Simon's Megalomaniacal Legal Resources

Appeals - Standard of Review (SOR) - Extricable Issues of Law (2)

. Patel v. Dermaspark Products Inc.

In Patel v. Dermaspark Products Inc. (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal, here where the lower court "decided that the appellants were liable, jointly and severally, in the amount of $45,000, representing statutory damages of $5,000 for copyright infringement, $20,000 for trademark infringement, passing off, depreciation of goodwill and unfair competition, and $20,000 for punitive damages".

Here the court considers (perhaps critically) the appellate 'mixed questions of fact and law' category with it's 'palpable and overriding' standard of review:

[6] Appellate courts bandy around the phrase "“questions of mixed fact and law”" but seldom define it, much to the prejudice of young practitioners, most of whom graduated from law schools that did not instruct them on the standard of review. For their benefit, questions of mixed fact and law are those where appellate courts apply the law to the facts of the case. This includes so-called discretionary questions where courts apply legal standards to a set of facts: Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215, [2017] 1 F.C.R. 331, citing Decor Grates Incorporated v. Imperial Manufacturing Group Inc., 2015 FCA 100, [2016] 1 F.C.R. 246 at paras. 15-29; see also Mahjoub v. Canada (Citizenship and Immigration), 2017 FCA 157, [2018] 2 F.C.R. 344 at paras. 71-72.

[7] In some cases, legal questions predominate or fundamentally taint the question of mixed fact and law. In the parlance of appellate standards of review, this is called "“an extricable question of law”". When there is an extricable question of law, the appellate court can examine that question of law and decide it on a standard of correctness—i.e., without any deference at all to the first-instance court.

[8] But where legal questions are not extricable, i.e., do not predominate or fundamentally taint the question of mixed fact and law—in other words, where the question of mixed fact and law is factually suffused or the facts predominate—the appellate court can interfere only for palpable and overriding error.

[9] Palpable means obvious. And overriding means capable of changing the result of the case. As a practical matter, these two things very seldom happen together. First-instance judges almost never make obvious factual errors that can change the result of the case. Thus, reversal on this ground is rare indeed.

[10] On occasion, some have said that a lower standard, such as "“unsafe verdict”", might have been better in furthering accountability and high-quality decision-making. In some countries, that is the standard. But that is not our standard. The Supreme Court decided upon "“palpable and overriding error” "as our standard. It has kept that standard almost for a quarter-century.

[11] Truly, palpable and overriding error is a tough standard:

Palpable and overriding error is a highly deferential standard of review: H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401; Peart v. Peel Regional Police Services (2006), 2006 CanLII 37566 (ON CA), 217 O.A.C. 269 (C.A.) at paragraphs 158-59; Waxman, [2004 CanLII 39040 (ON CA), 186 O.A.C. 201 at paragraphs 278-84]. “Palpable” means an error that is obvious. “Overriding” means an error that goes to the very core of the outcome of the case. When arguing palpable and overriding error, it is not enough to pull at leaves and branches and leave the tree standing. The entire tree must fall.

(Canada v. South Yukon Forest Corporation, 2012 FCA 165, 4 B.L.R. (5th) 31 at para. 46, adopted by the Supreme Court in Benhaim v. St‑Germain, 2016 SCC 48, [2016] 2 S.C.R. 352 at para. 38.)

[12] Later cases have clarified that the palpable and overriding error standard can be met not only by "“one decisive chop”" at the "“tree”" but by "“several telling ones”": Mahjoub at paras. 64-65.

[13] Examples of things that can qualify under this difficult-to-meet standard include a number of different types of errors: "“obvious illogic in the reasons (such as factual findings that cannot sit together), findings made without any admissible evidence or evidence received [not] in accordance with the doctrine of judicial notice [""R. v. Spence, ""2005 SCC 71"", ""[2005] 3 S.C.R. 458""], findings based on improper inferences [""Pfizer Canada Inc. v. Teva Canada Limited, ""2016 FCA 161"", ""400 D.L.R. (4th) 723"" at paras. ""168-170]"" or logical error, and the failure to make findings due to a complete or near-complete disregard of evidence”": Mahjoub at para. 62. But, as said before, only errors on central points that can change the result of the case will qualify.

[14] This discussion is not meant to suggest that the judgment of the Federal Court in this case survives only because the palpable and overriding error standard is hard to meet. But it is to suggest that many of the appellants’ submissions in this Court — vigorously argued and gamely pursued—run straight into this unforgiving and uncompromising standard. As a result, they must fail.

. BNSF Railway Company v. Greater Vancouver Water District

In BNSF Railway Company v. Greater Vancouver Water District (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal [under the Canada Transportation Act, s.41(1)], here from a CTA decision that "found the rerouting works suitable and authorized the District to construct and maintain them at the District’s cost".

Here the court considers samples of 'extricable questions of law' in an SOR context:

[166] .... Examples of extricable questions of law include the application of an incorrect principle; the failure to consider a required element of a legal test; the failure to consider a relevant factor; or a question regarding the formation of a contract: Sattva at para. 53, citing King v. Operating Engineers Training, 2011 MBCA 80 at para. 21.

. Wiener Städtische Versicherung AG Vienna Insurance Group v. Infrassure Ltd.

In Wiener Städtische Versicherung AG Vienna Insurance Group v. Infrassure Ltd. (Ont CA, 2025) the Ontario Court of Appeal dismissed an appeal, here from a trial addressing "the meaning and effect of a so-called “follow settlements” clause in a contract of reinsurance" in the context of a business interruption claim:

Here the court considered the role of 'extricable questions of law' in determining the appellate SOR:

[45] There are limited exceptions to this deferential standard. A correctness standard of review applies to “extricable questions of law” that arise in the interpretation process, such as “the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor”: Sattva, at paras. 53, 55. However, instances involving extricable questions of law will be “rare” and “uncommon”, since ascertaining the objective intention of the parties is an “inherently fact specific exercise”: Sattva, at para. 55; Corner Brook (City) v. Bailey, 2021 SCC 29, [2021] 2 S.C.R. 540, at para. 44.

. Pinnacle International (One Yonge) Ltd. v. Torstar Corporation

In Pinnacle International (One Yonge) Ltd. v. Torstar Corporation (Ont CA, 2024) the Ontario Court of Appeal allowed an appeal, here in a sublease profit-sharing dispute.

The court considers the appellate SOR applicable to this lease-contract dispute, here involving a customized sub-lease:

V. Standard of Review

[51] The first, second, and fourth issues involve the interpretation of the Lease and the Boreal Sublease. As neither document is a standard form contract, this court must review the motion judge’s interpretation of those contracts in accordance with the dictates of Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 52-53. In Sattva, the Supreme Court of Canada explained that because the interpretation of a contract involves questions of mixed fact and law, absent an extricable question of law which attracts a correctness standard, the standard of review is palpable and overriding error: at paras. 50, 53. See also Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20, 492 D.L.R. (4th) 389, at paras. 27-28.

[52] Extricable errors of law in contract interpretation include the application of an incorrect legal principle, the failure to consider a required element of a legal test, and the failure to consider a relevant factor: Sattva, at para. 53. This court has identified other extricable errors of law, such as the failure to properly, accurately, and fully consider the context in which a contract was made, and the failure to consider the contract as a whole by focusing on one provision without giving proper consideration to other relevant provisions: Fuller v. Aphria Inc., 2020 ONCA 403, 4 B.L.R. (6th) 161, at para. 50.

[53] The standard of review on the third issue, however, is correctness, because the question of which limitation period applies is a pure question of law: Northwinds Brewery Ltd. v. Caralyse Inc., 2023 ONCA 17, 53 R.P.R. (6th) 29, at para. 22. Thus, the motion judge must have correctly decided that the RPLA applies to the Claim. If not correct, this court must intervene and apply the correct limitation period.

. Achaia-Shiwram v. Intact Insurance Co.

In Achaia-Shiwram v. Intact Insurance Co. (Div Court, 2024) the Divisional Court dismissed a LAT SABS appeal, here for "no-fault accident benefits under the Statutory Accident Benefits Schedule – Effective September 1, 2010, O. Reg. 34/10 (the “Schedule”)" for "catastrophic psychological impairment".

Here the court equates 'extricable' errors of law contained in a mixed error of fact and law, with fact errors that amount to legal errors:

[19] There are limited circumstances in which findings of fact, or the adjudicator’s assessment of evidence, may give rise to an extricable error of law: see Yatar v. TD Insurance Meloche Monnex, 2021 ONSC 2507, 157 O.R. (3d) 337 (Div. Ct), at para. 28, aff’d 2022 ONCA 446, rev’d on other grounds, 2024 SCC 8, 489 D.L.R. (4th) 191. Challenges to the sufficiency or weight of evidence supporting a finding of fact do not give rise to a question of law. However, a misapprehension of or failure to appreciate the evidence may constitute an error of law if the failure is based on a wrong legal principle: R. v. J.M.H., 2011 SCC 45, [2011] 3 S.C.R. 197, at paras. 29, citing R. v Morin, 1992 CanLII 40 (SCC), [1992] 3 S.C.R. 286, at p. 295. It is an error of law to make a finding of fact for which there is no supporting evidence: J.M.H, at para. 25, citing R. v. Schuldt, 1985 CanLII 20 (SCC), [1985] 2 S.C.R. 592, at p. 604. It is an error of law to make a finding of fact on a material point where the factual finding is based solely on (a) no evidence, (b) irrelevant evidence, or (c) an irrational inference: Johannson v. Saskatchewan Government Insurance, 2019 SKCA 52, 93 C.C.L.I. (5th) 228, at paras. 24-25.