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Ontario Energy Group’s ONSC Action Stayed Pending Outcome of Small Claims Court Actions

By Kathryn Orydzuk

In MDG Newmarket Inc. v Symonds, 2022 ONSC 6481, Justice Vermette rendered a decision on an interesting motion that touched upon the doctrine of abuse of process, and when commencing a separate action in the Superior Court may effectively be considered an attempt to transfer a matter out of the Small Claims Court without the required consent.


The plaintiff, MDG Newmarket Inc. o/a Ontario Energy Group (“OEG”) was a company in business of marketing, delivering and installing HVAC equipment to residential consumers.

The numerous moving defendants are Ontarians who have commenced separate Small Claims Court actions as against OEG, Enbridge Inc. (“Enbridge”) and Eugene Farber, the President and directing mind of OEG, in early 2020.

Broadly, the Plaintiff’s Claims in the Small Claims Court actions allege that they were induced into signing contracts with OEG via high-pressure sales tactics and misrepresentations by OEG’s door-to-door sales representatives, contrary to the provisions of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A. They therefore allege the contracts are unenforceable.

Similar allegations were made as against OEG in the London class action proceeding, which was certified in November 2019 and settled in October 2021. OEG has also been the subject of media scrutiny after being charged with 142 counts of violating the Consumer Protection Act, which were later withdrawn.

OEG issued an action in the Ontario Superior Court of Justice as against the Small Claims Court plaintiffs on May 15, 2020 (“the Superior Court action”), seeking damages in breach of contract and defamation, among other relief, arising from the same sales that are the subject matter of the Small Claims Court actions. There are 46 defendants to the Superior Court action.

The moving defendants in the Superior Court action brought a motion to strike the plaintiff’s claim against them, without leave to amend, on the grounds that it does not disclose a reasonable cause of action and it is an abuse of process.

Positions of Parties

The moving defendants, (who, as above, are simultaneously plaintiffs in the Small Claims Court action), argued that the Superior Court action was tactical and an abuse of process. They argued that the Superior Court action was an attempt to intimidate the moving defendants with regard to their claims in the Small Claims Court. Furthermore, they argued that the Superior Court action was an attempt to relitigate the issues already before the Small Claims Court.

The moving defendants raised the decision in MDG Newmarket Inc. v Bechard, 2021 ONSC 1933, in which OEG had previously unsuccessfully moved before the Superior Court to obtain relief properly obtained from the Small Claims Court. In the Endorsement, McSweeney J. commented that the motions appeared to have been tactical rather than resolution-oriented and necessitated  that the defendants shoulder the burden of defence costs in the Superior Court.

The moving defendants further argued that the effect of the Superior Court action is also to force the Small Claims Court plaintiffs into a jurisdiction not of their choosing. The allegations in the Superior Court action “mirror” those in the Small Claims Court actions and consider the same issue of breach of contract. This could result in inconsistent findings and evidentiary overlap and is therefore an abuse of process.

OEG opposed the motion on the basis that the Small Claims Court actions were vexatious and abusive, referring to the fact that the many Plaintiff’s Claims contained similar pleadings and were issued on the same day. OEG also argued that the Plaintiff’s Claims were effectively a “multi-proceeding class action” following the settled London class action referenced above.

OEG also alleged that the Small Claims Court plaintiffs were not receiving appropriate legal advice and that many of the Small Claims Courts plaintiffs were not aware that Plaintiff’s Claims had been issued in their names.

OEG argued that the action is properly in the Superior Court as the damages it is seeking are beyond the monetary limit of the Small Claims Court.

Analysis and Decision

Interestingly, although this was not a motion to transfer the actions from the Small Claims Court to the Superior Court, Justice Vermette commented that transfer was clearly OEG’s effective goal in issuing the Superior Court action, and considered the relevant law surrounding transfer. Her Honour held that the Superior Court action was contrary to the provisions of the Courts of Justice Act that prevent transfer from the Small Claims Court without consent of the plaintiff.

Justice Vermette reviewed the relevant case law with regard to the doctrine of abuse of process, and upon application to the facts of this case found that it would be an abuse of process to allow the Superior Court action to proceed while the Small Claims Court actions were pending.

Justice Vermette agreed with the moving defendants that the allegations “mirrored” each other and the issues arose from the same factual matrix. She found that the Superior Court action was a reaction to the Small Claims Court actions. Her Honour wrote at para 41, “Allowing the issues to proceed before both the Small Claims Court and this Court would inevitably lead to duplicative proceedings and potentially inconsistent findings.”

Justice Vermette also agreed that the effect (and intent) of the Superior Court action was to circumvent and undermine the jurisdiction of the Small Claims Court.

With regard to the arguments raised by OEG regarding quantum of damages and appropriate legal advice for the Small Claims Court plaintiffs, Justice Vermette disposed of those arguments by holding that the prayer seemed high in any event and that it was not for OEG to comment on the legal advice of an opposing party.

In Her Honour’s discussion of prejudice to the parties, she held that the moving defendants would be prejudiced by the more burdensome requirements of the Superior Court, whereas OEG would not be prejudiced because the action would be stayed instead of dismissed.

Justice Vermette noted in closing that with respect to the request that the claim be struck as disclosing no reasonable cause of action, Her Honour did not feel that it would be justified to strike the claim without leave to amend. Her Honour further noted that, as a practical matter, it would not be prudent to order OEG to amend its pleadings, as OEG would almost certainly need to amend its pleadings in any event following the resolution of the Small Claims Court matters. In particular, the Small Claims Court’s findings with regard to the enforceability of the OEG contracts and what complaints were made by the moving defendants to Enbridge about OEG would need to be accounted for in OEG’s pleadings.

It remains open to the moving defendants to bring a further motion to strike the Superior Court action following the lifting of the stay.


This is an interesting case both because of the subject matter and because of the nexus with previous litigation that has warranted media attention.

One of the most interesting parts of this decision, to me, is the treatment of the transfer issue by Justice Vermette. It should be understood that the effect of an action, although perhaps not the explicit intent, may still be found to be contrary to the CJA or Rules. With regard to the doctrine of abuse of process, counsel should note that the effect of separate proceedings is a relevant consideration even if the explicit relief sought may appear distinguishable at first blush.

This case is not at an end following this decision, given that the action was stayed rather than dismissed. As Justice Vermette noted, the outcome of the Small Claims Court actions will have a significant impact on what the Superior Court action will look like. The moving defendants may even have another opportunity to dismiss the action, depending on the outcome of their efforts in Small Claims Court. I, for one, will be following the cases in both Courts with interest.