Summary

37269

Board of Regents of Victoria University, et al. v. GE Canada Real Estate Equity, et al.

(Ontario) (Civil) (By Leave)

Keywords

None.

Summary

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Arbitration – Appeals – Issue estoppel – Contracts – Interpretation – Whether there is a need for direction on the correct interpretation of “fair market value” outside of the reserve land context – Whether the Court of Appeal’s decision is unworkable in practice – Whether the failure to defer to the exercise of discretion by the arbitration panel undermines the proper role of arbitration in the dispute resolution process – When should a civil dispute be remitted for a hearing of first instance to a new trier-of-fact – What factors should be considered to direct an arbitration for a hearing of first instance to the original arbitrators or to a new panel – In an appeal from an arbitral tribunal on an error of law, do the superior courts possess an inherent jurisdiction to remove a tribunal that has erred in law, or must that power be expressly conferred by the relevant arbitration statute – In an appeal from an arbitral tribunal on an error of law, what is the appropriate threshold for the exercise of the court’s removal power – In deciding whether to exercise such power based upon an error of law, how should the court balance competing values of fairness and efficiency.

The applicant owns land located on Bloor Street West, Toronto, which is the subject of two separate 100 year ground leases currently held by the respondent tenants. The rent under each lease was fixed for an initial thirty year period, after which the leases provided a mechanism for rental resets every twenty years. If the parties could not agree on the rent payable, the rental rate for the next twenty years would be the greater of the current rate or six percent of “the fair market value of the demised lands” as determined by arbitration. Disputes arose over whether the value of the demised lands should take into account a potential use of the lands (a freehold residential condominium project) which was impossible due to the existence of the leases. For the first rental reset in 1990, an appeal from the arbitration decision determined that the lands should be valued as if vacant but subject to a lease, thereby precluding a condominium development. For the 2010 reset, the majority of an arbitral panel valued the lands based on development of a mixed-use commercial-retail and freehold condominium project. On appeal to the Ontario Superior Court of Justice, the court set aside the arbitration awards and remitted the matters to the same panel for redetermination. The Court of Appeal for Ontario dismissed the applicant’s appeal on the merits and the tenants’ appeals of the remedy.

Lower Court Rulings

December 23, 2014
Ontario Superior Court of Justice

2014 ONSC 7435, CV-13-485218, CV-13-485219, CV-14-00010587-00 CL, CV-14-00010588-00CL
Arbitration awards set aside and matter remitted to same panel for redetermination in accordance with court’s reasons
August 29, 2016
Court of Appeal for Ontario

C60511, C60512, 2016 ONCA 646
Appeals on merits and cross-appeals on remedy dismissed