Canada: The Second Opinion: The BCCA Sheds Indirect Light On The "Public Importance" Test For Granting Leave To Appeal To The SCC

A recent ruling of the British Columbia Court of Appeal — Byatt International SA v. Canworld Shipping Company Limited, 2013 BCCA 558 — provides useful guidance regarding the unique test to be applied on a motion to stay an appeal court's ruling, pending the conclusion of a leave-to-appeal application before the Supreme Court of Canada.  In so doing, the BCCA also shed indirect (but useful) light on the somewhat opaque test applied by the SCC in determining such applications for leave to appeal.

As is well known, most appeals to the Supreme Court of Canada can only be commenced if the appellant first obtains a preliminary order from the SCC granting the appellant "leave to appeal."  The resulting two-stage appeal process complicates the position of an appellant who wishes to obtain a stay of the ruling below (which traditionally remains in place pending the eventual determination of the appeal).  What such a party requires, at first instance, is not a "stay pending appeal," but rather a "stay pending leave to appeal" (i.e., a stay that will preserve the status quo pending the SCC's determination of the preliminary leave-to-appeal application).

The Supreme Court Act addresses both leave-to-appeal applications (at s. 40) and motions for stays pending leave to appeal (at s. 65.1).

Canadian lawyers know — or certainly should know — that a party seeking leave to appeal to the SCC will not succeed by demonstrating that the court of appeal below committed an egregious error.  The SCC is not concerned with correcting errors.  Instead, to obtain leave to appeal under s. 40, the applicant must convince the SCC that:

[A]ny question involved [in the appeal] is, by reason of its public importance or the importance of any issue of law or any issue of mixed law and fact involved in that question, one that ought to be decided by the Supreme Court or is, for any other reason, of such a nature or significance as to warrant decision by it...

These criteria are often referred to compendiously as the "public importance" or "national importance" test.  Because the modern practice of the Supreme Court is to grant or deny leave-to-appeal applications without issuing reasons, there remains uncertainty regarding the types of arguments that are likely to find favour with the SCC.

Under s. 65.1 of the Supreme Court Act, a motion seeking to stay an order of a court of appeal — pending the SCC's determination of a leave-to-appeal application — can be brought either before the SCC or the court of appeal.  The most common practice is to move before the court of appeal, as was done in Byatt International.

As noted by Harris J.A. in Byatt International, the general test to be applied in any stay motion is the tripartite "injunction test" famously enunciated in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311.   Under that test, a party seeking a stay must convince the court:

1)    that there is some merit to the appeal in the sense that there is a serious question to be determined;

2)    that irreparable harm would be occasioned to the applicant if the stay was refused;

3)    that, on balance, the inconvenience to the applicant if the stay was refused would be greater than the inconvenience to the respondent if the stay was granted.

The most interesting aspect of this tripartite test — when it is applied to a stay pending leave to appeal – is the modification of the first RJR-MacDonald criterion.

As noted by Harris J.A. (at para. 12), when a leave-to-appeal application is pending, the "serious question to be determined" does not relate to the overall merits of the proposed appeal to the SCC, but rather involves an assessment of the strength of the moving party's argument that its appeal meets the "public importance" test:

In the context of a stay application pending an appeal to the Supreme Court of Canada, the merits test involves examining whether the issue raised on the appeal is one of public importance so that the Supreme Court might grant leave to hear an appeal. ... The test involves considering whether there is any likelihood that the Supreme Court of Canada will grant leave to appeal...

The proposed appeal to the SCC in Byatt International involved an insolvent shipping company's breach of its charter party obligations, which led to the imposition of a lien on the ship's freight.  The moving party emphasized that the appeal "engage[d] significant, novel and unresolved questions of maritime law," and that no other Canadian decisions had addressed the issues arising in the case (at para. 18).

The BCCA rejected this characterization, observing that "this case involves the application of settled legal principles governing legal entitlement that have been created by a contract."  Although an intervening insolvency had occurred, "I do not see that that context alters or informs or changes the legal character of the dispute in any material respect."   The case turned in large measure on "a matter...of contract interpretation. While it may be of importance to the parties, I cannot see that issue is raising an issue of national importance."  (See paras. 21-22.)

In ultimately determining that the appellant's leave-to-appeal arguments were too weak to raise a "serious issue to be determined" by the SCC, the British Columbia Court of Appeal provided its own gloss on some of the elements of the "public importance" test, as it expected that test to be applied by the SCC.  Most interesting was Justice Harris's observations about what he felt would have satisfied the "public importance" test (at paras. 20-21):

  • He noted that the applicant could not " conflicting provincial appellate authority on this issue..."  If such authority existed, it "would increase the likelihood that the Supreme Court of Canada would grant leave to appeal."
  • Nor did the applicant point to "a conflict between different regimes of law that might govern the facts" — e.g., "a conflict that might arise between priorities created, on the one hand, by a statutory regime...and priorities created by the system of maritime law."
  • He also noted that the case did not involve "international or jurisdictional conflicts or conflicting results that might arise from the application of maritime law principles in different jurisdictions."
  • While he agreed that international trade, international trade law, and maritime insolvency are all unquestionably important, "those facts alone do not elevate the issues in this case to ones of national or international importance."

At the end of the day, because the BCCA did not believe that the application for leave to appeal was likely to satisfy the SCC's "public importance" test, the first branch of the RJR-MacDonald test was not met, and the stay was not granted.

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