CITATION: Sgrignuoli v. Sgrignuoli, 2017 ONSC 65

COURT FILE NO.: DC-16-0911-00ML

DATE: 20170104

ONTARIO

SUPERIOR COURT OF JUSTICE

(DIVISIONAL COURT)

BETWEEN:

EVELYN SGRIGNUOLI

Applicant

(Respondent on Appeal)

– and –

SYLVANA MELARA (also known as SILVANA SGRIGNUOLI, Estate Trustee of the estate of ERNIE SGRIGNUOLI)

Respondent

(Appellant on Appeal)

– and between –

JUDITH HOLZMAN

Respondent on Motion for Costs

(Respondent on Appeal)

Ronald Sleightholm, for the Applicant/Respondent on Appeal

David Moore and Diana Soos, for the Respondent/Appellant on Appeal

Susan Sack, for the Respondent on Motion for Costs/Respondent on Appeal

HEARD: October 6, 2016 and December 19, 2016

RULING ON MOTION TO SET ASIDE LEAVE TO APPEAL ORDER

SUTHERLAND J.:

Overview

[1] Silvana Melara, Estate Trustee of the estate of Ernie Sgrignuoli (the “Appellant”), brings a motion to set aside McKelvey J.’s order dated July 20, 2016 refusing leave to appeal Nelson J.’s orders dated September 4, 2015 and November 18, 2015 and to obtain an order that the Appellant’s Motion for Leave to Appeal be reheard orally. Alternatively, the Appellant requests that I direct this motion to a panel of the Divisional Court.

[2] The leave motion was brought from two costs orders of Nelson J.[^1] McKelvey J. dismissed the motion without an oral hearing.[^2]

[3] Counsel for the Appellant and counsel for the Respondent on Appeal Judith Holzman (“Holzman”) provided written submissions on this motion, and appeared before me on October 6, 2016. The Respondent on Appeal, Evelyn Sgrignuoli (“Evelyn”) declined to make submissions.

[4] I requested further submissions regarding jurisdiction from the Appellant and Holzman. They appeared before me again on December 19, 2016.

[5] For the reasons below, I adjourn this motion to a panel of the Divisional Court.

Background

[6] Ernie Sgrignuoli (“Ernie”) and Evelyn Sigrinuoli (“Evelyn”) cohabited in a common law relationship during two separate periods: (a) from in or about 1990 to 1996 and (b) from 1999 to 2003. After each separation, they reached a settlement and signed a release.

[7] In 2003, Evelyn consulted with Holzman, a solicitor, with respect to the second release. Holzman signed a Certificate of Independent Legal Advice (the “Certificate”) and Evelyn signed the release. The Certificate provided that Evelyn had declared that she was signing the release “of her own volition and without fear, threats, compulsion or influence by Ernie Sgrignuoli or any person.”

[8] On February 6, 2014, Holzman, as Evelyn’s counsel, commenced an application seeking spousal support from Ernie. Despite the Certificate, Evelyn alleged that the second release was signed under duress.

[9] Ernie died shortly after the application was filed. His estate trustees (the “Estate Trustees”) have acted on his behalf ever since.

[10] The Estate Trustees brought a Motion for Summary Judgment in the spousal support application. At the motion scheduling hearing, Holzman appeared as amicus curiae on Evelyn’s behalf. The motion was made returnable on January 7, 2015.

[11] On December 29, 2014, Evelyn served a Notice of Withdrawal of her spousal support claim.

[12] On February 2, 2015, the Estate Trustees filed a Notice of Motion for costs of the withdrawn application against Evelyn and Holzman, jointly and severally. The Estate Trustees sought costs of $60,257.92 on a full recovery basis, and $40,830.39 on a partial recovery basis.[^3] In his ruling of September 4, 2015, Nelson J. dismissed the motion against Holzman and declined to order costs against Evelyn because of her inability to pay.

[13] Evelyn then sought costs for the motion heard by Nelson J. On November 18, 2015, Nelson J. ordered the Estate Trustees to pay Evelyn costs of $3,845.

[14] The Appellant brought a motion for leave to appeal Nelson J.’s cost orders to the Divisional Court. The Notice of Motion proposed that the motion be heard orally.

[15] Despite an oral hearing being set, the leave motion was put before McKelvey J. as an in-writing motion. McKelvey J. dismissed the motion, with reasons, on July 20, 2016.[^4]

Grounds for the Motion

[16] The Appellant argues that McKelvey J.’s leave order should be set aside on two grounds. First, the Rules of Civil Procedure (“Civil Rules”)[^5] were breached by denying the Appellant an oral hearing. Second, McKelvey J. applied the wrong legal test in determining whether to grant leave to appeal on a final order.

Issues

[17] The issues for this court to decide are:

1. Does this court have jurisdiction to set aside the leave order?

2. Does this court have jurisdiction to hear the appeal of the cost orders?

3. Should the leave order be set aside?

Legal principles

Appeal Procedure and Jurisdiction

[18] Under s. 6(1)(b) of the Courts of Justice Act (“CJA”),[^6] appeals of final orders from the Superior Court of Justice lie to the Divisional Court if the orders fall within the scope of s. 19(1)(a) of the CJA, and to the Court of Appeal in all other circumstances.

[19] Under s. 19(1)(a), an appeal lies to the Divisional Court if the order falls within the monetary limits outlined by ss. 19(1.1) and 19(1.2). Section 19(1.2) applies in this case. It reads as follows:

(1.2) If the notice of appeal is filed on or after October 1, 2007, clause (1) (a) applies in respect of a final order,

(a) for a single payment of not more than $50,000, exclusive of costs;

(b) for periodic payments that amount to not more than $50,000, exclusive of costs, in the 12 months commencing on the date the first payment is due under the order;

(c) dismissing a claim for an amount that is not more than the amount set out in clause (a) or (b); or

(d) dismissing a claim for an amount that is more than the amount set out in clause (a) or (b) and in respect of which the judge or jury indicates that if the claim had been allowed the amount awarded would have been not more than the amount set out in clause (a) or (b). 2006, c. 21, Sched. A, s. 3; 2009, c. 33, Sched. 2, s. 20 (3).

[20] Generally, final orders of the Superior Court of Justice that fall within the limit set out in s. 19(1.2) may be appealed to the Divisional Court as of right. However, s. 133(b) of the CJA says that all cost order appeals require leave.

[21] Though the cost orders in this case arose from a family law matter, r. 38(1) of the Family Law Rules[^7] dictates that the Civil Rules generally govern the procedure of their appeals.

[22] Rule 1.04 of the Civil Rules requires that the rules be interpreted “to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.”

[23] Under r. 2.1 of the Civil Rules, the court may stay or dismiss proceedings that appear to be an abuse of process.

[24] Under the Civil Rules, motions for leave to appeal from Superior Court of Justice orders are typically heard in writing, without the presence of parties or lawyers. This procedure applies for leave motions brought to the Court of Appeal, per r. 61.03.1(1), and from interlocutory orders to the Divisional Court, per r. 62.02(2). There is no similar rule for leave motions from final orders to the Divisional Court.

[25] Subsections of r. 61.03 imply that leave motions from final cost orders are to be heard orally. Rule 61.03 governs the procedure for leave motions to the Divisional Court other than those from interlocutory orders of the Superior Court of Justice. Rules 61.03(1)(a) and (5) direct that the motion will be heard on a date fixed by the Registrar. Where a party seeks to join an appeal of a cost order with an appeal as of right, r. 61.03(7) says that the leave motion for the cost order will be heard by a panel of the Divisional Court.

[26] Other than in specific exceptional circumstances, the Civil Rules require motions to be heard orally. Rule 37 generally governs motion procedure. Per r. 37.11(2), motions “shall be open to the public”, unless an exception under r. 37.11(1) or s. 135 of the CJA applies. Section 135 of the CJA enables the court to exclude the public from a hearing where it is justified by the risk of serious harm or injustice. Under r. 37.11(1)(e), motions may be heard in the absence of the public when it is before a single judge of the Divisional Court. Rule 37.11(1)(a) says that motions may be heard without oral argument.

[27] The situations where motions are to be heard without oral argument, as contemplated by r. 37.11(1)(a), are defined under r. 37.12.1 Under r. 37.12.1(1), a motion may be heard in writing where it is “on consent, unopposed or without notice under subrule 37.07(2)”. Subrules 37.12.1(4) to (6) say that motions may be heard in writing if the parties consent and the issues of fact and law are not complex.

Does this court have jurisdiction to set aside the leave order?

Positions of the parties

[28] The Appellant argues that I sit as a Superior Court judge, vested with inherent jurisdiction to set aside McKelvey J.’s leave order. McKelvey J. applied the test for leave to appeal interlocutory orders under r. 62.02(4) of the Civil Rules in rendering his decision. Per r. 62.02, motions for leave to appeal are heard by judges of the Superior Court of Justice. McKelvey J. also labelled his ruling as a decision of the “Ontario Superior Court of Justice”. Thus, he was sitting as judge of the Superior Court of Justice, and I sit as a judge of the same court.

[29] Alternatively, if I sit as a Divisional Court judge, the appellant argues that I can set aside the leave order pursuant to r. 37.14(6) of the Civil Rules. Rule 37.14(6)(a) permits a judge or panel of the Divisional Court or Court of Appeal to set aside an order of the same court where a motion is brought under r. 37.14(1) or any other rule that contemplates setting aside an order. Rule 37.14(1) allows an order to be set aside by a “party or other person (a) is affected by an order obtained on motion without notice; (b) fails to appear on a motion through accident, mistake or insufficient notice; or (c) is affected by an order of a registrar”.

[30] Holzman argues that I sit as a judge of the Divisional Court. The Appellant was appealing a final order of the Superior Court of Justice, pursuant to s. 6(1)(b) of the CJA. In Direk v. Argiris & Associates, Corbett J. wrote, “Since every judge of the Superior Court is also a judge of the Divisional Court, it is not the nature of the judge, but the nature of the matter before the judge that determines whether the judge is sitting ‘as’ a judge of the Superior Court or ‘as’ a judge of the Divisional Court.”[^8] Thus, the test applied by McKelvey J. is not determinative of whether he sat as a judge of the Superior Court or the Divisional Court.

[31] At the first appearance before me, Holzman agreed with the appellant that I had inherent jurisdiction to set aside the order. At the next appearance on December 19, 2016, Holzman changed her position. Holzman now notes that the Divisional Court is a statutory court with no inherent jurisdiction.[^9] Therefore, Holzman submits that this court cannot rely on inherent jurisdiction to set aside order of McKelvey J.

[32] Holzman also submits that there is no applicable procedural rule that permits this court to set aside the leave order. None of the enumerated grounds for setting aside an order under r. 25(19) of the Family Law Rules or r. 59.06 of the Civil Rules apply in the present case. She also argues that r. 15 of the Family Law Rules does not allow a court to set aside a final order.

Analysis

[33] In some circumstances, motions for leave to appeal to the Divisional Court are heard by judges of the Superior Court of Justice, who are vested with inherent jurisdiction. Per r. 62.02(1.1) of the Civil Rules, a judge of the Superior Court of Justice may hear leave motions from interlocutory orders.

[34] The parties agree and I do so find that Nelson J.’s cost orders were final, not interlocutory. In 2156384 Ontario Inc. v. C. & K. Property Management Inc., the Divisional Court said, at para. 6, “The nature of a costs order depends upon the nature of the order with which it is associated.” [^10] In Hendrickson v. Kallio, the Court of Appeal held that an order “is interlocutory if the merits of the case remain to be determined.” [^11] Nelson J.’s cost orders arose after Evelyn’s spousal support application was finally determined. Therefore, the orders were final, and r. 62.02(1.1) was inapplicable to the leave motion before McKelvey J.

[35] Rule 61.03 sets out the procedure for leave motions from final orders to the Divisional Court. Per r. 61.03(1), leave is granted by the Divisional Court. Following Corbett J.’s decision in Direk, the nature of the matter before the court determines whether a judge sits ‘as’ a Divisional Court judge or ‘as’ a Superior Court judge. Therefore, regardless of whatever test was applied, McKelvey J. was sitting as a Divisional Court judge when he heard the leave motion. For this motion, I find that I also sit as a member of the Divisional Court.

[36] As a statutory court, the Divisional Court is not vested with inherent jurisdiction.[^12] The Divisional Court has some implied power not explicitly granted by statute, but I do not find this implied power would allow me to grant the relief requested by the appellant. In United States v. Shulman, the Supreme Court of Canada affirmed that all courts have “an implied, if not inherent, jurisdiction to control its own process, including through the application of the common law doctrine of abuse of process.”[^13] This jurisdiction allows Divisional Court judges to dismiss frivolous or vexatious motions, but I do not accept nor do I find that this inherent power provides me with the authority to set aside the orders of McKelvey J.

[37] The Appellant argues that hearing the motion in writing was a “mistake”. Rule 25(19) of the Family Law Rules says that an order can be amended if the order “contains a mistake”. Here, the alleged mistake was a procedural error in law, not a mistake within the order itself. As Boswell J. wrote in Gray v. Rizzi, “Mistakes, or errors, in law are appealable errors and not subject to correction under Rule 25(19).”[^14] Therefore, I find that the rule is inapplicable. In any case, Ontario courts have held that r. 25(19) does not permit a court to set aside its own order.[^15]

[38] Absent inherent jurisdiction, I can only rely on statutory authority to set aside the order of McKelvey J. refusing leave to the appellant. I agree with Holzman that no procedural rule or statutory authority vests this court with jurisdiction to set aside McKelvey J.’s order.

[39] None of the circumstances that allow an order to be set aside under r. 37.14(1) of the Civil Rules are applicable in these circumstances. There is no other rule of the Civil Rules, other than under r. 37.14(6), that would provide this court with the authority to set aside the order of McKelvey J.

[40] Rule 15 of the Family Law Rules allows a final order to be amended, but not set aside.

[41] Rule 59.06(2)(a) of the Family Law Rules allows a court to set aside an order on the grounds of fraud or of facts arising or discovered after it was made. Neither ground is applicable in this case.

[42] Accordingly, I conclude that I, as a single judge of the Divisional Court, do not have the jurisdiction to set aside McKelvey J.’s order. However, pursuant to s. 21(5) of the CJA, a panel of the Divisional Court may set aside a motion order of a single judge. However, it is questionable whether the Divisional Court has jurisdiction to hear this appeal in the first place.

Does this court have jurisdiction to hear the appeal of the orders of Nelson J.?

Positions of the Parties

[43] Though the issue was not raised at the first appearance before me, Holzman now argues that the Estate Trustees’ initial cost claim exceeds the monetary limit for appeals to the Divisional Court. The $60,257.92 claim exceeds the limit under s. 19(1.2) of the CJA. Thus, she argues, the appeal of Nelson J.’s first cost order lies to the Court of Appeal.

[44] The Appellant argues that the appeal is within the s. 19(1.2) limit. First, the limit is set “exclusive of costs”. Since this is an appeal of a costs order, the limit is inapplicable. Second, the Estate Trustees’ initial cost claim was not proven or assessed by Nelson J. as being over $50,000 limit. The appellant submits that as the Court of Appeal wrote in Harte-Eichmanis v. Fernandes, “where the court finds no liability, or some other reason not to award damages that are otherwise proven or assessed at less than $50,000, an appeal lies to the Divisional Court”.[^16]

Analysis

[45] The s. 19(1.2) of the CJA monetary limit is set “exclusive of costs”, but the Ontario Court of Appeal has held that the limit applies to costs when the cost order is the subject of the appeal. In Mullin v. Lagace,[^17] the Ontario Court of Appeal held that a cost order appeal was properly before the Court because the amount in issue exceeded the limit prescribed by s. 19(1.2)(a).

[46] Though Nelson J. did not award any amount in the first costs motion, s. 19(1.2)(c) of the CJA says that the claimed amount determines whether an order is appealable to the Divisional Court. The February 2, 2015 Notice of Motion of the appellant in front of Nelson J. did not specify the amount of the costs claimed. However, Nelson J.’s judgment indicated that the Estate Trustees sought costs of $60,257.92 on a full indemnity basis.[^18]

[47] Regarding the s. 19(1.2) monetary limit, the judgment is determinative of whether a claim exceeds the monetary limit. As the Court of Appeal said in Mohammed v. Tucci, “The judgment records the claims allowed and the claims that have been dismissed and is the key document to which reference must be made in determining the applicability or not of s. 19 of the Act.”[^19] From Nelson J.’s judgment, then, I would make the observation that it seems that the claim exceeds the s. 19(1.2) limit.

[48] I make no finding regarding whether the Divisional Court or the Court of Appeal has jurisdiction to hear the appeal of Nelson J.’s first cost order. As I lack authority to set aside the order, I think this determination is better left to a panel of the Divisional Court, equipped with the requisite statutory jurisdiction.

Should the leave order be set aside?

[49] Because of the limits on my jurisdiction, it is also unnecessary for me to consider whether the order should be set aside. However, a brief comment is warranted regarding the gap in the Civil Rules at issue.

[50] There is no rule that expressly permits a leave motion brought from a final order to the Divisional Court to be heard in writing. By contrast, rr. 61.03.1 and 62.02(2) mandate written hearings for leave motions to the Court of Appeal and leave motions from interlocutory orders of the Superior Court of Justice.

[51] Rules 37 and 61.03 imply that the leave motions to the Divisional Court should be heard orally, through a hearing. Per r. 61.03(5), leave motions from final orders are to be heard on a date fixed by the Registrar. Rule 37.12 outlines exceptions to the general rule that motions are to be heard orally, but this case does not fall within any of those exceptions. Though r. 37.11(1)(e) allows motions before a single appellate judge to be “heard in the absence of public”, it does not consider denying an oral hearing altogether.

[52] On the other hand, I do not imagine that the drafters of the Civil Rules intended to bestow greater procedural rights at the Divisional Court to appellants where the issue is only that of a final cost order than that of interlocutory orders for costs.

[53] This inconsistency of motion for leave to appeal of final orders on costs and interlocutory orders to the Divisional Court may require examination by the Civil Rules committee. It may be that appeals from final order where the only issue is that of costs and interlocutory orders should both be heard in writing.

Disposition

[54] Pursuant to s. 21(4) of the CJA, the motion of the Appellant seeking an order to set aside the order of McKelvey J. dated July 20, 2016 and the request for an oral hearing is adjourned to a panel of the Divisional Court.

[55] Costs are reserved to the panel.

Justice P. W. Sutherland

Released: January 4, 2017

[^1]: Sgrignuoli v. Sgrignuoli, 2016 ONSC 4710, [2016] W.D.F.L. 4832 [Sgrignuoli #2]. [^2]: Ibid. [^3]: Sgrignuoli v. Sgrignuoli, 2015 ONSC 5537, [2015] W.D.F.L. 5813MR 2, Tab E, at para. 2 [Sgrignuoli #1]. [^4]: Sgrignuoli #2, supra note 1. [^5]: R.R.O. 1990, Reg. 194 [^6]: R.S.O. 1990, c. C. 43 [^7]: O. Reg. 114/99 [^8]: 2009 CarswellOnt 9692, at para. 31. [^9]: See R. v. Chramer (1974), 1974 629 (ON SC), 3 O.R. (2d) 602, at para. 3, (Ont. Div. Ct.); and Marlatt v. Woolley (2000), 129 O.A.C. 328, at para. 2, (Ont. Div. Ct.). [^10]: 2012 ONSC 6759, 2012 CarswellOnt 16461 [^11]: 1932 123 (ON CA) [^12]: See Marlatt, supra note 10, at para. 3; Chramer, supra note 10, at para. 2; Adams v. Canada (AG), 2011 ONSC 325, 272 O.A.C. 301, at para. 22; and R. v. W. (G.), 1999 668 (SCC), at para. 8. [^13]: 2001 SCC 21, [2001] 1 S.C.R. 616, at para. 33. [^14]: 2010 ONSC 2858, [2011] W.D.F.L. 914, at para. 37. [^15]: See Boivin v. Smith, 2010 ONCJ 411, 92 R.F.L. (6th) 432, at para. 15; and Farhan v. Farhan, 2012 ONSC 6596, [2013] W.D.F.L. 2807. [^16]: 2012 ONCA 266, 15 R.F.L. (7th) 1, at para. 14. [^17]: 2015 ONCA 757, 56 C.C.L.I. (5th) 292, at para. 13. [^18]: Sgrignuoli #1, supra note 3, at para. 2. [^19]: 2009 ONCA 554, 97 O.R. (3d) 145, at para. 23.