Canada: Supreme Court Of Canada Refines Approach To Summary Judgment Motions

Last Updated: February 16 2014
Article by Genna Wood

On January 23, 2014, the Supreme Court of Canada released companion decisions in Hyrniak v. Mauldin (Hyrniak) and Bruno Appliance and Furniture Inc. v. Hyrniak (Bruno Appliance) reforming the test for summary judgment motions previously adopted by the Court of Appeal for Ontario and broadening the circumstances under which judges may entertain such motions.  In doing so, the Supreme Court of Canada made clear that access to justice concerns necessitate a more proportionate approach to dispute resolution and that summary judgment motions can be a viable alternative in appropriate circumstances to presumptively ordering a trial.

The decision in Hyrniak grants judges more latitude to use the Rules of Civil Procedure to develop procedures to resolve disputes more efficiently.  While the decision's emphasis on access to justice and proportionality are in line with the stated broader goals of class proceedings legislation which also include access to justice as well as judicial economy, it remains to be seen whether the decision in Hyrniak will lead to an increase in the use of summary judgment motions in class proceedings. 

BACKGROUND

In both Hyrniak and Bruno Appliance, investors had alleged fraud against supposed Canadian traders and their lawyer. The Maudlin Group (a group of American investors) met with Hyrniak, his associate, and their lawyer. The investors claimed that Hyrniak convinced them to invest $1.2M with his company. Hyrniak's associate and lawyer also met with the principal of Bruno Appliance, and the allegation was that they convinced him to invest $1M as well.  Hyrniak's company then pooled the money with various funds and wired it to several entities and an offshore bank. The money was not invested, and neither the Maudlin Group nor Bruno Appliance received a return (although a nominal amount was returned to the Maudlin Group years later). Each brought an action in fraud against the defendants and motions for summary judgment which were heard together.

Decision of the Motion Judge

In Hyrniak, the motion judge used his powers under Rule 20.04(2.1) and found that there was "no genuine issue requiring a trial" in the fraud claim against Hyrniak and granted summary judgment against him. The motion judge considered the four elements of the tort of civil fraud and found that all had been met.1 There was no credible evidence to support Hyrniak's claim that he was a legitimate trader, or his claim that the funds had been stolen from him.

The motion judge reached the same conclusion in Bruno Appliance, even though Hyrniak was not present at certain discussions with the investor. In both cases, the summary judgment motions were dismissed against Hyrniak's associate and lawyer, as the claims involved factual issues that could not be resolved on the record.

Decision of the Court of Appeal

The Court of Appeal for Ontario overturned the motion judge's finding in Bruno Appliance finding that to determine whether Hyrniak had committed civil fraud would require a finding that Hyrniak himself made a misrepresentation that induced Bruno Appliance to invest – it was not enough for him to have been aware of, and benefit from, the fraud. The Court of Appeal held that the motion judge failed to identify the need for a misrepresentation and had not found that Hyrniak made one. Therefore, there was a genuine issue requiring a trial as to the alleged fraudulent conduct.

The Court of Appeal upheld the motion judge's decision in Hyrniak, but found that it was not an appropriate case for summary judgment. To determine whether the interests of justice allowed the motion judge to use the powers in Rule 20.04, the Court of Appeal found that the motion judge was required to ask whether a full appreciation of the evidence and issues that is required to make dispositive findings could be achieved by way of summary judgment, or whether this full appreciation could only be achieved by way of a trial. The Court of Appeal also found that the question of whether there is a "genuine issue requiring a trial" is a legal one, reviewable on a correctness standard, while any factual determinations made by the motion judge would attract deference.

DECISION OF THE SUPREME COURT OF CANADA

The Supreme Court of Canada dismissed the appeal in Bruno Appliance, following the reasons from the Court of Appeal and also dismissed the appeal in Hyrniak, but in that case, revisited and reformed the test for when the use of summary judgment motions may be appropriate.

Writing for the Court, Justice Karakatsanis reviewed the importance of the fair and just resolution of disputes as a core value of the Canadian legal system. She found that "undue process and protracted trials, with unnecessary expense and delay, can prevent the fair and just resolution of disputes." She then provided extensive guidance on the use of the summary judgment procedures in Rule 20.04:

20.04 (2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence

...

Powers

(2.1)  In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence.

Justice Karakatsanis found that more expansive use of summary judgment procedures, tailored to the needs of the parties, will promote timely and affordable resolutions of disputes. This was the original intent when the new Rules were enacted in 2010. Justice Karakatsanis acknowledged that an involved summary judgment motion could be long and expensive but noted that it still may be proportionally less onerous than a trial.

The Supreme Court of Canada found that the "full appreciation" test that had been adopted by the Court of Appeal for Ontario limited the use of summary judgment motions to instances where a "full appreciation of the evidence" could be achieved", and was unduly restrictive.  Justice Karakatsanis wrote, "[o]n a summary judgment motion, the evidence need not be equivalent to that at trial, but such that the judge is confident she can fairly resolve the dispute". 

A Revised Analytical Framework

Justice Karakatsanis laid out the analytical framework to be followed on a motion for summary judgment under Rule 20.04:

  • The motion judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. 
  • There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). 
  • If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2) (i.e., the power to call oral evidence). 
  • She may, at her discretion, use those powers, provided that their use is not against the interest of justice. 
  • Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

The Supreme Court of Canada also provided guidance on the standard of review on appeals of orders granting summary judgment and accorded a higher level of deference to the decision of the motion judge than the Court of Appeal had, finding that it is a question of mixed fact and law whether there is a genuine issue requiring a trial, and the decision should not be overturned absent palpable and overriding error. The question of whether it is in the "interest of justice" for the motion judge to exercise the new fact-finding powers provided by Rule 20.04(2.1) is also a question of mixed fact and law which attracts deference, as it depends on the relative evidence available at the summary judgment motion and at trial, the nature, size, complexity and cost of the dispute and other contextual factors.

The motion judge's decision should not be disturbed unless the motions judge has misdirected herself, or come to a decision that is so clearly wrong that it resulted in an injustice. However, the failure to apply the correct legal test to make out a cause of action will be reviewed on a correctness standard.

Ultimately, the Supreme Court of Canada found that the motion judge in Hyrniak did not make a palpable and overriding error in granting summary judgment. He found no credible evidence that Hyrniak was a legitimate trader, so it was clear there was no genuine issue requiring a trial. Further, the Court found that it was within the motion judge's purview, and was not an error, to use the fact-finding powers afforded by Rule 20.04(2.1); the record was sufficient for him to make a "fair and just determination and a timely resolution of the matter was called for." The appeal was therefore dismissed.

 Footnote

1 While the Supreme Court found that he did not explicitly address them, the motions judge adequately considered whether there was: (1) a false representation by the defendant; (2) some level of knowledge of the falsehood of the representation on the part of the defendant (whether knowledge or recklessness); (3) the false representation caused the plaintiff to act; (4) the plaintiff's actions resulted in a loss.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions