Court of Appeal for Ontario

Date: 2017-01-04

Docket: C61820

Judges: Simmons, LaForme and Pardu JJ.A.

Between

Rinaldo Ticchiarelli Plaintiff (Appellant)

and

Nazzareno Ticchiarelli, 882897 Ontario Ltd., the Estate of Ermoli Piccioni, deceased, and John Doe as Litigation Guardian of the Estate of Danny Piccioni, deceased Defendants (Respondents)

Counsel

William J. Burden, for the appellant

Jasmine T. Akbarali, for the respondents, Nazzareno Ticchiarelli, 882897 Ontario Ltd., the Estate of Ermoli Piccioni, deceased, and John Doe as litigation guardian of the Estate of Danny Piccioni, deceased

Heard: September 26, 2016

Appeal from the decision of Justice Richard A. Lococo J. of the Superior Court of Justice, dated February 5, 2016.

H.S. LaForme J.A.:

INTRODUCTION

[1] Rinaldo Ticchiarelli appeals from the decision of the motion judge to dismiss his action against the respondents because his inordinate and inexcusable delay had prejudiced the respondents. The motion judge relied both on Rule 24.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and the Superior Court's inherent jurisdiction.

[2] Given the deferential standard of review that applies when this court considers a motion judge's dismissal of an action for delay, my conclusion is that this is not a case where this court should interfere. My reasons are set out below.

BACKGROUND

[3] This action involves a dispute over the ownership of shares of 897 Corporation, a company with an equity interest in a property development in Windsor, Ontario. On February 19, 2004, the appellant commenced the action against the respondents; his brother Nazzareno, his uncle Ermoli Piccioni and the estate of his cousin Danny Piccioni, as well as a related corporation (882897 Ontario Ltd. — "897 Corp."). Ermoli Piccioni died in 2006 and an Order to Continue from 2010 continued the action against his estate.

[4] The appellant asserts that Nazzareno, in reliance on misrepresentations by Danny and Ermoli Piccioni, misused a power of attorney that the appellant had granted to Nazzareno and deprived the appellant of repayment of his $225,000 shareholder loan to 897 Corp., $25,000 owed to him for common shares that Nazzareno sold to Danny Piccioni, and the appellant's share of profits pursuant to a Profit Sharing Agreement that Nazzareno purported to execute on the appellant's behalf. The respondents acknowledge some indebtedness, and promise to pay it when it becomes due; they deny the allegations of conspiracy, misrepresentation, undue influence and unconscionability.

[5] The issues in the action centred on the signing of two agreements in June 1996 and the intention of the parties when those agreements were signed. However, the appellant did not commence the action until February 2004, more than seven and a half years after the relevant events. Meanwhile, Danny Piccioni had died during the previous year.

[6] According to the motion judge, the action began with "reasonable dispatch", but, after the appellant filed his Affidavit of Documents, the action became dormant for over five years. The appellant allowed four years to pass between when his first lawyer ceased to represent him and the time when he retained a new one, in 2009.

[7] This second lawyer took action by proposing a settlement in May 2010 and by cross-examining Danny and Ermoli Piccioni's estate trustees on November 4, 2010. However, no progress occurred between November 2010 and July 2014.

[8] In September 2014, the appellant made an offer to settle, but, by 2015, the negotiations failed. During 2015, the parties agreed to mediation, but, on June 8, two days before the mediation date, counsel for the Estate of Ermoli Piccioni cancelled the mediation. Shortly after, all the defendants except for Nazzareno Ticchiarelli moved to dismiss the action for delay.

[9] During the time since the motion judge's decision, one of the proposed witnesses, Angeladea Piccioni, has died.

ISSUES

[10] There are only two issues on this appeal: (i) whether the motion judge erred in dismissing the action because of delay; and (ii) the admissibility of fresh evidence.

[11] There was no real opposition to the admission of the new evidence that one proposed witness for the trial of this action, Angeladea ("Angela") Piccioni, has died during the time since the motion judge's ruling. The relevance of the evidence and its admissibility are obvious and ought to be admitted on appeal. Consequently, the analysis that follows will be on the motion judge's dismissal of the action for delay.

ANALYSIS

(1) The Test for Dismissing an Action for Delay

[12] The parties agree that the motion judge correctly outlined the test. That is, an order dismissing an action for delay will be justified where the delay is inordinate, inexcusable, and prejudicial to the defendants in that it gives rise to a substantial risk that a fair trial of the issues will not be possible: Langenecker v. Sauvé, 2011 ONCA 803, 286 O.A.C. 268, at paras. 4-7. The court may derive its jurisdiction to dismiss an action for delay either from Rule 24.01 of the Rules of Civil Procedure, or through its inherent jurisdiction to prevent an abuse of its own process.

[13] The motion judge found that the delay of over 11 years was inordinate, which the appellant had conceded. He rejected the appellant's arguments that the delay had been excused. And, he concluded that the appellant had not rebutted the inference of prejudice from the delay. Indeed, the respondents, in his view, suffered actual prejudice. The motion judge dismissed the action for delay, noting that he could do so on the basis of Rule 24.01 or on the basis of the court's inherent jurisdiction.

[14] The motion judge's order dismissing this action for delay is a discretionary order. It is entitled to deference from this court and will not be interfered with unless the motion judge exercised his or her discretion unreasonably or acted on a wrong principle: Ali v. Fruci, 2014 ONCA 596, 122 O.R. (3d) 517, at para. 10.

(2) Application of the Test

(a) Inordinate delay?

[15] The motion judge correctly observed that "the inordinance of the delay is measured simply by reference to the length of time from the commencement of the proceeding to the motion to dismiss": Langenecker, at para. 8. He also noted the appellant's concession that the 11 year delay in this case was inordinate and agreed that it was. While the appellant seems to resile from that concession on appeal, there is no reason that I can find to disagree with the appellant's concession on the motion or the reasonableness of the motion judge's agreement with that concession.

(b) Inexcusable delay?

[16] Whether the delay is inexcusable requires an examination of the reasons for it and whether they present an adequate explanation. Such an examination would look for explanations that are "reasonable and cogent" or "sensible and persuasive". The court will consider not only the explanations offered for individual parts of the delay, but also the overall delay and the effect of the explanations considered as a whole. Through this examination, the delay could then be excused, at least to the extent that an order dismissing the action would be inappropriate: Langenecker, at paras. 9-10.

[17] The appellant argues that the motion judge erred in finding that the delay was inexcusable because the respondents "excused" two lengthy periods of delay by engaging in certain procedural steps and in settlement negotiations. He also argues that the respondents bore responsibility for the delay and he says that he offered reasonable explanations for the delay. I would reject these arguments.

[18] The motion judge focused on two periods of inactivity: (i) September 2004 to October 2009; and (ii) November 2010 to June 2014. He then, reasonably in my view, rejected the appellant's submissions that the respondents excused both periods of inactivity by their conduct.

[19] Specifically, the appellant argues that during the period of November 2009 to November 2010, the respondents, among other things, served affidavit materials and attended cross-examinations. And, during the period of June 2014 to June 2015, the respondents cooperated in the scheduling of a motion, engaged in settlement discussions, and agreed to mediate the dispute. In each of these instances, he says that the respondents' conduct excused any delays.

[20] With respect to the first period of delay — September 2004 to October 2009 — the motion judge considered the procedural steps that were undertaken. He agreed that such steps were relevant, but not dispositive. Rather, his approach, which was correct, was to include these steps in an assessment of the delay when considering the delay in its global context.

[21] As for the submissions related to the second period — June 2014 to June 2015 — and the respondents' role in scheduling a motion and engaging in settlement discussions, the motion judge's conclusion is again reasonable and not tainted by error. There are two reasons why I reach this conclusion.

[22] First, the "procedural steps" that the appellant relies upon as excusing the second portion of his delay were limited to addressing the date for the appellant's 2009 motion that he sought to bring back on. This procedural activity prompted the respondents to bring a cross-motion to dismiss the appellant's action for delay. This is not the kind of cooperative step that excuses a plaintiff's delay.

[23] Second, whether settlement discussions excuse the delay depends on the circumstances, and assessing a motion seeking dismissal for delay is not simply a mechanical process. Here, the motion judge relied on the public policy favouring the timely resolution of disputes, which finds expression in the "without prejudice" nature of settlement negotiations, to reject the proposition that the settlement discussions in 2014 excused any part of the delay. His approach does not amount to an error in law and his decision, in the context of this case, was entirely reasonable.

[24] Whether the respondents "excused" the delay at any point is, in my view, a fact-sensitive matter, and the motion judge's interpretation of the relevant facts was reasonable. The appellant's explanations were simply not "sensible and persuasive".

[25] The motion judge found the appellant's explanations no more persuasive from a "global" perspective on the total delay. Again, there is nothing unreasonable about this conclusion.

[26] The appellant's explanation for the delay from 2004 - 2009 is extremely weak. His excuse is that he always has understood that this dispute is a "family dispute, which could and should be resolved among family members". Yet, he next asserts that he always intended to pursue the lawsuit. Similarly, his explanation for the delay from 2010 - 2014 is incoherent. On the one hand, he believed that the respondents would honour their duty to return his investment. On the other hand, he claims that he always intended to pursue the lawsuit.

[27] Finally, the motion judge rejected the argument that at least some of the delay falls at the feet of the respondents. As this court noted in Wallace v. Crate's Marine Sales Ltd., 2014 ONCA 671, 245 A.C.W.S. (3d) 72, at para. 18, the plaintiff is responsible for moving the action along. In our case the motion judge reasonably found that the appellant failed to meet this responsibility.

(c) Prejudice to fair trial rights?

[28] Here the test is whether the delay has been prejudicial to the defendants in that it creates a substantial risk that a fair trial of the issues will not be possible. The motion judge correctly stated this principle and the related rule that inordinate delay generates a presumption of prejudice. He then directed himself to the comments of this court in Langenecker, at para. 11: "Memories fade and fail, witnesses can become unavailable, and documents can be lost. The longer the delay, the stronger the inference of prejudice to the defence case flowing from that delay".

[29] The motion judge noted that there is an evidentiary burden on the plaintiff to demonstrate that the defendants have not been prejudiced and, by way of example, referred to key witnesses being available or documents having been preserved. The motion judge also noted that in addition to relying on the inference of prejudice arising from the inordinate delay, it was open to the defendants to lead evidence of actual prejudice.

[30] The appellant argues that the motion judge erred by mechanically applying the presumption of prejudice rather than considering whether there was in fact any prejudice based on all the circumstances. In particular, he relies on MDM Plastics Limited v. Vincor International Inc., 2015 ONCA 28, 124 O.R. (3d) 420, at para. 37, to say that the motion judge erred by placing an evidentiary burden on the appellant to lead affirmative evidence to prove that the documents that were required for trial had been preserved. I would reject this argument.

[31] First, I would note that MDM Plastics dealt with an appeal from a motion to set aside an order of the registrar dismissing the plaintiff's action for delay pursuant to Rule 48.14(4). The test is somewhat different but, nevertheless, requires the court to consider whether there is prejudice to the defendant in setting aside the dismissal. In that context, this court, in MDM Plastics, at para. 32 said there was no general proposition that the plaintiff must lead affirmative evidence to rebut a presumption of prejudice. Rather, it said that "in evaluating the strength of the presumption of prejudice, the [court] must consider all of the circumstances, including the defendant's conduct in the litigation".

[32] Second, I agree with the respondents; evidence of their actions may rebut the presumption of prejudice, but this hardly means that the presumption of prejudice does not exist. Indeed it does, and the burden to displace it lies on the plaintiff. This conclusion is consistent with the decision in Ali, at para. 16 where this court accepted that there was some presumed prejudice and that the plaintiff had not rebutted it. Also I note that in Wallace, at para. 17, this court referred to the "appellants' attempted rebuttal of the presumption of prejudice" as part of its reasoning. In sum, the trial judge, in my view, did not misdirect himself as to the burden.

[33] The prejudice in this case was properly assessed by the motion judge in the context of the allegations made in the appellant's statement of claim. His claim makes allegations of conspiracy, misrepresentation, unconscionability and undue influence. Allegations such as these succeed or fail largely on the viva voce evidence offered at trial. As the respondents say, and as the motion judge observed, the state of the witnesses was a key element for the motion judge in assessing prejudice.

[34] The reasonableness of the motion judge's conclusion that both presumed and actual prejudice existed such they created a substantial risk that a fair trial of the issues would not be possible is apparent when two important realities are noted.

[35] First, even without the fresh evidence, the appellant has failed to rebut the presumption of prejudice from his inordinate and inexcusable delay. The delay of 11 years from the initiation of proceedings until the motion to dismiss mandates a heavy onus of rebuttal. Yet the appellant fails to explain when he first became aware of the impugned transactions. He merely states that he learned of them "long after they were executed", but there was a delay of approximately eight years between their execution and his statement of claim.

[36] Second, it seems obvious, given the appellant's allegations of conspiracy, misrepresentation, unconscionability and undue influence, that actual prejudice exists. The viva voce evidence that would be essential to the trial is dramatically impacted because of the passage of so much time. Beyond the fact that several important witnesses have died, the passing of time probably would make the testimony of surviving witnesses less reliable.

[37] The appellant himself, in his affidavit from 2009, confesses, "The passage of time in conjunction with the passing away of key family members is resulting in the loss of key witnesses in this proceeding who had knowledge of the original reasons for the transfer of my shares and the transfer of Naz's shares to Danny Piccioni".

[38] In these circumstances, the motion judge's finding that the presumption of prejudice was not rebutted is completely reasonable. Indeed, actual prejudice was made out as a result of the death of key witnesses. The motion judge's further conclusion that the prejudice creates a substantial risk that a fair trial of the issues will not be possible is also reasonable.

(d) Inherent jurisdiction?

[39] Finally, the motion judge concluded his reasons by granting the respondents relief under Rule 24.01, but he went on also to dismiss the action through the court's inherent jurisdiction, citing this court's decision in Wallace. As Lauwers J.A. explained in Wallace, at para. 22:

There comes a time…when enough is enough, and the civil justice system will no longer tolerate inordinate and inexplicable delay. A court may then eject the action as an exercise of its inherent jurisdiction, whether or not the relevant rules expressly mandate it.

[40] Clearly, the motion judge was of the opinion that the civil justice system could no longer tolerate the inordinate and inexplicable delay in this case. His view on the record before him was that the time had come when enough was enough. The record certainly supports the motion judge's conclusion and I cannot say it was unreasonable.

CONCLUSION

[41] I would dismiss the appeal. The motion judge applied the correct test required under Rule 24.01. And, while it was unnecessary for him to rely on the court's inherent jurisdiction, he did so correctly. His findings of fact and his assessment of them are reasonable and reveal no error. The respondents are entitled to their costs of the appeal in the agreed upon amount of $15,000, inclusive of relevant taxes and disbursements.

Released: January 4, 2017

H.S. LaForme J.A.

I agree Janet Simmons J.A.

I agree G. Pardu J.A.