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Appeals - SOR - When Fact Error is Legal Error (3). 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 [contrast 'palpable and overriding' examples at para 13 with 'fact errors as legal errors' (my read) - they see quite similar]:[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. . Reid v. Shewen
In Reid v. Shewen (Ont Div Ct, 2025) the Ontario Divisional Court dismissed an RTA s.210 landord's appeal, this from "the Review Decision of the Landlord and Tenant Board (“LTB”), ... that declined to grant a review", here where the decision "found that that Appellant gave the Respondent/tenant a N12 [SS: 'Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit'] notice, that she required the unit for her own use, in bad faith and ordered the Appellant to pay the Respondent $35,000, which included $24,000 in general compensation". The tenant vacated the unit on the strength of the Notice of Termination, and then applied to the LTB [under RTA 57(3)] for bad faith remedies.
Here the court considers when errors of fact can constitute legal errors for appellate SOR purposes:[59] The appellant argues that there can be findings of fact that are an error of law: McLeod v Wigwamen Incorporated, 2024 ONSC 859, at para. 12. In McLeod, the court found that the circumstances when a factual finding can be considered an error of law are limited. Those circumstances include when an adjudicator ignored items of evidence, and where the adjudicator committed an error of law or legal principle during a fact-finding exercise. It is also an error of law where the factual finding is based on (a) no evidence, (b) irrelevant evidence, or (c) an irrational inference: Yatar v. TD Insurance Meloche Monnex, 2021 ONSC 2507; aff’d 2022 ONCA 446, leave to appeal granted 2023 CanLII 17178 (SCC), at para. 28. . McAvany v. Kingston Home Base Non-Profit Housing
In McAvany v. Kingston Home Base Non-Profit Housing (Ont Divisional Ct, 2025) the Divisional Court dismissed an RTA s.210 appeal.
Here the court characterizes the range of 'fact errors as legal errors' as being "extremely narrow":“No Evidence” and Unsupported Inferences
[13] At all levels of this case, the Appellant has argued that there was “no proof” (a) of an illegal act; (b) that the tenant committed an illegal act; or (c) that the tenant permitted another person to commit an illegal act. A generous reading of the Appellant’s grounds of appeal suggests an assertion that the factual findings made, and inferences drawn by Member Priest were so baseless that they fall into an extremely narrow circumstance wherein findings of fact may give rise to an error of law alone for purposes of an appeal. Specifically, that the findings were (a) based on no evidence; (b) made on the basis of irrelevant evidence or in disregard of relevant evidence; or (c) based on an irrational inference of fact: see Johannson v. Saskatchewan Government Insurance, 2019 SKCA 52 (CanLII) at para. 25. I do not accept this argument. The Appellant’s position broadly alleges errors of fact and mixed fact and law. The adjudicator’s treatment of the evidence in this case does not rise to an error of law.
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