When Will a Court Interfere With a Family Law Arbitration Award?

An Ontario court recently set out the principles regarding the standard of appellate review for an arbitration decision after a wife appealed a family law arbitration award following separation from her husband.

What Happened?

The husband and wife were married for 37 years and separated in 2006.

After six years of negotiations, the husband and wife signed a separation agreement dated August 15, 2012.  

The separation agreement settled all outstanding issues between the husband and wife, including equalization and spousal support. In the agreement, they meticulously set out steps to be taken on the issue of spousal support to provide for an annual recalculation of income for the husband to avoid double dipping and to set out specific net disposable income distribution. The agreement stipulated that income streams arising from “previously equalized property” were to be excluded in the annual support calculations. The agreement did not define “previously equalized property”.  

Following the signing of the agreement, the husband and wife were unable to agree as to what “previously equalized property” meant, which led them to the dispute resolution mechanism provided for in the agreement.  

It took until 2018 for the parties to attend arbitration.  The arbitrator released her decision on September 10, 2018.   

However, the wife claimed that the arbitrator erred in her legal interpretation of “previously equalized property”. The wife appealed the arbitration award.

The arbitration agreement provided for appeals based on a question of law (without leave), a question of fact, and/or a question of mixed fact and law. The agreement also stated that the parties had a right to make application to the court to set aside the award in accordance with s. 46 of the Arbitration Act, 1991. 

Court Decision

The court explained that an appeal is not a re-trial of a case. As such, consideration must be given to the appropriate standard of review applicable to the questions at issue on appeal. The court stated: 

“The decision of an arbitrator deserves as much deference on appeal as does a decision of a trial judge[…].

In reaching an award, an arbitrator sits in the same position as a judge in a lower court when a decision is appealed to a higher court, and for a decision to be overturned on appeal, the appellate court must find that the reasons amount to an error law and that the decision is not correct, or that a palpable and overriding error was made on a question of mixed fact and law.”

The court then set out the principles regarding the standard of appellate review as set out in previous case law, as they apply to both trial decisions and arbitration awards: 

a) an appellate court should not interfere with a trial judge’s reasons unless there is palpable and overriding error; stated another way, an appellate court is prohibited from reviewing a trial judge’s decision if there is evidence upon which the trial judge could have relied to reach that decision;

b) the role of appellate court judges is to review the reasons in light of the arguments of the parties and relevant evidence, and then to uphold the decision unless a palpable error leading to the wrong result has been made by the trial judge;

c) on a pure question of law, the standard of review is that of correctness;

d) the standard of review for findings of fact is such that findings are not to be reversed unless the trial judge has made a “palpable and overriding” error;

e) appellate courts must treat a trial judge’s findings of fact with great deference, this rule being based principally on the assumption that the trier of fact is in a privileged position to assess the credibility of witnesses’ testimony;

f) a court of appeal is clearly not entitled to interfere merely because it takes a different view of the evidence; the finding of facts and the drawing of evidentiary conclusions from the facts is the province of the trial judge, not the Court of Appeal;

g) the standard of review for factual inference is the same as for findings of fact — there is one, and only one, standard of review applicable to all factual conclusions made by the trial judge — that of palpable and overriding error;

h) a question of mixed fact and law involves the application of a legal standard to a set of facts; where a decision-maker applies the wrong law to a set of facts, then this will constitute an error of law subject to the standard of correctness; and

i) matters of mixed fact and law lie along a spectrum; where a legal principle is not readily extricable so as to characterize the error as an error of law subject to the standard of correctness, then the matter is a matter of mixed fact and law subject to the more stringent standard of palpable and overriding error.

Additionally, the court stated that it should not interfere with an arbitrator’s award unless it is satisfied that the arbitrator acted on the basis of a wrong principle, disregarded material evidence, or misapprehended the evidence.

After reviewing the grounds of appeal and the arbitrator’s decision, the court found that the arbitrator had made no error in principle, nor any palpable or overriding error, nor had she misapprehended the evidence. Additionally, the court found that the arbitrator’s conclusions were sufficiently clear and adequate, and properly supported in the evidence before her.

As a result, the court refused to interfere with the determinations rendered by the arbitrator and dismissed the appeal on all grounds.

Get Advice

Separation and divorce are challenging for everyone involved.  When dealing with custody or access disputes, matters involving spousal and child support, the division of assets, and other family issues, emotions can be your worst enemy. Having an experienced family lawyer on your side can help you stay focused and resolve disputes as quickly and amicably as possible.

At Campbell Bader LLP our family team has collectively spent more than twenty years advising clients about family disputes, including those involving high net worth individuals or complex matters.

We value and incorporate collaborative family law principles into our practice, but we’re smart enough to recognize when that approach won’t work for you and we adapt our strategy accordingly. To learn more about how we can help you, contact us online or at 905-828-2247.