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The Conduct of an Appeal

Recent Developments in Canadian Appellate Law and Practice

Richmond Hill (Town) v Elginbay Corporation: Statutory Uncertainty Required for Deference to Tribunal

Posted in Standards of Appellate Review

In its decision in Richmond Hill (Town) v Elginbay Corporation, 2016 ONSC 5560 the Ontario Divisional Court noted that in order for a tribunal’s statutory interpretation to be entitled to deference, there must have been a “statutory uncertainty.” Where no such uncertainty exists, the tribunal’s interpretation will not be afforded deference.

This case arose in the context of a municipal planning issue. Pursuant to s. 42 of the Planning Act, a municipality may pass a by-law requiring a developer –  as a condition for land development – to convey land for parks or other recreational purposes, or to pay cash-in-lieu of such a conveyance. In 2010, Richmond Hill’s town council exercised this power, adopting a standard formula to calculate the amount that condominium developers were required to pay the municipality in lieu of creating parkland to accompany new developments. In 2015, the Ontario Municipal Board (“OMB”) imposed on the cap on the application of this standard rate (equivalent to 25% of the area of any site to be developed or its cash-in-lieu equivalent). The Town of Richmond Hill appealed the OMB’s decision.

At issue on appeal was whether the OMB had the authority to impose a cap on the municipality’s alternative parkland dedication. Applying a reasonableness standard of review, the Ontario Divisional Court determined that the OMB had overstepped its jurisdiction. The OMB’s decision was inconsistent with municipalities’ broad powers to  make “individual planning decisions that affect their citizens” (para 48). The OMB had unnecessarily fettered the discretion of the town to make its own decision to set the alternative rate, contrary to Parliamentary intent as expressed in the Planning Act (para 52).

Furthermore, the Divisional Court concluded that the OMB’s statutory interpretation of the Planning Act  was “unreasonable on the face of the plain wording of s. 42” (para 46). The Board’s interpretation, the Divisional Court found, “effectively abrogates the role that the Legislature intended municipalities would perform and instead bestows that role onto itself” (para 45-46).  The Court further noted at para 47:

[47]           The modern principle of statutory interpretation, and the concomitant deference to the interpretation adopted by an administrative tribunal, rests on the prerequisite that there exists  “a statutory uncertainty” thus giving rise to the possibility of competing reasonable interpretations.  There is no statutory uncertainty here nor did the OMB point to one.  Rather, the OMB appears to have adopted a statutory interpretation solely for the purpose of allowing it to regulate the municipality’s exercise of its authority under s. 42. [Emphasis added]

 

Boston Pizza v Registrar, Alcohol and Gaming: Standard of review applicable to decision of the License Appeal Tribunal is reasonableness

Posted in Standards of Appellate Review

The Divisional Court’s decision in  2193145 Ontario Inc. o/a Boston Pizza v Registrar, Alcohol and Gaming, 2016 ONSC 3552 clarifies that the standard of review from the decision or order of the License Appeal Tribunal (“LAT”) is reasonableness. Justice Horkins noted that uncertainty in the authorities on the correct standard necessitated further explanation on this issue.

Background

Shortly after leaving the appellant’s restaurant establishment where he was overserved, an intoxicated patron was struck by a vehicle and died. The Registrar, Alcohol and Gaming issued a Notice of Proposal to Suspend the appellant’s Liquor Licence. The Tribunal found that the appellant breached s. 29 of the Liquor Licence Act by selling liquor to a person who was or appeared to be intoxicated, and s. 45(1) of Ontario Regulation 719/90 by allowing drunkenness on its premises. The appellant’s appeal to the LAT was dismissed. The appellant then appealed to the Divisional Court, which also dismissed the appeal, holding that the decision was reasonable.

Divisional Court’s Analysis

Justice Horkins began by first setting out the correct standard for review for decisions of the LAT. She accepted and adopted Justice Sachs’ basis for the standard of review in 2130845 Ontario Inc. v. Ontario, 2014 ONSC 3595 quoting the decision at length. In that particular case, Justice Sachs rejected the view that the LAT is a generalist tribunal and that the sufficiency of its reasons should be reviewed on a correctness standard:

While it is true that […] the Licence Appeal Tribunal reviews decisions arising under twenty-one different statutes, it does not follow that it lacks expertise relating to licensing issues in this province. The twenty-one statutes specified in LATA are similar in substance and structure. For example, ten of them contain provisions similar to s. 6(2)(d) of the Act. Thus, unlike the courts, the LAT is an adjudicative body that has developed specialized expertise in substantively-related licensing issues across the various regulatory schemes implemented by the Legislature.

In light of this analysis, Justice Horkins concluded “…it is clear from the reasoning provided by Sachs J. that the proper standard of review is reasonableness.”

Justice Horkins then applied this standard of review to the case current case. Beginning with an analysis under s. 29 of the Liquor License Act, the appellant challenged the Tribunal’s interpretation of the provision and the evidence used to support it. Justice Horkins rejected the appellant’s contention and found that the Tribunal correctly identified the legal test under s. 29 and applied it as it was required to do so. The test in this case was that “no person shall sell or supply liquor or permit liquor to be sold or supplied to any person who is or appears to be intoxicated.”

According to Justice Horkins, the Tribunal’s application of s. 29 of Liquor License Act was consistent with direction of the Supreme Court of Canada, noting that “where the court stated that the ‘words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.’”

The Tribunal fairly reviewed and considered evidence of intoxication in light of the properly identified legal test. Additionally, the Tribunal had ample evidence to support the finding that the deceased was served liquor when he appeared to be intoxicated.

Justice Horkins also found the Tribunal’s decision pertaining to s. 45(1) of the Regulation reasonable. The Tribunal, once again, had ample evidence that the appellant permitted drunkenness in its premises, thereby breaching the Ontario Regulation.

 

Ledcor Construction Limited v Northbridge Indemnity Insurance Company: the SCC revisits Sattva on standard of review for contractual interpretation

Posted in Standards of Appellate Review

While initially heralded as a transformative for the law of contractual interpretation and appellate intervention, the legacy of Sattva Capital Corp v Creston Moly has become more complicated as the Supreme Court begins to revisit this case.

Sattva arose in the context of a finder’s fee agreement. An arbitrator’s interpretation of this agreement entitled Sattva to a finder’s fee, the size of which Creston disputed. The arbitral award led to a dizzying string of appeals, culminating at the Supreme Court. Historically, contractual interpretation had been viewed as a question of pure law, reviewable under a correctness standard of appellate review. In Sattva, the Supreme Court reversed this historical standard. The Court’s finding that contractual interpretation amounted to a question of mixed fact and law had immediate implications for the appellate standard of review, requiring the application of a very deferential standard of palpable and overriding error. Nonetheless, Sattva left room for provincial appellate courts to review cases involving contractual interpretation on the historical correctness standard where an extricable question of law could be identified.

Following Sattva, a growing chorus of dissent emerged from the provincial appellate courts about the standard of review that applied to the interpretation of standard form contracts. This dissent culminated in Ledcor Construction Ltd. v Northbridge Indemnity Insurance Co., in which the Supreme Court clarified how its decision in Sattva should be interpreted in the context of standard form contracts. In Ledcor, a contractor was hired to clean the windows of a building under construction, but in doing so damaged its windows. The windows’ replacement cost was claimed under a builders’ risk insurance policy, but the insurers denied coverage under an exclusion clause. At issue was the proper interpretation of the exclusion clause in the standard-form insurance contract. At trial, the judge concluded the windows’ replacement cost was not excluded. Applying a correctness standard of review, the Alberta Court of Appeal overturned the trial judge’s decision. Taking the opportunity to revisit its decision in Sattva, the Supreme Court found that the Alberta Court of Appeal had applied the appropriate standard of review.

In Ledcor, the Supreme Court recognized a possible exception to its holding in Sattva, finding that where: (i) an appeal involves the interpretation of a standard form contract, (ii) the interpretation at issue is of precedential value, and (iii) there is no meaningful factual matrix that is specific to the particular parties to assist in the interpretation process, this interpretation is better characterized as a question of law, subject to a correctness standard of review. The Court found that the reasons underlying the decision in Sattva are generally “less compelling in the context of standard form contracts”. First, the factual matrix surrounding the formation of the contract is less relevant to adhesion contracts, where parties have not negotiated terms. Second, the interpretation of standard form contracts – which are typically highly-specialized in nature and widely distributed to customers without negotiation of their terms – may have significant precedential value. Consistency in the interpretation of such contracts may be of interest to the legal system in the future. This is not to say that following Ledcor the interpretation of a standard form contract will always be a question of law; rather, the Supreme Court left this determination to the provincial appellate courts.

In the wake of Ledcor, it remains to be seen whether the Supreme Court will further clarify its decision in Sattva. One opportunity to do so will arise when the Court hears the appeal of Teal Cedar Products v British Columbia  in November 2016. This case relates to a settlement agreement between Teal Cedar and the Province of British Columbia under the B.C. Forestry Revitalization Act. In Teal Cedar, an arbitrator awarded interest on the settlement award to Teal Cedar, notwithstanding a clause in an addendum to the settlement agreement which the Province submitted precluded an award of interest. The Alberta Court of Appeal determined that the appropriate standard of review was correctness in relation to both the arbitrator’s statutory and contractual interpretation in that case. Considering the arbitrator’s statutory interpretation, the Court of Appeal found that no deference was owed to the arbitrator, who had no special expertise in the legislation at issue. With regard to contractual interpretation, the Court of Appeal found that an extricable question of law had arisen as to whether the arbitrator had incorrectly allowed the surrounding circumstances to overwhelm the words of the settlement agreement. In the appeal of Teal Cedar, the Supreme Court will have an opportunity to weigh in on the standard of review applicable to commercial arbitrations which engage both statutory and contractual interpretation. The Court will also have the chance to clarify whether allowing the surrounding circumstances to overwhelm the words of an agreement is an “incorrect legal principle” which attracts a correctness standard. It remains to be seen what further guidance we will see from the Court in the post-Sattva era.

 

Sorila v. Chan: Standard of Appellate Review not a matter of “directions”

Posted in Standards of Appellate Review, Uncategorized

In Sorila v. Chan, the British Columbia Court of Appeal held that it was inappropriate for the standard of review to be determined by way of directions. The court ruled that determining the standard of review to be applied to an appeal is an issue which goes to the substance of that appeal, and which therefore must be determined and applied by the judge hearing the appeal.

The appellant had brought an application to commence third party proceedings, which was dismissed by a master. The appellant subsequently appealed the master’s decision to a B.C. Supreme Court judge. In that appeal, the judge in chambers provided directions that the standard of review to be applied was the “clearly wrong” standard. The appellant – without proceeding with the appeal – instead appealed the chambers judge’s directions regarding the appropriate standard of review.

The Court of Appeal quashed the chambers judge’s directions, noting that the standard of review should not be determined by way of directions:

[20]        The standard of review on an appeal from a master is a nuanced question, requiring an analysis of the importance of the master’s ruling to the final disposition of the case. That analysis depends very much on the circumstances of an individual case: see Kalafchi v. Yao, 2015 BCCA 524 (CanLII), particularly at para. 16.

[21]        The correct standard of review from the order of a master will often be closely tied to the substantive issues on the appeal. It is therefore appropriate that it be decided by the judge hearing the appeal, as part of the appeal proceedings.

[22]        It was, therefore, improper for the parties to seek to resolve the issue of standard of review by way of directions rather than in the appeal itself. The problem is compounded in this case, because the judge who gave the directions is now retired, and will not be hearing the substantive appeal. His ruling should not bind the judge who hears the appeal, who may well take a different view of matters.

Law Society of Upper Canada v. Kivisto: Final v. Interlocutory Analysis Varies Between Civil and Regulatory Proceedings

Posted in Interlocutory v Final Orders

In its decision in Law Society of Upper Canada v. Kivisto, 2016 ONSC 1400 the Ontario Divisional Court explained that because of the differences between a regulatory proceeding and a civil proceeding, the distinction between final and interlocutory orders will vary in these two contexts. The Court also confirmed that the distinction between final and interlocutory orders has a different dimension when the appeal is from an appellate decision rather than a decision of first instance.

In this case, the Divisional Court considered the Law Society of Upper Canada’s motion to dismiss Mr. Kivisto’s notice of appeal from an order of the Law Society Appeal Division. Section 49.38 of the Law Society Act, R.S.O. 1990, c.L.8 provides that an appeal lies to the Ontario Divisional Court from a final decision or order of the Law Society of Upper Canada Appeal Panel. At the outset of its decision, the Court relied on Opara v. Law Society of Upper Canada, 2015 ONSC 3348 (Div. Ct.) to briefly confirm that the distinction between final and interlocutory orders has a different dimension when the appeal is from an appellate decision rather than a decision of first instance.

Ultimately, the Court ruled that the Appeal Panel’s decision was not a final decision for two reasons. First, the Appeal Panel’s decision did not deprive Mr. Kivisto of a substantive right that could determine the entire proceeding. Based on the Court’s review of the applicable case law, this meant that and the decision was therefore not a “final” decision. Second, the Court went on to state that even if its interpretation of the jurisprudence was incorrect, the case law it had reviewed regarding the distinction between final and interlocutory orders arose pursuant to s. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c.43. The Court went on to note that a “civil proceeding, however, is quite different than a regulatory proceeding and specifically a conduct application under the Act.” The Court concluded that “final” decision under the Act meant determination of professional misconduct or, in this case, a determination of conduct unbecoming. As the Appeal Panel’s decision was not a final determination on this issue, it was not a final decision within the meaning of the Act and there was therefore no right of appeal to the Divisional Court.

 

Runkle v Alberta (Chief Firearms Officer): mootness is alive and well

Posted in Discretion Not to Hear Moot Appeals

In its decision in Runkle v. Alberta (Chief Firearms Officer), the Alberta Court of Appeal dismissed an appeal from the Court of Queen’s Bench on the basis of mootness. The respondent Runkle had originally brought a claim against the Chief Firearms Officer of Alberta (“CFAO”), because the CFOA had amended the respondent’s Long-Term Authorization to Transport Firearms to exclude permission to transport his firearm to a gunsmith. However, by the time the appeal reached the Alberta Court of Appeal, the respondent had received the authorization he originally sought from the CFOA. Therefore, the respondent requested to have the appeal dismissed on the grounds that the case was now moot. Conversely, the CFOA wanted the appeal to be heard, for fear that the Queen’s Bench decision would set a problematic precedent.

The court determined that on the facts, this appeal became moot once the respondent had been given exactly what he had wanted from the CFOA. The Court stated that it does retain the discretion to entertain a moot appeal under limited circumstances:

[3]        The three criteria applied in deciding whether to exercise the discretion are whether there still exists an adversarial relationship, concern for conserving judicial resources and sensitivity to the court’s proper law-making function […]

However, in this case the court determined that the remaining questions of law were best left for an appropriately adversarial set of facts. Specifically, the Court stated:

[10]      While we endorse the observation of the leave judge that the law in this area might benefit from greater certainty, it can perhaps be said in most cases where the issue becomes moot on the facts that the law could still use clarification. The adversary system, however, generally contemplates a real dispute existing in order to nourish the exercise of appellate jurisdiction.

Lin v. Rock: Pending Motion to the SCC for Reconsideration of Leave does not Constitute and Appeal nor Prevent Courts from Making Decisions Affecting Parties

Posted in Procedure: SCC, Stay Pending Appeal

In its decision in Lin v. Rock, 2016 ONSC 1638 the Ontario Divisional Court confirmed that a pending a motion to the Supreme Court of Canada for reconsideration of its denial of an application for leave to appeal does not constitute a further appeal, nor does it prevent a court from making decisions affecting the rights of the relevant parties.

In this case, Master Hawkins had granted a motion by Rock to dismiss the action on the basis that Lin had failed to comply with interlocutory orders of the court, including the order to pay costs. Lin did not attend the hearing of the motion to dismiss, nor did she file material in response to the motion.

On the appeal, Lin did not dispute that she had not delivered an amended pleading as ordered, nor did she dispute that she had not paid the cost orders made against her. Rather, Lin took the position that because she had brought a motion to the Supreme Court of Canada for reconsideration of the Court’s denial of her application for leave to appeal, this request operated as an automatic stay of the orders from which she appealed. Lin pointed to the fact that she had recently received a Notice from the Senior Registry Officer for the Supreme Court of Canada which advised “that the Registrar may request a judge to make an order that no further document relating to the proceeding be filed by Lin.”

Citing Padelt v. 638506 Ontario Inc., 2010 Carswell Ont 10711 (Ont. C.A.) and Hundley v. Garnier, 2013 BCSC 380 the Divisional Court concluded that the case law “supports a conclusion that a pending motion for reconsideration to the Supreme Court of Canada does not constitute a further appeal or prevent the court from making decisions affecting the rights of the parties in proceedings before them”. Given this, the Divisional Court ruled that Master Hawkins had the jurisdiction to entertain Rock’s motion to dismiss and concluded that there was no palpable and overriding error that would justify appellate intervention. The appeal was therefore dismissed.

Ross-Clair v. Canada (Attorney General): Judge’s Failure to Consider Contract as a Whole Leads to Correctness Review

Posted in Overturning the Decision Appealed From, Standards of Appellate Review

The Ontario Court of Appeal’s decision in Ross-Clair v. Canada (Attorney General)is another post-Sattva instance of a dispute over the standard of review of contract interpretation. For a unanimous Court of Appeal, Justice Epstein reviewed the application judge’s interpretation of a contract on the correctness standard. She did so not because the contract was standard form (as was the appellant’s primary argument) but because the trial judge committed an extricable error of law by reading a particular provision in the contract in isolation and thus failing to consider the contract as a whole. She held:

[45]      In my view, the decision is reviewable on a standard of correctness.

[46]      I do not come to this conclusion based on a finding as to the nature of the Contract. Although it may be appropriate to regard the Contract as a standard form agreement, the interpretation of which is subject to review on a correctness standard, it is difficult to arrive at a definitive resolution of that question on this record. There is scant evidence of the circumstances surrounding the formation of the Contract, particularly any aspects that may have been negotiated. There is also scant evidence of the extent to which the terms in the Contract are used in other agreements with the Government of Canada. Moreover, the fact that in a previous decision, the court was required to interpret a very similar contractual provision does not provide a basis for a conclusion that the interpretive exercise in this case would have the potential precedential value that influenced the decisions in Vallieres, Precision Plating, Ledcor, and Chicago Title.

[47]      My view rests on PWC’s alternative argument. For reasons I will now explain, I agree that, in interpreting the Contract, the application judge erred by failing to construe the Contract as a whole. Accordingly, it falls to this court to properly interpret and apply GC 35.4.

Essar Steel Algoma Inc. (Re): Determining Appeal Procedure in CCAA proceeding

Posted in Jurisdiction: Civil Matters, Stay Pending Appeal

In Essar Steel Algoma Inc. (Re), Justice David Brown of the Ontario Court of Appeal held that the ambit of orders “made under” the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the “CCAA”), and thus requiring leave to be appealed, is broad. Though concluding that the appellant in this case required leave to appeal, he nonetheless ordered the leave motion be expedited. He further stayed a particular Superior Court order pending the hearing of the leave motion even though irreparable harm was not established.

Background

The appellant (“Cliffs”) and the respondent (“Essar”) became parties to a supply contract relating to Essar’s steel manufacturing business in Sault Ste. Marie. After their relationship soured, Cliffs commenced a complaint in Ohio and terminated its contract with Essar. Thereafter, Essar sought and obtained an order under the CCAA.

Essar moved in the CCAA proceeding for a declaration that Cliffs’s purported termination of the contract was not effective and Cliffs must continue to supply Essar. Cliffs then brought a motion that the Ontario court lacks jurisdiction to grant the relief sought or, alternatively, Ontario is not the convenient forum in which to adjudicate the dispute. Justice Newbould of the Superior Court dismissed this jurisdictional motion.

Orders “Made Under” the CCAA

Before the Court of Appeal, Cliffs argued that Justice Newbould’s Order was not “made under” the CCAA and, as such, it did not require leave to be appealed. Justice Brown disagreed and, in doing so, he comprehensively considered the rationale behind the leave requirement in the CCAA.

First, Justice Brown held that s. 13 of the CCAA (which prescribes a leave to appeal requirement) recognizes that the CCAA seeks to resolve matters and obtain finality without undue delay. Accordingly, appeal rights are to be restricted and the ambit of orders “made under” the CCAA for the purpose of s. 13 is broad.

Second, he held that two cases that Cliffs relied upon to support its position were clearly distinguishable as:

  • Sandvik Mining & Construction Canada Inc. v. Redcorp Ventures Ltd., a 2011 British Columbia Court of Appeal decision, was a case where the CCAA proceedings had been dormant for several years after they had failed – it was in these peculiar circumstances that the receiver’s obtaining an order in that proceeding “as a matter of convenience” resulted in an order not “made under” the CCAA; and
  • Monarch Land Ltd. v. Sanderson of Fish Creek (Calgary) Developments Ltd., a 2014 Alberta Court of Appeal decision, was a case that involved a second non-CCAA issue being tacked on to a trial of issues in a CCAA proceeding, purely as a matter of procedural convenience.

Third, he held that the inquiry should be “purposed-focused”:

[33]      […] When asked to determine whether an order requires leave to appeal under s. 13 of the CCAA, an appellate court should ascertain whether the order was made in a CCAA proceeding in which the judge was exercising his or her discretion in furtherance of the purposes of the CCAA by supervising an attempt to reorganize the financial affairs of the debtor company, either by way of plan of arrangement or compromise, sale, or liquidation: […] If the order resulted from such an exercise of judicial decision-making, then it is an order “made under” the CCAA for purposes of s. 13.

He noted that indicia about when an order is “made under” the CCAA include (para. 34):

  • “whether the order was ‘necessarily incidental to the proceedings under the CCAA’ or ‘incidental to any order made under the CCAA’”;
  • “whether the order required the interpretation of a previous order made in the CCAA proceeding or involved an issue that impacted on the restructuring organization of the insolvent companies”;
  • “if ‘CCAA considerations informed the decision of and the exercise of discretion by the chambers judge’ or ‘if a claim is being prosecuted by virtue of or as a result of the CCAA’”; and
  • whether “the notice of motion and the reasons of the motion judge explicitly state that the matter is a CCAA proceeding”;
  • whether “directions were sought, amongst other things, to determine rights and requirements of voting in relation to the proposed plan of arrangement”;
  • whether there is an independent originating process; and
  • whether “the order determined rights arising under an agreement that arose out of and that was related entirely to the CCAA proceeding”.

Applying the principles to this case, Justice Brown concluded that the Order was “made under” the CCAA for reasons including:

  • “it was made by the judge supervising an active CCAA proceeding in furtherance of the purposes of the CCAA” (para. 35);
  • the evidence “disclosed that what, if any, rights Essar possesses under the Contract, which Cliffs purported to terminate on October 5, 2015, is an issue in the CCAA proceeding” (para. 35);
  • Cliffs’s submission that Justice Newbould did not rely on a specific section of the CCAA was incorrect but, in any event, could not have been determinative; and
  • the fact that Essar could have brought the relevant claim in a normal civil proceeding without regard to the CCAA is irrelevant – the question remains whether the Order was “made under” the CCAA.

Expediting Leave Motion

Given the urgency of the matter, Justice Brown ordered that the leave motion be expedited.

Granting a Stay

The RJR-Macdonald test for granting a stay pending appeal is very well known. An appellant must establish that:

  1. the appeal raises a serious issue to be tried;
  2. the appellant will suffer irreparable harm if the stay is not granted; and
  3. the balance of convenience favours granting a stay.

There was no question that the appeal raised a serious issue to be tried – indeed, Essar conceded as much.

Cliffs argued that its participating in further steps in the Superior Court pending its appeal would result in it having attorned to the jurisdiction of the Ontario courts. Whether this would in fact amount to attornment and thus give rise to irreparable harm is an issue that has divided the Court of Appeal over the past decade. However, Essar had made various undertakings that reduced if not removed this risk, so Justice Brown concluded that irreparable harm had not been established.

Having said that, the balance of convenience favoured granting the stay as Cliffs was not required to do anything in the Superior Court during the short period of time prior to the hearing of the expedited leave motion. As such, there was no disadvantage to a stay pending the hearing of the leave motion. Justice Brown did note that if leave were granted, the panel hearing the leave motion would need to consider whether to continue the stay.

Even though irreparable harm had not been established, Justice Brown held that the overall consideration in deciding whether to grant a stay relates to the interests of justice. Given the unique facts of this case, he held a two week stay pending the hearing of the leave motion was warranted.

Fanshawe College of Applied Arts and Technology v. Au Optronics Corporation: Consolidating Class Action Appeals While Refusing to Strike Portions of a Factum

Posted in Appeal Order, Not Reasons, Class Actions, Jurisdiction: Civil Matters

Fanshawe College of Applied Arts and Technology v. Au Optronics Corporation, is a short endorsement of the Ontario Court of Appeal that addressed two aspects of appellate practice:

  • when portions of factums should be struck; and
  • when a Divisional Court appeal should be consolidated with a Court of Appeal appeal.

In an apparent attempt to allow the panel hearing the appeal to decide all relevant issues in the most efficient manner possible, Justice Huscroft refused to strike the portions of the factums, and ordered consolidation of the different appeals.

Background

The appellant brought a motion to add a second plaintiff in a class action. The motion judge concluded that the proposed amendment expanded the scope of the appellant’s claim and that the proposed second plaintiff’s claim was in any event statute-barred.

The respondents had also brought a summary motion to dismiss the appellants’ claim for being statute-barred. The motion judge denied the respondents’ motion. The respondents’ appeal to the Court of Appeal was quashed on the basis that it was interlocutory (discussed here). The Divisional Court then granted leave to appeal.

Striking Portions of Factums

The appellant brought a motion to strike certain paragraphs in the respondents’ factums, arguing they raised issues that went beyond the scope of the motion judge’s reasons and its appeal. The respondents opposed the motion to strike but consented to the filing of a reply factum. Justice Huscroft held that the panel hearing the appeal could elect not to consider the impugned paragraphs, but it was inappropriate to strike them. He granted leave to file a reply factum:

[8]        I do not think it is appropriate to strike anything from the respondents’ factums. This is not to say that the Court of Appeal must deal with all of the issues and arguments when they are raised in this court. It is only to say that the respondents are entitled to raise them.

[9]        First, the appeal lies from the order, not the reasons for the order. The respondents are not limited to making arguments in response to the reasons proffered by the motion judge. Rule 61.12(3)(d) of the Rules of Civil Procedure allows the respondents to raise additional issues in their factums, and they can seek to sustain the order on any basis that is not an entirely new argument: Perka v. The Queen, [1984] 2 S.C.R. 232, at p. 240. Second, Fanshawe acknowledges that the paragraphs it proposes to strike are in no way inappropriate – they are not scandalous, frivolous, or futile. They raise arguments concerning defences to the proposed claim. Third, the arguments were raised by the respondents in their factums and in oral argument before the motion judge, who acknowledged that he did not deal with all of them in his decision.

[10]      Accordingly, Fanshawe’s request to strike the paragraphs from the respondents’ factums is dismissed. Fanshawe may serve and file a reply factum of no more than 15 pages by March 4, 2016. The respondents do not have a right of reply to the reply factum.

Consolidating the appeals

Notwithstanding efficiency issues, the Ontario Court of Appeal does not always order consolidation of appeals in the same manner if doing so would result in it deciding issues within the jurisdiction and expertise of the Divisional Court – see, for example, Cavanaugh v. Grenville Christian College, discussed here. But Justice Huscroft nonetheless granted the respondents’ motion:

[11]      The power to consolidate appeals arises under s. 6(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43, which establishes this court’s jurisdiction to hear and determine an appeal that lies to the Divisional Court.

[12]      The parties agree that the question whether the discoverability rule applies to the limitation period in the Competition Act arises in both Fanshawe’s appeal to this court and the respondents’ appeal to the Divisional Court.

[13]      Fanshawe submits that the Divisional Court could be expected to await this court’s decision on the discoverability issue, so there is no risk of inconsistent decisions and no reason to consolidate.

[14]      In my view, it is appropriate to consolidate these proceedings. Fanshawe’s motion to amend its statement of claim was brought in response to the respondents’ motion for summary judgment. Fanshawe’s goal appears to have been to add MASS as a representative plaintiff for a different class of consumers as a safeguard against the possibility that its claim might be statute-barred. Not only is there an overlap on the discoverability issue, but there is also overlap in the evidence required for the two appeals.