Can An Arbitration Agreement Be Enforced Despite Lacking Certain Requirements?

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Naturally, many people may not associate family law with contract law, but there are many instances when relationships between partners involve contracts. Examples of when a contract may be put in place within the context of family law include prenuptial agreements (or “prenups”), separation agreements, and post-separation agreements

At Howie Johnson Barristers & Solicitors, one area in which we are proud to offer is mediation. When parties going through a separation pursue mediation, they may be able to resolve their differences without having to turn to costly, lengthy litigation. Sometimes the result of a separation agreement or mediation may be an agreement to resolve future differences through mediation, arbitration, or some other form of dispute resolution. In those cases, it’s essential to understand that an agreement to take matters to arbitration cannot be set aside if one of the parties later decides they’d rather pursue litigation. But what if the agreement doesn’t meet its legal requirements? This question was explored in an Ontario Superior Court of Justice decision.  

Parents agree to arbitration for future disputes

The parties involved in the matter were married in August 2001. Their marriage lasted 11 years and resulted in two children, who were 15 and 13 years old at the time of the trial. The father brought the matter to court in an effort to amend the parenting time agreement that he and the mother reached in a 2021 amendment to their separation agreement. 

The mother sought to prevent the father from even bringing the motion, stating that they had agreed to pursue arbitration as a first attempt to resolve their differences. Ignoring that commitment would be contrary to Ontario’s Arbitration Act. That’s because the parties’ separation agreement contained a dispute resolution clause that required any issues of parenting time (as well as other issues) to be dealt with via binding arbitration as opposed to litigation.

The court pointed out that while both the mother and the father filed affidavits rife with allegations and accusations, the real issue was not which parent’s position on the motion was in line with the court’s thinking, instead it was whether the court should even hear the matter to begin with. To determine that, the court had first to ask whether the separation agreement’s dispute resolution clause constitutes an “arbitration agreement” defined by the Act

Did the parents enter into an arbitration agreement?

The court began its analysis by citing Section 7 of the Arbitration Act. It states,

7(1) 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.

From a plain reading of the Act, it’s clear that the court must not issue a ruling on the dispute if an arbitration agreement is in place. The court then turned to the separation agreement signed by the parents. The dispute resolution clause states that the parents would first try to resolve differences through negotiation with their lawyers. It goes on to state that if they “cannot agree within 60 days of the request for review or variation, they will try arbitration. They will jointly select an arbitrator at the time the issue arises.” It also states that they will split the cost of arbitration and that any decision issued by an arbitrator shall be binding. Another interesting part of the agreement states that “If neither party address the dispute by this process and no further action is taken on an issue in dispute within the required 60 days as set out in the separation agreement, the matter is at an end, and the issue cannot be raised at a later date.”

The regulations related to the Act state actually define “family arbitration,” stating that it is arbitration that deals with matters that can be dealt with in a marriage contract, separation agreement, cohabitation agreement or paternity agreement. However, the Act also states that arbitrations of this kind have specific requirements, among them language dictating which jurisdiction’s laws apply to the arbitration process, whether appeals can be made, and if so, on what grounds. 

The dispute resolution clause lacked both of these requirements. The court wrote that based on that, it could have decided to allow the matter to proceed to trial. However, the court determined that it would follow the approach outlined in a 2017 decision where a judge enforced an arbitration agreement between parties even though it did not meet some of the technical requirements on the basis that it was important for courts to allow parties to carry out their intentions despite a lack of technical requirements or formalities.

On this basis, the court’s ruling stated that it could not hear the positions of the parties as they relate to their parenting time issues and that the matter must proceed to arbitration as they originally intended. 

Howie Johnson Barristers & Solicitors are experienced in family law mediation

Our own Jason P. Howie has been certified by the Law Society of Ontario as a specialist in family law and has well over 15 years of experience as a family law mediator. He is regularly retained by lawyers to conduct mediation for family law. Jason regularly works with clients to mediate their family law issues. If you are curious about whether the mediation process is the appropriate approach for your family law issues, please don’t hesitate to reach out to us online or by phone at 519-973-1500. In the event that mediation is an option, we would be happy to assist. In the event that mediation is not the best path forward, we also represent clients through litigation when necessary. We look forward to hearing from you and working to ensure that the needs of you and your family are given the attention and care they deserve.

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