Mills v. Thompson, 2022 ONSC 1525

Citation: Mills v. Thompson, 2022 ONSC 1525

OSHAWA DIVISIONAL COURT FILE NO.: DC-22-1291

DATE: 20220309

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

Rose Marie Mills

Respondent in Appeal/Moving Party

– and –

Audely Roy Thompson

Appellant/Responding Party

Michael H. Tweyman, for the Respondent in Appeal/Moving Party

Grace-Ann Roberts, for the Appellant/Responding Party

HEARD: In-Writing

REASONS FOR DECISION

CHARNEY J.:

1The issue on this motion is whether a party requires leave to appeal from a denial of leave to appeal or may appeal a denial of leave as of right.

Facts

2The parties agreed to binding arbitration and the arbitrator, Robert Snell, issued an award dated May 7, 2020. In that award, Mr. Snell imputed income to the Mr. Thompson, awarded spousal and child support to Ms. Mills, divided s. 7 expenses, and determined the equalization payment owed by Mr. Thompson to Ms. Mills.

3Mr. Thompson, the Appellant, sought leave to appeal that award in the Superior Court of Justice pursuant to s.45 of the Arbitration Act, 1991, S.O. 1991, c. 17, which provides:

45 (1) If the arbitration agreement does not deal with appeals on questions of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that,

(a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and

(b) determination of the question of law at issue will significantly affect the rights of the parties.

4On January 13, 2022, Nicholson J. heard the Appellant’s motion for leave to appeal. Oral reasons were given and the motion for leave to appeal was dismissed.

5The Appellant filed a Notice of Appeal from the decision of Nicholson J. on January 24, 2022. This proposed appeal would be heard by the Divisional Court pursuant to s. 19 (1) (a.1) of the Courts of Justice Act, R.S.O., 1990, c. 43.

6An issue arose as to whether Nicholson J.’s decision was appealable or whether leave to appeal must be sought. A case conference was held on February 15, 2022, and pursuant to the direction given at that case conference Ms. Mills, the Respondent in Appeal, filed a motion to be heard in writing to quash the appeal and the parties exchanged factums.

Position of the Parties

7The Respondent in Appeal takes the position that there is no right to appeal from an order denying leave to appeal. The appeal should therefore be quashed. The Respondent in Appeal does, however, consent to an extension of time to permit the Appellant to file a motion for leave to appeal should he be so inclined.

8The Appellant takes the position that the order denying leave to appeal is a final order, not an interlocutory order, and therefore he may appeal the denial of leave as of right. He relies on s. 19 (1) (a.1) of the Courts of Justice Act.

9For ease of reference s.19 of the Courts of Justice Act provides:

19 (1) An appeal lies to the Divisional Court from,

(a) a final order of a judge of the Superior Court of Justice, as described in subsections (1.1) and (1.2);

(a.1) a final order of a judge of the Family Court made only under a provision of an Act or regulation of Ontario;

(b) an interlocutory order of a judge of the Superior Court of Justice, with leave as provided in the rules of court;

(c) a final order of a master, case management master or associate judge.

Analysis

10The Ontario Court of Appeal has issued many decisions explaining the difference between a final and an interlocutory decision. One such recent decision is 1476335 Ontario Inc. v. Frezza, 2021 ONCA 822 at para. 7, where the court offered this succinct distinction:

A final order disposes of the litigation, or finally disposes of part of the litigation: Ball v. Donais (1993), 1993 8613 (ON CA), 13 O.R. (3d) 322 (C.A.). An interlocutory order disposes of the issue raised, most often a procedural issue, but the litigation proceeds: Hendrickson v. Kallio, 1932 123 (ON CA), [1932] O.R. 675 (C.A.), at p. 678.

11Also relevant to this analysis is para. 8 of that decision:

As is apparent from the strict requirements for leave to be granted to appeal interlocutory orders, appeals from such orders are intended to be very limited. On the other hand, appeals from final orders are as of right. As a result, the issue of whether an order is final or interlocutory determines not only which court has jurisdiction, but also the extent to which an appeal will lie from the order.

12The Appellant argues that since the arbitrator’s award was a final order, the denial of leave to appeal from the arbitrator’s award is also a final order since it finally disposes of the litigation. Once leave is denied no litigation can proceed. The merits of the case do not remain to be determined. There are no issues left to be litigated. Denial of leave is, therefore, a final order.

13The Respondent in Appeal takes the position that this issue has been settled by the Ontario Court of Appeal in the case of Hillmond Investments Ltd. v. Canadian Imperial Bank of Commerce, 1996 413 (ON CA), in circumstances very close to those in this case.

14In Hillmond, the dispute between the parties related to the rent payable under a commercial lease. The dispute went to arbitration and was governed by the Arbitration Act, 1991. Following the arbitrator’s decision, Hillmond sought leave to appeal.

15Hillmond’s motion for leave to appeal was dismissed by Davidson J. of what was then the Ontario Court (General Division), now known as the Ontario Superior Court of Justice. Davidson J. examined the merits of the appellant's objections to the award, applied the tests for granting leave in s. 45(1) of the Arbitration Act, 1991, and determined that he would not grant leave to appeal.

16Hillmond then appealed the denial of leave to the Court of Appeal, which held that Davidson J.’s decision to deny leave to appeal was not a final order, but an interlocutory decision.

17The Court of Appeal stated that the first issue to be determined was whether “the order of Davidson J. was a final order of a judge of the Ontario Court (General Division) and was therefore appealable as of right under the provisions of … the Courts of Justice Act”. Finlayson J., writing for the Court, set out the issues as follows, at p. 5:

I would phrase the issues in this appeal in the following language.

(1) Does the Arbitration Act, 1991 grant a right of appeal from the order of Davidson J. refusing leave to appeal?

(2) Does the C.J.A. grant a right of appeal from the order of Davidson J. refusing leave to appeal?

(3) Is there a right of appeal to this court from the award of the arbitrator on the merits, notwithstanding the refusal of Davidson J. to grant leave?

I would answer all three questions in the negative.

18In bringing his appeal, Hillmond asked that the order denying leave be set aside, that an order be made granting the appellant leave to appeal, and that judgment be rendered on the merits of the appeal. This proposed order was different than the order sought by the Appellant in our case, where the Appellant asks only that the order denying leave be set aside and an order granting leave to appeal be substituted. The Appellant is not seeking a decision on the merits of the appeal. I will consider later in these reasons whether this should make any difference in the result, but I want to point it out now because the relief requested by Hillmond was relevant to the analysis of the Court of Appeal.

19The Court of Appeal set out the following analysis as to why, in its view, a denial of leave to appeal can itself be appealed only with leave. The Court focused first on the fact that Hillmond was asking the Court to hear the merits of the appeal in addition to the issue of whether leave should be granted. The Court stated, at p. 7:

I think that the very nature of the relief sought underscores the fundamental problem facing the appellant. While the appeal is nominally from the order of Davidson J. for refusing to grant leave to appeal, the result is a request that we by-pass the leave requirement, review the award of the arbitrator, and determine the correctness of that award. If, as authority suggests (see Industrial Acceptance Corp. v. Canada Permanent Trust Co., 1931 67 (SCC), [1931] S.C.R. 652 at p. 655, [1932] 1 D.L.R. 287), the leave requirement is intended to prevent frivolous and unnecessary appeals, that purpose would be frustrated if an appeal as of right could be had from decisions refusing to grant leave or, for that matter, from decisions granting leave.

20The Court, however, went beyond the specific relief requested by Hillmond, stating, at p. 8 that “There is Canadian and English authority for the proposition that a refusal by an intermediate court to grant leave to appeal is not a "final order or judgment" that may be appealed to a higher appellate court.”. The Court relied on the House of Lords decision in Lane v. Esdaile, [1891] A.C. 210, 64 L.T. 666, stating, at p. 9:

The House of Lords held that if leave to appeal could be had from a refusal to grant leave to appeal, the whole object of the concept of leave, which is to grant an appellate tribunal the power to stop unnecessary or frivolous appeals, would be defeated. Lord Halsbury stated at pp. 211-12:

But when I look not only at the language used, but at the substance and meaning of the provision, it seems to me that to give an appeal in this case would defeat the whole object and purview of the order or rule itself, because it is obvious that what was there intended by the Legislature was that there should be in some form or other a power to stop an appeal -- that there should not be an appeal unless some particular body pointed out by the statute . . . should permit that an appeal should be given. Now just let us consider what that means, that an appeal shall not be given unless some particular body consents to its being given. Surely if that is intended as a check to unnecessary or frivolous appeals it becomes absolutely illusory if you can appeal from that decision or leave, or whatever it is to be called itself. How could any Court of Review determine whether leave ought to be given or not without hearing and determining upon the hearing whether it was a fit case for an appeal?

I find this language most compelling even in contemporary circumstances. Modern systems of alternative dispute resolution, commonly referred to as A.D.R., are designed to help parties solve disputes efficiently without resort to formal litigation and with a minimum of judicial interference. Allowing an appeal from a refusal to grant leave to appeal defeats the object of arbitration by frustrating the legislated impediment to appeals as of right. The purpose of s. 45 of the Arbitration Act, 1991 is to stop an appeal unless the Ontario Court (General Division) grants leave.

The function of the General Division as a check on unnecessary or frivolous appeals is defeated if the Court of Appeal may hear an appeal from the General Division's refusal to grant leave. [emphasis added]

21The Court of Appeal also relied on the Supreme Court of Canada’s decision in Canadian Utilities Ltd. v. Deputy Minister of National Revenue, 1963 88 (SCC), [1964] S.C.R. 57, 41 D.L.R. (2d) 429, where Cartwright J. for the court, said at p. 61:

In my opinion, the reasoning of the House of Lords in Lane et al. v. Esdaile et al is decisive against the existence of a right of appeal to this Court from the decision of Thorson P. to refuse leave to appeal.

22As I read the Court of Appeal’s decision and analysis, the conclusion applies regardless of whether the Appellant only seeks to appeal the denial of leave, or both the denial of leave and the merits of the appeal. Either way, there is no right to appeal a decision denying leave to appeal.

23The Court explained that one reason for this conclusion is that the decision to deny leave to appeal is not a decision on the merits, only a decision that the matter does not merit leave to appeal: Paul v. R., 1960 9 (SCC), [1960] S.C.R. 452, per Taschereau J., at p. 457:

It is furthermore my strong view, that a refusal by a Court of Appeal to grant leave to appeal is not tantamount to a dismissal of the appeal. It simply means that the right of appeal which does not exist as of right, but only by leave, never came into being. A judgment on an application for leave to appeal is one judgment, and the disposal of the case on its merits when leave has been granted is another judgment. The refusal by the Court of Appeal to grant leave is not a disposal of the case on its merits.

24Finally, the Court of Appeal stated, at p. 15:

[A]s I read the cases, they reinforce the proposition that without specific statutory language permitting an appeal from a refusal to grant leave, the refusal signifies that the appellate process is at an end.

25The Court agreed that “there must be an avenue of redress in exceptional cases”, but limited these to cases where the intermediate court “mistakenly declines jurisdiction on a leave motion by acting upon a wrong principle”. In such cases the appellant would still have to seek leave to appeal. The Court stated at p. 21:

In this province, the limited appellate review of the granting or denial of leave to appeal by a General Division judge is exercised by the Divisional Court, not the Court of Appeal, because the order, however mistaken, still is not a final order: it remains interlocutory. I hasten to add that there is no suggestion on this record that procedural or other defects caused Davidson J. to mistakenly decline jurisdiction in considering whether to grant leave. But if he had, the procedural route for relief from an order refusing or granting leave is set out in s. 19(1)(b) of the C.J.A. as follows:

19(1) An appeal lies to the Divisional Court from,

(b) an interlocutory order of a judge of the General Division with leave as provided in the rules of court;

Furthermore, leave will only be granted under s. 19(1)(b) if it can be shown that Davidson J. declined jurisdiction and not merely that he should have recognized errors in law on the part of the arbitrator. An examination of the latter would simply be a rehearing of the original motion.

26The Court of Appeal concluded its analysis in Hillmond at p. 22 in unambiguous terms:

The ultimate question on the motion to quash this appeal is whether leave was required before this court had jurisdiction to entertain the appeal. On authority, it clearly was. It is also established that our court will not permit an appellant to circumvent the requirement of obtaining leave to appeal by complaining about the correctness of the decision of the judge or tribunal that declined to give that leave. An order granting or refusing leave is not a final order. In the very limited circumstances in which such an interlocutory order could be reviewed, redress must be had to the Divisional Court with leave.

Accordingly, the answer to issue (1) is that, failing leave, there is no appeal from an award of an arbitrator under the Arbitration Act, 1991. The answer to issue (2) is that the order under appeal is not a final order because it does not dispose of the issues between the parties and, accordingly, s. 6(1)(b) of the C.J.A. is not available to the parties. As to issue (3), the appellant's argument that the refusal of the judge to grant leave has the effect of conferring final order status on the decision of the arbitrator is of no consequence. The refusal to grant leave may well mean that the award of the arbitrator is final as between the parties, but that is what the legislature intended under the provisions of s. 45 of the Arbitration Act, 1991. [emphasis added]

27See also: Denison Mines Ltd. v. Ontario Hydro (2001), 2001 5681 (ON CA), 56 O.R. (3d) 181 where Morden J.A. stated, at paras. 6 - 8:

The non-appealability of decisions refusing or granting leave to appeal is the general rule and, subject to the exception to which I shall refer shortly, it should, as Hillmond held, be applicable to appeals from orders made under s. 45(1) of the Arbitration Act, 1991. The rule flows from the strong implication that, notwithstanding the wording of s. 6(1) (b) of the Courts of Justice Act, a general statute, no appeal is intended from an order made refusing or granting leave to appeal. Any other conclusion would defeat the purpose of s. 45(1), which is to limit appellate recourse to the courts in arbitration matters.

This strong negative implication is reinforced by s. 49 of the Arbitration Act, 1991, which provides for an appeal to the Court of Appeal from a superior court judge's decision in an appeal of an award, but only with leave of the Court of Appeal. It would be incongruous to attribute to the legislature an intention that there be appeals, as of right, from decisions on leave applications under s. 45(1) when no such appeal is provided for with respect to decisions on what may be called the main issue, the correctness of the arbitral decision.

As I have said, the non-appealability of orders refusing leave is the general rule. As Hillmond sets forth…, the courts have engrafted onto this general rule an exception which is applicable where the judge mistakenly declines jurisdiction.

28If a denial of leave to appeal can be appealed only where the judge “mistakenly declines jurisdiction”, there must be some process to ensure that such appeals are only brought where this exception might apply. In the absence of a gatekeeper the exception could easily swallow the rule. If a denial of leave to appeal can be appealed as of right, every motion for leave to appeal from the decision of an arbitrator would be heard twice: once by a judge of the Superior Court, and, if leave is refused, a second time by a panel of the Divisional court after oral argument. Such a result would be inconsistent with Hillmond, which clearly states that the procedural route for relief from an order refusing leave to appeal under s.45 of the Arbitration Act is an application for leave to appeal under s. 19(1)(b) of the Courts of Justice Act.

29The Appellant points out that in Denison, the Court of Appeal held, at paras. 20 -21, that the decision refusing leave to appeal under the Arbitration Act was a final order.

30A similar result was reached by Rouleau J.A. (In Chambers) in Mignacca v. Merck Frosst Canada Ltd., 2009 ONCA 393, where he noted, at para. 19: “There is considerable confusion as to whether a refusal to grant leave to appeal can be appealed and, if so, what court to apply to and what procedure to follow.”

31In Mignacca, Rouleau J.A. held:

[N]ot every refusal of leave to appeal to the Divisional Court is necessarily an interlocutory order. Where, as in this case, a statute provides a right of appeal to the Divisional Court with leave of the Superior Court of Justice, the question of whether the refusal to grant leave is an interlocutory or final order will depend on whether the refusal meets the definition of a final order articulated by this court in Hendrickson v. Kallio, 1932 123 (ON CA), [1932] O.R. 675, [1932] O.J. No. 380 (C.A.).

32In Mignacca, Rouleau J.A. found, at para. 24, that in that case, leave to appeal was not required to appeal a decision denying leave to appeal.

33Notwithstanding the decisions in Denison and Mignacca, the Court of Appeal’s decision in Hillmond has been followed in subsequent decisions of both the Court of Appeal and the Divisional Court, which confirm “the general rule that there is no right of appeal from an order refusing leave to appeal”: Nithiananthan v. Quash, 2017 ONSC 155, at para. 5 and paras. 6-11 and 13.

34See also: Halton (Regional Municipality) v. F. Greco & Sons Limited (Greco Construction), 2021 ONCA 446; Fort Erie (Town) v. 2312810 Ontario Inc., 2021 ONCA 500; CAMPP Windsor Essex Residents Association v. City of Windsor, 2021 ONSC 3456, at para. 2; McEwen (Re), 2020 ONCA 511, at paras. 63 -68; Ottawa (City) v. Coliseum Inc., 2016 ONCA 363, at paras. 27 -29; Peritus Inc. v. Elder, 2011 ONSC 7357.

35These cases all confirm that there is no appeal from a denial of leave to appeal save in exceptional circumstances, and even then, leave to appeal is required to confirm the existence of the exceptional circumstances. In this respect I am unable to reconcile the decision in Hillmond and its progeny with the decisions in Denison and Mignacca.

36In any event, there is no allegation in the Appellant’s Notice of Appeal that Nicholson J. declined jurisdiction in this case. The Notice of Appeal argues that the judge committed errors of law and failed to accord the Appellant procedural fairness, although no particulars are provided. There is certainly nothing in the Notice of Appeal that would bring it within the narrow exception to the general rule that there is no right of appeal from an order refusing leave to appeal.

37Accordingly, even if the Appellant does not require leave to appeal, the Notice of Appeal should be struck because it does not fall into the narrow exception identified in Hillmond.

Conclusion

38For the foregoing reasons, the Appellant’s Notice of Appeal is quashed, without prejudice to his right to bring a motion for leave to appeal if he believes that he can come within the narrow exception set out in the cases above.

39The Respondent in Appeal was successful on this motion and is presumptively entitled to costs. Her Notice of Motion requests that costs be fixed at $250 plus HST. If the parties are not able to agree on costs, the Respondent in Appeal may serve and file costs submissions of two pages, plus any offers to settle, within 15 days of the release of this decision, and the Appellant may file responding submissions on the same terms within a further 10 days.