COURT FILE NO.: 525/07
DATE: 20080114
SUPERIOR COURT OF JUSTICE - ONTARIO
DIVISIONAL COURT
RE: LAFONTAINE-RISH MEDICAL GROUP LIMITED, MEDICAL GROUP RESEARCH ASSOCIATES LIMITED, LAFONTAINE-RISH MEDICAL ASSOCIATES, SONIA LAFONTAINE AND ARTHUR FROOM Plaintiffs/Appellants
- and -
GLOBAL TV NEWS INC., PETER VINER, JAMES SWARD, ROBERT DAVIDSON, PETER KENT, MARLEEN TROTTER, GREGORY DENNIS, PAUL ROGERS, COLLEGE OF PHYSICIANS AND SURGEONS OF ONTARIO, JERRY LEVITAN, THOMAS BELL, M.D., TRACY HYNES, RAQUEL NAVARRO, RALPH NAVARRO and OLGA NAVARRO Defendants/Respondents
BEFORE: Mr. Justice Carnwath
COUNSEL: Robert Zigler, for the appellants, Lafontaine-Rish Medical Group Limited & Arthur Froom
Bruce Thomas, for the respondents, Global TV News Inc., Peter Viner, James Sward, Robert Davidson, Peter Kent, Marleen Trotter, Gregory Dennis and Paul Rogers
Marcela Saitua, for the respondent, College of Physicians and Surgeons of Ontario
Lorne Honickman, for the respondent, Jerry Levitan
Roy Stephenson & Trevor Shaw, for the respondent, Thomas Bell, M.D.
HEARD: January 7, 2008
E N D O R S E M E N T
CARNWATH J.:
[1] The first eight respondents to this appeal (the “Global defendants”), along with the defendants, College of Physicians and Surgeons of Ontario, Jerry Levitan and Dr. Thomas Bell (together the “moving defendants”), moved for a second time to dismiss this action before Master Hawkins, the Case Management Master. The motion was heard on March 7, 2007, and for reasons released March 23, 2007, the Master dismissed this action against the moving defendants.
[2] Master Hawkins found the plaintiffs, Lafontaine-Rish and Mr. Froom, contumelious and their delay intentional, inordinate and inexcusable. The plaintiffs now appeal the dismissal of their action.
[3] The appeal raises the following questions:
Should the plaintiffs’ motion to lead fresh evidence be granted?
What is the appropriate standard of review where a case management Master dismisses an action for delay?
Applying the appropriate standard of review, should the Master’s decision be overturned?
Was the Master’s decision a denial of natural justice?
BACKGROUND
[4] The action commenced on September 18, 1998.
[5] The action arose from a television news broadcast on the Global Television Network. The plaintiffs allege that the broadcast suggested the corporate plaintiff, Lafontaine-Rish Medical Group Limited, (“Lafontaine-Rish”) should be shut down because it was being operated in a negligent manner. The plaintiff, Arthur Froom, is a shareholder and director and the controlling mind of the corporation.
[6] By February 4, 1999, Statements of Defence had been filed on behalf of the moving defendants.
[7] Over one year later, on March 14, 2000, counsel for the corporate plaintiff, David Cousins, requested the defendants’ affidavit of documents. Shortly thereafter, the Global defendants met the request. It was not until December 12, 2000, that the affidavit of documents of the corporate plaintiff was delivered.
[8] On March 2, 2001, Mr. Cousins gave notice that the only plaintiffs intending to proceed with the action would be Lafontaine-Rish and Mr. Froom.
[9] On March 5, 2001, Mr. Froom delivered his affidavit of documents, two-and-a-half years after the action started. A motion to dismiss his action had been delivered and was scheduled to be heard later that month.
[10] A series of examinations-for-discovery took place leading to a motion brought by the Global defendants for satisfaction of undertakings, returnable June 28, 2002. This motion was adjourned until finally a case conference was held with Master Hawkins on July 16, 2002. At that case conference, November 13 and 14, 2002, were set aside for undertakings and refusal motions.
[11] The undertakings and refusal motion of the Global defendants proceeded on November 13 and 14, 2002. The balance of the motion was scheduled to continue and was finally re-scheduled to October 2 and 3, 2003.
[12] The motion continued on October 2 and 3, 2003 with Master Hawkins reserving on certain issues and ordering Mr. Froom to deliver answers to all undertakings by January 9, 2004. The motion was resumed on January 27, 2004 for the purposes of a confidentiality order since Mr. Froom refused to produce financial statements without it. On that date, the date by which the plaintiffs were to deliver answers to undertakings was extended to May of 2004. The January 27, 2004 hearing resulted in the Master issuing an order on February 13, 2004, following which the Global defendants made submissions as to costs. Mr. Froom asked for an extension of the time to file his costs submissions to March 24, 2004. Mr. Froom failed to file any submissions and was requested again in August of 2004 to file his costs submissions. On September 7, 2004, Master Hawkins ordered costs in the amount of $1,500 to be paid by the plaintiffs within thirty days.
[13] In April of 2005, Mr. Froom delivered answers to undertakings, provided financial material and paid the costs order, seven months after the costs order.
[14] The Global defendants then scheduled a motion to amend the Statement of Defence for June 29, 2005. The motion was re-scheduled for July 20, 2005, as Mr. Cousins was not available. Mr. Froom then reported that he had broken his leg on June 6, 2005 and was not able to prepare a response for the motion scheduled for July 20, 2005.
[15] A special appointment was set for September 21, 2005. The plaintiffs requested an adjournment on that date, the request was granted and Master Hawkins re-scheduled a new motion date of January 25, 2006. Mr. Froom then brought a motion to amend his Statement of Claim returnable on that date.
[16] The Global defendants consented to the amendments to the plaintiffs’ Statement of Claim. Master Hawkins, on January 25, 2006, ordered that the amended Statement of Claim be delivered within fifteen days. I note here that it was not delivered until over a year later in February of 2007.
[17] The Global defendants’ brought their first motion to dismiss the action for delay returnable July 18, 2006. At the request of the plaintiffs and over the opposition of the defendants, the Master adjourned the motion to November 9, 2006. The motion proceeded on November 9, 2006 and by reasons issued December 5, 2006, the Master dismissed the defendants’ motion to dismiss and awarded costs against the plaintiffs.
[18] On December 6, 2006, Mr. Froom was incarcerated at the Metro West Detention Centre on immigration matters, including his possible extradition to the United States. He remained in custody at the Detention Centre until May 22, 2007, when he was released on bail.
[19] In his order issued December 5, 2006, the Master provided that a case conference could be requested within fifteen days. The moving defendants requested such a case conference, which was conducted by telephone on Monday, February 12, 2007.
[20] On Sunday, February 11, 2007, the day before the scheduled conference, the plaintiffs finally served their amended Statement of Claim approximately one year after they had been ordered to do so in the Master’s order of January 25, 2006. The costs award flowing from the Master’s order issued December 5, 2006, was finally paid on March 5, 2007, some three months late.
[21] Following the telephone conference of February 12, 2007, the Master fixed the date of March 7, 2007 for the hearing of the moving defendants’ second motion to dismiss the action for delay. At no time during the telephone conference of February 12, 2007, did Mr. Cousins advise the Master and the defendants that Mr. Froom was in custody.
[22] On March 7, 2007, Mr. Schuetz, a solicitor, appeared on behalf of Mr. Froom. He told the Master that he was retained only for the purpose of asking for an adjournment. When asked about the whereabouts of Mr. Froom, Mr. Schuetz replied that he was “in custody, in Ontario”. Mr. Cousins, who appeared on behalf of the corporate defendant, offered no explanation as to Mr. Froom’s whereabouts. The Master, for reasons developed later in this decision, refused the adjournment and heard argument on the merits of the motions to dismiss. He granted the motions and dismissed the action with costs to the moving defendants to be assessed.
THE MASTER’S ORDERS
The Order of September 7, 2004
[23] The order of September 7, 2004 was the culmination of motions heard November 13 and 14, 2002, May 8, 2003 and January 27, 2004. In reviewing the costs submissions of the parties following the motions, the Master is reported, at para. 76 of his reasons, as follows:
[76] However, there are other considerations. Mr. Froom was frequently late in appearing. Mr. Cousins was late on occasion as well. This put the other parties to needless expense. Further, the plaintiffs failed to complete the responding party’s column in the chart of questions the defendants were moving on and thus did not indicate in advance why they objected to answer questions. Time was wasted as a result. In instances where Mr. Froom took the position (as he did on a number of occasions) that a particular refused question had been asked and answered elsewhere he often did not have the transcript references at hand. Counsel and the court were kept waiting while he looked for the references he relied upon.
[24] Taking those factors into consideration, despite the divided success on the motion, the Master ordered the plaintiffs to pay the moving defendants $1,500 in costs within thirty days.
The Master’s Order of December 5, 2006
[25] This order issued following the hearing on November 9, 2006 of the moving defendants’ first motion to have the action dismissed for delay.
[26] The Master began by finding that two affidavits sworn by Mr. Froom were not served within the time limits he had established. These affidavits were rejected by the Master. The Master then turned to consider the plaintiffs’ failure to deliver their amended Statement of Claim within the original fifteen-day deadline established in the timetable set on January 25, 2006. The following paragraphs from his order are significant:
[19] As a result, the timetable I set on January 25, 2006 cannot be met. The position of the plaintiffs seems to be that because they wish to make still further amendments to the amended statement of claim not contemplated in January 2006 they may ignore the January 25, 2006 timetable order altogether. I find that attitude most disturbing. The remaining plaintiffs have known for months that the Global defendants would not consent to the latest proposed amendments, yet they waited until November 2, 2006 to bring a motion for leave to amend.
[20] The remaining plaintiffs submit that the defendants have not suffered and will not suffer prejudice through delay because a record of the broadcast giving rise to this action has been preserved. This ignores the fact that those defendants who have raised a justification defence must rely upon the evidence of non-parties to prove the truth of the statements complained of. Memories fade over time. While there is no evidence that any potential witness has died or disappeared, that is simply fortuitous.
[21] I am not prepared to dismiss these motions on the ground that the moving defendants are themselves in default. There is no evidence before me that they are. If defence defaults were really serious enough to concern the plaintiffs, Mr. Froom would have mentioned these defaults in his first or September 15, 2006 affidavit. He did not.
[22] While the default of a moving party is an automatic bar to a motion to dismiss for delay brought under subrule 24.01(1)(c), it is not an automatic bar to a motion to dismiss under subrule 57.03(2), rule 60.12 or subrule 77.10(7)(b). A default of that kind is simply a matter for the court to consider when deciding what order to make. Here the remaining plaintiffs are in a class by themselves when it comes to defaults.
[23] Several of the moving defendants also relied upon subrule 57.03(2) and the failure of the plaintiff to pay the costs of a motion. On September 7, 2004 I ordered the remaining plaintiffs to pay the Global defendants and several other defendants $1,500 in costs of an undertakings and refusal motion. These costs were to be paid within 30 days. In fact the plaintiffs did not pay these costs until April, 2005.
[24] I am not prepared to dismiss this action on the basis of late payment of these costs. This default was cured by the time the present motions were brought. However I recognize this as another instance where the plaintiffs failed to meet a deadline set by court order.
[25] I am not prepared to dismiss this action for delay and non-compliance with court orders at this time. I have reached this conclusion for two reasons. First and foremost this action has not ground to a complete halt. This is not a case where there has been absolutely no activity for a significant period of time. The parties have recently been in negotiations about dropping some of the Global defendants from the action and about amending pleadings. The plaintiffs may well feel that they are moving this action forward. If that is how they feel, I have to say that the pace of progress is glacial. Secondly since there has been no defence prejudice in the form of a witness who has died or disappeared or documentary evidence that has been lost, I have decided that the plaintiffs should be warned and given one last opportunity to change their ways.
[26] The plaintiffs’ mindset must undergo a fundamental change if this action is to survive a second motion to dismiss for delay. Right now this action hangs by a thread. The plaintiffs’ attitude of indifference to court orders and deadlines must cease and cease now.
[27] The plaintiffs should not regard any dismissal of these motions as wiping the slate clean as regards past defaults. If any of the defendants are in future instructed to bring a second motion to dismiss for delay and defaults they may rely upon the plaintiff’s [sic] defaults and delays described in the Global defendants [sic] present affidavit as part of the basis for that second motion.
The Order of April 11, 2007
[27] The order dated April 11, 2007 followed the second motion to dismiss brought by the moving defendants and heard on March 7, 2007. The Master began his reasons by noting that he had given a special appointment for the argument of the motions and that his order was noted “This motion date is peremptory to all parties. Adjournments will be only in exceptional circumstances.”
[28] The Master then put on record the events which took place on March 7, 2007:
[10] On March 7, 2007 counsel for Mr. Froom advised the court that Mr. Froom was currently incarcerated. When asked where Mr. Froom was incarcerated, he simply replied ‘In Ontario’. He said that he had met Mr. Froom many times but that he had just been retained the previous day. He said that he was having difficulty getting instructions from Mr. Froom. He did not say how long Mr. Froom had been incarcerated. He denied that counsel for La-Fontaine-Rish was instructing him. He did not profer [sic] any affidavit supporting the statements he made to the court. Counsel for the moving defendants were clearly and justifiably upset at the lack of information from or about Mr. Froom. They were not aware until just before I convened court that any adjournment would be requested.
[11] The basis of the present motions is no surprise to the plaintiffs. They have known since mid-February 2007 that the Global defendants and the other active defendants would be moving to have this action dismissed on March 7, 2007. That gave them plenty of time to prepare affidavit material supporting, explaining or justifying their position. Neither plaintiff filed any material.
[12] Counsel for La-Fontaine-Rish did not complain of any inability to obtain instructions. I have been involved with this action since July 2002 and have case managed this action for several years. Mr. Froom and counsel for La-Fontaine-Rish have been before me many times. They have always worked closely together. Counsel for La-Fontaine-Rish is experienced and competent. He knows how to respond to motions. Mr. Froom could easily have retained him.
[13] However, from the perspective of Mr. Froom on March 7, 2007, counsel for La-Fontaine-Rish had one shortcoming. He could not say that he was new to this action and that he needed time to become familiar with this action and to prepare a response to these motions. For someone inclined to delay this action that is a significant shortcoming.
[14] In all these circumstances I declined to grant the plaintiffs’ request for an adjournment of these motions. I then heard argument [sic] the merits of these four motions.
[29] The Master then turned to hear arguments on the merits of the four motions. He is reported, as follows:
[15] In my decision of December 5, 2006 I described how the plaintiffs had repeatedly delayed this action and were frequently in default of court orders. I said that I wanted my decision to be a warning that the plaintiffs had one last opportunity to change their ways. Finally, I said that the plaintiffs’ mindset must undergo a fundamental change if this action were to survive a second motion to dismiss for delay and that this action hung by the thread. I said that the plaintiff’s [sic] attitude of indifference to court orders and deadlines must cease immediately.
[16] Since December 5, 1006 I have not seen any change in the plaintiffs’ mindset. Their attitude of indifference to court orders and deadlines had continued despite my warning.
[17] At a telephone case conference on January 25, 2006 I ordered the plaintiffs to deliver their amended statement of claim within 15 days. It was not delivered by the time I released my December 5, 2006 decision on the first round of dismissal motions. Had the plaintiffs delivered their amended statement of claim promptly after that decision was released, that would have been evidence of a change in the plaintiffs’ mindset and evidence that the plaintiffs were taking my warning to heart. It was not so delivered. In fact, it was not delivered until February 11, 2007, approximately one year late.
[18] When the first round of dismissal motions were argued on November 9, 2006 the plaintiffs had a pending motion for leave to make further amendments to the amended statement of claim. In my December 5, 2006 decision I stated that I had not dealt with all aspects of all motions pending before me at that time and that those who wished to pursue the unargued aspects of those motions had 15 days to request a case conference at which time I would make a timetable order respecting such motions. The plaintiffs never requested any such case conference. Their motion for leave to amend their amended statement of claim was never argued.
[19] In argument before me on March 7, 2007 counsel for Mr. Froom submitted that I should not dismiss this action because it was close to the state where it could be set down for trial. If that were true, the plaintiffs’ opportunities for further delay would be limited. But it is not true. At the telephone case conference January 25, 2006 I scheduled six more days of examinations for discovery, three of the plaintiffs and three for the Global defendants. I also set deadlines for answering undertakings, bring discovery motions and setting this action down for trial. The timetable could not be met because of the plaintiffs’ failure to deliver their amended statement of claim when ordered.
[20] The plaintiffs have never asked for a case conference to set a new timetable to reschedule those examinations for discovery and any other steps to be taken before this action is set down for trial. Over one year has passed since that timetable order was made.
[21] Finally, Mr. Froom did not retain counsel in order to instruct him to move this action forward. The retainer of Mr. Froom’s counsel was limited to seeking an adjournment of these motions.
[22] Over eight years have passed since the television programme which gave rise to this action was aired. Despite my clear warnings of dire consequences, the plaintiffs’ default and attitude of indifference to court orders remains unchanged. The plaintiffs are contumelious. If I were to dismiss these motions it would likely be several more years before this action reached the trial stage. That would be manifestly unjust to the defendants. By that time there is a virtual certainty that a fair trial of the issues in this action would not be possible, with resultant real prejudice to the defendants.
[23] The plaintiffs have led no evidence to rebut the presumption of prejudice to the defendants. The plaintiffs’ delay has been intentional, inordinate and inexcusable. They have squandered their last chance.
[24] For all these reasons these motions are granted. This action is dismissed with costs to the moving defendants to be assessed.
- Should the plaintiffs’ motion to lead fresh evidence be granted?
[30] The first order of business on the appeal was consideration of the plaintiffs’ motion to introduce fresh evidence. Sealed envelopes were filed with the Court containing the motion to receive fresh evidence and Mr. Froom’s affidavit. Also filed in sealed envelopes were the responses of the various defendants objecting to the introduction of fresh evidence, including factums and authorities. I told counsel at the beginning of the motion that I had opened the sealed envelopes on Sunday, January 6 and reviewed the contents. I invited counsel to make submissions with respect to any objections they might have for doing so. No objections were made.
[31] Baldly put, the basis for Mr. Froom’s motion to receive fresh evidence is his sworn affidavit that he did not receive or have any knowledge of Master Hawkins’ endorsement, dated December 5, 2006, until March 2, 2007. This state of affairs, he swears, prevented him from complying with the costs order of December 5, 2006; it prevented him from knowing about or participating in the telephone conference of February 12, 2007; and it prevented him from instructing counsel on his behalf to appear on March 7 to make submissions with respect to the motion for dismissal.
[32] For this state of affairs to exist means that Mr. Froom made no efforts to find out the results of the first motion for dismissal. It means that his office took no steps to communicate the results of that motion which that office received on or shortly after December 6, 2006, three months before the hearing. It means that Mr. Cousins, Mr. Froom’s lawyer, retained to represent the interests of Lafontaine-Rish made no efforts to communicate the results of the motion to Mr. Froom. In addition, it appears, Mr. Cousins made no effort to inform the Master or the defendants in the telephone conference of February 12, 2007, that Mr. Froom was in custody. Indeed, on March 7, 2007, Mr. Cousins had nothing to say about Mr. Froom when the Master inquired where he might be.
[33] Almost every day in Canada juries are instructed to use their common sense and their ordinary life experience when assessing credibility. When I consider Mr. Froom’s sworn statement that he didn’t learn of the December 5 order until March 2, 2007, through the optic of common sense and ordinary life experience, I can find only two explanations for this statement. One explanation is that he is attempting to deceive the court while knowing full well of the December 5 order well in advance of the March 7 hearing and, indeed, well in advance of the February 12 telephone conference. The other explanation is that he deliberately organized his affairs and crafted his instructions to his counsel and to his employees in such a way that he would remain ignorant of the contents of the order until such time as it suited him to learn of them.
[34] In considering whether due diligence was exercised by the plaintiffs, it matters not which explanation obtains. In either instance, due diligence has not been exercised. I reject the sworn statement of Mr. Froom that the circumstances of his incarceration made it impossible for him to find out the results of the December 5, 2006 decision. Persons in Canadian custody have access to lawyers and have access to correspondence, both sent and received. If Mr. Froom chose not to use these avenues to inform himself, he has not exercised due diligence. If Mr. Froom knew very well the contents of the December 5, 2006, before March 2, 2007, as I suspect he did, he has not exercised due diligence. It is trite law that fresh evidence should generally not be admitted if, by due diligence, it could have been adduced at first instance. (R. v. Palmer, [1981] S.C.R. 759 at p. 775; SLMsoft.com Inc. v. Rampart Securities (Trustee of), 78 O.R. (3d) 521 (Ont. Div. Ct.), at paras. 53, 55 & 63) Following the submissions on the motion to introduce fresh evidence, I adjourned briefly and returned to advise the parties that the motion was denied with reasons to follow, together with the results of the appeal. It is for the above reasons the motion to introduce fresh evidence was denied.
[35] There had been an additional motion brought by the plaintiffs whose consideration depended upon the fresh evidence being admitted. Plaintiffs’ counsel agreed it was unnecessary to deal with it.
- What is the appropriate standard of review where a case management Master dismisses an action for delay?
[36] The plaintiffs submit that the standard of review of the Master’s decision to dismiss the action is one of correctness. The moving defendants submit that a degree of deference is owed to the Master by virtue of his position as case management Master of the action since 2002.
[37] This is an appeal from a final order of a Master exercising discretion. Ontario case law has been inconsistent with respect to how an appellate court should deal with such an appeal. In Hudon v. Colliers Macaulay Nicholls, [2001] O.J. No. 1588 (Ont. Div. Ct.), the appeal was from a final order of a Master exercising discretion. A panel of the Divisional Court stated that “on an appeal from a discretionary order of a Master which is final, or which determines a matter vital to the final issue of the case, the judge hearing the appeal is entitled to conduct a re-hearing and – after according some deference to the Master’s expertise in the field – substitute his or her discretion for that of the Master”.
[38] An example of the contrary view, is the decision of Nordheimer J., in Noranda Metal Industries Ltd. v. Employers Liability Assurance Corp. (2000), 49 C.P.C. (4th) 336 (Ont. S.C.J.). Nordheimer J. stated that “the appropriate standard of review is one of deference, regardless of whether or not the Master’s decision disposed of the final issue; appeals should be heard as appeals and not de novo”. The policy reasons offered for this conclusion included the fact that Masters are on the frontline in determining many matters, the fact that case management Masters must have reasonable and fair control over their process and that if matters are heard de novo, it would encourage parties to launch appeals and thereby obtain a new hearing.
[39] In Moritex Europe Ltd. v. Oz Optics Ltd. (2006), 81 O.R. (3d) 783, Epstein J. made an extensive review of the two approaches, touching on over thirty-five cases which touched on the subject. She concluded that it would be useful if a higher court were to resolve the issue and reconcile the Hudon line of cases with the policy concerns raised in the line of cases following Carter v. Brooks (1990), 2 O.R. (3d) 321 (Ont. C.A.). Epstein J. concluded by finding that she was obliged to follow the test established in Hudon, that is to say, the standard of review is correctness.
[40] I respectfully suggest that in certain circumstances, the standard of review established in Moritex may require further examination on a case-by-case basis. Moritex involved a motion for summary judgment granted by the Master. The Master was required to consider facts presented by affidavit evidence. There is no suggestion in the judgment that the Master was a case management Master and thereby intimately familiar with the history of the matter. A standard of review of correctness was appropriate in those circumstances.
[41] However, in Bank of Nova Scotia v. Liberty Mutual Insurance Company et al., [2003] O.J. No. 4474 (Ont. Div. Ct.), a panel of the Divisional Court echoed Nordheimer J. in Noranda Metal, above, when speaking of the role of a Case Management Master:
Case management masters play an important role in shepherding cases through the pre-trial process and ensuring that the purposes of Rules 77 are achieved. In furtherance of their role in this regard, case management masters must have the ability to exercise some reasonable and fair control over the discovery process without being second-guessed by judges who will normally be very much less familiar with the history of the proceeding.
(Bank of Nova Scotia v. Liberty Mutual, above, at para. [10])
[42] In this appeal, the case management Master was faced with a motion to dismiss an action for delay. The action was one with which he was intimately involved since 2002. He had presided over lengthy motions for completion of undertakings and refusals on examinations. He was ideally situated over a period of four years to form an opinion as to the manner in which the plaintiffs were conducting the litigation. I asked myself how appropriate would it be for me to deal with this appeal by way of hearing de novo, while giving deference to the Master’s conclusion. I find it would be inappropriate, indeed approaching judicial arrogance, to, in effect, say that I am in a better position to consider the issue of delay than the Master.
[43] It must be remembered that this final order bears no relation to an order for summary judgment. The issue between the parties was delay; that issue brings into play the special knowledge acquired by the Master during the course of his case management responsibilities.
[44] In the circumstance of this appeal, I adopt a standard of review where I must be convinced the Master made a palpable or overriding error, misapprehended the evidence or was clearly wrong in his conclusion. I do not propose to conduct a re-hearing where my discretion may be substituted for that of the Master.
[45] In the event I should have conducted a hearing de novo, while giving some deference to the Master’s decision, I would have refused leave to introduce fresh evidence. I would have based my refusal on the evidence that was before the Master, from the start of the action to March 7, 2007.
- Applying the appropriate standard of review, should the Master’s decision be overturned?
[46] The plaintiffs’ submit the Master committed a reversible error in dismissing the action for delay.
[47] An action should not be dismissed for delay unless one of two requirements are met:
(a) the default is intentional and contumelious; or
(b) the plaintiff and his/her lawyers are responsible for the inexcusable delay that gives rise to a substantial risk that a fair trial may not now be possible.
(Armstrong v. McCall, [2006] O.J. No 2055 (Ont. C.A.) at para. 11)
[48] In determining part one of the test, the court looks at the evidence to determine whether the delay on the part of the plaintiff has been intentionally disdainful or disrespectful.
[49] A review of the Master’s ruling issued December 5, 2006 shows the following findings of fact made by the Master in his unique position in managing the litigation:
(i) The plaintiffs’ mindset must undergo a fundamental change if the action is to survive a second motion to dismiss for delay;
(ii) The plaintiffs’ attitude of indifference to court orders and deadlines must cease and cease now;
(iii) The moving defendants were fully justified in complaining of the plaintiff’s delays and defaults to date.
[50] In his March 23, 2007 ruling, the Master made the following findings of fact:
(i) Despite my clear warnings of dire consequences, the plaintiffs’ default and attitude of indifference to court orders remained unchanged;
(ii) The plaintiffs are contumelious;
(iii) The plaintiffs’ delay has been intentional, inordinate and inexcusable.
These were findings the Master was entitled to make on the state of the evidence before him as of March 7, 2007. I find no palpable or overriding error, no misapprehension of the evidence nor any suggestion that the Master was clearly wrong in his conclusion.
[51] It may be said that his findings were based on incomplete information, that if he knew the circumstances of Mr. Froom’s incarceration, he might have come to a different conclusion. Any lack of knowledge on the part of the Master is directly attributable to Mr. Froom and his solicitors. Earlier in these reasons, I found that either Mr. Froom attempted to deceive the court or arranged his affairs in such a way as to remain in an ignorant state about the order of December 5, 2006. The plaintiffs can not rely on the conduct of Mr. Froom and his solicitors to impair the findings of fact made by the Master on March 7, 2007. Added to what he already knew was the failure of Mr. Froom to engage in the telephone conference of February 12, 2007 and his failure to appear on March 7, 2007 other than by the appearance of counsel retained solely for the purpose of asking for an adjournment. The failure of Mr. Cousins to acquaint the Master of Mr. Froom’s circumstances is the failure of Mr. Froom.
[52] In determining part two of the test, an inordinate delay may give rise to a presumption of prejudice. Where a presumption of prejudice exists, the defendants do not have to lead evidence of actual prejudice, rather the action will be dismissed unless and until the plaintiffs are able to successfully rebut that presumption. The presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and the issues in the lawsuit do not depend on the recollection of witnesses. (see: Woodheath Developments Limited v. Goldman, [2003] O.J. No. 3440 (S.C.J.), at paras. 4 and 5)
[53] In para. [22] of his reasons, dated April 11, 2007, the Master found that if he were to dismiss the Global defendants’ motions, “it would be likely to be several more years before this action reached the trial stage. That would be manifestly unjust to the defendants. By that time there is a virtual certainty that a fair trial of the issues in this action would not be possible, with resultant real prejudice to the defendants”.
[54] The Master’s reasons continue, at para. [23]:
The plaintiffs have led no evidence to rebut the presumption of prejudice to the defendants. The plaintiffs’ delay has been intentional, inordinate and inexcusable.
[55] The Master was entitled to come to these conclusions on the evidence before him as of March 7, 2007. I find no palpable or overriding error, no misapprehension of evidence and no suggestion that he was clearly wrong in his conclusions.
[56] The plaintiffs’ submit that the defendants are responsible for delay since they did not file their amended Statement of Defence. There is no merit in this submission. The plaintiffs did not produce their amended Statement of Claim until March of 2007. To suggest the defendants had an obligation to produce an amended Statement of Defence before receiving the amended Statement of Claim is preposterous.
[57] The plaintiffs submit that the doctrines of res judicata and issue estoppel apply to the findings of the Master in his decision issued December 5, 2006, wherein he concluded there was no evidence of prejudice which would justify a dismissal of the action. I find no merit in this submission. His statement that there was no evidence that a potential witness had died or disappeared or that documentary evidence had been lost does not mean that further inordinate or inexcusable delays by the plaintiffs would not give rise to prejudice to the defendants. Master Hawkins specifically stated the plaintiffs should not regard his dismissal of the motions of November 9, 2006 as “wiping the slate clean as regards to past defaults”. In para. 27 of the December 5, 2006 reasons, he is reported:
If any of the defendants are in future instructed to bring a second motion to dismiss for delay and defaults they may rely upon the plaintiffs’ defaults and delays described in the Global defendants’ present affidavit as part of the basis for that second motion.
[58] The plaintiffs’ submit that the Master erred in dismissing the action for failure to comply with court orders, including failure to pay costs. I find no merit in this submission.
[59] Rules 57.03(2), 60.12 and 77.10(7) of the Rules of Civil Procedure provide as follows:
57.03
(2) Where a party fails to pay the costs of a motion…the court may dismiss or stay the party’s proceeding…
60.12. Where a party fails to comply with an interlocutory order, the court may, in addition to any other sanction provided by these rules,
(b) dismiss the party’s proceeding…
77.10.
(7) If a party fails to comply with a time requirement set out in a timetable established under this rule, a case management judge or case management master may,
(b) dismiss the party’s proceeding…
[60] The plaintiffs’ repeated breach of court orders, including orders to pay costs within a certain time and their breaches of timetables provided sufficient grounds for Master Hawkins to dismiss the plaintiffs’ action.
[61] Where a plaintiff has breached numerous orders and is found to have shown “utter disregard” for court orders, it will be appropriate for an action to be dismissed pursuant to Rules 60.12 and 77.10(7).
[62] The plaintiffs in this case had continuously breached court orders and timetables. The Reasons for Decision of Master Hawkins issued December 5, 2006 make it clear the plaintiffs were being given “one last opportunity” to comply with the orders of the court and to move their matter along. When the plaintiffs continued to breach court orders after the motion of November 9, 2006, Master Hawkins found the plaintiffs to be contumelious. The finding was justified on the state of the matter as he knew it.
[63] The plaintiffs’ submit the Master unlawfully fettered his discretion in his order of December 5, 2006 by issuing a warning to the plaintiffs as to what might happen if further instances of delay occurred. I find no merit in this submission. The plaintiffs were entitled to know the Master’s view of the conduct of the proceedings to that point. The Master fulfilled his obligations to the plaintiffs by telling them exactly where they stood.
- Was the Master’s decision a denial of natural justice?
[64] The plaintiffs allege the Master denied their rights to natural justice by refusing the adjournment. When a denial of natural justice is alleged, a standard of review analysis is not required. Rather, the inquiry is directed simply to whether the Master lost jurisdiction by proceeding with the motion to dismiss when informed that Mr. Froom was in custody.
[65] Earlier in these reasons, I heard submissions relating to the request of the plaintiffs to motion to introduce fresh evidence. In the course of that motion, I received and read affidavit material filed by the plaintiffs and the moving defendants. There are two reasons why I find it appropriate that I should consider that evidence when ruling on the allegation of denial of natural justice.
[66] The fresh evidence which the plaintiffs sought to introduce on this appeal was ruled inadmissible because it failed to meet the test for such a motion as previously discussed in these reasons. I found they had failed to demonstrate due diligence in bringing the evidence before the court. Evidence ruled inadmissible for one purpose may, nevertheless, be admissible for another purpose. The affidavit of Mr. Froom and the affidavit of Ms. Clark, filed on behalf of the Global defendants, are properly before me in considering the alleged denial of natural justice.
[67] Moreover, where a denial of natural justice is alleged, there is authority for the proposition that affidavit evidence may be admitted on a judicial review application (and by extension, on an appeal of the nature before me) where the evidence contained in the affidavits bears on the issue of jurisdictional error based on a denial of natural justice. In Re Keeprite Workers’ Independent Union et al. v. Keeprite Products Inc. (1980), 29 O.R. (2d) 513, Morden J.A. is reported at p. 521:
I would express the view…that the practice of admitting affidavits of this kind should be very exceptional, it being emphasized that they are admissible only to the extent that they show jurisdictional error.
[68] Keeprite, above, was applied by the Divisional Court in a matter which subsequently went to the Court of Appeal, Hindes v. Ontario (Superintendent of Pensions) (2002), 58 O.R. (3d) 367. The Divisional Court had struck out the majority of affidavits filed on an application for judicial review, but retained a portion of an affidavit speaking to the question of an alleged loss of jurisdiction. The Court of Appeal found the Divisional Court’s understanding and application of Keeprite were correct.
[69] For the reasons expressed in my ruling on the motion to introduce fresh evidence, I find Mr. Froom to be the author of his own misfortune. By his own actions and inactions, he left the Master with no alternative but to refuse the request for adjournment. I find no denial of natural justice.
[70] The appeal is dismissed.
[71] Brief submissions as to costs, limited to three pages, may be made by the respondents by February 9, 2008, after service on the plaintiffs. The plaintiffs shall have fifteen days thereafter to respond.
_____________________________
CARNWATH J.
DATE: 20080114