COURT OF APPEAL FOR ONTARIO
CATZMAN, LASKIN and ARMSTRONG JJ.A.
DATE: 20050316 DOCKETS: M32025 (M31880), M32026 (C42624)
B E T W E E N :
GRAND RIVER ENTERPRISES A PARTNERSHIP CARRYING ON BUSINESS IN THE PROVINCE OF ONTARIO THE PARTNERS OF WHICH ARE MEMBERS OF THE FIRST NATIONS OF CANADA and GRAND RIVER ENTERPRISES SIX NATIONS LTD.
Plaintiffs (Appellants), defendants by counterclaim
- and -
SYDNEY BURNHAM
Defendant (Respondent), plaintiff by counterclaim
- and -
SIDNEY BURNHAM
Defendant Plaintiff by Counterclaim (Respondent)
GRAND RIVER ENTERPRISES A PARTNERSHIP CARRYING ON BUSINESS IN THE PROVINCE OF ONTARIO THE PARTNERS OF WHICH ARE MEMBERS OF THE FIRST NATIONS OF CANADA, GRAND RIVER ENTERPRISES SIX NATIONS LTD. and WAYNE (VICTOR) BOMBERRY, KENNY HILL, JERRY MONTOUR, PETER MONTOUR, DON SKYE, SCOTT SMITH and CURTIS STYRES
Plaintiffs Defendants by Counterclaim (Appellants)
Counsel: Brian Duxbury and Stephen Chisholm for the plaintiffs (appellants), defendants by counterclaim Peter C. Wardle and Marlo L. Kravetsky for the defendant respondent, plaintiff by counterclaim
Heard: February 9, 2005
Motion to quash an appeal and a motion for leave to appeal from the order of Justice C. Raymond Harris of the Superior Court of Justice dated November 11, 2004.
CATZMAN J.A.:
The appeal
[1] Grand River Enterprises Six Nations Ltd. (“Grand River”) is a corporation incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (“the CBCA” or “the Act”). It carries on the business of manufacturing cigarettes under a licence by the federal government. Sidney Burnham (“Burnham”) is one of eight shareholders of record of Grand River.
[2] Grand River Enterprises, a partnership of Grand River and members of the First Nations of Canada, commenced an action against Burnham, alleging that he had wrongfully terminated a lease under which the partnership had built, occupied and maintained a building on property Burnham owned. Burnham defended the action and brought a counterclaim, alleging oppression under the CBCA, in that he had been denied participation in the management of the partnership, denied information about its financial affairs and denied dividends and other distribution of profits.
[3] Burnham brought a motion, under s. 241 of the CBCA, for what his notice of motion described as interim relief. His motion was granted by Harris J., who made the order that is the subject-matter of the current motions (“the order”).
[4] In general terms, the order directed Grand River to pay Burnham an interim payment of $988,688 on account of shareholder benefits, to disclose to Burnham specified items of financial information, and to produce a number of Grand River’s representatives for examination for discovery regarding its financial affairs.
[5] Grand River took exception not only to the terms of the order but also to certain language appearing in the endorsement of Harris J. In it, he found that Burnham had not received any shareholder bonuses since January 2000, whereas all of the other shareholders had received bonuses in proportion to their shares. He further found that, in December 2002, bonuses totalling $15,000,000 were distributed to the remaining seven shareholders, but not to Burnham. The language to which Grand River took particular exception was the following:
• “The conduct of Grand River is prima facie oppressive” (para.15);
• “I am satisfied that the business affairs of [Grand River] have been conducted in a manner that is oppressive and has unfairly disregarded the interests of [Burnham] as a security holder” (para. 16); and
• (in rejecting a cross-motion by Grand River to split the trial between liability and damages), “I have already made a finding of oppression against [Grand River]” (para. 21).
The appeal, the motion for leave to appeal, and the motion to quash
[6] Grand River responded to the order in two ways. First, it served a notice of appeal to the Court of Appeal, asking that the finding of oppression against it in favour of Burnham be set aside and that the order requiring it to pay to Burnham the sum of $988,668 be set aside. Second, to cover the contingency that the order might be found to be interlocutory rather than final, Grand River moved for leave to appeal to the Court of Appeal from the finding of oppression and the order for payment of $988,688 and from other provisions of the order.
[7] In response, Burnham moved before this court to quash Grand River’s appeal and motion for leave to appeal. He founded the motion to quash on two grounds: first, that no aspect of the order was final, and the order was therefore not appealable without leave; and second, that the proper court to which the order can be appealed was the Divisional Court, not the Court of Appeal.
The issues
[8] Burnham’s motion to quash raises two issues:
(1) is the order final or interlocutory?
(2) in either case, to what court does the appeal from the order lie?
Final or interlocutory
[9] On the face of the order, several of its provisions clearly indicate that it was intended to be interlocutory. The preamble speaks of a motion “for the interim payment” of moneys and “for an interim order” regarding discoveries and disclosure of information. Paragraph 1 orders Grand River to pay to Burnham “an interim payment” of $988,688. Paragraph 6 orders Grand River to deliver a number of documents “until the trial or other resolution of this action” [italics added].
[10] In any event, the law is clear that an appeal lies from an order, not from the reasons given by the judge making the order: Williston and Rolls, The Law of Civil Procedure (Toronto: Butterworths, 1970), Vol. 2 at p. 1025; Lake v. Lake, [1955] 2 All E.R. 538 (C.A.); Canadian Express Ltd. v. Blair (1991), 1991 7172 (ON SC), 6 O.R. (3d) 212 (Div. Ct.).
[11] In his factum in support of the motion to quash, Mr. Wardle took the position that the endorsement of Harris J. should be interpreted as determining only whether there was a strong prima facie case of oppression for the purposes of the motion before him. At the invitation of the court, he filed Burnham’s written undertaking not to raise the “finding of oppression” made by Harris J. as a substantive defence, whether as issue estoppel, res judicata or otherwise, to any position Grand River might take on the trial of the issues in this proceeding. He further acknowledged and undertook that the interim payment of $988,588 was subject to whatever disposition the trial judge might make at trial, which disposition might include, if appropriate, repayment of some or all of that sum.
[12] Burnham’s undertaking should alleviate any concern by Grand River about the comments made by the motion judge in the course of his reasons.
[13] Focusing, then, upon the terms of the order and not the motion judge’s reasons, it is my view that the order was interlocutory and that no appeal lies from the order without leave.
The appeal forum
[14] Before 2001, s. 249 – the provision of the CBCA governing appeals – read:
- An appeal lies to the court of appeal from any order made by a court under this Act.
[15] In 2001, the provision was amended to read:
(1) An appeal lies to the court of appeal of a province from any final order made by a court of that province under this Act.
(2) An appeal lies to the court of appeal of a province from any order other than a final order made by a court of that province, only with leave of the court of appeal in accordance with the rules applicable to that court.
[16] The effect of the 2001 amendment was to distinguish between final orders and other orders and to require the granting of leave to appeal from orders in the latter category. But there was no amendment to the terms “court of appeal” or “court”. Both terms were, and currently continue to be, defined in s. 2(1) as follows:
“court of appeal” means the court to which an appeal lies from an order of a court.
and
“court” means
(a.1) in the Province of Ontario, the Superior Court of Justice.
[17] The question of the appropriate appeal forum was first raised in this province in Ferguson v. Imax Systems Corp. (1982), 1982 2038 (ON SC), 38 O.R. (2d) 59 (Div. Ct.). Ferguson involved an appeal from an order appointing an appraiser to assist the court to fix a fair value for the shares of dissenting shareholders. It was conceded that the order was interlocutory. After referring to what was then s. 242 (in the language of s. 249 prior to the 2001 amendment) and to the definition of “court of appeal” set out above, Galligan J. said at p. 60:
It was contended by the respondent that this Court has no jurisdiction to entertain this appeal because leave to appeal has not been granted by a judge of the High Court. It is, of course, common ground, that if this were an appeal from an interlocutory order made in proceedings authorized by an Ontario statute, this Court would have jurisdiction only if leave were granted. However, these are proceedings under a federal statute and are governed by the appeal provisions contained in that statute. Section 242 of the Canada Business Corporations Act provides that an appeal lies to the Court of Appeal from any order made by a court under that Act. Section 2(1) [am. 1978-79, c. 11, s. 10(1)] of the Act defines Court of Appeal as follows:
“court of appeal” means the court to which an appeal lies from an order of a court;
It is common ground that the Divisional Court is the Court of Appeal for the purpose of that definition.
The problem arises because of the provisions of the Judicature Act, R.S.O. 1980, c. 223, which provide that an appeal from an interlocutory order may only be taken with leave of a judge of the High Court. However, s. 242 of the Canada Business Corporations Act does not restrict the right of appeal in any such way, it grants an absolute right of appeal, from any order. It is therefore, my opinion that this Court does have jurisdiction to hear this appeal. I do not think that an Act of the Legislature of Ontario can derogate from rights of appeal specifically created by a federal statute [italics added].
[18] In fairness, the focus of the decision in Ferguson was whether an appeal from an interlocutory order under the CBCA lay as of right or only with leave. Galligan J. held that the Act (in its pre-amendment form) conferred an absolute right of appeal and that leave was not required. But he also noted that it was “common ground” that the Divisional Court was the court of appeal intended by the definition of that term under the Act.
[19] The question whether an appeal under s. 249 lay to the Divisional Court or to the Court of Appeal was addressed again by the Divisional Court in Budd v. Gentra Inc. (2001), 2001 38734 (ON SCDC), 56 O.R. (3d) 414. Again, the appeal was brought from an interlocutory order, in this case, an order dismissing motions under the Act for an interim award of costs and a motion for the appointment of an inspector. The amendment to s. 249 was not yet in force, and so the issue before the court was not whether leave was required (Ferguson had decided that it was not) but rather whether the appeal lay to the Divisional Court or to the Court of Appeal. Blair R.S.J., speaking for the court, held that the appeal lay to the Court of Appeal. After setting out the extract quoted in para. 16, above, Blair R.S.J. said, at p. 416:
[5] We note the comment that “[it was] common ground that the Divisional Court is the Court of Appeal for purposes of [the definition in s. 249 of the CBCA]”. It appears, therefore, that the issue which is presently before us was presumed and not addressed specifically in Ferguson v. Imax.
[6] With deference to this earlier decision, we are all of the view that the language of s. 249 of the CBCA is clear and that the appeal lies to the Court of Appeal for Ontario and not the Divisional Court under that section.
[7] Resort to the definition of Court of Appeal in s. 2(1) of the CBCA is not helpful. It says: “‘court of appeal’ means the court to which an appeal lies from an order of a court” [emphasis added]. The definition simply begs the question at issue, namely, what is the court to which an appeal lies from the order in question?
[8] The Divisional Court is a statutory court and has no jurisdiction other than what is given to it by statute. While it may prove anomalous that appeals under the CBCA go to the Court of Appeal whereas appeals from essentially similar orders under the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 go to [the] Divisional Court, the language of s. 249 is clear, in our opinion, and therefore must govern. [italics in original].[^1]
[20] Mr. Wardle submitted that the reference to provincial procedure signalled Parliament’s intention that appeals from interlocutory orders were to go to the Divisional Court. The submission was that, since the Divisional Court is an appellate court for some purposes (see s. 19(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, and rules 1.03(1) and 61 of the Rules of Civil Procedure), and since interlocutory orders are appealable, with leave, to the Divisional Court, the closing words of s. 249(2) of the CBCA incorporate by reference the powers of appeal conferred on the Divisional Court. In the result, Mr. Wardle argued, an appeal from an interlocutory order under the CBCA lies, with leave, to the Divisional Court.
[21] I do not agree. The amendment to s. 249 in 2001 drew a statutory distinction, where one had not appeared before, between appeals from final orders and appeals from other orders, such as interlocutory orders. The amendment was probably prompted by the decision of the Supreme Court of Canada in Kelvin Energy Ltd. v. Lee (1992), 1992 38 (SCC), 97 D.L.R. (4th) 616 (S.C.C.), in which L’Heureux-Dubé noted (at p. 627), with apparent approval, that courts (including Ferguson) in different provinces had confirmed that the scope of s. 249, as it then read, was not limited to a final judgment rendered under a power conferred by the Act.
[22] Before 2001, all appeals – whether from final or from interlocutory orders made under the powers conferred by the CBCA – were appealable as of right. The 2001 amendment distinguished between final orders and interlocutory orders. Final orders were still appealable as of right, but interlocutory orders were appealable only with leave. The process for applying for leave – but not the forum for the appeal – was directed by s. 249(2) to follow the rules applicable to the court.
[23] That, in my view, was all that the final phrase in s. 249(2) was intended to accomplish: to bring provincial rules of procedure to apply to the manner in which leave was to be sought. The final phrase did not, and was not intended to, confer a substantive right of appeal on any court other than the “court of appeal” as defined in s. 2(1). Although Budd v. Gentra Inc. was decided before the 2001 amendment, it remains good law today. In this province, the court to which an appeal can be taken, as of right if the order is final, and with leave if it is not, remains the Court of Appeal.
Disposition
[24] For these reasons, I have concluded that the order under appeal is interlocutory and that an appeal lies, with leave, to this court. The motion to quash the appeal is granted, but the motion to quash the motion for leave to appeal is dismissed. I am advised that the motion for leave to appeal has been perfected in accordance with rule 61.03.1 of the Rules of Civil Procedure, and I direct that it be submitted in the usual manner to a panel of this court for consideration.
[25] The parties, appropriately, agreed that, if success on these motions was divided, no costs should be awarded, and I therefore make no order as to costs.
Released:
“MAC” “M. A. Catzman J.A.”
“MAR 16 2005” “I agree John Laskin J.A.”
“I agree Robert P. Armstrong J.A.”
[^1]: The anomaly to which Blair R.S.J. refers in this paragraph is mitigated by the fact that appeals from orders made under other federal commercial statutes go not to the Divisional Court but to the Court of Appeal: see s. 193 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 and ss. 13 and 14 of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36.