



COURT OF APPEAL FOR ONTARIO

CITATION: Callidus Capital Corporation v.
    Opes Resources Inc., 2019 ONCA 212

DATE: 20190318

DOCKET: M50105 (C66441)

Simmons, Tulloch and Brown JJ.A.

BETWEEN

Callidus Capital Corporation

Moving
    Party/Respondent

Plaintiff/Defendant
    by Counterclaim

and

Opes Resources Inc.,
Richard George Molyneux
and Darryl Levitt

Responding Party/Appellant

Defendants/Plaintiffs
    by Counterclaim

AND BETWEEN

Richard George Molyneux

Responding
    Party/Appellant

Plaintiff by Counterclaim

and

J. Claire Edwards, not
    individually, but as a Chapter 7 Trustee of Fortress Resources, LLC d/b/a McCoy
    Elkhorn Coal Company,
Callidus Capital Corporation
,
    Opes Resources Inc. and Darryl Levitt

Moving Party/Respondent

Defendants
    by Counterclaim

Lisa S. Corne and John D. Leslie, for
    the moving party, Callidus Capital Corporation

Nancy Tourgis and Laney Paddock, for
    the responding party, Richard George Molyneux

Heard and released orally:
    March 15, 2019

REASONS FOR DECISION

[1]

In this action, the moving party, Callidus
    Capital Corporation, sues the responding party, Richard Molyneux, on his
    guarantee of the indebtedness of Fortress Resources, LLC to Callidus under
    certain loan agreements. As part of his defence and counterclaim, Molyneux pleads
    that by reason of Callidus commercially unreasonable conduct in respect of the
    loans, Fortress does not owe Callidus any money, with the result that the guarantee
    is unenforceable. Molyneux pleads that the unreasonable conduct by Callidus is
    part of a pattern of conduct by Callidus towards its borrowers.

[2]

On his examination for discovery of the
    representative of Callidus, Molyneux asked several questions concerning his
    pleading that Callidus unlawful treatment of Fortress is part of a pattern of
    conduct that Callidus has carried out over a number of years with various
    customers who borrowed money from Callidus (the Similar
    Fact Discovery Questions). Callidus refused to answer the questions. Molyneux
    moved for an order compelling the representative of Callidus to reattend to
    answer the questions refused.

[3]

The motion judge dismissed that part of Molyneuxs
    motion. She held that the Similar Fact Discovery Questions did not meet the
    standard of relevance because Molyneux had failed to demonstrate on the motion
    sufficient similarities between Calliduss conduct toward Fortress and its
    conduct toward other borrowers. Consequently, she concluded that the refusals
    were proper.

[4]

Molyneux appeals that order to this court. Callidus
    moves to quash the appeal, arguing that the order is interlocutory, with an
    appeal lying to the Divisional Court with leave.

[5]

As a general rule, an order compelling or
    refusing to compel a representative of a party to answer questions posed on an
    examination for discovery is interlocutory, not final:
Cartwright &
    Sons Ltd. v. Carswell Co. Ltd.
, [1958] O.J. No. 475 (C.A.);
Brine Lake
    Products Ltd. v. Schenker of Canada Ltd.
, [2004] O.J. No. 1342, at paras.
    11 and 12;
Diversitel Communications Inc. v. Glacier Bay Inc.
, (2004) 181
    O.A.C. 6 (O.N. C.A.), at para. 6;
Susin v. Chapman
, 2004 CarswellOnt
    143 (C.A.), at para. 5; Morden & Perell,
The Law of Civil Procedure in
    Ontario Third Edition
, at p. 1056. That is because an examination for
    discovery is a device by which a party can secure evidence from an adverse
    party in respect of a matter placed in dispute by the pleadings. A
    determination by a court that a question posed on discovery is not relevant to
    a pleaded issue merely forecloses resort to that evidence-seeking device in
    respect of that matter.

[6]

However, Molyneux contends that in the specific circumstances
    of this case, the order amounts to a final determination of one of his
    defences. We do not agree. The starting point is to look at the order:
Walchuk
    Estate v. Houghton
, 2015 ONCA 862, at para. 12. On its face, para. 5 of
    the order dismisses Molyneuxs motion to compel Callidus to answer questions
    refused.

[7]

Although in some cases a motion judges reasons
    may determine a substantive right or defence, in this case the motion judges
    reasons disclose that she went no further than holding the questions moved on
    were not relevant and the refusals were proper. As well, in refusing to compel
    Callidus to answer the Similar Fact Discovery Questions, the motion judge did
    not determine the very subject matter of the litigation, nor did she dispose of
    an issue raised by Molyneux in his defence or counterclaim that would deprive
    him of a substantive right that could be determinative of the entire claim or
    counterclaim:
2441472 Ontario Inc. v. Collicutt Energy Services
, 2017
    ONCA 452, 48 C.B.R. (6th) 173, at para. 9.

[8]

The order of the motion judge clearly is
    interlocutory.

[9]

Accordingly, Molyneux has appealed to the
    wrong court. An appeal of the motion judges order lies to the Divisional
    Court, with leave, pursuant to s. 19(1)(b) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43
.
As this
    appeal patently was brought in the wrong court, we decline to transfer it to
    the Divisional Court.

[10]

The appeal is quashed.

[11]

Callidus is entitled to its costs of the motion
    on a partial indemnity scale fixed in the amount of $7,500, inclusive of
    disbursements and applicable taxes.

Janet
    Simmons J.A.

M.
    Tulloch J.A.

David
    Brown J.A.


