2017 NLCA 58, 2017 NLCA 58

Community Mental Health Initiative Inc. (appellant) v. Summit Lounge Ltd. (first respondent) and Power Development and Consulting Inc. (second respondent) and Jacques Whitford Stantec Limited (applicant/third respondent) and Stantec Consulting Ltd. (applicant/fourth respondent) (14/90) Indexed As: Community Mental Health Initiative Inc. v. Summit Lounge Ltd. 2017 NLCA 58 2 C.A.N.L.R. 222 Court of Appeal of Newfoundland and Labrador White, Harrington and Hoegg JJ.A. October 6, 2017

Summary: The respondent Stantec applied pursuant to the Court of Appeal Rules NLR 38/16 for directions and a reconsideration of the order reinstating an appeal which had been deemed abandoned prior to the coming into force of the new rules. The appellant’s, Community Mental Health Initiative Inc.’s (“CMHI”), appeal was filed in November 2014. By November 2015, 12 months had passed without any steps being taken and old rule 57.20(4) became engaged. Nonetheless, a trial record was filed in January 2016. The Registrar did not record the appeal as abandoned until October 2016.

It was reinstated upon ex parte application by CMHI without a hearing on November 22, 2016. Held: Application dismissed. White J.A. (Harrington and Hoegg JJ.A. concurring): The application raises several interesting questions. If an appeal is abandoned and the registrar does not record it, is it abandoned at all? Was this appeal abandoned in November 2015, when rule 57.20 became engaged, or in October 2016, when the abandonment was recorded? If it was abandoned in November 2015, did the subsequent accepted filing revive it?

The Rules are not hurdles of inconvenience to be gotten over, nor are they to be interpreted and applied without reference to their underlying spirit and purpose. Former rule 57.20 should be interpreted, so far as the language allows, to let the deemed-abandonment system work in a reasonably effective way. The new Rules apply to applications for reinstatement made after the new Rules came into force, even if the abandonment took place beforehand. However, interpreting old rule 57(20) is necessary to decide this application.

This case falls within a gap in the Rule which is silent about what happens if the registry fails to record an abandonment or mistakenly accepts a filing. Even though Stantec argued that the registry could not validly accept a filing after a deemed abandonment, the record of a superior court cannot be a simple nullity. It is valid until amended or struck out. Both the old deemed abandonment rule (rule 57.20) and the new rule (rule 17) assume that appeals can be neatly divided into appeals that are active and appeals that are deemed abandoned.

The difference, however, is that the new rule eliminates the issue of automatic deemed abandonment; now notice must be given. Once abandonment is effective, however, whether under new or old Rules, the question becomes whether there should be reinstatement. In both cases, the test is the same.

In this case as in other cases, there was a long lag between the date when the appeal was deemed abandoned in theory and the date whenthat abandonment gained a tangible reality. It is not necessary to determine in the context of this case whether abandonment waseffective on the expiration of one year or upon filing of a notice by the Registrar. The Court must now bring theory and practice backinto alignment by either reinstating the appeal and ratifying the January 2016 filing, or setting aside the filing and leaving the appealabandoned.

The approach to reinstatement applications involves considering factors such as: 1. whether the appeal can be said to be frivolous orvexatious, in the sense that there is no arguable case; 2. whether, prior to its deemed abandonment, the appellant had a bona fideintention to proceed with the appeal; 3. whether there is a reasonable excuse for the failure to proceed with the appeal prior to thedeemed abandonment; 4. timeliness of the application for reinstatement after receipt of notice of deemed abandonment; and 5. thepresence of any exceptional or special circumstances justifying or working against the fairness of reinstatement.

CMHI did not have a reasonable excuse for its lateness, but had a bona fide intention to appeal. It filed a trial record and correspondedrepeatedly with the Court to attempt to find a date to hear the application for leave. The timeliness of the application for leave is assessed after receipt of notice of deemed abandonment, not from the date the appeal wasdeemed abandoned in theory. CMHI filed its application for reinstatement within a week of receiving notice. That is very timely. Stantec did not rely on the deemed abandonment, nor would it be prejudiced by allowing the appeal to proceed.

After balancing the factors, the Court was satisfied that the appeal was properly reinstated. However, the Court ordered costs of the application against CMHI because, but for its lateness there would be no application. Cases cited: Atlantic Lottery Inc. - Societé de Loteries de l’Atlantique v. Babstock, 2016 NLCA 64, 1 C.A.N.L.R. 279 Canadian Paraplegic Association (Newfoundland and Labrador) Inc. v. Sparcott Engineering Ltd. (1997), (NL CA),150 Nfld. & P.E.I.R. 203 (Nfld. C.A.) Archean Resources Ltd. v.

Newfoundland (Minister of Justice), 2002 NFCA 43, 215 Nfld. & P.E.I.R. 124 Newfoundland and Labrador (Treasury Board) v. Newfoundland and Labrador Assn. of Public and Private Employees, 2004 NLCA 58,241 Nfld. & P.E.I.R. 13 Wiscombe v. Wiscombe, 2017 NLCA 8, 1 C.A.N.L.R. 432 Ellis v. Pelley Estate, 2016 NLCA 77, 1 C.A.N.L.R. 383 Law Society of Newfoundland v. Fahey, 2003 NLCA 8, 221 Nfld. & P.E.I.R. 79 Counsel: Dean A. Porter, for the appellant; No appearance, for the first respondent; Geoffrey Boyd, for the second respondent; Ruth E. Trask, for the applicants/third and fourth respondents.

This application was heard on April 11, 2017 before White, Harrington and Hoegg JJ.A.

The following judgment was delivered on October 6, 2017 by White J.A. for the Court. ______________________________________________________________ White J.A.: [1] This is an application for directions and to reconsider an ex parte order reinstating an abandoned appeal. BACKGROUND [2] Community Mental Health Initiative Inc. (“CMHI”) purchased land to build a housing project. After the transaction wascompleted it discovered some environmental contamination.

It sued several parties who were involved in the sale and the preparation ofan environmental impact assessment. [3] Two of those parties, Jacques Whitford Stantec Limited and Stantec Consulting Limited (together, “Stantec”), applied for asummary trial. At the

summary trial, the claims against them were dismissed: 2014 NLTD(G) 130. [4] CMHI applied for leave to appeal on November 12, 2014. Twelve months passed without any step being taken, and so onNovember 13, 2015, rule 57.20(4) became engaged: … the appeal shall be deemed to have been abandoned, the Registrar shall record the abandonment, and the respondent shall be entitledto costs. [5] Despite this, CMHI filed a trial record in January 2016.

Then in October, 2016, just before the new Court of Appeal Rules cameinto force, the registry recorded the appeal as abandoned and notified the parties. [6] CMHI applied to reinstate the appeal. The new rules apply to whether there should be reinstatement in the present case asapplication for reinstatement was made after the new rules came into force (Atlantic Lottery Inc. - Societé de Loteries de l’Atlantique v.Babstock, 2016 NLCA 64). The appeal was reinstated without a hearing on November 22, 2016. Now Stantec applies for directionsand a reconsideration of the order reinstating the appeal.

ANALYSIS [7] This application raises several interesting questions. If an appeal is abandoned and the registrar does not record it, is itabandoned at all? Was this appeal abandoned in November 2015, when rule 57.20 became engaged, or in October 2016, when theabandonment was recorded? If it was abandoned in November 2015, did the subsequent accepted filing revive it? [8] The starting point in addressing these questions is Canadian Paraplegic Association (Newfoundland and Labrador) Inc. v.Sparcott Engineering Ltd. (1997), (NL CA), 150 Nfld. & P.E.I.R. 203 (Nfld.

C.A.), where Green J.A. (as he thenwas) set out the general principles of interpreting court rules at para. 31: The Rules are not hurdles of inconvenience to be gotten over, nor are they to be interpreted and applied without reference to theirunderlying spirit and purpose. The Rules attempt to further the fundamental goal of procedural justice. They are to be interpreted by thecourts and applied by counsel and parties with that goal in mind, so as to ensure an expeditious and inexpensive determination on themerits in a manner that is fair to all sides. (See similarly Archean Resources Ltd. v.

Newfoundland (Minister of Justice), 2002 NFCA 43, 215 Nfld. & P.E.I.R. 124.) [9] Rule 57.20 should be interpreted, so far as the language allows, to let the deemed-abandonment system work in a reasonablyeffective way. The Old Deemed Abandonment Rule [10] Much of the argument revolves around the

interpretation of the old rule 57.20: 57.20(4) Where on a pending appeal, in respect of which the notice of appeal was filed after January 1, 2000, 12 months have passedsince the last step was taken and no order has been made pursuant to rule 57.20(2), the appeal shall be deemed to have been abandoned,the Registrar shall record the abandonment and the respondent shall be entitled to costs. …

(6) Upon recording abandonment of any such appeal under rules 57.20(4) …, the Registrar shall send notice by ordinary mail or byfacsimile transmission to the solicitors of record or to the parties at the last known addresses of such solicitors or parties as indicated inthe documents filed in the appeal. …

(7) Inability or failure of the Registrar to effect any notice required by rule 57.20(6) shall not affect the deemed abandonment of anappeal.

(8) No proceedings shall thereafter be taken in any appeal deemed abandoned pursuant to rules 57.20(4) … unless the same shallhave been re-instated by the Court, which the Court may do on such terms as the Court deems just, which terms may include thepayment to the respondent or respondents of costs to date on a solicitor and client basis, which the Court may order be paid by thesolicitor who filed the notice of appeal or any solicitor named in a notice of change of solicitors, or both, personally if the Court issatisfied that the solicitor or solicitors is or are responsible for the failure to have proceeded with the appeal on a timely basis.

Stantec’s Argument [ 11 ] Stantec argues that, under rule 57.20, the appeal was automatically abandoned in November 2015, even if the court registry did not take any steps to record the abandonment. Stantec emphasizes that the rules use what it calls “mandatory language”: the appeal “shall be deemed to be abandoned”. [ 12 ] Because the appeal was abandoned, the court registry had no discretion to accept a trial record in January 2016.

The filing is essentially a nullity (though the Stantec Parties do not use the word). [ 13 ] A mistaken filing cannot revive an appeal, as only a court order can reinstate an abandoned appeal. The rules do not allow a court officer to reinstate an appeal by mistake by stamping a document. Thus the appeal remained abandoned until CMHI’s belated application in October 2016. [ 14 ] Stantec’s

interpretation is well reasoned but misses several points. First, the rule is silent about what happens if the registry fails to record an abandonment or mistakenly accepts a filing. The silence stands out because the rule specifically addresses a failure to give notice (rule 57.20(7)). Far from being covered by “mandatory language”, this case falls within a gap in the rule. [ 15 ] Second, the record of a superior court cannot be a simple nullity, but is valid until amended or struck out: see e.g. Newfoundland and Labrador (Treasury Board) v.

Newfoundland and Labrador Assn. of Public and Private Employees , 2004 NLCA 58 , 241 Nfld. & P.E.I.R. 13 ; Blackstone, Commentaries on the Laws of England , book 3,

chapter 24. So the January 2016 trial record is a valid court record until set aside (though without the effect of reviving an appeal that has been deemed abandoned), even if it should have been refused. [ 16 ] Third, if the January 2016 trial record was a nullity, would further steps be a nullity? What if the appeal continued to a hearing, or even to a final order? The possibility is not merely theoretical. The registry has failed to record abandonments in other cases: see e.g. Wiscombe v. Wiscombe , 2017 NLCA 8 .

The Correct Approach [ 17 ] Both the old deemed abandonment rule (rule 57.20) and the new rule (rule 17) assume that appeals can be neatly divided into appeals that are active and appeals that are deemed abandoned. The difference, however, is that the new rule eliminates the issue of automatic deemed abandonment; now notice must be given. Once abandonment is effective, however, whether under new or old rules, the question becomes whether there should be reinstatement. In both cases, the test is the same. Appeals that are deemed abandoned in theory are thus treated as abandoned in practice.

From the moment the appeal was deemed abandoned, the rules assume that the abandonment was recorded, notice delivered, filings refused. [ 18 ] In this case, as in Wiscombe , theory and practice diverge. For many months the appeals were deemed abandoned in theory but treated for all practical purposes as live appeals. There is a long lag between the date when they were deemed abandoned and the date when that abandonment gained a tangible reality.

As in Wiscombe , it is not necessary to determine in the context of this case whether abandonment was effective on the expiration of one year or upon filing of a notice by the Registrar. [ 19 ] The Court must now bring theory and practice back into alignment, either reinstating the appeal and ratifying the January 2016 filing, or setting aside the filing and leaving the appeal abandoned. In doing so it must consider the whole context, warts and all: the November 2015 abandonment, the January 2016 filing, and the October 2016 recording and notice of abandonment.

Application to the Facts [ 20 ] The approach to reinstatement applications was recently stated in Ellis v. Pelley Estate , 2016 NLCA 77 : [5] The relevant rule here is rule 17(9) which provides for reinstatement upon terms the Court considers just. The rule does not list factors to be considered in determining whether reinstatement should be ordered. On this point, judicial authority under the former rules provides assistance. In Law Society of Newfoundland v.

Fahey , 2003 NLCA 8 , 221 Nfld. & P.E.I.R. 79 , Wells C.J.N.L., for the Court, wrote: [13] … [U]ltimately, the decision to be made is “whether, considering the merits of the case and all other relevant matters, it is in the interest of justice that the appeal be reinstated or left [abandoned]”. That is, essentially, another way of saying where, in the opinion of the Court, refusal to do so would create an injustice . In either case, the decision can only be judicially arrived at as a result of consideration of factors such as: 1.

Whether the appeal can be said to be frivolous or vexatious, in the sense that there is no arguable case; 2. Whether, prior to its deemed abandonment, the appellant had a bona fide intention to proceed with the appeal; 3. Whether there is a reasonable excuse for the failure to proceed with the appeal prior to the deemed abandonment; 4. Timeliness of the application for reinstatement after receipt of notice of deemed abandonment; and 5.

The presence of any exceptional or special circumstances justifying or working against the fairness of reinstatement. … [S]uch factors should not be considered to constitute, exclusively, “the test” for every case. However, the first four are clearly core considerations properly to be applied in virtually every case.

The fifth category … should be broad enough to include prejudice to a party, in the specific circumstances of the case, as well as any other special circumstance which justice would require should be considered in a particular case. [ 21 ] Stantec does not argue that the appeal is frivolous or vexatious. It argues that there was no bona fide intention to appeal, no

reasonable excuse for the lateness, and that the application to reinstate was not timely. It also argues that it “ought to be able to rely on the rules in this regard”. [ 22 ] I conclude that CMHI did have a bona fide intention to appeal. CMHI did file a trial record and corresponded repeatedly with the Court to attempt to find a date to hear the application for leave. [ 23 ] Under Fahey , Ellis , and Wiscombe , the timeliness of the application for leave is assessed “after receipt of notice of deemed abandonment”, not from the date the appeal was deemed abandoned in theory.

CMHI filed its application for reinstatement within a week of receiving notice. That is very timely. [ 24 ] Nor does the record suggest Stantec relied on the deemed abandonment or would be prejudiced by allowing the appeal to proceed. Stantec did not object to CMHI filing a trial record. Far from relying on the deemed abandonment, Stantec gave no sign of being aware of it. [ 25 ] There is no evidence that CMHI had a reasonable excuse for lateness. But after balancing the factors, I am satisfied that the appeal was properly reinstated. CONCLUSION [ 26 ] I would dismiss the application for reconsideration.

COSTS [ 27 ] But for the inaction of CMHI, there would be no application for re-consideration. I would award the other participating parties their costs on the application on column 3 of the scale. Application dismissed .