Simon's Megalomaniacal Legal Resources

Fairness - Is It Only An Administrative Law Issue?

. Bernier v. Kinzinger

In Bernier v. Kinzinger (Div Court, 2023) the Divisional Court allowed an appeal where the theory relied upon by the respondent was unpled, here framed as an issue of procedural fairness:

25. The appellant states that mutual rescission was not an issue raised by or argued by the parties before the application judge. It was a “novel legal theory” applied by the application judge, which “escaped the rigours of the adversarial process”. This, the appellant argues, raises issues of procedural fairness and substantive propriety of the application judge’s finding that the agreement had been rescinded.

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30. An application judge’s interpretation of a contract is entitled to considerable deference in this court. However, when an application judge decides a matter on a basis that was not anchored in the pleadings, evidence, positions and submissions of the parties, principles of procedural fairness overtake principles of contractual interpretation: Union Building Corporation of Canada v. Markham Woodmills Development Inc., 2018 ONCA 401, para. 13. The following passage from the Court of Appeal’s decision in Rodaro v. Royal Bank (2002) 2002 CanLII 41834 (ON CA), 59 OR (3d) 74, para. 62 – was stated in respect to unargued theories of liability, but applies equally to unargued defences:

In addition to fairness concerns which standing alone would warrant appellate intervention, the introduction of a new theory of liability in the reasons for judgment also raises concerns about the reliability of that theory. We rely on the adversarial process to get at the truth. That process assumes that the truth best emerges after a full and vigorous competition amongst the various opposing parties. A theory of liability that emerges for the first time in the reasons for judgment is never tested in the crucible of the adversarial process. We simply do not know how Spence J.'s lost opportunity theory would have held up had it been subject to the rigours of the adversarial process. We do know, however, that all arguments that were in fact advanced by Mr. Rodaro and were therefore subject to the adversarial process were found wanting by Spence J.

31. I appreciate that there is no formal statement of defence in an application. However, the parties filed extensive materials, including factums, and nowhere was the issue of mutual rescission mentioned. None of the cases relied upon by the application judge on this point were put to him by the parties. The application judge did not have the benefit of full argument from the parties on the impact of the sale of Northbud on the share acquisition agreement. In all of these circumstances, the application judge’s findings on the issue of mutual rescission are not entitled to deference in this court, and we are required to take a fresh look at the issue: Rodaro v. Royal Bank (2002) 2002 CanLII 41834 (ON CA), 59 OR (3d) 74.

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39. The passage from Chitty highlights the procedural unfairness of deciding this case on the basis on an unargued ground. There was no express contract to rescind the agreement. The question of whether subsequent events rescinded, varied, or left the agreement essentially intact, is, at best, of “considerable difficulty” in this case. The parties did address this “considerable difficulty” before us, and we are persuaded the original agreement can be implemented, as originally agreed, with only minor adjustments.

. G.S. v. S.B.

In G.S. v. S.B. (Div Court, 2023) the Divisional Court viewed 'natural justice' and 'procedure fairness' as equivalent concepts - even though the appeal was from a court, not a tribunal:

[17] When considering an allegation of a denial of natural justice, the court is required to evaluate whether the rules of procedural fairness were adhered to. “The court does this by assessing the specific circumstances giving rise to the allegation and by determining what procedures and safeguards were required in those circumstances in order to comply with the duty to act fairly”: London (City of) v. Ayerswood Development Corp. (2002), 2002 CanLII 3225 (ON CA), 167 O.A.C. 120 (Ont. C.A.), at para. 10.

[18] In this case, examining all the circumstances, there was no breach of procedural fairness. It is undisputed that procedural fairness includes an opportunity for those affected by the decision to put forward their views and evidence fully and have them considered by the trial judge: Baker v. Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC), [1999] 2 S.C.R. 817, at para. 22. As further detailed below, the father had this opportunity.

. R. v. Smith

In R. v. Smith (Ont CA, 2023) the Court of Appeal openly asserts a "denial of procedural fairness", here in the criminal sentencing process:

[32] In my view, there was an inadvertent denial of procedural fairness in this sentencing proceeding. That denial arose from the appellant’s reliance upon comments made by the sentencing judge at the January 20, 2021 appearance, a reliance that later worked to his detriment when the matter returned to court for further sentencing submissions in August.

. Nguyen v. Hu

In Nguyen v. Hu (Div Court, 2023) the Divisional Court illustrated how the terminology of 'fairness' has infiltrated itself from administrative law to civil law, here in an action on a failed APS:

[20] This appeal raises the following issues:

(1) Did the motion judge violate procedural fairness when he assessed damages as of the date of the breach? ...

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[30] Mr. Nguyen makes an overriding argument that it was unfair for the motion judge to assess damages as of a date that resulted in him receiving only nominal damages. After all, he was the innocent party in the transaction. This submission is fully answered by the Court of Appeal’s decision in Akelius. As the motion judge noted, para. 29 of Akelius makes it clear that the principles governing the date to choose for the assessment of damages apply equally to an innocent purchaser in a rising market.

[31] Mr. Nguyen also submits that it was unfair for the motion judge to assess damages as of the date of the breach because he was not able to re-enter the market until his deposit was returned to him.

[32] We do not see any basis to interfere in the conclusion that assessing damages on the date of the breach was fair in all the circumstances. As set out above, the motion judge relied on Akelius to correctly conclude Mr. Nguyen had the onus of establishing he could not re-enter the market on the date of breach. The motion judge expressly found Mr. Nguyen failed to meet this onus. He noted at para. 84 of his reasons that Mr. Nguyen had admitted to purchasing the property as a speculative investment and had given “no evidence of his resources.” Meanwhile, Mr. Hu pointed to the mortgage approval obtained by Mr. Nguyen to suggest he had the financial ability to buy elsewhere. The motion judge concluded that, on learning the transaction would not close, Mr. Nguyen was not out of any money other than the deposit that remained with the real estate agents. He had not “adduced any evidence suggesting that he was disabled at all from investing in another condominium.”

[33] Although Mr. Nguyen now claims he needed the return of his deposit to re-enter the market, this argument was not raised on the motion. The motion judge stated at para. 12:

Mr. Nguyen does not claim that he could not re-invest until he received his deposit back and provided no evidence justifying a delay of the assessment of damages from the date of the breach of contract committed by Mr. Hu.[Emphasis added]

[34] Given that Mr. Nguyen did not raise this argument before the motion judge and in the face of his failure to lead evidence of his financial resources, the motion judge was entitled to assess damages as of the date of the breach.

. Terra Scapes Landscape Construction Inc. v. Ashtaryeh

In Terra Scapes Landscape Construction Inc. v. Ashtaryeh (Div Court, 2022) the Divisional Court granted an appeal in Small Claims Court grounded on procedural fairness - there was no mention that 'fairness' was an administrative law principle.

. AE Hospitality Ltd. v. Canada (National Revenue)

In AE Hospitality Ltd. v. Canada (National Revenue) (Fed CA, 2020) the Federal Court of Appeal considered whether new case law introduced by the court itself, though on an already-argued issue, was a breach of 'procedural fairness'. What's interesting is that fairness was raised at the Tax Court level:

[17] Lastly, AE submits that the Tax Court denied it procedural fairness by relying on case law that was not submitted by the parties and without providing it an opportunity to make submissions. A breach of procedural fairness might arise where a judge’s reliance on additional authorities "“introduce[s] a principle of law that was not raised by either party expressly or by necessary implication, or [takes] the case on a substantially new and different analytical path”" (Heron Bay Investments Ltd. v. Canada, 2010 FCA 203, 405 N.R. 73 at para. 24). We do not agree that there was a breach of procedural fairness in this case.