|
Appeals - Stay Pending Appeal (3). Rappaport v. Law Society Ontario [stay pending appeal]
In Rappaport v. Law Society Ontario (Div Court, 2024) the Divisional Court granted a stay pending appeal, here of a decision of the Appeal Division of the Law Society Tribunal that "imposed a five-month suspension" for professional misconduct:[4] The onus is on Mr. Rappaport to demonstrate that it is in the interest of justice to grant him a stay of the Appeal Division’s decision pending the outcome of his appeal in this Court: Louis v. Poitras, 2020 ONCA 815at para. 16. When considering whether it is in the interest of justice to grant a stay, I must consider three interrelated factors: (1) whether there is a serious issue to be determined on the appeal; (2) whether Mr. Rappaport will suffer irreparable harm if the stay is not granted; and (3) whether the balance of convenience favours granting or denying the stay: RJR-MacDonald Inc. v. Canada (Attorney General, 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334, Kitmitto et al. v. Ontario Securities Commission, 2023 ONSC 1739 at para. 5.
[5] For the following reasons, I grant Mr. Rappaport’s motion.
....
[7] The threshold for establishing a serious issue on appeal is low. My task is not to engage in a thorough analysis of the merits of Mr. Rappaport’s appeal. So long as I am satisfied that some of the grounds Mr. Rappaport advanced in his Notice of Appeal are neither vexatious nor frivolous, I should consider the second and third elements of the tests, even if I think he is unlikely to succeed on his appeal.
....
C. Irreparable Harm
[13] Irreparable harm is a harm that cannot be quantified in monetary terms or a harm that cannot be cured: RJ-MacDonald Inc. v. Canada, 1994 CanLII 117 (SCC), [1994] 1 SCR 311 at p. 341. Evidence of possible, or likely, harm is not enough to satisfy this element of the test. The evidence must show that the party will suffer irreparable harm: Kitmitto et al v. Ontario Securities Commission, 2023 ONSC 1739 (Div. Ct.) at para. 13. Similarly, something more is required to establish irreparable harm than the usual financial loss, loss of professional identity or reputational loss that results from the suspension or revocation of a licence to practise a regulated profession: Kitmitto, at para. 14.
[14] In his affidavit, Mr. Rappaport describes the harm he will suffer if he is required to serve the five-month suspension before his appeal is heard. First, he says he will lose all his clients because, as a sole practitioner, he will have to refer all his clients to another lawyer. Second, he argues he will suffer significant financial harm if he loses his income for five months but has to continue paying his business expenses. Mr. Rappaport was not cross-examined on his affidavit.
[15] The Law Society argues the type of harm Mr. Rappaport describes in his affidavit does not meet the test for “irreparable harm.” The Law Society relies on the decision of this Court in Kitmitto et al v. Ontario Securities Commission, 2023 ONSC 1739 in support of its position. In that case, the three appellants were found to have committed insider trading contrary to the Securities Act, RSO 1990, c.S.5. The Capital Markets Tribunal banned each appellant from market participation for 10 years or more and ordered them to pay financial penalties ranging from $600,000 to $1,000,000. Justice Schabas was not satisfied that denying the appellants a stay of the Tribunal’s decision pending their appeals to the Divisional Court would cause them irreparable harm. Two of the appellants, Kitmitto and Vannatta, argued that they may have to declare bankruptcy if a stay was not granted. Justice Schabas found that their evidence did not establish irreparable harm because bankruptcy was only a possibility, not a certainty. The third appellant, Goss, argued that the trading ban would cause him irreparable harm because he would lose his clients and that would have a devastating impact on his own sense of identity and self-worth. Justice Schabas did not accept Goss’s evidence. Justice Schabas was not convinced that Goss would lose all, or even most, of his clients because other advisors in Goss’s firm could manage his accounts until the appeal was decided.
[16] In my view, Kitmitto is distinguishable on its facts from Mr. Rappaport’s case for two reasons. First, I accept Mr. Rappaport’s evidence that he will lose all or most of his clients if he is required to serve his five-month suspension now. Mr. Rappaport is a sole practitioner who practises family and estates law in Ottawa. His affidavit states that most of his clients have upcoming court appearances. Unlike in Kitmitto, Mr. Rappaport does not have partners or associates who can manage his files or appear on behalf of his clients during his suspension. Mr. Rappaport’s clients will have to be referred to other lawyers while Mr. Rappaport is serving his suspension. I accept that few, if any, of those clients will return to Mr. Rappaport five months later.
[17] Second, if the Appeal Division’s decision is not stayed, Mr. Rappaport will likely have served the entire five-month suspension before his appeal can be heard and decided. That was not true in Kitmitto where the appellants would only have served a fraction of their market ban while the appeal was ongoing. In my view, fully serving an administrative suspension before an appeal can be heard is the sort of harm that cannot be quantified and could be cured if Mr. Rappaport is ultimately successful on his appeal.
[18] I am, therefore, satisfied that Mr. Rappaport will suffer irreparable harm if the Appeal Division’s decision is not stayed.
D. Balance of Convenience
[19] Under the third branch of the test, I must consider which party will suffer greater harm by granting or refusing a stay: Urbancorp Toronto Management Inc, at para. 20.
[20] I have already found that Mr. Rappaport will suffer irreparable harm if he is denied a stay.
[21] On the other hand, granting a stay could damage the reputation of the legal profession and the public confidence in the Law Society’s ability to regulate its members. Mr. Rappaport has been found to have committed professional misconduct by failing to serve his clients and by failing to encourage respect for the administration of justice and ordered to serve a suspension. While Mr. Rappaport was granted a stay of the suspension pending his appeal to the Appeal Division of the Law Society Tribunal, that appeal has now been dismissed and the original finding has been upheld.
[22] The Law Society Act specifically states that filing an appeal does not stay the decision of the Law Society Tribunal unless this court orders otherwise: Law Society Act, s. 49.41(1). The Law Society argues that there is a public interest in Mr. Rappaport serving his suspension without delay. The Law Society also argues granting a stay will undermine the reputation of the profession and the public’s confidence in the Law Society’s ability to fulfil its regulatory role. Finally, the law society argues the public interest outweighs Mr. Rappaport’s private interest in delaying his suspension.
[23] In my view, the harm Mr. Rappaport will suffer if a stay is not granted is greater than the potential harm to the public confidence in the Law Society’s ability to regulate the profession. There is no evidence of any ongoing concerns about Mr. Rappaport’s competence or professionalism. The allegations all relate to one family law matter in 2018. If Mr. Rappaport is unsuccessful on his appeal, he will serve his suspension, thus satisfying the public interest in ensuring professional misconduct is properly sanctioned by the Law Society. However, if Mr. Rappaport is successful on his appeal, he could not be compensated for serving a suspension that has been overturned. I, therefore, find that the balance of convenience favours granting Mr. Rappaport a stay of the suspension pending the appeal. . Sapusak v. 9706151 Canada Ltd.
In Sapusak v. 9706151 Canada Ltd. (Ont CA, 2024) the Ontario Court of Appeal dismissed a motion (with remedial terms) for a R63.02 stay pending appeal, here where the concern was the registration of the judgment on property title.
Here the court sets out the RJR test for stays pending appeal:The Test for a Stay
[12] The test for staying an order pending appeal requires the court to consider the following three factors: (i) the merits of the appeal to ensure, on a preliminary assessment, that there is a serious question to be tried; (ii) whether the moving party would suffer irreparable harm if the stay were refused; and (iii) the balance of convenience, that is, which of the parties would suffer greater harm from the granting or refusal of the stay pending a decision on the appeal: Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674 (C.A.), at pp. 676-77, citing RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334.
[13] The three factors are not watertight compartments, but rather interrelated considerations such that the strength of one may compensate for the weakness of another: Circuit World Corp., at p. 677. The overarching test is whether granting the stay is in the interests of justice: Dhatt v. Beer, 2020 ONCA 545, 449 D.L.R. (4th) 263, at para. 15. . Barnwell v. LSO
In Barnwell v. LSO (Div Court, 2024) the Divisional Court considers the RJR test for stays pending appeal:Test for a Stay
[6] To obtain a stay pending appeal, Mr. Barnwell must satisfy the three-part test set out in RJR MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334, that: (1) there is a serious issue to be tried; (2) Mr. Barnwell will suffer irreparable harm if the stay is not granted; and (3) the balance of convenience favours granting a stay.
[7] The factors are not “watertight compartments” independent of one another. They are interrelated and the strength of one factor may compensate for the weakness in another. The overriding question is whether the moving party has shown that it is in the interests of justice to grant a stay: Louis v. Poitras, 2020 ONCA 815, at para. 16.
Serious Issue to be Tried
[8] The test to establish a serious issue is not high. The appeal simply must not be frivolous or vexatious. Whether this aspect of the test has been met should be determined based on “common sense and an extremely limited review of the case on the merits”: RJR MacDonald. . Nutrition Guidance Services Inc. v. Schwartz
In Nutrition Guidance Services Inc. v. Schwartz (Ont CA, 2024) the Ontario Court of Appeal allowed a stay pending appeal motion:[2] The test for granting a stay pending appeal is well-settled and not in dispute. Based on the Supreme Court’s framework in RJR‑MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385, in order to obtain a stay, the moving party must establish that:a) there is some merit in the appeal;
b) the moving party will suffer irreparable harm if the stay should be refused; and
c) the balance of convenience favours the stay. [3] Further, the court's power to grant a stay is discretionary, guided by what is in the interests of justice.
[4] These prongs to the test are not watertight compartments. The conclusions on one prong may affect the analysis of another. With this in mind, I turn now to a consideration of this framework in the circumstances of this appeal.
(a) The merits of the appeal
[5] The threshold for the merits prong of the test for a stay is a low one. It will be met where an appeal is not frivolous or vexatious, and where there is “some reasonable prospect of success”: see Fiala v. Hamilton, 2008 ONCA 784, O.J. No. 4653, at para. 15. . World Medpharm Inc. v. York Region Standard Condominium Corporation No. 1279
In World Medpharm Inc. v. York Region Standard Condominium Corporation No. 1279 (Ont CA, 2024) the Ontario Court of Appeal dismissed a stay pending appeal (RJR) application [under RCP 63.02(b)], here where the underlying order was "a compliance order made under the Condominium Act 1998" that prevented the operation of a competing pharmacy in the condo.
Here the court cites the RJR stay test:(1) The Test for a Stay
[13] The test for staying an order pending appeal requires the court to consider the following three factors: (1) the merits of the appeal to ensure, on a preliminary assessment, that there is a serious question to be tried; (2) whether the moving party would suffer irreparable harm if the stay were refused; and (3) the balance of inconvenience, that is, which of the parties would suffer greater harm from the granting or refusal of the stay pending a decision on the appeal: Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674 (C.A.), at pp. 676-77, citing RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at p. 334.
[14] The three factors are not watertight compartments, but rather interrelated considerations such that the strength of one may compensate for the weakness of another: Circuit World Corp., at p. 677. The overarching test is whether granting the stay is in the interests of justice: Dhatt v. Beer, 2020 ONCA 545, 449 D.L.R. (4th) 263, at para.15.
....
(2) Application of the Test
a. The Merits
[15] The application judge made the order in the exercise of her discretion, and substantial deference will be owed on appeal: Toronto Standard Condominium Corporation No. 1908 v. Stefco Plumbing & Mechanical Contracting Inc., 2014 ONCA 696, 377 D.L.R. (4th) 369, at paras. 31-32. The appellants’ grounds of appeal must be considered in that light. . Musqua v. Bellegarde
In Musqua v. Bellegarde (Fed CA, 2024) the Federal Court of Appeal dismissed a motion for a stay pending appeal (under the test in RJR-MacDonald), here of a contempt order:[8] Paragraph 398(1)(b) of the Federal Courts Rules, SOR/98-106 permits this Court to stay an order that is under appeal. The test for obtaining a stay is set out in RJR-MacDonald. Moving parties must establish that: (1) their appeal raises a serious issue; (2) they will suffer irreparable harm if the stay is not granted; and (3) the balance of convenience favours granting the stay: RJR-MacDonald at 334; Canada v. Canadian Council for Refugees, 2008 FCA 40 at para. 18. All three criteria must be met for a stay to be issued.
[9] The threshold for determining whether there is a serious issue is low: RJR-MacDonald at 335; Western Oilfield Equipment Rentals Ltd. v. M-I L.L.C., 2020 FCA 3 at para. 8. The test is met where there is at least one issue to be determined on appeal that is "“not frivolous or vexatious”": RJR-MacDonald at 337; Toronto Real Estate Board v. Commissioner of Competition, 2016 FCA 204 at para. 11; Canadian Council for Refugees at para. 22.
....
[13] Under the second branch of the RJR-MacDonald test, Councillor Musqua must show that she would suffer irreparable harm if the stay were not granted. "“Irreparable”" refers to the nature of the harm, not the magnitude. It is harm that cannot be quantified in monetary terms or remedied through compensation: RJR-MacDonald at 341.
[14] Although the alleged harm in an RJR-MacDonald analysis is necessarily future harm, it cannot be "“hypothetical and speculative”": Janssen Inc. v. Abbvie Corporation, 2014 FCA 112 at para. 24. There must be "“a real probability”" of irreparable harm that cannot be avoided: Bell Canada v. Beanfield Technologies Inc., 2024 FCA 28 at para. 21, and the cases cited therein.
....
[18] Until the Federal Court determines the appropriate sanction, I do not know what harm Councillor Musqua will suffer and therefore cannot determine if the harm is irreparable. The Ontario Court of Appeal similarly held in Sabourin and Sun Group of Companies v. Laiken, 2011 ONCA 757. That Court concluded that the motion to stay a contempt order prior to the sentencing hearing was premature: Sabourin at para. 7. The Court did not accept that the mere risk of being sent to jail qualified as irreparable harm: Sabourin at para. 13.
[19] Even accepting that a risk of imprisonment may constitute irreparable harm, it is potentially avoidable. If the Federal Court were to order imprisonment at the sentencing hearing, Councillor Musqua could immediately appeal the order to this Court and seek a stay of the sentence. This Court could then assess the merits of a stay application with a complete picture of the harm she faces, as is recommended in Sabourin at para. 13. It may also be possible for Councillor Musqua to ask the Federal Court to adjourn her sentencing hearing until after the appeal is heard: Canada (Attorney General) v. Oshkosh Defense Canada Inc., 2018 FCA 102 at para. 24; Hama v. Werbes, 1999 BCCA 714 at para. 3.
[20] At this point, the harm alleged by Councillor Musqua is hypothetical, speculative, and avoidable. The "“irreparable harm”" criterion for the issuance of a stay is not met.
....
[21] The third step of the RJR-MacDonald test, the "“balance of convenience”", involves a comparison of the harm to the responding party from granting the stay and the harm to the moving party from refusing to grant the stay, pending a decision on the merits: RJR-MacDonald at 342; Canada (Citizenship and Immigration) v. Canadian Council of Refugees, 2020 FCA 181 at para. 10. As the RJR-MacDonald test is conjunctive, and Councillor Musqua has not satisfied the second step of the test, it is unnecessary for me to consider the balance of convenience: Janssen at para. 14; Western Oilfield at para. 7.
[22] In any case, in these circumstances, I would be reluctant to intervene in the Federal Court’s contempt proceeding, which does not conclude until a sanction has been determined. While within this Court’s power to order a stay, it is generally preferable not to interrupt proceedings in the trial court if the consequence is to fragment the appeals: Sabourin at para. 7; Hama at para. 3. The sanction for contempt, while determined in a separate hearing, will reflect the Federal Court’s views of the seriousness of the contempt, which is potentially relevant to this Court’s full appreciation of the matter under appeal. . Carvalho Estate v. Verma
In Carvalho Estate v. Verma (Ont CA, 2024) the Ontario Court of Appeal dismissed a novel 'stay pending appeal' motion where the main object of concern was a dog, Rocco. At the lower application stage the dog was held to be the property of the estate, and thus the dog was ordered returned to the estate trustee.
Here the court cites the standard 'stay pending appeal' test from RJR-MacDonald (SCC, 1994):The Test on a Motion for a Stay
[4] The overarching consideration is whether a stay is in the interests of justice: Sase Aggregate Ltd. v. Langdon, 2023 ONCA 644, at para. 10. This is determined by a consideration of the factors in RJR-MacDonald Inc v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, at pp. 347-49:(a) whether the appeal raises a serious question to be tried;
(b) whether the moving party would suffer irreparable harm if the stay were refused; and
(c) the balance of convenience, namely which of the parties would suffer greater harm from the granting or refusal of the stay. [5] The relative strengths of these factors need not be equal. One factor may favour a stay more strongly than another: Haudenosaunee Development Institute v. Metrolinx, 2023 ONCA 122, at para. 6. However, all three factors must be satisfied for a stay to be granted: R. v. Canadian Broadcasting Corp., 2018 SCC 5, [2018] 1 S.C.R. 196, at para. 12.
|
