COURT OF APPEAL FOR ONTARIO
Cronk, Rouleau and Huscroft JJ.A.
BETWEEN
Patricia Buccilli and Drapery Interiors Etc. Inc.
Moving Parties (Plaintiffs/Respondents)
and
Pasquale Pillitteri, also known as Pat Pillitteri, Christina Pillitteri, Patron Contracting Limited, also known as CDC Contracting, Birchland Homes Inc. and Vendrain Inc.
Respondents (Defendants/Appellants)
Thomas M. Slahta, for the moving parties
Linda Galessiere and Alex Smith, for the respondents
Heard: September 19, 2016
1This is a motion by the plaintiffs seeking an order to quash an appeal by the defendants of a March 9, 2016 order of Newbould J. of the Superior Court of Justice, wherein the defendants were ordered to make certain interim payments to the plaintiffs pending a later trial to determine what further remedies are available to the plaintiffs.
A. Background
2The dispute among the parties has been ongoing for some time. It is rooted in a claim by the plaintiffs that one or more of the individual defendants deprived the plaintiffs of their interest in various corporations, including the defendant corporations. The claim was the subject of a bifurcation order in 2009, whereby the court split consideration and determination of the plaintiffs’ request for declarations as to their rights and the extent of those rights from their request for remedies related to any declared rights.
3The declaratory relief portion of the claim was the subject of a trial in 2012 (the “phase one trial”). The judgment rendered at the phase one trial declared, among other things, that the plaintiffs had a one-third interest in the defendants, Patron Contracting Limited and Birchland Homes Inc., as well as in all monies, benefits and opportunities withdrawn or diverted directly or indirectly from those companies, including but not limited to various real estate investments: Buccilli v. Pillitteri, 2012 ONSC 6624, [2012] O.J. No. 5628. That judgment was affirmed on appeal: Buccilli v. Pillitteri, 2014 ONCA 432, [2014] O.J. No. 2561.
4Pending the “phase two trial” to determine the value of the plaintiffs’ declared interests and the appropriate equitable and monetary remedies under the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 (“OBCA”), the plaintiffs, the moving parties herein, brought a motion pursuant to s. 248(3)(j) of the OBCA and r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, seeking substantial interim payments along with other declaratory relief. The motion judge granted much of the relief sought and, assessing the value of the plaintiffs’ one-third interest in various properties and investments, ordered the defendants to make payments totalling $6,098,427 plus the plaintiffs’ proportionate share of “other legal expenses” as that term is defined in the order, together with costs fixed in the amount of $170,000.1
5The defendants have appealed that order to this court. The hearing of that appeal is scheduled for December of this year.
B. Basis of this motion
6The moving parties now move for an order quashing the defendants’ appeal for want of jurisdiction. They advance three grounds in support of their motion.
7First, the moving parties argue that the order is not a final order. They explain that the interim partial payments are with respect to properties or investments in which the moving parties’ one-third interest was finally determined by the decision in the phase one trial. The amounts ordered to be paid were calculated using the lower of the two appraised values for each of the properties involved, as adjusted based on the evidence filed at the hearing. The payments, therefore, are based on the minimum amounts that will be recovered at the phase two trial.
8In the moving parties’ submission, because the decision and payments ordered do not restrict the responding parties’ ability to raise any issue regarding the value of the moving parties’ declared one-third interest and the associated remedies at the phase two trial, the order is not final. No lis between the parties has been finally determined by the order under appeal. Pursuant to s. 19(1)(b) of the Courts of Justice Act, R.S.O., 1990, c. C-43, any appeal is to the Divisional Court and, although I need not determine this issue, leave may be required.
9Second, the moving parties argue that if any of the relief granted was in fact final, it was awarded pursuant to the OBCA. Appeals from such orders, be they final or interlocutory, are properly made to the Divisional Court pursuant to s. 255 of the OBCA.
10Finally, the moving parties argue in their factum that the appeal should be quashed as being manifestly devoid of merit.
C. Discussion
(1) Is the order final?
11In my view, the order under appeal by the defendants is final. That order is not, as suggested by the moving parties, simply an order requiring the payment of sums representing the minimum amounts that will be recovered at the phase two trial. The order consists of a series of paragraphs, each of which determines the moving parties’ entitlement to minimum set amounts for their interest in each of several disputed properties or investments.
12In some cases, the motion judge was presented with two market value appraisals for a disputed property and he used the lower of the two. He left to the phase two trial the final determination as to the correct market value. Significantly, however, although he used the lower of the two appraisals as his starting point, he then went on to determine what reductions he would or would not allow the responding parties to make to those values because of costs they allege were, or would be, incurred. This exercise involved the final determination of several disputed issues, such as whether the respondents to the motion would be allowed to claim management fees against some of the properties, and whether the taxes that would be incurred upon the sale of the properties should be taken into account: Buccilli v. Pillitteri, 2016 ONSC 1655, 264 A.C.W.S. (3d) 654, at paras. 30-33.
13The respondents to the motion accept that the “minimum” payments ordered are the product of several final determinations which, if not reversed on appeal, will be binding on them at the phase two trial. In other words, they argue that, despite being characterized as minimum amounts and recognizing that more may well be obtained by the moving parties at the phase two trial, the fact remains that the respondents to the motion are prevented by reason of the order from challenging these minimum payments and arguing at the phase two trial that the deductions the motion judge rejected ought to be accepted.
14I agree. The order, therefore, is final.
15I note that one paragraph in the order (para. 1) does not relate to the moving parties’ one-third interest in a property and investment. This paragraph orders the respondents to the motion to pay the moving parties’ proportionate share of the legal expenses and the expenses of an accounting firm appointed by the court. It is apparent that the payments ordered in this paragraph of the order are also final.
(2) Does the order constitute relief granted pursuant to the OBCA?
16I turn now to the second ground advanced by the moving parties, that is, that the relief was granted pursuant to the OBCA and that s. 255 of that Act provides that appeals from orders made under the OBCA lie to the Divisional Court.
17The moving parties emphasize that their notice of motion invoked both s. 248(3) of the OBCA and partial summary judgment pursuant to r. 20. Although the motion judge did not, in his reasons, identify whether the order was made pursuant to s. 248(3) or r. 20, the moving parties submit that, properly construed, all the relief was awarded or could have been granted pursuant to s. 248(3). The relevant part of s. 248(3) is as follows:
(3) In connection with an application under this section, the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing …
(j) an order compensating an aggrieved person[.]
18I will say at the outset that it is apparent even from a cursory review of the order that the relief granted in several of the paragraphs therein was clearly not compensation ordered “in connection with an application” pursuant to s. 248(3). Arguably, none of the relief was so granted.
19In my view, the critical issue to be determined is the basis of the power pursuant to which the partial summary judgment was granted. If, as alleged by the moving parties, the underlying source of authority for the relief ordered is the OBCA, then the order, whether it was made pursuant to s. 248(3) or r. 20, is for appeal purposes considered to be an order made under the OBCA. In other words, if the motion judge was exercising a power “sufficiently ‘close’ to a legislative source under the OBCA”, then it will be treated as an OBCA order and it matters not whether the relief was granted pursuant to s. 248(3) or r. 20: Ontario (Securities Commission) v. McLaughlin, 2009 ONCA 280, 248 O.A.C. 54, at para. 16. If, however, the source of the authority for the order is the common law or equity, as opposed to the OBCA, then the appeal lies properly to this court.
20From my review of the phase one trial judgment, it is apparent that this decision was rooted in a finding that the responding parties breached their fiduciary duties and inequitably deprived the moving parties of their interests in several corporations. The trial judge concluded that there were sufficient grounds on which to decide in favour of the plaintiffs under each of the doctrines of undue influence (para. 152), unconscionability (para. 172), misrepresentation (para. 178) and breach of fiduciary duty (para. 185). The order for an accounting of profits and for payment of one-third to the plaintiffs was expressly framed as a remedy to make the moving parties whole from the breach of fiduciary duty (para. 185). These are common law or equity claims. It follows, therefore, that the relief later granted by the motion judge giving effect to that judgment is likewise rooted in a common law or equitable claim such as breach of fiduciary duty. The fact that the moving parties included OBCA claims in their statement of claim and again in their motion for partial summary judgment does not change the essential nature of their claim.
21I do not, therefore, view the appeal as constituting, at its core, an appeal under the OBCA to which s. 255 of that Act applies.
22Even if I were to assume that part of the relief was grounded in an OBCA claim and was granted pursuant to s. 248(3), this court would nonetheless have jurisdiction to hear the appeal from all aspects of the order pursuant to s. 6(2) of the Courts of Justice Act. This is because those parts of the order under appeal that are rooted in the OBCA are final orders that, although appealable to the Divisional Court, may be joined to the appeal of the parts of the order that are not rooted in the OBCA.
(3) Is the appeal devoid of merit?
23With respect to the final ground, that the appeal is devoid of merit, that ground was not pressed by the moving parties in oral submissions and in my view does not succeed. The appeal has already been scheduled for hearing later this year and, in light of the very limited argument on the merits of the appeal itself, I am not, on a motion, prepared to conclude that the appeal is devoid of any merit.
D. Conclusion
24For these reasons, I would dismiss the motion and award the responding parties their costs of the motion, fixed in the amount of $5,000, inclusive of disbursements and applicable taxes.
Released: “P.R.” October 24, 2016
“Paul Rouleau J.A.”
“I agree E.A. Cronk J.A.”
“I agree Grant Huscroft J.A.”