Ary Homes Inc v Triple-A Classic Homes Ltd, 2017 ABQB 510

Court of Queen’s Bench of Alberta Citation: Ary Homes Inc v Triple-A Classic Homes Ltd, 2017 ABQB 510 Date: 20170818 Docket: 1501 08369 Registry: Calgary Between: Ary Homes Inc. Applicant - and - Triple-A Classic Homes Ltd. Respondent Corrected judgment: A corrigendum was issued on August 29, 2017; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice J. T. Eamon _______________________________________________________ I.

Introduction [ 1 ] The Applicant applies in chambers against the Respondent to set aside or vary an arbitration award dated July 17, 2015, pursuant to

section 45 of the Arbitration Act , RSA 2000, c. A - 43.

[ 2 ] The Applicant advances two primary grounds for review of the award: fraud by the Respondent and unfair treatment by the arbitrator. Both are alleged to arise from evidence submitted by the Respondent in the arbitration. The Applicant says the evidence was false and that the Respondent’s conduct in submitting it was fraudulent, and that the arbitrator did not allow the Applicant a sufficient opportunity in the arbitration to test this evidence.

The Applicant further says that some of the credits awarded to the Respondent in the arbitration were “otherwise awarded to the Respondent in error”. [ 3 ] The Applicant’s formal motion also seeks permission to appeal under section 44(2) of the Arbitration Act . This request was not pursued in submissions, and no statement of the proposed issue for appeal was provided. It appears from the Applicant’s Court filings that this was mainly an alternative plea based on the same underlying fraud and procedural allegations and related evidence advanced in support of the application to set aside the award.

The substantive issues will be dealt with in relation to the set aside application. Any reliance on section 44(2) would not have changed the result of the Court’s decision. [ 4 ] A subsidiary issue relates to amendment of the pleadings. II. Background facts [ 5 ] Triple A is a residential home builder, which had operations in Fort McMurray Alberta before relocating to Calgary in 2013.

The parties previously had a joint venture to construct a residential home in Fort McMurray, which was successfully completed. [ 6 ] The dispute arose from a joint venture between the parties to develop a residential home in Calgary, Alberta known as 115 Aspen. [ 7 ] The written JV Agreement dated August 7, 2013 provided that each party would equally contribute the capital required to purchase the lot and construct the family residence at 115 Aspen. A joint venture bank account was required.

The revenues were to be paid first to all proper operating costs or expenses, second to interest and principal payments due on financing, and third to the parties in equal shares. All matters relating to the construction were in the sole discretion of Triple A per

article 5.01 of the JV Agreement. [ 8 ]

Article 7.06 of the JV Agreement provided for arbitration of disputes on any matter concerning the

interpretation or application of the JV Agreement. [ 9 ] Construction of the home commenced in March 2014. Disputes over construction arose shortly after, and Ary purported to terminate the JV Agreement in November 2014. At that point, an appraisal indicated the home was 43% complete. [ 10 ] The parties made a written agreement to mediate/arbitrate dated June 2015. The copy provided to the Court is not signed by all parties. Both sides identified this document as the agreement in their respective affidavits and submissions.

I find as a fact that the written document is their agreement to mediate and arbitrate (the “arbitration agreement”). [ 11 ] The arbitration agreement appointed a Neutral to act first as mediator, and later as arbitrator, to resolve the parties’ dispute over 115Aspen. [ 12 ] Clause 6 of the arbitration agreement makes clear that the Neutral would not provide representation or advice to either party: The Neutral will not provide legal representation or legal advice to any party at any time. Each party should retain its own lawyer to be properly advised about its legal interests, rights and obligations.

The Neutral has no duty to assert or protect the legal rights and responsibilities of any party, to raise any issue not raised by the parties themselves, or to determine who should participate in the mediation. [ 13 ] The arbitration agreement contained almost no procedural rules for the conduct of the arbitration, other than an acknowledgment that oral evidence would be taken and that the Neutral could limit testimony, cross-examination or argument to complete the arbitration in the allotted time. The arbitration agreement provided for adoption of the ADR Chambers Arbitration Rules.

The Court was not provided a copy of these rules, nor were any submissions directed at their effect in the circumstances of this case. The arbitration agreement precluded the Neutral from relying on information he gained during the mediation, unless the parties otherwise agree. [ 14 ] The Applicant was represented by legal counsel when the arbitration agreement was made and in the mediation. The Applicant was self-represented at the arbitration hearing. [ 15 ] The mediation took place in early June 2015.

It resulted in an agreement, signed by both parties and their respective legal counsel, to list and sell 115 Aspen, and to accept certain items in the contribution and claims formula, including an amount for $15,000 for plans and permits incurred by the Applicant. On the Respondent’s side, several line items from a disputed accounting relating mainly to construction costs were agreed to. [ 16 ] The remaining issues proceeded to arbitration. Both sides provided written briefs in advance of the oral hearing. An oral hearing was conducted on June 29, 2015. There is no transcript of the hearing.

I was told during submissions that the parties did not retain a court reporter, so there is no prospect of obtaining a verbatim record of the proceeding. [ 17 ] The Applicant made numerous allegations of fraud against the Respondent in the arbitration.

These included allegations that the Respondent falsified invoices and records, gave false evidence, claimed credits for services or materials that did not exist, and used some of the building materials or services on the Respondent’s construction project at nearby 111 Aspen. [ 18 ] Following the arbitration hearing and release of an award on July 6, 2015, the Applicant, in its requests for clarification directed to the Neutral, observed:

We are appalled by the decision but we will honour it and abide pending some clarifications we seek. It is very unfortunate that you could not reason with solid evidences we provided and agreed to insufficient and forged ones provided by Triple-A ….

Trust me we will not be ashamed of swearing an oath on Bible and will need no evidences or witnesses there whereas Triple-A repeatedly lied under oath … We have prepared spreadsheet summarizing all decisions you have made with amounts and seek further clarification. [ 19 ] The Applicant submitted a request for further credits in its favour, which it again characterized as clarification, by email dated July 16, 2015. [ 20 ] The Neutral released a further award (following the requests for clarification to the earlier version) on July 17, 2015. The reasons in the award are very brief.

The Neutral recognized that some items had been settled in the mediation, including the $15,000 cost of permits and plans and that the arbitration only dealt with the remaining issues. He observed that on the remaining issues, the Applicant’s evidence was limited and consisted mainly of argument, and found no compelling evidence that the claimed expenditures included materials or services for other projects, or compelling evidence that the records of the Respondent were fraudulent.

The Neutral said the test for fraud is an onerous one and requires very compelling evidence. (The Applicant did not argue that this sentence mischaracterizes the standard of proof as opposed to commenting on any inherent improbabilities in the case before the Neutral, or that anything turns on this wording). The Neutral said he was satisfied on review of all the evidence that the expenditures claimed by the Respondent were paid in relation to the property and properly credited as construction costs.

The Neutral directed that the remaining lien against the property was the Respondent’s responsibility. [ 21 ] On July 27, 2015 the Applicant said it might ask for an opportunity to present new evidence and asked the Neutral to respond to its second round of requests for reduced credits. The Neutral responded that the arbitration process was concluded. The Applicant responded the same day with a request to present new evidence. It did not specify what the evidence was, and said it would be very relevant and will conclusively prove all the Applicant’s claims.

The Applicant further said it did not receive fair play, because the Respondent intentionally failed to submit invoices prior to the arbitration hearing so the Applicant was not prepared to respond. [ 22 ] The Applicant reiterated its request to the Neutral on July 29, 2015, citing

section 43 of the Arbitration Act . The Neutral responded on July 30, 2015 that he had considered and rejected the request. [ 23 ] 115 Aspen was sold in 2016 and some of the sale proceeds remain in trust pending resolution of the dispute. [ 24 ] The Applicant says the parties did not resolve all issues in the mediation/arbitration. It says they have not determined how to deal with post-arbitration homeowners association fees, mortgage interest, or home insurance, or the calculation of GST to be paid on the sale of 115 Aspen. III. Standard of review and applicable law (

a) Statutory provisions [ 25 ] The Court’s review jurisdiction in the present case is pursuant to

section 45 of the Arbitration Act . The pertinent parts provide: 45(1) On a party’s application, the court may set aside an award on any of the following grounds: ... (

f) the applicant was treated manifestly unfairly and unequally, was not given an opportunity to present a case or to respond to another party’s case, or was not given proper notice of the arbitration or of the appointment of an arbitrator; ... (

i) the award was obtained by fraud. ...

(7) When the court sets aside an award, it may remove an arbitrator or the arbitral tribunal and may give directions about the conduct of the arbitration.

(8) Instead of setting aside an award, the court may remit it to the arbitral tribunal and give directions about the conduct of the arbitration. (

b) The first ground: fraud [ 26 ] The first ground largely turns on whether the evidence said to prove the award was procured by fraud must be new in the sense that it was not available through due diligence efforts in the arbitration. [ 27 ] The Applicant submits that fraud must be proved to the balance of probabilities standard, and that new evidence may be relied on without satisfying any due diligence requirements. [ 28 ] The Respondent emphasizes a higher standard of proof and says that that a due diligence standard applies to new evidence

relied on to prove fraud. The Respondent relies on the English decision of Chantiers de l’Atlantique S.A. v. Gaztransport & TechnigazS.A.S., 2011 EWHC 3383 (Comm) at para 52 - 60, which laid down the following approach for setting aside an arbitration award forhaving been obtained by fraud: (

a) First, an arbitral award will only be set aside for fraud in extreme cases (para 55); (

b) Second, fraud (that is, dishonest, reprehensible or unconscionable conduct) must be distinctly pleaded and proved to a heightenedburden of proof that recognizes that the inherent probability or improbability of an event is itself a matter to be taken into account whenweighing the probabilities and deciding whether, on balance, the event occurred. The court must be satisfied that what is involved isdishonesty, and must be mindful that the explanation for something is much more likely to be human error than dishonesty (para 56); (

c) Third, the award must have been obtained by the fraud. There must be fraud in the arbitration proceeding, and “a causative linkbetween the deliberate concealment of the document and the decision in the award” (para 57 - 58); (

d) Fourth, the applicant must show that the evidence of fraud now relied upon was not such as could have been obtained or producedat the arbitration hearing with reasonable diligence and then must show that the evidence in question is "so material that its production[at trial] would probably have affected the result and (when the fraud consists of perjury) is so strong that it would reasonably beexpected to be decisive at the re-hearing and if unanswered must have that result" or would have had an “important influence on theresult” (para 59 - 62). [29] I adopt the definition of fraud from Colborne Capital Corporation v. 542775 Alberta Ltd., (AB KB),[1995] 7 WWR 671, 30 Alta LR (3d) 127 (QB), var. on other points 1999 ABCA 14, where Mr.

Justice Virtue of this Court observed: [365] ... Fraud is so infinite in its varieties that courts have not attempted to define it with precision. McDonnell, Monroe, Kerr on theLaw of Fraud and Mistake, 7th ed. (London: Sweet & Maxwell Limited, 1952), at p. 1 states: … It is not easy to give a definition of what constitutes fraud in the extensive signification in which that term is understood by CivilCourts of Justice. The Courts have always avoided hampering themselves by defining or laying down as a general proposition what shallbe held to constitute fraud. Fraud is infinite in variety.

The fertility of man's invention in devising new schemes of fraud is so great, thatthe Courts have always declined to define it … Fraud, in the contemplation of a Civil Court of Justice, may be said to include properly allacts, omissions, and concealments which involve a breach of legal or equitable duty, trust or confidence, justly reposed, and are injuriousto another, or by which an undue or unconscientious advantage is taken of another. All surprise, trick, cunning, dissembling and otherunfair way that is used to cheat any one is considered as fraud.

Fraud in all cases implies a wilful act on the part of any one, wherebyanother is sought to be deprived, by illegal or inequitable means, of what he is entitled to. [366] The legal elements of fraud at law are: (1) dishonest conduct; (2) an intention to deceive; and (3) damages suffered by theinnocent party. To determine if conduct is dishonest, an objective standard is applied.

It is conduct which a reasonable, decent personwould consider dishonest. [367] The intention element of fraud is established by proof of subjective knowledge of the prohibited act, and subjective knowledgethat the act could have as a consequence deprivation, in the sense of causing another to lose its pecuniary interest in certain property or inplacing that interest at risk. There is no requirement that the accused subjectively appreciate the dishonesty of his acts.

Generally, theprimary objective of fraudsmen is to advantage themselves .... [30] Having regard to the authorities discussed below, I generally accept the Chantiers de l’Atlantique S.A. test with the followingmodifications to fit the Alberta context as follows: (

a) Fraud must be proved on the civil balance of probabilities standard; (

b) The fraud relied on must be something collateral or extraneous, and not merely the fraud which is imputed from alleged falsestatements or evidence submitted in the arbitration, which were met by counter-statements by the other side, and the whole adjudicatedupon. The award should not be disturbed except on proof of new and material facts, or newly discovered and material facts which werenot before the arbitration tribunal, and from which are to be deduced the new proposition that the award was obtained by fraud; (

c) The new and material facts must be limited to those facts that a party could not have discovered and brought to the attention of thearbitration tribunal through the exercise of reasonable diligence; (

d) The requirement of materiality imports a causal link between the fraud and the arbitration award; (

e) Where the fraud relates to falsifying or concealing evidence, the evidence must be material in the sense that it probably would haveaffected the result or, in cases of perjury, would reasonably be expected to be decisive; The following are my reasons for adopting this standard. [31] To the extent that the Chantiers de l’Atlantique S.A. case applies a higher burden of proof than other civil cases, I do notagree with it. In Canada, that there is only one civil standard of proof at common law and that is proof on a balance of probabilities. F.H. v.

McDougall, [2008] 3 S.C.R. 41, 2008 SCC 53, para 40. [32] Of course, context is all important and a judge should not be unmindful, where appropriate, of inherent probabilities or

improbabilities or the seriousness of the allegations or consequences. It will be for the trial judge to decide to what extent, if any, the circumstances suggest that an allegation is inherently improbable and where appropriate, that may be taken into account in the assessment of whether the evidence establishes that it is more likely than not that the event occurred. However, there can be no rule of law imposing such a formula, and these considerations do not change the standard of proof.

In all civil cases, the trial judge must scrutinize the relevant evidence with care to determine whether it is more likely than not that an alleged event occurred. F.H. v. McDougall , at para 40 - 49 . [ 33 ] The due diligence standard applies to the evidence sought to be tendered of the alleged fraud.

Although it may seem odd that a party should be able to hold a judgment or award allegedly procured by fraud where the victim, through negligence, inexperience or otherwise, had not discovered the fraud during the proceedings, the due diligence standard represents a balancing between fairness and the need for finality in legal proceedings. [ 34 ] In Hill v Hill , 2016 ABCA 49 , the Alberta Court of Appeal describes the necessity of maintaining respect for the administration of justice, and as part of that, to avoid unnecessary re-litigation of cases: 27 The doctrine of res judicata has developed to maintain respect for the administration of justice.

It is a cornerstone of our legal system. The system depends on finality, the guiding principle being: "interest rei publicae ut finis sit litium"; it is in the interest of the public that litigation come to an end. Public policy dictates that, once the right of appeal has been exhausted, judicial decisions should be conclusive. The law requires that parties to litigation put forward their entire and best case once.

Parties should not be called upon a second time to answer the same claim because legal ingenuity has revealed a new or revised version of the case. 28 Thus, the grounds for permitting relitigation must be narrow in scope and the discretion to allow it must be exercised only in the most compelling of circumstances, to prevent a substantial miscarriage of justice... 29 One special circumstance that can operate as an exception to res judicata is where a judgment is obtained through fraud. Another is the discovery of new evidence, not available at trial, that impeaches the result of the case.

These are narrow exceptions with very high degrees of proof required to ensure that relitigation will be permitted only in rare circumstances. As noted by LeBel J, relitigation is available only where necessary to enhance the credibility, effectiveness and integrity of the administration of justice : Toronto(City) v CUPE, Local 79, 2003 SCC 63 at para 52 , [2003] 3 SCR 77 [CUPE]. [underlining added] [ 35 ] These concerns were mentioned by the Supreme Court of Canada in Beals v.

Saldanha , 2003 SCC 72 , [2003] 3 S.C.R. 416, where the Court decided to apply a due diligence standard to the submission of evidence in support of an allegation that a local or foreign judgment was obtained by fraud. Major J wrote on behalf of the majority: 43 As a general but qualified statement, neither foreign nor domestic judgments will be enforced if obtained by fraud. 44 Inherent to the defence of fraud is the concern that defendants may try to use this defence as a means of relitigating an action previously decided and so thwart the finality sought in litigation.

The desire to avoid the relitigation of issues previously tried and decided has led the courts to treat the defence of fraud narrowly. It limits the type of evidence of fraud which can be pleaded in response to a judgment. If this Court were to widen the scope of the fraud defence, domestic courts would be increasingly drawn into a re- examination of the merits of foreign judgments.

That result would obviously be contrary to the quest for finality. 45 Courts have drawn a distinction between "intrinsic fraud" and "extrinsic fraud" in an attempt to clarify the types of fraud that can vitiate the judgment of a foreign court. Extrinsic fraud is identified as fraud going to the jurisdiction of the issuing court or the kind of fraud that misleads the court, foreign or domestic, into believing that it has jurisdiction over the cause of action. Evidence of this kind of fraud, if accepted, will justify setting aside the judgment.

On the other hand, intrinsic fraud is fraud which goes to the merits of the case and to the existence of a cause of action. The extent to which evidence of intrinsic fraud can act as a defence to the recognition of a judgment has not been as clear as that of extrinsic fraud. 46 A restrictive application of the defence of fraud was endorsed in Woodruff v. McLennan (1887), 14 O.A.R. 242 .

The Ontario Court of Appeal stated, at pp. 254-55, that the defence could be raised where the recovery was collusive, [the] defendant had never been served with process, ... the suit had been undefended without defendant's default, ... the defendant had been fraudulently persuaded by plaintiff to let judgment go by default ... or some fraud to defendant's prejudice committed or allowed in the proceedings of the other Court... . Woodruff established that evidence of fraud that went to the merits of the case (intrinsic) was inadmissible.

Only evidence of fraud which misled a court into taking jurisdiction (extrinsic) was admissible and could bar the enforcement of the judgment. 47 Woodruff, supra , was subsequently modified by the Ontario Court of Appeal. See Jacobs v. Beaver (1908), 17 O.L.R. 496, at p. 506 : ... the fraud relied on must be something collateral or extraneous, and not merely the fraud which is imputed from alleged false statements made at the trial, which were met by counter-statements by the other side, and the whole adjudicated upon by the Court and so passed on into the limbo of estoppel by the judgment.

This estoppel cannot, in my opinion, be disturbed except upon the allegation and proof of new and material facts, or newly discovered and material facts which were not before the former Court and from which are to be deduced the new proposition that the former judgment was obtained by fraud. The burden of that issue is upon the defendant, and until he at least gives prima facie evidence in support of it, the estoppel stands.

And it may be, as I have before stated, that when such evidence is given, and in order to fully prove this new issue, the whole case should be re-opened. [Emphasis added.] The court, in Jacobs , acknowledged that in addition to evidence of extrinsic fraud, evidence of intrinsic fraud was admissible where the defendant could establish "proof of new and material facts" that, not being available at the time of trial, were not before the issuing court

and demonstrate that the judgment sought to be enforced was obtained by fraud. ... 50 What should be the scope of the defence of fraud in relation to foreign judgments? Jacobs, supra, represents a reasonable approachto that defence. It effectively balances the need to guard against fraudulently obtained judgments with the need to treat foreign judgmentsas final.

I agree with Doherty J.A. for the majority in the Court of Appeal that the "new and material facts" discussed in Jacobs must belimited to those facts that a defendant could not have discovered and brought to the attention of the foreign court through the exercise ofreasonable diligence. 51 The historic description of and the distinction between intrinsic and extrinsic fraud are of no apparent value and, because of theirability to both complicate and confuse, should be discontinued. It is simpler to say that fraud going to jurisdiction can always be raisedbefore a domestic court to challenge the judgment.

On the other hand, the merits of a foreign judgment can be challenged for fraud onlywhere the allegations are new and not the subject of prior adjudication.

Where material facts not previously discoverable arise thatpotentially challenge the evidence that was before the foreign court, the domestic court can decline recognition of the judgment. 52 Where a foreign judgment was obtained by fraud that was undetectable by the foreign court, it will not be enforced domestically."Evidence of fraud undetectable by the foreign court" and the mention of "new and material facts" in Jacobs, supra, demand an elementof reasonable diligence on the part of a defendant.

To repeat Doherty J.A.'s ruling, in order to raise the defence of fraud, a defendant hasthe burden of demonstrating that the facts sought to be raised could not have been discovered by the exercise of due diligence prior to theobtaining of the foreign judgment. See para. 43: A due diligence requirement is consistent with the policy underlying the recognition and enforcement of foreign judgments. In themodern global village, decisions made by foreign courts acting within Canadian concepts of jurisdiction and in accordance withfundamental principles of fairness should be respected and enforced.

That policy does not, however, extend to protect decisions whichare based on fraud that could not, through the exercise of reasonable diligence, have been brought to the attention of the foreign court.Respect for the foreign court does not diminish when a refusal to enforce its judgment is based on material that could not, through theexercise of reasonable diligence, have been placed before that court. [Emphasis added.] Such an approach represents a fair balance between the countervailing goals of comity and fairness to the defendant. [underlining in original] [36] The same values pertaining to fairness and the administration of justice apply to arbitration awards.

I therefore agree with thedue diligence requirement expressed in the Chantiers de l’Atlantique S.A. case. [37] I must also address the materiality requirement that applies where the fraud relates to evidence of the merits of the dispute(intrinsic fraud). Should a lower standard apply, such as the falsified evidence was material?

Or should the standard be higher, such asthe evidence probably would have affected the result, or the evidence would have changed the result? [38] Several Alberta decisions discuss the situation where intrinsic fraud (that is, perjured or falsified evidence) is alleged as theground for setting aside the judgment. [39] In Burcevski v. Ambrozic, 2010 ABQB 570, affirmed 2011 ABCA 178, Madam Justice Kent of this Court described variousAlberta authorities, including the decision of the Alberta Court of Appeal in Wavel Ventures Corp. et al. v.

Constantini (1996), 1996ABCA 415 , 193 A.R. 81 (where the Plaintiff sought to avoid a previous adverse determination of the issues by alleging perjuryby the Defendant in a previous action between them) as follows: 45 The Court of Appeal in Wavel says that the evidence must be "practically conclusive". The "practically conclusive test" is, inessence, that but for the fraud the rest of the previous proceedings would have been different: Wavel at para. 46; see also Imperial Bankv. Latham (1962), (AB CA), 41 W.W.R. 33, 36 D.L.R. (2d) 486 (Alta. S.C.A.D.) at para. 37; MacDonald v.

Pier atparas. 21, 26-27; and Lange at p. 260. Other authorities have formulated a less stringent test, that the plaintiff have a reasonableprobability of success, but for the fraud: Kaliel [v. Aherne et al. (1946), (AB CA), 1 W.W.R. 461, [1946] 2 D.L.R. 388(Alta. S.C.A.D.)] at para. 35. [40] The Alberta Court of Appeal in Hill, although not a case dealing with the fraud ground, disagreed with Kent, J’s

interpretationof Kaliel as articulating a lower standard for the fraud exception to res judicata (para 38).

However, it did not cast doubt on herconclusion at para 50 that in cases of judgments obtained through fraud relating to evidence, the most recent authority says the evidencemust be practically conclusive. [41] In dismissing the appeal from Kent, J’s decision, the Alberta Court of Appeal said: 10 Although there was evidence that the Respondent was less than truthful in her testimony before the trial judge, the record makesclear that he was well aware that both parties had either embellished their positions or shaded the facts.

Nonetheless, the trial judge, witha full appreciation of the conflicting positions, found for the Respondent on critical issues. We discern no error in principle nor anymisapprehension of the evidence on the part of the chambers judge…. [underlining added] [42] Nevertheless, the Court in Hill at para 44 observed that ... The Supreme Court of Canada has consistently recognized that courts retain a discretion to set aside a judgment on the basis of newevidence that is sufficiently compelling to undermine the verdict.

While the courts have been more willing to invoke that discretion incases where a concern about fraud or perjury has arisen, it is still available where newly obtained and incontrovertible evidence shows

that there has been a fundamental miscarriage of justice, and that the judgment is clearly wrong. [43] In view of the comments in Hill, I agree with the fourth element of the test formulated in the Chantiers de l’Atlantique S.A.case. It provides some flexibility in fraud cases to balance administration of justice concerns with fairness. At a minimum, the Applicantmust show the fraudulent evidence probably would have affected the result. (

c) The second ground: unfairness [44] In the context of the present case, the issues are whether the Applicant was treated manifestly unfairly and unequally, or wasnot given an opportunity to present a case or to respond to another party’s case, as referenced in sub-section 45(1)(

f) of the ArbitrationAct. [45] Procedural fairness depends on the context, and one size does not fit all. Quaidoo v. Edmonton (City) Police Service, 2015ABCA 381, para 31.The British Columbia Court of Appeal described the well-known general principles concerning procedural fairnessin arbitrations, in 0927613 BC Ltd.

V. 0941187 BC Ltd., 2015 BCCA 457: 59 Natural justice requirements in arbitration have been broadly stated to require the arbitrator to act in good faith (or stated otherwiseto be unbiased), fairly listen to both sides, and to give a fair opportunity to those who are parties to make representations, including tocorrect or to contradict any relevant statement prejudicial to their view. See Kane v. Board of Governors of the University of BritishColumbia, (SCC), [1980] 1 S.C.R. 1105 at 1113; and Lakeside Colony of Hutterian Brethren v.

Hofer,(SCC), [1992] 3 S.C.R. 165 at 195. 60 Natural justice will require an arbitrator to act with procedural fairness, the requirements of which will depend on the subject-matterof the dispute, the circumstances of each case, the nature of the inquiry, and the rules under which the parties have agreed to arbitratetheir dispute. See Zaleschuk Pubs Ltd. v. Barop Construction Ltd. (1992), (BC SC), 68 B.C.L.R. (2d) 340 at para. 47;Arbutus Software Inc. v. ACL Services Ltd., 2012 BCSC 1834 at para. 81; and Farrar v. Bojan High End Kitchens Inc., 2013 BCSC1881 at para. 24.

The duty of fairness is not a "one size fits all" requirement but is molded by the circumstances of each case. Its mostbasic requirement is "simple fairness" or "fair play in action". See Canada (Attorney General) v. Mavi, 2011 SCC 30 at para. 42; Ridgev. Baldwin, [1962] 1 All E.R. 834 (C.A.) at 850, Harman L.J., cited in Kane at 1113. [46] In Arbutus Software Inc. v. ACL Services Ltd., 2012 BCSC 1834 the BC Supreme Court observed that procedural fairnessconsiderations can extend to decisions concerning the admission or consideration of evidence.

At para 81, the Court observed: Natural justice requires an arbitrator to act with procedural fairness. The concept of natural justice can mean different things in differentcases, however, and the standard will vary to suit the circumstances. For example, natural justice may be denied where the arbitrator failsto give a party the opportunity to present its case, refuses to admit relevant evidence, or fails to deal with all issues for determination.

Inaddition, depending upon the circumstances, a failure to order production of necessary documents may amount to a breach of the rules ofnatural justice: Williston Navigation Inc. v. BCR. Finav No. 3 et. al. (2007), 2007 BCSC 190 , 69 B.C.L.R. (4th) 187; AmosInvestments Ltd. v. Minou Enterprises Ltd., 2008 BCSC 332. [47] However, not every evidentiary ruling rises to the level of procedural fairness. The nuanced analysis that is required isdescribed in Wright v.

College and Assn. of Registered Nurses of Alberta (Appeals Committee), 2012 ABCA 267, para 33, 40. [48] As in Arbutus, records production is also recognized in Alberta case law as a requirement of procedural fairness in appropriatecases. Nortel Networks Inc. v. Calgary (City), 2008 ABCA 370, para 19 - 20. [49] In assessing the Applicant’s procedural issues, the Court must be mindful of the review standard.

The fairness of theproceedings is not measured based on whether they are "correct" or "reasonable" in the sense of the administrative tribunal standards ofreview described in Dunsmuir v New Brunswick, 2008 SCC 9, [2008] 1 SCR 190 or the earlier Pushpanathan decision, (SCC), [1998] 1 S.C.R. 982. Rather these issues are reviewed based on whether the proceedings met the level of fairness required bylaw. Nortel, para 1, 32; Alberta (Securities Commission) v. Workum, 2010 ABCA 405, para 28; Synergy Group

(2000) Inc v Alberta(Securities Commission), 2011 ABCA 194, para 25; Alberta (Information and Privacy Commissioner) v. Alberta (Freedom ofInformation and Protection of Privacy Act Adjudicator); Information and Privacy Commissioner (Alta.) v. Wittmann, A.C.J., 2011ABCA 36, para 38; Wright, para 31. (

d) Procedural limitations in the present proceeding [50] This matter was heard in chambers, not in a trial procedure or a hearing with oral evidence. [51] The court is obliged to resolve legal disputes in the most cost-effective and timely method available, provided the processensures fairness between the parties.

It is appropriate to pursue a cost-effective, timely final resolution to litigation which is fair and justto the parties, rather than permit continuation of protracted and costly litigation when it can be properly disposed of summarily andentirely: Pyrrha Design Inc v Plum and Posey Inc., 2016 ABCA 12, para 8 - 11. [52] A court therefore ought to consider whether it could make sufficient findings on the record to arrive at a fair and justdisposition. This is not to say that the standard is low or that material credibility contests can be tried in chambers. Like

summaryjudgment, neither is true: Attila Dogan Construction v AMEC Americas Limited, 2015 ABQB 120 at para 51; appeal dismissed 2015ABCA 406. [53] This approach, and considerations which may permit a court sitting in chambers to resolve contested factual issues, aredescribed by Beilby JA in Sandhu v. Siri Guru Nanak Sikh Gurdwara of Alberta, 2015 ABCA 101, leave to appeal refused [2015]SCCA No. 184:

[78] In Nieuwesteeg v Barron, 2009 ABCA 235 , 460 AR 329, this Court concluded that a chambers judge should direct that a matter be tried, or at least that oral evidence be heard where he or she is unable to resolve conflicting affidavit evidence. Credibility cannot be tried "merely by reading affidavits which conflict on primary facts": Charles v Young, 2014 ABCA 200 at para 4 . [79] However, last year the Supreme Court of Canada in Hryniak v Mauldin, 2014 SCC 7 , [2014] 1 SCR 87 determined that the fact that some conflict exists in the affidavit evidence of opposing parties in an application for

summary judgment does not mandate setting the matter for trial in every situation. Where the judge finds that he or she can make a fair and just determination on the merits of the application, it should proceed without oral evidence. This arises where the judge can make the necessary findings of fact and apply the law to those facts. This is often a proportionate, more expeditious and less expensive way to achieve a just result than a trial. [80] This approach to litigation economy may also be applied to this application which, like a

summary judgment application, addressed issues which resolved the litigation in its entirety. [81] Therefore, conflict on certain points in the parties' affidavits does not alone mean it should have been adjourned for oral testimony or a full trial. It may be that the conflicts do not arise on essential facts. It may be that analysis shows no factual conflict exists, but only a conflict of the litigants' separate opinions.

It may be, as here, that one party relies on several affidavits, which contain internally conflicting evidence, including some evidence which agrees with or supports the evidence lead by the opposite party, and thus amount to admissions against interest. It may be that issues can be resolved on the basis of those portions of the affidavits which are not in dispute, as in Seymour Resources Ltd. v Hofer, 2004 ABQB 303 at para 20 , [2004] A.J. No. 1087.] [ 54 ] The Applicant emphasizes that the parties chose a chambers application and the issues should be resolved in chambers.

Ultimately the issue is whether a fair and just adjudication can be made, and I accept that the parties’ procedural choice should be respected if possible. Shefsky v California Gold Mining Inc , 2016 ABCA 103 , para 110 - 115 per Slatter JA (dissenting). [ 55 ] It would generally not be appropriate to try fraud allegations arising from contested and fragmented evidence in a chambers proceeding without oral evidence. Moreover, this is a final application.

Much of the evidence consists of hearsay, such as the Applicant’s version of what its representative was told by, or emails or letters from, third parties (such as Mr. Sahota) which are contested by the Respondent. If there were a material issue of fraud, the proper course would be to consider whether to direct a trial of an issue or an oral evidence hearing.

Both options are available under the Alberta Rules of Court. [ 56 ] The Applicant suggested that a consent order providing that the appeal record in this proceeding will consist of all the affidavits and cross-examinations somehow changes the requirements for new evidence or impacts the way the evidence should be assessed. I disagree with such suggestions. The consent order merely provides that the evidence will form part of the record. It does not limit the judge hearing the application from deciding how to assess the evidence, or purport to define the test for setting aside an arbitration award. IV.

Analysis of allegations (

a) Framing costs [ 57 ] The Applicant says the $51,000 award for framing costs should be set aside for fraud, and $6,000 substituted. Its arbitration brief says the only documented payment was $6,000 and sought proof of payment to substantiate the balance of the claim. [ 58 ] There were several records before the Neutral about framing. They included a framing contract with Vik Construction, for $53,000 plus GST. In response to the Applicant’s demand for proof of payment, the Respondent produced an invoice from W-Win’s Construction and proof that a cheque in the amount invoiced cleared the JV bank account.

The Respondent said this payment related to the framing. The invoice was irregular on its face because it was dated November 2015. [ 59 ] The Applicant’s representative in the present proceedings swore in an affidavit on August 5, 2015 that he was involved in the project during the framing, had complete knowledge of who framed what

section of the house, and knew that W-Win’s Construction was not involved as claimed by the Respondent. He testified at the arbitration hearing that the invoice was fraudulent. His October 6, 2015 affidavit in the present proceedings says he saw Vik Construction doing the framing and that it completed approximately 70% of the framing work. He acknowledges that W-Win’s Construction may have done some work later, because some additional work was done after Vik Construction’s work. [ 60 ] After the arbitration, the Applicant gathered more evidence.

It applied in the present proceeding for a third party records production order against W-Win’s Construction. That company responded by letter that the $45,000 payment was a deposit from the Respondent for purchase of two real estate properties in Calgary, and that it did not provide framing services at 115 Aspen. Curiously, W-Win’s Construction has never said in these proceedings that the property sale ever completed, or what happened to the deposit.

In fact (as the Respondent proved in the present proceeding by producing the relevant records from Alberta Land Titles), the properties were never transferred to the Respondent and were under foreclosure proceedings. The Applicant also spoke to Vik Construction after the arbitration and obtained evidence that Vik Construction only completed 70% of the framing and very little work was done on framing thereafter. [ 61 ] The Respondent says it terminated Vik Construction because that company used subcontractors and the work was substandard.

It says it hired W-Win’s Construction to complete and correct the framing, and they agreed to apply the $45,000 deposit from the failed property transaction to the costs to correct the framing deficiencies left by Vik Construction and complete the project. [ 62 ] Both sides provided evidence at the arbitration on the value of the framing work actually completed. The Neutral had uncontested evidence that the house was actually framed and that the framing was complete. [ 63 ] The record does not indicate how the Neutral dealt with the allegation about the framing invoice from W-Win’s Construction

or what weight he placed on it. He appears to have accepted the home was actually framed (which was true), and directed that any remaining lien on the home be the responsibility of the Respondent.

Article 3.01 of the JV Agreement requires the parties to account for proper costs or expenses made or incurred. It may have been that the Respondent incurred a liability which was unpaid, or paid the framing. In either case, it would not be unreasonable to regard the cost of framing as a proper credit in the joint venture as long as any liens were covered off so that the Applicant was protected from additional claims from any framer, whether Vik Construction, W-Win’s Construction or anyone else.

There was no evidence provided to the Court that suggests in any way that the Applicant had or has a potential liability other than for a builder’s lien, as there is no evidence that any framing contractor was told that a joint venture existed or that any contract was purportedly made on behalf of the Applicant.

The builders lien issue was covered off by the Neutral. [ 64 ] The Respondent’s representative gave inconsistent evidence during cross-examination on an affidavit in the present proceeding with respect to the invoice from W-Win’s Construction and failed to answer undertakings to produce additional information about the matter including information from the Respondent’s construction manager. [ 65 ] The evidence about framing is contested and there are many unanswered questions.

One of the most important, which the Applicant has not addressed, is why W-Win’s Construction would not have agreed to return the $45,000 in cash, or in kind (which is effectively what the Respondent says occurred).

Re-litigating this dispute would require evidence from W-Win’s Construction (including inquiry into the accounting for the $45,000), Vik Construction (as to alleged deficiencies) and the parties (as to corrections and completion of framing and the manner of receiving the supposed invoice from W-Win’s Construction). [ 66 ] In assessing the due diligence requirement, the context of the parties’ deteriorated relationship is important. The Applicant had long suspected the Respondent of fraud or dishonesty in the operation of the joint venture.

For many months prior to the arbitration, the Applicant was convinced that the Respondent was deceitful in the operation of the JV. The Applicant’s representative says in an affidavit in these proceedings that he saw an increasing level of dishonesty throughout the execution of the project, which led him in November 2014 to terminate the JV Agreement.

In an exhibit to an affidavit, appearing to be a history of the matter prepared by the principals of the Applicant, much is made of a sequence of fraudulent behaviour, and that in March or June 2014 they started realizing the relationship had been like a ponzi scheme there the Respondent was using the Applicant’s funds to secure other business opportunities for the Respondent, and by November 2014 the Applicant was convinced of the Respondent’s fraudulent behaviour. [ 67 ] In light of that context, the personal knowledge of the Applicant’s representative Mr.

Vyas about the course of construction and identity of the framers, and the content of the Applicant’s mediation and arbitration briefs which repeatedly accused the Respondent of fraud, one would reasonably expect the Applicant to carefully scrutinize the Respondent’s evidence and develop the necessary evidence from others involved in the project to respond in the arbitration. [ 68 ] There is nothing to indicate that the Applicant could not have pursued its fraud allegation more diligently during the arbitration. A representative of Vik Construction was compellable to testify at the demand of either side.

Arbitration Act , section 29(1). The Court could assist the arbitration by making orders and giving directions with respect to the taking of evidence for an arbitration as if the arbitration were a court proceeding. Arbitration Act , section 29(1). A decision of the Alberta Court of Appeal on a similar provision in the Model Law holds that this power includes third party discovery orders. Jardine Lloyd Thompson Canada Inc. v. SJO Catlin; Jardine Lloyd Thompson Canada Inc. v. Western Oil Sands Inc ., 2006 ABCA 18 .

There is no doubt the same would apply under the Arbitration Act . [ 69 ] There is nothing to indicate any request for an adjournment to bring a Vik Construction representative to testify, to depose the construction manager, or to apply to the Court to compel W-Win’s Construction to produce files. (Such an application was brought in the present proceeding). [ 70 ] The Neutral’s reasons do not mention the specific issue over the W-Win’s Construction invoice, but his reasons would have to be assessed in the context of the entire record before the Neutral. The Court was not provided the entire record.

The parties apparently wanted to save the expense of a court reporter sitting fee, so the arbitration was not transcribed.

The Court does not have the actual submissions before the Neutral or any comments or rulings he may have made about the invoice or any procedural matters generally. [ 71 ] In these circumstances, the Applicant has not met the due diligence standard. [ 72 ] Further, the Applicant has not shown any reasonable prospect that the invoice in question was actually relied on by the Neutral in deciding to award an obviously reasonable amount for the actual framing that he could see with his own eyes. [ 73 ] Finally, the Applicant has not shown that additional disputed evidence from W-Win’s Construction or Vik Construction probably would have changed the result: first, the evidence put forward by the Applicant is fragmented and incomplete, and one cannot predict the outcome of the credibility dispute among Vik, W-Win’s Construction and Triple-A on this record; and second, someone actually framed the house so a liability has been incurred that should be accounted for under

Article 3.01 of the JV Agreement. [ 74 ] I find the due diligence standard is not met. If it were, no causal link between the invoice and the award has been shown, and the evidence is not sufficiently material to warrant re-litigating the issue. [ 75 ] The Applicant further submits it was treated unfairly. It is not unusual in arbitrations or court proceedings for evidence to be produced in a tight time frame. This arbitration was fast tracked, with a mediation in early June and an arbitration in late June.

Arbitration submissions were due only a few days before the hearing date. [ 76 ] The norm is that a party, when met with evidence submitted shortly before or during an arbitration that it did not anticipate, may choose to respond as best it can or ask for an adjournment. That is often a strategic or tactical decision, and where an issue is raised the arbitrator and the parties have an opportunity to discuss and develop ways to mitigate any prejudice and continue to resolve the dispute in a timely way. [ 77 ] The Applicant did not request an adjournment of the arbitration to develop responding evidence.

During oral argument the Applicant observed at one point that the arbitration was unfair because the Neutral did not offer an adjournment to the Applicant and the

Applicant was self-represented. [ 78 ] The parties provided no information about the rules of the arbitration administration here (ADR Chambers) or about what, if any, information is given to self-represented parties by ADR Chambers before the arbitration to assist them in being ready and able to represent themselves.

As noted earlier, the arbitration agreement warns parties that the Neutral will not raise issues for them and recommends they have a lawyer. [ 79 ] In Court proceedings, the Statement of Principles on Self-represented Litigants and Accused Persons (2006) established by the Canadian Judicial Council, as endorsed by the Supreme Court of Canada in Pintea v Johns , 2017 SCC 23 , express the expectations that self-represented persons are to familiarize themselves with the relevant legal practices and procedures pertaining to their case, and to prepare their own case.

Those expectations are contained in a comprehensive statement that also includes requirements for provision of legal information (not advice) to self-represented parties and an institutional response to ensure fairness for self-represented parties. [ 80 ] In this case the record provides no information about the steps taken to assist self-represented litigants in ADR Chambers or whether the Applicant actually did not understand its options. There is no transcript that would help the Court understand how the Neutral approached the hearing.

Section 6 of the arbitration agreement clearly warned the Applicant of the Neutral’s role and limitations on his duties, and recommended the Applicant have a lawyer. The Applicant actually had a lawyer until shortly before the arbitration hearing. There was no adjournment request. In these circumstances I see no unfairness that the Applicant must live with its procedural or strategic choices or omissions. (

b) Building materials [ 81 ] The Respondent ordered building materials from Star Building Materials. The Applicant says some of these were used for 111 Aspen but charged to 115 Aspen.

The Applicant claims that following a video shown during the mediation by the Applicant showing materials being moved to 111 Aspen, the Respondent admitted at the arbitration that some of the materials were used for 111 Aspen and the credit was reduced (the Respondent contests some details of this version of events, and it is not necessary to resolve this contest in this application). [ 82 ] The Applicant seeks a further reduction from the amount of the credit awarded. [ 83 ] The Applicant’s initial position concerning these charges was that they were incurred after the joint venture was (according to the Applicant) annulled. [ 84 ] Following the arbitration, and the sale of 115 Aspen in 2016, the purchaser of 115 Aspen showed the Applicant an estimate dated May 30, 2016 that he obtained from Star for building materials to construct a deck and finish the basement.

The Applicant submits that the amount the Applicant ordered is approximately double the amount ordered by the new owner. [ 85 ] That led to the Applicant’s later position, that the quote is new evidence that shows “intentional or reckless non-disclosure” by the Respondent. The Applicant seeks a reduction in lumber costs of $2,580.37. [ 86 ] As is apparent from the Applicant’s description of what occurred at the mediation in obtaining a video at 115 Aspen showing some information about building materials, the Applicant could have reviewed quantities and obtained estimates for the arbitration.

The due diligence test is not met. [ 87 ] Moreover, the new evidence only shows that a different person obtained a different quote at a different time. There is no evidence to show that the plans on which the quotes were based were the same. The Respondent points out that Star’s lawyers, in responding to a document production request against Star, advised that Star understood the materials were provided for one property, not two properties, and were quoted off the plans for 115 Aspen.

Therefore, the new evidence alone is fragmented and remains to be tested. [ 88 ] The fact a subsequent owner obtained a different quote is not evidence purporting to show fraud in the arbitration, nor is the evidence suggested by the Applicant material in the sense it probably would have influenced the Neutral. [ 89 ] As to the assertion that the materials were purchased after the joint venture was terminated, I would not have granted leave to appeal. Whether a contract is terminated is a question of mixed law and fact. Section 44(2) only allows for appeals on questions of law.

No extricable legal error has been articulated by the Applicant. The only evidence is that the Applicant purported to terminate. There is nothing to show that the Respondent accepted termination, that the Respondent had committed a breach that permitted the Applicant to terminate, or that any of this was a material issue in the arbitration. (

c) Electrical work and electrical supply, and claims for “reduced credits” generally [ 90 ] The Respondent was awarded a credit for electrical work of $12,000, the amount claimed by the Respondent. [ 91 ] The Respondent claimed in the arbitration that it paid $12,000 to an electrical contractor as an advance on electrical work. The cheque, which was proved to have cleared the bank account, states that it is for “115 Aspen Electrical Rough-In Advance”.

The Neutral appears to have accepted this evidence and awarded the $12,000 as a credit for electrical work. [ 92 ] The Applicant says its representative spoke to the electrical contractor, who informed him the payment was not an advance for work on 115 Aspen but rather payment on an invoice rendered the previous day for work on 111 Aspen. A representative of the electrical contractor subsequently confirmed that position in writing. [ 93 ] It is not clear from the affidavit evidence when the Applicant’s conversation with the electrical contractor occurred.

However, the Applicant’s arbitration submission says that the Applicant was in communication with the electrical contractor before the arbitration

and had been advised they had not been paid for 115 Aspen. [ 94 ] The Applicant’s position at the arbitration obviously shows the due diligence test cannot be met. It was open to the Applicant to issue a notice under

section 29 of the Arbitration Act for a representative of the electrical contractor to attend and testify, and to seek directions from the Neutral to have that occur. Instead the Applicant decided to defend on the basis of hearsay statements it attributed to that contractor. [ 95 ] There is a further issue relating to what the Applicant calls an award of “reduced credits”. This argument arises from the following sentence in the award: Some additional amounts were claimed at the arbitration and these are proper credits as well.

Some of the costs paid were prepayments, or standby fees and may be subject to further credit, and also which will reduce Triple A’s credits. [ 96 ] The Applicant takes this sentence as an invitation to re-litigate amounts awarded in

Schedule 3 to the award if new evidence is later found. The Applicant also claims in its application (though the argument was not advanced in either written or oral submissions) that the award should be set aside as inconclusive. As discussed below, these positions (which were not advanced by its counsel in submissions) do not reflect a correct or reasonable

interpretation of the award. [ 97 ] The Respondent’s counsel submits in its brief that the electrical costs award should be remitted back to the Neutral under section 45(8) of the Arbitration Act . This seems to be based on a concern that the above-quoted sentence means that prepayments by the Respondent will reduce credits otherwise awarded to the Respondent. As discussed below, that is a mis-reading of the award. [ 98 ] That part of the award only means that there might be other, unspecified adjustments to be made.

It does not purport to eliminate prepaid credits awarded to the Respondent in Appendix 3 to the award. [ 99 ] Without a proper record of the arbitration including a record of submissions to the Neutral that would provide context, it is not reasonable to interpret the award as meaning that any credits awarded in

Schedule 3 without any conditions were intended to be taken away through further litigation. This is particularly so as the award was made following the Applicant’s claim for clarification which included its claim that the so-called reduced credits should be adjusted. The most likely meaning of this sentence of the award is to cover events following the arbitration where a supplier refunds a prepayment. [ 100 ] The Respondent was awarded $12,000 on account of electrical costs. The Court will not set aside that award.

In any case, the Respondent did not cross-apply to correct any error it might perceive in the award. Claims by the Applicant for “reduced credits” are also refused. [ 101 ] The Applicant further submits that an award of $1480 for lighting supplies should be set aside, as the new evidence shows the Respondent did not pay it. The award indicates this amount was paid to Brite-Lite. The Applicant has not explained what evidence shows Brite-Lite was not paid or what evidence shows fraud.

The Applicant’s arbitration brief shows that the Applicant argued that pot lights were supplied by a different contractor (Aim) and more pot lights are shown in an invoice than are installed in the home. This is simply an attempt to re-litigate the Neutral’s refusal to accept that submission. (

d) Plans and permits [ 102 ] The Applicant asks the Court to set aside a credit to the Respondent of $15,000 for plans and permits. This credit was agreed to by the parties at the mediation, and it did not form part of the arbitration award. [ 103 ] The Applicant claimed a mistake was made because the Respondent had already been compensated for this amount. The Applicant asked the Neutral to correct the alleged mistake. The Respondent objected on jurisdictional grounds.

The Neutral refused. [ 104 ] If there was a mistake in the settlement agreement following mediation, then the Applicant’s remedy was to apply to a Court to rectify the agreement. It has not done so in the present application, as filed or as proposed to be amended. [ 105 ] The Court does not have jurisdiction on the present application to set aside the award to correct an alleged mistake in some other agreement.

The Neutral did not have jurisdiction under the Arbitration Act or the arbitration agreement to correct an alleged error in a mediated settlement, and no error has been demonstrated in the Neutral’s refusal to rectify the mediation agreement whether directly, or indirectly by reducing credits previously awarded. [ 106 ] If I had jurisdiction to rectify, no basis has been shown to exercise it. There is nothing to show the Respondent knew or ought to have known of the alleged mistake when the mediation settlement was arrived at. Each side was represented by counsel and there was an experienced mediator.

The Court cannot simply assume that the circumstances required to rectify are present. (

e) Plumbing [ 107 ] A plumbing and heating contractor invoiced $20,000 for plumbing and heating services. The Neutral awarded this amount to the Respondent. The Applicant says the plumbing invoice was inflated. [ 108 ] It is apparent from the Applicant’s brief that it is rearguing the evidence that was provided to the Neutral and asking the Court to characterize the evidence as showing fraud. [ 109 ] This evidence does not meet the due diligence standard or the materiality standard. (

f) Siding/fascia exterior

[ 110 ] The Applicant says the amount claimed for stucco and window work was inflated.

The Applicant relies on a quotation from another stucco contractor obtained before the arbitration and a quotation provided by a contractor in 2014 to a representative of the Applicant to seal the building envelope at his property under construction at 99 Aspen. [ 111 ] It is apparent from the Applicant’s materials that it is rearguing the evidence that was provided to the Neutral and asking the Court to characterize the evidence as showing fraud. [ 112 ] This evidence does not meet the due diligence standard or the materiality standard. [ 113 ] The Applicant further says the Respondent refused in cross-examination in the present proceeding to produce its records for the cost incurred to stucco and seal 111 Aspen, which could be reviewed to see if the costs were as high at 111 Aspen.

It says that because the Respondent refused the undertaking, an adverse inference should be drawn. This argument has no merit, as it is part of an impermissible effort at re-litigation, and the Respondent’s refusal to facilitate that effort does not warrant adverse inferences. (

g) Garbage disposal/dirt removal [ 114 ] The Applicant said at the arbitration that the dirt removal costs were inflated and provided a quote from another contractor to show the market cost to remove the dirt was markedly lower than the Respondent’s charge.

The Neutral found for the Respondent. [ 115 ] It is apparent from the Applicant’s materials that it is rearguing the evidence that was provided to the Neutral and asking the Court to characterize the evidence as showing fraud. [ 116 ] The evidence does not meet the due diligence standard or the materiality standard. [ 117 ] Garbage disposal was provided by a cleaning company. The Applicant says that company also provided construction management services so the invoice also included an allowance for a cell phone of $100 per month for two months, being $200 of the $5460 awarded.

The invoices identify, in a separate line item, the $100 charges for a phone for both months. [ 118 ] The Applicant says the phone charge is not allowable and the other charges exceed market value for the services. The record does not disclose whether or not the invoices were shown to the Neutral. If they were, then he knew of the phone charge.

The Applicant’s arbitration brief makes clear the market value argument was made to the Neutral. [ 119 ] It is apparent from the Applicant’s materials that it is rearguing the evidence that was provided to the Neutral about market value and asking the Court to characterize the evidence as showing fraud. There is no evidence from the Applicant to satisfy the due diligence requirement concerning any of the concerns it now advances – market value arguments or cell phone charges.

The Applicant also has not shown the evidence to be material in the sense it was not before the Neutral and if it were, would probably have influenced the result. [ 120 ] However, the Respondent agreed in its brief (without providing reasons) to reduce the credit for garbage disposal from $5460 to $2000. A consent order will issue reflecting this agreement. (

h) Architectural fee [ 121 ] The Respondent paid a refundable deposit to the developer, called an architectural fee. This credit was agreed in favour of the Respondent in the settlement arrived at in the mediation. [ 122 ] The Applicant submitted that the Respondent paid this fee as a refundable deposit, but no refund was forthcoming because the site was not kept clean during construction. The Applicant submits the Court should reduce the credits awarded in the arbitration under the “reduced credits” theory (Part IV(

c) above). [ 123 ] There is no basis to unwind the settlement agreement, or to think that the arbitration award contains a mechanism to indirectly deprive the Respondent of a negotiated agreement. (

i) Equipment rental [ 124 ] The Neutral awarded $3882.55 for equipment rental costs incurred to install second floor windows. The windows were installed by the framer. The Applicant says if the framing costs cannot be proved then the equipment rentals should also be refused. [ 125 ] The Court refused to re-open the award on framing (Part IV(

a) above). There is therefore no basis for concern over this rental cost. Moreover, there is no suggestion of any new evidence, let alone any evidence that could not have been provided to the Neutral or that purportedly supports a fraud allegation. This is simply an attempt to re-litigate framing and equipment charges. (

j) Project management fee [ 126 ] The Neutral awarded a $20,000 project management fee. He noted the JV Agreement provided for payment of all proper operating expenses. He found the parties could not recall discussing a fee. He noted a fee was paid for 99 Aspen under a contract between the Respondent and the principals of the Applicant in the amount of $50,000. He found a $20,000 fee appropriate. [ 127 ] The Applicant correctly points out that 99 Aspen was developed under a much different contractual arrangement that did not involve the Applicant. The Applicant further submits that a project management fee should not be awarded given the Respondent’s allegedly reprehensible conduct.

[ 128 ] The Respondent says that at the arbitration it basically argued it was entitled under the JV Agreement to hire a project manager and having done the service itself, it should receive a fee to cover its time, effort, and disbursements such as on-site employee wages, fuel, insurance, and inspection costs. There is also evidence that the Respondent had a supervisor on-site, Mr. Gill. [ 129 ] The Court has rejected the Applicant’s attempts at re-litigation of the underlying merits, so there is no basis to set aside the award of the project management fee under

section 45. [ 130 ] The filed Application seeks leave to appeal under sub- section 44(2) of the Arbitration Act , though no argument was developed on this point. [ 131 ] I would have refused leave. An appeal under sub- section 44(2) is only available on a point of law. The

interpretation of

Article 3.01(

a) of the JV Agreement is not a question of law, but rather a question of mixed fact and law for which an appeal is not available under this type of appeal provision absent some extricable error of law. Sattva Capital Corp. v. Creston Moly Corp ., 2014 SCC 53 , para 42 - 55 . The Applicant has not identified an extricable error committed in interpreting the meaning of

Article 3.01(a). The Arbitrator’s reliance on the agreement for 99 Aspen may only have been to obtain a sense of the quantum appropriate. Absent a sufficient record of the nature of the submissions on this point before the Arbitrator, including a transcript of proceedings, I am not able to ascertain whether there was an extricable error of law. (

k) Procedural fairness [ 132 ] The only procedural fairness complaint advanced in argument is the one addressed in

Part IV(

a) above. [ 133 ] In its affidavits, the Applicant says fairness was breached because it expected the Respondent to produce all its records, or produce records honestly. There is nothing in the record to attribute this to the way the proceedings were conducted by the Neutral. The Applicant’s position is just an alternative way of complaining that the Respondent committed fraud in the arbitration, and as explained above, such claims require proof to the proper standard.

The proof is lacking in this case. [ 134 ] The Applicant did not submit that procedural fairness required the Neutral to order production of records from the Respondent or third parties. The Applicant did not suggest the Neutral erred in refusing to consider evidence or applied the wrong standard in assessing evidence. [ 135 ] The Court cannot discern any procedural unfairness in the circumstances. (

l) Pleading amendments [ 136 ] The application to add the principal of the Respondent as a party to this proceeding is dismissed. The only relief sought against him is an award of costs. If the Rules provide or the Court’s inherent jurisdiction permits an award against a non-party who is the instigator or controller of litigation, then formally joining that person is not necessary. He merely requires notice. If the Rules as revised in 2010 preclude such a remedy, then their effect cannot be avoided by joining him.

Further, there is no basis for the allegations of misconduct in the present application or of fraud in the arbitration. The request is refused. [ 137 ] The balance of the requested amendments relate to particulars of the relief sought, and I permit these amendments to be made. (

m) GST and other directions [ 138 ] The parties are unable to ascertain or agree on the amount of GST to be remitted on sale of the development. The Applicant wants a direction as to the amount of GST (but stated in oral argument it has to be determined by an accountant) and a holdback of the sale proceeds currently in trust. The Applicant asks that GST be credited to it in the calculations (for reasons which are not apparent).

The Applicant seeks directions that amounts be paid directly from the sale proceeds in trust to Vik Construction and an electrical contractor, and a holdback of funds in trust for any potential claims by such contractors. [ 139 ] These requests are not related to the set aside application. If the parties are unable to agree on such matters as the GST, how to disburse JV trust funds, whether the Respondent has control and management of any pending claims by contractors, or whether to make holdbacks, they have their arbitration remedies under the JV Agreement. (

n) Summary and conclusion [ 140 ] The Applicant has not met the due diligence test for new evidence. Indeed in many cases it has no new evidence. [ 141 ] It also has failed to meet any materiality standard. Its new evidence consists, to a large extent, of contested arguments and

interpretations of what untested witnesses would be expected to say if there were a trial or other resolution of the evidence in this application. Had the new information been put forward to the Neutral, it would have been contested. The Court is unable to find that this mass of contested and fragmented evidence probably would have influenced the result. The evidence is not practically conclusive or even shown as something that probably would have influenced the Neutral. [ 142 ] The Applicant’s case is largely an attempt to re-litigate the arbitration under the guise of fraud.

As the Alberta Court of Appeal stated in Hill , .... Parties should not be called upon a second time to answer the same claim because legal ingenuity has revealed a new or revised version of the case.

[ 143 ] Given the obvious lack of due diligence and materiality appearing from the Applicant’s materials, the application should be dismissed, and the fraud and other allegations should not be referred to a trial of an issue. V. Orders [ 144 ] The Application is deemed amended in the form under Tab C of the Applicant’s written brief filed October 28, 2016, except that Mr. Garcha will not be named as a Respondent. An order will issue on consent reducing the garbage credit to $2000. The rest of the claims are dismissed.

The parties may make written submissions on costs, including scale or basis, within 21 days of this judgment. Heard on the 23 rd day of February, 2017, and supplemental submissions dated March 10 th , 2017. Dated at Calgary, Alberta this 18 th day of August, 2017. J.T. Eamon J.C.Q.B.A. Appearances: Brad J. Findlater Machida James McCall Barristers for the Applicant Mandeep Badyal Badyal Toor, Lawyers for the Respondent _______________________________________________________ Corrigendum of the Memorandum of Decision of The Honourable Mr. Justice J.T.

Eamon _______________________________________________________ On page 19, paragraph 103, a new sentence was added on the first line. New paragraph 103 reads: [103] The Applicant claimed a mistake was made because the Respondent had already been compensated for this amount. The Applicant

asked the Neutral to correct the alleged mistake. The Respondent objected on jurisdictional grounds. The Neutral refused.