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

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