DATE: 20030617

DOCKET: M29862

COURT OF APPEAL FOR ONTARIO

CHARRON J.A. (in chambers)

B E T W E E N:

RICHARD MANDEVILLE, WISMAR GREAVES, MARCUS JORDAN and ANTHONY BOWEN

David Stratas for the plaintiffs/respondents to the motion

Plaintiffs (Respondents to the motion)

• and -

THE MANUFACTURERS LIFE INSURANCE COMPANY

Sheila Block for the defendant/moving party

Defendant (Moving party)

Heard: June 9, 2003

CHARRON J.A.:

[1] The defendant The Manufacturers Life Insurance Company moves before this court for directions in connection with a proposed appeal from the order of Nordheimer J. dated September 30, 2002 dismissing its Rule 21 motion. If necessary, the defendant also seeks leave of the court to extend the time to appeal the order. The defendant seeks the direction of the court on the question of whether the order made on the Rule 21 motion is interlocutory or final in nature. It is only in the event that this court finds that it is final that an order extending the time to appeal is sought.

[2] The plaintiffs take the position that this court is without jurisdiction to entertain this motion as there is no notice of appeal before the court. They further submit that, in any event, there is no basis to grant an extension of time to file an appeal.

[3] I see no merit to the plaintiffs’ jurisdictional argument. A notice of appeal cannot be filed by the defendant since it is out of time. This court clearly has jurisdiction to entertain a motion for an extension of time to file a notice of appeal even if this request is couched as an alternate ground of relief. Rule 1.05 further provides that when making an order under the Rules, the court may impose such terms and give such directions as are just. In light of the particular circumstances of this case, which I will outline shortly, it is my view that justice requires that I give directions as requested on the nature of the Rule 21 order.

[4] In his reasons for decision, reported at 2002 79684 (ON SC), [2002] O.J. No. 5386, the motions judge succinctly set out the nature of this action as follows at paras. 2-3:

The claims in this action arise out of the transfer in late 1996 by the defendant of its Barbados policies to a third party corporation. This transfer was part of an ongoing effort by the defendant to sell all of its Caribbean business. The plaintiffs, who propose to act on behalf of a class comprised of the 8,048 Barbados policyholders of the defendant, complain that this transfer was undertaken without ensuring that their interests in receiving benefits if the defendant demutualized were protected or safeguarded. Slightly over a year after the transaction closed, the defendant’s board of directors announced that the defendant would demutualize as soon as the law permitting it came into force. The result was that the Barbados policyholders did not receive the substantial benefits of demutualization that other policyholders of the defendant received when demutualization occurred. The plaintiffs plead that the failure of the defendant to protect the Barbados policyholders was negligent and/or was a breach of fiduciary duties owed by the defendant to these policyholders. The plaintiffs seek various declarations to that effect as well as general damages and punitive damages of $150 million.

The defendant asserts that the rights of the proposed class were extinguished by the transfer of their insurance policies in 1996, in accordance with the Barbados Insurance Act. That Act required that the transfer of the defendant’s Barbados insurance business be sanctioned by the Barbados Supervisor of Insurance through a process that included notice, the right to object, and a hearing, with a right of appeal to the Barbados court. The transfer was ultimately sanctioned by the Supervisor of Insurance which the defendant says thereby brought to an end the relationship between the defendant and the Barbados policyholders. The defendant also says that, pursuant to the Barbados Insurance Act, the transfer, one sanctioned, is binding on all policyholders, i.e., it is binding on all members of the proposed class.

[5] The defendant moved pursuant to rules 21.01(3)(a) and (d) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and s. 106 of the Courts of Justice Act, R.S.O. 1990, c. C.43 to dismiss or stay the action on the basis that the Superior Court of Justice does not have jurisdiction to adjudicate the claims raised or that the action is an abuse of the court’s process. The plaintiffs moved concurrently to certify the action as a class proceeding. This latter motion is not in issue on the motion presently before me. After giving thorough and extensive reasons, the motions judge concluded that he was unable to dispose of the issues raised on the Rule 21 motion without a trial. His reasons are replete with statements such as the following:

I do not consider it to be my role on this type of motion to resolve such a conflict on the evidence …

I do not consider it necessary to reach a conclusion on that issue. In my view, it is enough for me to conclude that there is an issue regarding the proper interpretation of the statutory scheme and that, in turn, is all that is necessary to conclude that the matter should not be resolved on a summary basis …

Unlike those cases, however, I do not find that it is clear, or that it is plain and obvious, that the process under the Barbados Insurance Act either does, or was intended to, address the causes of action which the plaintiffs allege here …

Consequently, I find that it is not clear that the claims raised by the plaintiffs were determined in the Barbados proceeding and therefore it is not clear that this court is without jurisdiction to hear and determine those matters …

The argument on this aspect of the motion reinforces my conclusion that this is not a matter which ought to be determined summarily …

I reach no conclusions regarding these matters. As I have said, I do not consider it my role on this type of a motion to reach such conclusions. I do consider that these matters require a trial for their determination so that the court can decide after a review of the full facts whether or not the plaintiffs’ claim ought to be precluded or whether the court ought to exercise its discretion to relieve from that result …

In the end result, therefore, I am unable to find that a trial is unnecessary to deal with these very serious and complex issues. The motion under rule 21.01(3) to dismiss or stay the action must therefore be dismissed.

[6] Following this decision and within the appeal period, counsel for the respective parties (not counsel appearing on this motion) exchanged the following correspondence. Counsel for the defendant, in a letter dated October 3, 2002, wrote the following:

It is our position on a review of the decision that it is interlocutory – that is, there are no final determinations of points of law. There would therefore be no automatic right of appeal from any aspect of the decision. If you disagree, please let us know as soon as possible given the approaching appeal periods.

[7] In response, counsel for the plaintiffs wrote the following on October 6, 2002:

Before I respond to your letter of October 3, 2002, please advise whether Manulife intends to appeal or seek leave to appeal as the case may be.

[8] On October 7, 2002, counsel for the defendants responded:

We write further to your letter of October 6, 2002. At present, we do not plan to seek leave to appeal, and there would be no right of appeal. If, however, you disagree with the position set out in our letter of October 3, we will have to reconsider taking into account your response.

[9] Finally, counsel for the plaintiffs, in a letter dated October 8, 2002, stated the following:

We write further to your letters of October 3 and 7, 2002. At present, we too believe that there is no right of appeal.

[10] Not surprisingly given the context, counsel for the defendants took this latter response as an acknowledgement that the order was interlocutory in nature. Hence, given its belief that there had been no final determinations on those defences that it wished to bring, the defendant filed its statement of defence alleging, among other things, the following:

8. The plaintiffs’ claim should be dismissed because:

(f) the plaintiffs’ claim, brought in Canada five years after the transfer of the Barbados policies by individuals who never pursued any of the appropriate avenues of appeal or judicial review, is an improper attack on the finality and integrity of the Barbados and Canadian regulatory systems and is an abuse of process.

83. Manulife denies the alleged liability to the Barbados policyholders. The plaintiffs’ claim should be dismissed because:

(a) the principles of international comity require the Ontario courts to decline to exercise jurisdiction over the plaintiffs’ action;

87. Under principles of comity, Canadian courts must defer to and respect the law of Barbados and the legal actions taken by Barbados within its territory. In particular, Canadian courts must recognize, defer to and respect the regulatory regime established by the Barbados Insurance Act, and the effect of the Sanction.

[11] The plaintiffs then responded to the pleading by a reply that contained the following allegation:

12. In reply to paragraphs 8(f), 83(a) and 87 of the statement of defence, the plaintiffs plead that:

(a) by order dated September 30, 2002, the Ontario court finally determined that it exercised jurisdiction over this action and that this action was not an abuse of process [emphasis added].

[12] After receiving the plaintiffs’ reply, counsel for the defendant notified counsel for the plaintiffs that the pleading in subparagraph 12(a) of the reply was improper as well as surprising given the earlier exchange of correspondence between them. Counsel for Manulife indicated that its client would move to strike out that subparagraph if the plaintiffs would not remove it. Plaintiffs’ counsel declined to amend the reply. By that time, the appeal period had expired. Manulife therefore proceeded with a motion pursuant to rule 25.11 to strike out the impugned pleading. The motion was heard, again before Nordheimer J., on March 7, 2003. The motions judge dismissed the motion finding that the question of whether the Rule 21 decision was final or interlocutory was not a matter that was pertinent to a pleading motion under Rule 25.

[13] It is against this background that the defendant now moves before this court to finally resolve the issue that has arisen between the parties.

[14] It is common ground between the parties that a decision made pursuant to rule 21.01(3) may be final or interlocutory in nature. See, for example, Abbott v. Collins (2002), 2002 41457 (ON CA), 62 O.R. (3d) 99 (C.A.), where the order was found to be final, and Suresh v. Canada (1998), 1998 2843 (ON CA), 42 O.R. (3d) 793 (C.A.), where the order was found to be interlocutory. The question whether an order is final depends on whether the decision results in a final adjudication of a substantive right between the parties. In this case, the motions judge declined to decide the issues that were raised in the Rule 21 motion because he thought it was inappropriate to do so given the conflicting state of the evidence and the complexity of the issues. Hence, the order is clearly interlocutory in nature and no appeal lies to this court.

[15] Counsel for the plaintiffs agrees that the order is interlocutory in nature and, indeed, submits that if the defendant had launched an appeal before this court, his clients would have moved to quash that appeal for lack of jurisdiction. Nonetheless, counsel for the plaintiffs maintains that the motions judge’s decision on the Rule 21 motion has the effect of foreclosing all issues related to jurisdiction and to the question of abuse of process at trial. In particular, counsel relies on the following comments contained in the motions judge’s reasons for decision, at paras. 47 and 51, that he contends are final in nature:

… I reject the alternative contention of the defendant that in some fashion the courts of Barbados are the only courts to which the plaintiffs may have recourse in the instance where it is determined that the issues are still live for adjudication …

I do not view this case as involving a collateral attack on the decision of the Supervisor. To the contrary, on this branch of the argument it seems to me that the plaintiffs’ attack on the Sanction is not collateral, it is direct.

[16] In my view, those statements, made in the course of lengthy reasons for decision, do not at all detract from the interlocutory nature of the order that was made. The motions judge’s reasons should not be taken as anything more than his explanation for finding that the issues raised on the Rule 21 motion should go to trial.

[17] Consequently, I dismiss the defendant’s motion for an extension of time within which to appeal on the ground that this court has no jurisdiction to entertain an appeal from an interlocutory order. However, given the rather disingenuous position advanced by counsel for the plaintiffs on this issue, I make no order as to costs.

Released: JUN 17 2003 Signed: “Louise Charron J.A.”

LC