Canada: Litigation And Dispute Resolution In Canada


This Guide provides an introduction to Canada's civil litigation and dispute resolution system. It describes the procedures followed in Canada's civil courts and administrative tribunals, and discusses alternatives to dispute resolution, with a focus on mediation and arbitration.

The following discussion is intended to provide only general guidance and is not an exhaustive description of all procedures and laws that may apply in any particular proceeding or dispute. For this reason, the reader should not rely solely on this Guide, and should seek the advice of qualified counsel for assistance in dealing with any particular problem or dispute.

This information is current as of June 2015.

1. Overview

Canada is a federal system comprised of 10 provinces and three territories. In addition to a federal government, each province and territory has its own government. At the federal level, the seat of government is in Ottawa, where members of Parliament from across Canada convene. Additionally, the people of each province elect members to a Provincial Legislative Assembly or a Provincial Parliament.

Canada's Constitution Act, 1867, specifies the areas in which each level of government can enact legislation. The federal government has authority over the regulation of trade and commerce, banking, patents, copyrights and taxation, among other matters. The most noteworthy areas over which the provinces have authority are property and civil rights, and the administration of justice. As expected, there are areas of overlap. Indeed, the division of powers between the federal and provincial governments has been a long-standing source of contention.

Due to Canada's federal structure, depending on the subject matter, both federal and provincial legislation may need to be considered. Because the provinces have authority over the administration of justice, there may be instances when it is more advantageous or appropriate to bring or defend an action in a particular province.

2. Court System

There are three types of courts in Canada. Selecting the court in which to commence or respond to an action is a critical step in the litigation process.

The Superior Court of each province and territory is the court that most commonly decides cases involving commercial litigants. These are courts of general and inherent jurisdiction that hear both civil and criminal matters. The Superior Courts are split into trial and appeal levels, except in the Province of Quebec where the Superior Court and the Court of Appeal of Quebec are distinct judicial courts. Depending on the province, the trial level is referred to as the Court of Queen's Bench, the Supreme Court or the Superior Court. Courts at the appeal level are referred to as the Court of Appeal of the particular province. Appeals from the Court of Appeal of any province are heard by the Supreme Court of Canada.

The second type of court in Canada is the Provincial Court, which obtains its jurisdiction from provincial legislation. Typically, the Provincial Court will have jurisdiction over some civil, criminal, family and provincial law matters. The Provincial Court's jurisdiction over civil disputes is significantly restricted as compared to the Superior Court's jurisdiction. For instance, in Alberta, the Provincial Court has no jurisdiction over land disputes, and it can only hear disputes where the value of the claim does not exceed C$25,000. Appeals from the Provincial Court go to the Superior Court of the particular province or territory.

The third type of court, the Federal Court, has jurisdiction over federal legislation, such as the Income Tax Act and the Trade-marks Act, certain issues under the purview of the federal government pursuant to the division of powers and, importantly, over all federally administered administrative boards, commissions and tribunals. There is a trial and appeal level at the Federal Court of Canada. Appeals from the Federal Court of Appeal are heard by the Supreme Court of Canada.

The final appellate court is the Supreme Court of Canada, Canada's highest court. In certain circumstances, predominantly in criminal law, appeals to the Supreme Court of Canada are as of right. In most circumstances, however, litigants in civil cases can only appeal if they obtain permission (or leave) from the Supreme Court of Canada.

3. Common Law and Civil Law

Understanding the hierarchy of the courts in Canada is important for understanding the role of precedent in Canadian law. With the exception of Quebec, all Canadian provincial jurisdictions follow the "common law."

In a common law system, the principle of stare decisis applies, which means that precedents, or prior decisions from higher-level courts, are binding on all lower-level courts within the same jurisdiction. A decision of the Superior Court of one province is persuasive in the Superior Court of another, but it is not binding. Similarly, a decision of the Court of Appeal in one province is only binding in its own province, although it may be persuasive in other provinces. There are many instances in which two provincial Courts of Appeal have made different determinations on similar points of law. A decision of the Supreme Court of Canada, however, is binding on all other courts in Canada, no matter the type or level.

In Quebec, there is a "civil law" system that is derivative of the French Civil Code of 1804. The Civil Code of Québec (CCQ) establishes the law in Quebec pertaining to disputes between individuals in society. The principle of stare decisis is not as influential since the Code itself is intended to be clear and easy to apply. While integration into the federal system poses some difficulty when decisions applying the Code are appealed, the Supreme Court of Canada maintains full jurisdiction over cases decided pursuant to the Civil Code of Québec.

4. Alternatives

Apart from the court system, litigants can resort to alternate dispute resolution methods such as mediation or arbitration to resolve disputes. In many cases, parties can agree by contract to resolve all of their disputes through arbitration. In most cases, Canadian courts will enforce a pre-dispute arbitration clause in a contract by prohibiting the parties from litigating the dispute in court and requiring them to arbitrate. Typically, parties wishing to arbitrate or mediate disputes are required to do so by agreement, although it is sufficient if that agreement is a provision in a pre-dispute contract.

In some Canadian jurisdictions, however, the court offers judicial mediation or dispute resolution procedures, which allow parties to take a dispute off the litigation track after a formal action has been commenced.

In addition to the court system, Canada has a wide range of regulatory and administrative tribunals that have jurisdiction over a variety of commercial activities. These tribunals often have the power to impose penalties and make mandatory orders.

5. Jurisdictional Issues in Canadian Courts

5.1 Jurisdiction of Canadian courts

5.1.1 When will a court entertain an action brought by a foreign plaintiff?

A Canadian court will entertain an action brought by any legal person, provided such person has an address for service in the province in which the action is brought. A foreign plaintiff, however, may be required to post security for the defendant's costs to defend the proceeding, the amount of which will vary from province to province, and depend on the circumstances.

5.1.2 When will a court take jurisdiction over a foreign defendant?

A Canadian court will take jurisdiction over a foreign defendant if the defendant resides or is served within the court's jurisdiction, or when the defendant voluntarily submits to the court's jurisdiction. A court will also take jurisdiction over a foreign defendant when the defendant is served outside the jurisdiction, but there is a real and substantial connection between the subject matter of the litigation, the parties, and the court's jurisdiction.

5.1.3 When will a court decline to exercise jurisdiction in favour of a more convenient forum?

In Canada, a court may decline to exercise jurisdiction if there is another forum that is clearly more convenient and appropriate for the pursuit of the action and for securing the ends of justice.

Foreign defendants will often seek to have the Canadian court decline jurisdiction in favour of their home territory. Canadian courts look to a number of factors to determine which jurisdiction has the closest and most substantial connection to the case. For example, while a court may have jurisdiction over a defendant served within the court's territorial jurisdiction, the court will likely decline to exercise jurisdiction if the defendant has a mere fleeting presence in the territory of the court.

5.2 Enforcement of extra-provincial orders

A judgment given in one Canadian province is entitled to recognition and enforcement in another Canadian province if there is a real and substantial connection between the original province and the subject matter or defendant, if the defendant submits to the jurisdiction of the original court, or there is some other basis on which the original court took jurisdiction, such as a presence or ordinary residency of the defendant. All common law provinces have reciprocating legislation that facilitates the recognition and enforcement of judgments from other provinces. There is similar reciprocating legislation between some Canadian provinces and certain American states.


Canada is governed by two different legal systems: common law and civil law. In the common law system — used in all provinces and territories except for Quebec — the courts interpret the meaning and application of legislation and thereby develop the law, rather than relying on government legislation alone. Court decisions set precedents for future decisions in similar cases. The common law system is based on the term stare decisis meaning "to stand by decisions" and on the hierarchy of courts; higher courts' decisions are binding on lower court judges. Common law is subject to the Constitution Act and the Canadian Charter of Rights and Freedoms. The civil law system — used only in Quebec — is based on the CCQ. Under this system, the CCQ is the primary source of law and court decisions are used as guides on how to interpret the CCQ. That said, the common law system has had a strong influence in Quebec, and previous decisions are often treated as authoritative with respect to their interpretation and application of the CCQ. In Quebec, there are no jury trials for civil matters.

1. General Court Procedures

1.1 Time for commencing proceedings

Deadlines for commencing actions are the subject of provincial law, with limited exceptions for matters within federal jurisdiction. If a party does not commence legal proceedings within the applicable limitation period, that party may be prohibited from asserting its claim.

Limitation periods vary from province to province, and often vary within a particular province depending on the type of action. Alberta, British Columbia and Ontario have a general two-year limitation period for most civil actions, but in certain limited circumstances, the limitation period is much shorter. For example, in British Columbia, the limitation period to give notice of a claim to a municipal body is only 60 days.

In addition to the limitation periods set out in statutes, there are certain common law doctrines (such as laches and acquiescence) that give the courts discretion to dismiss a claim if the plaintiff does not pursue its rights within a reasonable time.

It is recommended that persons with potential actions seek legal advice as soon as they become aware of a claim in order to avoid falling outside a limitation period and being barred from bringing the action.

1.2 Pleadings

In civil actions in Canada, the nature and scope of the dispute to be resolved by the court is defined by the pleadings filed by the parties. Pleadings are a concise statement of the facts that each party must prove to the court to establish its position. The plaintiff is required to plead all of the facts necessary to establish a valid cause of action against each defendant, and each defendant is required to plead all of the facts necessary to refute that cause of action. The pleadings are intended to define the facts and issues that will be relevant at trial.

1.2.1 Commencing proceedings

To commence a civil action, an originating document must be filed with the court and served on the opposing party. The Rules of Court in each common law province and Code of Civil Procedure (CCP) in Quebec set forth the specific form required. Most provinces require that an action be commenced by way of a Statement of Claim (in Quebec, a motion to introduce proceedings) setting out the particulars of the claim and the relief sought.

A more skeletal originating document, namely a Notice of Action, is permitted in New Brunswick and Ontario. A Notice of Action gives a general notice of the claim. Pursuant to the Rules, a Statement of Claim is either appended to the originating document or filed and served at a later date.

1.2.2 Statement of Defence

After being served with a Statement of Claim, each defendant has a certain number of days to deliver a formal legal response (generally called a Statement of Defence) to the Statement of Claim. If the Statement of Defence is not served on the plaintiff and filed with the court by the applicable deadline, the plaintiff may be able to apply to the court for default judgment against the defendant without any further notice to the defendant. See Section II, 1.5.1 Default judgment below.

If the defendant has a claim for relief against the plaintiff, the defendant can include a counterclaim against the plaintiff in its Statement of Defence. The defendant can also make claims against other defendants in a cross-claim, or the defendant can join other parties in the action by way of a third-party claim or action in warranty in Quebec. See Section II, 1.2.4 Joinder of parties below.

1.2.3 Amending pleadings

The Rules of Court in each province generally permit parties to amend pleadings. However, there are significant differences pertaining to the timing and method of making such amendments. Leave of the court may be required in certain circumstances.

Generally, a party has the right to amend its pleading before the close of pleadings (generally defined as after all parties have filed their pleadings and the time for a reply has expired). In certain provinces, the opposing party may apply to the court to set aside such amendments. In other provinces, unless the amendment necessitates the addition, deletion, or substitution of a party, the amendment is generally allowed without leave. In British Columbia, for example, parties are permitted one free amendment before the pleadings period closes, after which they will need leave of the court or consent of the other parties.

1.2.4 Joinder of parties

By its own order, the court may add or substitute a person as a party under the Rules of Court in the common law provinces and the CCP in Quebec where: (a) it is just and convenient to do so; and (b) that person ought to have been joined as a party, or that person's participation in the proceeding is necessary to ensure that all matters in the proceeding are effectively adjudicated. Thus, not only does the court have discretion to join "necessary parties," it may also join parties where there is a common question of law or fact arising in the proceeding, the claim to relief arises from the same transaction or occurrence, and it appears that joinder may promote the convenient administration of justice.

The Rules of Court in many provinces provide that the court may relieve parties from the requirement of joinder. Such relief may be granted if it appears that the joinder of multiple claims or parties may unduly complicate or delay the hearing or cause undue prejudice. Relief may take the form of separate hearings or an order that a party be compensated for having to attend, or be relieved from attending, any part of a hearing in which the party has no interest.

1.2.5 Joinder of issues

A party may join several causes of action against the opposite party in the same proceeding.

1.3 Discovery process

1.3.1 Particulars

The Rules of Court in the common law provinces and the CCP in Quebec set out the requirements for pleadings in a proceeding. If a pleading fails to provide the information necessary for the case to be met, or a pleading is vague or overly general, a party may demand "particulars" of that pleading. Particulars provide a more detailed explanation of the facts or legal issues of the claim. If the opposite party fails to provide particulars within a given time, a motion may be brought asking the court to order that particulars be delivered.

1.3.2 Discovery of documents

After pleadings have been exchanged, parties to an action in common law provinces are required to exchange a list of all documents in their possession, power or control that are relevant to the issues raised in the pleadings, with the exception of documents that are privileged. In some provinces these materials are accompanied by an affidavit of documents sworn by a representative of each party.

The definition of "documents" in Canada includes paper documents, emails, computer files, tape recordings, videos and electronic media. The definition of "relevance" is also broad.

The opposing party is entitled to receive a copy of every document contained in the list of documents that is not privileged. Privileged documents are generally those created for the purpose of giving or receiving legal advice ("solicitor-client privilege"), or those created mainly in anticipation of litigation, even if no lawyer is involved. In the former case, where legal advice of any kind is sought from an individual in his or her capacity as a professional legal adviser, the confidential communications relating to the giving or receiving of that advice are permanently protected from disclosure unless the client waives such protection. Solicitor-client privilege extends to communications in any form, but does not extend to facts that may be referred to in those communications if they are otherwise discoverable and relevant. While they are not provided to the other side, privileged documents are to be separately listed in the list of documents.

If a third party holds relevant documents, any party to an action may bring a motion seeking an order requiring the third party to produce such documents for inspection. Again, there is an exemption for privileged materials.

With certain limited exceptions, the parties to an action are not permitted to use the evidence or information elicited from documentary discovery and discovery by oral questioning from the other parties to the litigation for any purposes other than those of the court proceeding for which the evidence was obtained.

This document discovery process has not been adopted into Quebec law. In order to obtain documents from another party, a litigant must either send a subpoena duces tecum (for documents) specifically identifying the documents of which it seeks the communication or demand communication of specifically identified documents as an undertaking during an examination for discovery (discussed below).

1.3.3 Examinations for discovery

Following the exchange of relevant documents, the parties are entitled to conduct an examination for discovery of the opposing party. In some provinces, such as Ontario, there is no automatic right to conduct a discovery of more than one representative of a corporate litigant, nor is there an automatic right to conduct discovery of persons who are not parties to the litigation; a party must obtain leave of the court to do so.

The discovery witness produced on behalf of a corporate litigant must inform him- or herself of the corporation's knowledge. If the witness does not know the answer to a specific question, the witness may be required to make inquiries and provide the answer at a later date in writing. For example, a corporate representative may be required to find out what another corporate employee said or did with respect to a particular issue. In complex cases, it is common to have numerous requests to provide information.

With certain limited exceptions, such as when information is deemed privileged, the person being examined must answer every question at the examination for discovery. All answers are taken under oath or affirmation in the presence of a court reporter; no judge is present. The examination typically takes place in an office setting. The party asking the questions may use the transcript from the examination later at trial.

Before a party can serve a notice of examination, the party must have delivered its list of documents, unless the parties have agreed otherwise. Conducting examinations for discovery can be a lengthy and expensive step in the litigation, and many cases settle at this stage in the proceeding. Some provinces, such as Ontario and British Columbia, have a limit on the length of time for an examination of discovery. This time period can be extended by consent or court order.

In Quebec, a defendant may examine the plaintiff (or the representative of a corporate plaintiff) either before or after the filing of the defence, while the plaintiff may examine the defendant (or the representative of a corporate defendant) only after the filing of the defence. During these examinations, the plaintiff may seek the communications of documents, to be provided as undertakings at a later date. Examinations of third parties may only be conducted with leave of the court.

1.3.4 Examinations before motion or trial

In addition to provisions addressing examinations for discovery, there are provisions in most provinces for oral examinations of witnesses out of court with leave of the court or consent of the parties. Attendance can be required by summons, which may also require the person to bring all relevant documents in his or her possession to the examination.

As with examinations for discovery, examinations of witnesses before motion or trial are conducted under oath or affirmation in the presence of a court reporter, typically in an office setting. The transcript is used at the motion hearing or at trial.

1.4 Interlocutory motions and applications

1.4.1 General procedural motions

Canadian courts devote significant time and resources to provide litigants with a fair, balanced and timely pre-trial procedure. Court applications of this nature generally seek directions or decisions "between steps" in the litigation and, as such, are known as interlocutory motions.

The Rules and the CCP allow interlocutory motions to be scheduled on relatively short notice to parties adverse in interest. However, in some select registries there are significant scheduling delays and it may take several weeks to obtain a motion date for non-urgent motions.

On interlocutory motions, counsel argue their respective positions based largely on evidence put forward in affidavits that may be tested by cross-examination. Most Canadian jurisdictions use privatized court reporting services so that cross-examination of affiants occurs at a law office rather than in the courthouse.

Interlocutory motions are often brought to:

  • Determine whether the court should assume jurisdiction over the matter in issue.
  • Compel a plaintiff to post collateral as security for a defendant's litigation costs where it appears likely that the plaintiff will be unable to pay the defendant's allowable costs if unsuccessful.
  • Strike out a party's pleadings, or request another form of relief, where that party has failed to meet procedural requirements in the action.
  • Consolidate multiple actions where there are common facts and issues that ought to be dealt with together, or split one lawsuit into multiple actions where the opposite is true.
  • Enforce the Rules and other procedural protections by, for example, compelling a party to attend a cross-examination or examination for discovery, answer questions, or provide requested records that are likely to be helpful in the litigation.
  • Oversee court-supervised processes, such as the appointment of a receiver, receiver-manager or liquidator.
  • Obtain a judgment without trial (summary judgment) where there is no genuine issue requiring a trial.
  • Dispute a judgment or a step taken without providing appropriate notification to parties adverse in interest.

In most cases, Canadian counsel tend to be courteous and respectful in the courtroom, while advocating their client's interests in as compelling a manner as possible.

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