What happens when the Court of Appeal makes a mistake? A recent decision of the Ontario Court of Appeal addressed the issue in an unusual case involving the appellate court releasing reasons for judgment in error.
The underlying action in Hilson v. 1336365 Alberta Ltd., 2019 ONCA 653, concerned a claim brought by the second mortgagee of property located in Toronto, Ontario to recover monies owing under certain mortgages by way of enforcing personal guarantees granted by the individual mortgagees.
The Ontario Superior Court
In the court below, the issue concerned whether the law of Ontario or Alberta governed the guarantees. The mortgagors argued, among other things, that the guarantees were unenforceable as they did not comply with the execution formalities in the Alberta Guarantees Acknowledgement Act. The mortgagees were residents of Alberta and signed the required mortgage documentation in that province; the documents were then returned to Ontario for closing. The mortgagor, on the other hand, resided in Ontario, where the property was located. The lower court held that the mortgagor was entitled to recover from the mortgagors/guarantors under their personal guarantees since the guarantees related to indebtedness on mortgages secured against Ontario property, and because the guarantees stated that the guarantors attorned to the jurisdiction of the Ontario courts (reasons indexed as 2018 ONSC 1836). The mortgagors appealed.
The Court of Appeal
The appeal was heard before three Justices of the Ontario Court of Appeal, and reasons for judgment were issued on May 27, 2019 wherein the Respondent was largely successful. However, after the reasons were released, it came to the Court’s attention that one of the members of the panel who heard the appeal (Justice Huscroft) was not provided with either the draft judgment for review or the final judgment for signature. The Court invited the parties to make submissions on how the court should proceed in the circumstances. The Respondent mortgagee argued that the mistake could be corrected, and proposed that Justice Huscroft now review and either assent to or dissent from the judgment.
The Court ultimately rejected the Respondent’s proposal finding that as Justice Huscroft did not participate in the preparation of the panel’s judgment, the decision-making process had been compromised and the panel could not now render a judgment (para. 5). The Court held that the judgment had to be withdrawn as it was of not force and effect, and was not “a judgment of the court” (para. 2). The Court, accordingly, ordered that the appeal be re-heard by a differently constituted panel.
In its brief, six paragraph, reasons for judgment, the Court did not elaborate on how exactly the mistake happened. However the Court has to protect both the confidentiality and integrity of its internal processes. In this case, the parties’ right to have the appeal heard by three judges had been compromised. Usually one judge of the Court of Appeal panel will author reasons for judgment which are then circulated among the other two judges for review, comment and/or revision. This obviously did not happen in this case, and the outcome of the appeal may have very well been different with Justice Huscroft’s participation. As such, the Court’s order that the appeal be re-heard before a new panel is likely the right, and fair, outcome for all the parties involved.
Please see the Court of Appeal decision here: http://www.ontariocourts.ca/decisions/2019/2019ONCA0653.htm
Please see the Ontario Superior Court Decision here: http://www.ontariocourts.ca/search-canlii/scj/scj-en.htm