Ivandaeva Total Image Salon Inc. et al. v. Hlembizky c.o.b. as Dermocare; Ivandaeva, Third Party

Ivandaev v. Ivandaeva

[Indexed as: Ivandaeva Total Image Salon Inc. v. Hlembizky]

63 O.R. (3d) 769

[2003] O.J. No. 949

Docket No. C38289

Court of Appeal for Ontario

O'Connor A.C.J.O., Laskin and Borins JJ.A.

March 18, 2003

Civil procedure -- Orders -- Motion to set aside -- Sealing order made in matrimonial litigation -- Petitioner in that litigation was plaintiff in commercial litigation -- Defendants in commercial litigation not "persons affected" by sealing order -- Defendants not having right to notice of motion for sealing order under rule 37.07(1) of Rules of Civil Procedure as no proprietary or economic interest of theirs was affected by sealing order -- Defendants not having standing to bring motion under rule 37.14(1) to set aside or vary sealing order -- Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 37.07(1), 37.14(1).

The defendants entered into three commercial agreements with the plaintiff and his wife for the purchase of the defendants' business. Before the closing of the agreements, the marriage of the plaintiff and his wife failed. The plaintiff and his company brought three proceedings against the defendants claiming that they were entitled to terminate the agreements and asking for the return of all deposits paid under the agreements. Around the same time, the plaintiff commenced a petition for divorce and obtained an order in that proceeding sealing the court file pursuant to s. 137(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43. Counsel for the defendants in the commercial litigation became aware of the sealing order, obtained access to the file, which had not been sealed due to an administrative oversight, and made copies of 15 documents. The defendants filed a supplementary affidavit of documents in the commercial litigation stating that they had come into possession of the documents which their lawyer had copied. Counsel for the defendants ultimately returned the documents but took the position that the sealing order was not directed at himself or his clients and that they were not required to comply with it in the absence of an order of a Superior Court judge. The plaintiff moved for an order compelling compliance with the sealing order. The defendants brought a cross-motion under rule 37.14(1)(a) of the Rules of Civil Procedure to set aside the sealing order to the extent that it covered those documents listed in their supplementary affidavit of documents. The cross-motion was dismissed. The motions judge held that the defendants had failed to satisfy her that there had been any change in circumstances since the sealing order was made that would justify setting it aside. She further held that the defendants did not have any right to notice of the motion to seal the matrimonial files. The plaintiff's motion was granted. The defendants appealed both of those orders. [page770]

Held, the appeals should be dismissed.

Rule 37.14(1) of the Rules of Civil Procedure provides that a person who is affected by an order obtained on motion without notice may move to set aside or vary the order. The defendants failed to establish that they were persons "affected by" the sealing order within the meaning of rules 37.07(1) and 37.14(1). Rule 37.14(1) is designed to enable an order to be set aside or varied by those who have, or can acquire, standing under the rule. It does not give standing to non-parties to the proceeding in which the order was obtained, such as the defendants, or possibly to parties to the proceeding who are unable to satisfy the two conditions contained in the rule. Thus, a non-party who desires to set aside or vary an order must show that he or she has a direct interest in doing so, in the sense of establishing that he or she is affected by the order and that the order was obtained without notice to him or her. The starting point for determining whether the defendants were affected by the sealing order was rule 37.07(1), which provides that a notice of motion "shall be served on any person or party who will be affected by the order sought". The term "affected by" in rule 37.07(1) necessarily includes the same meaning of the term in rule 37.14(1). If the defendants should have received notice of the sealing order motion as persons who would be affected by it, it follows that they had standing under rule 37.14(1)(a) to set it aside. That would be the case if their proprietary or economic interests were affected by the order. The possibility that financial information about the plaintiff, or his companies, contained in the matrimonial court file might have assisted the defendants in their defence of the commercial litigation did not amount to the direct effect on their proprietary or financial interests contemplated by rule 37.07(1) and rule 37.14(1). Moreover, while standing has been found to exist in cases in which the media have complained that their right to freedom of expression as guaranteed by s. 2(b) of the Canadian Charter of Rights and Freedoms has been compromised and in which the principle of open and accessible court proceedings has been invoked, no Charter right of the defendants was infringed by the sealing order. As the defendants were not affected by the sealing order, they did not have standing under rule 37.14(1) to move to set aside or vary it.

APPEAL by defendants from orders dismissing a motion to set aside an order sealing a file and granting a motion by a plaintiff for an order that the defendants comply with a sealing order.

Beattie v. Ladouceur (1995), 1995 7192 (ON SC), 23 O.R. (3d) 225, 13 R.F.L. (4th) 435 (Gen. Div.); Canada Lumber Co. v. Whatmough (1923), 23 O.W.N. 584 (C.A.); Howland v. Dominion Bank (1893), 1893 6 (SCC), 22 S.C.R. 130, affg (1892), 15 P.R. 56 (Ont. C.A.); McLean v. Allen (1898), 18 P.R. 255 (Ont. H.C.J.); Palmateer v. Back (1976), 1975 612 (ON SC), 9 O.R. (2d) 693, [1975] I.L.R. 1-677 (H.C.J.); Stanley Canada Inc. v. 683481 Ontario Ltd. (1990), 1990 8098 (ON SC), 74 D.L.R. (4th) 528 (Ont. Gen. Div.); Unical Properties v. 784688 Ontario Ltd., [1993] O.J. No. 2039 (Quicklaw) (Gen. Div.); Weinstein v. Weinstein (Litigation Guardian of) (1997), 1997 24477 (ON SC), 35 O.R. (3d) 229, 19 E.T.R. (2d) 52, 30 R.F.L. (4th) 116 (Gen. Div.), consd Other cases referred to Avery (Re), 1951 111 (ON CA), [1952] O.R. 192, [1952] 2 D.L.R. 413 (C.A.); Broom v. Pepall (1911), 23 O.L.R. 630, 19 O.W.R. 262 (Div. Ct.); National Bank of Canada v. Melnitzer (1991), 1991 7271 (ON SC), 5 O.R. (3d) 234, 84 D.L.R. (4th) 315, 2 C.P.C. (3d) 106 (Gen. Div.); Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, 211 D.L.R. (4th) 193, 287 N.R. 203, 93 C.R.R. (2d) 219, 18 C.P.R. (4th) 1, 20 C.P.C. (5th) 1 (sub nom. Atomic Energy of Canada Ltd. v. Sierra Club of Canada); Strazisar v. Canadian Universal Insurance Co. (1981), 21 C.P.C. 51 (Ont. Co. Ct.) Statutes referred to Canadian Charter of Rights and Freedoms, s. 2(b) Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137(2) Judicature Act, 37 Vict., c. 7, s. 536 [page771] Rules and regulations referred to Rules of Civil Practice, rules 215, 219 Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 7, 16, 37.07(1), 37.14(1)(a), 38.11(1), 42, 44.01(1) Authorities referred to Morden"An Overview of the Rules of Civil Procedure of Ontario" (1984) 5 Adv. Q. 257 Watson, G.D., and C. Perkins, Holmested and Watson: Ontario Civil Procedure, looseleaf (Toronto: Carswell, 2002) Williston, W.B. and R.J. Rolls, The Law of Civil Procedure, Vol. 1 (Toronto: Butterworths, 1970)

Mark H. Arnold, for appellants Walter Hlembizky and Audrey Hlembizky. M. Michael Title, for respondent Denis Ivandaev. Michael Krylov, for third party Elena Ivandaeva.

The judgment of the court was delivered by

[1] BORINS J.A.: -- Walter and Audrey Hlembizky ("the Hlembizkys") moved under rule 37.14(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to set aside an order of Caswell J. issued under s. 137(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43 sealing the "court file" in Ivandaev v. Ivandaeva, which is a family law proceeding in the Family Law Division of the Superior Court of Justice. In response to the Hlembizkys' motion, Denis Ivandaev moved for an order, inter alia, that the Hlembizkys and their solicitor, Mark Arnold, comply with the order of Caswell J. The motion judge dismissed the Hlembizkys' motion and granted Mr. Ivandaev's motion. The Hlembizkys appeal both of these orders. For the reasons that follow, I would dismiss both appeals.

Background

[2] There is no serious dispute surrounding the events that led up to the motions under appeal. However, they are quite complicated. For the purpose of my reasons, I will limit my review of the background events to those that are required to decide the appeal.

[3] Denis Ivandaev and Elena Ivandaeva ("the Ivandaevs") entered into three commercial agreements with the Hlembizkys. One agreement was for the purchase of the Hlembizkys' spa and [page772] beauty salon business. Another required Mr. Hlembizky to provide consulting services to Mr. Ivandaev. The third required Mrs. Hlembizky to train the Ivandaevs in conducting the businesses. Before the closing of the agreements, the Ivandaevs' marriage failed. As a result, on September 26, 1999, Mr. Ivandaev and his company commenced three separate proceedings against [the] Hlembizkys (the "commercial litigation") claiming that they were entitled to terminate the agreements and asking for the return of all deposits paid under the agreements.

[4] In addition, sometime in September 1999, a petition for divorce was commenced by Mr. Ivandaev which, as well as claiming a divorce, raised issues of support and child custody. In the course of that proceeding, Mr. Ivandaev moved for certain interim relief, including an order sealing the court file on the ground that it contained "sensitive information" concerning the child and financial information about himself and his company. On the consent of all the parties to the petition, on December 16, 1999, Caswell J. granted an order that contained the following paragraph that is relevant to this appeal:

1. This court orders on consent of the parties, that:

(d) without prejudice to either party, this court file shall be sealed, and the previous divorce action 39403/99 at Brampton shall also be sealed, until further order of the court;

[5] The commercial litigation, which appears to have spawned a multitude of motions, has been case managed by Master Albert. On November 28, 2000, in the course of arguing a motion before Master Albert, Mr. Ivandaev's lawyer, Mr. Title, disclosed the existence of Caswell J.'s sealing order. The Hlembizkys' lawyer, Mr. Arnold, was present at this time.

[6] In November 2001, Mr. Arnold attended the Family Law Division registry. He obtained access to the court file in Ivandaev v. Ivandaeva that was the subject of the sealing order. As a result of an administrative oversight, the file had not been sealed. However, a copy of Caswell J.'s order was in the file. Even though Mr. Arnold had been made aware of the sealing order during the argument of the motion before Master Albert, and notwithstanding that a copy of the order was in the file, Mr. Arnold searched the contents of the file and made copies of 15 documents. On November 22, 2001, the Hlembizkys filed a supplementary affidavit of documents in the commercial litigation stating that they had come into possession of the documents which Mr. Arnold had copied, which they listed in their affidavit. [page773]

[7] On December 5, 2001, Master Albert ordered that by December 10, 2001 Mr. Arnold was to "provide" Mr. Ivandaev's lawyers with the copies of the documents he had removed from the file. In her endorsement, she noted that Mr. Arnold intended to use these documents "only for purposes of impeaching a witness if inconsistent answers were given at [the commercial] trial". As she did not have jurisdiction to enforce compliance with Caswell J.'s sealing order, she stated that any motion seeking a compliance order was to be made before a Superior Court judge.

[8] In an effort to avoid the necessity of a compliance motion, Mr. Ivandaev's lawyer wrote to Mr. Arnold seeking his voluntary compliance with the sealing order. In his reply, Mr. Arnold returned the documents referred to in the supplementary affidavit of documents. However, he took the position that the sealing order was not "directed at either [himself] or [his] clients". Consequently, he wrote that neither he, nor his clients, were required to comply with it in the absence of an order of a Superior Court judge.

The Motions and the Reasons of the Motion Court Judge

[9] As a result of Mr. Arnold's position, Mr. Ivandaev moved for an order, inter alia: (1) compelling compliance with the sealing order; (2) that the information contained in the supplementary affidavit of documents "not be communicated in any way or referred to in any way by" Mr. Arnold; (3) that Mr. Arnold deliver up all copies of documents referred to in the supplementary affidavit of documents and all copies of any additional documents obtained from the court file; (4) removing Mr. Arnold as solicitor of record for the Hlembizkys.

[10] The motion judge's endorsement in respect to this motion reads as follows:

The documents obtained by Mr. Arnold solicitor for the defendants from court files 99 FP252918 FIS and 39403/99 after these files were sealed by the Order of Caswell J. dated December 16, 1999 shall be destroyed. The Supplementary Affidavit of Documents containing these documents shall be struck. No use of any of the information contained in those documents shall be made by either the defendants or their counsel. There is no basis to remove Mr. Arnold as counsel for the defendants.

[11] In response to the Ivandaev's motion, the Hlembizkys brought a cross-motion for an order to strike out para. 1(d) of Caswell J.'s order "to the extent that the Order covers those documents listed in the Supplementary Affidavit of Documents". The cross-motion was brought pursuant to rule 37.14(1)(a), which reads, in part, as follows: [page774]

37.14(1) A person who,

(a) is affected by an order obtained on motion without notice;

may move to set aside or vary the order . . .

[12] The motion judge dismissed the cross-motion for the following reasons:

Motion dismissed. Mr. Arnold has not been able to satisfy me that there has been any change in circumstances since Caswell J. made her Order which would justify setting aside her order. I do not accept that the defendants had any right to notice of the motion to seal the matrimonial files. Costs of this motion and the plaintiffs' motion heard today to the plaintiffs fixed in the amount of $2,500.00 payable forthwith.

Positions of the Parties

[13] The appellants' position is that the motion judge erred in failing to set aside Caswell J.'s sealing order and in ordering compliance with that order. They offer a number of grounds in support of their position.

[14] As for the dismissal of their motion to set aside the sealing order, they submit that the motion judge erred:

(a) by applying an incorrect test in holding that there was an onus on the Hlembizkys to demonstrate a change in circumstances since the making of the order, whereas the onus rested on the Ivandaevs to demonstrate the necessity of a sealing order.

(b) in holding that the Hlembizkys were not entitled to receive notice of Mr. Ivandaev's motion to seal the matrimonial file.

[15] In addition, the appellants offer a number of reasons why they are persons "affected by" the sealing order within the meaning of rule 37.14(1)(a). For example, they point to a number of examples of information that they extracted from financial data contained in documents found in the matrimonial file that they say contradicts allegations in the Ivandaevs' pleadings in the commercial litigation and in the testimony of Mr. Ivandaev on his examination for discovery. They assert, therefore, that the information obtained from the matrimonial file is relevant to their defence in the commercial litigation. What I understand from these submissions is that the appellants say that they are affected by the sealing order because without the information contained in the sealed file, their defence in the commercial litigation would, or could, somehow be compromised. [page775]

[16] The appellants attack the motion judge's compliance order by asserting that because the court administration had neglected to seal the file as required by the sealing order, the "court file remained accessible to the public". They add that there was no reason that required the Hlembizkys to comply with the order because it was "a direction to the court's administration", and, as such, was not binding on them"particularly where they had no notice of the order prior to obtaining the documents" that they listed in their supplementary affidavit of documents.

[17] The respondents' position can be stated briefly. They submit that there is no basis on which this court can interfere with either order made by the motion judge. As the Hlembizkys are strangers to the matrimonial proceeding, they were not persons who were required to be served with Mr. Ivandaev's notice of motion to seal the court file in that proceeding and, therefore, lack locus standi, or standing, to move to have the sealing order set aside. Moreover, as this order applied to any person who sought access to the court file, neither the Hlembizkys, nor their solicitor, are exempt from it.

Analysis

[18] My analysis is focused on the appeal from the motion judge's order dismissing the appellants' appeal from her refusal to set aside or vary the sealing order. This is because the result of this appeal will determine the result of the appeal from the motion judge's compliance order. The resolution of the first appeal depends on the interpretation of rule 37.07(1), which stipulates the persons who must be served with a notice of motion, and rule 37.14(1), which governs the conditions that must prevail before a person has standing to bring a motion under that rule to set aside or vary an order. Therefore, to be successful in their appeal, the appellants must establish that:

(1) They are persons affected by Caswell J.'s sealing order.

(2) The order was obtained on a motion without notice.

(3) The motion judge erred in declining to set aside or vary the order.

[19] As I will explain, it is my opinion that the Hlembizkys have failed to establish that they were persons "affected by" the sealing order within the meaning of rules 37.07(1) and 37.14(1), with the result that the motion judge correctly dismissed their motion to set aside or vary the sealing order. It follows that she was also correct in granting the Ivandaevs' cross-motion requiring compliance with that order. [page776]

[20] Before commencing my analysis, it will be helpful to reproduce the former Rules of Civil Practice and the current Rules of Civil Procedure relevant to this appeal.

Rules of Practice

215. An application in an action shall be made by motion, and, unless the nature of the application or the circumstances of the case render it impracticable, notice of the motion shall be given to all parties affected by the order sought.

216. A party affected by an ex parte order, or any party who has failed to appear on an application through accident or mistake, or insufficient notice of the application, may move to rescind or vary the order by notice within seven days and returnable before the judge or officer who made the order, or any judge or officer having jurisdiction, within ten days after the order came to his notice.

(Emphasis added)

[Rules of Civil Procedure](https://www.canlii.org/en/on/laws/regu/rro-1990-reg-194/latest/rro-1990-reg-194.html)

37.07(1) The notice of motion shall be served on any person or party who will be affected by the order sought, unless these rules provide otherwise.

37.14(1) A person who,

(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,

may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person's attention and names the first available hearing date that is at least three days after service of the notice of motion.

38.11(1) A person who is affected by a judgment on an application made without notice or who fails to appear at the hearing of an application through accident, mistake or insufficient notice may move to set aside or vary the judgment, by a notice of motion that is served forthwith after the judgment comes to the person's attention and names the first available hearing date that is at least three days after service of the notice of motion.

(Emphasis added)

The nature and purpose of rule 37.14(1)

[21] Virtually every common law system contains a code of procedural law that regulates the procedure that governs civil [page777] proceedings from inception to appeal. Among the many functions of a procedural code, the notice-giving function introduces an essential ingredient of due process as a proceeding moves from commencement to appeal. In the context of the Rules of Civil Procedure, for example, Rule 16 requires personal service of every originating process, while providing for an alternative to personal service in appropriate circumstances. Similarly, the requirement of rule 37.07(1) that "any person or party who will be affected by the order" be given notice of the motion seeking the order, introduces an essential ingredient of due process. In this manner, rule 37.07(1) both informs, and defines, the due process purpose of rule 37.14(1) that provides the mechanism for any person, able to satisfy the conditions stipulated by the rule, to obtain an order to set aside or vary an order.

[22] Rule 37.14(1) has a long history. Its predecessor was part of Ontario's procedural rules long before the major revision of 1913. In 1881, rules of court were annexed to the Judicature Act, 37 Vict., c. 7 (Ont.), that made sweeping changes to the administration of justice. Thus, the original precursor to rule 37.14(1) read:

536. Any party affected by an ex parte order, except the party issuing the same, may move to rescind or vary the same before the Judge or officer who made the order, or any Judge or officer having jurisdiction, within four days from the time of its coming to his notice, or within such further time as the Court or Judge may allow, and whether it has been acted upon by the party issuing the order or not.

(Emphasis added)

[23] Rule 536 was considered by this court in Howland v. Dominion Bank (1892), 15 P.R. 56 (Ont. C.A.), affd (1893), 1893 6 (SCC), 22 S.C.R. 130. In the context of a motion under Rule 536 to set aside an ex parte order extending the time for service of a writ of summons, at pp. 63-64 Maclennan J.A. considered both the nature of a Rule 536 motion and the standard of review on appeal from the decision of the court on the motion:

It was not contended that the orders had been made inadvertently, or that the learned Master had been induced to make them by the use of any improper means, and, but for the recent Rule No. 536, I should have been of the opinion that there was no jurisdiction to do what was done. That Rule, however, enables any party affected by an ex parte order to move against it before the same Judge or officer who made it, within four days after it comes to his notice, or such further time as the Court or Judge may allow. It is confined to ex parte orders, and is silent as to the grounds of the motion. It follows, I think, that the party moving may support his motion by matter which was not before the Judge or officer when the order was made, and that it must be determined, not as a mere appeal from the former order, but as an original substantive application. I think, however, that the question on such a motion is not alone whether the order ought or ought not to have been made, but also whether, having been made, it should be rescinded or varied. Taking [page778] that to be so, any change in the state of affairs or the position of the parties between the making of the order and the motion against it, is proper to be taken into consideration; and I think I would hardly have rescinded the orders in question, seeing that it was then too late to commence another action.

It is a different question, however, whether we should reverse the action of the learned Master, after it has been, twice affirmed before coming here. After the most careful consideration, I cannot see that the learned Master was so clearly wrong that his order cannot stand, and I therefore agree that the appeal should be dismissed.

(Emphasis added)

[24] A similar view of the nature of a motion to rescind or vary an ex parte order was stated by this court in Re Avery, 1951 111 (ON CA), [1952] O.R. 192, [1952] 2 D.L.R. 413 (C.A.) at p. 201 O.R.:

However, it has been decided that the question open for consideration upon a motion under the provisions of Rule 217 [subsequently, Rule 219] is not alone whether the order ought or ought not to have been made, but also whether, having been made, it should be rescinded or varied.

[25] More recently, former Rule 219 was considered in Strazisar v. Canadian Universal Insurance Co. (1981), 21 C.P.C. 51 at p. 58 (Ont. Co. Ct.), where the court said:

The nature of an application pursuant to R. 219 is stated in Holmested's Judicature Act, 4th ed., at p. 681, and is quoted with approval by Masten J.A. in Fretz v. Lafay, 1939 62 (ON CA), [1939] O.R. 273 at 275 (C.A.):

The motion to rescind or vary may be supported, or opposed, by matter not before the Judge or officer when the order was made. The motion is not an appeal, but is a substantive motion, and the question is not alone whether the order should have been made, but whether, having been made, it should, in view of any change in the state of affairs, or positions of the parties, be rescinded: Howland v. Dominion Bank (1892), 15 P.R. 56, at p. 63; Cairns v. Airth (1894), 16 P.R. 100, and Cousins v. Cronk (1897), 17 P.R. 348; Allison v. Breen (1900), 19 P.R. 119, 143.

See, also, W.B. Williston and R.J. Rolls, The Law of Civil Procedure, Vol. 1 (Toronto: Butterworths, 1970), at pp. 470-71.

A person affected by an order

[26] Since the inception of the rule in 1881, access to it has been available to one "affected by" the order which it is sought to rescind, set aside or vary. From 1881 to the introduction of the Rules of Civil Procedure in 1985, the rule provided that it was available to a "party affected by an ex parte order". However, in 1985 "person" replaced "party" in rule 37.14(1). In this regard, I note that in the complementary rule, rule 37.07(1), a notice of motion must be served "on any person or party who will be affected by the order sought" (emphasis added). This raises the [page779] question of whether a party may bring a motion under rule 37.14(1), or whether it is available only to a "person", or whether a person includes a party.

[27] Other than Stanley Canada Inc. v. 683481 Ontario Ltd. (1990), 1990 8098 (ON SC), 74 D.L.R. (4th) 528 (Ont. Gen. Div.), the cases that have considered the rule in its different forms do not discuss the meaning of "affected by". However, a review of the cases in which a successful motion has been brought under rule 37.14(1) and rule 38.11(1), which applies to applications, or their predecessors, to set aside or vary an order suggests that the order must be one that directly affects the rights of the moving party in respect to the proprietary or economic interests of the party. In addition, there is another broad group of cases, usually arising from the sealing of a court file, in which the media has complained that its right to freedom of expression as guaranteed by s. 2(b) of the Canadian Charter of Rights and Freedoms has been compromised and in which the principle of open and accessible court proceedings has been invoked. See, e.g., Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, 211 D.L.R. (4th) 193.

[28] In Stanley, the issue was whether a union and its members had standing under rule 37.14(1)(a) as persons "affected by an order obtained on motion made without notice", to move for an order setting aside an order obtained under rule 44.01(1) by the employer of the union members, Stanley, directing the sheriff to enter the defendant company's premises and to recover a quantity of steel owned by Stanley. At the time of the order, the union was on a legal strike against Stelco Inc., which had manufactured the steel for Stanley, that was stored for Stanley by the corporate defendant.

[29] The union contended that it had standing because the economic impact on Stelco of its picketing had been, and would be, diminished as a result of the rule 44.01(1) order. The union's picketing of the company precluded Stanley from removing its steel from the company's warehouse. The union contended that this represented an economic advantage to it in its strike against Stelco Inc.

[30] McKeown J., at p. 537 D.L.R., held "that the substantial economic advantage to the union members in keeping the steel in the warehouse makes them persons 'affected by an order' under rule 37.14". He also found at p. 539 D.L.R., that the "potential infringement" of its freedom of expression guaranteed by s. 2(b) of the Canadian Charter of Rights and Freedoms "qualifies the union members as 'affected by' . . . the master's order".

[31] Stanley was applied in Weinstein v. Weinstein (Litigation Guardian of) (1997), 1997 24477 (ON SC), 35 O.R. (3d) 229, 30 R.F.L. (4th) 116 (Gen. Div.). [page780] In that case a wife had settled a trust and provided that on her death the trust assets were to go to her estate, the residue of which had been bequeathed to her grandchildren under her will. Subsequently, her husband applied without notice to the grandchildren for a judgment equalizing the net family assets of himself and his wife. The application was granted and a judgment was given transferring $2.5 million from the wife's trust to the husband. The grandchildren moved under rule 38.11(1) to set aside the judgment on the ground that they were persons "affected by a judgment on an application made without notice". In setting aside the judgment, Sheard J. held that the grandchildren were "manifestly" persons affected by the judgment and that they should have received notice of the application. Citing Stanley, he rejected the argument that an economic interest in the outcome of a proceeding does not confer standing under rule 38.11(1).

[32] The following cases which have considered whether a stranger to a proceeding was a person affected by an ex parte order, or an order made without notice to him or her, within the meaning of rule 37.14(1) or rule 38.11(1), all determine standing on the ground that the order sought to be set aside or varied affected the moving party's propriety or economic interests:

(1) The administrator of an estate of a deceased person had standing to move to set aside an order appointing an administrator ad litem to represent the estate of the deceased in an action against him commenced before his death: McLean v. Allen (1898), 18 P.R. 255 (Ont. H.C.J.).

(2) A person claiming to be entitled to moneys attached pursuant to a garnishee order obtained with notice to her, was a person affected by the order: Canada Lumber Co. v. Whatmough (1923), 23 O.W.N. 584 (C.A.).

(3) The defendant's motor vehicle insurer was affected by an order renewing a writ of summons because it could be liable to indemnify the plaintiff for any damages recovered from the defendant: Palmateer v. Back (1976), 1975 612 (ON SC), 9 O.R. (2d) 693, [1975] I.L.R. 1-677 (H.C.J.).

(4) A mortgagee's interests as a secured creditor were affected by an order expediting the sale of condominium units and requiring it to discharge its mortgage: Unical Properties v. 784688 Ontario Ltd., [1993] O.J. No. 2039 (Quicklaw) Gen. Div.).

(5) The Government of Canada was affected by an order in a garnishee proceeding that contemplated that it would [page781] exceed its statutory authority and pay out money in a manner other than as authorized by statute: Beattie v. Ladouceur (1995), 1995 7192 (ON SC), 23 O.R. (3d) 225, 13 R.F.L. (4th) 435 (Gen. Div.).

Order obtained on a motion without notice

[33] As I have explained, I have decided this appeal on the ground that the appellants were not "persons" affected by the sealing order. Strictly speaking, therefore, it is unnecessary to consider the other elements of rule 37.14(1). However, to complete my analysis I find it helpful to consider a further element of the rule, even though it does not enter into my decision.

[34] As I have observed, prior to the introduction of the present Rules of Civil Procedure in 1985 the relevant rules contained the term "ex parte order". That term was replaced by "motion without notice" upon the introduction of the present rules. This raises the question of whether the two terms have the same meaning.

[35] The meaning of an ex parte motion was considered in Broom v. Pepall (1911), 23 O.L.R. 630, 19 O.W.R. 262 (Div. Ct.) at p. 634 O.L.R. in the oft-quoted passage from the reasons of Riddell J.:

The order made in the first instance was not an ex parte order. That term is applied only to such orders as the party obtains without the attendance of the other, without his consent, and solely on his (the applicant's) own shewing. Interim orders for injunction, orders of ne exeat, for production, and the like, may be mentioned -- and many different kinds are well known to the practitioner: some of them are to be found referred to in Muir Mackenzie (1911), pp. 754-755. But an order obtained by one party upon the written consent of another is not an ex parte order, in the true sense or in the sense of the Rule.

[36] One of the changes to the rules made by the Rules of Civil Procedure was that of style. As pointed out by Mr. Justice Morden, the Chairman of the Special Sub-Committee that prepared the Rules of Civil Procedure, in his seminal article "An Overview of the Rules of Civil Procedure of Ontario" (1984) 5 Adv. Q. 257 at p. 261:

Style. The general approach is to use the clearest and most direct words and expressions in carrying out the intended policy. One example of this approach is the replacement of Latin terms, such as ad litem, lis pendens, and fieri facias, with plain English. This feature of the rules may be of greater benefit to the neophyte than a member of the cognoscenti.

[37] Thus, in the same way that the term "certificate of pending litigation" (Rule 42) replaced "lis pendens" and the term "litigation guardian" (Rule 7) replaced "guardian ad litem", it would follow that "motion without notice" replaced "ex parte motion". If this is so, it appears that rule 37.14(1)(a) and rule 38.11(1) may [page782] not serve their intended due process function. I say this because both rules would not accord standing to a stranger to a proceeding who is affected by an order obtained by motion or application brought without notice to the stranger, but would grant standing only to a party where an order was obtained without notice to the party, on the reasoning that "motion without notice" has the same meaning as "ex parte motion".

[38] This problem is highlighted when the former rules are compared to the present rules. Both former rules 536 and 219 confer standing on a party affected by an ex parte order. Similarly, former rule 215 requires service of a notice of motion on "all parties affected by the order sought". On the other hand, both rules 37.14(1) and 38.11(1) confer standing on a person affected by an order or judgment obtained without notice, while rule 37.07(1) requires service of a motion on "any person or party who will be affected by the order sought" (emphasis added). In my view, in regard to rules 37.14(1) and 38.11(1) this gives rise to the question: Without notice to whom? To a stranger, being a "person"? To the other party, or parties, in the proceeding in which the order was obtained, which would be the result if an order without notice has the same meaning as ex parte order? Or, to both? From my reading of the cases, courts have not been troubled by this concern as they appear to have read rules 37.14(1) and 38.11(1) as if they read "an order or judgment obtained without notice to the non-party" seeking to set aside or vary the order or judgment impugned. For example, it is apparent from the media cases that the courts have read "an order obtained without notice" to mean without notice to the newspaper, or other media non-party, seeking to set aside a sealing order. See, e.g., National Bank of Canada v. Melnitzer (1991), 1991 7271 (ON SC), 5 O.R. (3d) 234, 84 D.L.R. (4th) 315 (Gen. Div.).

[39] Because of the view that I hold with respect to the outcome of this appeal, it is unnecessary to resolve these questions. The better approach may be to refer the relevant rules to the Civil Rules Committee for its review. However, for the assistance of the Committee I would add the following observations.

[40] When the Civil Rules Committee introduced rule 37.14(1) in 1985 and substituted "person" for "party" in former Rule 219, it is reasonable to infer that the Committee intended to broaden the scope of Rule 219 to enable non-parties, as well as parties, to move to set aside or vary an order affecting them. The same may be said about rule 38.11(1). In addition, it is likely that the Committee intended "person" in rule 37.14(1) to include "party", to maintain parity with rule 37.07(1), where the expression "any person or party" is used. If these inferences are correct, the meaning of rule 37.14(1)(a) would confer standing upon any person or party affected [page783] by an order obtained on motion without notice to him or to her. In my view, to read the rule differently would result in an absurdity.

[41] The absurdity can be illustrated in this way. If "person" is read as meaning only a non-party, then a party to [a] proceeding who is affected by an order obtained without notice to him or to her, or who fails to appear on a motion through accident, mistake or insufficient notice, has no standing under rule 37.14(1). If "motion without notice" is read as "ex parte motion", then a non-party's standing under rule 37.14(1) would be limited to a motion brought without notice to one of the parties to a proceeding.

[42] I doubt that these were the intended results when rule 37.14(1) was introduced in 1985. In this regard, it is helpful to note that in G.D. Watson and C. Perkins, Holmested & Watson: Ontario Civil Procedure, looseleaf (Toronto: Carswell, 2002) at pp. 37-55, in their discussion of rule 37.14(1)(a), the authors consider that its purpose is to permit "a person affected by an order obtained without notice to him or her" to seek to set aside or vary the order. As I observed earlier, the giving of notice to those whose rights may be affected by the result of the motion and affording them the opportunity to participate in the motion, is an essential ingredient of due process. As I have illustrated, as worded the rule does not clearly fulfill its purpose. Of course, it is for the Civil Rules Committee, and not for the court, to rewrite the rule if necessary.

[43] A similar analysis applies to rule 38.11(1), which the Civil Rules Committee may also wish to review.

Conclusion

[44] In summary, rule 37.14(1)(a), under which the appellants moved to set aside Caswell J.'s sealing order, is designed to enable an order to be set aside or varied by those who have, or can acquire, standing under the rule. It does not give standing to non-parties to the proceeding in which the order was obtained, such as the appellants, or possibly to parties to the proceeding, who are unable to satisfy the two conditions contained in the rule. Thus, a non-party who desires to set aside or vary an order must show that he or she has a direct interest in doing so, in the sense of establishing that he or she is affected by the order, and that the order was obtained without notice to him or her. As I have indicated, in the view that I hold of the merits of this appeal, it is sufficient to consider only whether the appellants are affected by the sealing order.

[45] In my view, the starting point in determining whether the appellants are affected by the sealing order is rule 37.07(1), which provides that a notice of motion "shall be served on any person or party who will be affected by the order sought". I say [page784] this because the term "affected by" in rule 37.07(1) necessarily includes the same meaning of the term in rule 37.14(1). If the appellants should have received notice of the sealing order motion as persons who would be affected by it, it would follow that they have standing under rule 37.14(1) (a) to set it aside.

[46] I am satisfied that the possibility that financial information about Mr. Ivandaev, or his companies, contained in the matrimonial court file might have assisted the appellants in their defence of the commercial litigation, thus requiring service of the notice of motion on the appellants, is far removed from the direct effects on the proprietary or economic interests of a non-party considered in the cases that I have reviewed that have been found sufficient to constitute the non-party a person affected by an order or judgment within the meaning of rules 37.07(1), 37.14(1) and 38.11(1). Although I acknowledge that "affected" is capable of a very large meaning, and it may be said that the information which the appellants' counsel obtained from the sealed file may be of assistance to the appellants in their defence of the commercial litigation, that is not the effect contemplated by the rule. Moreover, it is to be remembered that the broad discovery and production mechanism of the Rules of Civil Procedure is available to the appellants to enable them to obtain from Mr. Ivandaeva information relevant to the commercial litigation.

[47] Nor can it be said that any Charter right of the appellants has been infringed by the sealing order, similar to the Charter rights affected by the sealing orders considered in the media cases.

[48] It follows, therefore, that as the appellants are not affected by the sealing order they did not have standing under rule 37.14(1) to move to set aside or vary the order. Consequently, the motion judge was correct in her finding that the appellants were not persons upon whom it was necessary to serve the notice of motion requesting an order to seal the court file in Ivandaev v. Ivandaeva.

[49] Having reached this conclusion, it is unnecessary to decide whether the motion judge applied the correct standard of review of Caswell J.'s sealing order under rule 37.14(1)(2), nor is it necessary to interpret "an order obtained on motion without notice".

[50] In addition, I would add that there is a very different category of interest that does not fall within the category of proprietary or economic interest that would constitute a non-party a person affected by an order, thereby requiring that a notice of motion be served upon him or her. I refer, for example, to essentially procedural motions to add a person as a party to a proceeding, to obtain discovery or production from a non-party or to obtain leave to commence a third party claim out of time. Clearly, the appellants do not fall into this category. [page785]

[51] From the foregoing discussion, it also follows that the motion judge was correct in ordering compliance with the sealing order.

Result

[52] For all the above reasons, I would dismiss the appeals with costs. The parties are invited to make written submissions about the scale and amount of costs. The respondents are to file their submissions no later than 15 days after the release of these reasons, and the appellants' submissions are to be filed no later than ten days thereafter.

Appeal dismissed.