Law Times

Law Times • June 29, 2015 Page 7 www.lawtimesnews.com COMMENT Time to revisit Sattva on the standard of review? BY ANNA WONG For Law Times n issue that transpires on every civil ap- peal is the applicable standard of review. The standard of review is important because it dictates the level of deference the appellate court is to show. The issues that confront a trial judge will lead to three possible classifications: question of law, fact or mixed fact and law. As discussed in the leading au- thority in Housen v. Nikolaisen, a trial judge's findings of fact and inferences of fact are entitled to deference and cannot be disturbed absent a "palpable and over- riding error." Questions of law attract a correctness standard; in practical terms, an appellate court is free to substitute its opinion for that of the trial judge. Questions of mixed fact and law, which can fall some- where along a spectrum with pure fact at one end and pure law at the other, are generally reviewable on the standard of palpable and overriding error. Is the interpretation of a contract a question of law, fact or mixed fact and law? Historically, as a legacy of trials by jurors who were likely illiterate, the courts considered contractual in- terpretation to be a question of law reserved for the judge. Following the move to a contextual approach to construing contracts with the factual matrix featur- ing more prominently in the interpretative exercise, uncertainty swirled around the categorization of contractual interpretation questions with courts in different Canadian jurisdictions espousing different views and, accordingly, applying different standards of review. In its landmark decision in Sattva Capital Corp. v. Creston Moly Corp. last year, the Supreme Court of Canada seemingly resolved the uncertainty. Aban- doning the historical stance, Justice Marshall Roth- stein, writing for a unanimous court, held that "con- tractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix." Rothstein did, however, leave open the pos- sibility of extricating a question of law from one of mixed fact and law. Legal errors made in the course of contractual interpretation, such as applying an in- correct principle or failing to consider all elements of a legal test, call for a more searching review for correct- ness. This is in keeping with the role of appellate judg- es to ensure consistency in the law and the notion that decisions of precedential value demand strict scrutiny. Nonetheless, as Rothstein made clear, circumstances where a question of law can be extricated will be rare. After Sattva, however, it appears as though the cer- tainty lawyers had hoped for remains elusive, particu- larly in the context of insurance contracts. In Vallieres v. Vozniak, the Alberta Court of Appeal distinguished Sattva on the basis that it concerned an arbitral award that is appealable only on questions of law and, hence, "some of the restrictive language in Sattva does not apply to ordinary appeals in Alber- ta." The court then applied a standard of correctness to the trial judge's interpretation of a standard form agreement of purchase and sale. As a standard form contract with widespread use, any decision on its in- terpretation has significant precedential value and the primary objective should be consistency of results. The Alberta Court of Appeal took the reasoning in Vallieres one step further in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. in suggest- ing that insurance policies, as a category of contracts, should be subject to review for correctness. "To the extent that interpretation of an insurance contract is a mixed question of fact and law, it falls on the extreme end of that 'spectrum of particularly', and the stan- dard of review for interpretation of insurance policies is correctness," the court stated. In its view, insurance contracts are highly special- ized contracts with terms the clients have no say over. Since there is no negotiation, any search for the par- ties' intention in the surrounding circumstances is but a legal fiction. Moreover, statutory provisions set or inf luence many insurance policies, a fact that raises the stakes in terms of general impact and justifies appellate intervention. The Nova Scotia bench saw matters different- ly. It intimated in Linden v. CUMIS Life Insurance Co. that there is no principled reason why interpretation of insurance contracts warrants little or no appellate deference. Instead, the same approach — correctness review for extricable questions of law and palpable and over- riding error for questions of fact or mixed fact and law — should apply in insurance cases as in other matters. Newfoundland and Labrador's Court of Appeal cleverly eschewed the issue. In Scottish & York Insur- ance Co. Ltd. v. Drover, a dispute over the meaning of the words "dependent" and "residence" in an auto insurance contract, Justice Leo Barry remarked: "This could fall within the class of cases involving an extri- cable principle of law, since the parties do not dispute the underlying facts." Barry ultimately declined to characterize the na- ture of the question on the basis that the trial judge's conclusions passed muster. The Supreme Court may soon have an opportu- nity to revisit the standard of review question, if it so chooses, with an application for leave to appeal filed in Ledcor. The Court of Appeal's analysis in Ledcor is not unpersuasive, although it appears to overstretch the measure of leeway offered in Sattva. Regardless, further guidance from our highest court will reduce the margin of divergence and, in turn, enhance the uniformity and predictability of decisions. Until it provides more clarification, the impres- sion shared by many lawyers, for better or for worse, is that appellate courts often engage in the interpretative task afresh rather than limiting themselves to dissect- ing the trial judge's analysis. They are hardly bashful about disturbing the trial judge's interpretation if they do not agree with it. As the maxim goes, where there's a will, there's a way. LT uAnna Wong practises civil litigation with Landy Marr Kats LLP. u SPEAKER'S CORNER SLATER & GORDON RESPONDS TO ABS CONCERNS I am writing in regards to a recent article (see "ABS firm's expansion offers new fodder for Ontario debate," April 20) in which the pur- chase of a legal services firm in the United Kingdom by Slater & Gordon is utilized to spark alarm about a potential change in law firm ownership laws in Canada. There are a number of comments and concerns raised in the article that require a response. Concerns about clients having their ac- cess to justice all of a sudden impacted by the acquisition of the professional services division of Quindell are misplaced. When a change in ownership occurs in any professional services firm, the clients are rightly concerned that the conduct of their matter will not be adversely affected and, in particular, that the same legal team will be responsible for it. It is for that reason that in announcing the proposed transaction, we made clear that if the transaction is com- pleted as expected, there will be no change to arrangements for existing clients. While commentators may be fascinated by the ownership structure of law firms, clients are more concerned about whether their matter will continue to be conducted professionally and affordably. Our experi- ence is that clients are reassured by the fact that Slater & Gordon has been providing legal services to clients professionally and affordably for 80 years. Concerns raised in the article about "competing with an organization that has hundreds of millions in revenue and prob- ably $50 million for advertising" is not only alarmist but inaccurate. The figure quoted for advertising is completely off the mark. In fact, it may be a surprise for readers to learn that in some markets, competitors (including smaller local ones) outspend even very large orga- nizations. Our publicly listed ownership structure has provided us with the capital to invest and fund new service lines; improve- ments in technology; an increase in office locations; better work environments for our staff; and a broad range of pro bono and philanthropic work. We are very proud of the progress we have made in providing an environment for our staff that allows them to provide excel- lent service to clients as well as improving the range and scope of career and profes- sional development opportunities available to them. While principals and lawyers from law firms that joined us in both Australia and the United Kingdom have seen the ben- efits of what has come from belonging to a larger group, it is of course the client who benefits most when there are options and competition in the market. As lawyers, we have a duty to seek out ways to provide meaningful, innovative, and accessible solutions to a key problem that undermines the proper administration of justice: the lack of access to legal services. For those concerned about access to jus- tice, the focus should be on how to increase the availability of affordable legal services, something that includes being open to an examination of and discussion about the benefits that can come from having a range of ownership structures. Putting the commercial interests of an individual lawyer or group of practitioners ahead of the potential broadening of owner- ship laws and the improvements it can bring for the client will ultimately undermine the confidence the public has in the integrity of the legal profession. Andrew Grech, Slater & Gordon, Melbourne, Australia DOCTOR'S COMMENTS ABOUT EXPERTS CHALLENGED In his recent article in Law Times, Dr. Mi- chael Ford applauds the Ontario Court of Appeal on its decision in Moore v. Getahun and the finding that counsel indeed is en- titled to discuss with an expert the contents of the expert's report. During the trial, the judge had ruled that such contact was im- proper and experts really should be left to their own devices based on submitted mate- rial information to come to their opinions. In his article, Ford suggests an independent medical examiner can come to a fair and unbiased opinion even after conversing with referring counsel. To understand what Ford means by an independent medical examiner, readers can look at an earlier submission by him on March 11, 2013 (see "An expert witness' friendly advice on information he needs from lawyers"). In it, Ford went through a litany of data, tests, information, photo- graphs, and so on he would require to help him discredit a plaintiff he was called on to examine on behalf of an insurer. He goes to great lengths to describe how clinical notes and records prior to the motor vehicle acci- dent are a godsend in finding a plaintiff mis- represented the symptoms emanating from the accident. A very telling comment in the earlier article is where Ford stated that it is amazing how often he gets notes from the time of the accident and onward and he re- ally does not care about that. What he wants are the notes predating the event. Why? Be- cause some people are dishonest, he said. Over the years, I have seen reports from many orthepedic doctors who are favoured by insurance companies. In all of them, there is a certain consistency of casting doubt on the honesty and integrity of acci- dent victims. These doctors simply believe that when complaints are subjective, they are plainly false or exaggerated. I remember a case from many years ago where I acted for an elderly lady who was knocked down by a streetcar. Counsel for the TTC asked her to list all of her injuries. He then asked her, "Do they cause you pain?" She stared at him for a moment and re- plied, "You should have such pain." Perhaps if defence doctors use that cri- teria, they might come to a more balanced opinion and not one clearly intended for the benefit of their insurance masters. Bert Raphael, Raphael Barristers, Toronto A u LETTERS TO THE EDITOR

• Cover