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Appeals - Stay Pending Appeal

Jurisdiction - Attornment to by filing Defence

Stuart Budd & Sons Limited v. IFS Vehicle Distributors (Ont CA, 2014)

In this case the court canvassed the elements required for an appellant to stay an order below pending it's appeal:
[21] 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 set out 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

[22] The first component, whether there is a serious question to be determined on the appeal, requires a preliminary assessment of the merits of the appeal: RJR-MacDonald Inc., at p. 334.

[23] This assessment begins with a presumption of correctness of the decision under appeal: Ogden Entertainment Services v. United Steelworkers of America, Local 440 1998 CanLII 1441 (ON CA), (1998), 38 O.R. (3d) 448 (C.A.), at p. 450. The onus is on the moving parties to establish a case for a stay: International Corona Resources Ltd. v. Lac Minerals Ltd. (1986), 21 C.P.C. (2d) 252 (Ont. C.A.- Ch’rs), at p. 255. The threshold to be met in connection with this first component of the test is a modest one: Horsefield v. Ontario (Registrar of Motor Vehicles) 1997 CanLII 2546 (ON CA), (1997), 35 O.R. (3d) 304 (C.A. – Ch’rs), at p. 311; RJR-MacDonald Inc., at p. 337. The moving parties must demonstrate that the appeal is not frivolous or vexatious: Longley v. Canada (Attorney General), 2007 ONCA 149 (CanLII), 2007 ONCA 149, 223 O.A.C. 102, at para. 16; International Corona, at p. 255.


[26] The irreparable harm component has to do with the nature, not the magnitude of the harm: RJR-MacDonald Inc., at p. 341. It refers to harm that cannot be quantified in monetary terms or that cannot be cured. RJR-MacDonald Inc., at p. 341.


[40] The balance of convenience part of the test involves a determination of which of the parties will suffer the greater harm from the granting or refusal of the stay pending the disposition of the appeal on the merits. The factors relevant for consideration in determining where the balance of convenience settles varies from one case to the next: RJR-MacDonald Inc., at pp. 342-343.
The court also considered, in the context of the stay pending appeal argument, the vexed issue of when a defendant, who disputes the jurisdiction of the court to hear a lawsuit, risks waiving that argument by participation in the case in the form of filing a Defence:
[27] The moving parties assert that they will suffer irreparable harm in several respects if a stay is not granted.

[28] 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, or being noted in default and subjected to default proceedings, either of which would irreparably harm their proposed appeal by rendering it moot.

[29] I have some difficulty assessing this argument. I say this based on differing views expressed in recent decisions of this court concerning whether a party risks attornment by taking court-ordered steps in a proceeding in the face of an on-going jurisdictional challenge. I refer to the decision in M.J. Jones Inc. v. Kingsway General Insurance Co. 2004 CanLII 6211 (ON CA), (2004), 72 O.R. (3d) 68 (C.A. – Ch’rs) where at paras. 27-31, Lang J.A. dealt with whether a court order requiring a defendant to deliver a statement of defence would amount to attornment. She held that the defendant’s compliance with such an order might amount to attornment. She therefore held that despite the plaintiff’s undertaking not to treat the defendant’s participation as attornment, refusing a stay could cause irreparable harm.

[30] In BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620 (CanLII), 2011 ONCA 620, 283 O.A.C. 231, at paras. 28-31, Laskin J.A. distinguished M.J. Jones on the basis that the defendant’s responding to the plaintiff’s request for documents outside of the “formal bounds” of the court proceedings would constitute attornment.

[31] More recently, in Van Damme v. Gelber, 2013 ONCA 388 (CanLII), 2013 ONCA 388, 115 O.R. (3d) 470, at paras. 21-23, Doherty J.A. noted that attornment by participation in court proceedings had been addressed in Wolfe v. Pickar, 2011 ONCA 347 (CanLII), 2011 ONCA 347, 332 D.L.R. (4th) 157, where, at para. 44, Goudge J.A. said:
[W]hen a party to an action appears in court and goes beyond challenging the jurisdiction of the court based on jurisdiction simpliciter and forum non conveniens, the party will be regarded as appearing voluntarily, thus giving the court consent-based jurisdiction. That is what happened here.
[32] Justice Doherty also recognized M.J. Jones and Gourmet Resources International Inc. (Trustee of) v. Paramount Capital Corp. (1991), 5 C.P.C. (3d) 140 (Ont. C.A.) as authorities for the proposition that, if a party appears in a court to challenge jurisdiction or seek a stay on the basis of forum non conveniens, any additional steps taken by the party pursuant to an order of the court will not amount to attornment.

[33] While Doherty J.A. expressed the view that taking steps in the proceedings further to a court order would not necessarily constitute attornment, advancing a motion for summary judgment, a motion that went beyond a jurisdictional challenge and was not further to any court order was attornment.

[34] Finally, in Yaiguaje v. Chevron Corp., 2014 ONCA 40 (CanLII), 2014 ONCA 40, 315 O.A.C. 109, at para. 11, MacPherson J.A. (in Chambers), citing Van Damme and BTR, rejected the argument that the party seeking a stay was exposed to irreparable harm based on the risk of attornment.

[35] Here, the responding parties have undertaking not to argue that the moving parties have attorned to the Ontario jurisdiction “by taking any further steps in the action”.

[36] I conclude that in the light of this court’s unresolved position on this issue, and the wording of the undertaking in question, the possibility of being found to have attorned creates some risk of irreparable harm to the moving parties.

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