Accounting for Law

Court says judge can seek submissions on issue after ruling

A recent ruling from the Ontario Court of Appeal confirms that a judge can seek further submissions on an undecided issue following his or her judgment without being considered ‘functus’, or barred from considering the case further, says Toronto civil litigation lawyer John Philpott.

In Pirani v. Esmail, a dispute arose out of the management and sale of a rental property that was subject to a trust. After the parties called competing experts, who came to different conclusions about the rental property’s profitability in the years prior to its sale, the trial judge ultimately accepted the respondent’s expert’s calculations. She found the appellants liable for breach of trust and breach of fiduciary duty, awarding damages, aggravated damages and substantial indemnity costs to the respondent.

In appealing the decision, the appellants challenged the respondent’s expert report and argued that the aggravated damages award should be set aside, as the trial judge “ought not to have sought further submissions on the issue of aggravated and exemplary damages” after issuing her initial judgment. They argued that in these circumstances, the trial judge was “functus” – the general rule providing that the final decision of a court cannot be reopened.

“On the facts, the trial judge invited the parties to make additional submissions on aggravated damages in her reasons for judgment. All of the other aspects of her trial decision were issued and entered as an order of the court prior to her ruling on this discrete issue of aggravated damages,” says Philpott, associate with Brauti Thorning Zibarras LLP, who represented the respondents before the Court of Appeal.

“The appellants urged the court to apply the technical rule that once an order for judgment is issued, the judge becomes ‘functus’ and can no longer consider the case. The respondents countered that this general rule should only apply when a judge is revisiting a decided issue, and should not apply when a judge purposely does not decide an issue so that both parties can make proper submissions,” he adds.

In its Feb. 26 ruling, the Court of Appeal ruled in favour of the respondents, writing that, in this case “the trial judge did not purport to alter or revisit her initial judgment. No additional evidence was called. The trial judge simply sought and received additional submissions on one issue, the issue of aggravated and exemplary damages. This was an issue that she had explicitly held open in her initial reasons.”

“The decision favours sound legal reasoning over the application of an overly technical rule. Of course, the legal system requires finality and judges should not be permitted to reopen decided cases. However, that mischief is not at play here. The judge in this case did not reopen an issue, rather she allowed an issue to remain open,” says Philpott.

“The previous Court of Appeal decision on functus was open to the interpretation that once an order is issued and entered, a trial judge is barred from considering further issues. While bright line rules may be appealing to some, they can cause injustice in particular circumstances. Here, the Court of Appeal applied the principle and rationale behind the rule and, in my view, came to the correct decision,” he adds.

In terms of the impact that the decision has had on his clients, Philpott says that they “suffered distress and humiliation as a result of the defendants’ actions and were therefore entitled to aggravated damages. They should not be barred from compensation because of a mere timing issue, especially when there is no prejudice to the defendants.”

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