2015 MBCA 13, 2015 MBCA 13

Citation: Loewen v. Manitoba Teachers’ Society, Date: 20150130 2015 MBCA 13 Docket: AI13-30-07940 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Freda M. Steel Mr. Justice Marc M. Monnin Mr. Justice Christopher J. Mainella BETWEEN : ) J. A. Kagan and LAVERNA LOEWEN ) A. D. F. Sain ) for the Appellant (Applicant) Respondent ) ) R. M. Beamish - and - ) for the Respondent ) ) Appeal heard: THE MANITOBA TEACHERS’ SOCIETY ) June 11, 2014 ) (Respondent) Appellant ) Judgment delivered: ) January 30, 2015 STEEL J.A. [ 1 ] This appeal involves a decision under The Arbitration Act , C.C.S.M., c.

A120 (the AA ), and gives rise to the thorny, and yet always fascinating question of the appropriate standard of review that should have been applied to the decision of the arbitrator by the application judge. [ 2 ] While I disagree with the application judge as to his choice of the standard of review, for the reasons detailed below, in the end, it matters little. The decision of Arbitrator Werier (the Second Arbitrator) is both incorrect and unreasonable.

I agree with the application judge that the decision of Arbitrator Martin (the First Arbitrator) should be reinstated. [ 3 ] Consequently, I would dismiss the appeal. Facts [ 4 ] The case has followed a long and winding road to this court, but the basic facts are not in dispute. [ 5 ] The applicant, Laverna Loewen (Loewen), became disabled in an automobile accident in 1992. She was a full-time teacher at the time and, therefore, was covered by The Manitoba Teachers’ Society Disability Benefits Plan Document (the Plan).

Pursuant to the terms of the Plan, Loewen received monthly disability payments representing a percentage of her salary. [ 6 ] In 1999, Loewen reached a global tort settlement with the Manitoba Public Insurance Corporation (MPIC) in the amount of $425,000. There was no breakdown of the components of the settlement with MPIC to identify certain sums as compensation for past or future lost wages or general damages. [ 7 ] In 2007, The Manitoba Teachers’ Society (MTS) ceased paying Loewen disability payments.

It was of the view that the Plan was entitled to either subrogation or a offset with respect to the settlement Loewen had reached with MPIC. The Plan contains the following provision: Offset Provision

Under this provision, the person’s disability income benefit is reduced by the following income: . . . . . 4. Where permitted by law, automobile insurance benefits paid or payable for loss of income. Such benefits will include those specifically mandated by the terms of coverage or legislation, as well as any other loss of income benefits included as part of a final settlement of claim. [ 8 ] Loewen contested the termination of the disability benefits.

In accordance with the provisions of the Plan, the matter was submitted to arbitration. [ 9 ] The First Arbitrator was asked by the parties to determine the following three preliminary issues and then, “if necessary, hear the substantive case as defined by the results of the preliminary issues.” The three preliminary issues were: 1. Does the Plan have a common law right of subrogation which arises in this case? 2. Do the provisions of the Plan allow the Plan to offset amounts attributable to income loss in the [tort] settlement with/against disability benefits which are currently payable? 3.

Does Loewen bear the onus to demonstrate what part of the settlement is attributable to income loss? [ 10 ] The First Arbitrator determined that neither the common-law doctrine of subrogation nor the offset provisions contained in the Plan were applicable (the First Arbitrator’s Award). He held that the general common-law principles of subrogation were modified in the case by the express provisions in the Plan regarding offset and that it was that offset provision that established the scheme of reductions and recovery of benefits.

Further, he held that the offset provision was ambiguous and, therefore, applying the contra proferentem rule, the Plan did not allow MTS to offset amounts attributable to income loss in the tort settlement against disability benefits. With respect to the third issue, he held, that based on his answer to the second issue, the Plan failed to discharge its onus and, therefore, the burden never shifted to Loewen. [ 11 ] Clarification of the award was sought by counsel for MTS.

The First Arbitrator issued a written clarification confirming that there was no live issue between the parties regarding subrogation or offset.

The effect of the award was, therefore, that MTS was not entitled to claim recovery either by way of subrogated claim or the offset provision the Plan. [ 12 ] The First Arbitrator’s Award was appealed by MTS to the Court of Queen’s Bench, but, following the submission of written arguments and authorities to the court, MTS abandoned its appeal, with costs granted in favour of Loewen. [ 13 ] After the First Arbitrator rendered his decision and the clarification, the Plan continued to withhold disability benefits from Loewen.

As a result, in 2009, Loewen brought an application under the AA in the Court of Queen’s Bench for an order enforcing the First Arbitrator’s Award. Loewen’s application was dismissed by the court on the basis that the arbitration needed to be finalized before enforcement could be sought. The parties were directed to complete the arbitration.

The outstanding issue was the quantum of income loss MTS sought to attribute to the tort settlement and, hence, to deduct from the disability payments. [ 14 ] Since the First Arbitrator had by then been appointed a justice of the Court of Queen’s Bench, the parties appointed the Second Arbitrator. The Second Arbitrator determined that he was not bound by the decision of the First Arbitrator’s Award for two reasons.

He held that the doctrines of res judicata , issue estoppel and abuse of process, which Loewen argued were applicable here, did not apply because the First Arbitrator’s Award lacked the required element of finality. Further, he also held that the First Arbitrator’s decision was not entitled to deference because it was wrongly decided. He was of the view that the First Arbitrator had incorrectly interpreted the offset provisions in the Plan. The Second Arbitrator then proceeded to reconsider the subrogation and offset issues, and concluded that there could indeed be an offset pursuant to the Plan’s wording.

Based upon the parties’ agreement on quantum, the Second Arbitrator quantified the amount of the offset as being $135,000, which MTS had in fact already held back from Loewen (the Second Award). [ 15 ] Loewen appealed the award of the Second Arbitrator to the Court of Queen’s Bench pursuant to s. 44(2) of the AA which provides that the parties may appeal an award to the court on a question of law with leave, provided certain criteria were met. [ 16 ] The application judge granted leave and held that the Second Arbitrator erred, set aside his decision and reinstated the First Arbitrator’s decision on the preliminary matters. [ 17 ] Pursuant to s. 48 of the AA , the decision of the application judge may be appealed to our court with leave.

That leave was granted on the following issues ( 2014 MBCA 12 at para. 28 ):

….

a) Did the application judge err in reviewing the second arbitrator’s decision on a standard of correctness?

b) Did the application judge err in concluding that the second arbitrator’s decision, on the question of whether the doctrines of resjudicata, issue estoppel, and abuse of process were inapplicable, was incorrect?

c) If the appropriate standard of review to be applied to the second arbitrator’s decision is reasonableness, did the second arbitrator’sdecision meet that standard? Decision of the Application Judge [18] The application judge first considered the appropriate standard of review that should be applied to the decision of theSecond Arbitrator. He considered the Supreme Court of Canada’s decisions in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1S.C.R. 190, and Nor-Man Regional Health Authority Inc. v.

Manitoba Association of Health Care Professionals, 2011 SCC 59, [2011] 3S.C.R. 616, as they pertained to questions of law. He accepted that a standard of correctness would apply to a question of law only if itwas a question of general law of central importance to the legal system and also outside the arbitrator’s realm of expertise. [19] The application judge determined that the Nor-Man case did not apply, as the current case did not involve a labourarbitrator making a decision under a collective agreement governed by the scheme set out in The Labour Relations Act, C.C.S.M., c.L10.

Rather, he saw this case as dealing with a more personal, “one-time” claim of an employee against a disability plan and, wastherefore, quite different. He relied on the Supreme Court of Canada’s decision in Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63,[2003] 3 S.C.R. 77, that identified the

interpretation and application of the doctrines of res judicata, issue estoppel and abuse of processas questions of “central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise” (at para.62), thus engaging the standard of review of correctness. [20] The application judge also held, in the alternative, that, if a standard of review analysis in accordance with Dunsmuirwas required, he was of the view that three of the four factors mandated by Dunsmuir favoured a standard of review of correctness. [21] In applying that standard of correctness, the application judge concluded that the Second Arbitrator was incorrect indetermining that the First Arbitrator’s decision was not final.

He allowed the appeal and restored the First Arbitrator’s Award. Asquantum had been agreed to by the parties by then, this meant that Loewen was entitled to receive the amount of $135,000 that had beenheld back by the Plan. [22] MTS now appeals, arguing that the application judge erred in his choice of the standard of review and that the properstandard of review to be applied here was that of reasonableness. It argues further that the Second Award was reasonable.

Alternatively,MTS submits that if the correct standard of review was correctness, then the Second Award was correct and the application judge erredin finding otherwise. [23] Loewen submits that the application judge was correct in his choice of the standard of review, either because this caseinvolves a question of law that is of central importance to the legal system and outside of the arbitrator’s expertise, or alternatively,because this case involves a true question of jurisdiction. If this court disagrees and holds that reasonableness is the test, then the SecondAward, it is submitted, is not reasonable.

Standard of Review of this Court [24] On appellate review from a decision of a judge hearing an application for judicial review or on a statutory appeal from adecision of an administrative tribunal, appellate courts are to determine whether the application judge chose and applied the correctstandard of review. This is a question of law to be determined on a standard of review of correctness. Dr. Q v.

College of Physicians andSurgeons of British Columbia, 2003 SCC 19 at paras. 43-44, [2003] 1 S.C.R. 226, followed in Armstrong’s Point Association Inc. v.Winnipeg (City) et al., 2013 MBCA 110 at para. 3, 303 Man.R. (2d) 56; and Bourgouin v. Rosser (Rural Municipality) et al., 2014MBCA 103 at para. 16. [25] In the event that I find that the application judge applied the incorrect standard of review, then I must substitute thecorrect standard of review and assess the Second Award on that basis. 1.

Did the application judge err in reviewing the Second Arbitrator’s decision on a standard of correctness? [26] To begin with, although the current question involves a statutory appeal rather than an application for judicial review,the Supreme Court of Canada has determined that general administrative law principles apply to both statutory appeals and applicationsfor judicial review of decisions made by administrative tribunals, and that a judge reviewing a decision by an administrative decision-maker, whether by appeal or judicial review, must begin by determining the standard of review to be applied. See Dr.

Q at para. 21;Pezim v. British Columbia (Superintendent of Brokers), (SCC), [1994] 2 S.C.R. 557 at 591-92, 598-99; and McLean v.British Columbia (Securities Commission), 2013 SCC 67 at para. 21, n. 2, [2013] 3 S.C.R. 895. [27] So, in reviewing the decision of the application judge, I must examine whether the doctrine of res judicata is a question

of law of such central importance to the legal system and outside of the expertise of the Second Arbitrator that a standard of review ofcorrectness should have been applied to the decision. [28] The doctrine of res judicata reflects the fundamental premise that there must, at some point, be an end to litigation. Thebroad concept was developed to deal with the problems of unfair relitigation, consistency of result and finality. See Donald J. Lange,The Doctrine of Res Judicata in Canada, 3d ed. (Markham: LexisNexis Canada Inc., 2010) at 1; and R. v. Mahalingan, 2008 SCC 63 atparas. 14-16, [2008] 3 S.C.R. 316.

It has been variably described as lying “at the heart of the administration of justice” (Toronto (City) atpara. 15); as a “fundamental principle of our system of justice” (R. v. Van Rassel, (SCC), [1990] 1 S.C.R. 225 at 238);and as “a cornerstone of the justice system in Canada” (Donald J.

Lange, The Doctrine of Res Judicata in Canada, 2d ed. (Markham: LexisNexis Canada Inc., 2004) at 4). [29] The doctrine is generally treated as part of the law of estoppel and, while the doctrine of res judicata in its broadestsense applies to the entire matter flowing between the parties, an estoppel can also apply to a single issue which may arise between twoparties. Issue estoppel is a form of res judicata. [30] Most recently in Penner v.

Niagara (Regional Police Services Board), 2013 SCC 19, [2013] 2 S.C.R. 125, the SupremeCourt of Canada stated (at para. 91): As a species of res judicata, issue estoppel is conceptually related to the doctrines of cause of action estoppel, collateral attack, and abuseof process (Lange [2010], at pp. 1-4).

Both individually and together, these doctrines are of fundamental importance to the finalityprinciple -- they are “not merely . . . technical rule[s]” but rather, “g[o] to the heart of a system of civil justice that strives for the truth ofthe matter [and] recognizes that perfection is an unattainable goal and finality is a practical necessity” (Revane v. Homersham, 2006BCCA 8, 53 B.C.L.R. (4th) 76, at para. 17). [31] The application of issue estoppel to any particular case is a two-step process.

First, the tribunal must decide whetherthat same question has been decided, whether the judicial decision which is said to create the estoppel was final and whether the partiesto the judicial decision were the same persons as the parties to the proceedings in which the estoppel is raised. If the preconditions arenot met, then at law, issue estoppel will not apply. If the preconditions are met, the tribunal must still determine whether, as a matter ofdiscretion, issue estoppel ought to be applied. In the case at bar, I am dealing with a decision at the first step of that two-step process.

The Second Arbitrator held that the decision of the First Arbitrator was not a final one and, therefore, the doctrine did not apply. Hisreasoning with respect to the principle of abuse of process was the same; that it was not a final decision. [32] In Toronto (City), Arbour J. discussed the similarities and differences between abuse of process by relititgation andissue estoppel.

She summarized the applicability of the doctrine of abuse of process stated (at para. 42): The attraction of the doctrine of abuse of process is that it is unencumbered by the specific requirements of res judicata while offeringthe discretion to prevent relitigation, essentially for the purpose of preserving the integrity of the court’s process. …. [33] In Danyluk v.

Ainsworth Technologies Inc., 2001 SCC 44 at para. 19, [2001] 2 S.C.R. 460, Binnie J. noted that thedoctrines supporting the finality of court decisions apply equally to judicial or quasi-judicial decisions made by administrative officers ortribunals, and stating (at para. 21): These rules were initially developed in the context of prior court proceedings. They have since been extended, with some necessarymodifications, to decisions classified as being of a judicial or quasi-judicial nature pronounced by administrative officers and tribunals.

In that context the more specific objective is to balance fairness to the parties with the protection of the administrative decision-makingprocess, whose integrity would be undermined by too readily permitting collateral attack or relitigation of issues once decided. [34] In determining that a standard of review of correctness was applicable to the decision of the Second Arbitrator, theapplication judge relied on the case of Toronto (City). In that case, an employee was dismissed after being criminally convicted ofsexual assault.

He grieved his dismissal and at the arbitration hearing he denied the commission of the offence. The arbitrator admittedevidence of the criminal conviction, but determined that it simply created a presumption that the sexual assault had occurred. Heultimately determined that the employee had rebutted the presumption and thus had been dismissed without just cause.

The SupremeCourt of Canada held that the arbitrator’s decision to relitigate whether the sexual assault had occurred, finally decided in a previousjudicial proceeding, had to be reviewed on a standard of correctness because this involved a question of law that is both of centralimportance to the legal system as a whole and outside the adjudicator’s specialized area of expertise. [35] Arbour J., in Toronto (City), referring to the doctrines of res judicata, issue estoppel and abuse of process, stated thatnot only were they questions of law of central importance to the legal system, but (at para. 15):

…. The application of these rules, doctrines and principles is clearly outside the sphere of expertise of a labour arbitrator who may be called to have recourse to them. …. [ 36 ] It should be noted that LeBel J., for the minority in that case, cautioned that he would not like his comments or those of the majority to be taken as authority for the proposition that correctness will be the standard to be applied whenever arbitrators or administrative decision-makers are required to interpret or apply general common law or civil law rules (see para. 67).

In this regard, he noted that deference may be owed if a decision-maker “has acquired expertise through its experience in the application of a general common or civil law rule in its specialized statutory context” (at para. 72). [ 37 ] The issue now raised is whether the correctness standard of review for questions involving issue estoppel or abuse of process, established in Toronto (City) , and applied in this court’s decision in Anderson et al. v.

Manitoba et al. , 2010 MBCA 113 , 262 Man.R. (2d) 96 , is still applicable in light of Dunsmuir and subsequent Supreme Court of Canada decisions. [ 38 ] In this regard, it will be noted that the court in Dunsmuir indicated that if the standard of review with respect to a particular category of question has been determined in a satisfactory manner, then an exhaustive standard of review analysis would not be required in later cases. Subsequently, however, the court in Canada (Canadian Human Rights Commission) v.

Canada (Attorney General) , 2011 SCC 53 , [2011] 3 S.C.R. 471 ( Mowat ) , indicated that due to the recent developments in the law of judicial review since Dunsmuir and its emphasis on deference owed to administrative tribunals, it may be necessary to reconsider previous jurisprudence which determined that a correctness standard of review was to be applied to a particular category of question (see para. 21). [ 39 ] In Dunsmuir , the court seems to have begun an adoption of a “usual” or “presumptive” standard of reasonableness review regarding the decisions of administrative tribunals generally.

When dealing with issues determined by the tribunal which fall into the category of the

interpretation of the tribunal’s enabling or closely related statutes, the category of mixed fact and law, or the category of issues of fact, discretion, or policy, a reasonableness standard is applied. A reasonableness standard of review is also applicable where an administrative decision-maker has to interpret a contract as a part of its function. See Nolan v. Kerry (Canada) Inc. , 2009 SCC 39 at paras. 29-30 , [2009] 2 S.C.R. 678. [ 40 ] The court in Dunsmuir also began to narrow the categories of questions of law that would warrant the application of the correctness standard.

The court noted that the jurisprudence had established that the correctness standard applied to constitutional questions (see para. 58), true questions of jurisdiction (see para. 59), and questions regarding the “jurisdictional lines between two or more competing specialized tribunals” (at para. 61).

Of particular importance to the present case, with respect to questions of general law, the court stated (at para. 60): … [C] ourts must also continue to substitute their own view of the correct answer where the question at issue is one of general law “that is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise” ( Toronto (City) v. C.U.P.E. , at para. 62, per LeBel J.). Because of their impact on the administration of justice as a whole, such questions require uniform and consistent answers. Such was the case in Toronto (City) v.

C.U.P.E. , which dealt with complex common law rules and conflicting jurisprudence on the doctrines of res judicata and abuse of process – issues that are at the heart of the administration of justice …. [ 41 ] Post- Dunsmuir , decisions of the Supreme Court of Canada have continued to shrink the category of a question of general law to which the correctness standard would apply.

See Matthew Lewans, “Deference and Reasonableness Since Dunsmuir” (2012), 38 Queen’s L.J. 59-98 at para. 35 (QL); and David Phillip Jones, “ Recent Developments in Administrative Law” (Paper delivered at the Canadian Bar Association 2013 National Administrative Law, Labour and Employment Law Conference, 29-30 November 2013) at 1. Lewans indicates that the Supreme Court of Canada’s decisions over the past year “provide a clear signal that the Court intends to rein in the conceptual categories associated with correctness review” (at para. 26).

This trend accords with the general emphasis on deference to the original decision-maker and the focus on more efficacy and proportionality in the justice system. [ 42 ] The case of Nor-Man is an example of that trend. In that case, the court determined that a standard of reasonableness applied in reviewing the decision of the arbitrator as to the application of the remedy of promissory estoppel. Fish J. stated (at paras. 44- 46) that while common law and equitable doctrines emanate from the courts, it does not follow that arbitrators lack either the legal authority or the expertise to apply them.

On the contrary, he held that labour arbitrators are authorized by their broad statutory and contractual mandates and well equipped by their expertise to “adapt the legal and equitable doctrines they find relevant within the contained sphere of arbitral creativity” (at para. 45). [ 43 ] In the case of Communications, Energy and Paperworkers Union of Canada, Local 30 v.

Irving Pulp & Paper, Ltd. , 2013 SCC 34 , [2013] 2 S.C.R. 458 ( Irving ) , Rothstein and Moldaver JJ. held (at para. 66) that it is not the direct impact of the decision on the public that leads a question to be characterized as a question of general law, but rather the impact of the decision on the legal system as a whole that is significant. If a decision does not have the capacity to affect the legal system in some way, it should not be characterized as involving a question of general law.

For the correctness standard to be applicable the question must be one that “safeguard[s] a basic consistency in the fundamental legal order of our country” ( McLean v. British Columbia (Securities Commission) , 2013 SCC 67 at para. 27 , [2013] 3 S.C.R. 895 ). Again, and most recently, in Canadian National Railway Co. v.

Canada (Attorney General) , 2014 SCC 40 ( CNR ) , the Supreme Court of Canada rejected the contention that the question relating to the availability of a complaint-based mechanism under the Canada Transportation Act , S.C. 1996, c. 10, fell into the correctness category (see para. 60). [ 44 ] One issue that has arisen is whether the Nor-Man adoption of the reasonableness standard with respect to estoppel was because of a deference to the special expertise of labour arbitrators or whether that deference extends to other arbitrators.

There are many comments in Nor-Man which highlight the unique role of labour arbitrators. The court specifically noted the broad grant of authority given to labour arbitrators by their governing legislation, which required labour arbitrators to consider “the real substance of

the matter in dispute between the parties” (at para. 46). The court also discussed the distinctive role of labour arbitrators in fostering peace in industrial relations, and their unique ability to respond to the immediate and long-term interests of both the employees and employer (at paras. 47-48). Several authors have concluded that, “The unique position of labour arbitrators was central to the conclusion” that a standard of reasonableness ought to apply in Nor-Man .

See Paul Daly, “The Unfortunate Triumph of Form over Substance in Canadian Administrative Law” (2012), 50 Osgoode Hall L.J. 317-357 at para. 68 (QL). [ 45 ] Fortunately, the Supreme Court of Canada recently decided a case which deals with a commercial arbitrator as opposed to a labour arbitrator. See Sattva Capital Corp. v. Creston Moly Corp. , 2014 SCC 53 . The issue on appeal in that case was the

interpretation by the arbitrator of a finder’s fee provision contained within the parties’ commercial arbitration agreement, in light of the agreement as a whole. [ 46 ] The court, in Sattva , held that aspects of the Dunsmuir framework established with respect to judicial review of administrative decisions, could be applied in the context of an appellate review of a commercial arbitration award (see para. 105). Rothstein J. held that generally a reasonableness standard of review with respect to tribunal decisions which involve the

interpretation of contracts governing the relationship between parties is appropriate unless the nature of the question in issue falls within one of the Dunsmuir correctness categories (see para. 75). Additionally, the court held that similar to judicial review, expertise is a factor in commercial arbitrations where it may be presumed that such decision-makers are chosen either based on their expertise in the area or are otherwise qualified in a manner that is acceptable to the parties (see para. 105). [ 47 ] In

summary, the recent Supreme Court of Canada jurisprudence clearly favours a reasonableness standard of review with respect to most decisions of administrative decision-makers, including those of labour arbitrators and commercial arbitrators.

It cautions a reviewing court to be careful in identifying the nature of the question in issue and to be wary about applying a correctness standard where the question involves the decision-maker interpreting its home legislation or where the question involves inextricably intertwined legal and factual issues within the decision-maker’s mandate and expertise. [ 48 ] I acknowledge that the “general rule” or “presumption” of a reasonableness standard is not set in stone. The court has continued to assert that even if the question involves an administrative decision-maker’s

interpretation of its home statute or the contractual terms of an arbitration agreement, a correctness standard will be applied if it falls within one of the correctness categories identified in Dunsmuir .

But, since Dunsmuir , there has been no case arising from the Supreme Court of Canada which identifies a question of general law that is of central importance to the legal system and outside of the expertise of the decision-maker so as to attract a correctness standard. [ 49 ] There have been some decisions arising from appellate courts that have grappled with this issue, but the results have been very fact dependent.

Most of those cases have agreed that the doctrines of res judicata , issue estoppel and abuse of process are principles of central importance to the legal system, but question whether they fall under the particular tribunal’s area of expertise. So, for example, in Donnelly v. Bighorn No. 8 (Municipal District) et al. , 2010 ABCA 68 , 474 A.R. 318 ; and in Sihota v. Edmonton (City) et al. , 2013 ABCA 43 , 542 A.R. 229 , the Alberta Court of Appeal held that these doctrines did not fall within the area of expertise of the Subdivision and Development Appeal Board. [ 50 ] A few months later, in Walsh v.

Mobil Oil Canada et al. , 2013 ABCA 238 , 553 A.R. 360 ( Walsh ), the Alberta Court of Appeal acknowledged that the case of Toronto (City) had traditionally stood for the proposition that a standard of correctness would apply to the issue of whether abuse of process is engaged, however, in light of British Columbia (Workers’ Compensation Board) v.

Figliola , 2011 SCC 52 , [2011] 3 S.C.R. 422, and Nor-Man , the majority held that a reasonableness standard now applied to determine the issue of abuse of process in the context of a human rights remedy. [ 51 ] The Saskatchewan Court of Appeal has also recently applied a reasonableness standard of review, relying upon Nor- Man , in two administrative law decisions respecting issue estoppel, res judicata and abuse of process by relitigation. In Canadian Union of Public Employees, Local 59 v.

Saskatoon (City) , 2014 SKCA 14 , 433 Sask.R. 134 ( CUPE Local 59 ), the reviewing judge determined, relying on Nor-Man, that the standard of review from an arbitral award which has applied the common law or equitable remedy of estoppel is reasonableness, and found that the decision of the Board of Arbitration was reasonable. On further appeal, the Saskatchewan Court of Appeal determined that the reviewing judge was correct to apply a reasonableness standard. Again, i n University of Saskatchewan v.

Peng , 2014 SKCA 98 (QL) ( Peng ) , the Saskatchewan Court of Appeal determined that a reasonableness standard applied with respect to questions involving statutory finality principles, especially since it involved the decision-maker’s

interpretation and application of its home statute. [ 52 ] There have been several decisions out of the Ontario Divisional Court on the issue of the standard of review to be applied with respect to decisions of administrative decision-makers relating to issue estoppel, res judicata and abuse of process by relitigation. I n Canadian Union of Public Employees, Local 79 v.

Toronto (City) et al. , 2012 ONSC 1158 , 290 O.A.C. 347 ( CUPE Local 79 ), the Divisional Court considered both Toronto (City) and Nor-Man , including Fish J.’s reference in Nor-Man (at para. 55) to Toronto (City) , and ultimately determined that Toronto (City) should be confined to its specific facts, and that Nor-Man dictated that a reasonableness standard should be applied. Lederman J. stated (at para. 27): Although the Supreme Court did not overrule Toronto (City) v. C.U.P.E. Local 79, the statement concerning the standard of review in that case should be confined to its facts.

In that case, the arbitrator was considering the interplay between the criminal and civil justice systems, and the effect of a conviction in a criminal matter upon a labour arbitrator determining whether the employer had cause to terminate the convicted employee. Toronto (City) v. C.U.P.E. Local 79 was about whether the determinations made by a criminal court to a standard of proof beyond a reasonable doubt were binding on a labour arbitrator, who found that the same events that underlay the criminal conviction were merely ‘ presumptively’ true, and subject to rebuttal.

The issue in such circumstances is of importance to the legal system as a whole and outside the arbitrator’s specialized area of expertise, and accordingly, a standard of review of correctness was appropriate.

[ 53 ] In the case of Toth Equity Ltd. v. Ottawa (City) , 2014 ONSC 941 , 321 O.A.C. 48 ( Toth ) , there was disagreement amongst the court members as to the standard of review to be applied with respect to a board’s decision on a question involving res judicata or issue estoppel. In this factually complicated case, Toth had started a number of proceedings against the City related to property taxes which had been assessed against it. In one of the related proceedings, a Divisional Court decision appeared to determine a limitations issue in Toth ’s favour.

Eventually, Toth’s appeal against the taxes was heard by the Assessment Review Board (the ARB), which dismissed the appeal on the basis that it was filed out of time. On appeal to the Divisional Court, Toth argued that not only had the ARB incorrectly interpreted the Municipal Act , 2001, S.O. 2001, c. C-25, in determining that the appeals were filed out of time, but it had also incorrectly concluded that the limitations issue was not res judicata .

The majority of the Divisional Court determined that both issues should be determined on a standard of reasonableness since the ARB was interpreting a statute with which it was very familiar and the limitations issue involved a question of statutory

interpretation confined to a particular context . [ 54 ] This analysis of the recent jurisprudence seems to confirm a key point. Context is central to determining whether the question falls within the category of a question of general law that is of central importance to the legal system as well as outside of the decision-maker’s expertise. Important doctrines of law may not be of central importance to the legal system as a whole depending upon the context in which they arise and are applied.

It may be that an analysis of the enabling statute and the factual matrix will reveal that the application of the doctrines are case-specific and will not have wider ramifications. It may be that the statute contemplates the application of such doctrines or that the decision-maker has the expertise to make these type of decisions. In those cases, the reasonableness standard will prevail.

A question of general law which will require the application of a correctness standard, aside from the constitutional questions and others mentioned in Dunsmuir , are becoming increasingly few and far between, if any still exist. [ 55 ] Given the above analysis, I conclude that an examination of the nature of the question in this case would not have an impact on the administration of justice in general.

In order to determine whether the doctrines of res judicata , issue estoppel or abuse of process were applicable, the Second Arbitrator was required to examine and interpret the Plan, his home statute, which was the AA , and the factual matrix between the parties. His decision has application only to these parties, these documents and these facts. The decision was dependent upon the

interpretation and application of a unique set of facts and documents which were the central tasks of the arbitrator. This is to be distinguished from the situation in Toronto (City) which implicated the proper interactions between two legal regimes: the criminal law system and grievance arbitration under a collective agreement. See Gerald P. Heckman “ Nor-Man Regional Health Authority : Labour Arbitration, Questions of General Law and the Challenges of Legal Centrism” (2011), 35:1 Man. L.J. 63. [ 56 ] A contextual analysis, as discussed in the Dunsmuir and Mowat cases, also points to a reasonableness standard.

The Supreme Court of Canada has engaged in such a contextual analysis to confirm or reinforce a conclusion on the applicable standard of review in both Canada (Citizenship and Immigration) v. Khosa , 2009 SCC 12 at para. 54 , [2009] 1 S.C.R. 339 ; and Nor-Man at para 39. This examination requires consideration of various factors including: the presence or absence of a privative clause, the purpose of the tribunal as determined by

interpretation of enabling legislation; the expertise of the tribunal; and the nature of the question at issue. [ 57 ] The AA does not contain a privative clause, however, the Plan and the AA state that the decision of the arbitrator will be final and binding on the parties, subject only to appeal on a question of law, with leave, on a question of importance which will significantly affect the rights of the parties. It should be noted that the absence of a privative clause is not determinative.

In Khosa , the majority of the Supreme Court of Canada confirmed that with or without a privative clause, administrative decision-makers are entitled to a measure of deference in matters that relate to their special role, function and expertise. See also Sattva at para. 104; and Mowat at para. 17 . [ 58 ] The nature and purpose of the tribunal must be determined with reference to both the AA and the Plan.

The Second Arbitrator was appointed pursuant to the Plan, which gives an arbitrator the power to determine the procedure to be followed when hearing a dispute, to identify the issues to be determined, and to waive procedural irregularities so that the arbitrator can address “the real matter in dispute” between the parties so as to come to a just and equitable decision.

The Plan also indicates that an arbitrator is “not bound by the rules of evidence, or any law applicable to the proceedings, and may determine the admissibility, relevance and weight of evidence.” The AA indicates that an arbitrator “shall decide a matter in dispute in accordance with law, including equity” (at s. 31 ) and may determine any question of law that arises during the arbitration (see s. 17(2)). [ 59 ] A review of the Plan suggests that its purpose was to give the arbitrator all the rights and responsibilities to make a final and binding decision that is just and equitable in the circumstances.

This is echoed by a review of the AA which indicates that it was the intention of the Legislature to convey wide powers to arbitrators in order to ensure that such disputes can be harmoniously resolved through a final and expeditious process. This suggests a high level of deference . [ 60 ] With respect to the expertise of the tribunal, absent evidence to the contrary, the case law states that expertise on the part of the arbitrators should be presumed. See Dunsmuir at para. 68 ; Nor-Man at para. 53; and Sattva at para. 105.

The recent case of McLean once again reminded us not to take a narrow view of the expertise of the decision-maker. The arbitrator in this case was agreed to by the parties and was interpreting a question posed by the parties that was directly within his area of expertise. His

interpretation required a review of the award itself, a review of the Plan and a factual review of what the parties had agreed to. [ 61 ] With respect to the nature of the question in issue, as stated earlier, the Second Arbitrator was specifically given the power to decide any dispute according to the law applicable to the proceedings. See s. 31 of the AA . [ 62 ] All of the above points to a standard of reasonableness. 2. Is this a question of jurisdiction so as to attract a standard of correctness?

[ 63 ] Loewen submitted, both before the Second Arbitrator, the application judge and before this court that the question raised was “one of jurisdiction” which required the application of a standard of review of correctness. The application judge rejected this argument and I would as well. [ 64 ] When determining whether a question of jurisdiction arises, the Supreme Court of Canada has consistently maintained that the question to be addressed is whether or not the decision-maker had to explicitly determine whether its statutory grant of power gave it the authority to decide the question in issue.

If the nature of the question is a question of jurisdiction, then a standard of correctness will be applied to the review. [ 65 ] In Dunsmuir , Bastarache and LeBel JJ. wrote (at para. 59): .... “Jurisdiction” is intended in the narrow sense of whether or not the tribunal had the authority to make the inquiry. In other words, true jurisdiction questions arise where the tribunal must explicitly determine whether its statutory grant of power gives it the authority to decide a particular matter. .... These questions will be narrow.

We reiterate the caution of Dickson J. in CUPE [2003 SCC 29 , [2003] 1 S.C.R. 539 ] that reviewing judges must not brand as jurisdictional issues that are doubtfully so. [ 66 ] More recently, for example, in Nolan , Rothstein J., for the majority, concluded that a true question of jurisdiction did not arise, stating that, “Here there is no question that the Tribunal has the statutory authority to enquire into the matter of costs” (at para. 35). And see Smith v. Alliance Pipeline Ltd. , 2011 SCC 7 at para. 36 , [2011] 1 S.C.R. 160 .

In CNR , the court unanimously determined that the issue raised did not involve a true question of jurisdiction, as it was not an issue in which the decision-maker “was required to explicitly determine whether its own statutory grant of power gave it the authority to decide the matter” (at para. 61). [ 67 ] Since Dunsmuir , the jurisprudence arising from the Supreme Court of Canada has taken an increasingly narrow view of what will constitute a true question of jurisdiction, almost to the point of extinction.

See Daly in which he suggests that “the bell may be tolling for the category of true questions of jurisdiction” (at para. 62); and Jones in which he opines that the Supreme Court of Canada “has virtually abolished the concept of a true jurisdictional error” (at pp.1-2). [ 68 ] In Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association , 2011 SCC 61 , [2011] 3 S.C.R. 654 ( ATA ), the leading case on this issue, Rothstein J., for the majority, noted that since Dunsmuir , the Supreme Court of Canada had not identified a single true question of jurisdiction.

He stated that (at para. 34): …. … [I]n view of recent jurisprudence, it may be that the time has come to reconsider whether, for purposes of judicial review, the category of true questions of jurisdiction exists and is necessary to identifying the appropriate standard of review. …. [ 69 ] In ATA , the Supreme Court of Canada determined that if the alleged jurisdictional question involves a decision-maker interpreting or applying its home statute, it should be presumed that the appropriate standard of review is reasonableness.

It is true that the presumption is rebuttable and that Cromwell J. and Binnie J. wrote decisions which questioned the extent to which the court narrowed the category of a question of jurisdiction. Nonetheless, in that case, Rothstein J. wrote for the majority. He determined that the issue involved the

interpretation of a provision in the decision-maker’s home statute, and indicated that unless the matter fell within one of the correctness categories previously delineated, deference was required. That trend has continued and the Supreme Court of Canada has still not identified a true question of jurisdiction since ATA . [ 70 ] In Manitoba v. Russell Inns Ltd. et al. , 2013 MBCA 46 , 291 Man.R. (2d) 244, this court considered Dunsmuir and ATA , as well as other authorities, and concluded as follows (at para. 52): In

summary, true jurisdiction is a very narrow concept. If the legislation (usually the home statute) gives the adjudicator the authority to decide or to act, the manner in which it makes that decision or exercises that authority is not a question of “true jurisdiction” for the purposes of determining the applicable standard of review. As stated in ATA , the party seeking to invoke the category of true jurisdiction must be required to demonstrate why the court should not review the tribunal’s

interpretation of its home statute on the deferential standard of reasonableness (at para. 39). This is a significant evolution from the concept of “true jurisdiction” as set out in Dunsmuir . [ 71 ] In this regard, I find that the Second Arbitrator had the authority to inquire into the issue of the applicability of the doctrines of res judicata , issue estoppel and abuse of process by relitigation pursuant to the AA and the provisions of the Plan. Making a decision on those issues therefore does not give rise to a true question of jurisdiction. 3.

If the appropriate standard of review to be applied to the Second Arbitrator’s decision is reasonableness, did the Second Arbitrator’s decision meet that standard? [ 72 ] MTS argues that the application of the standard of reasonableness requires that the Second Arbitrator must be provided with a significant degree of deference and his decision was reasonable and should be sustained.

[73] The reasonableness standard was discussed in the often quoted Dunsmuir (at para. 47): … [C]ertain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, theymay give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptableand rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable,referring both to the process of articulating the reasons and to outcomes.

In judicial review, reasonableness is concerned mostly with theexistence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether thedecision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. [74] In determining whether a decision falls within a range of possible, acceptable outcomes which are defensible in respectof the facts and law, the context in which the decision was made will be relevant.

In other words, if a decision-maker’s conclusion doesnot reasonably take into account or respond to the nature of the administrative scheme, the facts and the law in which the decision-makeracts and other relevant factors, then the decision-maker’s conclusion may be unreasonable. [75] Irving is an example of a case in which the Supreme Court of Canada considered the legal and factual context in orderto determine the reasonableness of a labour arbitration board’s decision.

Although members of the court differed on whether theparticular decision in that case was reasonable, Rothstein and Moldaver JJ. (dissenting, with McLachlin C.J.C.) concisely set out the lawwith respect to the reasonableness standard and the requirement to consider the context in which the arbitrator’s decision was made. They stated (at para. 74): In recent years, this Court has emphasized that reasonableness is “a single standard that takes its colour from the context” (Canada(Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para. 59; see also Alberta Teachers, at para. 47).

Thefactual and legal context in which a decision is made is critical to assessing its reasonableness for the simple reason that“[r]reasonableness is not a quality that exists in isolation” (Paccar [ (SCC), [1989] 2 S.C.R. 983], at p. 1018, per SopinkaJ.). Rather, when a reviewing court brands a decision as “reasonable” or “unreasonable”, it is necessarily making a conclusion about therelationship between the ultimate decision and the facts and law that underlie it.

The context of a decision thus shapes the “range ofpossible, acceptable outcomes which are defensible in respect of the facts and law” (Dunsmuir, at para. 47) or, more simply, the “rangeof reasonable outcomes” (Khosa, at para. 4). [76] The Second Arbitrator made two decisions. First, he decided that the doctrine of res judicata was not applicable here. Consequently, he decided he was free to revisit the issue, did so and came to an opposite conclusion. He held that the offset provisionsdid apply and that the Plan was entitled to offset $135,000 of the tort settlement against Loewen’s disability payments.

The applicationjudge and this court are concerned only with reviewing the first decision, that being that the doctrine of res judicata and itssubcategories, issue estoppel and abuse of process, did not apply. If that was an unreasonable decision, then it follows that the SecondArbitrator was not free to revisit the First Arbitrator’s

interpretation of the offset provisions in the Plan. [77] The Second Arbitrator came to the conclusion that the doctrine of res judicata did not apply here because the firstdecision was not final. He stated that the First Arbitrator’s decision “lacked the required element of finality” and did not provide theparties with a resolution. Second, he held that the decision was also incorrect. [78] Let me deal with the latter point first. MTS argues that the Second Arbitrator was not bound to follow a decision whichhe felt was incorrect.

He refers to a number of cases citing that proposition starting with the decision in Brewers’ Warehousing Co. v.Int’l Union of Brewery, Flour, Cereal, Malt, Yeast, Soft Drink & Distillery Workers of America, Local 278C (Collective AgreementGrievance) (1954), 5 L.A.C. 1797 (QL) (Ont.

L.A.), where Arbitrator Laskin (as he then was) wrote that, although it was preferable,especially if dealing with the same employer, union and collective agreement, a Board of Arbitration should not follow a prior award ifthe second board was under the clear conviction that the prior award was wrong. [79] In that case, and the cases following it cited by MTS, all in the labour relations field, the disputes arose from differentgrievances, albeit dealing with the same union, employer and collective agreement.

That is not the case here, where we are dealing withexactly the same dispute. [80] The doctrine of stare decisis should not be confused with the doctrine of res judicata. Boards of arbitration are notbound by the principle of stare decisis. Although it may be preferable for purposes of consistency, they are not bound to follow thedecisions of other boards of arbitrations, even if those decisions involve the same union, employer and collective agreement. SeeOntario Nurses Assn. v. St. Michael’s Hospital, 2011 ONSC 3369 (QL); Sackville (Town) v.

Canadian Union of Public Employees, Local1188 et al., 2007 NBCA 18, 313 N.B.R. (2d) 147; and Canadian Union of Public Employees, Local 4000 v. Aramark Canada Ltd., 2011ONSC 5640 at para. 21 (QL). [81] In this case, in fact, the Second Arbitrator rested his refusal to apply any of the three doctrines on his determination thatthe First Arbitrator’s decision on the offset issue was not a final one.

With respect to all three doctrines, he relied on the same rationale: 1) the fact that the Court of Queen’s Bench declined to enforce the First Arbitrator’s award; 2) the final statement in the first awardwhich was: “I leave it to counsel to advise me whether this resolves the substantive issues or whether a further hearing is required”; and3) previous arbitration decisions which indicated that an award is not final if the arbitrator omits to give necessary directions. Relying onthose three points, he concluded that it was “obvious that this could neither be ‘intended as nor constitute a final resolution’.”

[ 82 ] The issue which arises is whether this decision was reasonable in light of the legal and the factual background of the case. As I have already indicated, finality of decision is a precondition of the application of any of the doctrines. [ 83 ] Lange (2010) addresses this issue, stating (at p. 95): A decision that is final for the purpose of issue estoppel may be a decision that does not necessarily determine the entire subject matter of the litigation.

The test of finality is not a cause of action test and should not be confused with a final decision for the purpose of cause of action estoppel where the entire cause of action, or subject matter, is merged in the decision. The test for issue estoppel is a substantive issue test where the decision affects substantive rights of the parties in respect of a matter bearing upon the merits of the cause of action, as distinct from some collateral matter. This can readily be seen in decisions in interlocutory proceedings.

A decision is final in nature because it finally disposes of a substantive right raised between the parties which may or may not be determinative of the entire action. [ 84 ] In Figliola , Abella J. explained what she meant by final when she stated (at para. 51): .... “Final” means that all available means of review or appeal have been exhausted.

Where a party chooses not to avail itself of those steps, the decision is final. …. [ 85 ] In order to determine whether the First Arbitrator’s decision was intended to be final, the Second Arbitrator should have considered the decision in context, including the nature of the administrative scheme, specific statutory and Plan provisions (see Lange (2010) at p. 119), the factual matrix in which the decision was made and the general legal principles applicable to the type of decision being made. [ 86 ] The general nature and object of the arbitration scheme has been discussed earlier.

Arbitrations are designed to facilitate the expeditious resolution of disputes and the provisions in the AA and the Plan corroborate that intention. The AA applies to plan arbitrators pursuant to s. 2(1) . Sections 6 and 7 of the AA limit court intervention. The process allows the arbitrator or the parties to determine the issues which need to be arbitrated and allows the arbitrator to deal with the real matter in dispute in a just and equitable manner. Any award will bind the parties, subject to appeal or a judicial review application.

Thus, the Plan and the AA together create a comprehensive scheme whereby disputes in relation to the

interpretation of the Plan are to be quickly and finally determined by an arbitrator, with limited court intervention. Any review of an arbitrator’s decision must therefore keep these principles in mind. [ 87 ] Section 42(1) (

a) of the AA indicates that an arbitration is terminated when the arbitrator makes “a final award or awards in accordance with this Act, disposing of all matters in dispute referred to arbitration.” There is no provision permitting an arbitrator to rehear a matter which has been determined, or to reconsider a decision.

It should be particularly noted that s. 41(2) of the AA indicates: Final award 41(2) The arbitral tribunal may make more than one final award, disposing of one or more matters in dispute referred to arbitration in each award. [ 88 ] The specific provisions of the AA and the Plan, therefore, contemplate that an arbitrator may make more than one “final” award with respect to matters in dispute and that final awards are final and binding and cannot be reheard or reconsidered unless some sort of injustice exists (s. 43). [ 89 ] Consideration of the factual context is also required to determine whether or not it was reasonable to determine that the First Arbitrator’s decision was not a final one.

In this case, the parties agreed to arbitration, chose the arbitrator and agreed to submit three issues to him for determination by way of a bifurcated process. The parties were given a full opportunity to canvass the subrogation and

interpretation issues and both parties made written and oral submissions. [ 90 ] In the First Arbitrator’s decision, entitled “Preliminary Determination of an Issue(s),” he noted: …. Counsel requested that I determine three preliminary issues based on submissions as to facts and law and then, if necessary, hear the substantive case as defined by the results of the preliminary issues. …. By agreement, written submissions were filed in mid May and oral submissions took place on July 8, 2008.

Preliminary Issues During the oral submissions Counsel clarified the three preliminary issues as follows: 1. Does the Plan have a common law right of subrogation which arises in this case? 2. Do the provisions of the Plan allow the Plan to offset amounts attributable to income loss in the (tort) settlement with/against disability benefits which are currently payable? 3.

Does Loewen bear the onus to demonstrate what part of the settlement is attributable to income loss? [ 91 ] After setting out the facts and the relevant Plan provisions, the First Arbitrator then fully analyzed the preliminary issues, considered both parties’ arguments, reviewed the terms of the Plan and gave his decision relating to the three issues. It is within that context that he then stated that he would “leave it to Counsel to advise me whether this resolves the substantive issues or whether a further hearing is required.” The Second Arbitrator relies on that statement as evidence of lack of finality.

But when considered in context, that is not the case. [ 92 ] On the contrary, the First Arbitrator’s Award clearly indicates that the parties intended that the First Arbitrator would make a determination on the three preliminary issues, and would go on to hear the substantive case only if necessary . The decision further clarifies that if he did have to hear the substantive case, it would be on the basis of his determination on those three preliminary issues. As noted above, the First Arbitrator stated: ….

Counsel requested that I determine three preliminary issues based on submissions as to facts and law and then, if necessary, hear the substantive case as defined by the results of the preliminary issues . …. [emphasis added] [ 93 ] The context of the decision clearly indicates that the parties hoped to be able to settle the “substantive issues” on the basis of the First Arbitrator’s determination of the preliminary issues.

Regardless of whether it was called a final or interim award, the First Arbitrator’s Award was intended to be final on the issues it decided as between the parties. [ 94 ] In a subsequent “Clarification of a Conclusion” requested by MTS, the First Arbitrator explained that there was no live issue between the parties as to subrogation and that only the offset provisions had application. He concluded his Clarification by stating: As Counsel are aware, my jurisdiction is to exercise the analysis pursuant to the jointly submitted and agreed Preliminary Issues.

Ultimately, the issue of subrogation became academic in this fact situation as any potential recovery for an overpayment would follow the scheme of the Offset Provisions. [ 95 ] This clarification in no way suggests that the First Arbitrator’s determination of the preliminary issues was an interim decision. [ 96 ] The Second Arbitrator also relied upon the fact that in Loewen ’s subsequent application to secure the assistance of the court to enforce the First Arbitrator’s Award, the court declined to provide such assistance and directed the parties back to arbitration to complete the process.

In my view, that decision does not diminish the finality of what had already been accomplished in the arbitration procedure agreed to by the parties – rather, it simply directed the parties to complete what had already been started before the court could enforce the award. In other words, the effect of the award still needed to be quantified. The decision of the court was not to be considered as an invitation by the parties to go back and redo what had already been done. [ 97 ] Furthermore, MTS must have felt that the First Arbitrator’s decision had been final on the subrogation and

interpretation issues because it appealed his decision. Although it subsequently abandoned the appeal to concentrate on requesting that the Second Arbitrator revisit the issue, the filing of an appeal does evidence, at least at the time, the thinking that the decision of the First Arbitrator had been final on that issue. [ 98 ] Where the parties bifurcate a process by agreement, and a final decision on that issue results, it should not be open to the loser in the first stage of the process to ask that the issues in the completed process be tried again, even if the first decision was wrong.

[ 99 ] If the decision was wrong, MTS had a right to appeal on a question of law, with leave. It purposely abandoned that right. Furthermore, if the only reason to be advanced in circumstances such as this is that the first arbitrator is wrong, the integrity of any preliminary award will always be in jeopardy until the matter has been concluded. It is common in arbitration for issues to be decided at different times since often times by so doing, expense and time in regards to the balance of the arbitration might be avoided.

Parties ought to be encouraged to try and streamline arbitration processes, but if decisions made as a result of that streamlining are going to be easily set aside simply because a second arbitrator happens to have a different view of the issue, then any efficacy so gained will be sacrificed. [ 100 ] In his analysis, the Second Arbitrator did not consider any of the above.

He simply referred to the First Arbitrator’s statement that he would leave it to counsel to advise whether this would resolve the substantive issue or whether a further hearing was required, without considering that statement within the factual context in which it was made.

Nor did he consider the statutory context and the AA ’s provisions regarding interim awards, final awards, and when an arbitration is terminated or the overall nature of the administrative scheme and the intention to create an expeditious, binding dispute resolution system. [ 101 ] In particular, when determining whether the First Arbitrator’s Award was final, he did not consider whether it disposed of one or more matters in dispute referred to arbitration as opposed to being an interim award.

An award can be final with respect to the issues it decides, but not necessarily determine all the disputed substantive issues.

Just because it did not determine the entire dispute between the parties and the Court of Queen’s Bench declined to enforce the award, because some substantive issues remained (i.e., quantum), it does not mean that the award was not final with respect to the issues the First Arbitrator had been asked to determine. [ 102 ] With respect to the discretionary aspect of these doctrines, except to reiterate the reasons he gave for determining that the First Arbitrator’s Award was not final, the Second Arbitrator did not really address the exercise of discretion in this case.

I acknowledge that the discretion whether to apply the doctrine of issue estoppel “is necessarily broader in relation to the prior decisions of administrative tribunals because of the enormous range and diversity of the structures, mandates and procedures of administrative decision makers” ( Danyluk at para. 62 ), but even so, there was no consideration, analysis or application of discretionary factors here. [ 103 ] The court in Penner identified two ways in which the doctrine of issue estoppel could work an unfairness and, therefore, might be a rationale for not applying the doctrine in any particular situation (at para. 39): Broadly speaking, the factors identified in the jurisprudence illustrate that unfairness may arise in two main ways which overlap and are not mutually exclusive.

First, the unfairness of applying issue estoppel may arise from the unfairness of the prior proceedings.

Second, even where the prior proceedings were conducted fairly and properly having regard to their purposes, it may nonetheless be unfair to use the results of that process to preclude the subsequent claim. [ 104 ] These factors are also relevant to the discretionary aspect of abuse of process (see Toronto (City) ). [ 105 ] In the present case, the fact that the Court of Queen’s Bench declined to enforce the First Arbitrator’s Award and that the First Arbitrator’s Award failed to settle the dispute between the parties completely does not give rise to any particular concerns of injustice, especially since both parties appear to agree that the decision was not enforced because the outstanding quantum issue had to be finalized.

There was no argument or suggestion put forward to suggest that the arbitration proceedings before the First Arbitrator were procedurally unfair. To the contrary, both parties had ample opportunity to provide written and oral submissions. [ 106 ] Finally, the concern about different purposes or stakes between two proceedings does not apply in this case.

Both proceedings addressed the same issues, for the same purpose – to finally determine whether or not subrogation and/or offset applied with respect to the Plan in the circumstances of the case. [ 107 ] In short, the decision of the Second Arbitrator with respect to the application of the doctrines of res judicata , issue estoppel and abuse of process, is unreasonable because it failed to properly consider the factual and legal context with respect to the First Arbitrator’s Award and, ultimately, failed to conclude that the First Arbitrator’s Award was a final one which was subject to the doctrines of issue estoppel and abuse of process by relitigation.

He did not adequately consider that the First Arbitrator determined a question which the parties agreed he could determine, that the parties fully participated in the process before the First Arbitrator, and that the First Arbitrator’s Award indicated that it was the expectation of the parties that the three issues would be “determined,” and that if a further hearing on the substantive case was required, it would be heard “as defined by the results of the preliminary issues.” [ 108 ] Furthermore, the Second Arbitrator’s indication that he would use his discretion to refuse to apply issue estoppel and abuse of process by relitigation should also be considered unreasonable, as he failed to consider or apply the proper factors which underlie the exercise of such a discretion, and considered factors that were wholly irrelevant to the issue.

Conclusion [ 109 ] This dispute arose in 2007 when MTS started withholding Loewen’s disability payments. The Second Arbitrator felt that the First Arbitrator’s decision on

interpretation of the offset provision in the Plan was not a correct contractual

interpretation and proceeded to decide the case on his own

interpretation of the contractual provisions. The appeals from that decision have now gone on for more than seven years. Many thousands of dollars in legal fees and costs have been spent on this dispute, not counting the use of judicial resources in the several appeals and motions for leave to appeal to the Court of Queen’s Bench and the Court of Appeal. [ 110 ] These reasons do not determine whether the First Arbitrator or the Second Arbitrator applied the correct contractual interpretative provisions to the Plan contract.

But, they do determine that, having agreed to have the First Arbitrator decide the three issues, the parties are bound by his decision. His decision was final on those three questions and for the Second Arbitrator to decide differently was unreasonable. All that was available to MTS was to appeal the award. While attempting that initially, the appeal was

withdrawn. [ 111 ] This is not one of those situations where the parties should have a second bite of the cherry ( see Danyluk at para. 18 ). Instead, it provides a good example of the reason our legal system puts such an emphasis on finality to litigation and proportionality. Duplicative litigation, potentially inconsistent results, undue costs and inconclusive proceedings are to be avoided. Being correct in law is important, but it is not always as important as having an end to litigation. There can be no assumption that relitigation will yield a more accurate result than the original proceeding.

An issue, once decided, should not generally be relitigated to the benefit of the losing party and the harassment of the winner. “A person should only be vexed once in the same cause” ( ibid. ). [ 112 ] I would add that even if I am wrong and a standard of correctness should have been applied to the review of the Second Arbitrator’s decision, it follows from the above reasons that that decision was both incorrect and unreasonable.

It was incorrect because the decision of the First Arbitrator was final and, therefore, the doctrines do not arise and it was unreasonable because, given an analysis of the context in which the First Arbitrator’s decision was given, it was unreasonable to conclude that it was not a final decision. [ 113 ] I would dismiss the appeal with costs. J.A. I agree: J.A. I agree: J.A.