The Test for Permission for a Second Level of Appeal
The Test for Permission for a Second Level of Appeal
By Julie G. Hopkins, FCIArb
Under a number of domestic Arbitration Acts, there is a lack of clarity in the test used by Courts of Appeal when deciding whether to grant permission to appeal a decision by a superior court that determined an appeal of an arbitral award. Often, Courts of Appeal apply the common law test for leave to appeal to an appeal court at first instance. The author suggests that the test for permission to appeal could be clarified if it were based instead on the policy and statutory purpose behind a “second level of appeal”.
A number of domestic Arbitration Acts in Canada, including those of Alberta, Saskatchewan, Manitoba and Ontario, provide for an appeal to the Court of Appeal from a decision of a superior court that decided an appeal of an arbitral decision. Although the statutes typically require permission (or leave) to bring such an appeal, they are silent as to the requirements or considerations for permission to be granted. The decision to grant leave to appeal is discretionary and that discretion is usually exercised by a single Justice of a Court of Appeal.
The Criteria for Permission to Appeal
In the absence of statutory guidance for the exercise of discretion, some Courts have considered variations of the test commonly used in other statutory contexts where leave to appeal to the Court of Appeal, as the primary reviewing court, is required. That test can be generally stated as requiring “a question of law of sufficient importance to the parties and to the public to merit the full attention of the court, with a reasonable chance of success, and that could reasonably affect the result”. 
This test has apparent similarities to the test that courts have developed in the arbitral context in Manitoba:
- A pure question of law or jurisdiction;
- A question of arguable merit with a reasonable prospect of success;
- A matter of public interest that is of sufficient importance to warrant consideration by the province’s highest court; or
- When the denial of leave may result in an injustice.
The Alberta Court of Appeal has developed a similar test in the arbitral context, although it does not require an error of law:
- Is the question reasonably arguable?
- Is deciding the question likely to affect the result of the litigation?
- Is the answer likely to be of interest to others, or likely to influence later suits?
- Is there any independent reason not to re-litigate the question, or to limit the scope of the appeal?
In Saskatchewan, it is unclear whether the general test for leave to appeal under Saskatchewan law, which considers both the merit and importance of the appeal, is to be followed for arbitration or a whether a test similar to the one that applies in Manitoba should apply.
Interestingly, Ontario appears to have no reported decisions discussing the criteria to be applied for granting permission to appeal, although leave has been granted.
A “Second Level of Appeal”
Under the Alberta, Saskatchewan, Manitoba and Ontario domestic Arbitration Acts, the superior court is the primary appellate court for arbitration awards. The Court of Appeal provides, what is referred to in the case law as, a “second level of appeal”. A second layer of appellate review is rare, and it is generally recognized that it should be allowed sparingly.
The Courts of Appeal in both Manitoba and Alberta, in applying the tests for leave to appeal outlined above, have recognized that the “threshold” for meeting the test should be higher under the Arbitration Act to reflect the fact that an appeal to the Court of Appeal is a second level of appeal. Although acknowledging this, the Courts have never actually defined what that higher threshold might be when applying the tests. This lack of clarity, compounded by the fact that decisions granting permission to appeal are discretionary and made by a single Justice, make it difficult to predict whether leave might be granted in any particular case. Protracted appellate processes caused by uncertain motions undermine some of the key potential benefits of arbitration: timeliness and finality.
A Suggested Way Forward
It has been observed that “[t]he general policy of Canadian law is to allow a litigant one appeal (or something analogous), but only one. Second levels of appeal are usually designed only to benefit the public and clarify the law, not to correct errors between parties (whatever may be their effect on the parties)”. If that policy states the purpose behind providing a second level of appeal under domestic Arbitration Acts, then any test granting permission to do so should be consistent with that purpose. The result would be a more limited and well-defined threshold for granting permission to appeal.
Julie G. Hopkins, FCIArb is an Independent Arbitrator with Calgary Energy & Commercial Arbitrators. She has over 25 years of commercial arbitration and litigation, and administrative law experience including appellate work.
 Arbitration Act, RSA 2000, c A-43, s.48; The Arbitration Act, 1992, SS 1992, c A-24.1, s. 49; The Arbitration Act, CCSM c A120, s. 48; Arbitration Act, 1991, SO 1991, c 17, s.49.
 Alberta (Director of Law Enforcement) v McPike, 2019 ABCA 330, para. 51.
 See for example, Wolfe et al v Taylor et al; Fat Cat Farms Ltd et al v Wolfe et al, 2017 MBCA 74, paras. 54 and 55.
 This test was established by the Alberta Court of Appeal in Nilsson v. Alberta, 1999 ABCA 340 (“Nilsson”), but the Panel said it was specifically not deciding whether this test was appropriate where the specific factors peculiar to that appeal were not present, for instance, where the parties have agreed (as they did in that case) to appeals on questions of facts. Despite this, the test has been applied widely in Alberta: for example, ENMAX Energy Corporation v TransAlta. Generation Partnership, 2020 ABCA 68 (“ENMAX”); UCANU Manufacturing Corp v Jardeg Construction Services Ltd, 2015 ABCA 371. The proviso may explain, however, why in Alberta permission to appeal based on the decision in Nilsson does not require an error of law.
 Farm Credit Canada v National Bank of Canada, 2011 SKCA 129 (“FCC”).
 See the following examples where permission to appeal has been granted in Ontario: Allstate Insurance Company of Canada v. Motor Vehicle Accident Claims Fund, 2007 ONCA 61, Footnote 1 and Kingsway General Insurance Company v. Ontario, 2007 ONCA 62, Footnote 1.
 ENMAX, para. 33. The term “second level of appeal” is a misnomer, as what is actually being reviewed on appeal to the Court of Appeal is not the arbitral award, but the decision of the Superior Court reviewing the arbitral award. The appeal involves determining whether the reviewing judge chose the correct standard of review and properly applied it: Loewen v Manitoba Teachers’ Society, 2014 MBCA 12, para 23.
 In the context of summary conviction appeals, see R v Edmonton, 2013 ABCA 318, para. 12 and the cases cited therein.
 ENMAX, para. 33; Rolling River School Division v. Rolling River Teachers’ Association of the Manitoba Teachers’ Society et al., 2009 MBCA 38, paras. 11 -13.
 ENMAX, para. 33; FCC, para. 12.d.
 R v Argueta Reyes, 2015 ABCA 216, para. 8.