Hryniak v. Mauldin, (2014) 453 N.R. 51 (SCC)

• Judge: McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner, JJ.
• Court: Supreme Court (Canada)
• Case Date: March 26, 2013
• Jurisdiction: Canada (Federal)
• Citations: (2014), 453 N.R. 51 (SCC);2014 SCC 7;[2014] EXP 319;37 RPR (5th) 1;27 CLR (4th) 1;366 DLR (4th) 641;[2014] CarswellOnt 641;314 OAC 1;[2014] SCJ No 7 (QL);21 BLR (5th) 248;[2014] 1 SCR 87;12 CCEL (4th) 1;453 NR 51;[2014] ACS no 7;JE 2014-162;AZ-51036908

Hryniak v. Mauldin (2014), 453 N.R. 51 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2014] N.R. TBEd. JA.012

Robert Hryniak (appellant) v. Fred Mauldin, Dan Myers, Robert Blomberg, Theodore Landkammer, Lloyd Chelli, Stephen Yee, Marvin Cleair, Carolyn Cleair, Richard Hanna, Douglas Laird, Charles Ivans, Lyn White and Athena Smith (respondents) and Ontario Trial Lawyers Association and Canadian Bar Association (interveners)

(34641; 2014 SCC 7; 2014 CSC 7)

Indexed As: Hryniak v. Mauldin

Supreme Court of Canada

McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner, JJ.

January 23, 2014.

Summary:

In 2010, rule 20 of the Rules of Civil Procedure (Ont.) was amended to, inter alia, allow a judge on a summary judgment motion to weigh the evidence, evaluate the credibility of a deponent and draw any reasonable inference from the evidence, unless the judge was of the view that it was in the interest of justice for such powers to be exercised only at a trial. Prior to the amendments, jurisprudence had precluded considerations of such matters on a summary judgment motion. The Mauldin Group (and Bruno Appliance and Furniture Inc. - appellants in a companion appeal), commenced an action for civil fraud against Hryniak et al. (defendants), after losing investment moneys. The Mauldin Group and Bruno brought motions for summary judgment under the amended rule 20. The motions were heard together.

The Ontario Superior Court (motions judge), in a decision with neutral citation 2010 ONSC 5490, utilizing the expanded powers under the amended Civil Procedure Rule 20.04(2.1) to weigh the evidence, evaluate credibility and draw inferences, granted summary judgment against Hryniak. Hryniak appealed, arguing that the motions judge erred in concluding that a trial was not required to determine his liability. To provide some guidance to the profession, the Court of Appeal convened a five-judge panel to simultaneously hear five appeals under the amended rule (incl. the Mauldin Group matter and the Bruno Appliance matter).

The Ontario Court of Appeal, in a decision reported 286 O.A.C. 3, dealt with all five appeals. As to the Mauldin Group action, despite concluding that this case was not an appropriate candidate for summary judgment, the court was satisfied that the record supported the finding that Hryniak had committed the tort of civil fraud against the Mauldin Group, and therefore dismissed Hryniak's appeal. Hryniak appealed.

The Supreme Court of Canada, although it differed in part on the interpretation of Rule 20, agreed with the Court of Appeal's disposition and dismissed the appeal. The court, per Karakatsanis, J., stated that "In interpreting these provisions, the Ontario Court of Appeal placed too high a premium on the 'full appreciation' of evidence that can be gained at a conventional trial, given that such a trial is not a realistic alternative for most litigants. In my view, a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial. To that end, I conclude that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims. As the Court of Appeal observed, the inappropriate use of summary judgment motions creates its own costs and delays. However, judges can mitigate such risks by making use of their powers to manage and focus the process and, where possible, remain seized of the proceedings".

Editor's Note: This case and the companion case of Bruno Appliance and Furniture Inc. v. Hryniak 314 O.A.C. 49; 453 N.R. 101; 2014 SCC 8, were both previously reported under the Indexed As Name: "Combined Air Mechanical Services Inc. et al. v. Flesch et al." at the appeal and motion level. Since Combined Air and Flesch were not involved in this appeal to the Supreme Court of Canada or the companion appeal, the Indexed As Name of both cases have been modified accordingly.

Courts - Topic 1403

Administration - General - Access to courts (incl. access to justice issues) - The Supreme Court of Canada discussed the issue of access to civil justice in Canada - The court stated, that "... Our civil justice system is premised upon the value that the process of adjudication must be fair and just. This cannot be compromised. However, undue process and protracted trials, with unnecessary expense and delay, can prevent the fair and just resolution of disputes. The full trial has become largely illusory because, except where government funding is available, ordinary Canadians cannot afford to access the adjudication of civil disputes. The cost and delay associated with the traditional process means that ... the trial process denies ordinary people the opportunity to have adjudication. And while going to trial has long been seen as a last resort, other dispute resolution mechanisms such as mediation and settlement are more likely to produce fair and just results when adjudication remains a realistic alternative" - See paragraphs 23 and 24.

Courts - Topic 1403

Administration - General - Access to courts (incl. access to justice issues) - The Supreme Court of Canada discussed the issue of access to civil justice in Canada - The court stated, that "... Prompt judicial resolution of legal disputes allows individuals to get on with their lives. But, when court costs and delays become too great, people look for alternatives or simply give up on justice. Sometimes, they choose to represent themselves, often creating further problems due to their lack of familiarity with the law. In some circles, private arbitration is increasingly seen as an alternative to a slow judicial process. But private arbitration is not the solution since, without an accessible public forum for the adjudication of disputes, the rule of law is threatened and the development of the common law undermined ..." - See paragraphs 24 and 25.

Courts - Topic 1403

Administration - General - Access to courts (incl. access to justice issues) - The Supreme Court of Canada discussed the issue of access to civil justice in Canada - The court stated, that "... There is growing support for alternative adjudication of disputes and a developing consensus that the traditional balance struck by extensive pre-trial processes and the conventional trial no longer reflects the modern reality and needs to be re-adjusted. A proper balance requires simplified and proportionate procedures for adjudication, and impacts the role of counsel and judges. This balance must recognize that a process can be fair and just, without the expense and delay of a trial, and that alternative models of adjudication are no less legitimate than the conventional trial. This requires a shift in culture. The principal goal remains the same: a fair process that results in a just adjudication of disputes. A fair and just process must permit a judge to find the facts necessary to resolve the dispute and to apply the relevant legal principles to the facts as found. However, that process is illusory unless it is also accessible - proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure" - See paragraphs 27 and 28.

Courts - Topic 1403

Administration - General - Access to courts (incl. access to justice issues) - The Supreme Court of Canada discussed the issue of access to civil justice in Canada - The court stated, that "... There is, of course, always some tension between accessibility and the truth-seeking function but, much as one would not expect a jury trial over a contested parking ticket, the procedures used to adjudicate civil disputes must fit the nature of the claim. If the process is disproportionate to the nature of the dispute and the interests involved, then it will not achieve a fair and just result. The proportionality principle is now reflected in many of the provinces' rules and can act as a touchstone for access to civil justice ... Even where proportionality is not specifically codified, applying rules of court that involve discretion 'includes . . . an underlying principle of proportionality which means taking account of the appropriateness of the procedure, its cost and impact on the litigation, and its timeliness, given the nature and complexity of the litigation' ... This culture shift requires judges to actively manage the legal process in line with the principle of proportionality ..." - See paragraphs 29 to 32.

Courts - Topic 1403

Administration - General - Access to courts (incl. access to justice issues) - The Supreme Court of Canada discussed the issue of access to civil justice in Canada - The court stated that "While summary judgment motions can save time and resources, like most pre-trial procedures, they can also slow down the proceedings if used inappropriately. While judges can and should play a role in controlling such risks, counsel must, in accordance with the traditions of their profession, act in a way that facilitates rather than frustrates access to justice. Lawyers should consider their client's limited means and the nature of their case and fashion proportionate means to achieve a fair and just result. A complex claim may involve an extensive record and a significant commitment of time and expense. However, proportionality is inevitably comparative; even slow and expensive procedures can be proportionate when they are the fastest and most efficient alternative. The question is whether the added expense and delay of fact finding at trial is necessary to a fair process and just adjudication" - See paragraphs 32 and 33.

Fraud and Misrepresentation - Topic 7

Fraudulent misrepresentation (deceit) - General principles - What constitutes fraud - The Supreme Court of Canada stated that the tort of civil fraud had four elements, which had to be proven on a balance of probabilities: "(1) a false representation by the defendant; (2) some level of knowledge of the falsehood of the representation on the part of the defendant (whether knowledge or recklessness); (3) the false representation caused the plaintiff to act; (4) the plaintiff's actions resulted in a loss" - See paragraph 87.

Practice - Topic 5

General principles and definitions - Nature and interpretation of practice rules - [See first Practice - Topic 5702 ].

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - The Supreme Court of Canada discussed the amendments - The court stated, inter alia, that "... a trial is not required if a summary judgment motion can achieve a fair and just adjudication, if it provides a process that allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial. To that end, I conclude that summary judgment rules must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims ... the inappropriate use of summary judgment motions creates its own costs and delays. However, judges can mitigate such risks by making use of their powers to manage and focus the process and, where possible, remain seized of the proceedings ..." - See paragraphs 4 to 6.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - The Supreme Court of Canada discussed the amendments - The court stated that "The Ontario amendments changed the test for summary judgment from asking whether the case presents 'a genuine issue for trial' to asking whether there is a 'genuine issue requiring a trial'. The new rule, with its enhanced fact-finding powers, demonstrates that a trial is not the default procedure. Further, it eliminated the presumption of substantial indemnity costs against a party that brought an unsuccessful motion for summary judgment, in order to avoid deterring the use of the procedure ..." - See paragraph 43.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - The Supreme Court of Canada discussed the amendments - The court stated that "... The new powers in Rules 20.04(2.1) and (2.2) expand the number of cases in which there will be no genuine issue requiring a trial by permitting motion judges to weigh evidence, evaluate credibility and draw reasonable inferences. These new fact-finding powers are discretionary and are presumptively available; they may be exercised unless it is in the interest of justice for them to be exercised only at a trial; Rule 20.04(2.1). Thus, the amendments are designed to transform Rule 20 from a means to weed out unmeritorious claims to a significant alternative model of adjudication" - See paragraphs 44 and 45.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - The Supreme Court of Canada stated that "The Ontario amendments changed the test for summary judgment from asking whether the case presents 'a genuine issue for trial' to asking whether there is a 'genuine issue requiring a trial' ..." - The court discussed when summary judgment could be granted on the basis that there was "no genuine issue requiring a trial" (rule 20.04(2)(a)) - The court stated that "There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result ..." - See paragraphs 46 to 51.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - Rule 20.04(2)(a) provided that the court shall grant summary judgment if there was no genuine issue requiring a trial with respect to a claim or defence - Rule 20.04(2.1) provided that in determining whether there was a genuine issue requiring a trial, the court, unless it was in the "interest of justice" for such powers to be exercised only at a trial, could weigh the evidence submitted by the parties, evaluate the credibility of a deponent and draw inferences from the evidence - The Supreme Court of Canada discussed when it would be against the "interest of justice" for the new fact-finding powers in rule 20.04(2.1) to be used on a summary judgment motion - See paragraphs 46 and 52 to 60.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - Rule 20.04(2)(a) provided that the court shall grant summary judgment if there was no genuine issue requiring a trial with respect to a claim or defence - Rule 20.04(2.1) provided that in determining whether there was a genuine issue requiring a trial, the court, unless it was in the "interest of justice" for such powers to be exercised only at a trial, could weigh the evidence submitted by the parties, evaluate the credibility of a deponent and draw inferences from the evidence - Rule 20.04(2.2) provided that a judge could, for purposes of exercising the powers in rule 20.04(2.1), order that oral evidence be presented by one or more of the parties - The Supreme Court of Canada discussed the power to call oral evidence in this context - See paragraphs 46 and 61 to 65.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - Rule 20.04(2)(a) provided that the court shall grant summary judgment if there was no genuine issue requiring a trial with respect to a claim or defence - Rule 20.04(2.1) provided that in determining whether there was a genuine issue requiring a trial, the court, unless it was in the "interest of justice" for such powers to be exercised only at a trial, could weigh the evidence submitted by the parties, evaluate the credibility of a deponent and draw inferences from the evidence - Rule 20.04(2.2) provided that a judge could, for purposes of exercising the powers in rule 20.04(2.1), order that oral evidence be presented by one or more of the parties - The Supreme Court of Canada laid out the process (i.e., "roadmap"), to be followed on a summary judgment motion under the amended rules - The court also set out tools to maximize the efficiency of a summary judgment motion - See paragraphs 66 to 79.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - The Supreme Court of Canada discussed the standard of review from a motions judge's summary judgment ruling under the amended rules - The court stated, inter alia, that "... absent an error of law, the exercise of powers under the new summary judgment rule attracts deference. When the motion judge exercises her new fact-finding powers under Rule 20.04(2.1) and determines whether there is a genuine issue requiring a trial, this is a question of mixed fact and law. Where there is no extricable error in principle, findings of mixed fact and law, should not be overturned, absent palpable and overriding error ..." - See paragraphs 80 and 81.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - In 2010, rule 20 of the Rules of Civil Procedure (the summary judgment rule) was amended - The Supreme Court of Canada discussed the standard of review from a motions judge's summary judgment ruling under the amended rules - The court stated that "... the question of whether it is in the 'interest of justice' for the motion judge to exercise the new fact-finding powers provided by Rule 20.04(2.1) depends on the relative evidence available at the summary judgment motion and at trial, the nature, size, complexity and cost of the dispute and other contextual factors. Such a decision is also a question of mixed fact and law which attracts deference. Provided that it is not against the 'interest of justice', a motion judge's decision to exercise the new powers is discretionary. Thus, unless the motion judge misdirected herself, or came to a decision that is so clearly wrong that it resulted in an injustice, her decision should not be disturbed. Of course, where the motion judge applies an incorrect principle of law, or errs with regard to a purely legal question, such as the elements that must be proved for the plaintiff to make out her cause of action, the decision will be reviewed on a correctness standard ..." - See paragraphs 82 to 84.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - The Mauldin Group sued Hryniak et al. (defendants), alleging civil fraud after they lost investment moneys - The Mauldin Group moved for summary judgment - The motions judge, utilizing the expanded powers under the amended Civil Procedure Rule 20.04(2.1), granted summary judgment against Hryniak - Hryniak appealed - The Ontario Court of Appeal, while finding that the action should not have been decided by summary judgment, nevertheless dismissed the appeal - Hryniak appealed again - The Supreme Court of Canada dismissed the appeal - The court stated that while the motions judge did not explicitly address the correct test for civil fraud, the court was satisfied that his findings supported that result - The motions judge found no credible evidence to support Hryniak's claim that he was a legitimate trader, and the outcome was therefore clear, so the motion judge concluded that there was no issue requiring a trial - He made no palpable and overriding error in granting summary judgment - Further the interest of justice did not preclude the motion judge from using his powers under rule 20.04 (i.e., he made no error in exercising his fact-finding powers under rule 20.04(2.1)) - See paragraphs 85 to 96.

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - [See fifth Courts - Topic 1403 ].

Practice - Topic 5710

Judgments and orders - Summary judgments - Evidence - [See fifth, sixth, seventh, eighth and ninth Practice - Topic 5702 ].

Practice - Topic 8825.6

Appeals - General principles - Duty of appellate court on reviewing summary judgment decisions - [See eighth and ninth Practice - Topic 5702 ].

Cases Noticed:

New Brunswick (Minister of Health and Community Services) v. J.G. and D.V., [1999] 3 S.C.R. 46; 244 N.R. 276; 216 N.B.R.(2d) 25; 552 A.P.R. 25, refd to. [para. 24, footnote 1].

Medicine Shoppe Canada Inc. v. Devchand et al. (2012), 541 A.R. 312; 2012 ABQB 375, refd to. [para. 30, footnote 3].

Saturley v. CIBC World Markets Inc. (2011), 297 N.S.R.(2d) 371; 943 A.P.R. 371; 2011 NSSC 4, refd to. [para. 30, footnote 3].

Szeto v. Dwyer et al. (2010), 297 Nfld. & P.E.I.R. 311; 918 A.P.R. 311; 2010 NLCA 36, refd to. [para. 31].

Bal Global Finance Canada Corp. v. Aliments Breton (Canada) inc., 2010 QCCS 325, refd to. [para. 34, footnote 4].

Vaughn v. Warner Communications Inc. (1986), 56 O.R.(2d) 242 (H.C.), refd to. [para. 38, footnote 6].

Lameman et al. v. Canada (Attorney General) et al., [2008] 1 S.C.R. 372; 372 N.R. 239; 429 A.R. 26; 421 W.A.C. 26; 2008 SCC 14, refd to. [para. 38, footnote 7].

Agounie v. Galion Solid Waste Material Inc. et al. (1998), 107 O.A.C. 114; 38 O.R.(3d) 161 (C.A.), refd to. [para. 44, footnote 9].

Dawson et al. v. Rexcraft Storage and Warehouse Inc. et al. (1998), 111 O.A.C. 201; 164 D.L.R.(4th) 257 (C.A.), refd to. [para. 44, footnote 9].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 81].

Statutes Noticed:

Code of Civil Procedure, R.S.Q., c. C-25, art 54.1, art. 165(4) [para. 34, footnote 4].

Rules of Civil Procedure (Ont.), rule 1.04(1), rule 1.04(1.1) [para. 30]; rule 20.04(2)(a), rule 20.04(2)(b), rule 20.04(2.1), rule 20.04(2.2) [para. 42, footnote 8, Appendix]; rule 20.05(1), rule 20.05(2) [para. 75].

Authors and Works Noticed:

Agrast, Mark David, Botero, Juan Carlos, and Ponce, Alejandro, World Justice Project Rule of Law Index 2011, generally [para. 24, footnote 2].

Archibald, T.L., and Echlin, R.S., Annual Review of Civil Litigation 2013, pp. 422 to 432 [para. 37, footnote 5].

Ontario, Ministry of the Attorney General, Report from the Civil Justice Reform Project: Summary of Findings and Recommendations (2007) (Osborne Report), generally [para. 3].

Osborne Report - see Ontario, Ministry of the Attorney General, Report from the Civil Justice Reform Project: Summary of Findings and Recommendations (2007), pp. 35, 36 [para. 39]; 37 [para. 40].

Walsh, Teresa, and Posloski, Lauren, "Establishing a Workable Test for Summary Judgment: Are We There Yet?", in T. L. Archibald and R. S. Echlin, eds., Annual Review of Civil Litigation 2013, pp. 422 to 432 [para. 37, footnote 5].

Counsel:

Sarit E. Batner, Brandon Kain and Moya J. Graham, for the appellant;

Javad Heydary, Jeffrey D. Landmann, David K. Alderson, Michelle Jackson and Jonathan A. Odumeru, for the respondents;

Allan Rouben and Ronald P. Bohm, for the intervener, the Ontario Trial Lawyers Association;

Paul R. Sweeny and David Sterns, for the intervener, the Canadian Bar Association.

Solicitors of Record:

McCarthy Tétrault, Toronto, Ontario, for the appellant;

Heydary Hamilton, Toronto, Ontario, for  the respondents;

Allan Rouben, Toronto, Ontario; SBMB Law, Richmond Hill, Ontario, for the intervener, the Ontario Trial Lawyers Association;

Evans Sweeny Bordin, Hamilton, Ontario; Sotos, Toronto, Ontario, for the intervener, the Canadian Bar Association.

This appeal was heard on March 26, 2013, before McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner, JJ., of the Supreme Court of Canada. The following decision was delivered for the court on January 23, 2014, in both official languages, by Karakatsanis, J.