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Injunctions - RJR - General. 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.
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[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.
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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. . Platinum Cars Inc. v. Registrar, Motor Vehicle Dealers Act, 2002
In Platinum Cars Inc. v. Registrar, Motor Vehicle Dealers Act, 2002 (Div Court, 2024) the Divisional Court denied a motion for a stay pending appeal, here where the appellant appealed a LAT order "directing the Respondent Registrar to carry out a Notice of Proposal" to revoke both a car dealer and motor vehicle salesperson MVDA registration:[25] Their application has been updated, and includes a proposal for terms and conditions that would include maintaining a fund at $50,000 to respond to customer complaints, and supervision by a prior motor vehicle official who assists registrants with their obligations. The motion material includes a forebearance agreement from the security holder of the Appellants’ credit facility, which permits the dealership to continue its financial arrangements if a stay is granted.
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Applying the Test for a Stay Pending Appeal
[29] The parties agree that the test on a motion to stay an order under r. 63.02(1)(b) is that in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311 at p. 334 as follows:1. Is there a serious issue to be tried?
2. Will the moving party suffer irreparable harm if the stay is not granted?
3. Does the balance of convenience favour granting the stay? [30] The factors are interrelated and the strength of one factor may counterweigh a weaker factor: Louis v. Poitras 2020 ONCA 815 at para. 16.
[31] The overarching question is whether the moving party has demonstrated it is in the “interests of justice” to grant a stay: BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620, 283 O.A.C. 321, at para. 16. . Power Workers' Union v. Canada (Attorney General)
In Power Workers' Union v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered a preliminary motion for interim and interlocutory injunctions [under Federal Rules R373] in the course of an appeal of an unsuccessful union JR against a "regulatory document issued by the Canadian Nuclear Safety Commission", here on constitutional grounds. The policy in the impugned document, which the injunction would suspend if granted, established policy regarding "pre-placement and random alcohol and drug testing of safety-critical workers employed by the respondent employers at Class I high-security nuclear power plants".
This motion is essentially a stay pending appeal, and as such is heard under the RJR-MacDonald doctrine:[15] The test for obtaining an interlocutory injunction is set out in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311 at 334, 111 D.L.R. (4th) 385 [RJR-MacDonald]. The moving party must establish that: (1) there is a serious issue to be tried; (2) it will suffer irreparable harm if the injunction is not granted; and (3) the balance of convenience, taking into account the public interest, favours granting the injunction.
[16] The moving party has the burden of satisfying each branch of the test, on a balance of probabilities (Canada (Attorney General) v. Robinson, 2021 FCA 39 at para. 17, citing Novopharm Limited v. Janssen-Ortho Inc., 2006 FCA 406). . Sase Aggregate Ltd. v. Langdon,
In Sase Aggregate Ltd. v. Langdon, (Ont CA, 2023) the Court of Appeal considered the RJR stay pending appeal test:(2) Test for Granting a Stay
[9] 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 outlined a three-part test for obtaining a stay of a judgment pending appeal:(1) a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried;
(2) it must be determined whether the applicant would suffer irreparable harm if the application 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 remedy pending a decision on the merits. [10] These factors are not to be considered in isolation of each other. In other words, they are not watertight compartments. The strength of one may compensate for the weakness of another while considered against the backdrop of the overarching consideration: do the interests of justice call for a stay: BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, at para 16; Livent Inc. v. Deloitte & Touche, 2016 ONCA 395, at para. 5; and Thunder Bay (City) v. Canadian National Railway Company, 2018 ONCA 919, at para. 35.
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