Finding a Reasonable Apprehension of Bias: Stuart Budd v IFS Vehicle Distributors

Everyone has the right to a fair trial. This foundational principle was undermined in Stuart Budd & Sons Limited v IFS Vehicle Distributors ULC, 2015 ONSC 519 [IFS, Motion]. On appeal, the Ontario Court of Appeal (“ONCA”) determined that a reasonable and informed objective observer would consider the motion judge, Justice Corbett, to have displayed bias (Stuart Budd & Sons Limited v IFS Vehicle Distributors ULC, 2016 ONCA 60, para 5 [IFS, ONCA]). Justice Corbett’s comments and action indicated that he pre-judged the motion before hearing all the evidence. Justice Epstein, writing for a unanimous court, ordered a new trial.

Facts

After the near collapse of the auto sector, General Motors ceased its involvement with Canadian Saab dealerships. Saab Automobile entered the Canadian market in 2010 and approached International Fleet Sales (“Fleet Sales”) about assisting in importing and distributing Saab motor vehicles. IFS Vehicle Distributors (“IFS”), created to be an affiliate of Fleet Sales, was incorporated in British Columbia and was established to provide supplies to dealerships.

In March 2013, three Ontario dealers and five out-of-province dealers issued a statement of claim against IFS and Fleet Sales. One of the Ontario claimants was Mr. Bud, who would provide evidence for all the plaintiffs if their claims were successfully joined.

The claim alleged that there had been a breach of the franchise agreement. IFS and Fleet SalesIFS brought a motion to dismiss the proceedings due to the court’s alleged lack of jurisdiction.

Presumption of Judicial Integrity

Our legal system is founded on the principle that judges must impartially adjudicate matters before them. There is a strong presumption of judicial integrity (R v Teskey, [2007] 2 SCR 267). Judges have received legal training, have practiced extensively, and have self-selected to take on this neutral role. Moreover, they have taken an oath that they will carry out their duties in accordance with their legal responsibilities. To rebut the presumption of integrity, there needs to be a finding of a reasonable apprehension of bias.

Standard: Reasonable Apprehension of Bias

 Former Supreme Court Justice Grandpré succinctly defined the reasonable apprehension of bias as “what … an informed person, viewing the matter realistically and practically—and having thought the matter through—[would] conclude. Would he think that it is more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly?” (Committee for Justice and Liberty v National Energy Board, [1978] 1 SCR 369). Therefore, a finding of a reasonable apprehension of bias does not require a finding of bias. Rather, it means that an objective and informed observer would think that the judge was biased. Justice Epstein noted several problematic decisions made by Justice Corbett; the cumulative effect of these actions and comments met the test for a reasonable apprehension of bias.

Problem 1: Justice Corbett adjourned the Motion to allow correction of fatal error 

The plaintiffs filed a single affidavit in response to the motion to dismiss their application. The affidavit was sworn by Mr. Budd, an Ontario Saab dealer and plaintiff. The affidavit included statements of which Mr. Budd did not personally have knowledge, and he failed to include the sources of the information he was swearing to be true. Justice Corbett described this defect as a fatal error. Justice Corbett decided to adjourn the motion for one month in order to allow the plaintiffs to correct their affidavit.

Problem 2: First Endorsement indicated Pre-judgment

When Justice Corbett adjourned the motion, he made comments that indicated that he prejudged the issues raised in the motion. Specifically, he held, “[i]t seems plain that there is jurisdiction simpliciter in Ontario over the claims brought by the Ontario plaintiffs” (IFS, ONCA, para 17). He also informed the defendants, who brought the motion, that he did not expect that the matters required cross-examination. But cross-examination of witnesses can be critical in presenting favorable facts to support one’s motion; Justice Corbett’s remark could be interpreted to mean that he did not require cross-examination, as he had a strong factual background. Conversely, it supports the position that he had pre-judged the outcome of the motion.

Problem 3: Justice Corbett decided the case before hearing two central issues

At the first hearing, Justice Corbett indicated that the central issue would be the impact of joinder on the question of jurisdiction and issues of forum non conveniens. At the second hearing, Justice Corbett rendered his decision prior to hearing these two issues. This is particularly jarring as Canadian courts have yet to consider how joinders impact the Van Breda analysis (Club Resorts Ltd v Van Breda, [2012] 1 SCR 572). Further, Justice Corbett had identified these two issues as being contentious in the first hearing. While Justice Corbett was aided by comprehensive facta, he should have allowed the defendants to present their case (IFS, ONCA, para 57). By deciding the issues, presumably on the factual record as if it were a summary judgment, a reasonable and informed person might conclude that Justice Corbett pre-judged the issues.

Problem 4: Commentary & Critique of IFS & Fleet Street

Justice Corbett provided a scathing review of the counsel for IFS and Fleet Street during the first and second hearings. He indicated that he thought the cross-examination that occurred during the second hearing was pointless. He also blamed IFS and Fleet Street for the delay, even though it was the defects in the plaintiff’s affidavit that caused the second hearing to occur. Justice Corbett, annoyed with IFS and Fleet Street for bringing a motion devoid of merit, and ordered a $50,000 indemnity cost. Jurisdictional issues are inherently complex. In this case, there was no choice of forum, though there was a choice of law clause. It was not immediately apparent that the defendants would lose their motion to dismiss. Ordering an indemnity cost, in light of the other comments, indicates a predisposition on the merits of the motion.

Conclusion

Judges need to give litigants their day in court. If the litigants have not sought a summary judgment, the judge should accept oral testimony on issues central to the motion or case. While judges should always retain the discretion to limit oral testimony, this should occur to prevent an abuse of process—not because the judge has already determined the outcome of the case.