Awad v. Dover Investments Limited, 2015 ONSC 3955

CITATION: Awad v. Dover Investments Limited, 2015 ONSC 3955

DIVISIONAL COURT FILE NOS.: 261/15 & 262/15

COURT FILE NO.: 03-CL-5217

DATE: 20150619

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: GHAREEB AWAD and TRANSPACIFIC PETROLEUM CORP. Applicants/(Respondents)

AND:

DOVER INVESTMENTS LIMITED, DOVER PETROLEUM CORP. and ROBERT SALNA Respondents/(Moving Parties)

BEFORE: Lederer J.: (Orally)

COUNSEL: Mr. Awad appeared by telephone, representing only himself as an Applicant/(Respondent)

Harold Maltz, for the Respondents/(Moving Parties), Dover Investments Limited, Dover Petroleum Corp and Robert Salna

HEARD at Toronto: June 18, 2015

ENDORSEMENT

[1] On January 6, 2015, Mr. Justice McEwen released his decision with respect to a trial of an issue (in fact, several issues) which had been ordered by Mr. Justice Spence on May 26, 2011. Supplementary Reasons were issued on March 6, 2015.

[2] The trial had been ordered within a proceeding that had commenced as an application seeking an oppression remedy under s. 248 of the Business Corporations Act, R.S.O. 1990, c. B.16. The trial and the decision dealt with several substantive issues that had arisen between the parties in the context of that application. Among other things, Mr. Justice McEwen determined the volume of oil produced by a well in Egypt, identified within the application up to and including December 31, 2005, as well as the revenue produced by that well up to and including the same date. The judge assessed the value of the joint venture involved and concluded that certain monies were to be paid by the applicants to one of the respondents, (Dover Investments Limited).

[3] No appeal was taken from this order.

[4] On April 30, 2015, Mr. Justice McEwen released his decision on the costs that pertained to the trial he had heard.

[5] It is the order as to costs that the respondents wish to appeal. In order to appeal an order as to costs, leave to appeal must be obtained:

133. No appeal lies without leave of the court to which the appeal is to be taken,

(b) where the appeal is only as to costs that are in the discretion of the court that made the order for costs.

(Courts of Justice Act, R.S.O. 1990. c. C. 43, s. 133)

[6] The respondents are uncertain as to whether such an appeal (and the preceding motion for leave to appeal) should be brought in the Court of Appeal or the Divisional Court and, if it is the latter, whether the order being appealed is final, in which case r. 61.03 would apply, or interlocutory, in which case r. 62.02 would apply. In order to protect itself, notices of motion to both courts have been served and filed with two, one for each of the two rules, being filed in the Divisional Court.

[7] The moving parties (the Respondents) seek direction as to where to go (which court) and what to do (which rule). I confess to some doubt as to whether this is the best way to respond to the problem. No court or judge by providing its, his or her imprimatur can give jurisdiction to a court it would not otherwise have. This being so it would be better to leave this issue to the panel or judge that will ultimately be asked to hear the motion for leave to appeal. It is difficult to see what prejudice would arise if in the interim a motion to the other court is stayed or held down. Counsel should anticipate that if that judge or panel disagrees with whatever determination may be made here it may have difficulty proceeding.

[8] Having said this, the issue does not seem to be a difficult one.

[9] I begin with s. 6(1) (b) of the Courts of Justice Act which refers to a part of the jurisdiction of the Court of Appeal. It says:

6. (1) An appeal lies to the Court of Appeal from,

(b) a final order of a judge of the Superior Court of Justice, except an order referred to in clause 19(1)(a) or an order from which an appeal lies to the Divisional Court under another Act;

[Emphasis added]

[10] The authority for the commencement of the application is the Ontario Business Corporations Act. The oppression remedy is a creation of and proceeds pursuant to that legislation. Section 255 of the Ontario Business Corporations Act provides for an appeal to the Divisional Court:

An appeal lies to the Divisional Court from any order made by the court under this Act.

[11] As I see it, this is determinative of the issue. The trial conducted by Mr. Justice McEwen follows from the order Mr. Justice Spence made as part of, and in furtherance of, resolving the application for an oppression remedy.

[12] In Ontario Securities Commission v. McLaughlin, 2009 ONCA 280, [2009] O.J. No. 1336 (C. A.); 248 O.A.C. 54, the court considered whether an order dismissing a motion to amend a statement of defence in a claim based on an oppression remedy was an order under the Ontario Business Corporations Act. The court held that the order was made under that legislation and that, accordingly, the appeal of the dismissal was to the Divisional Court:

Unlike Kelvin, the order in this case was not an interlocutory order but a final order disposing of potential defences in an oppression action. In my view, the relationship between the power exercised by the motion judge was sufficiently ‘close’ to a legislative source under the OBCA, namely, the power to adjudicate on oppression claims under s. 248. Implicit in that power is the authority to allow or deny certain claims and defences. When a court allows or dismisses an application under s. 248 after the completion of the proceedings, it is making an order under the OBCA which is appealable to the Divisional Court under s. 255. In my view, when a court exercises what is, in effect, the same power by allowing or dismissing a claim or a defence brought under s. 248 at an early stage of the proceeding, it is equally making an order ‘under this Act’. The relationship between the power in fact exercised – dismissing a defence to the claim – is sufficiently ‘close’ to the source of the legislative power under s. 248.

(Ontario Securities Commission v. McLaughlin, supra, at para. 16)

[13] In Khan v. 1791450 Ontario Incorporated, [2012] O.J. No. 1149; 2012 ONCA 167 (also cited as 1791450 Ontario Inc. v. 1791450 Ontario Inc.), the court considered whether the jurisdiction to hear an appeal lies to the Court of Appeal or the Divisional Court pursuant to s. 255 of the Ontario Business Corporations Act. The Court of Appeal concluded that a decision not to adjourn a proceeding was an order ancillary to the Ontario Business Corporations Act proceeding for an oppression remedy and the appeal did not lie to the Court of Appeal:

… The Ontario cases dealing with the jurisdiction issue in respect of the OBCA that are relevant here – McCormick Estate (Trustee of) v. Murphy, 2005 CarswellOnt 1194, Ontario Securities Commission v. McLaughlin 2009 CarswellOnt 1749, (2009), ONCA 280, 2009 ONCA 280, 248 O.A.C. 54 and Amaranth LLC v. Counsel Corp., 2004 10897 (ON CA), 2004 CarswellOnt 2026, 186 O.A.C. 395, 71 O.R. (3d) 258 – all support the conclusion that the decision not to adjourn was an order ancillary to the OBCA proceeding for an oppression remedy under s. 248. As such, it is appealable to the Divisional Court under s. 255 of the OBCA and not to this court, and cannot be heard here.

(Khan v. 1791450 Ontario Incorporated, supra, at para. 2)

[14] In this case, the decision of Mr. Justice McEwen is “sufficiently close to” or “ancillary to” the oppression remedy being sought such that it and the costs order which flows from it are appealable to the Divisional Court and not the Court of Appeal.

[15] This takes me to the question of whether the order as to costs is final or interlocutory. An order is final if it resolves a substantive claim or defence. The order of Mr. Justice McEwen was final in respect of the substantive matters it determined, as noted above. The order as to costs is final in that it resolves the question of costs that spring from the trial; it is ancillary to and follows from the trial.

[16] The order being appealed is a final order.

[17] Having said this, I point out that one of the differences between r. 61.03 and r. 62.02 is the inclusion in the latter of the test for leave to appeal an interlocutory order (r. 62.02(4)). There is no corresponding test found in r. 61.03. If this gives counsel some comfort, it should not. Costs are a matter of discretion. Appeals as to costs are rare:

Leave to appeal costs orders will be granted only in the most obvious cases and very sparingly.

(Culligan Springs Ltd. v. Dunlop Lift Truck (1994) Inc., 2005 32571, at para. 15 (ON SC), referring to Ventin v. Ferguson, (1995), O.J. No. 2789 (Ont. Gen. Div.), at p. 4; and, Orlando Corp. v. Bothwell-Accurate Co., [2004] O.J. No. 2802 (Ont. C.A.). Also see: Van Damme v. Gelber, 2013 ONCA 388, 115 OR (3d) 470, at para. 32) and quoted in Men at Work General Contractors Ltd. v. Macdonald, 2015 ONSC 383 at para 14 and fn. 16.

[18] Finally, the respondents seek an extension of time to file the material that will support the motion for leave to appeal that will now proceed to the Divisional Court. In the circumstances and in the absence of anyone opposing this motion, such an extension is appropriate.

[19] The motion for leave to appeal is to be perfected no later than July 13, 2015. All other time limits pursuant to the Rules of Civil Procedure. No costs for today.

LEDERER J.

Date: 20150619