COURT FILE NO.: CV-20-00641053-0000
DATE: 20221118
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MDG NEWMARKET INC. o/a ONTARIO ENERGY GROUP, Plaintiff
AND:
ALICIA SYMONDS, ARTHUR WALKER, BEVERLY MARIUTTI, BRANDON SOMMERVILLE, BRINLEY FORD, BRUCE HALLIDY, BRYAN R. LEMOINE, CATHY WIDMEYER, CLAUDETTE GOODBOUT, COLLEEN RITTER, DAVID COMBS, DAVID COOPER, DAVID WILLARD, DAWNE KIHM, DIANNE HORTON BARNSLEY, DILIP PATEL, DON CAO TRINH, DORIS LARABIE, EMERITA BRODIE, EVELYN HUNTE, FEDRICK BIHUN, GREG TAYLOR, HELEN NUTT, JACYNTHE COLLIN, JAMES HUNTER, JAMES TAPLEY, JANE EVANS, JIM LEATHERDALE, JOHANNA PRECHTL, JOHN BORISKO, JOSEPHINE RECTO, KATHARINE LINTON, KENNETH CONTE, KENNETH RALPH, KERRY COLLETT, LADISLAV SOLC, LORRAINE NEUFELD, MAIDA KARAHLILOVICH, MARGARET MCCRIMMON, MARGARET ROBERTSON, MARGERY FRASER, MARILYN MURPHY, MICHAEL COOK, MICHAEL VACCARO, MORRISON HOOVER, MYRTLE PINNCOCK, NEILSON LESLIE, NICOLE MACLAREN, NOEL O’CARROLL, OLGA APOLLONOVA, RAYMOND DOUCET, ROBERT PRIMMER, ROBERT SEARS, RONALD PIKE, RUTH BLACK, SHARON ZIEGLER, SHIRLEY EARLE, SUSAN RYMER, THOMAS LAKE, TIMOTHY JONES, VERNON CULM, VINCE MCLEAN, VIRGINIA OVER, VIVIAN LALIBERTY, WAYNE COLLINS, WESLEY GRAY, WOLFGANG FROEBER, Defendants
BEFORE: VERMETTE J.
COUNSEL: Elliot Birnboim and Michael Crampton, for the Plaintiff
Brian Radnoff and Dylan Augruso, for the Defendants Alicia Symonds, Arthur Walker, Brandon Sommerville, Brinley Ford, Bruce Hallidy, Bryan R. Lemoine, Cathy Widmeyer, Claudette Goodbout, Colleen Ritter, David Cooper, David Willard, Dianne Horton Barnsley, Dilip Patel, Doris Larabie, Emerita Brodie, Evelyn Hunte, Greg Taylor, Helen Nutt, Jacynthe Collin, James Tapley, Jane Evans, Jim Leatherdale, John Borisko, Katharine Linton, Kenneth Conte, Kenneth Ralph, Michael Vaccaro, Neilson Leslie, Nicole Maclaren, Noel O’Carroll, Robert Primmer, Robert Sears, Ronald Pike, Ruth Black, Sharon Ziegler, Shirley Earle, Susan Rymer, Timothy Jones, Virginia Over, Wayne Collins and Wolfgang Froeber
HEARD: June 21, 2022
ENDORSEMENT
[1] The Defendants Alicia Symonds, Arthur Walker, Brandon Sommerville, Brinley Ford, Bruce Hallidy, Bryan R. Lemoine, Cathy Widmeyer, Claudette Goodbout, Colleen Ritter, David Cooper, David Willard, Dianne Horton Barnsley, Dilip Patel, Doris Larabie, Emerita Brodie, Evelyn Hunte, Greg Taylor, Helen Nutt, Jacynthe Collin, James Tapley, Jane Evans, Jim Leatherdale, John Borisko, Katharine Linton, Kenneth Conte, Kenneth Ralph, Michael Vaccaro, Neilson Leslie, Nicole Maclaren, Noel O’Carroll, Robert Primmer, Robert Sears, Ronald Pike, Ruth Black, Sharon Ziegler, Shirley Earle, Susan Rymer, Timothy Jones, Virginia Over, Wayne Collins and Wolfgang Froeber (“Moving Defendants”)[^1] move to strike the Plaintiff’s claim against them, without leave to amend, on the grounds that it does not disclose a reasonable cause of action and it is an abuse of process.
A. FACTUAL BACKGROUND
1. The parties
[2] The Plaintiff, MDG Newmarket Inc. o/a Ontario Energy Group (“OEG”), is an Ontario corporation with its head office in Mississauga. Until 2016, it was in the business of marketing, delivering and installing HVAC[^2] equipment to residential consumers in Ontario.
[3] The Defendants are individuals who reside in Ontario. They each commenced an action against OEG and Enbridge Inc. (“Enbridge”) in the Small Claims Court in relation to contracts that they allegedly entered into with OEG. The Small Claims Court actions were commenced on behalf of the Defendants by a paralegal, Mr. Eric Sabbah.
2. The action
[4] This action was commenced on May 15, 2020. OEG seeks the following relief:
a. The sum of $15,000.00 for breach of contract against 46 Defendants (“Breach of Contract Defendants”).
b. The sum of $50,000.00 for defamation and slander of goods against 30 Defendants (“Defamation Defendants”) and an order against the Defamation Defendants requiring them to withdraw their complaints to Enbridge regarding payments on rental contracts with OEG.
c. An order: (i) declaring that the Defendants hold any funds remitted to them by Enbridge in trust for OEG on the basis of a remedial constructive trust as a remedy for unjust enrichment; (ii) requiring the Defendants to pay to OEG any funds remitted to them by Enbridge; (iii) in the alternative, requiring the Defendants to pay in court any funds remitted by Enbridge pending the disposition of this action.
d. Punitive damages in the amount of $50,000.00 payable by each of the Defendants.
e. An order: (i) traversing 67 Small Claims Court actions commenced in Toronto to the Superior Court of Justice and ordering that they be heard together with this action; or (ii) staying the same 67 Small Claims Court actions.
[5] In its Statement of Claim, OEG alleges that the Defendants have engaged in a malicious and high-handed abuse of process in the Small Claims Court actions and in participating in what it calls the “Enbridge Gambit”, which it defines as follows: (a) making baseless complaints to Enbridge about OEG; (b) refusing to engage in any discussion about the resolution of the complaints; and (c) initiating the Small Claims Court actions involving Enbridge. According to OEG, the Enbridge Gambit takes advantage of an alleged “loophole” in the contract between Enbridge and OEG regarding the collection of payments and the refund of payments by Enbridge.
[6] OEG makes the following allegation of breach of contract against the Breach of Contract Defendants:
By exploiting the Enbridge Gambit and causing Enbridge to cease collecting Rental Payments and remitting same to OEG, the Breaching Defendants have breached their obligation to make timely payments. Per their agreements with OEG, the Breaching Defendants now owe for all amounts under the remaining Term of their agreement, details of which will be provided at trial, but which OEG estimates to be not more than $15,000.00 in the case of each Breaching Defendant.
[7] OEG alleges against the Defamation Defendants that they have caused injury to OEG’s reputation “by transmitting contrived and baseless complaints about OEG and its products to Enbridge.” The alleged complaints include complaints that certain Defendants were: (a) tricked or misled by sales representatives; (b) not informed that a lien would be registered on their residence as security for their obligations; and (c) not informed that their payments would increase over time.
[8] The Statement of Claim contains the following allegation regarding the claim for unjust enrichment and constructive trust:
The Enbridge Gambit has unjustly enriched the Defendants who have received a remittance of funds from Enbridge as aforesaid. There is a corresponding loss to OEG and there is no juristic reason for such loss. As a remedy, the OEG seeks a declaration that any proceeds recovered by such Defendants from Enbridge are impressed with a remedial constructive trust. In good conscience, the said Defendants ought not be permitted to retain those proceeds and such constructive trust imposed.
[9] OEG alleges the following in support of the relief it seeks regarding the transfer or stay of the Small Claims Court actions: (a) the “cookie cutter” nature of the Small Claims Court actions and the complaints to Enbridge; (b) the multiplicity of proceedings on identical issues; (c) the multiple common parties and counsel; and (d) the need to facilitate a more efficient administration of justice and use of court resources.
[10] The only Statement of Defence that has been delivered in this action was filed by the Defendant Margaret McCrimmon, who is not one of the Moving Defendants. In her Statement of Defence, Ms. McCrimmon alleges that she was not aware of the Small Claims Court action commenced in her name by Mr. Sabbah until she received the Statement of Claim in this action.
3. Small Claims Court actions
[11] The Moving Defendants commenced their respective Small Claims Court actions in the first quarter of 2020. The defendants to the Small Claims Court actions are OEG, Eugene Farber and Enbridge.[^3] Mr. Farber is the President and directing mind of OEG. Enbridge is alleged to both bill and collect money for third party HVAC companies by way of an agreement and orders issued by the Ontario Energy Board.
[12] The Moving Defendants allege that they signed a contract with OEG as a result of high-pressure sales tactics and misrepresentations of OEG’s door-to-door sales representatives. They each seek judgment in the amount of $35,000, consisting of general damages in the amount of $10,000 and punitive, aggravated and special damages in the amount of $25,000.
[13] The causes of action that are alleged against OEG are breach of contract, negligence, negligent misrepresentation, fraud, deceit and slander of title. The Moving Defendants also allege that they were made to sign contracts with OEG under fraudulent pretenses, and that their contracts are unenforceable and in breach of provisions of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A (“CPA”).
[14] OEG and Mr. Farber have defended each of the Small Claims Court actions.
[15] In their defences, which were delivered in April 2020, OEG and Mr. Farber deny the allegations against them and state that such allegations “are contrived and an abuse of process.” They allege that the actions were commenced after the expiry of the limitation period and rely on some of the findings made in a class action commenced against OEG to argue res judicata with respect to certain issues. They also refer to the “Enbridge Gambit”:
These Defendants state that the act of making such baseless complaints and Small Claim Court actions involving Enbridge (together or individually “the Enbridge Gambit”) is tactical: it is designed to take advantage of a “loophole” in the Enbridge Contract which provides that, regardless of the merit of such complaint, Enbridge will cease collection of the Rental Payments entirely and refund two years of payments. [Emphasis in the original.]
[16] OEG also claims set-off and alleges that it suffered damages as a result of the “Enbridge Gambit”. It states the following in its defences:
Set-Off of Damages
Ontario Energy Group states that its damages as a result of the Enbridge Gambit include but are not limited to:
(a) The loss of cash flow from Enbridge collections from the customers for the balance of the contract;
(b) The rebate of any previously paid amounts to the customers, which would be in addition to the amounts referred to above;
(c) The potential adverse impact on the business relationship with Enbridge as a result of the false complaints; and,
(d) The loss of Home Trust Company’s financing of Ontario Energy Group in connection with any defaulting customer and the potential adverse impact on that business relationship.
The full particulars of these damages will be provided at trial.
These damages arise not only from the Plaintiff’s breach of contract and unjust enrichment, but from the Plaintiff’s participation in the abuse of process as aforesaid and the defamatory complaints to Enbridge and/or slander of goods by the Plaintiff, all by virtue of the Enbridge Gambit.
[17] OEG also pleads the following:
Ontario Energy Group intends to issue a claim for the above noted damages and relief related to the Enbridge Gambit in the Ontario Superior Court of Justice. The relief sought therein exceeds the Small Claims Court jurisdiction. Further, given the:
(a) “cookie cutter” claims and complaints per the Enbridge Gambit;
(b) The multiplicity of proceedings on identical issues; and,
(c) The multiple common parties and counsel;
the Defendants herein seek an Order that this Claim be traversed to the Superior Court to be heard together with the claim of Ontario Energy Group, to be issued.
4. Analysis of the Statement of Claim in this action and comparison with OEG’s defences in the Small Claims Court actions
[18] The following describes the various paragraphs of the Statement of Claim in this action and compares them, where appropriate, to paragraphs contained in OEG’s defences in the Small Claims Court actions:
a. Paragraph 1: Prayer for relief.
b. Paragraphs 2 and 3: Description of the parties.
c. Paragraphs 4-8 are part of a section entitled “Background”. They are substantially the same as paragraphs 2-6 of OEG’s defences in the Small Claims Court actions.
d. Paragraphs 9-10 are part of a section entitled “Proliferation of Small Claims Court Actions”. They are substantially the same as paragraphs 12-13 of OEG’s defences in the Small Claims Court actions.
e. Paragraphs 11-16 are part of a section entitled “Ulterior Purpose: The Enbridge Gambit”. Paragraphs 11-14 are substantially the same as paragraphs 10-11 and 14-17 of OEG’s defences in the Small Claims Court actions. Further, paragraph 15 is similar to paragraph 18(c) of OEG’s defences in the Small Claims Court actions.
f. Paragraphs 17-18 are part of a section entitled “Breach of Contract”. OEG alleges breach of contract in paragraph 20 of its defences in the Small Claims Court actions.
g. Paragraphs 19-23 are part of a section entitled “Defamation”. OEG alleges defamation and slander of goods in paragraph 20 of its defences in the Small Claims Court actions.
h. Paragraphs 24-26 are part of a section entitled “Damages”. They are substantially the same as paragraphs 18-20 of OEG’s defences in the Small Claims Court actions.
i. Paragraph 27 is part of a section entitled “Unjust Enrichment and Constructive Trust”. OEG alleges unjust enrichment in paragraph 20 of its defences in the Small Claims Court actions.
j. Paragraphs 28-30 are part of a section entitled “Injunctive and Declaratory Relief”.
k. Paragraphs 31-32 are part of a section entitled “Procedural Issues”. Paragraph 31 is substantially the same as paragraph 21 of OEG’s defences in the Small Claims Court actions. Paragraph 32 requests that the action be heard in Toronto.
B. Submissions of the parties
1. Submissions of the Moving Defendants
[19] The Moving Defendants argue that this action is tactical and an abuse of process. They make the following points in support of their position:
a. There is no proper basis for the action. The action is an attempt to intimidate the Moving Defendants from pursuing the Small Claims Court actions or raising concerns about their rental agreements to Enbridge.
b. OEG has commenced this action as a separate proceeding for relief that should have been sought in the ongoing Small Claims Court actions or before a Deputy Judge of the Small Claims Court. The relief sought affects the Small Claims Court actions and is an attempt re-litigate the same issues already before the Small Claims Court.
c. OEG has caused the Moving Defendants to go through the unnecessary expense of retaining counsel and responding to the Statement of Claim. The Moving Defendants are represented by a paralegal in the Small Claims Court actions, i.e. Mr. Sabbah, and he is unable to defend them in this action since it was commenced in the Superior Court.
d. The Statement of Claim makes bald allegations against Mr. Sabbah without naming him as a party. This action was brought in the Superior Court to prevent the paralegal from representing the Moving Defendants and is a collateral attack on the paralegal.
e. OEG has previously unsuccessfully moved before the Superior Court of Justice to try to obtain relief that is properly sought in the Small Claims Court: see MDG Newmarket Inc. v. Bechard, 2021 ONSC 1933. In that case, McSweeney J. stated the following in his costs endorsement (MDG Newmarket Inc. v. Bechard, 2021 ONSC 1942 at para. 10):
The motions would appear therefore to have been tactical rather than resolution-oriented, and designed to compel Mr. Bechard into Superior Court in Brampton, where he needs to pay a lawyer to defend himself. Such an approach, taken without consent of the plaintiff in the SCC matter, is contrary to the rules applicable to Small Claims court proceedings, per my findings on the motion.
f. This action is unnecessary and a waste of the court’s and the parties’ resources and time. It constitutes unreasonable and bad faith conduct that warrants censure of the court.
[20] The Moving Defendants state that there is no reasonable prospect of success for any claim against the Moving Defendants as it relates to their decision to dispute their rental agreement or pursue an action against OEG. They argue that the Small Claims Court actions are the proper forum for any issues regarding the Moving Defendants’ conduct in connection with those proceedings, and that it is improper to sue an opposing party in a different court for commencing an action against you. They submit that it is in the interests of justice to strike the claim in favour of the adjudication of the Small Claims Court actions on their merits in the Small Claims Court.
[21] The Moving Defendants point out that pursuant to section 107(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), the Small Claims Court actions cannot be transferred to the Superior Court of Justice to be heard together with this action without the consent of the plaintiffs in the Small Claims Court actions. They also point out that OEG can move to strike or stay the Small Claims Court actions under Rule 12.02 of Rules of the Small Claims Court and that it is trying to circumvent this Rule by bringing this action. They argue that the Statement of Claim does not plead the material facts necessary to support a stay of the Small Claims Court actions.
[22] According to the Moving Defendants, it is improper for OEG to lump all the Moving Defendants together and to try to resolve everything in one action. The Moving Defendants point out that individual assessments will be required with respect to the allegations of misrepresentations and defamation, among others. They state that OEG has not adduced any evidence that it cannot deal with the issues in the Small Claims Court actions.
[23] The Moving Defendants submit that OEG’s claim that the Moving Defendants have breached their contracts with OEG is merely the mirror of the Moving Defendants’ claims in the Small Claims Court actions that the same contracts are unenforceable. They argue that if OEG wants to pursue an action for breach of contract, it must bring this claim in the Small Claims Court actions in response to the Moving Defendants’ claims. The Moving Defendants note that if they are successful in the Small Claims Court actions, they cannot be liable to OEG for breach of contract. They state that allowing OEG to pursue a separate breach of contract action in a different court in connection with the same contracts raises a significant risk of inconsistent findings and evidentiary overlap between the actions. They further state that pursuing such a claim is an abuse of process.
[24] The Moving Defendants also argue that OEG has no reasonable prospect of success in respect of its claims for unjust enrichment and defamation.
2. Submissions of the Plaintiff
[25] OEG’s Introduction to its Factum reads as follows:
This motion comes down to one issue: how is a party to respond, when faced with a coordinated and bad faith campaign to serve 67 individual Small Claims court claims (the “Abusive Small Claims Actions”) all on the same day, all issued in the same court, with cookie-cutter pleadings alleging overwhelmingly similar facts and legal arguments?
The fact of these vexatious claims is carefully obscured in the Moving Parties’ Factum.
Indeed, it was apparent to the Plaintiff herein, MDG Newmarket Inc. o/a Ontario Energy Group (“OEG”), and has since been confirmed, that may [sic] of the claimant Defendants were not even aware they had (ostensibly) commenced court proceedings against OEG. These [sic] is a breach of professional ethics by the issuing paralegal as well as an abuse of process.
This misconduct is in the face of the now-concluded class action proceeding in the London Superior Court of Justice (the “Class Action”). In effect, Mr. Sabbah effectively launched his own “multi-proceeding class action” in Small Claims court without client approval. This created unneeded administrative burden for the Toronto Small Claims court and complicated the Class Action.
The individual Defendants in this action (in many cases) through little fault of their own other than retaining Mr. Sabbah, now face claims from OEG arising from their:
(a) breach of contract;
(b) unjust enrichment; and,
(c) defamation of OEG.
OEG’s desire to consolidate the Abusive Small Claims action into one centralized proceeding is both more efficient and ensures that claimant Defendants will receive appropriate legal advice. This has already resulted in some of the Abusive Small Claims Actions and OEG’s claims against those claimant Defendants being settled. The alternative is chaos, and a gross waste of court resources.
Common sense must prevail. The Moving Parties’ motion should be dismissed, and the matter directed to a case conference to organize a process to consolidate the Abusive Small Claims Actions with OEG’s claims, which will allow the matter to move forward in proportionate and orderly manner. [Emphasis in the original.]
[26] According to OEG, the Small Claims Court actions are incoherent, and it is unclear which causes of action are asserted against which defendants. It submits that clear and compelling evidence has emerged that Mr. Sabbah commenced many of the Small Claims Court actions without advising his purported clients. OEG has made complaints about Mr. Sabbah to the Law Society of Ontario.
[27] OEG states that it has defended each of the Small Claims Court actions, but that it has asserted its own claims against the Defendants “because of the unique and, frankly, disturbing circumstances” of the Small Claims Court actions, which it describes as follows:
a. OEG was served with 67 cookie-cutter claims at the same time.
b. OEG was already aware from direct communication with some complainants to Enbridge that they had not authorized any claims.
c. There was an obvious and undeniable degree of coordination between the claims.
d. Even if they had not been “cookie-cutter” claims, all claims alleging that the rental contract in question is unenforceable for illegality share a common factual matrix and require one determination.
[28] OEG submits that while subsection 107(2) of the CJA prevents transferring a proceeding from the Small Claims Court to the Superior Court of Justice absent the plaintiff’s consent, subsection 107(3) does not prevent a Small Claims Court proceeding from being stayed pending determination of a Superior Court proceeding. OEG further submits that the prohibition against transfer is not absolute and can be relaxed in appropriate circumstances. It argues that it seeks to avoid a multiplicity of proceedings through a single determination of the contract’s validity precisely to avoid the risk of inconsistent findings.
[29] OEG states that it has pleaded the necessary elements of its claims.
[30] While this point is not made in its Factum, OEG argued at the hearing that this action was properly commenced in the Superior Court of Justice as the damages it seeks against each of the Moving Defendants in this action would exceed the Small Claims Court monetary limit in each case.[^4] It also pointed out that some of the relief it is seeking, including declaratory and mandatory relief, falls outside of the Small Claims Court’s jurisdiction. OEG indicated at the hearing that it would seek to amend its Statement of Claim to increase the award of damages sought against the Breach of Contract Defendants as, according to OEG, the amount of damages has significantly increased since this action was commenced.
C. DISCUSSION
[31] In my view, this action should be stayed pending the disposition of the Small Claims Court actions and until further order of this Court.
1. Doctrine of abuse of process
[32] Rule 21.01(3)(d) of the Rules of Civil Procedure provides that the court may stay or dismiss an action on the ground that the action is frivolous or vexatious or is otherwise an abuse of the process of the court. Evidence is admissible on a motion under Rule 21.01(3).
[33] The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute: see Carbone v. DeGroote, 2018 ONSC 109 at para. 42 (“Carbone”). Circumventing a court order or circumventing the operation of a Rule by initiating a further proceeding has been determined to be an abuse of process: see Carbone at para. 43.
[34] The doctrine of abuse of process seeks to promote judicial economy and to prevent a multiplicity of proceedings: see Maynes v. Allen-Vanguard Technologies Inc. (Med-Eng Systems Inc.), 2011 ONCA 125 at para. 36 and Living Water (Pressure Wash Services) Ltd. v. Dyballa, 2011 ONSC 5695 at para. 9. While a multiplicity of proceedings may constitute an abuse of process which warrants an order staying or dismissing a proceeding, that is not necessarily always the case. All of the circumstances must be considered to determine whether, in the interests of justice, a stay or dismissal should be granted. See Birdseye Security Inc. v. Milosevic, 2020 ONCA 355 at para. 16 (“Birdseye”) and Trindade v. Jantzi, 2021 ONSC 1927 at para. 27 (Div. Ct.) (“Trindade”).
[35] The presence of duplicate proceedings is relevant both under Rule 21.01(3)(d) and Rule 21.01(3)(c) which allows the court to stay or dismiss an action on the ground that another proceeding is pending between the same parties in respect of the same subject matter. See Crook v. Adler, 2021 ONSC 7719 at para. 11 (“Crook”). The determination of whether a stay of proceedings should be granted because another proceeding is pending between the same parties involves an exercise of discretion, taking into consideration the circumstances of the particular case. The moving party must demonstrate that the continuation of the action would cause it substantial prejudice or injustice (beyond inconvenience and expense) because it would be oppressive or vexatious or would otherwise be an abuse of the process of the court, and that the stay would not cause an injustice to the responding party. Factors relevant to prejudice include: the likelihood and effect of the two matters proceeding in tandem, the possibility and effect of different results, the potential for double recovery, and the effect of possible delay. See Birdseye at para. 15.
[36] A new proceeding that asserts the same claims as an existing proceeding, and that would amount to relitigating the same issues, can constitute an abuse of the court’s process. Thus, where the causes of action and alleged damages claimed in multiple proceedings arise from the same factual matrix, the proceedings are considered duplicative and can be found to be an abuse of the court’s process. See Crook at paras. 10-11.
[37] In Crook, the plaintiff argued that a counterclaim brought by the defendants was an abuse of process because the claims advanced in the counterclaim were duplicative of claims that the defendants had advanced in separate proceedings before the Landlord and Tenant Board. Justice Morgan agreed and dismissed the counterclaim. Among other things, he found that the plaintiff would be prejudiced by having to defend both the counterclaim and the Landlord and Tenant Board application, as she would be forced to incur two sets of legal costs. See Crook at paras. 12, 14.
2. Relevant considerations regarding the Small Claims Court
[38] This motion is not a motion to transfer a claim from the Small Claims Court to the Superior Court of Justice. However, it is my view that the factors considered on a motion to transfer are relevant considerations in assessing whether this action constitutes an abuse of process because OEG’s objective is clearly to have the relevant issues determined in this Court instead of the Small Claims Court.
[39] Courts have held that the discretion to transfer is to be exercised sparingly as a transfer can engender negative consequences. Among other things, actions in the Superior Court of Justice expose the parties to higher costs of pre-trial discovery and trial, both in terms of counsel fees and potential costs awards. In addition, a transfer at the request of a defendant deprives the plaintiff of their choice of court. There are also policy reasons for limiting the transfer of cases. Absent compelling reasons, permitting a transfer may undermine the jurisdictional legitimacy of the Small Claims Court. Among other things, a transfer assumes that the procedures in the Small Claims Court are inadequate. This is a dangerous assumption in an era where access to justice is a significant problem. See Segura Mosquera v. Rogers Communications Inc., 2020 ONSC 6024 at paras. 8-9; aff’d by 2021 ONCA 876 at para. 13, and Farlow v. Hospital for Sick Children, 2009 CanLII 63602 at para. 21 (Ont. S.C.J.).
3. Application to this case
[40] Having regard to all of the circumstances of this case, I conclude that it would be an abuse of process to permit this action to proceed while the Small Claims Court actions are pending.
[41] First, as set out above in the description and analysis of the pleadings in this action and the Small Claims Court actions, the allegations in this action are duplicative of the allegations in OEG’s defences in the Small Claims Court actions. I also agree with the Moving Defendants that OEG’s claims largely mirror the Moving Defendants’ claims in the Small Claims Court actions (i.e. breach of contract vs. unenforceable contract, defamation and slander of goods vs. legitimate complaints regarding OEG). The causes of action and alleged damages claimed by OEG in this action and in the Small Claims Court actions (as set-off) arise from the same factual matrix and require the litigation of the same issues. See Crook at paras. 10-11. Allowing the issues to proceed before both the Small Claims Court and this Court would inevitably lead to duplicative proceedings and potentially inconsistent findings. See Trindade at para. 29.
[42] Second, a significant part of this action relates to allegations that the Small Claims Court action are an abuse of process. I agree with the Moving Defendants that the bringing of this action seeks to circumvent Rule 12.02 of Rules of the Small Claims Court which provides that the Small Claims Court may, on motion, strike or stay a claim that is an abuse of the court’s process.
[43] More generally, it is my view, based on all the circumstances of this case, that this action seeks to circumvent and undermine the jurisdiction of the Small Claims Court. The excerpts from OEG’s Factum reproduced above clearly show that this action was brought in reaction and as a response to the Small Claims Court actions. The action seeks relief that is contrary to subsections 107(2) of the CJA, which provides that a proceeding in the Small Claims Court shall not be transferred to another court and required to be heard at the same time as another proceeding without the consent of the plaintiff in the proceeding in the Small Claims Court. Further, I note that subsection 107(3) of the CJA states that a proceeding in the Small Claims Court shall not be required to be asserted by way of counterclaim in a proceeding in the Superior Court of Justice without the consent of the plaintiff in the proceeding in the Small Claims Court. While such an order is not sought in this action, this would likely be the practical consequence of the relief sought by OEG. There is no evidence before me that the Small Claims Court cannot handle the 67 actions in issue. In fact, OEG attached to its Factum an endorsement of the Small Claims Court that shows that the Small Claims Court is able to provide case management for a group of related actions.
[44] While it is true that the damages sought by OEG against each of the Moving Defendants in this action would exceed the Small Claims Court monetary limit in each case and that some of the relief sought by OEG falls outside of the Small Claims Court’s jurisdiction, this rationale for starting this action in the Superior Court of Justice does not even appear in OEG’s Factum.[^5] As set out above, the Introduction to OEG’s Factum focuses on the alleged abusive nature of the Small Claims Court actions and the alleged misconduct of Mr. Sabbah. At a minimum, this raises questions regarding OEG’s motivation for commencing this action in this Court. In addition, there is no evidence before me as to whether the quantum of damages sought by OEG against the individual Moving Defendants in this action has any air of reality. For instance, with respect to the damages allegedly suffered by OEG as a result of alleged breaches of contract, no specific, per-Defendant quantum is pleaded in the Statement of Claim. The Statement of Claim states that details will be provided at trial. In addition, based on the pleadings, the figure of damages sought against the individual Defamation Defendants, i.e. $50,000, appears high given, among other things, the fact that: (a) the alleged defamatory statements were only made to Enbridge; (b) OEG is unable to provide particulars of the specific words allegedly used by the Defamation Defendants; (c) by the time the alleged statements were made, OEG had already been charged under the CPA and was a defendant in a class action that raised similar allegations as some of the allegations in the Small Claims Court action (see Cullaton v. MDG Newmarket Inc., 2019 ONSC 6432 at para. 26); and (d) the allegation of damages for defamation in the Statement of Claim is very general and without particulars. I acknowledge, however, that these are only general impressions as I have no evidentiary basis to assess the quantum of damages sought.[^6] As discussed further below, a stay of this action, as opposed to a dismissal, preserves OEG’s ability to later seek relief that is outside the jurisdiction of the Small Claims Court, if appropriate.
[45] Third, one of the rationales advanced by OEG to justify this action is to ensure that the Moving Defendants “will receive appropriate legal advice”. This constitutes an attempt to interfere with the legal representation of the Moving Defendants. While the evidence before me discloses that there have been issues regarding the legal representation of some of the Defendants by Mr. Sabbah, these issues relate to a small number of Defendants and should be addressed in the context of the relevant Small Claims Court actions, not in a new action commenced in this Court. This is especially the case since Mr. Sabbah is not named as a party and OEG has not alleged conspiracy as a cause of action. It does not lie in OEG’s mouth, who is adverse to the Moving Defendants, to opine on the kind of legal advice and legal representation that the Moving Defendants should have. Issues concerning legal representation are mainly issues between Mr. Sabbah and his clients.
[46] Fourth, the Moving Defendants would be prejudiced if they had to defend this action in the Superior Court of Justice. They would need to retain the services of a lawyer instead of a paralegal and, as stated above, it is recognized that actions in the Superior Court of Justice expose the parties to higher costs of pre-trial discovery and trial, both in terms of counsel fees and potential costs awards. Further, this action is against 67 Defendants – it will unavoidably be burdensome and involve significant delay compared to the Small Claims Court actions. One just has to think of how long the discovery stage (including the scheduling of the Defendants’ examinations for discovery) of this action would be. Claims of defamation (raised by OEG) and misrepresentations (raised by the Moving Defendants) require individualized evidence. While the Moving Defendants have not sought relief against joinder on this motion (presumably because they were seeking to have the action struck), there is a serious issue as to whether the joinder of multiple parties in this action “may unduly complicate or delay the hearing or cause undue prejudice to a party”: see Rule 5.05 of the Rules of Civil Procedure.
[47] Fifth, there is no evidence before me that staying this action while the Small Claims Court actions proceed would cause an injustice to OEG. By staying this action instead of striking it out, OEG’s ability to seek damages and relief that is outside of the Small Claims Court’s jurisdiction is preserved in the event such claims remain open to it after the determination of the Small Claims Court actions. Based on the record before me, it is not possible to conclude that OEG’s claims and the quantum of damages that it seeks are meritless. A stay deals with the aspects of this action that are an abuse of process, while ensuring that no injustice is caused to OEG.
[48] In light of the foregoing, I find that it is in the interests of justice to grant a stay of this action pending the disposition of the Small Claims Court actions and until further order of this Court.
4. Motion to strike out the claim on the ground that it does not disclose a reasonable cause of action
[49] Given my conclusion that the action should be stayed and my comments below, it is unnecessary to deal in any detail with the Moving Defendants’ request that the action be struck out under Rule 21.01(1)(b) on the ground that it does not disclose a reasonable cause of action.[^7]
[50] In my view, most of the arguments raised by the Moving Defendants in respect of the relief sought under Rule 21.01(1)(b) were not focused on whether all of the essential elements of the relevant causes of action had been pleaded by OEG. Rather, they were either arguments of potential defences or arguments that went to the issue of whether the action was an abuse of process. Further, any potential issues as to whether all of the essential elements have been pleaded, especially with respect to the cause of action of defamation, would not justify striking out the Statement of Claim without leave to amend. While a pleading may be struck, leave to amend should be denied only in the clearest of cases. See Miguna v. Ontario (Attorney General), 2005 CanLII 46385 at para. 22 (Ont. C.A.) and South Holly Holdings Limited v. The Toronto-Dominion Bank, 2007 ONCA 456 at para. 6.
[51] If and when the stay of this action is lifted, it is almost certain that OEG will need to amend its claim to take into account the evidence and findings in the Small Claims Court actions. For instance, after the determination of the Small Claims Court actions, OEG should have considerably more information regarding the complaints made by the individual Moving Defendants to Enbridge, and findings will likely have been made regarding the enforceability of OEG’s contracts. Given that it is likely that the ultimate claims advanced in this Court will look substantially different from the current claims, it is my view that it would be a waste of time and resources to order OEG to amend its claim at this time. However, the Moving Defendants’ right to bring another motion to strike under Rule 21.01(1)(b) after the lifting of the stay is preserved.
D. CONCLUSION
[52] I order that this action be stayed pending the disposition of the Moving Defendants’ Small Claims Court actions and until further order of this Court.
[53] If costs cannot be agreed upon, the Moving Defendants shall deliver submissions of not more than three pages (double-spaced), excluding the costs outline, by December 2, 2022. The Plaintiff shall deliver its responding submissions (with the same page limit) by December 16, 2022. The submissions of all parties shall also be sent to my assistant by e-mail and uploaded onto CaseLines.
Vermette J.
Date: November 18, 2022
[^1]: The following persons may no longer be Moving Defendants as it appears that they have opted in to participate in the settlement of a class action involving the Plaintiff: Brinley Ford, Bruce Hallidy, Dilip Patel, Jim Leatherdale, John Borisko, Kenneth Conte, Robert Primmer and Robert Sears.
[^2]: HVAC stands for heating, ventilation and air conditioning.
[^3]: The Motion Record includes a Statement of Claim of Alicia Symonds that also names Home Trust Company as a defendant. However, this Statement of Claim was issued after the commencement of this action, and the court file number on Ms. Symonds’ Statement of Claim (SC20000044060000) is not included in the Statement of Claim in this action. It appears that Ms. Symonds previously commenced a different action against the same defendants, except for Home Trust Company, with the court file number SC20000009440000, which court file number is referred to in the Statement of Claim in this action. This seems to be confirmed by the fact that the Motion Record includes OEG’s Statement of Defence to Ms. Symonds’ claim which: (a) bears court file number SC20000009440000; (b) does not include Home Trust Company as a defendant, but only OEG, Mr. Farber and Enbridge; and (c) has a date that precedes the issuance of the Statement of Claim of Ms. Symonds that is included in the Motion Record (i.e. court file number SC20000044060000).
[^4]: While it did not argue that its own claims would exceed the Small Claims Court monetary limit in its Factum, the Plaintiff argued that: (a) the Moving Defendants should be treated as de facto common parties given their cookie-cutter claims and coordinated approach; (b) if the Moving Defendants’ claims were to be consolidated in the Small Claims Court, they would vastly exceed the Small Claims Court limit; and (c) this justifies a transfer to the Superior Court of Justice, as in the case Municipality of Sioux Lookout v. Goodfellow, 2010 ONSC 1812 (“Goodfellow”). I reject this argument. In Goodfellow, the same plaintiff had commenced 10 separate actions in the Small Claims Court. This is not the case here. Although the Statements of Claim of the Moving Defendants in the Small Claims Court are very similar, the damages claimed in each action are for each individual Moving Defendant based on their own interactions with OEG and the representations that were made to them personally.
[^5]: I note, however, that OEG states in paragraph 21 of its defences in the Small Claims Court actions that “[t]he relief sought therein exceeds the Small Claims Court jurisdiction” and, after referring to other factors, states that “the Defendants herein [i.e. OEG and Mr. Farber] seek an Order that this Claim be traversed to the Superior Court to be heard together with the claim of [OEG], to be issued.” Such an order was not sought in the Small Claims Court and, as stated above, is contrary to section 107(2) of the CJA.
[^6]: I also acknowledge that in a libel case, general damages are presumed from the very publication of the false statement, the injured plaintiff bears no obligation to prove actual loss or injury, and the amount of general damages to be awarded is entirely discretionary and fact-specific. See Rutman v. Rabinowitz, 2018 ONCA 80 at paras. 62-63, 82-83 and Lotin v. Gregor, 2019 ONSC 1510 at paras. 93, 98.
[^7]: No evidence is admissible on such a motion. The general principles applicable to a Rule 21.01(1)(b) motion are summarized in Toronto District School Board v. City of Toronto, 2022 ONSC 4279 at paras. 49-54.