Alvarez v Alvarez, 2021 ABQB 717

Court of Queen’s Bench of Alberta Citation: Alvarez v Alvarez, 2021 ABQB 717 Date: 20210907 Docket: 4801 159916 Registry: Calgary Between: Manuel Del Valle Alvarez Applicant - and - Blanca Martha Bustos Respondent _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice O.P. Malik _______________________________________________________ I. Introduction [ 1 ] For the reasons that follow, I deny the Applicant’s application for permission to appeal an arbitrator’s Award pursuant to section 44(2) of the Arbitration Act , RSA 2000, c. A-43 (the “ Act ”). II.

Facts and Procedural History [ 2 ] In October 2019, the parties entered into a Mediation/Arbitration Agreement (the “Agreement”) to resolve various issues resulting from the breakdown of their relationship, namely spousal support and division of matrimonial property. [ 3 ] The mediation was conducted that month.

The parties were unable to reach agreement and the matter proceeded to an arbitration hearing conducted over the course of several days in February, 2020. [ 4 ] The issues for the Arbitrator to consider as part of his overall determination included the following: • the appropriate date for the division of matrimonial property; • whether there should be an unequal division of matrimonial property in favor of the Applicant pursuant to sections 7 and 8 of the Matrimonial Property Act , RSA 2000, c.

M-8 (“ MPA ”); and • whether there should be an award of retroactive and/or ongoing spousal support payable to the Respondent. [ 5 ] The Arbitrator issued his Award on October 2, 2020 (the “Award”). It was received by the Applicant on October 5, 2020.

The Arbitrator determined that the appropriate date for the division of matrimonial property was the date of the arbitration hearing (substituting for the date of trial) (paras 118-124 of the Award). [ 6 ] The Arbitrator found that the matrimonial property should be divided equally as the Applicant had enjoyed exclusive control over the assets that constituted the property from the date of separation thereby precluding the Respondent from benefiting from an increase in the value of those assets and as the Respondent had not received adequate support since the parties’ separation (paras 170-175

and 196-209 of the Award). The Arbitrator ordered that the division of the matrimonial property be made through a series of periodic equalization payments to the Respondent ending in June, 2023 (paras 11-12 of the Award). [ 7 ] The Arbitrator highlighted two considerations that informed his decision regarding division of matrimonial property. First, that his decision regarding the distribution of matrimonial property pursuant to sections 7 and 8 of the MPA must be legally justified but nevertheless involves the exercise of discretion (paras 132-133 of the Award).

Second, the Arbitrator was alive to the problem of “double-dipping” which arises when division of matrimonial property is made in conjunction with an award of spousal support (paras 202, 203, 210 and 245 of the Award). [ 8 ] The Arbitrator declined to award retroactive support (para 6 of the Award) but found that the Respondent was entitled to ongoing support on a compensatory basis in ever-decreasing amounts.

He ordered the Applicant to make periodic equalization payments to the Respondent with the final payment to be made in June, 2023 (paras 7, 244-246, and 280-285). [ 9 ] The Arbitrator stipulated that either party could request “corrections, clarifications or additional reasons” within 30 days of having published the Award (para 293 of the Award). [ 10 ] On October 27, 2020, the Applicant’s lawyer requested that the Arbitrator make corrections and offer a clarification of various aspects of the Award.

On November 5, 2020, the Applicant delivered a letter and binder of materials to the Arbitrator’s office with a list of specific corrections that he wanted made. [ 11 ] On November 19, 2020, the Arbitrator issued a corrected Award that addressed the Applicant’s requests for corrections (the “Corrected Award”). Other than making a nominal correction (para 44 of the Corrected Award), the Arbitrator provided responses to the Applicant’s requests but did not ultimately make any adjustments to the Award.

The Applicant received the Corrected Award on November 20, 2020. [ 12 ] The Arbitrator noted that “corrections” are “meant to deal with typographical errors, errors of calculation, and similar errors in the Award or to amend the Award to correct an injustice based on an oversight on my part” and should not be “new or repeat arguments or a chance to present new evidence” (paras 4-5 of the Corrected Award). [ 13 ] On December 10, 2020, the Applicant e-filed his application with this court for permission to appeal the Award pursuant to section 44(2) of the Act .

His counsel e-mailed an unfiled copy of the application to the Arbitrator and the Respondent on December 11, 2020. Due to filing delays, the Application was not formally filed by the clerk of the court until January 11 2021. III.

Standard of Review [ 14 ] It is agreed by the parties that as the Agreement did not expressly contemplate an appeal being brought, the Applicant’s right of appeal is circumscribed by section 44(2) of the Act which allows permission to appeal a question of law, for which the appropriate standard of review is correctness ( Capital Power Corporation v Lehigh Hanson Materials Limited , 2013 ABQB 413 at para 57 ). IV. Analysis [ 15 ] There are two preliminary issues that arise. First, has the Applicant brought this application within the 30-day limitation period set out in

section 46 of the Act . Second, is the application barred by virtue of section 44(3) of the Act . [ 16 ] With respect to the first question, I agree with the Respondent that the time for bringing an appeal of an arbitration under the Act is absolute and cannot be extended ( Mailer v Mailer , 2021 ABQB 423 at paras 35-40 ). [ 17 ] The Arbitrator invited the parties to request corrections to the Award (section 293 of the Award). This is permitted by virtue of section 43(1) of the Act .

Section 46(1) of the Act stipulates that the 30-day limitation period for filing an application for permission to appeal under section 44(2) commences after the applicant receives “the award, correction, explanation, change or statement of reasons on which the appeal or application is based...”. [ 18 ] The Applicant received the Corrected Award on November 20, 2020. In my view, this is when the 30-day limitation period commenced in accordance with section 46(1) of the Act . The application was e-filed in accordance with the court’s pandemic directive on December 10, 2020, well within the 30-day limitation period.

The delay which arose in the formal filing of the application on January 23, 2021, was not the Applicant’s fault but was caused due to the court’s own filing delays. Had the Applicant attended upon the courthouse in person to file his application on December 10, 2020, his application would have been received and filed that day. That is when I deem his application to have been filed.

I therefore find that this application was brought in time. [ 19 ] Second, I do not find that the application is barred by virtue of section 44(3) of the Act which precludes an appeal on questions of law that have been “expressly referred” to an arbitrator for an Award. Here, the questions to be determined by the Arbitrator pursuant to the Agreement were broadly framed as spousal support and division of matrimonial property. In his written argument, the Applicant asserts that the Arbitrator erred:

i) in fixing the payor’s tax liability at 23.5% rather than in the 40-75% range; and ii) in failing to address the issue of “double dipping”. [ 20 ] Section 44(3) should be read narrowly and I do not find that the specific questions which the Applicant seeks permission to appeal were identified as discrete legal issues and expressly referred to the Arbitrator for determination ( Capital Power at paras 38-44).

Should I Grant Permission to Appeal the Award? [21] The test for granting permission to appeal an arbitrator’s award under section 44(2) of the Act is set out in section 44(2.1). Ifind it unnecessary to address whether the application meets the requirement of section 44(2.1)(

a) of the Act as I do not find that theApplicant can satisfy the second branch of the test set out in section 44(2.1)(b), which limits the appeal to questions of law. On that basisalone, I deny his application for permission to appeal. i. Questions of Law Distinguished from Questions of Mixed Law and Fact [22] A question of law is a question about what the correct legal test and principles are: Generally stated, an incorrect statement of the legal standard, or test, or an application of incorrect factors in applying the law to the factsis clearly an error of law. The law must not only be stated correctly, but that correct

interpretation of the law applied to the facts, whenengaging in applying the law to the facts. Where there is discretion involved in applying the law to the facts, the application of thediscretion is not a question of law, but a question of mixed law and fact. However, if a wrong legal principle is used in the application ofthe law to the facts, or in the exercise of the discretion, there is an error of law. ... ...These correct legal considerations, set by the law, have to then be applied to the facts. That application of the law to the fact involves aquestion of mixed law and fact.

Where there is broad discretion, as there is in applying the law of spousal support, the review of theexercise of the discretion is a question of mixed law and fact.

The way the discretion has been exercised can only be reviewed as aquestion of law if it can be shown that there was an error of law in the legal rules (or law) that was applied, when exercising thatdiscretion (emphasis added) (Metcalfe v Metcalfe, 2006 ABQB 798 at paras 22 and 24). [23] Courts must distinguish the legal question from its application to a particular factual matrix because it is the unique facts of agiven case, rather than the strict application of a legal standard (particularly where a decision maker has significant discretion), thatdetermines the outcome: Courts should, however, exercise caution in identifying extricable questions of law because mixed questions, by definition, involveaspects of law...Courts must be vigilant in distinguishing between a party alleging that a legal test may have been altered in the course ofits application (an extricable question of law...), and a party alleging that a legal test, which was unaltered, should have, when applied,resulted in a different outcome (a mixed question) (Teal Cedar Products Ltd v British Columbia, 2017 SCC 32 , 2017 1 SCR688 at para 45). [24] It is therefore unsurprising that dividing matrimonial property and determining the quantum of spousal support, exercises thatrequire a consideration of their unique facts and which require the exercise of discretionary decision-making in respect of those facts,involve questions of mixed law and fact rather than questions of law (Mailer at paras 52-56, citing: Clark v Unterschultz, 2020 ABQB338 at paras 46-47; Craig v Craig, 2004 ABCA 364 at para 9; and Patton-Casse v Casse 2012 ONCA 709 at paras 9 and 13). ii.

Does the Division of the Parties’ Matrimonial Property Engage aQuestion of Law? [25] With respect to the division of matrimonial property, the Applicant asserts the Arbitrator misconstrued and misappliedsections 7 and 8 of the MPA as follows: • failed to consider the distribution of assets between the parties prior to their separation, upon, and after their divorce, and theirrespective contributions to increase the value of the matrimonial assets; • failed to consider the Applicant’s contributions towards the management of the matrimonial assets including the variousbusinesses and properties; • failed to consider each of the parties’ income, earning capacity, liabilities, obligations, property and other financial resources; and • failed to consider the Respondent’s failure to provide complete disclosure. [26] But these matters are precisely those that lie within the scope of the Arbitrator’s discretion – they constitute the matters insection 8 of the MPA that are to be taken into consideration when deciding how to divide matrimonial property in a manner that is “justand equitable” pursuant to

section 7 of the MPA. [27] I cannot identify anything in the Award or Corrected Award that would indicate the Arbitrator misunderstood the applicablelegislation, notably sections 7 and 8 of the MPA (paras 126-149 and 181-184 of the Award), the relevant case law which he cited(Hodgson v Hodgson, 2005 ABCA 13, paras 131 and 151 of the Award, Jensen v Jensen, 2009 ABCA 272, para 152 of the Award, andSengmueller v Sengmueller, (ON CA), 1994, 17 OR (3d) 208, para 30 of the Corrected Award), the caselaw that wasargued before him by the Respondent (Mew v Mew, 2011 ABQB 531, paras 156-169 of the Award); or that he otherwise misapplied thelaw. [28] Moreover, the Applicant disagrees with the Arbitrator preferring to apply a tax discount to matrimonial assets of only 23.5%as proposed by the Respondent’s counsel rather than the 39% proposed by the Applicant’s accountant.

In his written argument, theApplicant refers to various Alberta cases where courts have granted tax discounts falling within a range of 40-75%. I fail to see how thisis helpful. Each of those cases is limited to their individual context and are of little assistance to the particular facts before me. Nor has it

been argued that those cases articulate a uniform legal standard that should equally apply here. In the Corrected Award, the Arbitrator explained his reason for accepting the lower figure, due primarily to the fact that the equalization payments (in respect of which certain assets would have to be sold) would be payable over time and that the Applicant would recover tax losses through the issuance of corporate dividends (at paras 26-38 of the Corrected Award).

While the Applicant may disagree with the Arbitrator’s approach, this is a discretionary call the Arbitrator is entitled to make that does not engage a question of law. [ 29 ] In the result, I find that the Arbitrator’s determination regarding the division of the parties’ matrimonial property constitutes an exercise of his discretion with respect to questions of mixed law and fact rather than to any questions of law. iii.

Does Granting Spousal Support to the Respondent Engage a Question of Law? [ 30 ] With respect to the issue of spousal support, the Applicant asserts in his written submissions that the Arbitrator erred in law by failing to address the issue of “double dipping” and that it is “unclear if he was alive to the issue”. [ 31 ] To the contrary, the Arbitrator expressly recognized that dividing the increased value of matrimonial assets and ordering retroactive support for the same period would result in granting the Respondent double compensation which would result in unfairness to the Applicant.

However, he held that this problem did not arise as the matrimonial property would not be fully distributed until 2023 and that the Respondent was not entitled to retroactive support (paras 202-204, 239-241, 245, and 280-285 of the Award). [ 32 ] The Arbitrator further addressed this issue in the Corrected Award wherein he explained that his decision arose from his assessment of the total value of the matrimonial property and the Applicant’s obligation to provide the Respondent with an appropriate level of support assessed globally.

He considered the parties’ respective contributions overall to the value of the matrimonial property during their course of their marriage, that it was appropriate to order an equal division of the matrimonial property, and that any award of spousal support was not being made in addition to the Applicants’ entitlement of matrimonial property (paras 17, 52-63 of the Corrected Award). [ 33 ] Consequently, I find that the issues raised by the Applicant with respect to the award of spousal support engage questions of mixed law and fact which required the Arbitrator to exercise considerable discretion and to render a decision based on the totality of the parties’ circumstances.

V. Conclusion and Disposition [ 34 ] There are two additional points to make. [ 35 ] First, it is the Applicant’s view that the Arbitrator failed to explain the Award, or at least the Arbitrator’s reasoning process, in sufficient detail.

However, the Arbitrator acknowledged that the Award was abbreviated to save time and costs, that just because he had not set out every fact or argument did not mean he had not considered them, and that a party could request additional reasons should they wish to pay the additional cost (paras 49-53 of the Award). [ 36 ] Second, it is clear that the Applicant disagrees with the Award.

But that does not mean that the disagreement is in respect of a question of law that would justify this court granting permission to appeal the Award. [ 37 ] As this application for permission to appeal the Award pursuant to section 44(2) of the Act does not engage questions of law, the application is dismissed. [ 38 ] The parties shall, unless they can agree on costs of this hearing, provide me with submissions not exceeding five pages within 25 days and I request that submissions consider McAllister v Calgary (City) , 2021 ABCA 25 . Heard on August 10, 2021.

Dated at the City of Calgary, Alberta on September 7, 2021. O.P. Malik J.C.Q.B.A. Appearances:

Robert K. Omura for the Applicant, Manuel Del Valle Alvarez Janet E. Russell, Q.C. for the Respondent, Blanca Martha Bustos