The recent case of The Catalyst Capital Group Inc. v VimpelCom Ltd., 2019 ONCA 354 [Catalyst], serves as a reminder that a court’s finding will not be considered obiter simply because there was another sufficient basis for the court’s decision.
The Rule of Precedent
The rule of precedent requires that courts render decisions that are consistent with the previous decisions of higher courts [Canada (AG) v Bedford, 2012 ONCA 186].
There are several well-known rationales for the rule: it promotes consistency, certainty and practicability in the law, sound judicial administration, and it enhances the legitimacy and acceptability of the common law [David Polowin Real Estate Ltd. v Dominion of Canada General Insurance Co., 2005 ONCA 21093].
Ratio vs Obiter
The traditional dichotomy of ratio decidendi (“ratio”) and obiter dicta (“obiter”) is important for the scope of the rule. Only the ratio is binding on a subsequent court. Ratio refers to the process of judicial reasoning that was necessary in order for the court to reach a result on the issues that were presented to it for a decision. All other comments are obiter, which may have persuasive value but are not binding [Canada (AG) v Bedford].
The division between ratio and obiter is often nuanced. In R v Henry, the Supreme Court of Canada emphasized that the ratio of a case may be narrow or broad depending on what the case decided. In R v Prokofiew, the Ontario Court of Appeal clarified this point by noting the difference between factual issues and legal propositions:
“In Henry, at para. 53, Binnie J. explains that one must ask, “What does the case actually decide?” Some cases decide only a narrow point in a specific factual context. Other cases – including the vast majority of Supreme Court of Canada decisions – decide broader legal propositions and, in the course of doing so, set out legal analyses that have application beyond the facts of the particular case.”
Supreme Court of Canada Decisions
The Supreme Court of Canada once held the entirety of its majority judgments to be binding, no matter how incidental the statement was to the main point of the case or how far it was removed from the dispositive facts and principles of law [R v Sellars; Duggan v Durham Region Non-Profit Housing Corporation].
The Supreme Court of Canada retreated from this expansive approach in R v Henry, confirming that some obiter, even in a Supreme Court of Canada decision, is not binding. In R v Prokofiew, the Ontario Court of Appeal clarified R v Henry by distinguishing between two types of obiter in Supreme Court of Canada decisions: obiter that is integral to the analysis underlying the ratio of the judgment is binding, while obiter that is incidental or collateral to that analysis is not.
The Ontario Court of Appeal further held that it is best to begin from the premise that all obiter from the Supreme Court of Canada should be followed, and to move away from that premise only where a reading of the relevant judgment provides a cogent reason for not applying that obiter [R v Prokofiew].
Two Sufficient Grounds for a Decision Are Not Obiter
In Catalyst, the Ontario Court of Appeal recently considered the definition of obiter in the context of an argument about issue estoppel.
The Ontario Court of Appeal’s decision reiterated that Canadian courts have consistently rejected the argument that a judicial finding is merely collateral because there was another sufficient basis for the judge’s decision. The Court held that to hold otherwise would lead to absurd consequences, because it would make the applicability of issue estoppel dependant on the order in which the court chose to address issues in its reasons.
The Court of Appeal approvingly quoted the statement of Baron Bramwell from a 1889 House of Lords decision:
“Of course it is in a sense not necessary that I should express an opinion on this as the ground I have first mentioned, in my opinion, disposes of the case. But if, instead of mentioning that ground first, I had mentioned the one I am now dealing with, it would, on the same reasoning, be unnecessary to mention that. What I am saying is not obiter, not a needless expression of opinion on a matter not relevant to the decision. There are two answers to the plaintiff; and I decide against him on both; on one as much as on the other” [Membery v The Great Western Railway Co., (1889) 14 App. Cas. 179 (H.L.)].