Elchuk v Gulansky, 2019 SKCA 108

Court of Appeal for Saskatchewan Docket: CACV3377 Citation: Elchuk v Gulansky , 2019 SKCA 108 Date: 2019-10-08 Between: Leonard Elchuk Appellant (Applicant) And Sylvester Gulansky, Lydia Gulansky and the Honourable Ronald L. Barclay, Q.C. Respondents (Respondents) Before: Jackson, Caldwell and Tholl JJ.A. Disposition: Appeal dismissed (orally) Written reasons by: The Honourable Mr. Justice Tholl In concurrence: The Honourable Madam Justice Jackson The Honourable Mr.

Justice Caldwell On Appeal From: 2019 SKQB 23 , Saskatoon Appeal Heard: October 8, 2019 Counsel: Jay Watson for the Appellant Michael Scharfstein for the Respondent Tholl J.A. I. Introduction [ 1 ] Sylvester Gulansky and Lydia Gulansky own a quarter

section of land that contains a gravel pit. Leonard Elchuk operates a business that extracts and resells gravel. There is a long-term contract between the parties for the sale of gravel from the Gulanskys to Mr. Elchuk. A term of the contract requires the parties to negotiate the price of the gravel biannually and, if they fail to agree, the matter is referred to an arbitrator for a decision regarding the price. The parties were unable to agree on the price for the period of January 1, 2018, to December 31, 2019, so the matter went to arbitration. [ 2 ] Mr.

Elchuk was dissatisfied with the price set in the arbitration award and sought judicial review in the Court of Queen’s Bench. On January 21, 2019, Mr. Elchuk’s application was dismissed by the Chambers judge: Elchuk v Gulansky , 2019 SKQB 23 , 87 BLR (5th) 31 [ Chambers Decision ]. Mr. Elchuk appeals the Chambers Decision and seeks to set aside the decision and quash the arbitrator’s award. At the conclusion of the appeal hearing, we dismissed Mr. Elchuk’s appeal with brief written reasons to follow. These are those reasons. II. Analysis [ 3 ] Mr. Elchuk appealed the Chambers Decision on the following grounds: (

a) the Chambers judge applied the incorrect standard of review to the arbitrator’s award; (

b) the Chambers judge failed to quash the award on the basis that the arbitrator committed an error of law and acted on an incorrect principle; and (

c) the Chambers judge failed to quash the award on the basis that the arbitrator’s award was unreasonable and exceeded his jurisdiction. [ 4 ] The Chambers judge reviewed the award on a reasonableness standard. This was the correct standard to apply: Dunsmuir v New Brunswick , 2008 SCC 9 , [2008] 1 SCR 190; Sattva Capital Corporation v Creston Moly Corporation , 2014 SCC 53 at paras 104– 106 , [2014] 2 SCR 633; and Teal Cedar Products Ltd. v British Columbia , 2017 SCC 32 at para 74 , [2017] 1 SCR 688. In his factum and in oral submissions, Mr.

Elchuk properly conceded the Chambers judge had applied the correct standard of review to the arbitrator’s award. [ 5 ] The remaining two grounds of appeal can be distilled to an examination of whether the Chambers judge correctly applied the reasonableness standard to her review of the arbitrator’s award. The Chambers judge is owed no deference in this Court’s review of her application of the reasonableness standard: Dr.

Q v College of Physicians and Surgeons of British Columbia , 2003 SCC 19 at paras 43– 44 , [2003] 1 SCR 226, and Sun Country Regional Health Authority v The Health Sciences Association of Saskatchewan , 2017 SKCA 86 at para 2 . [ 6 ] Mr. Elchuk’s concerns, which he says led to an unreasonable award, can be summarized as follows: (

a) the arbitrator failed to set a price in the context of the contract in question and, instead, set a spot price for gravel in the geographic area;

(

b) the price of the gravel more than doubled from the previous price; (

c) in his analysis of the comparative contracts filed by the Gulanskys, the arbitrator failed to take into account the factors in the contract in question that rendered the prices in the other contracts incomparable without a significant adjustment; and (

d) the arbitrator found there was a market for gravel with local rural municipalities in a certain volume when there was no evidence of a market with such volumes. [ 7 ] The Gulanskys submit the arbitrator fully reviewed all of the evidence and, after evaluating the comparable contracts and both parties’ evidence and arguments, arrived at a reasonable price. They argue Mr. Elchuk is unhappy with the outcome and is simply seeking a rehearing and reweighing of the evidence in the hopes of a more favourable conclusion.

The Gulanskys assert the Chambers judge was correct to determine the arbitrator’s decision on price fell within the range of reasonable outcomes and, as a result, the dismissal of the judicial review application cannot be interfered with upon appeal. [ 8 ] I can find no reason to interfere with the Chambers judge’s finding that the arbitrator’s decision is reasonable. While the arbitrator may have overstated what the evidence established regarding the volume of gravel each municipality would use, the price found by the arbitrator fell within the reasonable range of prices.

The Chambers judge’s conclusions aptly summarize my view of this matter ( Chambers Decision ): [43] Upon examining the decision, it is eminently clear that the arbitrator expressly considered whether processing and transportation costs, road haul and extraction fees, rural municipality fees, minimum volumes, overburden clearage costs, and reclamation costs should have been considered when determining price.

He rejected Elchuk’s contention that the only realistic market for the gravel he was purchasing from the Gulanskys was in the City of Saskatoon and concluded, therefore, that these costs should not be taken into account when determining the price of gravel under the 2016 Contract. [44] The arbitrator decided on the evidence before him that the most accurate comparables for the purposes of determining price are in the Wakaw area.

He identified the fundamental question as being what the market would pay for gravel in that geographic area. … [45] Thus, the arbitrator did not fail to consider the factors put forward by Elchuk. Rather, he fully analyzed and weighed those factors, and ultimately rejected Elchuk’s position. [ 9 ] The Chambers judge was correct to determine the arbitrator’s award fell within the range of possible, acceptable outcomes and that it was, therefore, reasonable. Mr. Elchuk’s appeal was dismissed from the Bench, with costs fixed in the amount of $3,500.