Court File and Parties
COURT FILE NO.: CV-17-11727-00CL DATE: 2022-04-21 SUPERIOR COURT OF JUSTICE – ONTARIO (COMMERCIAL LIST)
RE: SS&C TECHNOLOGIES CANADA CORP., Applicant AND: THE BANK OF NEW YORK MELLON CORPORATION and CIBC MELLON GLOBAL SECURITIES SERVICES COMPANY, Respondents
BEFORE: Koehnen J.
COUNSEL: J. Thomas Curry, Eli Mogil and Erin Chesney and Brian Kolenda for the moving party Respondents Chris G. Paliare, Ren Bucholz, Glynnis Hawe, and Catherine Fan, for the Respondents on the motion, Applicants in the proceeding.
HEARD: April 12, 2022
Endorsement
[1] This is a motion by the Respondents in this application for an order that I recuse myself from the damages trial that is scheduled to begin on May 18, 2022, and to declare a mistrial, both by reason of what the Respondents submit is a reasonable apprehension of bias. The Applicants oppose the motion and submit there are no circumstances that give rise to a reasonable apprehension of bias.
[2] For the reasons set below, I dismiss the motion.
A. Background
[3] The motion arises out of an application in respect of which the Court released reasons on April 14, 2021, indexed as 2021 ONSC 2657 (the “First Decision”).
[4] The application arises out of a data services agreement entered into between a predecessor of the Applicant, SS & C Technologies Canada Corp. (“SS & C), and “Mellon Trust” dated September 1, 1999 (the “Mellon Trust Agreement”). The Mellon Trust Agreement provided the beneficiary of the agreement with securities pricing data which the beneficiary used to provide its end customers with account statements that list the securities the account held as well as the value of those securities.
[5] The fundamental issue on the application was to determine who could use data under the Mellon Trust Agreement. The issue arose because the contracting party, Mellon Trust, was not a legal entity but was the brand name under which Mellon Financial Corporation (the predecessor of the Respondent Bank of New York Mellon Corporation [“BNY”]) operated its custodial businesses.
[6] The Applicant argued that the legal effect of those circumstances was that data provided under the Mellon Trust Agreement could be shared with no one. As a result, any data sharing amounted to a breach of contract for which the Applicant claimed damages of $889,752,087.
[7] The matter became additionally complicated because the predecessor of SS & C had also entered into a different data sharing agreement with the respondent CIBC Mellon Global Securities Services Company (“CIBC Mellon”) on April 1, 1999 (the “CIBC Mellon Agreement), four months before the Mellon Trust agreement. CIBC Mellon made payments under its agreement until January 26, 2011 when it advised that it was terminating the agreement because it no longer required the services provided pursuant to the CIBC Mellon Agreement. That was incorrect. CIBC Mellon knew that it continued to require the services but that, as of 2011, it would receive the data from BNY without paying SS & C.
[8] The Applicant alleges that BNY improperly shared the data it received from SS & C and in particular that it improperly shared data with CIBC Mellon.
[9] In the First Decision the Court found, among other things, that BNY had breached the Mellon Trust Agreement and that CIBC Mellon had breached the CIBC Mellon Agreement. The Court also directed that the issue of damages should proceed to a trial of an issue on the existing record unless both sides agreed otherwise.
[10] The Respondents then moved to adjourn the damages trial pending an appeal of the liability decision. The Court dismissed that motion in the Second Decision indexed at 2021 ONSC 4682. Following that, the Applicant sought directions about the scope of the damages trial. The directions the Applicant sought included a request to vary the First Decision. In response to the request for directions, the Court corrected what both parties agreed was an error in the First Decision and made an additional change to the First Decision to more accurately reflect the relief the Applicant had sought, and which reflected the findings of fact that the Court had made in the First Decision. The balance of the Applicant’s requests were dismissed. These determinations are found in the Third Decision indexed as 2022 ONSC 1652 and will be discussed in greater detail below.
B. The Legal Test for Reasonable Apprehension of Bias
[11] The Respondents ask that the Court both recuse itself and declare a mistrial. The Respondents made no submissions on the appropriate test for a mistrial but did not contest the Applicant’s submission that, in a non-jury civil case such as this one, the test for a mistrial is essentially the same as the test for recusal for reasonable apprehension of bias. [1] I will therefore focus on the test for reasonable apprehension of bias and apply it to both issues.
[12] The basic legal principles applicable to a recusal for reasonable apprehension of bias are not in dispute and were summarized by the Supreme Court of Canada in Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), 2015 SCC 25, [2015] 2 SCR 282, [2] as follows:
(a) Would an informed person, viewing the matter realistically and practically after having thought the matter through think that it is more likely than not that the decision-maker, whether consciously or unconsciously, would not decide fairly. [3]
(b) Impartiality refers to the absence of actual or perceived bias. [4]
(c) The essence of impartiality is the requirement that the judge approach the case with an open mind. [5]
(d) The judge’s words and conduct must demonstrate to a reasonable and informed person that the judge is open to the evidence and arguments presented. [6]
(e) The cumulative effect of the alleged improprieties is more relevant than any single transgression. [7]
(f) The impugned comments or conduct should not be looked at in isolation but must be considered in the context of the circumstances and in light of the whole proceeding. [8]
(g) The threshold for bias is high because the integrity of the administration of justice presumes fairness, impartiality and integrity in the performance of the judicial role. [9]
[13] In applying these principles, a judge is, on the one hand, best advised to remove himself or herself if there is any air of reality to the bias claim. [10] On the other hand, a judge faced with allegations of reasonable apprehension of bias must “not to yield to temptation and take the easy way out by recusal.” [11]
[14] Counsel for the Respondents underscored in oral argument that the analysis is intensely fact driven and that there is “no substitute for a detailed review of the facts.” I agree. As a result, I turn first to a detailed review of the Respondents’ factual allegations and the full context in which those allegations arise. I will return to the applicable principles after establishing the full factual context.
C. Factual Analysis
[15] The Respondents submit that in the course of the three decisions, the Court conducted itself so as to create a reasonable apprehension of bias in three ways, namely that
i. The Court appeared predisposed toward the Applicant. ii. The Court appeared to disparage the Respondents. iii. The Court appeared to insinuate itself into the appeal process.
i. Appearance of Predisposition Toward the Applicant
[16] The Respondents submit that, at various points in the proceeding, the Court conducted itself in a manner that created the appearance of favouring the Applicant’s position. The Respondents point to five instances to support this submission.
[17] First, the Respondents submit that the Court appeared to favour the Applicant by deciding that the issue of damages should proceed to a trial on its own initiative without asking the parties to make submissions on the issue. In doing so, the Respondents submit that the Court rectified a significant flaw in SS&C’s strategy, which was to bring this proceeding as an application rather than as an action.
[18] The Court directed the issue of damages to a trial because, among other things, there were contradictions in the evidence that the Court could not resolve on a paper record. [12] Rule 38.10(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 specifically provides that on hearing an application the presiding judge may “order that the whole application or any issue proceed to trial and give such directions as are just.”
[19] The Respondents submit that this case resembles what the motions judge did in Stuart Budd & Sons Limited v IFS Vehicle Distributors ULC, 2016 ONCA 6, [13] and which the Court of Appeal found demonstrated reasonable apprehension of bias. In Budd, the motions judge found that the plaintiffs had filed no admissible evidence on the motion as a result of which their position would fail. The motions judge then adjourned the motion on his own initiative to permit the plaintiffs to file seven supplementary affidavits. On the return date the judge dismissed the defendants’ motion halfway through the hearing, without hearing from them on key issues. [14] In the case at bar, the Court was not allowing the applicant to improve the record but froze the record unless both sides agreed. This was done “to prevent any unfairness arising because of efforts of one side or the other to introduce new evidence at the damages hearing.” [15]
[20] Second, the Respondents submit that the Court favoured the Applicant by offering a proposed damages model in the first decision without seeking submissions. The Respondents rely on Budd for the proposition that it is inappropriate for the Court to make a finding on its own initiative, without the benefit of submissions. [16]
[21] In Budd, however, the Court actually made a finding, on its own initiative, that the underlying motion had been an abuse of process without any submissions on the point and without reference to any legal authorities. In this case, the Court did not make any findings about damages but raised an issue on which it invited submissions at the damages trial. More specifically, in paragraph 95 of the First Decision, the Court stated:
In the course of my efforts to struggle with damages, I asked myself whether calculating damages as a per centage of assets under administration or as a per centage of fees or revenues might not be appropriate. ….. I asked myself whether applying the pre merger per centage to post merger assets, perhaps with adjustments if appropriate, would not be the more suitable way to address damages. I would ask both sides to address this issue during the damages reference.
[22] This did not amount to a finding, but rather a question about whether an alternate approach was appropriate in respect of which the Court invited submissions. After hearing submissions about the issue during the attendance that led to the Second Decision, the Court withdrew the question.
[23] The third alleged instance of predisposition towards the Applicant is that the court held that the damages trial should proceed on the record as it currently stood unless both sides agreed otherwise. BNY submits that this is contrary to the Court’s expression that damages had caused it difficulty and that it could not come to a responsible view about damages on a paper record.
[24] There is no contradiction in light of the full context of the First Decision. The Court did not find that the record before it was an inadequate one on which to base damages. Rather, it said at paragraph 92 that:
The damages issue raises contradictions in the evidence that I cannot resolve on paper. The damages issues are addressed in a series of affidavits, reports, responding affidavits, responding reports, followed by reply, sur-replies and cross examinations. References to that evidence are then found in lengthy, detailed footnotes in experts’ reports. Presenting data intensive evidence in this way does not provide an adequate way in which to absorb and truly understand it.
[25] BNY notes that the court denied its requests to submit additional evidence. This was consistent, however, with the Court’s view of the record on damages. The record was not inadequate but contained contradictions that required viva voce evidence to resolve and was too complicated to determine on paper. The Court set out its reasoning for declining new evidence in the absence of agreement by both parties as follows in paragraph 57 of the Second Decision:
The fact that I am asking that the evidence on damages be explained using viva voce evidence does not mean that the parties are entitled to file new evidence. Indeed, doing that would be profoundly unfair. It would essentially be allowing one party the opportunity to reframe its case halfway through trial. That is not consistent with natural justice or the orderly administration of proceedings.
[26] Related to this issue, BNY objects that, despite the prohibition on new evidence, “the Court went on to permit SS & C to introduce demonstrative evidence through the testimony of its experts.” [17] The Court did not permit only SS & C to introduce demonstrative evidence. The Respondents are equally entitled to do so. The Court also noted in its Second Decision that any demonstrative evidence must be restricted to reflecting the evidence that is already in the record and that no new evidence would be permitted. [18]
[27] The fourth instance of an alleged predisposition toward the Applicant is the Court’s refusal to sign an order arising from the liability hearing thereby depriving the Respondents of an appeal before the damages trial.
[28] The First Decision stated that appeal periods from the liability proceeding would be suspended to allow a single appeal to proceed on both damages and liability. In response, the Respondents moved to adjourn the damages trial until an appeal from the liability decision could be disposed of. The Court addressed that motion in the Second Decision. The Court dismissed the motion because, among other things, the parties had not agreed to bifurcate the proceedings and that, in the absence of an agreement to bifurcate, a single appeal should be taken from both liability and damages findings. [19] The Court declined to sign an order from the liability finding because it was of the view that a single order should address liability and damages and that signing the liability order may result in the Respondents having a right of appeal on the liability issue before the damages issue had been addressed. [20]
[29] The Respondents did not appeal from the Second Decision. Instead, the Respondents moved in the Court of Appeal to expedite the appeal and to be relieved of a requirement to file a signed order arising from the liability finding. Thorburn J.A. dismissed the motion holding that a single appeal would be the most effective and fair use of public and private resources. [21] The Respondents appealed the decision of Thorburn J.A. to a three judge panel of the Court of Appeal. That panel relieved the Respondents of the obligation to file a signed order to perfect their appeal but otherwise dismissed the appeal noting that nothing in their order altered this Court’s refusal to adjourn the damages trial. [22] The Respondents then sought a third attendance in the Court of Appeal to schedule the liability appeal before the damages trial. Lauwers J.A. dismissed that request holding that both Thorburn J.A. and the panel accepted this Court’s conclusion that the case should be treated as a single proceeding in which liability and damages were to be determined by the lower court before any appeal to the Court of Appeal. [23]
[30] The fifth alleged instance of predisposition toward the Applicant is the allegation that,
[T]he Third Decision, changed CIBC Mellon from an authorized user to an unauthorized one, even as the Court acknowledged that the “express intention” of the First Decision was to find that “the custodial entities of Mellon Financial Corporation as they existed” in 1999 were authorized users under the Mellon Trust Agreement. [24]
[31] The “express intention” referred to in this quotation is found in the concluding passage of paragraph 19 of the First Decision which says:
In my view, […] the agreements were intended to benefit only the entity named in it and did not allow data sharing beyond the entity named in the agreement. In the case of the Mellon Trust agreement, that meant the custodial entities of Mellon Financial Corporation as they existed in 1999.
[32] It appears that there was a document in the record that described CIBC Mellon as a custodial entity of Mellon Financial Corporation. BNY combines that document and final sentence of preceding quotation to submit that, in the First Decision the Court intended to say that CIBC Mellon was an authorized user under the Mellon Trust agreement.
[33] This focus on a single sentence of paragraph 19 does not read the First Decision in its full context. The First Decision found that CIBC Mellon was not entitled to share data under the Mellon Trust Agreement but that it was required to pay for its own data under the CIBC Mellon Agreement. The First Decision analyses CIBC Mellon’s rights in this regard in paragraphs 54 – 62, 69 – 75 and 80 and concludes that CIBC Mellon was not entitled to share data under the Mellon Trust Agreement and that it acted in breach of contract by doing so. [25]
[34] The description of CIBC Mellon’s conduct as a breach of contract was an incorrect description of the remedy that SS & C sought. That error was brought to the Court’s attention during the attendance that led to the Third Decision. Both sides agreed that it was an error because the Applicant never sought relief for breach of contract against CIBC Mellon. The Third Decision recognizes that error and withdraws the breach of contract finding against CIBC Mellon. The Third Decision then also adds to the First Decision the finding that the Applicant actually sought against CIBC Mellon, namely a declaration that CIBC Mellon was not entitled to share data under the Mellon Trust Agreement. That finding was based on findings that the Court had already made in the First Decision to the effect that CIBC Mellon was not entitled to data under the Mellon Trust Agreement.
[35] It is clear from reading the First Decision as a whole that the Court found that it was improper for BNY to share data with CIBC Mellon and that the Court intended to provide a remedy for such sharing. In the Third Decision the court simply replaced the remedy of breach of contract (which had not been requested) with a declaration (which had been requested).
[36] It will of course be open to the Respondents to argue on any appeal that this change amounts to a reversible error. That will be for the Court of Appeal to decide. It does not, however, amount to a reasonable apprehension of bias. The change is entirely consistent with the tenor of the First Decision in which 19 paragraphs [26] analyse why CIBC Mellon was not entitled to receive data under the Mellon Trust Agreement and in which one sentence did not take into account that there was a document in the record that described CIBC Mellon as a custodial entity of Mellon Financial Corporation.
ii. Allegation that the Court Appeared to Disparage the Respondents
[37] The Respondents submit that the Court appeared to disparage them in three instances. First, by imputing to them an improper interest in delay. They rely on paragraphs 34 and 40 of the Second Decision in this regard.
[38] Paragraph 34 of the Second Decision states:
Most defendants have an economic interest in delay. At a minimum, delay postpones the payment of damages to a later date. Given the extremely low rates of prejudgment interest, most defendants will prefer to defer paying damages for as long as possible and use funds they would otherwise have to pay as damages to earn a rate of return superior to the prejudgment interest rate for as long as they can. Given the substantial amount of the damages claim, the difference between BNY’s liability for prejudgment interest and what BNY can earn on funds by either reinvesting them into its own business or investing them otherwise, is not inconsequential.
[39] The context in which that paragraph arose is critical. The Second Reasons were issued in response to the Respondents’ motion to adjourn the damages trial until after the disposition of its appeal on the liability decision. The applicable test for an adjournment in those circumstances is one that involves balancing 10 factors. Paragraph 34 of the Second Decision is found in the section of the reasons dealing with two of those factors under the following heading:
Factors #7 and #8: The Competing Interests of the Parties in Advancing or Delaying the Progress of the Litigation and The Need of the Administration of Justice to Effectively Enforce Court Orders
[40] As a result of these elements of the test, the Court was required to weigh the competing interests of the parties in delaying or advancing the litigation. The issue of delay is one that the applicable legal test requires the Court to consider. Although SS & C made vigorous arguments on the adjournment motion to the effect that the Respondents had engaged in a lengthy pattern of delay which, among other things, led Hainey J. to threaten to find the Respondents in contempt if they did not produce documents by a specified date, paragraph 34 does not make any findings of delay against the Respondents. Rather, it speaks of the general interest that most defendants in civil litigation have in delay and the economic benefit that delay can provide to defendants in light of extremely low prejudgment interest rates.
[41] That analysis in no way disparages the Respondents. It simply highlights an issue that has been openly recognized and written about by many commentators and has been described by them as a potential imperfection in the litigation system. [27]
[42] Paragraph 40 of the Second Decision which the Respondents say also disparages them must also be read in context. The section of the Second Decision in which paragraph 40 is found is reproduced below to place it in its proper context:
Factor #10: The Need of the Administration of Justice to Process Civil Proceedings in an Orderly Manner
[39] The judicial system has an interest in having its resources used as efficiently as possible. The ordinary practice of pursuing a single appeal from decisions on liability and damages provides for the most efficient and speedy way of addressing the high volume of cases that the justice system needs to deal with. Fragmenting cases and having each aspect of the case be pursued to a final appeal will delay the overall administration of justice at both the trial and appeal court level.
[40] It is not in the interests of justice to allow parties to slice and dice proceedings in order to have as many rounds of appeal as possible thereby delaying not only the resolution of the case immediately under appeal but also other cases waiting to be heard.
[41] The interest of the justice system lies in developing a method of appeal which balances rights of all parties in the justice system, not just the parties in the immediate case before the court. The rules in place have done so by creating a default position whereby a judge releases a single set of reasons on liability and damages followed by an appeal on both issues at once. The fact that I elected to share my reasons on liability before the damages trial should not change that fundamental default position.
[43] Paragraph 40, read in its proper context, does not disparage the Respondents. Paragraph 40 arises in the context of a discussion about one of the other elements of the applicable test that the court is required to balance when deciding whether to adjourn a proceeding. It is part of a discussion about the general need to run proceedings in a particular way to ensure the fair and orderly administration of justice.
[44] The second allegation of disparagement arises out of paragraph 60 of the Second Decision. As part of the motion for an adjournment of the damages trial, the Respondents asked the Court to sign a formal judgment arising out of the liability decision. SS & C objected to finalizing the form of judgment before the conclusion of the damages trial. In paragraph 60 the Court stated:
I am inclined to hold off issuing a formal order until after the liability issue has been determined. As a general rule, appeals are taken from orders or judgments, not from reasons. As a result, I am concerned that BNY’s request for a formal judgment may be an attempt to bootstrap itself into a right of appeal. That was never the intention in the reasons I issued and I would be disinclined to grant BNY that ability.
[45] The Respondents take issue with the expression “bootstrap” and view it as disparaging to them. The Oxford English Dictionary ascribes several meanings to the word bootstrap, the most relevant of which here is:
get (oneself or something) into or out of a situation using existing resources: the company is bootstrapping itself out of a marred financial past.
PHRASES: pull (or drag) oneself up by one’s (own) bootstraps, improve one’s position by one’s own efforts. [28]
[46] Neither those nor the other definitions the Oxford English Dictionary gives the word bootstrap are disparaging. The fundamental concept involves getting oneself into a better position than one is. In the First Decision the Court had held that an appeal from the liability decision would arise only after the damages decision was rendered. Signing a formal judgment on the liability decision was a step that would potentially get the Respondents into a better position vis-à-vis the timing of a liability appeal than they were in as a result of the First Decision. Using the verb bootstrap in that context is not disparaging but is nothing more than a description of the factual dynamics in play.
[47] Moreover, the Court used the same expression in the Third Decision with respect to the Applicant. [29]
[48] In their third allegation of disparagement, the Respondents submit that the Court treated their and their counsel’s integrity with “unfair scepticism.” [30] The allegation arises because the Court had asked Respondents’ Counsel for the case names and court file numbers of two trials that Respondents’ counsel had scheduled in the fall of 2022. The Respondents’ factum notes that the Applicants were not asked similar questions.
[49] The full context is that the Court had asked both sides for detailed schedules that showed counsel and witness availability between the fall of 2021 and the summer of 2022 together with an explanation for why counsel or witnesses were not available. The resulting schedule showed that the Respondents’ counsel had two trials which prevented them from participating in the damages trial before May 2021. The Applicants had no such trials.
[50] At the time, the trial office was adjourning trials because it did not have the judges to staff them. The Court asked for the case names and file numbers of the Respondents’ Counsel’s trials so that it could determine if the two trials would in fact be proceeding. Although the Respondents’ factum characterizes the Courts’ request for case names and file numbers as impugning their integrity, the affidavit on which the Respondents rely on this motion describes the matter more objectively as set out in this paragraph. [31] When the Court’s inquiries with the trial office did not give it sufficient assurance that the trials would not proceed as scheduled, the Court scheduled the damages trial for May 18 – 27 and June 21-24, 2022 as the Respondents had requested.
[51] The Respondents analogize the alleged instances of disparagement to those that occurred in Budd, 2016 ONCA 60. [32] The situation in Budd was in no way analogous to this case. In Budd, the motions judge criticized appellants’ counsel about their advocacy skills, knowledge of the law, handling of the case; referred to the appellants’ cross examinations as “a waste of time”; said that their argument was “frustrating” and “interminably circling around and about”; and concluded by saying:
A lick of common sense should have made it clear that this motion, as framed, was doomed from the outset. So why bring it? If the honestly held belief was that this case ought to be pursued in California, all I can say to the defendants is "give your heads a shake". [33]
[52] The Court of Appeal found those comments to be disparaging of counsel. There was no disparagement in the case at bar.
iii. Alleged Insinuation into the Appeal Process
[53] In Budd, 2016 ONCA 60, the Court of Appeal noted that judges’ attempts to insinuate themselves into the appeal process by attempting to defend their actions and comments can be indicators of reasonable apprehension of bias. [34] The Respondents submit that three such instances arise here.
[54] First, the Respondents note that the Court purported to suspend the appeal period for the First Decision until the reasons on the Damages Trial were released, so that any appeals on liability and damages could proceed together. The Respondents submit that this created the appearance that the Court was trying to prevent an appeal of the First Decision from being heard until it could be supported by additional reasons from the damages trial.
[55] Further context sets out the full picture. The Court released its First Decision before any appeal was launched. It explained its reasons for doing so in its First [35] and Second Decisions. [36] The Respondents did not appeal from the Second Decision which declined to adjourn the damages trial. The timing of the damages trial in relation to the appeal on liability was nevertheless addressed by the Court of Appeal on three occasions. [37] On none of those occasions did the Court of Appeal overrule or vary the Court’s initial direction that any appeal on the liability issue should occur only after the release of reasons in the damages trial.
[56] With respect to the concern that the reasons in the damages trial will be used to shore up any weaknesses in the liability decision, the Court expressly asked the parties not to advise it of any grounds of appeal specifically to avoid even the appearance of that occurring. [38] Both sides, on their own initiative, nevertheless advised the Court of at least certain grounds of appeal. I do not fault them for doing so. Each was merely trying to advance its client’s interest as best they could.
[57] The second alleged instance of the Court insinuating itself into the appeal process is the Court’s “continuing refusal to issue a formal order, even in the face of the Court of Appeal’s stated desire that this occur.” [39]
[58] The comment of the Court of Appeal about the desirability of filing a formal order was as follows:
That said, it would be most desirable if a copy of the formal liability order were filed prior to the hearing of the appeal. To that end, we encourage the parties to agree on the form of the liability order prior to the hearing of the appeal. [40]
[59] What the Court of Appeal thought desirable will occur. The Court will sign a copy of the formal order before the hearing of the appeal. Based on the three decisions of the Court of Appeal, however, that will not occur until after reasons in the damages trial have been released because there will be a single appeal (or appeals) from the liability and damages decisions.
[60] The Respondents’ third submission about the Court insinuating itself into the appeal arises out of what the Respondents described as the “sweeping changes” that the Third Decision makes to the First Decision. Those changes are the deletion of the breach of contract finding against CIBC Mellon, revising paragraph 19 of the First Decision to make clear that CIBC Mellon was not one of the entities with whom data delivered under the Mellon Trust Agreement could be shared and the addition of a finding that CIBC Mellon was not entitled to receive data under the Mellon Trust agreement. The Respondents submit that:
These amendments raise the same concern as those in Stuart Budd, 2016 ONCA 60, i.e., that “the amendment was an after-the-fact justification for the decision rather than an articulation of the reasoning that led to the decision”, and was “motivated, at least in part, by a desire of the motion judge to defend his decision to dismiss the motion against the specific attacks made in the appeal.” [41]
[61] As already noted, in Budd, the second reasons were prepared at the motion judge’s own initiative. The “amended endorsement” in Budd identified, responded to, and commented on the merits of various grounds of appeal thereby appearing to defend his original reasons.
[62] In the case at bar, the Court issued its Third Decision in response to a request for directions from the parties about the scope of the damages trial. The relief the Court gave SS & C was substantially less than what SS & C sought. As noted earlier, the changes that the Third Decision made to the First Decision were intended to correct what both sides agreed was an error and to reflect the overall thrust of the First Decision.
[63] The Respondents submit that the change to the basis of CIBC Mellon’s liability that the Court made in the Third Decision was not based on evidence or argument because it was not the subject of argument at the hearing. The documentary record indicates otherwise.
[64] The Applicant’s written submissions for the case conference that led to the Third Decision contain, among other things, a boldfaced heading which reads:
3. CIBC Mellon Not Entitled to Receive SS & C Data from BNY Mellon
[65] Beneath that heading, the Applicant explained how and why the First Decision did not entitle CIBC Mellon to share data from BNY Mellon.
[66] The Respondents written submissions address that proposition by saying, among other things, that:
Having been a Mellon Trust entity since 1996, CIBC Mellon’s use of SS&C data under the 1999 Mellon Trust Agreement was fully Authorized. [42]
[67] The affidavit of Erin Chesney, sworn March 30, 2022 is an affidavit of a lawyer from the Respondents’ law firm who attended the hearing that led to the Third Decision. In paragraphs 98 and 101 of her affidavit, Ms. Chesney states that:
…. Mr. Paliare [counsel for SS & C] focused his submissions on arguing that CIBC Mellon cannot be an authorized user since CIBC Mellon had its own agreement with the Applicant.
In reply, Mr. Paliare directed the Application Judge to the Entities Letter, in which CIBC Mellon is identified as an entity of Mellon Trust/BNY Mellon as of 1999, arguing that if paragraph 19 of the First Decision were not changed in the manner sought by the Applicant, then CIBC Mellon’s use of the Applicant’s data would be authorized under the Mellon Trust Agreement.
[68] These documents make it undisputedly clear that CIBC Mellon’s right to share data was a live issue in the hearing that led to the Third Decision, just as it was in the hearing that led to the First Decision.
[69] The Respondents argue that Mr. Paliare’s submissions on the hearing that led to the Third Decision were focused on holding CIBC Mellon liable either under the doctrine of knowing receipt or under the correction that the Applicant sought to paragraph 19 of the First Decision to the effect that none of the Mellon Financial Corporation entities were entitled to share the data. Although that is, strictly speaking correct, the point was nevertheless clearly made that CIBC Mellon, in particular, had no entitlement to share data under the Mellon Trust Agreement. The Court was not limited to providing SS & C with either all or none of the relief it sought in the Third Decision. A court is entitled to award a party a sub-set of the relief it seeks. That is precisely what the Court did in its Third Decision. The sub-set of relief that the Court awarded was specifically identified in both written and oral submissions of both sides and in the affidavit of Ms. Chesney. In those circumstances it cannot be said that the Third Decision included a ruling that was not the subject of argument at the hearing.
D. Application of the Yukon Francophone Factors
[70] Having set out the more fulsome context of the Respondents’ objections, I turn to back to the factors that the Supreme Court of Canada set out in Yukon Francophone, 2015 SCC 25 to evaluate reasonable apprehension of bias.
[71] The most fundamental concern in assessing a reasonable apprehension of bias is whether a judge has decided the matter to the extent that he or she is no longer capable of being persuaded by the evidence. [43]
[72] In my view, an informed person viewing the matter realistically and practically, in its full context, and having thought the matter through, would not come to the view that the Court is no longer capable of being persuaded by the evidence.
[73] The Court here based its rulings on evidence and argument by both sides and on the powers the Rules give the Court to order the trial of an issue. Although the issue of bias is not determined by keeping score of the number of decisions in favour of one side or another, the Court here made numerous decisions against the Applicants and in favour of the Respondents based on its assessment of the evidence and arguments. These include:
(a) Not accepting the Applicant’s damages theory on the application but requiring a trial as to damages. (b) Not acceding to the Applicant’s request for an earlier trial. (c) Not acceding to the Applicant’s request that the Court change its First Decision to hold that the Mellon Trust Agreement excluded any data sharing at all. (d) Not acceding to the Applicant’s request that the Court make a finding of knowing receipt against CIBC Mellon in the Third Decision. (e) Agreeing to allow the Respondents to call fact witnesses at the damages trial over the objection of the Applicant.
[74] This was not a case of the Court making findings without submissions. The direction to the trial of an issue on damages was made after three days of submissions. It is for the Court ultimately decide whether it sees a need for viva voce evidence, not one of the parties. When the court directed the trial of an issue, it froze the record to be fair to both sides, not to give one side advantage. The issue of the hearing of the damages trial went to the Court of Appeal three times. Each time, the Court of Appeal declined to vary the direction or the timing of the liability appeal.
[75] The changes to the First Decision were made to correct what both sides viewed as an obvious error. The correction simply replaced a remedy that had not been sought with one that had been sought. There were no additional findings of fact. The correction was consistent with the findings of fact in the First Decision.
[76] It cannot be disparaging to a party for the Court to apply the various elements of the legal test that the law requires the Court to apply. Nor can it be disparaging to use the term “bootstrap” when its definition in the Oxford English Dictionary contains no disparaging quality and when its definition corresponds precisely to the facts in issue.
[77] Likewise, it cannot impugn the integrity of counsel for the Court to explore the likelihood of trials proceeding in order to make the most optimal use of court time.
[78] It may well be that the Court’s decision on these or other issues amount to reviewable errors that the Court of Appeal may reverse. There is, however, a large distinction between reviewable error and reasonable apprehension of bias. Adverse rulings, even rulings which are subsequently held to be wrong by a higher court, do not demonstrate bias. [44] Adverse rulings should be pursued through the appeal process and not through motions to remove a judge for reasonable apprehension of bias.
[79] The changes to the First Decision will be easy to define and address. If the Court awards damages for BNY having shared data under the Mellon Trust agreement with CIBC Mellon, those damages (or any other entity for that matter) will be specifically defined and easily identifiable in the reasons arising out of the damages trial. It will therefore be easy for the Court of Appeal to identify any damages findings and any changes to the First Decision that it is inclined to reverse or vary.
Disposition and Costs
[80] For the reasons set out above, I dismiss the Respondents’ motion to have the court recuse itself from the Damages trial and to declare a mistrial. The parties have agreed that cost should be fixed at $25,000 in favour of the successful party. I therefore order the Respondents to pay the Applicant its costs fixed at $25,000.
Koehnen J. Date: 2022-04-21