Cobalt Capital CA Textile Investments, L.P. v. Pantziris, 2015 ONSC 7090

CITATION: Cobalt Capital CA Textile Investments, L.P. v. Pantziris, 2015 ONSC 7090

DIVISIONAL COURT FILE NO.: 402/15

DATE: 20151201

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

COBALT CAPITAL CA TEXTILE INVESTMENTS, L.P.

Plaintiff/Respondent

– and –

SPIROS PANTZIRIS and JULIE PANTZIRIS also known as JULIE TAYLOR also known as JULIE TAYLOR PANTZIRIS

Defendants/Appellant

Sean Zeitz, for the Respondent

Steve Bellissimo, for the Appellant

HEARD at Toronto: November 16, 2015

M.A. Sanderson J.

Introduction

1The Defendant, Julie Pantziris, (hereafter “Ms. Pantziris or Julie Pantziris”) seeks leave to appeal the order of Faieta J. dated July 17, 2015 dismissing her appeal from the order of Master Short dated March 11, 2015, setting aside the order of the Local Registrar dated June 26, 2014 dismissing Cobalt’s action for delay.

2The plaintiff Cobalt issued a claim against Spiros and Julie Pantziris on February 9, 2012 alleging that Spiros had fraudulently conveyed his interest in property at 9 Berkindale Crescent Toronto to Julie.

3A Statement of Defence was filed on April 16, 2012.

4A judgment debtor exam of Spiros was held in June 2012.

5On February 27, 2013, Spiros was ordered to attend a further judgment debtor examination.

6At the examination in May of 2013, Spiros refused to answer questions after he was served with an application for a bankruptcy order.

7On October 8, 2013 with Spiros’s consent, Morawetz J. issued a bankruptcy order against Spiros and appointed Albert Gelman Inc. as Trustee.

8In February 2014, Cobalt agreed to assign this action to the Trustee to be pursued for the benefit of all creditors.

9Counsel for Cobalt received a Notice of Pending Dismissal in April 2014.

10In April 2014, a process server attempted to file a Request for Status Hearing that had been prepared by Cobalt’s new counsel, Mr. O’Brien (“O’Brien”) but the process server was unable to file it with the Court because O’Brien had failed to file a Notice of Change of Solicitors after he had assumed carriage of the file.

11When the rejected Status Hearing Request was returned to O’Brien’s assistant, she placed it in another Cobalt file. O’Brien was unaware of the Notice of Pending Dismissal.

12A formal assignment of the action to the Trustee was made on May 30, 2014.

13The Registrar’s Order dismissing the action for delay was issued on June 26, 2014.

14During the last week of June 2014, when the Trustee’s lawyer went to file a Notice of Change of Solicitors and to requisition an Order to Continue he was advised that the action had been administratively dismissed.

15O’Brien became aware of the Registrar’s Order on June 27, 2014.

16On July 22, 2014, the Trustee issued a Fresh Statement of Claim seeking relief for the fraudulent conveyance as well as a consolidation order for the two actions.

17On July 29, 2014, a motion to set aside the Registrar’s Order pursuant to Rule 37.14 was served.

18On March 11, 2015, Master Short set aside the Registrar’s dismissal Order. Julie Pantziris then appealed.

19On July 24, 2015, Faieta J. denied the appeal.

20Julie Pantziris then sought leave from this Court to appeal that order.

The Test to Obtain Leave to Appeal to the Divisional Court

21Rules 62.02(1) and(4)(a) and (b) of the Rules of Civil Procedure provide:

62.02(1)

Leave to appeal to the Divisional Court under clause 19(1)(b) of the Act shall be obtained from a Judge other than the Judge who made the interlocutory Order.

Grounds on which leave may be granted

(4) Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another Judge or Court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the Judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the Judge hearing the motion good reason to doubt the correctness of the Order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

22Under Rule 62.02(4) (a), the moving party must establish that there is a conflicting decision of another Judge or Court in Ontario or elsewhere. A "conflicting decision" involves a matter of principle, not merely a situation where a different result was reached on different facts. The Judge hearing the motion must also be of the view that it is desirable that leave be granted.

23Under Rule 62.02(4) (b) the moving party must establish that there is good reason to doubt the correctness of the Order in question and that the proposed appeal involves matters of such importance that leave to appeal should be granted. It is not necessary that the Judge granting leave be satisfied that the decision in question was actually wrong. That aspect of the test can be satisfied if the Judge hearing the leave application is satisfied that the correctness of the Order is open to "very serious debate".

24Under Rule 62.02(4)(b), the moving party must also demonstrate the issue is a matter of importance that goes beyond the interest of the immediate parties and involves questions of general or public importance. Farmers Oil & Gas Inc. v. Ontario (Ministry of Natural Resources) 2013 ONSC 1608.

Application of the Test

25Counsel for Julie Pantziris submitted that the following four factors set out by Master Dash in Reid v. Dow Corning Corp. are the appropriate criteria to consider in determining whether to set aside a registrar’s dismissal order:

(a) An explanation for the litigation delay;

(b) That there was inadvertence in missing a deadline;

(c) That the motion is brought promptly; and

(d) That there would be no prejudice to the defendant if the order were set aside.

26Counsel for Cobalt submitted citing the Court of Appeal in HB. Fuller v. Rogers 2015 ONCA 173 at para 23:

“Neither the four-factor approach nor the two-part test provides an exhaustive list of considerations. Regardless of which is followed, all of the circumstances of the case must be considered in order to arrive at a just result".

27Counsel for Cobalt submitted that the applicable principles on a motion to set aside a Rule 48.14 dismissal required the Court to consider that while the four Reid factors are “likely to be of central importance in most cases”, there is no requirement that the plaintiff satisfy all four.. There is no rigid, one size fits all test for setting aside a Rule 48 dismissal. Instead, the court must take a “contextual approach” and “consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case”.

28Counsel for Julie Pantziris submitted that Cobalt had failed to demonstrate that there was an acceptable explanation for the delay in the litigation and that, if the action were allowed to proceed, she would suffer no non-compensable prejudice. Nissar v. Toronto Transit Commission, 2013 ONCA 361

29He also cited the reasoning of the Court of Appeal in Faris v. Eftimovski, 2013 ONCA 360, at para 32 and 42:

32The plain wording of rule 48.14(13) makes clear that the onus is on the plaintiff to demonstrate why the action should not be dismissed for delay. The test, as stated by the status hearing judge in the case at bar, requires the plaintiff to demonstrate that there was an acceptable explanation for the delay and establish that, if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice: Khan v. Sun Life Assurance, 2011 ONCA 650, at para. 1.

42Therefore, I conclude that the status hearing judge in the case at bar was correct to place the onus on the appellant and to apply a test similar in principle to one recently confirmed by this court in 1196158 Ontario Inc. v. 6274013 Canada Limited ONCA 544 At para. 32 of 1196158 Ontario Inc., the court held that a plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation and that, if the action was allowed to proceed, the defendant would suffer no non-compensable prejudice.

30Counsel for Julie Pantziris submitted that she was not required to lead evidence of actual prejudice in response to Cobalt’s motion to reinstate a dismissed action and that Faieta J. erred in relying on the Court of Appeal's decision in MDM Plastics Limited v. Vincor International Inc. ("MDM") 2015 ONCA 28 in dismissing her Appeal.

31Counsel for Cobalt submitted that in MDM, the Court held that a Plaintiff is not required to adduce affirmative evidence that the reinstatement of an action will not result in prejudice. Instead, the Court-must consider all the circumstances in evaluating prejudice. This reasoning applies equally to all cases concerning a motion to reinstate an action that have been dismissed, including the case at bar.

32Counsel for Julie Pantziris submitted that MDM "does not apply" to her because she did nothing to prevent the Plaintiff from pursuing the matter against her.

33Counsel for Ms. Pantziris submitted that the Court of Appeal in MDM did not consider the Nassir or Faris cases.

34Counsel for Cobalt submitted that at paragraph 26 of his Reasons, Faieta J. did specifically turn his mind to both Nassir and Faris and he expressly acknowledged that the burden rests on the Plaintiff to demonstrate no prejudice.

35He referred to Carioca's Import & Export Inc. v. Canadian Pacific Railway Limited 2015 ONCA 592 ("Carioca'').where Van Rensburg JA noted that the legal test for determining whether an action should be dismissed under Rule 48.14 should be adapted to determine when an action should be restored to the trial list. The plaintiff is required to provide an "acceptable""satisfactory", or "reasonable" explanation for the delay. A motion to restore an action to the trial list is not a "blame game", where counsel should be required or encouraged to take a defensive stance and justify their conduct of the litigation on a month-by-month basis. Rather, in assessing whether an explanation of delay is reasonable, a motion judge should consider the overall conduct of the litigation, among other factors (para 46). While the plaintiff bears the onus of demonstrating that the defendant would suffer no non-compensable prejudice if the action were allowed to proceed, the issue of prejudice is a factual question. A defendant is not required to offer evidence of actual prejudice. However, if the defendant asserts that he has been prejudiced, the court is entitled to consider the conduct of the defendant in light of its assertions. (para 50).The conduct of all parties in relation to the litigation is relevant in determining whether to restore an action to the trial list (para 53).

Application of the Test

36The Dismissal Notice dated June 26, 2014 was received by the Plaintiff on July 2, 2014. A Notice of Motion to set aside the Order followed on July 29, 2014. The delay was 34 days between the dismissal order and the date the Notice of Motion to set it aside was served.

37The possible prejudice at issue here was with respect to Ms Panziris’s ability to defend the fraudulent conveyance action as a result of the 34 day delay.

38Both the Master and the Appeal Judge inferred in all the circumstances here that a 34-day delay would not have prejudiced Ms. Pantziris' ability to defend the action.

39In my view, the Courts below took a contextual approach and weighed the proper factors. Prejudice is a factual issue. Master Short and Faita J are entitled to deference on their factual determinations. It was open on the evidence before them for them to conclude that Cobalt had provided a reasonable explanation for the dismissal and the delay. Cobalt’s process server had attempted to file a Notice of Status Hearing to prevent the action being dismissed for delay. That indicated Cobalt’s intention to proceed with the litigation at that time. The explanation for the dismissal and the delay was inadvertent error.

40On all of the evidence, it was open to the Courts below to hold that Cobalt had also met the burden of showing that Ms Pantzeris had not suffered non compensable prejudice in defending the action by reason of a 34 day delay , especially where she not presented any evidence asserting that the 34 day delay had caused her any disadvantage in defending the action.

41In my view, there is no good reason to doubt the correctness of the decision.

42To succeed, Ms. Pantziris was also required to demonstrate that the proposed appeal involved matters of such importance that leave to appeal should be granted.

43She has not demonstrated that the issues on this appeal go beyond the interests of the immediate parties and involve matters of general and public importance.

Conclusion

44The motion for leave to appeal is dismissed.

45Counsel for Cobalt is seeking costs of $5,844.64. Counsel for Ms. Pantziris has not complied with this Court’s practice direction regarding costs submissions. I order her to pay costs of this motion to Cobalt, fixed in the amount of $5,000 all inclusive.

___________________________ M.A. Sanderson J.