Ex Parte Communications In Arbitral Proceedings - Worth The Risk?: Hunt v. The Owners, Strata Plan LMS 2556

It is a well-established principle in judicial proceedings that a judge should not discuss any part of an ongoing case with only one party to the dispute. In Hunt v. The Owners, Strata Plan LMS 2556, the B.C. Court of Appeal recently confirmed that private conversations between an arbitrator and one party to the dispute, even those touching on procedural matters, can give rise to a reasonable apprehension of bias and provide a basis to set aside an arbitral award.

Background

The Hunts, owners of a strata unit and self-represented litigants, initiated an arbitration against the Strata Corporation (the "Strata") under the Strata Property Act, S.B.C. 1998, c. 43 (the "Act"). Although the Hunts expressed a preference for a single arbitrator, a three-person arbitration panel was constituted. After a four-day hearing, the arbitrators ultimately ruled against the Hunts and awarded special costs in favour of the Strata.

In preparing for the special costs assessment, the Hunts discovered that the Strata's lawyer had engaged in the following four private communications with the arbitrators during the proceedings:

An email to the Strata's nominated arbitrator on the issue of whether there should be a single arbitrator or a panel of three; A private conversation with the panel chair on the Strata's settlement proposal should the dispute go to mediation; A private conversation with the Hunts' nominated arbitrator on the Strata's proposed mediation settlement; and A phone call from the Strata's nominated arbitrator on the possibility of a mediated settlement. These private conversations were never disclosed to the Hunts by the Strata's counsel or by the arbitrators. Rather, the Hunts obtained the file of the Strata's counsel in the course of preparing for the assessment of special costs.

After discovering the communications, the Hunts brought an application for judicial review to set aside the arbitral and costs awards. The chambers judge dismissed the application for judicial review, finding that the arbitrators' decision was correct.

The Court of Appeal allowed the appeal and found that the chambers judge erred in failing to find that the four ex parte communications created a reasonable apprehension of bias.

Private communications and the apprehension of bias

On appeal, the Strata argued that the content of the ex parte communications was purely procedural and did not involve the taking of evidence. As such, the conversations did not raise a...