Ontario’s top court refuses consent order to “whitewash” Superior Court finding of misconduct

In brief reasons in Martin v. 11037315 Canada Inc., a unanimous Court of Appeal panel rejected a motion on the consent of all parties for an order allowing the appeal and setting aside the judgment below. In doing so, the Court of Appeal clarified that it is not appropriate for the court to set aside a judgment or order made by a court below based on the parties’ consent alone. Rather, “To ensure its powers do not serve an improper purpose, this court must consider, in every case, whether the relief requested is appropriate in light of the law and the facts of the case.”

The motion was brought after a settlement between the parties in a case involving a property sold in the face of a judgment for foreclosure and the issue of whether the purchaser of that property on the foreclosure was a bona fide purchaser of the property without notice. The trial judge had declared that the purchaser of the property at issue was not a bona fide purchaser without actual notice and the Court of Appeal refused to set that aside just because the parties had agreed to it. In the words of the Court:

“The parties are asking the court to whitewash this finding of misconduct without any basis for doing so. In the absence of any legal or evidentiary error, there is no authority for this court to set aside her judgment, even on consent. Given the circumstances of this case, we are satisfied that setting aside the judgment below based on the consent of the parties alone, given the declaratory judgment and the underlying findings of misconduct, would bring the administration of justice into disrepute.”

The Court recognized that the settlement and its refusal to set aside the judgment below put the original owner and successful party at trial, Ms. Martin, in an unfair position – as it potentially scuttled a  settlement that was favourable to her: “Unfortunately, the dismissal of the motion is obviously unsatisfactory for Ms. Martin. We order that, if the moving party wishes to pursue the appeal, the appeal is to be expedited.” This decision highlights that the administration of justice can sometimes trump the agreements and interests of the parties.