DIVISIONAL COURT FILE NO.: 148/04
COURT FILE NO.: 95-CU-91641
DATE: 20040405
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JOEL WAITE Respondent (Plaintiff)
- and -
LORNE GERSHUNY Applicant (Defendant)
E. Eva Frank, for the Applicant/Defendant
Y.D. Payne, for the Respondent/Plaintiff
HEARD at Toronto: March 30, 2004
O’DRISCOLL J.:
i. Nature of Proceedings
[1] The Applicant/Defendant/Lorne Gershuny (Gershuny) seeks:
- An order extending the time as prescribed under Rule 62.02 (2) for serving and filing the within Notice of Motion.
The Notice of Motion states: “The Plaintiff consents to the extension of time”.
Because nothing was stated to the contrary by counsel for the Respondent/Plaintiff, Joel Waite (Waite), that order will go as asked.
- Leave to appeal to the Divisional Court under s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C. 43 and Rule 62.02(4)(b) of the Rules of Civil Procedure from the interlocutory order of Herman J., dated January 15, 2004, which order revived the Plaintiff’s action which had been dismissed by court order as a result of the Plaintiff’s failure to attend for trial on November 2, 1998.
The application succeeds.
II. Background and Chronology
[2] Guy Steer had been a business partner with Joel Waite in a real estate transaction. “Unhappy differences” arose between the parties. Steer sued Waite. Gershuny, a lawyer, acted on behalf of Waite. In April 1995, the Steer action settled at mediation. Pursuant to the settlement, Waite received $10,000 and Steer’s action against him was dismissed without costs. Waite signed the Minutes of Settlement before the mediator, Honourable Gibson Gray. Waite did not honour the Minutes of Settlement; he refused to provide a release. The Minutes of Settlement had to be enforced by a court order. Waite appealed that order. The appeal was dismissed with costs.
[3] On October 2, 1995, Barnett Litigation Associates (M.G. La Rochelle) commenced this action for Waite against his former solicitor, Gershuny. The six (6) year limitation period for such a cause of action expired in April 2001. In action 95-CU-91641, Waite alleges that he suffered more than $300,000 in damages as a result of his purchase of the apartment building on September 22, 1988. The defence asserts that while this case was “alive” between October 2, 1995 and November 2, 1998, Waite never produced any evidence in support of his claim for damages.
[4] Further chronology of the action:
(a) February 6, 1996 – pleadings close
(b) July 26, 1996 and June 16, 1997 – examinations for discovery
(c) May 6, 1997 – Waite sets action down for trial
(d) August 13, 1997 and September 10, 1997 – action spoken to at trial scheduling court before Wilkins J.
(e) September 10, 1997 – trial date fixed for three (3) weeks commencing on October 26, 1998
(f) September 10, 1998 – action pre-tried by Dyson J.
(g) In late September 1998 or early October 1998 – Waite’s counsel advises counsel for the defendant that Waite could not raise fees for case to go to trial. Waite does however raise the further retainer.
(h) October 14, 1998 – a second pre-trial held before O’Brien J. Waite’s counsel requests an adjournment. It was refused.
(i) October 26, 1998 (date scheduled for trial) – Waite and his lawyer appear before Wilkins J. and again seek adjournment of trial. Adjournment was refused.
(j) October 26, 1998 – Thereupon, Waite in court, served on his lawyer, M.G. La Rochelle, a type written “Notice of Intention to Act in Person” dated October 23, 1998. Waite then gave a court employee a sheet of paper setting out where he could be contacted, including voice mail on his telephone at home. Waite was told by a court employee that the trial would proceed on the following Monday, November 2, 1998. Waite denies receiving voice mail messages left at his home and at his work by the trial co-ordinator on the Wednesday (October 28, 1998) and Friday (October 30, 1998) before the trial. Waite agrees that he received a voice mail message about the trial on November 2, 1998.
III. November 2, 1998 proceedings before Bellamy J.
[5] On this date, Mr. Bruce Hutchison, counsel for the Defendant Lorne Gershuny, appeared with his client ready for trial. Waite did not appear. The case was held down to the afternoon to give Waite an opportunity to appear. The Registrar undertook to arrange that Waite be advised. Waite failed to appear in the afternoon. Bellamy J. endorsed the Record as follows:
November 2, 1998
The plaintiff did not appear for the trial, despite having been told in person last Monday, by the trial co-ordinator, that the trial would be starting today and despite the trial co-ordinator having left messages at his home & his office on Wednesday & Friday of last week. By 2:40 p.m. the plaintiff had not shown up, despite messages having been left with him by the Registrar. The trial was to start at 10:00 a.m.
Accordingly, this matter is struck from the list. If the plaintiff does not restore it to the list by December 28, 1998, the plaintiff’s action will be dismissed with costs in the amount of $7,500.00. In any event, the plaintiff is to pay the defendant’s costs thrown away in preparation for today’s date, in the amount of $1,500.00, payable forthwith. Counsel for the defendant is to bring this order to the plaintiff’s attention in accordance with the Rules of Practice. The plaintiff’s concurrence with the draft order is not required.
Bellamy J.
[6] On November 6, 1998, by letter, counsel for Gershuny provided Waite with a copy of Bellamy J.’s order of November 2, 1998. Counsel for Gershuny heard nothing from Waite before December 28, 1998.
[7] On December 10, 1998, Waite retained a new lawyer, Paulos Luizos, and paid him a retainer of $1,500.00.
IV. December 24, 1998 proceedings before Dyson J.
[8] Without any notice to the defendant and/or his solicitors, Waite appeared before Dyson J. on December 24, 1998 and the following endorsement was made by that judge:
Dec. 24, 1998
The Pl appeared in person. He stated that he did not receive the messages referred to in Bellamy J.’s endorsement of November 2, 1998.
He stated that he has sent $1,500.00 to the Def’s lawyer.
On the assumption that both statements are true, this matter is to be restored to the trial list.
The Pl is in the process of engaging another counsel. Dyson J.
[9] On January 4, 1999, Mr. Hutchison, counsel for the Defendant, received a cheque, dated December 19, 1998, payable to him, personally, and signed by Waite. The cheque was in the amount of $1,500.00. There was no accompanying letter.
[10] On the same day, January 4, 1999, Mr. Hutchison wrote to Waite at the address on the December 19, 1998 cheque and stated:
As you are aware, your action against Lorne Gershuny is now at an end, its [sic] having been dismissed as of December 28, 1998.
I have today received your cheque in the amount of $1,500 payable to me. That cheque is attached as I am returning it to you. You are correct that the order which issued on November 2, 1998 requires you to pay $1,500 to Mr. Gershuny for his costs of November 2, 1998 and $7,500 to Mr. Gershuny for costs of the dismissed action. However, in the circumstances, my principles have closed their file with respect to this action and, therefore, will not be pursuing you for recovery of the costs awarded against you.
[11] On January 14, 1999, Mr. Hutchison received a letter from Mr. Paulos Luizos, barrister and solicitor. It stated:
Please be advised that I have been retained by Mr. Waite to act as his counsel in the above noted matter.
Mister Waite brought to my attention a letter from you to Mr. Waite dated January 4, 1999 stating that Mr. Waite’s action is now at an end. Mister Waite has also brought to my attention an Endorsement he obtained on motion to the Honourable Justice Dyson placing this matter back on the trial list (a copy of which is enclosed). Thus this matter is not at an end yet and Mr. Waite is anxious to have this matter tried.
I enclose a draft Order for your approval as to form and content. Please return when reviewed and approved at which point I will provide you with a copy of the Order as issued and entered.
[12] Upon receipt of this letter and the draft order, Mr. Hutchison took steps for the matter to be again placed before Dyson J.
V. February 23, 1999 – Second proceeding before Dyson J.
[13] On the above date, Dyson J. made the following order:
THIS MOTION, made by the defendant, Lorne Gershuny for an order setting aside the without notice order of the Honourable Mr. Justice Dyson, dated December 24, 1998, was heard this day in chambers at 361 University Avenue, Toronto, Ontario.
ON READING the affidavit of Bruce Hutchison, sworn February 18, 1999, the affidavit of Joel Waite sworn February 22, 1999 and on hearing the submissions of counsel for the parties.
THIS COURT ORDERS that my order dated December 24, 1998 be and hereby is set aside without prejudice to the plaintiff’s right to bring a motion on notice to set aside the order dismissing the action and to restore it to the trial list.
[14] From the date of Dyson J.’s order (February 23, 1999) until the present solicitors for Waite prepared a Notice of Motion, dated November 28, 2003, to set aside Dyson J.’s second order, the case was “dismissed”.
VI. Proceedings before Herman J.
[15] On January 15, 2004, Waite’s new counsel brought on the motion to set aside the second order of Dyson J., dated February 23, 1999, and restore the action to the trial list.
[16] After hearing submissions of counsel, Herman J. ordered:
That the February 23, 1999 order of Dyson J. be set aside, and
The action be restored to the trial list “on a priority basis”, and
The $1,500 costs ordered by Bellamy J. “paid and then returned, be paid by the plaintiff”.
[17] The reasons of the motions court judge state, in part:
Counsel for Mr. Gershuny maintains that I should go back in time to Mr. Waite’s failure to attend at trial. Justice Bellamy’s endorsement indicates that he was advised about the trial date. Although he indicated in his affidavit in support of this motion that he was not advised, he stated in cross-examination that he could not recall. The defendant suggested that I should conclude that he mislead Justice Dyson when he indicated that he was not advised.
The evidence is inconclusive but I believe that Justice Dyson was in a better position to assess the situation than I am. He had the endorsement of Justice Bellamy in front of him and chose to give Mr. Waite the benefit of the doubt. The defendants also suggested that Mr. Waite was misleading Justice Dyson when he said that he was in the process of retaining counsel when it appears that he had already retained counsel. I do not believe that the difference between retaining counsel and being in the process of doing so is so significant as to lead me to the conclusion at this point several years after the fact, that Mr. Waite was misleading the court.
The plaintiff suggests that I should apply the test under Rule 24.01 for a motion to dismiss for delay, to this motion to set aside the dismissal and restore the action to the trial list. He referred, in particular, to the case of Molevelt and Love v. Sowinski and Defoa, 6 O.R. (3d) 112 in which a motion was made to set aside the dismissal.
VII. Conclusions
[18] Counsel for the Applicant/Defendant submits that Herman J. erred by applying the test under Rule 24.01 where a defendant, who is not in default under the rules or an order of the court, may move to have an action dismissed for delay because the plaintiff has failed to serve a pleading or set an action down for trial within the prescribed time. The test in those circumstances is whether the delay is excusable and whether the order sought would cause prejudice to the opposite party. Here, the plaintiff failed to appear for the trial and failed for five (5) years to bring a motion to restore the action.
[19] In this case, counsel for the Defendant submits that, although no cases could be found directly on point, the proper test is/should be the test applicable where a party is moving to set aside a default judgment. The proper test, it is submitted, is for the moving party to provide the court with:
(1) a satisfactory explanation for her/his failure to attend at the trial, and
(2) a satisfactory explanation for the failure for a period of five (5) years to bring the motion to revive the action, and
(3) satisfactory evidence that the applicant has a meritorious case, should the action be revived.
Here, I find all three missing.
[20] In Ash v. Lloyd’s Corp. (1992), 8 O.R. (3d) 282 (Gen. Div.), Farley J. pointed out that to grant leave under Rule 62.02(4)(b) it is not necessary for the judge hearing the application to conclude that the impugned decision is wrong or probably wrong, but only that the decision is open to very serious debate. In my view, the impugned order is open to serious debate and fulfills the first branch of Rule 62.02(4)(b).
[21] Although the facts of this case may be bizarre and rather unique, motions to revive are not unusual. It is important that the public, the legal profession and all those involved in the administration of justice know the proper criteria for the exercise of judicial discretion in reviving moribund lawsuits. In Rankin v. McLeod, Young, Weir Ltd. (1986), 57 O.R. (2d) 569 (H.C.J.), Catzman J. said: “General importance relates to matters of public importance and matters relevant to the development of the law and the administration of justice”. In my view, this case fulfills the requirements of the second branch of Rule 62.02(4)(b).
VIII. Result
[22] An order to go, on consent, extending the time under Rule 62.02(2) within which to serve the Notice of Motion on this application for leave to appeal.
[23] Leave to appeal is granted under Rule 62.02(4)(b).
IX. Costs
[24] Costs of the leave application are left to the panel of the Court hearing the appeal.
O’Driscoll J.
Released: April 5, 2004
DIVISIONAL COURT FILE NO.: 148/04
COURT FILE NO.: 95-CU-91641
DATE: 20040405
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JOEL WAITE Respondent/Plaintiff
- and -
LORNE GERSHUNY Applicant/Defendant
REASONS FOR JUDGMENT
O’DRISCOLL J.
Released: April 5, 2004