Canada: Drywall Acoustic Lathing And Insulation, Local 675 v. SNC-Lavalin Group Inc.: Considering Final vs. Interlocutory Nature Of Orders Refusing Leave To Amend Pleadings

In her decision in Drywall Acoustic Lathing and Insulation, Local 675 v. SNC-Lavalin Group Inc., dated October 28, 2015, Associate Chief Justice Hoy, on behalf of a unanimous Ontario Court of Appeal, refused to quash an appeal. She rejected arguments that the appeal was interlocutory to the extent that it refused to grant leave to amend pleadings. In her view, the order under appeal finally prohibited the appellants from seeking relief under the Ontario Securities Act ("OSA") as a result of certain misrepresentations, in part because doing so was statute-barred. This constituted a final order, with an appeal from it lying to the Court of Appeal. Associate Chief Justice Hoy nonetheless largely dismissed the appeal, holding that deference was due to the motion judge's conclusion that the proposed amended pleadings contained new allegations of discrete misrepresentations.

Background

The appellants had obtained leave to commence a proceeding against the respondents for alleged violations of the OSA. This action was also certified as a class action. The respondents opposed neither the granting of leave nor the certification. After obtaining the leave and certification orders, the appellants sought to amend their pleadings to allege further misrepresentations. The motion judge refused to permit the appellants to amend their pleadings as they wished, agreeing with the respondents that the amendments contained new allegations that required fresh leave under the OSA. Moreover, he also agreed with the respondents that the limitation period within the OSA "barred the appellants from pursuing these new allegations of misrepresentation" (para. 5).

Court of Appeal's Jurisdiction

On appeal, the respondents sought to quash the appeal, on the grounds that it was partially interlocutory. On the facts of this case, Associate Chief Justice Hoy disagreed. She held:

[11] The appeal arises from para. 2 of the motion judge's order:

THIS COURT ORDERS that the Plaintiffs' motion is hereby dismissed with respect to the proposed amendments in paragraphs ... of the Plaintiffs' proposed Fourth Fresh as Amended Consolidated Statement of Claim ... and the causes of action arising from such amendments are hereby dismissed.

[12] The respondents argue that the order at issue is both interlocutory (to the extent that it dismissed the appellants' motion to amend because the amendments require leave under s. 138.8(1)) and final (to the extent that it dismissed the causes of action arising from the refused amendments because they are statute-barred). They say that an appeal from the interlocutory portion of the order lies to the Divisional Court, with leave, and not to this court. They say the interlocutory portion of the appeal cannot be transferred to this court until the Divisional Court grants leave.

[13] I reject the respondents' argument that this court does not have jurisdiction to hear this appeal and I would dismiss the respondents' motion to quash. The respondents rely on the motion judge's reasons to artificially parse the order under appeal. Appeals lie from orders, not reasons. The motion judge's single paragraph permanently prohibits the appellants from advancing the refused amendments and pursuing the underlying misrepresentation claims and therefore constitutes a final order. In any event, as becomes clearer below, the motion judge's reason for refusing the amendments underlies his conclusion that they are statute-barred.

Conclusion

Despite rejecting the respondents' arguments on the motion, Associate Chief Justice Hoy largely dismissed the appeal. With one discrete exception, she agreed with the motion judge that leave was required to bring the proposed amendments, and that they were statute-barred. In doing so, she held that the motion judge's conclusion that the proposed amendments represented new allegations of discrete misrepresentations was entitled to deference:

[54] The motion judge has case-managed every aspect of this complex action. Most importantly, he heard and granted the appellants' unopposed motion for leave under Part XXIII.1 of the OSA. The motion judge was best positioned to determine the nature of the claim he had granted the appellants leave to pursue. His conclusion that the proposed amendments constitute discrete misrepresentation claims is entitled to deference.

In the result, Associate Chief Justice Hoy ordered that the appellants pay the respondents costs of the appeal, but that the respondents pay the appellants costs of the motion.

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