DIVISIONAL COURT FILE NO.: 228/08
DATE: 20080724
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
ANDREW KOVACH and SARA KOVACH, minors by their Litigation Guardian, WAYNE KOVACH and WAYNE KOVACH, personally
Plaintiffs
- and -
PAULINE M. KOVACH, MACKENZIE E. LINN and BARRY LIN
Defendants
C.D. von Buchwald, for the Plaintiffs
A. Rachlin, for the Defendants
HEARD: July 16, 2008
LAX J.
[1] The plaintiffs seek an order granting leave to appeal to the Divisional Court from the decision of Chapnik J. setting aside the order of Master Egan. The Master refused the defendants’ motion to bifurcate a jury trial relying on appellate authority that there is no jurisdiction to do so. On appeal to this Court, Chapnik J. found that the Master erred in her interpretation of judicial authority. With the consent of the parties, she considered whether this was a case for bifurcation and concluded that it was. She severed the trial of liability issues from those involving damages and referred the action back to Master Egan to be case managed.
[2] The issues raised by this motion for leave to appeal are: (1) whether the power to bifurcate a trial may be exercised when there is a valid jury notice; and, (2) if so, did the Motion Judge apply the correct test in ordering severance? I have concluded that leave to appeal should be granted on both issues for the reasons that follow.
Issue I: Is there jurisdiction to bifurcate a jury trial?
[3] The Master relied on four appellate decisions to support her order that there is no jurisdiction to bifurcate a jury trial. Chapnik J. analysed these decisions and determined that they did not stand for this principle. She concluded that the court derives its jurisdiction to bifurcate from its inherent jurisdiction to control its own processes and “that there may well be situations where bifurcation of a jury trial will be appropriate”.
[4] A discretionary order of a Master may be set aside on appeal if the order is “clearly wrong”. If the Master’s discretion was based upon a wrong or inapplicable principle of law, Chapnik J. was clearly right to set her order aside. On the other hand, if these decisions establish the principle on which the Master relied, there would be good reason to doubt the correctness of Chapnik J.’s decision on a matter of importance satisfying the conjunctive test in subrule 62.02(4)(b). The decision would also be in conflict with binding authority on a matter of principle making it desirable that leave be granted under subrule 62.02(4)(a).
[5] The four decisions in question are: Shepley v. McNeil (1979), 23 O.R. (2d) 354 (Div. Ct); Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills (1986), 55 O.R. (2d) 56 (C.A.); Duffy et al. v. Gillespie (1997), 36 O.R. (3d) 443 (Div. Ct.) and Carreiro (Litigation Guardian of) v. Flynn, [2005] O.J. No. 877 (Div. Ct.).
[6] Carreiro is a recent decision of a panel of the Divisional Court affirming a decision of Sutherland J. in which he held that (1) he was bound by authorities from the Divisional Court and the Court of Appeal, the combined effect of which was to make bifurcation unavailable for jury trials; and (2) even if he had discretion to exercise, this was not an appropriate case to split the issues of liability and damages: Carreiro at para. 4.
[7] Subsequent to the decision in Carreiro, motion judges have determined that they have the power to bifurcate a jury trial, although no judge has ordered bifurcation until this case: Agshani v. Briglio, [2006] O.J. No. 2071 (S.C.J.); Ahmed v. Azzizzada, [2006] O.J. No. 4995 (S.C.J.); Schott v. Thomas, [2007] O.J. No. 1541 (S.C.J.). In these cases as well as in the reasons of Chapnik J., the development of the ‘no bifurcation rule’ is traced from Shepley in 1979 to Carreiro in 2005. In reaching the conclusion that the origin of the rule is questionable, Chapnik J. and others, relied on distinguishing features in the earlier cases and on the following bolded statement from Carreiro, where Molloy J. speaking for the Court said:
12 It may be the case that there are some trials that might appropriately be split, even where the result would be to have two different juries trying separate issues in the case. This is not such a case, for the reasons already expressed by Sutherland J. It is not advisable to develop “new law” in a factual vacuum. If the current state of the law as stated in Duffy v. Gillespie needs to evolve to meet the realities of modern trial length and complexities, it should only be in the context of a factual situation which illustrates the need for such a change. I do not see that need in this case. (emphasis added)
[8] The most compelling analysis of the earlier appellate authorities is found in the decision of Sutherland J. As his decision is the springboard for the decision of this Court in Carreiro and incorporates relevant passages from Shepley, Duffy and Elcano, I have quoted liberally from his reasons at [2004] O.J. No. 3117 where he said:
15 In Duffy v. Gillespie, supra, where a motions judge had severed the liability issues from the damages issues, mainly because of access to justice issues arising from the impecuniosity of the plaintiff who sought the severance, the order was set aside on appeal to the Divisional Court. The reasons of the Divisional Court include the following two paragraphs:
In the first place, it has been held both at the Court of Appeal and at the Divisional Court level in this province that the power to split a trial may not be exercised where one of the parties has served a jury notice and it is still outstanding: see Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills (1986), 55 O.R. (2d) 56 at p.59, 9 C.P.C. (2d) 260 at p.263 (C.A.); Shepley v. Libby McNeil (1979), 23 O.R. (2d) 354 at p.355, 9 C.P.C. 201 (Div.Ct.). A valid jury notice remains outstanding in this case.
Secondly, we are all of the view, respectfully, that the learned motions judge erred in principle in the exercise of his discretion in focusing almost entirely upon the inability of the plaintiff - as a result of his impecuniosity - to fund the preparation of his case properly, as a factor in determining whether or not to sever the issues of liability and damages for purposes of trial.
The statement in the first of those paragraphs is binding upon me - and really determines the outcome of this motion. However, in view of the considerations referred to in the next paragraph I believe it to be useful, for future reference, to consider the decisions referred to in that first paragraph.
16 It is well known that in the Toronto Region there is a significant backlog of untried cases on the Long Trial List. The cases on that list are, on average, taking much longer to try. Many of those cases are jury cases involving personal injuries. Usually the damages issues are what make those trials long trials. Given the chronic problems with the backlog of long trials it may be reasonably said that the balance of relevant factors bearing on the issue of bifurcation or severance is different from the balance in 1986 when Elcano, supra, was decided. The pressures of long trials on the judicial system are such that it may well be desirable that the rule, if it is a rule, that there cannot be bifurcation where there is a jury notice outstanding, be reconsidered. The right to trial by jury can be protected by providing that in the event of bifurcation each of the trials would be a trial by a separate jury. On the general issue, there is quoted at para. 14 of the reasons in Bourne v. Saunby, supra, the following statement made by Mr. Justice Richard E. Holland during an interview for an article in the Advocates' Society Journal, October 1992, issue:
It also seemed to me that in these really serious cases, particularly medical malpractice cases, it would make considerable sense to try the liability issues separately from the damages issue. If you succeed on the liability, then go ahead with damages. If you do not, then forget it. But to extend the trial for a number of weeks by calling economists and actuaries, rehabilitation experts, and so on when you are going to fail is just an unnecessary expense. There should be split trials in many of these cases.
As is well known, R.E. Holland J. had by then spent years supervising Toronto civil trial lists. Against that background I will briefly consider the cases cited in Duffy v. Gillespie, supra, as authority for the proposition that there should be no severance of trials as to liability from trials as to the related damages where there is a jury notice outstanding.
17 In Shepley v. Libby McNeil, supra, the Divisional Court was dealing with an appeal, with leave, from the order of a motions judge, [1978] O.J. No. 2305, who held that he had inherent jurisdiction to order the trial of an issue as to whether or not the plaintiff's action was statute barred by reason of the expiry of a limitation period. There was a jury notice outstanding. It is clear from the brief reasons of Henry J. on behalf of the court that one effect of the order of the motions judge in that case would be deny the plaintiff his right to a jury trial with respect to the limitations issues. The focus of the reasons was on the right of the plaintiff to have all of the issues of fact, including the questions of mixed fact and law, relating to the limitation period issue tried by a jury. The decision simply did not deal with what the situation would have been if the motions judge had, in effect, ordered a severance or bifurcation by ordering that the limitations issues should be tried first, by jury, and that if the plaintiff was finally successful on the limitations issues, the remainder of the issues were to go to trial before another jury.
18 The leading case of Elcano, supra, cited in Duffy v. Gillespie, supra, as authority for the proposition that the power to split a trial may not be exercised where a party has served a jury notice and it is still outstanding, contains only one sentence in that regard, as follows:
It has been held that the power may not be exercised where one of the parties has served a jury notice: Shepley v. Libby McNeil & Libby of Canada Ltd.; Clifford & McKenzie et al. Third Parties (1979), 23 O.R. (2d) 354, 9 C.P.C. 201.
That is hardly a ringing endorsement of Shepley, and it makes no mention of the fact that the bifurcation in Shepley (if it was that) had the effect of depriving a party of a jury trial of the limitations issues. Arguably, Shepley, in effect, left open the possibility of there being a bifurcation order that would preserve the right to have all the fact issues tried by jury, by having a different jury in each part of the case. That would mean that the above-quote statement from Elcano was insufficiently qualified and that Shepley, and therefore Elcano, are not such clear authorities on the bifurcation issues as they were taken to be in the first ground in the above-quoted excerpt from Duffy v. Gillespie. Be that as it may be, I regard myself as bound in this regard by the decision in Duffy v. Gillespie. Any opening that there may be for a refinement of what was held "in the first place" in Duffy v. Gillespie, is, at best, an opening for the Divisional Court or the Court of Appeal. (Emphasis added)
[9] Thus, Sutherland J. extended an invitation to an appellate court to revisit what was held “in the first place” in Duffy v. Gillespie. For convenience, I set this holding out again below:
In the first place, it has been held both at the Court of Appeal and at the Divisional Court level in this province that the power to split a trial may not be exercised where one of the parties has served a jury notice and it is still outstanding: see Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills (1986), 55 O.R. (2d) 56 at p.59, 9 C.P.C. (2d) 260 at p.263 (C.A.); Shepley v. Libby McNeil (1979), 23 O.R. (2d) 354 at p.355, 9 C.P.C. 201 (Div.Ct.). A valid jury notice remains outstanding in this case.
[10] To this point, I think there can be little doubt that there is binding appellate authority that there is no jurisdiction to bifurcate a jury trial. How then did the Divisional Court respond to the invitation?
[11] As I have already noted, the Court first set out at para. 4, the two issues that Sutherland J. determined, namely (1) the binding effect of the authorities that made bifurcation unavailable, and (2) that if discretion existed, this was not an appropriate case to bifurcate. The Court addressed the second issue first at paragraphs 5 to 8 and concluded that there was no basis to interfere with the discretion exercised by Sutherland J. to refuse bifurcation. It then turned to the first issue and said this:
10 With respect to the first issue, counsel for the defendants urges this Court to revisit the issue of bifurcation of trials in jury cases and, in effect, to develop new law removing the absolute prohibition of such an order in cases to be tried by a jury. I am not persuaded that this is an appropriate case in which to do so. I note the comments of Sutherland J. (at paragraphs 10 and 15-18) as to the way this principle has developed in the case law. The Court of Appeal decision in Elcano, supra, is recognized as the leading authority on the court’s inherent jurisdiction to split a trial. The case before the Court in Elcano was not a jury trial. However, Morden J.A. in the course of summarizing the law in this area, referred to a Divisional Court decision in Shepley v. Libby McNeil & Libby of Canada Ltd. (1979), 23 O.R. (2d) 354, 9 C.P.C. as having held that the power to split a trial “may not be exercised where one of the parties has served a jury notice”. Thus, the Court of Appeal pronouncement on this point was not a clear indication that the reasoning of the Divisional Court was adopted and in any event, was obiter. Further, as pointed out by Sutherland J., reasonable minds may differ as to whether the Divisional Court in Shepley went so far as to say that a trial could never be split if it was to be tried by a jury.
11 If those were the only decisions on this point, it might be said that there was no binding precedent on the issue. However, the subsequent decision of the Divisional Court in Duffy v. Gillespie (1997), 36 O.R. (3d) 443 is clearer on the point. The Court in that case specifically rejected the possibility of a split trial based on the fact that a jury notice had been served. The Court of Appeal decision in Elcano and the earlier Divisional Court decision in Shepley are cited as authority for that proposition. Sutherland J. quite correctly held he was bound to follow Duffy v. Gillespie. (emphasis added)
[12] Notwithstanding the inconclusive and obiter statement of this Court in Carreiro in the paragraph that follows on which Chapnik J. relied, the Divisional Court has clearly said that Duffy v. Gillespie was binding on Sutherland J. If this decision was binding on Sutherland J., it was also binding on the Master and it cannot be said that her decision was “clearly wrong”. There is therefore good reason to doubt the correctness of the decision of Chapnik J. in setting it aside.
[13] On my reading of Carreiro, the Divisional Court has said that under the current state of the law, jury trials may not be bifurcated. It has also said that the bifurcation of jury trials represents the development of “new law”: Carreiro at para. 12. There are now several decisions of lower courts, including the case at bar that have adopted the “new law”, but no appellate court has done so and there are appellate authorities that have not been overruled and stand for the principle that a jury trial may not be bifurcated. Bifurcation of jury trials has broad significance affecting the rights of litigants to have all issues heard in one proceeding. This is an important issue that again warrants the attention of the Divisional Court.
Issue II: If there is power to bifurcate a jury trial, did the Motion Judge apply the correct test?
[14] I turn again to the reasoning of Sutherland J. in Carreiro, which was specifically approved by this Court. The underlying facts are very similar to the present case. Both involve a seriously injured minor plaintiff. In both, experienced plaintiffs’ counsel had filed a jury notice, “asserting the basic right of the plaintiffs to have all the issues dealt with in a single trial”. (at para. 22). Sutherland J. regarded this as a significant factor. He also said in the same paragraph:
… While generally speaking I believe that in these bifurcation matters more emphasis should be placed on the saving of judicial resources, I would not want the court to solve some of its scheduling, workload and backlog problems on the backs of seriously injured minor plaintiffs. In such cases the bar, which is always high, is in my view even higher.”
[15] The bar that Sutherland J. refers to derives from Elcano where the Court of Appeal held that the power to bifurcate is a “narrowly circumscribed power”, to be exercised only in the “clearest cases” and that “a court should be slow to exercise the power if one of the parties objects to its exercise”. (at para. 11). The cases speak of a “heavy burden” or “high threshold”, which Sutherland J. regarded as even higher where the plaintiff is a seriously injured minor. The onus is on the party seeking bifurcation to demonstrate an exceptional case.
[16] Although Chapnik J. acknowledges that severance orders are rare and are only to be ordered in exceptional cases, she appears to rely on Rule 77.02 as the dominant principle to guide the exercise of discretion. She described the onus as requiring the party seeking the order to demonstrate, “a clear benefit in terms of time and expense”. She severed liability and damages on the basis that there would be considerable savings in litigation costs and court time and severance would minimize delays without causing real prejudice to the plaintiffs.
[17] There are a number of factors that have been identified as relevant factors to be taken into account in deciding whether a case warrants a departure from the general rule: See, Bourne v. Saunby (1993), 23 C.P.C. (3d) 333 at 334 (Gen. Div.), Carreiro, per Sutherland J. at paras. 12-14. Carreiro (Div. Ct.) at para. 5. The application of these factors in analogous cases has led other courts to refuse bifurcation: Carreiro; Ahmed, Aghsani. A relaxation of the criteria entitling a party to a bifurcated trial over the objections of the other party is contrary to existing precedent and not desirable from a fairness or policy standpoint: Carreiro (Div. Ct.) at para. 7.
[18] Bifurcation is a departure from the normal rule that a litigant is entitled to have all of the claims decided in one trial. The factors that are relied on in this decision to support bifurcation are common to many personal injury actions and gives rise to the perception that bifurcation will be available in personal injury actions where the moving party can demonstrate that there is a clear savings in time and expense. The fact that weeks of evidence on damages might be avoided if the plaintiff fails to establish liability is not an unusual occurrence and has been rejected in other cases: Aghsani at para. 33; Ahmed at para. 25.
[19] While a discretionary order of a Motion Judge is entitled to considerable deference, the Motion Judge made no finding that this was an exceptional case and appears to adopt the principle derived from Rule 77.02 that bifurcation is appropriate in order to bring the proceeding expeditiously to a just determination. She also appears to adopt a different and lower onus instead of the very high burden that the law requires for a bifurcation order.
[20] The principles that guide the courts in granting or refusing bifurcation are of general importance to the administration of justice. There is good reason to doubt whether these principles were correctly enunciated and applied in this case to support an order for bifurcation. I therefore also grant leave to appeal on this issue. Costs are reserved to the panel.
LAX J.
Released: July 24, 2008
DIVISIONAL COURT FILE NO.: 228/08
DATE: 20080724
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
ANDREW KOVACH and SARA KOVACH, minors by their Litigation Guardian, WAYNE KOVACH and WAYNE KOVACH, personally
Plaintiffs
- and -
PAULINE M. KOVACH, MACKENZIE E. LINN and BARRY LIN
Defendants
REASONS FOR JUDGMENT
LAX J.
Released: July 24, 2008