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Declarations - General

. 1472292 Ontario Inc. (Rosen Express) v. Northbridge General Insurance Company

In 1472292 Ontario Inc. (Rosen Express) v. Northbridge General Insurance Company (Ont CA, 2019) the Court of Appeal set out some refreshing basics on declarations:
Issue 1: Did the application judge err by making declarations in the absence of an underlying claim and therefore a real dispute?

[20] The Supreme Court most recently described the criteria for declaratory relief in S.A. v. Metro Vancouver Housing Corp., 2019 SCC 4 (CanLII), 430 D.L.R. (4th) 621, at para. 60:
Declaratory relief is granted by the courts on a discretionary basis, and may be appropriate where (a) the court has jurisdiction to hear the issue, (b) the dispute is real and not theoretical, (c) the party raising the issue has a genuine interest in its resolution, and (d) the responding party has an interest in opposing the declaration being sought (Ewert v. Canada, 2018 SCC 30 (CanLII), at para. 81; see also Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12 (CanLII), [2016] 1 S.C.R. 99, at para. 11; Canada (Prime Minister) v. Khadr, 2010 SCC 3 (CanLII), [2010] 1 S.C.R. 44, at para. 46).
[21] The authority to make a declaration of right is found in s. 97 of the Courts of Justice Act, R.S.O. 1990, c. C.43. Section 97 provides:
The Court of Appeal and the Superior Court of Justice, exclusive of the Small Claims Court, may make binding declarations of right, whether or not any consequential relief is or could be claimed.
[22] While the court has the jurisdiction and authority to make a declaration of right, it is only to be used when the declaration will have an effect on an existing dispute between the parties. It is not to be given as an opinion on a hypothetical set of facts, or as an academic exercise to settle what may happen in the future. For example, in Re Lockyer, 1933 CanLII 137 (ON CA), [1934] O.R. 22 (Ontario Supreme Court – Court of Appeal), a will left the residue of the testator’s estate following the death of the life interest beneficiary to be divided among named charities, one of which was the Protestants’ Orphan Asylum. As there was no such charity in existence, the Protestant Children’s Homes sought a declaration that it was the intended residuary beneficiary. However, it brought the application before the death of the life interest beneficiary. The court refused to give the declaration because it would have no present effect and circumstances could change before it could have an effect; for example, the life interest beneficiary could use the entire interest before she died. At p. 26, Riddell J.A. quoted from Curtis v. Sheffield (1882), 21 Ch. D. 1, at pp. 3-4, where Jessel M.R. stated:
Now it is true that it is not the practice of the Court, and was not the practice of the Court of Chancery, to decide as to future rights, but to wait until the event has happened, unless a present right depends on the decisions, or there are some other special circumstances to satisfy the Court that it is desirable at once to decide on the future rights.
[23] The leading decision from the Supreme Court on this issue is Solosky v. The Queen, 1979 CanLII 9 (SCC), [1980] 1 S.C.R. 821. Mr. Solosky, a federal prisoner, sought a declaration that it would be illegal for penitentiary officials to open and read his mail to and from his lawyer. Dickson J. stated that the principles that guide the court in exercising its jurisdiction to grant a declaration have been stated many times. There are two factors to consider. The first is the reality of the dispute: Dickson J. explained at p. 832 that “[i]t is clear that a declaration will not normally be granted when the dispute is over and has become academic, or where the dispute has yet to arise and may not arise”. In Solosky, the dispute was not hypothetical because there was an order in place requiring that Mr. Solosky’s mail be opened and read; that order had been and was continuing to be applied and therefore would apply to future mail.

[24] If the dispute is established as a real dispute, then the second factor is “whether the declaration is capable of having any practical effect in resolving the issues in the case”: at p. 833. In Solosky, the court concluded that the appellant was not entitled to the declaration sought for other reasons, but that otherwise, the court could have exercised its jurisdiction to grant it because the two criteria stated above were met.

....

Issue 2: Did the application judge err by declaring findings of fact?

[30] Declaratory relief must determine the rights of the parties. While determining the rights of the parties may entail findings of fact, courts do not have jurisdiction to simply declare facts, detached from the rights of the parties.

[31] Where the issue between an insured and the insurer is not the interpretation and application of the policy to a specific set of facts, but rather, what were the facts that occurred, then it is not a proper case for declaratory relief. The application judge erred by making findings of fact under the guise of a declaration of right.

[32] This issue has been canvassed numerous times by the Ontario Superior Court of Justice in the context of s. 108(2) of the Courts of Justice Act, which provides that claims for declaratory relief are to be assessed without a jury. Therefore where a plaintiff asks for declaratory relief and seeks to strike a jury notice, the court will examine whether in fact the claim is for declaratory relief, in which case the jury notice will be struck, or whether it is in reality merely a factual dispute that can be decided by a jury. The jury notice will not be struck where the claim is not properly for declaratory relief but for findings of fact on disputed evidence: see Harrison v. Antonopoulos (2002), 2002 CanLII 28725 (ON SC), 62 O.R. (3d) 463 (S.C.); Ramm v. Sun Life Assurance Co. of Canada (1999), 1999 CanLII 14784 (ON SC), 43 O.R. (3d) 652 (S.C.); and Thibault v. Empire Life Insurance Co., 2012 ONSC 1723 (CanLII), 24 C.P.C. (7th) 208.

[33] For example, in Reid v. Manufacturer, 2010 ONSC 4645 (CanLII), 89 C.C.L.I (4th) 149, the court explained at paras. 35-36:
Manulife's argument, of course, assumes that there was, in fact, a detrimental change in Mr. Reid's health in the relevant time period. But that fact is disputed. In fact it is the very centre of the dispute between the parties. There appears to be no dispute about their legal rights, obligations and entitlements depending on the outcome of that factual finding. The court in this instance is not called upon to make a pronunciation on the legal rights of the parties. They agree that their rights are spelled out in the policy. What they do not agree upon is whether a particular constellation of facts existed that vitiated the policy. The court is called upon to determine what is a relatively narrow factual dispute: whether there was a detrimental change in Joel Reid's health in the relevant time period.

On careful review, in pith and substance, this case is clearly a factual dispute. The parties seek a determination of that factual dispute and, at least from the plaintiff's point of view, a coercive order should that factual determination be resolved in his favour. [Emphasis added.]
[34] With respect, once the application judge heard the application and found that he could not make a declaration of rights because no claim existed, it was an error to make factual findings in relation to the two disputed issues raised by Northbridge’s denial of coverage letter and to frame those findings as declaratory relief.

[35] As an ancillary point, s. 138 of the Courts of Justice Act directs that: “As far as possible, multiplicity of legal proceedings shall be avoided.” This court has recently explained in the context of the propriety of awarding partial summary judgment, that cases should only rarely be bifurcated. In Butera v. Chown, Carins LLP, 2017 ONCA 783 (CanLII), 137 O.R. (3d) 561, the court set out a number of reasons why findings should not be made by one judge that do not dispose of the action and bind the judge that will hear and dispose of it, at paras. 29-34: (1) the danger of duplicative or inconsistent findings; (2) delay of the main action; (3) such motions can be expensive; (4) judges are required to spend time writing extensive reasons which do not dispose of the action; and (5) the record available at the hearing of a partial summary judgment motion will likely not be as expansive as the record at trial, increasing the risk of inconsistent findings.



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