"Mediation and Other Stuff"
Mediation and Arbitration Services
Welcome to Mediation and Other Stuff.
I hope everyone had a great St. Patrick's Day and are enjoying this wonderful weather we are having. This is the second anniversary of my newsletter and I am delighted to say that the number of subscribers continues to increase with each issue.
I have just returned from a week delivering negotiation training in Edmonton and plan to spend a significant portion of my time in the future in negotiation and mediation training.
This edition is about the use (or lack of it) of mediation in municipal related disputes in Ontario. Given the fact that many municipal disputes are between parties who have an ongoing relationship, it makes sense that mediation would be considered as the primary dispute resolution mechanism but it is not.
In this issue, I am highlighting two cases. The first is an example of the ongoing debate over mediation confidentiality while the second is a very recent case which strongly endorses mediation in condominium disputes and the potential downside in cost recoveries for condominiums which skip the process even if successful in court. I would like to thank my colleague, Marko Djurdjevac of Miller, Thompson in Toronto for sending the case to me.
As usual, if you have any questions about mediation or arbitration or have a topic that you would like covered in my newsletter, please contact me.
| MEDIATION IN MUNICIPAL DISPUTES
Most lawyers and disputants in Ontario agree that mediation offers an efficient and cost-effective way to try and resolve disputes. But in the area of disputes involving municipalities, the use of mediation and in particular early mediation is not common.
In general, municipalities have the following types of conflict,
- Council conflicts.
- Inter-governmental conflict, which can include conflict with another municipality, the Province, or local authority.
- Disputes over contracts between the municipality and the provider of goods or services.
- Employment disputes.
- Public policy disputes of which land use planning is the prime example.
- Disputes about municipal administration, services and by-law enforcement.
In many ways, the nature of the conflict or dispute is not as important to the long-term health of the municipality and other parties, as is the way in which it is resolved.
Disputes are usually resolved in one of three ways; by a negotiated agreement; by adjudication; or by the imposition of power to force the other party to comply.
Most disputes are settled through negotiation. But if that is not successful, or does not occur, the second and third alternatives are looked to as the means by which to resolve the matter. This traditional approach to dispute resolution is rapidly changing as disputants seek more efficient and economic means of resolution and the use of alternative dispute resolution processes should be an obvious part of a general move towards efficiency and cost reduction.
Even before the current emphasis on financial restraint, the English Court of Appeal indicated the 'heavy obligation' of lawyers acting in a public law dispute where there is a suitable alternative dispute resolution mechanism 'to resort to litigation only if it is really unavoidable'.
Cowl and others v. Plymouth City Council  EWCA Civ 1935.
While this directness has not been adopted by the courts in Ontario to date, given the current financial restraints on local governments, it would likely find favour in the appropriate case. Municipal lawyers, both in-house and outside counsel need to advise their clients that mediation should be considered in almost every dispute.
An example of one of the most comprehensive approaches to municipal mediation in Canada is in Alberta, where the Ministry of Municipal Affairs has set up a specific mediation service whose mission is to:
Promote public confidence in local government by providing effective and innovative leadership and support to municipal organizations by encouraging intermunicipal cooperation and self directed dispute resolution through mediation and/or related dispute resolution activities.
Mediation is now recognized as a key component of planning in the context of the relationship between community, land use and agriculture and it is also an important part of the environmental assessment process. The Ontario Ministry of Municipal Affairs, Citizens Guide to Land Use Planning System in Ontario contains a useful overview of mediation and could easily be adapted to other areas of municipal concern and potential conflict.
Municipalities using an interests based dispute resolution process such as mediation can expect the following results:
- Improved working relationships between participating parties.
- A better understanding and respect for different viewpoints.
- Better informed, more creative, and sustainable agreements.
- Shared responsibility for process, results and implementation.
In order to benefit from alternative dispute resolution, municipalities should develop a specific dispute resolution policy. The goals of this policy include establishing both systems to deal with conflict in its early stages and prevent escalation and processes to fairly manage disputes when they arise. This means that where possible, choosing the appropriate dispute resolution process from the available range which, depending on the circumstances could be litigation, or a form of alternative dispute resolution.
As an example of what is going on in municipal mediation, the City of Hamilton is investigating mediation in neighbour to neighbour disputes and has recently produced a report on the subject.
In the United States, MWI provides municipal mediation services and publishes MWI's Municipal Mediation Newsletter on their site.
From resolving neighbourhood disputes to improving bylaw enforcement strategies, the application of innovative alternative dispute resolution processes is virtually unlimited. Only the imagination to see a better way of resolving disputes and improving relationships is needed to implement mediation into the everyday routine of municipal government.
| CASES OF THE MONTH
Once again our courts plunge into the murky waters of mediation confidentiality and come up with another interesting result.
In CAS London Middlesex v. C.B. and L.B., 2011 ONSC 5853 (CanLII)
Mr. Justice Harper ordered a mediator to give evidence in court about what happened during a mediation, even though the parties had signed a mediation agreement with a confidentiality provision.
This order was made even though the judge found the parties intended their conversations with the mediator and each other in the mediation process would remain confidential, and that the mediator could not give evidence in court.
Justice Harper stated,
I am well aware of the importance of the protection of privilege in mediation. It should never be set aside lightly. It must only be done so when the balance of ensuring the integrity and fairness of the litigation at hand commands that it be done.
The case is important as it again confirms that a court can, and will disregard the confidentiality provisions of a private mediation contract in the interests of justice. It is extremely important that clients understand this limitation as some family mediators seem to "guarantee" the confidentiality of the mediation process.
It is more likely that the provision of a commercial mediation agreement would be upheld by court. But, while it is tempting for commercial and other mediators to say that this only applies to family law and is specific to the particular facts of the case, in the absence of statutory protection such as that provided by section 8 (2) of the Commercial Mediation Act, 2010 (and note the exceptions in 8 (3)) no definite guarantee can be given that the mediation process is confidential. As shown by the case law to date, the question will be decided by the courts on a case by case basis depending on the circumstances.
The importance of a clearly drafted agreement to mediate is also made clear from this case of course most lawyers and mediators know that, don't they?
For further information, I recommend you read the case itself or Hilary Linton's excellent blog post of February 8, 2012 at http://www.riverdalemediation.com/2012/02/when-mediation-isnt-confidential/
|A Good Reason to Mediate Condo Disputes.|
Despite the mandatory nature of mediation and arbitration in Ontario under section 132 of the Condominium Act, 1998, many disputants and their counsel seek to skip the procedures and go to court. Condominium Corporations have often proceeded to litigation and then when successful, charged all of the costs of enforcement back to the unit owner.
The decision of Mr. Justice Michael G. Quigley in the recent case of Toronto Common Elements Condominium Corporation No. 1508
v. William Stasyna, 2012 ONSC 1504 (CanLII) decision questions that approach and should be carefully reviewed by condominium boards, managers and their counsel.
Rather than paraphrase the decision, here is an excerpt which clearly shows how the judge reached his decision:
 As I mentioned above, in this case, mediation, though not mandatory, could have resolved this conflict in a more cost-effective manner. The applicant has unnecessarily wasted time and expense by insisting on bringing these proceedings.
 In Wallace v. Allen 2007 CanLII 31445 (ON SC), (2007), 86 O.R. (3d) 489 (S.C.J.), Eberhard J. found at para. 8 that the defendant's conduct, though "not dishonest or criminal", was "foolish, unnecessary, and wasteful" in provoking litigation. As a result, she exercised her discretion to reduce the partial indemnity costs owing to the defendant by 20 percent.
 There is no suggestion here that the bringing of this application by the board was anything even close to dishonest, but it does seem to have been unnecessary and wasteful when there was the mediation option open and available. Here too, I find that it is appropriate to exercise my discretion to reduce the partial indemnity costs owing to the applicant by 20 percent for its unnecessary and wasteful - though perfectly legal - conduct to pursue this litigation when openings were made available to permit this dispute to be resolved between all unit-owners on a more conciliatory and consensual basis. There is no question that the TCECC No. 1508 board had the technical right to act as it did. Yet, against the background of history here and the period of apparent inaction by prior boards, this board ought to have behaved in a more conciliatory manner in my view. This is especially so since the records of its meetings with unit-owners suggest that it may have been coddling to the seemingly overbearing views of one or two vocal and compliance-oriented unit-owners.
 As these reasons show, I find myself having to agree that the Corporation had and has the legal authority to behave as they did. It had the right to litigate rather than trying to first work out a long term solution that would again bring peace to this small community. The board was offered a number of conciliatory opportunities but chose not to pursue them. I cannot accept that it ought to be rewarded for that conduct when it was offered and could have pursued a conciliatory approach, at least initially and before incurring the costs of this application. Should it be rewarded in costs for that approach? In my view the answer is no.
 I am aware that in making this order, I am forcing the unit-owners as a whole, including these recalcitrant unit-owners, to shoulder these costs, together since it is inevitable that TCECC No. 1508 will seek to pass those costs on to unit-owners. The respondents must certainly pay for costs associated with this action and this application, but as well, all unit-owners, including these respondents, ought to bear the costs associated with their board's decision here to first litigate and only talk later. It was a decision that may have been legally correct, but that showed poor judgment in my view. I choose not to reward that conduct by a more fulsome award of costs, in the hope the message will avoid the recurrence of future similar situations. (emphasis added)
 In summary, I find that the respondents have breached s. 98 of the Act by making alterations to the common elements without board approval or an agreement with the Corporation. I do not agree with the respondents that the applicant is barred by a limitation period or equitable defences. I also do not agree that applicant was required to comply with mediation and arbitration under ss. 132 and 134 of the Act before commencing this litigation. However, the applicant's decision to insist on litigation when alternative dispute mechanisms were available to it informs my decision to reduce the costs owing to the applications.
 As a result, I am granting TCECC No. 1508's application for a declaration that the respondent owners are in breach of s. 98 of the Act and for an order requiring the respondents to remove unauthorized alterations from the common elements adjacent to each of their properties. I order that costs be paid by the respondent to the applicant on a partial indemnity basis, reduced by twenty percent.
Despite criticism of mediation in condominium dispute resolution, it seems that the courts see its value and condominiums need to look at the alternatives available to them before commencing court proceedings.
If you have any questions or comments, please contact me.
Mediator and Arbitrator