Executive Summary: Key Legal and Evidentiary Issues

• The application centered on whether extricable questions of law arose from a commercial arbitration damages award, justifying leave to appeal.

• Bear Mountain challenged the arbitrator’s assessment of damages, alleging reliance on speculation and improper application of contingency reductions.

• The applicants argued the arbitrator made a new and contradictory finding of liability compared to the original liability award.

• Claims were made that the arbitrator misapprehended material evidence, including expert testimony and receiver reports.

• The court considered whether the chambers judge properly applied the legal test for granting leave to appeal under the Arbitration Act.

• The determination turned on whether the issues raised were questions of mixed fact and law, rather than pure questions of law.

Facts of the case

Bear Mountain Resort & Spa Ltd., BM Management Holdings Ltd., and BM Resort Assets Ltd. (collectively, Bear Mountain) and Ecoasis Resort and Golf LLP (Ecoasis) were in a commercial dispute since April 2020. Ecoasis filed a civil action in the British Columbia Supreme Court, and the parties later agreed to resolve the matter through arbitration. In February 2021, the arbitrator released a liability award, finding various breaches of a contractual operations agreement between the parties. Bear Mountain sought leave to appeal the liability award, but leave was denied, and Bear Mountain did not pursue a review of that denial. The arbitrator then heard claims for damages based on the established breaches of contract. On April 15, 2025, the arbitrator awarded Ecoasis a cumulative $2,058,017.63 in damages.

Issues and arguments on appeal

In May 2025, Bear Mountain sought leave to appeal the damages award, arguing that the award raised eight extricable questions of law. These included that damages were awarded against an entity not party to the operations agreement, that an incorrect legal principle was applied regarding mitigation, that damages and contingency reductions were speculative, that a liability finding was made contrary to the liability award, and that the arbitrator misapprehended evidence from expert witnesses and receiver reports. Justice Winteringham, in chambers, denied leave to appeal, concluding that the proposed appeal did not raise extricable questions of law. Bear Mountain then sought a review of this decision by the Court of Appeal for British Columbia.

Discussion of policy terms and contractual clauses

The operations agreement between the parties was central to the dispute. Section 4.2 required Bear Mountain to provide food and beverage services to Ecoasis, and breaches of this obligation were among the key findings in the liability award. The arbitrator’s assessment of damages involved interpreting the agreement’s provisions, evaluating expert evidence, and applying legal principles regarding quantification of losses, mitigation, and the use of contingency reductions where evidence was uncertain or incomplete. The arbitrator cited relevant case law on the assessment of damages for loss of opportunity and the application of discount factors to account for uncertainty.

Outcome and ruling

The Court of Appeal reviewed whether Justice Winteringham erred in denying leave to appeal. The court found that the arbitrator’s assessment of damages was grounded in the evidence and relevant legal principles, and that no new or contradictory liability finding had been made. The court also determined that any alleged misapprehension of evidence did not rise to the level of a material error of law. Ultimately, the Court of Appeal concluded that Bear Mountain had not demonstrated the existence of extricable questions of law and that the issues raised were matters of mixed fact and law. As a result, the application for review was dismissed. Ecoasis Resort and Golf LLP was the successful party, with the damages award of $2,058,017.63 in its favor upheld, and ordinary costs for the appeal ordered to Ecoasis, to be assessed in accordance with Scale A. No special costs were awarded.