In this recent Divisional Court ruling, Davies J., sitting alone, took a hard look at appeal rights following an order made by a Small Claims Court judge, and in the process provided some helpful guidance. In a nutshell, final orders must be appealed (ie: commenced with a Notice of Appeal), and an interlocutory order must be judicially reviewed (ie: commenced with an Application for Judicial Review).
On a more granular level, the following dicta from the decision is important:
- Only final orders of the Small Claims Court can be appealed to the Divisional Court;
- The Divisional Court does not have jurisdiction to hear appeals from interlocutory orders from the Small Claims Court: Courts of Justice Act, s. 31, Cudini v. 1704405 Ontario Inc., 2012 ONSC 6645 at para. 32;
- In deciding whether an order is interlocutory or final, the test is whether the order determines the “real dispute between the parties,” because if the substantive matters in the dispute still remain undecided after the order is made, the order is interlocutory: Drywall Acoustics v. SNC Lavalin, 2020 ONCA 375 at para. 16;
- The Divisional Court does, however, have the jurisdiction to judicially review interlocutory orders of the Small Claims Court, which can be commenced as an Application for Judicial Review;
- If for some reason, as was the case before the judge, a party improperly served a Notice of Appeal instead of an Application for Judicial Review, the Divisional Court has the power to convert the appeal into a judicial review if that is the only route available to challenge what turns out to be a Small Claims Court interlocutory order: Joubarne v. Land Registrar & Director of Titles, 2019 ONSC 6709. However, when the appeal is improperly before a single judge of the Divisional Court because it should have been a judicial review application instead, that single judge can:
- Nonetheless undertake the judicial review if the single Divisional Court judge was designated to do so by the Chief Justice of the Superior Court (or his/her designate) under s. 21(2)(c) of the Courts of Justice Act; or
- Nonetheless undertake the judicial review under s. 6(2) of the Judicial Review Procedure Act if the application is urgent and the delay caused by scheduling a hearing before the full panel of the Divisional Court is likely to involve a failure of justice; or
- Convert the appeal into an Application for Judicial Review and refer the matter to a panel of the Divisional Court for a hearing, and prior to doing so, the judge must first inquire, and rule, on what is effectively a request for an extension of time to bring a judicial review application and an adjournment of the hearing (the “Conversion Request”).
In this particular case, the single Divisional Court Judge had to contend with last item in the list above: namely the Conversion Request. Since this involves an extension of time to commence a judicial review application, and an adjournment, the following guidelines from the decision are germane:
- An extension of time to commence a judicial review application can be granted only if the court is satisfied there are “apparent grounds for relief” and “no substantial prejudice or hardship will result”: Judicial Review Procedure Act, s. 5(2);
- An adjournment can be granted if it is in the interests of justice to do so;
- Based on the foregoing, the merits of the Appellant’s judicial review application become relevant to the exercise of the judge’s discretion in relation to both the extension of time and the adjournment;
- Judicial review is highly discretionary and the scope of judicial review of an interlocutory decision of the Small Claims Court is very narrow. The Divisional Court will not interfere with an interlocutory order of the Small Claims Court unless the order was made without jurisdiction or was made in breach of the principles of natural justice: Imperatore v. Fetesko, 2023 ONSC 1340 at paras. 14 to 16.
In this instance, the Appellant argued that during the Settlement Conference the Small Claims Court judge did not have jurisdiction to grant a stay of the action (pending an outcome of a related plenary court proceeding), and in the alternative, the Appellant argued that the procedure employed by the judge during the Settlement Conference was unfair because no written submissions were sought before the stay was granted.
On a preliminary review, the Divisional Court Judge disagreed with both arguments, and hence, the judge declined to exercise their jurisdiction to grant an extension of time and adjourn the judicial review application to a panel. Put another way, the judge felt that the arguments the Appellant intended to raise in their judicial review application did not have sufficient merit to justify exercising the judge’s discretion to convert the appeal into a judicial review before a panel of the Divisional Court.
The judge came to the view that the judicial review application had little merit because the Small Claims Court judge does in fact have jurisdiction to stay a court proceeding at a Settlement Conference under Rule 13.05(2)(a)(iii), and there was little merit in the argument that the Small Claims Court judge had to first demand full written submissions before making a ruling on the conditional stay issue.
The Small Claim Court rules simply do not require written submissions to be submitted before a stay is ordered at a Settlement Conference. Contrast this with a motion under Rule 12 which does require a judge to give a plaintiff the opportunity to make brief written submissions on why an action should not be stayed or dismissed. As the Davies J. said,
“on the plain reading of the rules, the Legislature intended the procedures to be different when the Court intends to permanently stay or dismiss an action on its own motion, and when a small claims court judge is considering staying or dismissing an action at a settlement conference, where the parties are present and can make submissions.”
Written submissions aside, the Divisional Court judge must still be satisfied that what the Small Claims Court judge did abided by the principles of natural justice and fairness, which the Divisional Court judge found to be the case because every party had the chance to speak, and any factual errors made by the Deputy Judge were technical and inconsequential in nature (ie: written submissions correcting those facts would not have made a difference).
2263921 Ontario Inc. v. Gordon, 2024 ONSC 2498 (CanLII)
https://www.canlii.org/en/on/onscdc/doc/2024/2024onsc2498/2024onsc2498.html