NEWMARKET COURT FILE NO.: CV-13-113950
DATE: 20130905
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
IRWIN DIAMOND
Applicant
– and –
996087 ONTARIO LIMITED o/a THE ACADEMY FOR GIFTED CHILDREN – P.A.C.E., 1366652 ONTARIO LTD., 1438823 ONTARIO INC. and BARBARA ROSENBERG
Respondents
N. Schernitzki, for the Applicant
F. S. Turton, for the Respondent Barbara Rosenberg
HEARD: August 30, 2013
REASONS FOR DECISION
DiTOMASO J.
THE MOTIONS
[1] There are two competing motions before the court. In her action (“the Rosenberg action”), the respondent Barbara Rosenberg (“Rosenberg”) moves for an order staying Mr. Diamond’s application or, in the alternative, consolidating the application with her action. Ultimately, Ms. Rosenberg seeks an order that the issues in the application proceed by way of counterclaim in action.
[2] In the application commenced by the applicant Irwin Diamond (“the Diamond application”), Irwin Diamond (“Diamond”) seeks an order under Rules 21.01(b), 21.01(3)(c) and 21.01(d) striking out the statement of claim in the Rosenberg action issued on March 6, 2013. In the alternative, Mr. Diamond seeks an order pursuant to Rule 6.01 and sections 106 and 138 pursuant to the Courts of Justice Act staying the Rosenberg action.
OVERVIEW
[3] Both sides acknowledge that there are common issues of fact and law that arise in both the Rosenberg action and the Diamond application. The essential facts are not in dispute.
[4] The Academy for Gifted Children is a private school located in Oak Ridges. It has about 300 students enrolled from grades 1 to 12. Ms. Rosenberg is the principal of the school and one of its co-founders. Mr. Diamond contributed funds to help establish the school but is not active in the operations of the school. The three corporations named in these proceedings are the company that operates the school (996087 Ontario Limited) and the two corporations that own the land and the buildings in which the school is located.
[5] Ms. Rosenberg and Mr. Diamond are the two shareholders of all three corporations. There is no shareholders agreement. Mr. Diamond no longer wishes to be a shareholder and seeks that either Ms. Rosenberg pays him the sum of $4,700,000 – or that the school lands and buildings be sold and half paid to him.
[6] Ms. Rosenberg has commenced an action to have the issues raised by Mr. Diamond decided by a jury drawn from the community affected by the issues in the lawsuit.
[7] After the action was commenced, Mr. Diamond wanted the matter dealt with by application in Toronto. He proceeded to have this matter dealt with on the Commercial List. Justice Morawetz rejected such an attempt by Mr. Diamond. Justice Morawetz held that this was York Region matter and declined to place this matter on the Commercial List.
[8] In addition, Justice Morawetz noted in his order of March 26, 2013 that Ms. Rosenberg had commenced her action in Newmarket on March 6, 2013. Further, he commented that the parties should coordinate proceedings in the Rosenberg action with the Diamond application so as to better utilize resources.[^1]
[9] Thereafter, the Diamond application was issued in Newmarket on April 10, 2013.
[10] On May 8, 2013, counsel attended in Assignment Court in Newmarket and a scheduled return date of February 3, 2014 for the Application.
[11] While there are two motions before the Court, there is really one critical issue: how should this matter proceed?
POSITIONS OF THE PARTIES
Position of Irwin Diamond
[12] Mr. Diamond submits that Ms. Rosenberg’s Statement of Claim should be struck for failing to disclose a reasonable cause of action pursuant to rule 21.01(b). In addition, her Statement of Claim should be struck as her action is frivolous, vexatious or otherwise is an abuse of process pursuant to rule 21.01(3)(d) of the Rules of Civil Procedure.
[13] Further, it is submitted that the Rosenberg action be stayed as there is another proceeding pending in Ontario, namely, the Diamond application between the same parties in respect of the same subject matter pursuant to rule 21.01(3)(c).
[14] Mr. Diamond submits that a stay of proceedings should also be ordered pursuant to section 106 of the Courts of Justice Act. He further asserts that a multiplicity of proceedings ought to be avoided in this case and relies upon section 138 of the Courts of Justice Act. He argues that the action commenced by Ms. Rosenberg is essentially a delaying tactic regarding which he would be prejudiced. His application is the best and most efficient proceeding in which to have all of the issues determined including those raised by Ms. Rosenberg.
Position of Barbara Rosenberg
[15] Ms. Rosenberg submits that she has commenced an action and seeks to have all of the issues, including Mr. Diamond’s issues, determined by a jury. Ms. Rosenberg has served a Jury Notice in this case.
[16] She asserts that she has a reasonable cause of action and that it is not plain and obvious that her Statement of Claim ought to be struck. Her action is not vexatious, frivolous, or an abuse of the process. Further, while it is agreed that there should not be a multiplicity of proceedings, she submits that it is not her action that ought to be stayed but rather the Diamond application. Mr. Diamond can deliver his Statement of Defence and counterclaim wherein all the issues in respect of the dispute with Ms. Rosenberg can be properly placed before the Court. It is disputed that Mr. Diamond’s application would be the most expeditious way to proceed in this dispute. Ms. Rosenberg also submits that she has a substantive right to have these issues determined by a jury drawn from the community affected by any decision of this Court relating to the issues between these parties.
THE ISSUES
[17] The following are the issues to be determined on these motions:
Issue #1 – Should the Statement of Claim in the Rosenberg action be struck out on the ground it discloses no reasonable cause of action?
Issue #2 – Should the Statement of Claim in the Rosenberg action be struck out on the ground that it is frivolous and vexatious?
Issue #3 – Should the Statement of Claim in the Rosenberg action be struck out on the ground that there is another proceeding pending between the parties involving the same subject matter (the Diamond application)? Should the Rosenberg action be stayed or dismissed? Should the Diamond application be stayed or dismissed? Should the Diamond application in the Rosenberg action be consolidated?
ANALYSIS
Issue #1 – Should the Statement of Claim in the Rosenberg action be struck out on the ground it discloses no reasonable cause of action?
[18] Counsel agree in respect of the applicable test to be applied regarding this issue.
[19] Rule 21.01(1)(b) permits a party to move before a judge to strike out a pleading on the ground that it discloses no reasonable cause of action.
[20] The test for this Rule is set out by the Supreme Court of Canada in Hunt v. Carey Canada Inc.[^2] as referred to by the Ontario Court of Appeal in R.D. Belanger and Associates Ltd. v. Stadium Corp. of Ontario Ltd.[^3]
[21] In R.D. Belanger, the Court stated:
In affirming that the test to be applied on motions of this kind was whether the outcome of the case was “plain and obvious” or “beyond reasonable doubt”, Wilson J., in delivering the judgment of the Court, stated … :
Thus, the test in Canada … is … assuming that the facts as stated in the statement of claim can be proved, is it “plain and obvious” that the plaintiff’s statement of claim discloses no reasonable cause of action?
The question therefore to which we must now turn … is whether it is “plain and obvious” that the plaintiff’s claims … disclose no reasonable cause of action or whether the plaintiff has presented a case that is “fit to be tried” …
[22] In Prete v. Ontario,[^4] the Ontario Court of Appeal stated that the facts alleged in the Statement of Claim should be taken as true for this purpose, but the Court should not look beyond the pleadings to determine if the action has any chance of success. To do so would amount to conducting a summary judgment proceeding under Rule 20 without having the benefit of the sworn evidence of the parties as a basis for determining whether there is a genuine issue for trial.
[23] In Doe v. Metropolitan Toronto (Municipality) (Commissioners of Police) the general principles applicable to all pleadings can be found at para. 11, adding, that the Statement of Claim must be read as generously as possible, with a view to accommodating any inadequacies in the form of the allegations due to drafting deficiencies. Further, if the facts, taken as proved, disclose a reasonable cause of action, that is, one with some chance of success, then the action may proceed.
[24] It is the position of Mr. Diamond that applying the test, if the Statement of Claim is read as a whole as generously as possible, with a view to accommodating any inadequacies in the form of the allegations due to drafting deficiencies, and if the facts set out in the Statement of Claim are taken as true for this purpose, the pleading does not disclose a cause of action founded in law. Further, it is submitted that it is plain and obvious that the Statement of Claim discloses no reasonable cause of action and that it should be struck out.
[25] I disagree for the following reasons. A review of the entire Statement of Claim takes me to the conclusion that it is not plain and obvious that there is no reasonable cause of action pleaded by Ms. Rosenberg in her action. Both the prayer for relief and background facts of the Statement of Claim are set out in Ms. Rosenberg’s factum at paras. 9 and 10. The Statement of Claim can be found in Ms. Rosenberg’s motion record at Tab 2.
[26] I find that both the Rosenberg action and the Diamond application address essentially the same issues for determination. The relief sought in the prayer for relief in Ms. Rosenberg’s Statement of Claim is set out as follows:
a) should Barbara Rosenberg be required to purchase all of the shares owned by Irwin Diamond in the three corporate defendants (996087 Ontario Limited, operating as The Academy for Gifted Children, 1366652 Ontario Ltd., and 1438823 Ontario Inc.);
b) Should the three corporate defendants be required to sell 12 and 20 Bond Crescent, Richmond Hill, and then pay part of the proceeds of the sale to Irwin Diamond;
c) should the three corporate defendants be wound up;
d) should Irwin Diamond be appointed a director of the Academy For Gifted Children;
e) Is there anything that Barbara Rosenberg should repay to the corporate defendants;
f) Is there some damage that Irwin Diamond has sustained and for which he should be compensated;
g) Is there some damage that the corporate defendants, or any of them, has sustained for which they should be compensated;
h) Is there anything that Barbara Rosenberg has done that has been oppressive, or unfairly prejudicial to, or been in unfair disregard of the interests of Irwin Diamond;
i) Barbara Rosenberg also asks the Court to make such cost orders or interest orders as are appropriate.
[27] Further, the basic background facts as set out in the following paragraphs can be found in the Rosenberg Statement of Claim:
Barbara Rosenberg (“Barbara”) along with the late Dennis Reynolds were the founders of the Academy For Gifted Children. Dennis Reynolds passed away in the 1990’s. The school is often also referred to as P.A.C.E., and for ease will from hereon be called “PACE.”
Barbara was a teacher by profession. About 20 years ago she embarked upon her vision of creating a school dedicated to the unique needs and potential of gifted children. That vision, through years of dedicated effort by Barbara and her colleagues, has produced a very special educational environment. With an enrolment now of nearly 300 students, from grades 1 to 12, PACE is achieving its guiding philosophy that gifted children need high-powered learning experiences to challenge their minds and ensure intellectual growth and achievement. PACE has graduated many students who have won awards and scholarships for their academic excellence.
Irwin Diamond made a final contribution of about $67,000.00 many years ago to assist in the getting the school underway. He was given shares in the company that operates the school: he owns 40% of the shares in 996087 Ontario Limited (“996”). Later he received shares in the two companies that own the land where the school is located: he owns 50% in each of 1438823 Ontario Inc. (“143”) and 1366652 Ontario Inc. (“136”).
Irwin Diamond was never active in the operation of PACE. He was a passive shareholder.
The three corporations are all Ontario companies. The pertinent basics are as follows:
996087 Ontario Limited
Incorporated: 31 July 1992
Directors: Barbara Rosenberg
Officers: Barbara Rosenberg, President and Secretary
Shareholders: Barbara Rosenberg 605, Irwin Diamond 40%
1366652 Ontario Ltd.
Incorporated: 21 July 1999
Directors: Barbara Rosenberg, Irwin Diamond
Officers: Barbara Rosenberg, President
Irwin Diamond, Secretary and Treasurer
Shareholders: Barbara Rosenberg 50%, Irwin Diamond 50%
1438823 Ontario Inc.
Incorporated: 13 September 2000
Directors: Barbara Rosenberg, Irwin Diamond
Officers: Barbara Rosenberg, President
Irwin Diamond, Secretary and Treasurer
Shareholders: Barbara Rosenberg 50%, Irwin Diamond 50%
The school is located in three buildings on two parcels of adjoining land (12 and 20 Bond Crescent). The first parcel was purchased by 136 for 1.7 million dollars in 1999 and the second parcel was purchased by 143 in 2000 for $225,000.00.
There is no shareholders agreement between Barbara and Irwin Diamond for any of the companies, so there is no contractual right on the part of Irwin Diamond to require the purchase of his shares or the sale of the companies or their assets.
[28] It is submitted on behalf of Ms. Rosenberg that her position regarding the matters raised in her action, and by implication of the matters raised in the Diamond application are concisely stated in paragraphs 10 and 11 of the Statement of Claim:
Barbara requests that the future of the school and the security and well-being of the students be protected by a determination that Irwin Diamond does not have the right to cause the school and its lands to be sold, or to be shut down, or to force the school or Barbara to purchase his shares. Barbara knows of no damages sustained by Irwin Diamond or the three companies, nor does she know of anything done to Irwin Diamond that has been prejudicial or unfair to him, or that disregarded him.
Barbara does not want the school disrupted or its future exposed to uncertainty. She would pay money to Irwin Diamond irrespective of whether he has any right to such a payment, but she cannot accede to financial demands by Irwin Diamond that put the school and its staff and students at risk.
[29] It is argued on behalf of Mr. Diamond that nowhere in the Statement of Claim is there pleaded or does there exist any reasonable cause of action. Having read the Statement of Claim in its entirety and having heard the submissions of counsel, I find that a reasonable cause of action does exist and is pleaded.
[30] Ms. Rosenberg is seeking a determination by this Court of various issues that go to the heart of the rights and obligations as between the parties. Ms. Rosenberg’s Statement of Claim is neither presented in a vacuum nor is it presented as an academic exercise. Rather, there are real and important issues to be determined by this court presented in a real and important factual context as pleaded in the Statement of Claim.
[31] Mr. Diamond and Ms. Rosenberg are shareholders in three corporations that collectively operate the Academy for Gifted Children in Oakridges. Mr. Diamond no longer wishes to be a shareholder and seeks that either Ms. Rosenberg pay him the sum of 4.7 million dollars – or that the school lands and buildings be sold and half paid to him. There is no shareholder agreement nor is there any contractual right that speaks to a shareholder being bought out. In the absence of any clear contractual rights spelled out in a shareholders agreement, the only other recourse is to have this issue dealt with by the Court. This is exactly what Ms. Rosenberger in her Statement of Claim has asked the Court to determine.
[32] Mr. Diamond has alleged that there is improper conduct on the part of Ms. Rosenberg and seeks damages against her. The issue of damages as well as punitive damages sought by Mr. Diamond is very much an issue to be determined by the Court.
[33] I am not satisfied that Mr. Diamond has satisfied the test that it is “plain and obvious” that the Statement of Claim does not disclose a reasonable cause of action. Quite to the contrary, Ms. Rosenberg in her Statement of Claim sets out matters in issue that speak to the rights and obligations as between the parties to be determined by this Court. The Statement of Claim does disclose a cause of action founded in law. There are material facts pleaded which can be taken as proved with some chance of success. Upon a reading of the Statement of Claim as generously as possible, with a view to accommodating any inadequacies in the form of the allegations due to drafting deficiencies, and with all of these principles in mind, I find that Mr. Diamond has not satisfied the “plain and obvious” test that the Claim disclosed no reasonable cause of action and ought to be struck.
Issue #2 – Should the Statement of Claim in the Rosenberg action be struck out on the ground that it is frivolous and vexatious?
[34] Rule 21.01(3)(d) permits a judge to stay or dismiss an action if it is frivolous or vexatious.
[35] The test under this Rule has been summarized as follows:
… dismissing or staying an action as frivolous or vexatious or abusive of the Court’s process must be reserved for the clearest of cases where on the face of the action and circumstances it is plain and obvious that the case cannot succeed.
[36] It is argued by Mr. Diamond that the Rosenberg action was commenced to muddy the waters in respect of the Commercial List. The real motive in Ms. Rosenberg commencing her action was to delay the matter.
[37] I do not agree with this submission. There is no basis to assert that Ms. Rosenberg commenced her action with the intention to cause delay, with the motive to divert the Diamond application from being dealt with on the Commercial List in Toronto or on the basis of a claim lacking bona fides.
[38] Ms. Rosenberg has commenced an action which is neither frivolous nor vexatious nor an abuse of process. She has set out in her Statement of Claim the relief sought and the supporting factual context. This is not the clearest of cases where on the face of the action and the circumstances, it is plain and obvious that this case cannot succeed.
[39] I should also note that the Rosenberg action and the Diamond application deal with the same common issues of fact and law. I find that it cannot be said that those same common issues of fact and law are frivolous and vexatious in the Rosenberg action but not frivolous and vexatious in the application. To so find would be illogical and inconsistent. Any such position would be unsupportable.
[40] I find that in respect of this issue, the Statement of Claim should not be struck out.
Issue #3 – Should the Statement of Claim in the Rosenberg action be struck out on the ground that there is another proceeding pending between the parties involving the same subject matter (the Diamond application)? Should the Rosenberg action be stayed or dismissed? Should the Diamond application be stayed or dismissed? Should the Diamond Application in the Rosenberg action be consolidated?
[41] Where two or more proceedings are pending in the Court and it appears to the Court that they have a question of law or fact in common, the relief claimed in them arises out of the same transaction or occurrence or for any other reason, the Court may order that the proceedings be consolidated, heard at the same time or one immediately after the other or any of the proceedings be stayed until after the determination of any other of them.[^5]
[42] Rule 21.01(3)(c) also permits a judge to stay or dismiss an action if another proceeding is pending in Ontario between the same parties in respect of the same subject matter.[^6]
[43] Furthermore, Section 106 of the Courts of Justice Act, R.S.O. 1990, c.C.43 states: “A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just”.[^7]
[44] Section 106 is often cited with Section 138 of the Courts of Justice Act, which functions as a guiding principle and states: “As far as possible, multiplicity of legal proceedings shall be avoided”.[^8]
[45] The test under Section 106 of the Courts of Justice Act, has been cited in Farris v. Staubach Ontario Inc. as follows:
A stay of proceedings should only be ordered in the clearest of cases, where the party seeking the stay can clearly demonstrate that (1) continuing the action would cause substantial prejudice or injustice to the moving party (not merely inconvenience and expense), and (2) the stay would not cause an injustice to the responding party: [Blair]; TDL Group Ltd. v. 1060284 Ontario Ltd., [2000] O.J. No. 4582 (S.C.J.) [which deals primarily with staying proceedings pending determination by the Ontario Human Rights Commission]. As McNair J. stated in [Varnam]:
A stay of proceedings is never granted as a matter of course. The matter is one calling for the exercise of a judicial discretion in determining whether a stay should be ordered in the particular circumstances of the case. The power to stay should be exercised sparingly, and a stay will only be ordered in the clearest cases. In an order to justify a stay of proceedings two conditions must be met, one positive, and the other negative: (a) the defendant must satisfy the court that the continuance of the action would work on an injustice because it would be oppressive or vexatious to him or would be an abuse of the process of the court in some other way; and (b) the stay must not cause an injustice to the plaintiff. On both the burden of proof is on the defendant. Expense and inconvenience to a party or the prospect of the proceedings being abortive in the event of a successful appeal are not sufficient special circumstances in themselves for the granting of a stay.
Factors to be considered in determining prejudice include: the likelihood and effect of the two matters proceeding in tandem in two different forums; the possibility and effect of different results; the potential for double recovery; and the effect of possible delay.
[46] Mr. Diamond contends that he would be prejudiced by the effect of possible delay.
[47] Also cited is the case of Hedley v. Air Canada[^9] where the Court discussed the general principles applicable to a stay of proceedings under rule 6.01(1).
- The Court has always had an inherent jurisdiction to grant a stay of proceedings whenever it is just and convenient to do so, in order to control its process or prevent an abuse of that process… In the civil context, this general power is also embodied in the very broad terms of s.106 of the Courts of Justice Act, R.S.O. 1990, Chap. C.43, which provides as follows:
s.106. A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.
Recently, Mr. Justice O’Connell has observed that this discretionary power is “highly dependent on the facts of each particular case”…
The Court is also empowered under Rule 6.01(1) to order a stay in order to avoid multiplicity of proceedings. The Rule states:
6.01(1) Where two or more proceedings are pending in the court and its appears to the court that,
(a) they have a question of law or fact in common;
(b) the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences; or
(c) for any other reason an order ought to be made under this rule,
(d) The court may order that,
(e) any of the proceedings be,
(i) stayed until after the determination of any other of them …
Thus, there are common questions of law and fact in the two actions and the relief arises out of the same series of transactions or occurrences.
… It would be unfair to Air Canada, in my opinion, and prejudicial to its position in the first action based on fraud, if the Hedley action were permitted to proceed at the same time as the Air Canada action, having regard to nature of the documentation which may become relevant and producible in the Hedley action and the circumstances in which that documentation came into the possession of the Crown.
…The Balance of convenience must weight significantly in favour of granting the stay, as a party’s right to have access to the courts must not be lightly interfered with. The Court must be satisfied that a continuance of the proceeding would work an injustice on the party seeking the stay, in the sense that it would be oppressive or vexatious or an abuse of the process of the court in some other way. The stay must not cause an injustice to the plaintiff. On all of these issues, the onus of satisfying the Court in on the party seeking the stay….
[48] Mr. Diamond submits that the Rosenberg action ought to be stayed. The Statement of Claim is deficient and the application provides more clarity to the Court as to what Mr. Diamond is seeking. He submits that the Rosenberg action should be stayed under rule 6.01 based on the fact that there are questions of law and fact in common in both the Rosenberg action and the Diamond application and that the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences. On this, both parties agree.
[49] However, Mr. Diamond asserts that he meets the test for a stay of the action under s.106 of the Courts of Justice Act, namely: (a) a continuation of the Rosenberg action would work an injustice on him, in the sense that it would be oppressive or vexatious or an abuse of the process of the Court; and (b) the stay does not cause an injustice to the Ms. Rosenberg. He also argues the same issues about the motivation for commencing the action and intended delay regarding which I have also made findings against Mr. Diamond.
[50] It is also submitted that the application is brought under sections 207 and 248 of the Ontario Business Corporations Act (“OBCA”). If the Rosenberg action was not stayed, Mr. Diamond submits that he would be denied the statutory right to proceed. However, it is submitted on behalf of Ms. Rosenberg, that the provisions referred to in the OBCA permits Mr. Diamond to proceed either by way of application or action. In this regard, he would not be prejudiced. He also seeks in his application the alternative relief under section 3 of the Partition Act which specifically permits Mr. Diamond to proceed by way of application.
[51] Given that the issues are identical in the Rosenberg action and the Diamond application, it is submitted that clearly only one of the proceedings should continue to avoid wasting judicial resources and the risk of the inconsistent decisions. There is no dispute in this regard.
[52] On behalf of Ms. Rosenberg, it is submitted that there is a distinct difference in this case as there is the existence of a Jury Notice.
[53] If the action were stayed, her right to have issues between the parties and affecting the community determined by a jury drawn from that community would be nullified. It is submitted that this factor weighs significantly in favour of the Diamond application being asserted as a counterclaim in the Rosenberg action.
[54] Counsel for Ms. Rosenberg relied on Sloane v. Toronto Stock Exchange.[^10] In Sloane the Ontario Court of Appeal restated that the right to a trial by a jury is an important substantive right and that right should not be denied prematurely.
[55] In McDonald-Wright (Litigation Guardian of) v. O’Herlihy,[^11] the Ontario Court of Appeal cited its decision in Sloane to support the principle that it is generally preferable for a trial judge to hear some evidence before deciding whether the jury should be discharged. If the evidence, as it unfolds, is overly complex, some or all of the issues may be removed from the jury’s consideration.
[56] I find that it is entirely premature at this stage to make a determination that would effectively negate Ms. Rosenberg’s Jury Notice. The pleadings have not been delivered by Mr. Diamond to deny Ms. Rosenberg’s substantive right to have the issues in her action decided by a jury. We are at the very early stages of this litigation and the issue of whether her Jury Notice should stand is not squarely before the Court.
[57] Her right to have her issues determined by a jury can only be dealt with in an action and not in an application.[^12]
[58] I am satisfied that Mr. Diamond’s application should be stayed. He can assert all of his claims by way of counter-claim without prejudice in the Rosenberg action pursuant to rule 6.01(1)(e)(i) and (ii). The assertion that it might be faster and more expeditious to proceed by way of his application is pure speculation at this point in time. While counsel for Mr. Diamond is optimistic that this matter and all of the issues on the application will be determined at the hearing of the application on February 3, 2014, I do not share that optimism.
[59] I have considered the balance of convenience and the prejudice argument. I am not persuaded that the Rosenberg action was commenced specifically to delay a resolution of these issues and to derail the application. I find that there is no prejudice to Mr. Diamond and that he can assert all of his claims by way of counterclaim in the Rosenberg action without prejudice and with the full safeguards that the rules afford him. At the same time, no prejudice will be suffered by Ms. Rosenberg as she will not be denied at this preliminary stage a denial of her substantive right to have the issues determined by a jury. Those issues and their determination would indeed affect not only the 300 students that attend the school but also their parents and the community at large.
[60] In respect of this issue, the Statement of Claim in the Rosenberg action should not be struck on the ground that Mr. Diamond’s application exists involving the same parties and the same subject matter. I find that the Diamond application should be stayed and that all of Mr. Diamond’s clams be asserted by way of counterclaim in the Rosenberg action.
DISPOSITION
[61] For the reasons given, Mr. Diamond’s motion is dismissed. As for Ms. Rosenberg’s motion, the following order that:
(a) the Rosenberg action shall proceed;
(b) the Diamond application shall be stayed; and,
(c) all Mr. Diamond’s claims shall be asserted by way of counterclaim in Ms. Rosenberg’s action.
[62] As for costs, counsel agree that costs are to be dealt with by way of written submissions. They are to submit a concise Summary of Position not exceeding two pages in length, Costs Outline, Bill of Costs and supporting authorities. They are to exchange these materials within 14 days of this decision and to deliver their materials to my judicial assistant at Barrie.
DiTOMASO J.
Released: September 5, 2013
[^1]: Order of Justice Morawetz dated March 26, 2013, Responding Motion Record, Affidavit of David Bleiwas sworn July 31, 2013, Exhibit E [^2]: Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959 (S.C.C.) [^3]: R.D. Belanger and Associates Ltd. v. Stadium Corp. of Ontario Ltd., [1991] O.J. No. 1962 (C.A.) [^4]: Prete v. Ontario, [1993] O.J. No. 2794 (C.A.); leave to appeal to S.C.C. refused (1994), 17 O.R. (3d) [^5]: Rule 6.01, Rules of Civil Procedure [^6]: Rule 21.01(3(c), Rules of Civil Procedure [^7]: Courts of Justice Act, R.S.O. 1990, c.C.43, Section 106 [^8]: Courts of Justice Act, R.S.O. 1990, c.C.43, Section 138 [^9]: Hedley v. Air Canada, [1994] O.J. No. 287 (Ont.Ct.J.-Gen. Div.) paras. 14,15,16,22,23,28 [^10]: Sloane v. Toronto Stock Exchange, 1991 CarswellOnt 439 [^11]: McDonald-Wright (Litigation Guardian of) v. O’Herlihy, 2007 CarswellOnt 674 [^12]: Rule 47.01, Rules of Civil Procedure