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The Conduct of an Appeal

Recent Developments in Canadian Appellate Law and Practice

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.

British Columbia (Police Complaint Commissioner) v The Abbotsford Police Department: Determining Whether an Appeal is Civil or Criminal in Nature

Posted in Jurisdiction: Civil Matters, Jurisdiction: Criminal Matters

The British Columbia Court of Appeal in British Columbia (Police Complaint Commissioner) v The Abbotsford Police Department, quashed an appeal of an order that directed sealed materials relating to confidential informants be returned back to police departments. In doing so, the court had to determine whether the appeal was civil or criminal in nature, and provided an overview of the law determining the nature and character of appeals. Since the appeal was found to be in criminal in nature, the court lacked the jurisdiction to hear the appeal, as the Criminal Code does not provide for interlocutory appeals.

The court added that, in the alternative, the appeal was denied on the grounds that informer privilege cannot be balanced against other policy considerations or goals to expand the circle of privilege.

Determining the Nature and Character of Appeals: Civil or Criminal?

The British Columbia Court of Appeal affirmed the legal test for determining the nature and character of appeals. The court said:

[52]    Counsel also seem to agree that the following passage from E.G. Ewaschuk, Criminal Pleadings and Practice in Canada (2nd ed., looseleaf) correctly states the law:

An appeal is either civil or criminal in nature. The nature and character of the appeal is not determined by the result of the proceedings being appealed from but, rather, by the nature of the law upon which the proceedings are based. The test is whether the proceedings being appealed are criminal or civil in nature and founded on the federal criminal law power, or whether the proceedings are civil in nature and founded on provincial legislative powers. [At 23–4; emphasis added.]

This passage has been approved by this court: see R. v. Ciancio 2006 BCCA 311 (CanLII) at para. 18; R. v. Sandhu 2012 BCCA 73 (CanLII) at para. 18; Hells Angels at para. 144.

While the respondent Abbotsford Police Department submitted that the “law upon which the proceedings are based” was criminal law, the appellant Police Complaint Commissioner submitted that the application below was civil since it was founded on Rule 8-1 of British Columbia’s Civil Rules. The court did not accept the appellant’s “rather literal” view, which would have, per Director of Civil Forfeiture v Hells Angels Motorcycle Corporation, elevated form over substance:

[59]        From the foregoing, I take two propositions. First, even if the application had been brought in a civil action, that fact would not have been determinative, as doing so would elevate form over substance. Second, the Code creates a comprehensive regime for the sealing and unsealing of packets. Once a packet has been sealed in connection with an authorization given under Part VI of the Code, only those judges specifically permitted by the Code, in the circumstances delineated by the Code, may unseal the packet, and only for the purposes implicit or expressed in the Code[…]

Noting that the sealing orders and applications for disclosure were first made in a criminal proceeding, the court found that the application was criminal in nature and thus denied the appeal for lack of jurisdiction:

[67]        Unlike CBC, the case at bar of course involves the privilege that protects confidential informants – an objective that will not end when Cst. A.B. and any other persons also charged, have been tried. It cannot be said that the unsealing of the packets will not “affect” sealing orders made in criminal proceedings for the protection of informants or, equally important, the informants themselves (who with the Crown are the beneficiaries of the secrecy rule). The application for disclosure to Sgt. Mullin was first made in the criminal proceeding of R. v. A.B. and in my opinion has, like the “matter” in Angel Acres, not lost its criminal character by reason of the change in the style of cause or the PCC’s invocation of the Civil Rules and the inherent jurisdiction of the Supreme Court of British Columbia.

[…]

[69]        In the result, I conclude that although the PCC purported to frame his application as civil in nature, an application to obtain access to a packet that has been sealed in a criminal proceeding must, in the context of the law as it now stands, be treated as criminal in nature. It follows that the order made by the Associate Chief Justice on March 11, 2015 was also criminal and that no appeal to this court is available. On this basis, I would quash the appeal.

Mardonet v. BDO Canada LLP: Orders Quashing Summons to Parties are Interlocutory and not Final

Posted in Interlocutory v Final Orders, Jurisdiction: Civil Matters

The Ontario Court of Appeal in Mardonet v. BPO Canada LLP determined that a motions judge’s order quashing a summons to a party is interlocutory, even if the summons is issued for a motion in which the party is not involved.

In Mardonet, the plaintiff sued the appellants to recover funds that were allegedly misappropriated and alleged that the moving parties were negligent in conducting audits and failing to detect the misappropriation of funds. The plaintiff moved for a Mareva injunction against the appellants, who in turn served notices of examination against the moving parties. The notices of examination were quashed by a motions judge.

While the moving parties submitted that the order under appeal was interlocutory, the appellants submitted it was final. Relying on Smerchanski v. Lewis, which held that an order quashing a summons to a non-party was final because it finally disposed of the rights of both the non-party and the party who issued the summons, the appellants submitted that the moving parties were the effective equivalent of non-parties.

The Court of Appeal disagreed with the appellants, finding that since the moving parties are parties to the action the order is interlocutory:

[8]         We conclude that the order under appeal is interlocutory and that the appeal must be quashed. The key factor in this court’s decision in Smerchanski was that the summons was issued to a non-party. That is not this case. The moving parties are parties to the action. The reasoning in Smerchanski does not apply. The order under appeal does not finally determine whether the moving parties can be examined in the action.

[9]         Further, the fact that the motion judge’s decision may finally determine whether the moving parties can be examined in relation to the Mareva injunction does not make the motion judge’s order final. The motion judge’s order does not terminate the underlying action or resolve a substantive claim or defence of one of the parties. To hold that the motion judge’s order is final because it determines whether parties to an action can be examined in relation to an interlocutory motion would effectively eliminate the distinction between interlocutory and final orders: see Waldman v. Thomson Reuters Canada Limited, 2015 ONCA 53 (CanLII), [2015] O.J. 395, at para 22.

AE Hospitality Ltd v George: Requirements of Test for Leave to Appeal Under Rule 62.02(4)

Posted in Appeals with Leave

AE Hospitality Ltd v George, 2015 ONSC 7370 dealt with the test for granting leave to appeal under Rule 62.02(4) of the Ontario Rules of Civil Procedure. On the issue of whether there was a “conflicting decision” as required by r. 62.02(4)(a), the fact that the motion judge declined to provide reasons on costs was not a sufficient conflict with existing case law. Further, Wilton-Siegel J. clarified that r. 62.02(4)(b) requires a party to demonstrate that there is “serious reason” to doubt that there was a proper basis for the costs award.

Background

The defendants sought leave to appeal a costs order which awarded costs in favour of the plaintiffs in the amount of $30,000. Before making the costs award, the motion judge requested cost submissions be provided by March 30, 2015. The plaintiffs provided costs submissions according to this timeline; the defendants did not. The motion judge issued his decision on March 31, 2015. After receiving the costs award, the defendants inquired whether the motion judge would still accept their costs submissions. Although the motion judge accepted and reviewed the costs submissions, he did not change his award. The defendants sought leave to appeal this costs decision. The defendants argued that because the motion judge confirmed his original $30,000 costs award without providing any reasons, they were unable to tell if necessary adjustments were factored into the motion judge’s costs award.

Decision

The test for granting leave to appeal under r. 62.02(4)(a) requires that there be a “conflicting decision” and that it be “desirable that leave to appeal be granted.” The defendants argued that in the circumstances, they were entitled to written reasons providing an indication as to whether an adjustment was made in light of their costs submissions, and that without such reasons it was impossible to determine the reasonableness of the cost award. The defendants further argued that the lack of reasons in the circumstances of the case conflicted with the decisions of the Court of Appeal in Toronto Standard Condominium Corp No 1633 v Baghai Development Ltd, 2012 ONCA 417 and in United States v Yemec, [2006] OJ No 510 (SC).

Wilton-Siegel J. did not accept this argument. His Honour noted “These decisions can only constitute conflicting decisions to the extent that they evidence a principle that written reasons are required in all circumstances. There is no statutory or case law authority for such a principle.” Wilton-Stiegel J. further noted that neither s. 131 of the Courts of Justice Act, nor r. 57 require a court to provide written reasons for costs award.

Wilton-Siegel J. went on to find that the defendants had not satisfied the test for leave under r. 62.02(4)(b).  That is, Wilton-Siegel J. clarified that the test for leave under r. 62.02(4)(b) will only be satisfied where a party can demonstrate that there is “serious reason” to doubt that there was a proper basis for the costs award of the motion judge. On the facts of the case, the defendants were unable to meet this standard and leave was not granted.

Walchuk Estate v. Houghton: Final v. Interlocutory … Again

Posted in Interlocutory v Final Orders

In Walchuk Estate v. Houghton, the Ontario Court of Appeal dismissed a motion to quash an appeal on the basis that the lower court’s adjournment of a contempt motion was a final order. The decision also provides guidance, yet again, on the proper test for distinguishing between final and interlocutory orders.

Background

In 2011, Walchuk obtained judgment against the appellant, Houghton, for $105,000. In December 2013, Walchuk attempted to examine Houghton in aid of execution on the judgment. Houghton did not attend the examination. Walchuk subsequently brought a motion for contempt. Harper J adjourned the contempt motion and ordered that Houghton attend an examination in aid of execution and produce the relevant documentation at the examination. While Houghton did attend the examination, he failed to bring any of the requested documentation. Moreover, the day before the scheduled examination, Houghton filed for bankruptcy.

Since Houghton failed to produce the requested documents, Walchuk renewed her motion for contempt. Houghton argued that pursuant to section 69 of the Bankruptcy and Insolvency Act, RSC 1985, the contempt proceedings against him were stayed. On March 9, 2015 Harper J concluded that section 69 did not stay the contempt proceedings against Houghton and ordered that the contempt motion be heard at a later date.

Houghton appealed this decision and brought a motion to stay the contempt proceedings pending the outcome of this appeal. Walchuk brought a cross-motion to quash the appeal.

Analysis

The issue before the Court of Appeal was whether or not Harper J’s March 9, 2015 decision was a final or interlocutory order.

In order to address this issue, the Court of Appeal noted: “The starting point is to look at the judgment or order itself, and not the reasons for the judgment” (at para 12). However, the Court went on to say that “[I]n some cases, to determine whether an order is truly final or interlocutory, one needs to look at the reasons” (at para 14). The Court further clarified this test and stated: “If the reasons show that the defendant has been deprived of a substantive right or defence that could resolve all or part of the proceedings, then the order is final” (at para 14).

Here, Harper J’s judgment alone appeared to be interlocutory – it adjourned, rather than finally disposed of the contempt motion. However, the Court of Appeal held that this was an appropriate case to look to the reasons of the judgment. The Court of Appeal held that since Harper J determined that section 69 did not stay the contempt proceedings, Houghton was potentially deprived of a right or defence that would have ended the proceedings against him. On this basis, the Court of Appeal held that Harper J’s judgment was indeed a final order and thus, the motion to quash the appeal was dismissed.