trial judge found that “Neither party came to trial intending to tell the truth.”

After a 2018 trial, Reasons were handed down in March 2019, and were followed by an application by the respondent wife for costs, including double costs, stemming from a settlement offer made before the trial.

In considering the costs application, Mr.Justice Funt noted that in advance of the trial each party swore a false Form 8 Financial Statement. He remarked that a Form 8 is an “important document tantamount to a pleading.”

With respect to the claim for double costs on the basis that the offer she made to her husband should have been accepted by him, the judge remarked that when an offer is made based on a fraudulent Form 8 it cannot be said to be an offer that should be accepted under the Supreme Court Family Rules. Validating such an offer would be condoning lies and improper financial disclosure. The judge also found that documents submitted by the wife at trial were fabrications.

However, the husband’s conduct was no better. He also came to court with lies and “sham” documents, but he was smart enough not to ask for costs.

The Court expressed its dismay with the parties’ “evidentiary concoctions” meant to “hoodwink” the Court.

As a result, while the judge granted the parties’ divorce, all other relief sought was dismissed, as were costs. The husband was, however, awarded special costs of the wife’s costs application.

Strict Requirements for Terms of “Agreement to Arbitrate” Not Optional

As family law arbitration becomes commonplace, issues will undoubtedly arise that can only be resolved by the Court. One such example is the case of Horowitz v Nightingale, 2017 ONSC 2168 where the parties entered into Minutes of Settlement that included the following provision:

“The parties agree to submit the issues outlined in paragraph 6 … to Arbitration with Stephen Grant on four of the following dates (subject to confirmation from Mr. Grant’s office and the parties regarding the appropriate amount of time for the hearing): July 27, 28, 29, August 2, 3, 15, 16 and 18. Provided that the arbitration proceeds, Murray will not proceed with a motion to reduce the support and will withdraw his current motion re same without costs. The Settlement Conference date will be vacated.”

Ultimately, the arbitration referred to in the Minutes of Settlement did not take place, which prompted the respondent, Mr. Nightingale, to bring an application to the Court to stay court proceedings, based on his position that the parties had agreed to arbitrate.

Mr. Nightingale relied on s. 7 of Ontario’s Arbitration Act which provides that if a party to an arbitration agreement applies to Court in respect of the matters to be arbitrated, the court matter shall be stayed. He argued that the arbitration provision in the Minutes of Settlement constituted an “agreement to arbitrate” pursuant to the definition in s. 1 of the Arbitration Act. He also maintained that the additional formalities found in most agreements to arbitrate need not be strictly observed.

Ms. Horowitz advanced the position that other requirements such as clauses identifying choice of law, the appeal process, confirmation of violence screening, and independent legal advice, are not optional.

To overcome these shortfalls, Mr. Nightingale posited that the Court could simply imply terms to reflect the parties’ intentions, but the Court distinguished the cases he cited saying:

“While courts cannot take an active role by ordering parties to arbitrate, a court may make an order on consent once parties have themselves chosen that process. To overcome formal deficiencies, however, a court should not imply or engraft terms upon what is essentially a consensual process chosen by the parties.”

The respondent also cited Haas v. Gunasekaram, 2016 ONCA 744 (CanLII), where the Court of Appeal states that “the law favours giving effect to arbitration agreements”, a principle endorsed by the hearing judge, however, he also found that the term in the Minutes of Settlement could not be characterized as an “agreement to arbitrate” absent the statutory terms required by the Arbitration Act.

Referring to Parker v. Pal, 2014 ONSC 7035, the Court agreed with the importance of holding parties to their agreement, affording a high degree of deference, but distinguished the case:

“It is to be noted in this case that the parties had already signed a valid arbitration agreement and the arbitrator had already made an interim (temporary) ruling. The aggrieved party was moving against the arbitration process by claiming bias. Once again, the court points out the mandatory nature of section 7.(1) of the Arbitration Ac to grant a stay. In Parker v. Pal, a valid arbitration was not at issue as it is here.”

The Court also considered McFarland v. McFarland, 2015 ONSC 2355 (CanLII), where Justice Minnema in dealing with Minutes of Settlement that set out the fact there would be a consent order for secondary arbitration stated:

“The Minutes of Settlement indicate: “The parties shall execute an Agreement in the form and manner acceptable to the Parenting Coordinator, and which shall conform with the provisions of the Arbitration Act and the Family Law Act, and the regulations thereunder.” Can the court order parties to agree? Can the court order the parties to sign a document dictated by a third person before they have seen it?”

The Court reluctantly dismissed the respondent’s application, noting that options such as arbitration and med/arb are desirable alternatives to the litigation process, however, the absence of formal requirements mandated by the Arbitration Act was fatal to the application’s success.

Lawdiva aka Georgialee Lang

Ontario Lawyer Steals $2 Million Dollars

Photo by Pixabay on
Ontario lawyer, John Findlay, stole almost $2 million dollars from his clients, but decided not to show up for the Law Society hearing to determine the circumstances and his punishment. Somehow, I am not surprised…

Findlay was called to the bar almost 40 years ago, in 1980, and practised civil litigation. Also not surprising, was that he was disbarred for two years in the early 2000’s for misappropriating client monies.

Findlay acted in a class action suit on behalf of property owners and businesses in Caledonia, Ontario, against several parties including the Ontario Provincial Police and the Government of Ontario. The law suit was settled for $20 million dollars, which Findlay was charged to distribute to the successful litigants. He was also ordered to retain $1.5 million dollars in trust, which eventually grew to $2 million dollars, to be held for two years.

Findlay held the funds in a GIC, but began stealing from this fund in a systematic way between March of 2012 and October of 2014, all the while deceiving the beneficiaries of the fund and the Court to believe the fund was intact. Apparently he hoped that the fund would generate sufficient interest allow him to pay back the fund the monies he had used.

Ontario’s Lawyer Compensation Fund received claims from 195 claimants in respect of the missing funds, totalling approximately $1.8 million.

On several occasions Mr. Findlay advised authorities that the funds were held in an interest-bearing trust account, reports that were false.

John Findlay was disbarred and ordered to pay the Compensation Fund approximately $1.750 million and costs of $51,500. The Law Society tribunal did not indicate whether Findlay
has funds to repay the trust funds.

Sadly, the Law Society tribunal noted that the litigants in the class action had previously suffered damages and economic loss. Findlay’s deceit and this fiasco will certainly not increase their confidence in the administration of justice.

Lawdiva aka Georgialee Lang

Law Society Reverses Zoraik Decision: Good Character Established

On October 12, 2018 Malcolm Zoraik applied to be admitted to the Ontario bar. After a 2-day hearing his application was dismissed. But that is not the last word in Mr. Zoraik’s journey to re-establish himself as a member of the bar.

On June 3, 2019 Mr. Zoraik appealed the earlier decision of the Law Society tribunal citing multiple grounds of appeal and presenting fresh evidence, namely, a pardon from the National Parole Board pursuant to the Criminal Records Act. The pardon related to three convictions in British Columbia for public mischief, obstruction of justice, and fabrication of evidence, in relation to a personal injury trial he conducted in Victoria B.C.

His grounds of appeal included:

A. The hearing panel erred in law and misapprehended the evidence by focusing unduly on the appellant’s failure to express remorse for the actions that resulted in his criminal conviction.

B. The hearing panel erred in law in relying on the adverse credibility findings that the courts had made against the appellant in the criminal proceedings.

C. The hearing panel erred in law by requiring the appellant to demonstrate that he had taken the necessary steps to “ensure” that he would not commit professional misconduct if he were licensed.

D. The hearing panel erred in law by drawing adverse inferences against the appellant on two issues despite an absence of evidence to support such conclusions. These issues concerned

i. the timing and circumstances of the appellant’s bankruptcy and his discharge;

ii. the relevant time span over which the appellant had presented evidence of rehabilitation and correction.

E. The hearing panel erred in law by applying the penalty decision of the BC disciplinary panel to discount the appellant’s character evidence in the instant application.

The appeal panel found that the earlier decision focused primarily on Mr. Zoraik’s approach to his previous convictions, noting that the earlier panel referred to Mr. Zoraik’s refusal to discuss the convictions ten times in their reasons. While Mr. Zoraik acknowledged the convictions, he had declined to discuss the underlying events, his version of what occurred, or his sworn testimony in support of his not guilty plea at the B.C. criminal trial. The appeal panel agreed that the earlier panel’s treatment of his approach constituted an error in law.

They also found the earlier panel erred in law by requiring Mr. Zoraik to ensure there would be no recurrence of misconduct, noting that an applicant does not have to guarantee that no future misconduct will occur or predict what may occur in the future.

A further error was related to the panel’s treatment of Mr. Zoraik’s earlier bankruptcy, where adverse findings were found to have been made with no supporting evidence.

In relation to the time that had elapsed since Mr. Zoraik’s difficulties, the appeal panel found that he had provided ample evidence of his rehabilitative efforts, commendable behaviour, and acceptance of the convictions and disbarment during the period since at least 2013. The earlier panel again misapprehended the relevance of this evidence, with their over-reliance on the “remorse” issue.

Finally, the appeal panel found that the earlier panel inappropriately discounted positive character evidence provided by a variety of individuals including two licensees whom he had worked for several years during his extended Ontario articles; a legal assistant; the Executive Director of the Somali Immigrant Aid Organization and Midaynta Community Services, where Mr. Zoraik volunteered in providing guidance and leadership to Somali youth; and clients and former colleagues.

Mr. Zoriak’s appeal was allowed; a finding of good character was recorded; and an exemption from writing any further licensing exams was ordered. Zoraik v. Law Society of Ontario, 2019 ONLSTA 11

Lawdiva aka Georgialee Lang

Judge, Who Finds 10-Week Trial in Children’s Best Interests, Overturned by Court of Appeal

After six years of litigation the parties reached a final settlement of all issues related to the parenting of their three children. With a 10-week trial scheduled for late January 2019, the parties brought their consent order to the trial judge on January 7, 2019 expecting to speak to the order, have it approved by the judge, and adjourn their trial. However, that is not what happened.

The judge declined to approve the consent order, finding that it was not in the best interests of the children, because the parties had not agreed on a counselor for the children, but did agree that their parenting coordinator could select a counselor after receiving submissions from the parties. The judge commented:

“I can tell you I’m not going to sign this order because I don’t think in the circumstances of this case at this moment it serves the best interests of the children. And so I would encourage the parties to resolve the name of the — the name or names of the counsellor or child psychologists and then I’ll sign it.”

The judge also advised counsel that several recent cases did not support the order sought by their clients. Subsequent to the January 7 hearing he sent a memorandum to counsel requesting their submissions with regards to Fleetwood v. Percival 2014 BCCA 502; NRG v. GRG 2017 BCCA 407; and LCT v. RK 2018 BCSC 1016, with respect to the scope of delegation to parenting coordinators.

Counsel reappeared before the judge on January 11, 2019, however, the respondent mother now wanted to proceed with the trial, while the claimant father submitted he would be pursuing a declaration of settlement based on the consent order endorsed by both counsel. At this hearing the judge also stated that based on NRG v. GRG, supra, he did not have the authority to appoint a counselor for the children.

On January 14, 2019 counsel for the father filed a Notice of Appeal of the judge’s order dismissing the consent order, and sought an expedited appeal pursuant to the Court of Appeal Practice Directive dated December 12, 2011. With the trial now seven days away, the father brought an adjournment application to the trial judge, which was argued on the first and second days of the trial.

On January 22, 2019 the judge granted the adjournment application which provided that the appellant father’s factum, appeal books, and transcripts must be filed on January 25, 2019 and that if the appeal was not successful the trial would commence on February 19, 2019.

The Court of Appeal heard and unanimously allowed the appeal on February 12, 2019, with oral reasons from Mr. Justice Tysoe. He discussed several preliminary issues. The first was his confirmation that the judge’s decision not to approve the consent order was a final order appealable pursuant to s. 6 of the Court of Appeal Act.

The second was his observation that the parties appeared in chambers with their consent order without filing a Notice of Application, a practice not to be encouraged, however, the actions of the parties amounted to a waiver of the requirements of the filing and service of a notice of application and for a joint oral application for an order in the form of the consent order.

Finally, given the expedited appeal, the chambers judge had not yet signed his order dismissing the oral application to approve the consent order, although the judge had reviewed the draft orders submitted by each counsel and drafted his own form of order. The court referred to its “normal policy” of declining to hear an appeal in the absence of an entered order but based on the transcripts from the January 7 and 11, 2019 hearings before him, were satisfied that he had dismissed the parties’ joint application to enter the consent order.

The Court held that the chambers judge made two errors when he refused to approve the consent order. While it would have been preferable for the parties to agree on a counselor, the judge erred when he failed to consider whether the consent order was nevertheless in the children’s best interests given that the parties could not agree and the alternative was a 10-week trial:

“ In my view, it was in the best interests of the children to have their parents avoid a ten-week trial over parenting issues: see Stonier v. Stonier, 2004 BCCA 307 at para. 31. Children are generally adversely affected by continuing conflict between their parents, and tensions are usually increased during a trial. As well, counsel for the respondent explained to the judge on January 7 that the trial was going to be costly and that the respondent had to make a decision whether she was going to be able to afford to raise the children.”

The second error was his failure to give sufficient weight to the effect of the selection by the parenting coordinator because he mistakenly believed that the parenting coordinator’s input would be a recommendation only, which could lead to further litigation, instead of allowing the parties to rely on the dispute resolution mechanisms available in the Family Law Act, in order to avoid a lengthy, fractious trial.

The Court referred to the provisions regarding parenting coordinators in the Family Law Act, s. 17 and 18; and in the Regulation to the Family Law Act including s. 6(3) and 6(4), finding that the selection of a counselor fell within s. 6(4) (a)(ix) and that the court should encourage decision-making by parenting coordinators in high-conflict cases to fulfill the mandate of avoiding court intervention in favour of alternate dispute resolution.

The Court also distinguished the case of HCF v. DTF 2018 BCSC 2411, relied on the by respondent mother, which was handed down in late December 2018, where the court held that a parenting coordinator did not have the ability to choose an appropriate therapy regime for a child, noting that in the case at bar the therapy had been determined, leaving only the choice of a counselor to the parenting coordinator.

Finally, the court reviewed the three cases referenced by the chambers judge, holding that none of them were of assistance in determining the principles arising from the appeal.

Sealing Order in Sherman Double Murder Set Aside

crime scene do not cross signage
Photo by kat wilcox on
The murders of billionaire couple Bernard and Honey Sherman of Toronto shocked Canadians across the country, who tend to believe that the very wealthy lead charmed lives. The case attracted huge attention, not only for the prominence of the Sherman’s and their political connections, but for the initial misstep, when the Toronto Police first pronounced their deaths a suicide. (Donovan v. Sherman Estate, 2019 ONCA 376)

The latest chapter in this story played out in a courtroom on April 29, 2019 when the Toronto Sun newspaper and reporter Kevin Donovan brought an appeal from a motions judge who ordered that the Sherman court files be sealed in order to protect the privacy and dignity of the victims of violence and their loved ones. The court also accepted the argument of the estate of the Sherman’s that without a sealing order, there was a reasonable apprehension of a risk to those who had in interest in the estate.

The Appeal Court confirmed that the lower court had applied the correct legal test which requires a party seeking a sealing order to show that the order is necessary to prevent a serious risk to an important public interest which cannot be protected by other reasonable alternative methods. Secondly, the party seeking an order must establish that the salutary effects of the order outweigh the negative effects on the right of freedom of expression and other public interests served by open, transparent courts.

However, the Appeal Court held that the focus on a risk of harm to the estate administrators and beneficiaries was not proven on the limited evidence before the motions judge. The Appeal Court allowed the appeal and set aside the sealing order finding that the lower court’s analysis was flawed:

“In our view, the motion judge’s analysis comes down to the proposition that because the Shermans were murdered by some unknown person or persons, for some unknown motive, individuals named as beneficiaries in their estates or as administrators of their estates are at risk of serious physical harm. With respect, the suggestion that the beneficiaries and trustees are somehow at risk because the Shermans were murdered is not an inference, but is speculation. It provides no basis for a sealing order.”

The Respondents requested the opportunity to present proposed “redactions” of the file but that too was denied.

The public can expect to learn more about this case when the sealed file is opened in 10 days.

Lawdiva aka Georgialee Lang