On December 5, 2011, a five-judge panel of the Ontario Court of Appeal released its decision in Combined Air Mechanical Services Inc v Flesch1 and provided long-awaited guidance on the scope and effect of the recently amended summary judgment rule (Rule 20 of the Ontario Rules of Civil Procedure – the "Rules"). In its decision, the Court developed a new test that requires a motion judge to now ask the following question when deciding whether to grant summary judgment: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or only by way of a trial? Where the "full appreciation" test cannot be satisfied on a motion, the interests of justice will require a trial and summary judgment will be denied.
This bulletin highlights the implications of the Court's decision and how it will impact summary judgment motions brought in the future.
context - the january 2010 amendments and expanded summary judgment powers
In January 2010, the Rules were amended with the primary purpose of making the civil justice system in Ontario cheaper, faster and more accessible. Perhaps the most significant of these amendments were those made to the summary judgment rule. The rule was amended to provide that:
- a court shall grant summary judgment where there is no genuine issue "requiring" a trial;2
- in determining whether there is a genuine issue requiring a trial, judges may weigh evidence, evaluate credibility and draw reasonable inferences from the evidence;
- in assessing whether there exists a genuine issue, judges may order that oral evidence be presented by one or more of the parties on the motion; and
- costs on a failed summary judgment motion are to be ordered on a partial indemnity basis, unless a party acted unreasonably or in bad faith so as to warrant costs on a higher scale.
Most agreed (as did the Court in Combined Air) that the intent of these amendments was to make summary judgment more readily available and allow the court more latitude to make final determinations where a trial is not necessary.
However, in the wake of the amendments, two competing interpretations of the new summary judgment rule emerged. The expansive approach, articulated in various decisions by Justices Perell, Pepall and Himel, confirmed that, unless there is good reason to defer to the trial judge, motion judges may use the new powers conferred by the amended rule to make findings of fact. The more narrow approach, first articulated by Justice Karakatsanis, was that the amendments to the rule have not fundamentally changed the nature of summary judgment, and the expanded powers are only to be used in assessing whether the old test for summary judgment is satisfied.
the court of appeal's decision
Rather than endorse either of these developing approaches, the Court of Appeal articulated a new (self-described as "fresh") approach to summary judgment. The Court acknowledged that the amendments to Rule 20 are meant to introduce significant changes in the manner by which summary judgment motions are to be decided. However, the Court went on to point out that the purpose of the new rule is to eliminate unnecessary trials – not all trials. According to the Court, the guiding consideration must always be whether, in the circumstances of any given case, the summary judgment process will provide an appropriate means for effecting a fair and just resolution of the dispute. With this principle in mind, the Court upheld the lower court's decision in four out of the five summary judgment appeals.
highlights of the new and "fresh" approach to summary judgment
1. the "full appreciation" test
The threshold issue that motion judges must now consider is whether they are satisfied that the "full appreciation" of the evidence and issues required to make a dispositive finding can be achieved by way of summary judgment. Only if such an appreciation of the evidence and issues can be attained on summary judgment – as opposed to by way of a full trial – can the motion judge exercise the expanded powers found in the new rules.
By way of example, the Court noted that the "full appreciation" test will not likely be met in cases that call for multiple findings of fact on the basis of conflicting evidence from numerous witnesses and found in a voluminous record. By contrast, the "full appreciation" test may be met in document-driven cases with limited testimonial evidence, where there are limited contentious factual issues or where the record can be supplemented at the judge's discretion by hearing live testimony on discreet issues.
The Court identified three types of cases that lend themselves to motions for summary judgment.3 These categories, which the Court identified as non-exhaustive, are:
(a) where the parties agree to submit their dispute to resolution by way of summary judgement (which rarely, if ever, happens);
(b) where a motion judge is satisfied that a claim or defence has no chance of success; or
(c) where a motion judge is satisfied that the issues can be fairly and justly resolved on the merits by exercising the expanded powers in the amended rules.4
In each instance, before exercising their powers to weigh evidence, evaluate credibility or draw inferences from facts, motion judges must first apply the "full appreciation" test to assess whether the "interest of justice" requires that these powers be exercised only at trial. They must consider whether they require the opportunity to hear and observe witnesses, have the evidence presented by way of a trial narrative, and experience the fact-finding process first-hand in order to have a full appreciation of the evidence and issues. Where a judge concludes that the "full appreciation" test is not met, a trial will be required.
2. oral evidence and summary judgment
The Court also discussed a judge's power to order that oral evidence be presented by one or more of the parties on a summary judgment motion. The Court made clear that the power to compel oral testimony resides with the judge; the parties have no authority to call witnesses in order to supplement their motion record. The tool is to be used to enable judges to determine whether they have a full appreciation of the evidence and issues, such that they can proceed with summary disposition.
The Court highlighted three (non-exhaustive) instances where it would be appropriate for a judge to request oral evidence: (a) where oral evidence can be obtained from a small number of witnesses and gathered in a manageable period of time; (b) where any issue to be dealt with by presenting oral evidence is likely to have a significant impact on whether the summary judgment motion is granted; and (c) where the issue is narrow and discrete.
3. the timing of summary judgment motions
The Court also reflected on the appropriate timing of summary judgment motions. The Court commented that it may not be in the interests of justice for a judge to exercise his or her new powers on motions for summary judgment brought early in the litigation process, prior to oral and documentary discovery. If the complexity of the issues demand that the normal discovery process be completed before dealing with a motion for summary judgment, a responding party may successfully move to have the motion stayed or dismissed.
4. simplified procedure and summary judgment motions
The Court also held that the "full appreciation" test applies equally to actions commenced under the simplified procedure (Rule 76). However, the Court raised concerns that motions for summary judgment in simplified procedure actions may serve to eliminate the efficiencies sought to be achieved in such proceedings. The Court discouraged the use of summary judgment motions in simplified procedure actions where there is competing evidence from multiple witnesses or where oral evidence is clearly required to decide the issues. In such circumstances, efficiency requires that the action simply proceed to a speedy trial with the limited discovery allowed by the Rules.
5. standard of review on appeal
Finally, the Court also addressed the standard of appellate review applicable to summary judgment decisions. The Court confirmed that the appropriate standard of review on questions of law (is there a "genuine issue requiring a trial") and mixed law and fact is that of correctness. However, if an appellate court determines that the motion judge correctly applied the legal test, any factual determinations made by the motion judge will be reviewed on the deferential standard of palpable and overriding error.
The new "full appreciation" test is designed to strike a balance between the competing goals of making summary judgment more readily available in appropriate cases, while at the same time not depriving litigants of their "day in court" where a trial is required. However, this tension has always existed in connection with summary judgment motions. Subsequent judicial interpretation of the Combined Air decision will determine whether or not the appropriate balance has been achieved. In the meantime, we do not anticipate that the Combined Air decision will have a chilling effect on the number of summary judgment motions that are brought in the future.
by W. Brad Hanna and Richard McCluskey
1 2011 ONCA 764 ("Combined Air"). To provide guidance to the profession, the Court heard appeals from five different decisions under the amended summary judgment rule together, and released one decision dealing with all of the appeals. In addition to the Combined Air decision, the Court also heard appeals in Mauldin v Hryniak (C52912), Bruno Appliance and Furniture v Hryniak (C52913), 394 Lakeshore Oakville Holdings Inc v Misek (C53035), and Parker v Casalese (C53395), as well as amicus curiae submissions from various bodies, including the Attorney General and the Ontario Bar Association.
2 The prior version of the rule differed only in that it said summary judgment shall be granted "where there is no genuine issue for trial." In Combined Air, the Court observed that this change in language is "not merely semantics." As the Court put it: "The prior wording served mainly to winnow out plainly unmeritorious litigation. The amended wording, coupled with the enhanced powers under rules 20.04(2.1) and (2.2), now permit the motion judge to dispose of cases on the merits where the trial process is not required in the ‘interest of justice'."
3 The court commented that it is not necessary for a motion judge to categorize the type of case in question, especially between the second and third classes which are not necessarily discrete categories.
4 The Court noted that the first two categories existed under the former rule, while the third category has been added by virtue of the amended rule.
a cautionary note
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2011