Court File and Parties
CITATION: Arminak & Associates Inc. v. Apollo Health and Beauty Care, 2014 ONSC 5806
DIVISIONAL COURT FILE NO.: 367-14
DATE: 20141003
SUPERIOR COURT OF JUSTICE – ONTARIO
DIVISIONAL COURT
RE: Arminak & Associates Inc., Plaintiff
AND:
Apollo Health and Beauty Care and Apollo Beauty Corp. and Apollo Health Corp., Defendants
AND BETWEEN:
Apollo Health and Beauty Care and Apollo Beauty Corp. and Apollo Health Corp., Plaintiffs by Counterclaim
AND:
Arminak & Associates Inc. and Helga Arminak, Defendants by Counterclaim
BEFORE: D. M. Brown J.
COUNSEL: J. Zibarras and A. Weissman, for the Moving Parties, Plaintiff/Defendants by Counterclaim
M. Wise, for the Responding Parties, Defendants/Plaintiffs by Counterclaim
HEARD: October 3, 2014
REASONS FOR DECISION
I. Motion for leave to appeal to the Divisional Court from an order adjourning a summary judgment motion with directions
[1] On August 1, 2014, the plaintiff/defendants by counterclaim brought on a summary judgment motion before Corbett J. seeking judgment on their liquidated claim. Counsel agreed that the moving parties did not seek summary judgment dismissing the defendants’ counterclaim. Corbett J. adjourned the motion to a date to be fixed before him, gave directions about the delivery of further evidence, and ordered counsel to provide him by August 29, 2014 with an agreed-upon schedule for the continuation of the motion. Counsel agreed that no party had asked the motions judge for that relief.
[2] Counsel did not provide Corbett J. with a schedule. Instead, the plaintiff/defendants by counterclaim served an August 12, 2014 notice of motion seeking leave to appeal the interlocutory order of Corbett J. to the Divisional Court pursuant to Rule 62.02(4) of the Rules of Civil Procedure.
[3] I conclude that there is no need to engage in an analysis of the two-prong test for leave to appeal from an interlocutory order of a judge set out in Rule 62.02(4). Instead, I dismiss the motion for leave to appeal because it is premature.
II. Background facts
[4] As described by Corbett J., the plaintiff, Arminak & Associates Inc., brought a liquidated claim for damages in the amount of US $280,147.52 for product delivered under certain purchase orders. The defendants, Apollo Health and Beauty Care, Apollo Beauty Corp. and Apollo Health Corp., counterclaimed for $1.7 million. The defendants alleged that the plaintiff was involved in an on-going scheme to manipulate the defendants’ purchasing prices and to this effect had bribed one of the defendants’ key purchasing employees, a Ms. Rogers. In his endorsement adjourning the summary judgment motion Corbett J. stated that “Ms. Rogers’ credibility will be an important aspect of any decision on the merits”.
[5] The plaintiff had been attempting to secure a hearing of its summary judgment motion since December, 2011. In his handwritten endorsement Corbett J. wrote:
I am sympathetic to the plaintiff’s position that the matter needs to move forward to a decision on the merits. Both parties acknowledge that they are both substantial businesses able to pay the amounts in issue – the parties need to have a forum in which to get a determination of all issues on the merits.
In this case there is an arguable counterclaim…
[6] The plaintiff objected to what followed next in the endorsement where Corbett J. gave directions regarding the filing of further evidence:
However there is a glaring gap in the defendants’ evidence. It has not proved damages. I accept that in the absence of damages being proved at trial if the defendant succeeds on the issue of liability in respect of the counterclaim, it should be able to recover at least the secured commissions and something perhaps for punitive damages. This would not significantly reduce the defendants’ liability for the liquidated clause.
That said, the defendants’ counterclaim is originally for about $1.7 million. It is possible that damages have been very substantial – that will depend on the number of transactions, the volume of product involved, and the impact of the impugned conduct on the prices paid for product by the defendant. I cannot see how this could be established without a damages report and likely an expert report on damages.
The parties have an obligation to put their best foot forward on a motion for summary judgment. The extent to which this requires a responding party to prove damages will vary from case to case. Here, at this stage in the proceedings, the responding defendant needs to satisfy the court of the general existence and scale of the damages – not on an evocative basis arising from the visceral acceptance of the defendants’ principals – but on a sound analytical basis, supported by the evidence. Given what may be a meritorious claim by the defendant that, as a matter of common sense, should cause some damage, I exercise my discretion to permit the defendant to fill this gap in its evidence on this motion.
[7] Corbett J. adjourned the motion to a future date before himself and gave the following directions:
The defendant shall deliver any further evidence on which it intends to rely on the issue of damages (including any expert reports in this regard);
The plaintiff shall deliver any responding materials on the issue of the defendants’ damages;
The parties shall agree between themselves on a schedule for 2 and 3 and any further steps required before returning before this court, failing which they shall arrange a telephone conference with the court for direction;
Counsel shall provide their agreed schedule to the court by August 29, 2014, failing which a telephone conference may be arranged for early September.
[8] The gravamen of the plaintiff’s motion for leave to appeal is that the motions judge improperly exercised his discretion to adjourn the motion in order to permit the defendant to file further evidence. Arminak submitted that the directions given by Corbett J. offended the “best foot forward” principle which operates in summary judgment motions, lay beyond the discretionary powers enjoyed by summary judgment motions judges – especially in light of the comment made by Corbett J. in his endorsement that the defendants had not proved damages - and involved relief which neither party had requested at the hearing.
III. Analysis
[9] A major theme running through the Supreme Court of Canada’s discussion of summary judgment motions in Hryniak v. Mauldin[^1] is the need for continuity in “judicial touch” throughout the summary judgment motion process. As stated by that Court:
The Ontario Rules and a superior court’s inherent jurisdiction permit a motion judge to be involved early in the life of a motion, in order to control the size of the record, and to remain active in the event the motion does not resolve the entire action.[^2]
The Supreme Court of Canada stated that a judge hearing a motion for directions “should generally be seized of the summary judgment motion itself, ensuring the knowledge she has developed about the case does not go to waste”[^3] and, similarly, “where a motion judge dismisses a motion for summary judgment, in the absence of compelling reasons to the contrary, she should also seize herself of the matter as the trial judge”.[^4]
[10] Corbett J. followed those directions of the Supreme Court of Canada: when he adjourned the motion he seized himself of the return of the motion and gave directions regarding any further evidence to be filed for his consideration as the summary judgment motions judge. Corbett J. made no final disposition of the plaintiff’s summary judgment motion, and his directions regarding further evidence were made by a judge seized of a matter who had not yet disposed of the motion brought before him.
[11] The question then arises: can a party to a summary judgment motion seek leave to appeal a ruling made by a judge during the course of a motion, of which he remained seized, before the judge has finally disposed of the motion?
[12] In my view the answer is: “No”. To countenance such types of appeals in summary judgment motions would open up a Pandora’s box of intra-hearing motions for leave to appeal, work great mischief and seriously offend the fundamental principle set out in Rule 1.04(1) that courts must act to secure the fair, timely and cost-effective determination of civil proceedings on their merits.
[13] Appeals of rulings made during the course of the hearing of a motion are rarely heard for reasons of practicality, fairness and efficiency. [^5] The decision of Corbett J. made August 1, 2014 arose within an on-going hearing which should be permitted to complete its course to its ultimate determination before a review on appeal is entertained. The fairness of the discretion exercised by Corbett J. in his intra-motion endorsement is best assessed once the final determination of the motion has occurred. As a full panel of the Divisional Court stated in ruling, as premature, an appeal from an intra-hearing order made during the course of a summary judgment motion:
Just as an appeal of a ruling made during the course of a trial should normally await the outcome of the trial, so too, should an appeal of a ruling made in the course of a motion for summary judgment normally be made at the completion of the motion for summary judgment.[^6]
[14] The motion for leave to appeal by the plaintiff/defendants by counterclaim of the intra-motion ruling made by the summary motions judge is premature. Upon the disposition of the summary judgment motion by Corbett J., the parties are free to avail themselves of the appeal rights granted to them by law, as they see fit.
[15] For those reasons, I conclude that the motion by the plaintiff/defendants by counterclaim for leave to appeal is premature and I dismiss it. The costs of this motion shall be in the cause of the summary judgment motion and shall be determined by Corbett J. in his disposition of the costs of the summary judgment motion.
[16] I direct the parties to submit to Corbett J. the ordered schedule by Tuesday, October 14, 2014.
D. M. Brown J.
Date: October 3, 2014
[^1]: 2014 SCC 7. [^2]: Ibid., para. 69. [^3]: Ibid, para. 71. [^4]: Ibid., para. 78. [^5]: See, generally, the discussion on this point in Donald Brown, Civil Appeals (Toronto: Thomson Reuters Canada, 2013), pp. 3-19 to 3-20. [^6]: Dr. Therese Thomas Dentistry v. Bank of Nova Scotia, 2010 ONSC 5900, para. 3.