Accounting for Law

OCA decision relieves summary judgment concerns

The Ontario Court of Appeal’s recent move to clarify the scope of motion judges’ fact-finding powers has alleviated some concerns that followed the Supreme Court of Canada ruling on the subject in Hryniak v. Mauldin earlier this year, says Toronto civil litigation lawyer Patricia Virc.

In Baywood Homes Partnership v. Haditaghi, the Court of Appeal set aside a motion judge’s move to grant summary judgment dismissing an appellant's allegations of fraud “on the basis that it was precluded by the terms of a release that he accepted as valid,” when the judge had referred the respondents’ counterclaim on two promissory notes to trial.

In allowing both the claim and counterclaim to proceed to trial, Court of Appeal Justice Peter Lauwers writes: “In my view, the motions judge made a material error in principle in his approach to this motion in light of the Supreme Court of Canada’s decision in Hryniak. He erred in failing to assess the advisability of the summary judgment process in the context of the litigation as a whole.

“… It was inappropriate for the motions judge to distinguish between the promissory notes and the Third Release on the basis of decontextualized transcript evidence," Lauwers writes, adding that “Great care must be taken by the motion judge to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all."

Virc, a lawyer with Steinberg Morton Hope & Israel LLP explains that “The piece that the judge had decided on summary judgment, those facts were still going to be relevant to certain legal results that were as yet outstanding between the parties."

The decision marks the first time the Court of Appeal has addressed the summary judgment issue since the Supreme Court’s decision in Hryniak,which Virc said earlier this year, appeared to water down the standard developed by the Court of Appeal which called for judges to gain a “full appreciation” of the evidence and issues prior to making dispositive findings.

“The SCC urged judges to gain this comfort in cases where there appears to be a genuine issue for trial by using their powers under Rules 20.04(2.1) and (2.2) to hear viva voce testimony on discrete issues,” Virc said, adding this allowed the fact-finder to go beyond the written record on certain factual issues without requiring a full blown trial on all issues.

However, she says, the Court of Appeal’s comments in Baywood Homes have now alleviated some of the concerns she had following Hryniak.

“I think it was a very, very important thing for the Court of Appeal to come out with a case that gives further guidance following the Supreme Court of Canada decision. I think otherwise, it would have been faced with, perhaps a lot of appeals where some motions judges then viewed their fact-finding powers as being broader than they are,” Virc says.

“Traditionally, we have viewed the summary process as being for a very limited range of cases. For example, when you can decide a case based on documents and credibility’s not an issue. Or where the credibility assessment is not key to the result, then you can decide it on summary judgment. And the expanded Rule 20 was giving judges a little more leeway to make credibility assessments and factual findings in certain cases.

“The Court of Appeal here is trying to reign it in a bit, in saying that these new fact-finding powers should not be exercised in a staged summary judgment process where credibility is important. You must consider the litigation as a whole, and whether the trial judge is likely to gain a better appreciation of context that will shed a different light on the evidence as a whole.

“It does relieve the anxiety I had that motions court judges might have seen the Supreme Court decision in Hryniak as a green light to decide more cases without the benefit of a trial,” says Virc.

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