Court of Appeal for Ontario

Date: 2019-03-18 Docket: M50105 (C66441) Judges: Simmons, Tulloch and Brown JJ.A.

Parties

Between

Callidus Capital Corporation Moving Party/Respondent Plaintiff/Defendant by Counterclaim

and

Opes Resources Inc., Richard George Molyneux and Darryl Levitt Responding Party/Appellant Defendants/Plaintiffs by Counterclaim

And Between

Richard George Molyneux Responding Party/Appellant Plaintiff by Counterclaim

and

J. Claire Edwards, not individually, but as a Chapter 7 Trustee of Fortress Resources, LLC d/b/a McCoy Elkhorn Coal Company, Callidus Capital Corporation, Opes Resources Inc. and Darryl Levitt Moving Party/Respondent Defendants by Counterclaim

Counsel

Lisa S. Corne and John D. Leslie, for the moving party, Callidus Capital Corporation

Nancy Tourgis and Laney Paddock, for the responding party, Richard George Molyneux

Heard and released orally: March 15, 2019

Reasons for Decision

[1] In this action, the moving party, Callidus Capital Corporation, sues the responding party, Richard Molyneux, on his guarantee of the indebtedness of Fortress Resources, LLC to Callidus under certain loan agreements. As part of his defence and counterclaim, Molyneux pleads that by reason of Callidus' commercially unreasonable conduct in respect of the loans, Fortress does not owe Callidus any money, with the result that the guarantee is unenforceable. Molyneux pleads that the unreasonable conduct by Callidus is part of a pattern of conduct by Callidus towards its borrowers.

[2] On his examination for discovery of the representative of Callidus, Molyneux asked several questions concerning his pleading that Callidus' unlawful treatment of Fortress "is part of a pattern of conduct that Callidus has carried out over a number of years with various customers who borrowed money from Callidus" (the "Similar Fact Discovery Questions"). Callidus refused to answer the questions. Molyneux moved for an order compelling the representative of Callidus to reattend to answer the questions refused.

[3] The motion judge dismissed that part of Molyneux's motion. She held that the Similar Fact Discovery Questions did not meet the standard of relevance because Molyneux had failed to demonstrate on the motion sufficient similarities between Callidus's conduct toward Fortress and its conduct toward other borrowers. Consequently, she concluded that the refusals were proper.

[4] Molyneux appeals that order to this court. Callidus moves to quash the appeal, arguing that the order is interlocutory, with an appeal lying to the Divisional Court with leave.

[5] As a general rule, an order compelling or refusing to compel a representative of a party to answer questions posed on an examination for discovery is interlocutory, not final: Cartwright & Sons Ltd. v. Carswell Co. Ltd., [1958] O.J. No. 475 (C.A.); Brine Lake Products Ltd. v. Schenker of Canada Ltd., [2004] O.J. No. 1342, at paras. 11 and 12; Diversitel Communications Inc. v. Glacier Bay Inc., 181 O.A.C. 6 (O.N. C.A.), at para. 6; Susin v. Chapman, 2004 CarswellOnt 143 (C.A.), at para. 5; Morden & Perell, The Law of Civil Procedure in Ontario Third Edition, at p. 1056. That is because an examination for discovery is a device by which a party can secure evidence from an adverse party in respect of a matter placed in dispute by the pleadings. A determination by a court that a question posed on discovery is not relevant to a pleaded issue merely forecloses resort to that evidence-seeking device in respect of that matter.

[6] However, Molyneux contends that in the specific circumstances of this case, the order amounts to a final determination of one of his defences. We do not agree. The starting point is to look at the order: Walchuk Estate v. Houghton, 2015 ONCA 862, at para. 12. On its face, para. 5 of the order dismisses Molyneux's motion to compel Callidus to answer questions refused.

[7] Although in some cases a motion judge's reasons may determine a substantive right or defence, in this case the motion judge's reasons disclose that she went no further than holding the questions moved on were not relevant and the refusals were proper. As well, in refusing to compel Callidus to answer the Similar Fact Discovery Questions, the motion judge did not determine the very subject matter of the litigation, nor did she dispose of an issue raised by Molyneux in his defence or counterclaim that would deprive him of a substantive right that could be determinative of the entire claim or counterclaim: 2441472 Ontario Inc. v. Collicutt Energy Services, 2017 ONCA 452, 48 C.B.R. (6th) 173, at para. 9.

[8] The order of the motion judge clearly is interlocutory.

[9] Accordingly, Molyneux has appealed to the wrong court. An appeal of the motion judge's order lies to the Divisional Court, with leave, pursuant to s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43. As this appeal patently was brought in the wrong court, we decline to transfer it to the Divisional Court.

[10] The appeal is quashed.

[11] Callidus is entitled to its costs of the motion on a partial indemnity scale fixed in the amount of $7,500, inclusive of disbursements and applicable taxes.

"Janet Simmons J.A."

"M. Tulloch J.A."

"David Brown J.A."