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Summary Judgment Arbitration

July 30th, 2014

The Supreme Court’s decision in Hryniak v. Mauldin [2014] S.C.J. No. 7 (“Hryniak”) is the latest in a series of laudable appellate decisions which are designed to provide more timely and affordable justice. However, these decisions do not address the judicial resources required to implement the decisions. Does summary judgment arbitration provide a better alternative?

Pre-Hryniak

Appellate courts across Canada have tried to provide motion judges with judicial teeth to encourage the use of motions for summary judgment so as to increase access to justice. However, through practice, these decisions can add more hurdles to the summary judgment process. For example, Justice David Brown’s decision in George Weston Limited v. Domtar Inc., 2012 ONSC 5001 provides a frank assessment of the, “tension [that] exists between the theoretical purpose of summary judgment motions and the reality of their practice” (at para. 1). He points to the Court of Appeal’s decision in Combined Air Mechanical Services Inc. v. Flesch 2011 ONCA 764 (CanLII), where the Court of Appeal tried to improve Rule 20 and the cumbersome procedures which had developed on summary judgment motions. The Court of Appeal suggested that where a party is faced with a premature or inappropriate summary judgment motion, it should have the option of moving to stay or dismiss the motion.

Motions to stay were rare before Combined Air; however, once the genie was out of the bottle, many counsel saw these motions as ways of derailing summary judgment motions. Summary judgment motions in Toronto already required an attendance in Motion Scheduling Court where counsel were routinely told that the hearing of the motion could not occur for 12 months or more. Justice Brown noted that, unless summary judgment practice improved, judges risked losing commercial litigation to arbitrators.

Hryniak Adds Hurdles

The Supreme Court in Hryniak clearly intended to promote a “culture shift” that simplified pre-trial procedures and moved “the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case” (at para. 2). Interestingly, procedural flexibility has always been a benefit of arbitration over conventional litigation because the parties, with the arbitrator, are able to design dispute resolution procedures which are appropriate to the dispute. Hryniak envisions litigation that looks more like arbitration.

A problem arises, however, where no new resources are added to court budgets to respond to the changes envisioned by the Supreme Court. For example, Hryniak requires motion judges to apply the new summary judgment test in a two-step approach. Under the first step, the judge must determine if there is a genuine issue requiring a trial based solely on the evidence before the court. If there appears to be a genuine issue for trial, the judge must in a second step decide whether a trial can be avoided by using the powers to weigh evidence, evaluate credibility, draw inferences and order oral evidence. The second step may require a second hearing. The Court also proposes that where a motion judge dismisses a motion for summary judgment, she should seize herself of the matter as the trial judge. Good ideas but the two-step procedure and remaining seized of the matter add to the burdens on a court system which is not equipped to have judges remain seized of files. Most superior court judges do not have sufficient control of their calendars to provide effective case-management. The Supreme Court’s answer is to tell over-worked administrators to “change their practices in order to facilitate access to justice” (at para. 79). Regrettably, counsel should expect longer delays in scheduling summary judgment motions and even longer delays in getting judges seized with summary judgment motions to deal with cases following the initial step one hearing.

Summary Judgment Arbitration

There is an alternative: when one party first advises that it intends to move for summary judgment, counsel should consider appointing an arbitrator to hear and dispose of the motion. There are some excellent arbitrators in Canada as evidenced by the websites of the major arbitration organizations in Canada and the bios of their panel members. As counsel, would you prefer to have your complex commercial dispute heard by a judge with no subject-matter expertise or an arbitrator whose bio is available on-line and whom you can interview in advance of the hearing? Further, even though you will have to split the cost of the arbitrator, what is the relative cost of using an arbitrator whose availability calendar is on-line versus a judge who cannot hear your motion for 16 months and cannot make herself available for many more months for a continued hearing?

Summary judgment motions inevitably lead to appeals. Arbitration allows parties to eliminate appeals or create private rights of appeal to a panel of retired judges or a single arbitrator. The parties can also develop their own appellate test rather than one based on the latest pronouncement from the Court of Appeal or Supreme Court. In arbitration, the parties and their counsel decide whether to and what kind of appeal is required.

Randy Pepper is a mediator and arbitrator with ADR Chambers, a Fellow of the Chartered Institute of Arbitrators and a barrister in Toronto who acts on a variety of international and domestic mediations and arbitrations.

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