Court File and Parties

COURT FILE NO.: DC-16-147-00 DATE: 20170303

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MATTI SIDDIQUI Plaintiff

• and -

MARSHA THOMPSON Defendant

COUNSEL: Granville Cadogan, for the Plaintiff Marc Whiteley, for the Defendants

HEARD: March 2, 2017

REASONS FOR JUDGMENT

LEMAY J

[1] The underlying action in this case is a mortgage enforcement action brought by the Plaintiff, Mr. Matti Siddiqui against the Defendant, Ms. Marsha Thompson. A default judgment in the Plaintiff’s favour was issued and entered by the Registrar on September 13th, 2016. The Defendant moved promptly to set aside the default judgment, and a motion seeking that relief was originally returnable on October 11th, 2016.

[2] On November 15th, 2016, Master Graham denied the Plaintiff’s request for a third adjournment of the Defendant’s motion, and ordered that the Default Judgment should be set aside.

[3] Thirty days later, the Plaintiff filed a notice appealing Master Graham’s Order to the Divisional Court. The Plaintiff viewed it as a final Order. The Defendant has brought a motion to quash the Plaintiff’s appeal on the basis that the Plaintiff is appealing an interlocutory Order, and that the Plaintiff’s appeal lies to a single judge of the Superior Court.

[4] As a result of the Defendant’s motion, and at my direction, the Plaintiff has brought a cross-motion in the event that his appeal is quashed. This cross-motion seeks to extend the time limits for appealing Master Graham’s Order to a judge of the Superior Court. The time limit for appealing the interlocutory order of a master is seven (7) days from the date the Order was made.

[5] For the reasons that follow, I have quashed the Plaintiff’s appeal to the Divisional Court, and am denying the Plaintiff’s motion for an extension of the time limits to appeal to a single judge of the Superior Court.

Background Facts

a) The Events Leading to Master Graham’s Order

[6] The Plaintiff commenced a mortgage enforcement action against the Defendant on February 5th, 2016. On June 17th, 2016, the Defendant was noted in default.

[7] Default judgment was issued in this matter on September 13th, 2016, at the same time that counsel for the Defendant was endeavouring to deal with issues relating to this claim and a related action.

[8] As a result, the Defendant moved promptly to set aside the default judgment, and the Defendant’s motion was served on September 27th, 2016. It was ultimately heard on October 11th, 2016 by Emery J., who adjourned the motion sine die, and directed the Plaintiff to file his materials by October 18th, 2016.

[9] The motion was then made returnable on October 28th, 2016. It came before Bielby J. who, at the request of the Plaintiff, granted a further adjournment. This adjournment was sought as a result of Mr. Cadogan advising that he was unable to attend on the motion because of an emergency medical procedure. Bielby J. adjourned the matter to November 15th, 2016, peremptory against the Plaintiff and stated:

Defence counsel opposes the request citing the history of this matter arguing there is an intention to delay.

I share that view especially when told that Mr. Cadogan is asking the motion be adjourned sine die.

[10] The Plaintiff had been seeking to cross-examine the Defendant on her Affidavits since early October. That cross-examination took place on November 14th, 2016, and lasted for approximately an hour and a half. It was conducted by Mr. Cadogan, counsel for the Plaintiff.

[11] Mr. Cadogan then sought a further adjournment of the motion on November 15th, as a result of ill health. Master Graham denied the request, stating as follows:

Mr. Scotland on behalf of Mr. Cadogan seeks what would be a third adjournment of this motion following the appearances before Emery, J. on October 11, 2016, and before Bielby, J. on October 28, 2016. Both of these judges recognized the need for the motion to proceed expeditiously, as reflected in the short deadlines in their endorsements and the fact that today’s date was made peremptory by Bielby, J. I note that Biebly, J. was aware of Mr. Cadogan’s medical concerns when he made his order.

I accept that as a Master, I cannot vary the order of a judge, and am therefore bound by Bielby J.’s order that today’s date is peremptory to the plaintiff. However, even if that were not the case, I would still require the motion to proceed. First, Mr. Cadogan must be aware of what medical attendances he may require and if he could not be available today, it was incumbent on him to instruct an agent to argue the motion on his behalf. Second, a fourth attendance on this motion is not warranted where the interests of justice favour a disposition of this action on the merits. The adjournment request is refused.

[12] It is this decision that the Plaintiff appeals from. The Plaintiff is challenging Master Graham’s decision to deny him a third adjournment of this motion. The Plaintiff does not want the Court to overturn Master Graham’s decision and restore the default judgment. Instead, the Plaintiff simply wants to re-argue the motion to set aside the default judgment. The Plaintiff sought to appeal this decision to the Divisional Court as of right, on the basis that it was a final Order.

b) The Events Since the Order of Master Graham

[13] There is a companion action in this case, Willis v. Thompson (CV-16-3658-00) that also raises a number of claims relating to the same property that Mr. Siddiqui had a mortgage on. The co-defendants in that action are Mr. Siddiqui, Ms. Thompson and the lawyer that acted on the mortgage transaction. A third party claim against the title insurer will also be brought as part of this action.

[14] As a result of this complexity and of the difficulty in determining how best to proceed in addressing the appeals, counsel for Ms. Thompson requested that R.S.J. Daley schedule a case conference before a judge of this Court. I was that judge, and I conducted a case conference on February 10th, 2017.

[15] As part of that case conference, I directed the parties that the issues relating to the appeal of Master Graham’s Order were to be dealt with by way of a pair of motions to be heard before me in a one hour appointment at 9:00 am on March 2nd, 2017.

[16] The first motion would be a formal motion from the Defendant to quash the Plaintiff’s appeal on the basis that Master Graham’s order was an interlocutory Order. If the first motion was granted, then the second motion would be brought by the Plaintiff to extend the time limits for bringing an appeal before a single judge of the Superior Court.

Issues and Statutory Provisions

[17] Sections 17 and 19 (1) of the Courts of Justice Act state:

17. An appeal lies to the Superior Court of Justice from, (a) an interlocutory order of a master or case management master

18. (1) An appeal lies to the Divisional Court from, (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 or case management master.

[18] In addition, Rule 62.01(2) states that an appeal to a Judge from an interlocutory Order of a Master must be served and filed within seven (7) days. Rule 61.04(1) states that the time limit for appealing a final Order to either the Divisional Court or the Court of Appeal is 30 days.

[19] Based on the foregoing, the issues that present themselves in this case are as follows:

a) Is the Order of Master Graham an interlocutory Order or a final Order? b) If the Order of Master Graham is an interlocutory Order, should the time-limits to appeal be extended?

[20] I will deal with each issue in turn.

Issue #1 - Is the Order of Master Graham an Interlocutory Order?

[21] I quashed the appeal from the bench without calling on counsel for the Defendant, and provided the parties with a brief oral summary of my reasoning. I also promised them additional reasons. What follows are those reasons.

[22] The Plaintiff argues that the Order of Master Graham is interlocutory, stating (at paragraph 16 of his factum):

16. The determination of whether an Order is interlocutory or final is not simply a matter of saying that a set aside of a default judgment has been held to be interlocutory. The Court must consider the issue of substantive rights and the determination of substantive rights as it relates to the overall litigation. The preferred approach is to look at the issues decided and the effect of Order on the rights of the parties in the litigation.

[23] In support of this position, the Plaintiff points to the decision in Walchuck Estate v. Houghton (2015 ONCA 862) where the Court states (at paragraph 14):

[14] But, in some cases, to determine whether an order is truly final or interlocutory, one needs to look at the reasons. This is one of those cases. If the reasons show that a defendant has been deprived of a substantive right or defence that could resolve all or part of the proceedings, then the order final. See Ball v. Donais, [1993] O.J. No. 972; Abbot v. Collins, [2002] O.J. No. 4058; Ashak, at para. 17

[24] Plaintiff’s counsel also argues that Master Graham’s Order is a final Order because it prevents the Plaintiff from raising his claims of ex turpi causa, equitable subrogation and the claims that flow from a judgment issued to the Equitable Bank relating to this property.

[25] I reject both of these arguments.

[26] First, there is the argument that I must consider the character of Master Graham’s order before determining whether it is interlocutory or final. The statement from Houghton Estate applies when a Court is considering an order in general.

[27] However, the Court of Appeal has had occasion to address the specific issue of Orders to set aside a default judgment. In Laurentian Plaza Corp. v. Martin ((1992), 7 O.R. (3d) 111) Morden A.C.J.O., in explaining why a motion to set aside a default judgment was an interlocutory decision if the motion was granted, stated (at 116):

One aspect of the difficulty is that orders made on condition vary greatly. For example, they may range from orders imposing: undertakings on defendants; strict time periods for the completion of the pretrial steps; the obligation to pay the plaintiff’s costs throw away; to the giving of security in varying amounts with respect to the plaintiff’s claim. As a matter of policy it may seem that some of these order, which, analytically, are interlocutory, might be appropriately treated as final – but, if this were to be done, where would the line be drawn and how could the definition of what is final be expressed so that it could be applied with some degree of predictability or confidence.

Neither can the nature of the order reasonably turn on the particular circumstances of the defendant. The question of categorization which determines access to appellate review must be decided on the basis of the legal nature of the order and not on a case by case basis depending on the application of the order to the facts of a particular case. As I have indicated, jurisdictional rules should be as clear as possible and their application should not be beset with factual disputes which themselves may be protracted and difficult to resolve.

[28] The same conclusion was reached by the Court of Appeal in National Bank of Canada v. Royal Bank of Canada ((1999), 44 O.R. (3d) 533), where the Court concluded that a default judgment does not become a final judgment until a Court makes a decision refusing to set it aside.

[29] Plaintiff’s counsel argued that the reasoning in Laurentian Plaza Corp. has been overtaken by more recent cases which require a consideration of the circumstances of each Order to determine whether it is interlocutory or final. I disagree for two reasons.

[30] First, Laurentian Plaza Corp. was quoted with approval by the Court of Appeal as recently as last year in Chirico v. Szalas (2016 ONCA 586). As a result, I view it as binding authority that I am required to follow. Applying it leads inescapably to the conclusion that the Plaintiff’s appeal must be quashed.

[31] Second, the reasoning in Laurentian Plaza Corp is still clearly applicable. It is difficult to determine what constitutes a final order. As a result, being able to provide clear rules is helpful to both litigants and to the Courts. The rule that a motion to set aside a default judgment does not become a final judgment unless the motion is refused is one such clear rule. This rule also fits with the Courts’ approach that cases should be dealt with on their merits, and in an expeditious way.

[32] I also want to deal briefly with the Plaintiff’s assertion that the order of Master Graham precludes the Plaintiff from dealing with his claims of ex turpi causa, equitable subrogation and the judgment obtained by the Equitable Bank. In my view, there is nothing in Master Graham’s order that disposes of those issues on a final basis.

[33] For the foregoing reasons, the appeal is quashed.

Issue #2 - Should the Time for Appealing be Extended?

[34] Given that I have quashed the Plaintiff’s appeal to the Divisional Court, it is clear that the appeal now lies to a single judge of the Superior Court. It is also clear that this appeal should have been launched no more than seven (7) days after Master Graham’s order. As a result, the appeal would have been required well before the end of November.

[35] The Plaintiff is now seeking an extension of the time limits to appeal. The test for granting an extension of time is set out in 1250264 Ontario Inc. v. Pet Valu Canada Inc. (2015 ONCA 5), where Pardu J.A. stated (at paragraph 6):

[6] As Gillese J.A. observed in Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131, 114 O.R. (3d) 363, at para. 15:

The test on a motion to extend time is well-settled. The overarching principle is whether the “justice of the case” requires that an extension be given. Each case depends on its own circumstance, but the court is to take into account all relevant considerations, including:

(a) Whether the moving party formed a bona fide intention to appeal within the relevant time period; (b) The length of, and explanation for, the delay in filing; (c) Any prejudice to the responding parties, caused, perpetuated or exacerbated by the delay; and (d) The merits of the proposed appeal.

[36] In Pet Valu, Pardu J.A. went on to find that, while the first three parts of the test were met, the final part of the test was not met as there was no merit to the appeal.

[37] In this case, Plaintiff’s counsel argues that all four branches of this test are met. In particular, he asserts that the merits and justice of the case require that this appeal be heard on its merits. He asserts that an adjournment should have been granted so that he can finish the cross-examination of the Defendant, and so that he can re-argue the motion fully.

[38] I agree with the Plaintiff that the first two branches of the test are met. The Plaintiff formed a bona fide intention to appeal this case. Further, the length of the delay is not long, and the explanation is clear. The Plaintiff thought this was a final Order, and that he had appealed within the required time limits.

[39] However, I have concerns about the third and fourth parts of the test. In particular, in my view there is no merit whatsoever to this appeal. The motion was scheduled by Bielby J. for November 15th, 2016, and it was marked peremptory to the Plaintiff.

[40] Master Graham concluded that he had to hear the motion as he had no jurisdiction to set aside or vary the order of a judge. It is clear under Rule 37.02(2) that a master’s jurisdiction does not include the right to set aside, vary or amend the order of a judge.

[41] Had Master Graham decided to grant the adjournment, he would have been varying the order of Bielby J., it is clear that such a decision would have been a nullity (see Beard Winter LLP v. Shekhdar [2015] O.J. No. 4336 (S.C.J.) at paragraph 41). Counsel for the Plaintiff did not direct me to any authority that would contradict this analysis.

[42] Since the Master correctly concluded that he had no jurisdiction to grant the relief sought by the Plaintiff, there can be no successful appeal of that decision, and the Plaintiff cannot demonstrate that there are grounds for a motion to extend the time to appeal.

[43] In addition, the Plaintiff did not seek to vary, amend, set aside or appeal the original order of Bielby J. making the November 15th, 2016 appearance peremptory. If the Plaintiff had wanted to challenge the decision that this appearance was peremptory, he was obligated to attempt to challenge the Order of Bielby J. He did not do so, and the appeal would have to fail. As a result, the extension of time will not be granted because there is no merit to the appeal.

[44] As a result of my decision on this issue, it is not necessary to address the arguments that both sides made about the administration of justice.

Conclusion and Costs

[45] For the foregoing reasons, the appeal to the Divisional Court is quashed, and the Plaintiff is denied an extension of time to appeal the decision of Master Graham to the Superior Court.

[46] As a result, the Defendant has ten (10) days from the release of these reasons to either deliver her Statement of Defence in Court File No. CV-16-578-00 or move to strike Mr. Siddiqui’s cross-claim in that action.

[47] The Defendant shall provide her costs submissions within seven (7) calendar days of the release of these reasons. Those costs submissions are not to exceed two (2) single spaced pages, exclusive of offers to settle, case-law and bills of costs.

[48] The Plaintiff shall have seven (7) calendar days from the receipt of the Defendants submissions to provide his costs submissions. Again, those costs submissions are not to exceed two (2) single spaced pages, exclusive of offers to settle, case-law and bills of costs.

[49] There shall be no reply submissions on costs without my leave.

LEMAY J Released: March 3, 2017