In a rare finding released Jan. 21, Justice David Corbett of the Superior Court of Justice was found to have shown a reasonable apprehension of bias.
The Court of Appeal decision in
Stuart Budd & Sons Ltd. v. IFS Vehicle Distributors ULC states IFS “did not receive the fair hearing to which they were entitled.”
“I have no doubt that the motion judge was well-intentioned. I have no doubt that he put a great deal of effort into resolving the jurisdiction issue,” states the appeal court decision by Justice Gloria Epstein, with justices K.M. Weiler and Grant Huscroft agreeing.
“However, my review of the three endorsements leads me to conclude that the motion judge’s actions gave rise to a reasonable apprehension of bias. He made unwarranted negative comments about the appellants — their counsel, their position and their arguments — prior to the conclusion of argument and arbitrarily curtailed argument.”
Ultimately, the appeal court set aside Corbett’s orders, including $50,000 in costs against IFS. The decision also ordered the joinder and
forum non conveniens motion be heard again before a different justice of the Superior Court.
Siskinds LLP partner Peter Dillon commented on the case, calling the finding of apprehension of bias extremely rare. He says the matter is a warning to lawyers to be on guard when things seem to be going too well, and to act as an officer of the court.
“If you find yourself in a position where the judge appears unduly supportive of your arguments, then perhaps you shouldn’t run too far ahead,” he says.
Dillon says lawyers should rely on the case and take on the mantle of officer of the court to ensure both sides have been properly represented to the bench.
“This is where you act as an officer of the court; if you’re going to advocate to the best of your ability, it includes to a certain extent reining in an overzealous judge,” says Dillon.
“This case will serve as a pretty good stick to beat back that overzealousness.”
In the original matter,
Stuart Budd & Sons Ltd. v. IFS Vehicle Distributors ULC, three Ontario plaintiffs, and five out-of-province plaintiffs sued four foreign defendants (IFS) for breach of various franchise agreements in a claim issued in March 2013.
IFS brought a motion to dismiss the proceeding for lack of jurisdiction, taking the position the claims should be brought in California.
Corbett dismissed the motion, finding there was jurisdiction
simpliciter in Ontario and that a single proceeding would be more suitable in Ontario.
IFS appealed to the appeal court to challenge the jurisdictional finding and alleged Corbett’s comments and conduct during the course of hearing the motion gave rise to their concerns of bias.
Counsel for IFS argued that during a jurisdictional motion hearing in the matter, Budd & Sons filed one affidavit that was contested on the grounds it was extensively based on information provided to Budd by others without identifying the source of the information. The appeal court ruling states Corbett agreed the evidence was improper and adjourned the motion to allow the respondents to serve a further
affidavit.
During the second hearing on joinder and
forum non conveniens, Corbett dismissed IFS’s motion for the matter to be heard in California, referring to it as an “abuse of process” before hearing the full scope of the evidence, the appeal court found.
The appeal court ruling goes on to state Corbett’s conclusions that “the motion was so devoid of merit and brought in a time-consuming, expensive and impractical manner” also gave rise to the concern of bias and led to the finding IFS Vehicle was deprived of a fair hearing.
“In my view, at various points in the proceedings the motion judge conducted himself in a manner that gave the appearance that he favoured the respondents’ position,” the ruling states. “First, he adjourned the motion on his own initiative to give the respondents an opportunity to correct a flaw that he identified as being fatal to their position.”
The appeal court also found: “In the second scheduled hearing, the motion judge dismissed the motion halfway through the full-day that had been scheduled without giving counsel the opportunity to make oral submissions on two issues that he properly identified as ‘principal arguments’ — joinder and
forum non conveniens. The parties had prepared their arguments with respect to these issues at the motion judge’s request.”
The appeal court said Corbett decided the jurisdictional challenge without hearing the full oral argument, which was “cause for particular concern.”
The appeal court ruled Corbett’s conclusion there was jurisdiction
simpliciter of all claims in Ontario, because the claims of the Ontario plaintiffs are properly joined with those of the non-Ontario plaintiffs, was incorrect.
The ruling stated he “effectively found that a non-Ontario plaintiff can be substantially connected to Ontario, without having established a presumptive connecting factor between the subject matter of the litigation and the forum, if the non-Ontario plaintiff’s claim is properly joined with that of at least one plaintiff that has established jurisdiction
simpliciter.”
Lawyer Marvin Huberman, a senior business lawyer, says the rare finding reinforces the appeal court’s “willingness and strong desire to assure the fair, efficient and effective operation of the administration of justice in Ontario.
“It takes a very responsible view of maintaining the core values of our traditional adversarial system of litigation,” he says, adding the ruling also serves as a warning to the bench that judges must take a rigorous look into the admissibility of evidence.
“The court is really telling people in the administration of justice, particularly trial judges, that we have to protect and preserve and assure the public that the principles at the core of the system are being maintained and promoted.”
Counsel for Budd declined to comment. Counsel for IFS could not be reached for comment prior to press time.
