NORVALL V. CANADA SOUTHERN RAILWAY Co.

Award-Specific performance of-Misconduct of arbitrators--Right of review under 38 Vic., ch. 15, 0.

Held, affirming the decree of PROUD FOOT, V. C., that the plaintiff was entitled to specific performance of an award giving him damages for his lands taken by the defendants; that the sum awarded was not so excessive as to shew any fraudulent or improper conduct on the part of the arbitrators; and, Quære, whether, if shewn, it would be a defence in such a proceeding.

Quare, also, the land having been taken under an Act of the Dominion Parliament, whether the finding of the arbitrators could be reviewed under the Statute of Ontario, 38 Vic., ch. 15, 0.

was

THE plaintiff filed his bill for specific performance of an award giving him compensation for the damage sustained by the expropriation of a portion of his land. By their answer the defendants alleged that the amount awarded excessively and fraudulently exorbitant, and that the award was made by the fraud, covin, and mirsepresentation of the plaintiff and the two arbitrators who concurred therein. It was also alleged that the award was void upon the ground of mistake by the arbitrators in basing their estimate upon the assumption that the whole of the plaintiff's frontage had been taken by the defendants.

It

had

appeared that before this bill was filed the defendants

presented a petition to the Court of Queen's Bench, under the 38 Vic., ch. 15, O., to set aside or reduce the award. Harrison, C. J., before whom the petition was heard, held that there was sufficient evidence to sustain the award, and dismissed the petition. Thereupon the defendants appealed to the Court of Appeal, who held they

had

no jurisdiction to entertain an appeal from the decision of the learned Chief Justice, whose judgment was final.

The case came on to be heard at the Sandwich sittings in the autumn of 1878, before Proudfoot, V. C., when a decree was made declaring that the plaintiff was entitled to specific performance of the award.

The defendants appealed.

The case was argued on the 10th of March, 1879 (a).

Crooks, Q. C., and Cattanach, for the appellants. The learned Vice-Chancellor should have held that the award was void in toto, as the amount awarded by the arbitrators is so excessive as to shock the conscience, and clearly shews that the arbitrators were guilty of fraud, or acted under a mistake as to the subject matter of the award: Widder v. Buffalo & Lake Huron R. W. Co., 24 U. C. R. 520, 536; Achsenbein v. Papelier, L. R. 8 Chy. App. 698; Great Western RW Co. v. Warner, 9 Gr. 506; Grant v. Eastwood, 22 Gr. 563; Smith v. Whitmore, 2 DeG. J. & S. 297, 310; In re Dare Valley R. W. Co., L. R. 6 Eq. 435. It is objected that the matter in question is res judicata by the judgment of Harrison, C. J., but such a contention is not tenable, as there the appellants only sought to obtain a review of the evidence; but the questions now in issue are quite different. They also cited Tredigar v. Windus, L. R. 19 Eq. 615; Davis v. Hedges, L. R. 6 Q. B. 687; Moss v. Anglo-Egyptian Navigation Co., L. R. 1 Ch. 108.

Blake, Q.C., and Boyd, Q.C., for the respondent. This case is clearly res judicata, as the whole question was fully discussed on the petition of the appellants to the Court of Queen's Bench. All the points relied upon to-day were susceptible of being taken on the hearing of the petition and finally adjudicated upon, and the matter is not the less res judicata because the appellants abstained from raising them. The largeness of the amount arrived at by the arbitrators is not sufficient to set aside the award, except fraud or mistake is shewn; and we submit that the evidence wholly fails to sustain any such contention. It is absurd to argue on the evidence that the arbitrators did not understand the subject matter. They cited Mason v. Stokes Bay R. W. Co., 32 L. J. Chy. 110; Collier v. Mason, 25 Beav. 200; Weekes v. Gallard, 21 L. T. N. S. 655; Lloyd on Compensation, 99; Morrison v. Mayor of Montreal, L. R. 3 App. 148; Henning v. Twinnerton, 2 Phil. 79; Re Harper, L. R. 18 Eq. 539; Commins v. Scott,

(a) Present-Moss, C.J.A., BURTON, PATTERSON, and MORRISON, JJ. A.

L. R. 20 Eq. 11; Regent's Canal Co. v. Ware, 23 Beav. 579; Moseley v. Simpson, L. R. 16 Eq. 226; Re Hopper, L. R. 2 Q. B. 367; Burr v. Gamble, 4 Gr. 426.

Crooks, Q.C., in reply. It is not objected on the pleadings that this question is res judicata. He cited 2 Sm. L. C., 6th ed, 794, 795, 796.

January 14, 1880. Moss, C. J. A., delivered the judgment of the Court.

The questions upon this appeal are, whether the defences sought to be raised are open upon this record, and if so, whether they are supported by the evidence.

It was conceded by Mr. Crooks at the opening of his very full and able argument, that it was not now open to him to impeach the award on the mere ground that the damages were unreasonably large or excessive, or even upon the ground that there had been such impropriety or misconduct by the arbitrators as would have warranted the interference of the Court upon a motion to set aside the award. The position he assumed was that the award was void in toto; and that the evidence shewed the amount to be so entirely disproportionate to any loss the plaintiff could possibly have suffered and so grossly exorbitant as to shock the conscience, and to lead to the inference either that the arbitrators had been guilty of fraud, or had made a mistake by including something which was not a proper subject of compensation, or had made the valuation upon a wholly erroneous principle.

There is really no reason for the contention that the arbitrators were under any mistake as to the subject matter of the award. They were perfectly familiar with the property of the plaintiff, and they knew exactly what the defendants had taken.

I was at first under the impression that there might be ground for inferring that they had proceeded upon an erroneous principle. An affidavit made by Mr. Rankin, one of the arbitrators, upon a petition for a review of the award,

(a) Present.—Moss, C.J.A., BURTON, PATTERSON, and MORRISON, JJ.A.

heard by the late Chief Justice of the Queen's Bench, seemed to lend some colour to this argument; but a perusal of the evidence, and an examination of the plan produced, have satisfied me that this ground of attack, even if now available, has not been established.

We have, therefore, to consider whether even if the arbitrators' conduct were fraudulent that defence is open to the defendants in this proceeding. All the cases to which we were referred were those of motions to set aside the award, in which it is well known that the courts exercise a large discretion, for the purpose of attaining justice. I have not found any case in which fraudulent, improper, or malignant conduct, on the part of the arbitrators alone, without any collusion with the person seeking to enforce the award, has been set up by way of defence to an action upon the award. The misconduct of the arbitrators alone, however gross or fraudulent, seems to have been only ground for an application to the equitable jurisdiction of the Court. In Braddick v. Thomson, 8 Ex. 344, Lord Ellenborongh put an inquiry which seems to go the root of the matter: "How can the injustice of the arbitrator be pleaded against one of the parties without at least implicating him in it?"

In Whitmore v. Smith, 7 H. & N. 509, Willes, J., by whom the judgment of the Exchequer Chamber was pronounced, explains very distinctly the grounds for requiring misconduct by an arbitrator to be made the subject of a motion and not of a plea. In Thorburn v. Barnes, L. R. 2 C. P. 384, it was held that such a defence could not be pleaded. The point was succinctly put by Keating J., p. 404: "In truth the whole question resolves itself into this, was that which is relied upon misconduct by the arbitrators? If it was it can only be taken advantage of by motion, and not by plea." It is not necessary to consider now the question whether collusion between the party so supporting the award and the arbitrators would make any difference in this rule, because there is no ground for arguing that this had in fact been proved. In the well known case of Widder v. Buffalo & Lake Huron R. W.

Co., 24U. C. R. 520, and in Appeal, 27 U. C. R. 425; the Court, in an action upon an award, felt at liberty to consider the exorbitancy of the amount awarded as a ground of defence. That case was peculiar in its circumstances, and it is noteworthy that the defendants by their plea alleged that the award was made by the fraud, covin, and misrepresentation of the plaintiff. I think, however, that there is no escape from the conclusion that the case was discussed by the learned Judges, who pronounced opinions in appeal, as if fraudulent misconduct by the arbitrators were in itself defence to the action. I have referred to these decisions of courts of law because this bill is in effect an action to recover the amount of the award, and it may be questionable whether it would have been entertained before the Administration of Justice Act gave the Court of Chancery jurisdiction to enforce payment of mere money demands founded upon a legal right.

a

The general rule in equity was, that a bill would lie to enforce specific performance of an award, where the thing awarded to be done was such that a Court of Equity would have compelled its performance in specie if agreed to by the parties themselves. The parties having agreed to act according to the arbitrator's directions, his decision is tantamount to an agreement upon the terms he lays down. But it does not follow that the Court extends to an award the same liberal jurisdiction, which it exercises in the case of an ordinary agreement, of refusing to compel specific performance on the ground of the harshness or unreasonableness of the terms. In Wood v. Griffith, 1 Swanst. 43, Lord Eldon held that the objection of unreasonableness Could not be sustained, but he seems to have proceeded upon the ground that the parties must abide by the decision. of the domestic tribunal they had themselves chosen; and it may be, as I shall presently explain, that that principle is not applicable here. That decision was commented upon by Lord Justice Turner, in Nickels v. Hancock, 7 D. M. & G. 300. While that learned Judge was perhaps prepared to agree that the arbitrators' judgment should be final,

3-VOL. V APP. R.