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Appeals - Standard of Review - (SOR) - General. Aziz v. Ontario (Securities Commission, Chief Executive Officer)
In Aziz v. Ontario (Securities Commission, Chief Executive Officer) (Div Court, 2024) the Divisional Court dismissed an appeal from 'merits and sanctions' decisions of the Capital Markets Tribunal.
Here the court considered a full range of applicable SORs:[35] A palpable and overriding error is an obvious error that is sufficiently significant to vitiate the challenged finding: Longo v. MacLaren Art Centre, 2014 ONCA 526, 323 O.A.C. 246, at para. 39. The appellant must show that the error goes to the root of the challenged finding such that it cannot safely stand in the face of the error: Waxman v. Waxman (2004), 2004 CanLII 39040 (ON CA), 186 O.A.C. 201 (C.A.), at para. 297, leave to appeal refused, [2004] S.C.C.A. No. 291.
[36] 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. If the adjudicator ignored items of evidence that the law required the adjudicator to consider in making the decision, then the adjudicator erred in law: Canada (Director of Investigation and Research) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748, at para. 41. 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.
[37] When the decision under appeal is fact intensive or involves the exercise of discretion, care must be taken in identifying extricable errors of law since the process of severing out legal issues can undermine the standard of review analysis. An arguably unreasonable exercise of discretion is not an error of law or jurisdiction: Wood Buffalo (Regional Municipality) v. Alberta (Energy and Utilities Board), 2007 ABCA 192, 80 Alta. L.R. (4th) 229, at para. 8; Natural Resource Gas Limited v. Ontario (Energy Board), 2012 ONSC 3520 (Div. Ct.), at para. 8; Conserve Our Rural Environment v. Dufferin Wind Power Inc., 2013 ONSC 7307 (Div. Ct.), at para. 13.
[38] While an appellate court is empowered to replace a tribunal’s findings on questions of law with its own, the correctness standard does not detract from the need to respect the tribunal’s specialized function. The tribunal’s subject matter experience and expertise relating to the requirements of its home statute are to be taken into account: Reisher v. Westdale Properties, 2023 ONSC 1817 (Div. Ct.), at paras. 9-10, citing Planet Energy (Ontario) Corp. v. Ontario Energy Board, 2020 ONSC 598 (Div. Ct.), at para. 31; Vavilov, at para. 36.
[39] Further considerations relating to the standard of review applicable to the Sanctions Decision are addressed later in these reasons under “Sanctions appeal: Legal Framework – sanctions and costs”. . Fresco v. Canadian Imperial Bank of Commerce
In Fresco v. Canadian Imperial Bank of Commerce (Ont CA, 2024) the Ontario Court of Appeal dismissed a class action plaintiff's fee dispute appeal.
Here the court usefully reviews the SOR applying to discretionary decisions, specifically discussing 'deference' as a concept:[31] On the first point, as stated in 2017 by the Supreme Court in Canada (Attorney General) v. Fontaine, 2017 SCC 47, [2017] 2 S.C.R. 205, at para. 36, a discretionary decision is entitled to deference. The court wrote:As regards the exercise of discretion, “appellate intervention is warranted only if the judge has clearly misdirected himself or herself on the facts or the law, proceeded arbitrarily, or if the decision is so clearly wrong as to amount to an injustice.” P. (W.) v. Alberta, 2014 ABCA 404, 378 D.L.R. (4th) 629, at para. 15; Balogun v. Pandher, 2010 ABCA 40, 474 A.R.258, at para.7. As this Court has said, where the judge had given sufficient weight to all relevant considerations and the exercise of discretion is not based on an erroneous principle, appellate reviewers must generally defer. [Citations omitted.] [32] This standard of review is not an open invitation to reweigh the evidence and Lavier should not be read as suggesting otherwise. As Laskin J.A. wrote in Reeves v. Brand, 2018 ONCA 263, 8 R.F.L. (8th) 1, at para. 23:The exercise of discretion involves the weighing of relevant considerations…To accede to the submission that an appeal court should intervene because it would have given more weight to a relevant consideration is to abandon discretion altogether. To be justified in interfering, an appellate court would have to be satisfied that the trial judge’s exercise of discretion was unreasonable. [Citations omitted.] [33] Similarly, in O’Brien v. Chuluunbaatar, 2021 ONCA 555, 461 D.L.R. (4th) 113, this court held that the appeal judge below had erred in law in interfering with the trial judge’s discretionary decision on the basis that she had given insufficient weight to a relevant consideration. As Gillese J.A. explained “[a]n appeal court is not to reweigh the relevant considerations”: at para. 48.
[34] In sum, appellate courts should review discretionary decisions with a posture of deference and may not interfere absent the parameters described by the Supreme Court in Fontaine.
[35] Dealing with the appellants’ second point on the absence of any long-standing involvement by the motion judge in this particular case, I do not agree with this submission. Repeatedly, the Supreme Court has instructed that the standard of review of a discretionary decision is deferential: Penner v. Niagara (Regional Police Services Board), 2013 SCC 19, [2013] 2 S.C.R. 125, at para. 27; Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 83. The concept of deference is deeply embedded in the hierarchical structure of the courts. It is not confined to cases with which the judge has long-standing or deep familiarity. As this court said of reviewing discretionary decisions in Cowles v. Balac, 2006 CanLII 34916 (ON CA), 83 O.R. (3d) 660 (C.A.), at para. 41:Appellate deference for the exercise of discretion by lower courts is justified on several bases: it serves to recognize the expertise of the lower court; it promotes the integrity and autonomy of the proceedings in the lower court; it limits the number, length and costs of appeals; and, in some cases (not this one), it recognizes the advantage that the lower courts have from firsthand observation of the evidence. . Ontario (Attorney General) v. Restoule
In Ontario (Attorney General) v. Restoule (SCC, 2024) the Supreme Court of Canada considered an aborginal lawsuit filed in 2001 by members of the "Ojibewa (Anishinaabe) Nation who are beneficiaries of the Robinson-Huron Treaty of 1850".
Here the court, abstracting upwards, considers the role of standards of review (SOR) between the trial and the appeal courts - and the fundamental policy (rather than legal) basis of an SOR:(2) Discussion
[88] The law on the standard of appellate review seeks “to achieve an appropriate division of labour between trial and appellate courts in accordance with their respective roles” (Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23, at para. 35). Trial courts primarily resolve factual and legal disputes raised before them, while appellate courts primarily ensure that legal rules are applied consistently, as required by the rule of law, and delineate and refine legal rules when necessary (para. 35; Housen, at para. 9).
[89] The division of labour between trial and appellate courts is reflected in the rules governing the standard of appellate review for questions of law, questions of fact, and questions of mixed fact and law. Questions of law, which involve identifying “what the correct legal test is” (Canada (Director of Investigation and Research) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748, at para. 35; Sattva, at para. 49), attract no appellate deference and are reviewable for correctness (Housen, at paras. 10, 19, 23, 28, 33 and 36; Benhaim v. St-Germain, 2016 SCC 48, [2016] 2 S.C.R. 352, at para. 36). Correctness review for questions of law recognizes the law-making function of appellate courts and ensures that legal rules are applied consistently in similar situations (Housen, at para. 9).
[90] Findings of fact, inferences of fact, and questions of mixed fact and law (which involve applying a legal standard to the facts) are, absent an extricable error of law, all reviewable for palpable and overriding error (Housen, at para. 26; Southam, at para. 26). The policy reasons for appellate deference to such questions include limiting the number, length and cost of appeals, promoting the autonomy and integrity of trial proceedings, and recognizing the expertise of the trial judge and their advantageous position given their first-hand exposure to the evidence (Housen, at paras. 16-18).
[91] As noted by former Justice Robert J. Sharpe, “[a]t the core of the debate over the appropriate standard of review are the competing principles of deference and legality” (Good Judgment: Making Judicial Decisions (2018), at p. 204). Deference entails an appellate court showing respect for a trial judge’s institutional advantages on factual issues and refraining from retrying the case on appeal (p. 204). Legality involves the appellate court’s duty to “ensure the overall legal integrity of the decision-making process” and intervening “when first-instance decisions do not respect the law’s general standards” (p. 204).
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(b) Legal Policy Considerations Supporting Correctness Review
[100] As has been recognized by this Court and the scholarly literature, the choice of a particular standard of review reflects a legal policy determination about the nature and purpose of the appellate process in a given context — what this Court described as the “appropriate division of labour between trial and appellate courts in accordance with their respective roles” (Ledcor, at para. 35; see also Sattva, at para. 51; Housen, at paras. 8-36; Sharpe, at pp. 204-5 and 208-16; D. Jutras, “The Narrowing Scope of Appellate Review: Has the Pendulum Swung Too Far?” (2006), 32:1 Man. L.J. 61, at p. 66; Y.-M. Morissette, “Appellate Standards of Review Then and Now” (2017), 18 J. App. Prac. & Process 55, at p. 76; R. D. Gibbens, “Appellate Review of Findings of Fact” (1991-92), 13 Adv. Q. 445, at p. 445; J. Sopinka, M. A. Gelowitz and W. D. Rankin, Sopinka, Gelowitz and Rankin on the Conduct of an Appeal (5th ed. 2022), at ⁋⁋2.6-2.35).
[101] This Court’s decision in Sattva is instructive as to how the applicable standard of review is shaped by legal policy considerations. There, this Court explained that the interpretation of a written contract was generally considered a question of law. This rule originated in England at a time when there were “frequent civil jury trials and widespread illiteracy” (para. 43). The interpretation of written documents such as contracts was characterized as a question of law, not because the core questions were inherently “legal”, but because “only the judge could be assured to be literate and therefore capable of reading the contract” (para. 43). Today, that reasoning no longer applies. This led this Court to decide, as a matter of legal policy, that absent an extricable error of law, contractual interpretation should now be treated as a question of mixed fact and law reviewable for palpable and overriding error (para. 50). The principal factors for this change in legal policy were to limit appellate intervention to cases where the results could affect parties beyond the particular dispute and to reflect the role of appeal courts “in ensuring the consistency of the law, rather than in providing a new forum for parties to continue . . . private litigation” (para. 51). Deference to trial courts also promotes “the goals of limiting the number, length, and cost of appeals, and of promoting the autonomy and integrity of trial proceedings” (para. 52).
[102] Professor Daniel Jutras has helpfully explained that the standard of appellate review “is not a matter of principle”, in the sense that it “does not turn on some essential nature of appeals, or on some fundamental right to error correction for disappointed litigants” (p. 66). Rather, the standard of appellate review reflects an attempt to make the “best and most effective compromise between competing policy considerations”, at least some of which may extend beyond the immediate interests of the parties (p. 66; see also p. 71). In treaty interpretation, various aspirations and concerns must be managed, including the potential for delay, cost considerations, and the private interests of parties to the litigation, but also the wider public interest, the constitutional nature of the rights at stake, and the important role of the honour of the Crown in the interpretive task.
[103] Against this backdrop, there are at least two significant reasons why the interpretation of historic Crown-Indigenous treaties should be, as a matter of sound legal policy, subject to correctness review. First, treaty rights are constitutionally protected by s. 35(1) of the Constitution Act, 1982, and relatedly, treaties are nation-to-nation agreements that engage the constitutional principle of the honour of the Crown. And second, treaty interpretation has significant precedential value because it concerns enduring, multi-generational compacts. I will address each point in turn.
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(c) Factual Findings Remain Reviewable for Palpable and Overriding Error
[114] Although the interpretation of an historic treaty right is reviewable for correctness, the factual findings underpinning that interpretation, including findings of historical fact, attract deference and are reviewable only for palpable and overriding error (Housen, at para. 10; H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401, at para. 53). The same deferential standard applies to inferences of fact (Housen, at para. 25; H.L., at para. 53).
[115] The policy rationales supporting deference to such factual determinations include the need to limit the number, length, and cost of appeals, to promote the autonomy and integrity of trial proceedings, and to recognize the expertise and advantageous position of the trial judge who has reviewed the evidence (Housen, at paras. 11-18; Gibbens, at pp. 445-48). The last of these is particularly significant in historic treaty interpretation where, as here, the trial judge’s factual determinations are the product of a robust and highly involved trial process. As the minority (per Hourigan J.A., Pardu J.A. concurring) said of the trial judge (at para. 576):... the trial judge took extensive efforts to involve and hear from the Indigenous Treaty partners. She conducted the proceedings in various Indigenous communities, immersed herself in the teachings of these communities’ many knowledge keepers, and permitted Anishinaabe ceremony to come into the courtroom and the court process, through witnesses, counsel, and members of the First Nations. The minority said that appellate intervention in such circumstances would “undervalu[e]” the trial judge’s process and would suggest that “the involvement of the Treaty partners, particularly the Indigenous signatories, did not make the trial judge better situated to decide the case” (para. 576).
[116] The trial judge’s sensitive trial process and deep engagement with Indigenous treaty partners undoubtedly made her better situated than an appellate court to decide factual matters, including the historical context in which the Robinson Treaties were signed and the credibility and reliability of witnesses (Van der Peet, at para. 81; Housen, at para. 20).
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(3) Conclusion
[119] I conclude that while the trial judge’s factual findings, including her findings of historical fact, attract deference, her interpretations of the treaty rights do not. Having regard to these standards of review, I now turn to the interpretation of the Augmentation Clause of the Robinson Treaties.
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