Canada: New Tricks For Summary Judgment

Last Updated: September 6 2011
Article by D. Lynne Watt

When summary judgment motions were first introduced to Ontario, they promised to reduce costs, shorten the length of trial, and free up court resources to reduce the strain on the legal system. This was to be accomplished by striking out baseless claims and defences, thereby removing them from the court's docket entirely or dramatically reducing the issues to be tried. As time went on, this intent was undermined by a series of decisions which interpreted the rule by, limiting the availability of summary judgment to a narrow-set of circumstances. This, in addition to the prospect of punitive cost awards if unsuccessful, on a motion for summary judgment, caused practitioners to often disregard it as a viable tool. With the addition of a single word into the Summary Judgement Rule, and the explicit granting of powers to judges hearing summary judgment motions, the new incarnation – introduced in Ontario in 2010 -- has done away with this troubled past and is finally in the position to accomplish what the Rule originally set out to do.

This new found strength began with changing the question being asked on a motion for summary judgment from, "whether there is a genuine issue for trial", to "whether there is a genuine issue requiring trial". To most, the addition of this one word may appear insignificant but it has had an important legal effect. For instance, British Columbia's summary judgment regime has flourished for years under the latter wording, with Ontario's having flat-lined under the former. Along with this revised test, judges have also been granted robust powers that mimic those of a trial judge to determine whether the standard has been met. This includes the ability to weigh evidence, to evaluate credibility, and to draw reasonable inferences from the evidence presented.

Lacking these powers in the past, judges were helpless when responding parties resisted summary judgment by leading even a minimal amount of evidence suggesting there was a genuine issue. Thwarting summary judgment motions in such a manner is no longer possible, as the responding party must now put its best foot forward by showing specific facts that demonstrate a genuine issue that can only be decided at a trial. One potential negative side effect of this change, however, is the potential for summary judgment motions to become long, drawn-out, evidence-laden hearings. In an effort to curb this possibility, the court is required to be cognizant of the proportionality principle that flows throughout the new procedural rules and not to allow a summary judgment motion to last multiple days.

If a multiple day motion is necessary, this is a strong indication that the issues in dispute warrant a full trial and the court is to exercise its discretion in declining to the hear the motion. This will usually be the case where the issues are complex, complicated, or contentious or extensive evidence is led. If the court allows a motion to proceed, but summary judgment is not granted, the motions judge is encouraged to make orders to limit the scope of issues to be determined at trial. In this way, the time, costs, and knowledge generated by the motion are not squandered, thereby allowing the trial to progress more efficiently and cost effectively.

This efficiency can only be realized if parties view summary judgment as a realistic option, which has not been the case for the past decade or so. Previously, the summary judgment rule presumptively held the unsuccessful party liable for substantial indemnity costs, only being relieved if it could be shown that the decision to proceed with the motion (or to resist it) was reasonable in the circumstances. This provision caused risk and uncertainty, resulting in the perception that summary judgment was something to be avoided. This presumption has been reversed, with the successful party now having to demonstrate to the court that substantial indemnity is warranted, rather than the unsuccessful moving party having to show why it is not. The court has the discretion to award substantial indemnity where a party has acted unreasonably or used the motion with the intent of delaying proceedings

This change does raise a question. Since the presumption of substantial indemnity has been taken away, will this not encourage unscrupulous parties from bringing summary judgment motions in order to delay trial? A strict reading of the rules would seem to suggest this, but the court can guard against it by asking "whether it reasonably appeared to the moving party that there was a genuine issue for trial at the time that the motion was brought, and the basis of the information known." Since each party must put its best foot forward on a summary judgment motion, the court will see the working information of a party and whether it was reasonable to proceed. Thus, if an unscrupulous party were to use the proceeding to delay the action or to burden the opposing party, the court will be able to recognize this and order substantial indemnity costs. If there is a reasonable basis to proceed (or to oppose), a party should be able to take advantage of the procedure. This has, in effect, allowed for a balance between those that might abuse the rule and those who wish to take advantage of its benefits.

By creating the new standard, explicitly granting robust powers to the judiciary, and altering the basis for cost awards, the legislature has brought summary judgment into line with its original purpose of efficiency and with the principle of proportionality. The changes have allowed for summary judgment to be more readily available, thereby allowing the courts to deal expeditiously with cases not requiring a full trial. This has placed summary judgment back into the arsenal of lawyers and the toolbox of the court.

For further reading, see: Optech Inc v. Sharma, 2011 ONSC 1081; Bruno Appliance and Furniture Inc. v. Cassels Brock & Blackwell LLP, 2011 ONCA 67 at para 11 to 28; and Canadian Premier Life Insurance Company v. Sears Canada Inc., 2010 ONSC 3834 at para 64 to 71.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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