Court File and Parties

CITATION: Cold River Resources LLC v. 1279514 Ontario Inc., 2013 ONSC 1514

DIVISIONAL COURT FILE NO.: 58/13

DATE: 20130312

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: COLD RIVER RESOURCES LLC v. 1279514 ONTARIO INC.

BEFORE: Justice Swinton

COUNSEL: Scott A. Crocco, for the Plaintiffs/Responding Parties Berkley D. Sells, for Northern Financial Corporation/Moving Party

HEARD AT TORONTO: February 22, 2013

E N D O R S E M E N T

Swinton J.:

[1] Northern Financial Corporation seeks leave to appeal from an order of Goldstein J. dated December 4, 2012 that dismissed an appeal from a Master who ordered a witness to reply to questions on a refusals motion.

[2] The witness, Robert Bruggeman, was examined as a non-party witness under Rule 39.03 on a pending motion that seeks to vary a judgment and orders against the named defendants to add Northern Financial Corporation as a defendant or to declare that the judgment and orders are enforceable against Northern.

[3] The two named defendants, 1279514 Ontario Inc. and IPO Capital Corp., were dissolved during the course of the litigation that led to the judgment and orders in issue. The plaintiffs state in their factum that the main thrust of their motion is to assert that Northern is liable for the amount of the judgment and other related orders to the extent that Northern received any property from the defendants on their dissolution. The plaintiffs rely largely on ss. 242 and 243 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 ("OBCA"), which allow recovery from a shareholder of a dissolved corporation to the extent that the shareholder has received property upon dissolution of the corporation.

[4] Northern argues that leave to appeal should be granted, as there is good reason to doubt the correctness of the order. Northern characterizes the questions put to Mr. Bruggeman as in the nature of a judgment debtor examination of Northern. Such an examination is said to be premature, given that Northern is not yet a party.

[5] The plaintiffs argue that the questions are relevant to the issues arising on the motion, as they seek to elicit information about the dissolved corporations' property, as contemplated by ss. 242 and 243 of the OBCA.

[6] Both the Master and the motions judge held that the refused questions were relevant to the issues in the main motion. The determination of relevancy is a question of law reviewable on a standard of correctness.

[7] Having examined the proposed questions, I have doubt about the relevance of some of the questions in issue. In particular, I have doubt about the relevance of the questions seeking to examine certain records of the Northern companies, such as their Minute Books, or asking about the ability of Northern to pay. However, the motions judge correctly held that other questions pertaining to the assets of the defendant corporations do meet the relevancy test.

[8] Moreover, in order to obtain leave to appeal, the moving party must not only show that there is good reason to doubt the correctness of the decision. It must also show that the proposed appeal raises an issue of general importance that transcends the interests of the parties.

[9] In my view, Northern has not met this part of the test for leave under Rule 62.02(4)(b). The motions judge applied the well-established test for relevancy to the facts of this case. He was aware that the questions permissible on the examination of a witness under Rule 39.03 are different from those permissible on discovery.

[10] The motions judge also pointed out that this case involves unusual facts, and the motion seeks novel relief, particularly under the OBCA. I agree. In my view, the refusals motion does not raise any issue of general importance that requires consideration by an appellate court.

[11] Accordingly, the motion for leave to appeal is dismissed. Costs to the plaintiffs are fixed at $3,500.00 payable by Northern within 30 days.

Swinton J.

Released: March 12, 2013