Final or Interlocutory Order?
That is the Question

By Catherine DiMarco

Construction lawyers are keenly aware of the complexities and nuances which impact an analysis of whether a Court order is a final order or an interlocutory order. Failure to reach the right conclusion can result in a notice of appeal which is not timely, and, possibly, a motion by the opposing party to quash the appeal for being brought in the wrong Court. Two decisions rendered 10 years apart illustrate the potential consequences of getting it wrong.

2008: V Gibbons Contracting Limited v Losani Homes (1998) Ltd
In V. Gibbons Contracting Limited v. Losani Homes (1998) Ltd.¹ Justice Harris considered a motion by V. Gibbons Contracting to quash an appeal commenced by Losani Homes. The decision under appeal was the denial of leave to Losani Homes to bring a motion seeking answers to outstanding undertakings and refusals, and leave to amend Losani’s statement of defence and counterclaim.

In oral reasons for decision on the underlying motion, the motions Judge denied Losani’s request for leave under s.67(2) of the (then in force) Construction Lien Act on the basis that the motion was not necessary and would not expedite resolution of the matters in dispute, and, furthermore, that the plaintiff had properly refused the questions at issue on the motion. The order of the motions Judge also prohibited any further examinations for discovery, and it awarded costs to the plaintiff V. Gibbons in the amount of $18,000. With respect to the pleadings amendment, the motions Judge held that certain of the claims were out of time and the balance would result in prejudice to the plaintiff, thus the motion was denied.

Losani sought to appeal the decision, and V. Gibbons brought a motion to quash the appeal.

The issue before Harris J. on the motion to quash the appeal was whether the decision of the motions Judge was interlocutory or final. If the order was interlocutory, there was no right of appeal as per s.71(3) of the Construction Lien Act (as the section stood at that time). Harris J. had to consider whether or not there was a disposition of the parties’ rights in litigation and not arising in the course thereof.² In other words, did the decision dispose of a parties’ rights which were collateral to the merits, or directly arising from the merits? If collateral to the merits, the decision is interlocutory, whereas a final order is characterized by its substance, and, where a defendant is precluded from being able to rely upon a defence, that defendant is deprived of a substantive right.

Justice Harris went on to hold that the scope of the issue was not “so narrow”, and included consideration of whether or not leave was actually required, and whether relief should have been granted. He held that leave to bring the motion was not required, and, in this case, because the Court denied leave to a party attempting to enforce the Court’s own prior order (the order for exchange of productions and examinations for discovery), the party seeking enforcement of that same order was left without a remedy. On that basis, Harris J. allowed the motion to proceed on its merits to the Divisional Court, because the denial of leave effectively precluded Losani from raising any defence it may wish to assert, and it had therefore been deprived of its substantive rights. On that basis, the order was a final order.

2018: Stubbe’s Precast v King & Columbia
More recently, in Stubbe’s Precast v. King & Columbia,³ the lawyers for Stubbe’s Precast had made an inadvertent error when registering the claim for lien,⁴ and the defendant King & Columbia brought a motion for an order discharging the claim for lien and for the return of security posted. The motions Judge determined that the misnomer was correctable and exercised his discretion under the curative provisions of s. 6 of the (then in force) Construction Lien Act.

King & Columbia appealed. Stubbe’s Precast brought a motion for an order quashing the appeal on the basis that the decision was interlocutory and not final, which was dismissed. Stubbe’s Precast then brought a further motion to the Divisional Court to set aside the order of the motions Judge, which was granted. The three-member panel of the Divisional Court reasoned, correctly, that nothing in the order precluded King & Columbia from raising the misnomer defence at trial, and therefore the order was interlocutory.

This result seems to follow the caselaw interpreting the Construction Lien Act curative provisions in s.6. A motion under s.6 of the Construction Lien Act (or now in force Construction Act) should only be brought when there is prejudice to the defendant, and, here, it was clear that there was no prejudice to the defendant by the lien claimant naming “Ltd.” in its claim for lien instead of “Inc.”. The litigation finger was pointing at the right party, and no one was misled.

The defendant’s “Hail Mary Pass” on its motion to discharge was (correctly) unsuccessful and appears to have only driven up procedural costs, with little or no advancement of the merits.

Going forward, the new Construction Act allows for of appeals of interlocutory orders, with leave of the Divisional Court.

1  [2008] OJ No 3841 (SCJ)
2  Roblin v. Drake (1938), [1938] 4 DLR 758 (Ont CA)
3  2018 ONSC 3062.
4  The claim for lien was registered in the name of “Stubbe’s Precast Ltd.” whereas the proper name of the corporate entity was “Stubbe’s Precast Inc.” This is precisely the kind of misnomer that s.6 is intended to correct. See the decision of Master Albert in Govan Brown & Associates v. Equinox [2014] OJ No 3092 (SCJ) wherein the owner Equinox sought an order discharging three claims for lien on the basis that the lien claimants failed to correctly identify the owner in their claims for lien. In her reasons for decision, Master Albert canvassed the s.6 jurisprudence in detail to conclude that “one purpose of section 6 of the Act is to relieve a lien claimant from strict compliance with the contents of the claim for lien where the owner is named incorrectly, provided there is no prejudice.”