Court File and Parties

Court File No.: 14/08 Released: 20080606

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Re: Guang Xi Gao v. Rodolfo Blanco De Keyser

Before: Swinton J.

Counsel: William S. Zener for the Plaintiff (Appellant) Pamela Connolly for the Defendant (Respondent)

Heard at Toronto: May 31, 2008

ENDORSEMENT

[1] The plaintiff (appellant) appeals from a decision of Master Haberman dated December 11, 2007, in which she dismissed a motion seeking an order setting aside the Registrar’s order to dismiss his action for delay.

[2] This action arises out of an accident on November 17, 2002 in which the appellant, a pedestrian, was injured in a collision with the respondent’s vehicle. The Statement of Claim was issued October 21, 2003, showing as solicitors of record Paul Lee & Associates, with Dana Hanson of that firm the responsible lawyer.

[3] A Statement of Defence was delivered April 21, 2004. Examinations for discovery were completed by September 1, 2004, while mediation took place October 19, 2004.

[4] Answers to undertakings were provided in the period up to June 30, 2005 (although there was an error in the affidavit evidence before the Master with respect to the extent of the responses, which is discussed below). In April, 2005, the respondent brought a successful motion under Rule 30.10 to obtain the contact information for two independent witnesses from the police.

[5] The respondent served two offers to settle on Mr. Hanson on August 29, 2006 and October 2, 2006, but received no response. Mr. Hanson left Mr. Lee’s firm in late October, 2006, unbeknownst to respondent’s counsel.

[6] A Status Notice was prepared by the Court dated November 7, 2006. It warned that the action would be dismissed for delay unless certain steps were taken within 90 days. An unsigned copy was mailed to the respondent’s counsel, but there is no mention of the appellant’s counsel on the form.

[7] An Order Dismissing Action for Delay dated March 12, 2007 was issued by the Court, although again, the form shows the address of the respondent’s counsel, but not that of the appellant’s counsel.

[8] New counsel for the appellant, Sue Chen, attempted to file a Notice of Change of Solicitors in June, 2007. She was informed by the Court Office that Mr. Lee was not solicitor of record. The Court enclosed a printout showing Mr. Hanson of Hanson Duby Lawyers as solicitor of record. Ms. Chen was also informed that the action had been dismissed.

[9] Ms. Chen admits that she failed to move expeditiously to set aside the order for dismissal. On September 25, 2007, she communicated with respondent’s counsel, requesting his consent to reinstate the action. When he refused, a motion date was booked, but not until December, 2007.

[10] The Master was very critical of the material filed in support of the motion, as it focussed on the issue of prejudice and did not address the other factors generally considered on a motion of this type: the explanation for the delay in the progress of the litigation from its beginning to the deadline for setting it down for trial; inadvertence in missing the deadline; promptness in bringing the motion to set aside the dismissal order; and lack of prejudice to the defendant (Marché d’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660 (C.A.) at para. 21). However, the Master refused a request for an adjournment that Ms. Chen made after she had presented her case.

[11] The Master found that the respondent would suffer no prejudice if the dismissal were set aside (Reasons, para. 52). However, she considered the conduct of the respondent and found that his counsel had been pro-active throughout. She was critical of the appellant’s delay in bringing the motion to set aside and the apparent lack of activity on the file. Ultimately, she stated (at para. 54):

In the face of these efforts by the defence and the plaintiff’s complete lack of activity, I am concerned that granting the relief sought would give entirely the wrong message about how our justice system operates. Though our Rules are intended to be interpreted liberally and not slavishly adhered to, they cannot be pushed aside again and again if we expect parties to at least attempt to abide by them. At some point, the integrity of the administration of justice requires that a line be drawn.

[12] The standard of review of an error by the Master is correctness with respect to principles of law and palpable and overriding error with respect to questions of fact (Zeitoun v. The Economical Insurance Group (Divisional Court, May 6, 2006).

[13] The appellant sought to put new evidence before me on this appeal, including affidavits from the appellant, and lawyers Paul Lee, Dana Bruce Hanson and Sue Chen. The evidence from the appellant, Lee and Hanson would have been available, had counsel exercised due diligence when preparing for the motion. Normally, such evidence would not be admitted on appeal (R. v. Palmer, [1980] 1 S.C.R. 759 at paras. 24-27). However, there was also evidence that the Master was inadvertently misled by the affidavit filed by respondent’s counsel in the motion before her. I indicated at the hearing that I would admit the evidence to that effect, as well as the new affidavit from respondent’s counsel explaining the inadvertent error. To ignore it would be unjust to the appellant.

[14] The Master applied the correct principles of law. Rule 37.14(2) provides that the court may set aside or vary an order of dismissal on such terms as are just. The Master referred to the recent decisions of the Court of Appeal in Scaini v. Prochnicki (2007), 2007 ONCA 63, 219 O.A.C. 317 (C.A.) and Giant Tiger, supra, in which the Court held that the four factors set out above should be considered, although the plaintiff need not satisfy every one. Rather, a contextual approach is required, in which the Court must consider the relevant factors and balance the interests of the parties so as to make an order that is just (Scaini at paras. 21 and 25).

[15] While the Master applied the correct principles, she made two errors of fact, one of which was caused by the deficiencies in the material before her, as disclosed in the new material filed on appeal.

[16] The Master was of the view that only one undertaking had been answered between the mediation and June 30, 2005. This was an error, as the Master was inadvertently provided with incomplete and misleading information. There were at least eight other letters from the appellant’s counsel answering undertakings and providing additional documentation between the mediation and June 30, 2005.

[17] The reason for the lack of correct information before the Master was twofold. First, counsel with carriage of the motion to set aside the Registrar’s order, Ms. Chen, did not provide adequate information to the Master as to the reasons for the delay and the progress of the litigation. Second, the affidavit of defence counsel, Craig Edwards, contained an inadvertent error about answers to undertakings. In the appeal before me, he filed a new affidavit, explaining his error with respect to the state of the file and confirming that the appellant’s counsel had provided answers to most of the undertakings by June 30, 2005.

[18] A careful reading of the Master’s endorsement leads me to the conclusion that the information that the appellant had provided answers to only one undertaking was of significance to her in reaching her decision. She mentions in paragraph 6 that the respondent was never provided with medical or employment information, when in fact there had been information in the form of one doctor’s clinical notes, the hospital notes, an OHIP summary, a pharmacy printout, CCRA information and the accident benefits file. She mentions again in paras. 23, 30 and 52 that there was only one answer to undertakings.

[19] In addition to the error with respect to disclosure, the Master appears to have erred in concluding that the evidence regarding liability changed “dramatically” following the discoveries and mediation (at para. 15; see also para. 18). The Master was of the view that the respondent became aware of two independent witnesses to the accident after discoveries and mediation, who confirmed the respondent’s evidence. In her view, this information only emerged in May, 2005, following the Rule 30.10 motion (at para. 21, and also paras. 25, 47, 53 and 55). The Master believed that appellant’s counsel became aware in May, 2005 that liability was going to be contentious.

[20] In fact, the existence of these two witnesses was known prior to discovery and mediation, as the witness statements (without names and addresses) had been provided to the appellant’s counsel prior to discovery. Therefore, liability was an issue in these proceedings during discoveries and mediation.

[21] The respondent submits that while the Master erred in appreciation of some of the evidence, the error is not an overriding one, given the other facts of this case. I disagree. In determining whether to set aside a dismissal for delay, the court must consider the relevant factors in context and balance the interests of the parties and consider the impact on the administration of justice. Here, the Master was clearly influenced by the appellant’s apparent lack of response to undertakings, as well as what she thought was new evidence regarding liability. Indeed, she refers to the Plaintiff’s “complete lack of activity” and contrasts that with the defense efforts when she concludes that the motion should be dismissed. When the evidence is properly considered, the context of this case changes, in my view significantly. Therefore, the Master’s decision must be set aside.

[22] The question then becomes whether I should substitute my decision or refer the matter back to her. To refer the matter back would cause further cost and delay. Therefore, I have decided to consider the merits of the case. In doing so, I have made reference to the new material filed, as such material would be available before the Master, were the matter referred back.

[23] There is no doubt that Ms. Chen did not move promptly to set aside the dismissal, as she should have done. That is admitted. However, given Scaini, supra, that is not fatal to the appellant’s motion.

[24] It appears to me that the solicitors failed to set this action down for trial through inadvertence. Both Paul Lee and Dana Hanson state that they never received the notices from the Court.

[25] Indeed, there is reason for concern that the Status Notice and the Dismissal Order were not properly sent to the appellant’s counsel of record. While the names of the counsel for all parties should appear on the notices, only the defence counsel’s name appeared on the documents in the record. Moreover, the Court printout shows Mr. Hanson as solicitor of record, even though no notice of change of solicitors was filed, and Ms. Chen and the appellant believed that Paul Lee was still solicitor of record.

[26] The Master found, and I agree, that there is no prejudice to the respondent if the dismissal is set aside. In contrast, there is significant prejudice to the appellant. The discoveries and mediation have been completed, and there have been answers to the majority of the undertakings. The appellant claims that he has suffered a catastrophic injury.

[27] It is true that the appellant’s various counsel have not been diligent in moving this action along since June, 2005, while the respondent’s counsel was pro-active in trying to move the proceeding along. Nevertheless, the appellant should not be denied the indulgence he seeks when there has been no prejudice to the respondent from the delay. It is not an adequate response to say that he may have a claim for damages in a negligence action against one or more of the three solicitors who have been involved in this case.

[28] In the Giant Tiger case, the Court of Appeal held that excusing the delay there risked undermining the public’s confidence in the administration of justice (at para. 32). There, the solicitor brought the motion to set aside five years after the dismissal of the action, a delay described as “inordinate” (at para. 39).

[29] While the Master relied on the same concern for public confidence in the administration of justice in the present case, the facts here are very different from those in Giant Tiger. While Ms. Chen did not move as promptly as she should have, the motion was scheduled within six months of her learning of the dismissal. This is not an inordinate delay. The Court of Appeal also noted in Giant Tiger that where a defendant would not be unfairly prejudiced by the delay, the plaintiff should generally be granted an indulgence (at para. 34). In my view, balancing all the interests, including the concern for public confidence in the administration of justice, the Registrar’s order should be set aside.

[30] Therefore, the appeal is allowed. The order of the Master is set aside, and an order is to go setting aside the Registrar’s dismissal of this action on the term that the appellant must either set the action down for trial or arrange a status hearing within sixty days of the release of this decision.

[31] If the parties cannot agree on costs, they may make brief written submissions within 30 days.

Swinton J.

Released: June 06, 2008