INTHISISSUEPAGE1INSURERSTAKENOTE:SUBROGATIONISNOTEQUIVALENTTOANASSIGNMENT

PAGE2FIRMANDINDUSTRYNEWS

PAGE3MESA2018

PAGE11DOINGBUSINESSINCANADA-PART6-EMPLOYMENT

PAGE14DISCRETIONARYORDERSVS.INJUNCTIVERELIEFPAGE15SEXUALHARASSMENTCLAIMS-AVIATION

PAGE16PARTIALSUMMARYJUDGMENTS

PAGE20CONTEST

FERNANDES HEARN LLP NEWSLETTER MARCH 2018

The recent decision by a five-judge panel of the Ontario Court ofAppealinDouglasv.StanFergussonFuelsLtd.(andothers)(*1)shouldbe “cause for pause” for an insurance company interested incommencingsubrogationproceedingsagainstathirdpartyresponsiblefor a loss and for which they have indemnifiedan insuredunder apolicy of insurance. A general benefit of this decision is thehelpfularticulation of “subrogation” principles and the rationale behind aninsurerbeingabletoexercisesucharight.

Amorefocused“take away” fromthis decisionis that it is importantforinsurers tobeawareofpotential issues thatmayfrustraterecoverywhen the insured is anundischargedbankrupt at the timethat thesubrogation lawsuit is to be filed. This case illustrates how thisrecoverygoalmaybe frustratedwherethe “subrogation”clauseinthepolicyofinsurancedoes notamounttoaneffectiveassignmenttotheinsureroftherighttosueuponthe paymentoftheindemnityandtheinsuredsubsequentlybecomesbankrupt.

Thecase addresses possiblestepsandtactical machinery available tothe insurer intrying toset up the right tosuetheresponsible thirdparty in such circumstances, thediscussion of samehowever beingbeyondthescopeofthisarticle.

Insurers must take care when drafting policy language and in theinstruction of their legal counsel at the time of commencingsubrogationproceedingswheretheinsuredisbankrupt.

Introduction

As stated above, this case concerned a decision rendered by fivejudges. Three of the five judges, forming the “majority decision”detailed below, ruled that there were fundamental flaws in theformulationofthesubrogationproceedingsuchthattheinsurercouldnot proceed with the lawsuit. The other two judges (being the“dissentingjudges”)cametoagreewiththefindingthattheactionwasrepletewithflaws,but,ratherthandismissingtheactionoutright,they

InsurersTakeNote:SubrogationisNottheEquivalentofAnAssignment

THENAVIGATOR

FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 2

FIRMANDINDUSTRYNEWS• CaroleMcAfeeWallacewill beparticipatingina webinarpresentationhostedbytheCanadianTransport LawyersAssociation concerning“UpdatestoRecentLegislationinOntarioConcerningOwner/Operators&Sub-Contractors”onApril5,2018.

• GordonHearnwill be a speakerattheTransportationIntermediariesAssociation2018CapitalIdeasConference&Exhibition inPalmDesert,CaliforniaonApril 11,2018.Gordon will be addressing the loss and liability exposure facing shippers andintermediaries arisingfromtheinsertionofmultiple layersofintermediaries ina supplychain.

• Louis Amato-Gauci be participating in a webinar regarding the NAFTAModernization Negotiations being hosted by the National Customs Brokers &ForwardersAssociationofAmerica,Inc.,onApril12,2018.

• KimStollwillbe representingthefirmat theDRITruckingSeminar onApril 26,2018inChicago,Illinois

• KimStollwillbeattendingtheWISTAUSAAnnualGeneralMeetingonApril27,2018inNewYork,NewYork.KimistheVice-President(CentralRegion)forWistaCanada.

• Gordon Hearn, Louis Amato-Gauci and Carole McAfee Wallace will berepresenting the Firm at the Annual Meeting of the Transportation LawyersAssociation on May 3, 2018 at Orlando, Florida. Gordon will be hosting a panelpresentationonthe“TheNeed forFreight ForwarderandLoad Broker DueDiligence:AStudy inRiskManagementand theProtection ofCommercial Interests”. Carolewill bepresentingapaperonupdatesanddevelopmentsin“InternationalTransportation”.

FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 3

INVITATIONTOMESA2018CONFERENCEFernandesHearnLLPis one ofthesponsors for theMarine&EnergySymposiumoftheAmericas2018(“MESA2018”)conferenceinTorontoApril 18-20,2018 inToronto.Thefollowingistheprogramfortheconference.

Where?OmniKingEdwardHotel,TorontoCanadaWhen?18-20April2018

Registration:http://www.mesa2018.com

Wednesday,April18,2018

6:00-8:00pmRegistration-Mezzanine,OmniKingEdwardHotel6:30-8:00pmOpeningReception-PalmCourt,OmniKingEdwardHotel8:00pmDinneronyourown-orjoinusatapre-arrangedrestaurantThursday,April19,2018

Time VanityFairBallroom

8:30to8:45am

Welcome–RuiFernandes,PartnerFernandesHearnLLP

8:45to9:45am

ArcticExplorationandShipping/ThePolarCodeModerator:RuiFernandes,PartnerFernandesHearnLLPPeterPamel–PartnerBordenLadnerGervais,(Canada)AldoChircop–ProfessorofLaw;CanadaResearchChair(Tier1)inMaritimeLawandPolicyDalhousieUniversity

9:45to11:15am

NAFTAModernizationandImpactonEnergyandTradeModerator:LouisAmato-Gauci,Partner,FernandesHearnLLPHon.LisaRaitt,MemberofParliamentforMilton,DeputyLeaderoftheOfficialOpposition(Canada)DanUjczo–Counsel,DickensonWrightPLLC(USA)

11:15to11:30am

CoffeeBreak

FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 4

MESA2018CONFERENCE

11:30to12:30pm

CatastrophesandCrisisManagementModerator:KimStoll–Partner,FernandesHearnLLPMarkNewcomb–CounselandVPClaims&Insurance,ZimIntegratedShippingServicesLtd.(USA)BruceHennes,ManagingPartner,HennesCommunications(USA)

12:30pmto1:30pmLunchSpeaker–OneOceanExpeditions

Time VanityFairBallroom

1:30to2:15pm

ApplicationofJurisdictionClausesinDifferentCountriesShelleyChapelski–PartnerNortonRoseFulbright(Canada)RobertReeb–Shareholder,Marwedel,Minichello&Reeb(USA)FabianaSimõesMartins–Partner,Siano&Martins(Brazil)

2:15to3:00pm

ArrestofVesselsinVariousJurisdictionsSusanDorgan–SpecialLinesRecoveryLead,GlobalRecovery,AIG(USA)Jean-FrancoisBilodeau–Partner,RobinsonSheppardShapiro(Canada)JorgeLuisCordoba–Partner,Cordoba&Associates(Colombia)

3:00to3:30pm

IssuesArisingfromProjectCargoJohnEvans–SeniorVice-President,Marine,BerkshireHathaway(USA)

3:30to4:00pm

Blockchain&SmartContractsChrisBurruss–President,BlockchaininTransportAlliance

4:00to4:30pm

AutonomousShipsandEquipmentLauraHill–Associate,PerkinsCoieLLP(U.S.)

6:00pmMESA2018CocktailReceptionandDinner–Hotel

Friday,April20,2018

8:30to9:30am

LimitationofLiabilitybyStatute–ConventionsandinContractsProf.Dr.DidemLight,YorkUniversity,OsgoodeHallLawSchool,VisitingScholar(Turkey)Hon.ElizabethHeneghan–Judge,FederalCourtofCanadaStevenW.Block–Member,FosterPepperLLC(USA)

FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 5

9:30to10:15am

ImpactofClimateChangeonShippingandEnergyProjectsDr.PeterTsantrizos–CEO,TerragonEnvironmentalTechnologiesInc.(Can)SeanDalton–HeadofMarineUnderwriting,NA,MunichReinsuranceAmerica,Inc.(USA)JanyaKelly–ClimateChangeandAirQualitySpecialist,GolderAssociates(Can)

10:15to11:00am

CyberRisksinTransportationandEnergyProjectsCarolineLeprince–SeniorPolicyAnalyst,CanadianCyberIncidentResponseCentre–PublicSafetyCanadaMaxJ.Bobys–Vice-President,GlobalStrategy,HudsonAnalytix(USA)

11:00to11:15am

Coffee

11:15to12:00pm

OffshoreExplorationandExploitation:LiabilityandCompensationIssuesLawrenceMalizzi–SeniorManager–O’Brien&Gere(USA)LucasLeiteMarques–Partner,KincaidMendesViannaAdvogados(Brazil)

12:00to12:45pm

PipelineTechnologies,DevelopmentIssuesandLitigationJoshuaJantzi–Partner,DentonsCanadaLLP(Canada)KoriPatrick–TechnicalManager,Research&Development,Enbridge(Canada)

12:45pmto1:45pmLunch–EthicsPresentation

1:45to2:30pm

EmergingIssuesinInsuranceinMarineandEnergySimonSwallow–ChiefExecutive,Shipowners’Club(UK)BrianMurphy–VicePresident,BerkleyOffshore(USA)

2:30to3:15pm

LNGContractsandTransportationJasonHicks–Associate,BernardLLP(Canada)R.MichaelSceery–Principal,NitrogasLtd.(USA)

3:15to3:45pm

WindTurbineLitigationSarahPowell–Partner,DaviesWardPhillips&VinebergLLP(Canada)

suggestedthat thematter be“remanded” backto a trial judge, where certain technicalprocedural amendments or “work around”mightbe consideredsoas torevivetheinsurer’sclaim. As mentioned, these potentialapproaches, being technical features of theRules of Court and federal bankruptcyprotection,arebeyondthescopeofthisarticle.

This article focusesontheresult; that is,whatthe majority came to find. Like all else in ademocracy, when a number of judges areinvolved,the“majorityrules”.Forthepurposesofthisarticle,inexaminingthe relevantfindingsby the “majority” below, reference is simplythenmadetothe“Court”.

TheCourtaptly introducesthiscaseas involvingthe “intersection of bankruptcy law and thedoctrineof subrogation”: is an insurer entitledtocommenceasubrogatedclaiminthenameofitsbankruptinsured?

TheCourtheldthat theinsurer inthis casewasnot entitled to doso because, at thetimetheactionwascommenced, theinsured’s causeofactionhad“vested” inhis trusteeinbankruptcyas the insured was an undischarged bankrupt.Upon an assignment into bankruptcy, thepropertyofthe bankrupttransfers tothetrusteeinbankruptcy. This includesthe“right tosue”.Thequestionforconsiderationwas whetherinasubrogation claim the right to sue has beentransferredtotheinsureruponthe paymentofapolicy indemnity, or whether such rightremainedwith the insured such that it wouldhave transferred to the trustee uponbankruptcy. In short, does the insurer have arighttoexercise?

Background

Art andWendy Douglas purchased a home inKingston, Ontario and arranged for StanFergusson Fuels Ltd. to deliver fuel oil totheirhome.OnJanuary9,2008,fuel oilwas deliveredtothe Douglas’external oil tank. Itwas allegedthat the fuel oil subsequently escaped andcontaminatedtheproperty.

The following day, the Douglas’ insurer, StateFarmFire andCasualtyCompany (“StateFarm”),

appointedanadjuster,whodeterminedthattheHomeowners Policyprovidedcoverageforlossesassociatedwiththespill.

At thetimeoftheoil leak,Wendy Douglas hadno ownership interest in the property. Severalmonths prior, onNovember 14, 2007, shehadbeendischargedfrombankruptcy subject tothestipulation that her interest in the propertyremained vested in her trustee in bankruptcy(the“Trustee”).TheTrustee remainedontitle totheproperty,togetherwithMr.Douglas.

The adjuster for the defendant sent invoicesfrom the January clean-up to State Farm onMarch 17, 2008. State Farmpaid the invoices,and advised that it intended to recover theseand any future clean-up costs from thedefendant.

TheHomeowners Policycontaineda subrogationclauseprovidingasfollows:

We w i l l b e e n t i t l e d t o a s s umeall your rights of recovery against othersandbringactioninyour name toenforcethese rights when we make payment orassumeliabilityunderthispolicy.

[Emphasis appearing in the in originalpolicywording.]

Onor about June4, 2009,Mr.Douglashimselffiledanassignment inbankruptcy. TheTrusteethen became Mr. Douglas’s trustee inbankruptcyandreplacedhimonthetitletotheproperty.

InOctober 2009, the Trusteesoldthepropertyafter it had been cleaned up and paid debtsowing to the various creditors. In total, StateFarm spent over $800,000 to remediate theproperty.

TheSubrogationClaim

OnJanuary7,2010,StateFarmcommencedthisaction against Stan Fergusson Fuels Ltd. andother certain related companies (hereaftercollectively referred to as “the defendant”) intheOntarioSuperior Court in thenamesof itsinsureds,ArtDouglasandWendyDouglas.

FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 6

Theactionwas commencedprior thedischargeofeitherMr.orMrs.Douglasfrombankruptcy.

Thedefendant brought a motion for summaryjudgmenttodismiss thelawsuit,arguingthattheDouglases lacked capacity to commence theaction because of their bankruptcies, and thataccordingly that the State Farm subrogationaction, which had been commenced in theirnameswasa“nullity”.

StateFarm repliedby asking thejudge, beforewhomtheissueswerepresented:

(a) for directions with respect to thecontinuationofthe actioninthe Douglas’oritsownname;

(b) alternatively, for a declaration that itwasthepartywhocouldandwhohadtherighttocontrolthesubrogationclaim;and

(c)foranorderpermittingittoamendthestatement of claim to plead that theplaintiffs were “Art Douglas and WendyDouglasby theirSubrogeeStateFarmFire&CasualtyCompany”.

The judge granted State Farm’s request for adeclaration that it was in control of thesubrogationclaimanddismissedthedefendant’smotiontostriketheclaim.HealsoorderedthatStateFarmhadtherighttocontinue andcontrolthe action without needing to amend itsstatementofclaimtoaddStateFarmasaparty.Thejudge reached this result onthebasis thatState Farm’s right of subrogation was a“contingent right” that vested at the time thepolicywas enteredintoandthatatcommonlawState Farm was allowed to control thesubrogationclaimonce theDouglaseswerefullyindemnified.

The judge was “not persuaded that theapplicable legislation governing Canadianbankruptcy law [(*2)] extinguishedor trumpedthe subrogation rights of State Farm, whichvestedat thetimethat thepolicy wasenteredintoandwhichremainedinplace atthedateofloss”.

The defendant then filed an appeal of thisdecision to the Ontario Divisional Court. The

Divisional Court dismissed the defendant’sappeal, finding that State Farm had a vestedcontingent right to assume Mr. Douglas’s righttorecoverand, further, tobringanactionthatcrystallized after State Farm had assumedliabilityfor theloss onoraboutMarch17,2008,before Mr. Douglas filed for bankruptcy.Accordingly,the Divisional CourtconcludedthatStateFarmwas entitledtocommence theactioninMr. Douglas’snamewithout the consent ofhis Trustee andthat thedefendant’s summaryjudgment motionhad beenproperly dismissedbytheoriginaljudge.

The defendant appealed this result to theOntarioCourtofAppeal.

AttheCourtofAppeal

The defendant raised various arguments, themost salient being that the Divisional Courterred in its application of the principle ofsubrogationand the law astotheeffect ofanearlier bankruptcy order. The defendant citedBritish case law authority clarifying that theprincipleofsubrogationonlygivesaninsureraninterestintherecoveredproceeds ofanaction,notaproprietary interest inthecauseofactionitself; that is, theability inandof itselftobringthelawsuit.(*3)Thedefendantarguedthatthesubrogation clause in the Homeowners PolicydidnotactuallyassignortransferMr.Douglas’scauseof action to StateFarm – rather, it onlygaveStateFarmthe limitedrighttocommencewhatever action was open to Mr. Douglas tocommence,inhisname.

Accordingly,it followedthatMr.Douglas’s righttosueforlossesarisingoutofthe oil spill passedtoandvested inthe Trustee,withMr.Douglasno longer having capacity to commence theactionuponhis assignmentinbankruptcy.SinceMr.Douglas didnothavecapacitytocommenceanaction on January 7, 2010, it followedthatStateFarmcouldnotcommenceanactioninhisnameonthatdate.

Thedefendant further argued that striking theclaim that State Farmcommencedinthenameof the Douglases was not unjust. State Farmcouldhave providedin theHomeownersPolicy

INVESTOR NEWSLETTER ISSUE N°3 FALL 2008FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 7

thattheDouglases assignedtheircauseofactiontoStateFarm.

In reply, State Farm argued that Mr. Douglas’rightofactionhadvestedinState Farmpriortohis bankruptcy and that the Divisional Courtcorrectly concluded that Mr. Douglas’sassignment in bankruptcy was subject toStateFarm’s vested right to commence an action inhis name. State Farm cited the legal principlethat a trustee acquires title to the bankrupt’sassets subject toall theequitiesexistingat thedateofbankruptcyandis boundby thetermsofcontracts the bankrupt entered into prior tobankruptcy. It followed then that when Mr.Douglas made his assignment in bankruptcyunder the Homeowners Policy that he hadalready granted State Farm the right tocommence an action in his name. State FarmfurtherarguedthatthesubrogationclauseintheHomeowners PolicyamountedtoanassignmentofMr. Douglas’srighttosuetoState FarmandthatStateFarmshouldbepermittedtocontinuetheaction.

TheCourt reviewedtherelevantaspects ofthedoctrine of subrogation and the applicableprovisions of the applicable bankruptcylegislation.

TheDoctrineofSubrogation:GoverningLegalPrinciples

1 . The common law doct r ine o fsubrogation is oneofthecornerstones ofinsurance law. The objectives of thedoctrineare toensurethat (i) theinsuredreceivesnomore and no less than a fullindemnity, and (ii) the loss falls on theperson who is legally responsible forcausingit(*4).

2.Thedoctrineofsubrogationis relatedtothe principle of indemnity. It mandatesthat,havingindemnifiedtheinsuredforaloss caused by a third party, the insurermaybringanactionagainstthethirdpartyintheinsured’s name. Theinsurer is saidto be subrogated to the insured’s rightsand is entitledtoexercise those rightsinthenameoftheinsured

3. At common law, the insurer’s right ofs u b r o g a t i o n a r i s e s u p o n “ f u l lindemnification” of the insured. In theabsenceofstatutory or contractual termsto the contrary, the insurer’s right ofsubrogation does not arise until theinsuredhas been fully indemnified. “Fullyindemnified”means indemnifiedfor bothinsured and uninsured losses, such aslosses that exceed policy limits or lossesthatarenotcoveredbythepolicy.

4.Beforethepointoffull indemnification,the insured is obligated to pursue anyclaimithas against thethirdpartyingoodfaith.

5. At common law, the insurer becomesthedominuslitis(thatis,the partyentitledto contro l the c la im) upon “ fu l lindemnification”oftheinsured.

6.Theinsuredis incontrol ofthe litigation,or thedominuslitis,until ithas beenfullyindemnified for its insuredanduninsuredlosses.

7. Theright tocontrolthelitigation doesnot necessarily follow from an insurer’scontractual right tobesubrogatedto therights ofthe insuredandtobringactioninthe name of the insured before theinsured is fully indemnified. Put anotherway,therightofsubrogationandthe rightto control the l it igation may notnecessarilybethesamething.

8. Subrogated claims are “derivative” innature: the insurer can be in no betterpositionasagainstthethirdparty thantheinsured would be. Expressed otherwise,the insurer “stands in the shoes of theinsured”. Any restriction or limit on theinsured’s right of recovery against thethirdpartyappliesequallytotheinsurer.

9.Wherean insurer is subrogated to theclaimofits insured,theclaimnonethelessremains thatoftheinsuredinwhosenameandwithwhoserights theclaimmust beadvanced.

INVESTOR NEWSLETTER ISSUE N°3 FALL 2008FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 8

10. Recoveries by the insurer beyondtheindemnified losses are payable to theinsured.The rightofsubrogationgives theinsurer therighttorecoverfromthethirdpartytheamountthattheinsurerhas paidout under the insurance contract to itsinsured. Any recovery in excess of theamountpaidoutby theinsurer is payabletotheinsured.

11. Recoveries by the insured forindemnifiedlossesareheldintrustfortheinsurer.Wherethe insuredcommences anactionagainstathirdpartyandrecovers inrespectofanindemnifiedloss,the insureris entitledtoseekreimbursementfromtheinsured.

Havingcanvassedthe relevant lawonrights ofsubrogation, the Court then reviewed therelevant provisions of applicable bankruptcylegislation.

Relevant Provisions of the Bankruptcy andInsolvencyAct(the“BIA”)

Section 71 of the BIA provides that upon anassignment in bankruptcy being filed, thebankrupt ceases to have any capacity to dealwithhisproperty,which,subjecttotheBIAandthe rights of secured creditors, immediatelypasses to and vests inhis trustee. Thesectionprovidesasfollows:

On a bankruptcy order beingmade or anassignment being filed with an officialreceiver, a bankrupt ceases to have anycapacity to dispose of or otherwise dealwith theirproperty,whichshall, subjecttothis Act and to the rights of securedcreditors, immediately passtoand vest inthetrusteenamedinthebankruptcyorderor assignment, and in any caseof changeof trustee the property shall pass fromtrusteeto trusteewithoutany assignmentortransfer.

This gives effect to the‘vesting’ of property intrusteeasreferredtoabove.

“Property” is broadly defined in s.2 oftheBIA and includes“thingsinaction” likeMr.

Douglas’s causeof action in this case. TheActstates:

Property means any type of property,whether situated in Canada or elsewhere,and includes money, goods, things inaction, land and every description ofproperty,whetherrealorpersonal,legalorequitable, as wel l as obl igations,easementsandeverydescriptionofestate,interest and profit, present or future,vested or contingent, in, arising out of orincidenttoproperty.[Emphasisadded.]

The Court ident i f ied three issues forconsideration:

1. D id S ta te Farm acqu i re aproprietary interestinMr.Douglas’s righttosue thedefendant–orhadthe righttosuevestedintheTrustee?2. Ifnot, didthesubrogationclausein the Homeowners Policy permit StateFarm to commence the action in thenameofMr.Douglas?3. If the answer to the first twoquestions was “no”,couldthecourtmakean order to remedy any proceduralimpedimentto(or, ineffect,tosomehowotherwise legitimize) State Farm’ssubrogatedaction?

TheCourt ruledagainst StateFarmonall threepoints,concludingthat:

a)Mr.Douglas’s right tosuevestedintheTrusteeonthe dateofhis assignmentintobankruptcy;

b) the subrogation c lause in theHomeowners Policy did not permit StateFarm to commence the action in Mr.Douglas’sname;and,

c)inthecircumstances, itcouldnotmakean order to remedy any proceduralimpediments to State Farm’s subrogatedaction.

TheCourt noted that as a sophisticated party,StateFarm could haveincludedanassignmentclause in the Homeowners Policy setting up aformal assignment of the right tosue. As this

INVESTOR NEWSLETTER ISSUE N°3 FALL 2008FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 9

was not the case State Farm should havecommenced its action in the name of theTrustee,as “TrusteeoftheestateofArtDouglas,a bankrupt”. The Court could not “regularize”State Farm’s subrogated action simply by nowsubstituting the name of the Trustee, as theplaintiffintheproceedings.

TheCourt tookintoconsiderationthefollowingkeyconsiderationsinarrivingatthisresult:

i) Subrogation is not the equivalent ofa s s i gnment . When an i n su re r i ssubrogatedtotheclaimofits insured,theclaim nonetheless remains that of theinsured in whose name andwith whoserightstheclaimmustbeadvanced.

ii)Subrogationrightsdonot giverise toaproprietary interest in the “cause ofaction”itself.

iii) An insured doesnot assign a right tosue to its insurer simply by operation ofthecommonlawdoctrineofsubrogation.

iv)Aninsuredwhomakesa recovery froma wrongdoer,andhas recoupedthe costsofrecovery, holds therest intrust for theinsurer up to the value of the insurer’spayment.

v) The subrogation clause in theHomeowners Policydidnotamount toanassignment ofMr. Douglas’s right tosue.Thereis a differencebetweensubrogationand assignment. Among other things, anassignment would permit an insurer torecoverandkeepanydamages sufferedbythe insured in excess of the insuranceproceedspaidtohim.

vi) Mr. Douglas’s right to sue was“property” that passed to and vested intheTrustee pursuanttos.71oftheBIAatthe time he filed his assignment inbankruptcy.

vi) The case law is clear that anundischarged bankrupt lacks capacity tocommence an action in his name, if hiscauseofactionvestedinthetrusteeonhis

assignment or at any time before hisdischarge.

vii) Because the Trustee acquired Mr.Douglas’s cause ofactionsubjecttoStateFarm’s right of subrogation, State Farmwas entitled to commence the action intheTrustee’s name. Thisconclusiongiveseffecttoboththeobjectives andprinciplesof the doctrine of subrogation andestablishedprinciplesofbankruptcylaw.

Onthebasisofthe foregoingtheCourtruledinfavour of the defendant and the lawsuit wasdismissedonceandforall.

GordonHearn

Endnotes(*1)2018ONCA192(*2)BankruptcyandInsolvencyActR.S.C.1985,c.B-3(*3)BallastPlc,Re,[2006]E.W.H.C.3189,[2007]B.C.C.620(Eng.Ch.Div.)4) Somersallv.Friedman,2002SCC

59(CanLII),[2002]3S.C.R.109,atpara.50

INVESTOR NEWSLETTER ISSUE N°3 FALL 2008FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 10

2. DoingBusinessinCanada–Part6(*1)–Employment

EmploymentinCanadaisregulatedbothattheprovincialandfederallevels.Legislationincludes:

EmploymentStandardsLabourRelationsHumanRightsOccupationalHealth&SafetyPrivacyRulesPensionBenefitsUnemploymentInsuranceWorkers’Compensation

Most employees are governed by provinciallegislation unless they in a federally regulatedindustry: banking, shipping, federal railways,federal pipelines, airlines and airports,broadcastingandtelecommunications.Contractsof employment will have to abide by bothstatutory legislation and common law. Suchcontracts mayrestrictorlimitemployee conductbothduring thetermofemployment andaftertermination. For example, many contractscommonlycontainthreetypesofrestrictions:a)non-solicitation covenants, b) non-competitioncovenants andc)non-disclosurecovenants.Theenforcement of these covenants depends ontheir duration and geographic scope, thewording of the contract, the nature of thebusiness andtheinterests ofthe employer thatneedtobe protected.Courtswill interpretsuchcovenants narrowly and no further than isnecessary to protect the employer’s legitimateinterests.

EmploymentStandards

Provincial and federal statues govern suchmatters as minimum wagerates, frequency ofpayment,hours ofwork,overtime,vacationpay,statutory holidays, maternity andother leaves,noticesfor terminationofemployment andpayinlieuthereof.

Employeeswhoare dismissedwithoutjustcauseareentitledtoreasonablenotice oftermination

of employment, and may recover damages ifsuchnotice isnotgiven.For federally regulatedindustries, in certain circumstances, under theCanada Labour Code, a non-managerialemployee may only be terminated for cause.Notice of termination is not an option.Terminationis onlypossible ifcertainconditionsexist, such asthe legitimateeliminationof theposition. Examples of what constitutes justcause may be set out in the employmentcontract.

Thelengthoftherequirednoticeperiodvariesamongjurisdictions,butgenerallyincreaseswithanemployee’slengthofservice.InAlberta,forexample,anemployeewithtenormoreyearsofserviceareentitledtoeightweeksofnotice.Noticeisnotrequiredforterminationforcause.Itusuallyincludesrepeatoffencesofaseriousnature.

LabourRelations

Eachprovinceandthe federal governmenthaveenactedlegislationgoverningthe formationandselection of unions and their collectivebargainingprocedures.Tradeunions representasignificant portion of the Canadianworkforce.Collective bargaining consists of negotiationsbetweenanemployer andgroupofemployeesover thetermsandconditions of employment.Theresultofcollectivebargainingis acollectiveagreement.

Employeeshavetheright to belong to atradeunion of their choice, free of any coercion orinterferenceby theemployer.Employershaveadutytorecognizeandbargain ingoodfaithwiththe trade union chosen by their employees.Labour relations tribunals supervise theorganizationofemployees and, tosomeextent,the collective bargaining process. Failureof anemployeetobargainingoodfaithmay result inpenalties being imposed. Most workers areentitled to strike if collective bargainingnegotiations between the union and theemployer do not result in an agreement;however, workers may not strike during thetermofacollectiveagreement.

INVESTOR NEWSLETTER ISSUE N°3 FALL 2008FERNANDES HEARN LLP NEWSLETTER MARCH 2018 PAGE 11

Collectiveagreementsmustprovideforaprivatesystemofdispute resolution,typicallyintheformof arbitration. Employeeswhoaredismissed ordisciplinedby their employer have the right toseekredress througharbitration. Arbitrators aregiventhepowerunder thecollective agreementto reinstate employees if they find that theemployer acted with insufficient cause. Theyhave the right to substitute a penalty of lessseverity thanthatimposedby theemployer.Thecommon law right to notice does not exist forunionizedemployees.

HumanRights

The Canadian Charter of Rights and Freedoms(Charter) is a constitutional charter that governsthecontent oflegislationandother governmentactions. Inaddition,everyprovincial andfederaljurisdiction has legislation designed to protecthumanrights.Amongotherthings,this legislationis aimed at preventing and redressingdiscrimination in the work place. For eachjurisdiction, the relevant legislation should bereferred to, as the prohibited grounds ofdiscriminationarenotuniform.Mostjurisdictionsprohibit discrimination on the basis of race,ancestry, nationality, ethnic or place of origin,political belief,colour,genderexpressionand/oridentity,religionorcreed,sex,sexual orientation,marital status, family status, age, physical ormental disability,orcriminalconvictionforwhicha pardonhas beengranted.Sexual harassmentisconsidered discrimination on the basis of sex.Some jurisdictions allow for mandatoryretirementat age 65,while inother jurisdictionsmandatory ret i rement const i tutes agediscrimination. With respect to disability,employers have a duty to accommodateemployees with a disability to the extentpossible,tothepointofunduehardship.

Examples of human rights legislation in effectinclude Ontario legislation where, in January2012, Ontario startedenforcing a rolling set ofcompl i ance dead l ines re la t ing to theimplementationoftheAccessibilityforOntarianswith Disabilities Act, 2005 (AODA). The AODA

creates significant obligations for public andprivate sector organizations in Ontario withrespect to accessibility for persons withdisabilities, including specific obligations relatingto accessibi l i ty and accommodation inemployment. Manitoba has recently enactedsimilar accessibility legislation with rollingcompliance deadlines, which commenced in2016.

OccupationalHealth&Safety

Worker health and safety legislation exists inevery province and federally. The legislation isdesigned to protect the safety, health andwelfareof the employeeas well as thatofnon-employees entering work sites. The legislationalsoprovidescompensationincasesofindustrialaccidentsanddiseases.

Occupational healthandsafetyofficers havethepowertoinspectworkplacesandhavethe powertoorderthesituationtobe rectifiedandtomake“stop-work” orders if necessary. Contraventionsofthe acts,codes orregulations aretreatedveryser ious ly , and may resu l t in f ines orimprisonment.TheCriminal Codehasprovisionsfor potential employer liability for failing toensuresafeworkplaces.

InCanada,itis a criminal offence foranemployerto take disciplinary measures, or threaten oradverselyaffecttheemploymentofanemployee,with the intent to stop such employee fromproviding information to law enforcementofficials regarding wrongful activity. Provinciallegislationalsocontainanti-reprisalprovisions.

PrivacyRules

Canada has federal privacy lawsthatgoverns thecollection, use, disclosure, storageandretentionof personal employee information. Manyprovinces have similar legislation. BusinessesoperatinginCanada shouldsetupproceduresfortheprotectionofinformation,including:

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a)the adoptionofa privacy compliancestrategythatidentifies theorganization’scompliancewiththeapplicableregulatoryregimes;b)theadoptionofa privacypolicy,andpersonalinformation management practices, to ensurecompliancewithapplicableprivacylaws;c) theappointmentof an individual whowill beresponsiblefor the administrationandoversightoftheorganization’spolicyandpractices;d) a review of the current personal informationpracticesoftheorganization;e) a review of the organization’s datamanagemen t i n f r a s t ru c tu re and da t amanagementpractices;f) the implementation of consent language incontracts,formsutilizedwhencollectingpersonalinformationfromindividuals,includingcustomersandemployees;andg) the requirement, where there are contractswiththirdparties towhompersonalinformationwill be disclosed, that the third party agree toappropriate contractual term to protect privateinformation.

PensionBenefits

The Canada Pension Plan is a federally createdplan that provides pensions for employees, aswell as survivors’ benefits for widows andwidowers and for any dependent children of adeceasedemployee.Quebec has its ownsimilarplan.All employees andemployers contributetotheplans bywayofdeductionsfrompay.FortheCanadianplan, an employeemust contributetotheplan4.95percentofall employmentearningsinexcess ofC$3,500uptoa specifiedmaximumof C$2,593.80 per year (in2018). Employers arerequired to deduct this amount from anemployee’s remuneration and remit it to thefederal government, and are required tomatchthis contribution. The maximum annualpensionableearningsfor2018is$55,900.00.

EmploymentInsurance

ThefederalEmployment Insurance Act regulatesan insurance scheme to which both employersand employeesmust contribute. Workers, whoqualifyfor assistance,receive benefits while they

are unemployed, or without pay because ofparentalleave,temporarysickness orquarantine,orcompassionatefamilycareleave.Since January2006Québecalsohas its ownParentalInsurancePlan, which provides benefits to insuredemployees when they take a maternity orparentalleave andtowhichbothemployers andemployeesinQuébeccontribute.

Under the Employment InsuranceAct,employersarerequiredtodeduct thecontributionamountfrom an employee’s pay and remit it to thefederal government and are required tomatchthe contribution, at a rate of 1.4 times theemployee’s contribution amount. For 2018, themaximum insurableearnings is $51,700 andtheemployeepremium rate is$1.66 per $100. Theemployer contribution is $2.32 per $100. InQuebec,thepremiumrateforemployees is $1.30per$100.00.

Workers’Compensation

For certain types of business, as set out inprovincial legislation,employers maybe requiredto provide injuredworkerswith benefits in theformofworkers’compensation.TheGovernmentEmployees Compensat ion Act prov idescompensationtofederal governmentemployeeswhoare injuredwhile onthe job or becomeillbecause of the work. Provincial and federalprograms protectemployers andemployees fromtheimpactofwork-relatedinjuries.All programsare administered by provincial workers’compensation agencies. They compensateemployeesfor lost income,healthcareandothercosts related to their injuries. They protectemployers frombeingsuedbyworkersiftheyareinjuredon the job. Inmost jurisdictions, injuredemployeesreceivebetween75 per cent and90per cent of their pre-injury income whiledisabled. Such compensation payments arelargelyfundedthroughemployercontributions.

RuiM.FernandesFo l l ow R u i M . F e r nande s on Tw i t t e r@RuiMFernandes and on Linkedin. See alsohisblogathttp://transportlaw.blogspot.ca

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Endnotes1) This article is part6of17partsdedicatedto

a review of doing business in Canada.Subsequentarticles willinclude Directors andOfficers, International Trade, Competition,SaleofGoods, Intellectual Property,Privacy,RealProperty,EnvironmentalLaws,Taxation,Insolvency,LitigationandADR.

3. DiscretionaryOrders on “Terms” in LieuofInjunctiveRelief

Injunctionsarenotoriously difficulttoobtain. ArecentdecisionoftheOntarioSuperior CourtofJustice in ProPurchaser.com v. Wifidelity Inc.(“ProPurchaser”) confirms as much. (*1)However, it also suggests a possible willingnessonthepartofthe courttoorderthatthepartiesabideby “terms” toprevent unfairness prior totrial.

In the ProPurchaser matter, ProPurchaserprovidedpricinginformationaboutrawmaterials,supplies,goods, andservices onits website. Todoso, it dependeduponWifidelity,whichwas asoftware developer specializing in software toprice commodities and to assist parties innegotiations. The arrangement betweenProPurchaser and Wifidelity included a non-exclusivesoftwarelicence,supportservices fromWifidelity, and collateral terms. Over time, adisputearoseas tothe amounts dueonaccountof the licence fee versus the support services.Litigationwas commencedlastJulyandinAugustan emergency injunction order was issued tomaintainthestatusquo. ItrequiredWifidelitytocontinue providing access and services for astipulatedfeeuntil furtherorderofthecourt. InNovember,the partieswere backbeforeajudgewith ProPurchaser seeking an extension of theinjunction, effectively to keep the licensing andservicesagreementaliveuntiltrial.

TheHonourableMr.JusticePerellconsideredthewell-known test for issuing an injunction,approvedbytheSupremeCourtofCanadainRJR-Macdonaldv.Canada.(*2)Pursuanttothattest,the moving party must show (i) a triable orserious issue, (ii) evidence that it would be

irreparably harmed if theorder was not made,and (iii) that evidence that the “balance ofconvenience”weighedinits favour suchthattheprejudice tothe movingparty infailingtoobtainthe injunction would be greater than theprejudicetotherespondentinhavingitissued.

Over time, the“irreparable harm” branchofthetest has proven difficult to meet in manycircumstances. It is generally understood that“irreparableharm” means that harm will ensuethat cannot beadequately compensatedby theawardofdamages. InRJR-Macondaldv.Canada,theCourt was clear that this branchof the testrelates to thequality or natureof the harmandnotitsmagnitude.

Inthe caseofProPurchaser,theHonourable Mr.Justice Perell found that any damagewould becompensablebyamoneyaward,notingalsothatWifidelity had asserted that it had validlyterminated the contract. In any event, HisHonour commentedfurther that thebalanceofconvenience lay with Wifidelity, finding that itwould be unfair to extend the injunction,particularly as such an order would betantamount to the remedy of “specificperformance”, whereby a person is ordered tofulfil a contractual obligation because moneydamages wouldbe inadequate. Courts areloathto make such orders, preferring the morecommonremedyofmoneydamages.

Despitetheoreticallydismissingthemotionintherespondent’s favour, the Court invoked Rule37.13 ofOntario’sRules of Civil Procedure, (*3)whichpermits a motions judge to disposeof amotion on such terms as it finds just. In thecircumstances, the Court ordered a six-monthdelay toits ordervacatingthe injunction. Intheinterim, ProPurchaser was required to continuetopayWifidelitythestipulatedfee.

TheCourt didnot explicitly say soaspartof itsconclusion,butithadearliernotedevidence thatreplacement software with similar functionalitytothatofWifidelitycouldbecreatedinamatterofmonths. Itwouldtaketwotothreemonths toreplicate thecorefunctionality,andnomorethan

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five months to recreatemost of the enhancedfeatures. Thus, therewasevidence tosupportthe six-month delay as having been in theinterestsofjustice.

His Honour did not mention it, but a similarpower exists forall proceedings inOntario– notjustmotions –pursuanttoRule1.05ofthe Rulesof CivilProcedure. That Rule providesthat anyorderofthecourtmaybemadeonsuchterms orconditions that are considered “just” in thecircumstances. OtherCanadianjurisdictions havesimilar provisions in their rules governing civillitigation. For example, Rule53 of theFederalCourtsRulespermitstheFederal Court tomakeany order that it considers “just”, even if theorder extends beyond the relief sought by aparty;(*4)andRule13-1(1)ofBritishColumbia’sSupreme Court Civil Rules permits a judge ormaster of the BC SupremeCourt toimposeanyterms or conditions, or togive directions, as “itconsiders will further the objectof [the Rules]”.(*5)

In the ProPurchaser matter, the moving partydodgeda couple ofbullets insofaras ithadreliedupon a third-party supplier to support criticalfunctionality without a sufficient terminationprovision and, in fact, without sufficientlyreducing its arrangement inwriting. Since anydamages were theoretically not “irreparable” inthe sense that a damages award couldcompensate for them, injunctive relief wasdisallowed.Inshort,itwaslucky.

Onewonders justhowfar courts may bewillingto go to order injunction-like terms to protectparties like ProPurchaser. One also wonderswhether thosecourtswouldbemore restrainedinthecircumstancesofa finalorder rather thananinterlocutoryorderpendingtrial.

AlanS.Cofman

Endnotes(*1)2017ONSC7307(*2)[1994]1S.C.R.311(*3)R.R.O.1990,Reg.194(*4)SOR/2004-283

(*5)B.C.Reg.168/2009

4. SexualHarassmentClaimSurvivesMotiontoStrike

Ata chancemeeting in2015, twoWestJet flightattendants realized that they both alleged tohave beensexually assaultedby thesamepilotfortheairline,onein2008andtheotherin2010.

As a federal corporation subject to theCanadaLabour Code, WestJet is obligated to issue apo l i c y s t a tement on ha ra s sment anddiscrimination (*1). WestJet however allegedlywentmuch further than thestatutory minimumby includingan“Anti-HarassmentPromise”initsstandardformemploymentcontract.

The plaintiff, who alleged the later instance ofsexual assault, brought civil proceedings in theBritishColumbiaSupremeCourt for certificationof a class action on behalf of all female flightattendantsentitledtothe protections oftheAnti-HarassmentPromise(*2).

Theplaintiff alleged in the Noticeof Civil Claimthat the airline had failed to implement thecontractually mandated Anti-Harassment Policyand, that moreover, as a result, the airline hadmade profits bybenefittingfromits reputationasan equality driven business, and also by savingthe costs associated with investigation ofharassment claims and with dismissing non-compliantstaffandtrainingnewhirestoreplaceerrantemployees.

Thereliefclaimedbythe plaintiffinthe Notice ofCivil Claimwasbroadin scope andrangedfromdeclarationsas to the failure to implement thecontractually requiredAnti-Harassment Policy torestitution by disgorgement of profits madebyWestJetandgeneraldamages.

Theairline broughta motiontostrikepursuanttoRule 9-5(1)(b) of the Supreme Court Civil Rules,B.C. Reg. 168/2009 (*3) on the basis that theclaim was unnecessary and properly within thepurviewof theCanadianHumanRights Tribunal

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and the provincial Workers’ CompensationBoards. WestJet argued that the claim wasdeliberately disingenuous in seeking to reframediscrimination claims into breach of contractcauses of action in order to escape themandatory jurisdiction of the administrativeboards.

Themotion failed. Theplaintiff was ordered toamend the pleadings so as to strike claims forgeneral damages. Such claims were patentlyclaims by workers for injuries suffered in thescopeoftheiremploymentandtherefore didfallsquarely within the jurisdictionof theWorkers’CompensationBoards.

As for thebalanceof theclaim,andparticularlythenovel reliefclaimbywayofdisgorgementofprofits by the airline, the court relied onp re ceden t Sup reme Cou r t o f C anadajurisprudence which establishes the highthresholdfor strikingofa claimata preliminarystageandurgeat thestriking notion that, “Theapproachmustbegenerousanderr onthesideof permitting a novel but arguable claim toproceedtotrial”(*4).

Although the court acknowledged that thepleadings were anythingbuta modelofclarity,italso refused to find that therelief claimedwas“manifestly unprovable or widely speculative”.The court distinguished the present case from

precedent where a plaintiff was seeking toenforce a statutory right, such as payment ofovertime, where there was an expressadministrative decision maker enabled bylegislationtoadjudicatesuchdispute(*5).

Moreover,since theclaimwasnotboundtofailand did not lack any arguable basis, theproceedingcouldnot be consideredanabuseofprocessandunnecessaryasallegedbyWestJet.

Thematterwill proceedtoa certificationhearingand should raise concern for employers whomakebroad undertakings as tono toleranceofimproper sexualconduct giventhat theymay becontractually held tosuchundertakingsthataremore exacting than those minimum standardsimposedbylegislation.MarkGlynn

Endnotes(*1)CanadaLabourCode,R.S.C.1985,c.L-2s.247.4(1)(a)(*2)Lewisv.WestJetAirlinesLtd.2017BCSC2327(*3)SupremeCourtCivilRules,BCReg.168/2009,Rule9-5(1)(b)(*4)R.vImperialTobaccoCanadaLtd.,2011SCC42(*5)Macaraegv.ECareContactCentersLtd.,2008BCCA182

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5. PartialSummaryJudgments:AWordtotheWise

TheCivil Practice CourtinTorontois a schedulingcourtwherejunior (andnot-so-junior)associatesappear to schedule hearing dates for summaryjudgmentmotions,amongother things. Startingat 9:30 a.m. eachmorning, counsel make shortappearances (of usually only a few minutes)beforea judge inaneffort tohavetheir varioushearingssetdownandtimetabled.

Civil Practice Court is widely known to have afairly efficient process, where counsel simplyhave their schedules and requests “rubber-stamped”bytheCourt.Schedulingrequestsseemtorarelybedenied.

However, thatmaybechanging,withrespect toscheduling summary judgment motions, and inparticular partial summary judgment motions.Based on recent experience in Civil PracticeCourt,counselandlitigantsshouldbeaware thatjudges appeartobemorewillingto“pushback”on requests for summary judgment and partialsummary judgment. Thisisparticularly thiscasein light of the recent Ontario Court of Appealdecision in Butera v. Chown, Cairns LLP, (*1)discussedbelow.

Buterav.Chown,CairnsLLPandPartialSummaryJudgments

TheButera decision from theOntario Court ofAppeal provides guidance on how courts inOntario are to approach motions for partialsummary judgment. Butera was a lawyers’negligence case, arising from a situation wherethe plaintiff was a client of the defendant lawfirm.Theplaintiffhada causeofactionagainstamanufac turer fo r b reach o f cont rac t ,misrepresentation, negligence and breach ofprovincial franchise legislation. Itsactionagainstthe manufacturer was dismissed, however,because it was commenced after the relevantlimitationperiod. Indismissingtheaction,JusticeHambly provided commentary about the

misrepresentation argument being advancedbytheplaintiffagainstthemanufacturer.

The plaintiff then appealed Justice Hambly’sdecision to the Court of Appeal. The Courtdismissedtheappeal,agreeingthatthelimitationdeadlinehadexpired.TheCourtdidnotconsidertheplaintiff’smisrepresentationargument.

Thus, the plaintiff then sued its lawyers fornegligence in missing the limitation perioddeadline,whichresultedintheplaintiff’s inabilitytoprosecuteits actionagainst themanufacturer.In its lawsuit against the lawyers, the plaintiffarguedthat, duetovarious errors made by thelawyers, theplaintiff had lost its ability toarguecertainaspects, including that themanufacturerin the underlying lawsuit had made certainmisrepresentationstotheplaintiff.

In response, the defendant law firm brought amotion for, ultimately, what became a requestfor partial summary judgment only. It askedtheCourttodismisspartoftheplaintiff’sactiononly– the part dealing with the plaintiff’s claim ford amag e s a r i s i n g o u t o f t h e a l l e g e dmisrepresentations.

Onthemotion, JusticeBelobabaconsideredthegrounds ofappeal thathadbeenadvancedbytheplaintiff on the appeal and concluded that theplaintiff had never actually appealed JusticeHambly’s finding on its misrepresentationargument. Accordingly, Justice Belobabaconcluded that the plaintiff had never lost anopportunity to argue its misrepresentationargumentbeforetheCourtofAppeal,becauseitnevertriedtodoso.

Justice Belobaba thus grantedthelawfirmpartialsummary judgment onthis issueandremoveditfromthelawyer’snegligencecase.

The plaintiff then appealed Justice Belobaba’sdecisiontotheCourtofAppeal.

Onappeal, theCourt ofAppeal reversedJusticeBelobaba’s decision, and allowed the plaintiff’sentireactiontoproceed.The Courtfound,among

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otherthings,thattheplaintiff’soriginal noticeofappeal contained an implicit appeal on themisrepresentation issue, which was enough forthe Court to conclude that the plaintiffs hadappealed Justice Hambly’s entire order.Accordingly, the underlying action and appealresultedinacompletelossoftheplaintiff’scauseofaction.

TheCourtalsoconcludedthat JusticeBelobaba’sdecision was not in keeping with summaryjudgment principles, which direct judges toconsiderwhethera summaryjudgmentmotionisadvisableinthecontextofthelitigationaswhole.

The Court observed that motions for partialsummary judgment“raises furtherproblems thatare anathema to the stated objectives of thesummary judgment regime” (*3) in Ontario,becauseofthefollowingreasons:

(1)theycause the resolutionofthemain action to be delayed,because typically an action doesnot move forward whi le asummary judgment motion ispending;

(2) a motion for partial summaryjudgmentcanbeveryexpensive;

(3) judges will be required tospend lots of time and energydealing with a narrow issue, andwritingreasons that ultimately donot dispose of the entire action;and

(4) the record filed on a partialsummary judgment motion willlikely not be as extensive as therecordattrial,whichincreases theriskofinconsistentfindings.

The Court admonished litigants that, whenbringinga motionforpartialsummary judgment,themovingpartyshouldconsiderthesefactors inassessingwhetherthe motionis goodidea inthecontextofthelitigationasawhole.(*4)Amotion

for partial summary judgment should beconsidered to be a “rare procedure” that is“reservedforanissueor issuesthatmay readilybebifurcatedfromthose inthemainactionandthatmaybedealtwithexpeditiouslyandinacosteffectivemanner”.(*5)

Inthe caseatbar,the Courtconcludedthat,evenif the misrepresentation argument had beenremoved from the plaintiff’s action against itslawyers, all of the other claims against thelawyers would nonetheless proceed. Since thealleged misrepresentation claims were “largelyintertwined” with the plaintiff’s other claims,therewas little ifanythingtobegainedfromanefficiencypointofview.

TheCourt alsoobserved the usualpoint that, ifthe partial summary judgment motion wasgrantedbutpart oftheactionstill proceeded, itmight lead to inconsistent findings from twodifferentjudges.

Accordingly, the Court allowed the appeal andpermittedtheentireactiontoproceed.

Conclusion

The merits of the Butera decision are fairlyuniqueandarenotreally soimportantgenerally.What is important,however,is thattheCourtofAppeal appears to be taking a “hard line” onpartial summary judgments. And,what ismore,that “hard line” is translating to more difficultscheduling court appearances. Although inHryniak v. Mauldin, (*6) the SupremeCourt ofCanada calledfora “cultureshift”inCanadafroma trial-orientedcivil litigationsystemtoonebasedonsummary judgments, it seemstobethecaseinOntario that requestsfor summary judgmentwill becarefully scrutinizedby schedulingjudgesinorder to ensure that they areappropriate inlight of thelitigationas awhole, as directedbythe Court in Hryniak. Moreover, absent veryspecial c ircumstances, part ial summaryjudgments will not beviewedas appropriate inlight of the litigation as a whole. Counsel andlitigants would be well-advised to bear this inmind.

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JamesManson

Endnotes(*1)2017ONCA783(CA).(*2)Seeparagraph29.(*3)Ibid.

(*4)Seeparagraph34.(*5)Ibid.(*6)[2014] 1 S.C.R. 87.Hryniak is thenewlocusclassicus fromtheSupreme Court of CanadaonsummaryjudgmentmotionsinCanada.

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