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Malik v Attia: Ontario Court of Appeal further restricts partial summary judgment

By Michael D. Schafler, Amer Pasalic, and Miranda Neal
February 2, 2021
  • Commercial Litigation
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The Ontario Court of Appeal recently provided further guidance – and arguably established a higher threshold – as to when motions for partial summary judgment are appropriate. In Malik v Attia,[1] a case which involved a real estate transaction gone awry, the Court set out three specific factors that parties and judges must consider when dealing with a partial summary judgment motion.

Facts

The appellant purchasers and the respondent vendor entered into two separate agreements for the purchase and sale of two abutting residential properties with an original closing date of December 8, 2016. The transaction did not close because the purchasers had insufficient funds. After obtaining several extensions, the purchasers still failed to close, and the vendor’s lawyer informed the purchasers’ lawyer on January 11, 2017 that the purchasers were in breach of the agreements. On the next day, the vendor advised that the purchasers were in fundamental breach, and that they would forfeit their deposits. On January 30, 2017, the vendor filed her claim for forfeiture and breach of contract against the purchasers. Nearly two years later, she moved for partial summary judgment declaring that the purchasers had breached the agreements, effectively seeking to bifurcate liability and damages.  

On the motion, the purchasers argued that granting summary judgment would be contrary to Baywood Homes Partnership v Haditaghi,[2] and Healthy Lifestyle Medical Group Inc. v Chand Morningside Plaza Inc.[3]  There, the Ontario Court of Appeal had cautioned against partial summary judgment where it is possible that the trial judge “will develop a fuller appreciation of the relationships and the transactional context than the motions judge” which could risk “inconsistent findings and substantive injustice”.[4]  The motion judge disagreed, holding that the facts regarding the breach of contract were not in dispute, making this one of the rare cases where partial summary judgment was appropriate. The motion judge granted partial summary judgment, and directed a trial on the issues of damages and the forfeiture of the deposits. The purchasers appealed.  

Discussion

Their first ground of appeal was that the motion judge had erred in concluding that there was no genuine issue requiring a trial with respect to breach of the agreements. The second ground of appeal – and the focus of this case comment – was that the motion judge had erred in granting partial summary judgment.

The purchasers argued that partial summary judgment was inappropriate due to the complex nature of the case, which involved multiple issues and facts, and credibility issues. They further argued that partial summary judgment here had the potential for inconsistent findings and would unfairly bind the trial judge who still had to consider the forfeiture and damages claims.

The Court of Appeal disagreed, finding that there was minimal risk in this case for inconsistent findings on liability and the issues of forfeiture and damages. However, the Court cautioned that the risk of inconsistent findings is only one factor out of several that must be weighed when considering a motion for partial summary judgment. In Hryniak v. Mauldin,[5] the Supreme Court of Canada had characterized summary judgment as a tool intended to help litigants achieve timely and affordable access to justice, when used in a proportional manner. The motion judge must first determine whether a motion for partial summary judgment would, in the specific circumstances, help the litigants pursue the objectives of timely, proportionate, and affordable justice. If the partial summary judgment would cause delay or increase expenses for the parties, then partial summary judgment is likely to be inappropriate even if, for example, there is minimal risk in inconsistent findings.[6]

The Court of Appeal expanded on this framework. Now, the motion judge is obliged to hear from the parties how:

  1. dividing the determination of the case into several parts will prove to be cheaper for the parties;
  2. partial summary judgment will get the parties’ case in and out of the court system more quickly; and
  3. partial summary judgment will not result in inconsistent findings by the multiple judges who will touch the divided case.

The Court expressed some criticism of the motion judge and the triage system that had allowed this motion to be scheduled in the first place. Specifically, the Court held that had these three inquiries been conducted, the motion judge would have realized that while there was minimal risk of inconsistent findings, there would be an increase to the overall costs of litigating the case. This was particularly so because the total damages in dispute appeared to fall below the simplified procedure threshold. Thus, splitting the case into two phases would have rendered the costs disproportionately high when weighed against the value of the claim.

Nonetheless, and sensibly, the Court did not interfere with the disposition below as setting aside partial summary judgment would have only added further costs and delay.

Conclusion

The main lesson here is that a party contemplating partial summary judgment must now be prepared to make submissions on the three factors cited by the Court regarding why the partial judgment would be beneficial and ought to proceed. Arguably, this creates an even higher threshold for partial summary judgment in Ontario.  The basic judicial message seems to be that partial summary judgment will be permitted only in extremely rare circumstances. Parties should thus think carefully about how many causes of action to plead, and how many parties to sue. If the hope is to be able to resort to Rule 20 at an early stage, then “less is [truly] more”.


[1] 2020 ONCA 787.

[2] 2014 ONCA 450.

[3] 2019 ONCA 6.

[4] Baywood Homes Partnership v Haditaghi 2014 ONCA 450, at para 37; Healthy Lifestyle Medical Group Inc. v Chand Morningside Plaza Inc. 2019 ONCA 6 at para 9; Malik v. Attia 2019 ONSC 4395, at para 32.

[5] 2014 SCC 7.

[6] Butera v. Chown, Cairns LLP, 2017 ONCA 783, at paras. 29-34; Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, at para. 14.

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ontario court of appeal, Real Estate Transaction, Simplified Procedure, Summary Judgment, Supreme Court of Canada
Michael D. Schafler

About Michael D. Schafler

Mike is a commercial litigator with almost 25 years’ experience handling significant disputes, including class actions. He has also acted as counsel on many large international and domestic arbitrations and, in 2017, obtained the Q. Arb. designation. Mike has particular expertise in auditor's liability and financial services litigation, professional negligence, real estate litigation, shareholder disputes, securities litigation, including proxy contests and contested M&A deals, and regulatory and appellate energy cases. Mike is currently a member of the Canada Region National Board, to which he was elected after serving as co-lead of the Dentons Canada Litigation and Dispute Resolution (LDR) group, and manager of the Toronto LDR group. Mike has also acted as practice leader for the global Litigation and Dispute Resolution group.

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Amer Pasalic

About Amer Pasalic

Amer Pasalic is a senior associate in the Litigation and Dispute Resolution group at Dentons Canada in Toronto. He has a broad commercial and civil litigation practice, with particular expertise in cases involving contractual disputes, fraud, product liability, estates and trusts litigation, professional negligence, lease disputes and real estate litigation.

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Miranda Neal

About Miranda Neal

Miranda Neal graduated from the University of New Brunswick in 2020 and is currently an articling student in Dentons’ Toronto Office.

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