Walter Campbell and Olakemi Sobomehin (Applicants) appealed a Superior Court decision that set aside an arbitral award favoring Toronto Standard Condominium Corporation No. 2600 (Appellant) due to alleged "constructive fraud."
The core legal question was whether "constructive fraud" falls under the definition of "fraud" in the Arbitration Act, 1991, specifically regarding the setting aside of an arbitral award and time limit exceptions for filing an appeal or application.
Key Points:
The arbitrator awarded the Condo Corp costs of $30,641.72 against the former unit owners (respondents) for breaching short-term rental rules.
The respondents missed the 30-day deadline to appeal the award but sought to set aside the award, alleging "constructive fraud."
The application judge found no actual fraud but agreed with the constructive fraud argument, setting aside the arbitral award.
The Court of Appeal disagreed, clarifying that "fraud" under the Arbitration Act, 1991, does not encompass "constructive fraud" and reinstated the arbitral award.
Outcome:
The Court of Appeal allowed the appeal, reinstating the arbitral award and emphasizing the narrow interpretation of "fraud" within the Arbitration Act, 1991.
Toronto Standard Condominium Corporation No. 2600 was awarded costs of $20,125.41 for the proceedings.
