O’Brien v. Tyrone Enterprises Ltd. Date:, 2012 MBCA 3

Citation: O’Brien v. Tyrone Enterprises Ltd. Date: 20120116 et al., 2012 MBCA 3 Docket: AI11-30-07569 IN THE COURT OF APPEAL OF MANITOBA Coram: Chief Justice Richard J. Scott Madam Justice Barbara M. Hamilton Mr. Justice Martin H. Freedman B E T W E E N: MARY ANN O’BRIEN ) ) W. S. Gange and (Plaintiff) Respondent ) A. M. Cathcart ) for the Appellant- and - ) ) R. I. Holloway andTYRONE ENTERPRISES ) U. A.

Saeed ) for the Respondent (Defendant) Appellant ) ) Appeal heard:- and - ) October 13, 2011 ) CENTURY 21 CARRIE REALTY LTD. ) Judgment delivered: ) January 16, 2012 (Third Party) ) SCOTT C.J.M. 1 For many years, it has been well understood that severance of a civil trial on liability and damages in Manitoba would onlybe granted in the most “exceptional” of circumstances.

This appeal directly raises the issue whether a change in perspective is nowdesirable given the increasing concerns about access to justice, including the cost and delay associated with civil litigation, and in lightof the amendments to the Queen’s Bench Rules which occurred in 1989. 2 The parties agree that the seminal authority on severance in civil proceedings in Manitoba remains the decision of Kroft J.,as he then was, in Investors Syndicate Limited v. Pro-Fund Distributors Ltd. et al. (1980), (MB KB), 12 Man.R. (2d)104 (Q.B.).

Then, as now, there was no specific Queen’s Bench rule dealing with severance of trial proceedings. 3 Kroft J. first noted that “[c]ertainly the normal preference of the court is to hear and determine all issues at one time and todiscourage the piecemeal trial of actions. That, however, is not an invariable rule. Rules of Court and case law make it clear that, inappropriate circumstances, issues can and should be severed and tried separately” (at para. 23).

He then went on to enumerate “some ofthe considerations which ought to be made by a judge in the exercise of his discretion” (emphasis added) as follows (at para. 27): … 1. One party ought not to be harassed at the instance of another by an unnecessary series of trials. 2. There must be some reasonable basis for concluding that the trial of the issue or issues sought to be severed, will put an end to theaction. 3. An order for severance should hold the prospect that there will be a significant saving of time and expense. 4.

Conversely, severance should not give rise to the necessity of duplication in a substantial way in the presentation of the facts andlaw involved in later questions.

5. Nothing should be done which might confuse rather than help the final solution of the problem. 6. A plaintiff who forms an action to suit his convenience will seldom be granted the right to sever, if the defendant objects.

The objection of a plaintiff to a defendant’s application does not bear such heavy significance. 4 Almost a decade later, the Queen’s Bench Rules were “modernized.” Rule 1.04(1), under the heading “General principle,” states: General principle 1.04(1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. 5 The plaintiff’s application for severance was dismissed by a Queen’s Bench master, but an appeal to the Court of Queen’s Bench was successful. It is from the latter decision that the defendant appeals.

Background 6 The statement of claim alleges that on April 6, 1997, the plaintiff was severely injured as a result of falling down a flight of stairs to the basement at the defendant’s rental property. At the time, the plaintiff was attending a party hosted by the defendant’s tenant. It is asserted that the accident occurred as a result of a banister coming off the wall. The nature of the plaintiff’s injuries, as set forth in the statement of claim, include an incomplete spinal cord lesion and incomplete quadriplegia, resulting, inter alia, in her becoming unemployable from the date of the accident.

The statement of defence, in addition to the “usual” general denial, contests the defendant’s responsibility as a matter of law and asserts that the plaintiff’s injuries were caused by the act of a third party. 7 Liability is very much an issue. An affidavit filed by the plaintiff in support of her application for severance discloses that the defendant takes the position she had consumed a substantial quantity of beer prior to her fall. The affidavit also indicates that for the years 2005-2007 inclusive, she earned between $7,000 and $7,400 per year from CPP disability and that this is her only source of income.

Discoveries have been conducted on both sides, and it would appear that the action with respect to liability is ready to proceed to trial. 8 In her affidavit in support of her application for severance, the plaintiff states: 13. I have been advised by my lawyers that in order to prove damages I will be required to retain expert medical and actuarial witnesses and I will be required to incur costs associated with obtaining expert reports and having those experts attend to testify at the trial. 14.

My lawyers are representing me on a contingency basis and are not prepared to front the costs of these disbursements unless a determination of liability is found. I am therefore responsible to pay for all disbursements up front and will be required to pay thousands of dollars for experts’ reports and attendance fees to prove the issue of damages. 9 The plaintiff was not cross-examined on her affidavit, nor was a copy of the contingency fee agreement filed.

Reasons of Motions Court Judge 10 In his factual analysis, the motions court judge was satisfied that the plaintiff would not be able to proceed because she could not afford to retain the necessary experts for trial of the damages issue, and, further, that her lawyers were “not prepared to front” the costs of the disbursements required for expert witnesses unless the defendant was found to be liable.

He was therefore “prepared to infer (and do so) that she cannot afford to pay the reasonable costs of the necessary expert witnesses required to prove her damages” (at para. 6). 11 Referring to the principles enunciated in the Investors Syndicate case, the motions court judge concluded that severance would not “cause any substantial duplication in the presentation of the evidence and the law” (at para. 15), that it was likely that a decision on liability favourable to the defendant would end the action, and a significant saving of time and expense would probably result if liability was decided against the plaintiff.

Consideration of these factors therefore favoured severance. 12 He accepted (at para. 18): …. … the submission of counsel for the plaintiff, who has, in effect, undertaken to prosecute her claim on the question of liability on a contingency basis, and that this is an “access to justice” issue. Litigants in the economic position of this plaintiff, absent any evidence or suggestion that their claim is frivolous or vexatious or otherwise without merit, have little or no ability to fund the cost of litigation in today’s economy.

I am mindful that if the plaintiff is successful on a trial of the issue of liability, the expenses for expert witnesses will be necessary. However, if the defendant is successful on the issue of liability, it will not likely need to incur the further costs it would otherwise incur on the issue of damages. However, although the plaintiff’s current counsel is not (at least at this point in time) prepared to fund these disbursements on a contingency basis absent a favourable finding of liability, it is likely that the plaintiff would be able to

retain him or other counsel on a further contingency basis if the defendant has been found liable. 13 In the end, he found (at para. 19): …. By analogy, I am satisfied it would not be “just” to deny this plaintiff her day in court because of her impecuniosity. The Defendant’s Argument 14 In addition to the decision in Investors Syndicate earlier referred to, the defendant places strong emphasis on twosubsequent Manitoba trial decisions that have correctly applied, counsel argued, the guidelines set forth in Investors Syndicate. 15 The first is Van Ingen v.

Thorvaldson (1987), (MB KB), 52 Man.R. (2d) 239 (Q.B.), decided before theenactment of the “new” Queen’s Bench Rules. The facts were that the plaintiff fell from a second-storey balcony and fractured his neck,becoming a quadriplegic. He requested severance. Monnin J., as he then was, dismissed the application. He observed that “[t]he issuesinvolved are not altogether different than most bodily injury claims and the normal practice is not to sever such claims” (at para. 8). Heconcluded that the facts were not complicated and that an order of severance would not bring about a significant time-saving.

This casewas affirmed by the Court of Appeal ([1988] M.J. No. 156 (QL)). 16 The other decision is Dmytriw v. Odim et al., 2008 MBQB 12, 226 Man.R. (2d) 284, decided subsequent to the enactmentof the “new” Queen’s Bench Rules. This was a medical malpractice case.

As in the case at bar, the difficulty for the plaintiffs was thefinancial hardship in obtaining expert reports on the issue of damages. 17 Simonsen J., while recognizing that “the court does have discretion to allow severance in order to meet the objective set outin Court of Queen’s Bench Rule 1.04(1)” (at para. 10), rejected the application for severance. She concluded (rightly so in my opinion)that financial hardship did not automatically lead to severance being granted.

Rather (at para. 16): …. … the issue that must be addressed is whether this is an exceptional case such that severance is the “just, most expeditious and leastexpensive” manner of proceeding (Queen’s Bench Rule 1.04(1)).

While the liability issues were complex, she also found that the issues of liability and damages were linked and that severing damagesfrom liability would not save a significant amount of time. 18 The defendant concedes that the list of six factors set forth in Investors Syndicate is not all-inclusive and that other criteriacan be considered and, further, that access to justice might, depending on the circumstances, be such a factor – but not in this instance.

This case, it says, is a routine slip and fall action, with no complicating factors or unusual circumstances other than the existence of acontingency fee agreement. The difficulty in this case is not so much one of access to justice the defendant argues, but rather the refusalof plaintiff’s counsel to enter into a contingency fee arrangement for the entire case, contrary to what it says is the ordinary practice inManitoba.

The plaintiff already has a lawyer; the difficulty, counsel for the defendant asserts, is the terms of the contingency feeagreement, which results from a manipulation of the traditional contingency fee arrangement. 19 Counsel argues that the motions court judge’s analysis of the criteria in Investors Syndicate is flawed; the factors inevidence here strongly support the defendant’s position. In particular, a separate determination of liability would make settlement less,not more, likely.

Finally, should the decision be sustained, this will be seen as tacit approval by the court of the terms of this particularcontingency fee arrangement and will open the flood gates to similar tactical maneuvering by other plaintiffs’ counsel, contrary to theraison d’être of contingency fee arrangements. The Plaintiff’s Argument 20 The plaintiff emphasizes, not surprisingly, that this is an appeal from a discretionary order of a motions court judge, which,pursuant to the widely recognized principle of non-interference, is entitled to significant deference and should accordingly not beinterfered with.

As Kroft J. noted in the Investors Syndicate decision (at para. 26): …. The question of when or if issues should be severed and tried separately, is one of general discretion for the court. The only limit tothe discretion is that there be sufficient reason for exercising it. 21 She asserts that unless the motions court judge misdirected himself on a question of law or his decision is so clearly wrongas to amount to an injustice, the court should not interfere (see Elsom v. Elsom, (SCC), [1989] 1 S.C.R. 1367 at 1375,and Towers Ltd. v. Quinton’s Cleaners Ltd. et al., 2009 MBCA 81 at para. 28, 245 Man.R. (2d) 70).

To similar effect, Freedman J.A., inTowers Ltd., described the standard for intervention with respect to a discretionary order as “very high” (ibid.). 22 Counsel for the plaintiff observed that one unintended consequence of the “new” Queen’s Bench Rules is that, as part of theemphasis on disclosure, these rules created additional procedural safeguards which, however beneficial in other respects, have addedsubstantially to the time and cost of litigation.

Furthermore, the reality today is that legal aid is simply not available in personal injuryproceedings, and civil litigation has increasingly become a difficult, time-consuming and costly process.

23 The plaintiff argued that liability is a critical hurdle for her; damages, given the nature and consequences of the plaintiff’sinjuries, will require expensive expert evidence; damages and liability are not intertwined as in Dmytriw; and the issues are not simple asthe court found in Van Ingen. 24 Counsel disputes the defendant’s bald assertion that there is a so-called “standard” contingency fee arrangement – there issimply no evidence before the court on this point. 25 The plaintiff’s position is that the motions court judge correctly analyzed the factors in light of today’s reality and thecriteria set forth in Investors Syndicate; no error in principle was made in his analysis or the exercise of his discretion.

In the end, as iscommonly the case, the particular facts are determinative of the issue. Having said all of this, her counsel urged the court to update thecriteria from Investors Syndicate in light of today’s litigation environment and the spectre of the lack of access to justice for impecuniousplaintiffs such as the plaintiff. Analysis and Decision 26 Manitoba is not the only jurisdiction where the courts have recently been required to consider the proper approach to theissue of severance in civil proceedings. 27 In Ontario, like Manitoba, the power to sever is not expressly conferred in the rules.

Nonetheless, it has been held to bewithin the inherent jurisdiction of the court, but has been regarded as “a narrowly circumscribed power” to be exercised only in theclearest of cases (Elcano Acceptance Ltd. et al. v. Richmond, Richmond, Stambler & Mills (1986), (ON CA), 55 O.R.(2d) 56 at 59 (C.A.)). Over the years, a number of authorities have created a growing list of criteria or guidelines for the granting ofbifurcation, as it is more commonly referred to in Ontario. Nonetheless, as noted by Sutherland J. in Carreiro et al. v. Flynn et al.,[2004] O.T.C. 664 (S.C.J.) (at para. 12): ….

Although many of the listed queries are clearly helpful to a court considering whether to exercise its inherent, discretionary,jurisdiction to order severance of the trial of liability from the trial of damages, I am strongly of the view that the court’s discretion inthis regard should not be cabined and confined to the consideration of only a pre-set list of factors or criteria. …. Sutherland J. further explained (ibid.): …. Different factors deserve to be given different weight, depending on their nature and the underlying facts of the case.

Moreover, itwould be unwise, and I believe wrong, for the court to adopt the position that any previously published list encompassed the totality ofthe factors it may consider. The discretion is not to be narrowed in that way. …. I agree with these comments. 28 Significantly for our purposes, Sutherland J. had this to say about concerns respecting access to justice (at para. 19): An important consideration for the court in its exercise of its inherent jurisdiction in this regard, in personal injury cases where it is theinjured plaintiff that seeks the bifurcation, is the factor of access to justice.

Trials are not only getting longer, they are getting muchmore expensive, in respect of lawyers fees and the high costs of experts’ reports and attendances, and even court fees. …. 29 The foregoing comments were approved on appeal ((2005), (ON SCDC), 195 O.A.C. 315 (S.C.J.)). Thus, Ontario case law also takes the “exceptional circumstances” approach, but with no hard and fast criteria. As David Stockwood,Q.C., explains in “Long trials: A modest proposal” (1999) 18:3 Advocates’ Soc.

J. 2 at 4, “[t]he cost of a long trial may give rise toexceptional circumstances,” noting that some judges were taking a more “liberal approach” to splitting trials. 30 In Alberta, the Alberta Rules of Court were recently completely revised. In Envision Edmonton Opportunities Society et al.v. Edmonton (City), 2011 ABQB 29, 507 A.R. 275, Moen J. considered whether the new rule concerning severance (Rule 7.1(1)(a))merely codified the previous “exceptional case” test or signalled a change in direction.

Relying on the Alberta equivalent of ManitobaRule 1.04(1), she concluded that the rules inserted a proportionality requirement in the exercise of the court’s discretion and that thestrict “exceptional case” test was no longer the law in Alberta. She observed (at para. 48): …. … [T]he court should be more willing to grant remedies with the potential to provide a more timely and cost-effective result withoutsacrificing fairness and justice.

If the court can narrow the focus of a trial and do away with the necessity for a long trial withoutsacrificing fairness or justice, it should do so, recognizing that providing litigants with a timely and cost-effective result serves the endsof justice. Interestingly, in coming to her conclusion, she relied on the Manitoba decision in Dmytriw.

31 British Columbia also has a new rule dealing with severance (Rule 12-5(67)) which, without establishing specificguidelines, mandates an objective of proportionality. In that province too, the “extraordinary, exceptional, or compelling reasons”criteria had been established by older authorities (Westwick v. Culbert (1992), 11 C.P.C. (3d) 311 at para. 14 (B.C.S.C.)). Nonetheless,in Nguyen v. Bains, 2001 BCSC 1130, 11 C.P.C. (5th) 177, Martinson J. observed (at para. 11): … a. A judge’s discretion to sever an issue is probably not restricted to extraordinary or exceptional cases.

However, it should not beexercised in favour of severance unless there is a real likelihood of a significant saving in time and expense. …. She also held that a party’s financial circumstances can be a factor to consider in the exercise of the discretion. 32 This recognition of the increased breadth of the court’s discretion is reflected in subsequent British Columbia case law andhas been expressly held to be applicable to the new rule (see, for example, Cayou v. Cayou, 2010 BCSC 1224, 89 C.C.L.I. (4th) 140). 33 Authorities are not consistent in considering whether financial concerns justify severance.

In a number of instances, theplaintiff’s financial circumstances have been considered, but found to be not exceptional enough or sufficiently imperative to warrantseverance. In addition to Dmytriw from Manitoba, see Westwick and Moseley v. Spray Lakes Sawmills

(1980) Ltd. et al. (1994), (AB KB), 164 A.R. 76 (Q.B.), where Wilkins J., under the old Alberta rules, concluded that the financial hardship to theplaintiff in proceeding in one trial was significant, but that factor could not by itself justify severance. 34 Probably the strongest judicial pronouncement against granting severance on the basis of the plaintiff’s financialpredicament is found in the appeal decision of the Ontario Divisional Court in Duffy v. Gillespie (1997), (ON SC),36 O.R. (3d) 443.

There, the motions court judge concluded that because the plaintiff was impecunious and hence unable to obtain thefunds necessary to properly proceed to trial on the issues of liability and damages, severance was warranted. Blair J., as he then was,writing for the court, disagreed, and the decision was reversed. His principal ground for doing so was that the action was scheduled toproceed before a jury so that severance of the trial was inappropriate.

Nonetheless, he went on to hold that the motions court judge“erred in principle in the exercise of his discretion in focusing almost entirely upon the inability of the plaintiff – as a result of hisimpecuniosity – to fund the preparation of his case properly” (at p. 446).

While acknowledging that whether to sever or not required adelicate balancing exercise, he considered the plaintiff’s financial circumstances in that instance to be an extraneous factor. 35 But there are any number of authorities that have accepted the plaintiff’s financial hardship as an important considerationfor severance. 36 Of particular assistance in the circumstances before us is the decision of Anderson v. Univ. of B.C. (1990), (BC SC), 51 B.C.L.R. (2d) 393 (S.C.), a medical malpractice case.

Finch J., as he then was, emphasized, in granting severance,that the plaintiff could not raise sufficient funds to pay the expenses in retaining experts for both liability and damages, together with theplaintiff’s willingness to waive the right to trial by jury and the fact that the risk of overlapping evidence was not a significantconsideration. Dealing specifically with the plaintiff’s financial circumstances, he considered this to be one of the factors weighing infavour of exercising his discretion to sever, relying on British Columbia’s equivalent rule to Manitoba Rule 1.04(1). See, as well, Lordv.

Royal Columbian Hospital and Smyth (1980), (BC CA), 27 B.C.L.R. 123 (C.A.), and Royal Bank of Canada v. VistaHomes Limited et al. (1985), (BC SC), 63 B.C.L.R. 366 (S.C.). 37 Access to justice concerns have also been specifically referred to. In Bidochka v. Ford Motor Co. of Canada, 2000 BCSC95, 48 C.P.C. (4th) 334, the primary reason for the request for severance was the impecuniosity of the plaintiff, largely resulting fromthe motor vehicle accident at issue in the case. Melnick J. concluded that if the trial was not split, it was highly unlikely that the plaintiffwould be able to proceed to court.

He accepted the plaintiff’s argument that it was doubtful that another lawyer would take the claim ona contingency basis. Melnick J. concluded that while the situation of the plaintiff was not extraordinary or exceptional, it was still trulycompelling because, without severance, the plaintiff was not going to have her day in court. 38 Another helpful decision specifically addressing access to justice issues is Vanderlee v. Doherty, 2000 ABQB 66, 258 A.R.194. There, Veit J., in reviewing the list of criteria from existing authorities to be considered in a severance application, stated (at para.5): ….

I would add to that list the court’s role in ensuring access to justice. Access to justice is, of course, a mere highlighting of one aspectof the “just and convenient” guide to making severance decisions. …. 39 Earlier decisions in Alberta emphasized that a lack of resources should not be determinative; Veit J. did not reject thisconclusion, but considered that impecuniosity was a relevant factor to be considered along with all other material factors in coming to ajust conclusion. To similar effect, see Roussel v. Charest, 2004 NBQB 446, 284 N.B.R. (2d) 292, Sather v.

Rousseau, 2006 BCSC 264,52 C.L.R. (3d) 307, and Hemmerling (Litigation Guardian of) v. Hole, 2005 BCSC 35 (QL). Interestingly for our purposes, and contraryto the defendant’s submission, in Hemmerling, Master Hyslop observed that since liability was “hotly disputed,” if the plaintiff was to besuccessful on that issue, the probability of a negotiated settlement was improved. 40 Finally in this analysis, I return to the decision of Dmytriw, which the defendant asserted was supportive, if not conclusive,in their favour. I do not see it this way.

In Dmytriw, the combined income of the family was $91,000 and $63,000 respectively in 2004and 2005; this is to be contrasted with the plaintiff’s subsistence level of income. In Dmytriw, given the family income, the motionscourt judge came to the conclusion that hardship “may” (but not “would”) result in their not being able to afford to pursue the litigation.

Here, the motions court judge’s finding is clear that the plaintiff could not afford the cost of the expert witnesses on damages. 41 Furthermore, being a medical malpractice case, the motions court judge in Dmytriw was worried about the overlap betweenthe issues of liability and damages and the consequent duplication of preparation and trial time, entailing significant additional cost.

Thiswas especially so as it related to the issue of causation, a major issue in that case. 42 These facts are a far cry from those before us. 43 I agree that the applicable standard of review is, as argued by the plaintiff, the high degree of deference due to adiscretionary order. This being so, it would be easy for this court to simply dismiss the appeal in a few short paragraphs since themotions court judge committed no error in principle, did not commit palpable and overriding error in his analysis of the facts or theinferences he drew from them, nor did a manifest injustice result from the decision.

However, given the extensive argument directed tothe appropriateness of the motions court judge’s reliance on “access to justice” in his decision, it is appropriate to review the traditionalapproach to severance applications in Manitoba, in light of the realities today of litigation before the courts, as earlier identified. 44 Is there a relationship between contingency fee arrangements and access to justice, and what of the defendant’s argumentthat the limited mandate in the contingency fee arrangement is the real culprit? 45 Contingency fee arrangements have been authorized in Manitoba since

Section 55 of The Legal Profession Act,C.C.S.M., c. L107, defines “contingency contract” and provides certain protections for the client, which include the ability, within sixmonths after the payment of the contingency fee, to move for a declaration that the contract is not fair and reasonable to the client, withthe attendant return of fees and disbursements found to be excessive if the application is granted. 46 The Law Society of Manitoba, Code of Professional Conduct, Winnipeg: Law Society of Manitoba, 2011, has a specificrule for contingency fee agreements, Rule 2.06(2), which provides: Contingent Fees and Contingent Fee Agreements 2.06(2) Subject to subrule (1) and

section 55 of The Legal Profession Act, a lawyer may enter into a written agreement that providesthat the lawyer’s fee is contingent, in whole or in part, on the outcome of the matter for which the lawyer’s services are to be provided. [emphasis added] While this wording likely refers to the fee arrangement rather than the outcome, it provides no support for the defendant’s “all ornothing” argument.

In the absence of evidence to the contrary, I am simply not prepared to assume, as invited by counsel for thedefendant, that a contingency fee arrangement such as that described in these proceedings is improper or even unusual. 47 Furthermore, there is a positive relationship between access to justice issues and the use of contingency fee agreements inappropriate circumstances. This is well illustrated by the lengthy debate in Ontario that eventually led, in 2004, to a rule permitting theuse of contingency fee arrangements in that province except for criminal or family matters.

Ontario was the last province to permit suchcontracts. 48 From time to time, the courts in Ontario commented on the non-availability of contingency fee agreements. Eventually, inMcIntyre Estate v. Ontario (Attorney General) (2002), (ON CA), 61 O.R. (3d) 257 (C.A.), O’Connor A.C.J.O.,writing for the court, questioned whether the concerns about contingency fee agreements were well founded, noting (at para. 55): There can be no doubt that from a public policy standpoint, the attitude towards permitting the use of contingency fee agreements hasundergone enormous change over the last century.

The reason for the change in attitude is directly tied to concerns about access tojustice. Over time, the costs of litigation have risen significantly and the unfortunate result is that many individuals with meritoriousclaims are simply not able to pay for legal representation unless they are successful in the litigation. …. 49 O’Connor A.C.J.O. concluded that a proper regulatory framework could address any potential abuses in the use ofcontingency fee agreements.

Furthermore (at para. 72): I am also of the view that the advantages to the administration of justice from permitting properly regulated contingency fee agreementsin the form of increased access to justice are compelling.

Indeed, there is a strong case to be made that the continuation of a per seprohibition against contingency fee agreements actually tends to defeat the fundamental purpose underlying the law of champerty – theprotection of the administration of justice and, in particular, the protection of vulnerable litigants. …. 50 It is surely no coincidence that the legislature responded to the call for change by enacting legislation permitting theregulation of contingency fee agreements.

At first reading of the bill, the Ontario Attorney General stated that “[t]he proposedlegislation would modernize outdated laws, improve access to the justice system for middle- and lower-income Ontarians and protect thepublic’s confidence in their investments” (Ontario, Legislative Assembly, Official Report of Debates (Hansard), 37th Parl., 3d Sess.(26 November 2002) (David Young)). 51 There can be no doubt that the impetus for change in Ontario and elsewhere lay in the recognition that contingency feeagreements, appropriately structured, can be an important tool in improving access to justice.

The motions court judge was entirelycorrect in taking this factor into account in his decision.

52 Manitoba jurisprudence has consistently required that for severance to be granted, an “exceptional case” should be made out. But as we have also seen, there is recent case law from other provinces which supports the conclusion that financial hardship can be a proper consideration in demonstrating that a case is exceptional or, more accurately, that a clear and compelling case has been made out for severance. 53 In my opinion, “exceptional,” “extraordinary” and “clear and compelling” essentially express the same thought.

I find the latter phrase more helpful because it confirms that the factors to be considered in an application for severance are very much factually driven and, further, that there are no obligatory criteria that must be adverted to by a motions court judge when considering an application for severance. 54 Indeed, in Dmytriw , relied on so extensively by the defendant, Simonsen J., after referencing the “exceptional case” criterion, noted that while authorities from other jurisdictions use different wording, the considerations were essentially the same.

While rightly finding that financial hardship does not automatically lead to severance being granted, the decision ultimately, she noted, depends on the application of Rule 1.04(1). 55 As we have seen, courts in other jurisdictions have moved decisively away from the view that consideration of financial hardship on a severance application is an error. In those instances where evidence of financial hardship has not resulted in severance being granted, it is often the case that either the plaintiff’s impecuniosity was the only factor in its favour, or it failed to demonstrate that it would be beneficial to sever.

Here the motions court judge, in the exercise of his discretion, while recognizing the criteria set forth in Investors Syndicate , gave, in the particular circumstances before him, significant weight to considerations of the plaintiff’s impecuniosity and the resulting access to justice issue. In doing so, he did not err.

In addition, the defendant filed no evidence as to any prejudice that it might suffer as a result of severance. 56 The motions court judge’s decision is entirely consistent with the fundamental principle to be considered in applications of this kind, namely, the exercise of judicial discretion to determine whether severance is the “just, most expeditious and least expensive” resolution (Rule 1.04(1)).

Whatever description one wishes to use – exceptional, extraordinary or clear and compelling – the task before the motions court judge is ultimately the same. 57 In order to facilitate the future progress of the proceedings, I would provide the following directions: (

a) evidence adduced at the trial of the liability issue should be admissible at any subsequent trial on the issue of damages; (

b) the judge who presides over the liability issue should be seized of the damages assessment; and (

c) if, once liability is determined, it is necessary to proceed to trial on the issue of damages, an early trial date should be made available to the parties. 58 I would accordingly dismiss the appeal with costs. ______________________________ C.J.M. I agree: ________________________________ J.A. I agree: ________________________________ J.A. COURT OF APPEAL PROVINCE OF MANITOBA WINNIPEG R3C OP9

ERRATUM January 24, 2012 TO WHOM IT MAY CONCERN: Re: O’Brien v. Tyrone Enterprises Ltd. et al. 2012 MBCA 3 Docket No. AI 11-30-07569 Released on January 16, 2012 The attached replaces p. 9 of the above-noted decision released January 16, 2012. A change has been made to para. 23 of the original decision; namely, the last sentence has been deleted in its entirety.