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ARBITRATION - Appeals

Wednesday, October 02, 2019 @ 6:13 AM  


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Appeal by Greata Ranch Holding Corp. (“Greata”) from the dismissal of its application for leave to appeal a question of law arising from an arbitration award. Appeal by Concord from the denial of its application for leave to appeal the award on the question of whether the arbitrator erred by ignoring the phrase “at the Interest Rate”. The arbitration between the parties addressed competing claims under contracts to develop a vineyard for residential and commercial use. The project was structured as a Limited Partnership between the landowner, Greata, and the developer, Concord. Although the project management agreement required the Partnership to develop a budget, no budget was ever adopted. The arbitrator made a declaration dissolving the partnership, found the project manager was entitled to $6,211,539 in project costs, and determined Concord’s loan was not a demand loan but rather created an interest to be accounted for when the assets of the partnership were liquidated, placing Concord behind other creditors in priority. The chambers judge denied the appellant leave to appeal the question of whether the arbitrator erred in law by ignoring the phrase “in accordance with and proportionate to the schedule of payments of fees and costs set out in the Budget”. Concord was granted leave to appeal on the question of whether the arbitrator erred in law by ignoring relevant provisions of the Partnership Act.

HELD: Appeal by Greata dismissed; appeal by Concord allowed. The chambers judge’s decision on whether a question of law had been identified on the leave applications was a question of law alone that attracted the correctness standard of review. The arbitrator did not ignore the phrase Greata identified but interpreted that phrase in light of the parties’ conduct by proceeding without adopting a budget that had such a schedule. The arbitrator did not consider potentially relevant sections of the Partnership Act. The pleadings did not show Concord ought to have identified those provisions at the arbitration as Concord had not anticipated the arbitrator would address post-dissolution asset distribution. The question of whether the arbitrator erred by failing to give any effect to the words “at the Interest Rate” despite acknowledging their applicability raised a potential extricable error of law.

Greata Ranch Holding Corp. v. Concord Okanagan Developments Ltd., [2019] B.C.J. No. 1575, British Columbia Court of Appeal, P.M. Willcock, G.J. Fitch and P. Abrioux JJ.A., August 22, 2019. TLD-September302019009