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The Conduct of an Appeal

Recent Developments in Canadian Appellate Law and Practice

SS v. Nova Scotia (Community Services): Nova Scotia Court of Appeal Asked to Reconstitute Appeal under the Judicature Act

Posted in Discretion Not to Hear Moot Appeals, Jurisdiction: Civil Matters

In a relatively rare request, the Nova Scotia Court of Appeal was recently asked to reconstitute an appeal under the Judicature Act that the appellant would otherwise have had no right to bring. Although the appellant’s request was unsuccessful, the decision, SS v. Nova Scotia (Community Services), is interesting for the Court’s consideration of when an otherwise defective appeal should be allowed to proceed.

Background

SS is the grandmother of three children currently in foster care. In September 2015, the Minister of Community Services applied for an order of permanent care and custody of the children. SS, in turn, applied to be added as a party to the Minister’s application. She also sought custody of her grandchildren under the Maintenance and Custody Act.

The application’s judge denied SS’s application to be joined as a party and dismissed her application for custody. SS subsequently appealed the decision under the Children and Family Services Act (“CFSA”), asking the Court of Appeal to grant her application for party status in the child protection proceeding.

The Minister moved to dismiss SS’s appeal on numerous grounds. In particular, the Minister argued that SS had no right to appeal under the CFSA as she was not a party to the proceeding. As such, the Minister brought a motion under Rule 90.40 of the Nova Scotia Rules of Civil Procedure to have SS’s appeal dismissed by a single judge of the Court of Appeal for disclosing “no ground of appeal”.

Decision

Justice Bryson, sitting in Chambers, agreed that SS had no right of appeal under the CFSA as she was not a party to the protection proceeding. He then noted that it could, nonetheless, be possible to reconstitute SS’s appeal under the Judicature Act, which permits an appeal from the NSSC.

In Nova Scotia, the ability for a judge to reconstitute an appeal is restricted to appeals that are not “otherwise provided by any enactment”. As a result, Justice Bryson held that the Court would have to find that the appeal provisions in the CFSA were no impediment to reconstituting SS’s appeal and that any appeal under the Judicature Act in a CFSA proceeding would still respect CFSA principles.

Ultimately, Justice Bryson held that, even if he had authority to amend SS’s appeal as one brought under the Judicature Act, he would not do so as:

  1. There are no exceptional circumstances, such as a compelling case on the merits, to warrant such an amendment;
  2. The appeal is moot; and
  3. The children’s best interests would not be served by doing so.

No Exceptional Circumstances

A chambers judges of the Court of Appeal cannot dispense with an appeal on the merits. However, Justice Bryson held that the merits, as in the strength of the case, are nonetheless a relevant factor to consider in any exercise of discretion. In turn, if SS appeared to have a strong case on the merits, it would weigh in favour of preserving her appeal.

On the facts of this case though, SS’s appeal was not strong on the merits. She did not allege any error of law or principle, but instead asserted numerous errors of fact relating to her health, history and personal circumstances. Justice Bryson found the record appeared to support the judge’s factual findings, and certainly did not disclose any obviously palpable and overriding error.

Mootness

Since SS failed to appeal the order dismissing her application for permanent custody, she was essentially asking the Court to give her standing in a matter that had already been decided. For her appeal to be effective, the custody order would have to have been appealed as well, and SS would need to seek standing to do so. Even if SS had requested standing, a single judge of the Court of Appeal would not have had the ability to grant it. SS’s appeal was, therefore, moot.

Best Interest of the Children

Lastly, Justice Bryson noted that SS’s proposed appeal would delay the adoption of her grandchildren even longer, which would not serve the best interest of the children and did not favour resurrecting her case by reconstituting it as a Judicature Act appeal.

Justice Bryson also determined that exercising his discretion to refer the matter to a full panel of the Court of Appeal likewise would not be in the best interests of the children, as it would simply complicate the case and exacerbate the uncertain circumstances they presently endure.

Conclusion

For the reasons discussed above, Justice Bryson refused to reconstitute SS’s appeal under the Judicature Act and, in turn, granted the Minister’s motion to dismiss her appeal.

Andraws v. Anslow: Reasons for Judgment Must be Adequate to Facilitate Proper Appellate Review

Posted in British Columbia, Overturning the Decision Appealed From

The British Columbia Court of Appeal in Andraws v. Anslow found that a trial judge’s reasons for judgment were inadequate, as they did not allow for meaningful appellate review. The plaintiff’s appeal from the dismissal of her action for damages was correspondingly granted. The decision provides guidance and illustrates the necessity of having reasons that are adequate for grounding a proper appellate review.

Background

The plaintiff launched an action for damages arising from injuries allegedly suffered in a motor vehicle accident in which she was rear-ended. The trial judge concluded that, on a balance of probabilities, “no injuries were occasioned by the accident”. However, the Court of Appeal found that the reasons were unclear as to whether the trial judge found that the plaintiff was not injured at all, or whether he found that the plaintiff was injured but not as a result of the accident.

The plaintiff advanced two grounds of appeal: (i) the inadequacy of the trial judge’s reasons; and (ii) the trial judge’s failure to consider the relevant evidence tending to corroborate her allegations that she had been injured in the accident. The Court of Appeal found that the appeal did not turn on the misapprehension of evidence issue, but on the question whether the reasons for judgment were adequate.

Law Governing the Adequacy of Reasons

The Court of Appeal summarized the law regarding adequacy of reasons:

[8]           The law governing adequacy of reasons is well settled. As Mr. Justice Tysoe, in dissent but not on this point, said in Bedwell v. McGill, 2008 BCCA 6 (CanLII):

[21]      The question of whether a trial judge’s reasons are adequate is a threshold issue. If the reasons are not adequate to permit proper appellate review, the appeal must be allowed and a new trial ordered. Inadequate reasons do not enable the appellate court to make its own findings of fact and conclusions of law based on those findings. In addition, the issue of adequacy of reasons is different than the issue of whether the failure of the trial judge to address critical evidence constitutes a palpable and overriding error.

[9]           Adequate reasons for judgment fulfil certain functions. As the Supreme Court of Canada stated in F.H. v. McDougall, 2008 SCC 53 (CanLII) at para. 98, they justify and explain the result, particularly to the losing party, provide a basis for appellate review, and satisfy the public interest in demonstrating that justice has been done. Reasons may be sufficient if they are responsive to the live issues in the case and the parties’ key arguments. A judge is not obliged to discuss all of the evidence, but it is necessary for the reasons to disclose that he or she has grappled with the substance of the live issues at trial. As Madam Justice Smith noted in Shannon at para. 9, even where reasons may be objectively inadequate, appellate interference will not be justified if the reasons, read in light of the record as a whole permit meaningful appellate review.

Conclusion

The plaintiff’s injuries were an important issue in this case, and aside from her own testimony, she provided corroborative evidence from her doctor and her husband. The Court of Appeal noted that, while it was open for the trial judge to reject this corroborative evidence, he did not provide any reasons for doing so:

[16]        The judge’s failure to offer any explanation of his reasons for rejecting important corrobative evidence makes it impossible to engage in any meaningful appellate review. Reading the reasons in light of the record as a whole only underscores the point. Whether the accident caused any injury was a central and vital live issue at trial. There was evidence bearing on this point. The corrobative evidence was subject to cross-examination and was the focus of submissions. But the reasons offer nothing to explain why, in light of the evidence and argument, the judge decided as he did. I cannot discern whether the judge accepted that Ms. Andraws was injured (at least to some extent), but those injuries were not caused by the accident or whether the judge concluded that the plaintiff was not injured at all. I cannot discern whether the trial judge rejected the husband’s evidence only in so far as it laid the basis for an inference that the injuries were attributable to the accident or whether he entirely rejected his evidence of his wife’s condition. I do not know if the judge accepted that the doctor detected muscle spasm (but attributed it to some other cause) or whether he rejected the evidence of the existence of muscle spasm. Attempting to discern the “why” of the result would require this Court to engage in pure speculation, not appellate review.

The Court of Appeal noted as well that there was an “inferential gap” in the trial judge’s reasoning, whereby his finding that the plaintiff had exaggerated the force of the collision led to his conclusion that she was a generally unreliable witness. It did not necessarily follow that the plaintiff exaggerating the impact of the collision meant that her evidence should be wholly disregarded, and the trial judge’s failure to explain this conclusion reinforced the Court of Appeal’s finding that the reasons were inadequate.

 

Stuart Budd & Sons Limited v. IFS Vehicle Distributors ULC: Supplemental Reasons Pending Appeal Lead to Reasonable Apprehension of Bias

Posted in Class Actions

Although it is trite to say that an appeal is from the order not the reasons, it is nevertheless equally trite that the reasons often provide the basis for an appellate court’s finding that the order was either correct or in error. Interesting questions about the interplay between the order and the reasons can arise when a judge issues supplementary reasons with knowledge that an appeal has been commenced.

In Stuart Budd & Sons Limited v. IFS Vehicle Distributors ULCthe Ontario Court of Appeal held that a reasonable apprehension of bias arose after a motion judge issued supplemental reasons nine months after a brief endorsement. A new hearing was thus ordered.

The Background

In the context of a franchise class action, the appellants brought a motion alleging that Ontario lacked jurisdiction or, in the alternative, was forum non conveniens. The motion judge held, in March 2014, that the respondents’ evidence on the motion was woefully deficient. He nonetheless adjourned the motion on his own initiative to allow the respondents to file supplementary evidence. His endorsement suggested that the appellants’ motion was unlikely to succeed. He issued a brief endorsement dismissing the motion after it was heard in April 2014. The Court of Appeal stayed the decision pending appeal in July 2014, and the motion judge issued supplementary reasons in February 2015. Within those supplementary reasons, he condemned the appellants’ tactics in bringing the motion, and expressed the view that jurisdiction motions frustrate the purposes of the Rules of Civil Procedure.

The Analysis

For a unanimous Court of Appeal, Justice Epstein “regrettably” came to the view that the motion judge’s actions created a reasonable apprehension of bias. She partially based her conclusion on reasons that are not relevant to appellate practice per se such as:

  • his adjournment on his own initiative (which could be seen as going out of his way to assist the respondents);
  • his deciding the motion without allowing the appellants to make oral arguments on certain issues;
  • inappropriately characterizing certain submissions of the appellants as “concessions”;
  • a derisive tenor, including describing the motion an “abuse of process” on his own initiative; and
  • being consistently discourteous towards the appellants’ counsel for no apparent reason.

Justice Epstein also gave helpful guidance about the circumstances in which delayed reasons will give rise to a reasonable apprehension of bias. Notably, when the judge has arrived at “an after‑the-fact justification for the decision rather than an articulation of the reasoning that led to the decision” or is engaged in “an after‑the-fact attempt not only to justify but also to bolster his decision”, a reasonable apprehension of bias may arise. Justice Epstein wrote:

[80]      Delay in delivering further reasons, in and of itself, does not displace the presumption of integrity: […].  Moreover, a judge’s knowledge of a pending appeal is just a factor to be taken into consideration: […]

[81]      However, in all of these circumstances, and in particular having regard to the conduct of the proceedings,  I am of the view that an informed and reasonable observer would think that the Amended Endorsement was something other than an expression of the reasoning that led him to dismiss the motion.

[82]      This case bears some similarity to Arnaout, which made clear that conduct will have the effect of displacing the presumption of integrity if, in all the circumstances, an informed and reasonable observer would think that the amendment was an after‑the-fact justification for the decision rather than an articulation of the reasoning that led to the decision […]

[…]

[84]      In my view, the Amended Endorsement suggests that the motion judge was motivated to respond to the challenges to his decision. I refer to the motion judge’s expressly identifying and then responding to grounds of appeal addressed in the reasons on the stay motion. Specifically, the motion judge dealt with two of the three “serious issues” raised in the proposed appeal – the fact that his Second Endorsement only addressed jurisdiction in regards to the appellant IFS and the consequences of certain comments he made and actions he took.

[85]      I find the portion of the Amended Endorsement where the motion judge attempts to justify his handling of the matter, particularly troubling […]

[86]      In these passages, the motion judge appears to insinuate himself into the appeal process by attempting to defend his actions and his comments.  It was an after‑the-fact attempt not only to justify but also to bolster his decision.

[Emphases added.]

Conclusion

Despite believing that the motion judge was “no doubt well-intentioned”, Justice Epstein ultimately concluded that “the cumulative effect of the motion judge’s conduct is that an informed, reasonable observer, viewing the proceedings as a whole, would conclude that the appellants did not receive the fair hearing to which they were entitled” (para. 89). She nonetheless held that the costs of the first motion should be at the discretion of the judge hearing the second motion.

It is clear from Stuart Budd that issuing supplemental reasons will not always create a reasonable apprehension of bias. But it is equally clear that a judge seeking to protect his or her reasons from appellate scrutiny can be improper, and may be the basis to find that a reasonable apprehension of bias has arisen.

R. v. Boutilier: Crown’s Right to Appeal the Constitutional Invalidity of Dangerous Offender Provisions of the Criminal Code

Posted in British Columbia, Jurisdiction: Criminal Matters

In R v. Boutilier, the British Columbia Court of Appeal concluded that the Crown has a right, under s. 759(2) of the Criminal Code, to appeal final decisions made in dangerous offender proceedings under the Code’s Part XXIV, including a decision holding that s. 753(1) is constitutionally invalid. In doing so, the Court dismissed the respondent’s application, which sought to quash the Crown appeal on the basis that the Crown had no statutory right to appeal. Justice Groberman’s concurrence additionally held that the Crown was entitled to appeal the constitutional invalidity of the provision, under British Columbia’s Court of Appeal Act, through civil proceedings, although the other Justices did not weigh in on this question.

Background

The Crown sought to have the respondent designated a dangerous offender under Part XXIV of the Criminal Code. While British Columbia Supreme Court declared that s. 753(1) of that Part of the Code was constitutionally invalid, it suspended the declaration for a year, refused to grant the respondent a constitutional exemption, designated him a dangerous offender, and sentenced him with indeterminate incarceration. The Crown brought a Notice of Appeal, pursuant to s. 759(2) of the Code, which enables rights of appeal under Part XXIV, seeking appeal of the declaration of s. 753(1)’s constitutional invalidity.

The respondent, arguing that the Crown is not entitled to a statutory right of appeal under s. 759(2), brought an application to quash the Crown’s Notice of Appeal:

[13]        Mr. Boutilier’s application raises two issues:

  1. a) Is the Crown entitled to appeal the declaration of constitutional invalidity when it succeeded in obtaining its ultimate objective of having Mr. Boutilier designated a dangerous offender under Part XXIV?
  2. b) Does s. 759(2) provide a statutory right of appeal from the declaration of constitutional invalidity?

The respondent maintained that the Crown’s pathways to appeal were limited to: (i) raising the constitutional ruling in response to the respondent’s appeal of his dangerous offender designation and his sentence; or (ii) seeking leave to appeal directly to the Supreme Court of Canada under s. 40(1) of the Supreme Court Act.

Analysis

The British Columbia Court of Appeal agreed that the two avenues to appealing the constitutional validity of s. 753(1) as outlined by the respondent were open to the Crown. However, the Court of Appeal disagreed that they were the only options for appeal available, finding that s. 759(2) entitled the Crown to a direct right of appeal. Justice Neilson’s reasons noted the practical problems of accepting the respondent’s contention that the Crown’s appeal options were limited:

[37]        I agree with Mr. Boutilier that the Crown is entitled to raise the constitutional validity of s. 753(1) in its capacity as the respondent to his appeal. A respondent may raise any argument that supports the order of the court below: Keegstra at 396. I see no reason why this would not apply to the Crown’s constitutional argument here. A reversal of the sentencing judge’s declaration of constitutional invalidity would lead to the same result: the imposition of an indeterminate sentence on Mr. Boutilier as a dangerous offender. This option is unsatisfactory, however, as the Crown’s right of appeal remains at the mercy of Mr. Boutilier. Should he abandon his appeal, the Crown’s appeal will also come to an end.

[38]        It is common ground that the Crown may avail itself of s. 40(1) of the Supreme Court Act and the “dual procedure” approach if it has no other avenue to appeal the declaration of constitutional invalidity. This too is unsatisfactory from the Crown’s perspective, however, as there is no certainty it will obtain leave to appeal. As well, the inconvenience and inefficiency of bifurcating the parties’ appeals is evident.

The Court of Appeal noted that while the determinations of “culpability and constitutionality” arose from the same proceedings, they are two separate and distinct rulings. Thus, the declaration of constitutional invalidity was a final order – and not an interlocutory order, as the respondent argued – in the proceeding to determine s. 753(1)’s constitutional validity, and was binding on the Crown and other trial courts in British Columbia. Similarly, the respondent’s argument that the Crown was precluded from appealing because it “won” in the proceedings below was rejected, as the Crown had “lost” in the proceeding over constitutional validity.

The final order of constitutional validity was determined by the Court of Appeal to be a “decision made under this Part” (i.e. Part XXIV of the Code), thus granting the Crown a right of appeal under s. 759(2):

[49]        An assessment of constitutional validity is thus necessarily and integrally related to the impugned provision and its legislative context. This proceeding was initiated and prosecuted under Part XXIV of the Criminal Code. Section 753(1), the provision under review, lies at the core of Part XXIV, and its constitutional validity is fundamental to the legitimacy of dangerous offender proceedings. Despite the two-pronged analysis described in Laba, the underlying proceeding in this case remains a proceeding under Part XXIV of the Criminal Code.

[50]        I subscribe to the view of the Court of Appeal in Ciarniello that appeal rights should not be interpreted in “an unduly restrictive or technical manner”, and that it is in the interests of justice to have all appeals relating to the same issue and proceeding brought at the same time before the same court, to the extent that the statutory language permits this.

[51]        In that context, I acknowledge that the phrase “a decision under this Part” in s. 759(2) is open to different interpretations, but I am persuaded that it may properly be interpreted broadly as “a final decision made in proceedings under this Part”. To adopt Chief Justice Lamer’s terminology in Laba at 982, the declaration of constitutional invalidity of s. 753(1) can and should be “piggybacked” onto appeal proceedings permitted by Part XXIV of the Criminal Code.

Truman v Association of Professional Engineers of Ontario: Ontario Divisional Court Applies Reasonableness Standard to Decision from the Discipline Committee of the Association of Professional Engineers

Posted in Standards of Appellate Review

In its recent decision in Truman v Association of Professional Engineers of Ontario, 2016 ONSC 472  the Ontario Divisional Court applied a reasonableness standard of review to a decision from the Discipline Committee of the Association of Professional Engineers of Ontario (the “Discipline Committee”). This case also confirmed that the Divisional Court has the jurisdiction to award costs to the appellants of a Discipline Committee hearing.

The Professional Engineers Act, RSO 1990, c P.28 (the “Act”) stipulates that complaints against professional engineers are investigated by a Complaints Committee.  The Complaints Committee investigates and then decides whether to refer the matter to the Discipline Committee.  Allegations are articulated by the Complaints Committee, and where the Complainants Committee deems appropriate, referred to the Discipline Committee. In this case, the appellants appealed the Discipline Committee’s decision to refuse them costs of the Discipline Committee hearing.

The parties agreed, and the court accepted, that the standard of review to be applied in this case was reasonableness. The court determined that the Discipline Committee’s decision to deny the appellants costs was unreasonable because the decision drew “a conclusion without providing any justification for the conclusion reached.” The court then went on to consider whether it had the jurisdiction to award costs to the appellants. As section 31(3) of the Act allows the court to “exercise all powers of the committee” the court concluded it had jurisdiction to award costs to the appellants, and issued an award of $21,000 for the hearing as well as $5,000 for the proceeding before the Divisional Court.

Antunes v. Limen Structures Ltd.: Lifting a Stay Pending Appeal Despite Late-Breaking Supplementary Notice of Appeal

Posted in Stay Pending Appeal

The Ontario Court of Appeal’s decision in Antunes v. Limen Structures Ltd. explores different aspects of appellate practice, principally surrounding stays pending appeal.

Background

The respondent-plaintiff was awarded damages for wrongful dismissal, pre-judgment interest, costs, and the value of 5% of the shares of the appellant-defendant (“Limen Structures”). The appellant originally appealed only the award for the value of the shares. After the respondent brought a motion to lift the stay pending appeal in respect of the other damages, the appellant filed a “supplementary notice of appeal” challenging the wrongful dismissal damages. Although appealing this award would normally have required an extension of time, Rule 68.08 of the Rules of Civil Procedure entitles an appellant to amend a notice of appeal without leave before the appeal is perfected.

Lifting the Stay

Justice Lauwers, in Chambers, nonetheless lifted the stay on the collection of the damages for wrongful dismissal, pre-judgment interest and costs. He explained the law surrounding the lifting of stays pending appeal:

[14]      This court described the test for lifting the stay in SA Horeca Financial Services v. Light, 2014 ONCA 811 (per Weiler J.A. (In Chambers)), at para. 13:

Rule 63.01(5) gives an appellate court judge discretion to lift a stay imposed by rule 63.01(1) “on such terms as are just.” In considering whether to lift a stay, the court should have regard to three principal factors: i) financial hardship to the respondent if the stay is not lifted; ii) the ability of the respondent to repay or provide security for the amount paid; and iii) the merits of the appeal.

[15]      In Keays v. Honda Canada Inc. […] Armstrong J.A. (In Chambers) considered lifting the stay in a wrongful dismissal action pending appeal to the Supreme Court of Canada. He partially lifted the stay on the basis that the respondent had made out a significant case for financial hardship if the stay were not lifted.  He recognized that it was very unlikely that the respondent would be able to repay or provide security for any amount paid to him.

[16]      While Armstrong J.A. expressed difficulty in assessing the merits of the appeal in Keays, because he was not provided with a list of the grounds, he noted, at para. 23, that the decision on liability for wrongful dismissal “is based on findings of fact made by the trial judge which were subject to appellate review on the basis of palpable and overriding error – a very difficult standard to meet.”

[17]      In Keays, Armstrong J.A. lifted the stay to the extent of $60,000 while the appeal proceeded in the Supreme Court of Canada. […]

Justice Lauwers held that the stay in this case should be lifted as:

  • the respondent had suffered financial hardship as a result of the wrongful dismissal and subsequent litigation;
  • there was reason to believe that the appellant may be insolvent by the time the appeal had resolved, a fact that was not helped by its “scorched earth” approach to litigating this claim;
  • for the appellant to succeed on its appeal with respect to the wrongful dismissal damages, it would have to demonstrate palpable and overriding error – a “very difficult standard to meet”; and
  • while the respondent would likely be unable to repay any award to the appellant, the interests of justice nonetheless favoured granting the stay – though the risk of non-repayment could be mitigated by the respondent’s counsel holding in trust funds collected as a result of lifting the stay, Justice Lauwers did not require this.

Costs of the motion were reserved to the panel hearing the appeal.

Global Royalties Limited v. Brook: Bankrupt Has No Right to Appeal Order Lifting Stay of Proceedings

Posted in Appeals with Leave, Jurisdiction: Civil Matters

In his decision in Global Royalties Limited v. Brook, Chief Justice Strathy of the Ontario Court of Appeal explained that the Bankruptcy and Insolvency Act (“BIA”) does not provide a bankrupt with a right to appeal an order lifting a stay of proceedings against him. Despite there being a multi-party bankruptcy, he rejected the submission that “the order or decision is likely to affect other cases of a similar nature in the bankruptcy proceedings”. He also refused to grant leave to appeal on the facts of this case.

Background

The plaintiffs-respondents commenced an action alleging that the bankrupt appellant-defendant, a former employee, had breached his fiduciary duties owed to them. The appellant submitted that the proceeding against him was invalid because s. 69.3 of the BIA stays proceedings against undischarged bankrupts. Justice Penny of the Superior Court held that the respondents’ claims for injunctive and declaratory relief, as well as their claims for damages from the appellant’s post-bankruptcy conduct, were not stayed pursuant to s. 69.3 of the BIA because they are not claims provable in bankruptcy. He further lifted the stay in respect of the claims for damages arising from the appellant’s pre-bankruptcy conduct because of “sound reasons” for doing so.

No Right to Appeal

Chief Justice Strathy held that the appellant had no right to appeal the Order pursuant to s. 193(b) of the BIA. The order was not “likely to affect other cases of a similar nature in the bankruptcy proceedings” and any potential effects were speculative:

[18]      Subsection 193(b) provides that an appeal lies to this court “if the order or decision is likely to affect other cases of a similar nature in the bankruptcy proceedings.” […]

[19]      The governing authorities stress that s. 193(b) concerns “real disputes” likely to affect other cases raising the same or similar issues in the same bankruptcy proceedings: […]

[20]      Here, the appellant submitted that the crossclaims against him by the co-defendants raise similar issues of whether the stay of proceedings under the BIA ought to be lifted.

[21]      In my view, this is a matter of pure speculation. Although counsel for the co-defendants was given notice of the motion to lift the stay, he did not appear on the motion and expressly disclaimed any intention to respond.

[22]      In addition, the statement of defence and crossclaim pleads the relationship between the co-defendants and the appellant took place after the bankruptcy. It seems arguable then that the stay would not apply to the crossclaim in any event.

[23]      Moreover, none of the grounds of appeal set out in the notice of appeal provide a basis to conclude that the order below would impact related cases in the bankruptcy.

Refusing Leave

Chief Justice Strathy also refused to grant leave to appeal. He began by recalling the test for leave to appeal under s. 193(e) of the BIA (described previously here), which requires considering whether the proposed appeal:

(a) raises an issue that is of general importance to the practice in bankruptcy/insolvency matters or to the administration of justice as a whole;

(b) is prima facie meritorious; and

(c) would not unduly hinder the progress of the bankruptcy/insolvency proceedings.

The appellant argued that the requirement of “sound reasons” to lift a stay required clarification. Specifically, he argued that courts should assess the merits of a claim when considering lifting a stay. Chief Justice Strathy disagreed, summarizing his conclusion as follows:

[35]      In my view, it has been settled law in this province, for at least 20 years, that on a motion to lift the stay the bankruptcy court is not required to look into the merits of the action […] As this court noted in Re Ma, at para. 3, this does not mean that the merits of the action can never be relevant. If, for example, the defendant wishes to argue that the action is frivolous, vexatious, or otherwise has little prospect of success, it may well adduce evidence to that effect.

[36]      I do not find that the proposed appeal raises an issue of general importance in bankruptcy and insolvency matters. Nor has the appellant satisfied me that the proposed appeal is prima facie meritorious. I, therefore, deny the appellant leave to appeal.

Kadiri v. Harikumar: The Importance of Choosing the Appropriate Venue for an Appeal

Posted in Jurisdiction: Civil Matters, Monetary Thresholds

In Kadiri v. Harikumar, 2016 ONSC 330 the Ontario Divisional Court ruled that the Kruzick J. of the Ontario Superior Court of Justice correctly declined to exercise his jurisdiction to transfer the plaintiff’s appeal from the Divisional Court to the Ontario Court of Appeal.

The plaintiff’s action was dismissed by Myers J. on August 4, 2015. The plaintiff then appealed to the Divisional Court. Kruzick J. held that the Divisional Court did not have jurisdiction to hear the appeal pursuant to section 19(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43. That is, the amount claimed in damages – $15 million – far exceeded the Divisional Court’s monetary jurisdiction of $50,000. Since the Court of Appeal, not the Divisional Court, was the correct venue for the appeal, Kruzick J. dismissed the appeal.

The plaintiff then brought a motion to the Divisional Court to vary or set aside Kruzick J.’s Order on the basis that Kruzick J. had erred in failing to exercise his discretion to transfer the appeal to the Court of Appeal. However, the appellant had not requested this relief in the Notice of Motion before the Divisional Court, nor had he sought this relief before Kruzick J, despite being aware of the jurisdictional problems. In light of these facts, the Divisional Court saw no basis to set aside or vary the Order and dismissed the motion.

R v. Lacasse: Supreme Court of Canada Confirms Limited Role of Courts of Appeal to Intervene in Criminal Sentences

Posted in Sentence Appeals

In criminal matters, sentencing ranges are established to indicate the maximum and minimum sentences that have been imposed for a particular crime. Such ranges act as guidelines for the sentencing judge and may provide a sense of certainty for the convicted. However, in R. v. Lacasse, the Supreme Court of Canada held that the Quebec Court of Appeal erred in reversing a sentence imposed on the Respondent, Mr. Lacasse, for deviating from the sentencing range for impaired driving causing death.

The case is noteworthy for the Court’s discussion on the standard for appellate intervention on sentencing appeals and the relevance of sentencing ranges.

Background

Mr. Lacasse was driving under the influence of alcohol when he lost control of his vehicle and careened into a ditch.  Two of his passengers died immediately upon impact. The incident was entirely Mr. Lacasse’s responsibility, and he plead guilty to two counts of impaired driving causing death. The only issue before the Court of Quebec was to determine the appropriate sentence.

The Court of Quebec

In Quebec, sentences for impaired driving causing death are generally divided into three categories:

(1)        lenient sentences between 18 months to three years’ imprisonment where the predominant factors weigh in favour of the accused;

(2)        harsh sentences between three and six years’ imprisonment where the factors of deterrence and denunciation outweigh the personal factors of the case; and

(3)        very harsh sentences between six and nine years’ imprisonment where personal factors are unfavourable to the accused, with even more severe sentences possible “when circumstances approach the worst-case situations”.

Mr. Lacasse requested a sentence of no more than three years’ imprisonment, which would have fallen within the lenient category. In contrast, the Crown asked for a sentence of six to eight years’ imprisonment, followed by a seven-year driving ban: Well within the “very harsh” category.

After reviewing each parties’ submissions, the Sentencing Judge found that the aggravating factors outweighed the mitigating and sentenced Mr. Lacasse to six years and six months’ imprisonment on each count of impaired driving causing death, to be served concurrently. The Sentencing Judge also prohibited Mr. Lacasse from operating a vehicle for a period of 11 years starting from the sentencing date.

The Quebec Court of Appeal

The Quebec Court of Appeal reduced Mr. Lacasse’s sentence to four years’ imprisonment and reduced the length of his driving prohibition to four years commencing at the end of his incarceration.

The Court of Appeal’s decision primarily rested on its conclusion that the Sentencing Judge had deviated from the sentencing ranges established by courts for impaired driving offences. It noted that the Sentencing Judge had imposed a sentence at the lower end of “very harsh” category, but that the unfavourable personal factors which would normally explain a move from the “harsh” to “very harsh” categories simply were not present. The Court of Appeal also noted that the Sentencing Judge should have given greater consideration to Mr. Lacasse’s potential for rehabilitation and placed less emphasis on making an example of him.

The Supreme Court’s Decision

On appeal to the Supreme Court, the Majority overturned the Quebec Court of Appeal’s decision and restored the sentence imposed by the Sentencing Judge.

Standard for Intervention on an Appeal from a Sentence

Justice Wagner, for the Majority, and Justice Gascon, for the Minority, agreed that the standard for intervention on a sentencing appeal is high:

“…a sentence [can] only be interfered with if it [is] ‘demonstrably unfit’ or if it reflect[s] an error in principle, the failure to consider a relevant factor, or the over-emphasis of a relevant factor.” (R. v. Nasogaluak, 2010 SCC 6 at 46, quoted by Justice Gascon at 136 and referred to by Justice Wagner at 39).

However, the Justices disagreed on the proper application of that standard.

For the Minority, Justice Gascon read Nasogaluak as establishing two alternative considerations justifying appellate intervention: If a party can establish that the sentencing judge erred in principle, failed to consider a relevant factor, or over-emphasized a relevant factor, a court of appeal may intervene in the sentence without the party further needing to establish that the sentence was “demonstrably unfit”. In that same vein, an appellate court may intervene in a demonstrably unfit sentence even if the sentencing judge did not err in his reasoning.

On this approach, Justice Gascon held that where a reviewable error is shown in the sentencing judge’s reasoning, it will be appropriate for an appellate court to intervene and, at that point, assess the fitness of the sentence on its own accord. Such an error does not necessarily mean that the court will vary the sentence, but it “opens the door to intervention and permits an appellate court to reopen the sentencing analysis.” (at 139).

The Majority took a markedly different approach to the standard of intervention. For Justice Wagner, allowing appellate intervention simply on the showing of an error in reasoning without further establishing that the error affected the sentence itself risked undermining the discretion afforded sentencing judges. Rather, Justice Wagner held that:

“an error in principle, the failure to consider a relevant factor or the erroneous consideration of an aggravating or mitigating factor will justify appellate intervention only where it appears from the trial judge’s decision that such an error had an impact on the sentence” (at 44).

As such, a mere showing that the sentencing judge erred in his reasoning is insufficient to open the doors to full appellate review, without further proof that the error affected the sentence itself.

Sentencing Ranges

Despite their different approaches to the standard for appellate intervention, Justices Wagner and Gascon each agreed that sentencing ranges are merely guidelines and that a judge will not have committed a reviewable error simply for deviating from them. As Justice Wagner wrote:

…sentencing ranges are primarily guidelines, and not hard and fast rules. As a result, a deviation from a sentencing range is not synonymous with an error of law or an error in principle…

Any other conclusion would have the effect of authorizing appellate courts to create categories of offences with no real justification and accordingly intervene without deference to substitute a sentence on appeal. But the power to create categories of offences lies with Parliament, not the courts”. (at 61-62)

Disposition

While both Justices agreed that deviating from sentencing ranges is not, on its own, sufficient to justify appellate intervention on a sentencing appeal, they disagreed on whether that deviation was the sole reason for the Quebec Court of Appeal’s intervention in this case. For Justice Wagner, it was. And since both the Majority and Minority agreed such a deviation is not, on its own, a reviewable error, Justice Wagner found the intervention inappropriate and restored the Sentencing Judge’s sentence.

In contrast, Justice Gascon found the Court of Appeal’s reasoning to be more nuanced and its decision based more on a finding that the Sentencing Judge imposed a sentence that was neither proportionate nor individualized. As such, he would have dismissed the Crown’s appeal and let the Court of Appeal’s sentence stand.

Conclusion

Although perhaps of limited relevance outside of the criminal context, R c. Lacasse provides an interesting example of judges approaching the same standard of review from rather different angles. In the context of an appeal, the decision is also noteworthy for Justice Wagner’s opening comments, in which he summarizes  the dual role appellate courts play in ensuring the consistency, stability and permanence of case law in criminal and civil contexts:

  1. Appellate courts act as safeguards against errors made by trial courts and are required to rectify errors of law and review the reasonableness of exercises of discretion. They must ensure trial courts state the law correctly and apply it uniformly.
  2. Appellate courts must ensure the coherent development of the law while formulating guiding principles to ensure that it is applied consistently in a given jurisdiction. They must clarify the law where clarification is needed and, in Quebec, they must ensure the harmonious interpretation of the distinctive rules of Quebec civil law (at 36 and 37).

 

 

Three Ontario Court of Appeal Decisions Hold Standard Form Insurance Contracts are to be Reviewed on Correctness Standard

Posted in Standards of Appellate Review

Contract law was forever changed in Canada as a result of the Supreme Court’s 2014 decision in Sattva Capital Corp. v. Creston Moly Corp. As we have previously discussed, the Court held that contractual interpretation is a question of mixed fact and law, and a trial judge’s interpretation of a contract is therefore to be given deference on appeal. But should this apply for standard form contracts, such as insurance contracts, where multiple pieces of litigation regarding the interpretation of the same contract may emerge?

The Supreme Court of Canada has granted leave to appeal an Alberta Court of Appeal decision, Ledcor Construction Limited, et al. v. Northbridge Indemnity Insurance Company, et al., that wrestles with this issue. This should hopefully result in important clarification in the law given that the Ontario Court of Appeal has found itself divided on this issue. We have already discussed how, in October 2015, the Ontario Court of Appeal decided that deference was due to a trial judge’s interpretation of a standard form insurance contract. But since then, three different judges of the Ontario Court of Appeal have strongly disagreed:

The three cases, principally MacDonald, make a compelling case for why a trial judge’s interpretation of a standard form insurance contract should be reviewed on a correctness standard.

MacDonald

MacDonald was an action brought against an insurance company for coverage and indemnification. The motion judge concluded that the plaintiffs were entitled to neither. Justice Hourigan concluded that deference was not owed to his interpretation of the insurance policy. He noted that many appellate judges and academic commentators across Canada have criticized Sattva, suggesting it must be understood in its own unique factual context (which was very much tied to the British Columbia Arbitration Act). However, Justice Hourigan nonetheless decided that significant guidance must be taken from Sattva such that appellate courts will generally be deferential to trial judges’ interpretations of a contract.

Justice Hourigan concentrated on the rationales the Supreme Court gave in Sattva for a deferential standard of review with respect to contractual interpretation:

  1. “Canadian courts now recognize that the meaning of contractual terms is often derived from contextual factors, including the purpose of the agreement, the commercial background of the agreement, and the nature of the relationship created by the agreement” (para. 20).
  2. “the purpose of the distinction drawn in the jurisprudence between questions of mixed fact and law and questions of law supports, as a matter of judicial economy, a limit on the ability of an appellate court to interfere with the fact-finder’s interpretation of a contract, given that in most cases the interpretation will have no impact beyond the interests of the parties to the particular dispute” (para. 21)

These rationales did not provide a justification for deference on the facts of this case in Justice Hourigan’s view. First, the need to consider the “unique factual circumstances” of a case is of little importance when interpreting standard form contracts:

[32]      […] the relative importance of the surrounding circumstances is largely dependent on the nature of the contract. The circumstances surrounding the formation of a contract negotiated by arms-length parties may be very important in understanding the parties’ objective intent. Similarly, the determination whether the parties are in a special relationship, such as a fiduciary relationship, may also be an important factor in determining the parties’ objectively intended obligations under a contract.

[33]      The importance of the factual matrix is far less significant, if at all, in the context of a standard form contract or contract of adhesion where the parties do not negotiate terms and the contract is put to the receiving party as a take-it-or-leave-it proposition. Any search for the intention of the parties in the surrounding circumstances of these contracts “is merely a legal fiction” [citation omitted]

Second, unlike the interpretation of most contracts, the interpretation of a standard form contract is of great significance beyond the parties to a case. As such, not only is deference unwarranted, but intervention can be particularly warranted:

[37]      The distinguishing factor between questions of law and mixed fact and law on appeal is the precedential value of the appellate court’s intervention. It is inarguable that the interpretation of many contracts would likely have very limited precedential value. However, standard form contracts are often highly specialized contracts that are sold widely to customers without negotiation of terms. The interpretation of the Title Policy applies equally to the appellants and to all of Chicago Title’s other customers who purchased the same policy, and therefore is of general importance and has precedential value in a way that the interpretation of other contracts may not.

[38]      In addition to the incompatibility of the reasoning in Sattva with the contract at issue in the current case, there is an important public policy argument that supports the adoption of a correctness standard for appeals involving the interpretation of standard form contracts such as the Title Policy. As Rothstein J. recognized in Sattva, at para. 51, provincial appellate courts play an important role in ensuring consistency in the law. They must be vigorous in fulfilling that mandate and must always be mindful of the line between deference to the trial court and the abdication of their statutorily-imposed duties.

[39]      Correction of legal errors lies at the heart of the responsibilities and the capabilities of provincial appellate courts. The standard of review analysis must respect the roles of both the trial and appellate courts in order for the civil justice system to function effectively. […]

[40]      It is untenable for standard form insurance policy wording to be given one meaning by one trial judge and another by a different trial judge […] Unpredictable outcomes in litigation only serve to encourage litigation because the more a given result depends on the particular trial judge, the greater the chance that litigants will risk going to trial. Appellate courts have a valuable role to play in ensuring consistency in the law and greater predictability in litigation outcomes: […]

[41]      In summary, the standard of review that applies to a standard form insurance contract like the Title Policy is correctness. The rationales in Sattva that support adopting a deferential standard of review do not apply to contracts of this type, as the factual matrix does not meaningfully assist in interpreting them and their construction has broad application. For these reasons, adopting the correctness standard of review for these contracts best ensures that provincial appellate courts are able to fulfill their responsibility of ensuring consistency in the law.

Monk

Monk addressed the interplay of various provisions in an insurance contract that would determine whether insurance coverage applied to damage caused by a contractor in the course of, or as a result of, restoration work performed on the exterior of the plaintiff’s home. The motion judge concluded that there was no coverage in these circumstances. Justice Huscroft’s concise standard of review analysis built on MacDonald:

[21]      Following the hearing of the appeal, the panel invited the parties to make submissions concerning the standard of appellate review and, in particular, the applicability of the Supreme Court of Canada’s decision in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633. We have received and reviewed those submissions.

[22]      This court has determined that the correctness standard of review applies to decisions interpreting standard form insurance contracts: MacDonald v. Chicago Title Insurance Company of Canada, 2015 ONCA 842, at para. 41.

[23]      In this case, as in MacDonald, we are concerned with the interpretation of a standard form insurance contract. This is not a case in which the circumstances surrounding the contract are important to its interpretation, nor is it a case in which the interpretation of a contract has no impact beyond the parties to it. The respondents’ submission that the “faulty workmanship” provision in this contract is not standard across the insurance industry misses the point: it is standard to the many customers of the respondent Farmers who purchased the same policy and it should be interpreted consistently.

[24]      Accordingly, the standard of review is correctness.

Daverne

The Daverne appeal arose from a third party claim which was brought after a party defended itself in a main action for which an insurer denied coverage. With respect to the standard of review of the motion judge’s interpretation of the relevant insurance contract, Justice Lauwers adopted Justice Hourigan’s analysis:

[11]      In response to a question from the bench, the appellant took the position that the interpretation and application of the insurance policy falls into the deferential standard of appellate review demanded by Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633. Counsel for the appellant submitted that he had nevertheless shown reversible error, even on a deferential standard.

[12]      Since this appeal was heard, this court has determined that the correctness standard of review applies on standard form insurance contracts: MacDonald v. Chicago Title Insurance Company of Canada, 2015 ONCA 842 at para. 41. As Hourigan J.A. observed [… :] “It is untenable for standard form insurance policy wording to be given one meaning by one trial judge and another by a different trial judge.” This followed his comment, at para. 38, that: “there is an important public policy argument that supports the adoption of a correctness standard for appeals involving the interpretation of standard form contracts.”

[13]      In the case of insurance policies, which involve the interpretation of similar if not common language and the application of general principles of insurance law, the high degree of generality and precedential value justifies a departure from the deferential standard of appellate review.

[14]      Accordingly, correctness is the standard of review applicable to the motion judge’s interpretation of the insurance policy. […]

Conclusion

Macdonald, Munk and Daverne make a compelling case for why a trial judge’s interpretation of an insurance contract should be reviewed on a correctness standard. It will be interesting to see how the Supreme Court resolves this issue.