CITATION: Donald William Hancock v. Michael Hancock, 2014 ONSC 6702
DIVISIONAL COURT FILE NO.: 499/14
DATE: 2014-11-21
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Donald William Hancock, Respondent/Plaintiff
AND:
Michael Hancock and Janine Hancock, Applicants/Defendants
AND RE: Michael Hancock and Janine Hancock, Applicants/Plaintiffs by Counterclaim
AND:
Donald William Hancock, Daphne Ames and Stephen Donald Hancock, Respondents/Defendants by Counterclaim
BEFORE: Morawetz, RSJ
COUNSEL: Ira Book, for the Applicants/Defendants Michael Hancock and Janine Hancock
Ross Morrison, for the Respondent/Plaintiff Donald Hancock
HEARD: November 18, 2014
ENDORSEMENT
[1] This is a motion brought by Mr. Michael Hancock and Ms. Janine Hancock, the applicants/defendants, pursuant to Rule 62.02(4)(b) of the Rules of Civil Procedure for leave to appeal from the Order of the Honourable Justice G. Mew, dated September 26, 2014 in which Mew J. dismissed the defendants’ motion for summary judgment with costs.
[2] The applicants also seek an order granting an extension of time to serve and file their motion for leave, if necessary, as well as an order staying the costs order of Mew J. pending a decision of the appellate court. The applicants submit that their motion for leave ought to be granted on the basis that there is good reason to doubt the correctness of the Order in question and the proposed appeal involves matters of such importance that leave should be granted.
[3] The applicants argue that the motion judge:
(a) did not use or apply the tools made available to him by the Supreme Court of Canada in the recent decision of Hryniak v. Mauldin, 2014 SCC 7, 2014 S.C.C. 7 which, they submit, if properly applied, would have allowed him to determine the issues in this matter;
(b) did not provide adequate and reviewable reasons for his decision. Specifically, the applicants submit that Mew J. did not compare, analyze or discredit any of the evidence presented by the defendants or the plaintiff and gave no reasons why he chose one version of the evidence over another;
(c) erred in concluding that based on the motion records filed by the litigants, that he could not confidently determine the issues in dispute.
[4] The applicants further submit that a review of the record confirms that there is no confused or contradictory evidence regarding the key issues in this matter and that the motion judge should have been able to answer the following questions:
a. did the applicants (defendants) successfully rebut the presumption of undue influence imposed on them by law with respect to the two disputed transactions, namely: (i) their father’s (Mr. Donald Hancock) transfer of the investment portfolio held by Scotia Asset Management LP to them on March 15, 2012; and (ii) their father’s sale of his house municipally known as 2100 Lorelei Road, Mississauga, to them on June 7, 2012.
b. did the applicants prove their counterclaim on a balance of probabilities.
[5] For the following reasons, I am unable to accept the submissions of the applicants.
Issue #1: Is there a good reason to doubt the correctness of the decision of the motion judge, dated September 26, 2014?
[6] The test for granting leave to the Divisional Court from an interlocutory order of the Superior Court of Justice is set out in Rule 62.02(4) of the Rules. Leave to appeal shall not be granted unless,
a. there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or
b. there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.
[7] In this case, the applicants are proceeding solely under Rule 62.02(4)(b).
[8] The threshold to be met for the first branch of Rule 62.02(4)(b) is whether there is good reason to doubt whether the impugned order is correct or is it at least open to serious debate, such that it warrants the attention of the appellate court. It is not necessary to conclude that the order is wrong or probably wrong. As further guidance with respect to this part of the test, it is the result of the exercise of the judge’s discretion that must be correct, not the reasoning process used in coming to the decision (see Nielsen v. Darcis, 2011 ONSC 967 and Vine Hotels Inc. v. Frumcor Investments Ltd., [2003] O.J. No. 4768).
[9] In this case, the applicants submit that there are good reasons to doubt the correctness of the decision of the motion judge on both grounds as:
a. the motion judge did not provide adequate reviewable reasons, which it is submitted would constitute an error of law, the standard of review being one of correctness;
b. the motion judge did not apply the investigative tools available to him to arrive at a just decision as mandated by the Supreme Court of Canada in Hryniak, which constitutes a palpable and overriding error.
[10] Counsel to the applicants further submits that in order for a reviewing court to consider the motion judge’s reasons and to decide whether or not that decision is correct, the court of first instance is obliged to provide the parties, especially the losing party, with adequate and reviewable reasons. Counsel to the applicants referenced Vines, supra, where Epstein J. (as she then was) stated at paragraph 7:
However, the reader should not be left in a position of having to speculate about whether proper principles were applied, particularly in a motion for summary judgment where jurisprudence has developed specific principles that must be applied to the test under that rule. Where a judge acts without reasons as in this case, with reasons that do not disclose the analysis, the reader cannot know whether these principles were applied and were applied properly. In such a case, there must necessarily be doubt about the correctness of the decision and therefore the first part of the test under Rule 62.02(4)(b) has been made out.
[11] In my view, the reasons of the motion judge meet or exceed the standard of adequacy of reasons in disposing of the motion. The reasons set out the analysis of the motion judge in sufficient detail for the reader to determine whether the proper legal principles have been applied. The applicable references are set out in the respondent’s factum as follows:
a. an accurate summary of the facts, including the parties and the claims (paras. 1 – 8 of the Reasons);
b. the parties’ positions, including a review of the relevant evidence (paras. 8 – 16);
c. a review of the law applicable to motions for summary judgment (paras. 9, 10, 17, 18, 29, 39 and 44);
d. a detailed analysis of the genuine issues requiring a trial for the main claim (paras. 17 – 24) and the counterclaim (paras. 25 – 28); and
e. a detailed analysis of whether the need for a trial can be avoided using the Rule 20.04 powers and fact finding tools (paras. 29 – 48).
[12] The motion judge adopted a two-step analysis. Step one: Are there genuine issues requiring a trial; and step two: Can the need for a trial be avoided using Rule 20.04 powers?
[13] With respect to the analysis on step one, the motion judge said the following:
[18] To reach a fair, just determination, the summary judgment process must, as already noted give “the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.” (Hryniak, at para. 50).
[19] I am not confident that the present record enables me to determine any of the issues in dispute between the parties.
[20] For a start, there are serious issues of credibility to be resolved.
[21] The plaintiff will no doubt have to explain to a court why Mr. MacSkimming concluded that there was no undue influence when the plaintiff says that in fact there was.
[22] I do not regard the fact that a claim for professional negligence against Mr. MacSkimming was dropped necessarily means that his assessment was correct. It merely implies that, in undertaking his responsibilities as the provider of independent legal advice to Donald Hancock, he did not fall below the standard of care expected of him. He could still have been wrong in his assessment despite having exercised due care.
[23] The defendants will have to explain how the transfer to them of a substantial investment portfolio, without consideration, against the advice given by Mr. Blom and to apparent exclusion of their brother Stephen’s interests, was designed only to help their father protect his assets from creditors, and not to serve their personal interest.
[24] In particular, the words and actions of Michael Hancock will have to be considered, and an assessment likely made as to whether they disclose what Mr. Book described in argument as “frustration” or, as suggested by Mr. Morrison, part of a campaign of elder abuse.
[14] As acknowledged by the appellant at paragraph 4 of his factum, a key issue in this matter concerns whether the applicants (defendants) successfully rebutted the presumption of undue influence imposed on them by law with respect to the two disputed transactions.
[15] In my view, it is clear that the motion judge directed his mind to this issue. He specifically referenced the two transactions in question (the transfer of the investment portfolio and the sale of the house). He came to the conclusion that there were serious issues of credibility to be resolved which resulted in a further conclusion that he was not confident that the present record enabled him to determine any of the issues in dispute between the parties.
[16] The motion judge also made specific reference to the counterclaim. At paragraphs 27 and 28 of his reasons, the motion judge stated:
[27] … Aside from an inadequate record to establish liability, insufficient evidence was presented that would have enabled me to assess a fair amount for damages.
[28] By reason of the foregoing, I also decline to grant the moving parties the summary judgment they seek on their counterclaim because I cannot comfortably conclude that there is no triable issue regarding the liability of the responding parties based on the record before me.
[17] In addition to the comments of the motion judge referenced above (paragraphs 19 – 24), at paragraph 47 of the reasons, the motion judge stated, “For a judge to assess what is really going on in this case, he or she will have to not only listen to and read the evidence, but will also want to observe the demeanour of the witnesses in respect of the full range of the issues between the parties and to consider the human dynamics involved”.
[18] A process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. I accept the submission of counsel for the respondents to the effect that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.
[19] Having concluded that there were genuine issues for trial, the motion judge went on to consider, if the fact finding tools provided by Rule 20.04(2.1) and (2.2) were to be deployed, whether the need for a trial could be avoided. Continuing at paragraph 29, the motion judge provided a detailed analysis of the factors that he considered and concluded at paragraph 49 that:
[49] Because of the nature and quality of the substantial evidentiary record in this case, and the credibility issues that are patent, I have concluded that the use of the fact finding powers would not allow the court to reach a fair and just adjudication on the merits.
[20] In my view, the motion judge identified genuine issues for trial in both the main action and the counterclaim and also considered and concluded that the use of the fact finding powers would not allow the court to reach a fair and just adjudication on the merits. I am satisfied that there is no good reason to doubt the correctness of the Order. This finding is sufficient to dispose of the motion.
Issue #2: Does the proposed approval involve matters of such importance that leave to appeal should be granted?
[21] The authorities are clear that matters of general importance involve an issue that transcends the particular dispute between the parties and relates to matters of public importance or matters relevant to the development of law and the administration of justice (see: Greslik v. Ontario Legal Aid Plan (1988), 1988 4842 (ON SCDC), 65 O.R. (2d) 110).
[22] The applicants rely on two propositions to satisfy this part of the test, namely:
a. That the motion judge, by failing or refusing to properly apply the new test for summary judgment motions, has set the bar too low, which other courts may follow and this should be addressed by an appellate court; and
b. When a judge acts without reasons or reasons that do not disclose his analysis, the reader cannot know what principles were applied or whether they were applied properly, which brings the case within the second branch of the test.
[23] With respect to the first proposition, it is the Supreme Court of Canada that sets the bar. This court follows the directions provided by the Supreme Court of Canada and, in my view, the motion judge has properly applied the test for summary judgment motions.
[24] With respect to the second proposition, I am satisfied that the motion judge has provided adequate reasons that disclose his analysis and the principles that he applied.
[25] Consequently, both of the applicants’ propositions fail.
Disposition
[26] The motion for leave to appeal is accordingly dismissed with costs, fixed in the agreed upon amount of $8,000, inclusive of disbursements and applicable taxes, payable by the applicants/defendants within 30 days. It is not necessary to consider the motion to grant the applicants/defendants an extension of time.
[27] It is my understanding that the motion judge has scheduled a case conference with respect to this matter for December 3, 2014. The parties are strongly encouraged to have advance consultations on how this matter can be expedited for trial.
Regional Senior Justice G. B. Morawetz
Date: November 21, 2014