One of the reasons that a trial judge has a duty to give sufficient reasons is to permit meaningful appellate review. But sufficiency of reasons will depend on the context. The Ontario Court of Appeal’s July 9, 2015 decision in Maple Ridge Community Management Ltd. v. Peel Condominium Corporation No. 231 held that appellate judges reviewing Small Claims Court decisions must recognize that the Small Claims Court’s summary procedure will mean that “reasons from the Small Claims Court will not always be as thorough as those in Superior Court decisions.” The decision is also a helpful reminder of:

  • how a Court and litigants are to approach an appeal where it is alleged that the trial judge gave insufficient reasons; and
  • when the Court of Appeal, sitting as a “second appeal” court, will decide issues when the “first appeal” judge did not do so.

Background

The case emerged from the termination of a condominium management agreement. The plaintiff-condominium management company sued for damages in the Small Claims Court. Its claim was dismissed, as the Small Claims Court deputy judge found that the defendant was justified in terminating the agreement due to the plaintiff’s “insubordination, recklessness and/or gross negligence”. He cited legal definitions of these words, reviewed the facts, and concluded that:

Notwithstanding that the grounds relied on by the Defendant in terminating the Agreement, may not have been sufficient individually to meet the tests outlined above, although in some cases I believe they were, I am satisfied that when taken together they are sufficient to constitute insubordination, recklessness and/or gross negligence entitling the Defendant to terminate the Agreement without notice […]

On appeal, the Divisional Court judge held that the reasons were insufficient to permit meaningful appellate review, as it was unclear “what” was decided or “why”. Specifically, it was not indicated which acts or omissions individually amounted to insubordination, recklessness or gross negligence, or “why” acts and omissions that were individually insufficient to constitute insubordination, recklessness or gross negligence collectively amounted to same.

Preliminary Issues

The defendant, on appeal to the Court of Appeal, advanced several arguments. Justice Hourigan, for a unanimous Court of Appeal, rejected two of them. First, the Divisional Court did not err in reviewing the trial judge’s reasons on a correctness standard. Reasonableness review applies to reviewing the reasons of an expert tribunal, not a court, and the Small Claims Court is a court. Moreover, insufficient reasons demonstrate an error of law.

Second, the defendant’s submission that there should have been an additional analysis into whether a substantial wrong or miscarriage of justice had occurred before ordering a new trial was rejected. A new trial is the appropriate order in the face of insufficient reasons.

The “What” and the “Why”

Justice Hourigan held that, though the Divisional Court had identified the correct standard upon which to assess the trial judge’s reasons, it misapplied it. He held:

[26]      The Divisional Court’s finding that the trial judge did not specify which grounds individually amounted to insubordination, recklessness or gross negligence was based on the trial judge’s statements that the allegations “could” meet these standards rather than that they actually did. The Divisional Court’s interpretation is incorrect when read in the context of the entire trial decision. The trial judge reviewed each ground and stated whether it could individually meet the tests for insubordination, recklessness or gross negligence. He then stated that “in some cases” – presumably those where he earlier indicated that the ground “could” individually constitute insubordination, recklessness or gross negligence – the grounds were, as a matter of fact, sufficient to meet those tests on an individual basis.

[…]

[28]      In addition, the Divisional Court’s finding that the trial judge did not demonstrate how he reached his conclusion because he did not state why acts and omissions that were individually insufficient to constitute insubordination, recklessness or gross negligence could collectively constitute the same is similarly unfounded when the trial judge’s reasons are read in context. As submitted by PCC 231, it is self-evident, as a matter of logic and common sense, that multiple acts or omissions can rise to a level that one alone cannot reach. […]

The Record

Justice Hourigan also held that the Divisional Court was obliged to consider the record to determine whether “the reasons were more comprehensible when read in the context of this record” (para. 30). He held:

[31]      The level of requisite detail in reasons will be lessened “[w]here the record discloses all that is required to be known to permit appellate review”: […] If a detailed record is available, the appellate court should not intervene “simply because it thinks the trial court did a poor job expressing itself” […]

[32]      There was ample evidence in the trial record that established that Maple Ridge was insubordinate, grossly negligent and/or reckless. The appeal justice was required to consider that evidence before concluding that the reasons of the trial judge were inadequate. He did not do so. Instead, he appears to have restricted his analysis to a review of the text of the reasons without regard to the trial record. In my view, in failing to conduct a contextual analysis, the Divisional Court erred in law.

The Small Claims Court Context

Justice Hourigan further noted that “access to justice” is currently a challenge in Canada, and the Small Claims Court is meant to partially address that concern. He held:

[34]      The Small Claims Court is mandated […] to “hear and determine in a summary way all questions of law and fact and may make such order as is considered just and agreeable to good conscience.” The Small Claims Court plays a vital role in the administration of justice in the province by ensuring meaningful and cost effective access to justice for cases involving relatively modest claims for damages. In order to meet its mandate, the Small Claims Court’s process and procedures are designed to ensure that it can handle a large volume of cases in an efficient and economical manner.

[35]      Reasons from the Small Claims Court must be sufficiently clear to permit judicial review on appeal. They must explain to the litigants what has been decided and why […] However, appellate consideration of Small Claims Court reasons must recognize the informal nature of that court, as well as the volume of cases it handles and its statutory mandate to deal with these cases efficiently. In short, in assessing the adequacy of the reasons, context matters […] Just as oral reasons will not necessarily be as detailed as written reasons, reasons from the Small Claims Court will not always be as thorough as those in Superior Court decisions. Failing to take the Small Claims Court context into account only serves to restrict access to justice by unnecessarily imparting formality and delay into a legal process that is designed to be informal and efficient.

[36]      In the present case, the Divisional Court decision overlooks the clear reasoning in the trial judge’s judgment and demands a level of detail that is significantly higher than generally required, particularly in Small Claims Court decisions.

Further Proceedings in the Divisional Court

Finally, the plaintiff argued that the matter should be remitted to the Divisional Court, to address its other appellate arguments that were never considered by the Divisional Court due to the Divisional Court’s decision on the adequacy of reasons. Justice Hourigan “would not accede” (para. 37) to this submission, providing guidance on what appellate courts should do in this situation:

[38]      […] on appeal this court may make any order or decision that ought to or could have been made by the court or tribunal appealed from and may make any other order or decision that is just. If Maple Ridge wanted to uphold the judgment of the Divisional Court on grounds other than the inadequacy of the reasons, it should have made those arguments before this court. […] It is hardly proportionate or practical to suggest that this modest claim should be sent back to the Divisional Court for its third appeal.

[39]      In any event, the other grounds of appeal advanced by Maple Ridge are weak. […]