December 6, 2011

In a decision released on December 5, 2011, a five-judge panel of the Ontario Court of Appeal has attempted to provide long-awaited guidance concerning the effect of the recently expanded summary judgment rule. Summary judgment, which is codified in Rule 20 of the Rules of Civil Procedure (the "Rules"), allows litigants, whether plaintiffs or defendants, to seek a quick disposal of litigation in motions court based on affidavit evidence where a trial is not required to resolve a claim.

There are two key aspects of this decision. First, the Court has held that motion judges must apply a "full appreciation test" when determining whether to exercise the enhanced powers made available to them under rule 20.04(2.1). Second, the Court has provided a very narrow interpretation of rule 20.04(2.2), which permits motion judges to conduct "mini-trials" during the course of summary judgment motions.

The New Rule 20

The question of when it is appropriate for litigants to use the powerful weapon of summary judgment has vexed courts for years. As a result, Rule 20 was amended effective January 1, 2010 in response to recommendations made by the former Associate Chief Justice of Ontario, the Honourable Coulter Osborne, in his report entitled Civil Justice Reform Project Summary of Findings and Recommendations ("Osborne Report").[1] The Osborne Report's findings reflected a consensus in the legal community that a motion judge's authority on motions for summary judgment had been too narrowly confined as a result of appellate case law.

Rule 20 was amended in a number of important ways. First, the moving party must now demonstrate that there is "no genuine issue requiring a trial" rather than demonstrating that there is "no genuine issue for trial" (rule 20.04(2)). Second, in determining whether there is a genuine issue requiring a trial, the motion judge may now weigh evidence, evaluate credibility, and draw reasonable inferences from evidence (rule 20.04(2.1)). Third, for the purposes of exercising these powers, rule 20.04(2.2) permits the motion judge to conduct "mini-trials" to determine issues arising on the motion. Importantly, however, none of the powers contained in rule 20.04(2.1) need be invoked if the motion judge determines instead that it is in the interest of justice for such powers to be exercised at a trial.

The decision of the Court of Appeal in Combined Air is intended to provide a comprehensive guide to the courts' use of their new powers under Rule 20, including when it is appropriate for judges to assess credibility, weigh evidence and make findings of fact on a motion for summary judgment. The Court also provided some insight as to when it is appropriate for a motion judge to order that a "mini-trial" be conducted during the course of a summary judgment motion.   

The Court needed to resolve diverging case law regarding the scope of the amended summary judgment rule. Some cases had interpreted the amended rule rather narrowly, holding that it is not the role of the motion judge to make findings of fact for the purpose of deciding the action on a motion for summary judgment. In contrast, other cases had interpreted the amended rule more broadly, concluding that the amendments: (a) represented a statutory reversal of case law that held that a judge cannot assess credibility, weigh evidence or find facts on a motion for summary judgment; (b) were an attempt to make summary judgment more readily available; and (c) now permit judges to make findings of fact on such motions unless it is in the interest of justice that such findings be made only at trial.

A New "Full Appreciation" Standard

In Combined Air, the Court of Appeal has held that there are generally three types of cases that are amenable to summary judgment. The first type is where the parties agree that it is appropriate to determine an action by way of summary judgment. The second type encompasses those claims or defences that are shown to be without merit. These two types of cases reflect the traditionally accepted circumstances in which summary judgment is appropriate.

The chief innovation in the Court's decision in Combined Air is its detailed elucidation of a third class of case in which summary judgment is appropriate. This third type of case is the product of the amended rule and permits the summary disposition of cases where the motion judge is satisfied that the issues can be fairly and justly resolved by exercising the powers in rule 20.04(2.1).

When determining whether it is appropriate to weigh evidence, evaluate credibility or draw reasonable inferences, the motion judge must be guided by what is in the "interest of justice". To decide when the exercise of such powers is in the interest of justice, the Court of Appeal established an overarching test, which it described as the "full appreciation test." Under this test, the motion judge must answer the following question: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of trial?

The "full appreciation test" requires motion judges to do more than simply determine that they are capable of reading and interpreting the evidence put forth on the motion. Instead, motion judges must assess whether they can accurately weigh and draw inferences from the evidence without: (a) the benefit of the trial narrative; (b) the ability to hear the witnesses speak in their own words; and (c) the assistance of counsel as the judge examines the record in chambers. Unless a full appreciation of the evidence and issues can be obtained from the motion record—which may, in turn, be supplemented through the presentation of oral testimony via a "mini-trial"—motion judges cannot be satisfied that the issues can be appropriately resolved on a motion for summary judgment.

The Court made it clear that the full appreciation test will generally not be met in cases that call for multiple findings of fact on the basis of conflicting evidence emanating from a number of witnesses and found in a voluminous record. In contrast, the test can be met in document-driven cases with limited testimonial evidence, or in cases with limited contentious factual issues. The test may also be met in cases where the record can be supplemented at the motion judge's discretion by hearing oral evidence on discrete issues.

The Court further concluded that, in general, it will not be in the interest of justice to exercise rule 20.04(2.1) powers in cases where the nature and complexity of the issues demand that the normal process of production of documents and examinations for discovery be completed before a party is required to respond to a summary judgment motion. In a surprising move that in effect creates a new form of civil motion, the Court stressed that a party faced with a premature or inappropriate summary judgment motion should have the option of moving to stay or dismiss the motion where the most efficient means of developing a record capable of satisfying the full appreciation test is to proceed through the normal route of discovery and trial. Such an option is available by way of a motion for directions pursuant to rules 1.04(1), (1.1), (2) and 1.05.

The Use of the Court's "Mini-Trial" Powers

One of the most striking aspects of the Court's decision is its treatment of the "mini-trial" powers available under the new Rule 20.

The "mini-trial" codified under rule 20.04(2.2) permits a judge to direct discrete issues to be separated out and resolved through the use of live witnesses and trial-like testimony. The Court of Appeal provided a restrictive interpretation of those powers and appears to have concluded that the new "mini-trial" powers are a means, not an end in themselves. In particular, the Court stressed that: (a) a summary judgment motion under the amended rule is not intended to be a form of hybrid or summary trial; (b) rule 20.04(2.2) is not intended to permit the parties to supplement the motion record; (c) the parties cannot anticipate the motion judge directing the calling of oral evidence on the motion; and (d) the "mini-trial" available under rule 20.04(2.2) is merely another tool to better enable the motion judge to determine whether it is safe to proceed with a summary disposition rather than requiring a trial.

According to the Court, a party who moves for summary judgment must present a case capable of being decided on the basis of the paper record before the court without reliance on any "mini-trial". It would be inappropriate for the moving party to suggest that further evidence is required, as this amounts to an admission that the case is not appropriate for summary judgment. It is for the motion judge to decide whether he or she requires viva voce evidence under rule 20.04(2.2) "for the purpose of exercising any of the powers" conferred by the amended rule. In this regard, the Court stated the following at paragraph 63 of its judgment:

[63] A party who moves for summary judgment must be in a position to present a case capable of being decided on the paper record before the court. To suggest that further evidence is required amounts to an admission that the case is not appropriate, at first impression, for summary judgment. It is for the motion judge to determine whether he or she requires viva voce evidence under rule 20.04(2.2) "for the purpose of exercising any of the powers" conferred by the rule. This is not an enabling provision entitling a party to enhance the record it has placed before the court. It may be that, for scheduling reasons, the oral evidentiary hearing will need to be held after the hearing of the main motion. Nonetheless, it is the purview of the motion judge, and the motion judge alone, to schedule this hearing, which is a continuation of the original motion and not a separate motion. [Emphasis added.]

Therefore, under this restrictive interpretation of rule 20.04(2.2), parties may not request a "mini-trial" and must draft their motion materials as though this procedure does not exist. It is perhaps questionable whether this is how rule 20.04(2.2) was intended to operate.

The Court went on to identify the circumstances in which it will be appropriate to order the presentation of oral evidence. Generally speaking, such an order will be appropriate in cases where the motion judge concludes that the exercise of the powers contained in rule 20.04(2.1) will be facilitated by hearing the oral evidence of a limited number of witnesses on one or more "specific, discrete and likely determinative issues". The circumstances where such an order would be appropriate include situations in which: (a) oral evidence can be obtained from a small number of witnesses and gathered in a manageable period of time; (b) 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) any such issue is narrow and discrete (i.e., the issue can be separately decided and is not enmeshed with other issues on the motion).

The Individual Appeals

The actual results of the individual appeals before the Court in its omnibus decision in Combined Air provide an interesting perspective on the principles developed by the Court:

• In Combined Air itself, the Court approved a decision of a motions judge who invoked the "mini-trial" powers under Rule 20.04(2.2) to resolve a very narrow factual question arising out of the interpretation of a single document.
• In Bruno Appliance and Furniture, Inc.  v. Cassels Brock & Blackwell LLP and Mauldin v. Cassels Brock & Blackwell LLP, the Court, while stressing that a complex fraud case will almost never be appropriately resolved on a summary judgment motion, nevertheless affirmed one of two summary judgment rulings finding one party liable in fraud.
• In 394 Lakeshore Oakville Holdings Inc. v. Misek, the Court affirmed a summary judgment decision finding that no prescriptive easement existed over the plaintiff's property on the basis that (a) the documentary evidence was limited and not contentious; (b) there were a limited number of relevant witnesses; (c) the governing legal principles were not in dispute.
• Parker v. Casalese was a decision arising out of a claim by the plaintiffs under the simplified procedure set out in Rule 76 for damage to their property allegedly caused by construction taking place on an adjacent lot. The Court affirmed in the result a decision denying summary judgment to the plaintiffs, and in doing so recognized that in many, if not most Rule 76 cases, the efficiencies already built into the Rule 76 procedure will often render a summary judgment motion inappropriate.

Conclusions

It is noteworthy that of the five separate appeals heard by the Court in its omnibus decision in Combined Air, only one of the appeals was allowed. The Court otherwise affirmed the results reached by each of the judges operating without the benefit of the Court's new guidance. This fact alone may invite one to question whether the Court's "reboot" of the summary judgment jurisprudence is truly revolutionary, or rather simply provides a different conceptual framework for future courts to follow their instincts to arrive at results that they would have reached in any event.

Indeed, it remains to be seen how lower courts will apply the Court of Appeal's adoption of a "full appreciation" approach to summary judgment grounded in a motion judge's perception of whether a "trial narrative" is required to resolve the case. These terms have almost a hermeneutic quality, and may be taken as an invitation to motion judges to simply follow impressions and instincts that they may always have been inclined to follow. While it may have been the Court of Appeal's intention to provide clear guidance to lower courts to achieve the true objectives of the new summary judgment procedure, it may be that further appellate clarification will be required.

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[1] (Toronto: Ontario Ministry of the Attorney General, 2007).