Court File and Parties

Citation: The Cash Store v. Her Majesty the Queen, 2013 ONSC 1486 Court File No.: 409/11 Date: 2013-03-11 Superior Court of Justice – Ontario – Divisional Court

Re: The Cash Store Financial Services Inc. et.al, Applicants (Responding Parties) And: Her Majesty the Queen in right of Ontario, as represented by the Minister of Consumer Services et al, Respondents (Moving Parties)

Before: Molloy J.

Counsel: W.J. Manuel and Emtiaz Bala, for the Moving Parties Timothy Pinos and Jason Beitchman, for the Responding Parties

Heard: March 8, 2013 at Toronto

Endorsement

(Motion to Dismiss for Delay)

[1] The Applicants (“Cash Store”) commenced this judicial review application on August 31, 2011 seeking to have certain new regulations made under the Payday Loans Act, 2008 (“the Act”) declared invalid.

[2] The Respondents (“Ontario”) have moved for an order dismissing the application on the grounds of delay or, alternatively, striking amendments to the application made on January 18, 2013 for delay. If any portion of the application is to proceed, Ontario seeks the appointment of a Case Management judge and a strict timetable to ensure that the application is dealt with as expeditiously as possible.

Dismissal for Delay

[3] In my view, it is not appropriate to dismiss the application for delay. Admittedly, the application was allowed to languish from when it was commenced until over a year later. It was only upon the Registrar delivering a notice that the application would be dismissed for delay that the applicants stirred into activity. The applicants assert that the reason they did nothing to move the application along during this period of time was because they were monitoring the progress of a case involving Shoppers Drug Mart, which counsel believed could have an impact on the issues in this application. Ontario would not consent to holding this application in abeyance until the Shopper’s Drug Mart case was concluded. Therefore, a motion was brought by Cash Store seeking a stay of this application pending the final determination of the Shopper’s Drug Mart case. That motion was dismissed by Aston J. on December 21, 2013.

[4] The applicants have been moving forward with since September 2012. The real issue with respect to delay is for the one year period prior to that time. The applicants maintain that during that time, in addition to monitoring the Shopper’s Drug Mart case, they were also attempting to obtain some resolution to their concerns through negotiations with the Registrar under the Act and other government officials. While Ontario does not accept the applicants’ characterization of those discussions, it is clear from the material that there was considerable communication between the parties during this time.

[5] I see no prejudice to Ontario as a result of the one-year delay. It was open to Ontario to bring a motion to dismiss during that period of time, or at the very least at the same time as the motion for a stay was being argued. It failed to do so. There is nothing to prevent the authorities from enforcing the regulations pending this application, if they see fit to do so. Cash Store is obliged to obey the law regardless of the fact that they are seeking to challenge its validity in this proceeding. Further, I do not see that the mere existence of this application brings any uncertainty to the industry. Unless and until the Regulations are held to be invalid, they are presumed to be lawful and binding.

[6] In my opinion, the applicants have provided an adequate explanation for the delay to date and there has not been any prejudice that would warrant dismissing the application at this stage.

The January 2013 Amendment

[7] I have greater concerns with respect to the January 2013 amendment. I recognize that a party may amend its notice of application at any time. However, that does not mean that the amended pleading is immune from attack on the basis of delay, both before the amendment was made and as a result of the amendment.

[8] Prior to the amendment, the attack on the regulations in the notice of application related to the regulations themselves and whether they were valid. The amendment alleges that prior to enacting the impugned regulations, Ontario failed to follow its own Regulatory Policy which provides for a process of public consultation and review. Cash Store asserts that it had a legitimate expectation that such a process would be followed and seeks an order quashing the Regulations on that basis, as well as an order in the nature of mandamus, requiring Ontario to follow its policy.

[9] I agree with counsel for Ontario that this adds a new dimension to the application and is essentially a pleading of procedural fairness with respect to how the amendment was enacted, rather than attacking the substance of the regulation itself. Cash Store was fully aware of the facts underlying this new allegation at the time it commenced the application in 2011. I am concerned about the delay in bringing this issue forward. That said, this is not a matter of a party simply sitting on a personal right and not seeking redress. Broader public interest issues are involved. Also, the only prejudice to the respondents is the delay that would be occasioned by the additional issue being added. If that delay can be kept to a minimum, I see no serious problem in permitting the claim to proceed.

[10] Cash Store has undertaken that it will file no new material dealing with the amendment as the facts it relies upon are already in its material. There were issues put to Ontario’s deponent on cross-examination this past fall which he refused to answer on the grounds of relevance, which may now become relevant in light of the new pleading. Also, Ontario may wish to file additional material to respond to this new ground. Obviously, this will involve some additional time. However, I do not consider this additional delay to be so extreme that dismissing this claim is warranted.

Case Management

[11] Any further delay in this matter will not be countenanced. I will remain seized as case management judge to hear any further motions arising in this matter and to ensure it proceeds in an orderly fashion to the earliest possible hearing date.

Costs

[12] If either party seeks costs of the motion before me, brief written submissions shall be exchanged between counsel and forwarded to me, together with bills of costs, by no later than March 25, 2013.

Going Forward

[13] Counsel for Ontario needs to decide whether or not to file additional material and whether to voluntarily answer prior refusals from earlier cross-examinations. If new material is filed by Ontario, cross-examinations will need to be scheduled. The transcript shall be expedited, at the cost of Cash Store. Both counsel then need to determine if a motion is necessary in order to deal with refusals. If so, I will hear the motion. I have dates available in April and May. A range of dates shall be provided to my secretary, along with an estimate of the time required. If necessary, a conference call can be set up to deal with any other details of the scheduling.

MOLLOY J.

Date: March 11, 2013