Law Times

February 11, 2019

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LAW TIMES COVERING ONTARIO'S LEGAL SCENE | FEBRUARY 11, 2019 7 COMMENT BY DANIEL WALDMAN For Law Times THE Ontario Court of Appeal has, for the third time, delivered a clear message to Ontario litigants: Stay away from partial summary judgment motions. If there is any risk (no matter how small) of in- consistent findings at trial, the motion will likely fail. This may seem unfair and it is hard for us to accept, but we cannot ignore it. Even if it seems like the right strategy, we may be doing our cli- ents a disservice by recommend- ing partial summary judgment. In the 2018 decision Mason v. Perras Mongenais, a defen- dant in a multi-party proceeding successfully brought a partial summary judgment motion to dismiss the claim against it. The decision was very well reasoned by the motions judge and the risks were acknowledged. De- spite this, the Court of Appeal overturned the decision and, as a result, the defendant ended up in a much worse position than when they started. In Mason, the plaintiff sued two law firms, alleging that they didn't consider tax consequences of a settlement. One of the firms brought a motion for partial sum- mary judgment to dismiss the claim against it. Justice Fred My- ers granted the motion and held that "the cost and delay to [the law firm] of requiring it to participate in a trial when its lack of liability is so clear would be unjust and amount to a failure of justice." The Court of Appeal over- turned Mason on the basis that the claim could not be easily separa ted from the remaining issues left over at trial. The risk of inconsistent findings made par- tial summary judgment inap- propriate. Mason is the latest in a trilogy of Court of Appeal de- cisions spanning over five years. All three decisions emphasize that partial summary judgment is, with few exceptions, not wel- come in Ontario courts. The trilogy began in 2013 with Baywood Homes v. Alex Ha- ditaghi. In Baywood, the defen- dants brought a motion for sum- mary judgment to dismiss claims against them and for judgment on their counterclaim. Justice Edward Belobaba granted partial summary judgment to dismiss the claims and sent the counter- claim to trial. The decision was overturned by the Court of Ap- peal on the basis that partial sum- mary judgment could have led to inconsistent findings at trial. In October 2017, another roadblock appeared in Butera v. Chown, Cairns LLP. In Butera, the defendant successfully moved for partial summary judgment to have one compo- nent of the plaintiff 's claim dis- missed and the rest of the action was sent to trial. The Court of Appeal again overturned the decision and held that the dis- missed claim was intertwined with the issues to be determined at trial. Therefore, deciding the claim summarily could have led to inconsistent results. The court emphasized that partial summa- ry judgment should be limited to instances where specified issues can be easily separated from the main action and be dealt with quickly and cost effectively. Baywood and Butera have since been cited more than 200 times in subsequent decisions and have brought about an insti- tutional response in Toronto. In my experience, when lawyers at- tend civil practice court to get a motion date, the sitting judge will often refuse to even schedule par- tial summary judgment motions, given their slim chance of success. As a result, many partial summa- ry judgment motions never get off the ground in the first place. Despite the stern warnings from the Court of Appeal and the resulting response, Ontario litigants have not been getting the message. Since Butera, the num- ber of partial summary judgment motions commenced in Ontario has barely slowed down. Accord- ing to data I have culled from public court decisions, there have been almost 200 partial sum- mary judgment motions brought in Ontario in the last three years, and this data does not account for the number of motions that are shut down at civil practice court. It appears that the Court of Appeal is now hoping that the third time will be a charm in dis- suading partial summary judg- ment once and for all. It should be emphasized that, in Mason, Myers carefully can- vassed the law on partial sum- mary judgment and was well aware of the pitfalls. His honour recognized that judges must be careful to evalute the risks of du- plicative proceedings and incon- sistent findings at trial. With this in mind, he held that dismissing a claim against a key party could secure the most efficient, afford- able and proportionate outcome for all. Despite Myers' clear effort to carve out a path for partial summary judgment, the Court of Appeal was not having it. In overturning Mason, it was held that Myers failed to heed the risks of partial summary judgment, as stated in Baywood and Butera. The court also stated that "sum- mary judgment remains the ex- ception, not the rule." If you were not dissuaded yet, Mason should be a much-needed wakeup call. The Court of Appeal has emphasized on no less than three occasions that, with very few exceptions, partial summary judgment should generally not be granted. Ontario lawyers should take this warning seriously before commencing their next partial summary judgment motion. Even if a single claim in a larg- er proceeding seems frivolous, getting the claim dismissed sum- marily may not be an easy task. The same holds true if you rep- resent a party that has no busi- ness being part of a lawsuit. If you score a motions judge who is bold enough to grant partial summary judgment, the decision may not hold up on appeal. So, I'd recom- mend that, even though a partial summary judgment motion may seem like a good strategy, you may not be doing your client any favours by proceeding with the motion, provided you even get to schedule it in the first place. This may not be an easy pill to swallow for some, because partial summary judgment has always been a useful tool, espe- cially to weed out meaningless claims. But unless the Supreme Court of Canada steps in and says otherwise, this is something with which Ontario lawyers must come to terms. LT Daniel Waldman is an associate in the litigation group at Daoust Vu- kovich LLP. His practice focuses on real property litigation, construction law and debt collection matters. Speaker's Corner Stay away from partial summary judgment BY JONATHAN RICHARDSON For Law Times T here are few motions in family law hated more than a motion for disclo- sure. Counsel bringing these motions will typically only resort to a motion for disclo- sure as a last resort. Counsel resisting dis- closure motions generally have few avenues for resistance. To make matters worse, when responding to a motion for disclo- sure, judges express exasperation and occa- sional snark in their written reasons. In November 2018, in Malik v. Malik, Justice Gordon Lemon of the Ontario Su- perior Court of Justice imposed a proto- col on disclosure motions in a case where disclosure has previously been ordered by the court. Lemon was faced with the alleged total non-compliance by Binesh Malik with a disclosure order in a family law proceed- ing seeking spousal support and equaliz- ation of net family property. Malik, the responding party, was an insurance broker who carried on busi- ness through three separate corporations. Malik swore his income was more than $150,000 per annum and had more than $500,000 of liquid assets to his name. A case conference was held where disclosure of the usual documents associated with Malik's income, assets and the corpora- tions was ordered. Of note, the respondent was ordered to obtain an income analysis for 2015 to 2018 as well as a valuation of his business and trust interests. All disclosure was ordered produced within 60 days. However, six months later, Urmila Malik brought the motion that forms the basis of Lemon's decision. Urmila Malik argued that none of Binesh Malik's outstand- ing disclosure obligations had been met. Binesh Malik claimed he had mostly fulfilled his previous obligations, but he acknowledged that neither the income analysis nor the business valuations had been provided. His position was that a business valuation was creat- ed in 2017 and the other shareholders in his corporation(s) would not consent to a further valuation. Equally, he said the income analysis was forthcoming and that he had contacted a certified business valuator to provide the income analysis within 60 days. Lemon gave no weight to any of these submissions. The 2017 valuation did not appear to have been prepared by a certified business valuator. No evidence was led from the other shareholders about a fur- ther business valuation. Further, the dis- closure order was never appealed, mean- ing Malik would be required to complete the valuation even if the other sharehold- ers did object to such a valuation. With re- spect to the income analysis, Lemon noted that retaining a valuator more than one month after the deadline for disclosure of the income analysis was "thumbing his nose [at the disclosure order] on anyone's definition." Lemon determined that Malik was in breach "and wilfully so." Having found the breach of the disclosure order, Lemon was left to determine what remedy was appropriate. Malik was nei- ther seeking a finding of con- tempt nor an order striking his pleadings. This left Lemon the discretion to fix an appropriate sanction. Lemon relied on Rule 1(8) of the Family Law Rules, which provides direction to the court on the types of orders that may be made when a person fails to obey a court order. It was noted that an effective remedy for inadequate or non-disclosure should be available. Lemon chose to set a framework for how rule 1(8) should be applied going forward to provide a workable remedy to the ongoing challen- ges in family law caused by non-disclosure. Lemon bases his framework on the Court of Appeal's decision in Mullin v. Sherlock. The first step of Lemon's frame- work is to be satisfied that there has been non-compliance. Given his comments about BMalik's "thumbing [his] nose" at the disclosure order, that part was obvious. The next step is to consider the rel- evance of the non-disclosure, the context and complexity of the issues in dispute, the extensiveness of existing disclo- sure, the seriousness of efforts made to disclose and any other relevant factors. Lemon considered the missing appraisal and valuation to be at the, in his words, "heart and soul" of the litigation given the significant issues at play. Lemon further considered that the delay in the litigation was entirely caused by Malik's conduct. The interesting part comes with Lemon's sanction for the breach of the disclosure order. Noting that the Court of Appeal gave him licence to be "more creative than simply striking pleadings" with his remedy, Lemon chose to im- pose, in essence, a fine. Lemon ordered Binesh Malik to pay Urmila Malik the sum of $30,000 within 30 days, separate and apart from any equalization, support or costs payment that might be owing. A further $5,000 was ordered payable on the first day of each month for which Malik continues to fail to disclose the income analysis and the business valuations. These amounts were specifically not to be set off against any other amounts owing by Binesh Malik to Urmila Malik. Financial penalties other than costs may be a new avenue for redress in the family courts. All counsel are aware of their dis- closure obligations. Parties are certainly aware of disclosure obligations once they have been ordered. This case is a good one to keep in one's toolkit for the contentious files where one party is simply failing to disclose relevant documents that go to the "heart and soul" of the litigation. LT Jonathan Richardson practises family law and civil litigation with Augustine Bater Binks LLP in Ottawa. He can be reached at and tweets @JMR_Lawyer. Motion for disclosure contains lessons Family Law Jonathan Richardson

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