The importance of complying with regulations in your dispute resolution clause to ensure they are enforceable.
BACKGROUND
The parties were married for 11 years and had two teenage children. The parties signed a separation agreement on April 29, 2014, which requires that parenting time, among other issues, proceed to arbitration instead of litigation. Despite the terms of this agreement, the Applicant, April Monterio, sought a court order amending the parenting time arrangement. The Respondent sought a stay to dismiss these proceedings per the arbitration clause included in the parties’ separation agreement.
S. 7(1) of the Arbitration Act stipulates that if “a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding”. However, s. 59.7 of the Family Law Act permits parties to arbitrate further as part of a Separation Agreement – this is referred to as “secondary arbitration”. Furthermore, s. 59.6 of the Family Law Act provides that any award stemming from the secondary arbitration is only enforceable if it complies with the provisions laid out in the Family Arbitration regulation, O. Reg. 134/07.
ANALYSIS
In looking to the intention of the parties’ separation agreement, Justice Mitchell found that the parties had intended for secondary arbitration to take place if a dispute arose regarding parenting time. The parties cannot avoid the applicability of the regulation as it is mandatory for all secondary proceedings. Subsection 2(2)(b) of the regulation highlights that all secondary arbitrations must include the following provisions:
- The arbitration will be conducted in accordance with, (choose either i or ii)
i. the law of Ontario, and the law of Canada as it applies in Ontario, or
ii. the law of (name other Canadian jurisdiction), and the law of Canada as it applies in that jurisdiction. - Any award may be appealed as follows: (choose either i or ii)
i. A party may appeal the award in accordance with subsection 45(1) of the Arbitration Act, 1991.
ii. A party may appeal the award on, (choose one or more of the following)
A. a question of law,
B. a question of fact, or
C. a question of mixed fact and law. - The arbitrator for this arbitration is (name of arbitrator).
- ....
- I,(print name of arbitrator), confirm the following matters:
i. I will treat the parties equally and fairly in the arbitration, as subsection 19(1) of the Arbitration Act, 1991 requires.
ii. I have received the appropriate training approved by the Attorney General.
iii. The parties were separately screened for power imbalances and domestic violence and I have considered the results of the screening and will do so throughout the arbitration, if I conduct one.
In examining the relevant requirements from the provision, Justice Mitchell found that the dispute resolution clause did not comply with the regulation. The parties’ dispute resolution clause did not indicate who would arbitrate the matter, which law would apply, nor did it contain the required certificate. The failure to comply with the regulation is detrimental to the enforcement of the provisions in the dispute resolution clause.
CONCLUSION
Justice Mitchell concluded that the parties could not be required to arbitrate because they did not comply with the requirements outlined in the regulation. Therefore, the Respondent’s request for a stay of proceedings was denied and the Applicant was successful in seeking out a court order.