



COURT OF APPEAL FOR ONTARIO

CITATION: Petersoo v. Petersoo, 2019 ONCA 624

DATE: 20190723

DOCKET: C66775

Tulloch, Benotto and Huscroft JJ.A.

BETWEEN

Karinna Margaret Gerda Petersoo

Applicant (Appellant)

and

Tonu Elmar Petersoo

Respondent (Respondent)

Kristen Normandin and Joanna Hunt-Jones, for the
    appellant

Michael Stangarone and Stephen Kirby, for the respondent

Heard: May 23, 2019

On appeal from the order of Justice Jasmine T. Akbarali
    of the Superior Court of Justice, dated November 1, 2018, with reasons reported
    at 2018 ONSC 6519, allowing an appeal from a decision of Arbitrator Gregory
    Cooper, dated August 21, 2017.

Benotto J.A.:

[1]

T
he parties retained an arbitrator to conduct the parenting plan review
    provided for in their separation agreement. Following an eight-day hearing, the
    arbitrator awarded the mother custody and allowed her to move the children from
    Toronto to Guelph to attend a school adapted to their special needs. The mother
    moved and enrolled the children in the school.  The father then appealed the
    arbitrators decision.

[2]

Although the father raised
    several grounds of appeal, the appeal judge overturned the arbitral award on
    the basis that there was a fundamental procedural unfairness to the process
    causing a denial of natural justice. It arose, she found, because the father
    did not receive adequate notice of the mothers intent to move. The appeal
    judge set aside the award and directed the parties to attend another arbitration
    before a different arbitrator.
[1]

[3]

For the reasons that follow, I would allow the
    appeal and re-instate the arbitrators award.

FACTS

[4]

The parties were married in 2003 and had three
    children: K. born November 2007, and twins U. and J. born December 17, 2009. The
    parents separated in 2011.

[5]

Not long after the separation, the parties
    retained senior family law lawyer Gregory Cooper to mediate their disputes as
    to property, support and parenting. The issues were resolved and incorporated
    into the terms of a separation agreement on December 16, 2013. They agreed to
    joint custody of the children with a comprehensive parenting plan that provided
    for the following:

·

The
    children would reside primarily with the mother;

·

The
    children would reside with the father alternate weekends, Tuesdays overnight
    and alternate Thursdays from after school until 7:30 pm.

·

The
    mother would continue to be the main contact person with respect to the
    childrens educators and health care providers.

[6]

The separation agreement provided that the
    parenting schedule would be reviewed at the request of either party on or after
    September 1, 2015. In this regard, the agreement stated, at para. 3.22:

The review will be conducted by way of
    mediation/arbitration with Gregory Cooper, or if Mr. Cooper is not available,
    another mutually agreed to mediator/arbitrator.

[7]

There was also a Dispute Resolution provision
    in para. 5.3 and 5.4:

The arbitration will be conducted in
    accordance with the
Arbitration Act,
and will constitute a secondary arbitration
    under the
Arbitration Act
and the
Family Law Act.


[The parties] waive section 35 of the
Arbitration Act.


[8]

The children did not do well under the parenting
    plan. All three children were having difficulties. K. was having serious
    difficulties academically. In 2014, the

mother
    sought the advice of
Dr. Handley-Derry,
a
    developmental pediatrician.

[9]

In 2015, the mother asked Mr. Cooper to
    terminate the fathers overnight access due to concerns about alcohol and anger
    management. Mr. Cooper did not do so, but required the parties to attend an
    assessment before Dr. Raymond Morris pursuant to s. 30 of the
Childrens
    Law Reform Act
, R.S.O. 1990, c. C.12
.

[10]

The childrens situation did not improve.
    According to the mother, the children were in crisis academically and
    emotionally. K., who by 2016 was in grade four, was reading at a grade one
    level and was falling further behind. The boys were also below grade level.

[11]

The mother initiated the custody review
    procedure provided for in the separation agreement.

[12]

Meanwhile,
Dr. Handley-Derry continued to
    see the children. He
recommended that they be enrolled in a
    school that offers a Direct Instruction system. This system operates in
    conjunction to regular classroom programmes with remedial attention for special
    needs children. Shortly before the review was to begin, the mother began
    researching schools. Unable to find an affordable and suitable institution in
    Toronto, she expanded her search. She was impressed with St. Judes/Scholars
    Hall in Kitchener which offers the Direct Instruction system at affordable
    tuition.

[13]

The father did not agree that the children were
    having difficulties at school. He wanted them to stay at their current school
    and he wanted more time with them, in accordance with the assessment report of
    Dr. Morris which recommended that the children not spend more than three days
    without seeing their father.

The arbitration

[14]

In May 2017, the parties attended before Mr.
    Cooper for a pre-arbitration meeting.  He fixed the date for the hearing at
    June 26, 2017.

[15]

On June 16, 2017 the father brought a motion before
    Mr. Cooper seeking a six to eight-week adjournment. He relied on a non-specific
    medical issue and the need for more time to assemble financial information. The
    adjournment was opposed by the mother, who argued that the children were in
    crisis. The arbitrator moved the start date for the hearing from June 26 to
    July 7, 2017 but made it peremptory on the father.

[16]

On July 4, 2017 the mother served an offer to
    settle including a term that she be entitled to move to Guelph so the children
    could attend St. Judes.

[17]

On July 6, 2017 Opening Statements were
    exchanged. The mothers statement indicated that she would be seeking an order
    allowing her to move to Guelph so that the children can attend St. Judes.

[18]

The arbitration began on July 7, 2017 and
    continued for eight hearing days concluding on July 24, 2017. The arbitrator
    heard from the parents, from Dr. Handley-Derry and from Dr. Morris. At no point
    during the hearing did the father seek an adjournment in response to the mother
    having raised the issue of the move to Guelph.

[19]

A review of the parenting plan was front and
    centre in the hearing. The most significant issue was the educational plan for
    the children.

[20]

Dr. Handley-Derry recommended that the children
    move schools. Dr. Morris recommended that the mother have final decision-making
    authority with respect to health and education. However, Dr. Morriss report of
    February 7, 2017 predated the mothers request to move the children to Guelph
    and he did not offer an opinion on this issue.

[21]

The arbitrators award was released on August
    21, 2017. He agreed that the children were in crisis. They were acting out,
    hitting each other, lashing out at their mother, exhibiting symptoms of illness
    with no apparent physical bases and regressing in terms of bladder and bowel
    control. He concluded that the existing joint custodial arrangement had not
    served the children well and that their best interests would be served by
    being in the custody of the mother, who had primarily managed their lives to
    date.

[22]

The arbitrator then addressed the mothers
    proposal to move the children to Guelph to attend St. Judes. At no point did
    the father or his counsel object to the mobility issue being addressed by the
    arbitrator.

[23]

The arbitrator correctly set out the law on
    mobility and concluded that the children should move to Guelph and attend St.
    Judes because it was most appropriate to meet their complex needs. The
    arbitrator recognized that this was contrary to one of the recommendations of
    Dr. Morris that the children should not be away from either parent for more
    than three days, but found as follows at para. 123:

However, when I
    examine Dr. Morris report carefully, I am not able to find the rationale for
    this position, nor did I hear such rationale in Dr. Morris oral evidenceIt
    was my impression that the frequent transitions between the parties houses has
    been detrimental rather than beneficial to the children, partly due to the
    differing parenting styles and regimens in each of the homes. I am buttressed
    in this view by the comment of Dr. Handley-Derrythat The moving back and
    forth between the two homes was a very stressful period for the children, due
    to the disruption in [their] sleep and routines.

[24]

The arbitrator found that the high level of
    conflict between the parents was impacting the children. He then set out a
    parenting plan on the basis of the move to Guelph.

Events
    following the award

(1)

The mother and children moved

[25]

Following the award, the mother and children
    moved to Guelph and the children began attending St. Judes. No motion to stay
    the award was brought by the father.

(2)

The father appealed

[26]

The father served a notice of appeal of the
    arbitrators award on September 20, 2017, after the children began attending
    St. Judes. This was the last day of the appeal period.

(3)

The costs award was released

[27]

On November 1, 2017 the arbitrator released his
    costs award. He awarded the mother $75,000 in costs pursuant to r. 24(11)
    representing costs of the financial issues. With respect to costs of the
    parenting issue, he awarded no costs. He explained this at para. 21:

I do not consider that it was unreasonable for [the father] to
    oppose the plan put forward by [the mother]. There are several reasons for
    this:

a)

The parties had operated for many years under a mediated separation
    agreement which provided [the father] with considerably more parenting time
    than that proposed by [the mother] at the hearing;

b)

The
mobility issue, which arose as a result
    of [the mothers] wishing to enroll the children in a private school in
    Kitchener, came to [the fathers]  attention only very shortly prior to the
    commencement of the hearing, and thus, arguably, [he] had insufficient time to
    fully prepare for and respond to this aspect of [the mothers] case;

c)

Dr. Morrisrecommended
    that the children not be apart from either parent for a period in excess of
    three days. In the face of this recommendation, I do not consider that it was
    unreasonable for [the father] to take the position that the children should not
    be moved

(4)

The appeal was heard

[28]

The appeal was heard in Superior Court on
    October 22, 2018. By this time, the children had been living in Guelph for 14
    months and were in their second year at St. Judes.

DECISION OF THE APPEAL JUDGE

[29]

Although many issues were raised by the father
    on appeal, the appeal judge relied entirely on a procedural issue to set aside
    the arbitrators award with respect to parenting issues.

[30]

She concluded that the arbitration process was
    fundamentally unfair to the father because of the late notice of the mobility
    issue. She found that the arbitrator did not comply with s. 19(2) of the
Arbitration
    Act
,
1991
, S.O. 1991, c. 17 (the 
Arbitration
    Act
),
which requires that
    each party: shall be given an opportunity to present a case and to respond to
    the other parties cases. Despite the fact that the father  who was
    represented throughout  did not object to the issue being decided or seek an
    adjournment, the appeal judge found at para. 32 that:

it was incumbent
    on the arbitrator to enquire about the issue to ensure proper notice has been
    given.

[31]

On this basis she found a denial of procedural
    fairness and set aside the award as it related to parenting issues. She ordered
    a new arbitration before a different arbitrator. Pending that arbitration, the
    appeal judge set aside the entirety of the arbitrators parenting schedule 

including several provisions that
    had been made on consent 
and made significant changes to the
    parenting arrangements on an interim basis.

POSITION OF THE PARTIES

[32]

The mother submits that the appeal judge erred
    by relying solely on the alleged procedural rights of the father without regard
    to the best interests of the children. The appeal judge should not have
    entertained a submission not made before the arbitrator. It was not incumbent
    on the arbitrator to pursue procedural rights not raised by a represented party
    at first instance.

[33]

The father submits that a balanced analysis of
    the best interests of the children cannot take place where there has been  as
    here  a denial of procedural fairness. The father was prevented from
    addressing the mobility issue because of the short notice. The appeal judge
    therefore correctly concluded that a new hearing before a different arbitrator
    was required.

ISSUES

[34]

The sole issue on this appeal is clear: did the
    appeal judge err in law by finding that the arbitrator violated principles of procedural
    fairness?

ANALYSIS

[35]

Mediation/arbitration is an important method by
    which family law litigants resolve their disputes. Indeed, the courts encourage
    parties to attempt to resolve issues cooperatively and to determine the
    resolution method most appropriate to their family. The mediation/arbitration process
    can be more informal, efficient, faster and less adversarial than judicial
    proceedings. These benefits are important with respect to parenting issues,
    which require a consideration of the best interests of children. The decision
    of an arbitrator, particularly in child related matters, is therefore entitled
    to significant deference by the courts: see
Patton-Casse v. Casse
,
    2012 ONCA 709, 298 O.A.C. 111, at paras. 9, 11.

[36]

The essence of arbitration is that the parties
    decide on the best procedure for their family. Although the family law of
    Ontario must be applied, the procedures on an arbitration are not meant to
    mirror those of the court. I do not agree with the appeal judges criticism of
    the process which did not include pleadings and a record of the pre-arbitration
    meeting.

[37]

Here the parties decided that an appeal would
    only be based on a question of law. As this court stated in
Alectra
    Utilities Commission v. Solar Power Network Inc.,
2019 ONCA 254, at para.
    20:

The starting point in exercising the courts
    role under the
Arbitration Act, 1991
is the
    recognition that appeals from private arbitration decisions are neither
    required nor routine.

[38]

The issue on this appeal is whether the appeal
    judge erred on a point of law. She found that the arbitrator violated s. 19 of
    the
Arbitration Act
because:

1.

It was incumbent on him to enquire about the
    notice as to mobility and to ensure proper notice had been given (para. 32);
    and

2.

The lack of notice of the mobility issue caused
    a fundamental procedural unfairness (para. 34).

[39]

The
Arbitration Act
provides the
    following under the general heading Conduct of Arbitration:

Equality and fairness

19

(1) In an
    arbitration, the parties
shall be treated equally and
    fairly.

(2) Each party shall be
    given an opportunity to present a case and to respond to the other parties
    cases. 1991, c. 17, s. 19 (2).

[40]

The appeal judge erred in law by finding a
    violation of s. 19. I say this for four reasons:

1.

the proceedings were fair;

2.

the father acquiesced in the notice with respect to mobility;

3.

the appeal judge ignored the best interests of the children; and

4.

the appeal judges interpretation of s. 19 of the
Arbitration Act
establishes a new duty for arbitrators that would fundamentally change the arbitration
    process and undermine arbitral independence and impartiality.

The proceedings were fair

[41]

There is no doubt that the issue of mobility
    came up relatively late in the proceedings. However, the father, who was
    represented throughout, knew of the issue prior to the start of the hearing and
    neither requested an adjournment nor objected to the issue being addressed.

[42]

For eight days while evidence was being
    presented, he was not impeded from presenting his case, nor from cross-examining
    the mother or the experts. At no point did he request a further assessment with
    respect to St. Judes to challenge the evidence that the school would benefit the
    children. Instead, the father simply gave evidence that the children were fine
    and should stay at their Toronto school.

[43]

Having received the evidence of both parties on
    the mobility issue, the arbitrator preferred the mothers evidence and found in
    her favour, as he was entitled to do so: see
Arbitration Act,
s. 21. The
    proceedings were not rendered unfair simply because the arbitrator found in
    favour of the mother on this issue.

The father acquiesced in the notice

[44]

The father acquiesced in the late notice.
    Instead of raising the issue and seeking an adjournment, he proceeded with the
    hearing, submitting that the children should stay at their school and only raising
    an objection when the result was not to his liking.

[45]

In
Popack v. Lipszyc,
2016 ONCA 135, 129 O.R.
    (3d) 321, this court dealt with a challenge to an arbitration decision where
    the arbitral panel met with a witness
ex parte
without notice to the parties
. On appeal,
    the appellant, Mr. Popack, who had not objected to such a meeting when the
    issue was raised during the hearing, argued that the award should be set aside
    because of this procedural breach. In dismissing the appeal and upholding the
    arbitral award, this court said, at para. 39:

Mr. Popack sought
    to gain an advantage in the arbitration proceedings when he learned of the
ex
    parte
meeting[He] positioned himself so that he could decide to raise the
    issue formallyif he was not satisfied with the award given by the panel. To
    reward that tactic by setting aside the award would eviscerate the finality
    principle that drives judicial review of arbitral awards and would cause a
    real practical injustice.

[46]

Similarly, here, the father was not entitled to
    stay silent, participate in the proceedings without objection, wait to see what
    the ruling was and then claim procedural unfairness when the decision was
    against him.

[47]

Further, the fathers conduct after the hearing
    confirms his acquiescence in the process. He did not seek a stay of the
    mobility order but raised the issue for the first time on appeal.

[48]

As a general rule, an appellate court will not
    permit an issue to be raised for the first time on appeal. This rule is
    grounded, in part, on societys interests in finality and the expectation that
    matters will be dealt with at first instance: see
R. v. Reid
, 2016
    ONCA 524, 132 O.R. (3d) 26, at paras. 39-40, leave to appeal refused [2016]
    S.C.C.A. No. 432.  This principle is particularly important when the lives of
    children are impacted by the proceedings.

Best interests of the children

[49]

The record leaves no doubt that the children
    were in crisis. The evidence was overwhelming that their behavioural, emotional
    and scholastic life was in danger. Although the father did not accept the
    crisis, he long knew that this was the issue on the parenting review. The
    mother found St. Judes to ameliorate the crisis. To require the parties to
    defer a proposed remedy  however late-breaking  because of procedural issues
    ignores the urgency of the situation and the best interests of the children.

[50]

The appeal judge relied exclusively on the short
    notice given to the father to set aside the award without regard to the
    childrens best interests. The procedural rights of a parent  which were not
    pursued at the time of their purported breach, despite ample opportunity to do
    so  cannot be invoked long after the hearing has been completed in order to override
    the welfare of children in crisis.

Duty of arbitrator

[51]

The appeal judges interpretation of s. 19 of
    the
Arbitration Act
places a new and unreasonable burden on an
    arbitrator in family law proceedings. When parties are represented, it does not
    fall to the arbitrator
to move to the role of advocate
.
    Such a move would undermine the required independence and impartiality of an
    arbitrator.

[52]

There is no evidence that the arbitrator did not
    treat the parties equally and fairly. There is no evidence that the father did
    not have an opportunity to present and respond to the case. As I have already
    explained, he was represented by counsel and did not object to the mobility
    issue being determined. The situation was urgent, and the arbitrator had a duty
    to consider the childrens welfare as paramount.
Recall that the
    arbitrator had been involved with the family for many years.

[53]

The appeal judge placed an obligation on the
    arbitrator to depart from his role as independent adjudicator and move to the
    role of advocate. This would compromise his independence and potentially breach
    his duty of impartiality. Section 19 does not require the arbitrator to descend
    into the arena and become an advocate or advance a partys case.

THE INTERIM PARENTING PLAN

[54]

In light of my determination to re-instate the
    arbitrators award, it is not necessary for me to consider the interim
    parenting plan set out by the appeal judge.

CONCLUSION

[55]

The appeal judge erred in determining that the
    principles of procedural fairness as articulated in s. 19 of the
Arbitration
    Act
were violated.

[56]

I would allow the appeal and re-instate the
    arbitral award.

[57]

I would award the appellant her costs of the
    appeal in the amount of $23,000 inclusive of HST, disbursements and the
    application for leave to appeal. I would reverse the costs awarded in the court
    below so that they are payable to the her by the father.

Released: July 23, 2019

MLB

M.L. Benotto J.A.

I agree M. Tulloch J.A.

I agree Grant Huscroft J.A.





[1]
Although financial issues were included in the award and on the appeal, only
    custody is an issue before this court.


