Case information

Arbitration — Agreement to arbitrate — Domestic Rules of Arbitration and Expedited Procedures promulgated by Vancouver International Arbitration Centre apply to contract between parties — Arbitration sought by one contractual party — Arbitrator applied res judicata — Party who sought arbitration sought to appeal finding of res judicata — Expedited Procedures do not permit appeal from arbitrator’s decision — Whether party who sought arbitration denied fundamental justice.

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Mr. Bollhorn, the purchaser, and Lakehouse Custom Homes Ltd., the builder and seller, entered into a contract for the construction of a house and for the sale of the property on completion. The contract included an arbitration clause which read, “Any dispute concerning the identification and pricing of deficiencies, the rectification of the deficiencies, and release of the holdback will be settled by arbitration under the British Columbia Commercial Arbitration Act at the expense of the Seller.” The parties proceeded on the basis that the Domestic Rules of Arbitration and the Expedited Procedures promulgated by the Vancouver International Arbitration Centre (“VanIAC”) applied, and the lower courts followed that approach. Disputes during the construction of the house led to a summary trial in the Supreme Court of British Columbia. Inter alia, the reasons for decision indicated that the financial amounts in relation to the alleged downgrades or deficiencies had not been proven and dismissed the relief requested in relation to them, but they were not mentioned in the order: 2022 BCSC 2120. The dispute about which deficiencies should be corrected continued. When the property transferred, no holdback was made in respect of the deficiency claims. Mr. Bollhorn then invoked the arbitration clause, seeking, inter alia, determination and quantification of the deficiencies. The arbitrator dismissed the arbitration on the ground that the subject matter was res judicata, having been determined by the summary trial judge. Mr. Bollhorn sought leave to appeal the arbitral question, saying that the arbitrator application of res judicata was an error of law.

The chambers judge referred the application for leave to appeal the arbitrator’s decision to a division of the Court of Appeal. The Court of Appeal held that Mr. Bollhorn had agreed to arbitration under the Rules, including the Expedited Procedures, that the Expedited Procedures applied on the facts, and that, under the Expedited Procedures, leave to appeal was not available.