ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
RHONDA SHUTER, MICHAEL SHUTER and 1336304 ONTARIO INC. o/a ROCKY MOUNTAIN CHOCOLATE FACTORY
Plaintiffs
- and -
THE TORONTO DOMINION BANK, 858916 ONTARIO LIMITED, MEDALLION PROPERTIES INC. and CHRISTOPHER PANDELL
Defendants
AND BETWEEN:
858916 ONTARIO LIMITED
Plaintiff by Counterclaim
- and -
RHONDA SHUTER and ROCKY MOUNTAIN CHOCOLATE FACTORY
Defendants by Counterclaim
A. Patrick Wymes, for the Plaintiffs
Mark Hartman, for the Respondent, The Toronto Dominion Bank
HEARD at Toronto: December 18, 2007
JENNINGS J.: (Orally)
1The Defendant Bank moves to quash the Plaintiff’s appeal from the order of Master Haberman, dated September 6, 2007 requiring the Plaintiffs to pay $100,000.00 into Court as security for the Bank’s costs.
2On October 9, 2007, the Plaintiffs served two Notices of Appeal.
3The next day, the Bank’s solicitors wrote to the Plaintiff’s solicitor saying in part:
“In our view, the order appealed from is interlocutory and on that basis the said notice of appeal should have been delivered within seven days of the release of the reasons of Master Haberman. It follows therefore that in our view, the appeal is to a judge of the Superior Court of Justice and not the Divisional Court.
In the circumstances, we are unable to consent to an order granting leave to extend the time for service of your client’s notice of appeal and in fact will vehemently oppose such a motion.”
4There was no reply to that letter, but on October 19, 2007, the Plaintiff’s solicitors delivered an amended Notice of Appeal identical in content to the first two notices, but adding a paragraph following the listing of the grounds of appeal, in the following words:
“The basis for the Court of Appeal’s jurisdiction is that the order appealed from is a final order of a case management master: Section 19(1)(c) of the Courts of Justice Act, R.S.O. 1990, C.c.43 as amended. Leave to appeal is not required: Section 19(1)(c) of the Courts of Justice Act, R.S.O. 1990, C.c.43 as amended.
5In argument, the Plaintiff’s counsel stated that the reference to the Court of Appeal in his Notice of Appeal was because the appeal lay to the Court of Appeal. He indicated that the references to the Divisional Court in each of the three Notices of Appeal were made in error. Subsequently he agreed that the reference to the Court of Appeal was in error and that he had always intended to appeal to the Divisional Court.
6On October 23, 2007, counsel for the Bank advised counsel for the Plaintiffs that he would seek instructions to quash the appeal. This motion was then launched.
7The moving party submits that an order for security for costs is interlocutory, not final; and pursuant to Rule 62.01, an appeal is to a judge of the Superior Court to be brought within the time limits set out in Rule 62.01(2) and (3).
8The responding party submits that the effect of the order finally disposes of the issues because the evidence placed before the Master was that the Plaintiffs were impecunious and could not pay the security ordered. Counsel relied upon the well-known case of Hendrickson v. Kallio [1932] O.R. 657 (C.A.), as applied in R.S. v. R.H., 52 O.R. (3d) 152 (C.A.), for the proposition that orders finally disposing of the rights of parties are final orders.
9The Master dealt with the issues of the ability of the Plaintiffs to pay security in paragraphs 65-76 of her extensive reasons. She found that the individual plaintiffs had failed to establish that they were impecunious. That finding may well be the subject of an appeal, but in my opinion, that is not the issue before me.
10Orders for security for costs are, in all the jurisprudence to which I have been referred, treated as being interlocutory. See, eg., Valu Health Care Realty Inc. v. Zellers Inc. [2004] O.J. 4939 and Padmos v. Luminart Inc., [1996] O.J. 4549.
11Security for costs is provided for in Rule 56.01. The Rule itself provides that an order for security may be increased or decreased at any time, and on that account security orders cannot be considered final. See Western Technologies v. Cryptologic Inc. [2005] O.J. No. 1320.
12A black-letter reading of the order of the Master does not suggest it is final. What the Plaintiffs submit is not that the order is final, but rather that the effect on them in their present circumstances is final because it will prevent them from proceeding to trial. That issue is a matter for variation or appeal. It cannot be used as a factor in characterizing the nature of the order pronounced.
13The order from which the appeal is taken was interlocutory. This Court has no jurisdiction to entertain the appeal. There is no cross-motion asking for any relief from the Plaintiff’s failure to comply with the rules and accordingly, the motion to quash must succeed.
14The moving party also sought an order to quash the appeal as being devoid of merit. Because of my conclusion it is not necessary for me to deal with that ground.
15The Defendant Bank is entitled to its costs. Having had submissions from counsel, I fix those costs at $5,500, including the costs of $500 fixed by Kiteley J., and inclusive of disbursements and GST, payable forthwith.
JENNINGS J.
Date of Reasons for Judgment: December 18, 2007
Date of Release: December 20, 2007
COURT FILE NO.: 503/07
DATE: 20071218
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
RHONDA SHUTER, MICHAEL SHUTER and 1336304 ONTARIO INC. o/a ROCKY MOUNTAIN CHOCOLATE FACTORY
Plaintiffs
- and -
THE TORONTO DOMINION BANK, 858916 ONTARIO LIMITED, MEDALLION PROPERTIES INC. and CHRISTOPHER PANDELL
Defendants
- and -
858916 ONTARIO LIMITED
Plaintiff by Counterclaim
- and -
RHONDA SHUTER and ROCKY MOUNTAIN CHOCOLATE FACTORY
Defendants by Counterclaim
ORAL REASONS FOR JUDGMENT
JENNINGS J.
Date of Reasons for Judgment: December 18, 2007
Date of Release: December 20, 2007