Legal Blog

Ping Pong

It is not often that the Divisional Court and Court of Appeal openly squabble, but it happened in Laredo Construction Inc. v. Sinnadurai (2005), 78 O.R. (3d) 321 (C.A.).

THE MERITS

A vendor seized a purchaser’s $15,000 deposit after the purchaser failed to close a real estate transaction. The purchaser commenced an action for the return of his deposit and for consequential damages. The vendor did not defend. The purchaser abandoned his claim for damages and obtained a judgment for the return of his deposit and costs of $2,750.00. The vendor, who had not been aware of the judgment until he became aware of the writ of seizure and sale, moved immediately to post security and lift the writ. The vendor then brought a motion to set aside the default judgment. Thus began the odyssey.

The motions judge refused the motion, in essence stating that the vendor had shown no reasons why the seizure of the deposit was not a penalty forfeiture. The vendor appealed to the Court of Appeal. Counsel for the vendor then realised that he had appealed to the wrong court. He brought a motion for directions to a single judge of the Court of Appeal. The motion was unopposed and the judge held that since the amount in issue was a single payment of less than $25,000, the Divisional Court would have jurisdiction; she transferred the appeal to the Divisional Court.

Back to You

The Divisional Court panel, on its own initiative, decided that it did not have jurisdiction because the impugned order merely dismissed the motion, rather than ordering payment of money, and section 19(1)(a) of the Courts of Justice Act only allows jurisdiction for an appeal from a single payment of not more than $25,000. The Divisional Court felt that it could ignore the order of the Court of Appeal because the motion had been unopposed, the submissions made to the single judge were in error, the order was given without reasons, and the order purported to confer jurisdiction on the Divisional Court that the Divisional Court had previously decided did not exist.

The Court of Appeal first dealt with the jurisdictional issue on its merits. It stated that the question was not whether the order was for a particular payment, but, rather, the nature of what was being dismissed. Since the dismissal was of a motion to set aside a judgment for a payment of less than $25,000, that issue fell within the Divisional Court’s jurisdiction.

Then the fun began. The Court of Appeal was not amused with the Divisional Court refusing to deal with a matter that the Court of Appeal had sent down to it. The court stated:

“Moreover, the reasons for re-transferring the appeal back to this court are questionable. In particular, I know of no authority to support the proposition that an order of a higher court made “without opposition and without opposing argument” or “made without reasons and without explicit indication that it was made after specific consideration of” a section of an act is a lesser type of order that can be overturned by a lower court.

It was not open to the Divisional Court to overturn a valid order of a single judge of this court. By way of analogy, I am not aware of any decision of a panel of the Court of Appeal that overrules a decision of a single judge of the Supreme Court of Canada. If the Divisional Court’s intention was to have the law clarified, it is not achieved by overruling a higher court.”

Upshot

The parties had spent over $30,000 in costs to date. The Court of Appeal panel, cognisant that the parties had suffered enough, had themselves appointed as members of the Divisional Court and heard the appeal on the merits.

Who won, you ask. At that point, it almost did not matter. The court agreed with the motions judge and dismissed the appeal.