Richter & Partners Inc. v. Ernst & Young, [1997] 2 S.C.R. 5

Richter & Partners Inc., Trustee of the Estate of Confederation Treasury Services Limited, a bankrupt Applicant

v.

Ernst & Young Respondent

and

George R. Albino, William H. Alexander, John D. Allan, William G. Benton, Bennett A. Brown, Patrick D. Burns, Paul G. S. Cantor, William D. Douglas, Mark E. Edwards, Kenneth E. Field, Nan-B de Gaspé Beaubien, Irving R. Gerstein, Anthony F. Griffiths, Sir Anthony S. Jolliffe, George E. Mara, Robert W. Martin, David R. McCamus, Daryl E. McLean, André Monast, Michael D. Regester, John A. Rhind, Michael Rosenfelder, Borden D. Rosiak, Michael J. White and Adam H. Zimmerman Respondents

and

The Commissioner of Insurance of the State of Michigan in his capacity as Rehabilitator of the assets of Confederation Life Insurance Company in the United States Respondent

and

The Superintendent of Financial Institutions (Canada) in his capacity as Liquidator of Confederation Life Insurance Company Respondent

Indexed as: Richter & Partners Inc. v. Ernst & Young

File No.: 25917.

1997: May 7.

Present: Sopinka J.

application for a stay of proceedings

Appeal -- Supreme Court of Canada -- Stay pending leave to appeal -- Application for stay of proceedings with respect to Court of Appeal's order from which leave to appeal is being sought --Rationale of recent amendment to s. 65.1(1) of Supreme Court Act being to enable parties to apply to judge of court appealed from -- Party applying first to Supreme Court judge must provide valid reason why rationale for s. 65.1 not applicable to application -- Application for stay made first to Supreme Court judge dismissed without prejudice to its being renewed before Court of Appeal judge -- Supreme Court Act, R.S.C., 1985, c. S-26, s. 65(1).

Cases Cited

Applied: Esmail v. Petro-Canada, 1996 CanLII 140 (SCC), [1997] 2 S.C.R. 3.

Statutes and Regulations Cited

Rules of the Supreme Court of Canada, SOR/83-74, rr. 22(2) [repl. SOR/95-573, s. 2], 27.

Supreme Court Act, R.S.C., 1985, c. S-26, s. 65(1) [en. 1990, c. 8, s. 40; repl. 1994, c. 44, s. 101].

APPLICATIONS for a stay of proceedings and for an expedited hearing of the application for leave to appeal. Application for a stay dismissed and application for an expedited hearing granted.

Ronald N. Robertson, Q.C., Michael J. MacNaughton and Edmond F. B. Lamek, for the applicant.

Alan J. Lenczner, Q.C., and Peter H. Griffin, for the respondent Ernst & Young.

Allan Sternberg, for the respondents Albino et al.

The following is the order delivered by

[1] Sopinka J. -- This is an application to stay the order of the Court of Appeal for Ontario dated January 14, 1997. The order grants leave to the respondents Ernst & Young and George R. Albino et al. (appellants in the Court of Appeal) to assert a claim against the applicant Trustee in proceedings in Michigan brought by the respondent the Commissioner of Insurance of the State of Michigan. The applicant has served and filed an application for leave to appeal from the order referred to as well as from another order made the same day which allowed an appeal from an order disallowing proof of claim of the respondent Ernst & Young in the bankruptcy proceedings.

[2] The applicant's solicitor has requested an oral hearing in a letter to the Registrar but nothing in the material filed demonstrates why the usual practice in Rule 22(2) should not apply. The application for a stay is made pursuant to s. 65.1 of the Supreme Court Act, R.S.C., 1985, c. S-26 (as amended by S.C. 1994, c. 44, s. 101), and Rule 27. By virtue of this recent amendment to the Act the court appealed from or a judge thereof is given concurrent jurisdiction. The rationale for this amendment was stated in Esmail v. Petro-Canada, S.C.C., No. 25095, released February 8, 1996, as follows:

The purpose of the amendment was to enable litigants to apply to the court that had recently dealt with the matter. Often the court appealed from is more conveniently located so as to permit the matter to be dealt with more expeditiously. It is only in special circumstances that successive applications to a judge of the court appealed from and a judge of this Court should be permitted.

For this reason a party applying in the first instance to a judge of this Court must provide a valid reason why the rationale for the new provision does not apply to the application.

[3] In response to a query from the Registrar as to the absence of any such reasons in the material filed, the applicant responded in writing as follows:

(i) Firstly, in our stay motion we seek, by way of ancillary relief, an order expediting the hearing of the application for leave to appeal, and if leave is granted, the appeal itself. It does not appear that the Provincial Courts of Appeal have jurisdiction under the Supreme Court Act to grant that ancillary relief, whereas the Supreme Court certainly does. Further, it would not appear to be appropriate for a Provincial Court of Appeal to deal with a Supreme Court timetable.

(ii) Secondly, in the commentary to section 65.1 of the Supreme Court Act in Supreme Court of Canada Practice 1996, B. Crane and H. Brown, Carswell, 1995, the authors question (at page 115, first full paragraph) the likelihood of Provincial Court of Appeal issuing stays of their own orders "when a significant component of the decision is the likely merit in the proposed application for leave -- a matter the appeal courts have consistently held is for the Supreme Court of Canada to decide." It would seem somewhat strange for a court from which leave to appeal is being sought to be asked to say, or say inferentially, that it thinks that there is some merit in the application for leave to appeal its decision, i.e. this is not the same as seeking a stay where there is an unquestioned right of appeal and the sole question is the effect of the granting a stay.

[4] With respect to the second point, this reasoning is at variance with the practice of this Court as set out in Esmail, supra. However, the applicant can be excused for not referring to the case since it appears not to have been reported.[^1] But I do not agree that the judges of the courts of appeal would not be objective in assessing whether an appeal raises a serious issue. There are numerous provisions which require judges to make a similar determination notwithstanding that a decision on the issue has already been made. For example, until comparatively recent times, leave to appeal to this Court was often granted by the court appealed from pursuant to s. 37 of the Supreme Court Act. That provision is still in the Act and fell into disuse because courts of appeal decided that this Court should determine its own workload and not by reason of any reluctance to reassess the merits for the purpose of identifying an issue fit to be decided by this Court.

[5] The first reason referred to might in some circumstances be sufficient although there is usually no impediment to having the two applications proceed concurrently in different fora. In view of my disposition of the application, it is unnecessary to express any final conclusion on this point. I have concluded that the balance of convenience favours dismissal of the application subject to certain conditions. First, the hearing of the application for leave is to be expedited. I would grant the extension of time as requested. Second, the application for a stay is dismissed without prejudice to it being renewed before a judge of the Court of Appeal. Third, if leave to appeal is granted,[^2] the application may be renewed before me subject to any disposition that may have been made by a judge of the Court of Appeal.

[6] In my opinion, the applicant will suffer no serious prejudice by the delay pending a decision on the application for leave. Unless the wheels of justice move much more quickly in Michigan than in Ontario, I doubt that the proceedings against the applicant will be advanced substantially pending a decision of this Court on the application for leave. In any event, if I am wrong in this respect, an application can be made to a judge of the Court of Appeal.

[7] Accordingly, the application for a stay is dismissed and the applications for an expedited hearing of the application for leave and for an extension of time with reference thereto are granted.

Application for a stay of proceedings dismissed and application for an expedited hearing of the application for leave to appeal granted.

Solicitors for the applicant: Fasken Campbell Godfrey, Toronto.

Solicitors for the respondent Ernst & Young: Lenczner Slaght Royce Smith Griffin, Toronto.

Solicitors for the respondents Albino et al.: Goodman & Carr, Toronto.

[^1]: Now reported at 1996 CanLII 140 (SCC), [1997] 2 S.C.R. 3.

[^2]: Application for leave to appeal refused May 26, 1997.