A New Departure And A Fresh Approach: The Ontario Court Of Appeal Decision In Combined Air

The fundamental question that the new Ontario summary judgment rule attempts to answer is neither new, nor complex. Rather, it is simple: which actions deserve or require a trial, and which can be disposed of by summary judgment? This seemingly simple question has proven exceptionally difficult to answer.

As we outline in this paper, a variety of means to resolve actions short of a trial have existed in the procedural rules of the Ontario courts for a century or more1 and were introduced into the Federal Courts Rules in 1994.2 Yet over time, and in the context of each different version of the rules, courts have struggled to articulate and maintain a consistent standard for identifying which procedure will be most just to determine the issues in a particular case. Each revised rule has followed a pattern of "interpretive erosion" in which initial wide and enthusiastic application of the summary judgment process has given way to increasingly narrow interpretation and consequent decreasing frequency of use.

The question of which actions may appropriately be resolved summarily again became the subject of debate among the Ontario civil litigation bar with the 2010 changes to Ontario's Rules of Civil Procedure. At this time, the test for granting summary judgment under Rule 20 changed from "there is no genuine issue for trial" to the new "there is no genuine issue requiring a trial" (emphasis added) and additional powers were given for judges to use in connection with a motion for summary judgment under Rule 20. The recent decision of Combined Air Mechanical Services Inc. v. Flesch3 is the first Ontario Court of Appeal decision to consider the new rule. In Combined Air, the Court of Appeal attempts to clarify both the nature and scope of the new Rule 20 and the circumstances that will allow a party to actually obtain summary judgment.

In the authors' view, while the decision in Combined Air is important, the true impact of the 2010 amendments will not be known for some years until successive appeals create a record upon which it will be possible to form a "full appreciation" of the significance of those amendments. The explicit powers granted to judges to resolve factual disputes short of trial gives the profession reason to hope that amended Rule 20 will not suffer the same narrowing and diminishing frequency of application as its predecessors.

1. Summary Judgment in Ontario Before 1985

   It is commonly thought that the summary judgment procedure came into the Province of Ontario with the "new" Rules of Civil Procedure made in 1984 and effective January 1, 1985 (the "1985 Rules"). In fact, there was a form of summary judgment based on English practice in the Ontario Rules of Practice even before the major overhaul under Justice Middleton in 1913. Those provisions remained in the Rules of Practice until the 1985 Rules came into force.4

   Under the old Rules of Practice, summary judgment was available only when the action was commenced with a "specially endorsed writ". Prior to 1985, an action was commenced by the issuance of a writ of summons, which roughly corresponded to a notice of action in the current Ontario practice. Such a writ would normally be "generally endorsed" with a short statement of the nature of the claim. The full particulars of the claim were provided later in a separate statement of claim.

   However, for a certain class of case – defined in Rule 335 – the writ itself could be "specially endorsed" with a brief statement of the claim as specified in Form 8A. A defendant served with a specially endorsed writ was required to deliver an "affidavit of merits" with his appearance "showing the nature of his defence, with the facts and circumstances which he deems entitled him to defend the action".6

   The plaintiff was then entitled to cross-examine on this affidavit, and move for summary judgment.7

   To grant summary judgment, the court had to be "satisfied that the defendant has not a good defence on the merits or has not disclosed such facts as may be deemed sufficient to entitle him to defend the action".8 If the court was so satisfied, the court could grant judgment for the plaintiff. If the test was not met, "instead of granting judgment, the court may give the defendant leave to defend on such terms as seems just, or make an order for the speedy trial of the action with or without pleadings upon proper terms".9

   Demonstrating that "the defendant has not a good defence to the action or has not disclosed such facts as may be deemed sufficient to entitle him to defend the action" was a difficult standard to meet as the plaintiff had to "leave no reason to doubt" that the defendant would not succeed at trial. This high standard was explained in Arnoldson y Serpa v. Confederation Life Association.10

   In Arnoldson y Serpa, the plaintiff had sued on a special endorsement for payment of the cash surrender value of a policy issued by the defendant to the plaintiff who was a national and resident of Cuba at the time the policy was issued. The policy provided that "[a]ll payments ... shall be in currency that is at present legal tender in the United States of America",11 and also that "[a]ll payments ... shall be made in the City of Havana, Republic of Cuba.".12 The plaintiff sought payment in US dollars, but the defendant asserted that by the law of Cuba payment in Havana could only be made in Cuban currency. Justice Keith granted summary judgment after finding that the defence was a sham and raised no triable issue. In reversing, the Court of Appeal took a restrictive view of summary judgment powers: 13

   We are all of the view that on an application of this nature the power to direct that judgment be summarily signed should be exercised with great caution and with the most scrupulous discretion. The plaintiff must make out a case which is so clear that there is no reason for doubt as to what the judgment of the Court should be if the matter proceeded to trial. Upon such a motion it is not the function of the Judge in Weekly Court or of the Master to determine matters either of law or of fact which are in serious controversy. That function should be reserved to the trial tribunal. The authorities are clear that where there exists any real difficulty as to a matter of law or any serious conflict as to a matter of fact then summary judgment should not be granted....

   In the course of argument certain grounds of defence were advanced. We do not pass upon the validity of these alleged defences nor upon the ultimate merits of the issues in this action. We content ourselves by holding that, in our opinion, the plaintiff has not made out a case which is so free of serious controversy on fact and law as to warrant summary judgment in his favour. [Emphasis added.]

   As for the provision that a court could give the defendant leave to defend upon terms, this power was used upon occasion. In Adelberg v. Lowe,14 the Master was dubious about the defences raised, but nevertheless determined that the case could not be decided on a motion for judgment and that a triable issue had been raised. He made an order dispensing with the need for the plaintiff to deliver a statement of claim, giving the defendant leave to file a statement of defence within eight days and directing a speedy trial. By contrast, in Gonzales v. Pardo,15 the Master declined to impose terms, in part because there was some question whether the foreign judgment the plaintiff sought to enforce was final, and partly because it appeared that the plaintiff had sequestered the defendant's assets in New York. Similarly, in Kaufman v. George Coles Ltd.,16 the Master had given the defendant leave to defend on terms. This was overturned on appeal on the basis that, if the defendant had raised a triable issue, the defendant could only be put on terms where very special circumstances were made out by the plaintiff. Kaufman appears to be the last case in which the rule was cited until it was repealed 35 years later in the 1985 Rules.

2. Summary Judgment in Ontario After 1985

   On January 1, 1985, the 1985 Rules came into force and replaced the old Rules of Practice.

   Included in the 1985 Rules was Rule 20, a new rule governing summary judgment that made many...