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Appeals - Stay Pending Appeal
MORE CASES
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COMMENT
'Stays pending appeal' are what they sound like - the suspension of the lower court or tribunal's order pending the completion of it's appeal. They are judged on the three-part interlocutory injunction test (merits, irreparable harm and balance of convenience), most well-known in the RJR-MacDonald Inc. v. Canada (Attorney General) (SCC, 1994) case. The RJR-Macdonald test is also used for interlocutory injunctions, so you may want to review those cases as well: Injunctions - Interlocutory Injunctions.
. Wilfert v. McCallum
In Wilfert v. McCallum (Ont CA< 2017) the Court of Appeal restates the test for granting a stay of the lower judgment pending appeal, in those cases where it may be sought [monetary Orders (other than support Orders) are automatically stayed on appeal: R63.01(1)]:[6] The test on a motion for a stay pending appeal under Rule 63.02(1) is the same as the test for an interlocutory injunction: (i) whether there is a serious issue to be tried; (ii) whether the moving party will suffer irreparable harm if the stay is not granted; and (iii) whether the balance of convenience favours the granting of the stay. See Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674 (C.A., in Chambers), at para. 8; Pathan v. Qureshi, 2009 ONCA 575 (CanLII), 2009 ONCA 575 (in Chambers), at para. 11; and Starkman v. Home Trust Company, 2015 ONCA 436 (CanLII), 2015 ONCA 436 (in Chambers), at para. 7. . Morguard Residential v. Mandel
In Morguard Residential v. Mandel (Ont CA, 2017) the Court of Appeal restates the test for issuing a stay pending appeal, which is essentially the same as for issuing an interlocutory injunction:[17] When deciding whether to grant a stay, generally, the courts are to apply the same three-stage test as they do when deciding whether to order an interlocutory injunction: RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334. This test requires the court to:1. make a preliminary assessment of the merits of the case to ensure that there is a serious question to be tried;
2. determine whether the moving party would suffer irreparable harm unless the stay were granted; and
3. determine which of the parties would suffer greater harm from the granting or refusal of the stay. [18] Because a stay is a discretionary remedy, the court may also consider the “clean hands” doctrine when deciding whether to order the stay: Authorson (Litigation Guardian of) v. Canada (Attorney General), 2006 CarswellOnt 9418 (C.A.), at para. 9. . Stuart Budd & Sons Limited v. IFS Vehicle Distributors
In Stuart Budd & Sons Limited v. IFS Vehicle Distributors (Ont CA, 2014) the Court of Appeal canvassed the elements required for an appellant to stay an order below pending it's appeal:[21] In RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334, the Supreme Court of Canada set out a three-part test for obtaining a stay of a judgment pending appeal: (1) is there a serious question to be tried (i.e., to be determined on the appeal); (2) will the moving party suffer irreparable harm if the stay is not granted; and (3) does the balance of convenience favour granting the stay?
(1) Serious question
[22] The first component, whether there is a serious question to be determined on the appeal, requires a preliminary assessment of the merits of the appeal: RJR-MacDonald Inc., at p. 334.
[23] This assessment begins with a presumption of correctness of the decision under appeal: Ogden Entertainment Services v. United Steelworkers of America, Local 440 1998 CanLII 1441 (ON CA), (1998), 38 O.R. (3d) 448 (C.A.), at p. 450. The onus is on the moving parties to establish a case for a stay: International Corona Resources Ltd. v. Lac Minerals Ltd. (1986), 21 C.P.C. (2d) 252 (Ont. C.A.- Ch’rs), at p. 255. The threshold to be met in connection with this first component of the test is a modest one: Horsefield v. Ontario (Registrar of Motor Vehicles) 1997 CanLII 2546 (ON CA), (1997), 35 O.R. (3d) 304 (C.A. – Ch’rs), at p. 311; RJR-MacDonald Inc., at p. 337. The moving parties must demonstrate that the appeal is not frivolous or vexatious: Longley v. Canada (Attorney General), 2007 ONCA 149 (CanLII), 2007 ONCA 149, 223 O.A.C. 102, at para. 16; International Corona, at p. 255.
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[26] The irreparable harm component has to do with the nature, not the magnitude of the harm: RJR-MacDonald Inc., at p. 341. It refers to harm that cannot be quantified in monetary terms or that cannot be cured. RJR-MacDonald Inc., at p. 341.
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[40] The balance of convenience part of the test involves a determination of which of the parties will suffer the greater harm from the granting or refusal of the stay pending the disposition of the appeal on the merits. The factors relevant for consideration in determining where the balance of convenience settles varies from one case to the next: RJR-MacDonald Inc., at pp. 342-343. The court also considered, in the context of the stay pending appeal argument, the vexed issue of when a defendant, who disputes the jurisdiction of the court to hear a lawsuit, risks waiving that argument by participation in the case in the form of filing a Defence:[27] The moving parties assert that they will suffer irreparable harm in several respects if a stay is not granted.
[28] The moving parties submit that, without a stay, they will be forced to choose between risking attornment to the jurisdiction of the Ontario court by filing a defence, or being noted in default and subjected to default proceedings, either of which would irreparably harm their proposed appeal by rendering it moot.
[29] I have some difficulty assessing this argument. I say this based on differing views expressed in recent decisions of this court concerning whether a party risks attornment by taking court-ordered steps in a proceeding in the face of an on-going jurisdictional challenge. I refer to the decision in M.J. Jones Inc. v. Kingsway General Insurance Co. 2004 CanLII 6211 (ON CA), (2004), 72 O.R. (3d) 68 (C.A. – Ch’rs) where at paras. 27-31, Lang J.A. dealt with whether a court order requiring a defendant to deliver a statement of defence would amount to attornment. She held that the defendant’s compliance with such an order might amount to attornment. She therefore held that despite the plaintiff’s undertaking not to treat the defendant’s participation as attornment, refusing a stay could cause irreparable harm.
[30] In BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620 (CanLII), 2011 ONCA 620, 283 O.A.C. 231, at paras. 28-31, Laskin J.A. distinguished M.J. Jones on the basis that the defendant’s responding to the plaintiff’s request for documents outside of the “formal bounds” of the court proceedings would constitute attornment.
[31] More recently, in Van Damme v. Gelber, 2013 ONCA 388 (CanLII), 2013 ONCA 388, 115 O.R. (3d) 470, at paras. 21-23, Doherty J.A. noted that attornment by participation in court proceedings had been addressed in Wolfe v. Pickar, 2011 ONCA 347 (CanLII), 2011 ONCA 347, 332 D.L.R. (4th) 157, where, at para. 44, Goudge J.A. said:[W]hen a party to an action appears in court and goes beyond challenging the jurisdiction of the court based on jurisdiction simpliciter and forum non conveniens, the party will be regarded as appearing voluntarily, thus giving the court consent-based jurisdiction. That is what happened here. [32] Justice Doherty also recognized M.J. Jones and Gourmet Resources International Inc. (Trustee of) v. Paramount Capital Corp. (1991), 5 C.P.C. (3d) 140 (Ont. C.A.) as authorities for the proposition that, if a party appears in a court to challenge jurisdiction or seek a stay on the basis of forum non conveniens, any additional steps taken by the party pursuant to an order of the court will not amount to attornment.
[33] While Doherty J.A. expressed the view that taking steps in the proceedings further to a court order would not necessarily constitute attornment, advancing a motion for summary judgment, a motion that went beyond a jurisdictional challenge and was not further to any court order was attornment.
[34] Finally, in Yaiguaje v. Chevron Corp., 2014 ONCA 40 (CanLII), 2014 ONCA 40, 315 O.A.C. 109, at para. 11, MacPherson J.A. (in Chambers), citing Van Damme and BTR, rejected the argument that the party seeking a stay was exposed to irreparable harm based on the risk of attornment.
[35] Here, the responding parties have undertaking not to argue that the moving parties have attorned to the Ontario jurisdiction “by taking any further steps in the action”.
[36] I conclude that in the light of this court’s unresolved position on this issue, and the wording of the undertaking in question, the possibility of being found to have attorned creates some risk of irreparable harm to the moving parties. . Thunder Bay (City) v. Canadian National Railway Company
In Thunder Bay (City) v. Canadian National Railway Company (Ont CA, 2018) the Court of Appeal sets out the test for a stay pending appeal, and comments on how this test is varied in the Supreme Court of Canada:C. THE TEST FOR GRANTING A STAY
[34] The basic test for granting a stay pending leave to appeal is the same as the test for granting an interlocutory injunction. The moving party must demonstrate: i) a serious issue to be adjudicated on appeal; ii) that it will suffer irreparable harm if a stay is not granted; and iii) that the balance of convenience favours granting a stay: see Yaiguaje v. Chevron Corporation, 2014 ONCA 40 (CanLII), 315 O.A.C. 109, at para. 3; RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 314.
[35] However, these factors are not “watertight compartments”; the strength of one factor may compensate for the weakness of another. Overall, the court must decide whether, taking all relevant considerations into account, the interests of justice warrant granting a stay: Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674 (C.A.), at p. 677.
[36] Although ordinarily the threshold for establishing a serious issue to be adjudicated is low, the criteria for granting leave to the Supreme Court of Canada add another layer to the test: BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620 (CanLII), 283 O.A.C. 321, at para. 16.
[37] Under s. 40(1) of the Supreme Court Act, R.S.C. 1985, c. S-26 leave may be granted where any question involved is one that ought to be decided by the Supreme Court by reason of its public importance or the importance of any issue of law or any issue of mixed fact and law or for any other reason of such a nature and significance as to warrant a decision by the Supreme Court.
[38] The stay test requires that a judge hearing a stay motion consider not only whether the proposed appeal raises a serious issue to be adjudicated under RJR-Macdonald. The judge must also consider the factors in s. 40(1) and assess whether there is some merit in the leave application: Yaiguaje, at para. 4. . The Public Guardian and Trustee v. Zammit
In The Public Guardian and Trustee v. Zammit (Ont CA, 2021) the Court of Appeal commented on the test for stay pending appeal:[3] This court has put a gloss on the application of the test in RJR-MacDonald where a stay is sought pending appeal. In Ogden Entertainment Services v. United Steelworkers of America, Local 440 (1998), 1998 CanLII 1441 (ON CA), 38 O.R. (3d) 448, [1998] O.J. No. 1824 (C.A.) Robins J.A. said, at para. 5:In determining whether a stay should be granted, regard must be had to the judgment under appeal and a strong case in favour of a stay must be made out. The court must proceed on the assumption that the judgment is correct and that the relief ordered was properly granted. The court is not engaged in a determination of the merits of the appeal on a stay application. . Eisen v. 2293398 Ontario Inc.
In Eisen v. 2293398 Ontario Inc. (Ont CA, 2021) the Court of Appeal considered the test for stay pending appeal:[9] The overarching consideration in whether to grant a stay or interlocutory injunction pending appeal is the interests of justice: Zafar v. Saiyid, 2017 ONCA 919, at para. 18; Circuit World Corp. v. Lesperance, 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674, at para. 8. The court considers three factors: (i) a preliminary assessment must be made of the merits of the case to ensure there is a serious question to be tried; (ii) it must be determined whether the applicant would suffer irreparable harm if the application were refused; and (iii) an assessment of the balance of convenience must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits: see M & M Homes Inc. v. 2088556 Ontario Inc., 2020 ONCA 134, 51 C.P.C. (8th) 253, at para. 29; RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334. These factors are not watertight compartments and the strength of one factor may compensate for weakness of another: Zafar, at para. 18. . Fontaine v. Canada (Attorney General)
In Fontaine v. Canada (Attorney General) (Ont CA, 2021) the Court of Appeal considered principles that apply to stays pending appeal:[38] The overarching consideration on a motion for a stay pending appeal is whether a stay is in the interests of justice: BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, 283 O.A.C. 321, at para. 16; 2257573 Ontario Inc. v. Furney, 2020 ONCA 742, at para. 20. This determination is informed by the three factors described in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p.334:(1) A preliminary assessment must be made of the merits of the case to ensure there is a serious question to be determined on the appeal;
(2) It must be determined whether the moving party would suffer irreparable harm if the stay were refused; and
(3) An assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the stay pending a decision on the merits.
[39] As Laskin J.A. noted in Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674, at p. 677, these three criteria are not “watertight compartments” and the “strength of one may compensate for the weakness of another.” ....
(1) A Serious Issue to be Determined on Appeal
[41] I recognize that the serious issue threshold is low and will be satisfied if an appeal is neither frivolous nor vexatious: Furney, at para. 22. ....
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(2) Irreparable Harm
[66] When framed properly, irreparable harm arguments should focus on the adverse effects that are likely to arise if the order under appeal is not stayed pending appeal: Ducharme v. Hudson, 2021 ONCA 151, at para. 20. ... . UD Trading Group Holding PTE. Limited v. TransAsia Private Capital Limited
In UD Trading Group Holding PTE. Limited v. TransAsia Private Capital Limited (Ont CA, 2021) the Court of Appeal set out the test for stay pending appeal:[29] Where a party seeks a stay pending appeal, the overarching consideration is whether the interests of justice call for a stay: BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, 283 O.A.C. 321, at para. 16; 2257573 Ontario Inc. v. Furney, 2020 ONCA 742, at para. 20. This determination is informed by the three factors described in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334:(a) A preliminary assessment must be made of the merits of the case to ensure there is a serious question to be determined on the appeal;
(b) It must be determined whether the moving party would suffer irreparable harm if the stay were refused; and
(c) An assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the stay pending a decision on the merits. [30] As Laskin J.A. noted in Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674, at p. 677, these three criteria are not “watertight compartments” and the “strength of one may compensate for the weakness of another.” . Ducharme v. Hudson
In Ducharme v. Hudson (Ont CA, 2021) the Court of Appeal stated the test for stay pending appeal:[10] The principles applicable to a motion to stay an order pursuant to r. 63.02(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 are well known. In RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334, the Supreme Court of Canada articulated a three-part test for obtaining a stay of a judgment pending appeal: (1) whether there is a serious question to be tried (i.e., to be determined on the appeal); (2) whether the moving party would suffer irreparable harm if the stay is not granted; and (3) whether the balance of convenience favours granting the stay.
[11] These components of the test are not watertight compartments; the strength of one may compensate for the weakness of another: see Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674 (C.A.), at p. 677. As well, they are interrelated in the sense that the overriding question is whether the moving party has shown that it is in the interests of justice to grant a stay: see BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620, 283 O.A.C. 321, at para. 16; Circuit World, at p. 677. The party moving for the stay bears the onus of proving that it should be granted.
[12] The factors to be considered by a motion judge “are generally designed to assess the prejudice to the parties if the order sought is granted or refused”: John Sopinka, Mark A. Gelowitz & W. David Rankin, Sopinka and Gelowitz on the Conduct of an Appeal, 4th ed. (Toronto: LexisNexis Canada, 2018), at §2.187.
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[16] The bar for a finding that there is a serious question to be tried is admittedly low: see RJR-Macdonald, at p. 337; Belton v. Spencer, 2020 ONCA 623, 58 C.P.C. (8th) 16, at para. 25. In my view, the chances of a successful appeal of the motion judge’s order are slim, at best.
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[20] The irreparable harm stage of the analysis focuses on the harm the moving party may suffer if the stay is not granted: see RJR-MacDonald, at pp. 340-41. A court must ascertain whether a refusal to grant the stay could so adversely affect the moving party’s interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the stay motion: see RJR-MacDonald, at p. 341. “Irreparable”, in this sense, refers to the nature of the harm suffered rather than its magnitude: see RJR-MacDonald, at p. 341. It is harm which either cannot be quantified in monetary terms or which cannot be cured: see RJR-MacDonald, at p. 341. Irreparable harm may occur where the failure to grant a stay would render any subsequent appeal moot: see Sopinka, Gelowitz & Rankin, at §2.192.
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[25] The balance of convenience analysis considers which of the parties would suffer greater harm from the granting or refusal of the motion to stay: see RJR-MacDonald, at p. 342. The Supreme Court found it appropriate to consider the public interest and rejected an approach that would exclude consideration of any harm not directly suffered by a party to the motion: see RJR-MacDonald, at p. 344, decided in the context of an interlocutory Charter proceeding. The interests of third parties may also be a relevant consideration at the balance of convenience stage: see e.g., M & M Homes Inc. v. 2088556 Ontario Inc., 2020 ONCA 134, 51 C.P.C. (8th) 253, at para. 46; Buccilli v. Pillitteri, [2013] O.J. No. 6110, at para. 48. . 2257573 Ontario Inc. v. Furney
In 2257573 Ontario Inc. v. Furney (Ont CA, 2020) the Court of Appeal cited the test for stay pending appeal:The Test for a Stay Pending Appeal
[19] To obtain a stay of a judgment pending appeal, a moving party must meet the three-part test for an interlocutory injunction: (1) there is a serious question to be determined on the appeal; (2) the moving party will suffer irreparable harm if the stay is denied; and (3) the balance of convenience favours granting the stay: RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334; Wilfert v. McCallum, 2017 ONCA 895, 54 C.B.R. (6th) 249, at para. 6; and Starkman v. Home Trust Company, 2015 ONCA 436, at para. 7.
[20] In applying this test, the court is mindful that “[t]hese three criteria are not watertight compartments. The strength of one may compensate for the weakness of another. Generally, the court must decide whether the interests of justice call for a stay”: Circuit World Corporation v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674 (C.A.), at p. 677.
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(1) Serious question to be determined on the appeal
[22] The threshold to establish a serious question on the appeal is low. The court must make a preliminary assessment of the merits of the case and determine whether the issue on appeal is neither frivolous nor vexatious: RJR-MacDonald, at p. 337; Circuit World Corporation, at p. 677.
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[27] Irreparable harm is “harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other”: RJR-MacDonald, at p. 341.
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[33] The balance of convenience involves a determination of who would suffer the greater harm from granting or refusing the stay, pending a decision on the merits of the appeal: RJR-MacDonald, at p. 342. . Livent Inc. v. Deloitte & Touche
In Livent Inc. v. Deloitte & Touche (Ont CA, 2016) the Court of Appeal reviewed the principles at play when deciding to issue a stay pending appeal:[4] This court discussed considerations on this kind of motion in Yaiguaje v. Chevron Corporation, 2014 ONCA 40 (CanLII). They are those set out in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311 at 334: (1) whether there is a serious question to be determined on the proposed appeal; (2) whether the moving party will suffer irreparable harm if the stay is not granted; and (3) whether the balance of convenience favours a stay.
[5] It has been held that these factors are not to be treated as watertight compartments and the strength of one may compensate for weaknesses of another. The overarching consideration is whether the interests of justice call for a stay. In BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620 (CanLII), Laskin J.A. described the test as follows, at para. 16:The moving party … must show that it has raised a serious issue to be adjudicated, that it will suffer irreparable harm if a stay is not granted, and that the balance of convenience favours a stay. These three components of the test are interrelated in the sense that the overriding question is whether the moving party has shown that it is in the interests of justice to grant a stay. See also Longley v. Canada (Attorney General) 2007 ONCA 149 (CanLII) at paras. 14-15.
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(1) Serious question to be determined
[7] As MacPherson J.A. explained in Yaiguaje, the “serious question” factor is modified in the context of stays pending appeal to the Supreme Court of Canada to require not simply an assessment of the merits of the proposed appeal, but also whether it raises an issue of public or national importance and thus meets the stringent requirements of s. 40(1) of the Supreme Court Act.
[8] Generally, this factor has been described as a “low threshold”: see Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1434 (ON CA), 33 O.R. (3d) 647 (C.A., Chambers).
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(2) Irreparable Harm
[10] The irreparable harm requirement refers to “harm which either cannot be quantified in monetary terms or which cannot be cured, usually because one party cannot collect damages from the other”: RJR-Macdonald at p. 341, Fontaine at para. 36. In Robert J. Sharpe, Injunctions and Specific Enforcement, Looseleaf Edition, Canada Law Book, Toronto, it is stated at para. 2.411 that “[i]t has been held that the courts should avoid taking a narrow view of irreparable harm.”
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[12] The balance of convenience is just that – a balancing of which party will suffer the greater harm from the stay being granted or refused. In this case, in my view, it goes in particular to the question of whether the interests of justice make up for the weakness of the irreparable harm factor.
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