View PDF: LitigationNotes_Vol9-2
The Supreme Court of Canada provides a roadmap for the effective use of summary judgment procedures.
The Supreme Court of Canada recently recognized the necessity of streamlining access to justice in Canada. The Court said;
“Ensuring access to justice is the greatest challenge to the rule of law in Canada today.Trials have become increasingly expensive and protracted.Most Canadians cannot afford to sue when they are wronged or defend themselves when they are sued, and cannot afford to go to trial…Increasingly, there is recognition that a culture shift is required in order to create an environment promoting timely and affordable access to the civil justice system.This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case…”
One tool for enhancing access to justice is the summary judgment motion, which can provide a cheaper, faster alternative to a full trial.’s summary judgment procedure is contained in Rule 20, which permits a party to move for summary judgment to grant or dismiss all or part of a claim.Rule 20 was amended in 2010, following the recommendations of the Osborne Report.20.04(2.1) now provides that a judge hearing a summary judgment motion “… 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:. Weighing the evidence; 2. Evaluating the credibility of a deponent.3. Drawing any reasonable inference from the evidence.”
This case involved investments made by a group of American investors, led by Fred Mauldin (the Mauldin Group), in a Canadian company, Tropos Capital (“Tropos”), which traded in bonds and debt instruments. Robert Hryniak was the principal of Tropos and Gregory Peebles, formerly of Cassels Brock & Blackwell (“Cassels Brock”), was legal counsel to Hryniak and Tropos.
In June of 2001, the Mauldin Group wired US$1.2 million to Cassels Brock, which was pooled with other funds and transferred to Tropos.A few months later, Tropos forwarded more than US$10 million to an offshore bank and the money disappeared.
The Mauldin Group sued Hryniak, Peebles and Cassels Brock for fraud and brought a motion for summary judgment. The motions judge used his powers under the new Rule 20.04(2.1) to weigh the evidence, evaluate credibility, and draw inferences.He concluded that a trial was not required against Hryniak.However, he found that the claim against Peebles involved issues with respect to credibility and required a trial. Consequently, he dismissed the motion for summary judgment against Peebles, as well as against Cassels Brock, since the claim against the firm was based on the theory that it was vicariously liable for Peebles’ conduct.
Hryniak appealed to the Court of Appeal for Ontario. The Court of Appeal concluded that because of its factual complexity and voluminous record, the Mauldin Group action was the type of action for which a trial is generally required.“There were numerous witnesses, various theories of liability against multiple defendants, serious credibility issues, and an absence of reliable documentary evidence.Moreover, since Hryniak and Peebles had cross-claimed against each other and a trial would nonetheless be required against the other defendants, summary judgment would not serve the values of better access to justice, proportionality, and cost savings”.
However, in spite of having concluded that the case was not appropriate for summary judgment, the Court of Appeal was satisfied that Hryniak had committed the tort of civil fraud against the Mauldin Group, and dismissed his appeal.
Hryniak appealed to the Supreme Court of Canada. The Supreme Court dismissed the appeal, but said that it differed in part on the Court of Appeal’s interpretation of Rule 20:
“In interpreting these provisions, the Ontario Court of Appeal placed too high a premium on the ‘full appreciation’ of evidence that can be gained at a conventional trial, given that such a trial is not a realistic alternative for most litigants.In my view, a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial.”
The Court then went on to outline its views on how the Summary Judgment rule should be applied.
The Court advocated a “roadmap” approach to summary judgment motions:
“1. On a motion for summary judgment under Rule 20.04, the 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.
2.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).
3.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).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.”
When is There no Genuine Issue Requiring a Trial?
Summary judgment motions must be granted whenever there is no genuine issue requiring a trial (Rule 20.04(2)(a)). “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.”
The Interest of Justice
The enhanced fact-finding powers granted to motion judges in Rule 20.04(2.1) may be employed on a motion for summary judgment unless it is in the “interest of justice” for them to be exercised only at trial.The “interest of justice” is not defined in the Rules.
The Court of Appeal said that it would not be in the interest of justice to proceed by way of summary judgment if a full appreciation of the evidence and issues that is required to make dispositive findings can only be achieved by way of a trial.
The Supreme Court agreed that a motion judge must have an appreciation of the evidence necessary to make dispositive findings, but said that such an appreciation is not only available at trial:
“ Focussing on how much and what kind of evidence could be adduced at a trial, as opposed to whether a trial is “requir[ed]” as the Rule directs, is likely to lead to the bar being set too high… On a summary judgment motion, the evidence need not be equivalent to that at trial, but must be such that the judge is confident that she can fairly resolve the dispute. A documentary record, particularly when supplemented by the new fact-finding tools, including ordering oral testimony, is often sufficient to resolve material issues fairly and justly.powers provided in Rules 20.04(2.1) and 20.04(2.2) can provide an equally valid, if less extensive, manner of fact finding.”
The Power to Hear Oral Evidence
Under Rule 20.04(2.2), the motion judge is given the power to hear oral evidence. The Court of Appeal suggested the motion judge should only exercise this power when oral evidence: (1) can be obtained from a small number of witnesses and gathered in a manageable period of time; (2) is likely to have a significant impact on whether the summary judgment motion is granted; and (3) is on an issue that is narrow and discrete.
The Supreme Court said that this was useful guidance but that they are not absolute rules. The Court said:
1. “This power should be employed when it allows the judge to reach a fair and just adjudication on the merits and it is the proportionate course of action.While this is more likely to be the case when the oral evidence required is limited, there will be cases where extensive oral evidence can be heard on the motion for summary judgment, avoiding the need for a longer, more complex trial and without compromising the fairness of the procedure.”
2. “Where a party seeks to lead oral evidence, it should be prepared to demonstrate why such evidence would assist the motion judge in weighing the evidence, assessing credibility, or drawing inferences and to provide a “will say” statement or other description of the proposed evidence so that the judge will have a basis for setting the scope of the oral evidence.”
3. “The power to call oral evidence should be used to promote the fair and just resolution of the dispute in light of principles of proportionality, timeliness and affordability….In tailoring the nature and extent of oral evidence that will be heard, the motion judge should be guided by these principles, and remember that the process is not a full trial on the merits but is designed to determine if there is a genuine issue requiring a trial.”
Controlling the Scope of a Summary Judgment Motion
“The Rules provide for early judicial involvement, through Rule 1.05, which allows for a motion for directions, to manage the time and cost of the summary judgment motion.This allows a judge to provide directions with regard to the timelines for filing affidavits, the length of cross-examination, and the nature and amount of evidence that will be filed.”
Salvaging a Failed Summary Judgment Motion
“Failed, or even partially successful, summary judgment motions add…to costs and delay. , this risk can be attenuated by a judge who makes use of the trial management powers provided in Rule 20.05 and the court’s inherent jurisdiction… The court may: set a schedule; provide a restricted discovery plan; set a trial date; require payment into court of the claim; or order security for costs.The court may order that: the parties deliver a concise summary of their opening statement; the parties deliver a written summary of the anticipated evidence of a witness; any oral examination of a witness at trial will be subject to a time limit or; the evidence of a witness be given in whole or in part by affidavit.”
“The motion judge should look to the summary trial as a model, particularly where affidavits filed could serve as the evidence of a witness, subject to time-limited examinations and cross-examinations.Although the Rules did not adopt the Osborne Report’s recommendation of a summary trial model, this model already exists under the simplified rules or on consent…the summary trial model would also be available further to the broad powers granted a judge under Rule 20.05(2).”
“Where a motion judge dismisses a motion for summary judgment, in the absence of compelling reasons to the contrary, she should also seize herself of the matter as the trial judge. agree with the Osborne Report that the involvement of a single judicial officer throughout saves judicial time since parties will not have to get a different judge up to speed each time an issue arises in the case.It may also have a calming effect on the conduct of litigious parties and counsel, as they will come to predict how the judicial official assigned to the case might rule on a given issue.”
This case was one of four cases heard by the Court of Appeal for Ontario in 2011 and reported as Combined Air Mechanical v. Flesch (Litigation Notes, December 2011). That case seemed to put a damper on the high expectations for easier access to summary judgment arising from the amendments to Rule 20. The Supreme Court has now fanned the embers.
Hryniak v. Mauldin, 2014 SCC 7 (CanLII)