COURT OF APPEAL FOR ONTARIO

CITATION: Adelaide Metcalfe (Township) v. Strathroy-Caradoc (Municipality), 2025 ONCA 180

DATE: 20250310

DOCKET: COA-24-CV-0137

Hourigan, Madsen and Pomerance JJ.A.

BETWEEN

The Corporation of the Township of Adelaide Metcalfe

Applicant

(Appellant)

and

The Corporation of the Municipality of Strathroy-Caradoc

Respondent

(Respondent)

Paula Lombardi and Michael Polvere, for the appellant

Carolyn Brandow and John Petrella, for the respondent

Kathleen Coulter and Brennyn Watterton, for the Ontario Land Tribunal

Heard: October 21, 2024

On appeal from the judgment of the Divisional Court (Justices John S. Fregeau, Michael N. Varpio and Sandra Nishikawa), dated June 14, 2023.

Madsen J.A.:

A. Introduction

[1] This is an appeal from an order of the Ontario Divisional Court rendered June 14, 2023, in which it found that the Ontario Land Tribunal (the “Tribunal” or the “OLT”) erred in asserting jurisdiction over a dispute between the Township of Adelaide Metcalfe (“Adelaide Metcalfe”) and the Corporation of the Municipality of Strathroy-Caradoc (“Strathroy-Caradoc”). Adelaide Metcalfe appeals the decision of the Divisional Court quashing the Tribunal’s order.

[2] For the reasons set out below, it is my view that the Divisional Court was without jurisdiction to hear Strathroy-Caradoc’s appeal of the Tribunal’s decision, as it was, on its face, interlocutory. Leave ought not to have been granted by the Divisional Court and the appeal should not have been heard. Accordingly, the decision of the Divisional Court is set aside, and the order of the Tribunal is restored.

B. Background

[3] Strathroy-Caradoc and Adelaide Metcalfe are neighbouring municipalities. In 2003, under the authority of s. 20(1) of the Municipal Act, 2001, S.O. 2001, c. 25 (the “Municipal Act”), the parties entered into an agreement under which Strathroy-Caradoc would provide potable water and sewage services to certain properties within Adelaide Metcalfe (the “Servicing Agreement”). The Servicing Agreement was for a term of ten years, with an option to renew for five years on certain conditions.

[4] The Servicing Agreement included a clause, Clause 4.2.4, titled “Termination of Services at End of Term,” setting out a process to negotiate renewals, which included an arbitration clause. That clause also provided that if no agreement to continue the provision of services was reached and if arbitration had not been requested within a specific timeframe, Strathroy-Caradoc would be at liberty to terminate services.

[5] At the end of the ten-year term, the parties renewed for a further five years beginning October 1, 2013. The renewal agreement contained an identical termination clause. In 2018, the parties then agreed to a further six-month extension to March 31, 2019. The parties attempted to negotiate a further renewal but were not successful.

[6] On April 19, 2022, after the expiry of the timeframe referenced in Clause 4.2.4, Adelaide Metcalfe delivered a Notice of Request for Arbitration by the Tribunal. Shortly thereafter, on April 28, 2022, Strathroy-Caradoc brought an application in Superior Court seeking a declaration that the Servicing Agreement had terminated and was no longer in force, as well as an injunction preventing Adelaide-Metcalfe from adding connections to the water supply or sewage connections.

[7] On May 27, 2022, Garson J. granted Adelaide Metcalfe’s request for an adjournment of the proceeding in Superior Court to permit the Tribunal to rule on whether it would assume jurisdiction, effectively bifurcating that question from a hearing on the merits. Garson J. also ordered, on an “interim interim” without prejudice basis, that no new connections be made to the system. In adjourning the application, Garson J. instructed Adelaide-Metcalfe to secure an “expedited jurisdiction hearing” before the Tribunal because “a presiding justice will want to know whether OLT would assume jurisdiction”. Garson J. also stated that the “OLT’s position is not determinative but is certainly a factor to take into account.” He set a return date of July 8, 2022, in Superior Court. It appears from the record that the matter was most recently adjourned by Dubé J. on September 12, 2022, to a date to be set after the leave to appeal motion in Divisional Court was heard.

[8] Following Garson J.’s order, Adelaide-Metcalfe brought a motion before the Tribunal seeking an order “confirming that the Ontario Land Tribunal has jurisdiction.” The Tribunal noted in its reasons that it was responding to Garson J.’s order, and had conducted an expedited hearing on a paper record for that reason. The Tribunal considered the question of jurisdiction under two sections of the Municipal Act: ss. 474.10.3(1)(j) and 474.10.16(1)(a). The Tribunal determined, “on a prima facie basis” that it could accept jurisdiction under s. 474.10(3)(1)(j), and in the alternative, on the facts presented, “the criteria for the Tribunal’s jurisdiction under s. 474.10.16(1)(a) [were] met.” Even with these prima facie determinations, the Tribunal expressly deferred several issues to a hearing on the merits. One of those issues was whether Strathroy-Caradoc could be considered “a municipality” for the purposes of s. 86 of the Municipal Act – a fact which presumably would have been foundational to the Tribunal’s jurisdiction, if any, under s. 474.10.16(1)(a).

[9] In its order, the Tribunal stated that “it has jurisdiction”, but further noted that “[a]s the Court may determine that it will retain jurisdiction and elect to assume and retain responsibility for the determination of issues raised in the Notice of Application before it, the Tribunal will await the further decision of the Ontario Superior Court of Justice under that Application.” The order further provided that if the court determined that it would retain jurisdiction over the issues raised in the application, “the Tribunal’s file will accordingly be reviewed to determine next steps.”

[10] Strathroy-Caradoc appealed to the Divisional Court. The Divisional Court granted leave and allowed Strathroy-Caradoc’s appeal, finding that the Tribunal erred in determining that it had jurisdiction. The analysis of the Divisional Court focused on “whether the Tribunal erred in its interpretation of the Servicing Agreement and the applicable statutory provisions.” The issue of prematurity was not raised before the Divisional Court and not addressed in its decision.

C. Positions of the Parties

[11] Before this court, the Tribunal argues that there is no right of appeal of an interlocutory decision of an administrative tribunal, absent explicit statutory language to the contrary. The Tribunal highlights the importance of preventing fragmentation and delay in administrative proceedings, and notes that because the case was bifurcated by order of Garson J., the Tribunal had not disposed of the substantive issues in the proceeding, nor was its decision final. In oral submissions, Adelaide Metcalfe echoed the Tribunal’s position on prematurity, emphasizing that the Tribunal should be permitted to complete its process.

[12] Strathroy-Caradoc asserts, first, that arguments on prematurity should not be entertained on appeal to this court, not having been raised before the Divisional Court, and the Tribunal having opted not to participate in the leave to appeal process before the Divisional Court. Second, Strathroy-Caradoc argues that this matter is not, in any event, premature, citing Johnson v. Ontario, 2021 ONCA 650, 158 O.R. (3d) 266, for the proposition that decisions that determine the forum in which a matter is to be determined are final, not interlocutory.

D. Analysis

[13] An appellate court is ordinarily reluctant to consider an issue not raised in the court below. In this case, however, the court cannot ignore the jurisdictional issue. Jurisdiction cannot be conferred by consent, nor by a party’s failure to raise the issue: J.N. v. Durham Regional Police Service, 2012 ONCA 428, 294 O.A.C. 56, at paras. 24-25. Whether the Divisional Court had jurisdiction to hear the appeal from the Tribunal is determinative of this appeal.

[14] Moreover, the issue can be fully considered without adding anything to the record that was before the Divisional Court. This court is not being asked to address a new issue on a record that does not speak to that issue. Addressing the issue of whether the Divisional Court had jurisdiction does not prejudice Strathroy-Caradoc in any manner that cannot be properly addressed by an appropriate costs order: George v. Anishinabek Police Service, 2014 ONCA 581, 321 O.A.C. 391, at para. 8.

[15] Unlike an application for judicial review, the court has no discretion to hear an appeal from an interlocutory order. Rather, the authority to hear an appeal is squarely grounded in the governing legislation. As stated in Penney v. The Co-operators General Insurance Company, 2022 ONSC 3874, 94 M.V.R. (7th) 281, at para. 8, determining the scope of a right of appeal thus requires the court to interpret the governing statute in accordance with the modern principle of statutory interpretation, “considering the statute, the context and the purpose and policy behind the statute.”

[16] Legislation conferring a right of appeal from a decision of an administrative tribunal has generally been interpreted as conferring a right to appeal a final decision only, absent clear language indicating that there is a right to appeal an interlocutory decision: Penney, at paras. 10, 23; Roosma v. Ford Motor Co. of Canada Ltd. (1988), 66 O.R. (2d) 18 (Div. Ct.); see also Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541, 111 O.R. (3d) 561, at paras. 62-67. This is consistent with the policy objective of reducing fragmentation and premature or inefficient judicial determinations in administrative proceedings: Halifax (Regional Municipality) v. Nova Scotia (Human Rights Commission), 2012 SCC 10, [2012] 1 S.C.R. 364, at para. 36. As noted by the Divisional Court in Eastpine Kennedy-Steeles Ltd. v. Markham (Town) (2000), 131 O.A.C. 147, at para. 4, “It is preferable…to allow such matters to run their full course before the tribunal and then consider all legal issues arising from the proceedings at their conclusion.”

[17] The Ontario Land Tribunal Act, 2021, S.O., 2021, c. 4, Sched. 6, provides at s. 24(1) that “unless another Act specifies otherwise, an order or decision of the Tribunal may be appealed to the Divisional Court, with leave of that court on motion in accordance with subsection (3) but only on a question of law.” The Divisional Court has held that this section, and appeal provisions for the Tribunal’s predecessor, the Ontario Municipal Board, provide only a right of appeal from a final order, not from an interlocutory order: The Estate of Nikolaus R. Holz v. Ministry of Transportation, 2024 ONSC 2176, 23 L.C.R. (2d) 177, at paras. 3, 14; Geneen v. Toronto (City) (1998), 107 O.A.C. 308 (Div. Ct.); and Maplehurst Bakeries Inc. v. Brampton (City) (1999), 44 O.R. (3d) 667 (Div. Ct.).

[18] Strathroy-Caradoc cites Johnson for the proposition that an order that determines the forum in which a case is to be heard is final, not interlocutory, for the purpose of determining appeal rights. Johnson, citing Skunk v. Ketash, 2016 ONCA 841, 135 O.R. (3d) 180, at para. 12,affirmed the distinction between an interlocutory order and a final order as an order that does not determine the “real matter” in dispute between the parties, reiterating the sound policy rationale for the distinction as being grounded in proportionality:

The reason for the distinction is explained by Paul M. Perell and John W. Morden in The Law of Civil Procedure in Ontario, 2d ed. (Markham: Lexis-Nexis Canada Inc., 2014), at p. 910:

12.41 In general terms, the policy underlying the distinction between interlocutory and final orders is the proportionality principle. For judicial decisions that are of comparatively less importance to the parties and the public than other decisions (particularly those other decisions that are determinative of the outcome of the litigation), there should be no appeal at all, or the right of appeal should be curbed by a leave requirement. [Footnote omitted.]

[19] The decision then provides, at para. 18, that: “In general terms, a decision that determines the forum in which the merits of the dispute are to be heard is considered to be a final decision.” In Johnson, in the context of a class proceedings matter, a denial of an extension of time to opt out of a class action was determined to affect significant substantive rights and was held to be a final order for the purpose of determining appeal rights. A determination of forum, this court held, affects substantive rights and is therefore final.

[20] In my view, the Johnson decision is wholly distinguishable from this case. At its most basic, this is because the Tribunal did not, in fact, determine the forum on a final basis. Rather, on its face, the Tribunal made a preliminary decision that it has jurisdiction to hear the merits, and took several preliminary actions to preserve the status quo between the parties pending such a hearing. However, as set out above, the decision as to the proper forum remains with the Superior Court in a proceeding that has been adjourned. As Garson J. endorsed, the decision of the Tribunal would not be determinative. Further, the reasons for the Tribunal’s decision repeatedly refer to accepting jurisdiction on a “prima facie basis,” and expressly deferred several issues that would bear on jurisdiction to a hearing on the merits. The Tribunal’s decision neither determined “the real matter in dispute between the parties – the very subject matter of the litigation”, nor deprived a party of a substantive right which could be determinative of the entire action: Ball v. Donais (1993), 13 O.R. (3d) 322 (C.A.); Heegsma v. Hamilton (City), 2024 ONCA 865, at para. 12. In sum, the Tribunal’s decision did not finally determine forum.

[21] As the Divisional Court erred in hearing an appeal of the Tribunal’s interlocutory decision, it is not necessary to address Adelaide Metcalfe’s other grounds of appeal.

E. Disposition

[22] The order of the Divisional Court is set aside, and the order of the Tribunal is restored.

[23] The parties were unable to agree on costs in advance of the hearing of the appeal. If no agreement has been reached, brief submissions may be submitted to the court on the following schedule: Appellant: March 21, 2025 Respondent: April 4, 2025; Appellant’s Reply, if any: April 18, 2025.

Released: March 10, 2025 “C.W.H.”

“L. Madsen J.A.”

“I agree. C.W. Hourigan J.A.”

“I agree. R. Pomerance J.A.”