Summary: Puppet Killer Productions Inc. sought to vary a Court of Appeal order regarding an arbitrator’s decision. The initial order allowed them to appeal an arbitrator’s award of damages and ordinary costs but denied leave to appeal the decision on special costs. The application to vary this order, aiming to include an appeal on special costs, was dismissed.

Key Points:

• Background: Puppet Killer Productions argued that the arbitrator should have awarded special costs due to the respondent's conduct during arbitration. They requested this on the grounds that the conduct was allegedly reprehensible, involving fabricated evidence and a meritless counterclaim.
• Arbitrator's Decision: The arbitrator decided not to award special costs, stating that as neither party was fully successful, each should bear its own costs. This was based on the parties' agreement to assess costs according to Scale B of the BC Supreme Court Rules Tariff unless ordered otherwise.
• Court of Appeal's Analysis: The Court confirmed the arbitrator's discretion in not awarding special costs, finding no error in principle or misapprehension of facts by the chambers judge. It was determined that the arbitrator understood the legal test for special costs and justifiably declined to apply it given the circumstances presented.
• Standard of Review: The application was reviewed with deference to the chambers judge's discretion. The court stated that challenging such discretion required showing a legal error or misconceived facts, which were not demonstrated.

Outcome: The Court of Appeal dismissed the application to vary the order, maintaining the decision not to grant leave to appeal the arbitrator’s decision on special costs. Costs for this application were awarded to the respondent, specific amount is not detailed in the provided excerpt.