Administrative law – Judicial review – Decisions reviewed – Arbitration and award – Arbitrators – Right to award costs – Standard of review – Reasonableness simpliciter
Blackmore v. Strata Plan VR-274,  B.C.J. No. 1719, British Columbia Supreme Court, August 20, 2004, Goepel J.
An arbitrator appointed under the British Columbia Strata Property Act, S.B.C. 1998, c. 43 held that the Petitioners had breached the strata council bylaws by feeding birds on a balcony and by improperly modifying interior plumbing. The arbitrator awarded costs to the strata corporation in the amount of $142,000, $41,000 being the amount of the arbitrator’s fees and the remaining $101,000 representing 75% of the actual legal fees incurred by the strata corporation in the course of the arbitration and the related court proceedings.
The Petitioners appealed the arbitrator’s cost award on a question of law. They also sought to set aside the arbitrator’s decisions on liability and costs pursuant to the Judicial Review Procedure Act, R.S.B.C. 1996, c.241.
With respect to the findings of liability, the court held that the standard of review of the arbitrator’s decision was one of reasonableness. The court held that the arbitrator’s findings in this regard were not clearly wrong and therefore could not be disturbed.
With respect to the award of costs, the court held that the absence of a definition of costs in the governing legislation did not give the arbitrator an unfettered discretion in determining the costs. When the provisions regarding costs in the constituent legislation do not indicate otherwise, the provisions of the BC Supreme Court Rules will govern a tribunal’s award of costs. Thus, the court held that the only costs that the arbitrator was entitled to award were party-and-party costs or special costs and it was an error of law for the arbitrator to base his award of costs on the actual legal costs incurred. Further, the costs awarded in relation to the court applications brought subsequent to the commencement of the arbitration were in error as the costs of such applications were in the sole jurisdiction of the court before which the matters were heard. The arbitrator also erred in basing his award on costs on the bylaws of the strata corporation.
In the result, the court set aside the arbitrator’s award on costs and held that costs should be assessed as party-and-party costs, noting that the conduct of the Petitioners was not sufficiently reprehensible to justify an award of special costs.
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