Supreme Court


Alternative Dispute Resolution

Question of law

Leave to appeal under arbitration legislation ought not to have been granted

Parties entered agreement by which petitioner, U Inc., leased fibre optic strands to BNS. By letter, BNS sought to exercise renewal option and requested that petitioner waive six months’ notice requirement. BNS did not include payment of $1.00 renewal fee. Petitioner later claimed that letter did not constitute valid exercise of option. Arbitrator found that BNS exercised option and that proposed modification of option was tendered only after making of new bilateral contract. Arbitrator found, in alternative, that if letter was not effective exercise of option, petitioner was estopped from relying on any defects in letter. Petitioner sought leave to appeal, and appealed. Leave was granted and appeal was allowed. Chambers judge found, in part, that arbitrator erred by failing to follow principle that qualified acceptance of offer constitutes counter-offer. Judge found, in part, that arbitrator erred by failing to accept parties’ agreement as to required consideration. Judge found, in part, that petitioner had no obligation to advise BNS that its purported exercise of option was defective. Judge ordered that award be amended to find that agreement required $1.00 as consideration for exercise of option; letter was qualified acceptance of option offer and was thus counter-offer extinguishing original offer; and, petitioner was not estopped from relying on defects in purported exercise of option. BNS appealed. Appeal was allowed, order was set aside, application for leave to appeal award was dismissed, and award was reinstated. Court of Appeal (C.A.) found that petitioner could not establish pure question of law arising from arbitrator’s interpretation of article of agreement and letter. C.A. found that threshold requirement for granting of leave to appeal under arbitration legislation was not met and leave to appeal ought not to have been granted. C.A. found that there was no consensus between parties on meaning of words in contractual documents. C.A. found that arbitrator had to determine true meaning of words in context and surrounding circumstances in which they were written. C.A. found that this engaged questions of mixed fact and law, which were not reviewable under statute provision. Petitioner appealed. Appeal dismissed. Court was of view that appeal should be dismissed substantially for reasons of C.A..

Urban Communications Inc v. BCNET Networking Society (2016), 2016 CarswellBC 3056, 2016 CarswellBC 3057, 2016 SCC 45, 2016 CSC 45, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Wagner J., Gascon J., Côté J., Brown J., and Rowe J. (S.C.C.); affirmed (2015), 2015 CarswellBC 1785, 2015 BCCA 297, D. Smith J.A., Bennett J.A., and Willcock J.A. (B.C. C.A.).

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