The best family arbitration appeals lawyers know arbitrations can lead to prompt and discrete resolutions of high net worth family law cases. Our family law arbitration lawyers help clients resolve matters quickly and discretely. Sometimes these cases go through mediation and then arbitration and one side is still upset with the result. In today’s blog Fraser MacLean explains the test to appeal a family arbitration award.
What happens when someone is dissatisfied with their family law arbitration? Is the test just a “redo” or is there a significant threshold they must meet to ensure integrity of the process? Obviously, disgruntled parties cannot get a free redo after hard work and effort leads to a proper family law case result.
In a recent BCCA case the Court of Appeal upheld an arbitration ruling on an earlier mediation on multimillion dollar overseas real estate, after the death of one of the parties. Notably, the Court of Appeal found that the ex-wife wanted all the benefits of the settlement but none of the burdens which the BC Court of Appeal said was patently unreasonable.
The test for appeals from arbitration awards is simple:
When leave is granted to appeal an arbitral award, the reviewing court is bound by the arbitrator’s factual findings (Sattva at para. 104). The normal “palpable and overriding error” standard does not apply; the arbitrator’s factual findings simply cannot be disturbed. The standard of review on the question of law under appeal will “almost always” be reasonableness (at para. 75). Here the Dunsmuir framework does apply (at para. 106), so the standard would be correctness if, for example, the question was both centrally important to the legal system as a whole and outside the arbitrator’s area of expertise (see Dunsmuir at para. 60; Toronto (City) v. C.U.P.E., 2003 SCC 63 at para. 6).
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Family Law Appellate review of family law arbitral awards is limited to “extricable questions” of law. Even where an extricable question of law exists, a family law award generally attracts the deferential “reasonableness” standard of review in order to recognize the finality of awards and advance the aims of arbitration.
The recent case of Zemstova helps us understand why arbitrations are given credence by higher courts.
This appeal concerns the division of certain property, namely sales purchase agreements (SPAs), following a divorce. The SPAs are owned by a holding company. An arbitrator concluded the holding company was a family asset and that the parties would therefore hold the SPAs through their joint beneficial ownership of the shares of the holding company. The appellant’s application to have the arbitration award set aside was dismissed. She now appeals, claiming the arbitrator erred in concluding the holding company was a family asset. Held: Appeal dismissed. The arbitrator was correct to conclude the holding company was a family asset. It served as a vehicle for holding the SPAs, which were purchased as a family investment.
A Person Sharing Multimillion Dollar Benefits Must Bear Liabilities Too
The Court of Appeal was very clear that arbitration awards will not be lightly set aside by unhappy family law clients:
[40] Similarly, the chambers judge correctly found Arbitrator Nordlinger did not breach natural justice by failing to permit the parties to make submissions on the FRA: RFJ at paras. 42, 59. He noted Ms. Zemtsova, when appearing before Arbitrator Nordlinger, had the opportunity to respond to the Estate’s argument that the shares in Rion and the SPAs were beneficially owned by both parties. Arbitrator Nordlinger ultimately agreed with the Estate’s position: RFJ at paras. 51–53, 56–57. As the chambers judge correctly held, in the circumstances, it was open to Arbitrator Nordlinger to consult an authority—the FRA—beyond those referred to by the parties in reaching her conclusion: RFJ at paras. 54–55; MSI Methylation Sciences, Inc. v. Quark Ventures Inc., 2019 BCSC 440 at paras. 52–53, aff’d 2019 BCCA 448.
[41] Ultimately, Arbitrator Nordlinger exercised her powers in accordance with the Arbitration Agreement and found Rion was a family asset. As the chambers judge concluded, “[t]he Arbitrator’s finding that Rion was a family asset resulted in a simple resolution to the issue put before her, since as a consequence the Arbitrator concluded that actually nothing further needed to be done for the parties to jointly hold the SPAs to implement the Kahn Award”: RFJ at para. 24. I agree.
[42] I understand Ms. Zemtsova is uncomfortable with being enmeshed in the complicated corporate structure surrounding the SPAs. But the decision to manage family assets through GMA was made when Ms. Zemtsova and Mr. Shevalev were married, as were the decisions to purchase the SPAs and then have Rion hold the shares of the SPAs. These were family decisions.
[43] Ms. Zemtsova is not entitled to enjoy only the benefits of family decisions. It’s a two-way street. She must also bear the burdens of those decisions. If she wants to realize and share in the residual value of the SPAs, she has to bear her share of the burden of continuing to hold the SPAs within Rion—including the management, fees, and any complications arising from this complex structure.
[44] For all of these reasons, I would dismiss the appeal.
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If you are unhappy with a family law arbitration result, contact us immediately to explore your options.
