2003 NLCA 15, 2003 NLCA 15

Date: 20030402 Docket: 02/58 Citation: 2003 NLCA 15 IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR COURT OF APPEAL BETWEEN : PETER BASS and ANTHONY BLOOM APPELLANTS AND : ANTHONY E. MCNALLY RESPONDENT Coram: Wells, C.J.N., Cameron and Roberts, JJ.A. Court Appealed From: Supreme Court of Newfoundland and Labrador Trial Division 1998040017 Appeal Heard: December 19, 2002 Judgment Rendered: April 2, 2003 Reasons for Judgment by Cameron, J.A. Concurred in by Roberts, J.A. Reasons for Judgment by Wells, C.J.N. Counsel for the Appellants: Nick Avis, Q.C. Counsel for the Respondent: Jamie Merrigan

Cameron, J.A.: [ 1 ] This appeal concerns the jurisdiction of this Court to grant a remedy in an unusual circumstance. Background [ 2 ] The appellants, both dentists, had been operating a dental clinic at Deer Lake but without any written agreement. On January 30, 1991 they entered into an agreement with the respondent, also a dentist, which agreement was styled “Deer Lake Dental Practice Agreement”. Unfortunately, the Agreement was drafted without the benefit of legal advice and it lacks clauses which one might normally expect to find in such documents.

The respondent paid each of the appellants $30,000 to join the practice. The trial judge held that the total of $60,000 amounted “to a one third interest in the business which they determined to be worth about $180,000.” [ 3 ] Clause 3 of the Agreement said: “Dr. Bass and Dr. Bloom undertake to purchase back Dr. MacNally’s (sic) share after three years for the sum of $30,000 each, if he so desires.” The trial judge described the issue at trial as being the

interpretation of this clause, “and in the alternative, Dr. McNally’s right to a valuation of and payment for his share of the partnership.” That statement is consistent with the Statement of Claim which, as an alternative to the claim based on clause 3, claimed compensation for unjust enrichment. In their Defence, the defendants (appellants) denied they were unjustly enriched. There is no reference in the pleadings to the Partnership Act , RSNL 1990, c. P-3 . [ 4 ] It is clear that the primary focus of the trial was, indeed, clause 3 of the Agreement.

The trial judge rejected the respondent’s submission that it governed the termination of the Agreement some six years later. That aspect of the decision has not been appealed. The trial judge then went on the deal with the alternative ground. The appellants argue that she should not have done so as the parties had agreed that the trial would be limited, at that stage, to the question of the

interpretation of clause 3. [ 5 ] Counsel for the respondent, different counsel than at trial, acknowledges that the arrangement made by the parties before trial was that the trial judge would be asked to deal only with the

interpretation of clause 3. However, he argues that the trial judge having determined the alternative issue, one which was raised in the pleadings, there is no basis upon which to overturn her decision. [ 6 ] In his submissions on the point, counsel for the appellants refers to a statement made by the solicitor for the respondent during trial, in which he said: I think both solicitors agreed before coming to court in the pretrial conference and when we first commenced on this hearing that we would be looking at the agreement, paragraph 3, and whether or not the defendants are obligated to pay back Dr.

McNally the sum of $30,000 each for a total of $60,000, and that’s what we’re looking to the Court to determine. To interpret that paragraph to see whether or not they’re obligated to buy it, give him his money back. He refers also to the trial briefs which had been filed by the parties. In the case of the appellants the following was stated: The Plaintiff and the Defendants have agreed to limit the issue before the court at this time to the

interpretation of paragraph 3 of the agreement. The parties are not seeking any other rulings regarding damages and so forth since they still feel that this can be worked out based upon the decision given. The respondent’s brief stated the issue to be determined as follows: Are the Defendants obligated to buy-back the Plaintiff’s share within the Practice for the sum of Thirty Thousand Dollars ($30,000)

each. [ 7 ] Generally trials deal with all issues placed before a court by the pleadings. There are, of course, procedures which would permit a court to deal with less than the full panoply of issues. For example, Rule 38 of the Rules of the Supreme Court, 1986 permits the court to grant an application for a preliminary determination of questions of law or fact. Rule 40.04 also permits the court to order that any question at issue be tried before the trial. However, in each of these cases it is contemplated that the court determine whether it is an appropriate case for issues to be tried separately.

Here, no such order was sought. Counsel agree that the judge who held the pre- trial conference was advised of the agreement to limit the issues before the trial judge to one, but he made no order reflecting this fact, nor was asked to make such an order. [ 8 ] On reading the submissions to the trial judge, while it is clear that the parties were concentrating on the

interpretation of clause 3, it is not clear that the trial judge was advised that the question of liability was limited in any way. The only statement before the trial judge that the issues were to be limited was that contained in the pre-trial brief of the appellants. While the first sentence says that the parties have agreed to limit the issue to

interpretation of paragraph 3, the second sentence would suggest that what was anticipated was that the court would determine only liability and that damages would be assessed later, if necessary. Indeed, the trial judge’s decision is consistent with such an

interpretation as, having rejected the argument that clause 3 required the appellants to pay the respondent a total of $60,000, she declared the respondent to be entitled to an evaluation of and payment for his one-third share as a partner and gave the parties leave to apply to the Court for an assessment if they were unable to agree on the amount. [ 9 ] So then, the issue in this case is whether, in the face of what counsel agree were clear undertakings, agreed to by their clients , that the trial be limited to one issue, one of the parties should be able to now ignore that agreement and take advantage of a determination by the trial judge on an alternative ground, one on which the appellants claim they did not present evidence because of the agreement between counsel. [ 10 ] In light of the fact that no order was sought to have a preliminary point of law or fact determined and the arrangement between counsel was far from clearly pointed out to the trial judge, one cannot say that the trial judge erred in proceeding as she did.

However, the result, in my view, would be most unjust if a party were permitted to cause another to alter the way a case is presented on the basis of an agreement between counsel and then take advantage of the trial judge’s ignorance of that agreement when the result is in his favour. The inherent jurisdiction of this Court, for the reasons which follow, permits this Court to provide a remedy. Inherent Jurisdiction [ 11 ] Any discussion of inherent jurisdiction gives rise to two questions: What is it and who exercises this jurisdiction? What is inherent jurisdiction? [ 12 ] Many cases cite Sir Jack I. H.

Jacob, The Inherent Jurisdiction of the Court , (1970) 23 Current Legal Problems, for his lucid examination of the subject [1] . Jacob’s definition of inherent jurisdiction is stated at p. 51: ... the inherent jurisdiction of the court may be defined as being the reserve or fund of powers, a residual source of powers, which the court may draw upon as necessary whenever it is just or equitable to do so, and in particular to ensure the observance of the due process of law, to prevent improper vexation or oppression, to do justice between the parties and to secure a fair trial between them.

This is a very broad statement. It must be underlined, however, that inherent jurisdiction is not a convenient label which enables a judge to impose some personal view of justice whenever he or she believes a litigant has been wronged. Historically, inherent jurisdiction has been invoked only in limited circumstances. [ 13 ] At pages 24-25, Jacob expressed the difficulty in being precise about the nature of inherent jurisdiction. He said:

Perhaps the true nature of the inherent jurisdiction of the court is not a simple one but is to be found in a complex of a number of features, some of which may be summarised as follows:

(1) The inherent jurisdiction of the court is exercisable as part of the process of the administration of justice. It is part of procedural law, both civil and criminal, and not of substantive law; it is invoked in relation to the process of litigation.

(2) The distinctive and basic feature of the inherent jurisdiction of the court is that it is exercisable by

summary process, i.e., without a plenary trial conducted in the normal or ordinary way, and generally without waiting for the trial or for the outcome of any pending or other proceeding. (3)Because it is part of the machinery of justice, the inherent jurisdiction of the court may be invoked not only in relation to the litigant parties in pending proceedings, but in relation also to anyone, whether a party or not, and in respect of matters which are not raised as issues in the litigation between the parties. (4)The inherent jurisdiction of the court is a concept which must be distinguished from the exercise of judicial discretion.

These two concepts resemble each other, particularly in their operation, and they often appear to overlap, and are therefore sometimes confused the one with the other. There is nevertheless a vital juridical distinction between jurisdiction and discretion, which must always be observed. (5)The inherent jurisdiction of the court may be exercised in any given case, notwithstanding that there are Rules of Court governing the circumstances of such case.

The powers conferred by Rules of Court are, generally speaking, additional to, and not in substitution of, powers arising out of the inherent jurisdiction of the court.

The two heads of powers are generally cumulative, and not mutually exclusive, so that in any given case, the court is able to proceed under either or both heads of jurisdiction. [ 14 ] Leaving aside contempt, perhaps the most obvious place for the exercise of a court's inherent jurisdiction, Jacob classified the cases in which inherent jurisdiction is cited as authority for a court’s actions into three groups: (1) control over process, (2) control over persons, and (3) control over powers of inferior courts and tribunals.

Under the first class falls such things as the power to make rules and practice directives; to set dates for trials; to dismiss an action for want of prosecution; to hold a hearing in camera; to modify its order to express correctly its intention; to terminate proceedings which are frivolous or vexatious or which are an abuse of process and to compel observance of its process and obedience of and compliance with its orders. The second class of cases are comprised of the cases in which the court exercises the parens patriae jurisdiction, and the control of the court over solicitors.

The final class is directed to preventing interference with inferior courts and to assist those courts to enable them to do their jobs. It includes the power of a superior court to set aside the award of an arbitrator. [ 15 ] M.S. Dockray, The Inherent Jurisdiction To Regulate Civil Proceedings , (1997) 113 L.Q.R. 120, is also quite helpful in the examination of inherent jurisdiction. Almost 3 decades after the publication of the Jacob article, Professor Dockray not only examined the origins of inherent jurisdiction but also the changes which had taken place since the Jacob treatise.

That is not to suggest that Dockray was able to provide one comprehensive theory of inherent jurisdiction. As Dockray put it at p. 120: “There is no clear agreement on what it is, where it came from, which courts and tribunals have it and what it can be used for.” Like Jacob, he concluded there are several inherent jurisdictions. Can the Court of Appeal exercise inherent jurisdiction?

Jacob said (at pp. 27-28): ... the jurisdiction to exercise these powers was derived, not from any statute or rule of law, but from the very nature of the court as a superior court of law, and for this reason such jurisdiction has been called “inherent” ... the essential character of a superior court of law necessarily involves that it should be invested with a power to maintain its authority and to prevent its process being obstructed and abused. Such a power is intrinsic in a superior court; it is its very life-blood, its very essence, its immanent attribute ...

The jurisdiction which is inherent in a superior court of law is that which enables it to fulfil itself as a court of law. The juridical basis of this jurisdiction is therefore the authority of the judiciary to uphold, to protect and to fulfil the judicial function of administering justice according to law in a regular, orderly and effective manner.

Jacob was, it must be noted, largely concerned with the jurisdiction of the English High Court. However, he did, citing Aviagents v. Balstravest Investments Ltd. , [1966] 1 All E.R. 450 (C.A.) , state that the Court of Appeal also exercises an inherent jurisdiction (p. 23). [ 16 ] In R v. G.W. , 1999 CanLII 668 (SCC) , [1999] 3 S.C.R. 597 , Lamer C.J.C., said commencing at paragraph 8: It is clear that there is no inherent appellate court jurisdiction. This statement has been explicitly made in numerous cases and should be well understood. Most recently in R. v.

Thomas, 1998 CanLII 774 (SCC) , [1998] 3 S.C.R. 535, I reiterated the established principle that courts of appeal are purely statutory bodies. La Forest J. earlier emphasized this concept in Kourtessis v. M.N.R. , 1993 CanLII 137 (SCC) , [1993] 2 S.C.R. 53, at pp. 69-70: Appeals are solely creatures of statute; see R. v. Meltzer , 1989 CanLII 68 (SCC) , [1989] 1 S.C.R. 1764, at p. 1773. There is no inherent jurisdiction in any appeal court. Nowadays, however, this basic proposition tends at times to be forgotten.

Appeals to appellate courts and to the Supreme Court of Canada have become so established and routine that there is a widespread expectation that there must be some way to appeal the decision of a court of first instance. But it remains true that there is no right of appeal on any matter unless provided for by the relevant legislature. The jurisprudence of this Court has definitively established therefore, that appellate courts cannot claim any inherent jurisdiction. [ 17 ] In Kourtessis , Justice La Forest said at pp. 65-66: “And courts of appeal have no inherent rights to create appeals.

Only superior court judges appointed under s. 96 of the Constitution Act, 1867 have inherent jurisdiction.” While Chief Justice Lamer used general language and the case under consideration in R. v. G.W. was on appeal from this Court, R. v. G.W. is not a complete answer operable in all circumstances. [ 18 ] To place R. v. G.W. in context, it was a criminal matter concerned with whether a Court of Appeal can, of its own motion, institute an appeal of sentence. The appellant, who had appealed from conviction, had not filed a notice of appeal from sentence.

At law, absent a statute providing a right of appeal, none exists. In that sense the decision of the Supreme Court of Canada that this Court had no inherent jurisdiction to, on its own motion, incorporate a notice of appeal against sentence in an appeal against conviction, is consistent with the nature of appeals. The position taken in R. v. G.W. regarding the use of inherent jurisdiction in the context of criminal matters is further buttressed by

section 674 of the Criminal Code which provides: “No proceedings other than those authorized by this Part and

Part XXVI shall be taken by way of appeal in proceedings in respect of indictable offences.” Here, of course, we are dealing with a civil matter where there is a right of appeal which the appellants seek to exercise (See

Section 5 of the Judicature Act , RSNL 1990, c. J-4 , reproduced at paragraph [21]). [ 19 ] Jacob saw inherent jurisdiction as the prerogative of the superior courts. Dockray observed the change in use of inherent jurisdiction in England and Wales over time and, in particular, in respect of civil proceedings. Dockray, at p. 122, said: The phrase has been used in English cases in at least three different ways: (

i) it has been used to describe the general powers of the old superior courts which the Supreme Court inherited on its creation; (ii) the phrase has also [been] used to mean powers which a court possesses simply by virtue of being a court, or perhaps by virtue of being a court of a specific kind. In this sense, inherent powers are intrinsic features of a body which is constituted as a court. Finally, (iii) inherent powers have also been said to be incidental powers which arise either out of or because of the work which the court undertakes.

As to the idea that inherent powers are limited to one level of court he said at p. 125: Admittedly at common law the inherent power to punish certain types of contempt was confined to courts of record, a category which it could be argued broadly matches the contemporary idea of a superior court. It is also the case that at the time when Sir Jack’s [Jacob’s] paper was written, the phrase inherent jurisdiction was almost always used in connection with the superior courts. But there is no reason to insist on this restriction in England and Wales today.

On the contrary, today a substantial number of English cases recognise that inferior courts or tribunals may possess at least some inherent powers or jurisdiction. All courts, it has been said, have inherent power to

regulate their own procedure, to make practice directions, to control abuse of process, to exclude the public if it becomes necessary for the administration of justice and to refuse to hear advocates who misconduct themselves. So then, when determining whether a court may exercise inherent jurisdiction one must consider the nature of the inherent jurisdiction being discussed and the court proposing to exercise that jurisdiction. [ 20 ] In the Canadian context it is recognized that the superior court in a province has inherent jurisdiction. See: Canada (HRC) v.

Canadian Liberty Net , 1998 CanLII 818 (SCC) , [1998] 1 S.C.R. 626 , per Bastarache J [2] . In the case of Newfoundland and Labrador, that court is the Supreme Court of Newfoundland and Labrador.

Section 3 of the Judicature Act states: 3.

(1) The Supreme Court of Newfoundland and Labrador is continued under this Act and shall have all civil and criminal jurisdiction conferred upon the Supreme Court of Newfoundland (

a) by the Imperial Statute passed in the 5 th year of the reign of His late Majesty King George the 4 th , entitled “An Act for the better administration of justice in Newfoundland, and for other purposes”; (

b) by the Royal Charter or Letters Patent under the Great Seal, issued by virtue of the Imperial Statute, dated September 19 th , 1825, in the 6 th year of His late Majesty’s reign; and (

c) by a law in force in the province.

(2) The Supreme Court of Newfoundland and Labrador shall continue to be composed of (

a) an appeal division, to be called the Court of Appeal; and (

b) a Trial Division. The Act referred to in paragraph (

a) of subsection (1) provides, in part: It shall ... be lawful for His Majesty, by his charter or letters patent under the Great Seal to institute a superior Court of judicature in Newfoundland which shall be called “The Supreme Court of Newfoundland” and the said Court shall ... have all civil and criminal jurisdiction whatever in Newfoundland ... as fully and amply, to all intents and purposes, as is his Majesty’s Courts of King’s Bench, Common Pleas, Exchequer and High Court of Chancellery in ...England have ... [ 21 ] Sections 5 and 6 of the Judicature Act state: 5.

(1) An appeal lies to the Court of Appeal (

a) from an order of the Trial Division or an order of a judge of the Trial Division; and (

b) in a proceeding where jurisdiction is given to it under

an Act of the Legislature or the Parliament of Canada.

(2) Where another Act of the Legislature or the Parliament of Canada provides that there is no appeal, or a limited right of appeal, from

an order referred to in subsection (1), that Act prevails.

(3) The Court of Appeal shall have and exercise appellate jurisdiction, with the original jurisdiction that may be necessary or incidental to the determining of an appeal, with appellate jurisdiction in civil and criminal proceedings, and jurisdiction and power to hear and determine appeals respecting an order or decision of a judge of the Trial Division. 6.

For the hearing and determination of a proceeding within its jurisdiction, and the amendment, execution and enforcement of an order, and for the purpose of every other authority expressly or implicitly given to the Court of Appeal, by this Act or another Act of the Legislature or the Parliament of Canada, the Court of Appeal has the power, authority and jurisdiction vested in the Court of Appeal of the Supreme Court of Newfoundland as it existed before September 2, 1986. [ 22 ] In Société des Acadiens du Nouveau-Brunswick v.

Association of Parents , 1986 CanLII 66 (SCC) , [1986] 1 S.C.R. 549 , though there were different views on other issues, on the question of the inherent jurisdiction of the New Brunswick Court of Appeal the Court unanimously held that court to have inherent jurisdiction to grant leave to appeal to a non-party. Wilson J., who wrote the decision respecting that issue, traced the history of the New Brunswick Court of Appeal finding that it was, except as modified by legislation, essentially that of the High Court of Chancery in England.

She then concluded, at p. 592: “Despite the obvious difficulty in determining the limits of the inherent jurisdiction of the New Brunswick Court of Appeal, it is clear, I believe, that it is not unlimited since its invocation requires an exercise of judicial discretion in accordance with accepted principles.” This is an express recognition that the New Brunswick Court of Appeal had inherent jurisdiction, though also reaffirming that inherent jurisdiction is not an unlimited power. [ 23 ] Like Newfoundland and Labrador, in New Brunswick the Judicature Act provides that the Supreme Court of New Brunswick continue under two names.

Section 8(2) of the Judicature Act , R.S.N.B. 1973, c. J-2 states: The Court of appeal shall have and exercise appellate jurisdiction, with such original jurisdiction as may be necessary or incidental to the determining of an appeal; and shall have all the jurisdiction and powers possessed by the Court of Appeal immediately before September 4, 1979, with appellate jurisdiction in civil and criminal causes and matters, and with jurisdiction and power to hear and determine motions and appeals respecting any judgment, order or decision of any judge of the Courts. There is an obvious similarity between that

section of the New Brunswick Act and section 5(3) of the Newfoundland and Labrador Act. Section 8(2) of the New Brunswick Act has been described by the New Brunswick Court of Appeal as conferring on that court “very wide jurisdiction, including what is commonly referred to as its inherent jurisdiction.” See Royal Bank of Canada v.

Belliveau (1998), 1998 CanLII 14084 (NB CA) , 167 D.L.R. (4 th ) 69, at p. 76. [ 24 ] I would conclude then that in Newfoundland and Labrador, as in New Brunswick, the Judicature Act specifically preserves to the Court the original jurisdiction necessary or incidental to the determining of an appeal. Dockray noted at pp. 122-23 that common law powers to stay actions, to prevent abuse of process, to control proceedings or to amend the court’s record which are now seen as examples of inherent jurisdiction were once referred to as general jurisdiction or original powers.

Section 5(3) of the Judicature Act is then an express preservation of inherent jurisdiction. So then, as a division of the Supreme Court of Newfoundland and Labrador this Court possesses that inherent jurisdiction which is a part of the power of the superior courts by virtue of their historical connections to certain English Courts and which is incidental to the determining of an appeal. However, even if I were wrong in that conclusion, the power to grant a remedy would still be available in this case. [ 25 ] In Taylor v. Lawrence , [2002] E.W.J.

No. 315 (C.A.), the England and Wales Court of Appeal was considering its jurisdiction to reopen an appeal after it had given a final judgment. Commencing at paragraph 50, Woolf C.J. said: If, as we believe it is necessary to do, we go back to first principles, we start with the fact which is uncontroversial, that the Court of Appeal was established with a broad jurisdiction to hear appeals. Equally it was not established to exercise an originating as opposed to an appellate jurisdiction. It is therefore appropriate to state that in that sense it has no inherent jurisdiction.

It is, however, wrong to say that it has no implicit or implied jurisdiction arising out of the fact that it is an appellate court. As an appellate court it has the implicit powers to do that which is necessary to achieve the dual objectives of an appellate court to which we have referred already. [3] As to these powers, Lord Diplock, who perhaps speaks on a subject of this nature with the greatest authority of any judge, has dealt

with the inherent power conferred on a court, whether appellate or not, to control its own procedure so as to prevent it being used to achieve injustice. We would give an illustration of Lord Diplock’s approach. It is taken from his speech in Bremer Vulcan v. South India Shipping [1981] AC 909 at p. 977 C-H: “The High Court’s power to dismiss a pending action for want of prosecution is but an instance of a general power to control its own procedure so as to prevent its being used to achieve injustice. Such a power is inherent in its constitutional function as a court of justice.

Every civilised system of government requires that the state should make available to all its citizens a means for the just and peaceful settlement of disputes between them as to their respective legal rights. The means provided are courts of justice to which every citizen has a constitutional right of access in the role of plaintiff to obtain the remedy to which he claims to be entitled in consequence of an alleged breach of his legal or equitable rights by some other citizen, the defendant.

Whether or not to avail himself of this right of access to the court lies exclusively within the plaintiff’s choice; if he chooses to do so, the defendant has no option in the matter; his subjection to the jurisdiction of the court is compulsory. So, it would stultify the constitutional role of the High Court as a court of justice if it were not armed with power to prevent its process being misused in such a way as to diminish its capability of arriving at a just decision of the dispute.

The power to dismiss a pending action for want of prosecution in cases where to allow the action to continue would involve a substantial risk that justice could not be done is thus properly described as an “inherent power” the exercise of which is within the “inherent jurisdiction” of the High Court.

It would I think be conducive to legal clarity if the use of these two expressions were confined to the doing by the court of acts which it needs must have power to do in order to maintain its character as a court of justice.” In our judgment the final words of Lord Diplock, “the doing by the courts of acts which it needs must have power to do in order to maintain its character as a court of justice” express the situation here under consideration exactly. If more authority is required, reference may be made in a very different context to the speech of Lord Morris of Borth-Y-Gest in Connelly v.

DPP [1964] A.C. 1254 , 1301 where Lord Morris said: “There can be no doubt that a court which is endowed with particular jurisdiction has powers which are necessary to enable it to act effectively within such jurisdiction. I would regard them as powers which are inherent in its jurisdiction. A court must enjoy such powers in order to enforce its rules of practice and to suppress any abuses of its process and to defeat any attempted thwarting of its process.” Earlier judgments referring to limits on the jurisdiction of this court must be read subject to this qualification.

It is very easy to confuse questions as to what is the jurisdiction of a court and how that jurisdiction should be exercised. The residual jurisdiction which we are satisfied is vested in a court of appeal to avoid real injustice in exceptional circumstances is linked to a discretion which enables the court to confine the use of that jurisdiction to the cases in which it is appropriate for it to be exercised. There is a tension between a court having a residual jurisdiction of the type to which we are here referring and the need to have finality in litigation.

The ability to reopen proceedings after the ordinary appeal process has been concluded can also create injustice. There therefore needs to be a procedure which will ensure that proceedings will only be reopened when there is a real requirement for this to happen. [ 26 ] Of course, even in the context of criminal appeals, it has been recognized that an appellate court does have “ancillary powers” over its own process and matters expressly assigned by statute to its jurisdiction. For example, in R. v. Church of Scientology; R. v.

Zaharia (1986), 1986 CanLII 4633 (ON CA) , 25 C.C.C. (3d) 149 , the Ontario Court of Appeal held at p. 150 that the Court of Appeal, “even though a statutory court, nevertheless possesses ancillary jurisdiction to make [an order sealing documents until the disposition of the appeal] to prevent the frustration of the appeal.” [ 27 ] In United States of America v.

Shulman , [2001] 1 S.C.R. 616 , 2001 SCC 21 , Arbour J, for the Court, said (para. 33, p. 633): Not only is the Court of Appeal a forum of original jurisdiction for Charter purposes under the Extradition Act as a result of the 1992 amendments, but it also has, like all courts, an implied, if not inherent, jurisdiction to control its own process, including through the application of the common law doctrine of abuse of process.

See also United States of America v. Cobb , 2001 SCC 19 (CanLII) , [2001] 1S.C.R. 587 at paragraph 37 . [ 28 ] Even for those courts with no inherent jurisdiction, in the sense of original jurisdiction, there was a recognized power to control their own procedure. The Court of Appeal for New South Wales concluded in Bogeta Pty. Ltd. v.

Wales , [1977] 1 N.S.W.L.R. 139 at p. 149: The general principle, where a court is properly seized with a matter, and there is no procedure laid down which enables it to deal with the particular problem facing it, that it should devise its own procedure is, in my opinion, applicable to all courts of Petty Sessions in this day and age. Historically, inferior courts have been allowed to devise their own procedures. The reasoning behind this view was expressed by Baron Alderson in Crocker v.

Tempest (1841), 7 M & W. 501, 151 E.R. 864 (Exch.) : The power of each Court over its own process is unlimited; it is a power incident to all Courts, inferior as well as superior; were it not so, the Court would be obliged to sit still and see its own process abused for the purpose of injustice. Should inherent jurisdiction be used to provide a remedy in this case? [ 29 ] Parenthetically, there was another obvious way of dealing with this issue without the necessity of an appeal.

After the decision was rendered and before the issuing of the Formal Order, the parties or any one of them could have made an application to the trial judge in an attempt to resolve this problem. It is only in exceptional circumstances that a trial judge would amend a decision before the issuing of a Formal Order but this is, in my view, exceptional. [ 30 ] Turning to the question of whether this Court should exercise inherent jurisdiction in this case, I find support in the decision of the Supreme Court of Canada in Royal Bank of Canada v.

Skene (1919), 1919 CanLII 33 (SCC) , 59 S.C.R. 211 for the view that this case is concerned with a question of “practice or procedure” relative to the proper method of rectifying a wrong. In that case, the trial judge had determined liability, set out principles for the calculation of damages and referred the calculation of the amount to the registrar. The solicitor for the respondents expressed in writing the intention of appealing the decision of the trial judge.

As to the calculation of damages on the basis of the trial judge’s decision, the parties were able to agree on the amount and a “consent judgment” was pronounced based on the agreement of the solicitors. An appeal was dismissed on the ground that it was a judgment by consent. The respondents took a direct action to set aside the judgment. [ 31 ] Duff J. declared that there was a common error in the expression of the intentions of the parties and therefore the judgment had to be rectified or set aside. The Court also recognized that there were other methods that might have been used to rectify the wrong.

For example, Duff J. noted at p. 217 that “ the trial judge would have been quite within the ambit of his competency in making [an amendment of his judgment].” [ 32 ] Skene could, of course, be explained in pure contractual terms. However that is too narrow an approach. In Skene the court concluded that while there was nothing irregular in what was done by the trial judge, it should interfere and set aside the order in the circumstances.

The same can be said here on the basis of the agreement of the parties prior to trial and the prejudice to two of the parties if the Order of the trial judge is permitted to stand. [ 33 ] There is, in my view, no doubt that both as part of the historic jurisdiction handed down to the Supreme Court of Newfoundland and Labrador and as part of an “implied” power to control its own process this Court may prevent the injustice that would result if the decision of the trial judge were to stand .

The appeal is therefore allowed by deleting from the order of the court paragraph 2 which reads: The Plaintiff is entitled to an evaluation of and payment for his one third share as a partner of the Deer Lake Dental Practice. If the parties are unable to agree on the quantum to be paid for the Plaintiff’s share, then leave is granted for the parties to apply to this Court for an assessment.

There shall be substituted the following: Either party is free to apply for the continuation of the trial of this matter. In all other respects, the decision of the trial judge is affirmed. [ 34 ] As to costs before this Court, the appellant has been successful and the position taken by the respondent, in light of the arrangement between the parties prior to trial, was untenable.

However, this appeal could have been avoided by an application before the trial judge or, even earlier than that, by obtaining an order for determination of a preliminary point prior to trial or, alternatively, seeking the consent of the trial judge at the commencement of trial. In the circumstances each party shall bear his own costs. _____________________________ M. A. Cameron, J.A. I Concur: D.M. Roberts, J.A. Wells, C.J.N. [ 35 ] I have had the benefit of reading the reasons of Cameron J.A. I agree with her conclusions as to the inherent jurisdiction of this Court.

I also agree that such jurisdiction can be exercised in the manner in which she proposes, with the result that she proposes, should it be necessary for the Court to exercise such jurisdiction. However, I am not convinced that engaging the inherent jurisdiction of the Court is necessary in this case. [ 36 ] The agreement between the parties described the parties as partners. In their pleadings, the parties describe themselves as partners, their agreement as a partnership agreement and their arrangement as a partnership. The trial judge found the arrangement to be a partnership and the parties to be partners.

That, as a matter of law, results in application of the Partnership Act RSNL 1990, c. P-3 in the process of determining the rights and obligations of the parties as partners, in any circumstances where there is a dissolution of the partnership or a withdrawal of a partner. Thus far, the parties appear to have failed to address that reality and it is not absolutely clear, in her reasons, that the trial judge accepted it.

If the decision of the trial judge has, in fact, recognized the requirement to apply the Partnership Act , then the appeal must be dismissed, and the process for valuation ordered by the trial judge will apply the Partnership Act . If the decision of the trial judge does not recognize the requirement to apply the Partnership Act , then that is error in law sufficient to allow the appeal without engaging the inherent jurisdiction of the Court, and the appeal must, therefore, be allowed.

For the reasons that follow, I am of the view that disposition of the appeal must result in application of the provisions of the Partnership Act , whether the appeal is dismissed or it is allowed. [ 37 ] Cameron J.A has set out the relevant facts and it is not necessary for me to repeat them here. It is convenient, however, to quote here the provisions of clause 3 of the partnership agreement. That clause reads as follows: Dr. Bass and Dr. Bloom undertake to purchase back Dr. McNally’s share after three years for the sum of $30,000 each, if he so desires.

I would also set out here the trial judge’s identification of the issues before her. She wrote: The issue is the

interpretation and application of this “buy back” clause, and in the alternative, Dr. McNally’s right to a valuation of and payment for his share of the partnership. [Emphasis added.] [ 38 ] The appellants do not take issue with the conclusion of the trial judge that clause 3 of the partnership agreement does not entitle the respondent to repayment of the $60,000.00 he paid to enter the partnership in 1991. Rather, the appeal seems to be taken solely on the ground that the trial judge erred “in ruling on an issue that the parties had not placed before her”.

In this respect the appellant is speaking of the findings made by the trial judge in that part of her reasons that follow the heading, “ Claim of Unjust Enrichment” . [ 39 ] Before proceeding to consider those findings of the trial judge, I should note that I also endorse the comments of Cameron J.A. with respect to the inadequacy of identification for the trial judge of the pre-trial arrangement between counsel.

Indeed, had they properly identified their arrangement the trial judge may well have required them to make an application pursuant to Rule 38 of the Rules of the Supreme Court, 1986 , or, on her own initiative, may have made an order under Rule 40.04 . In either case, it would have enabled proceeding with consideration of only one limited issue.

Their failure to make such an application, or even to clearly identify for the trial judge the arrangement they had agreed upon, so that she could give appropriate direction, could only leave the trial judge with the assumption that this was a trial in the ordinary course. [ 40 ] In the ordinary course, it is the pleadings that determine the issues before a trial judge.

Here the respondent pleaded, in paragraph 11 of the amended statement of claim, as follows: In the alternative, the Plaintiff states that the First and Second Defendants were unjustly enriched with the services and funds provided by the Plaintiff to the Deer Lake Dental Practice and therefore the Plaintiff makes a claim of quantum meruit against the First and Second Defendants. To this the appellants pleaded, in paragraph 9 of their defence, as follows: As to paragraph 11 of the Statement of Claim, the Defendants deny that they were unjustly enriched or that the Plaintiff has a claim in quantum meruit.

To the contrary, the Defendants state that it was the Plaintiff who economically benefitted from his association with them. The pleadings clearly raise the issue of unjust enrichment. In addition the statement of claim was amended as a result of application made by the respondent at the commencement of the trial. Near the conclusion of the trial, but ultimately with the consent of the appellants, the amendment sought was ordered. It allowed the respondent to plead estoppel. [ 41 ] Admittedly, argument of counsel concentrated on the

interpretation of clause 3 but other pleaded matters were also argued. The application of clause 2 of the partnership agreement was argued as was the question of whether or not estoppel had any application. The record does not indicate that the court was dealing with anything less than the issues as to liability , identified by the pleadings. Again, I agree with and would adopt the view expressed by Cameron J.A. in her comment that: The only statement before the trial judge that the issues were to be limited was that contained in the pre-trial brief of the appellants. While the first sentence says that the parties have agreed to limit the issue to

interpretation of paragraph 3, the second sentence would suggest that what was anticipated was that the court would determine only liability and that damages would be assessed later, if necessary. Indeed, the trial judge’s decision is consistent with such an

interpretation as, having rejected the argument that clause 3 required the appellants to pay the respondent a total of $60,000, she declared the respondent to be entitled to an evaluation of and

payment for his one-third share as a partner and gave the parties leave to apply to the Court for an assessment if they were unable to agree on the amount. [ 42 ] Counsel for the respondent, speaking at trial as counsel for the plaintiff, concluded his submission with: In conclusion, the plaintiff asks that the defendants, pursuant to paragraph 3 of the Deer Lake dental practice agreement, buy back his share within the Deer Lake dental practice each for a total of $60,000. Of course, the plaintiff also asks for interest on this order pursuant to the Judgment Interest Act and cost of this action.

Interest, of course, would go from the date of the application, of course, or the Statement of Claim. ... Counsel for the appellants concluded his argument, at trial, with a statement that: In

summary then, my lady, I believe that there are - my clients, the First and Second Defendants are looking for equity and fairness. That this man walked into the - if you give him the $30,000 now, it not only violates the agreement, particularly if you try to read paragraphs 2 and 3 together, but they got nothing out of this association with him. ... And with the following: So we’re asking the Court to dismiss the Plaintiff’s claim, at least under paragraph 3, that he should have exercised the option under paragraph 2.

And the First and Second Defendants are seeking their costs ... [ 43 ] Before this Court, counsel for the appellants is essentially arguing as though he had made an application, pursuant to Rule 38 for an

interpretation of clause 3 of the partnership agreement, to the exclusion of all other issues pleaded, and was successful in persuading the court that such an approach was appropriate in the circumstances. There was no such application and no agreed statement of facts to be considered in relation to that discrete issue. Instead evidence, which appeared to bear on all of the liability issues pleaded, was called, cross examined and contested, and counsel made the arguments as noted above.

Unless there is a specific determination by the trial judge that a discrete issue should be tried as a preliminary matter, under Rule 38 or an order made under Rule 40.04 , counsel have no right to expect a court to decide a case on an installment plan. [ 44 ] It must be acknowledged that nothing in the record indicates that unjust enrichment was specifically argued. That, however, is not conclusive. It is open to the parties to choose not to address, in argument, all the issues they have pleaded.

The court must, nevertheless, consider all applicable legal principles when deciding pleaded issues, whether or not the parties have chosen to address them in argument. Equally importantly, the court must consider whether there exists legislative provisions which have to be applied. The fact that a court so addresses the issues cannot possibly be a valid ground of appeal. [ 45 ] Turning to consideration of the findings of the trial judge, I am not convinced that she went beyond the matters submitted to her at the trial.

I do not think she specifically decided that the appellants were liable to compensate the respondent on the basis of application of the doctrine against unjust enrichment, as the appellants now assert. A careful examination of her reasons indicates she made the following three determinations: (

i) with respect to the claim of the respondent to be entitled to repayment of the full $60,000. under clause 3, she decided; For the reasons that follow, I conclude that clause 3 of the Agreement was not engaged when Dr. McNally withdrew from the partnership in June 1997 because that clause had been rendered inoperative by the passage of time. A reasonable

interpretation of the clause is that it was intended to provide a trial period for the partnership, not a guarantee to return Dr. McNally’s investment at any indefinite time in the future. (ii) with respect to estoppel, she decided;

Counsel for Doctors Bass and Bloom consented to the amendment, but argued that estoppel has no application on the facts of this case. I agree with that conclusion. ... ; and, (iii) following the heading “Claim for Unjust Enrichment”, she decided; In the alternative, Dr. McNally says Doctors Bass and Bloom would gain the benefit of unjust enrichment if, in light of his withdrawal from the partnership, there is no valuation of and payment for his share.

As previously discussed, the partnership Agreement is ambiguous as to whether dissolution of the partnership or withdrawal of a partner is to be dealt with as a buy out under clause 2, or in accordance with general principles in applicable legislation or judicial authority . As a general principle, a process to deal with dissolution of the partnership or withdrawal of one partner is a necessary component of any partnership agreement. It follows that Dr.

McNally is entitled to a valuation of and payment for the one third share in the Deer Lake Dental Practice which he purchased for $60,000 in accordance with clause 1 of the Agreement. It would be unjust to deny such a valuation and payment, and there is nothing in the Agreement to counter the conclusion that, in fact, this was the intention of the partners. Based on the evidence adduced, it is not possible to determine the appropriate valuation of Dr. McNally’s share in the partnership.

If the parties are unable to agree on the quantum to be paid for his share, leave is granted to apply to this Court for an assessment. [Emphasis added.] [ 46 ] I am not convinced that either the heading or those four paragraphs indicate that the trial judge was finding that the respondent was entitled to compensation under the doctrine against unjust enrichment, in an amount to be determined by application of that doctrine. The heading simply identifies the pleaded issue, as do the other two headings, in her reasons, “The

Interpretation of Clause 3”, and “Estoppel”. The comments of the trial judge in the first of those three paragraphs simply set out what the respondent claims in respect of unjust enrichment. It is the second paragraph which indicates the determination of the trial judge on this issue. She determines that the partnership agreement is ambiguous as to whether its provisions, or applicable legislation or judicial authority , are to be applied in the case of dissolution of the partnership or withdrawal of a partner.

She then, quite correctly in my view, observes that, as a general principle, a process to deal with dissolution or withdrawal is essential and concludes, as a result, that the respondent is entitled to a valuation of his one-third share.

Having already determined the necessity to consider “applicable legislation or judicial authority”, in order to determine entitlement on dissolution of the partnership or withdrawal of a partner, the observation of the trial judge in the third of the quoted paragraphs that it would be “unjust” to deny such a valuation is merely an observation and, in my opinion, does not justify a conclusion that the trial judge was deciding entitlement on the basis of application of the doctrine against unjust enrichment. [ 47 ] The Partnership Act was not specifically raised by counsel before the trial judge.

That does not mean that it does not apply to the circumstances of this case. It does, and I can only assume it is the statute to which the trial judge referred as “applicable legislation”. Unless the partnership agreement expressly or impliedly excludes the application, as between the partners, of any specific provision or provisions of

section 24 of the Partnership Act , then such provisions constitute the rules by which the interests of the partners and their rights and duties in relation to the partnership are to be determined. The Partnership Act also contains very specific provisions relating to termination or dissolution of partnerships and determination of partnership rights on such termination or dissolutions.

Section 26 provides: 26.

(1) Where a fixed time has not been agreed upon for the duration of the partnership, a partner may determine the partnership on giving notice of his or her intention to do so to the other partners.

(2) Where the partnership has originally been constituted by deed, a written notice, signed by the partner giving it, shall be sufficient for this purpose. That

section may well apply here. The circumstances set out in the

section may cover the circumstances of this case. [ 48 ] Depending on the evidence as to the manner in which the partnership was ended, some of sections 32 to 45 may also apply here. If the evidence indicates there has been a dissolution of the partnership, then

section 39 applies. It deals specifically with entitlement of partners on dissolution. It reads: 39.

On the dissolution of a partnership, a partner is entitled, as against the other partners in the firm, and persons claiming through them in respect of their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the firm, and to have the surplus assets after the payment applied in payment of what may be due to the partners, respectively, after deducting what may be due from them as partners to the firm; and for that purpose a partner or his or her representatives may, on the termination of the partnership, apply to the court to windup the business and affairs of the firm.

If there has not been a dissolution engaging

section 39, then

section 42 would seem to be engaged. Subsection (1) of that

section provides: 42.

(1) Where a member of a firm has died or otherwise stopped being a partner, and the surviving or continuing partners carry on the business of the firm with its capital and assets, without a final settlement of accounts as between the firm and the outgoing partner or his or her estate, then in the absence of an agreement to the contrary, the outgoing partner or his or her estate is entitled to the share of the profits made since the dissolution that the court may find to be attributable to the use of his or her share of the partnership assets, or interest at the rate of 6% annually on the amount of his or her share of the partnership assets. [ 49 ] When the trial judge, in her reasons, concluded that “[the respondent] is entitled to a valuation of and payment for the one third share”, she also observed that “there is nothing in the Agreement to counter the conclusion that, in fact, this was the intention of the partners”.

In light of that finding, and the record, it is difficult to conceive of circumstances in which one of sections 39 or 42 would not apply. Entitlement to and valuation of a share of the partnership depends on what results from the application of the Partnership Act and the rules of equity and common law, applicable by operation of

section 45 , to the facts relating to withdrawal or dissolution, as established by the evidence. [ 50 ] Assuming, as I must, that the trial judge was alert to the provisions of the Partnership Act , I can only conclude that her disposition of the issues submitted to her contemplated application of the provisions of the Partnership Act , not the doctrine of unjust enrichment.

If the trial judge had stated specifically that the provisions of the Partnership Act were to be applied, instead of simply referring to “applicable legislation”, “judicial authorities” and “general principle” and concluding the respondent “is entitled to a valuation of and payment for the one third share”, the four paragraphs of her decision, quoted above, would have been as appropriate to describe the consequences of applying the Partnership Act as they may be to applying the doctrine against unjust enrichment.

As well the final three paragraphs of her decision, which follow immediately after the four quoted above, are equally consistent with anticipated application of the Partnership Act to determine valuation and the amount, if any, to which the respondent is entitled. Those paragraphs read as follows: Clause 3 of the Agreement does not apply to Dr. McNally’s withdrawal from the partnership in June 1997. Accordingly, his application for payment of $30,000 from each of Doctors Bass and Bloom under that clause is denied. Dr.

McNally is entitled to a valuation of and payment for his one third share as a partner in the Deer Lake Dental Practice. If the parties are unable to agree on the quantum to be paid for his share, leave is granted to apply to this Court for an assessment. Since the Plaintiff was unsuccessful in his main argument regarding the application of clause 3 of the Agreement, and the Defendants were unsuccessful in having the claim dismissed, there will be no order as to costs.

[ 51 ] For the foregoing reasons I am of the opinion that the appeal should be dismissed. The matter should be referred back to the Trial Division, as the trial judge contemplated, for determination, after hearing all relevant evidence, of the basis appropriate for valuation and the resulting valuation, in accordance with the applicable provisions of the Partnership Act , including

section 45 which requires application of the rules of equity and common law. [ 52 ] If, however, the trial judge was deciding the matter on the basis of the doctrine against unjust enrichment, then I am of the view that it was error in law to apply the principle of unjust enrichment to the facts of this case as the basis on which the rights and duties of the partners are to be determined, without first applying the applicable provision of the Partnership Act .

In that case the appeal should be allowed and the matter referred back to the Trial Division for hearing of the evidence necessary to determine entitlement and valuation in accordance with the provisions of the Partnership Act . [ 53 ] In either case, the result is the same. In all of the circumstances of this case, I would make no order as to costs. C.K. Wells, C.J.N. [1 ] For example; Re Regina and Unnamed Person (1985), 1985 CanLII 3501 (ON CA) , 22 C.C.C. (3d) 284 (Ont. C.A.); Re B.C.G.E.U. v. B.C. Attorney General, 1988 CanLII 3 (SCC) , [1988] 2 S.C.R. 214; MacMillian Bloedel Ltd. v.

Simpson , 1995 CanLII 57 (SCC) , [1995] 4 S.C.R. 725; Taylor v. Attorney General [1975] 2 N.Z.L.R. 675. [2] Kourtessis acknowledges the inherent jurisdiction of superior court judges appointed under s. 96 of the Constitution Act, 1867 . [3] The dual objectives were described as follows: “The first is a private objective of correcting wrong decisions so as to ensure justice between the litigants involved. The second is a public objective, to ensure public confidence in the administration of justice not only by remedying wrong decisions but also by clarifying and developing the law and setting precedents. (§ 26)