CITATION: Peritus Inc. v. Elder, 2011 ONSC 7357
COURT FILE NO.: 46/11
DATE: 20111219
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN R.S.J., DAMBROT AND SWINTON JJ.
B E T W E E N:
PERITUS INC., PHARMATUS INC., W.A. KARABIN DEVELOPMENTS INC., KARABIN HOLDINGS INC., JOHN BUCKLEY, IAN CARLETON, DAVID OFFEN, RONALD GOLDSACK, ESTATE OF C.M. GOLDSACK, GRAHAM BRADLEY WRIGHT, JEFFREY & JENNIFER WEAVER FAMILY TRUST, J & J WEAVER INVESTMENTS INC., DEBORAH ROBINSON, DANIEL GREENGLASS and JOSEPH BRENNAN
Plaintiffs (Responding Parties)
- and -
MICHAEL JAMES ELDER and WORKONCE WIRELESS CORPORATION
Defendants (Moving Party)
Christopher P. Naudie and Kevin O’Brien, for the Plaintiffs (Responding Parties)
Angela Assuras and Kenneth Peacock, for the Defendant (Moving Party) Workonce Wireless Corporation
HEARD at TORONTO: December 5, 2011
Swinton J.:
[1] Workonce Wireless Corporation (“Workonce”) has brought a motion pursuant to s. 21(5) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), seeking to vary the order of Wilton Siegel J. dated April 8, 2011, in which he dismissed a motion for leave to appeal an interlocutory order of a judge of the Superior Court of Justice.
[2] At the end of the hearing, the Court indicated that the motion would be quashed for want of jurisdiction with reasons to follow. These are the reasons for the decision.
Factual Background
[3] The plaintiffs, minority shareholders in Workonce, brought an oppression action against the defendants, Michael Elder and Workonce, in July 2010. The defendants then brought a motion to remove the plaintiffs’ solicitors from the record. That motion was dismissed by C. Campbell J.
[4] A motion for leave to appeal that interlocutory order was heard and dismissed by Wilton Siegel J. Although the motion was placed on the list for Divisional Court motions, Wilton Siegel J. was sitting as a judge of the Superior Court of Justice, given Rule 62.02(1.1). That subrule provides that a motion for leave to appeal properly made in Toronto shall be heard by a judge of the Divisional Court sitting as a Superior Court of Justice judge.
[5] Workonce then brought a motion to vary pursuant to s. 21(5) of the CJA, which provides that a “panel of the Divisional Court may, on motion, set aside or vary the decision of a judge who hears and determines a motion.”
The Jurisdictional Issue
[6] The first issue on this motion to vary was the jurisdiction of the Divisional Court panel to hear the motion, given that Wilton Siegel J. was sitting as a judge of the Superior Court of Justice. Workonce argued that the plain words of the subsection give this Court jurisdiction, as there is no reference therein to the words “a judge of the Divisional Court”.
[7] Workonce noted that there are two lines of cases in the Divisional Court on the jurisdictional issue. Some cases have concluded that the panel has no jurisdiction to vary the order of a Superior Court judge; others have dealt with the merits of a motion to vary. As well, Workonce relied on the decision of the Court of Appeal in Hillmond Investments Ltd. v. Canadian Imperial Bank of Commerce (1996), 1996 413 (ON CA), 29 O.R. (3d) 612 and in particular paragraph 35, where the Court stated,
If a General Division judge mistakenly declines jurisdiction on a leave motion by acting upon a wrong principle, redress should be had to an appellate court.
[8] Subsection 21(5) is found in s. 21 of the CJA, which deals with the composition of the Divisional Court for hearings. Section 21(1) provides that a proceeding will normally be heard by a panel of three judges of the Divisional Court, with certain exceptions where one judge may hear the proceeding – for example, an appeal from the Small Claims Court (s. 21(2)). Subsection 21(3) provides that a motion in the Divisional Court shall be heard and determined by one judge, unless the rules of court provide otherwise, although that judge may adjourn a motion to the panel (s. 21(4).
[9] Thus, when s. 21(5) is read in the context of s. 21 as a whole, it appears that a panel of the Divisional Court may vary a decision of a judge who has heard a motion in the Divisional Court.
[10] That is the conclusion reached in a number of cases where a Divisional Court panel has been asked to vary a decision of a motions judge. Often, these motions have been brought when a judge has denied a motion for leave to appeal an interlocutory order. Where the judge was sitting as a judge of the Superior Court of Justice, this line of cases has held that the Divisional Court has no jurisdiction to grant a motion to vary under s. 21(5): see Kohar v. Dufferin-Peel Catholic District School Board, [1999] O.J. No. 3644 (Div. Ct.) at para. 2; CJSC “Sanokr-Moskva” v. Tradeoil Management Inc., [2005] O.J. No. 192 (Div. Ct.) at paras. 2 - 3; Pirani v. Esmail, 2007 CarswellOnt 1164 (Div. Ct.) at para. 1; Bazinet v. Davies Harley Davidson, 2008 CarswellOnt 3524 (Div. Ct.) at paras. 4 - 5; Direk v. Argiris & Associates, 2009 CarswellOnt 9692 (Div. Ct.) at para. 34; and Direk v. Ontario (Attorney General), 2011 ONSC 3830 (Div. Ct.) at paras. 26 - 30.
[11] Workonce argued that these cases are wrongly decided and relied on other cases where the Court considered the merits of the motion to vary: Bottan v. Vroom, [2001] O.J. No. 3125 (Div. Ct.); Dinham v. Brejkaln, [2006] O.J. No. 5376 (Div. Ct.); Re Weidenfeld (2008), 60 C.P.C. (6th) 324 (Div. Ct.); Diamond & Co. v. Nigro, [2003] O.J. No. 5051 (Div. Ct) and Atlas Holdings & Investments Inc. v. Vratsidas, 2011 ONSC 6098 (Div. Ct.). None of these cases discussed s. 21(5) of the CJA, and it is not apparent that the issue of the panel’s jurisdiction was raised with the Court.
[12] In my view, the correct analysis is found in Kohar and the cases that have followed it. I note that in two of the cases relied upon by Workonce, the motion to vary dealt with the denial of leave to appeal a decision of the Ontario Municipal Board (“OMB”) by a judge who was hearing motions in the Divisional Court. Pursuant to s. 96(1) of the Ontario Municipal Board Act, R.S.O. 1990 c. O.28, an appeal lies from a decision of the OMB to the Divisional Court, with leave of the Divisional Court, on a question of law. For that reason, the Divisional Court panel had jurisdiction under s. 21(5) of the CJA to consider a motion to vary the leave decision (Millcraft Investment Corp. v. Ontario (Regional Assessment Commissioner, Region No. 3) (2000), 46 O.R. (3d) 685 (Div. Ct.) at para. 3 and Universal Am-Cam Ltd. v. Tornorth Holdings Ltd. (2003), 2003 17582 (ON SCDC), 177 O.A.C. 297 (Div. Ct.)).
[13] The Court of Appeal has twice set out the proper procedure to be followed by a party who seeks to challenge the refusal of a judge of the Superior Court to grant leave to appeal (Hillmond, above at para. 37 and Mignacca v. Merck Frosst Canada Ltd., 2009 ONCA 393 at para. 21). Only in exceptional circumstances can the grant or denial of leave to appeal be challenged. For example, as Finlayson J.A. stated in Hillmond at para. 35, such a decision may be open to challenge if the motion judge has declined jurisdiction. In such circumstances, the proper forum for challenging the refusal to grant leave of an interlocutory order is found in s. 19(1)(b) of the CJA – an appeal lies to the Divisional Court, but only with leave of a judge of the Superior Court of Justice.
[14] I note that Rouleau J.A., reaching a similar conclusion in Mignacca, expressly referred to the decision of the Divisional Court in Kohar, above, after setting out the correct procedure for challenging a leave decision (at para. 21).
[15] While counsel for Workonce argued that this would lead to an unjust result for her client, I disagree. Section 19(1)(b) of the CJA confers a gatekeeper role on judges of the Superior Court of Justice in order to ensure that appeals of interlocutory matters are heard by the Divisional Court only if the criteria in Rule 62.02(4) are met. To interpret s. 21(5) of the CJA as Workonce suggests would undermine that gatekeeper role. Corbett J. in Direk (2009), above, succinctly set out the policy reasons supporting the reading of s. 21(5) at paras. 35 - 36, which I adopt:
... it would undercut the requirement for leave to appeal if the leave decision is subject to reconsideration by an entire panel of the Divisional Court as of right. It would afford potential appellants “two bites of the apple”, with consequent delay and expense for the parties, and a predictable increase in the workload of the Divisional Court.
The purpose of the leave provisions is to ensure that only matters of important legal principle are brought to the Divisional Court. On the leave motion, a single judge takes a hard look at the proposed appeal, and determines whether it should engage the attention of three members of the court. A leave motion often involves close scrutiny of the merits of the proposed appeal; if a full panel is required to do this on a motion to vary or set aside the leave decision, then the administrative benefit of the leave requirement will be largely lost.
Conclusion
[16] For these reasons, the motion to vary is quashed for want of jurisdiction. Costs to the plaintiffs are fixed at $7,500.00 all inclusive, payable within 30 days by Workonce.
Swinton J.
Then R.S.J.
Dambrot J.
Released: December 19 , 2011
CITATION: Peritus Inc. v. Elder, 2011 ONSC 7357
COURT FILE NO.: 46/11
DATE: 20111219
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
THEN R.S.J., DAMBROT AND SWINTON jj.
B E T W E E N:
PERITUS INC., PHARMATUS INC., W.A. KARABIN DEVELOPMENTS INC., KARABIN HOLDINGS INC., JOHN BUCKLEY, IAN CARLETON, DAVID OFFEN, RONALD GOLDSACK, ESTATE OF C.M. GOLDSACK, GRAHAM BRADLEY WRIGHT, JEFFREY & JENNIFER WEAVER FAMILY TRUST, J & J WEAVER INVESTMENTS INC., DEBORAH ROBINSON, DANIEL GREENGLASS and JOSEPH BRENNAN
Plaintiffs (Responding Parties)
- and -
MICHAEL JAMES ELDER and WORKONCE WIRELESS CORPORATION
Defendants (Moving Party)
REASONS FOR JUDGMENT
Swinton J.
Released: December 19, 2011