DIVISIONAL COURT FILE NO.: 41/04

COURT FILE NO.: 02-CV-224133CM

DATE: 20040401

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

BRINE LAKE PRODUCTS LTD.

Plaintiff/Applicant

• and -

SCHENKER OF CANADA LIMITED and BRITISH AIRWAYS

Defendants/Respondents

D. Yiokaris, for Schenker of Canada Limited

A.L. Casemore for British Airways

J.C. Morton, for Brine Lake Products Ltd.

HEARD at Toronto: March 19, 2004

O’DRISCOLL J.:

i. Nature of the Proceedings

1The Plaintiff, Brine Lake Products Ltd. (Brine Lake), a Barbadian corporation, brings action against Schenker of Canada Limited (Schenker), a flight agent for cargo, and British Airways claiming US $4.389 million in general damages and an estimated US $150,000 in special damages. Brine Lake alleges that the Defendants agreed with Brine Lake that on its behalf they would transport/carry fishing and processing equipment from Canada to Iran, equipment said to be used in the harvesting of shrimp food (“cargo”). Brine Lake alleges that it suffered damages resulting from the delay of the Defendants in delivering the processing equipment.

2By Notice of Motion, dated November 6, 2003, counsel for Schenker brought a motion before Master Dash seeking an order compelling Brine Lake to answer undertakings, certain questions taken under advisement and certain refusals given at the examination for discovery of David Haghani, the Plaintiff’s deponent, held on August 28, 2002 and September 10, 2002. The motion was argued on November 13, 2003 and December 22, 2003.

3In his January 14, 2004 endorsement as to costs, Master Dash wrote:

[1] …The motion as against the plaintiff was argued over two days, November 13 and December 22, 2003. On the first date issues relating to groups of questions were argued and the defendant Schenker was virtually totally successfully on every issue considered. The plaintiff argued each point, making few if any concessions. The plaintiff presented no evidentiary foundation to support its allegations of privilege and in fact was unable to articulate its precise grounds for privilege, particularly those relating to foreign law restrictions, or provide legal precedent. The documents and information that the plaintiff sought to protect were key to issues of damages in the plaintiff’s $4.5 million dollar claim. Time ran out on November 13 and no ruling was made on the individual questions within each group. I provided reasons and directions with respect to the various categories of questions in the expectation that counsel would be able to ascertain which specific questions must be answered in accordance with my directions. I also found the affidavit of documents to be deficient and directed a further and better affidavit of documents.

[2] Shortly before the return of the motion on December 22 the plaintiff provided an affidavit of David Haghani that outlined some of the difficulties in obtaining certain documents, but it also attempted to reargue certain issues already determined on November 13. For example Mr. Haghani continued to insist that because of confidentiality provisions he could not disclose more information about the joint venture agreement or about the second year’s harvest, and he continued to point to U.S. law respecting disclosure of the consultants’ names as a result of U.S. embargo laws. I had already rejected those arguments on November 13. The plaintiff answered a number of questions prior to the reattendance on December 22 based on my November 13 ruling. I found that all of the questions that Schenker claimed were still outstanding were in fact proper and should be answered. The further and better affidavit of documents had still not been delivered…

4The formal order of Master Dash, dated December 22, 2003 states, in part:

1. THIS COURT ORDERS that the plaintiff shall within 14 days deliver a further and better affidavit of documents including a detailed schedule B and C, including any additional schedule A documents in accordance with this order.

2. THIS COURT ORDERS that the questions listed as refusals, 10, 11, 12, 16, 17, 21, 24, 25, 27, 28, 29, 30, 31, 32, 38, 41, 54, 57, 58, 61, 62, 63, 64, and 65 shall be answered.

3. THIS COURT ORDERS that David Haghani shall reattend to answer the above questions and any proper questions arising at discoveries thereto at a date to be agreed, and in the absence of agreement on 7 days notice.

5On January 21, 2004, counsel for the Plaintiff, Brine Lake, launched an appeal from the order of Master Dash, dated December 22, 2003. The Notice of Appeal purports to be an appeal of a “final order” of the Master to the Divisional Court pursuant to s. 19(1)(c) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, as amended, and Rule 61.04 of the Rules of Civil Procedure. Rule 61.04 provides for an appeal period of thirty (30) days from the date of the order under appeal.

6Counsel for Schenker and counsel for British Airways make common cause and each filed a motion to quash Brine Lake’s appeal – Schenker’s Notice of Motion is dated February 4, 2004 and British Airways’ Notice of Motion is dated March 3, 2004. Each submitted that counsel for Brine Lake has misconceived the Plaintiff’s right of appeal because:

(1) the impugned order of Master Dash is interlocutory and not final;

(2) the only appeal route open to Brine Lake was under s. 17(c) of the Courts of Justice Act (supra) which was an appeal to a Superior Court Judge;

(3) the time limited for appeal under s. 17(c) of the Courts of Justice Act is seven (7) days, as prescribed under Rule 62.01(2), from the date of the order under appeal.

7In para. [5] of his factum, counsel for Brine Lake states “that the distinction between final and interlocutory orders governs the appeal route”.

II. Interlocutory or Final?

8In Hendrickson v. Kallio, [1932] O.R. 675 (Ont. C.A.), Middleton J.A. (for the Court) said:

I am clearly of opinion that the order in question is not an interlocutory order within the meaning of this statutory provision. The interlocutory order from which there is no appeal is an 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.

9In Sun Life Assurance Co. v. York Ridge Developments Ltd., [1998] O.J. No. 4899, the Court of Appeal for Ontario per Weiler J.A. stated:

[13] …As stated in Holmsted and Watson on Ontario Civil Procedure at 62-24: “Ball [(1993), 1993 8613 (ON CA), 13 O.R. (3d) 322] holds that what the Hendrikson test really means is that to be final an order must deal with the substantive merits as opposed to mere procedural rights, no matter how important the procedural rights may be. The test focuses on whether the order under appeal finally disposes of the rights of the parties, in the sense of substantive rights to relief (in the case of a plaintiff) or a substantive defence (in the case of a defendant).”

10In my view, the order of Master Dash does not order any “stranger” or “non party” to do anything. Thus, the issue faced in Smerchanski v. Lewis (1980), 30 O.R. (2d) 370 (Ont. C.A.) and Royal Trust Corporation of Canada et al. v. Fisherman (2001), 55 O.R. (3d) 794 is not here relevant.

III. Conclusions

11In the following list of cases, appeals from Masters’ orders dealing with discovery issues have been considered as interlocutory and heard by a Superior Court Judge under s. 17(c) of the Courts of Justice Act and Rule 61.04(1) of the Rules of Civil Procedure. See: Caputo v. Imperial Tobacco Ltd., [2003] O.J. No. 2269 (O.S.C.J.); Guido v. Nesbitt Burns Inc., [2000] O.J. No. 1861 (O.S.C.J.); Hawley v. Fearn-Stewart, [2003] O.J. No. 3910 (O.S.C.J.); Taberner Investments Ltd. v. Price Waterhouse, [2000] O.J. No. 2596 (O.S.C.J.); Williams v. Patel, [2001] O.J. No. 4002 (O.S.C.J.), para. 1 & 2.

12Indeed, an order of the type under review has been so traditionally categorized as “interlocutory” that one of the suggested orders in a text on “court forms” states, in part:

2. THIS COURT ORDERS that the defendant deliver a further and better affidavit of documents within ten days of the date of entry of this order.

3. THIS COURT ORDERS that thereafter the defendant re-attend on his examination for discovery at his own expense on seven days’ notice to his solicitors, and answer questions numbered [set out numbers of questions] on his examination for discovery conducted on [date].

See: Williston and Rolls Court Forms, second edition, Vol. 4, p. 15-23.

13In my view, the order sought to be appealed is an interlocutory order. It follows that counsel for Brine Lake has chosen the wrong path for this appeal.

14At no time prior to January 23, 2004 did Brine Lake ever express an intention to appeal any of the December 22, 2003 orders of Master Dash. Indeed, on January 5, 2004, Brine Lake took steps to comply with Master Dash’s order and provided Schenker with a copy of Brine Lake’s draft affidavit of documents.

IV. Result

15Brine Lake’s proposed appeal to the Divisional Court from the order of Master Dash, dated December 22, 2003, is quashed.

V. Costs

16Prior to reserving judgment, at my request, counsel made submissions as to costs. The quantum ranged from $1,250.00 to $7,500.00 plus disbursements plus G.S.T.

17The Respondent/Brine Lake shall forthwith pay the following fixed costs:

1. To Schenker of Canada Limited (i) Fees of $4,000.00, and (ii) Disbursements of $415.71, and (iii) G.S.T.

and

2. To British Airways (i) Fees of $2,000.00, and (ii) Disbursements of $489.66, and (iii) G.S.T.

O’Driscoll J.

Released: April 1, 2004

DIVISIONAL COURT FILE NO.: 41/04

COURT FILE NO.: 02-CV-224133CM

DATE: 20040401

ONTARIO

SUPERIOR COURT OF JUSTICE