



COURT OF APPEAL FOR ONTARIO

CITATION: Paulpillai Estate v. Yusuf, 2020
    ONCA 655

DATE: 20201019

DOCKET: M51439 & M51521 (C68024)

Doherty, Hoy and Jamal JJ.A.

BETWEEN

Theresa Yogaranie Paulpillai in her capacity as the Estate Trustee
    for the Estate

of
    Richmond Gabriel Paulpillai, Theresa Yogaranie Paulpillai

and Maneharran Paulpillai

Applicants/Moving Parties

(Respondents/Moving
    Parties on M51439/

Responding Parties on M51521)

and

Joshua Akanni Yusuf, Meerc Inc., All Saints University Limited,

All
    Saints University School of Medicine Limited, Avonelle Pinard, David Bruney,

Frankie Bellot and Medical Education Examination Resource Center

Respondents/Responding Parties

(Appellants/Responding
    Parties on M51439/

Responding Parties on M51521)

Edwin G. Upenieks and Angela H. Kwok,
    for the respondents

Osborne G. Barnwell, for the appellants

Heard: September
    17, 2020 by video conference

Jamal J.A.:

[1]

There are two motions before the court: the
    respondents motion to quash an appeal from an order of Fowler Byrne J. (the motion
    judge), dated February 6, 2020, on the basis that the order under appeal is
    interlocutory, not final, and thus any appeal lies to the Divisional Court with
    leave; and the appellants motion to stay the order under appeal.

[2]

For the reasons that follow, I conclude the
    order under appeal is interlocutory, and thus any appeal lies to the Divisional
    Court with leave. Because this court lacks jurisdiction over the appeal, I
    would quash the appeal and dismiss the motion to stay the order under appeal.

Background

[3]

The late Richmond Gabriel Paulpillai
    (Richmond) and Joshua Akanni Yusuf (Joshua) were partners in a successful business
    venture operating two medical schools in the Caribbean: All Saints University
    of Medicine Limited, incorporated and based in Dominica (ASU Dominica), and
    All Saints University Limited, incorporated and based in St. Vincent and the Grenadines
    (ASU SVG). Richmond and Joshua, who both lived in Ontario, each owned 40% of
    the shares in each of ASU Dominica and ASU AVG.

[4]

ASU Dominica and ASU SVG are managed by MEERC
    Inc., a corporation in which Richmond and Yusuf each owned 50% of the shares.

[5]

The tuition payments, dividends, and profits of
    ASU Dominica and ASU SVG are held by a partnership known as the Medical
    Education Examination Resource Center (the Center), in which Richmond and Joshua
    were equal partners. The Center holds
current
earnings
    and substantial undistributed earnings that accumulated before Richmonds
    death. The Center operates under a partnership agreement (the Partnership
    Agreement) governed by Ontario law that provides for arbitration of disputes between
    the partners.

[6]

Before Richmond died, ASU Dominica and ASU SVG
    shared recruiting efforts and expenses and allocated students to their
    respective campuses according to capacity, essentially operating as related businesses.
    When Richmond died, Joshua proposed to Theresa Paulpillai (Theresa)  Richmonds
    spouse and sole executor, trustee, and beneficiary  that they divide up the
    businesses, with Joshua and Richmonds family each assuming ownership and
    management of one university.

[7]

Theresa elected to take ASU SVG, but claims Joshua
    refused to provide her with financial information about the businesses. She
    alleges Joshua continued to manage both universities and their funds without
    regard to the interests of the Paulpillai family, recruited ASU SVGs staff and
    students, and competed with ASU SVG through another medical school, the
    American University of St. Vincent. She also claims Joshua failed to account for
    partnership funds after Richmonds death.

[8]

Because of these concerns, Theresa, acting on
    her own behalf and on behalf of Richmonds estate, and her son, Maneharran
    Paulpillai (Mane), commenced an application before the Ontario Superior Court
    of Justice against Joshua and the other entities and individuals involved in
    the businesses. They claimed, among other relief, a declaration and damages for
    corporate oppression, a declaration and damages for breach of the Partnership
    Agreement, an accounting and tracing of money received since Richmonds death,
    and other injunctive relief.

[9]

At the first attendance on the application on
    February 1, 2019, the parties agreed to a consent order separating the businesses
    and granting the injunctive relief sought on the application. The application
    was adjourned
sine die
, to be brought back if necessary.

[10]

Because Theresa felt that Joshua was breaching the
    consent order, the parties brought back the application and moved for a range
    of interim relief.

The Order Under Appeal

[11]

On February 6, 2020, the motion judge issued the
    order under appeal, with reasons reported as
Paulpillai v. Yusuf
, 2020
    ONSC 851.

[12]

The order: (1) appointed BDO Canada Limited
    (BDO) as an investigative monitor of ASU Dominica and ASU SVG; (2) released funds
    on an interim basis to Theresa and Mane to operate ASU SVG, as an advance of
    any sum that might be found to be payable to them; (3) enjoined Joshua on an interim
    basis from competing unfairly with ASU SVG or recruiting its students or
    personnel; (4) converted the application to an action; (5) added parties to the
    action; and (6) declined to seal the entire court file.

[13]

The respondents filed a notice of appeal from
    this order with this court, and later also filed a notice of motion for leave
    to appeal to the Divisional Court.

[14]

In response, Theresa and Mane (the moving
    parties) moved to quash this appeal on the basis that the order is
    interlocutory, not final, and thus any appeal lies to the Divisional Court with
    leave. For their part, Joshua and the other respondents (the responding
    parties) moved to stay the order under appeal.

Discussion

[15]

Section 6(1)(b) of the
Courts of Justice Act
,
    R.S.O. 1990, c. C.43, provides that an appeal lies to the Court of Appeal from
    a final order of a judge of the Superior Court of Justice, while s. 19(1)(b)
    provides that an appeal lies to the Divisional Court from an interlocutory
    order of a judge of the Superior Court of Justice, with leave as provided in
    the rules of court.

[16]

The main principles that determine whether an
    order is interlocutory or final are well known:

1.

An appeal lies from the courts order, not from
    the reasons given for making the order: see
Grand River Enterprises v.
    Burnham
(2005), 197 O.A.C. 168 (C.A.), at para. 10;
Amphenol Canada
    Corp. v. Sundaram
, 2019 ONCA 932, at para. 21; and
Fram Elgin Mills 90
    Inc. v. Romandale Farms Limited
, 2016 ONCA 404, 131 O.R. (3d) 455, at
    para. 33.

2.

An interlocutory order does not determine the real matter in dispute
    between the parties  the very subject matter of the litigation  or any
    substantive right[.] Even though the order determines the question raised by
    the motion, it is interlocutory if these substantive matters remain undecided:
Drywall Acoustic Lathing Insulation Local 675 Pension Fund v. SNC-Lavalin
    Group Inc.
, 2020 ONCA 375, at para. 16, citing
Hendrickson v. Kallio
,
    [1932] O.R. 675 (C.A.), at p. 678;
Ball v. Donais

(1993), 13
    O.R. (3d) 322 (C.A.). See also
Amphenol
, at para. 18.

3.

In determining whether an order is final or
    interlocutory, one must examine the terms of the order, the motion judges
    reasons for the order, the nature of the proceedings giving rise to the order,
    and other contextual factors that may inform the nature of the order:
Prescott
    & Russell (United Counties) v. David S. Laflamme Construction Inc.
,
    2018 ONCA 495, 142 O.R. (3d) 317, at para. 7.

4.

The question of access to appellate review must
    be decided on the basis of the legal nature of the order and not on a case by
    case basis depending on the application of the order to the facts of a
    particular case:
Laurentian Plaza Corp. v. Martin
(1992), 7 O.R. (3d)
    111 (C.A.), at p. 116; see also
Amphenol
, at para. 19. In other
    words, the characterization of the order depends upon its legal nature, not its
    practical effect: see
Ontario Medical Assn. v. Miller
(1976), 14 O.R.
    (2d) 468 (C.A.), at p. 470;
Deltro Group Ltd. v. Potentia Renewables Inc.
, 2017 ONCA 784, 139 O.R. (3d) 239, at
    para. 3.

[17]

As elaborated below, in my view, applying these principles
    to the order under appeal confirms that it is interlocutory.

(1)

Appointment of BDO as investigative monitor

[18]

Paragraphs 2-15 of the order appoint BDO Canada
    Limited as investigative monitor to monitor the business operations and
    financial affairs of MEERC Inc., the Centre, ASU Dominica, ASU SVG, and the
    American University of St. Vincent; requires these entities to cooperate with
    BDO; orders BDO to determine and make equalization payments between the parties;
    and requires the parties to authorize the release of $500,000 to the monitor as
    a retainer for its services.

[19]

Although the order does not refer to the
    specific statutory basis to appoint the monitor, the motion judges reasons noted
    the court had authority to appoint a receiver and manager by an interlocutory
    order where it appears to be just or convenient to do so:
Courts of Justice
    Act
, s. 101: at para. 59. Section 101(1) of the
Courts of Justice Act
provides:

101
(1) In the
    Superior Court of Justice, an interlocutory injunction or mandatory order may
    be granted or a receiver or receiver and manager may be appointed by an
    interlocutory order, where it appears to a judge of the court to be just and
    convenient to do so.

[20]

Section 101(1) authorizes the court to appoint a
    receiver with investigative powers to protect the parties interests pending
    the resolution of the claims and to mitigate risk posed to the plaintiffs
    right to recovery. A receiver with investigative powers is often appointed to
    gather information and determine the true state of affairs about the parties:
    see
Akagi v. Synergy Group (2000) Inc.
, 2015 ONCA 368, 125 O.R. (3d)
    401, at paras. 65-66, 90.

[21]

The motion judge invoked similar considerations
    in appointing BDO as monitor in this case. She noted that a monitor may be
    appointed where the plaintiffs ability to recover could be seriously
    jeopardized: at para. 61. The appointment was made not to adjudicate on an
    issue, but rather to provide the accounting that is required by both parties in
    order to resolve or try this issue: at para. 63. BDO would perform an audit
    function and determine the proper equalization payment to be made to one
    party: at para. 63.

[22]

This court has accepted that the appointment of a
    receiver on an interlocutory motion under s. 101(1) of the
Courts of
    Justice Act
(rather than on application) is interlocutory: see e.g.,
Illidge
    (Trustee of) v. St. James Securities Inc.
(2002), 60 O.R. (3d) 155 (C.A.),
    at para. 4;
Ontario v. Shehrazad Non Profit Housing Inc.
, 2007 ONCA
    267, 85 O.R. (3d) 81, at paras. 15-17.

[23]

In my view, the same is true of the order
    appointing BDO as investigative monitor here. The order does not adjudicate the
    parties rights and obligations. Rather, it authorizes BDO to undertake an audit,
    to protect the parties interests pending the resolution of the dispute, and to
    furnish the court with information to help resolve the dispute. The order
    appointing the monitor is interlocutory.

(2)

Interim release of funds to operate ASU SVG

[24]

Paragraphs 16-17 of the order require the parties
    to authorize the release of USD$1 million from the partnership funds to Theresa
    and Mane to operate ASU SVG, as an advance on any sum found to payable to [them],
    with any further release of interim funds at BDOs sole discretion.

[25]

In her reasons, the motion judge noted Joshua
    has admitted that $1 million could be released for each of the universities to
    allow them operating funds for a period of two months: at para. 44. She also highlighted
    that Joshua conceded that USD$4.6 million is currently in a Pay[P]al account
    that is related to both medical schools: at para. 44. She ordered an interim
    release of funds for ASU SVG alone because she was not convinced on the
    evidence that ASU Dominica requires funds on an urgent basis in order to
    continue its operations. There does appear to be an urgent need for ASU SVG:
    at para. 88.

[26]

An interim release of funds to one party, on
    motion, that settles no elements of the
lis
between the parties is an
    interlocutory order: see
Grand River Enterprises
, at paras. 4, 6, 9,
    and 13;
Watkin v. Open Window Bakery Ltd.
(1996), 28 O.R. (3d) 441 (Div.
    Ct.), at p. 444.

[27]

The responding parties assert in their factum
that
this aspect of the order is final in nature as
    it was granted against [their] wishes and the failure to make an equal
    payment to [them] leaves them without the working capital they need and thus,
    this is highly prejudicial and finally brings their request for money to an
    end.

[28]

This submission is without merit. The order refers
    to an advance of monies that may be found to be owing to Theresa and Mane. It
    is not a final determination of anyones entitlement. If the court ultimately
    decides that no money was owing to Theresa, Mane, or ASU SVG, it may have to be
    repaid.

[29]

Thus, I conclude that the order for an interim
    payment to Theresa and Mane to operate ASU SVG is interlocutory.

(3)

Interim injunction

[30]

Paragraphs 18-19 of the order restrain Joshua on
    an interim basis from directly or indirectly providing medical education in St.
    Vincent and the Grenadines, except through the American University of St.
    Vincent, and regarding the American University of St. Vincent, restrains Joshua
    from enrolling or educating students enrolled with ASU SVG, or employing
    individuals employed by ASU SVG, in the previous 12 months.

[31]

An interim or interlocutory injunction is
    interlocutory for purposes of the appeal route, because its legal nature does
    not finally determine the essence of the litigation before the court, even if
    its practical effect may be to do so: see
Amphenol
, at para. 23;
Ontario
    Medical Assn.
, at p. 470; and
Deltro Group
, at para. 3.

[32]

As a result, I conclude that this aspect of the
    order is interlocutory.

(4)

Conversion of the application to an action

[33]

Paragraphs 20-22 of the order convert the
    application to an action and provide a deadline for delivery of the statement
    of claim.

[34]

An order converting an application into an
    action is interlocutory. Such an order simply converts the application into a
    trial. The matter was started in the Superior Court of Justice and remains
    there: see
Susan J. Model & Talent Management Inc. v. IMG Models Inc.
,
    2006 CanLII 2882 (Ont. C.A.), at para. 3.

(5)

Addition of parties

[35]

Paragraph 23 of the order grants leave to add
    the American University of St. Vincent and related individuals as
    defendants.

[36]

An order adding parties as defendants is
    interlocutory. The litigation continues, and the order does not affect the added
    parties substantive rights: see
Fram Elgin Mills 90 Inc.
, at para. 28;
Hunter v. Richardson
, 2013 ONCA 731, at para. 2;
Shoukralla v.
    Shoukralla
, 2016 ONCA 128, 41 C.B.R. (6th) 6, at para. 17; and
Robinson
    v. Thornlea Farms Ltd.
, [1991] O.J. No. 2219 (C.A.).

(6)

Refusal to seal the court file

[37]

Paragraphs 24-25 of the order deny the request
    to seal the entire court file, except for certain affidavits that are to remain
    sealed. However, at para. 92 of her reasons, the motion judge stated [t]his
    issue can be revisited in the action if either party can present evidence in
    support of it.

[38]

This aspect of the order does not finally
    determine the real matter in dispute between the parties  the claim of
    corporate oppression, whether the responding parties have appropriately
    accounted to the moving parties for monies that may be owing to them, and the
    appropriate way to separate the two medical school businesses. Instead, it
    relates to the collateral matter of whether the court file is to be sealed, and
    in any event, is open to being revisited on
appropriate
evidence. In my view, this aspect of the order is therefore
    interlocutory.

(7)

Refusal to refer the dispute to arbitration

[39]

Finally, the responding parties assert that the
    motion judge refused to refer the dispute to arbitration under the arbitration
    clause in the Partnership Agreement
, and that this
    was a final order
because it finally determined the forum for adjudicating
    the parties dispute and deprived the responding parties of their substantive contractual
    right to resolve the dispute by arbitration.

[40]

I do not agree with this submission in this case.

[41]

It is telling that the motion judges order is
    silent on the issue of arbitration. As the motion judges reasons explain, this
    is because there was no motion before the court to refer the dispute to
    arbitration.

[42]

At para. 51 of her reasons, the motion judge
    accepted that the Partnership Agreement clearly states that any disputes
    should be resolved through an arbitration, adding that under the arbitration
    clause injunctive relief may be sought outside the arbitration process. Accordingly,
    nothing prohibited the moving parties from seeking injunctive relief before the
    court: at para. 52.

[43]

At para. 55, the motion judge observed that, despite
    the responding parties maintaining in their affidavit material on the motion
    that the matter should have proceeded to arbitration, at no time did they
    bring a motion seeking to stay these proceedings or to compel the [moving
    parties] to proceed by way of arbitration. She highlighted s. 7(1) of the
Arbitration
    Act, 1991
, S.O. 1991, c. 17 (
Arbitration Act
), which makes it clear
    that the action can only be stayed by way of motion, and even then, the court
    has the discretion to refuse to grant the stay if the motion is not made in a
    timely manner: at para. 55. That discretion arises under s. 7(2)4 of the
Arbitration
    Act
:

7
(2) However,
    the court may refuse to stay the proceeding in
any of
the following cases:



4. The motion was brought with undue delay.

[44]

At para. 57, the motion judge suggested that
    even if the responding parties had a right to have the issues determined by an
    arbitrator, they waived this right when they took steps within the proceeding.

[45]

At para. 58, the motion judge said that the lack
    of a motion to stay the proceeding and the responding parties taking steps
    within the proceeding meant that they had waived any right to arbitration:

[G]iven that
there is no motion before the Court to stay the action, and given
    that the [responding parties] have taken significant steps to respond to this
    application, including filing numerous affidavits, producing
viva voce
evidence in the application, conducting cross-examinations and even bringing an
    oral motion without formal notice seeking to remove the [moving parties]
    counsel as solicitors of record for the [moving parties], I find that the
    [responding parties] have waived their right to seek to have these issues
    determined by way of arbitration.

[46]

In my view, the motion judge did not make a
    final determination on whether the dispute should be referred to arbitration.
    She explained that the responding parties had failed to bring a motion as
    required by s. 7, and thus it was not open to her to grant a stay. For good
    measure, in
obiter
, she raised the issues of delay and waiver.

[47]

Even if the motion judge is viewed as having
    exercised discretion because of undue delay under s. 7(2)4 of the
Arbitration
    Act
to refuse to stay the court proceeding and refer the dispute to
    arbitration  despite the silence of the order on this point  this court would
    still lack appellate jurisdiction over this aspect of the order. Section 7(6)
    of the
Arbitration Act
provides: There is no appeal from the courts
    decision. The appeal bar in s. 7(6) applies to any decision under s. 7,
    including a decision to refuse a stay under s. 7(2): see
TELUS
    Communications Inc. v. Wellman
, 2019 SCC 19, [2019] 2 S.C.R. 144, at para.
    91;
Toronto Standard Condominium Corporation No. 1628 v. Toronto Standard
    Condominium Corporation No. 1636
, 2020 ONCA 612, at paras. 62, 66-68, and 95.

[48]

Thus, on either reading of the motion judges
    reasons, I conclude this court lacks jurisdiction over this aspect of the order
    under appeal.

Disposition

[49]

I would grant the motion to quash the appeal and
    dismiss the motion to stay the order under appeal, without prejudice to the right
    to seek leave to appeal to the Divisional Court and to renew the stay motion
    before that court.

[50]

I would order costs payable to the moving
    parties
in the agreed amount of $15,000
all
    inclusive.

Released: October 19, 2020 (D.D)

M.
    Jamal J.A.

I
    agree. Doherty J.A.

I
    agree. Alexandra Hoy J.A.


