CITATION: Canadian International Petroleum Corp., v. Dover Investments, 2016 ONSC 4097

DIVISIONAL COURT FILE NO.: DC-16-227 DATE: 20160714

ONTARIO

SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

Canadian International Petroleum Corp. and Ghareeb Awad

Appellants/Applicants

– and –

Dover Investments Limited and Robert Salna

Respondents on the Appeal/Respondents

Ghareeb Awad, participating by conference call, for the Appellants on the Appeal/Applicants

Harold Maltz, for the Respondents on the Appeal/ Respondents

HEARD at Toronto: June 20, 2016

Stewart J.

1The Respondents bring this motion to quash this appeal from the Order of Conway, J. dated March 31, 2016 which dismissed the Appellants’ Application as an abuse of process.

2An appeal lies to the Divisional Court from any order made under the Ontario Business Corporations Act, R.S.O. 1990, Chapter B. 16 (“OBCA”).

3The Respondents submit that this appeal lies to the Court of Appeal and not to the Divisional Court. They argue that the Order of Conway, J. is not in the nature of an order under the OBCA and that any appeal from it must be to the Court of Appeal pursuant to s. 6(1) (b) of the Courts of Justice Act, R.S.O. 1990. Chapter C. 43.

4Although the Notice of Appeal delivered by the Appellants contains no jurisdictional statement as required by Rule 61.04 (3) (c), they argue that this appeal is properly brought before the Divisional Court simply because the order being appealed from was made in a proceeding brought under the OBCA. They do not wish to incur any additional expense by proceeding in the Court of Appeal, only to be transferred back to the Divisional Court.

Discussion

[5]

Discussion

In considering this issue and the proper route of appeal, it must be determined what the primary issue, or “lynchpin,” raised in the Appellant’s claim actually is (see: Ontario Securities v. Commission McLaughlin 2009 ONCA 280, [2009] O.J. No. 1336; Pruner v. Ottawa Hunt and Golf Club Ltd. 2015 O.J. 4704).

6In their original Notice of Application, Canadian International Petroleum Corp. (“CIPC”) and Ghareeb Awad made various claims of “unlawful disposition”, unjust enrichment, breach of contract, breach of fiduciary obligations and “CIPC’s reasonable expectations” against the Respondents. None of these causes of action are explicitly said to arise under the OBCA.

7Further, the grounds for the Application do not allege that CIPC is either a shareholder or creditor of Dover Investments.

8The Affidavit of Ghareeb Awad sworn in support of the Application does not set out any facts supporting the relief that CIPC could have standing as complainant under the OBCA or disclose any basis for a cause of action under the OBCA. The Affidavit sets out the fundamental issues raised in the Application which demonstrate that it is the alleged breach by the Respondents of the Joint Venture Agreement between the parties that is central to the Application. Indeed, the Affidavit in support of the Application does not set out any facts to support any claim or cause of action under the OBCA.

9CIPC requests an order that Dover Investments and Salna execute a deed of assignment with respect to Dover’s 28% interest in the Abu Sennan Concession to CIPC pursuant to the terms of the February 2000 Agreement, that the Respondents account for all proceeds from the Abu Sennan Concession, an order valuing the 72% interest that the Respondents disposed of without the written approval of the Applicants as required pursuant to the February 2000 Agreement and, “if necessary”, an Order that CIPC is a proper person to seek relief under Part XVII of the OBCA and rely on section 245 (c) in that regard.

10The essence, or lynchpin, of the Application therefore is a claim to enforce the Joint Venture Agreement. CIPC claims that Dover Investments and Robert Salna are required by the Joint Venture Agreement to assign the benefit of the Abu Sennan Concession to CIPC. The Application is basically a claim for damages, specific performance and other relief for breach of contract.

11On March 31, 2016, Justice Conway dismissed the Application. Justice Conway held that the Application was an attempt to relitigate these same issues that had already been decided in the British Columbia litigation and was therefore a collateral attack on the orders and findings made by the British Columbia Courts.

12The Court has an inherent power to dismiss a proceeding that is an abuse of process. Justice Conway exercised her inherent power to dismiss the Application on that basis.

13The reasons articulated in the Endorsement of Conway, J. confirm that the alleged breach of the Joint Venture Agreement was central to the Application, as follows:

In this Application Awad seeks to relitigate the very issue that was decided by the BC courts. Essentially he seeks to have Dover transfer its interest in Abu Sennan to CIPC. He argues that this Application is distinct from the proceeding in BC because this application is brought by CIPC whereas the Plaintiffs in BC where Dr. A and Transpacific. He argues that Justice Loo made numerous errors in her decision including not considering this second amended Statement of Claim that deleted references to CIPC, allowing his former lawyer to testify and admitting into evidence certain emails from this lawyer.

Second, while CIPC may not have been a party before the BC courts, I am satisfied that CIPC is Awad’s privy and should be bound by the result in that proceeding (see: Q2 Electronics v. Sualim, 2014 ONSC 92, 2014 ONSC, at para. 92). The evidence shows that CIPC is indirectly controlled by Awad and his family. Its registered address is Dr. A’s home address. He is the President of that company and he and his daughter are the directors. His evidence has been that he acquired 96? Of CIPC which is now held through Transpacific. There is no question that in the BC proceeding Awad was litigating for CIPC and that CIPC is bound by the result.

Third, everything that is raised in this Application was adjudicated in the BC courts, in particular, the requested transfer of the Dover’s interest in Abu Sennan to CIPC based on breach of the Joint Venture Agreement. There is nothing new. This is a clear attempt to relitigate these issues and is a collateral attack on the orders and findings of the BC courts. As such it is an abuse of process – see Toronto (City) v. Canadian Union of Public Employees (C.U.P.E.) Local 79 2003 SCC 63, [2003] 3 SCR 77 at para. 33.

14I am satisfied by the material and arguments presented by the Respondents that the subject matter of this appeal is not, in fact, “relating to an order made under the OBCA. It is a final order disposing of contractual claims asserted against the Respondents in an Application.

Conclusion

[15]

Conclusion

For these reasons, I find that the Order of Conway J. was a final order which, by virtue of section 6(1) (b) of the Courts of Justice Act, must be appealed to the Court of Appeal and not the Divisional Court. The motion to quash is granted.

16Although he did not have instructions to consent to waiving any time limits for an appeal to the Court of Appeal, counsel for the moving party Respondents indicated that he did not anticipate a problem in that regard. In view of the circumstances of the bringing of this motion, I herein express the expectation that no motion for leave to extend the time for such appeal will be opposed, if one is required.

costs

[17]

Costs

If the parties cannot agree on costs, written submissions may be delivered by the Respondents within 20 days of the date of release of this decision, and by the Appellants within 10 days thereafter.

___________________________ Stewart J.