Appellate jurisdiction over interrelated final and interlocutory orders (with a COVID practice point)

The Court of Appeal for Ontario recently commented on the jurisdiction of the court over interrelated final and interlocutory orders. In Martin v. 11037315 Canada Inc., 2021 ONCA 246, the court below set aside default judgment (an interlocutory order) and also ordered that certain property be listed for sale and the proceeds distributed in a particular manner (final orders). Justice Pepall held that it was at least arguable that the court had jurisdiction given the interrelationship between the issues engaged by the orders under appeal. The appellants were permitted to proceed with their motion to restore the appeal, which the Registrar appears to have dismissed for delay.

Background

Justice Pepall briefly outlined the background related to the jurisdictional issue. Essentially, the court below exercised its equitable jurisdiction to restore a homeowner to the equity she had in her home, which she had lost when the appellants (numbered corporations) obtained a foreclosure order by default judgment. There appears to be more to the story on how these numbered corporations came to foreclose against this individual’s home by default judgment. For purposes of the jurisdictional issues, there were essentially three categories of orders subject to the appeal:

1. An order setting aside the default judgment foreclosing on the home (interlocutory);
2. Orders for the sale of the home and for the payment of the proceeds so that the homeowner recovers her equity in the property, net of the mortgage and other obligations (final); and
3. An order dismissing the motion of one of the corporation to vary the orders based on a “new fact” (interlocutory).

The mix of final and interlocutory orders raises a potential jurisdictional issue, as the Court of Appeal generally does not have jurisdiction over appeals of interlocutory orders. Justice Pepall raised this issue with counsel, who seemed content to proceed in the Court of Appeal. As we have written about before, the consent of the parties cannot confer jurisdiction upon the Court of Appeal.

Application of Section 6(2) of the Courts of Justice Act

Section 6(2) of the Courts of Justice Act grants the Court of Appeal jurisdiction over an appeal that lies in the Divisional Court, provided there is a concurrent appeal in the Court of Appeal in the same proceeding. Where the Court of Appeal has jurisdiction under this provision, the power to exercise that jurisdiction is discretionary. This is a powerful tool to avoid a multiplicity of proceedings, but it has limits. Importantly, it does not empower the Court of Appeal to grant leave to appeal where leave to appeal is required from the Divisional Court. In other words, if the matter that would otherwise lie in the Divisional Court requires leave to appeal, the Court of Appeal cannot assume jurisdiction over that appeal unless and until the Divisional Court itself grants leave.

This limit is particularly significant where interlocutory orders are involved, such as in Martin. An appeal from an interlocutory order of a judge of the Superior Court of Justice lies to the Divisional Court only with leave of that court (s. 19(1)(b) of the Courts of Justice Act). Accordingly, the appellant must first seek and obtain leave to appeal from the Divisional Court before the appeal can be combined with an appeal in the same proceeding already in the Court of Appeal (see, for example, Mader v. South Easthope Mutual Insurance Company, 2014 ONCA 714, para. 55). We discuss this further in Sopinka and Gelowitz on the Conduct of an Appeal, Fourth Edition, §1.182.

There is a line of cases, referred to by Pepall J.A. in Martin, where the Court of Appeal held “that leave to appeal from an order of a judge of the Superior Court is not required where the issues in an appeal from an order having final and interlocutory aspects are so interrelated that leave would inevitably have been granted” (Martin, para. 13, citing Lax v. Lax, 2004 CanLII 15466 (Ont. C.A.)). In Lax, Feldman J.A. grounded this appellate jurisdiction in s. 6(2) (para. 9). Lax has been followed in several cases since, including Abbasbayli v. Fiera Foods Company, 2021 ONCA 95.

At first glance, Lax may seem inconsistent with the notion that the Divisional Court must grant leave to appeal before the Court of Appeal has jurisdiction to take up the appeal under s. 6(2). However, the Lax principle makes good sense and is likely reconcilable with the Courts of Justice Act. Indeed, a panel of the Court of Appeal can actually become the Divisional Court by reconstituting itself as that court, although this jurisdiction is rarely invoked and requires the permission of the Chief Justice of the Superior Court of Justice. See Sopinka & Gelowitz, §1.178.

In Martin, Pepall J.A. was satisfied that it was at least arguable that the Court of Appeal has jurisdiction over the appeal, and she allowed the motion to set aside the dismissal order to proceed.

Additional COVID practice point

This case raises an additional practice point during the COVID-19 pandemic. Formal orders had not been taken out in the superior court, as the application judge dispensed with formal typed orders given the pandemic. Instead, he determined that his endorsements were deemed to be orders.

The problem this raises in an appellate court is that the appeal is from the order, not the reasons. The formal order is the basis for the appeal, not a formality, and must be before the appellate court. Justice Pepall noted the statement on the Court of Appeal’s website that an “issued and entered order is required for the purpose of an appeal to the Court of Appeal for Ontario in civil proceedings” (para. 10). She recommended that registry staff advise the appellants that they should obtain an issued and entered order before the hearing of the motion. This is good advice for us all.