COURT FILE NO.: 615/08

DATE: 20090629

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

RONALD FREDERICK CLEMENTS

Plaintiff (Appellant)

• and -

GLENN GREENLAW

Defendant (Respondent)

Brian A. Pickard, for the Plaintiff (Appellant)

James O’Brien, for the Defendant (Respondent)

HEARD at Toronto: June 22, 2009

JANET WILSON J.:

1The appellant/plaintiff appeals from the order of Master Abrams dated October 23, 2008, delivered November 4, 2008 dismissing the action for delay at a Status Hearing.

2The appellant alleges that the master erred in dismissing this action commenced in 2005, defended in 2006, with the Status Hearing occurring in October 2008, some seventeen months after the defence was filed.

3The appellants argue that the master:

(i) erred in law and applied the incorrect principles in determining whether an action should be dismissed at a Status Hearing, and

(ii) misapprehended evidence with respect to the preservation of relevant documents committing a palpable, overriding error.

Standard of Review

4The order of the master dismissing the action was a final discretionary order. On appeal, a decision of the master is entitled to the same level of deference with respect to findings of fact on the exercise of discretion as would be accorded to a decision of a judge.

5The standard of review of such an order is correctness when the issue engages a question of law. Where the master exercises discretion, the court on appeal must determine whether the correct principles were applied, and whether the master misapprehended the evidence such as there is a palpable and overriding error (see Zeitoun v. The Economical Insurance Group (2008), 91 O.R. (3d) 131 (Div. Ct.), aff’d 2009 ONCA 415).

Background

6On June 1, 2003 the plaintiff Ronald Clements, then 56 years of age, was participating in a soccer game. The defendant Glenn Greenlaw was on the opposing team. At the conclusion of one of the plays during the game, the defendant struck the appellant violently in the face and injured him.

7The Statement of Claim alleges that the plaintiff was seriously injured and as a result sustained a loss of income, loss of household and handyman capacities, and significant out-of-pocket expenses.

Admissibility of affidavit filed

8This matter was heard at a Status Hearing on October 23, 2008. There is no recording or transcription of what transpires at a Status Hearing. No material was filed by either of the parties. After the action was dismissed, counsel for the plaintiff in attendance at the Status Hearing filed an affidavit as part of the materials in this appeal outlining what transpired before the master. She was not cross examined on this affidavit. Counsel for the defendant objects to the affidavit material being considered by this court and argues that it is fresh evidence.

9Counsel’s affidavit confirms that she sought the imposition of a timetable at the Status Hearing. She confirmed that although she had not filed an Affidavit of Documents, that the documents in question were in her file which she had with her at the Status Hearing. These documents included statements of the referee from the soccer game who witnessed the incident, the hospital and medical records of the plaintiff, as well as the identity of the police officer who investigated the matter after a complaint was laid.

10I conclude that the affidavit may be considered by this court in this appeal as there is no transcript of what transpired at the Status Hearing. The documents attached to the affidavit were specifically referred to by counsel in her submissions to the master. This is not fresh evidence, but provides a record of what happened at the Status Hearing. Counsel for the respondent/defendant does not dispute the accuracy of the contents of the affidavit.

11To avoid the dilemma, it may be advisable to record what takes place in Status Hearings. Alternatively, if a master or judge contemplates the dismissal of the action, the parties should be given the opportunity to file materials, so there is a written record.

The master’s decision

12The following is the core of the master’s decision founding her dismissal of the action:

There is not one scintilla of evidence before me that the witnesses to the incident are ready & willing to testify; their identity, whereabouts & health status are not known. Further, no affidavit of documents has yet been served by the plaintiff such that the court cannot be assured of the preservation of documents. In the presence of his client & as an Officer of the Court (& inviting the court to question his client under oath if confirmation is required), Mr. O’Brien advises that his client has no documents. Hence the plaintiff’s documents are here key; &, yet, there is no evidence before the court as to what documents have been created & remain in the plaintiff’s possession & control.

Even now, there is nothing from the plaintiff or his counsel to give comfort that the claims will be pursued, if permitted to continue. I agree.

13In this case, the master appears to have reached her decision to dismiss the claim based upon the potential absence of evidence of the witnesses, their identity and the concern about the preservation of evidence.

14Counsel, in her affidavit, confirms that she advised the master that she had the necessary documents in question in her file including the witness statement of the referee and the police officer’s identity. She also confirmed that the medical records, hospital records and doctor’s records were available. She did acknowledge that an affidavit of documents had not yet been served.

15The defendant acknowledged that he has no documents relevant to this action and therefore he relies upon the documents of the plaintiff.

16It appears that the master’s concern about the existence and the preservation of evidence is clearly unfounded.

The Status Hearing Rule

17The Status Hearing rule is found at 48.14(1) and (8) of the Rules of Civil Procedure, R.S.O. 1990, Reg. 194 as follows:

Status Notice

48.14 (1) Where an action in which a statement of defence has been filed has not been placed on a trial list or terminated by any means within two years after the filing of a statement of defence, the registrar shall serve on the parties a status notice (Form 48C) that the action will be dismissed for delay unless it is set down for trial or terminated within ninety days after service of the notice. O.Reg. 770/92, s.13

Disposition at status hearing

(8) At the status hearing, the plaintiff shall show cause why the action should not be dismissed for delay, and,

(a) if the presiding judge is satisfied that the action should proceed, the judge may set time periods for the completion for the remaining steps necessary to have the action placed on a trial list and may order that it be placed on a trial list within a specified time, or may adjourn the status hearing to a specified date, on such terms as are just; or

(b) if the presiding judge is not satisfied that the action should proceed, the judge may dismiss the action for delay.

18The rule provides for the potent remedy of dismissing a claim for delay in appropriate circumstances, and requires the plaintiff to show cause why the claim should not be dismissed.

19Master Haberman in S.J.S. Ontario v. Second Cup (Ont. S.C.J.) outlines the background and evolving history of Status Hearings at pages 4 and 5 of her decision, as well as what appears to be the usual practice of the court:

Although Status Hearings have long been a mechanism provided by the Rules and available to courts within the province to oversee and manage case loads, this tool had fallen into disuse by the Toronto Region some years ago. It was only with appearance of Rule 78 in 2005 that the Status Hearing was revived and it is now fully reintegrated into the Toronto Region court system.

As a result, a body of case law interpreting the relevant provisions is just beginning to appear and the majority of those cases deal with setting aside dismissal orders by the registrar when a party who receives a status notice neglects to take action. Here, action was taken – a status hearing was sought, but no evidence was filed to address the issues raised at this hearing. (See Sepehr Industrial Mineral Exports Co. v. Alternative Marketing (2007), 86 O.R. (3d) 550).

The Rule therefore places the onus of explaining what has gone amiss squarely on the plaintiff’s shoulders. In most cases, the action arrives at a status hearing only two years after the claim has been issued and, generally, the defendants do not oppose an order permitting the action to go forward on the basis of an agreed timetable. Even where there is no such agreement, the court is hard-pressed to dismiss an action only two years after its inception. As a result, in those cases, the court will usually be satisfied and the action will be permitted to proceed.

[Emphasis added.]

20In Donskoy v. Toronto Transit Commission (Div. Ct.), the court at para. 16 sounds a caution about routinely dismissing an action at the first status hearing:

In other circumstances it may well be a reversible error to dismiss an action at a status hearing for which there are no outstanding orders, and which has come before the court for the first time.

21There are few cases considering the application of the Status Hearing rule. By way of analogy, the cases regarding the test for striking a pleading have some application.

22Gray J. in Broniek-Harren v. Osborne, [2008] O.J. No. 1690 (S.C.J.), describes the competing principles of the right to have cases determined on their merits, with the need for the orderly procedural progress of litigation. He confirms this dichotomy at paras. 28 and 29:

28 The policy underlying the Rules of Civil Procedure is twofold: to ensure that cases that are not settled are tried on their merits; and to ensure that cases are processed, and heard, in an orderly way. A civilized society must ensure that a credible system of justice is in place, and the Rules of Civil Procedure, made pursuant to the Courts of Justice Act, reflect the scheme created by the Province for the orderly handling of civil cases.

29 The Rules reflect a balance. The litigant does not have an untrammelled right to have his or her case heard. In order to be heard, a case must be processed in accordance with the Rules. By the same token, adherence to the Rules must not be slavish in all circumstances. They are, after all, designed to ensure that cases are heard. Throughout the Rules, the principle is reflected that strict compliance may be dispensed with where the interests of justice require it: see, for example, Rules 1.04(1), 2.01, 2.03, 3.02, and 26.01. The difficult issue, in any particular case, is to determine when non-compliance reaches the point that it can no longer be excused. The Court, and society as a whole, have an interest in ensuring that the system remains viable. If the Rules can be ignored with impunity, they might as well not exist.

23Master MacLeod in Tizard Estate v. Ontario, [2003] O.J. No. 3010 (S.C.J.) and Master Dash in Eloro Resources Ltd. v. Sovereign Capital Group (Ont.) Ltd., 2004 CarswellOnt 544 (S.C.J.) identified principles that are relevant to the exercise of the discretion to strike a pleading. Both masters emphasized the gravity of such an order, and confirm that the discretion should be exercised only when the integrity of the justice system is in issue as there has been a history of fragrant breaches. In both Tizard and Eloro the court declined to strike the pleading, but imposed terms.

24In Eloro Resources at para. 6, Master Dash stated:

… However, striking a defence is an extreme remedy and a last resort. It should only be ordered when the defence of the action is no longer viable and appropriate because the defendant has by its failure or refusal to be bound by the rules and orders of the court effectively abandoned its right to participate in the court process or when the breaches have become contumelious such as to demonstrate an utter disregard by the defaulting party for the court’s orders or when the moving party can demonstrate prejudice.

Analysis

25A decision to dismiss an action is entitled to deference, unless that decision is shown to have been exercised on wrong principles or based upon a misapprehension of the evidence such that there is a palpable and overriding error.

26I conclude that the master applied the incorrect principles in determining that this action should be dismissed for delay, and as well made a palpable and overriding error with respect to her concern about the preservation of evidence.

27The master applied rule 48.14(8) without regard to the relevant principles to be considered at a Status Hearing including the merits of the action, the length of the delay, or the question of actual prejudice to the defendant.

28The pleadings and the medical records confirm that the plaintiff experienced a serious facial injury. If the allegations of the plaintiff, that this was a deliberate attack by the defendant, are found to be true, this is a serious case.

29The master dismissed the action some 17 months after the defence was filed. Admittedly there were delays in commencing the proceeding, and delays with respect to effecting service. The time for considering the delay at a Status Hearing is from the date of filing the defence. No litigation steps had been taken. However counsel had obtained all of the relevant documents and was prepared to proceed.

30The dismissal for delay in this case bears no resemblance to the cases upholding a dismissal for lengthy, unexplained delays continuing for a matter several years. (See: Woodheath Developments Ltd. v. Goldman, (2003), 66 O.R. (3d) 731 (S.C.J.), S.J.S. Ontario v. Second Cup, supra and Ferrante v. Dingwall Estate (Ont. S.C.J.) where the actions were dismissed after delays of ten years, four years and nine years respectively.)

31The practice at Status Hearings is that counsel speak to the matter, and a timetable is set to move the case forward. Status Hearings are a management tool to get cases on track, and move a case forward in a reasonable fashion if it has been languishing.

32As Campbell J. stated in Central Canada Travel Services v. Bank of Montreal (1986), 57 O.R. (2d) 633, [1986] O.J. No. 1249 (S.C.J.) at para. 13 “the status hearing is not designed to give any party a procedural advantage, to encourage tactical manoeuvring, or to complicate life for litigants”.

33Clearly this case had been languishing. Counsel for the appellant acknowledged that the case had moved “at a snail’s pace”, and that a timetable was needed. The process at a Status Hearing is informal, and usually, as in this case, no written materials are filed. The submissions are not recorded.

34Unless there are clear, extraordinary circumstances, it would not be appropriate to dismiss an action at the first Status Hearing. If the master or judge is contemplating dismissal, the prudent course may be to allow counsel to file written material, or at least ensure that a court reporter is present so that a transcript may be ordered.

35I also note that the master did not make any specific finding of actual prejudice to the defendant. She states in her brief reasons that the plaintiff’s indecision increased “the risks eroding the chance of a fair trial” and left the defendant living “in a state of limbo.”

36The case law is clear that something more than a bald allegation of prejudice is required to justify the extreme measure of dismissing an action. I refer to the Ontario Court of Appeal decision in Chiarelli v. Wiens (2000), 46 O.R. (3d) 780 (C.A.) at para. 14, which was cited and applied in relation to a Status Hearing in Nicholson v. Sun Life Assurance Company of Canada (2007), 45 C.P.C. (6th) 13 (Ont. S.C.J.):

The motions judge was obviously unimpressed, as am I, with the defence’s assertion of prejudice. The only allegation of prejudice in the material filed by the defence on the motion is the following very general statement in the affidavit of State Farm’s claims adjuster:

It is my belief that the defence of this action has been seriously prejudiced due to the passage of time and the strong possibility that pre-accident and post-accident records and witnesses may not be available or that their recollections may not be accurate.

37The concern of the master with respect to the preservation of evidence is unfounded, and conflicts with the submissions made by counsel. As this appears to be the primary reason for the dismissal, I conclude this misapprehension of the evidence constitutes a palpable and overriding error. Counsel advised the master that the documents in question were available, and in her file. If the master had concerns, she should have required the plaintiff to serve the Affidavit of Documents and if necessary, adjourn the Status Hearing to ensure compliance.

38As well, counsel confirmed that her client had been unsure about whether he wished to embark on the litigation, and this was partly a reason for the delay. This is not unusual, and is not a valid reason to dismiss the action. At the Status Hearing, counsel confirmed that the plaintiff wished to proceed, and counsel requested that a timetable be set.

39In the ordinary course the purpose of a Status Hearing is to find out why the case in question has not been set down for trial within the two-year period prescribed by the Rules and to ensure that an order is made to facilitate steps to move the case forward. It may be that in unusual and clear cases, where there is actual prejudice to the defendant, and there is a history of flagrant breaches by the plaintiff of various court orders, that the drastic order of dismissing an action at the Status Hearing may be appropriate. I emphasize that such an order would be unusual. Such unusual circumstances are not present in the facts of this case.

Conclusion

40For these reasons, the appeal is allowed and the order is granted setting aside the dismissal of the plaintiff’s action and reinstating the action. The award for costs made by the master is also set aside.

41The parties have agreed to exchange documents and then to proceed with a pre-trial. Arrangements have been made for a pre-trial at a mutually convenient date in September 2009. If the parties are unable to resolve matters they may proceed with discovery.

42As in this case, the plaintiffs have not pursued their claim with diligence. Therefore, notwithstanding their success in this appeal, there shall be no order as to costs.

JANET WILSON J.

Date of Release: June 29, 2009.

COURT FILE NO.: 615/08

DATE: 20090629

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT