In Mills v Thompson, 2022 ONSC 1525, Justice Charney, sitting as an Ontario Divisional Court judge, quashed an appeal of the decision of a Superior Court judge denying leave to appeal an arbitral award. The question before him was, “whether a party requires leave to appeal from a decision denying leave to appeal [an arbitral award on a question of law] or may appeal a denial of leave to appeal as of right”. Justice Charney confirmed recent Ontario Court of Appeal jurisprudence holding that a decision of the Superior Court of Justice granting or denying leave to appeal an arbitral award is an interlocutory order in respect of which leave to appeal is required under s. 19(1) of the Ontario Courts of Justice Act, R.S.O., 1990, c. 43, as amended. Any other conclusion would defeat the purpose of the appeal provision in the Ontario Arbitration Act, 1991, S.O. 1991, c. 17, s. 45, which is intended to minimize judicial interference in arbitration. It would be incongruous to allow an appeal of a denial of leave decision as of right, when no such right is provided with respect to an appeal of the correctness of the award itself. The Appellant had not sought leave of the Divisional Court to appeal. Justice Charney quashed the appeal.
In this case, the parties participated in a family law arbitration, which resulted in an award dated May 7 2020. Thereafter, Thompson (“the Appellant”) sought leave to appeal the award to the Ontario Superior Court of Justice pursuant to s. 45(1) of the Ontario Arbitration Act, 1991, S.O. 1991, c. 17, which provides for an appeal on a question of law, with leave of that court. On January 13, 2022, leave to appeal was denied by Justice Nicholson sitting as a Superior Court of Justice Family Court judge.
On January 24, 2022, the Appellant filed a Notice of Appeal of that decision to the Ontario Divisional Court pursuant to s. 19(1)(a.1) of the Ontario Courts of Justice Act, RS.O. 1990, c.43, which provides for an appeal to the Divisional Court from a final order of a Family Court Judge. The Appellant argued that Justice Nicholson had committed errors of law and had failed to accord the Appellant procedural fairness.
An issue arose between the parties as to whether Justice Nicholson’s decision was appealable as of right or whether leave to appeal was required. Mills (“the Respondent”) filed a motion in the Divisional Court to quash the appeal because the Appellant had not sought leave to appeal. The question before Justice Charney turned on whether Justice Nicholson’s order was final or interlocutory.
The Appellant’s position was that Justice Nicholson’s order denying leave to appeal the arbitral award was final, not interlocutory, because the denial of an appeal of an arbitral award finally disposes of the litigation. In other words, the merits of the appeal do not remain to be determined. Therefore, he argued, he had an appeal to the Divisional Court as of right under s. 19(1)(a.1) of the Courts of Justice Act.
The Respondent argued that there was no right of appeal from an order denying leave to appeal an arbitral award, which was interlocutory. Her position was that the issue had already been settled by the Ontario Court of Appeal in Hillmond Investments Ltd. v. Canadian Imperial Bank of Commerce, 1996 CanLII 413 (ON CA) (a commercial case in which the appellant sought leave to appeal under s. 45 of the Ontario Arbitration Act, 1991). In that case, Justice Finlayson concluded that the order under appeal was interlocutory, which meant that leave to appeal to the Court of Appeal was required, after considering the following issues (at para. 5):
“(1) Does the Arbitration Act, 1991 grant a right of appeal from the order of [the Superior Court judge below] refusing leave to appeal?
(2) Does the [Courts of Justice Act] grant a right of appeal from the order of [the Superior Court judge below] refusing leave to appeal?
(3) Is there a right of appeal to this court from the award of the arbitrator on the merits, notwithstanding the refusal of [the Superior Court judge below] to grant leave?
I would answer all three questions in the negative.”
Justice Charney also quoted from the Hillmond Court of Appeal decision to explain the rationale for its determination that denial of leave to appeal can be appealed only with leave (at p.7):
“[19]…[t]he very nature of the relief sought underscores the fundamental problem facing the appellant. While the appeal is nominally from the order of the [Superior Court judge] for refusing to grant leave to appeal, the result is a request that we by-pass the leave requirement, review the award of the arbitrator, and determine the correctness of that award. If, as authority suggests (see Industrial Acceptance Corp. v. Canada Permanent Trust Co., 1931 CanLII 67 (SCC), [1931] S.C.R. 652 at p. 655, [1932] 1 D.L.R. 287), the leave requirement is intended to prevent frivolous and unnecessary appeals, that purpose would be frustrated if an appeal as of right could be had from decisions refusing to grant leave or, for that matter, from decisions granting leave.”
The Appellant argued that Hillmond had no application to his appeal because in that case, Hillmond had also asked the Court of Appeal to consider the merits of the appeal itself. The Appellant sought only an order setting aside the order denying leave to appeal and an order granting leave.
Justice Charney held that the Court of Appeal in Hillmond did not focus its reasons on the request to determine the merits of the appeal and stated that, “[t]here is Canadian and English authority for the proposition that a refusal by an intermediate court to grant leave to appeal is not a ‘final order or judgment’ that may be appealed to a higher appellate court”, relying upon the House of Lords decision in Lane v. Esdaile, [1891] A.C. 210, 64 L.T. 666. That case held that if leave to appeal could be ordered from a refusal to grant leave to appeal, it would defeat the “whole object of the concept of leave, which is to grant an appellate tribunal the power to stop unnecessary or frivolous appeals” or to determine whether “it was a fit case for an appeal”.
Justice Charney applied this reasoning to the public policy of minimal judicial intervention in arbitration:
“[20] I find this language most compelling even in contemporary circumstances. Modern systems of alternative dispute resolution, commonly referred to as A.D.R., are designed to help parties solve disputes efficiently without resort to formal litigation and with a minimum of judicial interference. Allowing an appeal from a refusal to grant leave to appeal defeats the object of arbitration by frustrating the legislated impediment to appeals as of right. The purpose of s. 45 of the Arbitration Act, 1991 is to stop an appeal unless the Ontario Court [Superior Court of Justice] grants leave.
The function of the [Superior Court] as a check on unnecessary or frivolous appeals is defeated if the Court of Appeal may hear an appeal from the [Superior Court’s] refusal to grant leave.”
In addition, Justice Charney found that the Court of Appeal in Hillmond held that a party may not “circumvent” the leave requirement by complaining about the correctness of the decision of the judge who declined to give leave. He answered the questions posed by Justice Finlayson in Hillmond as follows:
“[26]…Accordingly, the answer to issue (1) is that, failing leave, there is no appeal from an award of an arbitrator under the Arbitration Act, 1991. The answer to issue (2) is that the order under appeal is not a final order because it does not dispose of the issues between the parties and, accordingly, s. 6(1)(b) of the [Courts of Justice Act] is not available to the parties. As to issue (3), the appellant’s argument that the refusal of the judge to grant leave has the effect of conferring final order status on the decision of the arbitrator is of no consequence. The refusal to grant leave may well mean that the award of the arbitrator is final as between the parties, but that is what the legislature intended under the provisions of s. 45 of the Arbitration Act, 1991.
[27] See also: Denison Mines Ltd. v. Ontario Hydro (2001), 2001 CanLII 5681 (ON CA), 56 O.R. (3d) 181 where Morden J.A. stated, at paras. 6 – 8:
The non-appealability of decisions refusing or granting leave to appeal is the general rule and, subject to the exception to which I shall refer shortly, it should, as Hillmond held, be applicable to appeals from orders made under s. 45(1) of the Arbitration Act, 1991. The rule flows from the strong implication that, notwithstanding the wording of s. 6(1)(b) of the Courts of Justice Act [appeal to the Court of Appeal from a final order of a judge of the Superior Court], a general statute, no appeal is intended from an order made refusing or granting leave to appeal. Any other conclusion would defeat the purpose of s. 45(1), which is to limit appellate recourse to the courts in arbitration matters.
This strong negative implication is reinforced by s. 49 of the Arbitration Act, 1991, which provides for an appeal to the Court of Appeal from a Superior Court judge’s decision in an appeal of an award, but only with leave of the Court of Appeal. It would be incongruous to attribute to the legislature an intention that there be appeals, as of right, from decisions on leave applications under s. 45(1) when no such appeal is provided for with respect to decisions on what may be called the main issue, the correctness of the arbitral decision.
As I have said, the non-appealability of orders refusing leave is the general rule. As Hillmond sets forth…, the courts have engrafted onto this general rule an exception which is applicable where the judge mistakenly declines jurisdiction.”
That exception did not apply in this case (paras. 25 and 27).
Therefore, Justice Charney held that the procedural route for relief from an order refusing leave to appeal under s. 45 of the Arbitration Act, 1991, is an application for leave to appeal to the Divisional Court under s. 19(1) of the Courts of Justice Act, which may be granted only if the narrow exception applies.
Further, he found that the Ontario Court of Appeal in Hillmond held that the decision to deny leave is not a decision on the merits, only a decision that the matter does not merit leave to appeal; it is an interlocutory order requiring leave to appeal.
Justice Charney acknowledged that other cases have held that the decision refusing leave to appeal is final. See Denison Mines Ltd. v. Ontario Hydro (2001), 2001 CanLII 5681 (ON CA), 56 O.R. (3d) 181 at paras. 21-22 and Mignacca v. Merck Frosst Canada Ltd., 2009 ONCA 393 at paras. 19 and 24.
He could not reconcile those cases with Hillmond, which he held has been followed in subsequent decisions of the Court of Appeal and the Divisional Court. See Nithiananthan v. Quash, 2017 ONSC 155, at para. 5 and paras. 6-11, Halton (Regional Municipality) v. F. Greco & Sons Limited (Greco Construction), 2021 ONCA 446; Fort Erie (Town) v. 2312810 Ontario Inc., 2021 ONCA 500; CAMPP Windsor Essex Residents Association v. City of Windsor, 2021 ONSC 3456, at para. 2; McEwen (Re), 2020 ONCA 511, at paras. 63 -68; Ottawa (City) v. Coliseum Inc., 2016 ONCA 363, at paras. 27 -29; Peritus Inc. v. Elder, 2011 ONSC 7357.
Therefore, Justice Charney quashed the appeal. Because the facts did not fall within the exception to the rule, there was no leave to appeal right after the Superior Court had denied leave to appeal.
Editor’s Notes:
First, the determination of appeal rights and routes can be complex. Justice Charney held that under the relevant legislative regimes, an appeal of an arbitral award on a question of law may be made to the Superior Court of Justice only with leave of that Court (s. 45(1) of the Ontario Arbitration Act,1991, S.O. 1991, c. 17). Section 19(1) of the Ontario Courts of Justice Act, R.S.O. 1990, C-43, sets out the Divisional Court’s appeal jurisdiction. An appeal lies to the Divisional Court from a final order of a judge of the Superior Court of Justice without leave or an interlocutory order of with leave of that court. Under s. 6(1) of the Courts of Justice Act, which deals with Court of Appeal jurisdiction generally, an appeal to the Court of Appeal lies from an order of the Divisional Court on a question of law or mixed fact and law, with leave of the Court of Appeal.
Therefore, this case turned on the perennial and vexing question of whether the order of the Superior Court Judge, Justice Nicolson, was final or interlocutory. Charney observed that Ontario Superior Court of Justice and Court of Appeal jurisprudence is conflicting on this issue in the context of appeals of arbitral awards.
Second, another recent case is a good example of the complexity of determining appeal routes. In Terrace Community Forest LLP v Skeena Sawmills Ltd., 2022 BCCA 37, the Court of Appeal considered a provision in the new British Columbia Arbitration Act, S.B.C. 2020, c. 2, s. 29(1), which allows an arbitrator to make an order requiring a non-party to produce records or to issue a subpoena requiring a person to give evidence. Section 29(10) states that a decision of the Supreme Court under this section may not be appealed. However, the Supreme Court judge in this case found that he did not have jurisdiction to make an order under s. 29(1) and dismissed the petition for a subpoena. The Court of Appeal found that this was not a “decision” to which the appeal prohibition in s. 29(1) applied, but rather a determination that the judge below could make on decision. The Court of Appeal dismissed the appeal on the merits. See Case Note: B.C. – Court recognizes/enforces Swiss award, rejecting public policy defence – #597. For other recent Case Notes on interesting or complex appeal issues see Case Notes: Alberta – Previous arbitral award did not create res judicata for regulator – #589 and Alberta –No appeal of decision refusing leave to appeal arbitration award, despite s. 48 of Alberta Arbitration Act – #583.