CITATION: Srebrolow Lebowitz Spadafora Professional Corporation v. Siddiqui Law Office Professional Corporation, 2015 ONSC 529
DIVISIONAL COURT FILE NO.: 165/14 DATE: 20150122
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
SREBROLOW LEBOWITZ SPADAFORA PROFESSIONAL CORPORATION Appellant
– and –
FAWAD SIDDIQUI and SIDDIQUI LAW OFFICE PROFESSIONAL CORPORATION Respondents
James W. Srebrolow, for the Appellant Kristian Borg-Olivier, for the Respondents
HEARD at Toronto: January 22, 2015
KRUZICK J. (ORALLY)
Nature of the Appeal
[1] The appellant law firm seeks to set aside the order of Master Graham made on April 2, 2014 dismissing the firm’s law suit against a former lawyer of the firm and his now new firm. In the action, the appellant claims the respondent owes disbursements on files taken with him and for distribution of legal fees related to the files.
[2] The action was dismissed at a Status Hearing. The issue on this appeal is whether the Master erred in his decision.
Background Facts
[3] The appellant is a personal injury law firm in Toronto. The respondent set up the respondent law firm in the same field once he left the employment of the appellant.
[4] The respondent lawyer was terminated by the appellant on June 24, 2011. In its claim for outstanding disbursements and for a share of the legal fees under various heads of damages, the appellant claims a total of $3.125 million dollars. The claim is based on a contract of employment.
[5] The respondent served a Notice of Intent to Defend. Shortly after the Statement of Claim was issued in October 2011, the respondent served a Demand for Particulars in October 2011. Examinations for discovery were booked for March 2012 at the request of the appellant. They were cancelled at the request of the respondents given no response to their Demand for Particulars. The appellant served the Response to the Demand for Particulars in February 2014 with a second copy in March 2014. The respondents did not serve a Statement of Defence. The appellant served their Affidavit of Documents on March 5, 2014. The defendants served no Affidavit of Documents.
[6] The appellant relied on the affidavit of James Srebrolow which was sworn on March 24, 2014 to explain the delay in the proceedings. In that affidavit, he set out the delay resulted from essentially an inability to locate the relevant employment contract which apparently was never located.
[7] The appellant also relied on the Response to the Demand for Particulars. The affiant Srebrolow was never cross examined on his affidavit. The defendants filed no responding material and no Statement of Defence when the Status Hearing was held.
Position of the Appellant
[8] The appellant takes the position that a satisfactory explanation for the delay was set out. It relies on its attempted and failed search for lost documents coupled with the fact that the respondent had all the files in their possession that were not accessible to them.
[9] They also seek the position that the respondent did not avail themselves to remedies to advance the litigation.
[10] The position of the appellant is that the respondents have not been prejudiced by the acknowledged delay as witnesses and documents remained available and were to some degree particularized in the Response to the Demand for Particulars. Moreover, the appellant argues the respondents failed to set out how they were prejudiced by any delay.
Respondent’s Position
[11] It is the position of the respondent that the explanation for the delay was simply not acceptable. The delay of two years and four months for a search for documents was simply not satisfactorily addressed. There was no evidence that the appellant requested documents or particulars which they allege were in the possession of the respondents.
[12] The respondents also state the Examination for Discovery, which was set in March 2012 could not proceed given the failure to deliver a Response to the Demand for Particulars. Once the Demand for Particulars was delivered the long period of delay had already kicked in.
[13] With respect to prejudice, the respondent states the onus is on the appellant to demonstrate there was no possibility of non-compensable prejudice to the respondents.
Standard of Review
[14] Both counsel addressed the standard. The parties are in agreement that an order of the Master dismissing an action at a status hearing is discretionary. As the Court of Appeal stated in Faris v. Eftimovski, 2013 ONCA 360, 2013 ONCA 360:
At a status hearing, the decision to dismiss an action for delay is discretionary. Accordingly, on appeal, the decision attracts deference but may be set aside if it discloses palpable and overriding errors of fact or is made on the basis of an erroneous legal principle.
Absent palpable and overriding error on a question of fact or the application of an erroneous legal principle, the Court should not set aside the Master’s decision.
Analysis
[15] Counsel reviewed the arguments in their facta. I have reviewed the reasons for judgment of the Master. His decision dismissing the action of the appellant was made at a contested status hearing. The Master correctly sets out the law as expressed by the Court of Appeal in Khan v. Sun Life Assurance, 2011 ONSC 455, 2011 CarswellOnt 719 (Ont. Sup. Ct.). This was the first status hearing and counsel for the appellant was prepared to proceed based on the affidavit of Mr. Srebrolow. The Master did note that the respondents filed no responding affidavit. The Master’s reasons addressed the issue of delay and the onus on the appellant to satisfactorily explain the delay. I read from the Reasons and specifically page 2:
The explanation offered for this delay in paragraph 10 of Mr. Srebrolow’s affidavit is that the preparation of the response was delayed by attempts to locate the plaintiff’s copy of its employment contract with the individual defendant and the need to collect and review email correspondence with respect to the matters in question. There was also some delay between the drafting of the response by an associate lawyer and a review of it by Mr. Srebrolow.
These various steps could realistically have taken a few months, perhaps three or even four months but it cannot be accepted that it was reasonable for these steps to take a period of two years and three months that is a delay in this case. There’s no evidence of any communication from the plaintiff’s counsel to the defendant’s counsel, to advise of any problems locating any documents for the purpose of providing a response to the demand for particulars.
[16] The Master also addressed the appellant’s argument that the respondents failed to take steps to advance the action as was argued before me. The Master relied on this Court’s decision in Deverett Professional Corporation v. Canpages Inc., 2013 ONSC 6954 (Ont. Div. Ct.), quoting MacKinnon J. that a defendant is not expected to advance an action which the plaintiff has commenced.
[17] I accept and rely on the summary of the existing case law as was set out by Gray J. in Kara v. Arnold, 2014 ONSC 2647 and is referred to in the appellant’s factum at page 7, para. 11.
[18] Simply put, the onus is on the plaintiff here, the appellant, to provide a reasonable explanation for inordinate delay. A status hearing is not simply a management tool to get cases on track or to set timelines but a hearing with consequences given the significant civil case backlog in our system, cases must proceed more efficiently, more expeditiously. Otherwise, they run the risk of being struck.
[19] As was set out by Myers J. in Orsi v. Fromstein, 2014 ONSC 2508, the test is satisfaction - not perfection. The problem with the appellant’s case is that the affidavit evidence of Mr. Srebrolow upon which the appellant relied before the Master, simply does not meet the evidentiary obligation to provide sufficient detail or adequately explain why it took two years and three months to get to the point where the case could then regenerate.
[20] I agree with the Master that the test in Khan which he applied is conjunctive. There is therefore no need to consider the issue of prejudice, however, the Master did. Even if the Master had erred on his finding of delay and there was a palpable overriding error, which I do not find, in his reason he sufficiently addressed the issue of prejudice. Here I agree with the Master that the appellant failed on this branch. The evidence in Mr. Srebrolow’s affidavit failed to list the witnesses and the testimony they would provide, so that the defence knew the case it could meet. While that may have been somewhat satisfied by the Response to the Demand for Particulars, the satisfaction was either too little or too late or both.
[21] The appellant submits there was a practical onus on the respondents to provide evidence of prejudice. The appellant relies on Margaret Grace Kerr v. CIBC World Markets et al., 2013 ONSC 7685 and Chiarelli v. Wiens, 2000 3904 (ON CA). Both cases, I find are distinguishable from the facts in the case before me. They do not convince me that there is an onus on the respondent in this case to demonstrate prejudice. They simply did not know the case they were expected to meet.
[22] This case was completely different from Kerr which was significantly advanced with respect to Chiarelli v. Wiens. Again, the witnesses were easily identified and were clear. In the end, this case is not analogous to the facts before me.
[23] The Master held neither the Statement of Claim nor the affidavit of Mr. Srebrolow give the respondents an opportunity to know which witnesses they will have to call nor did they provide a clearing site into the case to be met. Simply put, the respondents could not address the claim. I therefore find no error in the decision.
Disposition
[24] For these reasons, the appeal is dismissed.
COSTS
[25] I have endorsed the back of the Appeal Book, “For reasons delivered orally, the appeal is dismissed. Costs shall be to the respondents fixed in the amount of $4,000 all inclusive.”
___________________________ KRUZICK J.
Date of Reasons for Judgment: January 22, 2015
Date of Release: February 4, 2015
CITATION: Srebrolow Lebowitz Spadafora Professional Corporation v. Siddiqui Law Office Professional Corporation, 2015 ONSC 529
DIVISIONAL COURT FILE NO.: 165/14 DATE: 20150122
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
SREBROLOW LEBOWITZ SPADAFORA PROFESSIONAL CORPORATION Appellant
– and –
FAWAD SIDDIQUI and SIDDIQUI LAW OFFICE PROFESSIONAL CORPORATION Respondents
ORAL REASONS FOR JUDGMENT
KRUZICK J.
Date of Reasons for Judgment: January 22, 2015
Date of Release: February 4, 2015