Take-off postponed (and requirement for leave lifted?) for the appeal of the first judgment rendered on the merits of a split proceeding

Most litigation practitioners remember the rule of the former Code of Civil Procedure (“FCCP”) providing that the right to appeal from judgments on the merits of a split proceeding did not arise until the termination of said proceeding:

273.2. No appeal lies from the judgment on the application for the splitting of an action; the right to appeal judgments on the merits only arises upon the issue of the judgment terminating the proceedings.

[Emphasis added.]

The fact that it had not been reprised in the new Code (or “CCP”) quickly led the Court of Appeal to conclude, in Droit de la famille — 161983 in 2016, that the modalities of the right to appeal from the first judgment rendered on the merits of a split proceeding were modified in two ways[1]: i) the appeal now had to be initiated without delay (s. 31 para. 3 CCP) and, because such ruling was considered to be an interlocutory judgment which “determine[d] part of the dispute”, ii) a leave to appeal had to be obtained from a judge of the Court (s. 31 para. 2 CCP).

i) Take-off postponed

In February of 2023, the rule of former section 273.2 in fine FCCP made an unexpected comeback through a last-minute amendment to Bill 8, An Act to improve justice efficiency and accessibility, in particular by promoting mediation and arbitration and by simplifying civil procedure in the Court of Québec[2], which was introduced by the Minister of Justice at the request of the Chief Justice of Quebec, on the second and last day of the clause-by-clause consideration of the Bill before the Commission on Institutions[3].

As the Minister then explained:

[TRANSLATION] “The amendment modifies section 211 of the Code of Civil Procedure to prevent parties from having to hurry to appeal a judgment rendered on a claim resulting from a split of a proceeding, simply to protect their rights. It specifies that the 30-day time limit for filing a notice of appeal begins with the judgment terminating the proceedings.”

Said modified section 211 CCP, which eventually came into force on June 30, 2023[4], reads as follows:

“211. The court, even on its own initiative, may split a proceeding if it thinks it advisable in order to protect the parties’ rights. The resulting applications are tried before the same judge, unless the chief justice or chief judge decides otherwise.

A judgment rendered on one of the applications resulting from the splitting of a proceeding may only be appealed as of the date of the notice of the judgment terminating the proceeding or as of the date of the judgment if it was rendered at the hearing.”

[Emphasis added.]

The Court of Appeal and its judges alone have since assessed the scope of section 211 para. 2 CCP in a handful of decisions, the most comprehensive (and also most recent) one having been rendered in Honeywell International Inc. v. Bombardier Inc.[5], a dispute between two giants of the aeronautics industry. In that decision, Justice Bich explained that said provision did not alter Honeywell’s substantial right to appeal from the first instance judgment, but rather that it simply affected its temporal modalities by postponing the moment starting at which it could be exercised[6]. Relying on the Supreme Court’s decision in Puskas[7], Justice Bich went on to explain that such a modification to the modalities of exercise of a right to appeal were merely procedural, as it would also have been the case if a right to appeal as of right had been transformed in a right to appeal with leave[8].

ii) Requirement for leave lifted?

At first glance, paragraph 2 of section 211 CCP contains nothing that directly interferes with the nature of the first judgment rendered on the merits of a split case. Thus, one would be inclined to think that it is still to be construed as an interlocutory judgment that “decides part of the dispute”, as determined by the Court in Droit de la famille — 161983 in 2016, and therefore also that the right to appeal from such judgment is still subject to the requirement that leave be obtained from a judge of the Court, pursuant to section 31 al. 2 CCP.

Litigators should note, however, that some of the decisions rendered by the Court and its judges since the coming into force of section 211 al. 2 CCP seem to indicate, or even initiate, a break with the Court’s stance of the past eight years on the requirement that leave be obtained in order to appeal from a first judgment rendered on the merits of a split proceeding, and this without any legislative amendment directly affecting the status of such judgment (indeed, section 211 al. 2 only deals with the moment starting at which the right of appeal attached to this judgment can be exercised, which is a distinct modality).

Indeed, in Procureur général du Canada v. Métro Excavation Inc.[9], it is mentioned that, as the result of new section 211 para. 2 CCP, motions for leave to appeal of first judgments rendered on the merits of a split proceeding were “no longer allowed”[10], despite said section not containing any express language in that direction. It is also mentioned, further in that same judgment, that considering the amounts in dispute, the first judgment was likely to become appealable as of right once the proceeding would be terminated[11].  

In the more recent decision Construction Normand Turcotte Inc. v. 9238-8859 Québec Inc.[12], a panel of the Court also relied on new section 211 para. 2 CCP to conclude that the simultaneous appeal of both a first interlocutory judgment on the merits, and of the judgment terminating the proceeding, was properly initiated, despite a verification of the docket confirming that no application for leave to appeal had been filed with regards to the first judgment[13]. Considering the fact that pursuant to section 365 CCP, the Court had the power to dismiss an unproperly initiated appeal from its own initiative if it deemed to be in the presence of one, the fact that the Court did not avail itself of that power suggests that it saw no problem with said appeal going forward, along with the appeal of the judgment terminating the proceeding, as an appeal as of right.

* * *

Regardless of what one may think of the opportunity to depart from the Court’s prior stance on the characterization of the first judgment rendered on the merits of a split proceeding as being an interlocutory judgment “determin[ing] part of the dispute”, one would have expected that it provide more complete and most of all clearer reasons if it were to do so, especially considering how ardently the Court has defended such characterization in the past[14].

As the situation currently stands, the state of the law as to whether leave is required in order to appeal from a first judgment rendered on the merits of a split proceeding is not sufficiently clear not settled. Authors Juliette Vani and Vincent Ranger addressed this issue in their most recent comments on section 31 CCP, suggesting that [TRANSLATION] “pending further clarity, prudent counsel may wish to file both a Notice of Appeal and an Application for Leave to Appeal justifying the granting of leave with regards to the findings of the judgments rendered in the course of the split proceeding”[15]. One can only be in agreement with such suggestion.

That said, should the Court elect to keep going in the same direction, and eventually decide as well to provide reasons to justify its departure from its own precedents, it needs to look no further than to the reasons of one of its panels in the Javanmardi case, for a ready-to-be-used blueprint. 

That said, if the Court really is breaking with its previous jurisprudence, but also wishes to offer easy-to-follow reasons as to why leave is not required in order to appeal from a first judgment rendered on the merits of a split proceeding, it can simply draw on the reasons of Javanmardi v. Collège des médecins du Québec, 2013 QCCA 306, which are perfectly transposable in today’s legislative context.

Javanmardi and the Principle of the Unicity of the Judgments Rendered on the Merits of a Split Proceeding

The Court of Appeal’s reasons in Javanmardi were rendered on February 19, 2013, merely two months before the Bill instituting the new Code of Civil Procedure was introduced before the National Assembly[16]. Considering that the legislator is always deemed to be familiar with the law and the state of the case law, including in matters of split proceedings[17], it can be presumed that he was well aware of this judgment and of its reasons at the time of initiating the transition towards to new Code.

In any event, in Javanmardi, it was not the temporal provision of section 273.2 in fine FCCP that directly justified that no leave was required to appeal from a first judgment rendered on the merits, but rather section 29 para. 2 CCP, which for what’s essential read as follows:

S. 29 para. 2: “However, an interlocutory judgment rendered during the trial cannot be appealed immediately and it cannot be put in question except on appeal from the final judgment, unless it disallows an objection to evidence […]”

[Emphasis added.]

Section 29 para. 2 FCCP is the equivalent of today’s section 31 para. 4 CCP[18].

Here is how it was applied in parallel with section 273.2 FCCP in Javanmardi: 

[TRANSLATION] “[42] Judgments rendered before or during the summary trial constitute interlocutory judgments (s. 29, para. 3 CCP) and, like all such judgments, are subject to s. 29 and 511 CCP (9052-1550 Québec Inc. v. Banque Nationale du Canada, 2006 QCCA 64, Hilton J., ruling as a judge alone). Thus, during the trial, only certain interlocutory judgments on objections to evidence may be appealed to the extent provided for in s. 29 and 511 CCP.

[…] [45] However, it has become common practice to adjourn the trial between these two phases, for a variety of reasons. […]

[46] Whatever the reason for the decision to proceed in two stages significantly separated in time, rather than in a single stage as envisaged by s. 54 CCP, the result is two separate judgments, much as in criminal matters, one constituting a verdict or finding of guilt and the other a sentence or penalty. The latter will put an end to the contempt proceedings and constitutes, without a shadow of a doubt, a final judgment within the meaning of the Code of Procedure. It may therefore be appealed as of right under s. 26, para. 1(3) CCP.

[47] Following the judgment on the verdict, however, the judge is not relieved of the contempt proceedings since he will subsequently have to impose the sentence. The proceeding is therefore still ongoing. In this context, the judgment on guilt can only be considered as an interlocutory judgment within the meaning of the Code of Procedure, even if it rules in part on the merits of the case[19] and entails serious consequences for the party cited because it is now liable to imprisonment.

[48] Is there then an appeal as of right? No, since it is not a judgment under art. 26 CCP. So, with leave under s. 29 and 511 CCP? Nor is it that either, since it was rendered in the context of an uncompleted trial (s. 29, para. 2 CCP).

[49] In another recent decision, Droit de la famille – 122617, 2012 QCCA 1721, a panel of the Court composed of Morin, Dutil and Bich JJ. concluded that the decision of the judge hearing the contempt proceedings to postpone pleadings on sentence until a later date, after having found the person summoned guilty of contempt, in fact constitutes a division of proceedings governed by s. 273.2 CCP: […].

 [50] In other words, given the wording of s. 273.2 CCP, the Court concludes that there is no possibility of appealing the judgment of conviction and that the right to appeal the judgment of conviction is suspended until the final judgment. Most recently, in Chamandy v. Chartier, 2013 QCCA 161, another panel, composed of Justices Morissette, Kasirer and Fournier, applied this ruling and declared an appeal of the conviction judgment improperly filed. However, once a sentence has been handed down, the person cited may appeal the verdict only.

[51] It also follows, as pointed out a few months ago by another panel of the Court composed of Justices Pelletier, Hilton and Wagner (now at the Supreme Court) in Droit de la famille – 12583, 2012 QCCA 508, that despite the presence of two separate judgments, one on conviction and the other on sentence, neither is a complete judgment on the merits and, consequently, only one award of costs is possible: […]

In short, conviction and sentencing are two parts of the same whole.

[52] It follows from my analysis of the relevant provisions of the Code of Procedure and our recent case law that the judge hearing a contempt summons should follow a process consistent with s. 54 CCP, i.e. ask the parties to make submissions on the sentence once the conviction has been handed down, unless the parties or one of them convinces him that it is preferable to split the two stages by adjourning the hearing. Before agreeing to split the trial, the judge should bear in mind that, in principle, the legislator did not intend the trial to be split in matters of contempt, as indicated by the words “if it [the judgment] results in a conviction, it must indicate the sentence imposed” (s. 54 CCP), and remember that the purpose of splitting the trial is “[t]o avoid complex or useless evidence or evidence relating to an unfounded conclusion, or to favour a settlement of the dispute. In such cases, splitting is likely to significantly reduce costs and delays”. When it is the person summoned for contempt who opposes the splitting, he will have to be extra careful to avoid any prejudice to the latter, as this will result, in the event of a conviction, in the postponement of his right of appeal.

[53] In this case, the only final judgment is the one imposing sentence, rendered on August 25, 2010. This judgment alone can therefore be appealed as of right under art. 26, para. 1(3) CCP. As for the judgment finding the appellant guilty, rendered on May 27, 2010, it must be declared that it could not be appealed before sentencing.

[References omitted. Emphasis added.]

To be clear, if the appeal of the first judgment in Javanmardi was not subjected to the obtaining of leave, it was not because of it being artificially labelled as a “final judgment” or anything like that. It was, rather and precisely, because it was a judgment rendered in the course of a proceeding, and more particularly one that was rendered “during the trial” pursuant to s. 29 para. 2[20]. This entailed that, in addition to the exercise of the right to appeal being suspended because of section 273.2 CCP, the first judgment could only “be put in question” on appeal from the last judgment, pursuant to section 29 para. 2 CCP.

In some way, section 29 para. 2 CCP consecrated the principle, referenced in particular at paragraph 51 of Javanmardi, that the collection of judgments rendered on the merits of a split proceeding (whether formal or de facto) were to be construed as the parts of a same whole, and treated as such for the purposes of an appeal. This same principle was also at the heart of the reasons rendered by Justices Bich, Vézina and Baudouin as judges alone respectively in Protection de la jeunesse — 122[21], Aliments Breton (Canada) Inc. v. Bal Global Finance Canada Corporation[22] and Yves Desgens Inc. v. Rioux[23], all cases in which there had been de facto splits of a proceeding, and in which attempts to appeal from first judgments on the merits were denied because the trial had not been completed[24].

* * *

The principle of unicity of the judgments rendered on the merits of a split proceeding, as well as the application made by the Court of section 29 para. 2 FCCP in Javanmardi, seem totally compatible with today’s legislative context, especially now that the temporal rule of former section 273.2 FCCP has been reinstated. If those constituted sufficient grounds to rule out, under the former Code, the hypothesis that leave might have been required in order to appeal from a first judgment on the merits of a split proceeding, they also seem to us amply sufficient to explain, and most importantly justify why leave is not necessary under the new Code either, at least as of today.

In any event, considering the importance of the issues at stake for litigants and the potentially disastrous consequences of failing to file an application for leave to appeal in situations where it is truly required, we can only hope that the Court of Appeal or its judges will soon come up with more elaborate reasons than those contained in Attorney General of Canada v. Métro Excavation inc. and Construction Normand Turcotte Inc. v. 9238-8859 Québec Inc.,to confirm whether, and as the case may be explain why, leave is or is not required to appeal from a first judgment rendered on the merits of a split proceeding, regardless of when the right to appeal from said judgment can be exercised. The clarity and predictability of the law depend on it.

By Kevin Lafrenière

Notes: