COURT FILE NO.: 18-DC-2437 DATE: 2019/03/21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Harel Davidson, Respondent/Plaintiff AND Carleton Condominium Corporation No. 73, Moving Party/Defendant

BEFORE: Justice Marc R. Labrosse

COUNSEL: Harel Davidson, Self-represented Cheryll Wood, Counsel, for the Moving Party/Defendant

HEARD: February 22, 2019

ENDORSEMENT

Overview

[1] The Respondent (Defendant in the Small Claims Court proceedings) brings this motion to dismiss the Appellant’s (Plaintiff in the Small Claims Court proceedings) appeal on the basis that the Divisional Court has no jurisdiction to hear the appeal.

[2] The first ground in support of the dismissal is that the order of the Small Claims Court deputy judge under appeal is an interlocutory order and that s. 31 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”) only allows for an appeal of a final order of the Small Claims Court.

[3] The second ground of appeal is that even if the order in question is final, the request for payment of two “amounts for non-compliance” of $500 is less than the prescribed amount of $2,500 required to appeal a final order pursuant to s. 31 of the CJA.

[4] The Appellant argues that the decision of the deputy judge finally disposes of his action as it ultimately dismisses his claim. As such, it is a final order and the Divisional Court has jurisdiction over the appeal. With respect to the prescribed amount under s. 31 (a) of the CJA, the Appellant states that the value of all the photocopies he has requested of the Respondent’s records easily exceeds $1,500 and as such, the overall value of his appeal is over the $2,500 prescribed amount.

Background

[5] The Appellant was formerly a director on the Board of Directors of the Respondent, Carleton Condominium Corporation No. 73 (the “Corporation”). He has made a number of requests under s. 55 of the Condominium Act, 1998, S.O. 1998, c. 19 (the “Act”). The Appellant became dissatisfied with the Corporation’s responses to his requests and commenced a proceeding in the Small Claims Court seeking the following relief:

(a) An order from the Ontario Superior Court of Justice pursuant to s. 55(10) of the Act to produce for examination and provide copies of, all the financial, corporate, or such other records, related to the Plaintiff’s requests to the Corporation to produce specific relevant records for examination;

(b) An order from the Ontario Superior Court of Justice pursuant to s. 55(9) of the Act, ordering the Corporation to pay the Plaintiff $500 for non-compliance with the Act in 2015/2016;

(c) An order from the Ontario Superior Court of Justice pursuant to s. 55(9) of the Act, ordering the Corporation to pay the Plaintiff $500 for non-compliance with the Act in 2017;

(d) An order from the Ontario Superior Court of Justice that a professional forensic audit of the Corporation’s financial and corporate records be conducted at the expense of the property management firm, Condominium Management Group (a non-party).

[6] In the course of the Small Claims Court action, the Respondent brought a motion to dismiss the Appellant’s claims for various grounds including that the relief requested was outside of the jurisdiction of the Small Claims Court.

[7] In his decision, the deputy judge indicated that in considering the proper jurisdiction, he had to analyse the claim and determine the pith and substance of the claim. If it was a claim for declaratory relief, then it would be outside the jurisdiction of the Small Claims Court pursuant to s. 97 of the CJA.

[8] The deputy judge made the following findings:

(a) that the claim for access to documents pursuant to s. 55(10) of the Act was simply a motion for production;

(b) that the request for a forensic audit was made to the Superior Court of Justice; and

(c) that the requests for an amount for non-compliance did not set out the non-compliance being alleged.

[9] Ultimately, the deputy judge followed the decision in Hradecky v. Hydro One Network Inc., 2014 ONSC 11543 and ordered that the action was temporarily stayed as of October 1, 2018, provided that the Appellant could bring a motion to transfer the proceeding to the Superior Court of Justice. If no such motion was brought before November 15, 2018, the Appellant’s claim was to be dismissed for want of jurisdiction.

Analysis

The Law

[10] An appeal lies to the Divisional Court from a final order of the Small Claims Court in an action for the payment of money in excess of the prescribed amount, excluding costs: see s. 31 (a) of the CJA.

[11] These appeals are heard by a single judge of the Divisional Court (CJA, s. 21(2)(b)).

[12] The “prescribed amount” is presently $2,500 (Small Claims Court Jurisdiction and Appeal Limit, O. Reg. 626/00, s. 2, as amended by O. Reg. 317/11).

[13] To determine whether the Divisional Court has jurisdiction over the merits of an appeal, one must ask if the order is a final order, and if the amount claimed in the action exceeds $2,500.

[14] The Divisional Court has no jurisdiction to hear an appeal from an interlocutory order of the Small Claims Court: see Grainger v. Windsor-Essex Children’s Aid Society (2009), 2009 ONSC 34987, 96 O.R. (3d) 711 (S.C.J.).

[15] Section 97 of the CJA states that the Small Claims Court is excluded from the power to make binding declarations of right, whether or not any consequential relief is or could be claimed.

[16] Pursuant to s. 134(3) of the CJA, on a motion, a court to which an appeal is taken may, in a proper case, quash the appeal.

[17] The classic statement concerning the power to quash is found in Schmidt v. Toronto-Dominion Bank (1995), 1995 ONCA 3502, 24 O.R. (3d) 1 (C.A.). The Court of Appeal observed that there are two situations where such motions may be brought: first, where the court has no jurisdiction to hear the appeal on the merits, and second, where the appeal is said to be manifestly devoid of merit. In the latter case, the Court stated that such a motion will seldom succeed, because it is difficult to determine such a motion without hearing the entire appeal.

Final or Interlocutory Order

[18] The challenge posed by this appeal is that the originating claim sought out very distinct relief falling within different jurisdictions:

(a) under s. 55(9) of the Act, the Appellant was entitled to seek an order for the recovery of a sum from the Respondent by an action in the Small Claims Court;

(b) under s. 55(10) of the Act, the Appellant was entitled to seek an order to examine or to obtain copies of records described under s. 55 of the Act from the Small Claims Court; and

(c) under s. 130 of the Act, the Appellant was entitled to seek from the Superior Court of Justice, an order appointing an inspector to investigate the corporation’s records mentioned in s. 55(1) of the Act.

[19] While the relief sought in the Claim did not specifically mention an investigator under s. 130 of the Act, the request for a forensic audit is akin to the appointment of an investigator. Regardless, such relief is declaratory in nature and the provisions of s. 97 of the CJA would also apply.

[20] The deputy judge was correct in assessing the claim by using the pith and substance analysis (see Pilon v. Lavigne, 2016 ONSC 1965 (Div. Ct.)). The Appellant drafted his claim seeking declaratory relief that was not available to a deputy judge of the Small Claims Court. He also sought other relief under ss. 55(9) and 55(10) of the Act that was properly sought from the Small Claims Court. However, the request for a forensic audit is clearly the true character or nature of the claim in question. The other relief, production of records and a payment for non-compliance could still have been pursued in the Superior Court of Justice as the jurisdiction of those claims is not exclusively reserved to the Small Claims Court: see Lahrkamp v. Metropolitan Toronto Condominium Corp. No. 932, 2010 CarswellOnt 11373.

[21] Having considered the submissions of the parties, I conclude that the order of the deputy judge was interlocutory. The nature of the order, allowing the Appellant to bring a motion to transfer the claim for relief to the Superior Court falls squarely under the rationale set out by Nordheimer J.A. in Houle v. St. Jude Medical Inc., 2018 ONCA 88, 420 D.L.R. (4th) 444.

[22] More particularly, I adopt the observation in Inforica Inc. v. CGI Information Systems and Management Consultants Inc., 2009 ONCA 642, 97 O. R. (3d) 161, where Sharpe J.A. said, at para. 26:

I recognize that failure to satisfy an order for security for costs may lead to a dismissal of the claim, but the sanction for non-compliance with an order cannot alter the nature of the order itself. … But if the claim is dismissed, the dismissal flows from the party's failure to comply with the interlocutory or procedural order, not from the order itself, and does not alter the interlocutory or procedural nature of the order that led to dismissal. [Citations omitted.]

[23] In Houle, the motion judge approved a funding agreement, subject to certain changes being made to some of the terms, failing which the motion would be dismissed. The Court of Appeal found that a final order must deal with the substantive merits and not procedural rights, regardless of how important the procedural rights are.

[24] Here, the deputy judge imposed a temporary stay to allow the Appellant to move to transfer the proceeding to the Superior Court of Justice. This was to allow the Appellant to continue his claim for a professional forensic audit. While it may have been open to the Appellant to abandon that claim and simply continue to seek his relief under ss. 55(9) and 55(10) of the Act, there is no indication that he attempted to do so. Consequently, the deputy judge was correct in requiring that the claim be transferred, failing which it would be dismissed.

[25] With this said, there is no dispute that the Appellant’s claim has not been determined on the merits. There has simply been a determination that the Appellant cannot seek the declaratory relief requested in the Small Claims Court. Subject to any possible legal issues preventing a new claim, such as a limitation period issue, I have not been presented with any reason that the Appellant cannot renew his requests under ss. 55 of the Act. While the forum for such relief may now be to the Condominium Authority Tribunal, the Appellant will benefit from having his claim brought before a tribunal that appears to have been created specifically to deal with such requests.

[26] Following the interlocutory order of the deputy judge, the Appellant simply had to bring a motion to transfer the action to the Superior Court of Justice. By failing to do so, he brought about the dismissal of his claim but this does not change the interlocutory nature of the order temporarily staying the claim. No substantive right was determined by ordering the temporary stay of procedure pending a transfer to the Superior Court. While the result is the end of the litigation, that result is the consequence of Appellant’s decision to seek declaratory relief and failing to move to transfer the claim to the Superior Court.

Appeal below the prescribed amount

[27] I will also comment briefly on the Respondent’s second ground seeking to quash the appeal given that the appeal does not meet the prescribed amount under s. 31 (a) of the CJA.

[28] A determination of this issue is easier where there has been an award or refusal of a claim in excess of $2,500.

[29] In these circumstances, the pith and substance of the claim is for an order for a forensic audit. The Appellant also seeks for documents to be produced and copies provided. The Appellant’s request for the payment of an amount for non-compliance was clearly the least important of the requested relief. I specifically reject the argument that the value of the photocopies meets the threshold of the prescribed amount.

[30] Just as it was appropriate for the deputy judge to determine the pith and substance of the claim, the same applies to the appeal. The request for money is a collateral issue. Had I concluded that the order in question was final, I would not have dismissed the appeal. The true character of the appeal would be the dismissal of the claim for declaratory relief and not the collateral claim for minimal financial compensation.

Conclusion

[31] I thereby conclude that the order of Deputy Judge McNeely was interlocutory and that pursuant to s. 31 of the CJA, there is no appeal from such an order. The appeal is therefore quashed as the Divisional Court does not have the jurisdiction to hear an appeal from an interlocutory order of the Small Claims Court.

Costs

[32] If the parties are unable to agree on the issue of costs, the Respondent will have 20 days to file written cost submissions and the Appellant will have 20 days to respond. Submissions will not exceed three pages, excluding bills of costs, costs outlines and attachments. The costs submissions will comply with Rule 4 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

Justice Marc R. Labrosse Date: 2019/03/21