Metal World Inc. v. Pennecon Energy Ltd.

Date: 20140219 Docket: 13/08 Citation: Metal World Inc. v. Pennecon Energy Ltd., 2014 NLCA 10 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN: METAL WORLD INC. APPELLANT AND: PENNECON ENERGY LTD. FIRST RESPONDENT AND: VALE NEWFOUNDLAND AND LABRADOR LIMITED SECOND RESPONDENT Coram: Green C.J.N.L., Welsh and White JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division (G) 201201G0799 Appeal Heard: December 17, 2013 Judgment Rendered: February 19, 2014 Reasons for Judgment by Welsh J.A. Concurred in by Green C.J.N.L. and White J.A. Counsel for the Appellant: Stephen Fitzgerald Counsel for the First Respondent: Peter A. O’Flaherty Counsel for the Second Respondent: No Appearance Page: 2 Welsh J.A.: [1] This Court filed a unanimous decision in this matter on November 27, 2013. On December 10, 2013, before the formal order had been filed, Pennecon Energy Ltd. filed an application for leave and for reconsideration of the decision. The application engages issues regarding the requirement for leave together with relevant factors to be assessed in determining the reconsideration application. BACKGROUND [2] The substantive issue as between Metal World Inc. and Pennecon Energy Ltd. is summarized in the decision of this Court (2013 NLCA 67): [2] Pennecon Energy Ltd., claiming it was owed money from Metal World Inc., filed a mechanics’ lien against property of Vale Newfoundland and Labrador Limited. This caused Vale to cease making payments to Metal World. The lien was vacated when Metal World paid the amount of the lien claim, $1,850,000, into court. While the lien against Vale’s property was vacated, the claim of lien remained in effect with the money being held in court. [3] Metal World then applied for an order for dismissal of Pennecon’s lien claim together with return of the money or, in the alternative, the setting of an early trial date. The judge denied Metal World’s application for both the primary and the alternate relief. [3] This Court concluded that the applications judge erred because he did not, in a manner consistent with the object of the Mechanics’ Lien Act, RSNL 1990, c. M-3, assess Metal World’s allegation that the lien claim should be vacated on the basis that the claim, being grossly exaggerated, could not be verified as true. The appeal was allowed on this basis with an order that Metal World would have its party and party costs in this Court and in the Court below. Pennecon’s application for reconsideration relates to the decision on the substantive issues as well as costs. ANALYSIS [4] In limited circumstances an application for reconsideration may be made after the decision has been rendered but before the final order is filed, or, in more restricted circumstances, after the final order has been filed. While this application falls within the former, the following discussion contains some comment regarding the latter. A review of past decisions leads to the conclusion that the appropriate distinction has not consistently Page: 3 been drawn between applications for reconsideration made before and those made after the filing of the final order. This has resulted in some confusion regarding the proper principles to be applied. The following discussion is intended to clarify the approach to be taken when a reconsideration is sought in the limited permitted circumstances and to address the scope of the power to reconsider, on the one hand, a decision prior to filing the final order, and, on the other hand, after the order has been filed. [5] Rule 49.10 of the Rules of the Supreme Court, 1986, states that “an order may be amended as provided in rule 15.07”. Under rule 15.07, an application may be made for the purpose of correcting “clerical mistakes” or “errors arising … from any accidental mistake or omission, or an amendment to provide for any matter which should have but was not adjudicated upon”. In addition, in the context of an appeal, rule 57.27(2) provides for amendment of a final order: Any party to an appeal who wishes the order amended to express better the intent of the decision of the Court may apply to the Court, which may thereupon correct or otherwise amend the formal order, and the amended order shall then without a change of date be signed and entered by the Registrar as the formal order disposing of the appeal. For greater certainty, the provisions of rule 15.07 shall apply, with the necessary changes. Where these rules do not apply, the remaining option is an application for reconsideration based on the Court’s inherent jurisdiction. Leave of the Court on a Reconsideration Application [6] For the following reasons, I am satisfied that leave is not required for a reconsideration application. Indeed, a requirement for leave has not been imposed in this Court in the past. [7] While different approaches have been taken in making the application, the merits of the reconsideration request have been disposed of on the application without the need for leave. In some instances, where the Court considered it appropriate, this was done by a single judge. (See, for example, Butt v. United Steelworkers of America, 2004 NLCA 75, 242 Nfld. & P.E.I.R. 300, where two of the three judges comprising the panel had retired and the parties agreed to accept the decision of the remaining judge as that of the Court; Bartlett v. Corner Brook (City), 2004 NLCA 63, 242 Nfld. & P.E.I.R. 10; McLean v. Carr Estate (1996), 142 Nfld. & P.E.I.R. 25 Page: 4 (NFCA).) In general, reconsideration of a decision of a panel, or a single judge, would be heard by the same panel or judge. [8] The underlying rationale for dealing with an application for reconsideration without requiring leave of the Court is based on the narrow and special focus of the application. In essence, an applicant for reconsideration is alleging that the Court’s decision should not stand as filed and that the appropriate remedy is not, following the ordinary course, an appeal to the Supreme Court of Canada. An application for reconsideration, by its nature, requires a final determination, based on the merits of the submissions, to permit the order of the Court to be settled. There are no special factors related to granting leave that would assist in the efficient and appropriate disposal of the application. This stands in contrast to the appeal of, for example, an interlocutory order which may properly be delayed pending the outcome at trial (rule 57.02). In the case of reconsideration, leave of the Court would serve no useful purpose. [9] Pennecon refers to the decision in Agriculture Financial Services Corporation v. Redmond, 1998 ABCA 189, 216 A.R. 321, in which leave was required for a reconsideration. While, depending on the circumstances, the procedure in another jurisdiction may be of assistance to this Court, in this instance the Redmond case must be distinguished on the basis that it does not engage the issue now before this Court. Redmond deals with an application to reconsider, not the Redmond decision, but three earlier decisions of the Court which it was alleged, on the basis of subsequent Supreme Court of Canada authority, no longer stated the correct law to be applied in Redmond. [10] In summary, Pennecon does not require leave of the Court to proceed with its reconsideration application. Appropriate Procedure for Making a Reconsideration Application [11] A comment on the appropriate procedure for making an application for reconsideration is apposite. Where the alleged basis for reconsideration is a ground set out in either rule 15.07 or 57.27(2), the application should make that clear by referring to the appropriate rule and specifying, as referenced in the rule, the particular ground at issue. Where the grounds covered by those rules are not engaged, the applicant must enumerate the grounds for the application and specify that it is based on the inherent jurisdiction of the Court. Care should be taken to ensure that the application Page: 5 is not merely an attempt to re-argue the case since that is not a basis for reconsideration. Factors to be Considered in an Application for Reconsideration [12] The reluctance to re-open a decision already rendered flows from the principle of finality on which judicial decisions are based. The underlying theme is that the appropriate avenue to challenge a decision is through the appeal process. (See, for example, Reekie v. Messervey, [1990] 1 S.C.R. 219, at pages 222 to 223.) [13] In assessing a reconsideration application, the courts have drawn a distinction between a request made after a final or formal order has been filed, which renders the court functus officio, and one made after a decision has been rendered but before the final order has been filed, in which case the court “continues to be seized of the case and is not functus” (R. v. Adams, [1995] 4 S.C.R. 707, at paragraph 29). [14] In Beanland v. Beanland (1997), 151 Nfld. & P.E.I.R. 51 (NFCA), Green J.A. discussed the question of reconsideration where the final order had been filed: [40] The court has inherent jurisdiction, as well as power under Rules 49.10 and 15.07 to amend or vary a previous order which has been drawn up and entered. The circumstances under which this may be done are, however, limited. The “general rule” as stated by Cameron, J.A., in this court in McLean et al. v. Carr Estate et al. (1996), 142 Nfld. & P.E.I.R. 25; 445 A.P.R. 25; 138 D.L.R. (4th) 541, is that a final decision of a court cannot be reopened. … Exceptions to the general rule, as set out by Green J.A., are discussed below. [15] Where the final order has not been filed, the same general principles apply. However, because the court continues to be seized of the case and is not yet functus officio, the request to make an amendment consequent upon a reconsideration application must be considered in that context, which may result in a broader degree of latitude. For example, as discussed in R. v. Adams, supra, the nature of the basis for reconsideration may be a relevant factor. In that case, the trial judge, having dismissed the charges of sexual assault against Adams, went on to lift the ban on the publication of the complainant’s name, apparently contrary to the requirements of the Criminal Code imposing a mandatory ban. The question was whether the trial judge Page: 6 could reconsider his decision to lift the ban. On this point, Sopinka J., for the Court, wrote: [29] … With respect to orders made during trial relating to the conduct of the trial, the approach is less formalistic and more flexible. These orders generally do not result in a formal order being drawn up and the circumstances under which they may be varied or set aside are also less rigid. The ease with which such an order may be varied or set aside will depend on the importance of the order and the nature of the rule of law pursuant to which the order is made. For instance, if the order is a discretionary order pursuant to a common law rule, the precondition to its variation or revocation will be less formal. On the other hand, an order made under the authority of statute will attract more stringent conditions before it can be varied or revoked. This will apply with greater force when the initial making of the order is mandatory. [30] As a general rule, any order relating to the conduct of a trial can be varied or revoked if the circumstances that were present at the time the order was made have materially changed. In order to be material, the change must relate to a matter that justified the making of the order in the first place. … [16] The above principles and a review of the cases lead to the conclusion that there is a continuum on which reconsideration applications may fall. The most restrictive instance is where the final order has been filed, and the least restrictive applies to orders made during the conduct of the trial. Reconsideration After the Final Order has been Filed [17] Following is a summary, not intended to be exhaustive, of grounds for a reconsideration application after the final order has been filed. 1. A clerical mistake or an error arising from an accidental mistake or omission is established (rule 15.07). 2. A matter should have been dealt with, but was not (rule 15.07). Where the final order has been filed, this exception is usually limited to circumstances “where the law requires the court to consider something which should have been but was not brought to the attention of the court: McLean et al. v. Carr Estate et al. [where a regulation limiting the quantum of damages was not brought to the court’s attention earlier]” (emphasis in original) (Beanland, at paragraph 40). 3. The applicant establishes that the fundamental basis for the decision is lacking. For example, without consideration of the merits, the Page: 7 appeal is struck out for non-appearance, but the party had not been served (Marlay Construction Ltd. v. Mount Pearl (City) (1997), 147 Nfld. & P.E.I.R. 191 (NFCA), at paragraph 4). See also: Beanland, at paragraph 40. This situation must be distinguished from circumstances where the applicant simply asks the Court to revisit the issues. The Court may not rehear the appeal. See, for example, Finn v. St. John’s (City), 2003 NLCA 29, 226 Nfld. & P.E.I.R. 102; Pelley v. Springdale (Town), 2008 NLCA 43, 280 Nfld. & P.E.I.R. 94. 4. An error in expressing the manifest intention of the Court is established. For example, in Butt v. United Steelworkers of America, supra, the decision provided that, “Each party shall bear his or its own costs” (paragraph 2). Cameron J.A. amended that language to clarify the intention of the Court by including the words, “here and in the Court below” (paragraph 8). 5. The order was obtained by fraud or misrepresentation. See: rule 15.08(b); R. v. Adams, supra, at paragraph 33. Reconsideration Before the Final Order has been Filed [18] Since the Court is not functus officio before the final order has been filed, the limits on a reconsideration application may be eased somewhat. However, a decision having been rendered, the principle of finality continues to apply. I begin with the exceptions discussed above which also apply here, followed by additional grounds relevant before the final order is filed. Again, the list is not intended to be exhaustive. 1. A clerical mistake or an error arising from an accidental mistake or omission is established (rule 15.07). See, for example, Eco-Zone Engineering Ltd. v. Grand Falls-Windsor (Town), 2012 NLCA 45, 325 Nfld. & P.E.I.R. 154, at paragraph 12. 2. A matter should have been dealt with, but was not (rule 15.07). While, on this ground, there may be broader scope for reconsideration than is permitted after the final order has been filed, an attempt to make an argument that should have been made prior to the court’s rendering its decision will not provide a basis for reconsideration unless, in particular limited circumstances, the court may be satisfied that a new argument should be entertained. Multiplicity of proceedings is to be avoided. However, where it is clear that the court Page: 8 overlooked, or through inadvertence failed to deal with, an issue that would have had a material impact on the result of the appeal, reconsideration may be available. Further, the fact that every issue is not addressed in the decision will not provide a basis for reconsideration unless, as a consequence of the omission, the dispute between the parties remains unresolved in some aspect. For examples of applications that were unsuccessful see: Franklin v. St. John’s (City), 2012 NLCA 66, 328 Nfld. & P.E.I.R. 28; Bartlett v. Corner Brook (City), supra; Eco-Zone Engineering Ltd. v. Grand Falls- Windsor (Town), supra, at paragraph 8; Marlay Construction Ltd. v. Mount Pearl (City), supra, at paragraph 5. 3. As discussed above, the applicant establishes that the fundamental basis for the decision is lacking. For example, a party, through failure to be served with notice, was denied participation in the appeal. See also, for example, Eco-Zone Engineering Ltd. v. Grand Falls-Windsor (Town), supra, at paragraphs 6 to 8. This ground may arise where the decision relies on repealed legislation or fails to apply relevant legislation which should have, but did not, come to the attention of the court in a timely manner. See, for example, McLean et al. v. Carr Estate et al., supra, referenced above. 4. An error in expressing the manifest intention of the Court is established. See, for example, Regular v. Law Society of Newfoundland and Labrador, 2006 NLCA 2, 253 Nfld. & P.E.I.R. 43, in which the Court denied the Law Society’s application to “amend its decision so as to remit the matter to the Benchers, rather than to the adjudication panel” (paragraph 2). 5. Failure to grant the reconsideration application will result in an injustice in the particular circumstances. For example, in Reekie v. Messervey, supra, the Supreme Court of Canada had denied leave to appeal on the basis that it had just released a decision regarding the same issue. Having settled the law, the Court had overlooked the fact that, in the absence of granting an appeal against an earlier contrary conclusion of the British Columbia Court of Appeal, the applicant would be denied the relief to which she was entitled. Sopinka J., for the Court, explained, at page 222: Page: 9 The respondent insurer submits with some justification that Rule 50 is narrow in scope and does not contemplate reversal of a decision that, on reconsideration, is found to be wrong. In my opinion, it would be extraordinary if the Court were powerless to remedy the injustice that is conceded as present in this case. As a general principle, the rules of procedure should be the servant of substantive rights and not the master. … Another example might be where it is obvious that the court has, contrary to the record or the unchallenged factual findings of the trial judge, overlooked or misstated the evidence in a way that would have a material impact on the outcome of the appeal. 6. The Court is satisfied that counsel was not given an adequate opportunity to address an issue fundamental to the decision. This may occur where the court’s decision is based on an issue arising after the hearing of the appeal. Ordinarily, counsel will be advised and given an opportunity to file additional submissions, particularly if the issue could not reasonably have been foreseen. An example is the issue of costs in the Trial Division in the particular circumstances of this appeal, as discussed below. 7. The decision was obtained by fraud or misrepresentation. See: rule 15.08(b); R. v. Adams, supra, at paragraph 33. [19] In summary, the fundamental principle of finality applies to decisions and orders of the court. It is expected that the issues, whether at trial, on an application, or on appeal, will be fully and accurately canvassed in the first instance. The necessity for and appropriateness of a reconsideration will arise only where an exception to the general rule may apply. As discussed above, such exceptions are limited in scope. The court will not grant a reconsideration request where what is being sought is effectively a further appeal by another name. Application of the Law [20] In the instant case, Pennecon submits that this Court misapprehended the basis on which the matter proceeded in the Trial Division. The submission is that Metal World applied for cross-examination of Pennecon’s affiant under section 26 of the Mechanics Lien Act while this Court based its decision on section 36 of the Act. However, it cannot be said that Pennecon Page: 10 had no opportunity to address the issues under section 36. Indeed, the hearing of the appeal was adjourned and supplemental submissions made by the parties. Pennecon’s application for reconsideration of the substantive issues, in fact, amounts to an appeal as to the correctness of the decision. Submissions on this basis do not fall within any of the exceptions to the general principle that the decision cannot be re-opened. [21] Pennecon further submits that an appeal to the Supreme Court of Canada is not a viable option because that Court would be unlikely to grant the necessary leave to appeal. It is not for this Court to assess the probable success of an application for leave to appeal to the Supreme Court of Canada. Where this Court has rendered its decision, an appeal as to the correctness of that decision, without more, lies only to the Supreme Court of Canada. [22] Pennecon also submits that, in any event, this Court should reconsider the order as to costs. There is no basis on which to reconsider costs ordered in respect of the appeal. Metal World was successful in this Court on the main issue. The exercise of discretion to award party and party costs to Metal World followed the ordinary practice. [23] As to costs in the Trial Division, Pennecon submits that the grounds on which the appeal was decided arose during the hearing of the appeal, were not raised by Metal World for consideration by the applications judge, and that, therefore, Metal World should not be entitled to its costs in the Trial Division. This submission does not bring the reconsideration application within the parameters of rules 15.07 or 57.27 as discussed above. [24] However, in the particular circumstances, exercising the inherent jurisdiction of the Court, I would allow reconsideration of the decision as to costs in the Trial Division. Given the unusual circumstances regarding the manner in which the application in the Trial Division and the appeal proceeded, Pennecon submits that it could not have anticipated the outcome as to costs. While there is an onus on counsel to make complete submissions regarding costs at the hearing of the appeal, the instant case presents an unusual situation in which it would have been appropriate for the Court to provide counsel with the opportunity to make additional submissions on costs in respect of the Trial Division application after the decision had been rendered on the substantive issues on the appeal. Having now heard those submissions, I would amend the decision on costs to the extent that costs for the application in the Trial Division would be costs in the cause. Page: 11 SUMMARY AND DISPOSITION [25] Leave is not required when an application is made for reconsideration of a decision or order of the court. The application for reconsideration of the substantive issues on the appeal is dismissed because the submissions amount only to an attempt to re-argue the case and challenge the correctness of the decision. As to reconsideration of the costs award, the application is dismissed in respect of costs of the appeal. However, the application for reconsideration of the costs in the Trial Division is allowed, and the decision is amended such that costs in the Court below shall be costs in the cause. [26] Given that the focus of this application was the substantive issues, on which Pennecon was unsuccessful, Metal World shall have its party and party costs of this application. ___________________________________ B. G. Welsh J.A. I Concur: _______________________________ J. D. Green C.J.N.L. I Concur: _______________________________ C. W. White J.A.