3.2: How to start an action
3.72: Consolidation or separation of claims and actions

Case Summary

The Applicant brought an Originating Application seeking a declaration that shares in the subject corporation were held in trust for him by the Respondent. The Applicant further alleged that the Respondent engaged in conduct that was oppressive or unfairly prejudicial to him and the corporation. The Respondent brought a Cross-Application to have the matter consolidated with another Action in which a number of Parties, including the Applicant, brought an Action against the Respondent and the corporation for damages related to alleged fraudulent activity.

The Respondent argued that the Applicant should not have proceeded by way of an Originating Application. The Respondent argued that, pursuant to Rule 3.2(2)(a), an Originating Application is only proper where there is no substantial factual dispute. The Respondent argued that many factual issues were in dispute, and that Discovery, Questioning and a Trial were necessary to determine the facts. As such, the Respondent argued that the Court should convert the Originating Application to a Statement of Claim. Justice Kenny rejected this argument and held that an Originating Application was appropriate. All evidence was before the Court on the relevant issues, and the evidence was not going to improve in the context of a Trial.

The Respondent further argued that the two Actions should be consolidated. Pursuant to Rule 3.72, the Court has discretion in determining whether the consolidation of Actions is appropriate. Justice Kenny held that there were a number of factors to consider with respect to consolidation, including: whether there were common claims, disputes, and relationships between the Parties; whether consolidation would save time and resources; whether Trial time would be reduced; whether one Party would be seriously prejudiced by having two Trials together; whether one Action was at a more advanced stage than the other; and whether consolidation would delay the Trial of one Action causing serious prejudice to one Party. The risk of inconsistent verdicts would also be a reason for consolidation. Upon reviewing all of the factors, Justice Kenny was satisfied that there was no reason to consolidate the two Actions. Her Ladyship held that the Court had enough information to decide the issues raised in the Originating Application, and that consolidation would only cause delay. Moreover, there were no common issues of fact or law between the two Actions, and consolidation would only have the effect of leaving the share issue unresolved until Trial, causing prejudice to the Applicant.

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