|
Civil Litigation - Application - Conversion to Action [R38.10]. V2 Investment Holdings Inc. v. Mizrahi
In V2 Investment Holdings Inc. v. Mizrahi (Ont CA, 2026) the Ontario Court of Appeal dismissed an appeal, this brought against "a judgment in favour of the respondent relating to an outstanding loan".
Here the court considers a conversion of an application to an action [under R38.10 'Disposition of Application']:[32] The decision with respect to whether an application should be converted to an action is a discretionary decision entitled to deference: Gatoto v. 5GC Inc., 2024 ONCA 210, 52 B.L.R. (6th) 186, at para. 14; Obolus Ltd. v. International Seniors Community Care Inc., 2023 ONCA 708, 487 D.L.R. (4th) 317, at para. 10; Thompson v. Casey, 2020 ONCA 5, 150 O.R. (3d) 61, at para. 10; Genstar Development Partnership v. The Roman Catholic Episcopal Corporation of the Diocese of Hamilton in Ontario, 2019 ONCA 506, 3 R.P.R. (6th) 1, at para. 23.
[33] As stated by this court in Obolus at para. 10:The application judge was required to review evidence to make findings of fact to determine whether the proceeding was properly commenced by way of an application, and whether it could be properly resolved as an application. An appellate court will only interfere with such a determination if the “lower court misdirected itself, came to a decision that is so clearly wrong so as to amount to an injustice, or gave no or insufficient weight to a relevant consideration”.: [Genstar], at para. 23; Pennyfeather v. Timminco Limited, 2017 ONCA 369, at para. 135, citing Penner v. Niagara Regional Police Services Board, 2013 SCC 19, [2013] 2 S.C.R. 125, at para. 27. [34] An application will not be converted to an action unless there is a justifiable reason to do so, such as when the judge hearing the matter cannot make a proper determination of the issues on the application record. The mere presence of a factual dispute is not self-sufficient to convert an application to an action. The facts in dispute must be material to the issues before the court before a trial may be required: Collins v. Canada (Attorney General), (2005), 2005 CanLII 28533 (ON SC), 76 O.R. (3d) 228 at paras. 28-31, cited with approval by this court in Obolus at para. 11. This is reflected in the language of r. 14.05(3)(h), which states that an application may be brought where the relief claimed is in respect of any matter where it is unlikely that there will be any material facts in dispute requiring a trial. Even where there are material facts in dispute, a trial will not be necessary if the factual dispute can be resolved on the application record. When viva voce evidence is required to resolve material issues of credibility, the matter should proceed as an action.
[35] As in Obolus, the application judge here determined, as a review of his reasons as a whole reflect, that there was no justifiable reason to convert the application to an action, and that he was satisfied that he could make a proper determination of the issues on the application record.
....
[51] Rule 38.10 is clear that on the hearing of an application, a judge may grant the relief sought, or dismiss the application in whole or in part and with or without terms, or order that the whole application or any issue proceed to trial and give such directions as are just. Where a trial of the whole application is directed, the proceeding shall thereafter be treated as an action, subject to the directions in the order directing the trial. The application judge had those powers available to him and declined to direct that the application or any issue therein should proceed to trial. He found it unnecessary to do so, and that finding does not warrant appellate intervention. . Pine Glen Thorold Inc. v. Rolling Meadows Land Development Corporation
In Pine Glen Thorold Inc. v. Rolling Meadows Land Development Corporation (Ont CA, 2025) the Ontario Court of Appeal dismissed a plaintiff-purchaser's appeal, here from a dismissed claim that "arose from an agreement of purchase and sale pursuant to which Rolling Meadows agreed to sell land to Pine Glen to be developed into individual residential lots (the “APS”)".
Here the court notes a trial court's ability to treat an application as an action [under R38.10 'Disposition of Application']:[60] In this case, Pine Glen initially chose to bring an application, but it could have brought an action for damages instead. Nor did Pine Glen try to convert its application to an action when it became aware that it would suffer damages because of the delay in completing the transaction. Rule 38.10 empowers the court to order a trial of all or part of an application and to treat the proceeding as an action. As part of an action, Pine Glen could have sought damages in addition to its claim for declaratory relief. If necessary, to avoid further delay in closing its sales, Pine Glen could have brought a motion for interim relief compelling the closing in the context of an action. All these procedural paths were open to Pine Glen. The option that it chose instead, the combination of an application followed by an action, is an abuse of process because it amounts to litigation by instalment: Skypower CL 1 LP and Others v. Ontario Power & HMQ, 2014 ONSC 6950, at para. 31, aff’d 2015 ONCA 427; Catalyst, at para. 66; PricewaterhouseCoopers Inc v. Perpetual Energy Inc, 2022 ABCA 111, 98 C.B.R. (6th) 161, at paras. 81-82.
|
