Copyright 2011, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Litigation & Dispute Resolution, December 2011
In a decision encompassing a series of five appeals that were heard together this summer, the Ontario Court of Appeal has clarified and more precisely articulated the test Ontario judges must apply to motions for summary judgment. Prior to this ground-breaking decision, lower courts had been split along two lines in defining what impact the 2010 amendments to the Rules of Civil Procedure had on the test for summary judgment. In its reasons, the Court of Appeal chose not to comment on the merits of those two lines, stating instead that "our decision marks a new departure and a fresh approach to the interpretation and application of the amended Rule 20." The underlying question for a motion judge now is whether or not a trial is required in the "interest of justice" – a question that must be answered in light of whether the "full appreciation" of the evidence and issues that is required to make dispositive findings can be achieved by way of summary judgment, or whether this full appreciation can be achieved only at trial. The Court also held that despite the broader powers available to a motion judge under the new rules, a summary judgment motion is not intended to be a mini-trial.
2010 AMENDMENTS TO RULE 20
In June 2006, the Government of Ontario commissioned the former
Associate Chief Justice of Ontario, The Honourable Coulter Osborne,
to provide recommendations for making the civil justice system more
accessible and affordable. Following the Osborne Report into reform
of the civil justice system, Ontario made a number of substantial
amendments to the Rules of Civil Procedure, including
changes to Rule 20 governing summary judgment, which became
effective on January 1, 2010.
One of the changes to Rule 20 was the provision mandating when
the court "shall" grant summary judgment. The amendments
reworded the test for summary judgment such that a party seeking
summary judgment must now satisfy the court that "there is no
genuine issue requiring a trial" instead of "no
genuine issue for trial." The amendments also gave
courts broader fact-finding powers by expressly permitting judges
(though not masters) to weigh evidence, evaluate a
deponent's credibility and draw any reasonable inference
from the evidence (Rule 20.04(2.1)). These changes effectively
overruled prior jurisprudence that had denied judges these powers.
The amendments also allowed judges to order the presentation of
oral evidence for the purpose of exercising these new powers (Rule
20.04(2.2)). Finally, the amendments changed the rule regarding
costs so that costs on a failed summary judgment motion are now to
be determined presumptively on a partial indemnity basis rather
than on a substantial indemnity basis, unless the factors of
unreasonableness or bad faith are present.
AFTERMATH OF RULE 20 AMENDMENTS
The amendments to the summary judgment rule resulted in a huge
increase in the number of summary judgment motions being brought
before the Ontario courts. The decisions that came out, however,
showed that the bench was split in how to interpret the changes.
Two lines of authority emerged: one following the approach outlined
by Justice Perell in Healey v. Lakeridge Health Corp. and
the other outlined by Justice Karakatsanis in Cuthbert v. TD
Canada Trust. This split in the jurisprudence led the Court of
Appeal to spend three days in June hearing argument in five cases:
Combined Air Mechanical Services v. Flesch, William;
394 Lakeshore Oakville Holdings Inc. v. Misek, Carol Anne;
Mauldin, Fred et al. v. Cassels Brock & Blackwell LLP;
Bruno Appliance and Furniture v. Cassels Brock & Blackwell
LLP; and Parker, Marie et al. v. Caselese, Eric et
al. While they differed significantly on the facts, issues and
results, these summary judgment motion decisions all followed the
reasoning by either Justice Perell or Justice Karakatsanis.
COURT OF APPEAL'S FRESH APPROACH TO RULE
In a unanimous decision of five justices released on December 5, 2011, the Court of Appeal stated that a motions judge, exercising the expanded powers available under the amended Rule 20, may decide an action or part of an action on a summary judgment motion where he or she is satisfied that there is no factual or legal issue raised by the parties that requires a trial. The guiding consideration in this regard is "whether the summary judgment process, in the circumstances of a given case, will provide an appropriate means for effecting a fair and just resolution of the dispute before the court."
The purpose of the new rule is "to eliminate
unnecessary trials, not to eliminate all
Significantly, the Court noted that the change in the wording of Rule 20 from "genuine issue for trial" to "genuine issue requiring a trial" is "more than mere semantics" – while the prior wording served primarily to "winnow out plainly unmeritorious litigation", the amended wording and the new powers "now permit the motion judge to dispose of cases on the merits where the trial process is not required in the 'interest of justice'". The Court set out a "full appreciation test" for deciding whether or not a trial is necessary. Specifically, the motion judge must ask: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment (that is, on the basis of the motion record, as may be supplemented by presentation of oral evidence under Rule 20.04(2.2)), or are the attributes and advantages of a trial process necessary to enable a full appreciation of the evidence and issues posed by the case?
The Court outlined three categories of cases that would typically be amenable to summary judgment. Although these categories are not intended to be exhaustive, they provide useful guidance regarding the types of cases that are now likely to succeed on a summary judgment motion, the first two of which were also available under the former Rule 20. The three categories are:
- cases where the parties agree that a motion for summary judgment is the appropriate procedure to determine the action and the court is satisfied that it is appropriate to grant summary judgment in the circumstances;
- cases where the claim or defence is completely devoid of merit, that is when it has no chance of success, the determination of which may be made by exercising the powers in Rule 20.04(2.1) and (2.2); and
- cases that can be fairly and justly resolved in part, or in their entirety, on the merits by exercising the powers in Rule 20.04(2.1) without a trial.
In deciding whether to exercise the powers in Rule 20.04(2.1),
the motion judge must apply the "full appreciation" test
articulated above. The full appreciation test recognizes the more
advantageous and (in the Court's words)
"privileged" position of a trial judge.
The Court held that the full appreciation test will likely
be met in cases that are largely driven by documents, involve
limited testimonial evidence and entail limited contentious factual
issues. In contrast, the full appreciation test is unlikely to
be met in cases that call for multiple findings of fact and
involve conflicting evidence from a number of witnesses and a
voluminous evidentiary record. In such cases, a trial judge, by
virtue of having familiarity with the case as a whole, having
extensive exposure to evidence (including observing witnesses and
hearing testimony viva voce) and following the trial
narrative is likely to develop a much better appreciation of the
issues and the evidence that is required to make dispositive
findings; therefore, it would not be in the "interest of
justice" to dispose of such cases absent a full trial.
The Court's clarification with respect to the impact of
Rule 20.04(2.2) and the availability of mini-trials is also
significant. The discretion of the motion judge to order oral
evidence under Rule 20.04(2.2) is limited and the Court considered
it significant that counsel do not control the extent of the
evidence to be led and the issues to which the evidence is to be
directed. The Court held that this new power is just another
instrument to assist a motion judge in determining whether it is
appropriate to summarily dispose of a matter but it cannot be used
to transform a summary judgment motion into a trial.
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