DIV. COURT FILE NO.: 670/04

DATE: 2005/04/08

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

TORONTO

B E T W E E N:

DANIEL HORNSTEIN, 4590 DUFFERIN HOLDINGS LTD. and DANIEL HORNSTEIN, for a company to be incorporated

Applicants

and -

THE VERITAS GROUP, in trust for a company to be incorporated, THE VERITAS GROUP, THE VERITAS GROUP LLC, VERITAS 4590 DUFFERIN STREET CORP., and STEPHEN HARDY

Respondents

A. Patrick Wymes, counsel for the Applicants, Moving Parties on Motion for Leave to Appeal

Jonathan F. Lancaster, counsel for the Respondents

HEARD: March 7, 2005

GREER J.

E N D O R S E M E N T

[1] The Applicants move for a Declaration that the Appeal previously filed by them is properly characterized as a final Order. This relief makes no sense, in that they previously incorrectly directly appealed the Order of Mr. Justice Ducharme, (the “Motions Judge”), made December 14, 2004, to the Divisional Court on the basis that it was a Final Order and the amount in question was less than $25,000. That Order, however, was not a Final Order but was an Interim Order, which required the Applicants to move for Leave to Appeal.

[2] In the alternative, the Applicants ask for an Order granting them Leave to Appeal that Order and ask for an Order staying the provisions of the Order of the Motions Judge if Leave to Appeal is granted by this Court.

[3] The Applicants list 15 points with reasons why they say that the Motions Judge erred in law and otherwise, in reaching his decision of December 14, 2004, which was later clarified by his Endorsement of January 7, 2005. Some of these points are repeated in the Applicants’ Motion for Leave to Appeal but others are added, including one part of the Rule for Leave, that is that they say there is good reason to doubt the correctness of the Motions Judge’s Order.

[4] The Applicants had a Notice of Application issued on October 21, 2004, in which it asked, inter alia, for an Order authorizing the issuance of a Certificate of Pending Litigation with respect to certain commercial property on Dufferin Street. They then obtained an ex parte Order from Mr. Justice Cameron, who ordered on October 29, 2004, that the Certificate be issued. Counsel before me on this Leave Motion, was not the counsel of record at that time. They also obtained injunctive relief. The Respondents then moved by Motion before the Motions Judge to set aside that Certificate. The Applicants requested an adjournment. The Motions Judge granted that adjournment to January 7, 2004, but only on strict terms as set out in his Order of December 14, 2004, namely:

The Applicants were ordered to file a joint and several Undertaking to the Court as to damages.
They were further ordered to pay into Court the amount of $20,000 as security for damages, with the issue of further security to be addressed on the Return of the Motion.
If the Applicants failed to satisfy the above terms by December 21, 2004, the Order of Mr. Justice Cameron was to be vacated and the matter brought back on only on the issue of damages and/or costs.
The Judge then struck 4590 Dufferin Holdings Ltd. as an Applicant, since it was a non-existent corporation. The Respondents were given until December 23, 2004 to file responding materials
The Respondents Costs thrown away were fixed at $1,500.

The Applicants took the position that the terms of this Order were not clear, since the Motions Judge had inadvertently, in his Reasons, referred to the terms “Orders”.

[5] On the appearance before the Motions Judge on January 7, 2005, he notes that the Applicants had already filed a Notice of Appeal of his earlier Order. They then asked for another adjournment in order to cross-examine one of the Respondents’ Affiants on his Affidavit. This was opposed by the Respondents, as they said that the Applicants had taken an incorrect step by filing a Notice of Motion to Appeal, given that the Order was an Interim Order. Further, they pointed out that the Applicants had failed to comply with the earlier terms of the Order of December 14, 2004. The Motions Judge adjourned the matter to May 3, 2005 for a full day hearing on the merits of the issues, and said that the parties could address the issues of the CPL, the injunctive relief granted and the issues of Costs and damages on that date, with the main Application to be adjourned to a subsequent date. He then clarified some of the wording of his previous Order. A new timetable was then agreed to by the parties.

[6] The parties appeared a third time before the Motions Judge to settle the terms of his Orders. He rejected the Applicants’ views of how they thought the wording of the Order of December 14, 2004, should be dealt with. He agreed with respect to some of their suggestions for his January 7, 2005 Order and he changed some wording so that the Order, as requested by the Respondents, could be registered to remove the CPL, as he had granted. He felt that this attendance would not have been necessary if the Applicants had tried to discuss matters with the Respondents, and he gave the Respondents their Costs fixed at $500 payable forthwith. Since the Applicants had not paid the $20,000 into Court as security for damages, the Order of Mr. Justice Cameron was vacated.

[7] I take this time to summarize all of these events, since it is clear in the Applicants’ Motion before me, that the Order of December 14, 2004, cannot be segregated from the other two attendances and subsequent Orders. When I reviewed the Applicants’ materials the evening before their Motion for Leave before me, I found their materials confusing, argumentative on issues not relevant to the Leave Motion and it seemed to me that they were unclear as to the procedure in Divisional Court for a Leave Motion. Counsel for the Applicants felt that his request for an adjournment on December 14, 2004, was not properly considered by the Motions Judge since he had just been retained and wanted to have cross-examinations on the Respondents’ affidavit material. He said that the Motions Judge did not have all the facts before him, that he did not exercise his discretion “judicially” in making the Orders he did.

[8] The Respondents say that the Motion for Leave should not be granted. They were unable to determine whether the Undertaking as to damages had ever been filed with the Court. They say that the Applicants’ former counsel had time to respond to their materials and that the representative of their client was in Toronto on November 15, 2004, and could have been cross-examined then but this was not done by the Applicants. It is clear from the correspondence between counsel before me, that the Applicants’ previous counsel did not get his materials served on time on the Respondents and then got off the Record. The Applicants then retained their present counsel on December 12, 2004. The Respondents made it clear that they would only adjourn the Motion on terms so the Applicants were aware of this when they appeared before the Motions Judge.

[9] The Respondents tried to clarify what procedure was actually being taken with respect to the Motions Judge’s Orders, as it was correctly unclear to them what was happening. Further, when they did receive materials these were not in order, with affidavits missing and pieces of a Transcript included although taken after the three Orders were issued.

[10] The Test for Leave to Appeal from an interim Order is set out in Rule 69.02(4)(a) and (b) of the Rules of Civil Procedure. It has two branches to it. On this Motion for Leave, the Applicants rely only on that branch set out in sub-rule (b) thereof.

[11] The test under this sub-rule is set out in the leading decision, Greslik v. Ontario Legal Aid Plan (1988), 65 O.R. (2d) 110 (Div. Ct.) at pp. 112 and 113. While these two branches of the Rule are conjunctive, I only refer to that in sub-rule (b). Under that sub-rule, the Judge hearing the Motion must have good reason to doubt the correctness of the decision and must also be satisfied that the matters involved are of “such importance” that in his or her opinion, Leave should be granted. The Court then stated that the matters must be of “general” importance and not of particular importance to just the litigants. Firstly, with respect to this branch, I have no good reason to doubt the correctness of the Motions Judge’s Reasons and Orders made. In my view, the Motions Judge properly exercised his discretion when he made the terms of the adjournment clear in his December 14, 2004, Order. He had no obligation to grant the adjournment without terms, given the nature of the relief granted by Mr. Justice Cameron. No Undertaking had yet been filed and he knew that one of the Applicants was a non-existent company. That Order and the subsequent Orders have no general importance to the public and relate strictly to the litigants in question.

[12] The Court will dismiss a Motion for Leave to Appeal where the Order made by the Motions Judge was not unreasonable in the circumstances. In 713484 Ontario Ltd. v. McMillan Binch, [2004] O.J. No.690, Court File No. 728/03 (Div. Ct.), Madam Justice Swinton failed to grant Leave to Appeal where the Motions Judge had ordered the plaintiffs, in the matter before him, to pay money into Court as security for Costs. There, Madam Justice Swinton found that such an Order did not raise a matter of general importance that goes beyond the interests of the parties. This is also the case before me, where the issue is strictly an issue between the parties of leasehold premises and the purchase of a commercial property. See also: Hanna v. Hanna, [2004] O.J. No.5605, Court File No. 621/04, where, again on such a Motion for Leave, Mr. Justice Ferrier said that it is an everyday occurrence for the Court to impose stiff terms of an adjournment related to costs and other matters in such Motions. It is within a Judge’s discretion to do so.

[13] The Applicants’ Motion for Leave to Appeal is therefore dismissed for the reasons I have noted. The Respondents are entitled to their Costs of the Motion, which I will fix if the parties cannot agree otherwise on them.

Greer J.

Released: April 8, 2005

DIV. COURT FILE NO.: 670/04

DATE: 2005/04/08

ONTARIO