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Civil Procedure - Stay Pending Appeal

Yaiguaje v. Chevron Corporation (Ont CA, 2014)

In this case the Court of Appeal reviewed the law applicable to the granting of a stay of a civil order pending appeal [for the reasons for the order see Yaiguaje v Chevron Corporation (Ont CA, 2013)]. As can be seen the criteria for stays largely maps those for interlocutory injunctions:
[3] In RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334, the Supreme Court of Canada articulated a three-part test for obtaining a stay of a judgment pending appeal: (1) is there a serious question to be tried (i.e., to be determined on the appeal); (2) will the moving party suffer irreparable harm if the stay is not granted; and (3) does the balance of convenience favour granting the stay?

(1) Serious question

[4] In Ontario, as well as in other jurisdictions, this component of the RJR-MacDonald test has been modified in the context of stays pending leave to appeal applications to the Supreme Court of Canada. This court, and other appellate courts, have held that a judge hearing a stay motion must engage not only in an assessment of the merits of the proposed appeal (i.e., is there a serious issue to be determined); in addition, the judge must consider the factors in s. 40(1) of the SCA and assess whether there is some merit in the leave application, and especially whether the appeal raises an issue of public importance.

[5] As explained by Laskin J.A. in BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620 (CanLII), 2011 ONCA 620, 283 O.A.C. 321, at paras. 18 and 19:
Ordinarily, the threshold for showing a serious issue to be adjudicated is low. However, the criteria for granting leave to appeal to the Supreme Court of Canada add another layer to this component of the test. Under s. 40(1) of the Supreme Court Act, R.S.C. 1985, c. S-26, the Supreme Court of Canada typically grants leave to appeal only in cases of public or national importance. Thus, a provincial appellate court judge hearing a motion for stay pending leave to appeal to the Supreme Court of Canada must take account of the stringent leave requirements in the Supreme Court Act: see Merck & Co. v. Nu-Pharm Inc. 2000 CanLII 15240 (FCA), (2000), 5 C.P.R. (4th) 417 (F.C.A.) and Ontario Public Service Employees Union v. Ontario (A.G.) 2002 CanLII 44918 (ON CA), (2002), 158 O.A.C. 113.

The Supreme Court of Canada itself decides when leave should be granted and does not give reasons for doing so. As Rothstein J.A. noted in Merck, this puts provincial appellate court judges in a “somewhat awkward position.” Nonetheless, the stay test requires that I make some preliminary assessment of the merit of the leave motion.
[6] I have no hesitation in concluding that the moving parties have established both branches of the serious question component of the test.

[7] The proposed appeals raise at least three serious questions: (1) the proper test to determine the jurisdiction of a provincial superior court to hear and determine an action for recognition and enforcement of a foreign judgment; (2) the test for jurisdiction of a provincial superior court when faced with a claim to recognize and enforce a foreign judgment against a non-party to the foreign judgment; and (3) potentially, consideration of the role of a corporate veil-piercing analysis with respect to related corporations in the context of the recognition and enforcement of a foreign judgment against a corporate defendant.

[8] I also conclude that these legal questions easily meet the public importance component of s. 40(1) of the SCA. They raise significant legal issues that lie at the heart of private international law.

(2) Irreparable harm

[9] The moving parties assert that they will suffer irreparable harm in two respects if a stay is not granted.

[10] First, the moving parties submit that, without a stay, they will be forced to choose between risking attornment to the jurisdiction of the Ontario court by filing a defence by January 16, 2014 or being noted in default and subjected to default proceedings, either of which would irreparably harm their proposed appeals by rendering them moot.

[11] I do not accept this submission. This court has stated that where a court order requires a party to file a defence, compliance with the order, including related conduct of depositions and discoveries, does not constitute attornment in the face of an ongoing jurisdictional challenge: see Van Damme v. Gelber, 2013 ONCA 388 (CanLII), 2013 ONCA 388, 115 O.R. (3d) 470, at para. 23. Moreover, and importantly, the responding parties have explicitly stated in their factum (para. 28) that if the moving parties simply provide them with their statements of defence (without formally filing them), “the respondents are content to receive the same, without prejudice to the Chevron companies Leave to Appeal Applications and will not claim that by doing so they have attorned to the jurisdiction of the Ontario Superior Court of Justice.” See BTR Global, at para. 31. I see no reason not to accept and respect this undertaking.

[12] Second, the moving parties contend that, without a stay, if the costs ordered by this court are paid to the ex juris plaintiffs who are resident in Ecuador, there is no assurance they will be returned if leave to appeal is granted and the appeal succeeds.

[13] In a case that has lasted 20 years in several countries and continents, where the existing judgment in question is for $9.51 billion, and where Chevron has been represented by excellent commercial litigators in those countries, I find this submission surprising. The costs award of this court is for $100,000, a small amount against the backdrop of the reality of this uber-expensive, worldwide litigation. In any event, my assumption is that all parties in this litigation, be they Chevron or Ecuadorian villagers, will respect final costs orders of the relevant Canadian court, especially the Supreme Court of Canada.

[14] Nonetheless, as noted in RJR-MacDonald, at p. 341,
“Irreparable” refers to the nature of the harm suffered rather than its magnitude. It is harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other…. The fact that one party may be impecunious does not automatically determine the application in favour of the other party who will not ultimately be able to collect damages, although it may be a relevant consideration.
[15] While the prospect of the moving parties permanently losing the costs awarded by this court after succeeding on appeal may not represent a serious harm, it may reflect an irreparable harm as that term is defined in RJR-MacDonald.

[16] In conclusion, the moving parties have made a very weak showing that they will suffer irreparable harm if the stay is not granted.

(3) Balance of convenience

[17] The third branch of the test concerns the balance of convenience as between the parties, including which of the parties will suffer the greater harm from the stay being granted or refused: see RJR-MacDonald, at p. 342.

[18] In my view, the balance of convenience favours the moving parties. The jurisdictional issue they raise is a serious one that deserves to be resolved before they are forced to take steps to mount a substantive defence in the Ontario action. The moving parties have moved expeditiously to file their leave applications in the Supreme Court of Canada; they did so in less than half the 60-day period allowed by the SCA. In almost all cases, the Supreme Court of Canada disposes of leave applications in a timely fashion, approximately three to four months. Accordingly, it is likely that these applications for leave will be determined by late spring. Obviously, if the Supreme Court of Canada grants leave, there would be no point in any of the parties taking further steps in the Ontario action until the jurisdiction issue is resolved by that court. Alternatively, if the Supreme Court of Canada denies leave, the Ontario action can proceed on the merits, with only a few months’ pause awaiting that court’s decision.

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