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Stays - General. Lithium Royalty Corporation v. Orion Resource Partners
In Lithium Royalty Corporation v. Orion Resource Partners (Ont CA, 2023) the Court of Appeal considers a moderately complex stay matter, initiated as a motion for stay pending appeal. Most 'stays pending appeal' seek to prevent enforcement of already-made lower court orders, but stays can also apply to proceedings - as here. Here the court considers staying an as yet incomplete (bifurcated) trial, and also the appeal itself.
Stays are adjudged on the RJR-McDonald interlocutory injunction test, and the quotes below [see them fully at paras 47-74] address that test regarding staying the remaining trial (a variation on the normal 'stay pending appeal' scenario):[3] For the reasons that follow, I am dismissing the moving parties’ motion for a stay of the entire underlying action pending appeal, but I am granting a partial stay of proceedings against the respondents, Bellatrix Ltd., and Orion Mine Finance (Master) Fund I LP, on terms that I find to be just. Those terms are intended to permit the action as a whole to continue to be litigated but will prevent enforcement action from being undertaken against Bellatrix Ltd. and Orion Mine Finance (Master) Fund I LP. These terms are in the interests of justice since they will enable the litigation to be concluded efficiently while insulating Bellatrix Ltd. and Orion Mine Finance (Master) Fund I LP from being prejudiced by enforcement action undertaken before an appeal in this matter can be heard, bearing in mind the apparent strength of their appeals.
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A. SHOULD A STAY OF THE UNDERLYING PROCEEDINGS BE GRANTED?
[44] I am not prepared to grant the stay of the underlying trial proceedings pending appeal that the Orion Respondents request, as I am not satisfied that the test adapted from RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311 warrants a stay of the entire action. I will, however, grant a partial stay of the proceedings pending appeal against Bellatrix Ltd., and Orion Mine Finance (Master) Fund I LP, on terms I find to be just, outlined below.
[45] In this context, the RJR-MacDonald Inc. test inquires whether the interests of justice call for a stay of proceedings pending appeal: Dieffenbacher v. Dieffenbacher IV, 2023 ONCA 189, at para. 10, citing Zafar v. Saiyid, 2017 ONCA 919, at paras. 17-18. This determination is to be informed by the consideration of three, non-exhaustive and potentially overlapping factors which can compensate for one another, including: (1) whether there is a serous question to be tried; (2) whether the moving party will suffer non-compensable harm if the stay is not granted, and (3) the balance of convenience: Dieffenbacher, at para. 10, citing Zafar, at paras. 17-18.
[46] The Orion Respondents argue that where an appeal is brought during an unfinished trial proceeding which raises questions that may affect the course of the trial, the underlying trial ought to be stayed absent “very special reasons”: Popovich v. Financial Investment Centre Inc., 2017 ONSC 1514, at paras. 53-54, citing Esquimalt & Nanaimo Railway Company v. Dunlop, 1918 CanLII 619 (BC CA), [1918] 3 W.W.R. 828 (B.C.C.A.). The fact that the resolution of issues on an appeal could render the completion of the trial moot is doubtlessly an important consideration, and I have given it full consideration. . Waxman v. Waxman
In Waxman v. Waxman (Ont CA, 2022) the Court of Appeal considered a permanent stay as a remedy at trial for non-disclosure of litigation-related settlements which the court held to be an abuse of process:[42] The appellants argue that an automatic stay is a “draconian” remedy for abuse of process in a case such as this and that the motion judge should have exercised his discretion to redress the failure to disclose through other means.
[43] The appellants further submit that while an automatic stay may be justified in the face of Mary Carter agreements that are not disclosed, in this case, “the plaintiffs did nothing wrong and did not deceive or mislead anyone.” They argue the motion judge erred by applying an automatic stay in these circumstances without considering the alternatives.
[44] I disagree.
[45] In Aecon, MacFarland J.A. stated, at para. 16:The obligation of immediate disclosure is clear and unequivocal. It is not optional. Any failure of compliance amounts to abuse of process and must result in consequences of the most serious nature for the defaulting party. Where, as here, the failure amounts to abuse of process, the only remedy to redress the wrong is to stay the Third Party proceedings and of course, by necessary implication, the Fourth Party proceedings commenced at the instance of the Third Party. Only by imposing consequences of the most serious nature on the defaulting party is the court able to enforce and control its own process and ensure that justice is done between and among the parties. To permit the litigation to proceed without disclosure of agreements such as the one in issue renders the process a sham and amounts to a failure of justice. [Emphasis added.] [46] Citing Aecon, the motion judge reiterated, at para. 44, “The Court of Appeal described the obligation to disclose as clear and unequivocal and noted that its breach constituted an abuse of process. Only by imposing a stay is the court able to control and enforce its own process to ensure that justice is done.”
[47] I see no basis on the facts of this case to depart from the clear consequences for a breach of this principle set out by this court in Aecon and affirmed a number of times since then, including in Handley Estate, at para. 45, and most recently in Tallman, at para. 28. In Tallman, after imposing the automatic stay as the only remedy appropriate for an undisclosed settlement agreement, the court added, at para. 28, “This remedy is designed to achieve justice between the parties. But it does more than that – it also enables the court to enforce and control its own process by deterring future breaches of this well-established rule.”
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