Fuhr Estate v. Husky Oil Marketing Co., 2010 ABQB 495

• Judge: Manderscheid, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 12, 2010
• Citations: 2010 ABQB 495;(2010), 496 A.R. 232 (QB)

Fuhr Estate v. Husky Oil Marketing Co. (2010), 496 A.R. 232 (QB)

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. AU.013

Sylvia E. Fuhr (Executrix of the Will of George H. Fuhr - deceased)

(applicant) v. Husky Oil Marketing Company, a Division of Husky Oil Limited (respondent)

(0903 18552; 2010 ABQB 495)

Indexed As: Fuhr Estate v. Husky Oil Marketing Co.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Manderscheid, J.

August 3, 2010.

Summary:

Husky Oil leased property from Fuhr. The leased property, operated for many years as a gas station, was contaminated with gasoline. When the lease was terminated, Husky remediated all the land except for the area immediately beneath an old building on the site. Fuhr insisted that the building be retained, while Husky refused to incur the significant increased costs of remediating under the building, arguing that it would be more reasonable to tear the building down and then remediate. The matter went to arbitration. The arbitrator held that Husky Oil breached the agreement between the parties to remediate the property on termination of the lease, but awarded damages rather than the specific performance remedy sought by Fuhr. The arbitration agreement did not provide for an appeal; therefore, Fuhr sought leave to appeal under s. 44 of the Arbitration Act.

The Alberta Court of Queen's Bench dismissed the application for leave to appeal. While most of the questions raised by Fuhr in the pleadings and submissions did not raise a question of law, the court found that there were two questions of law raised relating to how the arbitrator dealt with the issues of specific performance and mitigation. Those issues were of great importance to Fuhr and could significantly affect her rights; therefore, the test for leave to appeal under s. 44(2) was met. However, the court held that any appeal on the questions of law raised by Fuhr was barred by s. 44(3) of the Act, because these were questions of law that the parties expressly referred to the arbitral tribunal for decision. The court opined, however, that even if leave to appeal had been granted, the arbitrator committed no error of law in her statement of the tests for specific performance and mitigation. Nor did the arbitrator consider matters beyond the scope of the arbitration.

Arbitration - Topic 7917

Judicial review (incl. appeals) - Jurisdiction of the courts - Power to amend award (incl. remedy) - [See first and second Arbitration - Topic 8701 ].

Arbitration - Topic 8701

Judicial review (incl. appeals) - Practice - Appeals - Leave to appeal or right to appeal - Section 44 of the Arbitration Act provided for appeals from arbitration awards in limited circumstances - Section 44(2) provided that where an arbitration agreement did not provide for an appeal, leave to appeal was required - Section 49(7) provided that if an award granted a remedy that the court did not have jurisdiction to grant or would not grant in a similar proceeding, the court could grant a different remedy, or if the award was made in Alberta, remit the matter to the arbitral tribunal to consider a different remedy - An issue arose as to whether s. 49(7) provided a route whereby a party could appeal a remedy without seeking leave to appeal under s. 44 - The Alberta Court of Queen's Bench interpreted these provisions, holding that s. 49(7) could not be used to circumvent s. 44 - The court stated that s. 49(7) was limited to situations where there either was no jurisdiction to grant the remedy (e.g., a Quebec civil code remedy) or a remedy that was contrary to Alberta public policy - In such situations, the court could grant an order, as close as possible within the Alberta legal framework, that would give effect to the arbitral award - See paragraphs 22 to 57.

Arbitration - Topic 8701

Judicial review (incl. appeals) - Practice - Appeals - Leave to appeal or right to appeal - Husky Oil leased property from Fuhr which was operated for many years as a gas station - The property was contaminated with gasoline - The lease was terminated - As per the lease, Husky remediated all the land, but refused to remediate the area immediately beneath an old building which Fuhr insisted be retained - Husky claimed it was more reasonable to remove the building and remediate the land thereafter - The matter went to arbitration - The arbitrator held that Husky Oil breached the remediation agreement, but awarded damages rather than the specific performance remedy sought by Fuhr - Fuhr appealed, arguing that she did not require leave under s. 44 of the Arbitration Act because s. 49(7) of the Act permitted her to ask the court to grant a different remedy than that granted by the arbitrator - Husky Oil argued that this was, in effect, an attempt to appeal the award by using the enforcement provisions of the Act, instead of applying for leave to appeal under s. 44 of the Act - The Alberta Court of Queen's Bench held that Fuhr could not seek to replace the remedy awarded with a different remedy under s. 49(7), and her application had to be resolved under ss. 44 and 45 of the Act - See paragraphs 22 to 57.

Arbitration - Topic 8701

Judicial review (incl. appeals) - Practice - Appeals - Leave to appeal or right to appeal - Section 44(2) of the Arbitration Act provided that if an arbitration agreement did not provide for an appeal, a party could appeal to the court on a question of law with leave, however leave could only be granted if the court was satisfied that "(a) the importance to the parties of the matters at stake in the arbitration justifies an appeal, and (b) determination of the question of law at issue will significantly affect the rights of the parties" - The Alberta Court of Queen's Bench noted that the preponderance of the Alberta case law held that there had to be an element of public interest in order for leave to be granted - However, the court, in the case at bar, declined to find that ss. 42(a) and (b) required that a public interest be at issue - See paragraphs 91 to 104.

Arbitration - Topic 8701

Judicial review (incl. appeals) - Practice - Appeals - Leave to appeal or right to appeal - Sections 44(1) and (2) of the Arbitration Act provided for appeals from an arbitration award in limited circumstances - Section 44(3) provided that "Notwithstanding subsections (1) and (2), a party may not appeal an award to the court on a question of law that the parties expressly referred to the arbitral tribunal for decision" - The Alberta Court of Queen's Bench interpreted s. 44(3) - The court stated that "if the matter expressly referred to the Arbitrator necessarily includes the question subject to appeal, then it is a question of law that was expressly referred to the Arbitrator. This is in keeping with the Act's purpose of limiting judicial intervention where the parties have indicated their intention to use an alternative dispute mechanism" - See paragraphs 105 to 111.

Arbitration - Topic 8701

Judicial review (incl. appeals) - Practice - Appeals - Leave to appeal or right to appeal - Husky Oil leased property from Fuhr for a gas station - The property was contaminated with gasoline - The lease was terminated - As per the lease, Husky remediated all the land except for the area immediately beneath an old building on the site - A dispute arose regarding remediation under the building - An arbitrator determined that Husky Oil breached the remediation agreement, but awarded damages rather than the specific performance remedy sought by Fuhr - Fuhr sought leave to appeal under s. 44(2) of the Arbitration Act - The Alberta Court of Queen's Bench dismissed the application - While most of the questions raised by Fuhr in the pleadings and submissions did not raise a question of law, there were two questions of law raised relating to how the arbitrator dealt with specific performance and mitigation - Those issues were of great importance to Fuhr and could significantly affect her rights; therefore, the test for leave to appeal under s. 44(2) was met (ss. 44(2)(a) and (b) did not require that a public interest be at stake) - However, the court held that any appeal on the questions of law raised by Fuhr was barred by s. 44(3) of the Act because these were questions of law that the parties expressly referred to the arbitral tribunal for decision - See paragraphs 58 to 113.

Arbitration - Topic 8701

Judicial review (incl. appeals) - Practice - Appeals - Leave to appeal or right to appeal - Husky Oil leased property from Fuhr for a gas station - The property was contaminated with gasoline - The lease was terminated - As per the lease, Husky remediated all the land except for the area immediately beneath an old building on the site, which Fuhr insisted on keeping - Husky wanted to demolish the building - The dispute went to arbitration - An arbitrator determined that Husky Oil breached the remediation agreement, but awarded damages rather than the specific performance remedy sought by Fuhr - Fuhr sought leave to appeal under s. 44(2) of the Arbitration Act - The Alberta Court of Queen's Bench dismissed the application - The court opined, however, that even if leave to appeal had been granted, the arbitrator committed no error of law in her statement of the tests for specific performance or mitigation - Nor did the arbitrator consider matters beyond the scope of the arbitration - See paragraphs 114 to 144.

Damages - Topic 1002

Mitigation - Duty to mitigate - The Alberta Court of Queen's Bench discussed the duty to mitigate - See paragraphs 131 to 138.

Damages - Topic 1002

Mitigation - Duty to mitigate - [See sixth Arbitration - Topic 8701 ].

Specific Performance - Topic 506

When available - Contractual obligations - The Alberta Court of Queen's Bench reviewed when specific performance was available to enforce contractual obligations - See paragraphs 115 to 121.

Specific Performance - Topic 506

When available - Contractual obligations - [See sixth Arbitration - Topic 8701 ].

Statutes - Topic 1845

Interpretation - Intrinsic aids - Titles, headings and section numbers - Headings and marginal notes - The Alberta Court of Queen's Bench referred to the headings in the Arbitration Act as an aid to statutory interpretation - See paragraphs 38 to 42.

Statutes - Topic 2601

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - General principles - The Alberta Court of Queen's Bench used the modern approach to statutory interpretation in interpreting the Arbitration Act - See paragraphs 36 to 42.

Statutes - Topic 2617

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Harmonization of statutes (incl. presumption of coherence) - The Alberta Court of Queen's Bench referred to the presumption of coherence in interpreting the Arbitration Act - See paragraph 37.

Cases Noticed:

Universal Workers Union, Labourers' International Union of North America, Local 183 v. Ferreira et al. (2009), 249 O.A.C. 181; 2009 ONCA 155, refd to. [para. 34].

National Ballet of Canada v. Glasco et al., [2000] O.T.C. 419; 49 O.R.(3d) 230 (Sup. Ct.), refd to. [para. 35].

9083-4185 Québec Inc. (Bankrupt), Re, [2009] 3 S.C.R. 286; 394 N.R. 368; 2009 SCC 49, refd to. [para. 36].

Quebec (Revenue) v. Caisse populaire Desjardins de Montmagny - see 9083-4185 Québec Inc. (Bankrupt), Re.

Ludco Enterprises Ltd. et al. v. Ministre du Revenu national, [2001] 2 S.C.R. 1082; 275 N.R. 90; 2001 SCC 62, refd to. [para. 36].

A.D. v. Director of Child Welfare (Alta.) et al., [2010] A.R. Uned. 28; 2010 ABCA 83, refd to. [para. 37].

Skapinker v. Law Society of Upper Canada, [1984] 1 S.C.R. 357; 53 N.R. 169; 3 O.A.C. 321, refd to. [para. 40].

R. v. Davis (G.N.), [1999] 3 S.C.R. 759; 248 N.R. 44; 182 Nfld. & P.E.I.R. 78; 554 A.P.R. 78, refd to. [para. 41].

Subway Franchise Systems of Canada Ltd. v. Esmail et al. (2005), 380 A.R. 274; 363 W.A.C. 274; 2005 ABCA 350, refd to. [para. 45].

Babcock & Wilcox Canada Ltd. v. Agrium Inc. (2005), 363 A.R. 103; 343 W.A.C. 103; 2005 ABCA 82, refd to. [para. 49].

McCulloch v. Peat Marwick Thorne Inc. et al. (1991), 124 A.R. 267 (Q.B.), refd to. [para. 50].

Warren v. Alberta Lawyers' Public Protection Association (1997), 208 A.R. 149 (Q.B.), refd to. [para. 51].

Heredity Homes (St. Albert) Ltd. v. Scanga (2009), 471 A.R. 361; 2009 ABQB 237, refd to. [para. 59].

Workers' Compensation Board (Alta.) v. Workers' Compensation Board Appeals Commission (Alta.) (2005), 371 A.R. 318; 354 W.A.C. 318; 2005 ABCA 276, refd to. [para. 60].

Metcalfe v. Metcalfe (2006), 407 A.R. 103; 2006 ABQB 798, refd to. [para. 61].

Darmac Credit Corp. et al. v. Great Western Containers Inc. (1994), 163 A.R. 10 (Q.B.), refd to. [para. 67].

Janiak v. Ippolito, [1985] 1 S.C.R. 146; 57 N.R. 241; 9 O.A.C. 1, refd to. [paras. 67, 131].

Michaels et al. v. Red Deer College, [1976] 2 S.C.R. 324; 5 N.R. 99, refd to. [para. 67].

Costello and Dickhoff v. Calgary (City) (1997), 209 A.R. 1; 160 W.A.C. 1; 53 Alta. L.R.(3d) 15 (C.A.), refd to. [para. 67].

Buczynski v. McDonald (1971), 1 S.A.S.R. 569 (Aust. S.C.), refd to. [para. 67].

Canadian Western Natural Gas Co. v. Pathfinder Surveys Ltd. (1980), 21 A.R. 159; 12 Alta. L.R.(2d) 135 (C.A.), refd to. [para. 67].

Baud Corp., N.V. v. Brook, [1979] 1 S.C.R. 633; 23 N.R. 181; 12 A.R. 271, refd to. [para. 69].

Asamera Oil Corp. v. Sea Oil and General Corp. - see Baud Corp., N.V. v. Brook.

Pachanga Energy Inc. v. Mobile Investments Canada Inc. (1993), 138 A.R. 309 (Q.B.), refd to. [para. 76].

West-Man Culvert & Metal Co. v. Provincial Municipal Assessor (Man.), [1992] 5 W.W.R. 56; 81 Man.R.(2d) 112; 30 W.A.C. 112 (C.A.), refd to. [para. 76].

AWS Engineers and Planners Corp. v. Deep River (Town), [2005] O.T.C. 15; 249 D.L.R.(4th) 478 (Sup. Ct.), refd to. [para. 77].

Co-operators General Insurance Co. v. Great Pacific Industries Inc. (1998), 213 A.R. 229; 1998 ABQB 137, refd to. [para. 94].

Schultz v. Schultz (2000), 282 A.R. 59; 2000 ABQB 866, refd to. [para. 94].

Oakford v. Telemark Inc., [2001] A.J. No. 853 (Q.B.), refd to. [para. 94].

Sherwin-Williams Co. v. Walls Alive (Edmonton) Ltd. (2002), 331 A.R. 317; 2002 ABQB 999, refd to. [para. 94].

Lion's Gate Homes Ltd. v. Shand, [2008] A.R. Uned. 150; 2008 ABQB 15, refd to. [para. 94].

Venneman et al. v. Mountain View No. 17 (County), [2009] A.R. Uned. 661; 2009 ABQB 540, refd to. [para. 94].

Altarose Construction Ltd. v. Kornichuk (1997), 201 A.R. 258 (Q.B.), refd to. [para. 96].

Willick v. Willick (1994), 158 A.R. 52 (Q.B.), refd to. [para. 105].

Seneviratne v. Seneviratne (1998), 222 A.R. 65; 1998 ABQB 289, refd to. [para. 106].

Semelhago v. Paramadevan, [1996] 2 S.C.R. 415; 197 N.R. 379; 91 O.A.C. 379, refd to. [para. 117].

1244034 Alberta Ltd. v. Walton International Group Inc. et al. (2007), 422 A.R. 189; 415 W.A.C. 189; 2007 ABCA 372, refd to. [para. 118].

Jeune v. Queen's Cross Properties Ltd., [1974] 1 Ch. 97, refd to. [para. 120].

Westwood Plateau Partnership v. WSP Construction Ltd. et al., [1997] B.C.T.C. Uned. 780 (S.C.), refd to. [para. 120].

Wilson v. Northhampton and Banbury Junction Railway Co. (1874), L.R. 9 Ch. App. 279, refd to. [para. 121].

British Westinghouse and Manufacturing Co. v. Underground Electric Railways Co. of London, [1912] A.C. 673 (H.L.), refd to. [para. 131].

Barran v. Assef (1990), 105 A.R. 50 (Q.B.), affd. (1991), 117 A.R. 364; 2 W.A.C. 364; 83 Alta. L.R.(2d) 88 (C.A.), refd to. [para. 132].

Russel v. Wispinski (1987), 13 B.C.L.R.(2d) 196 (S.C.), refd to. [para. 132].

Grouse Mechanical Co. v. Griffith (1990), 14 R.P.R.(2d) 233 (B.C.S.C.), refd to. [para. 132].

Darbishire v. Warran, [1963] 1 W.L.R. 1067 (C.A.), refd to. [para. 135].

886496 Ontario Inc. et al. v. YCI Holdings Inc. et al., [2001] O.A.C. Uned. 175 (C.A.), refd to. [para. 135, footnote 2].

Canson Enterprises Ltd. et al. v. Boughton & Co. et al., [1991] 3 S.C.R. 534; 131 N.R. 321; 6 B.C.A.C. 1; 13 W.A.C. 1, refd to. [para. 135, footnote 2].

Manufacturers Life Insurance Co. et al. v. Granada Investments Ltd. et al. (2001), 150 O.A.C. 253 (C.A.), refd to. [para. 135, footnote 2].

Dewees v. Morrow, [1932] 2 D.L.R. 800; 45 B.C.R. 154 (C.A.), refd to. [para. 136].

Talon v. Whalley (1988), 25 O.A.C. 230; 63 O.R.(2d) 723 (C.A.), refd to. [para. 136].

Lengert v. Gladstone (1970), 11 D.L.R.(3d) 726 (B.C.C.A.), refd to. [para. 136].

Shulhan v. Peterson, Howell and Heather (Canada) Ltd. et al. (1966), 57 W.W.R.(N.S.) 46 (Sask. C.A.), refd to. [para. 136].

Dushynski v. Rumsey (2003), 327 A.R. 373; 296 W.A.C. 373; 2003 ABCA 164, refd to. [para. 138].

Statutes Noticed:

Arbitration Act, R.S.A. 2000, c. A-43.1, sect. 44, sect. 44(2) [para. 21, Appendix C]; sect. 42(a), sect. 42(b) [para. 91, Appendix C]; sect. 44(3) [para. 105, Appendix C]; sect. 49(7) [para. 21, Appendix C].

Authors and Works Noticed:

Alberta, Institute of Law Research and Reform, Towards a New Arbitration Act for Alberta (1987), by William H. Hurlburt, p. 5 [para. 50].

Cassels, Jamie, Remedies: The Law of Damages (2000), paras. 172, 173 [para. 135, footnote 2].

Halsbury's Laws of England (3rd Ed.), vol. 2, pp. 282, 289 [para. 67].

Hurlburt, William H., Case Comment on Willick v. Willick: Appeals from Awards under the Arbitration Act (1994), 33 Alta. L. Rev. 178, generally [para. 105].

Hurlburt, William H. - see Alberta, Institute of Law Research and Reform, Towards a New Arbitration Act for Alberta (1987).

Sullivan, Ruth, Sullivan and Driedger on the Construction of Statutes (4th Ed. 2002), generally [para. 37].

Counsel:

Richard DeFilippi (Boughton Law Corporation), for the claimant;

David Tupper (Blake Cassels & Graydon LLP), for the respondent.

This application was heard on February 12, 2010, before Manderscheid, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following memorandum of decision on August 3, 2010.