



COURT OF APPEAL FOR ONTARIO

CITATION: Martin v. 11037315 Canada Inc.,
    2021 ONCA 246

DATE: 20210416

DOCKET: M52365 (C69053)

Pepall J.A. (Motion Judge)

BETWEEN

Kelly
    Martin

Applicant

(Respondent/Responding
    Party)

and

11037315 Canada Inc.
,
2670082
    Ontario Corp.
, and Autodome Ltd.

Respondents

(Appellants/
Moving
    Parties
)

Samir S. Chhina, for the moving parties

Dennis Van Sickle, for the responding party

Heard: April 13, 2021 by video conference

ENDORSEMENT


[1]

The moving parties, 11037315 Canada Inc. (110) and 2670082 Ontario
    Corp. (267), seek an order setting aside the Registrars March 29, 2021 order
    dismissing their appeal and an order extending the time to perfect the appeal.

[2]

The responding party, Ms. Martin, was served last Wednesday evening. Ms. Martins
    counsel seeks an adjournment to file materials in response. Initially, counsel
    advised that his client also wanted to bring a cross-motion for security for
    costs but ultimately indicated that he does not intend to proceed with such a
    motion at this time. Such a motion would be moot if he is successful in
    resisting the moving parties motion. Accordingly, he will limit his position
    to responding to the motion. He submits that egregious facts are missing from
    the materials before the court and the merits and overall justice of the case
    favour a dismissal of this motion.

[3]

I raised with counsel the issue of the jurisdiction of this court over
    the appeal. The parties seemed content to proceed in this court, but
    jurisdiction cannot be conferred by consent or on the basis of being unopposed.
    That said, I am satisfied that there is an arguable case to be made that this
    court has jurisdiction.

[4]

I will briefly outline the background facts related to the question of whether
    this court has jurisdiction over the proposed appeal.

[5]

The application judges endorsement dated December 23, 2020 discloses
    that Ms. Martin bought her house in 2010 for $289,000 with mortgage financing
    from TD Bank. By 2019, the property was worth $575,000 and the mortgage had
    been reduced to $160,000. She then obtained a second mortgage for $65,000 from
    2148468 Ontario Ltd. (214). 214 assigned the mortgage to 110 but Ms. Martin
    was unaware of this. 110 served her with a claim for foreclosure. She thought
    the claim was from 214 and confused the meaning of foreclosure with power of
    sale, thinking she would ultimately receive the net proceeds following the
    sale. The application judge estimated these to amount to about $350,000.
    Unbeknownst to her, 110 obtained default judgment against her and then sold the
    property to 267 for $425,000 when it was worth $575,000. 267 obtained a
    mortgage of $465,000 on the property.

[6]

Ms. Martin brought an application to set aside the default judgment
    obtained in the foreclosure action and also sought other monetary relief. The
    application judge granted Ms. Martins application. On December 23, 2020, he ordered
    that: the default judgment be set aside, the property forthwith be listed for
    sale, net proceeds over $425,000 be paid to Ms. Martin, and 110 pay her the
    proceeds it received from the sale that were in excess of the amount set forth
    in its statement of claim. He also dispensed with a formal typed order, saying
    that his endorsement was deemed to be an order in the circumstances of COVID-19.

[7]

In essence, the effect of the application judges order is that Ms.
    Martin recovers her equity in the property net of the mortgage and other obligations.
    In exercising his discretion, he relied on equity, absence of prejudice to 267,
    whom he found was not a
bona fide
purchaser for value without notice,
    and the absence of notice of assignment, which meant that the default judgment
    was irregularly obtained.

[8]

267 then moved under r. 59.06(2) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194, arguing that a new fact had been discovered: 110 had
    sent Ms. Martin notice of the assignment by registered mail. On January 29,
    2021, the motion judge dismissed the motion on the basis of lack of due
    diligence and in any event, his earlier decision was based primarily on equity
    and not on the absence of any notice of assignment. He again determined that given
    the pandemic, his endorsement was deemed to be the order without any need to
    obtain a formal, typed order.

[9]

267 is now appealing from these two orders and a costs endorsement dated
    February 23, 2012.

[10]

The
    Court of Appeals website states that:

An issued and entered order is required for
    the purpose of an appeal to the Court of Appeal for Ontario in civil
    proceedings. For information on obtaining an order from the Ontario Superior
    Court of Justice during the COVID-19 pandemic, please see section D.5 of the
    Superior Court's Consolidated Notice to the Profession, Litigants, Accused
    Person, Public and the Media.

Thus, an issued and entered order is required for the
    purpose of an appeal to the Court of Appeal for Ontario in civil proceedings. I
    would recommend that our Registry Office staff advise the moving parties that
    they should obtain and file an issued and entered order prior to the hearing of
    this motion.

[11]

The
    December 23, 2020 order has both interlocutory and final elements. An order setting
    aside a default judgment is an interlocutory order:
Laurentian Plaza Corp. v.
    Martin
(1992), 89 D.L.R. (4th) 50 (Ont. C.A.) at p. 53. As such, leave to
    appeal to the Divisional Court pursuant to s. 19(1)(b) of the
Courts of Justice
    Act
,
R.S.O. 1990, c. C.43 and
    r. 62.02(1) of the
Rules of Civil Procedure
would be required, leave
    that may not be granted by this court.

[12]

However,
    the remaining portions of the December 23, 2020 order are final in nature and
    the order finally disposed of the application.

[13]

In
Lax v. Lax
(2004), 239 D.L.R.
    (4th) 683 (Ont. C.A.), at para. 9, this court held that leave to appeal from an
    order of a judge of the Superior Court is not required where the issues in an
    appeal from an order having final and interlocutory aspects are so interrelated
    that leave would inevitably have been granted. In that case, the defendants
    moved for summary judgment seeking to dismiss the plaintiffs action as being
    statute-barred by the applicable limitation period. The motion judge determined
    that the action was not statute-barred. This determination gave rise to a final
    order on the authority of
Abbott v. Collins
, (2002), 62 O.R. (3d) 99
    (C.A.). The motion judge went on to hold that even if the limitation period
    applied, there was a discoverability issue that required a trial. As Feldman
    J.A. noted on behalf of the court, the second determination was interlocutory:

Although the second issue would, if brought as a stand-alone
    appeal to the Divisional Court, require leave of that court, because the two
    issues are so interrelated, we were able to proceed to hear the two appeals
    together in accordance with s. 6(2) of the [
CJA
], on the basis that once the first
    issue was before this court, leave would inevitably have been granted on the
    second.

[14]

This
    court proceeded to hear and determine both issues.

[15]

Lax
has since been followed in
Azzeh v. Legendre
, 2017 ONCA 385, 135
    O.R. (3d) 721, leave to appeal refused, [2017] S.C.C.A. No. 289. This court
    acknowledged that para. 1 of the formal order, which granted leave to add the
    City of Sudbury and others as defendants, was interlocutory. Paragraph 2, which
    made other amendments consistent with the addition of the defendants, was also
    interlocutory. However, para. 3, which granted a declaration that the action
    was not statute-barred, was final. While normally leave must be obtained from
    the Divisional Court before an appeal from an interlocutory order can be
    combined with an appeal from a final order, leave was not required as this case
    was similar to
Lax
. The court explained: [w]hether the City was
    properly added as a defendant depends on whether the action against it is
    statute-barred. Therefore, both aspects of the appeal were heard by this court:
    at para. 26. See also
Abbasbayli v. Fiera Foods Company
, 2021 ONCA 95,
    at para. 17;
2099082 Ontario Limited v. Varcon Construction Corporation
,
    2020 ONCA 202, 97 C.L.R. (4th) 26, at para. 17; and
Cooper v. The Laundry
    Lounge, Inc.
, 2020 ONCA 166, at para. 2.

[16]

As
    for the January 29, 2021 order, an order dismissing a motion under r. 59 to set
    aside or vary an order is interlocutory:
Antique Treasures of the World
    Inc. v. Bauer
, 2003 CanLII 35349 (Ont. C.A.). However, again, the issues
    raised by that order are closely related to those in the December 23, 2020
    order.

[17]

In
    the circumstances, given the interrelationship of the issues engaged by the two
    orders the moving parties seek to appeal, and based on the aforementioned
    authorities, I conclude that it is at the very least arguable that this court
    has jurisdiction over the appeal.

[18]

As
    such, it is appropriate for me to adjourn the motion to a new date as requested
    by the responding party. I am adjourning the motion to April 28, 2021, a date
    agreed upon by the parties, to permit the responding party to respond to the
    motion. I am satisfied that the request is legitimate given the abbreviated service
    and the absence of any materials from the responding party. The costs of today
    are reserved to the judge hearing the motion.

S.E.
    Pepall J.A.


