Hryniak v Mauldin explained

Case-Name:Hryniak v Mauldin
Full-Case-Name:Robert Hryniak 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
Heard-Date:26 March 2013
Decided-Date:23 January 2014
Citations:2014 SCC 7
Docket:34641
History:APPEAL from Combined Air Mechanical Services Inc. v. Flesch. 2011. onca. 764. 2011-12-05., affirming Bruno Appliance v. Cassels Brock & Blackwell LLP. 2010. onsc. 5490. 2010-10-22. .
Ruling:Appeal dismissed.
Ratio:The motion judge did not err in granting summary judgment in the present case, as summary judgment motions must be granted whenever there is no genuine issue requiring a trial.
Unanimous:Karakatsanis J
Lawsapplied:http://www.canlii.org/en/on/laws/regu/rro-1990-reg-194/latest/rro-1990-reg-194.html#RULE_20_SUMMARY_JUDGMENT_256090 . CanLII . reg . Rules of Civil Procedure . RRO 1990, Reg 194. Rule 20 (Summary Judgment)

Hryniak v Mauldin. 2014. scc. 7. is a landmark case of the Supreme Court of Canada that supports recent reforms to Canadian civil procedure in the area of granting summary judgment in civil cases.

Background

Civil justice reform

Summary judgment procedures were first introduced in Canadian courts in the 1980s. Ontario, after a study on the issues of access to justice, reformed its rules in 2010 to extend the powers of motion judges and masters for ordering summary judgment. This followed the introduction of similar measures in Alberta and British Columbia,[1] all of which have been inspired by the reforms introduced in the English Civil Procedure Rules and the US Federal Rules of Civil Procedure.

The present case

A group of American investors (the "Mauldin Group") placed their money in the hands of Tropos Capital Inc., a company incorporated in Barbados that traded in bonds and debt instruments. At the end of June 2001, the group wired US$1.2 million to Cassels Brock (a Canadian law firm), which was pooled with other funds and transferred to Tropos. A few months later, Tropos forwarded more than US$10 million to an offshore bank, and the money disappeared. Hryniak (the principal of Tropos) claimed that at this point, Tropos's funds, including the funds contributed by the Mauldin Group, were stolen.

The Mauldin Group joined with Bruno Appliance and Furniture, Inc. (another affected investor) in an action for civil fraud against Hryniak, Cassels Brock and Peebles, a former managing partner of the latter. The group brought motions for summary judgment, which were heard together.

The courts below

At the Ontario Superior Court of Justice, the motion judge held that:

Accordingly, he ordered Hryniak to pay more than US$2 million in damages. The ruling marked the first successful use of summary judgment in an Ontario fraud case.[2]

The Ontario Court of Appeal heard the appeal together with others, in its first consideration of the 2010 changes made to summary judgment procedures in Ontario. While concluding that this specific case was not an appropriate candidate for summary judgment, the Court of Appeal 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. In arriving at that decision, the Court of Appeal devised a "full appreciation test" in determining whether the summary judgment procedure is appropriate in dealing with a case:

Hryniak appealed to the Supreme Court, and leave to appeal was granted.[3] [4]

At the Supreme Court of Canada

In a unanimous decision, the Court dismissed the appeal. In her ruling, Karakatsanis J agreed with the Court of Appeal's disposition of the matter, but argued that the "full appreciation test" placed inappropriate restrictions on the use of summary judgment:

To that end, she gave guidance as to how it can best be used:

  1. Our civil justice system is premised upon the value that the process of adjudication must be fair and just. This cannot be compromised.[5]
  2. The proportionality principle is now reflected in many of the provinces' rules and can act as a touchstone for access to civil justice.[6]
  3. The summary judgment motion is an important tool for enhancing access to justice because it can provide a cheaper, faster alternative to a full trial.[7]
  4. 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.[8]
  5. 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.[9]
  6. The interest of justice cannot be limited to the advantageous features of a conventional trial, and must account for proportionality, timeliness and affordability. Otherwise, the adjudication permitted with the new powersand the purpose of the amendmentswould be frustrated.[10]
  7. Where a party seeks to lead oral evidence, it should be prepared to demonstrate why such evidence would assist the motion judge in weighing the evidence, assessing credibility, or drawing inferences and to provide a "will say" statement or other description of the proposed evidence so that the judge will have a basis for setting the scope of the oral evidence.[11]
  8. On a motion for summary judgment, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure.[12]
  9. Not all motions for summary judgment will require a motion for directions. However, failure to bring such a motion where it was evident that the record would be complex or voluminous may be considered when dealing with costs consequences.[13]
  10. Absent an error of law, the exercise of powers under the new summary judgment rule attracts deference.[14]

She also gave a rebuke to judges who expressed concern that the increased use of summary judgment would lead to more crowded dockets:

Impact

While the original trial became complicated and spawned multiple appeals, the guidance given by the SCC has been welcomed as "useful" and "should give trial judges a greater sense of comfort when they attempt to simplify proceedings."[15] It has also been noted that the SCC has granted a wide berth for summary judgment determinations with limited ability to appeal.[16] In fact, the Court criticized the Court of Appeal for not going far enough in its ruling, which placed too much emphasis on the benefits of a conventional trial.[17]

The fact that judges' decisions will attract considerable deference on appeal means that parties are well-advised to "put their best foot forward"[18] in responding to a motion.[19] As the Court of Appeal stated in an earlier case, "a respondent on a motion for summary judgment must lead trump or risk losing."[20]

Further reading

Notes and References

  1. Web site: Craig Ferris. British Columbia and Alberta New Rules of Civil Procedure - Initial Impressions. Lawson Lundell LLP. 13 February 2011.
  2. News: Drew Hasselback. Fraud ruling a legal first; Ontario judge awards US$2M damages at preliminary stage. Financial Post. 13 November 2010.
  3. News: Drew Hasselback. Supreme Court of Canada to hear Robert Hryniak appeals. Financial Post. 29 June 2012.
  4. Robert Hryniak v. Fred Mauldin et al.. 2012. scc-l. 36231. canlii. 2012-06-28.
  5. SCC, par. 23
  6. SCC, par. 30
  7. SCC, par. 34
  8. SCC, par. 43
  9. SCC, par. 49
  10. SCC, par. 56
  11. SCC, par. 64
  12. SCC, par. 66
  13. SCC, par. 71
  14. SCC, par. 81
  15. Web site: Peter S. Spiro. The Supreme Court gives a Green Light to Summary Judgment in Hryniak v Mauldin. thecourt.ca. 27 January 2014. 28 January 2014. https://web.archive.org/web/20140130020438/http://www.thecourt.ca/2014/01/27/the-supreme-court-gives-a-green-light-to-summary-judgment-in-hryniak-v-mauldin/. 30 January 2014. dead.
  16. Web site: Rebecca Burrows. Ryan Cookson. Jason Wadden. The Supreme Court Breathes New Life into Summary Judgment. Goodmans LLP. 27 January 2014.
  17. Web site: Laura Fric. Mary Paterson. Catherine Gleason-Mercier. The Supreme Court of Canada Seeks to Improve Access to Justice through Expanded Summary Judgment Motions. Osler LLP. 27 January 2014.
  18. Pizza Pizza Ltd. v. Gillespie. 1990. onsc. 4023. canlii. par. 52. 75 OR (2d) 225. 1990-10-02. auto.
  19. Web site: Sarit E. Batner. Moya Graham. Brandon Kain. Summary Judgment: Come One; Come All. McCarthy Tétrault. 24 January 2014.
  20. 1061590 Ontario Ltd. v. Ontario Jockey Club. 1995. onca. 1686. canlii. 1995-01-27. auto.
  21. http://www.gilbertsondavis.com/lawyers/david-alderson/ David Alderson

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