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The Conduct of an Appeal

Recent Developments in Canadian Appellate Law and Practice

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.

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.