The Ontairo Court of Appeal recently released its decision in Combined Air Mechanical Services Inc. v. Flesch, in which it clarified the current law on summary judgments. Its implications are significant and, no doubt, will impact on a number of smaller and simpler cases but will it have any effect on complex litigation?
The motion court judge has to fully appreciate the evidence and issues in a way that permits a fair adjudication of the dispute.
In a decision released on January 19, 2012 called Honest Art Inc. v. Decode Entertainment Inc., Mr. Justice Belobaba heard a motion for summary judgment in which the parties filed 16 volumes of material. The material was filled with conflicting evidence across a range of interconnected and complex issues. The key issue in the case related to discoverability. The Plaintiff commenced its action soon after receiving an auditor’s report detailing the nonpayment of monies allegedly owned by the Defendant. The Defendant argued that the cause of action had materialized many years before, when the Plaintiff had received one of the Defendant’s accounting reports in which it should have noticed allegedly improper deductions which would have been “obvious” to any reader. As the Plaintiff waited for a number of years before suing, the Defendant argued that the claim was now statute barred.
Mr. Justice Belobaba concluded that in order to determine the matter and decide about “who knew what when”, the court would have to assess the financial abilities or accounting expertise of the Plaintiff, whether the indications in the accounting reports were so obvious that they should have started the limitations clock running, whether the Plaintiff acted reasonably and with due diligence in contacting the Defendant about its concerns, whether the Defendant obstructed the Plaintiff’s requests for information, whether there was any unreasonable delay in the Plaintiff’s decision to hire an auditor, and whether the auditor was right to say that the Plaintiff’s claim could not have been discovered without a physical inspection of the Defendant’s books.
In Combined Air, the Court of Appeal seemed to broaden the powers of a motions court judge in a summary judgment motion. Motions judges are now entitled to weigh evidence, evaluate credibility, and draw reasonable inferences. However, the judge is not entitled to do that unless he or she is satisfied that the interests of justice do not require that these powers be exercised only at a trial. The judge can only do so by concluding that he or she can reach a “full appreciation” of the evidence and the issues required to make dispositive findings. If the judge cannot do so, the full appreciation test will not be met and the interests of justice will require a trial.
Mr. Justice Belobaba had no difficulty concluding that the case before him was exactly the type of case that the Court of Appeal suggested would still have to go to trial. While he agreed with the Defendant’s counsel that the determinative criteria would be the quality of the evidence and not the quantity, such that there might well be motions with conflicting evidence and a voluminous record of which a motions judge could develop a full appreciation, those cases would be few and far between and the case before him was not one of them. In the case before him, a trial judge would have to hear from live witnesses who would explain what they knew, when they knew it and why they did what they did in order to reach a decision.
The essence of the test set out by the Court of Appeal, as pointed out by Justice Belobaba, is that the motion court judge has to fully appreciate the evidence and issues in a way that permits a fair adjudication of the dispute. Simply being knowledgeable about the entire content of a motion record is not sufficient.
Accordingly, for complex litigation with multiple issues in dispute, the new powers of motions court judges as defined by the Court of Appeal will not have an impact. Essentially, summary judgment in Ontario remains what always has been: a way to bring an early end to a relatively straightforward case.