“An appeal is not a re-trial of a case. As such, consideration must be given to the appropriate standard of review applicable to the questions at issue on appeal.
The decision of an arbitrator deserves as much deference on appeal as does a decision of a trial judge: Palmer v. Palmer, 2010 ONSC 1565 (Ont. S.C.J.) at para. 3 (cited in Reati v. Racz, 2016 ONSC 1967, at para. 28)
In reaching an award, an arbitrator sits in the same position as a judge in a lower court when a decision is appealed to a higher court, and for a decision to be overturned on appeal, the appellate court must find that the reasons amount to an error law and that the decision is not correct, or that a palpable and overriding error was made on a question of mixed fact and law: Gray v. Brusby, 2008 CarswellOnt 4045 (Ont. S.C.J.) at para. 27, and Palmer, supra, at para. 5, cited in Reati v. Racz, 2016 ONSC 1967, at para. 29.
Reati v. Racz, at para. 30, provides a helpful summary of the principles found in Housen v. Nikolaisen:
In Housen v. Nikolaisen, 2002 SCC 33 (S.C.C.), the Supreme Court of Canada discussed in detail the standard of appellate review. The following principles emerged from that case:
a) an appellate court should not interfere with a trial judge’s reasons unless there is palpable and overriding error; stated another way, an appellate court is prohibited from reviewing a trial judge’s decision if there is evidence upon which the trial judge could have relied to reach that decision (para. 1);
b) the role of appellate court judges is to review the reasons in light of the arguments of the parties and relevant evidence, and then to uphold the decision unless a palpable error leading to the wrong result has been made by the trial judge (para. 4);
c) on a pure question of law, the standard of review is that of correctness (para. 8);
d) the standard of review for findings of fact is such that findings are not to be reversed unless the trial judge has made a “palpable and overriding” error (para. 11);
e) appellate courts must treat a trial judge’s findings of fact with great deference, this rule being based principally on the assumption that the trier of fact is in a privileged position to assess the credibility of witnesses’ testimony (para. 12);
f) a court of appeal is clearly not entitled to interfere merely because it takes a different view of the evidence; the finding of facts and the drawing of evidentiary conclusions from the facts is the province of the trial judge, not the Court of Appeal (para. 24);
g) the standard of review for factual inference is the same as for findings of fact — there is one, and only one, standard of review applicable to all factual conclusions made by the trial judge — that ofpalpable and overriding error (para. 25);
h) a question of mixed fact and law involves the application of a legal standard to a set of facts; where a decision-maker applies the wrong law to a set of facts, then this will constitute an error of law subject to the standard of correctness (para. 27); and
i) matters of mixed fact and law lie along a spectrum; where a legal principle is not readily extricable so as to characterize the error as an error of law subject to the standard of correctness, then the matter is a matter of mixed fact and law subject to the more stringent standard of palpable and overriding error (paras. 36-37).
A palpable error is one that is plainly seen: Housen. Failing palpable and overriding error in the findings or inferences of facts, deference is granted to the trial judge or arbitrator.
The Supreme Court of Canada clarified that “questions of law” refers to the determination of what is the correct legal standard or test to employ in a particular case: Canada (Director of Investigation & Research) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748 (S.C.C.), at para. 35. Examples of errors in law can include application of an incorrect standard, a failure to consider a required element of a legal test, or similar error in principle, such an error can be characterized as an error of law, subject to a standard of correctness: Housen, supra, at para. 36. In the context of commercial arbitration, where appeals are restricted to questions of law, the standard of review will be reasonableness unless the question is one that would attract the correctness standard, such as constitutional questions or questions of law of central importance to the legal system as a whole and outside the adjudicator’s expertise: Creston Moly Corp. v. Sattva Capital Corp, 2014 SCC 53, at para. 106. (Also see Piller Investments Limited v. 1594342 Ontario Limited, 2018 ONSC 5874, at para. 16)
As set out in Creston Moly Corp., historically, determining parties’ legal rights and obligations under written contract are questions of law. Canadian courts, however, in the interpretation of contracts, have evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine “the intent of the parties and the scope of their understanding”: Creston Moly Corp. v. Sattva Capital Corp, at para. 47. (Also see J.W. v. Canada (Attorney General), 2019 SCC 20 (S.C.C.).)
The Court should not interfere with an arbitrator’s award unless it is satisfied that the arbitrator acted on the basis of a wrong principle, disregarded material evidence, or misapprehended the evidence: O’Connell v. Awada, 2019 ONSC 273, at para. 9, citing with approval Robinson v. Robinson, [2000] O.J. No. 3299 (Ont. S.C.J.), at para. 5.
The failure to discuss a relevant factor in depth, or even at all, is not itself a sufficient basis for an appellate court to reconsider the evidence: Housen, at para. 39. “[A]n omission is only a material error if it gives rise to the reasoned belief that the trial judge must have forgotten, ignored or misconceived the evidence in a way that affected his conclusion. Without this reasoned belief, the appellate court cannot reconsider the evidence.” Housen, at para. 39, citing Van de Perre v. Edwards, 2001 SCC 60 at para. 15.
The court in Housen affirmed that the scope of appellant review is narrowly defined and dictated that the appellant court should not find the trial judge to have misapprehended or ignored evidence or came to the wrong conclusion simply because the appellant court disagrees in some inferences drawn or would emphasize different portions of the evidence: Housen, at para. 56. A difference of opinion between the inferences to be drawn from the evidence and proper weight to be placed on particular facets of the evidence is not a justifiable reason for the appellant court to re-assess the evidence, particularly where there is no error in law. The determination of weight to give to evidence is to be left to the trier of fact, particularly where conflicted evidence is presented. (See Housen, at para. 59)
Absent proof that an omission in reasons is due to a misapprehension or neglect of the evidence, then the court can presume that the trial judge reviewed the evidence in its entirety and based its factual findings on this review: Housen at para. 72. Moreover, just because a trial judge does not discuss a certain point or particular evidence in depth is not sufficient grounds for appellate interference: Housen, ibid.
As set out in Southam, questions of law are questions about what the correct legal test is; questions of fact are questions about what actually took place between the parties; and questions of mixed law and fact are questions about whether the facts satisfy the legal tests: Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., at para. 36.”