A motion for summary judgment is one of the methods available to shorten the length and cost of civil actions in Ontario. A party to litigation can request a matter be decided without a formal trial if they can demonstrate that there is no genuine issue to be decided at trial. The leading decision on the use and procedure for a summary judgment was provided by the Supreme Court of Canada (SCC) in Hryniak v. Mauldin. The SCC provided the means of increasing their use through a form of mini-trial.
In some cases, there may be multiple issues to be decided, with some not requiring a formal trial. In this instance, it is possible to bring a motion for partial summary judgment. Through this option, the time required for a trial can be shortened by eliminating one or more issues on the motion. This method however has not received a warm welcome in the Ontario Court of Appeal (ONCA). In Butera v. Chown Cairns LLP, the ONCA advised all courts of the first instance that such motions should be successful only in very narrow circumstances. Now more recently, in Malik v. Attia, the court has set out the test that every court of the first instance must see satisfied before a motion for partial summary judgment can proceed.
Buyers Sued for Breach and Forfeiture After Failing to Close on Sale
A seller owned two adjoining real estate parcels and placed them up for sale in August 2016. Given the potential issues under the Planning Act (“the Act”), the buyers made two offers, one for each parcel. Both offers were accepted and thereafter were collectively called the Agreement of Purchase and Sale (APS). The buyers paid a deposit totalling $100,000. The APS did not contain any financing conditions. The only condition was that the seller was to ensure that he complied with the lot control provisions in the Act.
In the end, the buyers failed to obtain the necessary financing and did not have the cash to close on time. In good faith, the seller extended the closing date to grant the buyers additional time to secure financing. When there was no progress, the buyers opted to forfeit the deal.
The seller relisted the properties for sale and received no offers. As a result, he brought an action against the buyers claiming $500,000 for breach of contract and a forfeiture of the deposit. He then moved for partial summary judgment on the issue of breach of contract.
Motions Judge Grants Partial Summary Judgment
The motions judge agreed with the seller that there was no genuine issue for trial with respect to the breach and granted the order requested. The judge ordered that the issues of damages, as well as the forfeiture of the deposit, would proceed to trial. The judge did so despite the buyers’ argument that there was a liability issue in that the method of offering the two properties separately had contravened the Act. The buyers appealed.
ONCA Clarifies Assessment for Partial Summary Judgment
The buyers cited two errors on the part of the motions judge:
- It was inaccurate to say there was no genuine issue for trial with respect to the breach issue; and
- Bifurcating the claims was inappropriate, as it could lead to inconsistencies in finding of fact.
The buyers had little trouble getting the ONCA to agree that the motion for partial summary judgment should never have been entertained, let alone granted. The ONCA did not, however, reverse this finding due to the fact that the matter had been delayed long enough.
The buyers claim that the order could lead to inconsistent findings, since the trial judge would be bound by the breach decision yet still deciding the issue of the forfeiture of the deposit, was not successful. The ONCA found it unlikely that any inconsistent findings would be made. The motions judge had determined liability, and it would be up to the trial judge to assess the damages.
However, the ONCA did find it necessary to set out a new test in determining the appropriateness of granting a partial summary judgment.
When deciding on whether to grant the motion, a court should consider whether partial summary judgment would:
- Cause delay and/or increased expense, or
- Provide proportionate, timely and affordable justice?
To assist the court with determining the answers to these questions, the moving party must demonstrate the following:
- dividing the case into several parts would prove less expensive for the parties;
- A partial summary judgment would result in the matter getting through the court system more quickly; and,
- A partial summary judgment would not result in inconsistent findings by the multiple judges who will decide the divided case.
Using this tripartite test, the ONCA determined that the motion in the case at hand should not have been sought or granted, as the matter had faced a number of unnecessary delays as a result. However, given the delay to date, changing the finding on liability would likely only increase the delay and costs to the parties.
This decision effectively curtails the use of motions for partial summary judgment. Although they are an available option, the likelihood of satisfying the criteria necessary to grant the motion is unlikely. It would be a rare case where a partial summary judgment would contribute to a more efficient and cost-effective trial overall.
If you have a question about civil litigation, the highly skilled Toronto corporate lawyers at Milosevic Fiske LLP can help. We are exceptionally experienced with all manners of corporate litigation and commercial real estate disputes and we can provide you with advice and guidance suited to your unique situation. Call us at 416-916-1387 or contact us online to learn more about how we can help.