REASONS FOR DECISION

[1] Allan Gordon and Carol Gordon started an action in the Superior Court of Justice against Chouinard Bros., 413554 Ontario Limited and others in September 2022. The Gordons claim they hired Chouinard Bros. to do work on the roof of their home. They claim that Allan Gordon signed a contract with Chouinard Bros. on October 4, 2021. They further claim the work done by Chouinard Bros. was deficient and caused additional damage to their home. They are seeking $100,000 in damages.

[2] Approximately two months later, 2263921Ontario Inc. (operating as “Chouinard Home Improvements”) started a small claims court action against Allan Gordon and Carol Gordon for breach of contract. 2263921 Ontario Inc. claims it entered the contract with Allan and Carol Gordon on November 4, 2021 to fix the roof of their home. The company claims it issued an invoice to the Gordons on December 7, 2021 for $3,704.26 which was not paid.

[3] In their statement of defence on the small claims court action, Allan and Carol Gordon admitted they contracted with 2263921 Ontario Inc. However, Allan and Carol Gordon claimed that 2263921 Ontario Inc. did not complete the work agreed to and the work that was completed was done negligently. The Gordons also pleaded that the small claims court action should not have been brought. Rather, they claim 2263921 Ontario Inc. should have sought a set-off or made a counterclaim in the Superior Court of Justice action.

[4] Following a settlement conference on the small claims court action on June 6, 2023, the judge stayed the action “pending resolution of the Superior Court matter.” The judge found that the same facts are in issue in the Superior Court matter and the small claims matter. The settlement conference judge ruled:

To allow this Action to continue in parallel to the Superior Court action risks diverse findings on the same facts, those bringing the administration of justice into disrepute.

[5] 2263921 Ontario Inc. filed this appeal from the judge’s decision to stay the small claims matter pending the resolution of the Superior Court matter.

[6] Only final orders of the Small Claims Court can be appealed to the Divisional Court. The Divisional Court does not have jurisdiction to hear appeals from interlocutory orders from the Small Claims Court: Courts of Justice Act, s. 31, Cudini v. 1704405 Ontario Inc., 2012 ONSC 6645 at para. 32. The preliminary issue, therefore, is whether the settlement conference judge’s order staying the small claims court matter until the Superior Court matter is resolved is an interlocutory or final order.

[7] An interlocutory order is an order that does not determine the “real dispute between the parties.” If the substantive matters in dispute remain undecided after the order is made, the order is interlocutory: Drywall Acoustics v. SNC Lavalin, 2020 ONCA 375 at para. 16.

[8] I find that the settlement conference judge’s decision is an interlocutory decision. That decision did not dismiss the small claims court action. Nor did it permanently stay the action. Rather, the settlement conference judge stayed the small claims court action just until the Superior Court action is concluded. As a result, 2263921 Ontario Inc. will have an opportunity, if appropriate, to pursue its claim once the Superior Court matter is resolved.

[9] The appeal is, therefore, dismissed for want of jurisdiction.

[10] 2263921 Ontario Inc. argues, in the alternative, that if there was no right of appeal from the settlement conference judge’s decision, I should treat the Notice of Appeal as a Notice for Judicial Review and decide this matter as though it were commenced as an application for Judicial Review.

[11] The Divisional Court has jurisdiction to judicially review interlocutory orders of the Small Claims Court. This Court can also make orders in relation to its own process, including converting an appeal into a judicial review where a judicial review is the only route to challenge a decision: Joubarne v. Land Registrar & Director of Titles, 2019 ONSC 6709. However, I only have jurisdiction to hear a judicial review application as a single judge of the Divisional Court in two circumstances: first, if designated to do so by the Chief Justice of the Superior Court (or his designate) under s. 21(2)(c) of the Courts of Justice Act; second, under s. 6(2) of the Judicial Review Procedure Act if the application is urgent and the delay caused by scheduling a hearing before the Divisional Court is likely to involve a failure of justice. Neither provision applies in this case. The Chief Justice has not directed that this matter be heard by a single judge of the Divisional Court. Nor is there any urgency to this matter that would justify a hearing before a single judge. I, therefore, cannot decide this matter as if it were commenced as a judicial review application.

[12] In the further alternative, 2263921 Ontario Inc. argues that I should convert this appeal into an application for judicial review and refer it to a panel of this court for a hearing. If I were to accede to that request, I would be effectively granting 2263921 Ontario Inc. an extension of time to bring a judicial review application and an adjournment of the hearing.

[13] An extension of time to commence a judicial review application can be granted if the court is satisfied there are “apparent grounds for relief” and “no substantial prejudice or hardship will result”: Judicial Review Procedure Act, s. 5(2). An adjournment can be granted if it is in the interests of justice to do so. The apparent merits of 2263921 Ontario Inc.’s judicial review application are, therefore, relevant to the exercise of my discretion in relation to both the extension of time and adjournment.

[14] Judicial review is highly discretionary and the scope of judicial review of an interlocutory decision of the Small Claims Court is very narrow. This Court will not interfere with an interlocutory order of the Small Claims Court unless the order was made without jurisdiction or was made in breach of the principles of natural justice: Imperatore v. Fetesko, 2023 ONSC 1340 at paras. 14 to 16. 2263921 Ontario Inc. argues the Small Claims Court judge did not have jurisdiction to grant a stay at the settlement conference and, in the alternative, the procedure employed by the judge was unfair. I am not satisfied that either ground has any apparent merit.

[15] Rule 13.05(1) of the Small Claims Court Rules gives a judge authority to make “any order related to the conduct of the action” at a settlement conference. Rule 13.05(2)(a)(iii) expressly authorizes a small claims court judge to stay or dismiss the action at a settlement conference provided written reasons are given. The small claims court judge, therefore, had jurisdiction to stay 2263921 Ontario Inc.'s action pending the resolution of a Superior Court action at the settlement conference.

[16] 2263921 Ontario Inc. also argues the procedure was unfair because it was not given an opportunity to make full submissions on a written record about whether the matter should be conditionally stayed. 2263921 Ontario Inc. points to Rule 12.02(4) of the Small Claims Court Rules which sets out the procedure the Small Claims Court must follow if it intends, on its own motion, to stay or dismiss an action that is “inflammatory, a waste of time, a nuisance or an abuse of the court’s process.” The process requires the court to give the plaintiff written notice and an opportunity to make brief written submissions on why the action should not be stayed or dismissed. 2263921 Ontario Inc. argues that it should have been afforded at least the same procedural protections before the settlement conference judge stayed the proceeding pending the resolution of the Superior Court matter. The problem with that argument is that Rule 13.05 does not contain any procedural requirement other than giving written reasons for the decision and does not incorporate Rule 12.02 even by reference. On the plain reading of the rules, the Legislature intended the procedures to be different when the Court intends to permanently stay or dismiss an action on its own motion and when a small claims court judge is considering staying or dismissing an action at a settlement conference, where the parties are present and can make submissions.

[17] Of course, the procedure at a settlement conference must still be fair to the parties. 2263921 Ontario Inc. argues the procedure was unfair because it was not given an opportunity to make written submissions opposing a conditional stay. 2263921 Ontario Inc. argues that without written submissions and a proper motion record, the small claims court judge did not understand the facts and erroneously concluded that the issues were the same in the small claims court matter and the Superior Court matter. 2263921 Ontario Inc. also argues that if it had had an opportunity to make written submissions, the small claims court judge would have understood that 2263921 Ontario Inc. is not a party to the Superior Court matter – only 413554 Ontario Limited and Chouinard Bros. are parties to that action.

[18] In my view, 2263921 Ontario Inc.’s argument is overly technical.

[19] There is some confusion about which numbered company should be named in the Gordons’ Superior Court statement of claim, 2263921 Ontario Inc. or 413554 Ontario Limited (or both). 2263921 Ontario Inc. argues that the Gordons contracted with 2263921 Ontario Inc., not with 413554 Ontario Limited as the Gordons have claimed in their Superior Court action. 2263921 Ontario Inc. relies on the October 4, 2021 quote and December 7, 2021 invoice delivered to the Gordons to support its position that the contract in question was with 2263921 Ontario Inc., not 413554 Ontario Limited. The December 7, 2021 invoice states, in very small letters “(Operated by 2263921 Ontario Inc o/a Chouinard Home Improvements).” The quote is on a similar letterhead but the small lettering below is not legible on the copy in the record. 2263921 Ontario Inc. also notes that the Gordons admitted in their statement of defence on the small claims court action that they had a contract 2263921 Ontario Inc.

[20] The problem with the position of 2263921 Ontario Inc. is that the quote and invoice prominently bear the business name “Chouinard Bros.” in the letterhead. The Gordons have named Chouinard Bros. as a defendant in their Superior Court claim. The Gordons have also pled that 413554 Ontario Limited “is the company that registered the business name Chouinard Bros.” So even if the Gordons have named the wrong numbered company or should have also named 2263921 Ontario Inc., it is clear to all involved who they intend to sue – the company that did the work on their roof.

[21] More importantly, even if the two claims do not involve precisely the same parties, the Small Claims Court judge was right that the two actions relate to the same facts, which is clear on the face of the pleadings. The defence in the small claims court says the Gordons had started a Superior Court action alleging the work done on their roof was deficient and the plaintiffs were not entitled to payment for the work done. The Gordons also claimed in their defence on the small claims court action they would be entitled to a set-off for the losses they incurred for the negligent work and breach of contract. The Gordons’ defence also states that the plaintiffs should have raised the non-payment of the December 7, 2021 invoice in the Superior Court action rather than commencing a separate proceeding in the Small Claims Court.

[22] Both parties were represented by counsel at the settlement conference. It was plain and obvious the Gordons’ position was the two matters are duplicative and the small claims court matter should not proceed at the same time as the Superior Court matter. Both actions arise out of the same transaction and the same facts. Both deal with the repairs done to the roof of the Gordons’ home in the late fall of 2021. The Small Claims Court judge was right that there was a risk of inconsistent findings and verdicts if both matters proceeded in parallel.

[23] I am not satisfied there was any procedural unfairness in the Small Claims Court judge conditionally staying the small claims action pending the resolution of the Superior Court action without receiving written submission on the point or scheduling a formal motion.

[24] It is, of course, not my job to decide the merits of a judicial review application. I have already determined I do not have jurisdiction to so do. I have set out the merits of the proposed arguments on the judicial review application in some detail simply to explain why I am declining to exercise my jurisdiction to grant an extension of time and adjourn the judicial review application to a panel. In my view, the arguments 2263921 Ontario Inc. wants to advance on the judicial review application do not have sufficient merit to justify exercising my discretion to convert this appeal into a judicial review before a panel of this court.

[25] I also decline to order any costs on this appeal. There is an obvious deficiency in the Gordons’ pleadings in the Superior Court of Justice. Since 2263921 Ontario Inc. filed its statement of claim in the Small Claims Court in December 2021, the Gordons have known they should have named 2263921 Ontario Inc. rather than or as well as 413554 Ontario Limited in their action. Had they taken steps to correct that issue with their pleadings when it was first raised, there would be no argument that the Small Claims Court action should be stayed and this appeal would have been unnecessary. While successful on this appeal, the Gordons’ lack of diligence correcting the issue with their pleadings contributed to the additional litigation. I, therefore, find it is appropriate for each party to bear their own costs of this appeal.

Davies, J.

Date: May 1, 2024

CITATION: 2263921 Ontario Inc. v. Gordon, 2024 ONSC 2498

DIVISIONAL COURT FILE NO.: 409/23

DATE: 20240501

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

2263921 Ontario Inc. (operating as “Chouinard Home Improvements”)

Appellant

– and –

Allan Gordon and Carol Gordon

Respondents

REASONS FOR DECISION

DAVIES J.

Released: May 1, 2024

2263921 Ontario Inc. v. Gordon, 2024 ONSC 2498

Case Summary

REASONS FOR DECISION

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Financial Outcomes

Issues

Statutory Provisions 7

Legal Tests 1