Menegon v. Philip Services Corp. et al. [Indexed as: Menegon v. Philip Services Corp.]

50 O.R. (3d) 345

[2000] O.J. No. 5699

Ontario Superior Court of Justice

Divisional Court

O'Leary, MacFarland and Ground JJ.

September 13, 2000

[Quicklaw note: In the paper version, the decision of the Divisional Court, September 13, 2000, the judgment granting leave to appeal to the Divisional Court, June 22, 2000 and the judgment appealed from, May 26, 2000 were published together at 50 O.R. (3d) 345. The three decisions have been separated in the online version to enable linking to the citators. The June 22, 2000 ruling granting leave to appeal begins at 2000 29039 (ON SC), 50 O.R. (3d) 347 and the May 26, 2000 ruling on appeal from begins at 2000 29028 (ON SC), 50 O.R. (3d) 348. The following headnote was published on the combined case.]

Civil procedure -- Class proceedings -- Certification -- Venue for motion for certification -- Motion for certification returnable under rule 37.03(2) in place where office of responding party's solicitor is located -- Plaintiff moving for order under rule 37.03(4) for different place for hearing of certification motion -- Motions judge erring by applying balance of convenience test to determine place for hearing of certification motion -- Class Proceedings Act, 1992, S.O. 1992, c. 6 -- Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 37.03.

The plaintiff commenced an action under the Class Proceedings Act, 1992, alleging breaches of the Securities Act, R.S.O. 1990, c. S.5 and the Business Corporations Act, R.S.O. 1990, c. B.16 and negligent misrepresentations about the inventory and assets of the defendant PS Corp. by its directors and officers. The head office of PS Corp. and its place of operations was in and about the City of Hamilton and, in the statement of claim, the plaintiff selected Hamilton as the place of trial.

Section 34 of the Class Proceedings Act, 1992 states that the same judge shall hear all motions prior to the trial of the common issues and s. 35 of the Act states that the rules of court apply to class proceedings. Although rule 37.03(2) of the Rules of Civil Procedure states that the place for a motion is at the place where the office of the responding party's solicitor is located, which in this case was the City of Toronto, the plaintiff applied for certification by motion returnable in Hamilton. The defendants disagreed about the place for the hearing of the certification motion, and they moved for an order directing the certification motion to come before a judge in Toronto. They also brought a motion for a change of venue, which motion was adjourned. The plaintiff sought leave pursuant to rule 37.03(4) to have the certification motion heard in Hamilton. Relying on the strong connection between the plaintiff's claim and the City of Hamilton and the balance of convenience, Crane J. ordered that the certification motion should be heard in Hamilton. Leave to appeal having been granted by Festeryga J., the defendants appealed to the Divisional Court.

Held, the appeal should be allowed.

Rule 37.03 is applicable to determine the venue of the certification motion in a class proceeding. A balance of convenience test is not the proper test to apply to determine whether leave should be granted pursuant to rule 37.03(4) for the certification motion to be heard elsewhere than as prescribed in rule 37.03(2). Whether or not inconvenience may be so egregious as to constitute "another sufficient reason" under rule 37.03(4), there was no evidence in this case to conclude that the hearing of the certification motion in Toronto would constitute such a degree of inconvenience. Accordingly, the appeal should be allowed.

APPEAL from an order about the venue of a motion for certification under the Class Proceedings Act, 1992, S.O. 1992, c. 6.

Statutes referred to Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 12 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 37.03

John McDonald and John W. Findlay, for plaintiff. J.L. McDougall, Q.C., and Michael D. Schafler, for defendant, Deloitte & Touche LLP. Benjamin Zarnett and Jessica Kimmel, for Canadian Underwriters.

The judgment of the court was delivered by

GROUND J.: -- We are of the view that rule 37.03 is applicable to determine the venue for a motion in a class proceeding and that s. 12 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 does not oust that rule in that it does not provide for a different procedure.

We are also of the view that the balance of convenience is not the proper test to apply in determining whether leave should be granted pursuant to rule 37.03(4).

Whether or not inconvenience may, in certain circumstances, be so egregious as to constitute "another sufficient reason" to grant leave for a motion to be heard elsewhere than as prescribed in rule 37.03(2), there was not in our view any evidence before Justice Crane on which he could have considered that the hearing of the certification motion in Toronto would constitute such a degree of inconvenience.

Cost of the motion before Justice Crane, the motion for leave and the appeal to the appellants in an amount to be assessed.

Order accordingly.