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Stays - Conflicting Proceedings [R21.01(3)(c)]

. Birdseye Security Inc. v. Milosevic

In Birdseye Security Inc. v. Milosevic (Ont CA, 2020) the Court of Appeal considered when a stay could issue in an action because otherwise it would prejudice another action:
[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), 2004 CanLII 11325 (ON SC), 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. Milosevic’s 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, rev’d 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 CanLII 322 (SCC), [1997] 3 S.C.R. 391, at para. 87.


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