Facts
The Applicant Place Laurier Ltd. (“PLL”) appealed an arbitration award pursuant to section 45 of the Arbitration Act, 1991, SO 1991, c. 17.
The underlying dispute arose from rent payable under a 70-year ground lease (the “Lease”). The Applicant PLL was the tenant and the Respondent, The Manufacturers Life Insurance Company (“Manulife”), was the owner/lessor of the subject property. The Lease was divided into three rental periods, with rent payable for the third period to be based on the appraised value of the land. The lease defined appraised value as “the fair market value of the said lands exclusive of building or other improvements and as if free and unencumbered.”
The arbitrator addressed the correct interpretation of the Lease and the fair market value of the land. Both PLL and Manulife provided appraisal reports. Pursuant to the Canadian Uniform Standards of Professional Appraisal Practice (“CUSPAP”), each of the appraisers were bound to determine “the highest and best use” of land, defined as follows “the reasonably probable use of Real Property, that is physically possible, legally permissible, financially feasible and maximally productive, and that results in the highest value”.
PLL appealed the arbitrator’s determination of fair market value on the grounds that: i) the arbitrator failed to correctly determine the highest and best use of the land prior to determining the fair market value; and ii) the arbitrator determined the fair market value with disregarded for the available evidence and absent justification.
Decision
The Court dismissed PLL’s appeal with costs awarded to Manulife.
Justice Jensen found that the arbitrator identified the appropriate approach in determining the highest and best use of the land, and that the arbitrator arrived at a fair market value with due consideration for the available evidence.
Arbitrator’s Approach
The Court disagreed with PLL’s position that the CUSPAP’s definition of “highest and best use” constituted a 4-part legal test, broken down as i) physically possible; ii) legally permissible; iii) financially feasible; and iv) maximally productive. PLL advanced that because the arbitrator failed to consider the last two components, he erred in his analysis. The Court determined that the four components set out in CUSPAP’s definition “was not” a legal test that arbitrators were bound to apply in determining highest and best use.
The Court further disagreed with PLL’s position that because Manulife’s appraiser failed to include analysis of the last two components within CUSPAP’s definition, the arbitrator issued a determination in absence of materially relevant evidence. While noting the deficiencies with each parties’ evidence, the Court determined that the appraiser was provided with, and considered, sufficient evidence of financial feasibility and maximum return needed to determine the highest and best use. More notably, the Court agreed with Manulife’s position that the arbitrator, as an expert in real estate, “was entitled” to rely on his expertise and knowledge in forming his determination.
Determination of Fair Market Value
While the Court agreed with PLL that insufficient reasons may amount to an error of law, thus subjecting it to appeal, the Court determined that the arbitrator had in fact provided sufficient reasons.
In reaching its determination, the Court reiterated well-established law that reasons do not need to be comprehensive. Reasons will be deemed adequate if it demonstrates the substance of the proceeding was seized and disposed of when read in the context of the evidence and the parties’ submissions. Factually, the Court found that the arbitrator had provided sufficient reasons. Reviewing the evidence and submissions as a whole, it was apparent that the arbitrator had enough evidence to reach his determination and enough experience to use his discretion over the interpretation and applicable of the available evidence. Technical deficiencies, such as the arbitrator failing to show his calculations, did not constitute insufficient reasons.
The Court further denied leave to appeal with respect to the alleged insufficiency of the factual basis that informed the arbitrator’s determination, on the basis that there was no extricable question of law for appeal.
Comments
Laurier provides key guiding principles for arbitrators and parties involved in arbitration proceedings. Foremost, standards such as that provided by the CUSPAP do not constitute binding legal tests for arbitrators. Rather, arbitrators may rely on their expertise and use discretion in assessing the available evidence. Further, the threshold for “sufficient reasons” is whether the substance of the dispute was addressed within the context of the available evidence and the parties’ submissions.
The Laurier decision further affirms the well-establish principle that the Court will exercise caution when intervening in arbitration decisions, particularly where the dispute involves mixed questions of fact and law. The Court may show deference to an arbitrator’s determination where the arbitrator was acting within the scope of their role as a fact-finder.
J.P. Thomson Architects Ltd. v. Greater Essex County District School Board, 2025 ONCA 378
Mark Omenugha, Associate (Toronto)
Facts
J.P. Thomson Architects Limited (“J.P.”) is an architectural services firm that successfully bid on two contracts with the Greater Essex County District School Board (the “Board”). Each contract with the Board contained GC18, the dispute resolution clause that was in the then-standard form Ontario Association of Architects contract. The clause states:
Any dispute between the parties arising out of or relevant to this Agreement which cannot be resolved by the parties within thirty (30) days of the dispute arising, shall be referred to mediation, upon the request of either party.
…
In the event that any dispute between the parties has not been resolved by such mediation within thirty (30) days following selection of the mediator, such dispute shall be settled and determined by binding arbitration requested by either party, pursuant to the Arbitration Act of Ontario, in which case the following provisions shall apply.
On October 12, 2021, J.P. invoked its right to a mediation under GC18 following a breakdown of their relationship with the Board over the preceding 15 months. The Board refused to appoint a mediator since the disputes arose more than 30 days before J.P. requested a mediation. The same position was taken when J.P. followed by requesting to arbitrate. J.P. then applied for a court order appointing an arbitrator pursuant to GC18 and s. 10(1) of the Arbitration Act, S.O. 1991, c. 17.
The application judge interpreted GC18 to mean that a party must request a mediation within 30 days of any dispute arising. As such, J.P. failed to comply with a contractual term and is not entitled to a mediation or arbitration. According to the application judge, this interpretation is in keeping with the overall purpose of the clause to “provide an alternative mechanism to deal with disputes between the parties promptly when they arise.”
J.P. appealed the decision.
Decision
The Court of Appeal found that the application judge erred in law in their interpretation of GC18. When interpreted correctly, GC18 sets a minimum 30-day period for the parties to attempt to resolve a dispute prior to requesting the appointment of a mediator. The Court of Appeal found that this interpretation makes more sense within the overall scheme set out in GC18, as each stage of the clause requires the parties to make an attempt at settling their differences before escalating. Not only does this make sense from a contractual interpretation perspective, it also makes commercial sense. Requiring parties to negotiate informally prior to triggering a more formal dispute resolutions process helps to maintain long-standing and complex business relationships. `
Overall, the Court of Appeal found that the application judge’s interpretation was inconsistent with the language of the clause, the overall dispute resolution scheme, other contractual terms, sound commercial principles and good business sense. The appeal was allowed, and the application was granted, resulting in the matter proceeding to mediation.
Comments
This decision highlights the importance of contractual interpretation and how it impacts the rights available to parties to a contract. In order to properly interpret any contractual provision, the parties must read beyond the four-corners of the contract and consider the context of the agreement of the whole, and its intended meaning within that context. That interpretation should further be consistent with commercial principles and practical business sense.
In this decision, it is clear that the application judge’s interpretation of GC18 failed to consider the overall purpose of these types of clauses. As such, they rendered a decision that is inconsistent with regular business practices. This provides a necessary lesson for parties agreeing to a contract. Parties should carefully review contracts and fully understand their rights set out within. Furthermore, parties drafting them should ensure that the intended purpose of the clause is consistent with the overall purpose of its business function. As seen in this decision, the improper interpretation potentially led to an unfortunate result.
Ontario (Transportation) v. J & P Leveque Bros. Haulage Ltd., 2025 ONCA 573
Mark Omenugha, Associate (Toronto)
Facts
The Minister of Transportation (“MTO”) and J&P Leveque Bros. Haulage Ltd. (“Leveque”) entered into a contract requiring Leveque to rehabilitate 27 km of Highway 60. The contract was a standard form construction contract that included a three-level claims review process, involving a referee process, a referee decision, a notice of protest, and a 60-day period to explore alternative dispute resolution (“ADR”). A party who wishes to contest the referee decision is required to file a notice of protest and engage in alternative dispute resolution prior to commencing litigation. These steps must be completed prior to the second anniversary of the contract being completed.
The referee decision, which ruled against the MTO, was not released until after the second anniversary of the contract ended. The MTO acted as quickly as possible to register its notice of protest and invoke ADR before commencing a civil action against Leveque. In its civil action, the MTO sought to recover the $1.8 million awarded to Leveque as a result of the referee decision. Leveque brought a motion for summary judgement. The motion judge found that the MTO was barred by the 2-year contractual limitation period and ruled in favour of Leveque.
The MTO appealed the decision.
Decision
The appeal was allowed and the summary judgement issued against the MTO was set aside. The Court of Appeal held that the MTO was not required to file a notice of protest and seek ADR before the second anniversary of contract completion because the referee decision was not provided until after this period. The two-year limitation period should have commenced once the referee decision was provided and not when the contract was completed. Therefore, the MTO was not statute barred.
The Court of appeal found that the motion judge erred in their interpretation of the contractual claim review process. In particular, they failed to consider the principles governing contractual interpretation which require parties to go beyond the four corners of the agreement and consider the overarching commercial objective. In this case, postponing the claims review process, and any ensuing litigation, until after the contract is completed allows for the work to be completed without distractions or disputes. Further, the plain language of the contract contemplates that a referee decision would be released within the two-year period following the completion of the contract. It failed to contemplate what occurs when the referee decision is rendered following the second anniversary of the completion of the contract. Therefore, the contract cannot bind the parties to that two-year contractual limitation period.
The Court of Appeal further discussed the impossibility and absurdity of the situation. The contractual limitation period and the ADR process run concurrently. However, in order for ADR to proceed, there is an assumption that all other matters will be dealt with within the contractual limitation period. The parties cannot be bound by a decision that does not exist, nor can a party protest a decision that has not been released. Without a decision, there is no way of knowing who should protest and on what basis. There is similarly no ability to engage in meaningful ADR before litigation
On that premise alone, it was impossible for the MTO to comply with the two-year contractual limitation period. In ruling in favour of Leveque, the motion judge effectively deprived the MTO of any meaningful ability to challenge the referee decision and any ability to commence litigation. The Court of Appeal further placed an emphasis on the commercial absurdity of it all. A party cannot be required to protest a decision that has not yet been released, and it is absurd to conclude that a decision that is rendered late is final and binding simply because it was released after a contractual limitation period.
Comments
This decision emphasizes the importance of clear drafting and contractual interpretation in multi-tier dispute clauses. In this decision, the contract was drafted in a way that resulted in the contractual limitation period and the ADR process running concurrently. However, the contract failed to consider what occurs when the ADR process was completed after the end of the contractual limitation period for filing a court action.
As such, parties should not only be vigilant when drafting contracts, but they should also be attentive when entering into contracts that involve competing obligations. Overall, the clause was unnecessarily prescriptive and had the effect of extending the normal statutory limitation period set by the Limitations Act. This was unlikely the intended purpose, but the result of impractical drafting.
Integricon Construction Inc. v. Stevens et al., 2025 ONSC 4688
Khalil Mechantaf, Counsel, Q. Arb (Toronto)
Facts
Integricon Construction Inc. (“Integricon”) entered into a residential construction contract with the Stevens (the “Owners”) to build a custom home, using a draw-based payment schedule, requiring Integricon to meet certain milestones for triggering payments. The construction was financed by Royal Bank of Canada (RBC). After foundational and backfilling work, Integricon invoiced the Owners for the second draw. RBC declined to release funds, asserting that work completion was below the contractual threshold of 25%.
Integricon initiated an adjudication on January 15, 2025, by way of a notice of adjudication pursuant to s.13.5 of the Construction Act, R.S.O. 1990, C.30 (the “Act”), seeking a determination of entitlement to the second draw. In parallel, it registered a construction lien against the Owners’ property.
Three months later, on March 12, 2025, the adjudicator found in Integricon’s favour and ordered the Owners to pay the outstanding amount plus interest. The Owners did not comply. Integricon then brought a motion before the Superior Court of Justic (SCJ), to enforce the adjudicator’s determination through garnishment. The Owners opposed by a motion subject matter of this decision pursuant to r.60.08(16) of the Rules of Civil Procedure R.R.O. 1990, Reg. 194 (the “Rules”), arguing that (i) the adjudicator’s decision was wrong on the merits, (ii) enforcement should be stayed pending further dispute resolution, (iii) Integricon had terminated the contract and lost its entitlement, and (iv) garnishment risked double recovery given the ongoing lien claim.
It is noteworthy that, instead of applying for a stay of the adjudicator’s determination in the Divisional Court or leave before the same for an application for judicial review, the Owners’ have invited the court to exceed its jurisdiction by staying or applying the adjudicator’s determination under s. 60.08(16) of the rules, which relates, among others, to varying or suspending periodic payments under a notice of garnishment.
Decision
By way of decision issued on August 13, 2025, the SCJ dismissed the Owners’ motion to stay enforcement, holdings that it lacked jurisdiction to review the correctness of the adjudicator’s decision on a garnishment motion, stating that enforcement proceedings are not a vehicle for re-litigating the adjudicated dispute. The SCJ stated that the adjudicator’s decision is binding and enforceable, despite being interim basis and must be complied with subject to the following: (a) the Divisional Court grants a stay of the determination; (b) leave and applications for judicial review are granted; (C) matter subject to determination is addressed by a judge or arbitrator under the Arbitration Act, 1991; or (e) by agreement of the parties.
The SCJ refused to allow alleged contractual termination to defeat the adjudicator’s determination. Integricon had advised the Owners that it was terminating the contract because they had not satisfied the payment order of the adjudicator. The Owners asserted that the termination was a repudiation of the contract, therefore concluding that Integricon is not entitled to the payment order. The SCJ decided that the adjudicator’s determination was not made on the condition that Integricon would continue to work on the project, and that it was entitled to the second draw in any event as against foundation and backfilling works that were actually performed on the project, irrespective of the project’s overall completion percentage or the debtors’ financing arrangements with their bank. Integricon’s termination of the contract did not affect their entitlement to the second draw, as the obligation arose before the termination.
Further, according to the SCJ, the order of payment through garnishment does not amount to double recovery due to parallel lien proceeding, as was alleged by the Owners. The risk of double recovery was mitigated by statutory mechanisms under the Act, such as reducing lien security by amounts already paid through garnishment. Therefore, Integricon was entitled to pursue both garnishment and lien remedies concurrently, which is managed by crediting amounts recovered through adjudication enforcement against later lien judgments.
Based on the foregoing, the SCJ decided it was not valid to deny enforcement of the adjudicator’s payment order since that would undermine the prompt payment regime.
Comments
This case confirms that adjudicator determinations carry real weight. Even though they are “interim” in nature, they are immediately enforceable and not subject to collateral attack during enforcement. The SCJ treated the adjudicator’s decision similarly to an interlocutory arbitral award: binding unless properly set aside through judicial review.
For contractors and subcontractors, this is a significant strategic tool to maintain cash flow. For owners, ignoring an adjudicator’s order is risky, since enforcement will likely proceed swiftly. The Act does not provide a right of appeal from an adjudicator’s determination. The proper mechanism is judicial review with leave to the Divisional Court pursuant to s. 13(18). Leave requires applicants to show serious grounds, akin to interlocutory appeal tests e.g. jurisdictional error, procedural unfairness, unreasonableness, or a determination made because of fraud (Anatolia Tile & Stone v. Flow-Rite, 2023 ONSC 1291). The Integricon decision illustrates that if no judicial review is sought, the adjudicator’s decision stands and is enforceable as of right.
Finally, the SCJ’s approach aligns with the prompt payment and adjudication regime’s objectives, including cash flow protection, ensuring contractors and subcontractors are paid promptly to avoid project disruptions, and efficiency by avoiding backdoor merits’ reviews during enforcement.
Feldt Electric Ltd. v. Gorbern Mechanical Contractors Limited, 2025 ONSC 4150
Khelan Soogrim, Associate (Toronto)
The case relates to a dispute between a contractor and a subcontractor over the performance of works alleged to fall beyond the originally agreed scope of work and without a prescribed change order and additional payment. As a result, the contractor terminated the contract, appointed another subcontractor and sought adjudication under the Construction Act (the “Act”). The adjudicator ruled in favour of the contractor, ordering the original subcontractor to reimburse the contractor $94,017.20, in addition to interest and cost. Following the non-payment of the adjudicator’s determination, the contractor applied to discharge the lien of the subcontractor or, in the alternative, stay the lien action against it. The contractor also sought a return of its security posted into Court. The decision raises important questions about the interplay between adjudication and lien proceedings.
Facts
The Toronto District School Board (“TDSB”) contracted Gorbern Mechanical Contractors Limited (“Gobern”) as general contractor for a school project. Gorbern subcontracted Feldt Electric Ltd. (“Feldt”) for electrical work valued at $93,350 plus HST. Disputes arose regarding the scope of Feldt’s work. Feldt refused to perform certain work without a change order and additional payment, estimating the extra cost at $100,000. Gorbern insisted Feldt was obligated to perform the work under the original scope, but Feldt maintained its position. Gorbern issued notices of default and terminated its contract with Feldt’s. Gorbern then contracted another trade to complete the disputed work at a cost of $94,017.20, which is equal to the amount the adjudicator determined against Feldt. Feldt did not seek leave of the Divisional Court for judicial review of the adjudicator’s determination, instead refused payment, preserved its lien, and began a lien action, prompting Gorbern to post security.
In contrast, Gorbern filed for the enforcement of the adjudicator’s determination with the Court pursuant to s.13.20(1) of the Act.
Further, Gorbern moved under s. 47 of the Act for an order discharging the lien of Feldt. Alternatively, Gorbern seeks an order staying this action and returning the lien security.
Decision
i. Whether to Discharge the Lien on the Merits
The Court assessed whether Feldt’s lien should be discharged under s. 47 of the Construction Act. Gorbern argued its set-off and counterclaim exceeded Feldt’s lien value, warranting dismissal. However, the Court found triable issues regarding the scope of the Feldt’s work, particularly whether the disputed work was included in the subcontract. Further, the Court stated that the intention of the parties must be considered. Feldt states that it was contracted to perform its work for $93,350. It estimated the additional work at $100,000, which is what Gorbern roughly paid to the separate contractor to complete the work. Within this context, Feldt’s evaluation of the work is reasonable, and it appears unlikely that Feldt incorporated this scope of work into its subcontract, which was priced at $93,350.
The Court stated that the record was not sufficiently complete to make a finding that there is no triable issue on the required scope of work under the subcontract. To the contrary, the record supports a genuine issue in dispute over Feldt’s scope of work. The Court was not willing to discharge the lien as it would be disproportionate and unjust in the circumstances.
ii. Whether to Stay the Action
Alternatively, Gorbern argued for a stay of the lien action until Feldt paid the determination, with security returned.
Feldt argued that the adjudication process was procedurally unfair and that the adjudicator exceeded his jurisdiction, given that the dispute pertained to a contractual issue rather than a monetary matter. In response, Gorbern argued that it would be inappropriate to determine whether the adjudicator had jurisdiction, as these are functions of the Divisional Court on a judicial review application.
The Court agreed but held that it may consider Feldt’s concerns about unfairness and jurisdiction as a factor in deciding whether to stay the lien action without usurping the Divisional Court’s statutory function. The Court found that the adjudicator likely exceeded statutory jurisdiction and, therefore, Feldt’s procedural fairness concerns have merit. Hence, the Court ruled that it would be unfair to stay Feldt’s lien action given its concerns about the adjudication, and that such a stay would be disproportionate to Feldt’s breach regarding payment of the determination.
iii. Whether to Order the Return of Security
The Court declined to reduce Gorbern’s posted security to zero. Returning the security would leave Feldt’s lien unattached and effectively discharge it without an order for compliance. Importantly, the Court considered that the adjudicator’s determination is non-binding on the Court and cannot serve as a basis for disposing of the lien without due process.
Although Gorbern’s motions were rejected, Feldt was denied costs due to its refusal to pay the adjudicator’s determination, thus cautioning other litigants against assuming similar outcomes when defying determinations without seeking judicial review.
Comments
The Court’s decision give rise to important issues on the interplay between adjudication and lien proceedings.
Although adjudication was enacted as a method for enhancing the Act’s prompt payment regime, its attractiveness and effectiveness is likely to diminish as a result of the Court’s decision. The circumstances of the case not only reveal a loophole in that a party facing an adverse determination can neutralise the same without having to seek leave for judicial review, it can also find itself with an opportunity to seek liens and preserve the same by contesting the merits of that determination. Irrespective whether or not Feldt’s allegations against the determination are valid, trades in similar position may be able to resist enforcement of an adjudicator’s determination, further protracting the prompt payment process and impacting the supply chain.
Gabriella Swanson, Articling Student (Toronto)
Facts
The Applicants, Joseph Lebovic Charitable Foundation (the “Lebovics”), initiated an application pursuant to sections 45 and 46 of the Arbitration Act 1991 seeking to set aside and appeal the arbitral decision. The Lebovics entered into a Donor Agreement (the “Agreement”) with the Respondents, Jewish Foundation of Greater Toronto (referred to by the parties as “UJA”), agreeing to donate $20 million to UJA. In return for the gift, UJA would name its Vaughan, Ontario campus the Joseph Wolf Lebovic Campus. The Lebovics withheld $5 million of the pledged donation due to concerns regarding debt financing and programming approvals for the designated campus. In accordance with the Agreement’s dispute resolution clause, UJA commenced arbitration to address several matters related to naming rights and payment obligations. Arbitration proceedings began in 2015 (“First Arbitration”) and were resolved by a Consent Order, which required the outstanding $5 million to be paid in installments contingent upon agreement on a programming proposal. Despite submission of a proposal, the Lebovics did not fulfill their obligations under the Consent Order and failed to remit payment. In April 2016, UJA initiated a second arbitration and engaged in further negotiations, however, the arbitration was not pursued, and the outstanding balance remained unpaid. In April 2021, UJA commenced the present application to recognize and enforce the decisions of the Arbitrator.
Decision
The Lebovics argued that the Arbitrator had exceeded his jurisdiction, the tribunal was improperly constituted, and they had been denied procedural fairness. Further, they challenged the damages awarded, refusal of relief from forfeiture, and costs awards asserting there were errors in law and lack of evidence. UJA argued that the Arbitrator had valid jurisdiction in this matter, the tribunal composition was sound, and the process was fairly arbitrated. UJA sought recognition and enforcement of the award and argued that the Lebovics claims were meritless, and their conduct justified the elevated costs.
In his reasons dated July 27, 2023, the Arbitrator, the Honourable Colin L. Campbell, found in favour of UJA and issued a declaration that UJA was entitled to revoke the Lebovic’s naming rights pursuant to section 6.4 of the Donor Agreement. His reasons covered three applications relating to decisions on jurisdiction (March 15, 2023), the main arbitral award (July 27, 2023), the damages award (February 28, 2024), and the cost award (March 12, 2024).
Regarding jurisdiction, the Arbitrator confirmed that authority was established under both the Consent Order and the Agreement. The Lebovic’s arguments on jurisdiction were dismissed based on principles of res judicata, issue estoppel, and abuse of process, as this issue had previously been resolved by Akbarali J. and the Court of Appeal in an earlier proceeding with final decision issued on August 8, 2024. Concerning tribunal composition, it was determined that the panel was properly constituted with a sole arbitrator. The Lebovics’ failure to appoint a second arbitrator within the period specified in the Donor Agreement validated this arrangement. On procedural fairness, it was found that the Lebovics were afforded fair treatment and ample opportunity to present their case comprehensively. The damages award reflected evidence upon which the Arbitrator reasonably relied, specifically calculations submitted by UJA. As to the decisions relating to damages, denial of relief from forfeiture, confirmation of enforceability under the Arbitration Act, and the award of substantial indemnity costs, all determinations were based on credible evidence and robust legal reasoning. The objections raised by the Lebovics were deemed without merit, resulting in unnecessary delay and increased cost for the proceedings.
Comments
This case underscores the clarity of the Arbitration Act with regards to grounds for challenging an arbitral award:
First, and in relation to the arbitrator’s jurisdiction, pursuant to s.17(3) of the Arbitration Act a party who has an objection to a tribunal’s jurisdiction should raise the same no later than the first occasion on which the party submits a statement to the tribunal. The issue was whether the arbitrator had jurisdiction to decide on one or more of the claims under the arbitration agreement, in this case claims under the Consent Order and the Agreement. In this case, the notices of demand for arbitration of both Lebovics and UJA made claims and allegations under the Consent Order and the Agreement, thus expressly acknowledging the Arbitrator’s power to address claims under both contractual frameworks. These circumstances served as the reasons for the arbitrator’s decision assuming jurisdiction, which was later confirmed by Akrabali J. in the Court of Appeal’s decision on August 8, 2024. A party to an arbitration process should be cautious when raising claims in its notice of demand for arbitration, as such notice and the arbitration agreement will frame an arbitrator’s jurisdiction.
Second, if there is an issue of jurisdiction it should be raised as soon as possible. Indeed, pursuant to s.17(8) of the Arbitration Act, decisions in relation to objections determined on a preliminary basis can only be challenged in the court within 30 days. The Lebovics delayed jurisdictional challenge was viewed by the court as tactical rather than genuine, unnecessarily prolonging proceedings. The court acknowledged that such tactics undermine the intended efficiency and cost-effectiveness of arbitration and are inconsistent with the principles established by the Arbitration Act.
This matter, which initially began in 2015, took over a decade to resolve and amounted in significant costs. This was an unnecessary and preventable delay that resulted from non-compliance with initial decisions and delayed tactical arguments. Another key takeaway from this case is that parties to an arbitration process should exercise caution when advancing claims without due consideration of the arbitration clause in play, as well as be aware for making timely objections to decisions by the arbitral tribunal.
Chiarantano v. RDA Inc., 2025 ONSC 4466
Namrita Taggar, Articling Student (Toronto)
This case relates to a commercial arbitration held in April of 2024 between two sets of applicants: the Chiarantano Applicants and the RDA Applicants. The arbitration arises from an employment dispute and alleged constructive dismissal. The arbitrator issued a Final Award on September 10, 2024, and a Final Costs Award on September 24, 2024 (the “Arbitral Awards”). Following the arbitration, the Chiarantano Applicants brought an application to remit the matter back to the Arbitrator under s.46(8) of the Arbitration Act, 1991 (the “Act”) for determining unresolved issues and other procedural deficiencies. The RDA Applicants contended that such application was time-barred under s.47 of the Act, and sought enforcement of the arbitral awards pursuant to s. 50 thereof.
Facts
Robert Chiarantano was an employee of RDA from 2001 until his resignation in 2018. He claimed constructive dismissal based on RDA’s purported failure to make him a shareholder, as per his Producer Agreement. Following his resignation from RDA, he joined Ferrari & Associates and transferred his book of business to them. This led to a dispute over whether he breached his contractual obligations, as RDA exercised its option under the Producer Agreement to purchase the book of business. The arbitration concerned three issues: breach of contract, an alleged civil assault, and the valuation and buyout of shares in Power Investment Properties Inc. (“Power”), the owner of RDA’s office building.
The Arbitrator found that the restrictive covenants in the Producer Agreement were an unreasonable restraint of trade and therefore unenforceable, however upheld other provisions including the option to purchase the book of business. The arbitrator concluded that Chiarantano was not constructively dismissed, but had breached the agreement by transferring clients to Ferrari and was liable for the corresponding damages incurred by RDA. The Arbitrator ordered that RDA be paid $1,031,023 in damages and recommended a buyout of Chiarantano’s shares in Power. The Final Costs Award included a credit of $400,000 to Chiarantano and a net payment of $1,054,000 owed to RDA and Power.
Following the Final Costs Award, the Chiarantano Applicants requested that the Arbitrator issue a revised Final Award in the form of a judgment to account for an alleged undertaking by the Respondent counsel to receive Power’s financial information, as well as other unresolved issues. The Arbitrator declined to issue a revised award.
The Chiarantano Applicants then applied to remit the matter back to arbitration pursuant to s.46(8) of the Act, citing these concerns. They further sought to invalidate the share transfer and rectify Power’s corporate records. The RDA Applicants opposed remitting the matter back to arbitration and applied to enforce the Final Costs Award.
Decision
The Ontario Superior Court of Justice (SCJ) dismissed the Chiarantano Application, finding it time-barred under s. 47 of the Act, which imposes a 30-day deadline for applications to set aside or remit arbitral awards. The SCJ held that s. 46(8), which provides that the court may remit a matter to the arbitral tribunal and give directions rather than setting aside an award, is not a standalone remedy but an alternative remedy available only within a timely s. 46(1) application. This must be filed within the overarching 30-day time limit for challenging arbitral awards, including applications seeking remittance to the arbitrator. According to the SCJ, any other interpretation would undermine the finality of arbitral awards. Since the application was filed on March 11, 2025, the 30-day deadline from the Final Costs Award had passed and the court concluded the Applicants were out of time. The SCJ further rejected the argument that the February 2025 case conference appearance before the Arbitrator reset the deadline, since no additional awards or corrections were issued at that appearance.
Conversely, the court granted the RDA Application to enforce the Arbitral Awards. It found that these were “clear, detailed, comprehensive and final” [para 78]. Per s. 50(3) of the Act, the Arbitral Awards were enforceable since none of the statutory exceptions set out in s. 46(1) on setting aside awards applied in the circumstances.
Comments
This decision is a reminder of the importance of respecting statutory deadlines in arbitration proceedings. The SCJ determined that s. 46(8) is a remedy that must be filed within thirty days applicable to all appeals or applications to set aside arbitration awards. This decision reinforces the principle of the finality of arbitral awards, and underscores the court’s reluctance to interfere with arbitration outcomes unless some form of procedural unfairness (e.g., fraud or corruption) is established. Parties must be cautious and act in a timely manner and under appropriate grounds when challenging arbitral awards, so as not to undermine the integrity or efficiency of the arbitration process.
