Jun 14, 2021

Raising new issues on appeal

By Marco P. Falco
The Lawyer’s Daily View original

After a lower court proceeding, lawyers may be tempted to devise new arguments on appeal in the hope of having an unfavourable decision overturned. However, the legal threshold for advancing novel positions on appeal in Ontario remains high. 

Two decisions of the Ontario Court of Appeal, Kaiman v. Graham 2009 ONCA 77, and Whitby (Town) v. G & G 878996 LM Ltd. 2020 ONCA 654, show that the courts' hesitance to allow new appeal issues stems from a concern for fairness to the parties and the proper role of appellate judges. 

The high threshold 

A party seeking to raise new issues on appeal has a high onus. In order for the new issues to be considered, the appellant must show the court that all the facts necessary to address the point are before the court as fully as if the issue had been raised at trial. In other words, if a complete record is not before an appeal court, the court is in no position to assess its merits. Where, of course, the new issue raised is one of pure law, this burden necessarily eases, as the existence of a complete factual record is not as necessary: R. v. Brown [1993] 2 S.C.R. 918

The reluctance to admit new issues is based largely on a concern for fairness to the parties. As a 2008 decision of the Ontario Court of Appeal, 767269 Ontario Ltd. v. Ontario Energy Savings L.P. 2008 ONCA 350 makes clear," ... it is unfair to permit a new argument on appeal in relation to which evidence might have been led at trial had it been known the issue would be raised."

That being said, the decision to consider a new question is entirely within the appellate court's discretion. Although the threshold is onerous, there is no doubt that if it is in the interests of justice that the new issue be considered, it will be. This is particularly so where a party may not have had effective counsel at first instance or where there is a good explanation for the omission in the lower court. 

Two appeal decisions show the factors that go into the Ontario Court of Appeal's analysis. 

Why new questions may not be allowed on appeal 

Kaiman v. Graham involved a dispute over a family cottage. The appellants argued that, since the death of one of the cottage's owners, they were shut out of the use and enjoyment of the cottage. 

The appellants brought an action in the Ontario Superior Court alleging, among other things, that they had an equitable interest in the cottage property and a valid unsigned lease over the property. 

After losing at trial, the appellants advanced a new jurisdictional argument at the Court of Appeal, namely that the Residential Tenancies Act (RTA) applied to their case, such that the matter ought to have been adjudicated by the Landlord and Tenant Board, not the Superior Court. The appellants did not raise this argument at trial. 

The Court of Appeal declined to hear the issue of the applicability of the RTA. It held: 

  • The underlying pleadings illustrated that the majority of the relief requested at trial had "nothing to do with the RTA." To allow the appellants to raise this issue for the first time on appeal would run "contrary to the basic purpose of an appeal which is to correct trial error";
  • The issue of the application of the RTA to the cottage property was a question of mixed fact and law. The underlying factual record in the lower court was "sparse." If the respondents had known about the RTA issue at trial, they may have submitted a more complete trial record;
  • The appellants failed to give an explanation as to why they did not advance the RTA argument at trial. Trial counsel did not file an affidavit to explain why the RTA question was not pleaded or raised;
  • When raising the RTA issue, the appellants failed to undertake to indemnify the respondents from their costs at trial on a full indemnity basis, nor did they offer to pay the costs of the appeal. This weighed against allowing the appellants to raise this new issue; and
  • The likelihood of success on the RTA question was "by no means clear" and outweighed by the principle of finality in adjudication. In the words of the court, it would be unfair to the respondents" ... to have them undergo the expense of yet another hearing at first instance simply because a fresh lawyer on the case thought of a new argument that may or may not succeed."

Can new equitable claims be raised for first time on appeal?

Similar considerations went into the Court of Appeal's more recent decision, Whitby (Town) v. G & G 878996 LM Ltd. The context of G & G is what matters most: in this appeal, the appellant was seeking equitable relief for the first time. 

G & G involved an order of an application judge of the Superior Court under Ontario's Building Code Act in which the court ordered that the Town of Whitby could recover its full costs in repairing G & G's exposed wall following a fire at the premises. 

On appeal, G & G sought to raise the defence of equitable set-off, alleging that G & G had a claim against the Town of Whitby itself, such that any amounts owing by Whitby to G & G had to be "set off" against any liability G & G had to indemnify Whitby. 

After considering the pleading and the counsel's submissions at trial, the Court of Appeal held that the defence of equitable set-off could not be raised for the first time on appeal. 

Key to the court's analysis was that G & G was advancing an equitable defence, meaning the facts of the case and the underlying equities were essential to determining the defence's validity. If G & G wanted the equities to be considered, it should have raised the issue in the main application, where a complete factual record could have been considered by the lower court. 

The Court of Appeal held: 

This concern [i.e. of raising novel issues on appeal] is heightened in the present case where G&G is seeking an equitable remedy, and we have a wholly inadequate evidentiary record to assess the equities of the case. Further, G&G has not explained why equitable set-off was not raised on the application. It would be contrary to the interests of justice to allow G&G to introduce this new argument on appeal. 

Lessons of Kaiman and G & G 

Kaiman and G & Goffer discrete examples of when it is appropriate to raise new issues on appeal. 

The more the new issue raises pure questions of law, the more likely a factual record is not as relevant and the issue can be heard by the appellate court. This approach respects the proper role of appellate scrutiny in Canadian democracy, which is to identify legal error (and not necessarily to revisit factual findings) by the lower courts. 

On the other hand, where an issue, such as equitable relief, depends on a factual record, the appeal court will be reluctant to hear it for the first time. Appellate courts are generally not in the business of weighing evidence. This principle applies particularly where the party seeking to advance the issue has offered no explanation for why it was not brought forward in the lower court. 

In the end, the decision by the appeal court to entertain the new issue depends on the nature of the individual case. 

The court's duty to do what is in the "interests of justice" gives it broad discretion to balance the importance of the legal issue at stake against the prejudice to the opposing party in raising the issue for the first time. 

Marco P. Falco is an appellate litigator at Torkin Manes LLP in Toronto. His practice focuses on civil appeals and applications for judicial review.