Khimji v. Dhanani et al. [Indexed as: Khimji v. Dhanani]

69 O.R. (3d) 790

[2004] O.J. No. 320

Docket No. C39372

Court of Appeal for Ontario

Catzman, Doherty and Laskin JJ.A.

February 10, 2004

Civil procedure -- Trial -- Adjournment -- Plaintiff taking no steps to obtain new counsel before scheduled trial date after his lawyer had himself removed from record -- Plaintiff appearing unrepresented on trial date and requesting adjournment to retain and instruct counsel -- Trial judge granting adjournment but making matter peremptory and ordering plaintiff to pay defendants' costs thrown away by new trial date -- Plaintiff not being diligent in seeking new lawyer and retaining lawyer who was unable to act for him on trial date -- Plaintiff making no effort to comply with costs order -- Plaintiff appearing unrepresented on trial date and seeking another adjournment -- Trial judge being justified in refusing adjournment and dismissing action in light of plaintiff's failure to take all reasonable steps to be prepared for trial and to comply with costs order. [page791]

The trial of a civil action was adjourned once before being scheduled for the week of November 11, 2002. In August 2002, counsel for the plaintiff obtained an order removing himself as solicitor of record because of a dispute over fees. The plaintiff took no steps to obtain new counsel before trial, and appeared unrepresented before the trial judge on November 12, requesting an adjournment of one and a half to two months to retain and instruct counsel. The trial judge adjourned the trial to December 16, told the plaintiff that he had to appear then with or without a lawyer or his case would be dismissed, and marked the case "peremptory". He ordered the plaintiff to pay the defendants' costs thrown away by the new trial date. The plaintiff retained counsel on November 27, 2002. His lawyer sought an adjournment on December 10, 2002, but it was denied and the action was ordered to proceed on December 16. The plaintiff, who was legally blind and not fluent in English, appeared before the trial judge on December 16 with an interpreter and sought an adjournment. He had a letter from his lawyer stating that the lawyer would act for him if the trial could be adjourned to the next sittings. The trial judge did not want to see the letter. The plaintiff explained that he had not paid the costs ordered on November 12 because he did not have the money and wanted to arrange for monthly instalments. The trial judge did not inquire about the plaintiff's means or what payment arrangements might be made, and instead asked the plaintiff whether he was ready to proceed by himself. The plaintiff replied that he was not. The trial judge dismissed the action. The plaintiff appealed.

Held, the appeal should be dismissed.

Per Doherty J.A. (Catzman J.A. concurring): In determining whether to grant an adjournment, the trial judge had to consider not only the orderly processing of civil trials, but the need to effectively enforce court orders. The refusal of the adjournment in this case was justified because the plaintiff all but ignored the order of the court made in November. He took no steps to retain counsel for some 15 days, and when he finally got around to it, he went to only one lawyer, who told him that he was not available on the scheduled trial date. Instead of seeking the assistance of other counsel who could be available on the trial date, the plaintiff retained the lawyer who was not available, and that lawyer waited two weeks before bringing a motion for an adjournment. In addition to effectively ignoring the December trial date when retaining counsel, the plaintiff made no attempt to comply with the costs order.

The fact that the plaintiff was legally blind and not fluent in English was not relevant to the reasonableness of the trial judge's refusal to grant an adjournment. There was never any suggestion that the plaintiff would prosecute this case himself; nor was there any suggestion that the plaintiff's physical disability or his difficulties with the English language interfered in any way with his ability to retain and instruct counsel. Where a litigant successfully obtains the adjournment of a trial having failed to exercise due diligence in retaining counsel, that litigant must expect that, absent unforeseen circumstances, the trial will proceed on the new trial date. Similarly, where the adjournment is granted on terms, the litigant must make all reasonable efforts to comply with those terms. If in the assessment of the trial court a litigant does not take reasonable steps to be prepared for the new trial date and does not take reasonable steps to comply with the associated costs order, the trial court must have the authority to dismiss the claim.

Per Laskin J.A. (dissenting): Even though the plaintiff had been told on November 12 that he must be ready to proceed on December 16, his request for a further adjournment was reasonable and should have been granted. He [page792] sought only a short adjournment to the next sittings of the court. He had a lawyer ready to act. The adjournment would not have disrupted the court's trial schedule or prejudiced the other side. Although the plaintiff had not paid the costs ordered on November 12, he had an explanation for not having done so. In these circumstances, the order depriving him of his right to pursue his claim was wrong. It was contrary to the interests of justice and should not be allowed to stand.

APPEAL by the plaintiff from a judgment dismissing an action.

Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 2.01(1) (a), 26.01

Jeffrey A. Dicker, for appellant. Robert Lepore, for respondents.

[1] LASKIN J.A. (dissenting): -- The issue on this appeal is whether the trial judge unreasonably exercised his discretion by refusing to grant the appellant, Mr. Khimji, an adjournment of his trial to permit the counsel he had retained to conduct the trial for him. Instead of granting the adjournment, the trial judge dismissed Mr. Khimji's action. It is from this dismissal that Mr. Khimji appeals.

A. Background

(a) The dispute

[2] In late 1993, Mr. Khimji loaned Mr. Dhanani US$120,000. In May 1998, Mr. Dhanani died. In November 1998, Mr. Khimji's then lawyer wrote the respondent, Shirin Dhanani (Mr. Dhanani's wife), demanding repayment of the loan. Mrs. Dhanani replied by asserting that the loan had been repaid.

[3] In 1999, Mr. Khimji began this action, suing both Mrs. Dhanani and Mr. Dhanani's daughter, the court-appointed estate trustee, for repayment of the loan. The respondents acknowledge the loan. The only issue in the lawsuit is whether the loan has been repaid.

(b) Setting a trial date

[4] The action was scheduled to be tried in Newmarket on April 2, 2002. The respondents, however, obtained an adjournment because of another death in their family. Counsel for both sides told the court that they intended to amend their pleadings. The trial was adjourned to the trial scheduling court until June 4, 2002.

[5] On June 4 both counsel agreed to a trial date during the week of November 11, 2002. The appellant amended his statement [page793] of claim in mid-July, and the respondents amended their defence about a month later. Each side was to be permitted additional discovery on the amended pleadings. Those additional discoveries never took place.

[6] The appellant's difficulties began in early August when his lawyer obtained an order removing himself as solicitor of record because of a dispute over fees. A copy of the order of removal was served on Mr. Khimji by mail on August 13, 2002.

[7] Mr. Khimji took no steps to retain new counsel between mid-August 2003 and the scheduled trial date during the week of November 11. He appeared unrepresented before the trial judge on November 12, and requested an adjournment of one and a half to two months, which was a reasonable request in order to obtain a lawyer to conduct an anticipated three- to four-day trial.

[8] The respondents opposed the adjournment, but the trial judge granted it. However, he gave the appellant little more than a month. He adjourned the trial to December 16 and scheduled it for three days. He told the appellant that he "must appear then with or without a lawyer" and added: "If you don't show up or if you're not ready then, your case may be dismissed." He marked the case "peremptory" but did not explain to the appellant what that meant. Finally, he ordered the appellant to pay the respondents' costs thrown away, fixed at $6,700, by the new trial date.

[9] On November 27, 2002, 15 days after getting the adjournment, Mr. Khimji met with a new lawyer, Mr. Dicker, of the law firm of Robins, Appleby & Taub. Mr. Dicker told Mr. Khimji that he would act for him if the trial could be adjourned to the next scheduled sittings in Newmarket in March 2003. On December 10, 2002, Mr. Dicker sought an adjournment before Regional Senior Justice Shaunessy but it was denied and the action ordered to proceed as scheduled on December 16.

(c) The trial judge's ruling on December 16, 2002

[10] Mr. Khimji is legally blind and, though he can converse in English, is not fluent in it. Because of these impediments, realistically he could not conduct the trial himself. He needed a lawyer. He appeared before the trial judge on December 16 with an interpreter and sought an adjournment so Mr. Dicker could act. The respondents opposed the adjournment.

[11] The discussion before the trial judge was brief. Mr. Khimji had a letter from Mr. Dicker in which Mr. Dicker said he would act for the appellant if the trial could be adjourned to the next sittings. The trial judge did not want to see the letter. Through his interpreter Mr. Khimji explained that he had not [page794] paid the costs of $6,700 ordered on November 12 because he did not have the money "to pay all at once" and wanted to arrange for monthly instalments. The trial judge did not inquire about Mr. Khimji's means or about what payment arrangements might be made. Instead he asked the appellant whether he was ready to proceed by himself. The appellant answered that he was not.

[12] The trial judge then turned to counsel for the respondents, who asserted that he was ready to proceed, that his clients needed "some closure" and that Mr. Khimji's assertion that he had no money was "a lark".

[13] The trial judge denied the adjournment and dismissed the action with the following short endorsement:

The Plaintiff appears in person with a translator. He again requests an adjournment. Also the Plaintiff has not paid the costs previously ordered to be paid by today. The Plaintiff is not prepared to proceed today. A further adjournment is denied. The Plaintiff's action is therefore dismissed. Further costs to the defendants to be assessed.

B. Discussion

[14] A trial judge enjoys wide latitude in deciding whether to grant or refuse the adjournment of a scheduled civil trial. The decision is discretionary and the scope for appellate intervention is correspondingly limited. In exercising this discretion, however, the trial judge should balance the interests of the plaintiff, the interests of the defendant and the interests of the administration of justice in the orderly processing of civil trials on their merits. In any particular case, several considerations may bear on these interests. A trial judge who fails to take account of relevant considerations may exercise his or her discretion unreasonably and if, as a result, the decision is contrary to the interests of justice, an appellate court is justified in intervening. In my opinion, that is the case here.

[15] Even though the appellant had been told on November 12 that he must be ready to proceed on December 16, his request for a further adjournment was reasonable and should have been granted. He [page795] sought only a short adjournment to the next sittings of the court. He had a lawyer ready to act. The adjournment would not have disrupted the court's trial schedule. It would not have prejudiced the other side, which had already been granted a much longer adjournment. And, though the appellant had not paid the costs ordered on November 12, he had an explanation for not having done so. In these circumstances the order depriving the appellant of his right to pursue his claim was simply wrong. It was contrary to the interests of justice. It should not be allowed to stand.

[16] The trial judge's refusal to adjourn the trial appears to have been based on three considerations: his costs order of November 12, 2002 had not been paid; he had already granted Mr. Khimji one adjournment; and he had marked the December 16 trial date "peremptory".

[17] These three considerations were all important. In some cases they might have been determinative. But not in this case. Here, other considerations should also have been taken into account.

1. The overall objective of civil proceedings: a just determination of the real matters in dispute

[18] I begin with the overriding goal of our modern Rules of Civil Procedure, R.R.O. 1990, Reg. 194: to ensure as far as possible that cases are resolved on their merits. This goal is expressly set out in rule 2.01(1)(a), which gives a judge power to grant any relief necessary "to secure the just determination of the real matters in dispute". Courts should not be too quick to deprive litigants of a decision on the merits. The trial judge does not appear to have sufficiently taken into account that his order deprived the parties, especially the appellant, of a determination of "the real matters in dispute".

2. Prejudice caused by refusing or granting an adjournment

[19] Under our modern Rules non-compensable prejudice plays a pivotal role in deciding whether to grant an amendment or an adjournment. For example, under rule 26.01, a court shall (not may) grant leave to amend a pleading "at any stage of an action" -- on the eve of or even during a trial -- "unless prejudice would result that could not be compensated for by costs or an adjournment". Here, the prejudice to Mr. Khimji from the denial of an adjournment is obvious: his action was dismissed without an adjudication on its merits. In his very fair argument in this court, counsel for the respondents acknowledged that an adjournment of the trial from December 2002 to March 2003 would not have prejudiced his clients except for the costs incurred for the December 16 date. The trial judge, however, did not canvass the question of prejudice.

3. Mr. Khimji's ability to pay the costs ordered on November 12, 2002

[20] Whether Mr. Khimji could or could not pay these costs was a relevant consideration. If he genuinely could not pay them by December 16 but could, as he suggested, pay them over time, [page796] then his failure to comply with the November costs order should not have deprived him of his day in court. The trial judge was faced with conflicting statements from Mr. Khimji and counsel for the respondents on whether the appellant had the means to pay. Yet the trial judge made no inquiry to resolve this conflict or determine whether the appellant had the ability to pay. The appellant, in fact, paid these costs shortly before the hearing of the appeal.

4. Mr. Khimji's explanation for not being ready for trial on December 16, 2002

[21] The appellant did not have a lawyer ready to proceed on December 16 and he was incapable of representing himself. Admittedly, he bears some responsibility for the position he found himself in. On the evidence before us, he did not try to retain a new lawyer between the time his former lawyer withdrew from his case and the scheduled November trial date. Moreover, after obtaining an adjournment in November he waited 15 days before speaking to Mr. Dicker. Still, litigants do not always act with the haste that we, perhaps unrealistically, expect of them. I do not regard Mr. Khimji's tardiness as being so prolonged that it should have deprived him of a further adjournment.

[22] Also, as Mr. Khimji appeared alone on November 12, he may not have appreciated the implications of a peremptory trial date. Even had he attempted to retain a lawyer immediately after November 12, I doubt that he could have found a litigator to take on a three-day trial on such relatively short notice. Any reasonably busy trial lawyer would have already had his or her schedule booked for that period, as Mr. Dicker apparently did.

5. The length of the adjournment requested and disruption to the court's trial schedule

[23] The appellant sought only a short adjournment to the next sittings of the Newmarket court, when Mr. Dicker had undertaken to be available. Had the adjournment been granted, it would have delayed the trial for three and a half months. The adjournment obtained by the respondents earlier in the year had caused a delay of over seven months. Additionally, the adjournment requested by the appellant would not have disrupted the Newmarket civil trial schedule. The December transcript of the proceedings before the trial judge showed that he had another trial ready to proceed. [page797]

C. Conclusion

[24] It seems to me, respectfully, that the trial judge gave short shrift to Mr. Khimji's request for an adjournment. By dismissing the action, the trial judge deprived the appellant of the right to pursue a substantial claim of over $150,000. In failing to take into account the considerations I have listed, the trial judge exercised his discretion unreasonably. Denying the appellant a further adjournment in the absence of any prejudice to the respondents is contrary to the interests of justice. The appellant should be allowed to maintain his action.

[25] I would therefore allow the appeal, set aside the order of Loukidelis J. dated December 16, 2002 and in its place order that the action be tried at the next civil sittings in Newmarket convenient to the court and to counsel for the respondents.

[26] The respondents are entitled to their costs of preparing for and attending at the hearing of December 16, 2002. However, the appellant is entitled to his costs of the appeal on a partial indemnity basis. I would fix both parties' costs in the offsetting amounts of $3,500, inclusive of disbursements and GST.

[27] DOHERTY J.A. (CATZMAN J.A. concurring): -- I have had the privilege of reading the lucid reasons of Laskin J.A. I adopt his summary of the facts and his statement of the principles governing this appeal. I would only add that in determining whether to grant an adjournment in this case, the trial judge had to consider not only the orderly processing of civil trials, but the need to effectively enforce court orders. I think the refusal of the adjournment in this case was justified principally because the appellant all but ignored the order of the court made in November. He made virtually no attempt to retain a lawyer who could act for him on the scheduled trial date, or to pay even part of the costs order made against him.

[28] As my colleague points out, the appellant's first lawyer was removed from the record in August 2002. The appellant had notice of his lawyer's motion to be removed, but did not attend on the motion. Instead, he did nothing before the scheduled trial date some three months later in November 2002. My colleague describes the appellant's request for one and a half to two months adjournment in November as a "reasonable request". While the length of the adjournment requested was reasonable, the adjournment was only needed because the appellant had done nothing to retain counsel since August 2002. Unlike the earlier adjournment requested by the respondents, there was no good reason for this adjournment. I would describe the appellant as [page798] seeking the indulgence of the court in November as a result of his failure to take any steps to retain counsel between August and November.

[29] A transcript of the November proceedings was not initially part of the record on appeal. A copy was obtained at the court's request. It is clear from that transcript that the appellant knew that he would be expected to be ready for trial on the new trial date and indeed had agreed to that:

THE COURT: We're going to set a new date for the trial.

ROSHANALI KHIMJI: Yes.

THE COURT: And you must appear then with or without a lawyer.

ROSHANALI KHIMJI: Okay.

THE COURT: And it's going to go ahead.

ROSHANALI KHIMJI: Okay.

THE COURT: If you don't show up or if you're not ready then, your case may be dismissed.

ROSHANALI KHIMJI: Okay.

THE COURT: In addition, I'm going to award costs to the other side for today. Do you understand?

ROSHANALI KHIMJI: Yes.

THE COURT: And they'll be payable forthwith as well. Okay. The date . . . .

TRIAL COORDINATOR: We do have next week available, Your Honour, but I understand that Mr. Khimji will need some time to find a lawyer.

THE COURT: Okay. How much time do you need to find a lawyer?

ROSHANALI KHIMJI: One and a half, two months.

THE COURT: I'll give you . . . .

ROSHANALI KHIMJI: Because still now I not know any lawyer, and my friend can look another lawyer for me and to splend [sic] everything in the new lawyer and they have to study everything again, you know.

THE COURT: What about the middle of December?

ROSHANALI KHIMJI: Okay.

THE COURT: Middle of December?

ROSHANALI KHIMJI: Okay.

[30] It is also evident that the appellant understood that he was obliged to pay the costs awarded by the trial judge as a term [page799] of the adjournment. He did not suggest that paying those costs posed any difficulty.

THE COURT: Okay. You have to pay that money by the date of the trial. You must pay $6,720.00. Okay?

ROSHANALI KHIMJI: Okay.

[31] The appellant took no steps to retain counsel for some 15 days after the November appearance even though he knew the trial was scheduled for December 16th. When the appellant finally got around to going to a lawyer, he went to only one lawyer who told him that he was not available on the scheduled trial date. Instead of seeking the assistance of other counsel who could be available on the trial date, the appellant retained the lawyer who was not available on the trial date. That counsel waited two weeks and then brought a motion for an adjournment on the basis that he was not available on the trial date.

[32] I do not know how difficult it would have been for the appellant to find a lawyer who could have been available on the December trial date. Lawyers have been known to juggle their schedules to make themselves available on short notice. I do know, however, that by waiting 15 days to contact any lawyer, by going to see only one lawyer, and by retaining that lawyer even though he was not available on the trial date, the appellant insured that he could not be ready for trial on December 16th.

[33] In addition to effectively ignoring the December trial date when retaining counsel, the appellant made no attempt to comply with the costs order that had been made against him. There was a dispute as to appellant's ability to pay those costs and the trial judge should have made some inquiry into the appellant's ability to pay the order. However, even on the appellant's own version of events, he could have paid some part of those costs, but instead chose to pay nothing.

[34] The appellant is legally blind and is not fluent in the English language. Neither is relevant to the reasonableness of the trial judge's refusal to grant an adjournment. There was never any suggestion that the appellant would prosecute this case himself. The real question was whether the trial judge failed to act judicially in refusing to give the appellant a further adjournment so that he could be represented by counsel. There was no suggestion that the appellant's physical disability or his difficulties with the English language interfered in any way with his ability to retain and instruct counsel.

[35] Individual litigants have a right to pursue and defend their respective claims. They must do so, however, within a [page800] court structure that must accommodate thousands of individual litigants. That system can function effectively only when litigants take scheduling commitments seriously and make genuine efforts to comply with court orders relating to adjournments and related matters. Where a litigant successfully obtains the adjournment of a trial having failed to exercise due diligence in retaining counsel, that litigant must expect that absent unforeseen circumstances, the trial will proceed on the new trial date. Similarly, where the adjournment is granted on terms, the litigant must take all reasonable efforts to comply with those terms. If in the assessment of the trial court a litigant does not take reasonable steps to be prepared for the new trial date and does not make reasonable attempts to comply with the associated costs order, the trial court must have the authority to dismiss the claim. That is not to say that the dismissal of the claim will be inevitable in circumstances such as those presented on this appeal, but rather it is to say that the option of dismissal must be available to the trial court to ensure the ongoing effective operation of trial lists and to preserve the integrity of court orders.

[36] This court sits at a distance from the day-to-day operation of trial courts. That distance must impair this court's ability to review decisions such as the one under appeal. Strong deference is due to the decision of those in the trial courts who are responsible for the day-to-day maintenance of an efficient and just system of civil trials. Some judges may have given the appellant a third opportunity to proceed to trial, despite his apparent disregard for previous trial dates and his failure to make any attempt to comply with the court order relating to costs. I would not have interfered with the decision granting a third adjournment. Equally, however, I would not brand as unreasonable the decision refusing a third adjournment in light of the appellant's failure to make any effort to retain counsel who could act on the trial date and his failure to make any effort to pay the costs order. The trial court is in a much better position to balance the competing interests than is this court. I would dismiss the appeal.

Appeal dismissed.