Thursday, 9 May 2013

Interpretation of a Precedent is a Question of Law

Under section 31 of the Arbitration Act, an appeal from an arbitrator's decision (other than in family matters) can only be taken on a pure question of law with leave of the court.  Issues of fact or mixed fact and law are not appealable.  The distinction between different types of issues was explained by the SCC in Canada(Director of Investigation and Research) v. Southam Inc.:
35 ... Briefly stated, 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.
Despite the definition, determining whether a particular issue is a pure question of law is often a difficult task and counsel, as well as the courts, have often struggled trying to categorize particular issues.  Adding to the case law dealing with categorization of issues is the recent decision in Teal Cedar Products Ltd. v. British Columbia (Ministry of Forests), 2013 BCSC 788, where the court held that a proper interpretation of a legal precedent, such as a decision of the Court of Appeal, is a question of law for which leave to appeal may be granted:
[43] It is my conclusion that the application does raise a question of law, namely, the proper interpretation of the decision of the Court of Appeal in MacMillan Bloedel. The Arbitrator decided that MacMillan Bloedel stands for two propositions that are relevant to Teal’s claim to a gross-up award:
  1. In the absence of evidence that tax will be payable on the award, and where there is positive evidence of tax losses available to be applied by the awardee, there is no entitlement to a gross-up; and
  2. The use of existing tax loss credits to offset the income effect of the award does not constitute improperly requiring an awardee to use or expend an asset unrelated to the award.
[44] He applied those principles to the facts at hand and concluded that Teal did not require a tax gross-up.

[45] Accordingly, I find the petition raises a question of law and, if other relevant considerations are satisfied, leave should be granted.