Archive for the ‘Civil Litigation’ Category

Happy Trails and Happy Trials: Supreme Court of Canada Rules On the Test for Summary Judgment

January 23, 2014

 Today’s Supreme Court of Canada decisions on the summary judgment appeals in Hryniak v. Mauldin, 2014 SCC 7 and  Bruno Appliance and Furniture, Inc. v. Hryniak2014 SCC 8  offer a somewhat less than “full appreciation” of the test summary judgment established by the Court of Appeal for Ontario. [See my backgrounder on the Court of Appeal for Ontario's "full appreciation" test  here.] 
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How NOT To Bring a Motion for Interim Recovery of Personal Property

January 22, 2014

[2]        On other occasions, I have seen and expressed – both orally and in handwritten endorsements – concerns about the approach adopted on matters such as these.   Since this motion follows the same path, I am hopeful a more formal endorsement may have the effect a less forceful approach did not.

….

[8]        The court must be vigilant to ensure that orders are not made without notice easily.  The moving party must satisfy the court that all procedural and substantive requirements have been met.  Even then, the terms of the order should be carefully tailored to ensure that rights are not trampled.  Its terms and duration should be no more than is required to ensure that the court can effectively and fairly adjudicate the ultimate dispute.

[9]        This case provides a useful example of one requiring caution.

So begin the sobering reasons of Justice Grace in Paccar Financial Services Ltd. v. 2026125 Ontario Limited, 2014 ONSC 456 (CanLII),. a cautionary tale of the perils of moving without notice when notice is not only advisable,  but mandatory. It also serves as an object lesson in the vital importance of formulating a sound litigation strategy, including filing a factum that cites not only the applicable procedural rules, but also the cases upon which one intends to rely.

The plaintiff’s motion under  Rule 44 of the Rules of Civil Procedurewould appear to most practicing commercial litigation as relatively straightforward.  The problem identified by Grace, J. is that plaintiff’s counsel failure to follow basic procedural requirements:

[12]       Rule 44 establishes a number of requirements.  For example, an affidavit filed in support of a motion for interim recovery of personal property must contain listed information.  Rule 44.01(2) addresses the issue of service in these terms:

The notice of motion shall be served on the defendant unless the court is satisfied that there is reason to believe that the defendant may improperly attempt to prevent recovery of possession of the property or that, for any other sufficient reason, the order should be made without notice.

[13]        If a motion is made under Rule 44 without notice, the court may make an interim order.  Rule 44.03(2) provides in part:

On a motion for an interim order for the recovery of possession of personal property made without notice to the defendant, the court may,

(a)…direct the sheriff to take and detain the property for a period of ten days after service of the interim order on the defendant before giving it to the plaintiff… [Italics added]

[14]       I noted that the draft order provided by Paccar’s counsel contained no temporal limitation.  It did not comply with Rule 44 and importantly if signed, completely obliterated the rights of a party given no voice.

[15]       Furthermore, rule 44.03(2) clearly contemplates that an order for interim recovery of personal property will be enforced by the sheriff.[2]  That comes as no surprise.  Section 141(1) of the CJA provides that the court’s orders arising out of a civil proceeding shall be directed to the sheriff for enforcement in Ontario unless a statute provides otherwise.

[16]       The draft order contemplated enforcement by a bailiff retained by Paccar.  That, too, is not in accordance with the CJA or rule 44.

Although moving party’s counsel also relied upon  s. 67 of the Personal Property Security Act, R.S.O. 1990, c. P.10 (“PPSA”)which empowers a judge to “grant a range of orders at the request of, among others, a secured party ‘[u]pon application’.  ”  Since the proceeding was commenced by way of a notice of action, it too failed to follow the correct procedure.

Justice Grace’s consternation is evident:

[26]       Those differences are not cosmetic.  By way of example only, an affidavit filed in support of a motion may contain statements of the deponent’s information and belief.  An affidavit filed in support of an application must confine such statements “to facts that are not contentious”: see rules 39.01(4) and (5).  Much of the solicitor’s affidavit in this case is based on information and belief.  In paragraph 11 of his affidavit, the solicitor deposed:

I do verily believe that the acts of each of the Defendants are intentional and designed to deprive the Plaintiff of the Equipment and convert same to their own use.

[27]        The affidavit strays beyond issues which can be termed “not contentious”.

[28]       On a motion under Rule 44, the general rule applicable to facta applies.  A party may file a factum but is not obligated to do so: rule 37.10(6).  On an application, a factum is required: rule 38.09(1) (a).  While, in my view, even on motions counsel should file copies of provisions of statutes that are not included within publications containing the Rules, the importance of a factum in a case like this should be obvious.  The PPSA is not referenced on a daily basis on dockets in this region.  I suspect that is so elsewhere in Ontario with the possible exception of the Commercial List.

 The learned judge also expresses dismay over the lack of notice:

[37]       One would have thought that an inquiry would have been made before a motion was brought without notice.  One would have thought that the duty to provide full and frank disclosure necessitated disclosure of the existence of a lawyer who was believed to represent 125 in a piece of litigation raised by Paccar in support of its position before me.[6]  One would have thought that, out of an abundance of caution if nothing else, that lawyer would have been given notice – even if abridged – of the January 14, 2014 attendance.  One would have thought that full and accurate information would have been volunteered to the court.

[38]       After raising the issue, I was told that a copy of Paccar’s motion record had been sent to 125’s lawyer after the first attendance.  At my request, counsel filed a copy of the January 16, 2014 e-mail enclosing same and advising 125’s lawyer of the January 17, 2014 return date.

[39]       For now I will go no further than expressing my profound disappointment.  Advocacy has boundaries.  They were not respected.  Some notice could and should have been provided.  The solicitor’s affidavit on this motion was sworn on January 7, 2014, the very day that the same lawyer was writing to 125’s lawyer in respect of the CLE matter.

[40]       While my concerns with the lack of notice have overtaken my concerns with the procedure Paccar adopted, I will address the procedural issues too.

Ultimately, the motion failed for a variety of procedural deficiencies, the most telling of which was that interim relief was sought, yet no return date for the defendant was provided.  After telegraphing on what terms the court may be willing to entertain an application under  s. 67 of the PPSA,  Grace J. ends with this parting shot:

[61]                … Whirlwind justice is rarely just.  Paccar’s current motion is flawed in every respect.  It is dismissed without prejudice to the right of Paccar to start afresh.   

Back to the drawing board.

Wrong Legal Test on Causation? Meh, Close Enough

January 7, 2014

Canadian courts grapple with difficult legal, factual and evidentiary issues daily. Judging is difficult, but that’s why judges are paid the big bucks.

Mistakes happen. Canadian appellate courts usually deal with harmless error ( usually an evidentiary ruling by a trial judge that, while mistaken, does not meet the standard of reversible error on appeal, or to warrant a new trial) in the context of criminal trials.

But what happens when a trial judge applies the wrong legal test on causation?

The Court of Appeal for Ontario says: “Meh, close enough”:

[1]          The trial judge concluded on the law, that the appellants’ could not meet the “but for” test for causation and that, in the circumstances, he would apply the “material contribution test”.  In view of the Supreme Court of Canada’s decision in Clements (which decision was not available to the trial judge when he rendered his decision), this was an error and the material contribution test does not apply here.  However, we are of the view that the material contribution test is a more lenient test and if the trial judge applied it, he still found the appellants did not meet that test and failed to prove their case on a balance of probabilities.  In spite of what the trial judge said about his application of that test, a fair reading of his reasons would suggest that his very thorough analysis looks very much like the application of the “but for” test.  He concluded that while a number of factors could have caused the problems experienced by the appellants. The only one proved on a balance of probabilities was inadequate labour.

Reference: Cowan v. Hydro One Networks Inc.2014 ONCA 6

See also my previous posts:

A Judicial Do-Over

January 2, 2014

I have long thought that an appeal court is more than merely a forum of last resort , a venue for judicial review, or a chamber of sober second thought.

The intrinsic value of appellate review lies within an appellate court’s power to correct errors of law: lower courts are best suited to be triers of fact. Let the evidentiary chips fall onto the table of justice, where they may.

Many trial lawyers appreciate the difference between the conduct of a trial and that of an appeal. Preserving the record on appeal is vitally important: objections must be stated clearly and unequivocally, but ultimately silence is an admission when it comes to raising grounds for appeal. Equally important is the fact that all cases are framed by the pleadings. If a trier of fact decides a case outside the bounds of the causes of action and defences pleaded, this constitutes a denial of natural justice and procedural fairness and strikes at the very root of the adversarial system: both the plaintiff and the defendants are entitled to know what the dispute is about and raise all arguments and adduce any evidence in support of their respective legal positions.

However, no one likes legal “technicalities”, not even lawyers. Depending on your views of the judicial decision-making process as deductive, inductive or reductive; a court must fairly, impartially and rationally use the process of judicial reasoning to resolve a dispute on its merits.

There is an “escape clause” built into the civil justice system: the fusion of law and equity that reflects the historical compromise of the exercise of judicial power over individuals (jurisdiction in the traditional sense of “juris” (the law”) and diction (“speaks) and that justice not only be done, but also be seen to be done. Consider section 96 of the Courts of Justice Act R.S.O. 1990, c. C.43 (as am) which reads:

Common Law and Equity

Rules of law and equity

96.(1)Courts shall administer concurrently all rules of equity and the common law. R.S.O. 1990, c. C.43, s. 96 (1); 1993, c. 27, Sched.

Rules of equity to prevail

(2)Where a rule of equity conflicts with a rule of the common law, the rule of equity prevails. R.S.O. 1990, c. C.43, s. 96 (2); 1993, c. 27, Sched.

Jurisdiction for equitable relief

(3)Only the Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may grant equitable relief, unless otherwise provided. 1994, c. 12, s. 38; 1996, c. 25, s. 9 (17).

 Section 96 of the CJA is what I like to call the “judicial do-over”.

Let’s say you’re plaintiff’s counsel and you’ve persuaded the trial judge of the defendant’s liability, but proving the plaintiff’s damages poses to be a problem. Do you take your chances and hope the trial judge will award the plaintiff damages based upon a theory without expert evidence, or much evidence, for that matter? What do you do? Do you take your chances and hope the Court of Appeal will uphold the the trial judge’s assessment of damages, or will only nominal damages be awarded?  Is the fair and just result to order a new trial on the assessment of damages?

Read today’s decision of the Court of Appeal for Ontario in TMS Lighting Ltd. v. KJS Transport Inc., 2014 ONCA 1, per Cronk J.A. (Blair and Strathy JJ.A. concurring).and you be the judge:

(f) The question of remedy

[81] The appellants argue that any award of damages for TMS’s lost productivity should be nominal, at best. They submit that because the respondents’ nuisance-based damages theory was justifiably rejected at trial, and the trial judge’s substituted approach for the quantification of lost productivity damages is fatally flawed, the respondents must bear the consequences for their failure to lead the necessary evidence to establish the quantum of their damages. They rely, in this regard, on the trial judge’s findings that the respondents failed to adduce available evidence at trial that bore on their theory of lost productivity damages and that, as a result, an adverse inference should be drawn against the respondents regarding the utility of any such evidence. As a result of these factors, the appellants say, an award of only nominal damages is mandated.

[82] In the particular circumstances of this case, I would not accede to this argument.

[83] It is well-established that where the absence of evidence renders it impossible to assess damages, a plaintiff may be entitled to only nominal damages. Goldfarb, for example, says so. But this is not invariably the case. Where a plaintiff proves a substantial loss and the trial judge errs in the assessment of damages arising from that loss, the interests of justice may necessitate a new trial on damages. Although the quantification of damages flowing from the established loss may prove difficult, nonetheless the injured plaintiff is entitled to compensation.

[84] Goldfarb itself is a case in point. Goldfarb involved a claim for damages for breach of fiduciary duty advanced by the client of a law firm against the firm and the involved firm lawyer. This court held that there was inadequate cogent evidence to support the substantial award of damages made by the trial judge. Justice Finlayson explained, at para. 67:

[The plaintiff/client] failed to prove the losses through appropriate evidence. The trial judge’s award of damage is speculative at best, and does not reflect with much precision real losses flowing from the breach, notwithstanding that the plaintiff bore the burden of proving the losses in the normal course.

[85] Notwithstanding that the proffer of relevant evidence was “fully within the control of [the plaintiff]”, the Goldfarb court rejected the remedy of nominal damages and concluded that a new assessment of damages was necessary because the plaintiff had demonstrated a substantial personal loss although evidence proving the quantum of that loss was lacking: Goldfarb at paras. 80, 83 and 84. See also Rosenhek v. Windsor Regional Hospital, 2010 ONCA 13, 257 O.A.C. 283, at paras. 37-38, leave to appeal to S.C.C. refused, [2010] S.C.C.A. No. 89.

[86] This reasoning is apposite here. On the trial judge’s findings, the respondents suffered a substantial and unreasonable interference with the use and enjoyment of their lands, as well as trespass to those lands. The appellants’ nuisance and trespass were neither trivial nor transitory. To the contrary, they occurred over a sustained period and interfered, to a significant extent, with the respondents’ use and enjoyment of their lands for the purpose of TMS’s manufacturing operations. For approximately five years, disruption of TMS’s manufacturing operations led to reduced business productivity. This is a real wrong, which caused real loss.

[87] Damages, including damages for loss of revenues or profits, may be measured in various ways including, where appropriate, based on expert opinion evidence. That the manner of proof of lost productivity damages posited by the respondents at trial failed, does not mean that no proof is available. In all the circumstances, in my view, a new assessment of TMS’s lost productivity damages arising from the appellants’ proven nuisance and trespass is required in the interests of justice.

FURTHER UPDATED: Where In the World is Javad Heydary?

November 28, 2013

223747

Via the Toronto Star, the news dropped like a bombshell and rocked the Toronto legal community:

A Toronto lawyer who launched a high-profile lawsuit on behalf of investors in the Trump International Hotel & Tower has left the country in the wake of allegations that “well in excess” of $3 million in trust funds is missing.

Litigator Javad Heydary, 49, was last heard from Nov. 15 when he told colleagues he had to return to his native Iran to tend to a sick relative.

The Law Society of Upper Canada alleges in a court filing this week that Heydary is being investigated for “misappropriation, mishandling trust funds, and failing to comply with a court order.”

In the face of the recent resignation of a number of well-respected lawyers from some half dozen boutique firms that Heydary ran in the heart of the financial district, the Law Society has taken over as trustee of the businesses.

My colleague, Selwyn  Pieters, was  among the first to pick up the story on The Twitter:

Javad Heydary

The timing of Heydary’s disappearance is in stark contrast to a recent Law Times story touting Heydary’s visionary, ground-breaking alternative law firm model:

Javad Heydary has a theory: the future of law belongs to large international and small boutique firms. So when he sought to expand his law firm a couple of years ago, he decided he didn’t want to go with something between those two extremes.

That’s when he came up with a model called “affiliated boutique firms.” Today, the Heydary law firms, besides Heydary Hamilton Professional Corp., include intellectual property practitioners at Heydary Hayes Professional Corp., family lawyers at Heydary Green Professional Corp., a litigation practice at Heydary Elliott Professional Corp., and real estate lawyers at Heydary Samuel Professional Corp.

Each firm is legally a separate entity as a professional corporation. Heydary is a shareholder in each of them. To his knowledge, no one else in the legal industry is using this business formula.

“The future of law, in my humble opinion, will be those large international law firms and boutique firms,” says Heydary. “I don’t see a future for smaller full-service firms. The market is shrinking. There’s too much competition.”

Erm, the future of law has not only left the building, he has left the country. (more…)


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