Recently, Stuart Clark blogged on the procedural differences between Applications and Actions in the context of civil litigation. In his blog, he aptly describes key differences between the two proceedings, which rests largely on the manner in which evidence is heard. Applications are determined on a written record, meaning that evidence before the court is contained in affidavits sworn by the parties in advance of the hearing date. In contrast, actions are heard by way of viva voce evidence (i.e. parties are examined, and cross-examined in open court).
As parties inch towards their final hearing date, the benefits and disadvantages of proceeding by way of application versus action may sharpen into focus. As Stuart noted, parties may decide that there are strategic benefits to converting their application into an action, such as having a sympathetic witness. Parties are free to take steps necessary to effect that change.
However, if parties don’t convert their proceedings in advance of their hearing, Judges have the discretion to convert applications to actions, and can order a conversion at the hearing of an application. In other words, if a Judge decides that justice would best be served by hearing a matter by way of trial, they can order the conversion of a proceeding at the hearing of an application.
Such was the case in Halar v Bacic, wherein the court determined that there were significant and material facts in dispute relating to capacity, and that a trial was necessary to assess the credibility of the witnesses.
In that case, a mother appointed her son and daughter to act as her attorneys for property and personal care in 2017. Following execution of the POAs, she was diagnosed with moderate Alzheimer’s disease and dementia. Shortly thereafter, the mother and her husband sold their home and moved back to Croatia. The proceeds of sale of their home were deposited in their Canadian bank account, with the understanding that the son and daughter would send money from the Canadian bank account when funds were requested by the mother.
The daughter and son ran into some conflict with respect to how the Canadian bank account was managed, resulting in the mother executing a new Power of Attorney in 2018, which raised questions regarding whether the mother had capacity to execute the new Power of Attorney.
The Judge was not satisfied that the medical evidence before him supported the position of the applicants and was not satisfied that he was in a position to make the findings and orders requested of him on the evidentiary record before him.
Ultimately, the Judge converted the application to an action and ordered that a trial be directed pursuant to Rule 38.10(6).
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Rule 2.1 of the Ontario Rules of Civil Procedure is a powerful provision that allows a court to stay or a dismiss a proceeding if the proceeding “appears on its face to be frivolous or vexatious or otherwise an abuse of the process of the court”.
In Raji v. Borden Ladner Gervais LLP, 2015 ONSC 801 (CanLLI), Justice Myers gave direction with respect to what should be contained in the request for a stay. The court suggested that a one or two line letter making the request for the referral of the matter to a judge is all that is required. No narrative or background facts or information should be provided. This is because:
- The abusive nature of the proceedings should be apparent on the face of the pleading itself;
- No evidence is admissible on the motion;
- Submissions of the requestor (defendant) are of little use;
- There will be less likelihood for the plaintiff to “see conspiracies”. The process will be more efficient and fairer in fact and in appearance.
If the defendant wishes to put in evidence or background information, then the preferred procedure might be to move for summary judgment under Rule 20, or to strike out a pleading under Rule 25.11.
However, in The Estate of Lois Jean Davey v. Craig, 2018 ONSC 7367 (CanLII), the Rule was applied to an application where a claim of constructive trust was brought by the Estate Trustee against the Estate Trustee and his former spouse related to an addition paid for by the Deceased. (The Estate Trustee, who was the Deceased’s son, and the former spouse were involved in family law litigation.) The Deceased’s will was filed as part of the application record. The will specifically provided that the addition shall be the sole property of the son, and that “the estate shall have no claim on said addition”. The court also appeared to rely on submissions suggesting that the issue was previously raised by the son, unsuccessfully, in the family law proceedings. The court found that the estate was estopped from making the claim in light of the express wording of the will. Further, the court held that the claim had no basis in fact or law. “One cannot give the gift, make clear evidence of that gift, and then recover the property using the law of unjust enrichment.” The application was dismissed with costs.
The decision demonstrates the powerful nature of the Rule. The application was dismissed with no formal motion being brought by the respondent, no apparent reply materials, no cross-examinations and no attendance by the parties.
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In the latest development in the protracted litigation between the heiress to a cosmetics fortune and her daughter, a French Court this week granted guardianship applications brought by her daughter and grandchildren. The Court made findings that the mother was not capable of managing her own property or making personal care decisions.
In Ontario, guardianship disputes are governed by the Substitute Decisions Act (“SDA”). Under section 3 of the SDA, when the capacity of a person is in dispute, counsel may be ordered to be appointed by the Public Guardian and Trustee and the alleged incapable person will be deemed to have capacity to instruct counsel.
To read more about the history of the proceeding referred to at the outset of this blog, I suggest Forbes magazine’s article.
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