Court File and Parties

COURT FILE NO.: CV-16-544173 DATE: 2019/06/10 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Vince Cappelli Plaintiff – and – NOBILIS HEALTH CORP., HARRY JOSEPH FLEMING, CHRISTOPHER H. LLOYD, ANDREW CHEN, KENNETH J. KLEIN and CALVETTI FERGUSON, P.C. Defendants

Counsel: Andrew Morganti, Eli Karp and Hadi Davarinia for the Plaintiff Alan Lenczner, Nilou Nezhat and Brendan Morrison for the Defendant Nobilis Health Corp.

Proceeding pursuant to the Class Proceedings Act, 1992

HEARD: March 18, 2019

PERELL, J.

REASONS FOR DECISION

[1] Although there is no dispute about the form and content of the Order that I made in this action, the parties disagree about whether I should sign the Order or wait until after a “motion for reconsideration” is heard.

[2] Pursuant to the Class Proceedings Act, 1992 [1] and s. 138.3 of the Ontario Securities Act [2] and the comparable statutes across Canada, Vince Cappelli sued Nobilis Health Corp., amongst others, for misrepresentation in the secondary market for corporate securities. Mr. Cappelli sought certification of a class action and leave to pursue his statutory claim for secondary market misrepresentations as against Nobilis. I declined to grant leave, and I dismissed the certification motion. [3] I decided Nobilis’ claim for costs. [4]

[3] Nobilis drafted an order, and although Mr. Cappelli had no dispute about the form and content of the order, Mr. Cappelli refused to approve the order. The signature dispute came to my attention by an exchange of correspondence, which letters I shall let speak for themselves.

[4] The correspondence began on June 5, 2019, when I received the following letter from Alan Lenczner, counsel for Nobilis.

Dear Justice Perell

RE: Nobilis Health Corp et al ats Vince Cappelli

Court File No. CV-16-544173

Our File No.: 48583

We attach an Order which you pronounced on April 10, 2019. Kindly affix your fiat so that we may have it issued.

Counsel for the plaintiff takes no issue with either the form or the content of the Order. They do not wish it to be issued until after their motion is heard on July 29 and determined and will not approve the Order for that reason.

Their motion is for: (a) leave to amend the Amended Fresh as Amended Statement of Claim; (b) leave to add a new representative Plaintiff (previously a stranger to the litigation); (c) leave to recommence the certification proceedings; and (d) a “reconsideration” of the plaintiff’s failed motion on the basis of the new representative plaintiff and new claim, if leave is granted (which is not actually a motion for reconsideration).

Your Order of April 10 is a final Order. It cannot be impacted by the outcome of the plaintiff's motion(s). The determination of those motions will result in a subsequent Order(s).

Yours very truly,

Alan J. Lenczner, Q.C.

[5] Mr. Lenczner’s letter was followed on June 6, 2019, when I received the following letter from Eli Karp, counsel for Mr. Cappelli:

Dear Justice Perell

Re: Cappelli v. Nobilis - Response to Letter from Defendant's Counsel

Dated June 5, 2019

Court File No: CV-16-544173

We write in response to the letter of Mr. Lenczner dated June 5, 2019, which is included herein for ease of reference ("Lenczner Letter").

As indicated in the Lenczner Letter, the Plaintiffs have served a motion returnable before Your Honour on July 29 ("the Reconsideration Motion") inter alia to reopen and reconsider the Plaintiffs Motion for Leave to Proceed and the Certification Motion ("the Motions"), which were dismissed by Your Honour, on the basis of an Amended Statement of Claim.

The Plaintiff requests that Your Honour not fiat the draft order enclosed with the Lenczner Letter in case to do so might inhibit or preclude Your Honour's consideration of this motion on July 29.

Given that it is arguable that after the Order dismissing the Motions is issued and entered Your Honour is functus officio and that the Motions cannot be reopened, the Plaintiffs do not wish the Order dismissing the Motions to be issued and entered prior to the hearing of the Reconsideration Motion.

While the Plaintiffs are not aware if the Defendant is attempting to have the Order issued and entered for that very purpose, the Plaintiff is not aware of any other reason why the Defendant is now insisting that a formal order be issued and entered.

For the above reasons the Plaintiff would ask that Your Honour hold off on signing the Order submitted by the Defendants until after the Motion for Reconsideration is heard. If the Motion for Reconsideration is ultimately dismissed, and any appeal from the same is exhausted, the Plaintiff will immediately consent that the Order submitted with the Lenczner Letter be issued and entered forthwith.

Sincerely,

MORGANTI & CO., P.C.

Eli Karp.

[6] Mr. Karp’s letter was followed on June 7, 2019, when I received the following letter from Mr. Lenczner:

Dear Justice Perell:

RE: Nobilis Health Corp et al ats Vince Cappelli

Court File No. CV-16-544173

Our File No.: 48583

In your Reasons of April 10 you clearly pronounced the result that the plaintiff's motion was dismissed. That judgment is final, and the force and effect of the pronouncement is contained therein. No one needs to wait months for the formal Order to know and rely on the Court's determination.

The pronouncement renders Your Honour functus officio with regard to the claims that were advanced in the Amended Fresh as Amended Statement of Claim and adjudicated by you. Some examples elucidate the point that it is the pronouncement and not the formal Order that is the Court's determination. A formal Order is only a summary extract from the Reasons of the result:

1. An appeal must be brought within 30 days of the pronouncement, not within 30 days of the formal Order.
2. An appeal has been filed and the matters you adjudicated are now before the Court of Appeal. That step too renders Your Honour functus.
3. If a Court orally or by written endorsement pronounces a prohibition on a party's activity, the injunction operates and is effective from that moment, not when a formal Order, perhaps a day or two later, is issued.

The plaintiff's characterization of his new motions as a "reconsideration" is belied by the content of the motions themselves. They are no such thing. His starting point is for leave to issue a Second Fresh as Amended Statement of Claim with new facts, new disclosures and misrepresentations and an altogether new representative plaintiff. This is not only absurd on its face, it is also an abuse of process. The draft pleading was already substantially put before the Court on February 5 but then Cappelli advised the Court a week later he had abandoned it. That is a new claim, not a “reconsideration”.

Nobilis is entitled to its Order.

Yours very truly,

Alan J. Lenczner, Q.C.

[7] The disagreement between the parties is novel and how the doctrines of functus officio or abuse of process apply in the context of a case managed class action with the plenary power available to the court under s. 12 of the Class Proceedings Act, 1992 is unexplored territory.

[8] What seems, however, to be clear is that Mr. Cappelli’s omnibus motion involving new representative plaintiffs and amended pleadings and a redo of leave motion is not a motion under the Rules of Civil Procedure, which rules provide a very narrow jurisdiction to amend or vary orders after hearings. Therefore, as far as the rules of Civil Procedure are concerned, there is no reason why I should not sign the Order drafted by Nobilis, and, thus, this decision is my fiat to have the Order issued and entered.

[9] To be clear, in issuing this fiat, I am not deciding whether or not I am functus officio or whether or not the omnibus motion is an abuse of process. Those issues will be determined in the context of the omnibus motion.

Perell, J. Released: June 10, 2019

Footnotes

[1] S.O. 1992, c. 6. [2] R.S.O. 1990, c. S.5. [3] Cappelli v. Nobilis Health Corp., 2019 ONSC 2266. [4] Cappelli v. Nobilis Health Corp., 2019 ONSC 3376.