COURT FILE NO.: 04CV272058CM3
213/08
DATE: 20090121
SUPERIOR COURT OF JUSTICE - ONTARIO
(DIVISIONAL COURT)
B E T W E E N:
geoffrey allan wellwood
Plaintiff (Appellant)
- and -
ONTARIO PROVINCIAL POLICE, DETECTIVE CONSTABLE CINDY COLLINS, DETECTIVE INSPECTOR MORRIS ELBERS, DETECTIVE SCOTT MAYBEE, SOUTH SIMCOE POLICE FORCE, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO as represented by the Ministry of the Attorney General and HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, as represented by the Ministry of the Solicitor General
Defendants (Respondents)
William G. Scott
for the Plaintiff (Appellant)
Claudia Brabazon
for the Defendants (Respondents) Her Majesty the Queen in Right of Ontario, Detective Constable Cindy Collins, Detective Inspector Morris Elbers, and Detective Scott Maybee
Anne E. Spafford
for the Defendant (Respondent) Bradford West Gwillimbury / Innisfil Police Services Board
HEARD AT TORONTO: 20081219
Ferrier, J.
[1] The plaintiff appeals from the decision of Master Sproat dated April 8, 2008 in which she dismissed the plaintiff’s motions to set aside the Registrar’s dismissal of Action Nos. 04-CV-272058CM3 and 04-CV-275170CM1 pursuant to Rules 77.08 and 77.17(1).
[2] For the reasons following, the appeal is allowed.
FACTS
[3] On April 18, 1999, Katherine Wellwood, the plaintiff’s wife, committed suicide using a rifle owned by the plaintiff. The plaintiff was charged with first degree murder in connection with the death of his wife. The criminal charge against the plaintiff was withdrawn on January 8, 2004.
[4] On July 7, 2004, the plaintiff retained Justin Linden of the firm Himelfarb Proszanski.
[5] On July 7, 2004, Mr. Linden sent a letter giving notice of the plaintiff’s civil claim for damages to the Ontario Provincial Police, Detective Constable Cindy Collins, Detective Inspector Morris Elbers, Detective Scott Maybee, Her Majesty the Queen in Right of Ontario, as represented by the Ministry of the Attorney General, Her Majesty the Queen in Right of Ontario, as represented by the Ministry of the Solicitor General, and the South Simcoe Police Force.
[6] The notice to the Crown was provided pursuant to s. 7 of the Proceedings Against the Crown Act, R.S.O. 1999 c. P.27 which requires at least 60 days notice to the Crown before commencement of an action.
[7] Also on July 7, 2004, Mr. Linden issued a Notice of Action claiming damages for negligent investigation, malicious prosecution and breach of the plaintiff’s Charter rights, in Court File No. 04-CV-272058CM3 (“the first action”) as against the Ontario Provincial Police, Detective Constable Cindy Collins, Detective Inspector Morris Elbers, Detective Scott Maybee, Her Majesty the Queen in Right of Ontario, as represented by the Ministry of the Attorney General, Her Majesty the Queen in Right of Ontario as represented by the Ministry of the Solicitor General and the South Simcoe Police Force. This Notice of Action was issued to protect against the application of the 6-month limitation period in the Public Authorities Protection Act, R.S.O. 1990, c. P.38.
[8] On August 4, 2004, the plaintiff filed his Statement of Claim in the first action (“the First Claim”). On August 9, 2004, the Ministry of the Attorney General wrote to Mr. Linden requesting further particulars of the claim.
[9] On September 7, 2004, the plaintiff issued a second Statement of Claim (“the Second Claim”) in Court File No. 04-CV-275170CM1 (“the second action”). The Statements of Claim in the first action and second action are identical. The Second Claim was issued to comply with the 60 days notice period required before action by s. 7 of the Proceedings Against the Crown Act.
[10] Both Statements of Claim were served on the Simcoe Police defendants under covering letter dated December 17, 2004 and on the Crown defendants on December 22, 2004. Counsel for the plaintiff advised that he was “in the process of obtaining an Order consolidating the two actions.” The plaintiff’s counsel did not propose any timeline and did not refer to Statements of Defence.
[11] On November 9, 2004, (prior to service of the Statements of Claim) the Registrar issued a Case Expiry Notice in the first action which stated:
Take notice that in accordance with Rule 77.08, and Rule 77.17(1), if no defence has been filed and this proceeding has not been disposed by final order or judgment before January 3, 2005 an order shall be made dismissing the proceeding as abandoned.
[Emphasis in original]
[12] The plaintiff’s counsel acknowledged receiving the above Notice. However, no timetable was filed and no case conference was requested to establish a timetable as required by Rule 77.10(2) of the Rules of Civil Procedure. Nor was an extension of the case expiry deadline sought pursuant to Rules 77.11(1)(a).
[13] On January 10, 2005, the Registrar issued a Case Expiry Notice in the second action which stated:
Take notice that in accordance with Rule 77.08, and Rule 77.17(1), if no defence has been filed and this proceeding has not been disposed by final order or judgment before March 7, 2005 an order shall be made dismissing the proceeding as abandoned.
[Emphasis in original]
[14] The plaintiff’s counsel also acknowledges receiving the above Notice. However, as with the First Claim no time timetable was filed and no case conference was requested to establish a timetable as required by Rule 77.10(2). Nor was an extension of the case expiry deadline sought pursuant to Rule 77.11(1)(a).
[15] On January 18, 2005, counsel for the improperly named defendants, Ontario Provincial Police, Her Majesty the Queen in Right of Ontario as represented by the Ministry of the Attorney General and Her Majesty the Queen in Right of the Ontario as represented by the Ministry of the Solicitor General (collectively, the “Crown”), wrote to counsel for the Plaintiff advising that the First Claim is “a nullity as against the Crown for failure to comply with section 7 of the Proceedings Against the Crown Act”. With respect to the Second Claim, counsel for the Crown advised:
Only the Crown may be found vicariously liable for torts allegedly committed by OPP officers…Accordingly, please amend the title of proceedings to delete the Ontario Provincial Police and “Her Majesty the Queen in right of Ontario as represented by the Ministry of the Attorney General and Her Majesty the Queen in right of Ontario as represented by the Ministry of the Solicitor General” and replace them with “Her Majesty the Queen in right of Ontario”.
I will await the amended statement of claim before delivering any defence.
[Emphasis added]
[16] By this time, six months had passed since the First Claim was commenced. On January 19, 2005, the Registrar ordered the First Claim “dismissed as abandoned” pursuant to Rule 77.08 and 77.17(1).
[17] On January 28, 2005, counsel for Bradford West Gwillimbury/Innisfill Police Services Board (the “Police Services Board”) — improperly referred to in the First and Second Claims as South Simcoe Police Force — wrote to counsel for the Plaintiff and advised of the misnaming of its client. Counsel for the Police Services Board further advised:
We are in the midst of collecting materials and obtaining information with which to prepare a Statement of Defence. I would ask for an indulgence with respect to the delivery of the Statement of Defence while we conduct an investigation. In any event, I would respectfully suggest that you amend the Claim before we deliver a Statement of Defence.
[18] Counsel for the Plaintiff did not respond. Counsel for the Police Services Board followed up on March 1, 2005 and advised: “[I] am assuming that we continue to have an indulgence with respect to the delivery of the Statement of Defence”.
[19] On March 3, 2005, Davide Cortinovis, a solicitor at Himelfarb Proszanski, wrote to the solicitor for the Police Services Board stating as follows:
This is to confirm that we have spoken with regards to the Wellwood v. Bradford West Gwillimbury matter. We discussed the issue of the administrative dismissal with respect to one of the two court matters in these proceedings and the case expiry for March 7, 2005 with respect to the other proceedings. This is to confirm that we will be seeking an Order to consolidate the two matters, to setting aside the administrative dismissal, extending the time for case expiry and amending our claim with respect to the proper identity of the Defendant you identify in your January 28, 2005 letter. We will be drafting materials shortly and we will be contacting you in this regard.
[20] Also on March 3, 2005, Mr. Cortinovis wrote to the solicitor for the Crown as follows:
Further to our telephone conversation of March 3, 2005, this is to confirm that we have your consent to set aside the administrative dismissal dated January 19, 2005 with respect to Court File No. 04-CV-272058CM3 [the first action]. To reiterate, your position is that your consent is contingent upon the Plaintiffs amending their pleadings to exclude the Ontario Provincial Police as defendants.
[21] On March 8, 2005, the solicitor for the Crown replied to plaintiff’s counsel’s letter of March 3, 2005 as follows:
Your letter of March 3, 2005, does not accurately state our agreement.
When you called, I understood you to be discussing the action in court file No. 04-CV-275170CM1 [the second action], as this is the only valid outstanding action. The amendment that we require, as a condition of our consent to setting aside the order dismissing this action, is an amendment to the title of proceedings to delete the defendants, the Ontario Provincial Police, The Ministry of the Attorney General and the Ministry of the Solicitor General and the duplicate Her Majesty the Queen in right of Ontario. In addition, we require corresponding amendments to the content of the statement of claim to reflect the fact that these parties are no longer defendants. I refer to my letter dated January 18, 2005.
It is our position that the action in court file no. 04-CV-272058CM3 [the first action] is a nullity because of the failure to comply with section 7 of the Proceedings Against the Crown Act. We regard this statement of claim as the notice of the claim required by that provision. Accordingly, we do not consent to an order setting aside the dismissal of this action. It is properly dismissed as a nullity.
[22] In her letter of March 8, 2005, the solicitor for the Crown makes the following errors:
(a) In paragraph 2 of the letter, she refers to her consent to setting aide the aside the Order dismissing the second action. In fact, there was no order at that time dismissing that action. The Statement of Claim had been served and she had not delivered a Statement of Defence.
(b) In paragraph 3 of her letter, she states that the entire first action is a nullity because of the failure to comply with s. 7 of the Proceedings Against the Crown Act. She would not consent to an order setting aside the dismissal order in this action because in her opinion it had been properly dismissed as a nullity. In fact, the first action was a nullity only against the Crown. It was not a nullity against the South Simcoe Police Force and the individual OPP officers.
[23] On May 11, 2005, the solicitor for the Police Services Board wrote to the plaintiff’s solicitor as follows:
I am following up with respect to my letter to you of March 8, 2005. I have not received your motion materials with respect to the motion you indicated you would be bringing according to your letter of March 3^rd^.
I do not propose on delivering a Statement of Defence until pleadings have been regularized.
[24] Five and half months later, on October 31, 2005, the plaintiff’s solicitors wrote to the two defendants’ solicitors as follows:
Enclosed herein please find, a Case Management Motion form, Consent and Schedule “A” amending the Pleadings including draft Amended Notice of Action and draft Amended Claim. Kindly, endorse the Consent enclosed herein and fax it back to my office so that I may obtain the over the counter Order.
[25] By letter dated November 3, 2005, the solicitor for the Ministry of the Attorney General advised the plaintiff’s solicitor as follows:
In your proposed case management motion you are attempting to resurrect an action (court file No. 04-CV-272058CM3) [the first action] which was a nullity from the outset. I made this clear in my letters of January 18 and March 8, 2005.
What we are prepared to consent to is clearly set out in my letter of March 8^th^.
Your assertion in paragraph 11 of the case management motion form as to our consent is not true. Firstly, we have not consented with respect to action no. 04-CV-272058CM3 [the first action]. Secondly, we never agreed to allow you until March 1, 2006.
Your assertion in paragraph 12 of the case management motion form as to our consent is not true. We have not consented to the consolidation or hearing together of an action which is a nullity (court file no. 04-CV-272058CM3) [the first action].
Your assertion in paragraph 9 of the case management motion form that we have been dilatory in delivering a statement of defence is simply not true. My letter of January 18^th^ makes it clear that we have been waiting all along for you to deliver your amended statement of claim.
I note that the content of the proposed Fresh Amendment statement of claim still describes as defendants entities that have been removed from the proposed new title of proceedings. Please ensure that this does not happen when you prepare the fresh amended statement of claim in court file no. 04-CV-275170CM1 [the second action].
[26] This letter of November 3, 2005 restates the erroneous position that the first action was a nullity from the outset. In fact it was a nullity only against the Crown. The solicitor also reiterates her position in this letter that she will not deliver a Statement of Defence in the second action until the plaintiff delivers an Amended Statement of Claim.
[27] By letter dated November 4, 2005, the solicitor for the Police Services Board advised the plaintiff’s solicitor as follows:
I acknowledge receipt of your letter of October 31, 2005, enclosed draft motion materials. I echo what Ms. Blake said in her letter to you of November 3, 2005.
The reasons we have not delivered a response to the Statement of Claim is that you did not name the proper legal entity as it relates to my client. I also note that the style of cause on the proposed Fresh As Amended Statement of Claim is incorrect.
May I suggest that you amend your materials to incorporate both my and Ms. Blake’s comments.
[28] Owing to his concern regarding the limitation period that he believed might apply to the defendants other than the Crown, Mr. Linden did not consider that he could dismiss the first action in its entirety.
[29] On November 25, 2005, over a year after the second claim had been issued, the Court issued an Order Dismissing Proceedings in Action No. 04-CV-275170CM1 (the second action) which states as follows:
No defence having been filed and the proceedings not having been disposed of by final order or judgment within 180 days of the date of the issue of the originating process.
IT IS ORDERED pursuant to Rule 77:08 and Rule 77:17(1), that this proceedings is hereby dismissed as abandoned.
[30] The defendants then heard nothing from the plaintiff for 10 months. Ultimately a further request for a consent was sent under the cover of letter dated September 27, 2006 to the defendants’ solicitors. This letter stated as follows:
As you know, we are consolidating our two Statement of Claims. The first Statement of Claim was issued initially to deal with the claim against the local police force and a second claim was issued subsequently to deal with the claims against Her Majesty the Queen. The second claim was of course issued later so that we could comply with the different notice requirement.
As we anticipated, we are going to consolidate these claims.
There has been a tremendous amount of communication back and forth about the wording of the amended style. We are being asked to discontinue part of the case and simply proceed with another part. I do not want to be difficult, but we acknowledged that there is one limitation period against the police that is complied with by the issuing of the first claim and a second limitation period as against the Provincial Police that is complied with in the second claim.
With that being said, we simply want to consolidate the pleadings which I am enclosing herein along with a Consent to set aside the administrative dismissal. This should not really be a very complicated thing. Would both of you please execute the Consent so that I can file the same and finally put this matter to bed. I will not take any ones [sic] Consent as a waiver of any rights you have about anything. We would simply like to move forward to examinations for discovery as soon as possible and as such I would appreciate your attention to this matter. If there is some problem with the proposed Statement of Claim please call me directly so that I can deal with it forthwith.
[31] Mr. Linden deposes that the delay between the dismissal of the second action on November 25, 2005 and his letter of September 27, 2006 was the product of he and Mr. Cortinovis performing a number of a re-drafts in an attempt to deal with the defendants’ concerns while not prejudicing the client’s remedies.
[32] Counsel for the Police Services Board had closed its file in 2006.
[33] By letter of October 2, 2006, the solicitor for the Ministry of the Attorney General advised the plaintiff’s solicitor as follows:
In response to your letter dated September 27, 2006 (received by our office on September 29, 2006), please be advised that my client does not consent to an order setting aside the dismissal of their action. The plaintiff has delayed too long.
In addition, we would not consent to any order respecting the action in claim number 04-CV-272058CM3 [the first action] without the deletion of Her Majesty the Queen in right of Ontario from the title of the proceedings. The original Statement of Claim could continue to serve as the notice of claim under section 7 of the Proceedings Against the Crown Act.
If the plaintiff intends to bring motions in these two dismissed actions, please consult me with respect to the scheduling of the hearing date.
[34] The parties agreed to have the contemplated motion to set aide the dismissal orders heard on November 29, 2006. However, the plaintiff’s counsel failed to serve the motion materials in time.
[35] On consent, counsel agreed to a new date of January 22, 2007. However, the plaintiff’s counsel again failed to serve the motion materials in time.
[36] On January 18, 2007, the plaintiff’s solicitor advised the defendants’ solicitors that he had reported the matter to his insurer.
[37] Mr. Linden, in his affidavit, deposes as follows:
The plaintiff has preserved the complete package (14 boxes) of Crown disclosure for the underlying criminal prosecution and as such, the complete evidentiary record is available.
Absolutely no prejudice will befall the defendants as the complete evidentiary record has been preserved and is available.
As soon as the defendants received the plaintiff’s claims, they commenced investigations as indicated in their correspondence and have likely preserved the evidentiary records as well.
[38] The defendants do not allege in their affidavits that they will be prejudiced if the Registrar’s dismissal orders are set aside.
[39] By letter dated April 23, 2007, Brown & Korte, counsel to the plaintiff’s solicitors advised the defendants’ solicitors that motions would be brought to set aside the Registrar’s dismissal of the 2 actions.
[40] The plaintiff’s motion materials were served on April 24, 2007. Responding materials were served on behalf of the Crown on May 15, 2007.
[41] Subsequently, on May 23, 2007, the plaintiff swore an affidavit in the First Claim. The three-paragraph affidavit provided no explanation regarding the delay associated with the First Claim, the delay in bringing the present motion, or the plaintiff’s involvement, if any, during these periods. He simply stated that it was always his intention to pursue the action.
[42] The applicable two-year limitation period expired on January 8, 2006.
THE MASTER’S DECISION
[43] The Master noted that rule 37.14 of the Rules of Civil Procedure requires that a motion to set aside a Registrar’s dismissal order be brought forthwith and for the earliest hearing date. She held that the motions here were not served forthwith and for the first available hearing date. She held that there is no discretion to be exercised in relation to these matters and accordingly held she would dismiss the motions for this reason alone.
[44] The Master nevertheless went on to consider the factors for analysis developed in the case law and found that the Registrar’s dismissals should not be set aside.
STANDARD OF REVIEW
[45] On a question law alone, a master’s decision is to be reviewed on a standard of correctness. On a question of mixed fact and law, the master’s decision should only be interfered with in the presence of palpable and overriding error. The master’s decision on a motion to set aside a dismissal order is a discretionary decision of mixed fact and law, and thus, should not be interfered with absent palpable and overriding error. Palpable and overriding error is plain and obvious to see. This standard of review does not entitle the Appellant to a rehearing or to a reweighing of the evidence: Zeitoun v. Economical Insurance Group (2008), 2008 20996 (ON SCDC), 91 O.R. (3d) 131 (Div. Ct.) at paras. 40-41; Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at paras. 3-6.
ISSUE ONE
[46] Did the Master err in law finding that she had no discretion to extend the time under rule 37.14(1)?
[47] With respect, the answer is yes. Her finding is wrong in law. Rule 37.14(1) provides:
37.14(1) A party or other person who,
(c) is affected by an order of a registrar,
may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.
(2) On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.
[48] The master failed to consider rule 2.03 in this context:
2.03 The court may, only where and as necessary in the interest of justice, dispense with compliance with any rule at any time.
[49] I recognize that in some rules, express power to extend a time is provided. See for example rule 62.02(2). Such specific provisions do not diminish the overarching discretion afforded to the court by rule 2.03.
[50] As well, I do not consider that the decision of Master Dash in Gagne v. Yee (2008), 60 C.P.C. (6th) 365 at para. 38 is a determination that there is no discretion in the court to relieve against the timelines provided in rule 37.14.
ISSUE TWO
[51] Did the Master err in failing to set aside the orders based on the contextual approach?
[52] The learned Master stated:
If I am in error [in dismissing the motions] on the basis of the failure to bring the motions forthwith and on an early return date, I consider whether the Registrar’s orders ought to be set aside on the basis of the wording of subrule 37.14(2).
[53] Master Sproat identified the test developed through the case law for determining when such an order should be set aside. She noted the four factors in Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80, and the Court of Appeal’s instruction in Scaini v. Prochnicki (2007), 2007 ONCA 63, 85 O.R. (3d) 179 that the Reid factors were not to be applied rigidly, but rather contextually, along with all relevant factors.
[54] The learned Master acknowledged that in this case additional factors should be considered: whether the claim was served within the prescribed times, whether there were steps taken in the action, whether the delay was intentional and contumelious, whether a fair trial was possible, and whether the defendant failed to take a step that caused or contributed to the delay or the dismissal order.
[55] Master Sproat surveyed the evidence relating to each factor. She concluded the plaintiff had put “the defendants…on notice of the claims at an early date” and there was no evidence that defendant documents had been lost. However, she found that the plaintiff took no meaningful steps to move the action along by regularizing the pleadings and had delayed in bringing motions to set aside the dismissals. Furthermore, while the plaintiff’s affidavit testified to his intention to prosecute the action, there was no evidence of solicitor inadvertence and no other explanation for the inaction. In short, Master Sproat found the plaintiff had not discharged his burden to show that the delay was not intentional. She held that the defendants suffered from presumed prejudice resulting from the expiration of the limitation period. The plaintiff attempted to rebut that presumption, arguing that the Crown’s disclosure brief contained all the relevant evidence, but the Master agreed with the defendants that additional evidence would be necessary. Therefore a fair trial would not be possible. Balancing these factors, Master Sproat found the unexplained delay and deemed prejudice required that the Registrar’s dismissal stand.
[56] The Master appropriately assessed all the relevant factors, with two significant exceptions, amounting to palpable and overriding error.
[57] Firstly, she held that the defendants were not in any way responsible for the delay. I disagree.
[58] When a defendant is correctly identified as a party, but incorrectly named, the misnomer is a mere irregularity. See rules 2.01(1), 2.02 and 5.04(2).
[59] It was clearly open to the defendants to deliver statements of defence, raising the irregularity therein. It is common for a defendant to plead in such circumstances, for example, “John Smith incorrectly named George Smith,” with the pleadings being later regularized.
[60] Although the defendants may have been entitled to take the position they did in connection with the irregularities, their doing so contributed to the delay.
[61] I also note that the defendants could have moved for an order correcting the irregularities but did not do so. Their delay in doing so may have deprived them of their right to insist on the amendments they sought before delivering their pleadings. See rule 2.02(a) which provides that such a motion must be brought within a reasonable time.
[62] Their refusal to plead and their failure to move for an order was a factor leading to the Registrar’s dismissal. Those dismissals arose in part because the statements of defence had not been filed.
[63] Secondly, the analysis of prejudice to the defendant, one of the four Reid factors, incorrectly relied upon the passage of time and expiry of the limitation period. In this case, neither of these is sufficient to meet the test set out in Reid and approved of by the Court of Appeal in Scaini and Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660.
[64] Master Sproat held that there is deemed prejudice to the defendants as a result of the expiry of the limitation period, but gave no authority for this proposition. The Crown points to two cases: Kassam v. Sitzer [2004] O.T.C. 731, [2004] O.J. No. 3431, aff’d [2005] O.J. No. 1848 (Div. Ct.); and Hudon v. Colliers Macaulay Nicolls Inc. (2001), 147 O.A.C. 163 (Div. Ct.). It also raises the Court of Appeal’s view in Scaini that the limitation period is an important consideration.
[65] In Kassam, Master Dash states that prejudice can be assumed where the limitation period has expired but he does so in the context of a case in which the defendant was not served with, nor made aware of, the claim until after the limitation period ended. This is not the case here. Hudon merely states that if a suit is dismissed for delay but the limitation period has not expired, there is no prejudice to the defendants in setting aside the dismissal because the plaintiff can commence a new action.
[66] The defendants point to para. 27 of the Court of Appeal’s decision in Scaini to support their claim that the expiration of the limitation period creates prejudice:
I conclude that a contextual approach leads to the opposite result. There is no doubt that the appellant missed the 90-day deadline set out in rule 48.14(1) because of the inadvertence of his lawyer. The motion to set aside the registrar's order was brought promptly. And the respondent can point to no prejudice. Importantly, no limitation period has passed. Finally, while it would have been preferable if the appellant had provided more details, he did provide an explanation of the litigation delay. Moreover, his assertion that he always intended to proceed with the lawsuit and is eager to go to trial is unchallenged.
[Emphasis added]
[67] The above passage could be read to imply that had the limitation period expired, there would have been prejudice to the respondent. On closer examination, however, it becomes clear this case is on the same footing as Hudon, and is also of no help to the defendants.
[68] In Scaini, it was the appellant who raised the fact that the limitation period had not expired. He argued that the motion judge erred in not setting aside the Registrar’s dismissal because he could simply file a new statement of claim. Refusing to set aside the Registrar’s dismissal would not have the effect of stopping the action, but rather would result in duplication of time and effort in preparing and serving pleadings. His factum states:
Setting aside the Registrars Order dismissing the action for delay will be the most expeditious route to determine this proceeding on its merits. Setting aside the Order will also save both the Plaintiff and the Defendants the time and money associated with preparing fresh pleadings for a subsequent action.
[69] It would seem that the above quote from the Court of Appeal in Scaini was merely pointing out that refusing to set aside the dismissal would have no purpose. Since the limitation period had not expired, the plaintiff would simply re-file the claim. The Court was not, it would appear, speculating about any possible prejudice to the defendants had the limitation period expired.
[70] The idea that the expiration of a limitation period gives rise to a presumption of prejudice finds early expression in cases of dismissal for want of prosecution. In May et al. v. Johnston, 1961 155 (ON SC), [1964] 1 O.R. 467 (High Ct.), it was held that cases where the limitation period has expired should be treated with care because
…the purpose of the…limitation period of one year is to protect motor car drivers and owners of motor cars against stale claims and demands when made after such a lapse of time as to make it difficult, and probably impossible, for them to obtain satisfactory evidence to defend themselves. No one who has presided over trials involving motor accidents can help but be impressed with the importance of an accurate account of the facts surrounding the accident and the frailty of human memory. I think it would be most unfair to the defendant in this case to be called upon to defend himself in an action some months hence which arises out of an accident that happened over seven years ago. In my view it is almost humanly impossible to give an accurate account of the necessary details of an accident after so many years. This is especially true in view of the fact that two years were allowed to elapse before the defendant had any knowledge that he was going to be called upon to defend a civil action. Where so much time has elapsed since the cause of action arose and the limitation period has run, the onus is on the plaintiff to show that no injustice would be done by allowing the action to proceed.
[71] The Court of Appeal next addressed presumption of prejudice in Worrall v. Powell and Greater Niagara General Hospital, 1969 521 (ON CA), [1969] 2 O.R. 634. Writs were issued for suits against a doctor and a hospital just before the expiry of the application limitation periods, but they were not served until after it had run. The plaintiff then allowed the case to suffer an inordinate delay. The court found a presumption of prejudice that had not been rebutted and allowed the case to be dismissed for want of prosecution. While not stated explicitly in the three paragraph judgment of Aylesworth J.A., it is clear from the facts that the defendants were not aware of the claim until after the limitation period expired.
[72] In Clairmonte v. Canadian Imperial Bank of Commerce, 1970 470 (ON CA), [1970] 3 O.R. 97 (C.A.), Laskin J.A endorsed the view that the expiration of a limitation period prejudiced the plaintiff, not the defendant, as long as the action was originally brought within the prescribed timeframe:
I say, with respect, that where an action has been commenced within the proper limitation period, there can be no pretence that any right of a defendant to rely on a limitation period is prejudiced, because the course of the action is protracted…Indeed, to speak of prejudice to the defendant on the basis of the expiry of a limitation period which would protect him only if the application to dismiss the action for want of prosecution succeeded, is to beg the very question that has to be decided; it is to use the results of success on the application as a ground for granting it.
[73] Jessup J.A., in a separate concurring judgment, held that “the Courts may well take the limitation period as a measure by the Legislature of the time beyond which, in the absence of other evidence, a defendant may be presumed to be prejudiced by delay.” However, he continues later in his reasons:
In my view, the force of the presumption…will depend on the time which passed after the expiration of a limitation period…. While the presumption will speak as a barely audible caution immediately after a limitation period has expired, it may command with increasing imperativeness on the passage of a substantial time…
[74] The Court of Appeal most recently addressed the correct test for setting aside a dismissal for delay or want of prosecution in Armstrong v. McCall (2006), 2006 17248 (ON CA), 213 O.A.C. 229, where it adopted the conclusions of Master Dash in Woodheath Developments Ltd. v. Goldman (2001), 2001 28019 (ON SC), 56 O.R. (3d) 658, aff’d (2003) 2003 46735 (ON SCDC), 66 O.R. (3d) 731 (Div. Ct.), as summarized in the headnote to his decision:
It is presumed that memories fade over time, and an inordinate delay after the cause of action arose or after the passage of [a] limitation period gives rise to a presumption of prejudice.
[75] In Master Dash’s full reasons, it is clear that the expiration of the limitation period is not sufficient to give rise to a presumption of prejudice. Rather, an inordinate delay after the expiration is required for a presumption of prejudice: Woodheath Developments Ltd. v. Goldman (2001), 2001 28019 (ON SC), 56 O.R. (3d) 658 at para. 29.
[76] Prejudice, then, arises not simply because of the passing of a particular, and somewhat arbitrary, date. It arises because it is presumed that without notice of a claim, it would be unreasonable for a party to be expected to defend against it after the passing of an undue period of time.
[77] Of course, prejudice also arises with a passage of time so great that a party relies upon the finality implied by it. But it is not the expiration of a limitation period per se that creates the presumption of prejudice. In Marché, the Court of Appeal notes in its recitation of the facts that the limitation period had expired but also notes the appellants’ reliance upon that expiry:
The limitation period for the respondents' cause of action expired in June 2002 and the appellant's Vice-President of Finance, the individual best able to substantiate the appellant's set-off and counterclaim, died in May 2000. In view of the dismissal of the action and the passage of time, the appellant's solicitors stripped their file, destroyed all their notes, and sent what was left in the file to storage. The appellant destroyed many of the documents relating to the litigation including a significant portion of its records relating to its set-off and counterclaim.
[78] The Master in that case found that no prejudice existed, and this finding was not an issue on appeal. However, the Court commented upon the correct analysis of this fourth Reid factor, and the expiration of the limitation period was not itself referred to as a source of prejudice — presumed or actual. Rather, the Court focused upon the respondents’ reliance upon the finality of the dismissal, almost five years having passed since the order.
[79] The point of a limitation period is to ensure that a party who is open to liability is made aware of that liability within a reasonable timeframe. Here, the party was aware of the action almost from the time the limitation period began to run, because the statement of claim was issued to the correct party, if improperly named. No prejudice can arise where the limitation period was met, and the defendants were made aware of the claim before it expired. I find support for this view that knowledge of the claim is the true concern in the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, where at s. 21 the legislature specifically allowed the misnaming of parties to be corrected despite the expiration of the applicable limitation, while the addition of a party is categorically barred:
Adding party
- (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding. 2002, c. 24, Sched. B, s. 21 (1).
Misdescription
(2) Subsection (1) does not prevent the correction of a misnaming or misdescription of a party.
[80] It must also be remembered that it is not merely prejudice that is required, but “unfair” or “significant” prejudice. As Master Dash explained in Reid:
- No Prejudice to the Defendant: The plaintiff must convince the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiff's delay or as a result of steps taken following the dismissal of the action. The court takes note that witnesses' memories generally tend to fade over time and that sometime it is difficult to locate witnesses or documents. However to bar the plaintiff from proceeding with her action on the ground of prejudice, the defendant must lead evidence of actual prejudice. This might include evidence of specified documents lost over time, or destroyed following a dismissal, or of specific witnesses who have died, or have disappeared and the defendant has been unable to locate them with due diligence. While litigation is outstanding the defendants must take care to obtain and preserve evidence.
[81] The defendants filed no evidence of actual prejudice, but they argue it exists because this is a malicious prosecution action, and the police records do not contain notes on why a particular step in the investigation was or was not taken. Memory alone will have to provide the evidence on this issue. These submissions were accepted, without evidence, by the Master. Even if true, this action was launched in 2004, just months after the charges were withdrawn. The last sentence in the quote above applies here: the defendant was on notice to record those memories four years ago.
CONCLUSION
[82] “Ultimately, the court will exercise its discretion upon a consideration of the relevant factors and will attempt to balance the interests of the parties”: Steele v. Ottawa-Carleton (Regional Municipality), [1998] O.J. No. 3154 at para. 17 (per Master Beaudoin, agreed with by Goudge J.A. in Scaini).
[83] In addition to the interests of the parties, “[t]here is a strong public interest in promoting the timely resolution of disputes” (Marché at para. 25). The court points out in Marché that this important principle is the reason why an explanation for delay is a necessary consideration. When solicitors fail to adhere to rules and timelines for action, they create delay, which “multiplies costs and breeds frustration and unfairness” (Marche, para. 25). It is this aspect of this case that weighs heavily in favour of the defendants. There was little explanation as to why the delay occurred. The two periods of inactivity noted above, of 5 months and 10 months respectively, may well under other circumstances tip the balance in favour of the dismissal of the appeal.
[84] That said, in the circumstances here, especially with early notice of the claim and no evidence of actual prejudice, the ultimate balancing of all of the factors favours the plaintiff.
[85] Accordingly, the appeal is allowed in part, there being no need to revive the first action. Order to go that the dismissal order in Action No 04-CV-275170CM1 (the second action) is set aside. An amended statement of claim, correctly naming the parties shall be delivered within 20 days.
[86] The order for costs below is set aside. There shall be no costs here or below.
Ferrier, J.
DATE: January 21, 2009.