Keays v. Honda Canada Inc., 2007 ONCA 564

CITATION: Keays v. Honda Canada Inc., 2007 ONCA 564

DATE: 20070815

DOCKET: M35106 (C43398)

COURT OF APPEAL FOR ONTARIO

ARMSTRONG J.A. (In Chambers)

BETWEEN:

KEVIN KEAYS

Plaintiff (Respondent)

and

HONDA CANADA INC. operating as HONDA OF CANADA MFG

Defendant (Appellant)

Counsel:

Earl A. Cherniak, Q.C. and Jasmine T. Akbarali for the appellant

Hugh R. Scher for the respondent

Heard: June 4, 2007

[1] The appellant, Honda Canada Inc., has been granted leave to appeal to the Supreme Court of Canada from the order of the Court of Appeal for Ontario dated September 29, 2006. The order appealed from upheld, in part, the judgment of Justice McIsaac of the Superior Court of Justice which granted damages to the respondent, Kevin Keays, related to his dismissal from his employment with Honda. Keays has been granted leave to cross-appeal.

[2] Honda moves before me as a single judge of the Court of Appeal for a stay of execution of the order of the Court of Appeal pending the decision of the Supreme Court of Canada on the appeal and cross-appeal.

[3] The motion is brought pursuant to s. 65(1)(d) of the Supreme Court Act, R.S.C. 1985, c. S-26.

Factual Background

[4] On March 17, 2005, McIsaac J. released his judgment which ordered Honda to pay to Keays:

(a) wrongful dismissal damages of $72,730;

(b) “Wallace” damages of $43,638; and

(c) punitive damages of $500,000.

[5] On February 8, 2006, McIsaac J. ordered costs to be paid by Honda to Keays in the amount of $610,000.

[6] Honda appealed the judgment of McIsaac J. and Keays cross-appealed the said judgment. On September 29, 2006, a majority of a panel of the Court of Appeal reduced the punitive damages to $100,000. The court also reduced the costs award. Otherwise the trial judgment remained intact.

[7] The appeal and cross-appeal have been tentatively scheduled to be heard on February 20, 2008.

The Motion for a Stay

[8] As indicated above, Honda moves to stay the execution of the order of the Court of Appeal pending the appeal and cross-appeal pursuant to s. 65(1)(d) of the Supreme Court Act, which provides:

On filing and serving the notice of appeal and depositing security as required by section 60, execution shall be stayed in the original cause, except that

(d) where the judgment appealed from directs the payment of money, either as a debt or for damages or costs, the execution of the judgment shall not be stayed until the appellant has given security to the satisfaction of the court appealed from, or of a judge thereof, that, if the judgment or any part thereof is affirmed, the appellant will pay the amount thereby directed to be paid, or the part thereof with respect to which the judgment is affirmed, if it is affirmed only with respect to part, and all damages awarded against the appellant on the appeal.

As a matter of practice, the Supreme Court does not require the $500 deposit contem-plated by s. 60 of the Supreme Court Act.

[9] Honda’s position is that a stay of execution should be granted because Honda can satisfy the court that if the order of the court or any part thereof is affirmed, Honda will pay the amount directed to be paid to the respondent. In support of its position, Honda has provided an undertaking to pay any amount that the Supreme Court determines is owed by Honda to the respondent. Mr. Joe Sperduti, the General Manager Administration of Honda, filed an affidavit in which, inter alia, he deposes that Honda has been producing vehicles at its plant in Alliston, Ontario since November 1986 where they currently employ 4,600 associates and produce 390,000 vehicles each year. Honda’s accumulated investment in the Alliston facility is valued at over $2.4 billion. Mr. Sperduti further deposes that Honda is well able to pay the amount of the order and costs awarded against it.

[10] Counsel for Keays neither challenges Honda’s undertaking nor the evidence which supports the viability of the undertaking. However, counsel for Keays submits that in order to obtain a stay under s. 65(1)(d) of the Supreme Court Act, the applicant must satisfy the three part test in R.J.R.-MacDonald v. Canada (A.G.), 1994 117 (SCC), [1994] 1 S.C.R. 311. According to the three part test, an applicant must establish that:

(i) there is a serious question to be tried;

(ii) irreparable harm will result if the relief is not granted; and

(iii) the balance of convenience favours the applicant.

[11] Counsel for Keays argues that, although leave to appeal has been granted, Honda’s appeal is unlikely to succeed, that Honda cannot establish irreparable harm and that the balance of convenience favours the respondent. In the latter respect, counsel for Keays has filed unchallenged affidavit evidence that he is impecunious. He lives on a disability pension of approximately $900 a month and support from his family. At the time of filing the affidavit evidence for this motion, he had approximately $17 in his bank account.

[12] Counsel for Keays submits that s. 65(1)(d) of the Supreme Court Act does not grant an unconditional or automatic stay of execution and must be read together with s. 65(4) of the Act which provides:

The Court, the court appealed from or a judge of either of those courts may modify, vary or vacate a stay of execution imposed by subsection (1).

[13] The respondent further submits that by reading s. 65(1)(d) and s. 65(4) together and applying the three part test in R.J.R.-MacDonald, the court would be justified in granting a partial stay of execution to the extent of approximately one-half the value of the appeal judgment, including one-half of the costs award.

[14] Counsel for Honda submits that s. 65(1)(d) modifies the common law test for granting a stay application where leave to appeal to the Supreme Court of Canada has been granted. In this regard, he relies upon the obiter dicta of Low J.A. of the British Columbia Court of Appeal in Lee v. Dawson, (2006), 2006 BCCA 344, 269 D.L.R. (4th) 390 (C.A.) at para. 19:

Section 65(1)(d) is a statutory variation of the common law found in R.J.R.-MacDonald and other cases.

It should be noted that the application before Low J.A. was a motion for a stay pursuant to s. 65.1(1) of the Supreme Court Act, brought prior to leave to appeal being granted by the Supreme Court. Low J.A. held that under that section of the Supreme Court Act, the R.J.R.-MacDonald three part test applies. The common law remains applicable pending determination of a leave to appeal application; once leave to appeal is granted, s. 65(1)(d) becomes the appropriate test.

[15] Counsel for Honda also relies upon this court’s judgment in Beals v. Saldanha, (2002), 2002 41738 (ON CA), 61 O.R. (3d) 641 (C.A.). In that case, the court was dealing with a motion to stay the execution of a judgment of the Court of Appeal where leave to appeal to the Supreme Court had been granted. The court found that the Lawyers’ Professional Indemnity Company’s irrevocable guarantee of $1 million was satisfactory security for the purpose of s. 65(1)(d) of the Supreme Court Act. The court granted the stay without considering the R.J.R.-MacDonald factors such as hardship or balance of convenience.

[16] Counsel for Honda submits that s. 65(4) of the Supreme Court Act has no application at this stage. It is a saving provision to be invoked only if the circumstances under which a stay was granted should change, such as the death or insolvency of a person who may have given an undertaking to pay the damages.

Analysis

[17] In my view, the plain language of s. 65(1)(d) of the Supreme Court Act leads to no other conclusion than that an applicant for a stay of execution of a judgment in which leave to appeal has been granted and a notice of appeal has been filed and served, is entitled to a stay if he or she gives security to the satisfaction of a judge of the court appealed from. It is unnecessary to meet the requirements of the R.J.R.-MacDonald three part test. In this case, I am satisfied that the undertaking given by Honda satisfies the requirements of s. 65(1)(d). Honda is a company of considerable substance with assets that can easily satisfy any judgment in favour of Keays.

[18] Having found that Honda has satisfied the requirements for a stay under s. 65(1)(d) of the Supreme Court Act, I ask myself the question: am I entitled to modify, vary or vacate the stay of execution under s. 65(4)? A narrow reading of s. 65(1)(d) and s. 65(4) would suggest that the two sections taken together limit the court’s jurisdiction to modify, vary or vacate a stay only to a change of circumstances under which the stay was granted. However, I am persuaded that the language of s. 65(4) is sufficiently broad to permit me to vary the stay in appropriate circumstances.

[19] In deciding whether I should vary the stay, I would apply the test which this court has used under rule 63.01(5) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides:

A judge of the court to which the appeal is taken may order, on such terms as are just, that the stay provided by subrule (1), (3) or (4) does not apply.

Although the language of rule 63.01(5) is different than the language of s. 65(4) of the Supreme Court Act and although rule 63.01(5) relates to automatic stays, I think the basis upon which this court has lifted a stay under that rule can usefully be applied under s. 65(4) of the Supreme Court Act.

[20] The test for lifting a stay used by this court involves the balancing of three principal factors:

(i) the financial hardship to the respondent if the stay is not lifted;

(ii) the ability of the respondent to repay or provide security for the amount paid; and

(iii) the merits of the appeal.

See Siwick v. Dagmar Resort Ltd. (1996), 1996 407 (ON CA), 95 O.A.C. 188 (C.A.).

[21] In respect of the first factor, I am satisfied that the respondent has made out a significant case for financial hardship should the stay not be lifted.

[22] In respect of the second factor, it appears very unlikely that Keays would be able to repay or provide security for any amount paid to him.

[23] In respect of the third factor, the merits of the appeal, I was not provided with a list of the grounds of appeal. However, I was advised that in Honda’s application for leave to appeal to the Supreme Court, no attack was made on the quantum of wrongful dismissal damages. As to the issue of liability for wrongful dismissal, this finding is based on findings of fact made by the trial judge which are subject to appellate review on the basis of palpable and overriding error – a very difficult standard to meet. The Court of Appeal has already found that the evidence at trial supported the finding of wrongful dismissal.

[24] Honda also raises an issue of reasonable apprehension of bias by the trial judge and complains, inter alia, about independent research the trial judge carried out on the internet and other issues related to the conduct of the trial. In respect of these issues, the best that Honda could hope for is a new trial.

[25] In balancing the three factors and also taking into account that the short term needs of Keays are relatively modest, I would lift the stay granted under s. 65(1)(d) of the Act to the extent necessary to meet those needs pending the appeal.

[26] I am not disposed to lift the stay in respect of the punitive damages which are not compensatory. I also would not lift the stay in respect of costs. It was argued before me that counsel for Keays were at some significant disadvantage because they are not receiving funds to cover fees and disbursements from their client as the litigation progresses. I am not persuaded by this argument. No specific examples were given to support their position. Also, I was advised that counsel were taking this matter on a contingency fee retainer. They have already been granted a premium on their costs by the Court of Appeal. If they ultimately succeed in the Supreme Court of Canada, the compensation to counsel for Keays will be substantial.

Disposition

[27] In the result, a stay is granted pursuant to s. 65(1)(d) of the Supreme Court Act. However, I would lift the stay to the extent of $60,000. This will give Keays $5,000 a month for twelve months (more than five times what he presently receives by way of disability pension), which should alleviate his financial hardship for the period of time leading up to the appeal and for a reasonable period of time after the appeal is argued and the decision is under reserve.

Costs of the Motion

[28] In view of the fact that counsel for Keays was requesting an order that Honda pay his client $441,300 (an unrealistic sum), I think it can fairly be said that substantial success was achieved by counsel for Honda. Counsel for Honda does not seek costs and there shall be no order as to costs.

“Robert P. Armstrong J.A.”