ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
B E T W E E N:
JULIE POUGET
Donald W. Leschied and Crista L. Rea, for the Plaintiff(Appellant)
Plaintiff (Appellant)
- and -
DR. ADRIAN HYNES
Jaan E. Lilles and Brendan Gray, for the Defendant/Respondent
Defendant (Respondent)
HEARD: October 1, 2012
HOCKIN J.
1This is an appeal to a single judge of the Divisional Court under s. 19(1)(c) of the Courts of Justice Act, R.S.O., c. C. 43 from the order of Master Pope, at Windsor, dismissing an action for delay after a status hearing under rule 48.14(13) of the Rules of Civil Procedure.
2For the reasons which follow, I would allow the appeal and set aside the order dismissing the action.
The Standard of Review
3The standard of review is well known. It was shortly and usefully set out by Sharpe J.A. in 1196158 Ontario Inc. v. 6274013 Canada limited, (2012), 112 O.R. 3d. 67 (ONCA) as follows:
[16] It is common ground that a decision to dismiss an action for delay at a status hearing is discretionary and entitled to deference on appeal. The decision may, however, be set aside if made on an erroneous legal principle or if infected by a palpable and overriding error of fact.
The Action
4The plaintiff is a registered nurse. This action is an action for damages which arises from the suspension of her licence to practice her profession. She alleges that her suspension by the College of Nurses followed the receipt by the College of a flawed and carelessly executed opinion by the defendant physician on the subject of her capacity and competence to act as a nurse.
5A number of causes of action are plead: malicious prosecution, misfeasance of public office, negligence and interference with economic relations. The statement of claim is a lengthy document. It has been amended three times. It contains 54 paragraphs over 23 pages.
6The statement of defence denies liability and pleads that since Dr. Hynes’ involvement with the plaintiff was undertaken pursuant to s. 59 of the Health Professions Procedural Code or Schedule II to the Regulated Health Professions Act, S.O. 1991, c. 18, Dr. Hynes enjoys immunity from action under ss. 36(3) and 38(1) of the Act.
7The statement of claim was issued June 26, 2007. On October 22, 2007, the defendant moved to dismiss the action under rules 21.01(i)(b) and 25.11 on the ground that the action was, in effect, statute barred because the documents collected and created by Dr. Hynes were inadmissible at trial and without them the action could not succeed.
8On January 23, 2008, the defendant’s notice of intent to defend was delivered.
9The Rule 21 and 25 motion was heard by Cusinato J. on January 30, 31, 2008. Reasons were delivered February 14, 2008. The defence position that Dr. Hynes’ documents and reports under s. 36(3) were beyond the reach of Rule 30 and the discovery of documents, figured largely in the argument. Justice Cusinato decided, however, that it was not “plain and obvious” that some of the plaintiff’s “innovative claims” were doomed and could not succeed notwithstanding the section 36(3) argument and so the motion was dismissed.
10The defence moved before Gates J. for leave to appeal the order to the Divisional Court. Leave was refused for reasons released December 17, 2008. The defence then moved before the Divisional Court April 16, 2009 to set aside the order of Gates J. but the motion was dismissed from the bench.
11There followed three amendments to the statement of claim. The last amendment was made July 8, 2009. The pleadings closed October 16, 2009, when Dr. Hynes’ statement of defence was delivered.
12On June 7, 2010, the plaintiff delivered an unsworn affidavit of documents. Copies of the documents were delivered to the defence March 1, 2011.
13Two status notices were issued under rule 48.14.
14The first was issued March 10, 2010 after two years had passed after a “defence” had been filed. The “defence” was the defendant’s notice of intent to defend. The plaintiff’s response was to propose a timetable for discovery. The defendant agreed and the timetable was signed by both counsel. A draft order establishing the timetable was delivered to the court which left to the court the setting of a date by which the action was to be set down for trial. The master accepted that a status hearing in writing had been held and acceded to the parties’ request to set a date. That date was June 1, 2011. She signed the order August 11, 2010.
15The second notice was issued June 6, 2011. On June 22, 2011, counsel for the plaintiff requested a status hearing “in person” and in due course the date of October 3, 2011 was set for the hearing. It went forward on that date. The defendant delivered an affidavit in support of a dismissal for delay September 30, 2011 which was answered, the same day, by an affidavit from the plaintiff’s firm.
16I add the following facts and observations which are material to the disposition of this appeal.
17The defence position that s. 36(3) rendered inadmissible Dr. Hynes’ report and other relevant documents was the reason Dr. Hynes’ delivered a blank affidavit of documents. The defence position was that not only were they inadmissible but they need not be mentioned.
18The plaintiff Pouget, by statement of claim issued in March, 2009, commenced a companion action against her employer, Saint Elizabeth Health Care (“SEHC”). Section 36(3) sat squarely in the middle of SEHC’s defence. As was the case in this action, the defendant SEHC moved against Pouget under Rule 21. The motion to strike was heard by Patterson J. over four days, November 25, 26, 2010 and January 17, 18, 2011. Justice Patterson accepted the immunity/inadmissibility argument and dismissed all but one cause of action. The reasons of Cusinato J. in this case were cited but Justice Patterson found the two cases distinguishable on the facts.
19Julie Pouget appealed the SEHC case to the Court of Appeal, Pouget v. SEHC and Davidson 2012 ONCA 461. The court, per Feldman, J.A. allowed the appeal, in part, on the basis that s. 36(3) does not support a claim of privilege or inadmissibility for relevant documents save a report or document prepared for a proceeding under the Regulated Health Professions Act.
20The ratio of the case is set out at paras. 33 and 34 of the reasons of the Court of Appeal:
[33] Applying these principles to this case, Pouget is not precluded from asserting claims against SEHC based on bad faith, which has been pleaded, as long as those claims can be proved without using any document referred to in s. 36(3). The fact of a complaint and of an investigation can be proved at trial.
[34] The case law reviewed above, including Sutherland, does not support the respondents’ position that documents created in the normal course of business automatically become inadmissible under s. 36(3) if those documents are later referenced in, or appended to, a report to the College. Such an interpretation of s. 36(3) is not supported by the clear language of the provision, which speaks of a report, document or thing prepared for or as statement given at a proceeding. It would yield the absurd result that while Pouget has a claim for wrongful dismissal, she would have no meaningful way to prove that claim if documents such as her appointment schedule and billing records for February 2003 became immune from production because they later formed part of the “narrative” of SEHC’s report to the College.
21I have the reasons of Feldman J.A. from Mr. Leschied, counsel for Julie Pouget. I may take note of the reasons of Patterson J. from the report of his reasons at [2011] O.J. No. 1989.
22The SEHC case is mentioned for two reasons. One, there can now be no dispute over the content of Dr. Hynes’ affidavit of documents. The position set out by Dr. Hynes at paras. 51 through 57 of his factum is incorrect, in law. In fairness, the factum is dated May 22, 2012 and the reasons of Feldman J.A. followed on June 29, 2012. Two, on the issue of delay and more particularly, her “interest” or “commitment” to her claim of wrongful dismissal or suspension, on her instructions, Mr. Leschied appeared before Patterson J. twice in November, 2010 and twice in January, 2011. This was followed by an appearance before the Court of Appeal, albeit after the status hearing. It strikes me that the privilege and immunity argument had to be resolved before Mr. Leschied could reasonably expect anything in the way of production from Dr. Hynes. In any event, this history and these events are all factors which form the contextual basis for the determination of whether it is fair to dismiss an action without a trial on its merits.
23Finally, set out below are those parts of the plaintiff’s firm’s affidavit on a plan to place the action on the Windsor trial list.
As a result of a request by Plaintiff’s counsel for a Status Hearing and after it was scheduled returnable on Monday, October 3, 2011, at 10:00 a.m., we were served on September 30, 2011 with an Affidavit on behalf of the Defendant detailing portions of the chronology of the proceedings and seeking to put the Plaintiff on notice that a dismissal of the action would be sought if the Plaintiff could not show cause why the action should continue.
Given the failure of the Defendant to serve a properly sworn Affidavit of Documents, in conformity with the Rules of Civil Procedure, there is now required a motion to consider the validity of that Affidavit of Documents, as well as the venue of the discovery of the Defendant. Since this action was commenced, the Defendant has left Ontario and will not return to be discovered, notwithstanding that all of the events alleged in the amended, amended pleadings took place in Ontario.
There is no prejudice to the Defendant for the facts giving rise to this action since most if not all of such documentary evidence has been served and produced by the Plaintiff with her Affidavit of Documents and production of same.
With a revised timetable (if necessary) and a discovery plan with scheduled motions to determine the venue of the Defendant’s Discovery and the adequacy of the Defendant’s Affidavit of Documents (in draft) and to have this action set down for trial within twelve (12) months from the date of the Status Hearing, this action can be ready for mandatory mediation and a pre-trial (if necessary), all within the next twelve (12) months and before this case is listed for trial.
This Affidavit is made in response to a defence Affidavit sworn September 29, 2011 seeking a dismissal of this action and, alternatively, to secure a timetable to complete the proceedings in this action and to have this action set down for trial twelve (12) months after the date of the Status Hearing.
Reasons of the Master
24Master Pope on the plaintiff’s onus under rule 48.14(13) applied the two step test set out in Khan v. Sun Life Assurance of Canada, 2011 ONCA 680. From paras. 16 and 17 of her reasons:
[16] The test that a plaintiff must meet at a contested status hearing was confirmed in a recent decision by the Court of Appeal in Khan. The test places the onus on the plaintiff to satisfy both aspects of a two-part test; that is, to demonstrate that “there was an acceptable explanation for the involved litigation delay and that, if the action was allowed to proceed, the [defendant] would suffer no non-compensable prejudice.”
[17] There is no onus on the defendant to demonstrate prejudice; however, should the defendant show actual prejudice, the court will consider this as a relevant factor.
25The master found that the plaintiff had not satisfied the onus of providing an acceptable explanation of the litigation delay for four reasons. One, the plaintiff’s firm’s affidavit offered no explanation as to why the plaintiff’s draft affidavit of documents was not delivered within seven months after the close of pleadings and copies of the documents not until March, 2011. Two, when the defence in August, 2010, delivered a blank affidavit of documents and indicated the defendant would only be examined for discovery in Winnipeg, Manitoba, the plaintiff failed to move for a better affidavit of documents and for an order to settle the place of the defendant’s discovery, this in spite of a declared interest in doing so in September, 2010. Three, counsel for the plaintiff did not provide a “clearly articulated plan to complete all of the remaining steps in the action”. Four, the plaintiff, herself, did not offer evidence “regarding her intentions and the reasons for delay” nor that she was committed to move this case forward as quickly as possible”. The plaintiff, did not attend the status hearing and “as such, the court is unaware of the plaintiff’s intentions of moving this action forward”.
26Although there was no prejudice to the defendant if the action was permitted to proceed, the conclusion of Master Pope was that the action should be dismissed because the plaintiff had not satisfied the first test of the Khan case, to provide “a satisfactory explanation of the delay”.
What was the delay?
27The action was commenced in June, 2007. Without taking into account the time the master had the matter under reserve, 52 months passed from the date the action was commenced to the date of the status hearing in October 2011.
28The defence completed its effort to dismiss under Rule 21 in April, 2009. At this point, control of the action had been with the defendant 22 months. The statement of defence was delivered in October, 2009. This marked the close of pleadings. At this point, 28 months had passed from the start of the action. The relevant status notice (June, 2011) was issued 20 months later and the hearing before Master Pope was just short of the two year mark after the close of pleadings.
Analysis
29In coming to the view that the action should be dismissed, the master relied only on the Khan v. Sun Life Assurance of Canada case, supra. She found that the plaintiff failed to provide an acceptable explanation for the delay. Although there was no evidence of non-compensable prejudice, the plaintiff’s obligation was to satisfy both Khan criteria and she did not. It was put this way in her decision at para. 33:
In summary, the plaintiff failed to provide a satisfactory explanation for the delay. I am satisfied on the evidence that the plaintiff has established that there would be no non-compensable prejudice to the defendant if this action proceeded. However, the plaintiff has the burden to satisfy both requirements of the test at a status hearing. She has not done so.
30In my view, the master erred in principle in her narrow and rigid application of Khan. The test is not a rigid test but one which includes the Khan criteria and a contextual approach as advocated by Goudge J.A. in Scainini v. Prochniki (2007), 2007 ONCA 63, 85 O.R. (3d) 179 (C.A.). The objective is to take into account all relevant factors to arrive at an order which is just in the circumstances.
31From Scainini, Goudge J.A. at pp. 184-185 stated:
[18] The issue is what these rules require the appellant to show to have the registrar’s order of January 7, 2005, set aside. In particular, did the motion judge err by requiring the appellant to meet each of four criteria in order to succeed?
[19] In coming to his view the motion judge relied on the decision of Master Dash in Reid v. Dow Corning Corp., supra, which sets out the four criteria and the appellant’s obligation to meet each one separately. It was put this way in that decision at para. 40:
While I agree there must be some balancing of interests, I find, upon review of the case law presented to me, that in determining whether to set aside a registrar’s order dismissing an action made under rule 48.14(3), a plaintiff must satisfy four criteria. If the plaintiff fails to satisfy any one of these criteria, the registrar’s order will stand.
[20] The motion judge went on to find that this approach had been upheld by the Divisional court in that case. With respect, I do not agree. Writing for the Divisional court, Then J. simply recited the criteria used by the master in his description of the decision appealed from. He did so without approval, before going on to allow the appeal on other grounds, without commenting on the criteria or the proposed requirement that each one must be met.
[21] More importantly, I do not agree that the case law reviewed in Reid, supra, yields the proposition that an appellant must satisfy each relevant criterion in order to have the registrar’s order set aside. None of the cases referred to say so expressly and several proceed on a more contextual basis. For example, in Steele v. Ottawa-Carleton (Regional Municipality), [1998] O.J. No. 3154, 74 O.T.C. 259 (Gen. Div.), Master Beaudoin, at para. 17, described the guiding principle in deciding whether to set aside a rule 48.14 dismissal by the registrar as follows:
Ultimately, the Court will exercise its discretion upon a consideration of the relevant factors and will attempt to balance the interests of the parties.
[22] I agree with Master Beaudoin.
[23] In my view, a contextual approach to this question is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria. The latter approach is not mandated by the jurisprudence. On the other hand, the applicable rules clearly point to the former. In particular, the motion to set aside the registrar’s order dismissing the action for delay engages rule 37.14(1) and (2). The latter invites the court to make the order that is just in the circumstances. A fixed formula like that applied by the motion judge is simply too inflexible to allow the court in each case to reach the just result contemplated by the rules.
[24] That is not to say that there are no criteria to guide the court. Indeed I view the criteria used by the motion judge as likely to be of central importance in most cases. While there may be other relevant factors in any particular case, these will be the main ones. The key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case.
[25] It may be that in a particular case, one factor on which the appellant comes up short is of such importance that, taken together with the other factors, the appellant must fail. What is important is that the analysis be contextual to permit the court to make the order that is just.
See also Marche D’Alimentation Denis Theriault Stee v. Grant; Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660; and Hamilton (City) v. Svedas (2010), 2010 ONCA 887, 104 O.R. (3d) 689.
32These are registrar order cases but the contextual approach applies as well to status hearing cases. In Donskoy v. Toronto Transit Commission (2008), 241 O.A.C. 283 at paras. 8 and 13;
There is no specific appellate decision dealing with the appropriate criteria to apply in appeals from status hearing orders made pursuant to rule 48.14(8). However, there is some case law pursuant to s. 48.14(4) which is helpful.
The test articulated in Reid, supra, while fashioned for dismissal under Rule 14.48(4) (sic) is useful here, with necessary modifications. Only two of the factors are relevant under Rule 14.48(8) (sic) explanation of the litigation delay, and prejudice to the defendant. These, in addition to the sufficiency of the plaintiff’s plan to move the action forward, are factors to consider.
33In Koepcke v. Webster, [2012] ONSC 357, Master Dash, after repeating the Khan test, on a motion to dismiss for delay, stated as follows, at paras. 18 and 22:
18 In my view, the plaintiff need not rigidly satisfy both aspects of the test but the two factors, acceptable explanation for the delay and demonstrating absence of prejudice to the defendant, must be considered, together with any other relevant factors, on a contextual basis. Although the Court of Appeal in Khan did not address a contextual approach at a status hearing, other decisions of the Court of Appeal have determined that a contextual approach is required on motions to set aside a registrar’s dismissal of an action that resulted from a failure to set an action down within the time set out in a status notice (where no status hearing was requested) or as set out in a status hearing order. The Court of Appeal set out the four principal factors (known as the “Reid factors”) to be addressed on motions to set aside a registrar’s dismissal. Two of those factors are the same as the two factors to be addressed at a contested status hearing. (The other two factors do not apply at a status hearing but only where the action has been dismissed.) The Court of Appeal held that when considering the setting aside of a registrar’s dismissal the plaintiff need not rigidly satisfy each of the four factors but they are to be considered together with any other relevant factors on a contextual basis to make such order as is most just in the circumstances of the particular case. If a contextual approach is to be used after an action has been dismissed for failure to comply with a status hearing order it speaks even louder that a contextual approach should be followed at a contested status hearing, before the action is dismissed.
22 Finally, although the court at a contested status hearing must be guided by the two-part test articulated in Khan, and recognizing that the onus is on the plaintiff to satisfy both branches of the test, the determination whether to allow the action to proceed is discretionary. Rule 48.14(13)(b) provides that the court “may” dismiss for delay. There will be some cases where a plaintiff can show cause that “on the whole, it would be unfair for the action to be dismissed. Determining fairness or unfairness requires a consideration of all the circumstances and a certain balancing of the respective interests of the parties.” As Master MacLeod stated in Amirrahmani, what the court accepts as a justifiable or acceptable explanation is “case dependant.”
34In Canadian Champion Auto Services Ltd. v. Petro-Canada, 2011 ONSC 6794, O’Connell J. recognized that the court must be “cautious and scrupulously apply the test on a status hearing” before depriving a plaintiff a trial on the merits. As Master Dash points out Koepcke, supra, rule 48.14(13)(b) makes it clear that the status hearing master is not compelled to dismiss the action, only that the action “may” be dismissed. As he stated above, “there will be some cases when a plaintiff can show cause that on the whole, it would be unfair for the action to be dismissed. Determining fairness or unfairness requires a consideration of all the circumstances and a certain balancing of the respective interests of the parties”. This, of course, is the approach set out by Justice Goudge in Scainini, supra.
35It strikes me that when the master applied Khan and dismissed the action because the explanation was inadequate, she failed to consider the wider context of the case; and failed to apply the wide scope of her discretion under Rule 77 to impose strict terms and a timetable including the imposition of a “guillotine” order. This would have been a proper and curative exercise of her jurisdiction and one which is mandated by rule 1.04(1) “to secure a just and most expeditious… determination of… the proceeding”. For example, she could have set a date, close at hand, to decide the affidavit issue and where the defendant was to be examined for discovery. Both matters, I would have thought, could have been decided in short order.
36On the question of delay, the delay attributable to the plaintiff has to be assessed in the context of the time frame preceding it. Over half the time the case has been outstanding has been the responsibility of the defence. As well, it seems to me that when account is taken of the time which passed after August, 2010 when the defendant’s blank affidavit of documents was delivered, it should be remembered that the affidavit was delivered in that form because the defence took the position that s.36(3) of the Registered Health Professions Act, supra applied and nothing had to be mentioned or produced. It was the subject of the motion to strike before Cusinato J. and it is mentioned in the reasons of the master. As mentioned earlier in these reasons, it was the subject of the motion which was argued before Patterson J. over two days in November 2010 and again over two days in January 2011. The answer on the form of the Dr. Hynes affidavit of documents was determined by the result of the motion before Patterson J. It defies common sense and a reasonable management of Julie Pouget’s resources to think that through the fall, 2010 and to April 2011 when Justice Patterson delivered his reasons, that Mr. Leschied should have brought a motion on the affidavit on the same point. This applies also to the matter of where the discovery of the defendant was to take place. There was no point to deciding this until there was a proper affidavit of documents. Discoveries are not generally held until the questioning party has the other party’s documents. In fairness to the master, I do not know whether the SEHC motion was brought to her attention but the case was cited to me and I may take note of the reasons of Patterson J. and the timing of the motion before him.
37In short, the plaintiff’s law firm should not be faulted for not moving her case forward in the fall of 2010 and winter of 2011. This delay should be assessed in this wider context.
38Justice Sharpe in 1196158 Ontario Inc. v. 6274013 Canada Ltd. (2012) 2012 ONCA 544, at para. 35 stated that “it is surely not too much to expect a party to either set a matter down for trial within two years of the close of pleadings or be able to offer a reasonable explanation for why it is not possible to do so”. The plaintiff’s affidavit may be short on detail, particularly on the slow production of documents, but it is harsh and unfair to dismiss an action before the two year mark following the close of pleadings.
39Finally and significantly, there is no prejudice to the defendant if the plaintiff’s action is permitted to proceed to an adjudication on the merits.
40Taking these factors together, I conclude that the just order is to set aside the order dismissing the action. The master, with respect, in my view erred in principle.
41As well, it seems to me that she committed an overriding error of fact on two matters. One, the complete record points not to a lack of interest by the plaintiff in her case but a desire to continue to the end. She has at this point instructed Mr. Leschied to resist an energetic challenge by the defence under Rule 21, an appeal of the result, an appearance before the Divisional Court, four days of argument in her companion action and an appearance before the Court of Appeal, a contested status hearing and this appeal. This is not the record of a disinterested litigant.
42Two, the finding of the master that she failed to provide a “clearly articulated plan” to complete the action is, in my view, palpably wrong. The issue of the content of the affidavit of documents has been decided by Feldman J.A. in the companion action. That leaves only where the discovery of the defendant is to be. That can be decided on a simple, short motion. The plan described at para. 23 of these reasons will accomplish this, together with whatever procedural tool the master may choose to use under rule 48.14(13) and Rule 77.
43For these reasons the appeal is allowed. The order dismissing this action is set aside. I see no reason why the learned master at Windsor may not carry on with the management of this case from this date forward.
44This matter should be placed on the first available status hearing court to set dates, the timing of any motion and a date by which the action must be set down.
45Reasons on the matter of the costs, will be delivered separately by endorsement by month’s end.
“Justice Peter B. Hockin”
Justice Peter B. Hockin
Released: February 7, 2013