S.C. C. Court File No. 34645

IN THE SUPREME COURT OF CANADA (ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO) ) BETWEEN: BRUNO APPLIANCE AND FURNITURE, INC.

Appellant (Respondent) -and-

ROBERT HRYNIAK

Respondent (Appellant)

FACTUM OF THE RESPONDENT

Filing Party: ROBERT HRYNIAK

(Pursuant to Rule 42 of the Rules ofthe Supreme Court ofCanada)

MCCARTHY TETRAULT LLP CAVANAGH WILLIAMS CONWAY BAXTER Suite 5300, Toronto Dominion Bank Tower LLP Toronto ON M5K 1E6 Suite 40 1, 1111 Prince of Wales Drive Ottawa ON K2C 3T2 Sarit E. Batner ([email protected]) Brandon Kain ([email protected]) Colin S. Baxter ([email protected]) Moya J. Graham ([email protected] Tel: (613) 780-2016 Tel: (416) 362-1812 Fax: (613) 569-8668 Fax: (416) 868-0673

Solicitors for the Respondent Ottawa Agent for the Respondent

ORIGINAL TO: The Registrar Supreme Court of Canada 301 Wellington Street Ottawa ON KIA Oil Copies to:

HEYDARY HAMILTON PC GOWLING LAFLEUR HENDERSON I.LP 66 Wellington Street West Suite 2600, 160 Elgin Street Suite 4500, P.O. Box 150 Ottawa ON K1P 1C3 Toronto-Dominion Bank Tower Toronto ON M5K 1H1 Henry S. Brown, Q.C. ([email protected]) Javad Heydary ([email protected]) Tel: (613) 786-0139 David K. Alderson ([email protected]) Tel: ( 416) 972-9001 Fax: (416) 972-9940 Ottawa Agent for the Appellant

Solicitors for the Appellant

ALLAN ROUBEN SUPREME ADVOCACY LLP Suite 200, 70 Bond Street Suite 100, 397 Gladstone Avenue Toronto ON M5B 1X3 Ottawa ON K2P OY9

Tel: (416) 360-5444 Eugene Meehan, Q.C. Fax: (416) 365-7702 Tel: (613) 695-8855 Email: [email protected] Fax: (613) 695-8580 Email: [email protected] Solicitor for the Intervener, Ontario Trial Lawyers Association Ottawa Agent for the Intervener, Ontario Trial Lawyers Association

EVANS SWEENY BORDIN LLP SUPREME ADVOCACY LLP 1201- 1 King Street West Suite 100, 397 Gladstone Avenue Hamilton ON L8P 1A4 Ottawa ON K2P OY9

Paul R. Sweeny Marie-France Major Tel: (905) 523-5666 Tel: (613) 695-8855 Fax: (905) 523-8098 Fax: (613) 695-8580 Email: [email protected] Email: [email protected]

SOTOSLLP Ottawa Agent for the Intervener, 1250- 180 Dundas Street West The Canadian Bar Association Toronto ON M5G 1Z8

David Sterns Tel: (416) 977-0007 Fax: (416) 977-0717 Email: [email protected]

Counsel for the Intervener, The Canadian Bar Association BORDEN LADNER GERVAIS BORDEN LADNER GERVAIS World Exchange Plaza World Exchange Plaza Suite 1100, 100 Queen Street Suite 1100, 100 Queen Street Ottawa ON KIP 119 Ottawa ON KIP 119

David W. Scott, Q.C. Nadia Effendi Tel: (613) 237-5160 Tel: (613) 237-5160 Fax: (613) 230-8842 Fax: (613) 230-8842 Email: [email protected] Email: [email protected]

TORYSLLP Ottawa Agent for the Intervener, Suite 3000, 79 Wellington Street West The Advocates Society Box 270, TD Centre Toronto ON M5K 1N2

Patricia D.S. Jackson Tel: (416) 865-7323 Fax: (416) 865-7380 Email: [email protected]

Counsel for the Intervener, The Advocates' Society

MINISTRY OF THE ATTORNEY GENERAL BURKE ROBERTSON LLP FOR ONTARIO 200 - 441 MacLaren Street Crown Law Office, Civil Law Ottawa ON K2P 2H3 1 720 Bay Street, 8 h Floor Toronto ON M7A 2S9 Robert E. Houston, QC Tel: (613) 566-2058 Malliha Wilson Fax: (613) 235-4430 Tel: (416) 326-4953 Fax: (416) 326 4181 Ottawa Agent for the Intervener, Attorney General for Ontario Counsel for the Intervener, Attorney General for Ontario -1-

TABLE OF CONTENTS

PART I- OVERVIEW AND STATEMENT OF FACTS ...... 1 1. Overview ...... 1 2. Statement of Facts ...... 2 A. The Summary Judgment Motions ...... 2 B. The Appeals ...... 4 PART II- QUESTIONS IN ISSUE ...... 9 PART III- STATEMENT OF ARGUMENT ...... 10 1. The Court of Appeal Did Not Err in Formulating the Test Under Rule 20 ...... 10 A. Overview ...... 10 B. The Full Appreciation Test is Flexible, Fair and Balanced ...... 10 C. The Hallmarks Are Not Rigid Categories ...... 19 D. The Summary Judgment Test Should Not Be Altered For Fraud Cases ...... 23 E. "Undoubtedly" this Matter Should be Remitted to Trial ...... 26 2. The Court of Appeal Applied the Appropriate Standard of Review ...... 27 3. The Court of Appeal Did Not Err In Formulating the Elements of Civil Fraud ...... 27 A. Overview ...... 27 B. Inducement is an Essential Element of Fraudulent Misrepresentation ...... 28 C. Cranston's Theft ofthe Funds Is a Genuine Issue Requiring a Trial...... 31 4. The Court of Appeal Did Not Apply an Elevated Standard of Proof ...... 35 PART IV- SUBMISSIONS CONCERNING COSTS ...... 38 PART V- ORDER SOUGHT ...... 38 PART VI- TABLE OF AUTHORITIES ...... 39 PART VII- STATUTES, REGULATIONS AND RULES ...... 45 -1-

PART I-OVERVIEW AND STATEMENT OF FACTS

1. Overview

1. The issue in this appeal is whether the Ontario Court of Appeal properly interpreted Ontario's newly amended summary judgment rule by formulating the full appreciation test. The test requires a motion judge to consider whether she can achieve the full appreciation of the evidence and issues required to make dispositive findings of fact without the benefit of a trial. Only then may the motion judge exercise the newly expanded powers in Rule 20.04(2.1) to weigh evidence, evaluate credibility or draw factual inferences in order to determine if there are genuine issues requiring a trial for their resolution. Otherwise, the motion judge must dismiss the motion and remit the matter for trial.

2. The Court of Appeal held that it would not be in the interest ofjustice for a motion judge to exercise the expanded powers where a full appreciation of the case can only be achieved at trial. Absent a full appreciation, any attempt to make dispositive findings is unjust, procedurally unfair and risks arriving at the wrong outcome.

3. Central to the Court of Appeal's reasons is its recognition that there are important differences between a trial and a summary judgment motion. As the Court observed, the trial judge participates in the dynamic of a trial, sees witnesses testify, follows the trial narrative, asks questions when in doubt as to the substance of the evidence, monitors the cut and thrust ofthe adversaries, and hears the evidence in the words of the witnesses. 1 By contrast, a motion judge decides the case on a written record, based on affidavits typically drafted by counsel rather than spoken in the deponent's own words, and reviews the record in chambers without the assistance of counsel or the trial narrative.

4. In some situations, the trial process is not necessary in order to fully appreciate and thus justly decide a case. In other situations, a trial is essential. As the Court of Appeal held, the case at bar is undoubtedly one which does not meet the full appreciation test. The 28 volumes of evidence, 18 witness affidavits, 3 weeks of cross-examinations, 4 days of oral argument, different theories of liability and numerous central credibility issues, with no reliable documentary record and in a case

1 Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764 at para. 47, Respondent's Book of Authorities ("RBOA"), Tab 22 ["Appeal Decision"]. -2- alleging fraud, did not permit a full appreciation of the case on a paper record. The interests of justice required a trial.

5. Since a full appreciation was not possible on the motion, the Court of Appeal reached the correct result by setting aside the summary judgment and remitting the matter to trial. However, it got to the correct result by declining to apply the full appreciation test and, in spite of not having a full appreciation of the evidence and the issues in the case, using the expanded powers to analyze the evidence and determining there were genuine issues requiring a trial for their resolution. As addressed in Mr. Hryniak's factum in the Mauldin appeal, in failing to apply the full appreciation test, the Court of Appeal erred by engaging in prospective overruling. The outcome in this Bruno appeal, however, was unaffected by its error.

6. The Appellant's arguments, most of which are directed at the Court of Appeal's analysis of the case once it had already concluded the full appreciation test was not met, are therefore not determinative of this appeal. Moreover, they are not legally sound. The Court of Appeal applied the appropriate standard of review, it correctly formulated the elements of the tort of fraud and it did not apply an incorrect standard of proof.

7. For these reasons, Mr. Hryniak requests that the Court of Appeal's judgment be affirmed, summary judgment be set aside and the matter be remitted for a trial on the merits.

2. Statement of Facts

A. The Summary Judgment Motions

8. In 2005, the Appellant filed an action (the "Bruno Action") against Mr. Hryniak, Cassels Brock & Blackwell LLP ("Cassels") and Gregory Peebles, a lawyer at Cassels, seeking $30 million in damages? The Statement of Claim alleges that Mr. Hryniak committed the tort of fraudulent misrepresentation by making false statements with the express purpose of inducing the Plaintiff to invest $1,000,000 USD. 3

2 Fresh as Amended Statement of Claim, Appellant's Record ("AR"), Vol. II, p. 1 at para. 1. 3 Fresh as Amended Statement of Claim, Appellant's Record ("AR"), Vol. II, p. 1 at para. 48. -3-

9. Three year later, prior to discoveries,4 the Appellant moved for summary judgment. The motion was heard two further years later in 2010, concurrently with a summary judgment motion in another action (the "Mauldin Action"), where a different group of plaintiffs, Fred Mauldin et al., sued the same Defendants raising similar allegations. Rule 20 of the Ontario Rules of Civil Procedure, which came into effect on January 1, 2010, governed the motions.

10. The motions were complex. As summarized by the Court of Appeal:

... Eighteen witnesses filed affidavits on the motions. Cross-examinations took three weeks. The motion record consisted of28 volumes of evidence. Oral argument-which took place in 201 0 -took four days. 5 11. The picture of events that emerged from this evidence was far from clear. It was undisputed that the Appellant wired $1 million (USD) to Cassels after meeting with Peebles and a man named Robert Cranston on February 22,2002, without ever having met or spoken to Mr. Hryniak, and this money was subsequently lost. However, the surrounding circumstances were in serious contention:

Albert Bruno invested U.S.$1 million after a short meeting with Cranston and Peebles at the offices of Cassels Brock on February 22, 2002. How the meeting came about, what was said at the meeting, and with whom Bruno invested were all very much in dispute on the motion. Like the Mauldin meeting, no contemporaneous notes of the Bruno meeting were put into evidence.

Whatever was said at that meeting, Bruno was induced to invest by the prospect of a legitimate investment opportunity. On March 4, 2002, he wired U.S.$1 million to Cassels Brock. He did so without ever having met or spoken to Hryniak. 6 12. The evidence of Mr. Hryniak was that: (a) he was unaware ofthe Appellant's investment until long after the fact; (b) he did not make any representation to the Appellant to induce investment with his company, Tropos; (c) the Appellant did not in fact invest with Tropos, but instead invested with Mr. Cranston's companies; and (d) he never received the Appellant's funds, since they were sent by Mr. Peebles to Mr. Cranston.

13. The Motion Judge exercised the new fact-finding powers in Rule 20.04(2.1) to evaluate credibility, weigh evidence and draw contested factual inferences against Mr. Hryniak. In doing so, he rejected or failed to consider Mr. Hryniak's evidence:

4 Bruno Appliance and Furniture Inc. v. Cassels Brock & Blackwell LLP, 2010 ONSC 5490 at para. 266, RBOA, Tab 12 ["Motion Decision"]. 5 Appeal Decision at para. 117, RBOA, Tab 22. 6 Appeal Decision at paras. 133 and 135, RBOA, Tab 22. -4-

Of Bruno, Mr. Hryniak says this: Bruno's loss was attributable to the conduct of Mr. Cranston and Mr. Peebles for which neither he nor Tropos are responsible. Mr. Hryniak says that he had no knowledge of the Bruno investment until long after the fact. He says a careful review of the Cassels Brock trust account ledgers reveals that the Bruno monies were, in fact, disbursed to one ofMr. Cranston's companies and not to Tropos.

The circumstances do not support Mr. Hryniak's explanation. In my view, Mr. Hryniak knew of the Bruno investment from the time of its making ....

.. . Bruno's investment was confirmed on June 24, 2002 when Mr. Cranston e-mailed Mr. Hryniak and Cassels Brock. In the confidential e-mail he advised Mr. Hryniak of the persons who had sent money to Cassels Brock for Tropos. The Mauldin group and Bruno were specifically mentioned along with the dates and amounts of their investment. On June 25, 2002, Cassels Brock e-mailed Mr. Hryniak to advise him of the amount remaining on deposit at Cassels Brock. Mr. Hryniak says he did not receive those e-mails. I do not believe him.7 14. The Motion Judge, faced with arguments and evidence being put before him which were never the subject of Mr. Hryniak's cross examination and which Mr. Hryniak thus never had an opportunity to specifically address, held:

More than once I was referred to Browne v. Dunn (1893), 6 R. 67 (H.L.). I am ofthe view that Mr. Hryniak has known his credibility is at issue from the moment statements of claim were served upon him. He has had every opportunity to explain his side of the story .... 8 15. In the result, the Motion Judge granted summary judgment against Mr. Hryniak, but dismissed summary judgment against the other two Defendants (Peebles and Cassels), remitting the case against those Defendants to trial.

B. The Appeals

16. Mr. Hryniak appealed the summary judgments in both the Bruno and Mauldin actions. His appeals were heard with three other appeals, along with submissions by five amicus curiae, in a special sitting of a five-member panel of the Ontario Court of Appeal. The Court of Appeal proceeded in this fashion to give it a platform to provide some guidance to the profession regarding the circumstances in which motion judges may use the expanded powers in Rule 20.04(2.1).9

7 Motion Decision at paras. 151, 154 and 164-165, emphasis added, RBOA, Tab 12. 8 Motion Decision at para. 178, footnote 124, RBOA, Tab 12. vide Appellant's Factum, para. 23, ABOA, Tab 2. 9 Appeal Decision at paras. 5-6, RBOA, Tab 22. -5-

17. The Court of Appeal's guidance came in the form of a new summary judgment test, the "full appreciation" test, which must be met prior to use of the Rule 20.04(2.1) powers:

... In deciding if these powers should be used to weed out a claim as having no chance of success or be used to resolve all or part of an action, the motion judge must ask the following question: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?10 18. Despite purporting to apply these principles to the appeals before it, the Court of Appeal declined to apply the full appreciation test to Mr. Hryniak's appeals. The Court recognized that the Bruno appeal was one which undoubtedly did not meet the full appreciation test, nor the purposes underlying amended Rule 20:

However, both the Mauldin group action and the Bruno action bear all the hallmarks of the type of actions in which, generally speaking, the full appreciation of the evidence and issues can only be achieved at trial: • The motion record is voluminous-28 volumes of evidence together with additional evidence filed on the motions themselves; • Many witnesses gave evidence - 18 witnesses filed affidavits, and cross­ examinations on those affidavits took three weeks; • Different theories of liability were advanced against each of the defendants; • Numerous findings of fact were required to decide these motions; • Credibility determinations lay at the heart of these disputes, and the evidence of the major witnesses- Mauldin, Bruno, Hryniak and Peebles- conflicted on key issues; and • Assessing credibility was made more difficult by the near absence of reliable documentary yardsticks. The partial resolution of these two actions by way of summary judgment did not promote the values underlying the amended Rule 20: better access to justice, proportionality and costs savings. In a real sense the summary disposition had the opposite effect, as the length of time taken to bring and argue the motions and the plaintiffs' bill of costs tellingly illustrate ..

We therefore conclude that, going forward, cases such as the Mauldin group action and the Bruno action require a trial. They should not be decided by summary judgment.

Undoubtedly, ifthe motion ~udge had had the benefit ofthese reasons he would have sent both actions on to trial. . . . 1

10 Appeal Decision at para. 50, RBOA, Tab 22. 11 Appeal Decision at paras. 148-149 and 152-153, emphasis added, RBOA, Tab 22. vide Cosfordv. Player, 2012 ONCA 276 at para. 14, RBOA, Tab 25. ("The instant case is not one such as the Mauldin group action -6-

19. Nonetheless, without a full appreciation of the evidence and issues, the Court of Appeal proceeded to employ the Rule 20.04(2.1) powers to review the evidentiary record in Mr. Hryniak' s appeals. It did so on the ground that the full appreciation test had not been articulated at the time of the Motion Judge's decisionY

As an appellate court, we now have to decide what to do with these two summary judgments. One obvious approach is to set aside the judgments on the simple ground that cases of this nature should not be resolved summarily. However, we do not think this is a desirable approach. It is not a desirable approach because it fails to give effect to the reality of what is before us - a decision reached after a careful scrutiny ofan extensive record, written at a time when the law was unsettled. In the light of these particular circumstances, we are prepared to look beyond the characteristics ofthese actions that would otherwise preclude summary judgment to determine if the motion judge was nonetheless correct in granting partial summary judgment. In taking this approach, however, we wish to be clear that we are not creating a new type of case that is amenable to summary judgment, nor are we creating an exception to the principles we have laid out above. The court's decision to scrutinize the judgments in this case is a product ofthe unusual circumstances in which they arose. 13 20. In that context, the Court affirmed the Motion Judge's findings, made after weighing evidence and assessing Mr. Hryniak' s credibility under Rule 20.04(2.1 ), that Mr. Hryniak was aware of the Appellant's investment and that at least part of the money was received by Tropos rather than Mr. Cranston:

and the Bruno action analyzed at length within Combined Air Mechanical Services Inc. Unlike in those cases, the record here was not voluminous; the motion raised only two narrow issues; and only a discrete number offindings offact were required to decide the motion") 12 This is a fact which would apply to every summary judgment motion between the new rule coming into effect and the Court of Appeal's articulation of the new test, but one which did not prevent the Court of Appeal from applying the full appreciation test to at least 11 other similarly situated cases (nor to the 3 cases other than Mr. Hryniak' s resolved in the Appeal Decision itself): see Caton v. Devecseri Estate, 2012 ONCA 6 at paras. 1 and 3, RBOA, Tab 19; Business Development Bank of Canada v. 1626012 Ontario inc. (c.o.b. Artistic Leather Living), 2012 ONCA 56 at para. 2, RBOA, Tab 14; Byfield v. Toronto-Dominion Bank, 2012 ONCA 49 at paras. 5, 7 and 9, RBOA, Tab 15; Hinds v. Group 4 Security, 2012 ONCA 207 at para. 13, RBOA, Tab 39; Cosford v. Player, 2012 ONCA 276 at paras. 2 and 14, RBOA, Tab 25; Precious Metal Capital Corp. v. Smith, 2012 ONCA 298 at paras. 8-10 and 20, leave to appeal to S.C.C. refused, [2012] S.C.C.A. No. 256, RBOA, Tab 67; Downer v. Personal Insurance Co. (2012), 110 O.R. (3d) 401 (QL) at paras. 29-30 (C.A.), leave to appeal to S.C.C. filed, [2012] S.C.C.A. No. 332, RBOA, Tab 29; Bag/ow v. Smith (2012), 294 O.A.C. 24 (QL) at paras. 25-26,34-35 and 39 (C.A.), RBOA, Tab 9; Savage v. Belecque (2012), 111 O.R. (3d) 309 (QL) at paras. 17 and32 (C.A.), RBOA, Tab 77; Rudderham v. Folkes, 2012 ONCA603 at para. 1, RBOA, Tab 76; and Fifth Third Bankv. MPI Packaging Inc., 2013 ONCA 5 at para. 7, RBOA,, Tab 33. 13 Appeal Decision at paras. 154-155, emphasis added, RBOA, Tab 22. -7-

Hryniak maintained that Bruno did not invest with the Tropos Joint Venture but instead was persuaded by Cranston to invest in a joint venture of Cranston's company, Frontline. Some of the documents appear to bear this out. On March 20, 2002, Bruno received a certificate of investment from Frontline. Moreover, Hryniak said that he first spoke to Bruno in the fall of 2002, many months after the investment was made, when, in a telephone conversation, he explained basis trading.

Despite Hryniak's protestations to the contrary, we accept for the purpose of this appeal that he knew Bruno had invested U.S.$1 million with Tropos, that he did not invest this money, and that instead he used at least a portion of it for his own "corporate requirements." We are even prepared to accept that Hryniak knew about the meeting on February 22, 2002 that led to Bruno's investment. And, of course, we also accept that Bruno lost his entire investment.

... Again, despite Hryniak's denials, we accept for the purpose of this appeal that he knowingly took Bruno's money and used at least U.S.$450,000 of it for his own purposes. The Cassels Brock trust ledgers and Hryniak's own instructions to Peebles' assistant overwhelmingly show this to be so .... 14 21. However, the Court allowed the Bruno appeal and set aside the summary judgment, finding that the evidence disclosed at least two genuine issues requiring a trial. 15

22. The first genuine issue was whether Mr. Hryniak induced the Appellant to invest with him:

The first and most significant issue is whether Hryniak made a false statement that induced Bruno to invest with him. . ..

. . . The motion judge did not address this important element of a cause of action in civil fraud. As we read his reasons, he concluded that because Hryniak had dishonestly converted Bruno's money to his own use, Hryniak was liable to Bruno in fraud. In other words,fraud was made out because Hryniak deprived Bruno of his money and did so in a dishonest way. 16 23. The Court held that this aspect of the Motion Judge's decision involved a legal error, since mere deprivation of property is not sufficient to constitute the tort of civil fraud:

The notion of deprivation underlies both the tort of conversion and civil fraud: see Philip H. Osborne, The Law ofTorts, 4th ed. (Toronto: Irwin Law, 2011), at pp. 308-309. But proof of civil fraud requires proof of some additional elements; depriving the plaintiff of his goods is not enough. Fraud requires a false statement knowingly made that induces the victim to act to the victim's detriment. On the record before us, Bruno wired his U.S.$1 million investment to the Cassels Brock trust account without ever having met or spoken to

14 Appeal Decision at paras. 136, 168 and 173, emphasis added, RBOA, Tab 22. 15 Appeal Decision at para. 166, RBOA, Tab 22. 16 Appeal Decision at paras. 167 and 169, emphasis added, RBOA, Tab 22. -8-

Hryniak. He sent his investment after a short meeting with Peebles and Cranston, and first spoke to Hryniak a month or more later. 17 24. The Court also considered whether Mr. Hryniak induced Bruno to invest through Mr. Peebles, acting as his agent. However, the Court weighed the evidence and determined that this finding could not be made on the record, since the Motion Judge left Mr. Peebles' credibility to be determined at trial, and the Appellant's own evidence strongly suggested that he was induced by Mr. Cranston rather than Mr. Peebles:

Bruno acknowledges that he invested before meeting or talking to Hryniak. He contends, however, that Peebles acted as Hryniak's agent in inducing Bruno to invest. A person may commit fraud through an agent: see G.H.L Fridman, Canadian Agency Law, (Markham: LexisNexis Canada Inc., 2009), at pp. 190-93. But we have no compelling evidence that Peebles acted as Hryniak's agent for the purpose of inducing Bruno to invest. Nor could we make that finding as the motion judge left Peebles' credibility to be determined at trial. Also, we do not know what statements persuaded Bruno to invest. He may have invested because of something Peebles said; or, he may have invested because of something Cranston said. Indeed Bruno's own affidavit filed on his motion for summary judgment strongly suggests that Cranston's representations induced him to invest. Yet Cranston, as we have said, gave no evidence on the motion. For these reasons, whether Hryniak, through Peebles, made a false statement that induced Bruno to invest is a genuine issue requiring a trial. 18 25. The existence of one genuine issue requiring a trial is sufficient to set aside a summary judgment. Here, the Court of Appeal went on to identify a second genuine issue requiring a trial, being whether Mr. Cranston misappropriated part of the Appellant's investment:

There is a second genuine issue requiring a trial: whether part of Bruno's investment was misappropriated by Hryniak or by Cranston.... [T]he Cassels Brock trust ledgers also show that in late June 2002, Hryniak redeposited U.S.$550,000 into the Cassels Brock trust account for Tropos, with the result that the law firm then held more than U.S.$1 million in trust for Hryniak's company. In March 2005, Peebles signed a written statement before a lawyer in which he acknowledged that he inadvertently sent U.S.$1 million out of the Cassels Brock trust account to Cranston's company, Rhino Holdings. The motion judge did not refer to this statement. Although Peebles appeared to retract his statement in a later affidavit, his credibility remains to be determined. Thus, whether the U.S.$1 million sent to Cranston, included U.S.$550,000 ofBruno's money, and whether Hryniak eventually got the benefit of that money or whether Cranston misappropriated it are questions that require a trial for their resolution. 19

17 Appeal Decision at paras. 169-170, emphasis added, RBOA, Tab 22. 18 Appeal Decision at paras. 171-172, RBOA, Tab 22. 19 Appeal Decision at paras. 173-174, RBOA, Tab 22. -9-

26. Having found genuine issues requiring a trial for their resolution, the Court of Appeal came to the same conclusion it would have had it applied the full appreciation test: it allowed Mr. Hryniak' s appeal, set aside the summary judgment, and remitted the matter for trial.20

PART II-QUESTIONS IN ISSUE

27. The Appellant submits the Court of Appeal committed four errors:

(a) formulating the "full appreciation'' test for summary judgment;

(b) applying a standard of review of correctness to the Motion Judge's decision;

(c) requiring the Appellant to prove, as elements of the tort of civil fraud, that Mr. Hryniak induced its investment and received the entire benefit of it; and

(d) applying an elevated standard of proof to the fraud claim.

28. Mr. Hryniak submits the Court of Appeal did not err in any of those four ways.

29. The full appreciation test is the appropriate test under amended Rule 20. It ought to have governed this appeal. As the Court of Appeal recognized, the Bruno Action is one in which a full appreciation of the evidence and issues undoubtedly cannot be had without a trial. On that basis, the summary judgment should have been set aside. Having found that a full appreciation ofthe case was not possible, the Court of Appeal erred in proceeding to address the evidence and the Motion Judge's factual findings and by exercising the expanded powers itself. To do so was to engage in prospective overruling. However, its error did not impact the outcome, and is therefore moot.

30. The remaining three alleged errors all arise after the full appreciation test was found to not have been met and the Court ofAppeal nonetheless went on to analyze the case through use of the Rule 20.04(2.1) powers. As such, none of them impact the outcome of the case. In any event, Mr. Hryniak submits that none of them in fact disclose any legal error by the Court of Appeal.

20 Appeal Decision at para. 178, RBOA, Tab 22. -10-

PART III-STATEMENT OF ARGUMENT

1. The Court of Appeal Did Not Err in Formulating the Test Under Rule 20

A. Overview

31. The Appellant argues that the Court of Appeal erred in formulating the full appreciation test because it "significantly limited" access to justice by introducing a "blanket list" of case categories that are not suitable for summary judgment, and by "severely constrict[ing]" the categories of cases in which summary judgment is appropriate. 21 The Appellant asserts that courts should be willing to overlook the complexities that might otherwise preclude summary judgment where cases allege fraud. 22 According to the Appellant, the appropriate test should be one of "contextual justice", in which "[s ]imply put ... the motions judge must determine whether or not it would be unjust to the parties involved not to make summary judgment at this stage of the proceeding".23

32. The Appellant's position reflects a fundamental mischaracterization ofthe Court of Appeal's judgment, and would do nothing to address the problems which led to the articulation of the full appreciation test. Far from involving the rigidity suggested by the Appellant, the full appreciation test provides a flexible, fair and balanced approached to summary judgment in Ontario.

B. The Full Appreciation Test is Flexible, Fair and Balanced

33. Prior to the 2010 amendments, a judge hearing amotion under Rule 20 was prohibited from weighing evidence, evaluating credibility or drawing factual inferences. Borins J. (ad hoc) made this clear in Aguonie:

... In ruling on a motion for summary judgment, the court will never assess credibility, weigh the evidence, orfind the facts. Instead, the court's role is narrowly limited to assessing the threshold issue of whether a genuine issue exists as to material facts requiring a trial.

21 Appellant's Factum at paras. 8(a), 49(a), 60-61 and 69-70. 22 Appellant's Factum at paras. 7, 12 and 62-67. 23 Appellant's Factum at para. 68. -11-

Evaluating credibility, weighing evidence, and drawing factual inferences are all functions reserved for the trier offact . ... 24

34. The court's role was thus not to find facts or to resolve factual issues, but merely to identify whether a genuine issue of fact existed?5 This reflected the exceptional nature of dispositive fact­ finding powers. In respect of the power to assess credibility, for instance, Doherty J. (as he then was) said in Masciangelo:

Where the outcome of a law suit hinges on the assessment of credibility, a trial in which ~vidence is called and the competing stories are told and challenged before the trier of fact has traditionally been viewed as the ideal forum. This is so, not only because the trier of fact has the advantage of hearing and seeing the witnesses, but also because the parties are given their day in court during which they have the opportunity to present their entire case, face their judge, and tell their story. The quality ofjustice is measured. not only by the accuracy of the result reached but by the way that result is reached. That quality may suffer iflitigants are judged unworthy of belief by someone who has never seen them or heard them, but instead has examme. d on 1y wntten . matena . 1 .26

35. Other courts also emphasized the importance of the trial process. In Dawson, Borins J.A. held:

... [I]t is necessary to recognize the paramountcy of the due process requirements which apply to the resolution of disputes which have been incorporated in the Rules ofCivil Procedure, notably pre-trial discovery and a plenary trial on the merits before a trial judge presiding alone, or with a jury.

As I have stated, the purpose of Rule 20 is not to deny the parties due process. It is not intended to deprive plaintiffs and defendants of their day in court absent demonstrated compliance with its requirements. Under the Rules of Civil Procedure, the plenary trial remains the mode for the resolution of disputes .... 27

24 Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161 (QL) at para. 32 (C.A.), emphasis added, RBOA, Tab 4. vide Rozin (c.o.b. Grinfall Canada Co.) v. Ilitchev (2003), 66 O.R. (3d) 410 at para. 7 (C.A.), RBOA, Tab 75. 25 Irving Ungerman Ltd v. Galanis (1991), 4 O.R. (3d) 545 (QL) at para. 22 (C.A.), RBOA, Tab 47; Bosse v. Mastercraft Group Inc. (1995), 123 D.L.R. (4th) 161 (QL) at para. 21 (Ont. C.A.), leave to appeal to S.C.C. refused, [1995] S.C.C.A. No. 205, RBOA, Tab 10; Esses v. Bank ofMontreal (2008), 241 O.A.C. 134 at para. 43 (C.A.), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 471, RBOA, Tab 31. 26 Masciangelo v. Spensieri (1990), 1 C.P.C. (3d) 124 (WLeC) at para. 14 (Ont. H.C.J.), RBOA, Tab 56. vide: Khan v. Universityof0ttawa(1997), 34 O.R. (3d) 535 (QL) at para. 22 (C.A.), RBOA, Tab 51; and Goudiev. Ottawa (City), [2003] 1 S.C.R. 141 at para. 32, RBOA, Tab 38. 27 1 Dawson v. RexcraftStorage and Warehouse Inc. (1998), 164 D.L.R. (4 h) 257 (QL) at paras. 6 and 29 (Ont. C.A.), RBOA, Tab 27. vide Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at 972, RBOA, Tab 45 -12-

36. In 2006, the Government of Ontario commissioned the Honourable Coulter Osborne, Q.C. to provide recommendations for making the civil justice system in Ontario more accessible and affordable. Mr. Osborne released a report in November, 2007 (the ''Osborne Report"), which contained recommendations in regard to several areas of the law, including Rule 20. Recommendation 14 of the Osborne Report proposed as follows:

14. Amend rule 20 to expressly confer on a motion judge or master the authority to weigh evidence, evaluate credibility and draw any reasonable inference from the evidence and documents filed, including adverse inferences where a party fails to provide evidence of persons having personal knowledge of contested facts. This power, however, ought not to be exercised where the interests ofjustice require that the issue be determined at trial?8

3 7. In recognition of the extraordinary nature of the fact-finding powers that it proposed to confer upon motion judges and masters, the Osborne Report emphasized that the exercise of these powers should be subject to a threshold test to ensure they were used "safely". In a passage quoted by the Court of Appeal herein,29 the Osborne Report stated:

If the objective is to provide an effective mechanism for the court to dispose of cases early where in the opinion of the court a trial is unnecessary after reviewing the best available evidence from the parties, then it seems to me to be preferable to provide the court with the express authority to do what some decisions of the Court of Appeal have said a motion judge or master cannot do. That is, permit the court on a summary judgment motion to weigh the evidence, draw inferences and evaluate credibility in appropriate cases. Therefore, any new rule 20 should provide a basis for the motion judge to determine whether such an assessment can be safely made on the motion, or whether the interests ofjustice require that the issue be determined by the trier offact at trial.30

38. The recommendations in the Osborne Report were enacted, though only in part, by the Civil Rules Committee in 2010. With respect to Recommendation 14, the Civil Rules Committee agreed that the ability to weigh evidence, evaluate credibility and draw factual inferences should be subject to a threshold test which prohibited the powers from being exercised where it was in the "interest of justice" for them to be utilized only at trial. As well, in a significant departure from the Osborne

("Differences of law, just as differences offact, are normally to be decided by trial after hearing in Court, and not to be refused a hearing in Court by an order of the judge in chambers"). 28 Hon. Coulter A. Osborne, Q.C., Civil Justice Reform Project: Summary ofFindings and Recommendations (Toronto: Ontario Ministry of the Attorney General, 2007) at vi-vii, emphasis added, RBOA, Tab 91. 29 Appeal Decision at para. 23, RBOA, Tab 22. 30 Hon. Coulter A. Osborne, Q.C., Civil Justice Reform Project: Summary ofFindings and Recommendations (Toronto: Ontario Ministry of the Attorney General, 2007) at 35, emphasis added, RBOA, Tab 91. -13-

Report and in further recognition of the extraordinary nature of these new fact-finding powers, the Civil Rules Committee made them available only to motion judges, not masters.31 The new Rule 20.04(2.1) as enacted provides:

(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, ifthe determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest ofjustice for such powers to be exercised only at a trial: 1. Weighing the evidence. 2. Evaluating the credibility of a deponent. 3. Drawing any reasonable inference from the evidence. [emphasis addedj

39. The Civil Rules Committee also declined to adopt other recommendations in the Osborne Report which would have given motion judges expanded fact-finding powers.32 Although Recommendation 17 of the Osborne Report proposed that Ontario adopt a summary trial mechanism, similar to then-Rule 18A in British Columbia's Supreme Court Civil Rules, no such procedure was added by the Civil Rules Committee. Further, whereas Recommendation 15 of the Osborne Report proposed that courts be given the ability to direct a mini-trial on one or more issues to dispose of a summary judgment motion, Rule 20.04(2.2) merely permits a judge (and not a master) to order oral evidence for the limited purpose of exercising the Rule 20.04(2.1) powers. The Committee was clearly wary of expanding too broadly the new fact-finding powers available on motions.

40. Finally, the Committee amended the test for summary judgment in Rule 20.04(2) to reflect that if the case is one where the interests of justice permit the expanded powers to be used on the motion, some genuine issues of fact may not require a trial for their resolution, while some wi11. 33

41. It was against this backdrop that the Court of Appeal formulated the "full appreciation" test. The Court began by recognizing that, as under old Rule 20, summary judgment could be appropriate where either: (1) the parties agreed to proceed by summary judgment; or (2) the relevant claim or defence had no chance of success34 (i.e., it did not raise any genuine issue offact).35 It went on to

31 Appeal Decision at para. 31, RBOA, Tab 22. 32 Appeal Decision at paras. 24 and 26-34, RBOA, Tab 22. 33 Appeal Decision at para. 30, RBOA, Tab 22. 34 Appeal Decision at paras. 41-43, RBOA, Tab 22. See also paras. 73 and 101-111. 35 See Aronowicz v. Emtwo Properties Inc. (2010), 98 O.R. (3d) 641 (C.A.) at paras. 20-21, RBOA, Tab 6. -14-

observe that, with the Rule 20 amendment, summary judgment could also now be granted where a genuine issue of fact exists, but it can be resolved through the Rule 20.04(2.1) powers on a motion:

Moreover, the amended Rule 20 now permits a third type of case to be decided summarily. The rule provides for the summary disposition of cases other than by way of agreement or where there is "no chance of success". The prior wording of Rule 20, whether there was a "genuine issue for trial", was replaced by "genuine issue requiring a trial". This change in language is more than mere semantics. The prior wording served mainly to winnow out plainly unmeritorious litigation. The amended wording, coupled with the enhancedpowers under rules 20. 04(2.1) and (2.2), now permit the motion judge to dispose of cases on the merits where the trial process is not required in the "interest ofjustice".36

42. The Court of Appeal thus identified the critical question as being when the Rule 20.04(2.1) powers can be used to make dispositive factual findings. Consistent with the Osborne Report., the Court found that a threshold test for use of these powers was contained in Rule 20.04(2.1) itself:37

The threshold issue in understanding the application of the powers granted to the motion judge by rule 20.04(2.1) is the meaning to be attributed to the phrase "interest ofjustice". This phrase operates as the limiting language that guides the determination whether a motion judge should exercise the powers to weigh evidence, evaluate credibility, and draw reasonable inferences from the evidence on a motion for summary judgment, or if these powers should be exercised only at a trial. The phrase reflects that the aim of the civil justice system is to provide a just result in disputed matters through a fair process. The amended rule recognizes that while there is a role for an expanded summary judgment procedure, a trial is essential in certain circumstances if the "interest ofjustice" is to be served. 38

43. Thus, in order to determine when the Rule 20.04(2.1) powers can be used, the Court of Appeal was required to determine why a trial is sometimes necessary in the "interest ofjustice". It found the answer in this Court's own description of the unique position of the trial judge in Hausen:

What is it about the trial process that certain types ofcases require a trialfor their fair and just resolution? In Hausen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, the majority

36 Appeal Decision at para. 44, emphasis added, RBOA, Tab 22. 37 At para. 55 of the Appellant's Factum, the Appellant also criticizes the Court of Appeal for articulating the full appreciation test since those are "words not found in the Rule". However, the fact that the words "full appreciation" do not appear in the text of Rule 20.04 is immaterial. The words "material fact" do not appear in Rule 20.04 either, yet are clearly implicit within it: Irving Ungerman Ltd. v. Galanis (1991), 4 O.R. (3d) 545 (QL) at para. 16 (C.A.), RBOA, Tab 47; Esses v. Bank ofMontreal (2008), 241 O.A.C. 134 at para. 42 (C.A.), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 471, RBOA, Tab 31. The issue is thus whether Rule 20.04(2.1) contains an implicit requirement for the motion judge to possess a full appreciation of the evidence and issues in the case before exercising the Rule 20.04(2.1) powers, which it does, as discussed below. 38 Appeal Decision at para. 45, emphasis added, RBOA, Tab 22. -15-

decision of Iacobucci and Major JJ., at para. 14, quotes a passage from R.D. Gibbens in "Appellate Review ofFindings of Fact" (1991-92), 13 Advocates' Q. 445, at p. 446, which refers to the trial judge's "expertise in assessing and weighing the facts developed at trial". The quoted passage states: "The trial judge has sat through the entire case and his ultimate judgment reflects this totalfamiliarity with the evidence." The passage further notes that the trial judge gains insight by living with the case for days, weeks or even months. At para. 18, Iacobucci and Major JJ. go on to observe that it is the tria/judge's "extensive exposure to the evidence, the advantage ofhearing testimony viva voce, and the judge'sfamiliarity with the case as a whole" that enables him or her to gain the level ofappreciation ofthe issues and the evidence that is required to make dispositive findings. As these passages reflect, the trial judge is a trier of fact who participates in the dynamic of a trial, sees witnesses testify, follows the trial narrative, asks questions when in doubt as to the substance of the evidence, monitors the cut and thrust of the adversaries, and hears the evidence in the words of the witnesses. As expressed by the majority in Hausen, at para. 25, the trial judge is in a "privileged position". The trial judge's role as a participant in the unfolding ofthe evidence at trial provides a greater assurance offairness in the process for resolving the dispute. The nature of the process is such that it is unlikely that the judge will overlook evidence as it is adduced into the record in his or her presence.

In contrast, a summary judgment motion is decided primarily on a written record. The deponents swear to affidavits typically drafted by counsel and do not speak in their own words. Although they are cross-examined and transcripts ofthese examinations are before the court, the motion judge is not present to observe the witnesses during their testimony. Rather, the motion judge is working from transcripts. The record does not take the form of a trial narrative. The parties do not review the entire record with the motion judge. Any fulsome review of the record by the motion judge takes place in chambers.39

44. The Court of Appeal then made these critical remarks:

We find that the passages set out above from Hausen, at paras. 14 and 18, such as "total familiarity with the evidence", "extensive exposure to the evidence", and "familiarity with the case as a whole", provide guidance as to when it is appropriate for the motion judge to exercise the powers in rule 20.04(2.1). In deciding if these powers should be used to weed out a claim as having no chance of success or be used to resolve all or part of an action, the motion judge must ask the following question: can the full appreciation ofthe evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a tria/?40

45. Accordingly, the Court proposed the full appreciation test as a threshold measure to determine if the fact-finding powers in Rule 20.04(2.1) can be "safely" exercised on a motion, or if the case is one in which "it is in the interest of justice for such powers to be exercised only at a trial".

39 Appeal Decision at panis. 46-47 and 49, emphasis added, RBOA, Tab 22. 40 Appeal Decision at para. 50, emphasis added, RBOA, Tab 22. -16-

46. There is nothing remarkable in this conclusion that a full appreciation of the evidence and issues in a case is necessary for the trier of fact to justly and fairly resolve it. Were a court to make dispositive factual findings without a full appreciation of the evidence and issues, the process would be patently unjust and it would run a serious risk of arriving at an erroneous outcome.

47. This Court has itself emphasized the importance of the trier of fact possessing a full appreciation of the issues and the evidence. In Daley, for instance, Bastarache J. held that a jury charge which does not enable the jury to "fully appreciate" the issues and defence will be inadequate, and lead to an unfair trial:

The extent to which the evidence must be reviewed "will depend on each particular case .. The test is one of fairness. The accused is entitled to a fair trial and to make full answer and defence. So long as the evidence is put to the jury in a manner that will allow it to fully appreciate the issues and the defence presented, the charge will be adequate": see Granger, at p. 249 .... 41

48. Similarly, in Lahaye, McLachlin C.J.C. held:

Value judgements in this domain of the law, like many others, cannot be avoided. But this does not mean that the decision-making process is subjective and arbitrary . ... [T]hey should make value judgments on the basis of evidence and a full appreciation of the relevant factual and legal context, to ensure that it is informed not by the judge's subjective views, but by relevant, objectively tested criteria . ... 42

49. And in Hynes, McLachlin C.J.C., held:

.. .[T]rial courts are better situated than preliminary inquiry justices to engage ins. 24(2) determinations. ... The inquiry is potentially wide-ranging, sometimes complex. Preliminary inquiry justices usually possess the expertise necessary to deal with Charter issues; indeed sitting as trial judges they do so routinely. However, it is the trial judge that will generally enjoy the fullest appreciation of "all the circumstances" relevant to a s. 24(2) determination. At the preliminary inquiry, where evidence may be incomplete and the full circumstances unknown, this assessment may be difficult, or worse, erroneous. The result may be to exclude evidence that would have been admitted in the light of the fuller picture presented at trial. This in turn may lead to the premature dismissal of cases warranting prosecution at the preliminary stage.43

41 R. v. Daley, [2007] 3 S.C.R. 523 at para. 57, emphasis added, RBOA, Tab 70. vide R. v. Azoulay, [1952] 2 S.C.R. 495 at 499, per Taschereau J, RBOA, Tab 69. 42 R. v. Lahaye, [2005] 3 S.C.R. 728 at para. 54, emphasis added, RBOA, Tab 72. 43 R. v. Hynes, [2001] 3 S.C.R. 623 at para. 40, emphasis added, RBOA, Tab 71. -17-

50. The full appreciation test does not unduly limit access to justice, as the Appellant suggests.44 The main objectives of Ontario's summary judgment procedure are increased efficiency, expeditious resolution of court cases, and decreased legal expense to litigants".45 However, the Rules of Civil Procedure cannot be construed solely to produce expeditious and inexpensive results; justice necessarily comes first:

1.04 ( 1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.46

51. The summary judgment rule was not intended to deprive litigants of a trial where the interests ofjustice require one for the evidence to be fully appreciated, and the dispute fairly resolved. As the Court of Appeal held:

... One of the objectives behind enhancing the powers available to judges on a summary judgment motion was to make this form of summary disposition of an action more accessible to litigants with a view to achieving cost savings and a more efficient resolution of disputes.

However, it is equally clear that the amendments to Rule 20 were never intended to eliminate trials. In fact, the inappropriate use ofRule 20 has the perverse effect ofcreating delays and wasted costs associated with preparing for, arguing and deciding a motion for summary judgment, only to see the matter sent on for trial.

... [W]e emphasize that the purpose ofthe new rule is to eliminate unnecessary trials, not to eliminate all trials. The guiding consideration is whether the summary judgment process, in the circumstances of a given case, will provide an appropriate means for effecting a fair and just resolution of the dispute before the court. 47

52. This Court made the same point in Lameman:

... The summary judgment rule serves an important purpose in the civil litigation system. It prevents claims or defences that have no chance of success from proceeding to trial. Trying unmeritorious claims imposes a heavy price in terms of time and cost on the parties to the litigation and on the justice system. It is essential to the proper operation ofthe justice system and beneficial to the parties that claims that have no chance of success be weeded out at an early stage. Conversely, it is essential to justice that claims disclosing real issues that may be successful proceed to trial.

44 Appellant's Factum at paras. 8(a), 12, 49(a), 51 and 60-61. 45 Appellant's Factum at para. 9. 46 Rules of Civil Procedure, Rule 1.04(1), emphasis added. 47 Appeal Decision at paras. 3-4 and 38, underlining in original, holding and italics added, RBOA, Tab 22. -18-

For this reason, the bar on a motion for summary judgment is high . ... 48

53. It is thus important that courts not adopt a Rule 20 test which would permit the expanded :fact­ finding powers to be used without regard :for the motion judge's ability to :fairly resolve the case. As Montgomery J. said in the context of a class certification motion:

It is imperative to have a scrupulous and effective screening so that in the quest :for cost effectiveness we do not obscure the ultimate goal of a just determination between the parties on the altar of expediency . ... 49

54. Indeed, an order dismissing summary judgment on the ground that there is a genuine,, issue requiring a trial is merely an interlocutory order that :focuses upon the :form of the proceedings. By contrast, an order granting summary judgment is a final determination of the parties' substantive rights. 50 Where the nature of the evidence or issues raises concerns that resolving the ac:tion summarily does not promote justice and fairness to all parties, the Court should allow the action to proceed to trial.

55. As well, the concept that summary judgment represents the best or only chance for efficient access to justice is misguided. In this case, the Appellant's summary judgment motion took years to 1 prosecute and cost millions. 5 Proceeding expeditiously through discoveries and trial would have been less costly, more efficient and resulted in a final determination on the merits. As Brown J. recently observed:

In light of the clear and detailed guidance given by the Court of Appeal in Combined Air about when it would be appropriate to bring a motion for summary judgment, why do counsel still attempt to bring summary judgment motions in inappropriate cases instead ofproceeding to trial? Why does there continue to exist a "motions culture" in the Toronto Region­ which I again observed during my stints in civil Motions Scheduling Court this past summer -which sees counsel preferring to wait nine months for a hearing date for a complex (i.e. full day) summary judgment motion instead ofaccepting a trial date three months hence?

48 Canada (A. G.) v. Lameman, [2008] 1 S.C.R. 372 at paras. 10-11, emphasis added, RBOA, Tab 16. vide Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 at 972-973 and 980, RBOA, Tab 45. 49 Abdoolv. Anaheim Management Ltd. (1993), 15 O.R. (3d) 39 (QL) at para. 50 (Gen. Div.), affd (1995), 21 O.R. (3d) 453 (Div. Ct.), emphasis added, RBOA, Tab 3. vide Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 S.C.R. 534 at para. 44 (and 23, 45-46, 51 and 57) ("In the end, the court must strike a balance between efficiency andfairness"), RBOA, Tab 88. 50 VK. Mason Construction Ltd. v. Canadian General Insurance Group Ltd. (1998) 42 O.R. (3d) 618 (QL) at paras. 9 and 18-19 (C.A.), RBOA, Tab 86. 51 Appeal Decision at para. 150, RBOA, Tab 22. -19-

A summary judgment motion may result in the grant of full summary judgment, or it may not. By contrast, a trial will always result in a final determination on the merits. From the perspective ofthe allocation ofscarce judicial resources, the trial exerts a strong attraction because the amount ofjudicial time devoted to hearing a trial always will result in a final determination on the merits, whereas devoting an equal amount oftime to dealing with a complex summary judgment motion may or may not result in a final adjudication. In a time of constrained judicial resources, it should not surprise the Bar or litigants that judges prefer devoting time to achieving a final determination of a case than to dealing with a series of indeterminate, interlocutory motions, including summary judgment motions. 52

56. Efficiency and access to justice require that the right cases be decided on summary judgment, and that other cases proceed to trial. The amended Rule 20 calls for a balance. This balance is struck by the full appreciation test, which ensures that cases proceed to trial only where they cannot be justly and fairly resolved on a summary judgment motion.

57. The conflicting jurisprudence prior to the Appeal Decision demonstrates that such a clear test is needed. 53 The "contextual justice" approach suggested by the Appellant would create more uncertainty about which cases are appropriate for summary judgment, increase the risk of injustice, and lead to greater inefficiencies which would undermine the purpose of Rule 20.

C. The Hallmarks Are Not Rigid Categories

58. In critiquing the full appreciation test, the Appellant asserts that the Court of Appeal "severely constrict[ ed]" Rule 20 by adopting a "blanket list" of "restrictive" categories of cases which are not appropriate to summary judgment. 54 At paragraph 50 of its factum, the Appellant lists 11 such categories.

59. Most of the Appellant's "categories" (to the extent that they are not simply variations on the full appreciation test itself) overlap. This reflects the fact that the Court of Appeal did not purport to formulate a rigid set of rules for the use of Rule 20, but rather identified some non-exhaustive hallmarks of cases where summary judgment may or may not be presumptively appropriate. The Court of Appeal held:

52 George Weston Ltd. v. Domtar Inc., 2012 ONSC 5001 at para. 30, emphasis added, RBOA, Tab 37. 53 Appeal Decision at paras. 5 and 35, RBOA, Tab 22. 54 Appellant's Factum at paras. 8(a), 49(a) and 61. -20-

Speaking generally, and without attempting to be exhaustive, there are three types of cases that are amenable to summary judgment. ...

Finally, we observe that it is not necessary for a motion judge to try to categorize the type of case in question. In particular, the latter two classes of cases we described are not to be viewed as discrete compartments . ... The important element of the analysis under the amended Rule 20 is that, before using the powers in rule 20.04(2.1) to weigh evidence, evaluate credibility, and draw reasonable inferences, the motion judge must apply the full appreciation test in order to be satisfied that the interest ofjustice does not require that these powers be exercised only at a trial.

We think this "full appreciation test" provides a useful benchmark for deciding whether or not a trial is required in the interest of justice. In cases that call for multiple findings of fact on the basis of conflicting evidence emanating from a number of witnesses and found in a voluminous record, a summary judgment motion cannot serve as an adequate substitute for the trial process. Generally speaking, in those cases, the motion judge simply cannot achieve the full appreciation of the evidence and issues that is required to make dispositive findings. Accordingly, the full appreciation test is not met and the "interest ofjustice" requires a trial. In contrast, in document-driven cases with limited testimonial evidence, a motion judge would be able to achieve the full appreciation of the evidence and issues that is required to make dispositive findings. Similarly, the full appreciation test may be met in cases with limited contentious factual issues. The full appreciation test may also be met in cases where the record can be supplemented to the requisite degree at the motion judge's direction by hearing oral evidence on discrete issues.

Given that Rule 76 limits discoveries and prohibits cross-examination on affidavits and examinations of witnesses on motions, the test for granting summary judgment will generally not be met where there is significant conflicting evidence on issues confronting the motion 5 judge. 5

60. All cases fall along a continuum, ranging from those ideal for determination by summary judgment to those in which undoubtedly the matter should be sent to trial. The hallmarks set out by the Court are intended to illustrate how to approach the question of whether the interest of justice requires a trial. The hallmarks do not relieve motion judges of the obligation to consider the attributes of the cases before them to determine whether use of the expanded powers is appropriate. As stated by the Court of Appeal itself:

Although both the summary judgment motion and a full trial are processes by which actions may be adjudicated in the "interest of justice", the procedural fairness of each of these two processes depends on the nature of the issues posed and the evidence led by the parties. In some cases, it is safe to determine the matter on a motion for summary judgment because the

55 Appeal Decision at paras. 40, 51-52, 75 and 256, emphasis added, RBOA, Tab 22. -21-

motion record is sufficient to ensure that a just result can be achieved without the need for a full trial. In other cases, the record will not be adequate for this purpose, nor can it be made so regardless of the specific tools that are now available to the motion judge. In such cases, a just result can only be achieved through the trial process. This pivotal determination must be made on a case-by-case basis. 56

61. The factors identified by the Court as the hallmarks of cases requiring a trial were derived from prior jurisprudence on summary judgment motions, mostly under the amended Rule 20. For instance, before the Appeal Decision was rendered:

(a) a contest of credibility that related to key issues and genuine he said/she said disputes that required oral evidence to ascertain the likely truth was a reason to send a matter to trial·,57

(b) voluminous evidence, an extensive motion record and complicated issues was 8 identified as a reason to prefer a trial; 5

(c) the mitigating effect of reliable documentary evidence, which can sometimes be used 9 to overcome and resolve contests of credibility, had been addressed; 5 and

(d) the proposition that the benefits of summary judgment may be lost, and the risk of inconsistent findings introduced, where the evidence, witnesses and issues in question are going to be the subject of a trial anyway, had been recognized.60

62. These same characteristics had also been recognized by other Canadian courts as being relevant to the issue of whether it is in the interest of justice for a case to be resolved summarily.61

56 Appeal Decision at para. 39, emphasis added, RBOA, Tab 22. 57 Optech Inc. v. Sharma, 2011 ONSC 680 at para. 64, RBOA, Tab 63. vide: Zurba v. Lakeridge Health Corp. (2010), 99 O.R. (3d) 596 at para. 53 (S.C.J.), RBOA, Tab 89; Thirukumar v. Aravinthan (2010), 103 O.R. (3d) 777 at paras. 25-26 (S.C.J.), RBOA, Tab 82; and MCAP Leasing Limited Partnership v. Lind Furniture (Canada) Ltd., 2010 ONSC 1085 at paras. 50-51, RBOA, Tab 57. 58 Canadian Premier Life Insurance Co. v. Sears Canada Inc. (2010), 91 C.C.L.I. (4th) 120 at paras. 71 and 88 (Ont. S.C.J.), RBOA, Tab 17. 59 Cuthbertv. TD Canada Trust, 2010 ONSC 830, RBOA, Tab 26. 60 HSBC Securities (Canada) Inc. v. Davies, Ward & Beck, [2004] O.J. No. 3806 at paras. 144-147 (S.C.J.), RBOA, Tab 44. 61 Chalmers v. Dominion Lumber Winnipeg Ltd. (2000), 145 Man. R. (2d) 174 (C.A.) at para. 21, leave to appeal to S.C.C. refused, [2000] S.C.C.A. No. 246, RBOA, Tab 20; Duffv. Oshust(2005), 381 A.R. 386 at -22-

63. In order to formulate appropriate litigation strategies, litigants and members ofthe bar require some direction from the courts about when the expanded powers can appropriately be used and when cases require a trial. There is nothing improper in the Court of Appeal identifying presumptive categories of cases to provide the needed guidance. Indeed, this Court has taken a similar approach, as for instance in addressing the duty of care in negligence. 62

64. Similarly, in Van Breda, LeBel J. held that the approach of identifying presumptive factors struck the right balance between certainty and predictability on the one hand, and fairness and judicial discretion on the other:

The development and evolution of the approaches to the assumption ofjurisdiction reviewed above suggest that stability and predictability in this branch of the law of conflicts should turn primarily on the identification ofobjective factors that might link a legal situation or the subject matter oflitigation to the court that is seized ofit. At the same time, the need for fairness and justice to all parties engaged in litigation must be borne in mind in selecting these presumptive connecting factors. But in recent years, the preferred approach in Canada has been to rely on a set ofspecific factors, which are given presumptive effect, as opposed to a regime based on an exercise of almost pure and individualized judicial discretion .

. . . In my view, identifying a set of relevant presumptive connectingfactors and determining their legal nature and effect will bring greater clarity andpredictability to the analysis ofthe problems of assumption of jurisdiction, while at the same time ensuring consistency with the objectives offairness and efficiency that underlie this branch of the law.63

65. There is nothing in the Appeal Decision to suggest that any single characteristic in a case would require that a matter be sent to trial. Indeed, in applying the full appreciation test, motion judges have recognized that the hallmarks set out by the Court of Appeal are not definitive.64 The Court of Appeal recently affirmed this point in Precious Metal, where it upheld a summary judgment granted prior to the release of the Appeal Decision:

This is a case in which there is a voluminous evidentiary record and conflicting evidence from a number of witnesses. Nevertheless, the Combined Air formulation of the summary

para. 24 (Q.B.), RBOA, Tab30;Prymychv. Prymych, 2008 ABQB 461 at para. 40, RBOA, Tab 68;Fraserv. Abma, 2012 BCSC 1429 at paras. 47-61, RBOA, Tab 35. 62 Cooper v. Hobart, [2001] 3 S.C.R. 537 at paras, 23, 31, 35-36, 39 and 41, RBOA, Tab 23. 63 Club Resorts Ltd v. Van Breda, [2012] 1 S.C.R. 572 at paras. 75 and 78, emphasis added, RBOA, Tab 21. 64 Honest Art Inc. v. Decode Entertainment Inc., 2012 ONSC 580 at para. 4, leave to appeal to Ont. Div. Ct. refused, 2012 ONSC 2965, RBOA, Tab 42; Stewart v. State Farm Mutual Automobile Insurance Co., 2012 ONSC 2615 at para. 31, RBOA, Tab 81; Kidman Estate v. Christoforatou, 2012 ONSC 2981 at para. 8, RBOA, Tab 52; 2144688 Ontario Ltd v. 1482241 Ontario Ltd., 2012 ONSC 4133 at para. 12, RBOA, Tab 1. -23-

judgment test is met in this case. The record enabled the application judge to have a "full appreciation" of the evidence and issues required to make the findings he did. 65

66. The Appellant advocates for a test pursuant to which a case that bears all the hallmarks of one requiring a trial can still be determined by summary judgment in appropriate circumstances;66 a test whereby the characteristics of the cases that require a trial are guidelines rather than hard and fast rules. 67 The full appreciation test meets these goals.

D. The Summary Judgment Test Should Not Be Altered For Fraud Cases

67. The Appellant also argues that the full appreciation test should be abandoned because it is too difficult to satisfy in cases involving fraud. It asserts that "for the vast majority of civil fraud victims, after Combined Air, they will be unable to pursue a civil remedy in Ontario".68 This in terrorem argument is without foundation for several reasons.

68. First, the Appellant over-generalizes the features of fraud cases. There is no evidence before the Court that the "vast majority" of fraud cases "will run afoul of the guidelines laid out in Combined Air" by involving "different theories of liability being advanced against the various defendants" in the context of an "extensive record and numerous cross-examinations". 69 Some fraud cases may involve facts as simple as the vendor of a property intentionally misrepresenting the property's condition to the purchaser.

69. Second, even in complex fraud cases, there is no reason to believe that the full appreciation test is incapable of being met. Indeed, the Appellant itself acknowledges in its factum that:

However, the fact that these cases are factually made to appear complex by thefraudsters does not mean that a judge cannot gain a full appreciation of the evidence. . .. 70

70. Merely because some fraud cases are among those case which do not permit a full appreciation of the evidence and issues on a paper record does not mean that all fraud cases will

65 Precious Metal Capital Corp. v. Smith (2012), 76 E.T.R. (3d) 23 (Ont. C.A.) at para. 10, leave to appeal to S.C.C. refused, [2012] S.C.C.A. No. 256, emphasis added, RBOA, Tab 67. 66 Appellant's Factum at para. 71 67 Appellant's Factum at para. 69 68 Appellant's Factum at para. 66. 69 Appellant's Factum at paras. 64 and 66. 70 Appellant's Factum at para. 65, emphasis added. -24-

share this characteristic. Cases must be decided on their facts. As this Court said in the analogous context of a class certification motion in Hollick:

I should make one note on the scope of the holding in this case. The appellant took pains to characterize this case as raising the issue of whether Ontario's Class Proceedings Act, 1992 permits environmental class actions. I would not frame the issue so broadly. While the appellant has not met the certification requirements here, it does notfollow that those requirements could never be met in an environmental tort case. The question of whether an action should be permitted to be prosecuted as a class action is necessarily one that turns on the facts of the case. In this case there were serious questions about preferability. Other environmental tort cases may not raise the same questions. Those cases should be decided on their facts. 71

71. Third, Rule 20 is a procedural rule of broad application, which must be applied to many different types of cases.72 It should not be subject to different rules depending on the tort alleged. Had the Civil Rules Committee intended Rule 20 to apply differently in cases of fraud or other causes of action, it would have said so explicitly, as it did in relation to the rules of pleading in Rule 25.06(8):

[25.06](8) Where fraud, misrepresentation, breach of trust, malice or intent is alleged, the pleading shall contain full particulars, but knowledge may be alleged as a fact without pleading the circumstances from which it is to be inferred.

72. Fourth, to the extent that a special rule in cases of fraud is appropriate, it should be one which makes summary judgment more difficult to obtain.73 Allegations of fraud are quasi-criminal in nature, impugn the defendant's character, have serious repercussions for their reputation/4 and usually tum on assessments of credibility regarding the defendant's knowledge and intentions that are generally not amenable to determination on a paper record. As such, a trial is generally required to safely arrive at a just result. Cullity J. emphasized these points in Kanematsu:

71 Hollickv. Toronto (City), [2001] 3 S.C.R. 158 at para. 37, emphasis added, RBOA, Tab 40. 72 Irving Ungerman Ltd. v. Galanis (1991), 4 O.R. (3d) 545 (QL) at para. 38 (C.A.), ABOA, Tab 14; Appeal Decision, para. 218, ABOA, Tab 4.; Cosjordv. Player, 2012 ONCA 276 at para. 3, RBOA, Tab 25. 73 Fenwick v. Rumack (1993), 27 C.B.R. (3d) 235 (QL) at para. 2 (Gen. Div.), RBOA, Tab 47; Burchell v. Vincent(l993), 121 N.S.R. (2d) 37 (WLeC) at paras. 27-30 (S.C.), RBOA, Tab 13; Noethe v. Noethe, [2002] O.J. No. 1513 at para. 23 (S.C.J.), RBOA, Tab 62; Nestle Canada Inc. v. Kossatz, [2008] O.J. No. 4667 at para. 24 (S.C.J.), RBOA, Tab 61; Mystar Holdings Ltd. v. 247037 Alberta Ltd. (2009), 483 A.R. 12 at paras. 105-106 (Q.B.), RBOA, Tab 60; Optech Inc. v. Sharma, 2011 ONSC 680 at para. 64, RBOA, Tab 63. 74 862590 Ontario Ltd v. Petro Canada Inc. (2000), 33 C.E.L.R. (N.S.) 107 (Ont. S.C.J.) at paras. 316-317, RBOA, Tab2. -25-

While it would, no doubt, be going too far to exclude the possibility of summary judgment in all cases where fraud is alleged, a respondents denial of a fraudulent intention wiH necessarily give rise to an issue of credibility....

. . . Allegations of fraud involving personal dishonesty are very serious and the requirement that the moving party must put its best foot forward has, I think, special relevance in this case. I do not believe the requirement has been satisfied ... 75

73. Similarly, in Trans Canada, LeBlanc J. stated:

In considering the plaintiffs application for summary judgment, I am mi.ndful that the plaintiffs claim involves fraud This does not foreclose the possibility of summary judgment. It does, however, call for a very high degree of certainty. In Burchell v. Vincent (1993), 121 N.S.R. (2d) 37 (S.C.T.D.) ... Saunders J. (as he then was) ... went on to make the following comments about allegations of fraud in the context of summary judgment applications: I have been referred to a host of cases on summary judgment but in none ofthem was fraud found to have been proved. This is not surprising. Applications for summary judgment are brought in Chambers. The hearing is intended to proceed summarily. The motion is founded on evidence introduced by affidavit. Fraud is a very serious allegation. The burden of proving fraud rests with the party who asserts it. The standard of proof is on a balance of probabilities, but obviously will require a higher degree of probability commensurate with the severity of the accusation and its consequences ... It seems to me it would be a rare case where such a high degree ofproof could be met on a Chambers' application. In practically every case, an allegation offraud-­ here of deliberate deceit and wilful contractual breach -- would be founded on an attack against the reliability and credibility ofthe party accused ofsuch conduct. Such an attempt to impugn would be well beyond the scope of Chambers. But for an outright admission offraud by the defendant, the allegation can hardly be resolved in Chambers. It is not the forum where credit worthiness is established or challenged through the rigors of cross-examination. That is the province ofa full trial on the merits. [paras. 27-29.]

. . . Given the gravity of the allegation --fraud -- and the attendant requirement that the defendant intended to defraud the plaintiff, I am unable to see how credibility can be said not to be in issue. Neither ofthe witnesses who provided affidavits and appeared on behalf of the plaintiff were present when he completed the forms. They were therefore unable to speak to the circumstances in which the alleged fraudulent statements were made .... I am not convinced that the documents alone sufficiently substantiate the plaintiffs claim.

75 Kanematsu (Canada) Inc. v. Canada Import Sales, [1999] O.J. No. 3270 at paras. 29 and 32 (S.C.J.), RBOA, Tab 50. -26-

As a result, I believe that there is an arguable issue as to Mr. Crook's state of mind at the time he made the representations. The evidence is not sufficiently clear to attribute fraud on a summary judgment application. 76

7 4. Fifth, the 20 10 amendments to Rule 20 contain safeguards to dissuade parties from mounting illegitimate defences that are "factually made to appear complex".77 Under Rule 20.06, costs in summary judgment motions are no longer presumptively awarded against an unsuccessful moving party on a substantial indemnity basis. Instead, Rule 20.06(a) now permits the Court to award substantial indemnity costs against a party who "acted unreasonably by ... responding to the motion".78 If parties seek to manipulate the record for the purpose of making it appear factually complex, as the Defendants suggest a party who has committed fraud might do, courts have the power to address such behaviour.

E. "Undoubtedly" this Matter Should be Remitted to Trial

75. The Court of Appeal recognized that, applying the full appreciation test, the Bruno Action "undoubtedly" would be sent to trial. That finding meant it was not safe to make dispositive findings on a paper record, as a full appreciation of the evidence and issues was not available. Instead, it was in the interest of justice that the expanded powers be used only at trial.

76. Once that finding was made, the Court of Appeal was required to set aside the summary judgment and remit the matter to trial. It should not have gone on to use the Rule 20.04(2.1) powers to assess whether a genuine issue of material fact existed, or to resolve genuine issues of material fact. To do so was to not only to engage in prospective overruling, which was beyond the jurisdiction the Court, but was also to carry out an unsafe and unjust process by attempting to address the record in spite of the absence of a full appreciation of it.

77. Because the Appellant's remaining three allegations of error are directed at findings made through use ofthe Rule 20.04(2.1) powers, they concern aspects ofthe Court's reasons that are in effect obiter, and moot. However, for completeness, these arguments are addressed below.

76 1 Trans Canada Credit Corp. v. Crook (2005), 8 C.B.R. (5 h) 154 at paras. 19-20 and 23-24 (N.S.S.C.), emphasis added, RBOA, Tab 83. 77 Appellant's Factum at para. 65. 78 See also Appeal Decision at paras. 25 and 33, RBOA, Tab 22. -27-

2. The Court of Appeal Applied the Appropriate Standard of Review

78. The Appellant is incorrect to suggest that the Court of Appeal ignored the factual findings of the Motion Judge by applying a standard of correctness.79 Rather, the Court accepted several of the Motion Judge's findings regarding whether Mr. Hryniak was aware of the Appellant's investment, or received part ofit.80 As well, the Court made clear that the Motion Judge's factual findings were reviewable on a standard of palpable and overriding error:

Where the appellate court determines that the motion judge correctly applied the legal test for determining whether to grant summary judgment, any factual determinations by the motion judge in deciding the motion will attract review on the deferential standard ofpalpable and overriding error. 81

79. The errors which the Court found the Motion Judge committed were extricable errors oflaw, which by their nature attracted review on a standard of correctness. For instance, the Court found that the Motion Judge applied an incorrect legal standard for the application of the Rule 20.04(2.1) powers since he did not have the benefit of the full appreciation test, 82 and failed to consider the inducement element of the tort of deceit. 83 Both errors were properly reviewable on a standard of correctness. As this Court said in Hausen:

... Where, for instance, an error with respect to a finding of negligence can be attributed to the application ofan incorrect standard, a failure to consider a required element ofa legal test, or similar error in principle, such an error can be characterized as an error of law, subject to a standard of correctness. ... 84

3. The Court of Appeal Did Not Err In Formulating the Elements of Civil Fraud

A. Overview

80. The Appellant is also incorrect to suggest that the Court of Appeal erred in relation to the tort of civil fraud. Contrary to the Appellant's suggestions, the Court neither: (a) wrongly required proof

79 Appellant's Factum at paras. 73 and 77. 80 Appeal Decision at paras. 168 and 173, RBOA, Tab 22. 81 Appeal Decision at para. 71, emphasis added, RBOA, Tab 22. 82 Appeal Decision at paras. 147-148 and 152-155, RBOA, Tab 22. 83 Appeal Decision at paras. 169-170, RBOA, Tab 22. 84 Hausen v. Nikolaisen, [2002] 2 S.C.R. 235 at para. 36 (and 27, 31, 33 and 35), emphasis added, RBOA, Tab 43. -28- that Mr. Hryniak induced the Appellant's investment as an element of the tort; nor (b) wrongly required proof that Mr. Hryniak benefitted from the Appellant's entire loss as an element ofthe tort. 85

B. Inducement is an Essential Element of Fraudulent Misrepresentation

81. The allegations in the Appellant's Statement of Claim set out:

F. DECEIT/FRAUD

46. In the alternative, the Plaintiff states that at all material times Hryniak and Peebles, with the assistance of their associates, made false representations to the Plaintiff about the existence, purpose, security, safety and nature of the investment.

4 7. The Plaintiff states that the Defendants knowing! y made these statements to the Plaintiff when they knew that they were false or when they did not believe in the truth of the statements. In the alternative, the Plaintiff states that the Defendants made the statements recklessly, careless as to whether the statements were true or false.

48. The Plaintiff states that the Defendants made the statements with the express purpose of inducing the Plaintiff to invest his $1,000,000.00 (USD) in·their scheme.

49. The Plaintiff states that it was the statements made by Hryniak, Peebles, and their associates, which led Bruno to send the $1,000,000.00 (USD) into the trust account of Cassels Brock. The Plaintiff states that as a result of the fraud he has lost $1,000,000.00 (USD).86

82. The cause of action alleged against Mr. Hryniak is thus not "civil fraud", but the discrete: tort of fraudulent misrepresentation. Notably, the Appellant itself recognized that this tort requires proof of inducement; it pled that Mr. Hryniak made the allegedly false statements to it with the "express purpose of inducing" his investment, and that it was led by the statements to invest.

83. By its pleading, the Appellant can betaken to have accepted that the question of whether Mr. Hryniak induced its investment is a material fact about which there can be a genuine issue: requiring a trial. Rule 25.06(1) requires that"[e ]very pleading shall contain a concise statement of the material facts on which the party relies". The Appellant pleaded the material fact of inducement.

85 Appellant's Factum at paras. 8(c), 49(c) and 80-103. 86 Fresh as Amended Statement ofC1aim, AR, Vol. II, p. 1 at paras. 46-49, emphasis added. -29-

84. Moreover, the law has been settled for nearly two centuries that the tort of fraudulent misrepresentation requires proof of a representation through which the defendant induced the plaintiffs loss. Even prior to Derry v. Peek,87 the House of Lords said in Smith v. Chadwick:

My Lords, I conceive that in an action ofdeceit, like the present, it is the duty of the plaintiff to establish two things; first, actual fraud, which is to be judged ofby the nature and character of the representations made, considered with reference to the object for which they were made, the knowledge or means of knowledge of the person making them, and the intention which the law justly imputes to every man to produce those consequences which are the natural result ofhis acts: and, secondly, he must establish that this fraud was an inducing cause to the contract; for which purpose it must be material, and it must have produced in his mind an erroneous belief, influencing his conduct. 88

85. Similarly, in Attwood v. Small, Lord Brougham stated:

Now, my Lords, what inference do I draw from these cases? It is this, that generalfraudulent conduct signifies nothing; that general dishonesty ofpurpose signifies nothing; that attempts to overreach go for nothing; that an intention and design to deceive may go for nothing, unless all this dishonesty ofpurpose, all this fraud, all this intention and design, can be connected with the particular transaction, and not only connected with the particular transaction, but must be made to be the very ground upon which this transaction took place, and must have given rise to this contract. ... It must be shown that the attempt was made, and made with success, cum fructu. The party must not only have been minded to overreach, but he must actually have overreached. He must not only have given instructions to the agent to deceive, but the agent must, in fulfilment of his directions, have made a representation; and moreover, the representation so made must have had the effect of deceiving the purchaser; and moreover, the purchaser must have trusted to that representation, and not to his own acumen, not to his own perspicacity, not to inquiries of . 89 hts own ....

86. In Parna, this Court dismissed an action for fraudulent misrepresentation where the plaintiff, a sophisticated purchaser, failed to prove that his decision to purchase the defendants' property was actually induced by their misstatements as opposed to his own business calculations:

The learned trial judge cited two brief passages; the first, from the judgment of Lord Herschell in Derry v. Peek [(1889), 14 App. Cas. 337],at p. 374, reads as follows:

87 (1888), 14 App. Cas. 337 (H.L.), RBOA, Tab 28. 88 Smith v. Chadwick (1884), 9 App. Cas. 187 (H.L.) at 190 (and 194-196), per Earl of Selbourne L.C., emphasis added, RBOA, Tab 79. , 89 Attwoodv. Small (1838), 7 E.R. 684, 6 Cl. & Fin. 232 (H.L.) at 447-448, emphasis added, RBOA, Tab 8. -30-

I think the authorities establish the following propositions.: First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice ... The second, from Anson on Contract, where ''fraud" has been defined, reads: Fraud is a false representation of fact, made with a knowledge of its falsehood, or recklessly, without belief in its truth, with the intention that it should be acted upon by the complaining party, and actually inducing him to act upon it. I am content to adopt these two short passages as being sufficient to dispose of this appeal. I am of the opinion that, firstly, the plaintiffs/ailed to prove false representation of fact made with a knowledge of its falsehood or recklessly, without belief in its truth and, secondly, that the plaintiffs actually were induced by any such representation. It must be remembered that the appellant Parna was, as I have said, a shrewd and experienced apartment house operator ... In my view, the appellant Pama knew much more about the apartment house operating business than did the personal respondents .... The appellant, therefore, knew that the amounts set out in ex. 6, and taken from that document into the schedule to the offer to purchase, were mere estimates and that they were not accurate statements as to either receipts or disbursements . ...

I have come to the conclusion that the evidence given by the appellant Pama himself and by the solicitor who acted for him in the purchase proves that the appellant Parna was not misled in any way by the representations even ifthey had been false to the knowledge ofthe respondents, but that a shrewd and intelligent apartment house operator figured that he could pay $251,000 for the property in question and obtain a satisfactory percentage of net profit.

I, therefore, have come to the conclusion that the plaintiffhas failed to prove the necessary ingredients in an action for deceit and that is the basis upon which the appellant has framed his action.90

87. The Appellant cites two authorities for the proposition that inducement is not an element of the tort of deceit: 91 (a) G.H.L. Fridman's The Law of Torts in Canada; 92 and (b) a trial ruling in Tretfab Inc. v. Kinmond. 93 However, both hold that "reliance" by the plaintiff on the defendant's misstatement is an element of the tort. Reliance is inducement by another name. 94

90 Parnav. G. & S. Properties Ltd., [1971] S.C.R. 306 at 316-317 and 319-320, emphasis added, RBOA, Tab 65. 91 Appellant's Factum at paras. 82-83. 92 G.H.L .Fridman, The Law of Torts in Canada, 2nd ed. (Toronto: Carswell, 2002) at 709, ABOA, Tab 30. 93 Trentfab Inc. v. Kinmond, 2011 ONSC 773 at para. 202, affd, 2012 ONCA 914, ABOA, Tab 21. 94 1 L.K. Oil & Gas Ltd. v. Canalands Energy Corp. (1989), 60 D.L.R. (4 h) 490 (WLeC) at para. 25 (Alta. C.A.), leave to appeal to S.C.C. refused, [1989] S.C.C.A. No. 383, RBOA, Tab 54. vide D. Greenberg, ed., Jowitt 's Dictionary ofEnglish Law, 3rd ed. (London: Sweet & Maxwell, 20 10), s. v., "inducement" ("In the -31-

88. The authorities are clear that the Appellant was required to prove that Mr. Hryniak induced him to transfer his money to Cassels. The Appellant's evidence on the motion was insufficient to establish proof of this. As noted by the Court of Appeal:

... On the record before us, Bruno wired his U.S.$1 million investment to the Cassels Brock trust account without ever having met or spoken to Hryniak. He sent his investment after a short meeting with Peebles and Cranston, and first spoke to Hryniak a month or more later. Bruno acknowledges that he invested before meeting or talking to Hryniak. ... 95

89. The inducing statements the Appellant points to were made to him by Mr. Peebles. He asserts that Mr. Peebles was acting as Mr: Hryniak' s agent, and that Mr. Hryniak may therefore be liable regardless of whether Mr. Peebles is liable himself.96 However, the record before the Court was insufficient to permit a determination of whether this alleged agency relationship existed, or a finding as to what statements made by whom were relied upon by the Appellant:

... He contends, however, that Peebles acted as Hryniak's agent in inducing Bruno to invest. A person may commit fraud through an agent: see G.H.L Fridman, Canadian Agency Law, (Markham: LexisNexis Canada Inc., 2009), at pp. 190-93. But we have no compelling evidence that Peebles acted as Hryniak's agent for the purpose of inducing Bruno to invest. Nor could we make that finding as the motion judge left Peebles' credibility to be determined at trial. Also, we do not know what statements persuaded Bruno to invest. He may have invested because of something Peebles said; or, he may have invested because of something Cranston said. Indeed Bruno's own affidavit filed on his motion for summary judgment strongly suggests that Cranston's representations induced him to invest. Yet Cranston, as we have said, gave no evidence on the motion. For these reasons, whether Hryniak, through Peebles, made a false statement that induced Bruno to invest is a genuine issue requiring a trial. 97

C. Cranston's Theft of the Funds Is a Genuine Issue Requiring a Trial

90. In finding there to be a genuine issue requiring a trial with regard to whether Mr. Cranston and not Mr. Hryniak misappropriated the Appellant's funds, the Court of Appeal did not erroneously

law of misrepresentation, inducement denotes the required impact on the mind of the representee, also referred to as 'reliance"'), RBOA, Tab 90. 95 Appeal Decision at paras. 170-171, emphasis added, RBOA, Tab 22. 96 Appellant's Factum at paras. 96-103. 97 Appeal Decision at paras. 171-172, emphasis added, RBOA, Tab 22. -32-

add a new element to the tort of deceit. 98 Rather, the Court set out the correct elements of the tort, and explained that while one "element" of the tort was missing (inducement), there was also a genuine issue of material fact as to who received the Appellant's funds. 99

91. Implicit in the Appellant's argument is the proposition that only the elements of a cause of action can be genuine issues requiring a trial. That proposition is incorrect. The concept of a genuine issue for trial has long been referred to as a genuine issue with respect to "material facts", i.e., a fact whose existence or non-existence will affect the result. 100 Some facts may be material in determining whether an element of a cause of action is made out, without themselves being elements of the cause of action. For example, courts often determine that the credibility of the parties is a genuine issue requiring a trial. 101 The credibility of the parties is not an element of a cause of action, but is still an issue that can be material to determining whether the action is made out, and thus can constitute a genuine issue requiring a trial.

92. The issue of whether Mr. Cranston rather than Mr. Hryniak: subsequently misappropriated the funds is a material fact because it bears on other issues including Mr. Hryniak's credibility and the plausibility of his evidence that it was Mr. Cranston and/or Mr. Peebles who defrauded the Appellant. Mr. Hryniak:'s evidence is that the Appellant did not invest any money with him. If anyone, it must have been Mr. Peebles and/or Mr. Cranston who induced the Appellant to invest and planned to receive the Appellant's funds. If the evidence ultimately demonstrates that Mr. Peebles did in fact send some or all of the Appellant's funds to Mr. Cranston's company, that would tend to support Mr. Hryniak's defence and overall credibility.

93. Further, the extent to which Mr. Cranston subsequently misappropriated the funds is directly relevant to causation, which the Appellant must prove in order to establish the tort of deceit. As Lord Steyn held for the majority of Law Lords in Smith New Court Securities:

98 Appellant's Factum at para. 88. 99 Appeal Decision at paras. 156 and 167, RBOA, Tab 22. 100 Dawson v. RexcraftStorage and Warehouse Inc. (1998), 164 D.L.R. (4th) 257 (QL) at para. 28 (Ont. C.A.), RBOA, Tab 27; Kallaba v. Bylykbashi (2006), 265 D.L.R. (4th) 320 (Ont. C.A.) at para. 58, leave to appeal to S.C.C. refused, [2006] S.C.C.A. No. 144, RBOA, Tab 49. 101 Paiha v. McVean Drive Estates Inc., 2010 ONSC 6358 at paras. 32-33, RBOA, Tab 64; Altaibayeva v. Onyewucki, 2012 ONSC 4334 at para. 19, RBOA, Tab 5. -33-

... It is now necessary to consider separately the three limiting principles which, even in a case of deceit, serve to keep wrongdoers' liability within practical and sensible limits .... The second limiting principle is remoteness. I have already discussed the special rule of remoteness developed by the courts in the context of deceit. This requirement is in issue in the present case: ifthere is a sufficient causal link it must still be shown that the entire loss suffered by Smith is a direct consequence of the fraudulently induced transaction . ...

In these circumstances Smith was truly locked into the transaction by reason of the fraud perpetrated on it. And the causative influence ofthe fraud is not significantly attenuated or diluted by other causative factors acting simultaneously with or subsequent to the fraud. The position would have been different if the loss suffered by Smith arose from a subsequent fraud. ... 102

94. This Court affirmed these principles in Canson, where it considered a breach of fiduciary duty claim against a solicitor by his clients. The claim was brought in circumstances where the solicitor failed to inform the clients of a third party's interest in the property transaction to which they were purchasers, and the clients subsequently incurred losses when the property was damaged owing to the unrelated negligence of engineers and pile-drivers. Though the clients sought to recover the losses attributable to the unrelated property damage from the solicitor, on the theory they would not have entered into the transaction leading to them but for his fiduciary breach, LaForest J. writing for four members of the Court held that such losses were not recoverable, but that their compensation should be equivalent to the damages available for the tort of deceit. In dismissing the appeal, he said:

... Is the solicitor responsible only for losses directly flowing from the breach of duty itself, or is he also liable for loss caused by an intervening act unrelated to that breach, in this case loss caused by subsidence of a building resulting from the fault of engineers and pile­ drivers in carrying out the project knowri by the parties to be the purpose for the acquisition ofthe property? ...

. . .[Iff the action was one for deceit or fraud, not only foreseeable but unforeseeable damages flowing from the deceit would be awarded, stopping, however, where the chain of causation was broken; see Doyle v. Olby (Ironmongers) Ltd, [1969] 2 Q.B. 158 (C.A.); Rainbow Industrial Caterers Ltd v. C.NR., [1990] 3 W.W.R. 413, atp. 426 (B.C.C.A.), affd by this Court, [1991] 3 S.C.R. 3. If the action were brought on any of these bases, then, the appellants could not recover for the very substantial damages that arose from the actions

102 Smith New Court Securities Ltd v. Citibank NA., [1997] A.C. 254 at 284-285 (and 267 and 278-279) (H.L.), emphasis added, RBOA, Tab 78. vide: Peek v. Derry (1887), 37 Ch. D. 541 at 592 (C.A.), rev'd on other grounds (1889), 14 App. Cas. 337 (H.L.), RBOA, Tab 66; Lumbers v. Gold Medal Furniture Manufacturing Co. (1899), 30 S.C.R. 55 at 62, RBOA, Tab 55; K.R.M Construction Ltd v. British Columbia Railway Co. (1982), 40 B.C.L.R. 1 (QL) at paras. 97 and 99 (C.A.), RBOA, Tab 48; andSouthAustraliaAsset Management Corp. v. York Montague Ltd, [1997] 1 A.C. 191 at 216 (H.L.), RBOA, Tab 80. -34-

of the engineering firm and the pile-driving company.

. . . I do not accept that there is need to strengthen the fiduciary position to the point of unnecessary harshness. Both the common law and equity sufficiently support the fiduciary position by compensating the victim of the breach of confidence. Damages equivalent to those for deceit would seem sufficient to meet both these ends. That was the level of compensation awarded by the courts below and neither party contested its appropriateness. 103

95. If the trial reveals that the Appellant was induced to invest by Mr. Hryniak but that Mr. Cranston, with the help of Mr. Peebles, subsequently misappropriated the investment, the chain of causation would be broken. 104 In those circumstances, based on the principles of causation and remoteness outlined above, the Appellant would not be entitled to recover its loss from Mr. Hryniak. As Lord Bingham stated in Carr:

The rationale of the principle that a novus actus interveniens breaks the chain ofcausation is fairness. It is not fair to hold a tortfeasor liable, however gross his breach of duty may he, for damage caused to the claimant not by the tortfeasor's breach of duty but by some independent, supervening cause (which may cir may not be tortious) for which the tortfeasor Is. not respons1"bl e. . .. 105

96. The Court of Appeal's reasons demonstrate that there is a genuine issue requiring a trial regarding whether this in fact occurred:

... [T]he Cassels Brock trust ledgers also show that in late June 2002, Hryniak redeposited U.S.$550,000 into the Cassels Brock trust account for Tropos, with the result that the law firm then held more than U.S.$1 million in trust for Hryniak's company. In March 2005, Peebles signed a written statement before a lawyer in which he acknowledged that he inadvertently sent U.S.$1 million out of the Cassels Brock trust account to Cranston's company, Rhino Holdings. The motion judge did not refer to this statement. Although Peebles appeared to retract his statement in a later affidavit, his

103 Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534 at 558, 565 and 589, emphasis added, RBOA, Tab 18. Stevenson J., writing for himself, agreed with La Forest J.'s conclusion and was in "substantial agreement" with his reasoning. McLachlin J., writing for three members of the Court, disagreed with La Forest J. that compensation for breach of fiduciary duty should be assessed by analogy with tort or contract, but did not suggest that La Forest J. improperly identified the measure of damages for deceit. 104 Home Office v. Dorset Yacht Co. Ltd., [1970) A. C. 1004 at 1027-1030 (H.L.), per Lord Reid, RBOA, Tab 41; Bradfordv. Kanellos, [1974] S.C.R. 409 at 412-413, affg, [1971] 2 O.R. 393 (QL) at paras. 5-7 (C.A.), RBOA, Tab 11; Renaissance Leisure Group Inc. (c.o.b. Muskoka Sands Inc.) v. Frazer (2004), 242 D.L.R. (41h) 229 at para. 40 (Ont. C.A.), RBOA, Tab 73; Garrattv. OrilliaPower Distribution Corp. (2008), 90 O.R. (3d) 161 at paras. 57-66 (C.A.), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 344, RBOA, Tab 36. 105 Carr v. IBC Vehicles Ltd., [2008] 1 A.C. 884 at para. 15 (H.L.), emphasis added, RBOA, Tab 24. -35-

credibility remains to be determined. Thus, whether the U.S.$1 million sent to Cranston, included U.S.$550,000 ofBruno's money, and whether Hryniak eventually got the benefit of that money or whether Cranston misappropriated it are questions that require a trial for their resolution. 106

97. Accordingly, the Court did not err in setting aside the summary judgment and remitting the matter to a trial on the merits on this ground as well.

4. The Court of Appeal Did Not Apply an Elevated Standard of Proof

98. The Court of Appeal also did not err by imposing an elevated standard of proof through use of the word "compelling" in the following passage:

Bruno acknowledges that he invested before meeting or talking to Hryniak. He contends, however, that Peebles acted as Hryniak's agent in inducing Bruno to invest. A person may commit fraud through an agent: see G.H.L Fridman, Canadian Agency Law, (Markham: LexisNexis Canada Inc., 2009), at pp. 190-93. But we have no compelling evidence that Peebles acted as Hryniak's agent for the purpose of inducing Bruno to invest. Nor could we make that finding as the motionjudge left Peebles' credibility to be determined at trial. 107

99. "Compelling" was not said by the Court of Appeal to represent the applicable standard of proof. The Court made clear that the Appellant was required to prove its case on a balance of probabilities. 108 The Appellant has not rebutted the strong presumption that the Court of Appeal applied the correct legal standard. As this Court stated in McDougall:

... Where the trial judge expressly states the correct standard ofproof, it will be presumed that it was applied. Where the trial judge does not express a particular standard of proof, it will also be presumed that the correct standard was applied: ... Whether the correct standard was expressly stated or not, the presumption ofcorrect application will apply unless it can be demonstrated by the analysis conducted that the incorrect standard was applied. ... 109

106 Appeal Decision at paras. 173-174, emphasis added, RBOA, Tab 22. 107 Appeal Decision at para. 171, emphasis added, RBOA, Tab 22. See also paras. 8(d), 49(d) and 104-125 of the Appellant's Factum. 108 Appeal Decision at para. 157, RBOA, Tab 22. 109 F.H v. McDougall, [2008] 3 S.C.R. 41 at para. 54, emphasis added, RBOA, Tab 32. vide Hausen v. Nikolaisen, [2002] 2 S.C.R. 235 at para. 40, RBOA, Tab 43. -36-

100. The mere use of the word "compelling" does not meet this test. To the contrary, several appellate courts since McDougall have recognized that a requirement for "compelling" evidence is consistent with the balance of probabilities. 110 In Mundulai, the Ontario Divisional Court stated:

The Supreme Court of Canada in F.H v. McDougall [2008] 3 S.C.R. 41, finally put to rest the question of whether there is some sort of sliding scale in civil proceedings involving allegations of criminal or quasi-criminal conduct. The simple answer is no- there is only one standard - proof on a balance ofprobabilities in civil matters, recognizing that the trier or triers of fact should look for clear, compelling and cogent evidence to get the trier or triers to that threshold .... 111

101. Similarly, in Richardson, the New Brunswick Court of Appeal held:

Although the trial judge did find motive, the finding was tenuous at best. In my opinion, the evidence of motive is so wanting that it fails to meet the balance ofprobabilities standard. The financial situation of the appellants was not so serious as to be a motive for arson. In fact, I suspect that the financial situation of the Richardsons is not unlike that of many New Brunswick households. The fact the property was listed for sale and had yet to generate any offers could be compelling evidence of motive, but not when one considers that the property had been on the market a mere five weeks .... 112

102. In Universal Aide Society, the Federal Court of Appeal said:

... While the applicant's memorandum of fact and law correctly asserts that reputational harm is an example of irreparable harm, the applicant has not provided any evidence of any aetual harm, reputational or otherwise, that it will suffer if the requested order is not granted. As stated by this Court in Hache v. Canada, 2006 FCA 424, at paragraph 11: The moving parties must demonstrate, on a balance ofprobabilities, that the harm that they would suffer is irreparable: Halford v. Seed Hawk Inc., 2006 FCA 167 at paragraph 12. Mere assertions do not suffice. Irreparable harm cannot be inferred. It must be established by clear and compelling evidence: A. Lassonde Inc. v; Island Oasis Canada Inc., [200 1] 2 F .C. 568 at paragraph 20. 113

103. The cases cited by the Appellant confirm this point. In Tsawwassen, the Court held:

110 See, in addition to the cases cited below, Merck Frosst Canada Ltd. v. Wuttunee, [2009] 5 W.W.R. 228 at para. 144 (Sask. C.A.), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 512, RBOA, Tab 59. 111 Law Society of Upper Canada v. Mundulai (2012), 294 O.A.C. 42 at para. 16 (Div. Ct.), emphasis added, RBOA, Tab 53. ll2 Richardson v. Smith (2012), 393 N.B.R. (2d) 95 at para. 32 (C.A.), emphasis added, RBOA, Tab 74. 113 Universal Aide Society v. Canada (MNR.) (2009), 389 N.R. 66 at para. 17 (F.C.A.), emphasis added, RBOA, Tab 85. -37-

I agree that the Commission's use of the term "compelling evidence" and reference to confirmation and corroboration could imply a higher standard than the normal balance of probabilities, but in the context of the Commission's consideration of Sea Breeze's evidence of trade benefits, there is no substantial question to be argued that a higher standard was in fact imposed. The Commission may have used more categorical language than necessary to explain its reasons for rejecting Sea Breeze's evidence, but that does not support the application for leave to appeal. 114

104. The context in which the Court of Appeal used the words "compelling evidence" is impmiant. The Court was being asked to make a finding of civil fraud against Mr. Hryniak on a paper record, without any ability to assess the credibility of the person who the Appellant alleged acted as Mr. Hryniak's agent for the purpose of making the fraudulent misrepresentations. Indeed, the Appellant's own affidavit evidence did not establish whether he was even induced through statements made by Mr. Hryniak's supposed agent, Mr. Peebles, or by Mr. Cranston. In these circumstances, there was no error in the Court of Appeal's statement that the Appellant lacked compelling evidence that Mr. Peebles acted as Mr. Hryniak' s agent for the purpose of inducing the Appellant to invest.

105. Fraud is "the most serious kind of civil claim", 115 and each of its elements must be strictly proven through sufficient evidence. 116 Recently, in Merck, a decision which postdates McDougall, this Court affirmed that the seriousness of the allegations may be taken into account in assessing how readily the b~lance of probabilities standard will be met in a given case:

... [I]t is important to differentiate between the standard of proof and how readily that standard may be attained in a given case. It is now settled law that there is only one civil standard of proof at common law and that standard is proof on the balance ofprobabilities: F.H v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, at para. 40. Nothing in the Act suggests that we should depart from this standard. However, as noted in McDougall, "context is all important and a judge should not be unmindful, where appropriate, of inherent probabilities or improbabilities or the seriousness ofthe allegations or consequences" (para. 40). Proof of risk of future harm, for example, is often not easy. Rothstein J. (then of the Federal Court) captured this point in Canada v. Canada where he noted that there is a "heavy onus" on a party attempting to prove future harm while underlining that the obligation to do so requires proof on a balance of probabilities (p. 476). Therefore, I conclude that a third

114 Tsawwassen Residents Against Higher Voltage Overhead Lines Society v. B. C. Utilities Commission, 2006 BCCA 537 at para. 77 (Chambers), var'd, 2007 BCCA 95, RBOA, Tab 84. 115 ATB Financial v. Metcalfe & Mansfield Alternative Investments II Corp. (2008), 92 O.R. (3d) 513 at para. 111 (C.A.), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 337, RBOA, Tab 7. 116 Van Raes v. Yen, [1955] S.C.J. No. 1 at para. 15, RBOA, Tab 87. -38-

party must establish that the statutory exemption applies on the balance ofprobabilities. However, what evidence will he required to reach that standard will be affected by the nature ofthe proposition the third party seeks to establish and the particular context ofthe 117 case. · 106. In this case, deficiencies in the evidence led the Court to conclude that there were genuine issues as to this material fact. The Court of Appeal's analysis, including its use ofthe phrase "no compelling evidence", is consistent with a weighing of the evidence to determine whether, on a balance of probabilities, these genuine issues required a trial.

PART IV-SUBMISSIONS CONCERNING COSTS

107. Mr. Hryniak submits that he is entitled to costs.

PARTV-ORDERSOUGHT

108. Mr. Hryniak respectfully requests that the appeal be dismissed, with the costs of the summary judgment motion and the appeals payable by the Appellant.

ALL OF WHICH IS RESPECTFULLY SUBMITTED this 1st day ofFebruary, 2013.

/1------J Brandon Kain

117 Merck Frosst Canada Ltd v. Canada (Health), [2012] 1 S.C.R. 23 at para. 94, emphasis added, RBOA, Tab 58. vide In Re H (Minors), [1996] A.C. 563 (H.L.) at 586-587, per Lord Nicholls ("When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence"), RBOA, Tab 46. -39-

PART VI-TABLE OF AUTHORITIES

Case Paragraph(s) referred to in memorandum of argument 2144688 Ontario Ltd. v. 1482241 Ontario Ltd., 2012 ONSC 4133. 65 862590 Ontario Ltd. v. Petro Canada Inc. (2000), 33 C.E.L.R. (N.S.) 72 107, [2000] O.J. No. 984 (QL) (S.C.J.).

Abdool v. Anaheim Management Ltd. (1993), 15 O.R. (3d) 39, [1993] 53 O.J. No. 1820 (QL) (Gen. Div.), affd (1995), 21 O.R. (3d) 453 (Div. Ct.).

Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161, 33 [1998] O.J. No. 459 (QL) (C.A.).

Altaibayeva v. Onyewucki, 2012 ONSC 4334. 91 Aronowicz v. Emtwo Properties Inc. (2010), 98 O.R. (3d) 641 (C.A.). 41 ATB Financial v. Metcalfe & Mansfield Alternative Investments II Corp. 105 (2008), 92 O.R. (3d) 513 (C.A.), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 337.

Attwood v. Small (1838), 7 E.R. 684, 6 Cl. & Fin. 232 (H.L.). 85 Baglow v. Smith (2012), 294 O.A.C. 24 (QL) (C.A.). 19 Bosse v. Mastercraft Group Inc. (1995), 123 D.L.R. (4th) 161, [1995] 34 O.J. No. 884 (QL) (Ont. C.A.), leave to appeal to S.C.C. refused, [1995] S.C.C.A. No. 205.

Bradford v. Kanellos, [1974] S.C.R. 409, affg [1971] 2 O.R. 393, [1970] 95 O.J. No. 1790 (QL) (C.A.).

Bruno Appliance and Furniture Inc. v. Cassels Brock & Blackwell LLP, 9, 13-14 2010 ONSC 5490 ["Motion Decision"].

Burchell v. Vincent (1993), 121 N.S.R. (2d) 37, 1993 CarswellNS 62 72-73 (WLeC) (S.C.).

Business Development BankofCanada v. 1626012 Ontario inc. (c.o.b. 19 Artistic Leather Living), 2012 ONCA 56. -40-

Byfield v. Toronto-Dominion Bank, 2012 ONCA 49. 19 Canada (A.G.) v. Lameman, [2008] 1 S.C.R. 372. 52 Canadian Premier Life Insurance Co. v. Sears Canada Inc. (2010), 91 61 C.C.L.I. (4th) 120 (Ont. S.C.J.).

Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534. 94 Caton v. Devecseri Estate, 2012 ONCA 6. 19 Chalmers v. Dominion Lumber Winnipeg Ltd. (2000), 145 Man. R. (2d) 62 174 (C.A.), leave to appeal to S.C.C. refused, [2000] S.C.C.A. No. 246.

Club Resorts Ltd. v. Van Breda, [2012] 1 S.C.R. 572. 64 Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764 3, 10-11, 16-26, ["Appeal Decision"]. 37-44, 51, 55, 57, 59-61, 65, 71, 74, 78-79, 88-90, 96, 98-99 Cooper v. Hobart, [2001] 3 S.C.R. 537. 63 Carr v. IBC Vehicles Ltd., [2008] 1 A.C. 884 (H.L.). 95 Cosford v. Player, 2012 ONCA 276. 18-19, 71 Cuthbert v. TD Canada Trust, 2010 ONSC 830. 61 Dawson v. RexcraftStorage and Warehouse Inc. (1998), 164 D.L.R. 35,91 (4th) 257, [1998] O.J. No. 3240 (QL) (Ont. C.A.).

Derry v. Peek, (1888), 14 App. Cas. 337 (H.L.). 84 Downer v. Personal Insurance Co. (2012), 110 O.R. (3d) 401 (QL) 19 (C.A.), leave to appeal to S.C.C. filed, [2012] S.C.C.A. No. 332.

Duffv. Oshust (2005), 381 A.R. 386 (Q.B.). 62

Esses v. Bank ofMontreal (2008), 241 O.A.C. 134 (C.A.), leave to appeal 34,42 to S.C.C. refused, [2008] S.C.C.A. No. 471.

F.H v. McDougall, [2008] 3 S.C.R. 41. 99-100, 105 Fifth Third Bank v. MP I Packaging Inc., 2013 ONCA 5. 19 -41-

Fenwick v. Rumack (1993), 27 C.B.R. (3d) 235, [1993] 0.1. No. 4351 72 (QL) (Gen. Div.).

Fraser v. Abma, 2012 BCSC 1429. 62 Garratt v. Orillia Power Distribution Corp. (2008), 90 O.R. (3d) 161 95 (C.A.), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 344.

George Weston Ltd v. Domtar Inc., 2012 ONSC 5001. 55 Goudie v. Ottawa (City), [2003] 1 S.C.R. 141. 34 Hinds v. Group 4 Security, 2012 ONCA 207. 19 Hollickv. Toronto (City), [2001] 3 S.C.R. 158. 70 Home Office v. Dorset Yacht Co. Ltd, [1970] A.C. 1004 (H.L.). 95 Honest Art Inc. v. Decode Entertainment Inc., 2012 ONSC 580, leave to 65 appeal to Ont. Div. Ct. refused, 2012 ONSC 2965.

Hausen v. Nikolaisen, [2002] 2 S.C.R. 235. 79,99 HSBC Securities (Canada) Inc. v. Davies, Ward & Beck, [2004] O.J. No. 61 3806 (QL) (S.C.J.).

Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959. 35,52 In Re H (Minors), [1996] A.C. 563 (H.L.). 105 Irving Ungerman Ltd v. Galanis (1991), 4 O.R. (3d) 545, [1991] O.J. 34,42, 71 No. 1478 (QL) (C.A.)

K.R.M Construction Ltd v. British Columbia Railway Co. (1982), 40 93 B.C.L.R. 1, [1982] B.C.J. No. 2049 (QL) (C.A.).

Kallaba v. Bylykbashi (2006), 265 D.L.R. (4th) 320 (Ont. C.A.), leave to 91 appeal to S.C.C. refused, [2006] S.C.C.A. No. 144.

Kanematsu (Canada) Inc. v. Canada Import Sales, [1999] O.J. No. 3270 72 (QL) (S.C.J.).

Khan v. University of Ottawa (1997), 34 O.R. (3d) 535, [1997] O.J. No. 34 2650 (QL) (C.A.)

Kidman Estate v. Christoforatou, 2012 ONSC 2981. 65 -42-

Law Society of Upper Canada v. Mundulai (2012), 294 O.A.C. 42 (Div. 100 Ct.).

L.K. Oil & Gas Ltd v. Canalands Energy Corp. (1989), 60 D.L.R. (4tn) 87 490 (Alta. C.A.) (WLeC), leave to appeal to S.C.C. refused, [1989] S.C.C.A. No. 383

Lumbers v. Gold Medal Furniture Manufacturing Co. (1899), 30 S.C.R. 93 55.

Masciangelo v. Spensieri (1990), 1 C.P.C. (3d) 124, 1990 CarswellOnt 34 341 (WLeC) (Ont. H.C.J.).

MCAP Leasing Limited Partnership v. Lind Furniture (Canada) Ltd, 61 2010 ONSC 1085.

Merck Frosst Canada Ltd v. Canada (Health), [2012] 1 S.C.R. 23. 105 Merck Frosst Canada Ltd v. Wuttunee, [2009] 5 W.W.R. 228 (Sask. 100 C.A.), leave to appeal to S.C.C. refused, [2008] S.C.C.A. No. 512.

Mystar Holdings Ltd v. 247037 Alberta Ltd (2009), 483 A.R. 12 (Q.B.). 72 Nestle Canada Inc. v. Kossatz, [2008] O.J. No. 4667 (QL) (S.C.J.). 72 Noethe v. Noethe, [2002] O.J. No. 1513 (QL) (S.C.J.). 72 Optech Inc. v. Sharma, 2011 ONSC 680. 72 Paiha v. McVean Drive Estates Inc., 2010 ONSC 6358. 91 Parna v. G. & S. Properties Ltd, [1971] S.C.R. 306. 86 Peekv. Derry (1887), 37 Ch. D. 541 (C.A.), rev'd on other grounds 93 (1889), 14 App. Cas. 337 (H.L.)

Precious Metal Capital Corp. v. Smith (2012), 76 E.T.R. (3d) 23 (Ont. 19 C.A.), leave to appeal to S.C.C. refused, [2012] S.C.C.A. No. 256, emphasis added.

Prymych v. Prymych, 2008 ABQB 461. 65 R. v. Azoulay, [1952] 2 S.C.R. 495. 47 [2007] 3 S.C.R. 523. R. v. Daley, 47 [2001] 3 S.C.R. 623. R. v. Hynes, 49 -43-

R. v. Lahaye, [2005] 3 S.C.R. 728. 48 Renaissance Leisure Group Inc. (c.o.b. Muskoka Sands Inc.) v. Frazer 95 (2004), 242 D.L.R. (4th) 229 (Ont. C.A.).

Richardson v. Smith (2012), 393 N.B.R. (2d) 95 (C.A.). 101 Rozin (c.o.b. Grinfall Canada Co.) v. Ilitchev (2003), 66 O.R. (3d) 410 33 (C.A.).

Rudderham v. Folkes, 2012 ONCA 603. 19 Savage v. Belecque (2012), 111 O.R. (3d) 309 (QL) (C.A.). 19 Smith New Court Securities Ltd. v. Citibank NA., [1997] A. C. 254 93 (H.L.).

Smith v. Chadwick(1884), 9 App. Cas. 187 (H.L.). 84 South Australia Asset Management Corp. v. York Montague Ltd., [1997] 93 1 A.C. 191(H.L.).

Stewart v. State Farm Mutual Automobile Insurance Co., 2012 ONSC 65 2615.

Thirukumar v. Aravinthan (2010), 103 O.R. (3d) 777 (S.C.J.). 61 Trans Canada Credit Corp. v. Crook (2005), 8 C.B.R. (5th) 154 73 (N.S.S.C.).

Trentfab Inc. v. Kinmond, 2011 ONSC 773 at para. 202, affd, 2012 87 ONCA914.

Tsawwassen Residents Against Higher Voltage Overhead Lines Society v. 103 B.C. Utilities Commission, 2006 BCCA 537 (Chambers), var'd, 2007 BCCA95.

Universal Aide Society v. Canada (MNR.) (2009), 389 N.R. 66 (F.C.A.). 102 VK. Mason Construction Ltd. v. Canadian General Insurance Group 54 Ltd. (1998) 42 O.R. (3d) 618 (QL) (C.A.)

Van Raes v. Yen, [1955] S.C.J. No. 1 (QL). 105 Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 S.C.R. 534. 53 Zurba v. Lakeridge Health Corp. (2010), 99 O.R. (3d) 596 (S.C.J.). 61 -44-

D. Greenberg, ed., Jowitt's Dictionary of English Law, 3rd ed. (London: 87 Sweet & Maxwell, 201 0).

G.H.L .Fridman, The Law ofTorts in Canada, 2nd ed. (Toronto: 87 Carswell, 2002).

Hon. Coulter A. Osborne, Q.C., Civil Justice Reform Project: Summary 36-37 of Findings and Recommendations (Toronto: Ontario Ministry of the Attorney General, 2007). -45-

PART VII-STATUTES, REGULATIONS AND RULES

Courts of Justice Act

R.R.O. 1990, REGULATION 194 RULES OF CIVIL PROCEDURE

RULE 1 CITATION, APPLICATION AND INTERPRETATION

INTERPRETATION General Principle

1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. R.R.O. 1990, Reg. 194, r. 1.04 (1).

RULE 20 SUMMARY JUDGMENT WHERE AVAILABLE To Plaintiff

20.01 (1) A plaintiff may, after the defendant has delivered a statement of defence or served a notice of motion, move with supporting affidavit material or other evidence for summary judgment on all or part of the claim in the statement of claim. R.R.O. 1990, Reg. 194, r. 20.01 (1). · ill The plaintiff may move, without notice, for leave to serve a notice of motion for summary judgment together with the statement of claim, and leave may be given where special urgency is shown, subject to such directions as are just. R.R.O. 1990, Reg. 194, r. 20.01 (2). To Defendant ill A defendant may, after delivering a statement of defence, move with supporting affidavit material or other evidence for summary judgment dismissing all or part of the claim in the statement of claim. R.R.O. 1990, Reg. 194, r. 20.01 (3). EVIDENCE ON MOTION

20.02 (1) An affidavit for use on a motion for summary judgment may be made on information and belief as provided in subrule 39.01 (4), but, on the hearing of the motion, the court may, if appropriate, draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts. 0. Reg. 438/08, s. 12. ill In response to affidavit material or other evidence supporting a motion for summary judgment, a responding party may not rest solely on the allegations or denials in the party's pleadings, but must set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial. 0. Reg. 438/08, s. 12. FACTUMS REQUIRED

20.03 (1) On amotion for summary judgment, each party shall serve on every other party to the motion a factum consisting of a concise argument stating the facts and law relied on by the party. 0. Reg. 14/04, s. 14. ill The moving party's factum shall be served and filed with proof of service in the court office where the motion is to be heard at least seven days before the hearing. 0. Reg. 394/09, s. 4. -46-

ill The responding party's factum shall be served and filed with proof of service in the court office where the motion is to be heard at least four days before the hearing. 0. Reg. 394/09, s. 4.

ill REVOKED: 0. Reg. 394/09, s. 4. DISPOSITION OF MOTION General

20.04 (1) REVOKED: 0. Reg. 438/08, s. 13 (1). ill The court shall grant summary judgment if, (a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or (b) the parties agree to have all or part ofthe claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment. 0. Reg. 284/01, s. 6; 0. Reg. 438/08, s. 13 (2). Powers .{Lll In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial: 1. Weighing the evidence. 2. Evaluating the credibility of a deponent. 3. Drawing any reasonable inference from the evidence. 0. Reg. 438/08, s. 13 (3). Oral Evidence (Mini-Trial) (2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1 ), order that oral evidence be presented by one or more parties, with or without time limits on its presentation. 0. Reg. 438/08, s. 13 (3). Only Genuine Issue Is Amount ill Where the court is satisfied that the only genuine issue is the amount to which the moving party is entitled, the court may order a trial of that issue or grant judgment with a reference to determine the amount. R.R.O. 1990, Reg. 194, r. 20.04 (3); 0. Reg. 438/08, s. 13 (4). Only Genuine Issue Is Question Of Law ill Where the court is satisfied that the only genuine issue is a question oflaw, the court may determine the question and grant judgment accordingly, but where the motion is made to a master, it shall be adjourned to be heard by a judge. R.R.O. 1990, Reg. 194, r. 20.04 (4); 0. Reg. 438/08, s. 13 (4). Only Claim Is For An Accounting ill Where the plaintiff is the moving party and claims an accounting and the defendant fails to satisfy the court that there is a preliminary issue to be tried, the court may grant judgment on the claim with a reference to take the accounts. R.R.O. 1990, Reg. 194, r. 20.04 (5). WHERE TRIAL IS NECESSARY Powers of Court

20.05 (1) Where summary judgment is refused or is granted only in part, the court may make an order specifying what material facts are not in dispute and defining the issues to be tried, and order that the action proceed to trial expeditiously. 0. Reg. 438/08, s. 14. Directions and Terms ill If an action is ordered to proceed to trial under sub rule ( 1), the court may give such directions or impose such terms as are just, including an order, -47-

(a) that each party deliver, within a specified time, an affidavit of documents in accordance with the court's directions; (b) that any motions be brought within a specified time; (c) that a statement setting out what material facts are not in dispute be filed within a specified time; (d) that examinations for discovery be conducted in accordance with a discovery plan established by the court, which may set a schedule for examinations and impose such limits on the right of discovery as are just, including a limit on the scope of discovery to matters not covered by the affidavits or any other evidence filed on the motion and any cross-examinations on them; (e) that a discovery plan agreed to by the parties under Rule 29.1 (discovery plan) be amended; (f) that the affidavits or any other evidence filed on the motion and any cross-examinations on them may be used at trial in the same manner as an examination for discovery; (g) that any examination of a person under Rule 36 (taking evidence before trial) be subject to a time limit; (h) that a party deliver, within a specified time, a written summary ofthe anticipated evidence of a witness; (i) that any oral examination of a witness at trial be subject to a time limit; U) that the evidence of a witness be given in whole or in part by affidavit; (k) that any experts engaged by or on behalf of the parties in relation to the action meet on a without prejudice basis in order to identify the issues on which the experts agree and the issues on which they do not agree, to attempt to clarify and resolve any issues that are the subject of disagreement and to prepare a joint statement setting out the areas of agreement and any areas of disagreement and the reasons for it if, in the opinion of the court, the cost or time savings or other benefits that may be achieved from the meeting are proportionate to the amounts at stake or the importance of the issues involved in the case and, (i) there is a reasonable prospect for agreement on some or all of the issues, or (ii) the rationale for opposing expert opinions is unknown and clarification on areas of disagreement would assist the parties or the court; (1) that each of the parties deliver a concise summary of his or her opening statement; (m) that the parties appear before the court by a specified date, at which appearance the court may make any order that may be made under this subrule; (n) that the action be set down for trial on a particular date or on a particular trial list, subject to the direction of the regional senior judge; ( o) for payment into court of all or part of the claim; and (p) for security for costs. 0. Reg. 438/08, s. 14. Specified Facts ill At the trial, any facts specified under sub rule ( 1) or clause (2) (c) shall be deemed to be established unless the trial judge orders otherwise to prevent injustice. 0. Reg. 438/08, s. 14. Order re Affidavit Evidence ill In deciding whether to make an order under clause (2) (j), the fact that an adverse party may reasonably require the attendance of the deponent at trial for cross-examination is a relevant consideration. 0. Reg. 438/08, s. 14. Order re Experts, Costs ill If an order is made under clause (2) (k), each party shall bear his or her own costs. 0. Reg. 438/08, s. 14. Failure to Comply with Order -48-

® Where a party fails to comply with an order under clause (2) ( o) for payment into court or under clause (2) (p) for security for costs, the court on motion of the opposite party may dismiss the action, strike out the statement of defence or make such other order as is just. 0. Reg. 438/08, s. 14. ill Where on a motion under subrule ( 6) the statement of defence is struck out, the defendant shall be deemed to be noted in default. 0. Reg. 438/08, s. 14. COSTS SANCTIONS FOR IMPROPER USE OF RULE

20.06 The court may fix and order payment of the costs of a motion for summary judgment by a party on a substantial indemnity basis if, (a) the party acted umeasonably by making or responding to the motion; or (b) the party acted in bad faith for the purpose of delay. 0. Reg. 43 8/08, s. 14. EFFECT OF SUMMARY JUDGMENT

20.07 A plaintiff who obtains summary judgment may proceed against the same defendant for any other relief. R.R.O. 1990, Reg. 194, r. 20.07. STAY OF EXECUTION

20.08 Where it appears that the enforcement of a summary judgment ought to be stayed pending the determination of any other issue in the action or a counterclaim, crossclaim or third party claim, the court may so order on such terms as are just. R.R.O. 1990, Reg. 194, r. 20.08. APPLICATION TO COUNTERCLAIMS, CROSSCLAIMS AND THIRD PARTY CLAIMS

20.09 Rules 20.01 to 20.08 apply, with necessary modifications, to counterclaims, crossclaims and third party claims. R.R.O. 1990, Reg. 194, r. 20.09.

RULE 25 PLEADINGS IN AN ACTION

RULES OF PLEADING- APPLICABLE TO ALL PLEADINGS Material Facts

25.06 (1) Every pleading shall contain a concise statement of the material facts on which the party relies for the claim or defence, but not the evidence by which those facts are to be proved. R.R.O. 1990, Reg. 194, r. 25.06 (1). -49-

Loi sur les tribunaux judiciaires

R.R.O. 1990, REGLEMENT 194 REGLES DE PROCEDURE CIVILE

REGLE 1 MENTION, CHAMP D' APPLICATION ET INTERPRETATION

PRINCIPES D'INTERPRETATION Principe general 1.04 (1) Les presentes regles doivent recevoir une interpretation large afin d'assurer Ia resolution equitable sur le fond de chaque instance civile, de la fa9on la plus expeditive et la moins onereuse. R.R.O. 1990, Regl. 194, par. 1.04 (1).

REGLE 20 JUGEMENT SOMMAIRE APPLICABILITE Au demandeur 20.01 (1) Le demandeur peut, apres que le defendeur a remis une defense ou signifie un avis de motion, demander, par voie de motion, appuyee d'un affidavit ou d'autres elements de preuve, unjugement sommaire sur la totalite ou une partie de la demande formulee dans la declaration. R.R.O. 1990, Regl. 194, par. 20.01 (1). ill Le demandeur peut demander, par voie de motion presentee sans preavis, l'autorisation de signifier avec la declaration un avis de motion en vue d' obtenir unjugement sommaire. L' autorisation peut etre accordee en cas d'urgence extraordinaire, sous reserve de directives justes. R.R.O. 1990, Regl. 194, par. 20.01 (2). Au defendeur ill Le defendeur peut, apres avoir remis une defense, demander, par voie de motion appuyee d'un affidavit ou d'autres elements de preuve, un jugement sommaire rejetant en totalite ou en partie la demande formulee dans la declaration. R.R.O. 1990, Regl. 194, par. 20.01 (3). PREUVES A L' APPUI D'UNE MOTION 20.02 (1) Dans un affidavit a l'appui d'une motion visant a obtenir unjugement sommaire, une partie peut faire etat des elements qu'elle tient pour veridiques sur la foi de renseignements, comme le prevoit le paragraphe 39.01 (4). Toutefois, dans le cas ou la partie ne fournit pas le temoignage de toute persom1e ayant une connaissance directe des faits contestes, le tribunal peut en tirer des conclusions defavorables, s'il y a lieu,lors de I' audition de la motion. Regl. de l'Ont. 438/08, art. 12. ill Lorsqu'une motion en vue d'obtenir unjugement sommaire est appuyee d'un affidavit ou d'autres elements de preuve, la partie intimee ne peut pas se contenter uniquement des allegations ou denegations contenues dans ses actes de procedure. Elle doit preciser, au moyen d'un affidavit ou d'autres elements de preuve, des faits specifiques indiquant qu'il y a une veritable question litigieuse necessitant la tenue d'une instruction. Regl. de l'Ont. 438/08, art. 12. MEMOIRES REQUIS 20.03 (1) Dans le cas d'une motion en vue d' obtenir unjugement sommaire, chaque partie signifie aux autres pmties a la motion un memoire comprenant une argumentation concise exposant les faits et les regles de droit qu'elle invoque. Regl. de l'Ont. 14/04, art. 14. ill Le memoire de !'auteur de la motion est signifie et depose, avec la preuve de la signification, au greffe du tribunal oit la motion do it etre entendue, au moins sept jours avant !'audience. Regl. de l'Ont. 394/09, art. 4. ill Le memo ire de la partie intimee est signifie et depose, avec la preuve de la signification, au greffe du tribunal ou la motion doit etre entendue, au moins quatre jours avant !'audience. Regl. de l'Ont. 394/09, art. 4. 8} ABROGE: Regl. de l'Ont. 394/09, art. 4. DECISION SUR LA MOTION Dispositions generales -50-

20.04 (1) ABROGE: Regl. de l'Ont. 438/08, par. 13 (1). ill Le tribunal rend un jugement sommaire si, selon le cas : a) il est convaincu qu'une demande ou une defense ne soul eve pas de veritable question litigieuse necessitant la tenue d'une instruction; b) il est convaincu qu'il est approprie de rendre unjugement sommaire et les parties sont d'accord pour que tout ou partie de la demande soit decide par jugement sommaire. Regl. de l'Ont. 284/01, art. 6; Regl. de l'Ont. 438/08, par. 13 (2). Pouvoirs .GJ} Lorsqu'il decide, aux tennes de l'alinea (2) a), s'il existe une veritable question litigieuse necessitant la tenue d'une instruction, le tribunal tient compte des elements de preuve presentes par les parties et, si la decision doit etre rendue par unjuge, ce demier peut, acette fin, exercer l'un ou !'autre des pouvoirs suivants, amains qu'il ne soit dans I' interet de la justice de ne les exercer que lors d'un proces : 1. Apprecier la preuve. 2. Evaluer la credibilite d'un deposant. 3. Tirer une conclusion raisonnable de la preuve. Regl. de l'Ont. 438/08, par. 13 (3). Temoignage oral (mini-proces) (2.2) Un juge peut, dans le but d' exercer les pouvoirs prevus au paragraphe (2.1 ), ordonner que des temoignages oraux soient presentes par une ou plusieurs parties, avec ou sans limite de temps pour leur presentation. Regl. de l'Ont. 438/08, par. 13 (3). Si Ia seule question litigieuse est le montant de Ia demande ill Le tribunal, s'il est convaincu que la seule veritable question litigieuse porte sur le montant auquell'auteur de la motion a droit, peut ordonner !'instruction de la question ou rendre unjugement et ordonner un renvoi afin de fixer le montant. R.R.O. 1990, Regl. 194, par. 20.04 (3); Regl. de l'Ont. 438/08, par. 13 (4). Si Ia seule question litigieuse est une question de droit ffi Le tribunal, s'il est convaincu que la seule veritable question litigieuse porte sur une question de droit, peut trancher cette question et rendre un jugement en consequence. Toutefois, si la motion est presentee aun protonotaire, elle est deferee a unjuge pour audition. R.R.O. 1990, Regl. 194, par. 20.04 (4); Regl. de l'Ont. 438/08, par. 13 (4). Demande de reddition de comptes seulement ill Si le demandeur est !'auteur de la motion et qu'il demande une reddition de comptes, le tribunal peut rendre jugement sur la demande et ordonner un renvoi pour la reddition des comptes, amains que le defendeur ne convainque le tribunal qu'une question prelirninaire doit etre instruite. R.R.O. 1990, Regl. 194, par. 20.04 (5). NECESSITE D'UNE INSTRUCTION Pouvoirs du tribunal 20.05 (1) Si le jugement sommaire est refuse ou n'est accorde qu'en partie, le tribunal peut rendre une ordonnance dans laquelle il precise les faits pertinents qui ne sont pas en litige et les questions qui doivent etre instruites. II peut egalement ordonner que I' action soit instruite de fa<;on expeditive. Regl. de l'Ont. 438/08, art. 14. Directives et conditions ill Le tribunal qui ordonne l' instruction d 'une action en vertu du paragraphe ( 1) peut donner les directives ou imposer les conditions qu'il estime justes, et ordonner notamment: a) la remise par chaque partie, dans un delai determine, d'un affidavit de documents conformement aux directives du tribunal; b) la presentation des motions dans un delai determine; c) le depot, dans un delai determine, d'un expose des faits pertinents qui ne sont pas en litige; d) le deroulement des interrogatoires prealables conformement aun plan d'enquete prealable etabli par le tribunal, dans lequel un calendrier des interrogatoires peut etre fixe et des limites au droit al'interrogatoire prealable qui sontjustes peuvent etre irnposees, y compris la limitation de l'enquete prealable a des questions qui n'ont pas ete traitees dans les affidavits ou les autres elements de preuve presentes a l'appui de la motion et dans les contre­ interrogatoires sur ceux-ci; -51-

e) la modification d'un plan d'enquete pn\alable convenu par les parties en application de la Regie 29.1 (plan d'enquete prealable); f) !'utilisation, a !'instruction, des affidavits ou des autres elements de preuve presentes a l'appui de la motion et des contre-interrogatoires sur ceux-ci comme s'il s'agissait d'interrogatoires prealables; g) la limitation de la duree de tout interrogatoire d'une personne prevu ala Regie 36 (obtention de depositions avant !'instruction); h) la remise par une partie, dans un delai determine, d'un resume ecrit de la deposition prevue d'un temoin; i) la limitation de la duree de tout interrogatoire oral d'un temoin a !'instruction; j) la presentation par affidavit de tout ou partie de la deposition d'un temoin; k) la rencontre, sous toutes reserves, des experts engages par les parties ou en leur nom relativement a I' action pour determiner les questions en litige sur lesquelles ils s' entendent et celles sur lesquelles ils ne s' entendent pas, pour tenter de clarifier et regler toute question en litige qui fait l'objet d'un desaccord et pour rediger une declaration conjointe exposant les sujets d'entente et de desaccord ainsi que les motifs de ceux-ci, s'il estime que les economies de temps ou d'argent ou les autres avantages qui peuvent en decouler sont proportionnels aux sommes enjeu ou a !'importance des questions en litige dans la cause et que, selon le cas: (i) il y a des perspectives raisonnables d'en arriver a un accord sur une partie ou I' ensemble des questions en litige, (ii) le fondement des opinions d'experts contraires est inconnu et qu'une clarification des questions faisant I' objet d'un desaccord aiderait les parties ou 1e tribunal; I) la remise par chacune des parties d'un resume concis de sa declaration preliminaire; m) la comparution des parties devant le tribunal au plus tard a une date determinee, comparution au cours de laquelle le tribunal peut rendre toute ordonnance qu'autorise le present paragraphe; n) !'inscription de I' action pour instruction a une date donnee ou son inscription a un role donne, sous reserve des directives du juge principal regional; o) la consignation de la totalite ou d'une partie de la somme demandee; p) le versement d'un cautionnement pour depens. Regl. de l'Ont. 438/08, art. 14. Faits precises ill Lors de !'instruction, les faits precises conformement au paragraphe (1) ou a l'alinea (2) c) sont reputes etablis, a moins que le juge du proces n'ordonne autrement afin d'eviter une injustice. Regl. de l'Ont. 438/08, art. 14. Ordonnance : deposition par affidavit ill Lorsqu'il est decide si une ordonnance doit etre rendue en vertu de l'alinea (2)j), le faitqu'unepartie opposee peut etre fondee a exiger la presence du deposant a !'instruction pour le contre-interroger constitue un facteurpertinent. Regl. de l'Ont. 438/08, art. 14. Ordonnance : experts, depens ill Si une ordonnance est rendue en vertu de l'alinea (2) k), chaque partie paie ses propres depens. Regl. de l'Ont. 438/08, art. 14. Defaut de se conformer al'ordonnance .(Q) Si une partie ne se conforme pas a une ordonnance de consignation prevue a l'alinea (2) o) ou aune ordonnance de cautionnement pour depens prevue a l'alinea (2) p), le tribunal peut, sur motion de la partie adverse, rejeter !'action, radier la defense ou rendre une autre ordonnance juste. Regl. de l'Ont. 438/08, art. 14. ill Si la defense est radiee sur motion presentee en application du paragraphe ( 6), le defendeur est repute constate en defaut. Regl. de l'Ont. 438/08, art. 14. CONDAMNATION AUX DEPENS POUR USAGE ABUSIF DE LA REGLE 20.06 Le tribunal peut fixer les depens d'une motion visant a obtenir un jugement sommaire sur une base d'indenmisation substantielle et en ordonner le paiement par une partie si, selon le cas : a) la partie a agi deraisonnablement en presentant la motion ou en y repondant; b) la partie a agi de mauvaise foi dans !'intention de causer des retards. Regl. de l'Ont. 438/08, art. 14. -52-

EFFET DU JUGEMENT SOMMAIRE 20.07 Le demandeur qui obtient unjugement sommaire peut poursuivre le meme defendeur pour d'autres mesures de redressement. R.R.O. 1990, Regl. 194, regie 20.07. SURSIS D'EXECUTION 20.08 Le tribunal, s'il constate qu'il devrait etre sursis a !'execution d'un jugement sommaire en attendant le reglement d'une autre question en litige dans !'action, d'une demande reconventionnelle, d'une demande entre defendeurs ou d'une mise en cause, peut ordonner le sursis ades conditionsjustes. R.R.O. 1990, Regl. 194, regie 20.08.

A~PLICATION AUX DEMANDES RECONVENTIONNELLES, AUX DEMANDES ENTRE DEFENDEURS ET AUX MISES EN CAUSE 20.09 Les regles 20.01 a20.08 s'appliquent, avec les modifications necessaires, aux demandes reconventionnelles, aux demandes entre defendeurs et aux mises en cause. R.R.O. 1990, Regl. 194, regie 20.09.

REGLE 25 PROCEDURE ECRITE DANS L' ACTION

REGLES APPLICABLES A TOUS LES ACTES DE PROCEDURE Faits pertinents

25.06 (1) L'acte de procedure expose de fa~on concise les faits pertinents sur lesquels la partie fonde sa demande ou sa defense, mais non les elements de preuve devant les etablir. R.R.O. 1990, Regl. 194, par. 25.06 (1). Court File No. 34645 IN THE SUPREME COURT OF CANADA (ON APPEAL FROM THE ONTARIO COURT OF APPEAL)

BETWEEN: Bruno Appliance and Furniture, Inc. Appellant (Respondent)

-and-

Robert Hryniak Respondent (Appellant)

FACTUM OF THE RESPONDENT

Filing Party: ROBERT HRYNIAK

McCarthy Tetrault LLP Suite 5300, Toronto Dominion Bank Tower Toronto ON M5K 1E6

Sarit E. Batner Brandon Kain Moya J. Graham Tel: (416) 601-7756 Fax: (416) 868-0673 Counsel for the Appellant, Robert Hryniak.

Cavanagh Williams Conway Baxter LLP 401 - 1111 Prince of Wales Drive Ottawa ON K2C 3T2

Colin S. Baxter Tel: (613) 780-2016 Fax: (613) 569-8668 Ottawa Agent for the Appellant, Robert Hryniak.

DOCS 12046889v1 0