Clarke et al. v. Bean et al., 2009 ABQB 755

• Judge: Wachowich, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: November 03, 2009
• Citations: 2009 ABQB 755;(2009), 486 A.R. 81 (QB)

Clarke v. Bean (2009), 486 A.R. 81 (QB)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. JA.014

Rob Clarke and Clarke Insurance Services Inc. (applicants) v. Al Bean and 694327 Alberta Ltd. (respondents)

(0810 00489; 2009 ABQB 755)

Indexed As: Clarke et al. v. Bean et al.

Alberta Court of Queen's Bench

Judicial District of Red Deer

Wachowich, J.

December 21, 2009.

Summary:

Clarke and Clarke Insurance Services Inc. (the applicants) and Bean and 694327 Alberta Ltd. (the respondents) maintained a business association under a Unit Owners Agreement (the agreement) since February 1, 2006. The agreement designated Phoenix Group Management Corp. as the provider of certain management services to the parties, which included maintaining the applicants' insurance policies and client information, and determining the parties' respective revenue and expense entitlements. On March 12, 2008, the applicants received notice of the respondents' intention to terminate the parties' association under the agreement. Following a series of arbitration sessions, the Arbitrator issued a report addressing a variety of issues including the distribution of income and expenses between the parties for the fiscal period July 1, 2008 to December 31, 2008. The applicants brought a special chambers application for the following orders: (a) to vary the amount of the legislated interest to reflect at a minimum the bank rate for the period of the applicants' loan and to award judgment interest in that amount; (b) for costs of the proceeding in accordance with an attached proposed bill of costs, which included costs for Clarke's attendance at the arbitration meetings; (c) for a trial of the issue of whether Phoenix Companies was entitled to issue certain charges against the applicants; and (d) for a trial of the issue of whether Bean breached the Buy-Sell Agreement with the applicants. The respondents brought a cross-application for an order setting aside part of the award on the grounds that the respondents were not afforded the opportunity to present a case or to respond to the other party's case, contrary to ss. 19 and 45(1)(f) of the Arbitration Act.

The Alberta Court of Queen's Bench determined the issues.

Arbitration - Topic 5704

The award - Interest - Pre-award interest - Clarke and Clarke Insurance Services Inc. (the applicants) and Bean and 694327 Alberta Ltd. (the respondents) maintained a business association under a Unit Owners Agreement (the agreement) - On March 12, 2008, the applicants received notice of the respondents' intention to terminate the parties' association under the agreement - Following a series of arbitration sessions, the Arbitrator issued a report addressing a variety of issues including the distribution of income and expenses between the parties for the fiscal period July 1, 2008 to December 31, 2008 - The applicants brought a special chambers application to, inter alia, vary the amount of the legislated interest to reflect at a minimum the bank rate for the period of the applicants' loan and to award judgment interest in that amount - The Alberta Court of Queen's Bench held that considering how the applicants had attempted to obtain payment from the respondents since the termination of the agreement in May 2008, and the fact that the arbitration evolved into a lengthy process, the court was inclined to grant the applicants' application to vary the interest to reflect the bank interest rate - However, the applicants also sought interest for the legal costs incurred - Having determined that this was a case where each party was responsible for its own legal expenses in relation to the arbitration process, granting interest for the legal costs was not warranted under the circumstances - See paragraphs 19 to 24.

Arbitration - Topic 6221

Practice - Costs - General - Clarke and Clarke Insurance Services Inc. (the applicants) and Bean and 694327 Alberta Ltd. (the respondents) maintained a business association under a Unit Owners Agreement (the agreement) - On March 12, 2008, the applicants received notice of the respondents' intention to terminate the parties' association under the agreement - Following a series of arbitration sessions, the Arbitrator issued a report addressing a variety of issues including the distribution of income and expenses between the parties for the fiscal period July 1, 2008 to December 31, 2008 - The applicants brought a special chambers application for, inter alia, costs of the proceeding in accordance with an attached proposed bill of costs, which included costs for Clarke's attendance at the arbitration meetings - The applicants submitted that they were entitled to (1) costs for the interlocutory motions which were required to bring the disputes to a final resolution and (2) party-party costs for attendance with counsel for examinations on affidavit on several dates and for the attendances at the arbitration meetings where Clarke was self-represented - The Alberta Court of Queen's Bench held that considering the efforts made and actions taken by the applicants in order to bring the disputes to a final resolution and the fact that delays incurred due to the respondents' inaction or lack of cooperation on most occasions, the applicants' costs for the interlocutory motions should be granted - However, in view of Clarke's examinations on affidavit and participation in the arbitration process, his attendance could be equated to ordinary attendance at court in a proceeding - The applicants were not entitled to party-party costs for attendance for examinations on affidavit and attendances at the arbitration meetings where Clarke was self-represented - See paragraphs 7 to 18.

Arbitration - Topic 8409

Judicial review (incl. appeals) - Grounds - Misconduct - Failure to hear parties - Clarke and Clarke Insurance Services Inc. (the applicants) and Bean and 694327 Alberta Ltd. (the respondents) maintained a business association under a Unit Owners Agreement (the agreement) - On March 12, 2008, the applicants received notice of the respondents' intention to terminate the parties' association under the agreement - Following a series of arbitration sessions, the Arbitrator issued a report addressing a variety of issues including the distribution of income and expenses between the parties for the fiscal period July 1, 2008 to December 31, 2008 - The respondents brought a cross-application for an order setting aside part of the award on the grounds that the respondents were not afforded the opportunity to present a case or to respond to the other party's case, contrary to ss. 19 and 45(1)(f) of the Arbitration Act - The Alberta Court of Queen's Bench dismissed the counter-application - The rules of natural justice applied to arbitration - Having reviewed the Arbitrator's reports, it was clear that the steps taken by the Arbitrator during the arbitration were both meticulous and transparent - Moreover, s. 20(1) of the Arbitration Act stated that an arbitrator "may determine the procedure to be followed in the arbitration," and s. 21(1) states that an arbitrator "is not bound by the rules of evidence or any other law applicable to judicial proceedings and has power to determine the admissibility, relevance and weight of any evidence." - The Act indicated that it was within the Arbitrator's power to admit and weigh evidence, as well as determine the procedure to be followed in the arbitration - Deference should be accorded to the Arbitrator's decision and choice of procedure - In the absence of finding evidence of manifestly unfair and unequal treatment to either party as a result of the arbitration procedure, the Arbitrator's finding should not be disturbed - See paragraphs 30 to 35.

Arbitration - Topic 8417

Judicial review (incl. appeals) - Grounds - Misconduct - Breach of rules of natural justice - [See Arbitration - Topic 8409 ].

Practice - Topic 5209

Trials - General - Trial of issues directed by court - Clarke and Clarke Insurance Services Inc. (the applicants) and Bean and 694327 Alberta Ltd. (the respondents), maintained a business association under a Unit Owners Agreement (the agreement) - The agreement designated Phoenix Group Management Corp. as the provider of certain management services to the parties, which included maintaining the applicants' insurance policies and client information, and determining the parties' respective revenue and expense entitlements - On March 12, 2008, the applicants received notice of the respondents' intention to terminate the parties' association under the agreement - Following a series of arbitration sessions, the Arbitrator issued a report addressing a variety of issues including the distribution of income and expenses between the parties for the fiscal period July 1, 2008 to December 31, 2008 - The applicants brought a special chambers application for, inter alia, trial of the issues of whether Phoenix was entitled to issue certain charges against the applicants and whether Bean breached the Buy-Sell Agreement with the applicants - The Alberta Court of Queen's Bench referred these issues to trial - While court intervention under s. 6 of the Arbitration Act was limited, several factors indicated that the issues raised should not be barred from proceeding to trial - Upon review of the Arbitrator's final report, while the charges and fees of Phoenix had been factored into the decision of the Arbitrator (the final amount owed by the respondents to the applicants), it was not evident that the Arbitrator had ruled on the appropriateness and the allocation of the costs associated with the services provided by Phoenix - On the issue of the Buy-Sell Agreement, the issue was a matter that the Arbitrator specifically declined to address in his decision - As it was difficult to find an intention on the Arbitrator's part to rule on the issues based on his final decision, neither issue should be barred from proceeding to trial - See paragraphs 25 to 29.

Practice - Topic 7050

Costs - Party and party costs - Entitlement to - Successful party not represented by counsel - [See Arbitration - Topic 6221 ].

Cases Noticed:

Dechant v. Law Society of Alberta (2001), 277 A.R. 333; 242 W.A.C. 333; 2001 ABCA 81, refd to. [para. 7].

Collins v. Collins (1999), 256 A.R. 311 (Q.B.), refd to. [para. 7].

V.A.H. v. Lynch et al. (2001), 277 A.R. 104; 242 W.A.C. 104; 2001 ABCA 37, refd to. [para. 7].

Babcock & Wilcox Canada Ltd. v. Agrium Inc. (2005), 363 A.R. 103; 343 W.A.C. 103; 2005 ABCA 82, refd to. [para. 8].

Weber v. Ontario Hydro, [1995] 2 S.C.R. 929; 183 N.R. 241; 82 O.A.C. 321, refd to. [para. 8].

Rubin's Realty Ltd. v. Stardust Enterprises Ltd. (1991), 116 N.B.R.(2d) 234; 293 A.P.R. 234 (T.D.), refd to. [para. 8].

Collavino Inc. v. Tihama Development Authority (TDA) an Organ of the Republic of Yemen (2007), 444 A.R. 1; 2007 ABQB 497, refd to. [para. 9].

R. v. Caron (G.) (2009), 446 A.R. 362; 442 W.A.C. 362; 2009 ABCA 34, refd to. [para. 10].

232 Kennedy Street Ltd. v. King Insurance Brokers (2002) Ltd. et al. (2009), 236 Man.R.(2d) 147; 448 W.A.C. 147; 2009 MBCA 22, refd to. [para. 12].

Usenik v. Sidorowicz et al., [2009] O.T.C. Uned. 842; 2009 CarswellOnt 1874 (Sup. Ct.), refd to. [para. 13].

Caron v. Dennis (2005), 290 N.B.R.(2d) 177; 755 A.P.R. 177; 2005 NBQB 392 (Fam. Div.), refd to. [para. 21].

LeClerc v. Sunbury Transport Ltd. and Risteen (1996), 184 N.B.R.(2d) 1; 469 A.P.R. 1 (C.A.), refd to. [para. 21].

Driscoll v. Coseka Resources Ltd. (1992), 130 A.R. 378; 4 Alta. L.R.(3d) 106 (Q.B.), refd to. [para. 22].

Royal Bank of Canada v. Got (W.) Associates Electric Ltd. et al. (1994), 154 A.R. 277; 18 Alta. L.R.(3d) 140 (Q.B.), refd to. [para. 22].

Aetna Insurance Co. et al. v. Canadian Surety Co. et al. (1994), 157 A.R. 162; 77 W.A.C. 162; 23 Alta. L.R.(3d) 182 (C.A.), refd to. [para. 22].

Shah v. Alberta (1998), 225 A.R. 79; 1998 ABQB 444, refd to. [para. 22].

Alberta v. Nilsson (2002), 320 A.R. 88; 288 W.A.C. 88; 2002 ABCA 283, refd to. [para. 22].

O'Keefe v. Overacker et al. (2002), 326 A.R. 201; 2002 ABPC 149, refd to. [para. 22].

Meek (James H.) Trust et al. v. San Juan Resources Inc. et al. (2005), 376 A.R. 202; 360 W.A.C. 202; 2005 ABCA 448, refd to. [para. 22].

Flock v. Flock (2007), 418 A.R. 350; 2007 ABQB 307, refd to. [para. 31].

Counsel:

Shelley L. Miller, Q.C. (Fraser Milner Casgrain), for the applicants;

Gary W. Wanless (Chapman Riebeek LLP), for the respondents;

Walter Braul, Q.C. (Braul McEvoy & Gee), for Phoenix Group Management.

This special chambers application and cross-application were heard on November 3, 2009, by Wachowich, J., of the Alberta Court of Queen's Bench, Judicial District of Red Deer, who delivered the following reasons for judgment on December 21, 2009.