Court of Appeal for Ontario

Citation: 1186708 Ontario Inc. v. Gerstein, 2016 ONCA 905 Date: 2016-11-28 Docket: C61932

Before: Gillese, Benotto and Roberts JJ.A.

Between

1186708 Ontario Inc., 746190 Ontario Limited and 746191 Ontario Limited Plaintiffs (Appellants)

and

Elliott J. Gerstein, Iris L. Gerstein, Sydney Gerstein, Attara Developments Limited., Bellcrest Builders Limited., Brenthall Apartments Limited., Chelsandy Developments Limited., Grover Realty Management (a partnership), Grover Realty Cable (a partnership), Lilliana Buildings Limited., Luray Investments Limited., Pauldor Developments Limited., 375685 Ontario Limited., Stan Vine Construction Ltd, Kilbarry Holding Corporation, 678678 Ontario Limited., Matanah Investments Corp., Dawn Trading Ltd., 497505 Ontario Inc., 781527 Ontario Inc., 781526 Ontario Inc., Richard Mintz and Andrea Mintz, Estate Trustees for Saul Mintz, Irwin Mintz, Howard Mintz, Faye Mintz, Mintz & Partners (a partnership), Rhonda Strasberg, Estate Of Belle Mernick, Minkids Holdings (a partnership), Ettie Wosnick, Morris Wosnick, 2135637 Ontario Inc., Lerric Investments Corp., Mernick Construction Limited and Stanmore Developments Limited. Defendants (Respondents)

Counsel: James Zibarras and David Meirovici, for the appellants Howard L. Shankman, for the respondents Estate of Saul Mintz, Richard Mintz and Andrea Mintz Deepshikha Dutt and Douglas Stewart, for the respondents Irwin Mintz, Faye Mintz (deceased), 2135637 Ontario Ltd., Minkids Holdings, 781526 Ontario Ltd. and Mintz & Partners LLP Elaine Perilz, for the respondents Howard Mintz, 781527 Ontario Inc., Dawn Trading Ltd., 497505 Ontario Inc., Rhonda Strasberg, Ettie Wosnick and Morris Wosnick Linda Galessiere, for the respondents Estate of Sydney Gerstein, Matanah Investments Corp. and Lerric Investments Corp.

Heard: November 23, 2016

On appeal from the order of Justice Michael A. Penny of the Superior Court of Justice, dated February 24, 2016.

Endorsement

[1] Certain of the defendants brought a motion to strike portions of the plaintiffs' fresh as amended statement of claim. In response, the plaintiffs brought a motion for leave to commence a derivative action nunc pro tunc. The plaintiffs' motion was brought under s. 246 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 (the "OBCA").

[2] The two motions were heard together and disposed of by order of the Superior Court of Justice, dated February 24, 2016 (the "Order"). Paragraph 1 of the Order orders that the plaintiffs' motion is statute-barred by virtue of s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B.

[3] The plaintiffs wish to appeal para. 1 of the Order. That is, they wish to appeal the disposition of the motions judge in respect of their motion alone.

[4] The plaintiffs brought their appeal to this court. A question arose as to the jurisdiction of this court to hear the appeal.

[5] After hearing oral argument on the issue of jurisdiction, the court advised the parties that, in its view, the appeal is in respect of an order made under the OBCA and, consequently, the proper route of appeal is to the Divisional Court.

[6] In sum, the court reasoned as follows.

[7] Under s. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43, an appeal lies to this court from "a final order of a judge of the Superior Court of Justice, except ... an order from which an appeal lies to the Divisional Court under another Act" (emphasis added). Under s. 255 of the OBCA, "[a]n appeal lies to the Divisional Court from any order made by the court under this Act."

[8] There is no dispute that the Order is a final order.

[9] Paragraph 1 of the Order flowed from a motion for leave to commence a derivative action under s. 246 of the OBCA. We acknowledge that the claim was found to be statute-barred and leave refused on that basis. We also acknowledge that the determination that the claim was statute-barred was made under the Limitations Act, 2002, not the OBCA. However, para. 1 of the Order disposed of the motion which was brought under s. 246 of the OBCA. Given the broad scope afforded to s. 255 of the OBCA in this court's jurisprudence, it is our view that para. 1 of the Order is an order within the meaning of s. 255 of the OBCA: see Amaranth L.L.C. v. Counsel Corp. (2004), 2004 CanLII 10897 (ON CA), 71 O.R. (3d) 258 (C.A.); and Ontario Securities Commission v. McLaughlin, 2009 ONCA 280, 248 O.A.C. 54.

[10] The parties had argued that this court had jurisdiction to hear the appeal based on Buccilli v. Pillitter, 2016 ONCA 775, 271 A.C.W.S. (3d) 323. However, that case is distinguishable from the present case for three reasons.

[11] First, in Buccilli, the underlying motion for summary judgment was brought under r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. In the present case, the plaintiffs' motion was brought under s. 246 of the OBCA.

[12] Second, had the relief which the plaintiffs sought been granted in this case, it would have been under s. 246 of the OBCA. The fact that leave to commence a derivative action was found to be statute-barred does not change the nature of the underlying motion.

[13] Third, at para. 22 of Buccilli, the court noted that even if it could assume that part of the relief was grounded in an OBCA claim, this court would nonetheless have jurisdiction to hear the appeal because it could be joined to those parts of the appeal of the order not rooted in the OBCA. In the present case, no other parts of the Order are under appeal, so there is nothing to which the plaintiffs' appeal can be joined.

Disposition

[14] Accordingly, as the proper route of appeal is to the Divisional Court, we order that this appeal be transferred to the Divisional Court.

[15] While it is for the Divisional Court to determine whether to expedite the hearing of the appeal, the parties have asked this court to urge the Divisional Court to schedule the hearing of the appeal as expeditiously as possible, because of the tight timeline that has been established for it and the time that has been lost in resolving the jurisdictional issue. We respectfully convey that request to the Divisional Court.

"E.E. Gillese J.A."

"M.L. Benotto J.A."

"L.B. Roberts J.A."