



COURT
    OF APPEAL FOR ONTARIO

CITATION:
    Birdseye Security Inc. v. Milosevic, 2020 ONCA 355

DATE:
    20200605

DOCKET:
    C67407&C67708

Rouleau,
    van Rensburg and Roberts JJ.A.

DOCKET: C67407

BETWEEN

Birdseye Security Inc.

Plaintiff

and

Danilo Milosevic also
    known as Danny Milosevic carrying on business as

VCMS Security Services and as VCMS
    Security

Defendant

AND
    BETWEEN

Danilo Milosevic also
    known as Danny Milosevic carrying on business as

VCMS Security Services and as VCMS
    Security

Plaintiff
    by Counterclaim (Appellant)

and

Birdseye Security Inc.
, and Mile Grabovica

Defendants
    by Counterclaim (
Respondent
)

DOCKET: C67708

BETWEEN

Birdseye Security Inc.

Plaintiff

and

Danilo Milosevic also
    known as Danny Milosevic carrying on business as

VCMS Security Services and as VCMS
    Security

Defendant

AND
    BETWEEN

Danilo Milosevic also
    known as Danny Milosevic carrying on business

as VCMS Security Services and as VCMS
    Security

Plaintiff
    by Counterclaim (Respondent)

and

Birdseye
    Security Inc. and Mile Grabovica

Defendants
    by Counterclaim (Appellants)

Rocco
    Galati, for the appellant in C67407 and the respondent in C67708

Tyler
    H. McLean, for the appellants in C67708 and the respondent in C67407

Heard:
    In writing

On
    appeal from the order of Justice Michael T. Doi of the Superior Court of
    Justice, dated August 14, 2019 (C67407).

On
    appeal from the order of Justice Judy A. Fowler Byrne of the Superior Court of
    Justice, dated October 21, 2019 (C67708).


REASONS
    FOR DECISION

INTRODUCTION

[1]

These two appeals arise out of two separate actions that are pending in
    the Superior Court in Brampton. Both involve the same parties: Mile Grabovica
    and Danilo Milosevic and their respective security and home surveillance
    businesses. Mr. Grabovica, through his company, Birdseye Security Inc.
    (Birdseye), commenced Action CV-18-1527 (Action 1527) in April 2018 and
    Action CV-18-4669 (Action 4669) in October 2018. Both actions named as
    defendant Mr. Milosevics sole proprietorship VCMS Security Services or
    VCMS Security (VCMS).

[2]

In Action 1527, Birdseye claims damages for, among other things,
    conversion and theft of confidential and sensitive proprietary information,
    inducing breach of contract, conspiracy, and unlawful interference with
    economic relations. In Action 4669, Birdseye claims damages for trademark
    infringement and defamation, alleging that VCMS has attempted to duplicate its
    business by infringing its Voice-Down trademark and by making false and
    misleading statements that discredit its goods and services.

[3]

Mr. Milosevic has defended and asserted a counterclaim against Birdseye
    and Mr. Grabovica in both actions. Essentially, he pleads various facts
    concerning the business and personal relationship between himself and Mr.
    Grabovica (who are brothers-in-law), asserting that there is no merit to the
    actions, and that they have been brought to harass him and to put him out of
    business. The counterclaim in each action seeks essentially the same relief:
    damages and an order prohibiting Birdseye and Mr. Grabovica from bringing
    further proceedings against him and his business without prior leave of the
    court. The counterclaim in Action 4669 also seeks an injunction against
    Birdseye and Mr. Grabovica from trademarking the VCMS logo. Mr. Milosevic
    pleads essentially the same facts in each counterclaim, except that in Action
    4669 he pleads, at para. 29, that having launched a claim for trademark
    infringement against him, Mr. Grabovica is attempting to trademark the VCMS
    logo for collateral purposes, and to cause him and his company harm.

[4]

Neither action has progressed beyond the pleadings stage. Birdseye has
    brought motions to strike various paragraphs of Mr. Milosevics statement of
    defence and counterclaim in each action. These appeals arise out of the two
    most recent pleadings motions.

[5]

Birdseye brought its first motion in Action 1527 seeking to strike
    certain paragraphs of the counterclaim on various grounds, including that it
    disclosed no reasonable cause of action (in relation to the claim for abuse of
    process), that it was frivolous and vexatious, and that it failed to contain a
    concise statement of material facts. The motion was served in August 2018 and
    was heard on December 19, 2018. By order dated April 29, 2019, Kumaranayake J.
    struck certain paragraphs of the counterclaim with leave to amend: 2019 ONSC
    2676. No appeal was taken, and Mr. Milosevic amended his pleading.

[6]

While this motion was under reserve, Birdseye served a motion in January
    2019, returnable April 2, 2019, to strike certain paragraphs of the statement
    of defence and the entire counterclaim in Action 4669. By order dated August
    14, 2019, Doi J. dismissed the motion with respect to the statement of
    defence and struck the counterclaim without leave to amend.

[7]

Meanwhile, while the motion before Doi J. was under reserve, in June
    2019, Birdseye served another motion in Action 1527, seeking to strike certain
    paragraphs of Mr. Milosevics amended counterclaim, including the entire cause
    of action of abuse of process. That motion was heard by Fowler Byrne J. on July
    23, 2019. She dismissed the motion by order dated October 21, 2019.

[8]

In their appeals to this court, Mr. Milosevic appeals the order of Doi
    J. striking its counterclaim in Action 4669 (Appeal C67407), and Birdseye and
    Mr. Grabovica appeal the order of Fowler Byrne J. dismissing the motion to
    strike in Action 1527 (Appeal C67708).

APPEAL C67407

[9]

Birdseye moved to strike paras. 16 to 19 of the statement of defence and
    the entire counterclaim in Action 4669.

[10]

The
    relevant paragraphs of the statement of defence set out the personal and
    business history of the parties, referring to the other proceedings commenced
    by Birdseye, which Mr. Milosevic claims are abusive. These paragraphs also
    allege that Birdseyes pleadings contain misleading or blatantly false claims.
    Birdseye asserted that these paragraphs were neither relevant nor material to
    the defence, and were pleaded to give atmosphere and to show Birdseye in a bad
    light. The motion judge disagreed and refused to strike paras. 16 to 19 of the
    statement of defence.

[11]

Birdseye
    argued that the entire counterclaim should be struck under r. 21.01(3)(c) of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194

because it
    duplicated the counterclaim asserted in Action 1527. Mr. Milosevic
    submitted that any concern about duplication could be addressed by
    consolidating or ordering the trial together of the two Superior Court actions,
    as well as another action between the same parties in the Small Claims Court in
    Toronto (SC-18-5547). He also argued that he would be prejudiced if the
    counterclaim were struck and Birdseye discontinued Action 1527.

[12]

The
    motion judge rejected the request for consolidation or trial together in the
    absence of a motion for such relief. He noted that Mr. Milosevic had retained a
    different lawyer to defend the Small Claims Court action, which was not before
    the court. He directed that, should the parties wish to pursue a consolidation
    or joinder of the actions, they would need to do so by motion with notice on a
    different occasion. The motion judge found that the counterclaim should be
    stayed under r. 21.01(3)(c) and made an order striking the counterclaim.
    He concluded that to do otherwise would constitute an abuse of process and that
    Mr. Milosevic would not be prejudiced as, under r. 23.02, he could pursue the
    counterclaim in Action 1527 even if Birdseye were to discontinue its claim in that
    action.

[13]

On
    appeal, Mr. Milosevic submits that the counterclaim ought not to have been
    struck and that, in the alternative, all of the actions ought to be
    consolidated or ordered to be tried together. In response, Birdseye asserts
    that the order striking the counterclaim reflected a proper exercise of
    discretion, as there was no motion to consolidate, and the counterclaim
    duplicates what is asserted in Action 1527.

[14]

A
    defendant may move for an order staying or dismissing an action (in this case a
    counterclaim) under r. 21.01(3)(c) where another proceeding is pending in
    Ontario or another jurisdiction between the same parties in respect of the same
    subject matter. Having concluded that the duplicative counterclaim justified a
    stay, the motion judge ought to have stayed, and not struck the counterclaim.
    No issue was made of this, and nothing turns on it for the purpose of the
    appeal. Rather, the issue is whether there was a reversible error in the
    application of r. 21.01(3)(c) to bring to an end the counterclaim in Action
    4669.

[15]

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:
Farris v. Staubach Ontario Inc.

(2004), 32
    C.C.E.L. (3d) 265 (Ont. S.C.), at para. 15. 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:
Farris
, at para. 16.

[16]

The
    fact that another proceeding is pending between the same parties in respect of
    the same subject matter does not automatically lead to an order dismissing or
    staying the claim. Rather, the order is discretionary and the judge hearing the
    motion must be satisfied that the stay or dismissal is warranted in the
    particular circumstances of the case. While a multiplicity of proceedings
may
constitute an abuse of process which warrants an order staying or dismissing a
    proceeding (see e.g.,
Maynes v.
    Allen-Vanguard Technologies Inc. (Med-Eng Systems Inc.)
, 2011 ONCA
    125, 274 O.A.C. 229, at paras. 36, 46), 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.

[17]

In
    this case, the motion judge stayed the counterclaim to avoid an unjust
    multiplicity of proceedings. He concluded that the duplicative litigation
    would on the facts of this case constitute an abuse of process, and he
    rejected Mr. Milosevics claim of prejudice on the basis that he would be
    able to pursue his counterclaim in Action 1527 regardless of whether Birdseye
    discontinued the main action in that proceeding.

[18]

An
    order dismissing or staying a proceeding under r. 21.01(3)(c) is a
    discretionary order that is subject to deference on appeal, absent an error in
    principle:
1420041 Ontario Inc. v. 1 King West Inc.
, 2010 ONSC 6671, 1
    R.P.R. (5th) 33 (Div. Ct.), at para. 24, revd on other grounds 2012 ONCA 249,
    349 D.L.R. (4th) 97, leave to appeal refused, [2012] S.C.C.A. No. 272;
Canada
    (Minister of Citizenship and Immigration) v. Tobiass
, [1997] 3 S.C.R. 391,
    at para. 87. In this case, the motion judge did not explain why permitting Mr. Milosevic
    to assert his counterclaim in both actions would constitute an abuse of
    process. He appears to have assumed that the existence of an almost identical
    pleading in both actions would
ipso facto
constitute an abuse of process. His failure to consider the context of the
    litigation was an error in principle that warrants this courts intervention.

[19]

Considering
    the matter afresh, we set aside the order of Doi J. We are not persuaded, in
    the context of the proceedings involving these parties, that there would be any
    prejudice or injustice in permitting Mr. Milosevic to assert a counterclaim in
    response to both actions.

[20]

First,
    it is Birdseye that is responsible for the fact that there are multiple
    proceedings. Rather than asserting all of its claims in a single action,
    Birdseye chose to commence three separate actions in the Superior Court in
    Brampton (one of which it discontinued) and an action in the Toronto Small
    Claims Court. Birdseye opposed the consolidation or trial together of the pending
    actions as a solution to its concern about duplication. If the facts pleaded by
    Mr. Milosevic in his statement of defence and counterclaim are true (and they
    are assumed to be true for the purpose of the pleadings motions), the actions
    commenced by Birdseye are without merit, an abuse of process, and were initiated
    for the collateral purpose of causing him harm. The fact that Mr. Milosevic has
    asserted a counterclaim in each of the multiple actions commenced by Birdseye
    does not in itself constitute an injustice or prejudice to Birdseye. Indeed, no
    specific harm was alleged by Birdseye.

[21]

Second,
    we note that the counterclaim in Action 4669 seeks additional relief that is
    not claimed in Action 1527: an injunction against Birdseye and Mr. Grabovica
    from trademarking the VCMS logo, and it pleads the additional facts to support
    that claim. Striking the counterclaim in Action 4669 would eliminate this claim
    for relief altogether.

[22]

For
    these reasons, we agree with Mr. Milosevic that, by striking his counterclaim, the
    motion judge deprived him of a claim that he was validly entitled to make in
    response to each of Birdseyes actions  that the actions started against him
    were an abuse of process. It was not sufficient to strike the counterclaim in Action
    4669 simply because the same type of claim was asserted in response to Action
    1527. The counterclaim followed on the facts pleaded at paras. 16 to 19 of the
    statement of defence, which the motion judge had refused to strike.

[23]

Accordingly,
    the appeal is allowed, and the order of Doi J. is set aside.

APPEAL C67708

[24]

This
    appeal is in respect of the order of Fowler Byrne J. dismissing Birdseyes
    motion to strike certain paragraphs of Mr. Milosevics Fresh as Amended
    Counterclaim in Action 1527 on the grounds that they disclose no cause of
    action and are frivolous and vexatious. Fowler Byrne J. dismissed the motion,
    concluding that Mr. Milosevic had addressed the flaws previously identified by
    Kumaranayake J. and that the pleading was not otherwise deficient. In
    particular, she concluded that the claim in respect of abuse of process was
    properly pleaded. She encouraged the parties to move beyond the pleadings stage
    to focus on discovery and then possible mediation or trial. Birdseye and Mr.
    Grabovica appeal from the order dismissing the motion.

[25]

Birdseye
    and Mr. Grabovica submit that it is plain and obvious that the claim for abuse
    of process discloses no reasonable cause of action, or alternatively that the
    claim is frivolous and vexatious and should be struck. Mr. Milosevic argues
    that the order under appeal is interlocutory and that the appeal should be
    quashed for want of jurisdiction. In the alternative, he asserts that the
    question of whether the claim for abuse of process could stand was already
    decided in his favour in the earlier motion before Kumaranayake J.

[26]

We
    agree that the order of Fowler Byrne J. is interlocutory. Birdseyes motion was
    to strike paragraphs in Mr. Milosevics pleading as failing to disclose a cause
    of action and as frivolous and vexatious, relying on rr. 21.01(1)(b),
    21.01(3)(d) and 25.11. An order dismissing such a motion is typically
    interlocutory:
S.(R.) v. H.(R.)
(2000), 195 D.L.R. (4th) 345 (Ont. C.A.), at paras. 13-15;
Hopkins v. Kay
, 2014 ONCA 514, at para. 7.
    The appellants reliance on
Brown v. Hanley
, 2019 ONCA 395, 2019
    C.L.L.C. 220-044, as authority that the order under appeal is final, is
    misplaced. That case involved, among other things, the appeal of an order
    refusing to strike a claim under r. 21.01(3)(a) on the basis that the dispute
    was covered by a collective agreement. See
Abbott
    v. Collins
(2002), 62 O.R. (3d) 99 (C.A.), at paras. 6-7, where
    Morden J.A. distinguished between such an order, which determines jurisdiction
    on a final basis, and an order dismissing a motion under r. 21.01(1)(b) to
    strike pleadings for failure to disclose a reasonable cause of action, which is
    interlocutory.

[27]

As
    the order of Fowler Byrne J. dismissing Birdseyes motion is interlocutory, any
    appeal lies to the Divisional Court with leave under s. 19(1) of the
Courts of Justice Act
, R.S.O. 1990, c.
    C-43. Accordingly, the appeal to this court is quashed.

DISPOSITION

[28]

For
    these reasons, we allow the appeal in C67407, and set aside the order of Doi J.
    dated August 14, 2019, and we quash the appeal in C67708.

[29]

Mr.
    Milosevic is entitled to his costs of both appeals, and he may be entitled to
    costs of the motion before Doi J. If the parties are unable to agree on costs,
    they shall serve and file with the
court at COA.E-File@ontario.ca
    their written submissions as follows: Mr. Milosevic shall provide his costs
    outline and
written submissions of no more than three pages within 20
    days, and Birdseye and Mr. Grabovica shall provide their written
    submissions limited to three pages, within 15 days thereafter.

Paul
    Rouleau J.A.

K.
    van Rensburg J.A.

L.
    B. Roberts J.A.


