The Petitioner sought leave under section 31 of the Commercial Arbitration Act, R.S.B.C. 1996, c.55 to appeal the decision of an Arbitrator in a motor vehicle case who awarded court order interest to the Respondent motorist (“Lopatka”) after the initial award for damages had been made. The court refused to grant leave, holding that the merits of the appeal did not have sufficient substance to warrant leave and it was important that the principle of finality in arbitrations be maintained.

Administrative law – Motor vehicle accidents – Arbitration and award – Arbitrators – Jurisdiction – Appeals – Leave to appeal – Test

Maruna v. Lopatka, [2002] B.C.J. No. 1706, British Columbia Supreme Court, July 19, 2002, Brooke J.

Lopatka was involved in four motor vehicle accidents. Pursuant to section 148 of the Regulations to the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231, an Arbitrator was asked to determine the amount Lopatka was entitled to and the apportionment between the four accidents. Accordingly, the Arbitrator issued a global award on July 26, 2000. On November 16, 2000, the Arbitrator apportioned the award and made certain adjustments. On December 14, 2000, a third award was made to deal with the issue of income tax gross-up and costs. This was characterized as the “final award” by the Arbitrator. On April 18, 2001, the Arbitrator wrote to both counsel inquiring as to whether he could close the file. Counsel for Lopatka raised the issue of a claim for pre-judgment interest pursuant to section 28 of the Commercial Arbitration Act, R.S.B.C. 1996, c. 55 and section 1 of the Court Order Interest Act, R.S.B.C. 1996, c.79. Counsel for ICBC and the four drivers involved in the accident with Lopatka took the position that the Arbitration was closed. The Arbitrator released a subsequent award at which time he concluded that even if he was functus officio generally, he was still able to pronounce on the matter of pre-award/judgment interest. The Arbitrator referred to sections 28 and 29 of the Commercial Arbitration Act which provided that a sum directed to be paid as an award under the Act is a “pecuniary judgment of the court”. The Arbitrator also referred to the language of section 1 of the Court Order Interest Act which provided that a court “must add to a pecuniary judgment an amount of interest calculated on the amount…”. This fourth award was issued on October 17, 2001. ICBC and the four Respondent motorists sought leave to appeal the Arbitrator’s decision pursuant to section 31 of the Commercial Arbitration Act, R.S.B.C. 1996, c. 55.

Brooke J. reviewed the decision of the British Columbia Court of Appeal in Student Association of the British Columbia Institution of Technology ats. British Columbia Institute of Technology (2000), 80 B.C.L.R. (3d) 266 where the court found following three requirements for a leave application under section 31(2)(a) of the Commercial Arbitration Act:

  1. the importance of the result of the arbitration to the parties justifies the intervention of the court;
  2. the determination of the point of law may prevent a miscarriage of justice; and
  3. granting leave is an appropriate exercise of judicial discretion.

In this case, the court was satisfied that the importance of the result of the arbitration was sufficient to justify the intervention of the court as it was in excess of $100,000.00. The court was also satisfied that the issue as to whether the Arbitrator was functus was a question of law and that if it had been decided differently, it would have led the Arbitrator to a different result. The court stated that the core issue was whether granting leave was an appropriate exercise of judicial discretion. The court noted that arbitration is an alternative to litigation and that were leave to appeal to be readily granted, the important principle of finality would be diluted. In this case, the court held that the Arbitrator had carefully considered the question of whether he was functus and that this review was appropriate. The court also agreed with the Arbitrator that the award of pre-judgment was mandated not only by statute but by the Arbitrator’s terms of reference to determine financial compensation. In the result, the court held that it was not satisfied that the merits of the appeal had sufficient substance to warrant granting leave and the application for leave to appeal was dismissed.

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