CITATION: Polmat Group Inc. v. E Ring Corp., 2015 ONSC 1233
COURT FILE NO.: DC-14-129001
DATE: 20150224
ONTARIO
SUPERIOR COURT OF JUSTICE
(DIVISIONAL COURT)
B E T W E E N:
POLMAT GROUP INC.
Mr. H.W. Reininger, for the Plaintiff
Plaintiff
- and -
E RING CORP. INVESTMENTS LLC (IN TRUST), DAVE BENSON AKA DAVID BENSON, 2203746 ONTARIO INC. AND MACDONALD SAGER MANIS LLP
Mr. D. Rose, for the defendants E Ring Corp. Investments LLC (in trust), Dave Benson aka David Benson and 2203746 Ontario Inc.
No one appearing for the defendant, MacDonald Sager Manis LLP
Defendants
HEARD: February 10, 2015
ENDORSEMENT
MACKENZIE J.
Nature of the Proceeding
[1] The plaintiff brings this motion seeking to dismiss the defendants’ appeal from the orders of: Snowie J., dated December 4, 2014 (the Snowie Order) and Price J., dated December 18, 2014 (the Price Order), setting aside the certificate of stay obtained by the defendants and directing the enforcement of a writ of possession obtained by the plaintiff in relation to the defendant David Benson’s occupancy of the subject premises.
[2] The defendants oppose the relief sought by the plaintiff in the motion and seek dismissal of such motion.
Background
[3] In the action out of which the plaintiff’s motion arises, the plaintiff seeks damages for breach of an Agreement of Purchase and Sale entered into between the plaintiff, as vendor, and the defendants as purchasers of the plaintiff’s real property (the Property). The Agreement of Purchase and Sale had a scheduled completion date of August 15, 2013.
[4] On July 20, 2012, being the date of the Agreement of Purchase and Sale, the plaintiff and the defendant, David Benson, entered into a lease for the Property for a one-year term which was to end on the scheduled closing date of August 15, 2013. This lease provided for a rental payment of $4,000 per month, plus all utilities. The purchase and sale transaction was not completed because of a dispute between the plaintiff as vendor and the Benson defendants, as purchasers, as to whether or not the plaintiff would take back a mortgage on closing.
[5] The defendant David Benson stopped paying the stipulated rent after September 15, 2013, but remained in possession of the Property, and declined to vacate same upon notice.
[6] The plaintiff then moved for an order requiring David Benson to vacate the Property. This motion was heard by Mossip J. on January 24, 2014. She made an order of even date requiring David Benson to pay the stipulated rent of $4,000 per month by providing post-dated cheques every six months payable to the plaintiff (the Mossip Order). It is noteworthy that the Mossip Order was obtained on consent and has never been appealed.
[7] David Benson thereupon paid the stipulated rent to the plaintiff until August 2014 when the second mortgagee of the Property served a notice of attornment of rents on him on August 6, 2014. On or about August 23, 2014, counsel for the mortgagee by letter to counsel for David Benson informed that the attornment of rents was being withdrawn and returned rent cheques for August and September of 2014.
[8] On November 3 and November 10, 2014, counsel for the plaintiff forwarded further letters to counsel for David Benson demanding payment of any rent outstanding at that time. In the event, no rent was received nor paid and plaintiff brought a motion to compel payment of that rent.
[9] The plaintiff’s motion to compel payment of rent was heard on December 4, 2014, before Snowie J. (the Snowie Order) and directed that David Benson comply with the Mossip Order, but adjourned the balance of the motion at the request of David Benson to December 18, 2014. At the hearing before Snowie J. on December 4, 2014, submissions were made by counsel and by the defendant, David Benson, who appeared in person but no evidence was tendered or proffered on such motion. The substance of the endorsement by Snowie J. dated December 4, 2014, and resulting order was that David Benson was to pay the outstanding arrears of $16,000 in rent within five days and in default, the pleading of the defendants in the action would be struck without further notice.
[10] David Benson thereupon filed a Notice of Appeal to the Divisional Court from the Snowie Order on the basis that the appeal was being made from a final order by Snowie J.
[11] On December 18, 2014, the return date of the motion before Price J., David Benson had retained new counsel (his present counsel, Mr. Rose) who appeared and made submissions.
[12] The Price Order provided, among other things, that David Benson was to vacate the Property and deliver vacant possession thereof to the plaintiff and the plaintiff was granted leave to obtain and enforce a writ of possession in relation to the Property.
[13] On December 18, 2014, being the return date of the motion before Price J., the defendants through counsel served an Amended Notice of Appeal in which it was sought to appeal the Snowie and Price orders. On the same date, the defendant served an Amended Appellant Certificate respecting evidence. The Amended Appellant Certificate provided that included in the evidence required for the hearing of the appeal were transcripts of the motions heard on December 4 and December 18, 2014. It is not in dispute that no oral evidence was heard on those dates but only submissions.
[14] The defendants take the position as set out in the Amended Notice of Appeal that the decisions subject to appeal were interlocutory and accordingly leave to appeal to the Divisional Court was not required. The defendants’ Certificate of Ordering the Transcripts for Appeal dated December 9, 2014, stayed the trial proceedings before Snowie J. on December 4, 2014 were to be directed to the Court of Appeal and not the Divisional Court. This destination is now acknowledged to be an inadvertent error in nomenclature.
[15] The plaintiff through counsel informed the defendants through their counsel by letter dated January 6, 2015, that there was no stay of the order for possession notwithstanding the filing of the Amended Notices of Appeal and then as of the date of this hearing, February 10, 2015, the defendants have not sought any order for a stay. Notwithstanding that there was no order for a stay, the defendants have issued a Certificate of Stay which resulted in the sheriff not proceeding to enforce the writ of possession and deliver vacant possession of the Property to the plaintiff. There is also no question that the appeal has not been perfected as of the date of hearing, the plaintiff’s motion, namely February 10, 2015.
The Issues
[16] Was the order of Snowie J. dated December 4th final or interlocutory in nature? Does the filing of the Amended Notices of Appeal, effect a stay of the Price Order directing enforcement of a Writ of Possession against David Benson?
Analysis
The Plaintiffs’ Position
[17] The plaintiff submits that filing of a Notice of Appeal has the effect of only staying an order of payment of money and any other order subject to appeal must be stayed on motion to the court to which the appeal has been taken. In addition, the plaintiff contends there is no stay of an order of or judgment for possession.
[18] The plaintiff relies on Rule 63.01(1) and Rule 63.02(1) of the Rules of Civil Procedure and the case of the Toronto Dominion Bank v. Charette (2003), 33 C.P.C. (5th) 21 (Ont. C.A.). The plaintiff further contends that the Snowie Order is interlocutory in nature as it simply orders compliance with the prior Mossip Order which, as noted, was a consent order and has never been appealed.
[19] The plaintiff further submits that Rule 61.09(1) of the Rules of Civil Procedure provides an appeal must be perfected within 30 days of the date of the order appealed from if no transcript of evidence is required. In this regard, the plaintiff contends that submissions made by a party and/or his counsel do not constitute evidence and accordingly, there is no evidence or a transcription thereof available nor applicable in the orders appealed from.
[20] Finally, the plaintiff submits that it is open to a judge of the Divisional Court to quash an appeal that is devoid of merit. In support of this proposition, counsel refers to sections 21(3) and 134(3) of the Courts of Justice Act and the case of Lesyork Holdings Ltd. v. Munden Acres Ltd., [1976] 13 O.R. (2d) 430 (Ont. C.A.).
The Defendants’ Position
[21] The filing of a Notice of Appeal stays an interlocutory or final order under the Residential Tenancies Act, 2006, until the disposition of the appeal any provision of the order that declares a tenancy agreement as terminated or evicting a person. In support of this proposition, counsel refers to Rule 63.01(3)(a) of the Rules of Civil Procedure.
[22] Counsel submits that the Snowie Order is a final order as it struck out the defendants’ pleadings. In support of this proposition, counsel cites Four Seasons Travel Ltd. v. Laker Airways Ltd. et al. (1975), 6 O.R. (2d) 453 (Div. Crt.).
[23] Counsel further contends that Rule 61.09(1)(b) of the Rules of Civil Procedure provides for an appeal to be perfected within 60 days after receiving notice that the evidence has been transcribed. In this regard, counsel indicates that a transcription of the December 4, 2014, proceedings before Snowie J. has not been completed though it has been ordered. Finally, the defendants argue that a single judge of the Divisional Court may only quash an appeal where it is manifestly devoid of merit and the power of the court to quash an appeal where it manifestly devoid of merit will seldom be exercised. In support of this proposition, counsel cites the case of Schmidt v. Toronto-Dominion Bank, [1995] O.J. No. 1604 (Ont. C.A.).
Discussion
Whether the Snowie Order is Final or Interlocutory
[24] The defendants’ characterization of the Snowie Order as final and not interlocutory is based on the stipulation therein that in default of payment of the arrears of rent, the defendants’ pleadings will be struck and thus dispose of the matter.
[25] There is some support for this proposition based on the Four Seasons Travel Ltd. case, above. In that case, the order under appeal struck out a Statement of Defence and was characterized as a final and not an interlocutory order on the basis that it finally disposed of the issues raised in the Statement of Defence. In this case, the order striking pleadings of the defendants in consequence of a failure to pay the arrears owing under the Mossip Order does finally dispose of the issue, from the viewpoint of the defendants.
[26] In contrast to this proposition, the plaintiff submits the Snowie Order is interlocutory in nature since it was in aid of the Mossip Order in that it ordered compliance with the Mossip Order. As noted above, the Mossip Order was made on consent and never appealed by the defendants; in this regard, the plaintiff refers to section 19(1)()b) of the Courts of Justice Act.
[27] The significance of the distinction between final or interlocutory in dealing with appellate matters in the Divisional Court depends on whether the decision in appeal finally disposes of the matter or does not finally dispose of the matter; however, this is subject to the specific provisions of the rules of practice dealings with stays of enforcement pending appeal of a decision as set out in Rule 63.
[28] The basic concept in Rule 63 is that a Notice of Appeal from an interlocutory or a final order stays pending the disposition of the appeal a provision for the order of payment of money except for provisions awarding support or enforcing a support order or a default judgment for the payment of money: see 63.01(2). Rule 63.01(3), however, provides as follows:
The delivery of a notice of appeal from an interlocutory or a final order made under the Residential Tenancies Act, 2006 stays, until the disposition of the appeal, any provision of the order,
(a) declaring a tenancy agreement terminated or evicting a person and …
[29] A court has jurisdiction to lift a stay as set out in Rule 63.01(5) as follows:
A judge of the court to whom the appeal is taken may order, on such terms as are just, that the stay provided by (1), (3) or (4) does not apply.
[30] The plaintiff cites the Toronto-Dominion Bank v. Charette case, above, as authority for the proposition that there is no stay of an order for possession.
[31] In Toronto-Dominion Bank v. Charette, the issue arose in the context of a mortgagee’s action for enforcement by way of obtaining a writ of possession after trial; reference is made in the decision to Rule 63.01(3). On the facts of the Toronto-Dominion Bank v. Charette the court noted that the bank and the defaulting mortgagor in possession had agreed to an order of permitting the mortgagors to remain in the mortgaged premises pending the appeal and pending the appeal, the mortgagors would make four payments on specified dates before the hearing of the appeal. The mortgagors failed to make the first two payments resulting in the bank returning the motion, and the mortgagors bringing a cross-motion for a stay of the writ of possession being enforced pending the appeal.
[32] The court there concluded that under Rule 63.01, there is no automatic stay of a writ of possession to enforce a mortgage and that the automatic stay applies only to money judgments and to certain writs of possession in residential tenancy matters and it may be lifted by a judge on terms. (my emphasis).
[33] This result in the context of a mortgage enforcement action differs from a situation involving enforcement of a tenancy arrangement which was made ancillary to an agreement of purchase and sale of the Property.
[34] The plaintiff’s position on this motion is that the order terminating the tenancy and seeking vacant possession of the subject property is not an order (either final or interlocutory) under the Residential Tenancies Act, and is thus not stayed by Rule 63.01(3). In this regard, counsel refers to the Mossip Order and the two following orders of Snowie and Price, both of which are derivative from the Mossip Order.
[35] This court has been referred to a Review Order dated March 10, 2014, pursuant to s. 21.2 of the Statutory Powers Procedures Act and the Residential Tenancies Act, 2006.
[36] Among other things, the Review Order declared the subject tenancy terminated and required the tenant (David Benson) to vacate the Property on or before March 21, 2014. The order further provided for costs and stipulated that the enforcement of the provision for vacant possession could take place only on or after March 22, 2014.
[37] There is an obvious interval between the Mossip Order and the order of the Landlord and Tenant Board member of approximately two months.
[38] A close review of the Mossip Order, and in particular para. 8 thereof, indicates that there was an undertaking of sorts by the defendants to comply with paragraphs one and two of the Mossip Order (paying the arrears of rent plus monthly rental payments running from February 15, 2014 to July 15, 2014) and upon so doing, the plaintiff would withdraw the notice of rescheduled hearing before the Landlord and Tenant Board scheduled for Friday, February 28, 2014. From the recitals and substantive provisions of the Snowie Order, it is clear that payment of such rent did not take place, hence the reason for the motions in aid before Snowie J. on December 4, 2014 and before Price J. on December 18, 2014.
[39] This court has not been supplied with any information indicating proceedings between the parties arising out of the tenancy in the Landlord and Tenant Board under the Residential Tenancies Act, 2006 were formally withdrawn or discontinued. This concern is pertinent as to whether or not the orders under appeal declaring the tenancy agreement terminated and directing delivery of vacant possession are interlocutory or final orders made under the Residential Tenancies Act, 2006. On the record, however, I am not persuaded that the Snowie and Price Orders are caught within the ambit of Rule 63.01(3)(a).
[40] I conclude that the stay issues arising out of the Amended Notice of Appeal are governed by Rule 63.01(1). In these circumstances, there is no stay of the Snowie and Price Orders relating to the writ of possession and obtaining vacant possession on behalf of the plaintiff.
[41] In these circumstances, it was open to the defendants to obtain a stay under Rule 63.02(1)(b); the defendants have failed to move for leave for a stay of execution of the Writ of Possession herein.
[42] The defendants through counsel have sought a certificate of stay pursuant to Rule 63.01(3)(a) by instrument dated February 4, 2015. For the reasons mentioned above, that path to obtain a stay is not open to the defendants and accordingly there is no proper requisition for, and resulting certificate of stay before the court.
[43] Reference however must be made of some of the other arguments that have been made by the parties. As previously indicated, the submissions of the defendant David Benson and his counsel in the hearing before Snowie J. on December 4, 2014, are not evidence at the hearing. Mention is made that the defendant David Benson sought to file his affidavit at such hearing and that Snowie J. declined to accept it. The endorsement by Snowie J. dated December 4, 2014, does not refer to David Benson seeking to file an affidavit but rather refers to Mr. Benson asking for an adjournment in the absence of Mr. Benson’s then counsel (not Mr. Rose). In any event, upon the engagement of Mr. Rose at the hearing before Price J. on December 18, 2014, his endorsement does refer to the affidavit of Mr. David Benson which was not accepted on the appearance before Snowie J. on December 4, 2014. The only reference by Price J. on December 18, 2014 relating to to that affidavit is found in paragraph 2 of his endorsement. Price, J. states that the affidavit and a letter from Mr. Benson’s then counsel “have been reviewed but which do not show any reasonable justification for non-compliance of the order of Madam Justice Mossip or Madam Justice Snowie”. I am not prepared on this record to conclude that there was any denial of due process by either Snowie J. or Price J. to the defendant’s cause.
[44] In like manner, I conclude that the appeals have not been perfected within the prescribed time of 30 days of the orders appealed from (the latest being December 18, 2014): see Rule 61.09(1), Rules of Civil Procedure.
[45] Finally, the plaintiff seeks an order pursuant to section 21(3) and 134(3) of the Courts of Justice Act quashing the appeals on the grounds that they are devoid of merit.
[46] The governing principle of the law in this area is enunciated in the case cited by the defendants, Schmidt et al. v. Toronto-Dominion Bank, above. In that case, the court makes the following observation on its jurisdiction in a motion to quash an appeal:
The very nature of this power, however dictates that it will seldom be exercised. It is very difficult, in most cases, to reach the conclusion that an appeal is devoid of merit without first hearing the entire appeal. Where, as here, the ultimate merits of the appeal require a consideration of a lengthy trial record, numerous issues, and detailed reasons for judgment, it is virtually inevitable that an inquiry into the question of whether the appeal has any merit will involve extensive written submissions and considerable oral argument. (Emphasis added)
[47] The present appeals relating to the termination of a tenancy and the consequences involving the issuance of a Writ of Possession and enforcement of same do not require “a lengthy trial record, numerous issues, and detailed reasons for judgment”. The underlying facts giving rise to the order of Mossip J. dated January 24, 2014 (which as again noted has not been appealed) and the ancillary and facilitating orders of Snowie J. and Price J. in December 2014 are not within the ambit of requiring a consideration of a lengthy trial record, numerous issues, and detailed reasons for judgment. In the result, this is one of those rare circumstances where the appeals in question are “manifestly devoid of merit” and it is therefore appropriate that a single judge of the Divisional Court may quash the appeals in question.
Disposition
[48] In the result, the plaintiff’s motion is granted and an order will issue quashing the appeals from the Snowie and Price orders; setting aside the Certificate of Stay and directing the sheriff of the Judicial District of Peel to enforce the Writ of Possession in favour of the plaintiff.
[49] The plaintiff shall its costs of this action on the following basis, in the absence of agreement between the parties as to the amount of costs: written submissions not to exceed four pages in length (exclusive of supporting materials);
(a) by the plaintiff within 21 days from the date of issuance of this endorsement;
(b) responding submissions by the defendants within 10 days of receiving the plaintiff’s submissions; and
(c) reply, if any, by the plaintiff within 7 days of receiving the defendants submissions.
MACKENZIE J.
Released: February 24, 2015
CITATION: Polmat Group Inc. v. E Ring Corp., 2015 ONSC 1233
COURT FILE NO.: DC-14-12900
DATE: 20150224
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
POLMAT GROUP INC.
- and –
E RING CORP. INVESTMENTS LLC (IN TRUST), DAVE BENSON AKA DAVID BENSON, 2203746 ONTARIO INC. AND MACDONALD SAGER MANIS LLP
ENDORSEMENT
MacKenzie J.
Released: February 24, 2015