COURT OF APPEAL FOR ONTARIO DATE: 20211118 DOCKET: M52811 & M52846 (C69611) Feldman, van Rensburg and Coroza JJ.A.
BETWEEN
1476335 Ontario Inc., Aldo Rotondi, D’Andrea Management Inc. and Rick D’Andrea Plaintiffs (Appellants/Moving Parties)
and
Brenda Frezza, Onorio Frezza, Elio Ascenzo Frezza, Jane Frezza and Frezza Management Inc. Defendants (Respondents/Responding Parties)
Anthony J. Gabriele, for the moving parties D. John Kirby, for the responding party Brenda Frezza No one appearing for the responding parties Onorio Frezza, Elio Ascenzo Frezza and Jane Frezza
Heard: November 5, 2021 by video conference
Feldman J.A.:
A. Introduction
[1] There were two motions before the court. The first asked the court to determine whether it has jurisdiction to hear the appeal. The second asked for interim relief pending appeal. During the hearing, the court determined that it did not have jurisdiction to hear the appeal or to grant interim relief, but proceeded to hear submissions on whether the court should seek the permission of the Chief Justice of the Superior Court to sit as the Divisional Court for the purpose of considering whether to grant the request for interim relief.
B. Background
[2] The moving parties are the plaintiffs in an action seeking to set aside three alleged fraudulent conveyances. The conveyances were made in or around 2003, after litigation had been commenced by the current defendants Elio Ascenzo Frezza, Onorio Frezza, and Frezza Management Inc., as well as others, against a number of parties including the current plaintiffs. This prior litigation was dismissed in 2016 and resulted in a significant costs award in favour of the current plaintiffs.
[3] While the current plaintiffs have recovered some of the costs awarded to them, $700,000 in costs remains outstanding. In the current action, the plaintiffs allege that during the prior litigation, the current defendants Elio Ascenzo Frezza, Onorio Frezza, and Frezza Management Inc. fraudulently transferred three properties to Jane Frezza and Brenda Frezza, who were not parties to the prior litigation, for nominal consideration. The plaintiffs say that, as a result of these transfers, they are unable to enforce the costs order from the prior litigation against those defendants. They commenced the action for fraudulent conveyance against both the transferors and the recipients of the properties, the current defendants, and sought a certificate of pending litigation to prevent the disposal of the properties. One property is scheduled to be sold in January 2022.
[4] The plaintiffs’ motion for a certificate of pending litigation over two properties that are now owned by Brenda Frezza was dismissed by the motion judge on the basis that the fraudulent conveyance action is statute-barred. He also found that in any event, a balancing of the equities favoured the defendants. The plaintiffs took two steps to appeal: they sought leave to appeal to the Divisional Court on the basis that the order denying the certificate may be interlocutory, and at the same time they filed a notice of appeal to this court on the basis that the order may be final. The appellants adopted this unusual procedure on the basis that they were uncertain whether the motion judge’s order was final or interlocutory. The respondents took no position on the jurisdiction issue.
[5] The moving parties asked, and the Divisional Court agreed on this occasion, to hold the leave motion in abeyance while a motion for directions was brought in this court to ask the court to determine the jurisdiction issue. The moving parties also brought a second motion in this court asking the court to grant leave to issue and register a certificate of pending litigation as interim relief pending appeal. Brown J.A., sitting in chambers, referred the interim relief motion to the panel to be heard following the panel’s determination whether this court has the jurisdiction to hear the appeal: 1476335 Ontario Inc. v. Frezza, 2021 ONCA 732. The panel heard both motions.
C. Issues and Analysis
(1) Is the order under appeal a final or an interlocutory order?
[6] The first issue to be determined was whether the order under appeal was a final or an interlocutory order. An appeal lies to the Court of Appeal from a final order of a judge of the Superior Court of Justice for an amount of $50,000 or more: Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(1)(b), 19(1)(a), and 19(1.2). A final order involving less than $50,000 is appealed to the Divisional Court: ss. 19(1)(a) and 19(1.2). An interlocutory order of a Superior Court judge is appealed to the Divisional Court, and requires leave of that court: s.19(1)(b). Rule 62.02(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the grounds for granting leave to appeal to the Divisional Court:
62.02(4) Leave to appeal from an interlocutory order shall not be granted unless,
(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the panel hearing the motion, desirable that leave to appeal be granted; or
(b) there appears to the panel hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in the panel’s opinion, leave to appeal should be granted.
[7] A final order disposes of the litigation, or finally disposes of part of the litigation: Ball v. Donais (1993), 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] O.R. 675 (C.A.), at p. 678.
[8] 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.
[9] The order sought to be appealed in this case is an order denying leave to issue and register a certificate of pending litigation. A number of authorities from this court have held that an order granting or lifting a certificate of pending litigation is an interlocutory order: see Archer v. Archer (1975), 11 O.R. (2d) 432 (C.A.); Amphenol Canada Corp. v. Sundaram, 2019 ONCA 932, 56 C.P.C. (8th) 307; 561895 Ontario Ltd. v. Metropolitan Trust Co. of Canada (1997), 14 C.P.C. (4th) 195 (Ont. C.A.), leave to appeal to S.C.C. refused, 26191 (November 20, 1997). The reason is that the granting or lifting of the certificate does not finally determine the litigation, which is ongoing. The refusal to grant a certificate is analogous. It does not finally determine any issue in the litigation, which remains ongoing. It is therefore an interlocutory order. As a result, the appeal does not lie to the Court of Appeal but to the Divisional Court with leave.
[10] The appellants asked the court whether the order could be viewed as final based on the reasons of the motion judge. The motion judge’s primary reason for denying the certificate was that the action is statute-barred. If that finding is binding on a trial or summary judgment judge, then the order that included that finding would be a final order. The answer is no: the reasons for denying the motion for a certificate of pending litigation are not binding on the trial or summary judgment judge.
[11] The issue of whether the reasons for dismissing a summary judgment motion constitute binding findings was recently discussed by this court in Skunk v. Ketash, 2016 ONCA 841, 135 O.R. (3d) 180, where Hoy A.C.J.O. set out the following helpful summary of the effect of this court’s jurisprudence, at para. 58:
58 In an attempt to provide greater clarity, I would summarize the effect of this court’s jurisprudence as follows:
The general rule is that an order dismissing a motion for summary judgment is an interlocutory, and not a final, order.
If a party argues that the motion judge made a final, binding determination of law that disposes of the substantive rights of one of the parties (“Binding Legal Determination”) in dismissing the summary judgment motion, then this court will consider whether the motion judge’s order invokes r. 20.04(4) and references the legal determination that the party argues is a Binding Legal Determination.
If the order does not invoke r. 20.04(4) and reference the legal determination that the party argues is a Binding Legal Determination, the court will usually consider whether the precise scope of the point of law determined by the motion judge is clear and whether it is clear that the motion judge intended that her determination be binding on the parties at trial. In this case, it was not clear that the motion judge intended his determination to be binding on the parties at trial.
[12] On a summary judgment motion, the Rules contemplate that binding determinations may be made by the summary judgment motion judge, either by invoking r. 20.04(4) or otherwise indicating that one or more findings is intended to be final and binding. This is because a summary judgment motion is intended to dispose of the action, if appropriate, either by granting or denying judgment, or, if that is not possible, to narrow the issues that require a trial.
[13] However, the same approach is not appropriate and therefore not available (except possibly on the request or consent of the parties) on a motion that seeks specific interim relief, but does not seek to finally dispose of an issue in the action. On such motions, the record is tailored to the relief sought and may not be the full record required for the final determination of an issue in the litigation. Further, the motion does not request a final determination in the relief sought. As a result, the order that flows from the reasons will only address the relief sought.
[14] In this case, the reasons of the motion judge for denying the certificate of pending litigation do not bind the trial or summary judgment judge. They do not constitute the final determination of the limitation issue because the court was not asked to determine that issue for the purpose of granting or denying judgment. The full record for finally determining the issue may or may not have been placed before the motion judge, but only enough to allow the motion judge to make or deny the discretionary order that was sought. In any event, the court was not asked to make a final determination of the limitation issue.
(2) Where the court does not have jurisdiction over the appeal, can it make an interim order pending the appeal?
[15] Having found that the order sought to be appealed is an interlocutory order which can only be appealed to the Divisional Court with leave of that court, the next issue that was argued was the motion for interim relief.
[16] Section 134(2) of the Courts of Justice Act states:
On motion, a court to which a motion for leave to appeal is made or to which an appeal is taken may make any interim order that is considered just to prevent prejudice to a party pending the appeal.
[17] I agree with Brown J.A. that where the court does not have jurisdiction to hear the appeal, it cannot make an interim order because such an order can only be made “pending the appeal”.
[18] There have been rare occasions in the past where an appeal has been wrongly commenced in this court and proceeded to an oral hearing before anyone realized that the appeal was in the wrong court, and where, on consent of all parties, the court has requested the authority of the Chief Justice of the Superior Court to sit as the Divisional Court in order to save time and cost: Courts of Justice Act, ss. 13 and 18; Tomec v. Economical Mutual Insurance Company, 2019 ONCA 839, 148 O.R. (3d) 433, at paras. 12-14.
[19] This is not an appropriate case to seek to apply this procedure. The appeal to this court was not brought by mistake. The appellants have their leave to appeal motion ready to proceed in the Divisional Court. The appellants may seek their interim relief from the Divisional Court, if they decide to proceed with the appeal to that court.
D. Conclusion
[20] In the result, the appeal in this court is quashed. The parties agreed that costs in the amount of $5,000, inclusive of disbursements and HST, be awarded to the successful party. As this motion was in essence a motion for the direction of the court, without opposition, the costs of $5,000, which will include the $250 awarded by Brown J.A., will be in the cause of the action.
Released: November 18, 2021 “K.F.” “K. Feldman J.A.” “I agree. K. van Rensburg J.A.” “I agree. Coroza J.A.”
