On December 5th 2011, the Ontario Court of Appeal released its five-judge panel decision considering Ontario's new rules regarding summary judgment (Combined Air Mechanical Sevices Inc. v. Flesch, 2011 ONCA 764). The summary judgment rules were amended on January 1st 2010, after extensive consultation with the former Associate Chief Justice Coulter Osborne. Five different appeals were simultaneously considered by the Court of Appeal, an approach that allowed the Court to apply the new rules in varied circumstances. John Callaghan, the head of Gowlings' commercial litigation national practice group, sees the Court of Appeal's decision as "innovative" and expects the case to have a major influence on future summary judgment motions.

The Court reviewed the new rules in light of both the former summary judgment rule, which many judges and lawyers believed greatly undermined the efficacy of summary judgment motions, and the recommendations of Mr. Osborne. Mr. Osborne found general agreement that the former summary judgment rule was not working as intended because the judges' mandate was too narrow. In particular, the jurisprudence regarding summary judgment had limited the ability of motions judges to weigh the evidence presented. Mr. Osborne had advocated the broadening of judges' powers on summary judgment motions to permit the court to weigh evidence and to draw inferences and evaluate credibility where such assessments can be safely made without a trial.

In its reasons the Court stated that under the new rules, summary judgment is available in cases where: (1) the parties agree to submit their dispute to resolution by way of summary judgment; (2) a claim or defence has no chance of success; and (3), the motion judge can fully appreciate the evidence and issues to make a dispositive finding on the basis of the motion record.

The third scenario identified by the Court introduces a new 'full-appreciation test.' As motions involve only a paper record review where judges do not have the benefit of hearing witnesses give oral testimony, it is typically difficult for judges to make findings of credibility and other determinations that may have bearing on the matters in issue. The Court have now made clear that under the full-appreciation test, a motion judge must ask: 'Can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of trial?' In cases where there is conflicting evidence from a number of witnesses and oral evidence is required, summary judgment would not be appropriate and the matter should be sent to a full hearing at trial.

The Court discussed the new 'tools' available to a judge on a summary judgment motion under the new rules:

  • Oral Evidence: Necessity of such evidence is to be determined by the judge hearing the motion (rather than the parties) and such evidence is appropriate only to determine whether it is safe to proceed with summary disposition rather than a trial;
  • Trial Management following a dismissal of the motion: This new power can be used to salvage the resources that went into an unsuccessful summary judgment motion, but should not be applied to effectively order a trial that resembles the dismissed motion.
  • Costs: Unlike practice under the prior iteration of the rule, substantial indemnity costs are only available where it is demonstrated that the moving party acted unreasonably or in bad faith.

Applied to the five cases before it, the Court provided some guidance on the application of the new rules. The Court found oral evidence may be appropriate where it is relevant to a specific, limited issue (Combined Air Mechanical Services Inc. v. Flesch) and a voluminous evidentiary record will typically mean a matter ought not to proceed by way of summary judgment (Mauldin v. Herniak; Bruno Appliance and Furniture v. Hyrniak). While these cases are helpful in gauging the Court's present intentions, the new full-appreciation test, which requires each case to be evaluated on its merits to determine if it is appropriate for summary judgment, leads us to believe the 'true colours' of the new rules will only come out in the jurisprudence to follow in the next few years.

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