Court File and Parties

Court File No.: CV-08-0169-00 Date: 2017-03-01 Ontario Superior Court of Justice

Between: James Richardson, Plaintiff (A. J. Esterbauer, for the Plaintiff)

- and -

Kenneth James and James and Associates, Defendants (S. Turnham, for the Defendants)

Heard: January 26, 2017

Reasons for Judgment

Lemay J

[1] This is a claim by the Plaintiff, James Richardson, that his solicitors the Defendants Kenneth James and James and Associates negligently failed to negotiate settlements and manage litigation that the Defendants had allegedly been retained to manage. The Defendants deny all of the Plaintiff’s claims.

[2] There have been considerable delays in moving this action forward. The Plaintiff has not complied with Orders made by Edwards J. in May 2016. As a result, the Defendants have moved to have the action dismissed. The Plaintiff explains the delays and the non-compliance with the Order of Edwards J. as resulting from a breakdown in his relationship with his solicitor.

[3] On reviewing the facts, I have concluded that the Defendants motion should be dismissed, as the draconian remedy of dismissing the Plaintiff’s action without a hearing on the merits is not yet justified. However, I share the Defendants’ concern about the pace of litigation in this case, as well as with the Plaintiff’s failure to comply with Court orders. As a result, I have imposed terms on the Plaintiff.

Background Facts

The Claims and Litigation

[4] This litigation was commenced in 2008, and has proceeded very slowly since that time. The Plaintiff has had a number of lawyers throughout the litigation, and has also had periods where he has been self-represented. It is not clear to me that anything much, other than the completion of pleadings, took place between 2008 and 2014.

[5] Mr. Kenneth Laimon became the Plaintiff’s lawyer in June 2014. There have been ongoing problems with the solicitor-client relationship since Mr. Laimon became the Plaintiff’s lawyer.

[6] Given the slow pace of proceedings, the Defendants brought a motion for various relief in December 2014. As a result, a consent Order was made on December 9, 2014, by Donahue J., directing the Plaintiff to attend for examination for discovery, and declaring that the Plaintiff was not entitled to conduct discovery of the Defendants. As a result, an examination for discovery of the Plaintiff was conducted on January 28, 2015.

[7] There were challenges with the Plaintiff’s discovery. As a result, the parties agreed to complete the remaining questioning of the Plaintiff by way of written interrogatories.

[8] Subsequently, on May 6, 2015, counsel for the Defendants provided the Plaintiff’s counsel with a list of 31 separate interrogatories, each with multiple questions. There were no responses to these interrogatories by February 10, 2016. I note that this was a very significant and detailed list of questions.

[9] On February 10, 2016, the Defendants brought a motion to have the action dismissed. This motion was returnable on March 11, 2016. The Plaintiff’s counsel then provided some answers, but they were not satisfactory to the Defendants. As a result, there was an attendance before Edwards J. on April 22, 2016.

The Order of Edwards J.

[10] Ultimately, the parties consented to an Order of Edwards J. on April 22, 2016. This Order required the Plaintiff to deliver answers to all undertakings, written interrogatories, questions taken under advisement or refusals within eight days of the Order, failing which the action would be dismissed.

[11] The Order of Edwards J. also required that the Plaintiff pay costs to the Defendants in the sum of $1,500.00 within forty-five (45) days.

The Events since the Order of Edwards J.

[12] A response to the interrogatories and other questions were provided on May 3, 2016. In some cases, answers were provided. In other cases, the questions were challenged as overbroad and/or claims of privilege were made.

[13] Counsel for the Defendants viewed these answers as being incomplete and advised Mr. Laimon, counsel for the Plaintiff, of this fact. There was some back and forth correspondence between Mr. Laimon and Mr. Youd in June 2016.

[14] Mr. Youd advised that he viewed the responses to the undertakings and interrogatories as being insufficient, and that he would be bringing a motion to have the action dismissed. Mr. Laimon advised that he would be challenging this motion, and that he thought it would be a long motion. Mr. Laimon did not provide dates when he was available, although requested to do so. As a result, the Defendants booked this motion for July 29, 2016.

[15] Once the date was booked, Mr. Laimon requested an adjournment because of a scheduling conflict. The Defendants granted an adjournment to August 11, 2016 as long as materials were delivered by July 29, 2016.

[16] The Plaintiff did not deliver materials by this deadline. However, on August 5, 2016, Mr. Esterbauer wrote to Defendants’ counsel to advise that he had taken over carriage of the file on behalf of Mr. Laimon, and was seeking an adjournment. The motion was adjourned to November 15, 2016, and materials were to be provided by the Plaintiff by mid-September. It is clear from the materials that have been filed that, at some point in July or very early August 2016 Mr. Laimon reported this impending motion to LawPro.

[17] Materials were not provided by mid-September. However, on November 8, 2015, Mr. Esterbauer provided the cheque for the costs that had been ordered. Shortly thereafter, Mr. Esterbauer provided affidavits from the Plaintiff and from Mr. Laimon in response to the motion.

[18] At around the same time, the answers to Undertakings and Refusals were delivered by counsel for the Plaintiff, Mr. Esterbauer, and the costs were also paid. It is clear that none of the outstanding answers had been delivered prior to this time.

[19] The Defendants attended on the motion on November 15, 2016. At that time, Donohue J. ordered, on consent, an adjournment of the motion to January 26, 2017 peremptory to the Plaintiff, as well as directing cross-examinations of both Mr. Laimon and the Plaintiff.

[20] Those cross-examinations were held, and the matter returned before me on January 27, 2016.

Positions of the Parties

[21] The Defendant takes the position that this motion should be granted, and the claim dismissed, for the following reasons:

a) There has been considerable delay in moving this action forward on the part of the Plaintiff.

b) There was an agreement by way of a Consent Order, and that agreement should be enforced.

[22] In addition, Defendants’ counsel spent considerable time outlining the reasons why I should reject the Plaintiff’s arguments. I will return to those submissions below.

[23] The Plaintiff advanced a number of arguments in support of his position that this motion should be dismissed. The most significant of those arguments are:

a) The Courts generally favour determination of cases on the merits, and the discretionary remedy of a dismissal under Rule 60.12 is an extreme remedy and a last resort.

b) The breach of the Court order, which was not authorized by the Plaintiff, was as a result of the inadvertence of counsel.

c) Related to this second point is the Plaintiff’s assertion that he intends, and has always intended, to proceed with this matter.

d) The Plaintiff has now taken reasonable steps to comply with the Court Orders.

Analysis

[24] I will deal with each of the four arguments advanced by the Plaintiff in turn, which will allow me to address the arguments raised by the Defendants.

Determination of the Case on the Merits

[25] In my view, there are two competing considerations under this point. First, as the Plaintiff rightly points out, the Courts have a strong preference for determining matters on their merits, rather than dismissing them on procedural bases.

[26] As noted at paragraph 35 of Bell ExpressVu Limited Partnership v. Torroni et al., 2009 ONCA 85, 94 O.R. (3d) 614:

[34] The motion judge concluded that “no reason [was] shown why his defence should not be struck”. Respectfully, this approach transfers the onus on the motion to strike to the appellant. It was not for the appellant to demonstrate that he had a strong defence on the merits or to show why his defence should not be struck. It [page624] was for the respondents to do so. This flaw is significant given the grounds upon which the motion judge proceeded.

[35] It was open to the motion judge to consider striking the appellant’s defence based on his failure to pay the costs of the November 16 Orders and on his conduct in relation to those orders: rules 57.03(2) and 60.12(b). Striking out a defence is a severe remedy, however, and in my opinion ought generally not to be a remedy of first resort in circumstances such as this, without at least providing the defaulting defendant with an opportunity to cure the default. The appellant was afforded no such opportunity.

[27] In other words, the striking of a pleading on procedural grounds should not be used as a remedy of first resort. Indeed, the Courts have recognized that this is a draconian remedy that should only be used as a last resort (see, for example, the discussion in Dew Point Insulation Systems Ltd. V. JV Mechanical Limited, 2009 ONSCDC 71721, at paragraphs 35 and 36).

[28] In this case, it must be remembered that, when discoveries were ordered by Donahue J., the Plaintiff attended at them. It must also be remembered that the first time that any Order suggested a dismissal of this action was the Order of Edwards J. As a result, when I apply the principles set out above, it is clear that this case should not be dismissed at this stage.

[29] However, our Courts also have a strong belief that the agreements that parties make should be enforced. To that end, counsel points to the decision in Srajeldin v. Ramsumeer, 2015 ONSC 6697 (Div. Ct.), rev’g 2013 ONSC 6178 where Molloy J. stated:

[41] In my view, the motion judge also minimized the prejudice to the TTC, as well as the public policy issues involved. The TTC settled this action in good faith and should be entitled to rely upon it, rather than being drawn into litigation. The public policy concerns are even more pressing. Setting aside a settlement in circumstances where it was freely negotiated between two professionals would be highly unusual. To do so where there is no evidence of sharp practice or bad faith, no unequal bargaining power, and no suggestion that the settlement is unfair or improvident is, in my view, unprecedented. The only “injustice” to the plaintiff is that she must now litigate her claim against her former solicitor rather than the TTC. Given the very early stage of the litigation against the TTC, there is little to no prejudice in that regard.

[30] In my view, the case before me is distinguishable from Srajeldin on two grounds. First, the agreement in Srajeldin was a compromise of the entire merits of the case, and as Molloy J. noted (at paragraph 20) a contract was formed. In this case, the agreement was over a procedural issue, and incomplete compliance would not have been intended to result in the dismissal of the entire claim.

[31] Second, in considering the law in Srajeldin, the Court was considering the enforcement of an agreement to resolve the entire case. The Court was not considering an interlocutory order and, as a result, was not obligated to consider the case-law under Rule 60.12. In this case, in deciding whether to enforce the parties’ agreement to dismiss this action, I must consider the case-law under Rule 60.12 as that dismissal would flow from an interlocutory order. As discussed above, consideration of that case-law leads to the conclusion that this action should not be dismissed.

[32] Given the basis on which I have distinguished Srajeldin, I do not find it necessary to consider the questions (set out at paragraph 37 of Srajeldin) that a court will consider when deciding to set aside an agreement on the merits.

[33] The Defendants also argue that there is a clear risk of injustice if I do not grant a dismissal at this stage. I disagree. At this stage, virtually all of the provisions of the Order of Edwards J. have been complied with. In my view, the greater injustice would arise if the Plaintiff was denied the opportunity to have his claim determined on the merits.

[34] I also note that there was no evidence before me of any steps that the Defendants took to advance this action between 2008 and 2014. I am also not aware of any Court orders that the Plaintiff violated in this time period. In fact, the only Court order that he has violated has been the Order of Edwards J., and he has (as I discuss below) substantially complied with that Order.

[35] As a result, there is no prejudice that the Defendants will suffer (other than having to continue to defend this action) if this motion is dismissed. The Plaintiff will be clearly prejudiced by not being able to pursue his claim at all if this action is dismissed.

[36] Defendants’ counsel argues that the prejudice to the Plaintiff can be ameliorated because he will be able to sue Mr. Laimon as a result of the dismissal of the action. I turn to that issue now.

The Inadvertence of Counsel

[37] The Plaintiff has deposed that he did not instruct his counsel to agree on the order of Edwards J. in this matter. Counsel has acknowledged that he is not certain when he told the Plaintiff about the Order of Edwards J. It is clear that Mr. Laimon likely did not have instructions to agree to this Order.

[38] However, as Ms. Turnham pointed out, there was some disagreement between the Plaintiff and his counsel as to what was said about the completion of the undertakings, refusals and questions taken under advisement. Ms. Turnham asserts that this disagreement demonstrates that this was not a mere mistake on the part of the solicitor. In addition, she points out that the Plaintiff also gave evidence that, with respect to the Order of Edwards J., his lawyer was doing what had to be done.

[39] In support of her assertion that this was not mere negligence on Mr. Laimon’s part, Ms. Turnham relies on the line of cases flowing from Denis Theriault Lte. v. Giant Tiger, 2007 ONCA 695, 87 O.R. (3d) 660 (C.A.). In that case, the Court of Appeal found that the decision of the Registrar to dismiss the action for delay should not be set aside merely because of a claim of solicitor’s inadvertence.

[40] In Giant Tiger, the last lawyer for the Plaintiffs had failed to serve and file a notice of change of solicitors in 1998 because his assistant could not locate the previous solicitor for the purposes of service. The Defendants pressed the new solicitor for the Plaintiff for answers to undertakings and a proper trial record, but did not receive one.

[41] As a result, in March 1999, the Registrar dismissed the Plaintiff’s action. The Plaintiff’s counsel did not discover that the action had been dismissed until mid-June 2003. A motion to set aside the dismissal was not brought until December 2003.

[42] Giant Tiger is distinguishable from this case on three grounds, as follows:

a) The action had been dismissed, and the Court was considering whether to set aside the dismissal. There is no Order in this case dismissing the action. The test for dismissing an action is different than the test for setting aside a dismissal Order. In addition, the burden on this motion lies on the Defendants, whereas in Giant Tiger, the burden lay on the party trying to set aside the dismissal.

b) In Giant Tiger, the Plaintiff’s counsel had ignored the matter, and had not corresponded with the Defence counsel for a period of years. In this case, while the correspondence has been less frequent than it should have been, there has been correspondence and steps have been taken to move the action forward. In other words, in this case, the matter has not been ignored by the Plaintiff’s counsel.

c) In Giant Tiger, the action had been dismissed for almost five years before the Plaintiff sought to bring it back on. In this case, there was substantial compliance with the Order within a few months.

[43] As a result, the Giant Tiger line of cases does not assist the Defendants on this motion. At this stage in the proceedings, the action has not yet been dismissed. The factors that the Court must consider in deciding whether to dismiss an action are set out in the previous section, and the Defendants clearly have a different test to meet.

[44] Further, in Giant Tiger, the Court was of the view that the Plaintiff would have had a strong claim in negligence against counsel. In this case, having read the transcripts of the cross-examinations, it is not clear to me whether the Plaintiff would have a strong case in negligence as against Mr. Laimon. As a result, dismissing this action could be significantly prejudicial to the Plaintiff.

[45] I reject the Defendants arguments on this point.

The Plaintiff’s Intention to Proceed

[46] The record filed with the Court makes it clear that the Plaintiff was a difficult witness on his discovery, and was also difficult on cross-examination. In particular, I note that he used offensive and inappropriate language, and had difficulty in answering questions that were appropriately asked.

[47] The Plaintiff asserts that he suffers from Obsessive Compulsive Disorder (“OCD”). The Defendants rightly point out that there is no medical information whatsoever before the Court to support this assertion. As a result, I decline to consider it as a factor in determining this motion.

[48] This brings me back to the Plaintiff’s sworn statement that he was always intending to pursue this action. Given that this action has been going on for over eight years, and given that the Plaintiff and his counsel prioritized other work, I have some doubts about this statement. I can also understand why counsel for the Defendants also has doubts about this statement.

[49] However, I am prepared to give the Plaintiff the benefit of the doubt on this issue and accept, for the moment, that he is intending to prosecute this action. However, given the delays and difficulties in this case, the Defendants are entitled to more than the Plaintiff’s statement. They are entitled to a timetable that will bring this action to a speedy conclusion, and that cannot be varied by the Plaintiff without leave of the Court or consent of the Defendants.

The Plaintiff has Taken Reasonable Steps to Comply

[50] The Plaintiff argues that he has taken reasonable steps to comply with the Orders. While I agree with this submission, I also note two points of concern:

a) The “reasonable steps” that were taken to comply with the Order of Edwards J. were taken long after the deadline for those steps to be completed.

b) The Plaintiff does not seem to completely understand that the obligation to move this action forward, and to provide his counsel with instructions in a timely and meaningful way is his responsibility.

[51] As a result, although the Plaintiff has now taken reasonable steps to comply with the Order of Edwards J., this action should not be left to drift. Instead, the Plaintiff needs to be provided with specific directions as to the further steps that are required of him.

[52] As a final matter, I note that there was some indication that the Plaintiff had not complied with a couple of the undertakings and/or refusals at this point. Those matters are to be addressed as set out in the timetable below.

Disposition and Costs

[53] For the foregoing reasons, the Defendants’ motion is dismissed. However, as I have noted, terms are necessary to move this action along. Those terms are as follows:

a) An Order removing Mr. Laimon as counsel of record is to issue forthwith after release of these reasons. Counsel for Mr. Laimon will be responsible for ensuring that this Order is taken out.

b) The Plaintiff shall either have his lawyer (if he has retained one) serve and file a notice of change of solicitors, or serve and file a notice of intention to act in person within twenty-one (21) days of the date of this decision.

c) The Plaintiff shall respond to the few undertakings and refusals that remain outstanding within forty-five (45) days of the date of this decision.

d) In the event that the Defendants find the Plaintiff’s response unsatisfactory, they are to bring a motion within four (4) weeks of receiving the responses in paragraph (c), and the motion must be returnable within eight (8) weeks of the receipt of the responses.

e) The Plaintiff is to set this matter down for trial within ninety (90) days of this endorsement, and a pre-trial date is to be agreed to at or prior to the first assignment court date.

f) For clarity, the Plaintiff is not permitted to conduct discovery.

[54] I want to be clear about the time requirements in the timetable I have set out above. This is now a “last chance” for the Plaintiff (and his new counsel) to proceed with this action. As a result, it is my expectation that this timetable will be strictly adhered to. Any changes to this timetable require the prior approval of the Court or consent of the Defendants. A failure of the Plaintiff to adhere to the terms above shall entitle the Defendants to seek the dismissal of the Plaintiff’s actions on notice.

[55] This brings me to the question of costs. The Plaintiff shall provide its costs submissions, not to exceed two (2) single-spaced pages exclusive of bills of cost, case law and offers to settle within fourteen (14) days of the release of these reasons.

[56] The Defendants shall provide their costs submissions, not to exceed two (2) single-spaced pages exclusive of bills of cost, case law and offers to settle within fourteen (14) days of receiving the Plaintiff’s costs submissions.

[57] There shall be no reply submissions on costs without my leave.

Lemay J Released: March 1, 2017