Administrative law – Arbitration and award – Arbitrators – Judicial review – Bias
Idowu v. York Condominium Corp. No. 128,  O.J. No. 2102, Ontario Superior Court of Justice, May 21, 2002m Nordheimer J.
Idowu owned three units in York Condominium. An issue arose as to whether Idowu was using these units as “rooming houses” contrary to the terms of the declaration for the condominium. York Condominium was represented by the law firm of Miller Thomson. By letter dated November 20, 2001, Miller Thomson wrote to Idowu, who was unrepresented, advising that the parties were required, under the Condominium Act, 1998, S.O. 1998, c. 19, to mediate and/or arbitrate their dispute prior to any application to the court to resolve this dispute. Attached to this letter was a brochure for a company called “The Condominium Dispute Resolution Centre” (“CDRC”). The parties ultimately agreed on Stephen Morrison, a lawyer with Blake Cassels, to act as arbitrator. Subsequent to the arbitration award, Idowu discovered that CDRC had been created by two lawyers at Miller Thomson both of whom were directors of CDRC. Idowu brought an application to the court pursuant to section 46(1).8 of the Arbitration Act, 1991, S.O. 1991, c. 17 to set aside the arbitration award on the ground of reasonable apprehension of bias. Idowu filed an affidavit stating that had he been aware of the connection between Miller Thomson and the company who was providing the arbitrator, he would never have agreed to the selection of one of the CDRC’s arbitrators as the arbitrators for this matter.
The court reviewed the decision in Szilard v. Szasz,  1 D.L.R. 370 (S.C.C.), where an arbitration award had been set aside after one of the parties had subsequently discovered that the wife of the other party and the wife of the arbitrator were joint tenants of a large property that they held as an investment. The Supreme Court of Canada had held that this relationship was sufficient to disqualify the arbitrator on the grounds of a reasonable apprehension of bias.
In this case, the court held that the failure of the solicitor at Miller Thomson to disclose a connection between CDRC and Miller Thomson was fatal to the selection of Mr. Morrison as the arbitrator, especially where Idowu was unrepresented. The court noted that it was reasonable to be concerned about the impartiality of an arbitrator being provided by a company which other solicitors at Miller Thomson were instrumental in establishing and, at least one of whom, had a continuing financial interest.
In the result, the court set aside the arbitration award and ordered that the parties resubmit their dispute to mediation or arbitration as required by the Condominium Act, 1998.
To stay current with the new case law and emerging legal issues in this area, subscribe here.