Simon's Megalomaniacal Legal Resources

Appeals - Final versus Interlocutory (11)

. 1086289 Ontario Inc. (Urban Electrical Contractors) v. Welland (City) [interlocutory and final]

In 1086289 Ontario Inc. (Urban Electrical Contractors) v. Welland (City) (Ont CA, 2026) the Ontario Court of Appeal considered several appeals, these all requiring re-consideration of "the framework governing the disclosure of partial settlement agreements in multi-party civil litigation, and, in particular, the continued validity of the rule articulated in Handley Estate v. DTE Industries Limited."

Here the court extensively considers appeal routes (ie. interlocutory or final) for settlement disclosure issues:

4. Reversing Handley Estate: The Issue of Jurisdiction

[71] In CHU, the respondent argued that a refusal to grant a stay was an interlocutory decision, and therefore, this court lacked jurisdiction to hear the appeal.[70] This court concluded that it was reasonable to treat the order under appeal as a final order for determining appeal rights, relying in part on Aecon Buildings v. Brampton (City).[71] The conclusion in CHU has been cited in at least one other setting involving an appeal from a denial of a stay.[72] Handley Estate itself also arose in the context of an appeal from a decision denying a stay on abuse of process grounds, though the court did not address the jurisdictional question in that case.

[72] Sections 6(1)(b) and 19(1)(b) of the Courts of Justice Act (“CJA”) make clear that only final orders are appealable to this court, while interlocutory orders are appealable to the Divisional Court, with leave.[73] A final order is one that determines the real matter in dispute between the parties, the very subject matter of the litigation, or any substantive right to relief of a plaintiff or substantive right of a defendant, while an interlocutory order is one which does not do so.[74]

[73] Having reversed the Handley Estate framework for challenges to partial litigation agreements and having broadened the abuse of process analysis along the lines set out above, we conclude it is appropriate to revisit the question of this court’s jurisdiction over appeals from challenges to partial litigation agreements. Questions regarding appeal routes from determinations under the new r. 49.14 are also sure to arise.

[74] While none of the parties raised this aspect of the Handley Estate framework in arguing these appeals, providing clear guidance at the outset of the partial settlement disclosure framework, which will govern future litigation, will avoid unnecessary disputes over the pathway of appeals.

[75] We also note that the stare decisis analysis is more straightforward in the jurisdictional context than in the context of reversing the Handley Estate rule itself. In our view, the Polowin framework is not engaged. Where this court has determined that a prior precedent establishing this court’s jurisdiction was wrong, that error will be corrected irrespective of whether it might meet or not meet the criteria in the second prong of Polowin.

[76] There are two jurisdictional issues to be addressed under the post-Handley Estate framework: (1) the appeal routes from remedies imposed under r. 49.14(7) or at common law following a finding of abuse of process; and (2) the appeal routes from a finding that r. 49.14 has not been violated or where a court has found no abuse of process occurred.

A. Appeal routes from a breach of r. 49.14 or a finding of abuse of process

[77] Under the current approach, where a stay is ordered after a challenge to a litigation agreement, that order is final, and an appeal lies to this court.

[78] However, under the new framework, an array of remedies short of a stay may be available to deal with litigation agreements, either under r. 49.14(7) or under the common law abuse of process analysis set out above.

[79] Most of the available remedies do not end the litigation, for example, costs, further examinations, or more extensive discovery. These are interlocutory orders from which the appeal will lie to the Divisional Court, with leave.

[80] As this court observed in Drywall Acoustic, the key distinction is whether the order below forecloses a substantive claim or defence on the merits. In the partial litigation agreement context, this means that a stay will generally result in appeals to this court because the claim is foreclosed, while remedies short of a stay (including the denial of a stay) will generally result in appeals to the Divisional Court, with leave, because the claim remains to be determined.

B. Appeal routes from a finding that r. 49.14 was not breached or that no abuse of process has occurred

[81] Generally, while orders granting stays of proceedings are final, orders denying such stays are interlocutory.[75] However, this rule generally has been read together with the broader principle that it is an order’s legal nature that governs appellate jurisdiction.[76] An order that forecloses a substantive claim or defence that could be determinative of the entire action has long been held to be final for the purposes of appeal.[77]

[82] This conclusion has been applied explicitly to orders denying stays on the basis of an abuse of process under r. 21.01(3)(d) of the Rules of Civil Procedure.[78] This context gave rise to the court’s conclusion in Aecon Buildings v. Brampton (City) that the denial of a stay on the basis of abuse of process in the context of failing to disclose a partial settlement agreement is interlocutory.[79]

[83] The reasoning from Ball v. Donais has been used to justify appeals to this court on the basis of denials of stays in other settings as well, for example, where it was argued that the court had no subject matter jurisdiction or should decline to exercise that jurisdiction on the basis of forum non conveniens.[80] As explained in Locking v. Armtec Infrastructure Inc., such cases were treated as final because they “involved access to the court system or the disposition of a substantial issue forming part of the dispute between the parties”.[81]

[84] While the broader jurisdictional question in these other areas of stay motions is not before us, the jurisdictional question in relation to partial litigation agreements, going forward, may be helpfully simplified.

[85] A finding that r. 49.14 has not been breached and that no remedy is warranted is an interlocutory decision, which would give rise to an appeal to the Divisional Court, with leave, pursuant to the CJA. This is because, to adapt the language from Locking, the decision does not determine access to the court system or dispose of any substantial issue forming part of the dispute between the parties. Rather, an alleged abuse of process arising from a partial settlement agreement is entirely collateral to the merits of the dispute. We distinguish such a case from those under r. 21.01(3)(d) in which the moving party is alleging an abuse of process on the basis of a collateral attack or res judicata, which concerns whether the merits of the case have already been determined in another forum.[82]

[86] Further, going forward, and contrary to this court’s earlier statement in Aecon Buildings v. Brampton (City) and CHU, where a stay for abuse of process is sought in relation to a partial litigation agreement but no abuse of process is found, that decision should be treated as interlocutory, because the litigation continues.

. Libfeld v. Libfeld

In Libfeld v. Libfeld (Ont CA, 2026) the Ontario Court of Appeal granted a motion to quash an appeal, this on appeal route final-v-interlocutory grounds:

[34] This court’s jurisdiction to hear appeals from a final order of a judge of the Superior Court is set out in ss. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43. Interlocutory orders, by contrast, are appealed to the Divisional Court.

[35] In Hendrickson v. Kallio, 1932 CanLII 123 (ON CA), [1932] O.R. 675 (C.A.), at p. 678, this court defined an interlocutory order as follows:

[A]n order which does not determine the real matter in dispute between the parties – the very subject matter of the litigation, but only some matter collateral. It may be final in the sense that it determines the very question raised by the applications, but it is interlocutory if the merits of the case remain to be determined.

[36] This court more recently held that, in determining whether an order is final or interlocutory, “one must examine the terms of the order, the motion judge’s reasons for the order, the nature of the proceedings giving rise to the order, and other contextual factors that may inform the nature of the order”: Prescott & Russell (United Counties) v. David S. Laflamme Construction Inc., 2018 ONCA 495, 142 O.R. (3d) 317, at para. 7; see also Paulpillai Estate v. Yusuf, 2020 ONCA 655, at para 16.

[37] In Gefen v. Gefen, 2021 ONSC 6497, 72 E.T.R. (4th) 59, at para. 23, the Divisional Court held that the sale process orders made in that case were interlocutory as:

The Orders do not finally dispose of the issues in the estate proceeding. Because the sale is subject to the approval and supervision of the court, with the distribution of the proceeds to be determined at a later date, the Orders do not affect the substantive rights of the parties to the litigation. The Orders do not affect the Appellants’ claims to the net proceeds of the sale …. As a result, the Orders are interlocutory.

See also Kauffman v. Fazari, 2020 ONSC 7358, 70 C.P.C. (8th) 210.

[38] Finally, the Sales Officer relies on this court’s decisions in Rickwood et al. v. The Town of Aylmer et al., 1955 CanLII 115 (ON CA), [1955] O.R. 470 (C.A.) and Duffy v. Duffy, 2025 ONCA 507, 19 R.F.L. (9th) 67, to support its position that such post-judgment orders are interlocutory. In Duffy, at para. 9, this court held that:

The mere fact that an order determines “an issue” that is in dispute does not make such an order “final” for purposes of the [Courts of Justice Act] … Moreover, orders that merely resolve issues arising in the implementation or enforcement of a final order have been deemed to be interlocutory, since they are collateral to the substantive rights of the parties. [Citations omitted.]

[39] The responding parties claim, however, that the Raki Order is final because the issue before the motion judge was “whether new commercial agreements should be imposed on the parties” and “there is no future proceeding in which this will be revisited”. They argue the decisions in Gefen and Kauffman are distinguishable as they do not involve situations that will affect third parties. They claim that the Raki Order will replace existing contractual rights and obligations freely negotiated between Conservatory and DG Group, despite the objections of 50% of Conservatory’s ownership.

[40] The responding parties rely on Smerchanski v. Lewis (1980), 1980 CanLII 1699 (ON CA), 30 O.R. (2d) 370 (C.A.), in which this court found that the underlying decisions quashing subpoenas were final. In that case, third-party witnesses were subpoenaed to give evidence in a trial to which they were not parties.

[41] However, in Royal Trust Corporation v. Fisherman (2001), 2001 CanLII 4080 (ON CA), 55 O.R. (3d) 794 (C.A.), at para. 16, this court clarified that Smerchanski does not create a general rule that all orders directed to a non-party must be final:

When given its broadest interpretation, the principle in [Smerchanski] does not fit comfortably with the general test for determining whether an order is interlocutory or final … Smerchanski was not intended to mean that all orders directed to a non-party must be final, and the principle expressed therein should not be further expanded in that way. [Emphasis added. Citations omitted.]

[42] Moreover, this case is distinguishable from P1 v. XYZ School, 2021 ONCA 901, 160 O.R. (3d) 445, a decision relied on by the responding parties. In that case the court characterized a sealing order as final because of its effects on the third party’s right to freedom of the press.