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Civil Litigation - Applications


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. Reflection Productions v. Ontario Media Dev. Corp.

In Reflection Productions v. Ontario Media Dev. Corp. (Div Ct, 2021) the Divisional Court considered an issue of the record required at an application for judicial review, and the efforts that a party must make to create it:
[71] The Applicant served a Notice of Examination under Rule 39.03 of the Rules of Civil Procedure, which is a mechanism to compel oral testimony. The Notice of Examination was quashed. The decision to quash was not appealed. The Notice of Application seeking judicial review does not raise the decision to quash the Notice of Examination as an error.

[72] A subpoena duces tecum is a mechanism to have a witness present oral testimony. It is not an order to produce documents to a party outside of court, as set out in Law Society of Saskatchewan v Abrametz, 2016 SKQB 134 at para 46:
The document in issue, a subpoena duces tecum, is understood to have a particular function - to compel the subpoenaed person to court, or other independent tribunal, to testify and to bring with him/her certain, specified documents. Watt J. (as he then was) described a subpoena in these terms in R. v. Finkle, [2007] O.J. No. 3506 (Ont. S.C.J.) (QL): "literally translated 'under penalty', [a subpoena] is a command to the person named to appear at a time and place specified to give testimony about a matter in issue between the parties to a proceeding" (para. 88). Watt J. then explained the function of a subpoena duces tecum and the limits that ought to attach to its use:
... A subpoena duces tecum requires the witness to bring with him or her things like books, papers and other things connected with his or her testimony. In the usual course, a subpoena duces tecum is not used to obtain these other things, which are often used as aides memoires for production at trial.


It is uncontroversial that, where alternative methods of obtaining evidence are available, the party who seeks the evidence may generally choose the means to achieve that end. At the same time, however, courts should be chary of manifest circumventions of traditional methods of acquiring evidence, especially those that avoid adherence to established constitutional principle. A subpoena duces tecum ought not to be used to avoid the scrutiny associated with other methods of acquisition. See, by comparison, R. v. French (1977), 1977 CanLII 2117 (ON CA), 37 C.C.C. (2d) 201, 213-4 (Ont. C.A.) per MacKinnon J.A., affirmed on other grounds (1979), 1979 CanLII 49 (SCC), 47 C.C.C. (2d) 411 (S.C.C.). [Emphasis in original.]
[73] Although not raised in the Notice of Application, the applicant now argues that the record filed by the decision-maker was underinclusive.

[74] Section 10 of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 provides:
Record to be filed in court

When notice of an application for judicial review of a decision made in the exercise or purported exercise of a statutory power of decision has been served on the person making the decision, such person shall forthwith file in the court for use on the application the record of the proceedings in which the decision was made.
[75] Ergo, pursuant to s. 10 of the Judicial Review Procedure Act, it was available to the applicant to bring a motion seeking production of documents it alleges were relied on by the decision-maker but are not contained in the record: see, for example K.D. v. Peel Children’s Aid Society, 2017 ONSC 7392 (Div. Ct.) at paras. 16-17). The applicant failed to do so. As a result, it is precluded from raising this issue for the first time on judicial review.

[76] The applicant’s argument in this regard therefore fails.
. Isaac v. Law Society of Ontario

In Isaac v. Law Society of Ontario (Div Ct, 2021) the Divisional Court considers briefly the pleading style in applications:
[20] Notices of application are typically sparse in detail, but one essential aspect of the notice is the section in which the applicant lists “grounds” for the application. None are listed in Mr Isaac’s Notice of Application. I accept Mr Isaac’s argument that a defect in the form of his pleading should not preclude him from recourse to justice, but in his R.2.1.01 submissions he still does not mention a single ground for his application. The impugned orders are scheduling directions and mid-hearing rulings. No conceivable basis for attacking them in this court on an interlocutory basis is set out anywhere. None comes to mind.
. Mandel v. 1909975 Ontario Inc.

In Mandel v. 1909975 Ontario Inc. (Ont CA, 2021) the Court of Appeal supported the Superior Court application judge below in exercising their discretion to decline jurisdiction in favour of the Tax Court:
[31] The issue before this court is whether the application judge erred in the exercise of his discretion by declining to answer the question and, instead, deferring jurisdiction in favour of the Tax Court of Canada. On matters of judicial discretion, this court will defer to the application judge unless the judge misdirected himself, gave no or insufficient weight to relevant considerations, or came to a decision that was clearly wrong, amounting to an injustice: Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, [2013] 2 S.C.R. 125, at para. 27; Ewert v. Canada, 2018 SCC 30, [2018] 2 S.C.R. 165, at para. 83; and Holmes v. Schoenfeld Inc., 2016 ONCA 148, 345 O.A.C. 162, at para. 14.

[32] The application judge gave one reason for declining jurisdiction in favour of the Tax Court, and also added three reasons why declining a declaration would not cause injustice, which reinforced his discretionary decision to decline to exercise jurisdiction. He understood that no appeal of the assessments had yet been taken to the Tax Court because the appellants were first pursuing this application. However, it is expected that depending on the outcome of this application, an appeal may be filed with the Tax Court.

[33] The main reason the application judge gave for deferring to the Tax Court is that the only dispute in this case is between the appellants and the CRA, and that dispute is within the expertise of the Tax Court. He noted that pursuant to the Tax Court of Canada Act, R.S.C. 1985, c. T-2, the Tax Court is a superior court of record and has exclusive original jurisdiction to hear and determine appeals on matters arising under the Income Tax Act: ss. 3 and 12(1). As a superior court, it may interpret and apply provisions of the OBCA in the context of a tax dispute.

[34] Related to the fact that the only dispute between any parties in this case is the appellants’ dispute with CRA, is the fact that the Child Corporations support the appellants in their request for relief. The application judge referred to this fact as the first reason that supported his conclusion that declining the declaration would not amount to an injustice. There is no dispute among the families or within the corporations about what should be done with the shares. In fact, as of February 2020, the families have reorganized the share structure such that each child was issued 2,000 Class A voting shares, becoming the controlling shareholder and a director of their Child Corporation. The respective shareholders meetings at which each child was elected as director of their Child Corporation proceeded on the basis that each child was the sole voting shareholder.

[35] Therefore, although the appellants argue that unlike the Superior Court, the Tax Court has no authority to make a binding order that would bind the Child Corporations, in fact the parties do not require such an order to correct mistakes and amend the register. Consequently, the application judge concluded that the effect of the relief sought by the appellants would primarily be to “force the outcome of a tax dispute with the CRA before the taxpayers have pursued the remedies available under federal statute”.[2]

[36] The second ground relied on by the application judge as demonstrating no injustice in declining the declaration request was the unclear factual record regarding whether the appellants paid for their shares and why the Child Corporations recorded the purchase price as a receivable in the financial statements. He concluded that the factual findings should be made within the tax context, where the court could determine what bearing the findings would have on the application of s. 23(3) to the tax assessment.

[37] This application was brought under r. 14.05 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Rule 14.05(3)(d) allows an application to be brought for the determination of rights that depend on the interpretation of a statute. That rule could apply to this proceeding; however, there are both statutory interpretation and factual issues to be determined. Rule 14.05(3)(h) allows proceeding by an application “where it is unlikely that there will be any material facts in dispute requiring a trial.” An application under r. 14.05(3)(h) gives the application judge limited jurisdiction to make factual findings where the judge is satisfied that a trial is not needed.

[38] Whether or not the application judge could have made the findings based on the record before him, he was entitled to determine that it was not appropriate for him to do so on this application. That decision regarding procedure on an application for a declaration also supports the decision not to take jurisdiction, but to defer to the Tax Court which has the full jurisdiction to decide the legal and factual issues put before the court in the context of an income tax appeal. The Tax Court has the expertise to resolve the uncertainty surrounding the appellants’ shareholdings to determine the tax consequences that flow from them, even if it does so by interpreting s. 23(3) only in the context of this specific tax dispute.

[39] The third reason the application judge gave to support the justice of his decision to decline to grant a declaration was that if he were to accede to the appellants’ position that shares issued but not paid for are void ab initio, that finding could have unintended consequences regarding the status of transactions and other steps taken by the corporation and its directors before the shares were declared void.

[40] This concern must be tempered by s. 17(3) of the OBCA, which provides:
17(3) Despite subsection (2) and subsection 3(2), no act of a corporation including a transfer of property to or by the corporation is invalid by reason only that the act is contrary to its articles, by-laws, a unanimous shareholders agreement or this Act.
[41] In light of this section, I do not share the application judge’s concern generally, although it is possible that there could be unforeseen consequences to a retroactive order, if a court were to accept the appellants’ position on nullity. However, because the Tax Court cannot order an amendment to the share register, but can only make a decision on the tax issue, it would not be making an order with retroactive effect on others. Again, that supports the decision to defer to the Tax Court.

[42] In my view, the application judge made no error in considering the factors he did — most importantly, that the only dispute is between the appellants and the CRA — in exercising his discretion to decline jurisdiction in favour of the Tax Court.
. 2503257 Ontario Ltd. v. 2505304 Ontario Inc. (Good Guys Gas Bar)

In 2503257 Ontario Ltd. v. 2505304 Ontario Inc. (Good Guys Gas Bar) (Div Ct, 2021) the Divisional Court held that a matter brought as an application (not a motion for summary judgment in contrast) should have been brought as an action (as there were facts to be determined) and ordered it to trial under R38.10:
[12] An application is not a motion for summary judgment. In Jackson v. Solar Income Fund Inc., 2016 ONCA 908, the Court of Appeal allowed an appeal of an application brought under Rule 14.05(3)(h). The appellant argued that the application judge erred by failing to look beyond the face of a promissory note to the factual matrix. The Court stated,
What is at issue is not the interpretation of the promissory note, but the determination of whether the promissory note was modified by a subsequent agreement such that, despite its clear wording, it is not enforceable on demand. This requires an understanding of the broader factual matrix, which includes the other agreements that may or may not conflict with the promissory note. This cannot be determined simply by reading the promissory note in isolation from the larger transaction of which it appears to be a part, or of understanding what the various agreements together were expected to achieve.

For the same reason, the respondent cannot rely on Rule 14.05(3)(h), which authorizes proceeding by way of application “where it is unlikely that there will be any material facts in dispute.” There are material facts in dispute, in particular, whether there was an agreement to convert the promissory note from a demand note to a note not payable on demand, and the resolution of this dispute requires the trial of an action.
[13] There may be an issue as to whether this principle applies to cases brought under other subsections of Rule 14.05(3). In McKay Estate v. Love (1991), 1992 CanLII 7508 (ON SC), 6 O.R. (3d) 511, the application judge found that the provisions in Rule 14.05 that an application not contain disputed facts is limited to subrule (h). This decision was affirmed on appeal without specific comment on this principle. In a subsequent decision of the Court of Appeal, however, in Maurice v. Alles, 2016 ONCA 287, the Court held that the provisions of Rule 20 apply in the context of an action, but not an application. The court went on to hold that, “where there is conflicting evidence that required credibility determination on central issues the application must be converted to an action”.

[14] A similar conclusion was reached by the Court of Appeal in Gorden Glaves Holdings Ltd. v. Care Corporation of Canada Ltd., 2000 CanLII 3913 (ON CA) at para. 30.

[15] Similarly, in this case I am of the view that the application judge was in error when he concluded that a landlord tenant relationship existed between the appellant and the respondents. This issue was subject to a dispute on the evidence which involved a broad factual matrix and which involved a larger transaction where the terms were in dispute.

[16] This case was, therefore, not one which was amenable to a summary decision on the application. The appeal is therefore allowed and the application is to proceed to trial in accordance with Rule 38.10(b).
. Family and Children’s Services of Lanark, Leeds and Grenville v. Co-operators General Insurance Company

In Family and Children’s Services of Lanark, Leeds and Grenville v. Co-operators General Insurance Company (Ont CA, 2021) the Court of Appeal commented briefly when an application may be converted to an action:
[48] Rule 14.05(3)(d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that a proceeding may be brought by application where the relief claimed is the determination of rights that depend on the interpretation of a contract. An application will however be converted to an action where there are material facts in dispute, complex issues requiring expert evidence or the weighing of evidence, or other need for discoveries or further pleadings: see Fort William Band v. Canada (Attorney General), 2005 CanLII 28533 (ON SC), 76 O.R. (3d) 228 (S.C.), at paras. 5 and 28-31.
. Lucas v. 1858793 Ontario Inc. (Howard Park)

In Lucas v. 1858793 Ontario Inc. (Howard Park) (Ont CA, 2021) the Court of Appeal judge praises the application process as being more efficient in some cases:
[91] In regard to the application judge’s comment that a suit for damages could drag on for years, I would note that an application is designed as a more stream-lined device than an action to obtain a remedy, avoiding the delays and costs too often associated with productions, discoveries, and the scheduling of trials. And the potential advantage of an application over an action was demonstrated in this case: the Lucases issued their notice of application in March 2019 and obtained their judgment less than 10 months later, in January 2020. An example of the court’s process satisfying the “service guarantee” promised by r. 1.04(1) of the Rules of Civil Procedure to secure “the just, most expeditious and least expensive determination of every civil proceedings on its merits”: Louis v. Poitras, 2020 ONCA 815, at para. 33; 2021 ONCA 49, at para. 22.
. Glegg v. Glass

In Glegg v. Glass (Ont CA, 2020) the Court of Appeal considers a point of local practice with applications under R38:
[29] Rule 38.09.1(1) of the Rules of Civil Procedure requires the party who makes an application on notice to give the registrar, at least three days before the hearing date, a confirmation of application using Form 38B. If no confirmation is given, the application will not be heard except by order of the court: r. 38.09.1(2). Regional practice may modify the content of confirmation form. The modified Form 38B used in the Toronto Region requires counsel to identify the materials that have been filed and will be relied upon for the hearing of the application. As the form states, it “must be attached to the materials being filed and all materials to be relied on at hearing must be filed in one complete package within the required timelines.”[3]

[30] As is apparent from the language on the Toronto Region’s modified confirmation form, the document operates as a device that assists court staff in the Civil Scheduling Unit to identify the materials that should be delivered to the judge hearing an application or motion. The form does not act as some sort of administrative constraint on a judge’s discretion to determine the materials that are in fact relevant to the decision he has to make.
And also the appeal court endorses a broad remedial jurisdiction of the application judge:
[36] I do not accept this submission. The application judge had the authority to make the direction he did. Rule 38.10(1)(a) provides that a judge hearing an application may “grant the relief sought or dismiss or adjourn the application, in whole or in part and with or without terms.” It was open to the application judge to direct the delivery of his reasons to other courts as a term of his dismissal of the application.


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