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An Ontario court recently considered whether or not it should overturn an arbitration award because one of the parties only received notice that mobility was an issue the day before the arbitration commenced.
Background
The parties were married in May 2003 and separated in January 2011. They had three children together.
In 2013, the parties signed a mediation-arbitration agreement. Later that year, they negotiated a separation agreement that provided for joint custody and primary residence of the children with the mother. The father was granted significant parenting time.
The separation agreement provided that the parenting plan would be reviewed on or before September 1, 2015. The mediation arising out of this review was unsuccessful. As a result, the parties proceeded to arbitration.
The day before the arbitration commenced, the mother delivered her opening statement to the father. There, for the first time, she raised her request to relocate with the children from Toronto to Guelph. This was the first meaningful notice the father had that mobility was an issue in the arbitration.
In August 2017, the arbitrator awarded sole custody to the mother and permitted her to relocate with the children from Toronto to Guelph.
The father appealed from this award.
The Relevant Legal Principles
Section 19(2) of the Arbitration Act requires that, “[e]ach party shall be given an opportunity to present a case and to respond to the other parties’ cases”.
Furthermore, a previous Ontario court held that the right to a fair hearing in an arbitration is “an independent and unqualified right”. It explained that:
[a]rbitrators must listen fairly to both sides, give parties a fair opportunity to contradict or correct prejudicial statements, not receive evidence from one party behind the back of the other and ensure that the parties know the case they have to meet. [emphasis added]
That is, in order to meaningfully present a case and respond to another party’s case, each party must know what issues are in dispute.
Setting Aside the Arbitral Award
The court found that the arbitral award, as it related to the parenting issues, had to be set aside.
In granting the father’s appeal, the court focused on the fact that the mother did not identify mobility as an issue for the arbitration until the day before the arbitration was scheduled to begin. It concluded that such late-breaking notice of a critically important issue required an adjournment if the process was to remain fair.
The court also noted that the arbitrator acknowledged the problem that the father faced in his costs reasons. That is, in deciding not to award costs against the father regarding the parenting issues, the arbitrator stated that the father had insufficient time to fully prepare for and respond to that aspect of the mother’s case.
The court explained that it was incumbent on the arbitrator to inquire about the issue to ensure proper notice had been given. It concluded that the lack of notice of the mobility issue caused a fundamental procedural unfairness to the father, which was a denial of natural justice. This denial amounted to an error of law that required intervention. As a result, it was necessary to set aside the arbitral award as it related to parenting issues.
Lessons Learned
Parties involved in arbitration have the right to a fair hearing. As a result, if you are undergoing arbitration, you must ensure that you provide the other party with sufficient notice of the case they have to meet. Similarly, if someone fails to provide you with sufficient notice of an issue they intend to raise, you may be successful in appealing the arbitration award.
If you have questions about your separation or divorce, contact Gelman & Associates. Our lawyers – who are knowledgeable and compassionate, but also tough when necessary – provide exceptional legal representation in all family law matters. Our goal is to always empower clients to make informed decisions about their future. We give all prospective clients a comprehensive family law kit during their initial consultation, as well as a copy of our firm’s handbook on separation and divorce. This information is full of resources that will help you understand and navigate the difficult and often complicated separation and divorce process.
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