Court File and Parties

COURT FILE NO.: CV-17-62-OT DATE: 20180926 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Dr. Leonard Reeves Foundation Plaintiff – and – The Coterie Group Inc. and Christian Gallant, also known as Chris Gallant Defendants

COUNSEL: James Spiroff, for the Plaintiff Nour Jomaa, for the Defendants

HEARD: August 13, 2018

RULING ON MOTIONS

HEBNER J.:

[1] This action was commenced in Woodstock, Ontario by statement of claim issued May 8, 2017. The defendants brought a motion for an order that the action be transferred to Windsor, Ontario. The plaintiff opposes that motion and brought a cross motion seeking an order that, in the event the action is transferred to Windsor, it be consolidated with, or heard at the same time as, three Windsor Small Claims Court actions bearing file numbers 17–56861, 308/17, and 18–59582. This is my ruling on the two motions.

The Claim

[2] The plaintiff is a private foundation with its registered head office in Woodstock. The foundation invests in and finances business and real estate development projects. According to the statement of claim, the foundation donates its income to local charitable organizations and other qualified donees. Leonard Reeves is the president of the foundation.

[3] The defendant, The Coterie Group Inc. (“Coterie”), is a funding and/or business consultant. Chris Gallant is an officer and director of Coterie.

[4] The allegation is that Mr. Gallant was contacted by individuals representing Panther Corp. who wished to turn a property located at 675 Tecumseh Road East in Windsor (a former bowling business called Bowlero and referred to herein as “the Bowlero property”) into an amusement park. They needed funding. Mr. Gallant contacted Mr. Reeves. Mr. Reeves traveled to Windsor to view the property, returned to Woodstock and then told Mr. Gallant that he was willing to provide funding. The foundation loaned $705,000 to Panther Corp., acting in trust for 2461245 Ontario Ltd. The loan was secured by a mortgage on the Bowlero property. The mortgagor defaulted on the mortgage two months in a row and Mr. Reeves commenced power of sale proceedings. Mr. Reeves hired Mr. Gallant to manage the Bowlero property during the power of sale proceedings. The Bowlero property ultimately sold for only $500,000 and, after tax arrears and transaction costs, the foundation received $307,000. The foundation claims to have sustained losses amounting to approximately $500,000.

[5] The foundation’s claim against the defendants is grounded in breach of fiduciary duty and false, reckless or negligent misrepresentations.

[6] The action is in the discovery stage with examinations for discovery anticipated to take place over the next few months.

The Small Claims Court Claims

[7] There are three outstanding Small Claims Court actions all currently in Windsor. They can be summarized as follows:

1. Action number 17 – 56861 (“the Bowlero management action”) Coterie claims the sum of $32,044.54 for property management services allegedly provided by Mr. Gallant at the Bowlero property. The claim is based on an invoice rendered by Coterie in 2016. The claim was issued February 8, 2017, in which Coterie claims payment up to the monetary jurisdiction of the Small Claims Court ($25,000).

2. Action number 308/17 (“the referral fee action”) This action was commenced by Mr. Reeves against Mr. Gallant and Coterie for the sum of $25,000 pursuant to an alleged contract that Gallant and Coterie would pay a 25 percent broker’s fee to Mr. Reeves for referrals that resulted in successful lending transactions. Although the referral fee action was commenced at the Woodstock Small Claims Court, the parties agreed that the referral fee action would be transferred to the Windsor Small Claims Court to be heard at the same time as the Bowlero management action. A consent order was obtained to that effect on November 28, 2017.

3. Action number 18 – 59582 (“the Windsor Moose Lodge management action”) Coterie commenced this action against Mr. Reeves and two corporations associated with Mr. Reeves for the sum of $1,361.09 for property management services allegedly provided pursuant to an agreement. The Windsor Moose Lodge management action was commenced May 16, 2018.

[8] Trial dates are set for the Bowlero management action and the referral fee action on October 1 and 2, 2018.

Positions of the Parties

The Defendants

[9] Coterie and Mr. Gallant seek to transfer this action from Woodstock to Windsor. They make the following arguments:

• the events that took place occurred in Windsor;
• the claimed damages occurred in Windsor;
• the subject matter of the claim is the Bowlero property which is located in Windsor;
• the balance of convenience favours the trial of the action in Windsor;
• there are greater judicial resources in Windsor and, should the action be transferred to Windsor, mediation is mandatory.

[10] The defendants oppose an order that this action be tried together with the Small Claims Court actions. It is the defendants’ position that the Small Claims Court actions ought to proceed as scheduled. The defendants point out that s. 107(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43, prohibits the transfer of a Small Claims Court proceeding “to the Superior Court of Justice without the consent of the plaintiff in the proceeding in the Small Claims Court.” The defendants submit that the motion for consolidation or a trial together was brought by the plaintiff for tactical reasons; that each Small Claims Court claim deals with a discrete issue between the parties; and that the Small Claims Court can deal with these discrete issues expeditiously.

The Plaintiff

[11] The plaintiff opposes the motion to transfer the proceeding to Windsor. The plaintiff makes the following arguments:

• the plaintiff commenced this proceeding in the place of its choice;
• Windsor is not a “substantially better” venue for the action;
• Mr. Reeves resides in Woodstock and Mr. Gallant resides in Tilbury;
• the damages do not relate to the Bowlero property; instead they relate to the loan being under secured and the alleged misrepresentations made by Mr. Gallant.

[12] As for the cross motion, the plaintiff requests a consolidation of the Small Claims Court claims, or trial together with this action, only if this action is transferred from Woodstock to Windsor.

Motion to Transfer

[13] Rule 13.1.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, deals with transfer of an action to another county. It provides, in pertinent part, that:

13.1.02(2) … the court may, on any party’s motion, make an order to transfer the proceeding to a county other than the one where it was commenced, if the court is satisfied,

(b) that a transfer is desirable in the interest of justice, having regard to,

(i) where a substantial part of the events or omissions that gave rise to the claim occurred,

(ii) where a substantial part of the damages were sustained,

(iii) where the subject matter of the proceeding is or was located,

(iv) any local community’s interest in the subject matter of the proceeding,

(v) the convenience of the parties, the witnesses and the court,

(vi) …

(vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits,

(viii) …

(ix) any other relevant matter.

[14] The Divisional Court, in Chatterson v. M&M Meat Shops Ltd., 2014 ONSC 1897, directs the court to take “a holistic application of the factors in subrule 13.1.02(2).” The Divisional Court went on to say that “if the plaintiff’s place of trial is not reasonable and the defendant has moved for a change of venue to a reasonable location, then a change of venue will likely be in order.” However:

[I]f the plaintiff’s choice of venue is reasonable and the defendant moves for a change of venue, then a comparison of the two venues is required. … [I]n this situation the defendant’s choice has to be significantly better in order to prevail. This is because the Rules permit the plaintiff to choose the venue at the commencement of the claim.

See: para. 29.

[15] The plaintiff chose Woodstock as the place of trial. Given that the plaintiff’s head office is in Woodstock, and Leonard Reeves resides in Woodstock, the chosen place of trial is reasonable. The question, therefore, is whether Windsor is a significantly better venue. To consider that question, I must have regard to the factors set out in r. 13.1.02 (b). I shall consider them individually.

(i) where a substantial part of the events or omissions that gave rise to the claim occurred

[16] In this action the plaintiff claims that they relied on the defendants to provide financial advice and fairly broker mortgage transactions that the defendants introduced to the foundation. The plaintiff alleges a fiduciary duty and claims that the defendants breached that duty. The plaintiff alleges that it relied on false, reckless or negligent misrepresentations made by the defendants. The plaintiff alleges that the defendants failed to abide by the duties of a mortgage broker. Thus, the plaintiff’s allegations against the defendants relate to and arise out of their business relationship and communications between the parties. Without further evidence on where, or how, those communications took place, it is impossible to determine where the substantial part of the events occurred. In my view, this factor does not assist the defendants.

(ii) where a substantial part of the damages were sustained

[17] The defendants rely on 2305769 Ontario Ltd. v. Youth Opportunities, 2016 ONSC 4447. In that case, the plaintiff and the defendant were next-door neighbours in London, Ontario. The plaintiff alleged that its property was damaged in the course of construction and renovation work carried on by the defendant on the defendant’s neighbouring property. The plaintiff commenced its action in Milton, Ontario. The defendant brought a motion for an order transferring the action to London. The court found that this factor favoured a transfer of the action as the claim related to property damage in London and a depreciation of the value of the property in London.

[18] In my view, the facts at hand are different than in Youth Opportunities. I agree with counsel for the plaintiff that, in so far as this factor is concerned, the damages would be felt by the plaintiff, whose office is in Woodstock. In that regard, this case more closely resembles Siemens Canada Ltd. v. Ottawa, 2008 48152 (ON SC), 93 O.R. (3d) 220, a case involving a claim for damages arising out of an aborted project to construct a light rail mass transit system in Ottawa. The plaintiff commenced the action in Peel region. The defendant brought a motion for a change of venue to Ottawa. In considering this factor, at para. 39, Corbett J. said, “it would probably be fair to say that the damages would be suffered throughout the company, but would be most likely felt in the regional offices in Peel.” The same can be said for the foundation. The damages would most likely be felt in the foundation’s office in Woodstock. This factor favours the plaintiff.

(iii) where the subject matter of the proceeding is or was located

[19] The defendants claim that the subject matter of the action is the Bowlero property and is situated in Windsor. The plaintiff claims that the subject matter is not the Bowlero property but rather the advice given by the defendants and relied upon by the plaintiff. In that regard, the plaintiff claims that the geographical area of the security for the loan is not determinative. I agree with counsel for the plaintiff. In my view, this factor is neutral.

(iv) any local communities interest in the subject matter of the proceeding

[20] The defendants suggest that this is either a neutral factor or, at best, favours Windsor. The defendants say that the key witness in the case is Mr. Musgrove, the individual who negotiated with Mr. Reeves on behalf of Panther Corp. Mr. Musgrove is, apparently, a former mayoral candidate of Windsor.

[21] The plaintiff suggests that this factor weighs in its favour. The plaintiff asserts that the foundation is a charitable organization benefiting the communities of Oxford County and, accordingly, the Oxford County community has a greater interest in the subject matter of the action.

[22] Mr. Musgrove is not a party to the action. I have difficulty with the argument that the Windsor community will have an interest in the subject matter of a proceeding between a charitable foundation based in Woodstock and a mortgage/financial consultant. On the other hand, there is insufficient evidence before the court to determine the extent of the foundation’s involvement in the Oxford County community. I find this to be a neutral factor.

(v) the convenience of the parties, the witnesses and the court

[23] It is this factor that generated the most argument. The plaintiff’s lawyer is located in Woodstock. The defendants’ lawyer is located in Windsor. The plaintiff’s office is in Woodstock. The defendants’ office is in Belle River. Mr. Reeves lives in Woodstock. Mr. Gallant lives in Tilbury. When considering only the parties and their counsel, both venues are equally convenient.

[24] The defendants have indicated that 14 witnesses are anticipated to be called by the defendants. Of those 14 witnesses, 10 are alleged to reside in Windsor, two in Belle River and two in Tilbury.

[25] The plaintiff asserts that the plaintiff will need to call approximately five witnesses. The plaintiff asserts that the witness list generated by the defendants is inflated, and includes Mr. Gallant’s wife and every agent or broker involved in the Bowlero property. Counsel for the plaintiff asserts that he has interviewed several of these proposed witnesses and questions the relevance and necessity of their evidence.

[26] Certainly, the defendants’ witness list is longer than that of the plaintiff and I must take counsel’s word for the necessity of a witness’s attendance. This factor would seem to favour the defendants’ position. However, I note that the parties have not yet had examinations for discovery. The substance of the evidence of each of the witnesses, and the anticipated length of their evidence, has not been provided. It seems to me that this factor could be better considered following the completion of examinations for discovery.

(vii) any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits

[27] The defendants suggest that it would be more convenient to have the matter transferred to Windsor as there are greater judicial resources in Windsor and the wait time for trial is shorter. The defendants point to the mandatory mediation requirement that exists in Windsor but not in Woodstock.

[28] The plaintiff does not agree that the wait time for a trial would be longer in Woodstock. The plaintiff also points out that the City of Windsor and the City of Woodstock are both within the Southwest judicial region and the availability of judicial resources and facilities in both jurisdictions is comparable.

[29] I agree with counsel for the plaintiff. The justices of the Southwest judicial region travel to all courthouses within the region when necessary and I am not aware of any significant differences in wait times for a trial.

[30] Counsel for the plaintiff indicated that his client was prepared to attend voluntary mediation. Accordingly, the mediation requirement in Windsor is neutral in the analysis.

(ix) any other relevant matter

[31] Mr. Gallant points to his own personal financial situation. He claims that there is a difference in the parties’ economic resources and that if the action is continued in Woodstock it would cause him significant financial hardship. Mr. Gallant raises the issue of access to justice. The plaintiff points out that Mr. Gallant deposed that he obtained a mortgage agent licence in April 2018 and currently operates a mortgage brokerage firm in Windsor.

[32] In my view, this is not a matter of access to justice. Both Mr. Reeves and Mr. Gallant, by all accounts, are sophisticated businessmen. In such circumstances, it seems to me to be unreasonable to compare their relative means for the purpose of determining the appropriate place of trial.

[33] Windsor and Woodstock are approximately 2½ hours apart by car. The distance is manageable for both parties regardless of which location is chosen. Instead, this seems to be a matter of the cost of litigation. That issue can be dealt with by way of appropriate orders for costs when necessary.

Disposition

[34] Taking all of the factors into account, at this time, on balance, I cannot find that Windsor is a substantially better venue than Woodstock. Accordingly, for the foregoing reasons, the defendants’ motion to transfer this action to the City of Windsor is dismissed, without prejudice to the right to revisit the issue after completion of examinations for discovery.

[35] Having dismissed the defendants’ motion, given the position taken by the plaintiff, it is not necessary to consider the plaintiff’s motion for consolidation of this action with the three Small Claims Court claims.

Costs

[36] The plaintiff was successful in defending the defendants’ motion for transfer and, accordingly, is entitled to its costs of that motion in the event the plaintiff is successful in its claim. Counsel for both parties provided a costs outline on the motion. The plaintiff’s counsel claims costs in the amount of $4,392.58. That amount is, in my view, reasonable and is an amount the defendants could reasonably be expected to be required to pay. Accordingly, I order that the defendants pay to the plaintiff its costs of the motion, in the cause, in the sum of $4,392.58.

Original signed by Justice Pamela L. Hebner Pamela L. Hebner Justice

Released: September 26, 2018