LAW 270B-003 Civil Procedure Week 10: Interim relief and summary trials. Andrew I. Nathanson March 20, 2014
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1 LAW 270B-003 Civil Procedure Week 10: Interim relief and summary trials Andrew I. Nathanson March 20, 2014
2 Introduction The state of affairs in B.C. 25 years ago: while every effort must be made to ensure a just result, the volumes of litigation presently before our courts, the urgency of some cases, and the cost of litigation do not always permit the luxury of a full trial with all traditional safeguard in every case, particularly if a just result can be achieved by a less expensive and more expeditious procedure Inspiration Management per McEachern C.J.B.C.
3 Introduction (cont.) And in 2014: 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 go to trial. Without an effective and accessible means of enforcing rights, the rule of law is threatened. Without public adjudication of civil cases, the development of the common law is stunted. Increasingly, there is recognition that a culture shift is required. 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. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just Hryniak v. Mauldin 2014 SCC 7 per Karakatsanis J. at paras. 1-2
4 Takeaways Summary judgment as distinct from summary trial Summary trials Suitability Escape valve: court may refuse to grant judgment where Unable to find the facts necessary to decide issues of fact or law arising Unjust to do so Practice and professionalism issues Will Hyrniak move the dial?
5 Takeaways (cont.) Injunctions Purpose Test and considerations Specific types of injunctions Mareva injunctions Anton Piller orders Ethical issues in injunction practice
6 Summary judgment (R. 9-6) Governed by R. 9-6 Summary application for judgment on, or for an order dismissing, all or part of a claim Summary judgment distinguished from summary trial Summary trial is concerned with whether there is a genuine issue for trial
7 Summary judgment (cont.) Compare with Ontario R : (2) [General] The court shall grant summary judgment if, (a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
8 Summary judgment (cont.) Ontario R (cont.) (2.1) [Powers] In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge 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: 1. Weighing the evidence. 2. Evaluating the credibility of a deponent. 3. Drawing any reasonable inference from the evidence. (2.2) [Oral Evidence (Mini-Trial)] A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.
9 Summary judgment cases Skybridge Investments Ltd. v. Metro Motors Ltd BCCA 500 (decided under former R. 18) [not in readings] Question is whether there is a bona fide triable issue To decide this, court should not weigh the evidence
10 Summary trials (R. 9-7) Governed by R. 9-7 (formerly R. 18A) Trial on affidavits; contrasted with a conventional trial with live witnesses Brought into force in the mid-1990s to meet the needs of the day: a rising volume of litigation with concomitant increases in cost and delay Orangeville Raceway, para. 28 Important and successful B.C. procedural innovation Made so in part by early confident and expansive judicial interpretations by McEachern C.J.B.C. and others
11 Summary trials: rule and requirements Application for judgment on an issue or generally R. 9-7(2) Must be heard at least 42 days before scheduled trial date R. 9-7(3) Evidence may consist of Affidavit Answer to interrogatories Evidence taken on an examination for discovery An admission under R. 7-7 Expert report R. 9-7(5)
12 Summary trials: rules and requirements (cont.) Suitability is an important issue On an application under R. 9-7(11) [formerly R. 18A(8)], the court may (i.e. discretionary decision): Adjourn the application Dismiss it on the ground that Issues not suitable for disposition by summary trial Summary trial application will not assist in the efficient resolution of the proceeding Suitability considerations, and whether such applications should be heard as a preliminary application, discussed by Allan J. in Western Delta Lands Partnership No. 1
13 Summary trials: rules and requirements (cont.) Court may make preliminary or ancillary orders Cross examinations Before the court or before another person Delivery of briefs Parties attend a case planning conference R. 9-7(12) and (17) Jurisdiction: on hearing a summary trial application, the court may: Grant judgment on an issue or generally Impose terms respecting enforcement of the judgment, including a stay of execution Award costs
14 Summary trials: rules and requirements (cont.) Court should not grant judgment where It is unable, on the whole of the evidence, to find the facts necessary to decide the issues of fact or law It is of the opinion it would be unjust to decide the issues on the application R. 9-7(15)(a)(i) and (ii)
15 Potential objections to summary determination of issues Fairness concerns, especially the inability to find the necessary facts Issues of credibility that are better resolved at trial Substantial evidence to be weighed Complexity Unavailability of evidence that could be available through trial procedures E.g. evidence from third party witnesses
16 Potential objections to summary determination of issues (cont.) Efficiency concerns Duplicative proceedings and inconsistent findings Litigating in slices Does not do enough to resolve the issues in the context of the case as a whole Application against some defendants only Summary determination of only one issue
17 Locus classicus on summary trials: Inspiration Management while every effort must be made to ensure a just result, the volumes of litigation presently before our courts, the urgency of some cases, and the cost of litigation do not always permit the luxury of a full trial with all traditional safeguard in every case, particularly if a just result can be achieved by a less expensive and more expeditious procedure Chambers judges should be careful but not timid in using R. 18A for the purpose for which it was intended aking the case forward to a conventional trial in relation to
18 Inspiration Management (cont.) In deciding whether it wil be unjust to give judgment, the chambers judge is entitled to consider, inter alia, the amount involved, the complexity of the matter, its urgency, any prejudice likely to arise by reason of delay, the cost of taking the case forward to a conventional trial in relation to the amount involved, the course of the proceedings and any other matters which arise for consideration on this important question
19 Inspiration Management (cont.) The chambers judge will give consideration to the affidavit evidence and consider, on all of the evidence, whether the evidence is sufficient for adjudication a judge should not decide an issue of fact or law solely on the basis of conflicting affidavits even if he prefers one version to the other It may be, however, that other admissible evidence will make it possible to find the facts necessary for judgment to be given If there is a conflict on the affidavits, the judge can: Order cross-examination on affidavits Order cross-examination before him or her or another judge Have resort to other procedures under the rule Require the matter to be tried
20 Summary trials: particular issues The problem of conflicting affidavits and credibility The court is not obliged to refuse to decide the application simply because there is a credibility issue or conflicting affidavits Inspiration Management; Orangeville Raceway Court, however, remains sensitive to limitations on factfinding function R. 9-7 permits a summary trial of an issue; litigation in slices is, however, disfavoured because of problems of fairness and inefficiency Prevost v. Vetter
21 Summary trials: particular issues Summary trial is a trial: you can lose and not just not succeed on the application Note Bouck J. s judgment in Chu v. Chen Re-appraisal Invitation to retrenchment? Note his suggested limits on material: not realistic
22 Summary trial practice points Do carefully prepare affidavits and exhibits Affidavits must not contain inadmissible evidence including hearsay or statements on information and belief Do not split your case Do give fair notice in your Notice of Application or Response
23 Summary trial practice points (cont.) Do identify rather than obscure the central issues, evidence, authorities and arguments Do not dumptruck the judge Do not do a once over lightly in oral argument on a large record, expecting the judge to read everything on their own time Do estimate the time required for hearing realistically
24 Summary trial practice points (cont.) But it is necessary to recognize that it is essential on all applications under R. 18A for counsel to bring an appropriate measure of professional skill to the preparation of both the substance and form of their material. It is unfair to scoopshovel volumes of disjointed affidavits and exhibits upon the chambers judge and expect him or her to make an informed judgment One of counsel s objectives is to persuade, and they cannot expect to succeed in this endeavour if they permit confusion in the form of masses of disorganized fact and paper to intrude on the decisional process Inspiration Management, per McEachern C.J.B.C.
25 Values underlying summary trial rule Efficiency rationale predominates Checks and balances, however, designed not to unduly compromise correctness Also speed and cost
26 Summary trial cases Inspiration Management Orangeville Raceway Prevost v. Vetter Chu v. Chen Western Delta Lands Partnership Nos. 1 and 2
27 25 year wake-up call: Hryniak v. Mauldin 2014 SCC 7 Action by investors (Maudlin Group) against Hryniak, his company and their lawyers, Peebles and Peebles firm, Cassels Brock, for civil fraud arising out of a $1 million investment Maudlin Group and investors who commenced other actions brought application for summary judgment In court of first instances, summary judgment ordered against Hryniak Motions for summary judgment against Peebles and Cassels Brock dismissed Claim depended on credibility issues and required a trial
28 Hryniak v. Mauldin contextual observations The principal goal remains the same: a fair process that results in a just adjudication of disputes (para. 28) Court of Appeal erred in placing too high a premium on the importance of a conventional trial; not realistic for most litigants There is a a developing consensus that the traditional balance struck by extensive pre-trial processes and the conventional trial no longer reflects the modern reality and needs to be re-adjusted. A proper balance requires simplified and proportionate procedures for adjudication (para. 27)
29 Hryniak v. Mauldin contextual observations There is, of course, always some tension between accessibility and the truth-seeking function but, much as one would not expect a jury trial over a contested parking ticket, the procedures used to adjudicate civil disputes must fit the nature of the claim. If the process is disproportionate to the nature of the dispute and the interests involved, then it will not achieve a fair and just result (para. 29) [P]roportionality is inevitably comparative; even slow and expensive procedures can be proportionate when they are the fastest and most efficient alternative (para. 33)
30 Hryniak test for summary judgment The Roadmap/Approach to a Motion for Summary Judgment Two part test, with subparts: Is there a genuine issue requiring a trial? If there is a genuine issue requiring a trial, can the need for a trial nevertheless be avoided by resort to the discretionary procedural powers in the rule?
31 Hryniak test explained Is there a genuine issue requiring a trial? Does summary judgment process provide court with the evidence required to fairly and justly adjudicate the dispute; and Is it a timely, affordable and proportionate procedure?
32 Hryniak test explained (cont.) If there is a genuine issue requiring a trial, can the need for a trial nevertheless be avoided by resort to the discretionary procedural powers in the rule? Those powers available if in interest of justice In interest of justice if: Their use will lead to a fair and just result This involves a comparison with the alternative of a full trial Court will look to the nature of the issues, the nature and strength of the evidence and proportional procedure The use of the discretionary powers will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole
33 Other Hryniak observations Motions judges should be prepared to be involved early, actively and throughout Motions for directions encouraged Judge hearing the motion for directions should generally be seized ensuring the knowledge developed about the case does not go to waste (para. 71) Similarly, judges who hear failed summary judgment motions should, absent compelling reasons, seize themselves as trial judge (para. 78)
34 Other Hryniak observations (cont.) Risks of cost and delay occasioned by failed summary judgment motions recognised, but can be attenuated by exercise of trial management powers and inherent jurisdiction (para. 74). Examples include: Setting schedule Fix restricted discovery plan Require payment into court or security for costs Require written summaries of witnesses trial evidence or evidence in chief by affidavit Impose time limits on evidence at trial
35 Other Hryniak observations (cont.) These powers allow the judge to use the insight she gained from hearing the summary judgment motion to craft a trial procedure that will resolve the dispute in a way that is sensitive to the complexity and importance of the issue, the amount involved in the case, and the effort expended on the failed motion. The motion judge should look to the summary trial as a model (para. 77)
36 What does Hryniak mean in B.C.? Has more implications for R. 9-7 than R. 9-6, since the Ontario R is a hybrid of both B.C. rules Strong endorsement of even more liberal resort to summary procedures, whether summary judgment or summary trial, and that the discretion must be exercised in accordance with the proportionality principle Encouragement of resort to discretionary powers in R. 9-7(12) and (17)
37 What does Hryniak mean in B.C.? (cont.) Endorsement of greater case management in general Judges who hear motions for directions should seize themselves Judges who hear summary judgment or summary trial applications but conclude not appropriate should seize themselves Pretty close to, if you touch it, you own it This is so regardless of R. 9-7(14)
38 Other Hryniak conclusions Statements of principle about proportionality, culture change and the importance of access to justice have implications far beyond summary judgment and summary trial applications Wake up call to the system: will it be heard?
39 Other Hryniak conclusions (cont.) Note, too: The explicit balancing of values (paras. 27, 29) Predominant value remains fair and just process This cannot be compromised (para. 23) However, just being reconceptualised as including time, cost and access The appeal to purpose (para. 56) Focus on underlying principles In outlining how to determine whether there is [a genuine issue requiring trial], I focus on the goals and principles that underlie whether to grant motions for summary judgment (para. 47)
40 Interlocutory injunctions Governed by Law and Equity Act, s. 39(1) ( an injunction may be granted by an interlocutory order in all cases in which it appears to the court to be just or convenient ), R and the common law Dealing here with interlocutory and interim injunctions Distinguished from final injunctions Interlocutory injunctions now referred to as pre-trial injunctions Interim injunctions serve bridging function; ordered for a limited period of time or until a defined event
41 Interlocutory injunctions (cont.) Purpose of interlocutory injunctions is to prevent irreparable harm pending the court s determination of the merits at trial Merits matter but interlocutory injunctions usually do not turn on them
42 Interlocutory injunctions (cont.) Three part test Fair question to be tried Irreparable harm Balance of convenience RJR-MacDonald Inc. v. Canada (Attorney General) [1994] 1 S.C.R. 311 ( RJR ) Leading B.C. case prior to RJR is B.C.(A.G.) v. Wale (1986), 9 B.C.L.R. (2d) 333 (C.A.) ( Wale ) Two part test, treating irreparable harm as part of balance of convenience
43 Interlocutory injunctions: injunctions about the correct approach Do not become a prisoner of formula The fundamental question in each case is whether the granting of an injunction is just and equitable in all the circumstances of the case The checklist of factors which the courts have developed relative strength of the case, irreparable harm, and balance of convenience should not be employed as a series of independent hurdles. They should be seen in the nature of evidence relative to the central issue of assessing the relative risks of harm to the parties from granting or withholding interlocutory relief Wale; Tracy v. Instaloans Financial Solutions Centres (B.C.) Ltd BCCA 481 ( Tracy v. Instaloans )
44 Merits test Fair or serious question to be tried Previously, prior to American Cynamid (seminal House of Lords decision), strong prima facie case required No specific requirements to satisfy this test; something higher than not frivolous or vexatious Requires the court to make a preliminary assessment of the merits
45 Merits test (cont.) A prolonged examination of the merits is generally neither necessary nor desirable Two exceptions The result will in effect amount to a final determination of the action When the issue is the constitutionality of legislation or conduct and presents as a simple question of law alone Both rare Possible third exception left open: the factual record is largely settled prior to the application RJR
46 Irreparable harm Concerned with whether the refusal of injunctive relief could so adversely affect the applicant s own interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application RJR Irreparable harm Refers to the nature of the harm, not its magnitude Harm which cannot be quantified in monetary terms; or Harm which cannot be compensated E.g. because damages if awarded cannot be collected
47 Irreparable harm (cont.) Examples of irreparable harm Permanent market loss Irrevocable damage to business reputation Permanent loss of natural resources Impecuniosity of defendant a consideration but not determinative
48 Balance of (in)convenience [A] determination of which of the two parties will suffer the greater harm from the granting or refusal of an interlocutory injunction pending a decision on the merits RJR, citing Metropolitan Stores Considerations include Adequacy of damages as a remedy for applicant if injunction is not granted, and for respondent if it is Likelihood that if damages are awarded they will be paid Preservation of contested property Other factors affecting whether the harm from the granting or refusal of the injunction would be irreparable These factors all relate to irreparable harm and would be considered at the second stage of the RJR three part test
49 Balance of (in)convenience (cont.) Which of the parties has acted to alter the balance of their relationship and so affect the status quo The strength of the applicant s case Any factors affecting the public interest Any other factors affecting the balance of convenience Canadian Broadcasting Corp. v. CKPG Television Ltd. (1992), 64 B.C.L.R. (2d) 96 (C.A.) The factors in all parts of the test ought not to be seen as watertight compartments; strength on one part of the test ought to be permitted to compensate for weakness on another Wale, citing Sharpe on Injunctions
50 Interlocutory injunctions (cont.) Kinds of interlocutory injunctions Prohibitory Mandatory Quia timet ( since he fears )/Anticipatory
51 Mareva injunctions Species of interlocutory injunction with very special requirements (Tracy v. Instaloans) Refers to orders that impound or freeze assets before judgment Designed to protect against the risk of harm either through the dissipation of assets or their removal from the jurisdiction to place them beyond the reach of the court Exception to the rule against pre-judgment execution
52 Mareva injunctions (cont.) Originated in shipping cases in England Recognised in Canada in Aetna in context of application to enforce a foreign judgment Now less exceptional than in past Most often seen in fraud cases and where assets may be removed from the jurisdiction
53 Mareva injunctions (cont.) Concern, however, with litigious blackmail In most cases, it will not be just or convenient to tie up a defendant s assets or funds simply to give the plaintiff general security for a judgment he may never obtain Silver Standard
54 Mareva injunctions (cont.) Discretionary Test Strong prima facie case? Some cases say higher merits showing than for an usual injunction Balance of convenience Requires a balancing of the parties interests, having regard to all relevant factors
55 Mareva injunctions (cont.) Balance of convenience (cont.) Includes consideration of whether there is evidence establishing the existence of assets within B.C. (for a domestic injunction) or outside (for a national or international injunction) and a real risk of disposal or dissipation so as to render nugatory any judgment Generally it will not be appropriate simply to grant the order to provide pre-judgment security
56 Mareva injunctions (cont.) May be made on an interim basis Operates in personam and punishable by contempt May be made against defendant s worldwide assets If so, service of the order may be required on third parties Order may include affidavit identifying all defendant s assets and their location, and provide for cross-examination on the affidavit Very powerful tool
57 Mareva injunction cases Tracy v. Instaloans Financial Solutions Centres (B.C.) Ltd. ICBC v. Patko Also: Silver Standard Resources Inc. v. Joint Stock Co. Geolog (1998), 59 B.C.L.R. (3d) 196 (C.A.) Mooney v. Orr (1994), 100 B.C.L.R. (2d) 335 (S.C.) (worldwide Mareva injunction) Aetna Financial Services v. Feigelman [1985] 1 S.C.R. 2
58 Anton Pillar orders Referred to as a civil search warrant, draconian, and a neutron bomb of remedies At the extremity of this court s powers (Ormond J.) Extraordinary remedy designed to preserve evidence Sought without notice Originally conceived in trade secrets and intellectual property cases Breach is punishable by contempt
59 Anton Piller orders (cont.) Test Strong prima facie case Very serious potential or actual damage as a result of defendant s misconduct Convincing evidence defendant possesses incriminating documents or things Real possibility that defendant may destroy such material before any application made on notice Celanese Canada v. Murray Demolition Corp.
60 Anton Piller orders (cont.) Protections Carefully drawn order Clearly identifies material to be seized Contains protections for privileged documents Vigilant, court appointed independent solicitor A sense of responsible restraint on the part of those executing the order (Celanese per Binnie J.)
61 Anton Piller orders (cont.) Protections (cont.) Limits on conduct of the search including during normal business hours (and not at night), with service of the pleadings and order and opportunity for defendant to consult with counsel Procedure following search Supervising solicitor to file a report with the court on the search Possibility of requiring plaintiff to initiate an automatic review of the independent solicitor s report and the results of the search
62 Anton Piller order cases Celanese Canada v. Murray Demolition Corp SCC 36 Also: British Columbia (Attorney General) v. Malik 2011 SCC 18
63 Ethical issues in injunction practice If, as on many Mareva and Anton Pillar orders, application made without notice, duty of full and frank disclosure Mooney v. Orr Available sanctions for breach duty of full and frank disclosure Special costs BCCI v. Akbar (Week 11 readings) Injunction may be dissolved Murphy v. Dodd (Week 2 readings) Possible irreparable damage to case if judge is seized or writes damaging reasons Almost certain irreparable damage to counsel s reputation
64 Ethical issues in injunction practice (cont.) Be careful when serving Mareva orders on third parties Counsel swearing affidavit May result in a waiver of privilege May not do so unless The matter is purely formal or uncontroverted; or Necessary in the interests of justice BC Code Undertaking in damages Invariably required as a term of an injunction Explain to client and ensure have instructions to give Good practice to include in the client s affidavit
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