Since its 1995 decision in David Bull Laboratories (Canada) Inc. v. Pharmacia Inc.1, the Federal Court of Appeal consistently applied a unique standard of review to interlocutory, discretionary orders of the Federal Court. Under this longstanding test, the FCA gave deference to a discretionary decision of the Federal Court unless it proceeded “on a wrong principle, gave insufficient weight to relevant factors, misapprehended the facts, or where an obvious injustice would result”. This was despite the Supreme Court of Canada’s 2002 decision in Housen v Nikolaisen,2 which the FCA applied to the standard of review on all other appeals.
No more. In its recent decision of Imperial Manufacturing Group Inc v Décor Grates Inc,3 2015 FCA 100, the Federal Court of Appeal clarified that the Housen standard of “palpable and overriding error”, unless there is an extricable error of law, applies to all questions of mixed fact and law, even discretionary interlocutory orders.
David Bull was a case in which the Federal Court refused to strike out a notice of motion. On appeal, the FCA stated the following about the standard of review: “This court should not of course interfere with a trial judge’s exercise of discretion, such as in a refusal to strike, unless he or she has proceeded on some wrong principle of law or has seriously misapprehended the facts, or unless an obvious injustice would otherwise result”.4
The Supreme Court of Canada’s majority decision in Housen, which came seven years after David Bull, held that on questions of fact, or mixed fact and law not traceable to a legal error, an appellate court may not intervene absent palpable and overriding error. The Court succinctly summarized the point as follows:
A proposition that should be unnecessary to state is that a court of appeal should not interfere with a trial judge’s reasons unless there is a palpable and overriding error. The same proposition is sometimes stated as prohibiting an appellate court from reviewing a trial judge’s decision if there was some evidence upon which he or she could have relied to reach that conclusion.5
Imperial Manufacturing related to an appeal from a Federal Court decision6 dismissing a motion for particulars in an industrial design infringement action. In dismissing the appeal, Justice Stratas noted six problems with applying the David Bull standard of review to interlocutory and discretionary orders:
- Following David Bull over Housen creates a problem of stare decisis because the Supreme Court of Canada’s Housendecision “provided the definitive word on the standard of review” and is “binding on all”;7
- Applying a different standard of review to discretionary interlocutory decisions causes confusion because it is sometimes unclear whether a decision is final or interlocutory;8
- The David Bull line is redundant in face of Housen. Where a court commits “an error on an extricable point of law” (fromHousen) it “has proceeded on a wrong principle” (from David Bull). Likewise, severe instances of “giving of insufficient weight to relevant factors, misapprehending the facts or causing an obvious injustice” (the David Bull standard) are “palpable and overriding errors” (in Housen terms);9
- David Bull “poses a trap for the unwary” by suggesting that the Federal Court of Appeal will reweigh the evidence if “insufficient weight was given to relevant factors” by the Federal Court. Justice Stratas viewed this is a trap, because in his view “plainly this is not what we [(Federal Court of Appeal judges)] ever do”;10
- All other Canadian appellate courts apply the Housen standard of review “across the board”. There is no rationale to support the Federal Court of Appeal’s use of a different standard;11 and
- David Bull simply asserts, without authority, that “giving insufficient weight to relevant factors” warrants appellate intervention.12
Imperial Manufacturing is an important decision as it clarifies the law surrounding the appropriate standard of review. Housen dictates and is binding on all. For questions of fact the standard is one of palpable and overriding error. The standard is the same for questions of mixed fact and law, where the alleged error is not traceable to an error in law.