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Overturned family law arbitration offers guidance to all parties

A Superior Court decision offers valuable lessons for arbitrators and counsel involved in family law arbitrations, Toronto family lawyers Michael Stangarone and Stephen Kirby tell

Ontario Superior Court Justice Jasmine Akbarali’s decision overturned an arbitration award granting a mother sole custody and allowing her to relocate after the judge agreed the father in the case was treated unfairly.  

Stangarone, a partner with MacDonald & Partners LLP, was not involved in the original arbitration but acted for the successful father in his appeal.

“This is an important case for both family and civil cases on s. 19(2) of the Arbitration Act, which provides that a party is entitled to know the case he or she has to meet,” he explains. “The decision is also helpful on how to properly conduct an arbitration to avoid unfairness and errors of law.”

The couple in the case had three children together before splitting in 2011 after eight years of marriage. They reached a separation agreement that set the children’s primary residence with their mother but included significant parenting time for the father, who also paid child support.

However, when the agreement came up for review in 2015, the parties proceeded to arbitration after failing to agree on new terms at mediation.

The arbitrator ultimately ruled in the mother’s favour, granting her sole custody of the three children, and allowing her to relocate with them from Toronto to Guelph, even though she only notified the father of her intention to relocate the children on the eve of the arbitration.

“That caused fundamental procedural unfairness and a denial of natural justice," Stangarone says.

Justice Akbarali agreed and set aside the arbitral award as it related to parenting issues for failure to comply with s. 19(2) of the Arbitration Act.

“In this case, there were no pleadings exchanged to define the issues. Even if pleadings are not, strictly speaking, mandatory in an arbitration, in my view it does no service to a proper process to fail to require them,” the judge wrote. “Pleadings provide notice and certainty about the case to meet. Any fair dispute resolution process requires that notice and certainty.”

Although she noted the father “could have, and should have” sought an adjournment after the relocation was raised at a late stage, the judge added that it was also “incumbent on the arbitrator to inquire about the issue to ensure proper notice” had been given.

“The arbitrator should have recognized the issue as a new one and made enquiries as to when it arose,” Akbarali added.

The judge ordered both parties to attend a further arbitration on the parenting issues, governed by their existing mediation-arbitration agreement.

“It is unfortunate that this family will have to go through yet another process in the conflict between the parties,” she wrote. “I understand that parties choose arbitration because they seek a streamlined, faster process with greater finality. Those are laudable goals, and particularly so in family law. However, shortcuts in the fundamental procedural fairness of the process do not assist the parties, but rather do them a disservice, by burdening them and their children with more costs, delay, uncertainty and stress.”

Akbarali also ordered more parenting time for the father pending the new arbitration.

“This case reaffirms the importance of procedural fairness in light of the countrywide push towards alternative dispute resolution in family law,” adds Stephen Kirby, Stangarone’s associate and co-counsel on the case.

“Family counsel often forget that the rules of evidence and procedure were designed to ensure a fair process. This case demonstrates that those who stray too far from those rules do so at their client’s peril,” he says.

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