The standard Of Review After Imperial Manufacturing: Housen Is The Definitive Word And Is Binding On All

Since its 1995 decision in David Bull Laboratories (Canada) Inc. v. Pharmacia Inc.1, the Federal Court of Appeal consistently applied a unique standard of review to interlocutory, discretionary orders of the Federal Court. Under this longstanding test, the FCA gave deference to a discretionary decision of the Federal Court unless it proceeded "on a wrong principle, gave insufficient weight to relevant factors, misapprehended the facts, or where an obvious injustice would result". This was despite the Supreme Court of Canada's 2002 decision in Housen v Nikolaisen2 which the FCA applied to the standard of review on all other appeals.

No more. In its recent decision of Imperial Manufacturing Group Inc v Décor Grates Inc.3 2015 FCA 100, the Federal Court of Appeal clarified that the Housen standard of "palpable and overriding error", unless there is an extricable error of law, applies to all questions of mixed fact and law, even discretionary interlocutory orders.

David Bull was a case in which the Federal Court refused to strike out a notice of motion. On appeal, the FCA stated the following about the standard of review: "This court should not of course interfere with a trial judge's exercise of discretion, such as in a refusal to strike, unless he or she has proceeded on some wrong principle of law or has seriously misapprehended the facts, or unless an obvious injustice would otherwise result".4

The Supreme Court of Canada's majority decision in Housen, which came seven years after David Bull, held that on questions of fact, or mixed fact and law not traceable to a legal error, an appellate court may not intervene absent palpable and overriding error. The Court succinctly summarized the point as follows:

A proposition that should be unnecessary to state is that a court of appeal should not interfere with a trial judge's reasons unless there is a palpable and overriding error. The same proposition is sometimes stated as prohibiting an appellate court from reviewing a trial judge's decision if there was some evidence upon which he or she could have relied to reach that conclusion.5

Imperial Manufacturing related to an appeal from a Federal Court decision6 dismissing a motion for particulars in an industrial design infringement action. In dismissing the appeal, Justice Stratas noted six problems with applying the David Bull standard of review to interlocutory and discretionary orders:

Following David Bull over Housen creates a problem of stare...