Canadian Underwriter

Supreme Court of Canada stipulates ‘new approach’ to handling lawsuits in Ontario

January 30, 2014   by Canadian Underwriter

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Two recent ruling by the Supreme Court of Canada means that Ontario courts “should grant summary judgement more often” in lawsuits, according to one law firm.

“While the Supreme Court has outlined a new approach to summary judgment motions, it remains to be seen whether this will provide greater opportunities to resolve negligence cases summarily,” according to a bulletin published Thursday by Toronto-based Dutton Brock LLP.

Dutton Brock was commenting on two judgements arising from the same fraud lawsuit.

On Jan. 23, the highest court in the land dismissed two appeals of rulings by the Court of Appeal for Ontario.

Robert Hryniak “was the principal of the company Tropos Capital, which traded in bonds and debt instruments,” according to background information provided in the Supreme Court of Canada rulings. He was sued for fraud in two separate actions.

In one lawsuit, filed by Bruno Appliance and Furniture Inc., the Ontario Superior Court of Justice granted summary judgment in favour of Bruno Appliance. In the other lawsuit – filed by Fred Mauldin and 12 other plaintiffs – the lower court in 2010 “concluded that a trial was not required against Hryniak” but “dismissed the Mauldin Group’s motion for summary judgment” against a co-defendant – lawyer Gregory Peebles – “because that claim involved factual issues, particularly with respect to Peebles’ credibility and involvement in a key meeting, which required a trial.”

Peebles had been Hryniak’s lawyer, working at the time for Cassels Brock & Blackwell LLP.

Court records indicate that in June 2001, the plaintiffs in the Mauldin lawsuit wired about $1.2 million to Cassels Brock & Blackwell while the following March, Bruno Appliance and Furniture wired $1 million to Cassels Brock & Blackwell. Their money was forwarded to Tropos Capital.

“Bruno Appliance’s money was not invested and disappeared,” according to court records. “Beyond a small payment of US$9,600 in February 2002, the Mauldin Group lost its investment.” So Bruno Appliance, Mauldin and his co-plaintiffs filed civil fraud suits in Ontario against Hryniak, Peebles and Cassels Brock.

The Court of Appeal for Ontario upheld the court order “granting summary judgment in favour of the Mauldin group” but allowed an appeal from Hryniak “from the motion judge’s order granting summary judgment” in favour of Bruno Appliance.

“The Court of Appeal found that Bruno Appliance’s action should not be addressed through summary judgment due to its voluminous record, conflicting testimony, credibility issues, conflicting theories of liability advanced against multiple defendants, and the absence of reliable documentary evidence,” the Supreme Court of Canada noted.

Bruno appealed that Ontario appeal court ruling, while Hryniak appealed the ruling on Mauldin to the Supreme Court of Canada, which dismissed both appeals.

The Supreme Court of Canada noted that in 2010, Ontario changed Rule 20 in its Rules of Civil Procedure.

“These reforms embody the evolution of summary judgment rules from highly restricted tools used to weed out clearly unmeritorious claims or defences to their current status as a legitimate alternative means for adjudicating and resolving legal disputes,” wrote Madam Justice Andromache Karakatsanis of the Supreme Court of Canada, on behalf of the six-judge panel who made the unanimous rulings.

“The Ontario Government commissioned former Ontario Associate Chief Justice Coulter Osborne Q.C., to consider reforms to make the Ontario civil justice system more accessible and affordable, leading to the report of the Civil Justice Reform Project (the Osborne Report).  The Osborne Report concluded that few summary judgment motions were being brought and, if the summary judgment rule was to work as intended, the appellate jurisprudence that had narrowed the scope and utility of the rule had to be reversed.”

Justice Karakatsanis noted that in lawsuits filed in accordance with the revised Rule 20 of the Ontario Rules of Civil Procedure,  “there will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment.”

“This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result,” she added.

The highest court has “set out a new methodology,” Dutton Brock noted, adding the ruling means that “if there appears to be a genuine issue requiring a trial, the motion judge should consider whether a trial can be avoided using his or her discretionary fact-finding powers, as long as it is not against the interest of justice to do so.”

Dutton Brock noted “it remains to be seen” whether the decisions in Hryniak “will provide greater opportunities to resolve negligence cases” by summary judgement.

“At least the parties now have some certainty about how the test is to be applied,” wrote Dutton Brock. “Lawyers and clients should revisit whether summary judgment is appropriate in their cases and we expect to see many more of these motions in our practice.”

In its ruling, the Supreme Court of Canada noted that trials, “with unnecessary expense and delay, can prevent the fair and just resolution of disputes.”

“The full trial has become largely illusory because, except where government funding is available, ordinary Canadians cannot afford to access the adjudication of civil disputes,” wrote Justice Karakatsanis.

“The cost and delay associated with the traditional process means that, as counsel for the intervener the Advocates’ Society (in Bruno Appliance) stated at the hearing of this appeal, the trial process denies ordinary people the opportunity to have adjudication. 

“And while going to trial has long been seen as a last resort, other dispute resolution mechanisms such as mediation and settlement are more likely to produce fair and just results when adjudication remains a realistic alternative.”