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Appeals - Laments, Musings and Ideas on the Final v Interlocutory Problem

. Airport Business Park v. Huszti Holdings

In Airport Business Park v. Huszti Holdings (Div Ct, 2021) the Divisional Court gets philosophical about rulings and their finality, and appeals:
[15] In 1974, in Smith v. Tellier, in a similar context, the Court of Appeal held that a trial decision is “in a sense interlocutory” and “does not possess the element of absolute finality” until appeal rights have been exhausted.[2] The Supreme Court of Canada reversed this decision, but on a narrow basis that qualified but did not displace this principle:
An order which is subject to appeal cannot be said to be effective for all purposes, even in respect of third parties, before the time for appeal has run. On the other hand, the fact that the time for appeal has not yet run will not invariably stay the full effectiveness of the order, even as against third parties if there is only an ephemeral prospect of appeal.[3]
[16] At the time of Smith v. Tellier, there was an automatic stay pending appeal. An order that is stayed is, by definition, not “fully effective” so long as the stay is operating. This is not the case today. The order of Heeney RSJ was not subject to an automatic stay if an appeal was brought. When the order was appealed, no stay order was sought or obtained. Thus, the application judge was correct in finding that the order of Heeney RSJ was effective in accordance with its terms as of the date it was registered on title, and this effectiveness was not impaired as a result of a stay order.[4] Does this finding displace the principle stated in Smith v. Tellier?

[17] The appellant argues that it did not receive what it bargained for – the order of Heeney RSJ could have been overturned on appeal, and it could not deal with its property free and clear of the Easement so long as the removal of the Easement was still contingent. That is the logic of Smith v. Tellier: the decision of Heeney RSJ was “in some sense interlocutory” until appeal rights had been extinguished. The Supreme Court of Canada’s decision carved out a limited exception to this principle: where “the prospect of an appeal” was ephemeral. “The prospect of an appeal” is not a matter of assessing the underlying merits of an appeal, but rather assessing whether anyone will bring an appeal. In Smith v. Tellier, no one opposed the original court order, and there was no reason to imagine that anyone would appeal it. No one did. In the case at bar, the application before Heeney RSJ was contested vigorously by sophisticated parties. The “prospect of appeal” was not “ephemeral”. And the appeal was, in fact, brought. Even when the Court of Appeal dismissed the appeal in a brief endorsement, the discharge order remained “in some sense interlocutory” pending a possible motion for leave to appeal to the Supreme Court of Canada.

[18] The respondent argued that the elimination of a stay pending appeal is a basis for distinguishing Smith v. Tellier, and pointed to a BC trial decision, Hydro Fuels Inc. v. Mid-Pacific Services Inc., in support of this argument. Hydro Fuels does make this distinction, but it is rather difficult to discern the effect of the finding in that case.[5] The case seems to have concerned a contested right of first refusal that the court concluded should bind title, so the effect of the decision was to uphold a defect in title, not to remove it. Thus, the underlying principle in Smith v. Tellier does not appear to have been engaged in Hydro Fuels. If Hydro Fuels cannot be distinguished in this way then, with respect, I would decline to follow it: Smith v. Tellier is binding authority on this court and the underlying mischief to which it is addressed is not affected by a change in the Rules respecting automatic stays pending appeal.

[19] To be clear, Smith v. Tellier must be read in its very specific context: it holds that a “final” decision from the Superior Court is “in some sense interlocutory” pending extinction of appeal rights in matters concerning title to land where the parties have bargained for extinction of a blot on title, without contingency. Smith v. Tellier does not impugn the final effect of court orders generally, pending appeal, in the absence of a stay. Orders are effective from the time that they are made and do not have to await the end of all appeals or potential appeals to come into effect, and Smith v. Tellier did not hold otherwise. However, there remains a contingency (that the decision may be overturned on appeal) that leaves parties at risk until appeal rights have run. In title matters, parties are entitled to, and do, allocate risk and the price of assuming risk.
. 2099082 Ontario Limited v. Varcon

In 2099082 Ontario Limited v. Varcon (Ont CA, 2020) the Court of Appeal resolved the final v interlocutory issue with a novel approach (ie. they gave up trying to distinguish the issues and heard them all together):
[17] This is a case in which the appeals from the final and interlocutory aspects of the motion judge’s order “are so interrelated, we [are] able to proceed to hear the two appeals together in accordance with s. 6(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43, on the basis that once the first issue was before this court, leave would inevitably have been granted on the second”: Lax v. Lax (2004), 2004 CanLII 15466 (ON CA), 70 O.R. (3d) 520 (C.A.), at para. 9; see also Azzeh v. Legendre, 2017 ONCA 385, 135 O.R. (3d) 721, at para. 26. Accordingly, this is a case where both appeals should be heard together by this court.
. Shinder v Shinder

In Shinder v Shinder (Ont CA, 2017) the Court of Appeal laments the difficulty in distinguishing final from interlocutory Orders, as the distinction conditions the appropriate appeal route, and calls for legislative reform on the issue:
[2] Neil Shinder now brings a motion for directions in which he seeks an order “that the motions for leave to appeal to the Divisional Court brought by the Respondent/Appellant and the Respondent, Sol Shinder, be heard by the Court of Appeal”. Randi Shinder opposes that relief and brings a cross-motion to adjourn the hearing of the appeal and for an extension of time to file her responding materials.

[3] There are two problems with the relief that the appellant seeks. First, this court does not have jurisdiction to determine a motion for leave to appeal that is brought before the Divisional Court. Section 6(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43 permits this court to hear an appeal that lies to the Divisional Court, but only where there is an appeal in the same proceeding in this court. However, an appeal does not lie to the Divisional Court unless and until leave to appeal has been granted: Waldman v. Thomson Reuters Canada Ltd., 2015 ONCA 53 (CanLII).

[4] Second, even if I had jurisdiction to transfer the matter from the Divisional Court to this court, in order to make that order, I would have to decide that the order in question is a final order and properly appealed to this court. In my view, it is not appropriate for a motions judge to make that determination. That issue, which is squarely raised by this motion, is a question of jurisdiction and that question is properly determined by the panel hearing the appeal or, alternatively, by a panel on a motion to quash, if such a motion is brought by the respondent.

[5] I have been referred to the endorsement of Epstein J.A. in Klasios v. Klasios, (May 1, 2015), Toronto, M44974 (Ont. C.A.). It is argued that that decision concluded that a motions judge could determine a jurisdiction issue. I do not agree, at least in respect of the issue that is presented here. Justice Epstein was addressing whether an extension of time to file a Notice of Appeal should be granted. Because of certain concessions that appear to have been made by counsel in that case, Epstein J.A. concluded that the order in question was clearly interlocutory and thus an extension of time to appeal ought not to be granted since the matter was not properly before this court. I note that Epstein J.A. said, at the outset of her endorsement at para. 2: “I do not have jurisdiction to decide the jurisdiction question”.

[6] In reaching the conclusion that I have, I am mindful of the costs that parties can incur when confusion arises over the proper appeal route. This is not the first time that parties have had to launch proceedings both in this court and in the Divisional Court because of the uncertainty over whether an order is final or interlocutory. This problem is inherent when the appeal route depends on a distinction between final and interlocutory orders. It is a problem that has plagued both judges and lawyers for a long time and which was aptly captured by Laskin J.A. in Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc., 2007 ONCA 497 (CanLII), 87 O.R. (3d) 443, where he said, at para. 36:
The distinction between final and interlocutory orders bedevils this court. Far too much ink has been spilled over the pages of the Ontario Reports, grappling with this distinction. Even when the parties themselves do not raise the issue, the court itself often feels compelled to do so — as it did in this case — because the court's jurisdiction to hear an appeal turns on the distinction: final orders are appealable as of right to this court; interlocutory orders are not.
[7] The problem also drew the attention of the Honourable Colter Osborne in his Civil Justice Reform Project. He recommended that the Civil Rules Committee consider the issue and, “hopefully”, make recommendations to the Attorney General for a legislative amendment to the Courts of Justice Act “that would jettison the final/interlocutory distinction” (Honourable Coulter A. Osborne, Civil Justice Reform Project: Summary of Findings & Recommendations (November 2007), at p. 105). That has not happened.

[8] Unless the problem is addressed in some such fashion, this situation will continue to occur and parties will be put to avoidable expense. None of that changes the fact, however, that it is a panel of this court that must determine the jurisdiction issue, not a motions judge. The decision of a motions judge is not binding on a panel: Courts of Justice Act, s. 7(5).
. 1476335 Ontario Inc. v. Frezza

In 1476335 Ontario Inc. v. Frezza (Ont CA, 2021) the Court of Appeal (Brown JA) takes the oppourtunity to suggest legislative amendments to end to 'interlocutory-final' conundrum:
[15] I conclude by observing that one of the great on-going failures of the Ontario civil justice system is the confusion entrenched in the Courts of Justice Act, R.S.O. 1990, c. C.43 concerning appeal routes from orders made by judges of the Superior Court of Justice: Does the appeal lie with leave to the Divisional Court or as of right to this court? Such confusion inflicts unnecessary legal costs on parties, delays the resolution of appeals on their merits and, as this case illustrates, sows uncertainty about how a party can attempt to protect its rights pending an appeal.

[16] There is absolutely no excuse for such confusion to continue. Simple “bright line” appeal route solutions are available. I would hope that at some point in the near future the Ontario Legislature will awake and address this far-too-long-outstanding stain on our civil justice system. In my respectful view, the Legislature needs to enact legislation that creates an unambiguous “bright line” explaining when an appeal lies to the Divisional Court and when it lies to the Court of Appeal for Ontario. The current final/interlocutory dividing line is an expensive, time-wasting anachronism. Implementing a “bright line” solution is not a hard task: all it needs is a bit of creativity, political will, and concern for the health of our ailing civil justice system.




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