



COURT OF APPEAL FOR ONTARIO

CITATION: Butera v. Chown, Cairns LLP, 2017 ONCA 783

DATE: 20171013

DOCKET: C62318

Juriansz, Pepall and Miller JJ.A.

BETWEEN

Luciano
    Butera, 1515404 Ontario Inc., operating as Niagara Mitsubishi

and Canterra Property
    Holdings Inc.

Plaintiffs (Appellants)

and

Chown, Cairns LLP and Harry Korosis

Defendants (Respondents)

Neil G. Wilson, for the appellants

John D. Campbell, for the respondents

Heard: April 28, 2017

On appeal from the partial judgment of Justice Edward P. Belobaba
    of the Superior Court of Justice, dated May 27, 2016, with reasons reported at 2016
    ONSC 3134.

Pepall J.A.:

[1]

This appeal concerns an award of partial summary judgment
arising from an action by the appellants against their former
    solicitors, the respondents.  The respondents had acted for the appellants in a
    prior lawsuit that was dismissed due to a successful limitations period
    defence.  As a result, the appellants sued the respondents for solicitors
    negligence and lost opportunity damages.  The respondents brought a motion for
    partial summary judgment to dismiss that portion of the appellants damages
    claim relating to misrepresentation.  The judgment was granted.  The appellants
    now appeal.  For the reasons that follow, I would allow the appeal.

Facts

(a)

The Original Action

[2]

The appellant, Luciano Butera, is the sole owner
    and operator of the appellant, 1515404 Ontario Inc., a Mitsubishi Motors
    franchisee operating as Niagara Mitsubishi, and of the appellant, Canterra
    Property Holdings Inc. (collectively referred to as the appellants).  When their
    dealership failed, the appellants sued various Mitsubishi companies
    (Mitsubishi) for damages for breach of contract, misrepresentation,
    negligence, and breaches of the provisions of the
Arthur Wishart Act,
    Franchise Disclosure, 2000
, S.O. 2000,
    c. 3
.

[3]

Mitsubishi moved for summary judgment on the
    basis that the applicable two-year limitation period had expired.  In the
    alternative, it sought an order for summary judgment dismissing some of the
    appellants claims on the merits.  The appellants conceded that the applicable
    limitation period was two years.

[4]

Justice Hambly granted summary judgment to Mitsubishi
    and dismissed the appellants action.  He decided, with reasons reported at
    2012 ONSC 4980, that there was no genuine issue for trial due to the passage of
    the two-year limitation period applicable to the appellants claims.  In addition,
    in obiter, he determined that the appellants had no evidence that the
    information presented to them by Mitsubishi was inaccurate or that Mitsubishi
    did not honestly believe their own predictions of success.  He concluded that
    the predictions made by Mitsubishi were opinions about the future that were
    honestly held and did not amount to misrepresentations.  He also found that the
    entire agreement and release provisions in the dealer licence agreement were
    complete defences to the appellants claims and that the
Arthur Wishart
    Act
did not apply.  If the Act did apply, Mitsubishi made
    no representation which would give the [appellants] a cause of action [under s.
    7 of the Act].

[5]

He ordered the appellants to pay $150,000 in
    costs of both the action and the summary judgment motion on a partial indemnity
    scale inclusive of disbursements and applicable tax.

[6]

The appellants appealed from Hambly J.s
    dismissal of their action and asked that the judgment be set aside. In their
    grounds for appeal, among other things, they took the position for the first
    time that a six-year limitation period was applicable.  Mitsubishi successfully
    moved to strike that ground of appeal on the basis that the appellants had
    raised a new issue that they had not advanced before Hambly J.

[7]

This court then dismissed the appellants
    appeal.  It agreed with Hambly J. that the action was time-barred by the
    two-year limitation period.  In its endorsement, reported at 2013 ONCA 99, the court
    stated:

Without going into the overall merits of the
    plaintiffs claim, we are satisfied that the motion judge was in a position to
    have a full appreciation of the record for purposes of determining  as he
    did  the factual issue of whether, and as of when, the plaintiff knew or ought
    to have known the basis of his claim. The motion judge decided this date was
    April 11, 2005 at the latest and the action was not commenced until October 31,
    2007, more then two years after the claim was discovered. It is therefore
    statute barred.

The court therefore only addressed
    the issue of the limitation period and did not comment on Hambly J.s findings
    made in obiter or otherwise deal with the merits of the appellants claims
    except to say it was not going to consider them.

(b)

The Solicitors Negligence Action

[8]

The appellants then sued the respondents, their
    solicitors in the action against Mitsubishi, for negligence.  The appellants
    stated that in the original action, the respondents had failed to take the
    position that a six-year limitation period applied rather than the two years found
    by Hambly J.  As such, they had lost the opportunity on appeal to argue the
    merits of their claims against Mitsubishi.  They claim $5 million in damages
    flowing from their lost opportunity to argue the merits of their claims in
    negligence, misrepresentation, breach of contract, and breaches of the
Arthur
    Wishart Act
.

[9]

The respondents defended the solicitors
    negligence action and moved for summary judgment asking that the entire action
    be dismissed.  They subsequently advised that they were only going to argue
    that there was no genuine issue requiring a trial on the issue of common law
    and statutory misrepresentation and therefore were seeking a partial summary
    judgment.

(c)

Motion Judges Decision

[10]

The respondents motion for partial summary
    judgment proceeded before Belobaba J.  He framed the analysis at para. 10 of
    his reasons as follows:

The [solicitors] motion turns on whether
    there was an appeal from Justice Hamblys finding that there was no
    misrepresentation.  If the misrepresentation finding was appealed, then the
    [appellants] arguably lost the opportunity to argue and possibly prevail on
    this ground.  But if it was not appealed, then no such opportunity was lost.

[11]

Before Belobaba J., the respondents argued that
    the appellants did not appeal Hambly J.s misrepresentation conclusion and
    therefore there could be no lost opportunity.  The appellants argued to the
    contrary.

[12]

Justice Belobaba agreed with the respondents position. 
    He examined the grounds of appeal that had been advanced by the respondents on
    behalf of the appellants and concluded that there was no indication of any
    intention to appeal the finding that there were no misrepresentations. 
    Accordingly, the appellants did not lose any opportunity to pursue an appeal on
    this ground.  He therefore allowed the motion for partial summary judgment and
    dismissed the damages claim arising out of the common law and statutory
    misrepresentations allegedly made.

Issues on Appeal

[13]

There are two issues to consider.  First, did
    the motion judge err in concluding that the appellants had not appealed the
    misrepresentation finding? Second, and in any event, did he err in failing to
    consider the advisability of an award of partial summary judgment?

[14]

For the following reasons, I would allow the
    appeal on both grounds.

(a)      Appeal of Hambly J.s Judgment

[15]

The appellants submit that the motion judge
    erred in failing to conclude that the appellants had appealed Hambly J.s
    entire decision.  The respondents argue that the appellants did not raise
    misrepresentation as a specific ground of appeal.  Justice Hambly made a
    factual finding that no misrepresentation was made and this finding was not
    challenged on appeal.  Issue estoppel precluded the appellants from
    re-litigating the issue of misrepresentation as it was finally determined in
    the underlying action.  There was no lost opportunity.

[16]

In my view, the motion judge erred in law in
    framing the issue as an analysis of whether there was an appeal from the
    finding of no misrepresentation.  While issue estoppel may be based on
    reasons alone (see Donald J. Lange,
The Doctrine of Res Judicata in
    Canada
, 4th ed (Markham, ON: LexisNexis Canada, 2015) at
    pp. 16-18), an appeal is from an order or a judgment, not from the reasons for
    decision:
Fram
Elgin Mills 90 Inc. v. Romandale Farms Ltd.
,
2016 ONCA 404, 131 O.R. (3d) 455, at para. 33; and
Glennie
    v. McD. & C. Holdings Ltd.
,
[1935] S.C.R. 257, at p. 268.

[17]

Here, the appellants appealed from the judgment
    of Hambly J. and asked that it be set aside. As a matter of law, this included
    the claims based on misrepresentation.

[18]

That conclusion is dispositive.

[19]

However, I would also note that one of the four
    grounds of appeal that was advanced by the appellants was that Hambly J. had
    erred in his application of the then-applicable full appreciation test enunciated
    by the Court of Appeal in
Combined Air Mechanical Services Inc. v.
    Flesch
, 2010 ONCA 633, 268 O.A.C. 172.  It is
    inconceivable to me that had this court found in favour of the appellants on
    the limitation issue, the panel would not have gone on to consider the
    misrepresentation claims.  Put differently, to the extent that the notice of
    appeal lacked specific detail, it was implicit that the appellants were
    appealing the judgment that encompassed misrepresentation. The appellants
    factum filed before the Court of Appeal was replete with references to
    misrepresentation.  No one would have been caught by surprise.

[20]

Lastly, I would also observe that Hambly J.s
    decision was anchored in his conclusion regarding the expiry of the two-year
    limitation period.  He stated at para. 20 of his reasons that if he were wrong
    in his conclusion on the limitation period, he would go on to assess the other
    arguments advanced.  However, as it turned out, he was not wrong in his
    conclusion and his comments on the issue of misrepresentation were obiter.

[21]

For these reasons, I would allow the appeal on
    this first ground of appeal.

(b)     Partial Summary Judgment

[22]

I now turn to the second ground of appeal which
    relates to the granting of partial summary judgment.

[23]

In
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court rewrote the law
    on summary judgments.  Justice Karakatsanis, writing for a unanimous court,
    commenced her analysis by stating: Ensuring access to justice is the greatest
    challenge to the rule of law in Canada today.  She described accessibility as
    being achievable through justice that is proportionate, timely and affordable. 
    As noted in that decision, rr. 1.04(1) and (1.1) of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194, specifically codify the proportionality
    principle:

1.04(1)    These rules shall be liberally
    construed to secure the just, most expeditious and least expensive
    determination of every civil proceeding on its merits.

(1.1)        In applying these rules, the
    court shall make orders and give directions that are proportionate to the
    importance and complexity of the issues, and to the amount involved, in the
    proceeding.

[24]

The Superior Court of Justice has since
    considered a multitude of summary judgment motions using the principles
    established in
Hryniak
.

[25]

Hryniak
does not address partial
    summary judgment per se except in the context of exercising the enhanced
    fact-finding powers contained in r. 20.04(2.1).  In that regard, Karakatsanis
    J. observed that it may not be in the interests of justice to use the new
    fact-finding powers to grant summary judgment against a single defendant if the
    claims against other parties will proceed to trial in any event. Such partial
    summary judgment runs the risk of duplicative proceedings or inconsistent
    facts.  On the other hand, Karakatsanis J. noted that the resolution of an
    important claim against a key party could significantly advance access to
    justice and be the most proportionate, timely and cost effective approach.

[26]

The pre-
Hryniak
appellate jurisprudence on partial summary judgment limited its availability.  At
    para. 3 of
Corchis v. KPMG Peat Marwick Thorne
,
    [2002] O.J. No. 1437 (C.A.), this court applied
Gold Chance
    International Ltd. v. Daigle & Hancock
, [2001] O.J.
    No. 1032 (S.C.J.) to state that:

[P]artial summary judgment ought only to be
    granted in the clearest of cases where the issue on which judgment is sought is
    clearly severable from the balance of the case.  If this principle is not
    followed, there is a very real possibility of a trial result that is
    inconsistent with the result of the summary judgment motion on essentially the
    same claim.

[27]

Since
Hryniak
,
    this court has considered partial summary judgment in
Baywood Homes Partnership
    v. Haditaghi
, 2014 ONCA 450, 120 O.R. (3d) 438 and in
Canadian
    Imperial Bank of Commerce v. Deloitte & Touche
, 2016
    ONCA 922, 133 O.R. (3d) 561.
Baywood
was
    decided in the context of a motion for summary judgment on all claims, but
    where only partial summary judgment was granted.  CIBC involved a motion for
    partial summary judgment.

[28]

In both
Baywood

and
CIBC
, the court analyzed the
    issue from the perspective of whether (i) there was a risk of duplicative or
    inconsistent findings at trial and whether (ii) granting partial summary
    judgment was advisable in the context of the litigation as a whole.  In both cases,
    the court held that partial summary judgment was inadvisable in the
    circumstances.

[29]

The caution expressed pre-
Hryniak
in
Corchis
is equally applicable
    in the post-
Hryniak
world.  In addition to the
    danger of duplicative or inconsistent findings considered in
Baywood

and
CIBC
, partial summary
    judgment raises further problems that are anathema to the stated objectives
    underlying
Hryniak
.

[30]

First, such motions cause the resolution of the main
    action to be delayed.  Typically, an action does not progress in the face of a
    motion for partial summary judgment.  A delay tactic, dressed as a request for
    partial summary judgment, may be used, albeit improperly, to cause an opposing
    party to expend time and legal fees on a motion that will not finally determine
    the action and, at best, will only resolve one element of the action.  At
    worst, the result is only increased fees and delay.  There is also always the
    possibility of an appeal.

[31]

Second, a motion for partial summary judgment
    may by very expensive.  The provision for a presumptive cost award for an
    unsuccessful summary judgment motion that existed under the former summary
    judgment rule has been repealed, thereby removing a disincentive for bringing partial
    summary judgment motions.

[32]

Third, judges, who already face a significant responsibility
    addressing the increase in summary judgment motions that have flowed since
Hryniak
,
are required to spend time hearing partial summary judgment motions
    and writing comprehensive reasons on an issue that does not dispose of the
    action.

[33]

Fourth, the record available at the hearing of a
    partial summary judgment motion will likely not be as expansive as the record
    at trial therefore increasing the danger of inconsistent findings.

[34]

When bringing a motion for partial summary
    judgment, the moving party should consider these factors in assessing whether
    the motion is advisable in the context of the litigation as a whole.  A motion
    for partial summary judgment should be considered to be a rare procedure that
    is reserved for an issue or issues that may be readily bifurcated from those in
    the main action and that may be dealt with expeditiously and in a cost
    effective manner.  Such an approach is consistent with the objectives described
    by the Supreme Court in
Hryniak

and with the
    direction that the Rules be liberally construed to secure the just, most
    expeditious, and least expensive determination of every civil proceeding on its
    merits.

[35]

Lastly, I would observe the obvious, namely,
    that a motion for partial summary judgment differs from a motion for summary
    judgment. If the latter is granted, subject to appeals, it results in the
    disposal of the entire action.  In addition, to the extent the motion judge
    considers it advisable, if the motion for summary judgment is not granted but
    is successful in part, partial summary judgment may be ordered in that
    context.

[36]

Turning then to the substance of the second
    ground of appeal, the appellants submit that granting partial summary judgment
    on the misrepresentation issue provides minimal, if any, efficiency as the action
    is proceeding to trial on the negligence, breach of contract, and
Arthur
    Wishart Act
claims.  The misrepresentation claims are
    largely intertwined with these other claims and partial summary judgment risks
    inconsistent results.

[37]

The respondents reject these submissions,
    arguing that r. 20.05(1) recognizes the utility of partial summary judgment. 
    The motion judges decision is entitled to deference and was appropriate for
    the litigation as a whole.

[38]

As explained in
Hryniak
, the exercise of powers under the summary judgment rule generally
    attracts deference.  Here the motion judge made an extricable error in
    principle in failing to consider whether partial summary judgment was
    appropriate in the context of the litigation as a whole.  As the appellants
    point out, the action is proceeding to trial on the
Arthur Wishart
    Act
claims, which include allegations of a breach of the
    duty of fair dealing and deficient disclosure, the claims in negligence, and for
    breach of contract.  These claims are intertwined with the misrepresentation
    claims.  An award of partial summary judgment in these circumstances may lead
    to inconsistent results to the extent the misrepresentation claims were not barred
    due to a limitation period.  On the other hand, had the litigation as a whole
    been considered, partial summary judgment would not have been an appropriate
    award as it would not serve the objectives of proportionality, efficiency, and
    cost effectiveness.

Disposition

[39]

For these reasons, I would allow the appeal and
    set aside the award of partial summary judgment. I would order the respondents
    to pay $12,500 in costs of the appeal on a partial indemnity scale inclusive of
    fees, disbursements, and applicable tax. I would set aside the costs of $25,000
    awarded by the motion judge to the respondents and, in the absence of agreement
    between the parties which is encouraged, remit the costs to him to reconsider
    in light of this decision.

Released:

OCT 13 2017                                   S.E.
    Pepall J.A.

RGJ                                                I agree
    R.G. Juriansz J.A.

I
    agree B.W. Miller J.A.


