



COURT OF APPEAL FOR ONTARIO

CITATION: Drywall Acoustic Lathing
    Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375

DATE: 20200612

DOCKET: M51262 and M51557 (C67841)

Benotto, Zarnett and Thorburn
    JJ.A.

BETWEEN

The Trustees of the Drywall
    Acoustic Lathing and Insulation Local 675 Pension Fund

Plaintiffs (Moving Parties
[1]
/Responding Parties
[2]
)

and

SNC-Lavalin Group Inc., Kevin G.
    Lynch, Neil Bruce, Sylvain Girard, Jean Raby, Alain Rhéaume, Eric D. Siegel and
    Benita M. Warmbold

Defendants (Moving Parties
[3]
)

Joel P. Rochon, Peter R. Jervis,
    Douglas Worndl, Ronald Podolny and Peter Proszanski, for the Trustees of the
    Drywall Acoustic Lathing and Insulation Local 675 Pension Fund,  moving parties
    in M51262 and  responding parties in M51557

Michael G. Robb, Garett M. Hunter,
    Anthony OBrien, Karim Diallo, Erika Provencher and Serge Kalloghlian, for Ruediger
    Martin Graaf, responding party in M51262 and M51557

Katherine L. Kay, Daniel S. Murdoch and
    Libby Nixon, for SNC-Lavalin Group Inc., Kevin G. Lynch, Neil Bruce, Sylvain
    Girard, Jean Raby, Alain Rhéaume, Eric D. Siegel and Benita M. Warmbold, moving
    parties in M51557

Heard: In Writing

Zarnett JA:

INTRODUCTION

[1]

In 2019, two proposed class actions were
    commenced against SNC-Lavalin Group Inc. (SNC) and certain of its officers
    and directors (collectively with SNC, the Defendants). The class actions
    allege that the Defendants made misrepresentations and failed to make required
    disclosures affecting the price or value of SNCs securities.

[2]

The first action was commenced by Ruediger
    Martin Graaf (the Quebec Plaintiff) in February 2019 in the Superior Court of
    Quebec (the Quebec Action). The second action was commenced by the Trustees of
    the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (the
    Ontario Plaintiff) in June 2019 in the Ontario Superior Court of Justice (the
    Ontario Action).

[3]

The Quebec Plaintiff and the Defendants each
    moved to stay the Ontario Action. On November 21, 2019, the motion judge,
    Belobaba J., dismissed each motion to stay: 2019 ONSC 6512.

[4]

The Quebec Plaintiff, taking the position that
    the dismissal of his request to stay the Ontario Action was a final order, has appealed
    the dismissal to this court.
[4]
As a precautionary measure, the Quebec Plaintiff has also filed a motion for
    leave to appeal the dismissal to the Divisional Court, in the event it is
    determined to be interlocutory. The Defendants did not appeal the dismissal of
    their request to stay to this court; they have instead moved for leave to
    appeal to the Divisional Court.

[5]

The Ontario Plaintiff now moves to quash the
    Quebec Plaintiffs appeal to this court on the basis that the dismissal of his
    request to stay the Ontario Action is an interlocutory order and can only be
    appealed to the Divisional Court with leave. The Ontario Plaintiff submits that
    this court has no jurisdiction to hear the Quebec Plaintiffs appeal.

[6]

The Defendants move for certain directions in
    the event that the Quebec Plaintiffs appeal is determined to be properly
    before this court.

[7]

For the reasons that follow, I conclude that the
    dismissal of the Quebec Plaintiffs request to stay the Ontario Action is an interlocutory
    order, not a final order. No appeal lies from it to this court. I would
    therefore quash the Quebec Plaintiffs appeal. It follows that the Defendants
    motion for directions must also be dismissed.

THE MOTION JUDGES DECISION

[8]

The motion judge described the situation giving
    rise to the motions to stay as follows:

A law firm files a proposed national class
    action against the defendant in Quebec. A different law firm representing a
    different plaintiff files a proposed national class action against the
    defendant in Ontario. The pleadings in the two actions allege securities
    misrepresentations in the secondary market and end up being substantially
    similar in scope and content. The damages claim is in excess of a billion
    dollars. Neither action has yet been granted leave to proceed under provincial
    securities law or has been certified as a class proceeding. The leave and
    certification motions in both actions will be argued sometime next year.

[9]

The Quebec Plaintiffs position is that the
    Quebec and Ontario actions are substantially similar in scope and contentthey
    have substantially overlapping class definitions, class periods, defendants,
    impugned disclosure documents, and causes of action.
[5]
In other words, the actions
    advance substantially similar claims against substantially the same defendants,
    on behalf of substantially the same proposed class.

[10]

The motion judge stated that, in order to
    succeed, the Quebec Plaintiff had to show that the Ontario Action was an abuse
    of process because it was duplicative and served no legitimate purpose when it
    was commenced. The motion judge rejected the suggestion that it was, stating at
    para. 33:

The question is whether the Ontario action
    when filed was duplicative of the Quebec action as it was at that time. The
    answer is no. Abuse of process has not beenestablished on the evidence
    before me. The two stay motions must be dismissed.

[11]

In its Notice of Appeal to this court, the
    Quebec Plaintiff submits that the motion judge erred in the way he considered
    the duplicative and no legitimate purpose argument. He also submits that the
    motion judge should have considered broader matters, including factors
    relevant to both the best interests of the class members and the fair and efficient
    administration of justice.

[12]

Although the motion judge dismissed the motions
    to stay, he observed that the Quebec Plaintiff and the Defendants could argue,
    at the certification stage, that the Ontario Action should not proceed because
    of the Quebec Action. He stated at para. 41:

If the Ontario action clears the leave hurdle
    and advances to certification, both the defendant as a party and [the Quebec
    Plaintiff] as a participant, could argue that the Quebec action should be
    preferred under the s. 5(1)(d) [of the
Class Proceedings Act
, 1992
,
    S.O. 1992, c. 6] analysis and the Ontario action should be stayed. The value of
    doing so at certification is that this court would have the benefit of a more
    complete record.

[13]

The motion judge went on to state that even if
    he were wrong that those arguments could be addressed at the certification
    stage, he was still required to dismiss the motions to stay that were before
    him.

[14]

Because of the view I take of the matter, I need
    not decide if the Quebec Plaintiff will or will not have a chance at the
    certification stage of the Ontario Action to argue for a stay, nor the extent (if
    any) to which any such argument would be restricted by the dismissal of the
    earlier stay motion.

ANALYSIS

[15]

It is common ground between the Ontario
    Plaintiff and the Quebec Plaintiff that even though the Ontario Action is a
    proceeding under the
Class Proceedings Act
, 1992
, S.O. 1992, c.
    6 (the 
Class Proceedings Act
), the appeal route in this case is
    governed by the
Courts of Justice Act
, R.S.O. 1990, c. C.43 (the 
CJA
).
    There is no provision in the
Class Proceedings Act
that governs
    appeals for this type of order: see, generally,
Class Proceedings Act
,
    s. 30. It is also common ground between the parties that under the
CJA
,
    an appeal lies to this court only if the order is final: s. 6(1)(b). If the
    order is interlocutory, the appeal lies to the Divisional Court, with leave:
CJA
,
    s. 19(1)(b).

[16]

An interlocutory order is one which does not
    determine the real matter in dispute between the partiesthe very subject
    matter of the litigationor any substantive right to relief of a plaintiff or
    substantive right of a defendant. Even though the order determines the question
    raised by the motion, it is interlocutory if these substantive matters remain
    undecided
:
Hendrickson v.
    KalIio
, [1932] O.R. 675 (C.A.), at p. 678;
Ball v. Donais
(1993),
    13 O.R. (3d) 322 (C.A.).

[17]

In
Sun Life Assurance Co. of Canada v. York
    Ridge Developments Ltd.
, 1998 CarswellOnt 4534 (C.A.), Weiler J.A. distinguished
    substantive matters, which are the subject of final orders, from procedural
    rights, which are not. She stated, at para. 13:

As stated in
Holmsted
    and Watson
on
Ontario Civil Procedure
at 62-24: to be
    final an order must deal with the substantive merits as opposed to mere
    procedural rights, no matter how important the procedural rights may be. The
    test focuses on whether the order under appeal finally disposes of the rights
    of the parties, in the sense of substantive rights to relief (in the case of a
    plaintiff) or a substantive defence (in the case of a defendant).

[18]

In
Locking v. Armtec Infrastructure Inc.
,
    2012 ONCA 774, 299 O.A.C. 20, this court considered whether an order resulting
    from a carriage dispute between competing Ontario class actions is final or
    interlocutory. In a carriage dispute, the court is called upon to consider
    which of two competing class actions should be allowed to proceedin other
    words, which representative plaintiff and counsel should be allowed to continue
    with the action they commenced for the benefit of the class and which
    representative plaintiff and counsel should have their proposed class action
    stayed. Mr. Locking was unsuccessful in the carriage dispute and his action was
    stayed. The motion judge refused to stay the competing action and permitted it
    to continue. Mr. Locking sought to appeal the  decision to this court.

[19]

This court held that it did not have
    jurisdiction over Mr. Lockings appeal because the disposition of a carriage
    dispute is interlocutory. The order staying Mr. Lockings action did not bring
    an end to his proceedings, as his action was not stayed for all purposes, but
    simply as a class action. The stay did not determine or terminate the claim. He
    could still prosecute his lawsuit as an ordinary action. Furthermore, the
    refusal to stay the competing action did not make the disposition final. If the
    plaintiff in the competing action succeeded in obtaining certification, Mr. Locking
    could opt out of the class and continue with his own action. The only effect of
    the impugned order was to prevent Mr. Locking from bringing an application to
    have his action certified as a class proceeding. As the court stated, at para.
    17, Mr. Locking had not lost his right to sue the defendants. He may remain as
    part of the [competing] proposed class action and may also seek to actively
    participate to protect his interests pursuant to s. 14 of the [
Class
    Proceedings Act
]
. He may
    also opt out and pursue his individual action independently.

[20]

Applying these principles to this case, it is clear
    that the refusal to stay the Ontario Action at the request of the Quebec
    Plaintiff is an interlocutory order. The dismissal of his stay request does not
    determine the subject matter of the Ontario Action or of any action. It does
    not determine any substantive right to relief that the Quebec Plaintiff, the
    Ontario Plaintiff, or any potential class member has against the Defendants,
    nor does it determine any substantive defence. It does not terminate the Quebec
    Plaintiffs right to proceed with the Quebec Action. It does not determine the
    Quebec Plaintiffs right or any potential class members right to opt out of
    the Ontario Action if the latter is certified as a class proceeding. Nor does
    it determine anyones right to pursue an individual claim.

[21]

The refusal to stay the Ontario Action can only
    be said to affect the Quebec Plaintiffs procedural rights. The Quebec
    Plaintiff considers that the class affected by the Defendants alleged
    wrongdoing would be better off if only the Quebec Action went forward as a
    class proceeding and the Ontario Action did not.
Locking
makes clear
    that, from an Ontario law perspective, a determination of which of two
    competing actions should proceed as a class action affects procedural rights.
    This is consistent with the view that the
Class Proceedings Act
is
    itself a procedural statute:
Hislop v. Canada (Attorney General)
, 2009
    ONCA 354, 95 O.R. (3d) 81, leave to appeal refused, [2009] S.C.C.A. No. 264, at
    para. 42.

[22]

Although
Locking
was a contest between
    two competing Ontario actions, the conclusion it reached about appeal rights is
    applicable to this case where the contest is between competing proposed
    national class actions in different provinces. This is so because of the nature
    of the dispositions made on each type of motion and their lack of effect on
    substantive rights. It is not dependent on whether or not the factors that are
    considered in deciding a carriage dispute are the same as those to be
    considered on an interprovincial motion to stay. If anything, the conclusion that
    the refusal to stay the Ontario Action is interlocutory resounds with even greater
    force here than it did in
Locking
. There, Mr. Lockings own action was
    stayed and he was prevented from seeking to have it certified as a class
    proceeding. Here, the Quebec Plaintiffs action was not stayed and the order
    does not purport to affect his ability to seek its approval as a class proceeding.
    Even from a procedural standpoint, the refusal to stay the Ontario Action is
    less far-reaching than the order in
Locking
.

[23]

The Quebec Plaintiff notes that, before the
    motion judge, the Ontario Plaintiff argued that the motion to stay should not
    be conflated with a carriage motion. This argument was made by the Ontario
    Plaintiff in response to submissions on the proper factors to be applied for a
    motion to stay. The Ontario Plaintiff took the position that the Quebec
    Plaintiff was incorrectly asserting that  the test on a motion to stay should
    be taken from jurisprudence relating to carriage motions. The Quebec Plaintiff
    suggests that the Ontario Plaintiffs position in the court below is a reason
    why
Locking
ought not to apply to the appeal route issue here.

[24]

I do not consider that point to be germane. First,
    the question before this court is one of jurisdiction, and jurisdiction cannot
    be conferred by the parties characterizations in the court below, for a
    different purpose, about the similarity to a carriage dispute (the
    characterizations are in any event conflicting). Second, the issue on the
    motions under consideration here is not what factors should be applied in
    deciding a motion to stay and how similar those factors are to the factors on a
    carriage motion; the issue is the similarity of the type of order that results
    from a carriage dispute and the type of order here.

[25]

The Quebec Plaintiff relies on the decision in
Ontario
    v. Lipsitz
, 2011 ONCA 466, 281 O.A.C. 67, leave to appeal refused, [2011]
    S.C.C.A. No. 407. He argues that
Lipsitz
stands for the proposition
    that the refusal to stay an action on the grounds of abuse of process results
    in a final order when the refusal does not leave open the right to argue abuse
    of process later in the action. As mentioned, it is unclear whether the motion
    judges decision has foreclosed any future arguments on whether the Ontario
    Action should be stayed in favour of the Quebec Action (see paras. 12 and 13 of
    these reasons). But in any event,
Lipsitz
is of no assistance to the
    Quebec Plaintiff.

[26]

In
Lipsitz
, the plaintiff alleged that
    several defendants improperly forced his sleep disorder clinics to close. After
    filing their statements of defence, the defendants moved to dismiss and to stay
    the plaintiffs action. The motion to stay was premised on the assertion that the
    plaintiffs action was a collateral attack on administrative decisions relating
    to the licensing of sleep clinics. The collateral attack/abuse of process
    argument was one of the defendants
substantive
responses to the
merits
of the plaintiffs claim. The motion judge largely dismissed the defendants
    motion. In doing so, he finally disposed of the defendants substantive
    response that the plaintiffs action was an impermissible collateral attack,
    without reserving the issue for trial. Accordingly, this court held that the
    motion judges order was final:
Lipsitz
, at paras. 40-41.

[27]

In contrast, the Quebec Plaintiffs motion to
    stay did not raise for determination any of the Defendants substantive
    responses to the merits of the Ontario Plaintiffs claim, let alone result in the
    determination of any such substantive response.

[28]

Nor is this case similar to cases like
Smith
    Estate v. National Money Mart Company
, 2008 ONCA 746, 92 O.R. (3d) 641,
    leave to appeal refused, [2008] S.C.C.A. No. 535, relied on by the Quebec
    Plaintiff.
Smith Estate
dealt with a refusal to stay an action in
    favour of arbitration. Sharpe J.A., at para. 30, considered the order final
    because it finally deprived the defendant of a substantive contractual right to
    arbitration.
[6]
Nor is this case similar to
M.J. Jones Inc. v. Kingsway General Insurance
    Co.
(2003), 233 D.L.R. (4th) 285 (Ont. C.A.), where the court held that a
    refusal to stay an action for lack of territorial jurisdiction over the defendant
    and on
forum non conveniens
grounds was final. As Sharpe J.A. stated,
    those motions finally determine substantive questions with constitutional
    implications about the power of the court to adjudicate claims against the defendant:
M.J. Jones
, at para. 10; see also
Microvoice Applications Inc. v.
    Ice Consultants Inc.
, 2004 CarswellOnt 6310 (C.A.). Nothing similar is present
    here.

[29]

The Quebec Plaintiff also submits, citing
Smerchanski
    v. Lewis
(1980)
, 117
    D.L.R. (3d) 716 (C.A.), at p. 720, that an order made in a contest between a
    party to an action and a non-party is final if it finally disposes of their
    rights in the issue raised between them. He argues that the order here is final
    because he is a non-party to the Ontario Action, and the decision of the motion
    judge finally determined whether he could obtain a stay of the Ontario Action
    on the grounds raised by him when the motion was decided.

[30]

I would not give effect to that argument.
Smerchanski
dealt with an order made during a trial, at the request of strangers to the
    action, to quash subpoenas directed to the strangers. The statement in
Smerchanski

must be read in light of what was in issue, and not as a statement that all
    orders made concerning non-parties are final. In
CC&L Dedicated
    Enterprise Fund (Trustee of) v. Fisherman
, 2001 CarswellOnt 3354 (C.A.), this
    court said, at para. 16:

When given its broadest interpretation, the
    principle in
Smerchanski

v. Lewis, supra
, does not fit
    comfortably with the general test for determining whether an order is
    interlocutory or final, as set out in
Hendrickson v. Kallio
, [1932]
    O.R. 675 (C.A.) and clarified in subsequent cases such as
Ball v. Donais
(1993), 13 O.R. (3d) 322 (C.A.).
Smerchanski
was not intended to mean
    that all orders directed to a non-party must be final, and the principle
    expressed therein should not be further expanded in that way.

[31]

Similarly, in
Ambrose v. Zuppardi
, 2013
    ONCA 768, 368 D.L.R. (4th) 749, at para. 8, this court stated: 
Smerchanski
should be restricted to cases in which there are like circumstances  a ruling
    made in the course of a trial quashing a subpoena of a witness in circumstances
    where the information sought to be obtained from the witness cannot be obtained
    from the [parties] themselves.

[32]

The circumstances here are not like those in
Smerchanski
.
    Nor are they circumstances that should attract any variant of its principle. The
    Quebec Plaintiff is not a party to the Ontario Action in the formal sense. But
    he does not premise his request to stay the Ontario Action on being a complete stranger;
    rather he does so on the basis that the Ontario Action overlaps, in all
    material respects, including in respect of the class on whose behalf it is
    brought, with the Quebec Action. This case parallels the situation in
Locking
,
    where Mr. Locking was not a party to the competing class action, although he
    was a member of its proposed class. Mr. Lockings status as a non-party to one
    of the actions, and the fact that he was affected by the result of the carriage
    dispute, did not make the order there final. The Quebec Plaintiffs non-party
    status in the Ontario Action does not lead to a different result here.

CONCLUSION

[33]

For these reasons I would quash the Quebec
    Plaintiffs appeal. In light of that disposition, I would also dismiss the
    Defendants motion for directions.

[34]

If the parties are unable to agree on costs, I
    would require that they each make written submissions within ten days of the
    release of these reasons. Those submissions should not exceed two pages in
    length.

Released: JUN 12, 2020 MLB

B.
    Zarnett J.A.

I
    agree. M.L. Benotto J.A.

I
    agree. Thorburn J.A.





[1]
Moving parties in M51262, the motion to quash.



[2]
Responding parties in M51557, the motion for directions.



[3]
Moving parties in M51557.



[4]
Appeal file number C67841.



[5]
The Quebec Plaintiff also takes the position that the Quebec Action
    is slightly broader in scope.



[6]
In
TELUS Communications Inc. v. Wellman
,
    2019 SCC 19, at para. 91 (per Moldaver J.), it was suggested that decisions
    under s. 7(6) of the
Arbitration Act
,
    1991
, S.O. 1991, c. 17, cannot be appealed at all. Whether or not this
    affects the decision in
Smith Estate
,
    it further underscores the inapplicability of the jurisprudence on stays in
    favour of arbitration to the situation in the case at bar.


