After yesterday’s decision by the Court of Appeal in Prudential Securities Credit Corp., LLC v. Cobrand Foods Ltd., we are unlikely to see many more motions for non-suit in this province. The Court said that the procedure “has little practical value”, that it “adds to the time and expense of a trial” and that it is “becoming obsolete”.
The ruling was also interesting because the Court heard two appeals, one by the plaintiff and the other by one of two defendants. In both, the Court agreed that the trial judge had erred. But it dismissed both appeals on the ground that no substantial injustice had resulted from the errors.
Prudential had sued a husband and wife, the former on a guarantee and the latter on the basis that the husband’s transfers of property to her had been fraudulent and therefore void under the Fraudulent Conveyances Act. At trial, counsel for both husband and wife brought motions for non-suit and elected to call no evidence. The non-suit motions were argued over the course of two and a half days and the trial judge, Mr. Justice Herman J.W. Siegel, reserved his decision. He advised counsel that if he decided to dismiss the motions, they should be prepared to re-attend before him, to make closing submissions.
A few days later, he released his decision. He dismissed the husband’s motion for non-suit and granted the wife’s motion. He said that his reasons would follow. When they did, nine months later, the reasons dealt not only with the motions for non-suit but also gave judgment for Prudential against the husband on his guarantee. The trial judge had evidently forgotten about having counsel present their final arguments.
The husband appealed on the basis that because his counsel had not been able to make closing submissions, he had not been afforded an opportunity to fully present his case.
Prudential also appealed the dismissal of its claim against the wife, following her motion for non-suit. It argued that the trial judge had applied the wrong test in granting the wife’s motion.
The Court of Appeal (the panel was made up of Justices John Laskin, Stephen Borins and Kathryn Feldman) agreed with both of these submissions but chose not to disturb the trial judge’s decision. In the course of its reasons, Justice Laskin, writing for the Court, discussed motions for non-suit in language calculated to discourage their use in future cases.
A motion for non-suit is a procedure available to a defendant at the conclusion of the plaintiff’s case. The defendant can ask the trial judge to dismiss the action on the ground that the plaintiff has failed to make out any case for the defendant to answer. In bringing the motion, the defendant must elect whether to call evidence. If the defendant chooses to call evidence, the judge will not rule on the motion until the defence evidence has been adduced. Should the defence decide to call no evidence (which is what happened in this case), the court rules on the motion immediately.
To win a motion for non-suit, a defendant must show that the plaintiff has put forward no case to answer, “in most lawsuits an onerous task”, as Laskin J.A. observed. Prudential had only to establish that it had put forward evidence which, if believed, would allow the trial judge to find in its favour. In other words, to defeat the motion for nons-suit, Prudential was not required to have the trial judge accept its evidence, just to find that there was some evidence.
Justice Siegel found that, as against the husband, Prudential had not only made out a prima facie case, it had more than proven its case on a balance of probabilities. For this reason, Siegel J. gave judgment against the husband.
But in relation to the fraudulent conveyance claim against the wife, the trial judge said that “on a balance of probabilities” [emphasis added], the evidence did not establish fraud on the part of the wife. Prudential argued that the trial judge should first have considered whether there was any evidence which, if believed, would have made out its case of fraud and only then undertaken a weighing of the evidence. Here, the trial judge had conflated the two different procedures.
The Court of Appeal agreed. It said a trial judge must dismiss a motion for non-suit “if a plaintiff puts forward some evidence on all elements of its claim”. On such a motion, “the judge must assume the evidence to be true and must assign ‘the most favourable meaning’ to evidence capable of giving rise to competing inferences”. Only at the end of the trial (if the motion for non-suit fails) should a judge decide which inferences should be drawn from the evidence.
In this case, the Court agreed that Justice Siegel “went beyond his limited mandate” on a motion for non-suit and entered into a weighing of the evidence. However, after undertaking its own evaluation of that evidence, the Court said that the trial judge had not made a palpable and overriding error in concluding that fraudulent intent had not been proved by Prudential. Accordingly, it dismissed Prudential’s appeal.
With respect to the appeal by the husband, the Court agreed that the trial judge had deprived the husband of a substantive right by forgetting to give his counsel an opportunity to make closing argument. But once again, the Court concluded that no substantial injustice had been occasioned by this oversight. It dismissed the husband’s appeal too.