NEWMARKET

COURT FILE NO.: CV-13-112774-00

DATE: 20130925

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Unimac – United Management Corp., Plaintiff (Appellant)

AND:

St. Clare’s-Monaco Place and Ellen Vera Allen, Defendants (Respondents)

BEFORE: THE HON. MR. JUSTICE P.H. HOWDEN

COUNSEL:
J. Baichoo, Counsel for the Plaintiff (Appellant)

L. Bowman, Counsel for the Defendant (Respondent) St. Clare’s Monaco Place

J. Vickerman, Counsel for the Defendant (Respondent) Ellen Vera Allen

HEARD: August 30, 2013 at Newmarket, Ontario

ENDORSEMENT

On appeal from the decision of Master C. Albert dated April 8, 2013 –

CJA, s.17; Rule 62.01

[1] This is an appeal by the plaintiff Unimac-United Management Corporation (“Unimac”) from the order of Master Albert dated April 8, 2013. The context for the order is that Unimac has commenced two separate actions in respect of a building project of which it was the general contractor and the defendant/ respondent St. Clare’s-Monaco Place (“St. Clare’s”) was the owner. It is said to be a 20-unit residential housing project on Ossington Ave. in Toronto. Out of this modest project have sprung several lien actions in Toronto for moneys alleged to be owing for work and materials and damages for delay and other heads of damage, as well as an action in this court commenced in Newmarket for breach of trust and other claims all relating to the same project and the same contract. A Master at Toronto was designated by the Judgment of Reference of Stinson J. dated May 18, 2012 “to determine all questions arising in this action (the lien action) on the reference and all questions arising under the Construction Lien Act...” Master Albert was the Master assigned to the Toronto lien actions.

[2] The respondent brought a motion claiming a stay of certain claims and cross-claims against it in Unimac’s statement of claim and in its statement of defence in the main action and in the lien actions of sub-trades, striking out a cross-claim in another related lien action, or in the alternative, striking Unimac’s claims in the Toronto Action, or an order that the claims in contract, tort and equity in the Newmarket action be pleaded in the Toronto action.

[3] Counsel for both parties made their submissions on the motion. Master Albert found on a review of the pleadings in the various actions in Toronto and the action in Newmarket that “there are overlapping issues, facts, witnesses, common questions of fact and law, and claims for relief arising from the same events. Having done a similar review of the appellant’s Toronto and Newmarket pleadings, I concur, with the exception that the Newmarket action adds a lengthy pleading and claim for breach of trust. The problem arises from the Master’s statement that “a solution ...is needed to sort out these multiple proceedings” and then proceeded to ignore the relief claimed in the notice of motion to make an order beyond any relief claimed and argued on the motion. The Master ordered a stay of the entire Newmarket action pending final disposition of Unimac’s Toronto lien claim.

[4] The appellant attacks the order as being made without jurisdiction and submits that the Master erred in law in going beyond the motion before her as well as misapprehending the evidence and law and the issues as framed by the notice of motion.

[5] The respondent St. Clare’s takes no position on the issue of the Master’s alleged lack of jurisdiction but asks that, if I find that the appeal is well-founded on jurisdictional grounds, I should act under s. 134 of the Courts of Justice Act to stay the Newmarket action until a decision on the breach of contract issues in the Toronto lien action.

[6] As to the jurisdictional and natural justice submissions, they raise questions of law on which the standard of review is correctness.

[7] I find, with genuine respect for this experienced judicial officer, that the Master lacked jurisdiction to make the order that she did regarding the Newmarket action. S.107 of the Courts of Justice Act, R.S.O. 1990, c.C.43 and rule 6.01 apply to motions brought to consolidate two or more related proceedings or to stay one proceeding until after determination of the others. It is not limited, as the Master suggested, to cases of actions in different court levels; it has been used to transfer actions to a different region within the Superior Court of Justice or to consolidate actions in different regions within the court. “Court” is used in its ordinary meaning in a generic and locational sense. Terzopoulos v. Terzopoulos [2002] CarswellOnt 2367 (SCJ); Schneider v. Design Recovery Inc. [2002] CarswellOnt 3172 (SCJ). Section 107 (4) requires such motion to be made to a judge of this court. S. 66(2)(h) allows the Civil Rules Committee to make rules in relation to the jurisdiction of masters but not where the jurisdiction is conferred by statute on a judge. Rule 37.02(a) states along the same line:

A master has jurisdiction to hear any motion in a proceeding, and has all the jurisdiction of a judge in respect of a motion, except a motion where the power to grant the relief sought is conferred expressly on a judge by a statute or rule.

[8] Rule 21.01 (3) (c) was relied on by the respondent before the Master to ask for a stay of the Unimac’s lien action. It states that a defendant may move “before a judge” to stay an action.

[9] In my view, the Master lacked jurisdiction to stay the Newmarket action. However, if I am in error in that finding, I also find that in going beyond the primary and the alternate relief requested, the Master erred in law. I adopt the conclusion of Molloy J. in 2183164 Ontario Inc. v. Gillani, 2013 ONSC 1456 (Ont. Div. Ct.) at paras. 21-2, as applicable to this case, after describing the Master’s rejection of the initial request for relief:

What he should have done at that point was to simply proceed with the alternate relief claimed, i.e. an order for cross-examination on the lien and a consideration of whether security for costs was appropriate. Unfortunately, rather than doing that, the Master embarked on a lengthy analysis of the action itself...

In entering into that analysis, the Master wandered far beyond the parameters of the motion before him as it had been framed by the defendants. In my view this was unfair to the plaintiff who had no notice that these issues would be raised and no opportunity to either prepare material in response or address the issues appropriately in oral argument. This is a matter that went to the fairness of the motion and undermines any decision rendered on those issues.

[10] Similarly, in this case, Master Albert seemed to feel that once she had diagnosed the problem, correctly as I have stated, she could go beyond what was asked in the notice of motion to consider various remedies not before her, including a stay of the Newmarket action in its entirety, which the plaintiff had no chance to reply to in argument. The principle in Rodaro v. Royal Bank (2002), 2002 41834 (ON CA), 59 O.R. (3d) 74 (C.A.) still holds true, that it is fundamental to the litigation process that lawsuits be decided within the boundaries of the pleadings. Nowhere in the material before the Master was there notice of a request to stay the Newmarket action.

[11] Additionally, the Judgment of Reference designated the Master’s task as limited to determining all questions in the lien action and under the Construction Lien Act “C.L.A.”), R.S.O. 1990, c. C.30. The point of the Newmarket action was that because it involved breach of trust claims, a separate action was required. S. 50(1) and (2) of the C.L.A. state:

(1) A lien claim is enforceable in an action in the Superior Court of Justice in accordance with the procedure set out in this part.

(2) A trust claim shall not be joined with a lien claim but may be brought in any court of competent jurisdiction.

[12] For these reasons, the order of Master Albert dated April 8, 2013 staying the action commenced by the Appellant in Newmarket, Ontario must be set aside.

[13] The respondent St. Clare’s has requested that, in the event that I find as I have, this court should substitute an order for the order set aside. She pointed to s. 134 (1) as providing the court on appeal with jurisdiction to make such order as is just.

134 (1). Unless otherwise provided, a court to which an appeal is taken may,

(a) make any order or decision that ought or could have been made by the court or tribunal appealed from;

(c) make any other order or decision that is considered just.

(5). The powers conferred by this section may be exercised even if the appeal is as to part only of an order or decision, and may be exercised in favour of a party even though the party did not appeal.

[14] I agree that Rule 6.01 and s. 107 of the Courts of Justice Act require only that there be a commonality of fact and law or a common origin for a stay to be granted. But it has been held that this discretion must be exercised sparingly and the balance of convenience must weigh heavily in favour of a stay in order to make the order. Gowling Lafleur Henderson LLP v. Meredith and Allen, 2011 ONSC 2686 (SCJ), citing Etco Financial Corp. v. Royal Bank, [1999] O.J. No. 3658 (SCJ) at para. 3.

[15] The remedy of a stay is not, in my view, the only one that is appropriate here. There are other remedies that would not interfere with the Appellant’s right to bring its trust claims forward in a separate action without delay, such as the various forms of consolidation of the non-trust claims into one action while retaining the necessary separation of the breach of trust claims from the lien action. Most of the non-trust claims in the Newmarket action raise similar evidentiary issues and would utilize similar witnesses to the Toronto proceedings. They are simply the claims in the lien action augmented to in terms of higher monetary amounts claimed and dressed in different causes of action including breach of contract, negligence, delay, wrongful termination, loss of profit, negligent misrepresentation, future income loss, and intentional interference with the plaintiff’s economic relations. All of these claims arise out of the same contract and the same building project as those in the lien action. In my view, it would be an unnecessary and expensive, indeed wasteful exercise to simply let these two actions go separately to trial and it would risk the possibility of conflicting verdicts, all of which this court has a duty to prevent. Rule 104 still gives the important directive to the court to construe the rules of procedure liberally “to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.”

[16] I see nothing in the Appellant’s reply that discourages this court from attempting to bring the related claims together in and with the lien actions of which Master Albert is seized. This should be achievable while at the same time allowing the breach of trust claims of the Appellant to proceed in a separate action, though not necessarily in Newmarket. I do not intend to deal with venue now because it has not been raised. I merely want it understood that in referring to the Newmarket action, I am merely doing so to distinguish it from the Toronto lien proceedings and not as any indication of approval where the issues here are all Toronto-related and only Mr. Baichoo’s place of practice in Central East Region make it convenient for him.

[17] In my view the required type of order here should follow the same lines as the order in Bemar Construction (Ontario) Inc. v. Toronto Transit Commission (1998), 39 C.L.R. (2d) 172 (Ont. Div. Ct.). It was another case involving lien actions in Toronto where the project was built, and a separate action commenced in the Ontario General Division in Kitchener involving many of the same claims as in the Toronto proceedings as well as claims for breach of trust. This type of order has the advantage that it was before the Master in abbreviated form as requested order #5 in the respondent’s notice of motion.

[18] In my view, this court has a duty to do what it can to achieve a similar procedural coherence that the impugned order of Master Albert had tried to accomplish. The Master’s finding regarding the duplication and overlapping of issues between these actions was correct and must be addressed. I see no significant prejudice to the Appellant whose counsel is involved in the Toronto lien actions anyway.

[19] It is ordered that:

(i) the order of Master Albert dated April 8, 2013 staying the Appellant’s action commenced in Newmarket under file no. CV-13-112774-00 is hereby set aside;

(ii) the order of Master Albert awarding costs to the respondent in the amount of $3,500 is also set aside;

(iii) pursuant to sections 134 and 138 of the Courts of Justice Act and s. 107(1)(d), as well as rule 6.01(1)(d), the claims and cross-claims of Unimac in the lien actions in Toronto shall be amended by incorporating into them all of the heads of relief raised in the Newmarket action No. CV-13-112774-00 other than the claim or claims in breach of trust. The appellant shall do so within 30 days of release of these Reasons for Judgment. If either party finds that further consolidation and directions by the court as to the number and form of the pleadings in the lien actions are required, counsel may of course seek direction from the court in Toronto.

[20] If there is any difficulty in enforcing this order, the remedy of a stay of the Newmarket action would then be available, on motion to a judge of this court.

[21] If costs are not agreed, counsel may send written submissions to me at the Court House in Barrie within 30 days.

HOWDEN J.

Date: September 25, 2013