



COURT OF APPEAL FOR ONTARIO

CITATION: Sabatino v. Posta Ital Bar Inc.,
    2022 ONCA 208

DATE: 20220310

DOCKET: M53127 (C70005)

Pepall
    J.A. (Motions Judge)

BETWEEN

Moses
    Sabatino

Applicant

(Appellant/Moving Party)

and

Posta Ital Bar Inc., Rocco Mastrangelo and Marco Mastrangelo

Respondents

(Respondents/Responding Parties)

David Morawetz and John Lo Faso, for
    the appellant

Daniel Rosenbluth, for the respondents

Heard: February 25, 2022 by video conference

REASONS
    FOR DECISION

[1]

The applicant, Moses Sabatino, moves for an extension of time to perfect
    his appeal. A factor that may be considered on a motion to extend time is
    whether this court has jurisdiction:
Jadhav v. Jadhav
,
    2020 ONCA 19.

[2]

The order under appeal dismissed an oppression application under the
Ontario Business Corporations Act
, R.S.O. 1990, c. B.16.
    Section 255 of that Act states that [a]n appeal lies to the Divisional Court
    from any order made by the court under this Act.

[3]

On February 22, 2022, the Executive Legal Officer (Acting) of this court
    wrote to counsel alerting them to this concern and asking them to be prepared
    to address the issue in their submissions on the motion.

[4]

In attending before me, both counsel agreed that this appeal should be
    in Divisional Court but urged me to address the other issues. The parties advised
    that they would be bound by the result and if the respondents were unsuccessful
    on the issues other than jurisdiction, they would consent to a late filing in
    the Divisional Court. Under the circumstances, I will first very briefly
    address the relevant background facts followed by a discussion of the test for
    an extension and its application.

Background Facts

[5]

The applicant is a one-third shareholder in the corporate respondent, Posta Ital
    Bar Inc., a restaurant in Port Credit, Ontario. The individual respondent,
    Rocco Mastrangelo, holds the remaining two-thirds of the shares in the company,
    one half of which is held in trust for his brother, the respondent Marco
    Mastrangelo. In late 2018, the applicant was asked to participate in a cash
    call which Rocco felt was critical for the survival of the business. The
    applicant refused and Rocco then caused him to be removed as a director. He was
    not removed from his position as an officer of the company.

[6]

The applicant then commenced an application under s. 248 of the
OBCA
. On October 6, 2021, Cavanagh J. dismissed the
    application and subsequently ordered him to pay costs fixed in the amount of
    $106,758.88.

[7]

On November 16, 2021, the applicant filed his notice of appeal dated
    November 3, 2021.

[8]

The applicant did not perfect his appeal and on December 20, 2021, the
    Registrar of this court gave notice of his intention to dismiss the appeal for delay
    if it was not perfected by January 11, 2022.

[9]

The applicant states in his affidavit that beginning in November 2021,
    his former lawyers and lawyers for the individual respondents had ongoing
    settlement discussions with an aim to resolving the appeal. He maintains that
    around Christmas, he had lost confidence in his former lawyers and began
    looking for a new one. He retained his current lawyers on January 6, 2022 but
    states that they have not had an opportunity to review the file. He maintains
    the delay has been brief and the respondents will suffer no prejudice to his
    knowledge. He has been locked out of the restaurant and the individual
    respondents are running it.

[10]

The
    respondents take issue with this characterization of the facts and submit that
    the appeal has no merit.

Applicable Test

[11]

In
    considering whether to grant an extension of time, the court has generally
    considered the following factors: (i) whether the appellant formed an intention
    to appeal within the relevant period; (ii) the length of, and explanation for,
    the delay; (iii) prejudice to the respondent; and (iv) the merits of the
    appeal. The overarching principle is that an extension should be granted if the
    justice of the case so requires.

[12]

Dealing
    first with the intention to appeal, as this motion involves an extension of
    time to perfect an appeal, the factor to consider is whether the applicant has
    demonstrated a continuing intention to appeal.

[13]

The
    applicant made an offer to settle to the respondents on November 12, 2021,
    which was rejected by the respondents on November 14. He made a further overture
    on November 15 to which counsel for the respondents provided thoughts but no
    counteroffer. On December 8, counsel for the respondents asked counsel for the
    applicant for the applicants appeal materials. That same day, counsel for the
    applicant responded, stating that the notice of appeal and certificate were
    submitted to the court within the requisite 30 days but due to internal delays
    at the court, the court staff only reached them by November 16. Counsel
    was advised by the court staff that the 30 days would run from November 16.

[14]

On
    December 14, the applicants counsel proposed a call and on December 15,
    he sent a further offer to the respondents counsel. On December 16, the
    respondents provided a counteroffer and on December 20, again asked
    the applicant for his materials. On December 21, counsel for the applicant
    advised the respondents counsel to respond directly to the applicant as they
    were no longer acting for him.

[15]

The
    motion record for an extension of time was served before the date set for a
    dismissal by the Registrar.

[16]

Although
    the applicant should have acted with greater dispatch, the delay was short, he
    has explained the delay, and I am satisfied that he does have a continuing
    intention to appeal.

[17]

Turning
    to the issue of prejudice, I am to focus on the prejudice caused by the delay
    to perfect, not the overall delay. The respondents candidly acknowledge that
    they have not suffered significant prejudice in this regard.

[18]

As
    for the merits, the applicant advances numerous arguments. He submits that he
    injected shareholder loans into the company but the application judge rejected
    this position, contrary to all the companys records including financial
    statements and the minute book. He also asserts that the application judge
    improperly limited his analysis to oppression and failed to address the
    remaining elements in s. 248 of the
OBCA
:
    namely unfair prejudice and unfair disregard. He further submits that the
    application judge erred by suggesting that acting improperly or in bad faith
    was necessary for a finding of oppression. Lastly, he submits that while the application
    judge considered it significant that the applicant was not removed as an
    officer, the respondents intention was to do so.

[19]

The
    respondents submit that the case was entirely fact-driven and the appeal has no
    reasonable prospect of success. Counsel responds to each of the applicants
    arguments and submits that it is unfair to allow the applicants allegations of
    fraud to hang over the respondents heads.

[20]

When
    assessing the merits of an appeal, it is to determine whether the appeal has so
    little merit that the court could reasonably deny the important right of
    appeal:
Issasi v. Rosenzweig
, 2011 ONCA 112,
    277 O.A.C. 391, at para. 10;
Duca Community Credit Union
    Ltd. v. Giovannoli
(2001), 142 O.A.C. 146 (C.A.), at para. 14. Even
    where it is difficult to see the merits of a proposed appeal, a party should
    not be deprived of the right to appeal where there is no real prejudice to the
    other side:
Denomme v. McArthur
, 2013 ONCA
    694, 36 R.F.L. (7th) 273, at para. 10;
Derakhshan v.
    Narula
, 2018 ONCA 658, 142 O.R. (3d) 535, at para. 22.

[21]

That
    said, there are occasions when the lack of merit in an appeal is so clear-cut
    that, on its own or in combination with a consideration of the other factors, a
    motion judge determines that leave should not be granted: see for example
Reid v. College of Chiropractors of Ontario
, 2016
    ONCA 779, at para. 15;
Wardlaw v. Wardlaw
,
    2020 ONCA 286, at para. 4;
Sutherland Lofts Inc. v. Peck
,
    2017 ONCA 803, at para. 12. Courts must be mindful of the cost of litigation
    and unnecessary expenditures of time but all the while preserving the need to
    ensure that the dictates of the justice of the case are met.

[22]

But
    for the jurisdiction issue, I do not view the merits of this appeal to be so
    weak that the requested extension of time is unjustified. While the respondents
    assert strong arguments in response to those of the applicant, I would not be
    prepared to conclude that the justice of the case precludes an extension of
    time to permit the applicant to have his appeal adjudicated.

[23]

However,
    here I must conclude that the appeal is meritless because, as the parties
    concede, this court has no jurisdiction to hear it: see
Henderson
    v. Henderson,
2014 ONCA 571, 325 O.A.C. 138, at para. 8;
Aljawhiri v. Pharmacy Examining Board of Canada
, 2019
    ONCA 798, at para. 7; and
Jadhav v. Jadhav
.
    But for that difficulty, the other factors would favour the grant of an
    extension of time.

[24]

For
    these reasons, the motion for an extension of time to perfect the appeal in
    this court is dismissed. There shall be no order of costs of the motion.

S.E.
    Pepall J.A.


