COURT FILE NO.: 03-BN-6525

DATE: 20040322

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

Gurdev Sajjan and Mohinder Sajjan

Applicants

• and -

Baljit Sajjan

Respondent

• and -

Manmohan Sajjan

Respondent

Counsel: Mr. H. Auklah, for the Applicants Ms. K. Cunningham-McBean, for the Respondent Baljit Sajjan Mr. M. Mangat, for the Respondent Manmohan Sajjan

HEARD: February 19, 25, 2004

REASONS FOR JUDGMENT

WEIN J.

1The applicants, Gurdev Sajjan and Mohinder Sajjan, seek leave to appeal to the Divisional Court under Section 19(1)(b) of the Courts of Justice Act, from the order of Justice Belleghem dated November 14, 2003 regarding the interest they claim in the matrimonial home of their son and his wife.

2Baljit Sajjan and her husband, Manmohan Sajjan, were married in 1994. They separated on April 13, 2003. Manmohan Sajjan is currently incarcerated, facing criminal charges for assaulting his wife. Their two children, now ages eight and seven, reside with Baljit in the matrimonial home.

3The matrimonial home was purchased on August 27, 2002. Baljit's in-laws, Gurdev and Mohinder Sajjan, brought an Application to claim a beneficial interest in the home.

4After a number of adjournments, the matter was heard by Justice Belleghem on November 14. All parties had notice. Counsel for Baljit Sajjan was present and made submissions. Mr. Mangat was present as an agent for Manmohan Sajjan who had not yet retained him, although he arrived late. Mr. Kaler, who was at the time the solicitor of record for Gurdev and Mohinder Sajjan, did not appear.

5The Court ordered;

1. That this Application be converted into an action.
2. That the applicant by Counter-Application, Baljit Sajjan, will deliver a Statement of Claim within 20 days, and the respondents Gurdev, Mohinder, and Manmohan Sajjan will deliver Defences and Counterclaims (if any) within 10 days thereafter (with or without Legal Aid) and the applicant by Counter-Application, Baljit Sajjan, will deliver a reply within 5 days thereafter.
3. That the parties will exchange Affidavits of Documents and usual discoveries will apply.
4. That a Pre-Trial date may be obtained once pleadings are exchanged.
5. That costs to date thereon thrown away are fixed at $2,500.00 payable by Gurdev and Mohinder Sajjan directly to Ms. Cunningham-McBean, solicitor for Baljit Sajjan, within 10 days. Baljit Sajjan may move ex parte against them for relief sought in the Counter-Application by way of motion in the action on the basis of their default.
6. That costs to date thereon are fixed at $1,000.00 payable by Manmohan Sajjan directly to Ms. Cunningham-McBean, solicitor for Baljit Sajjan, on the same terms.
7. That approval as to form and content of this order is dispensed with.

6On the failure of the respondents to take any formal action in compliance, counsel for the Baljit Sajjan moved ex parte, in accordance with the terms of Justice Belleghem's order. The Court ordered:

1. That Gurdev and Mohinder Sajjan do not have and are not entitled to a beneficial interest in the property municipally known as 9 Heartleaf Crescent located in Brampton, Ontario, and legally described as Lot 45, on Plan 43M-1439 in Brampton, Ontario, which is further described in Instrument No. PR303710 registered in the Land Registry Office in Peel on August 27, 2002 and bears the Property Identification No. 14253-0697 LT (Herein referred to as the "property").
2. That the 30% interest in the above-mentioned property currently registered in the name of Gurdev and Mohinder Sajjan is held in trust by them for the benefit of the Plaintiff, Baljit Sajjan, and her husband, the defendant, Manmohan Sajjan.
3. That an order be made vesting exclusive title in the above-mentioned property in the sole name of Baljit Sajjan.
4. That the Registrar of the Land Titles Office of Peel is to register title to the above-mentioned property in the sole name of Baljit Sajjan.
5. That the consent and signature of Gurdev, Mohinder, and Manmohan Sajjan is dispensed with respect to the registration of title in the above-mentioned property in the sole name of Baljit Sajjan.
6. Costs fixed at $500.00.

7The Applicants, Gurdev and Mohinder Sajjan, moved to set aside the November order of Justice Belleghem, presumably under Rule 37.14(1)(b), on the basis that they failed to appear on the motion through accident, mistake, or insufficient notice. The Rule requires that such a motion, to set aside an order on this basis, be brought by a Notice of Motion served "forthwith" after the order comes to the person's attention, on the first available hearing date at least three days later. Under Rule 37.14(4) the motion may be made either to the judge who made it or any other judge of this court.

8The motion to set aside the December 1 order is presumably brought pursuant to Rule 37.14(1)(a) on the basis that the order was obtained on motion without notice.

9On February 19, 2004, the date on which I originally heard this motion, none of the counsel suggested that the December 1 order was a final order that could only be varied by the Court of Appeal under s. 6(1)(b) of the Courts of Justice Act. Subsequently, on February 25, when asked to clarify her position on that procedural point, Ms. Cunningham-McBean, on behalf of Baljit Sajjan, argued that that was the correct route. None of the counsel had researched the issue, despite the delay between the issuing of the order and the motion to vary.

10The case law is not entirely clear concerning the scope of Rule 37.14(1). In Warger v. Nudel, [1989] O.J. No. 1880 (H.C.J.), it was held that where an order was made after an adjournment had been refused, the order was not an ex parte one and a motion against it had to be by way of an appeal. An order made ex parte in furtherance of an order on notice was held not to be a true ex parte order. Subsequently, in Rolling Stone Haulage Ltd. v. Wilkinson, Tyrell, McKay Insurance Brokers & Consultants Ltd., [1997] O.J. No. 4018 (Div. Ct.), it was held that an order made on a motion without notice pursuant to leave granted by an order made on a motion with notice is still an "order obtained on a motion without notice" as contemplated by Rule 37.14(1). The court noted that the primary policy of the Rules of Civil Procedure is to facilitate the expeditious resolution of civil disputes on the merits.

11In Vesely v. Dietrich (1998), 39 O.R. (3d) 541, the Divisional Court distinguished Warger on the facts of the case because there was purported compliance with the underlying order as opposed to no compliance. The Court held that unless the moving party is precisely within the four corners of the order allowing the without notice motion, the reasoning in Warger cannot apply. Without expressly disagreeing with Warger, the Court endorsed the principle that the practice of granting leave to move for substantial relief without notice, now commonplace, should be exercised sparingly. Similarly, in Zesta Engineering v. Thermal Energetics Ltd., [2002] O.J. No. 4523 (S.C.J.), it was held that there had been reported compliance such that the principles in Rolling Stone are applicable and the motion to set aside could be dealt with pursuant to Rule 37.14(1)(a).

12In this case I am satisfied that the motion is properly before me under the provisions of Rule 37.14. The order of November 14 was not formulated as or intended to be a final order, and the subsequent events relating to the December 1 order do not bring it within the parameters of Warger, assuming Warger to be correctly decided on the particular facts of that case.

Factual Background

13It is clear from the affidavit material filed that real factual disputes exist concerning the intentions of the parties at the time of the initial financing of the home. The matter is complicated by subsequent financing that the applicants provided at the time that Manmohan Sajjan required bail.

14Prior to the hearing on November 14, the matter had been listed for hearing or to be spoken to on at least five court dates. Apparently, some tensions had arisen amongst counsel because of the delays. The Application and Counter-Application were eventually set down for October 24, 2003, but had to be further adjourned, because Manmohan Sajjan, who was still in custody, had just been approved to receive Legal Aid. The matter was adjourned to November 14.

15On November 11, Mr. Mangat advised counsel for the applicants that he was in the process of being retained. He asked for an adjournment of the November 14 date. Counsel for the applicants agreed, but counsel for the respondent, Baljit Sajjan, did not agree. Mr. Mangat was to appear to request the adjournment.

16On November 14, however, the matter was unconfirmed or incorrectly confirmed and did not appear on the formal list of cases to be heard in motions court. It was dealt with by Justice Belleghem at the request of Ms. Cunningham –McBean, who is counsel for Baljit Sajjan. Affidavit material filed by Baljit Sajjan indicates that Mr. Mangat and Mr. Kaler were present in court when the matter was traversed to be heard by Justice Belleghem. The matter was set down for later in the day, so that the materials could be reviewed. Although delayed twice to awaits the arrival of Mr. Kaler, he did not appear. Mr. Kaler's position, but the matter should proceed to trial, was presented through Mr. Mangat.

17Mr. Kaler, counsel for the applicants, learned about the order later that day when he saw Ms. Cunningham-McBean in the halls of the courthouse. He advised her that he would be appealing and confirmed his intention in writing on November 17. Ms. Cunningham-McBean acknowledged receipt of the letter. The tone of these letters is indicative of the acrimony that has arisen between counsel and may in part explain why the case has become mired in procedural defects rather than being determined on the merits.

18On November 25, 2003, Ms. Cunningham-McBean had a Statement of Claim issued and served. On December 1, 2003, without further discussing the matter with counsel, who had indicated an intention to appeal, Ms. Cunningham- McBean proceeded with the ex parte motion.

19On December 4, counsel for the applicants served the Statement of Defense and Counterclaim and further advise that the Notice of Appeal would be served shortly. There is no evidence that Ms. Cunningham-McBean advised the other counsel that she had proceeded with the ex parte motion. Rather, on December 9, she filed the Defence to the Counterclaim, accompanied by a letter, which enigmatically suggests that the Defense to the Counterclaim is not necessary "in light of your client's failure to pay costs and His Honor' s orders".

20Counsel for the applicants responded with a letter indicating "in the event that you bring an ex parte motion (knowing well enough that the appeal is underway), we will be left with no option but to make you a party, and seek costs against you personally". It was not until December 18 that Ms. Cunningham-McBean advised that she hadn't obtained an ex parte order on December 1.

Ruling

21The guiding principle in this case is that a trial on the merits should be facilitated. I am satisfied that the December 1 order can be set aside jurisdictionally under the provisions of Rule 37.14(1)(a). I am further satisfied that it ought to be set aside in this case. Although the applicants did not move expeditiously to set that order aside, or to launch an appeal, they had advised of their intention to do so and that fact should have been made known to the court before the ex parte order was sought.

22With respect to the setting aside of the November 14 order, under Rule 37.14(1)(b), the motion to set aside must be brought forthwith. I am not satisfied this was done in this case. It is apparent to me from the actions taken by the parties before the existence of the December 1 order became known that the parties were proceeding to have the issues dealt with on the merits in accordance with the terms of Justice Belleghem's November 14 order. It is obvious that any review of that order would likely result in the same procedure being imposed. In all of the circumstances, the motion to set aside that order must be denied.

23Accordingly, the order of Justice Belleghem dated December 1, 2003, is set aside. The order dated November 14, 2003, is affirmed. The schedule for filing will apply from the date of release of this order.

Costs

24If counsel are unable to resolve the issue of costs, a further appointment may be taken out before me through the office of the trial coordinator.