June 1, 2014
"It's (quite possibly) the End of the World As I Know It — And I Feel Fine"BY ROBERT KENNALEY
The title to this article has been borrowed, unabashedly, from a classic (in my mind) REM song from the late ‘80s. The lyrics pretty much summarize my view of recent developments in litigation in Canada. These relate to the use of “summary judgment” processes to, in some circumstances, eliminate the need for lengthy trials and reduce legal costs in litigation.
As a starting point, let’s put the developments in context. Historically, pre-trial discovery and disclosure obligations have increased over time. In Ontario, for example, it got to the point where the Rules of Civil Procedure required litigants to produce any document, and answer any question, so long as there was a mere “semblance of relevancy” to the inquiry. This overlapped with our increasing use of computer technology and the corresponding production of more and more documents — think, for example, of how the use of email has changed the way we communicate. Although in Ontario the “semblance of relevancy” test has been rolled back (some would say only marginally), pre-trial disclosure obligations and processes have continued to drive the cost of litigation.
The problem only gets worse when the parties are forced on to an actual trial: all of the relevant documents and issues are potentially at play. This can result in lengthy trials on the heels of the lengthy and expensive pre-trial process. This can be particularly true in relation to construction disputes, which are generally document-intensive and the number of issues can be substantial. Consider, for example, the common case where the contractor is suing for balance of contract and changes in the work, while the owner is disputing the changes and back-charging the contractor for deficiencies and incomplete work. We can often add competing delay claims and/or allegations of wrongful termination or abandonment of the work to the mix. In addition, numerous witnesses and experts are often required to determine whether or not and why the work was deficient. It isn’t hard to imagine how even a relatively small residential construction project gone wrong can result in significant litigation costs.
Summary judgment can eliminate trials
One tool that has been available to address litigation costs has been the motion for “summary judgment.” This remedy has been generally available in Canada where the Court could determine, on the facts before it, that there was no real need to continue with the litigation process. Rather, a judge would be able to summarily determine the merits of some or all of a law suit on the basis of motion materials before the Court, and without the need for a trial.
In Ontario, these processes lost some momentum in 1998 when the Ontario Court of Appeal held that summary judgment should not be granted if there were credibility issues to be determined. In other words, the Ontario Court decided that if any “he-said-she-said” dispute was at issue, a trial judge — in fairness to parties — would have to hear from the witnesses themselves to evaluate credibility before judgment could be rendered. This was in keeping with longstanding trial practices and principles of adjudication. More recently, however, the Ministry of the Attorney General in Ontario amended the Rules to lower the bar for successful summary judgments and put procedures in place to allow for credibility to be assessed without the need for a trial. In its first opportunity to interpret the new Rules, the Ontario Court of Appeal determined that to award summary judgment the Judge would have to be able to form a “full appreciation” of all of the evidence, based solely on the evidence before the Court on the motion. It is in this context that the Supreme Court of Canada weighed in on when, and why, summary judgment should be available.
Conventional trials not always realistic
The Supreme Court in Hryniak v. Mauldin, 2014 SCC 7, expressly recognized that undue process and protracted trials, with unnecessary expense and delay, can prevent the fair and just resolution of disputes. In this regard, it held that the best forum for resolving a dispute is not always the most painstaking procedure and that a shift in culture is required. The Court went on to say that Canadian Courts should move away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. It held that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims.
In relation to the Ontario Rules, the Court held that 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.” The Court essentially held that the judge can exercise discretion, depending on the amounts at issue and the principal of proportionality, to decide (even without a full appreciation of the evidence) that she has enough evidence before her to either render a decision or limit/control the pre-trial procedures necessary to administer justice without resorting to a full-blown trial. The Court held that a motions Judge in Ontario could render summary judgement when he or she could make the necessary findings of fact and law and where the summary procedure would be the more proportionate, expeditious and less expensive means to achieve a just result. The focus, it appears, is on letting the motion judge decide how much evidence is necessary to administer justice, when the amounts at issue and potential litigation costs are considered.
Time will tell us how and to what extent the Supreme Court’s call for a culture shift will play out in actual courtrooms across the nation. I, for one, will ‘feel fine’ if our lower courts accept the challenge and give teeth to the remedy.
Robert Kennaley has a background in construction and now practices construction law in Toronto and Simcoe, Ontario. Rob can be reached for comment at 416-368-2522, at firstname.lastname@example.org, or on LinkedIn. This material is for information purposes and is not intended to provide legal advice in relation to any particular situation. Readers who have concerns about any particular circumstance are encouraged to seek independent legal advice in that regard.