



COURT OF APPEAL FOR ONTARIO

CITATION: 1186708 Ontario Inc. v. Gerstein, 2016 ONCA 905

DATE: 20161128

DOCKET: C61932

Gillese, Benotto and Roberts JJ.A.

BETWEEN

1186708
    Ontario Inc., 746190 Ontario Limited and 746191 Ontario Limited

Plaintiffs (Appellants)

and

Elliott
    J. Gerstein, Iris L. Gerstein,
Sydney Gerstein
, Attara Developments
    Limited., Bellcrest Builders Limited., Brenthall Apartments Limited., Chelsandy
    Developments Limited., Grover Realty Management (a partnership), Grover Realty
    Cable (a partnership), Lilliana Buildings Limited., Luray Investments Limited.,
    Pauldor Developments Limited., 375685 Ontario Limited., Stan Vine Construction
    Ltd, Kilbarry Holding Corporation, 678678 Ontario Limited.,
Matanah
    Investments Corp.
,
Dawn Trading Ltd.
,
497505 Ontario Inc.
,
781527
    Ontario Inc.
,
781526 Ontario Inc.
,
Richard Mintz and Andrea Mintz
,
Estate Trustees for Saul Mintz
,
Irwin Mintz
,
Howard Mintz
,
Faye Mintz
,
Mintz & Partners (a partnership)
,
Rhonda
    Strasberg
, Estate Of Belle Mernick,
Minkids Holdings (a partnership)
,
Ettie Wosnick
,
Morris Wosnick
,
2135637 Ontario Inc.
,
Lerric
    Investments Corp.
, Mernick Construction Limited and Stanmore Developments
    Limited.

Defendants (
Respondents
)

James Zibarras and David Meirovici, for the appellants

Howard L. Shankman, for the respondents Estate of Saul
    Mintz, Richard Mintz and Andrea Mintz

Deepshikha Dutt and Douglas Stewart, for the respondents
    Irwin Mintz, Faye Mintz (deceased), 2135637 Ontario Ltd., Minkids Holdings, 781526
    Ontario Ltd. and Mintz & Partners LLP

Elaine Perilz, for the respondents Howard Mintz, 781527
    Ontario Inc., Dawn Trading Ltd., 497505 Ontario Inc., Rhonda Strasberg, Ettie
    Wosnick and Morris Wosnick

Linda Galessiere, for the respondents Estate of Sydney
    Gerstein, Matanah Investments Corp. and Lerric Investments Corp.

Heard: November 23, 2016

On appeal from the order of Justice Michael A. Penny of
    the Superior Court of Justice, dated February 24, 2016.

ENDORSEMENT

[1]

Certain of the defendants brought a motion to strike portions of the
    plaintiffs fresh as amended statement of claim.  In response, the plaintiffs
    brought a motion for leave to commence a derivative action
nunc pro tunc
. 
    The plaintiffs motion was brought under s. 246 of the
Ontario
Business Corporations Act
,
    R.S.O. 1990, c. B.16 (the 
OBCA
).

[2]

The two motions were heard together and disposed of by order of the
    Superior Court of Justice, dated February 24, 2016 (the Order).  Paragraph 1
    of the Order orders that the plaintiffs motion is statute-barred by virtue of
    s. 4 of the
Limitations Act
,
2002
, S.O. 2002, c. 24, Sch. B.

[3]

The plaintiffs wish to appeal para. 1 of the Order.  That is, they wish
    to appeal the disposition of the motions judge in respect of their motion
    alone.

[4]

The plaintiffs brought their appeal to this court.  A question arose as
    to the jurisdiction of this court to hear the appeal.

[5]

After hearing oral argument on the issue of jurisdiction, the court
    advised the parties that, in its view, the appeal is in respect of an order made
    under the
OBCA
and, consequently, the proper route of appeal is to the
    Divisional Court.

[6]

In sum, the court reasoned as follows.

[7]

Under s. 6(1)(b) of the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43, an appeal lies to this court from a final order of a judge of the
    Superior Court of Justice,
except  an order from which
    an appeal lies to the Divisional Court under another Act
 (emphasis
    added).  Under s. 255 of the
OBCA
, [a]n appeal lies to the Divisional
    Court from any order made by the court under this Act.

[8]

There is no dispute that the Order is a final order.

[9]

Paragraph 1 of the Order flowed from a motion for leave to commence a
    derivative action under s. 246 of the
OBCA
.  We acknowledge that the
    claim was found to be statute-barred and leave refused on that basis.  We also
    acknowledge that the determination that the claim was statute-barred was made
    under the
Limitations

Act
,
2002
, not the
OBCA
. 
    However, para. 1 of the Order disposed of the motion which was brought under s.
    246 of the
OBCA
.  Given the broad scope afforded to s. 255 of the
OBCA
in this courts jurisprudence, it is our view that para. 1 of the Order is an
    order within the meaning of s. 255 of the
OBCA
: see
Amaranth
    L.L.C. v. Counsel Corp.
(2004), 71 O.R. (3d) 258 (C.A.); and
Ontario
    Securities Commission v. McLaughlin
, 2009 ONCA 280, 248 O.A.C. 54.

[10]

The parties had argued that this court had jurisdiction to hear the
    appeal based on
Buccilli v. Pillitter
, 2016 ONCA 775, 271 A.C.W.S.
    (3d) 323.  However, that case is distinguishable from the present case for
    three reasons.

[11]

First, in
Buccilli
, the underlying motion for summary judgment was
    brought under r. 20 of the
Rules of Civil Procedure
, R.R.O. 1990, Reg.
    194.  In the present case, the plaintiffs motion was brought under s. 246 of
    the
OBCA
.

[12]

Second, had the relief which the plaintiffs sought been granted in this
    case, it would have been under s. 246 of the
OBCA
.  The fact that leave
    to commence a derivative action was found to be statute-barred does not change
    the nature of the underlying motion.

[13]

Third, at para. 22 of
Buccilli
, the court noted that even if it
    could assume that part of the relief was grounded in an
OBCA
claim, this
    court would nonetheless have jurisdiction to hear the appeal because it could
    be joined to those parts of the appeal of the order not rooted in the
OBCA
. 
    In the present case, no other parts of the Order are under appeal, so there is
    nothing to which the plaintiffs appeal can be joined.

DISPOSITION

[14]

Accordingly, as the proper route of appeal is to the Divisional Court, we
    order that this appeal be transferred to the Divisional Court.

[15]

While it is for the Divisional Court to determine whether to expedite
    the hearing of the appeal, the parties have asked this court to urge the
    Divisional Court to schedule the hearing of the appeal as expeditiously as
    possible, because of the tight timeline that has been established for it and
    the time that has been lost in resolving the jurisdictional issue.  We
    respectfully convey that request to the Divisional Court.

E.E. Gillese J.A.

M.L. Benotto J.A.

L.B. Roberts J.A.


