Court File and Parties
Court file no.: CV-06-316456 Date: 2017/01/03
SUPERIOR COURT OF JUSTICE - ONTARIO
Short Title: Szpakowsky v. Tenenbaum et al.
Heard by: Master Graham Event date: October 19, 2016
Counsel: K. Dixon, agent for plaintiff’s counsel D. Fenig for the defendants H. Tenenbaum et al. S. Gosnell for the defendant Callaghan A. Powell for the defendant S. Tenenbaum K. Nusbaum for the defendants Nemesis Security and Dneipper B. Jones for the defendant A. Menzies
Reasons for Decision
(Defendants’ motions to dismiss for delay)
[1] The plaintiff Lidia Szpakowsky claims damages for losses arising from her ex-husband Robert Kramar’s allegedly fraudulent conduct in relation to over-leveraging investment properties, one of which was the couple’s matrimonial home. The plaintiff acknowledges that the subject transactions “occurred roughly between 1996 and 2001”. The defendant Kramar has been noted in default but the plaintiff also alleges that various other defendants, including several lawyers, contributed to her losses through negligent or intentional conduct.
[2] A detailed chronology of the action since it was commenced in 2006 is set out below. The more immediate background to the motions now before the court is that on May 20, 2014, the defendants brought motions to dismiss the action for delay, on which date the plaintiff’s counsel consented to an order of Master Hawkins. That order required that the plaintiff answer her undertakings from her last examination for discovery, re-attend to be examined in relation to those answers, waive any rights to conduct examinations of the defendants, undertake not to file any expert reports beyond that already served and set the action down for trial on or before August 30, 2014 (paragraph 5). Most significantly, Master Hawkins’ order contained the following term:
“7. THIS COURT ORDERS that in the event that the Plaintiff Lidia Yvonne Szpakowsky fails to comply with paragraphs 1, 2 or 5 of this Order, the Moving Parties or any of them shall be entitled to move before the Court, for the Dismissal of this action without costs. Opposition by the Plaintiff to the said motion shall be strictly limited to a denial of her failure to comply with the terms of this Consent and order made pursuant thereto .” [emphasis added]
[3] The action has still not been set down for trial. The defendants now move to dismiss the action for breach of Master Hawkins’ order and to dismiss the action for delay.
Motion to dismiss for breach of Master Hawkins’ order
[4] These motions are brought pursuant to rule 60.12:
60.12 Where a party fails to comply with an interlocutory order, the court may in addition to any other sanction provided by these rules, (a) stay the party’s proceeding; (b) dismiss the party’s proceeding or strike out the party’s defence; or (c) make such other order as is just.
[5] The defendants submit that as the plaintiff cannot deny that she failed to comply with the term of the Order requiring that she set the action down for trial by the August 30, 2014 deadline, there is no basis on which she can oppose the motion.
[6] The first issue is whether the plaintiff is bound by the terms of Master Hawkins’ order such that her opposition to the motion is limited to the sole issue that that order allows her to raise. In this regard, the defendants rely on Yan v. Chen, 2014 ONSC 3111 at paragraph 84:
“84 The law regarding the review of consent orders is well-established. The basis of consent orders was described recently by the Court of Appeal in Ruffudeen-Coutts v. Coutts :
[C]onsent orders have their foundation in contract. It follows that they may be appealed on the basis that the circumstances surrounding the consent were such that there was no enforceable agreement. This engages standard contract principles . . .
It follows that in cases where the issue relates to the validity of consent, leave to appeal should not be granted unless the evidence before the court on the leave application demonstrates that there is an arguable case that, at the time the agreement that formed the basis of the consent order was entered into, the moving party could not or did not consent. Such evidence may relate to factors that may undermine the enforceability of contracts, such as fraud, duress, or undue influence.
[7] In Larizza v. Scrivo, 2013 ONSC 7929, Price J. quotes with approval the decision of the Court of Appeal in Scherer v. Paletta, 1966 CarswellOnt 119, at paragraph 23:
“ 23 Where a principal gives an agent general authority to conduct any business on his behalf, he is bound as regards third persons by every act done by the agent which is incidental to the ordinary course of such business or which falls within the apparent scope of the agent’s authority. As between principal and agent, the authority may be limited by agreement or special instructions but as regards third parties, the authority which the agent has is that which he is reasonably believed to have, having regard to all the circumstances, and which is reasonably to be gathered from the nature of his employment and duties . . .
A solicitor whose retainer is established in the particular proceedings may bind his client by a compromise of these proceedings unless his client has limited his authority and the opposing side has knowledge of the limitation , subject always to the discretionary power of the court, if its intervention by the making of an order is required, to inquire into the circumstances and grant or withhold its intervention if it sees fit; and, subject also to the disability of the client.”
[8] In this case, it was the plaintiff’s lawyer Mr. Langevin who consented to the order on behalf of the plaintiff. The plaintiff does not argue in this case that her lawyer did not have authority to do this. Further, there is no issue of fraud, duress or undue influence.
[9] In paragraph 25 of Larizza, supra, Price J. also considers a number of factors in exercising his discretion as to whether to enforce an agreement made by counsel for a party. These factors are:
(1) Were the terms of the consent improvident or unconscionable? (2) Was there inequality of bargaining power? (3) Did either party act in bad faith? (4) Is there evidence that the lawyer acted without authority? (5) Are the terms of the consent or the ensuing order sufficiently clear as to avoid further litigation? (6) Do the terms of the consent or consent order arise from the issues on the proceeding before the court (in this case, the original motions to dismiss for delay)? (7) Could counsel have sought instructions if necessary? (8) What steps, if any, did the party take on learning of the order consented to by her counsel?
[10] The court in Larizza also considers the circumstances in which a court could decline to uphold or enforce a consent order. Price J. states further, at paragraph 30:
“30 A settlement will generally be enforced unless it will result in a real risk of injustice, but one should not be enforced where injustice is likely to ensue. In Brzozowski v. O’Leary, (2004), Misener J., after reviewing the jurisprudence, stated:
Those judgments emphasize the judicial obligation to consider all of the circumstances of the case at hand, and to then decide whether it is fair to enforce the settlement. Although I risk unduly limiting my discretion by saying so, I think the right approach is to consider that a settlement effected pursuant to Rule 49 ought to be enforced, and so judgment ought to be granted, unless the offeror satisfies the judge that, in all the circumstances, enforcement would create a real risk of a clear injustice. It seems to me that that approach is required because it is good public policy to encourage settlement, and it would be quite inconsistent with that policy to decline enforcement unless a good reason for doing so is shown.
[11] In addressing the issue of whether the defendants’ motion succeeds based on paragraph 7 of Master Hawkins’ order the court must first consider the factors in paragraph 25 of Larizza, to determine whether the plaintiff’s lawyer made a binding agreement. If the court concludes that there was a binding agreement, it must then consider whether, as stated in paragraph 30 of Larizza, “enforcement would create a real risk of a clear injustice” such that the consent order should not be enforced.
[12] My review of the evidence with respect to each of the factors from Larizza is as follows:
(1) Were the terms of the consent improvident or unconscionable? The terms of the consent essentially consisted of a series of deadlines for the plaintiff to answer undertakings, attend for a further examination for discovery and set the action down for trial. In addition, the plaintiff waived her rights to conduct examinations for discovery of the defendants and to deliver any more expert reports. The motions to dismiss returnable at that time were dismissed without costs and in the event of non-compliance by the plaintiff, the defendants could move for a dismissal without costs and the plaintiff’s opposition to any such motion would be limited to a denial of a failure to comply.
The deadlines in the order are the sort of terms that one would expect in an order embodying the settlement of a dismissal motion. The waiver of the plaintiff’s rights to conduct examinations for discovery and to deliver any more expert reports would plausibly have been sought by the defendants with a view to avoiding any further delays in the action, which was reasonable given that even in 2014 the action was eight years old. Similarly, given the age of the action, the waiver by the defendants of their costs of the motion was a valuable concession from the plaintiff’s standpoint.
The plaintiff submits that the term limiting the plaintiff’s opposition to this motion to dismiss for delay to arguing that she did comply with the order is unrealistic because the action has either been set down or it has not. Further, such a term deprives the plaintiff from arguing any extenuating circumstances that might have impeded the setting down of the action.
I accept that the term is onerous; however, it is not unconscionable.
(2) Was there inequality of bargaining power? Although the defendants were in a strong position on the motion on which Master Hawkins made the consent order, any litigation advantage to them in negotiating from that position did not constitute inequality of bargaining power.
(3) Did either party act in bad faith? There is no evidence of bad faith on the part of either party. Given the lengthy delay of eight years between the inception of the action in 2006 and the motion in 2014, it was reasonable for the defendants to seek terms of the order that would result in the matter proceeding to trial expeditiously.
(4) Is there evidence that the lawyer acted without authority? Counsel on the motion acknowledges that there is no evidence that the plaintiff’s lawyer Mr. Langevin acted without authority in consenting to the order.
(5) Are the terms of the consent or the ensuing order sufficiently clear as to avoid further litigation? There is no submission from the plaintiff that the terms of the order are in any way ambiguous or that they did not completely resolve the previous dismissal motion.
(6) Do the terms of the consent or consent order arise from the issues on the proceeding before the court (in this case, the original motions to dismiss for delay)? The order of Master Hawkins directly arises from the original motions to dismiss the action for delay.
(7) Could counsel have sought instructions if necessary? Mr. Langevin was aware of most of the terms sought by the defendants by way of Mr. Birken’s letter of May 8, 2014 proposing a resolution of the motion, although the terms in that letter did not include the limitation on the plaintiff’s ability to respond to a further dismissal motion in the event that the defendants brought such a motion. In any event, there was nothing preventing Mr. Langevin from seeking instructions with respect to the terms of the order prior to Master Hawkins signing the order on May 20, 2016.
(8) What steps, if any, did the party take on learning of the order consented to by her counsel? Although there is some inconsistency in the evidence as to when the plaintiff herself learned of Master Hawkins’ order, she did acknowledge on her cross-examination that in August of 2014 her counsel Mr. Langevin informed her “In order for your claim not to be dismissed, you have to do two of the following things. One, is to waive your right to discoveries and two, to agree to be placed on the trial list by August 30 th of 2014”. The plaintiff was therefore aware before August 30, 2014 of the existence of that deadline. The plaintiff’s evidence, also from her cross-examination, is that she did not learn that these terms were the subject of a court order until June of 2015 when she found in her lawyer’s file the letter dated May 8, 2014 from Mr. Birken indicating that the defendants’ counsel were proposing a resolution of the pending dismissal motion.
To address the specific issue raised by this factor from Larizza, at no time after first learning of these terms or subsequently learning that they were embodied in an order did the plaintiff instruct her counsel to seek an extension of time as a remedy for her non-compliance.
[13] Based on my review of these factors, the plaintiff’s lawyer Mr. Langevin had authority to negotiate and enter into the consent order and could have sought instructions had he chosen to. There is no reason not to treat it as a binding consent order.
[14] The second issue arising from Master Hawkins’ order is whether in all the circumstances, enforcement of the order would create a real risk of a clear injustice to the plaintiff (see Larizza, paragraph 30 supra).
[15] Plaintiff’s counsel on this motion submits that the plaintiff should be relieved from the consequences of paragraph 7 of Master Hawkins’ order because her counsel in the action failed to keep her fully informed about the status of her action, particularly in relation to the delay in having it set down for trial. In addition, the plaintiff was unaware of the fact that Master Hawkins had made his order until June, 2015, although she was aware of some of the substance of that order in August, 2014. The plaintiff appears never to have been aware of the limitation in responding to a further motion to dismiss set out in paragraph 7 of the order.
[16] The main concern with respect to enforcement of paragraph 7 of Master Hawkins’ order is that neither the delay leading to Master Hawkins’ order nor the failure to comply with that order was in any way the fault of the plaintiff. She reasonably relied on her counsel to meet the required deadline and to comply with any court orders but her counsel failed to do so. In these circumstances, to dismiss the plaintiff’s action as a result of her counsel’s failure to protect her claim would be “a clear injustice to the plaintiff”. This is even more the case where there was partial compliance with Master Hawkins’ order to the extent that the plaintiff answered her undertakings by June 30, 2014, attended for a further examination for discovery on July 15, 2014 and provided answers to the further undertakings on August 11, 2014. Accordingly, I decline to enforce paragraph 7 of Master Hawkins’ order or to dismiss the action on the basis of the plaintiff’s breach of that order.
Motion to dismiss for delay
[17] The next issue is whether, irrespective of the contents of Master Hawkins’ order, the plaintiff’s action should be dismissed for delay.
[18] The moving defendants bring this motion under rule 24.01(1)(c):
24.01(1) A defendant who is not in default under these rules or an order of the court may move to have an action dismissed for delay where the plaintiff has failed, . . . (c) to set the action down for trial within six months after the close of pleadings; . . .
[19] The case law with respect to dismissal for delay is as follows:
(1) To dismiss an action for delay, the court must be satisfied that the plaintiff’s default has been intentional and contumelious, or that there has been inordinate and inexcusable delay for which the plaintiff or his lawyers are responsible resulting in a substantial risk that a fair trial will not be possible. (Armstrong v. McCall, 2006 ONCA 440, [2006] O.J. No. 2055 (C.A.), Langenecker v. Sauve, 2011 ONCA 803, [2011] O.J. No. 5777 (C.A.), Francis v. Peel (Regional Municipality) Police, [2015] O.J. No. 5001 (SCJ))
(2) A dismissal on the basis of intentional and contumelious delay would be warranted in cases “in which the delay is caused by the intentional conduct of the plaintiff or his counsel that demonstrates a disdain or disrespect for the court process.” (Langenecker, supra, para. 6)
(3) The plaintiff is responsible for moving the action along. (Wallace v. Crate’s Marine Sales Ltd., 2014 ONCA 671, [2014] O.J. No. 4606 (C.A.) at para. 18)
(4) Any delay in the prosecution of an action requires an explanation. The onus rests with the plaintiff to show that the delay was not intentional. In the absence of an explanation from the plaintiff for the delay, it is to be presumed that the delay was intentional. (Berg v. Robbins, [2009] O.J. No. 6169 (Div. Ct.) at para. 13)
The onus is on the plaintiff to rebut the presumption of prejudice arising from the unexplained delay by showing that documents have been preserved, and that the issues in dispute do not require the recollection of witnesses, or that necessary witnesses are available with detailed recollection of events. (Berg, para. 14)
(5) The requirement that the delay be “inexcusable” requires a determination of the reasons for the delay and an assessment of whether those reasons afford an adequate explanation for the delay. . . . [E]xplanations that are “reasonable and cogent” or “sensible and persuasive” will excuse the delay at least to the extent that an order dismissing the action would be inappropriate.
In assessing the explanations offered, the court will consider not only the credibility of those explanations and the explanations offered for individual parts of the delay, but also the overall delay and the effect of the explanations considered as a whole. (Langenecker, supra at paragraphs 9 and 10)
(6) An inordinate delay after the cause of action arose or after the passage of a limitation period gives rise to a presumption of prejudice in which case the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebuts the presumption. The plaintiff’s onus is to persuade the court with convincing evidence that there is no substantial risk that a fair trial is not possible. (Armstrong, supra and Woodheath Developments Ltd. v. Goldman, [2003] O.J. No. 3440)
(7) Courts may dismiss actions for delay even when the relevant rules do not mandate it. A court has inherent jurisdiction to control its own process, which includes the discretionary power to dismiss an action for delay. The power of a superior court to dismiss an action for delay is not limited to that conferred by any specific Rules of Civil Procedure, but also flows from the inherent power of the court to prevent an abuse of its own process. (Marché D’Alimentation Denis Thériault v. Giant Tiger Stores Ltd., 2007 ONCA 695 at paragraph 24, Wallace, supra at para. 21)
As stated in Wallace at para. 22 “There comes a time, in short, 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.”
[20] The chronology of the action prior to August 30, 2014, being the deadline in Master Hawkins’ order, is as follows:
August 8, 2006: Statement of claim issued August 27 and 30, 2007: Examination for discovery of the plaintiff 2007: The action was discontinued against various defendants February 5, 2008: Death of the plaintiff Victor Barrese December, 2009: Order to Continue obtained with respect to the claim of the plaintiff Barrese May, 2010: The estate trustees for the Barrese estate discontinued the estate’s action. October 17, 2011: The plaintiff answered her undertaking to provide a damages brief August 20, 2012: Further examination for discovery of the plaintiff September 10, 2012: The continuation of the plaintiff’s further examination for discovery did not proceed because it was cancelled by her counsel. November 16, 2012 - March 11, 2013: Defendants’ counsel sent various correspondence to plaintiff’s counsel to determine the plaintiff’s intentions. October 22, 2013: Counsel for the Harvey Tenenbaum defendants advised of their intention to bring a motion to dismiss the action for delay. February, 2014: The defendants served material for the motion returnable May 20, 2014. May 20, 2014: Master Hawkins’ consent order setting a timetable for further steps and a deadline of August 30, 2014 to set the action down June 30, 2014: The plaintiff provided answers to her outstanding undertakings. July 15, 2014: The plaintiff attended for a further examination for discovery. August 11, 2014: The plaintiff answered her undertakings given at the further examination. August, 2014: An associate lawyer at the office of plaintiff’s counsel made efforts to prepare and serve the trial record.
[21] The chronology of the action subsequent to August 30, 2014 is as follows:
September 8, 2014: The plaintiff’s counsel served the trial record. October 7, 2014: Plaintiff’s counsel was informed by his process server that the trial record could not be filed because the plaintiff needed to discontinue the action against several defendants who had not responded to it and the statement of defence and crossclaim of the Harvey Tenenbaum defendants, although served, had not been filed with the court. November 27, 2014: Counsel for the plaintiff informed the Tenenbaum defendants’ counsel that those defendants’ statement of defence and crossclaims had never been filed with the court and requested that counsel do so. December 4 and 5, 2014: Counsel for the Tenebaum defendants advised plaintiff’s counsel that he could not file his pleadings because the court record indicated that the plaintiff’s action had been dismissed as against all defendants. December 4, 2014 - January 14, 2015: Counsel for various defendants sent reminders to the plaintiff’s counsel that he had not complied with Master Hawkins’ order. June 8, 2015: The defendants served notices of motion for this motion to dismiss for delay. August 12, 2015: The defendants’ motions to dismiss for delay first came before me and the plaintiff concurrently brought a motion to set aside the administrative dismissal of the action. At this time, I informed counsel that the court’s case history did not indicate that the action had been administratively dismissed, thus rendering unnecessary any motion to set aside a dismissal. I also granted the plaintiff’s request to adjourn the defendants’ motions so that her counsel Mr. Langevin could inform LawPro of the motions and I ordered that counsel contact the court staff to schedule a case conference to arrange a new date for the motions. September 16, 2015: The plaintiff served a trial record but could not file it because no mediator’s report had been filed and no mediation had been scheduled. September 17, 2015: The Tenebaum defendants’ counsel provided a draft order to all counsel to enable them to file their pleading. November 19, 2015: The plaintiff provided her approval to the form and content of this order. February 18, 2016: At a telephone case conference to schedule a special appointment for the defendants’ motions, Mr. Langevin informed the court that he had not reported the matter to LawPro and advised that he needed to see the defendants’ new material before doing so. I ordered that Mr. Langevin inform LawPro of the motion within 15 days, scheduled the motion to proceed before me on July 26, 2016 and set a timetable. July 7, 2016: Associate counsel for the plaintiff informed the court that Mr. Langevin had suffered a stroke which would prevent him from arguing the motion on July 26, 2016. Counsel for the defendants indicated that they did not oppose the required adjournment. July 26, 2016: At a further telephone case conference, I adjourned the motion to October 19, 2016. After hearing submissions, I also set a date of September 6, 2016 for the plaintiff to bring a motion for leave to file responding evidence on the defendants’ motions. September 6, 2016: On consent of the parties, I set a further timetable for the delivery of further materials for the October 19, 2016 motion and for cross-examinations.
[22] The first issue is whether the plaintiff’s default or delay in the matter has been intentional and contumelious. The term “contumelious” essentially means “abusive” and the objective of this requirement is that a delay that amounts to an abuse of the court’s process will result in the loss of the plaintiff’s right to proceed with her action.
[23] Counsel for the Tenebaum defendants submits that the plaintiff’s conduct amounts to a wilful breach of Master Hawkins’s order and as such is sufficient to constitute contumelious delay. In this regard, I accept the plaintiff’s submission that her personal conduct was in no way obstructive or tantamount to an abuse of the court’s process and she herself did not play any role with respect to the delay. Similarly, although her counsel should have advanced the action more expeditiously, there is no evidence to suggest or infer that he intended to delay the matter or to gain any advantage from the delay. The defendants relied on another case in which Ms. Szpakowsky was plaintiff that was dismissed for delay, but the fact of that dismissal and that costs were awarded against Ms. Szpakowsky in other litigation are not appropriately factors to be considered on this motion. There has no doubt been delay in this action, but it does not amount to intentional and contumelious delay.
[24] The second issue is whether there has been inordinate and inexcusable delay resulting in a substantial risk that a fair trial will not be possible. The court must consider the length of the delay, the reasons for the delay and whether the delay has resulted in prejudice to the defendants.
[25] The Harvey Tenenbaum defendants submit that the plaintiff has not provided a reasonable explanation for the five year delay between August, 2007 and August, 2012 for the completion of her examination for discovery. During this time, plaintiff’s counsel expressed the intention to amend the statement of claim but failed to do so and also delayed in answering the undertakings. The continued examination for discovery, scheduled to proceed in the fall of 2011, did not proceed because the plaintiff retained a new accountant to provide an opinion with respect to her damages. The continued examination of the plaintiff was commenced on August 20, 2012 but the completion of the examination was further delayed when plaintiff’s counsel cancelled the further examination scheduled to proceed on September 10, 2012. Plaintiff’s counsel then failed to respond to correspondence from defendants’ counsel dated November 16, 2012, January 10, 2013 and March 11, 2013. Plaintiff’s counsel took no further steps before October 22, 2013 when the defendants’ counsel stated that he would bring a motion to dismiss for delay or before February, 2014 when he served the motion record for the motion returnable May 20, 2014.
[26] The Harvey Tenenbaum defendants acknowledge that subsequent to Master Hawkins’ order of May 20, 2014, the plaintiff did comply with its terms requiring answers to undertakings and a further examination for discovery. As stated above, the plaintiff did not meet the deadline for setting the action down and these defendants submit that she made no effort to do so until almost three months after it expired despite communication from the defendants’ counsel. The action was still not set down for trial when counsel served the notices of motion for this motion on June 8, 2015.
[27] A further instance of unexplained delay on the part of the plaintiff is that after counsel for the Tenebaum defendants informed plaintiff’s counsel in early December, 2014 that the action had been dismissed (based on incorrect information from the court), plaintiff’s counsel did nothing to remedy that apparent state of affairs because he was too busy to attend at the Toronto court office between December, 2014 and July, 2015. Plaintiff’s counsel ultimately acknowledged that he should have taken steps to either set the dismissal aside, should that have been necessary, or rectify the court record to properly reflect the status of the action. The plaintiff’s first pro-active step in this regard was to serve the motion record returnable August 12, 2015, the same date as the defendants’ motions now before me were first returnable, to set aside the dismissal order.
[28] The Tenebaum defendants submit that there was further delay by plaintiff’s counsel after the parties’ first appearance on these motions on August 12, 2015. On September 17, 2015, the Tenebaum defendants’ counsel provided a draft order to all counsel to enable them to file their pleading and the plaintiff failed to provide her approval to the form and content of this order until November 19, 2015. Further, although the plaintiff’s adjournment request on August 12, 2015 was granted so that plaintiff’s counsel could report the matter to LawPro, he had still not done so by the time of the February 18, 2016 case conference.
[29] With respect to the issue of prejudice, counsel for the Harvey Tenenbaum defendants relies on the fact that the mortgage loan transactions that are the subject of the claims against them took place 16-19 years ago, between June 1997 and April 2000 and submits that this lengthy passage of time creates a strong presumption of prejudice. (The plaintiff acknowledges in her factum that the subject transactions and events “occurred roughly between 1996 and 2001”, which would be between 15 and 20 years ago.) The Harvey Tenenbaum defendants also submit that the quality of the oral evidence required to substantiate the allegations by the plaintiff of collusion between the defendant Kramar and the defendant Tenenbaum is significantly compromised by a delay of this length.
[30] The defendant Callaghan, in addition to relying on the submissions of the Harvey Tenenbaum defendants, submits that, contrary to the plaintiff’s assertions that she had little or no knowledge of the delays in the action, she did have personal knowledge of much of the delay. In this regard, this defendant submits as follows:
- At her August 27, 2007 discovery, the plaintiff undertook to provide her damages calculation within 90 days; she did not provide a damages brief until October 17, 2011, more than four years later.
- The plaintiff’s factum purports to explain her delay in the matter on the basis of the death of the former plaintiff Barrese. The defendant Callaghan submits that the plaintiff Szpakowsky has acknowledged that Barrese’s claims were separate from her own, so his death should not have affected her ability to advance her own claims.
- The plaintiff asserts that she has no responsibility for her lawyer’s failure to report himself to LawPro. The defendant Callaghan submits that she was present on August 12, 2015 when her counsel sought an adjournment to report the matter to LawPro and she participated in the conference call on February 18, 2016 when he was ordered to do so.
- The plaintiff asserts that none of the parties considered the need to schedule a mediation when consenting to Master Hawkins’ order. The defendant Callaghan submits that the plaintiff could still have taken steps to schedule the mediation between the date of the order of May 20, 2014 and the deadline of August 30, 2014.
[31] On the issue of whether the delay in the matter means that a fair trial is no longer possible, the defendant Callaghan submits that the allegation that one of the properties that is the subject of the claim was a matrimonial home will require the evidence of many fact witnesses, the quality of which is reduced by the significant passage of time.
[32] In response to the motion, the plaintiff has filed affidavits from herself and from her counsel Mr. Langevin.
[33] In her own affidavit, Ms. Szpakowsky acknowledges that “this is a long-standing matter”, having been commenced in 2006. With respect to the issue of delay, she also deposes that, based on information from Mr. Langevin, the delay is due to the normal challenges in an action that involves a rich factual matrix, as well as several untimely developments, many of which were well out of the control of his firm, and definitely outside of her control. She also states that she was not consulted or fully informed with respect to many decisions in the litigation. Further, she deposes that “it has been and remains my intention to pursue this action”, “I have been and remain engaged in this litigation” and “[i]n no way did I create this delay”.
[34] With respect to the issue of whether there would be prejudice to the defendants if the matter were permitted to proceed to trial, Ms. Szpakowsky deposes only that “I believe that should my action be continued, it will not result in prejudice to the defendants such to [sic] prevent a fair trial of the action on its merits. If there would be any prejudice to the defendants should this matter be continued, it would be significantly outweighed by the prejudice to myself if my action is dismissed.”
[35] Mr. Langevin acknowledges in his affidavit that Ms. Szpakowsky did not contribute to the delays in the litigation, having made herself available for examinations and tracking down documentation required to fulfill her undertakings. He confirms that it has been and remains Ms. Szpakowsky’s intention to pursue the action, and further that “she has been and remains engaged in this litigation, her approach to the litigation has been zealous” and “the delay in bringing this matter forward to trial cannot be attributed to her”.
[36] Mr. Langevin has provided evidence to attempt to explain the delay in the action. He acknowledges that “this is a long-standing matter” in which he has “encountered obstacles in pushing this matter forward”. He refers to the death of one plaintiff (the plaintiff Barrese) and to untimely procedural ‘holdups’. He recognizes “some procedural lapses” during his firm’s carriage of the matter, which he attributes to his busy and varied practice as well as to strategy and instances of misapprehension as to circumstances or inadvertence as to timelines.
[37] Essentially, Mr. Langevin submits that the complexity of the transactions giving rise to the action required that numerous defendants be named and that time be spent during the first two years of the action considering the “complicated web of transactions” in order to narrow the number of defendants. As a result, in 2007, the action was discontinued against two individual defendants and two corporate defendants.
[38] Following the death of Mr. Barrese on February 5, 2008, Mr. Langevin attempted to get instructions from the representatives of his estate with respect to his claims. He refers to “challenges” in this regard such that the order to continue was not obtained until December 2009 but these challenges essentially seem to consist of attempts to delegate the work to associate lawyers in his office. In any event, as indicated, it was acknowledged by Ms. Szpakowsky that her claims were separate from those of Mr. Barrese. Further, Mr. Barrese’s claims were discontinued in May, 2010 and there is no evidence of any previous efforts to advance those claims on the merits or of why Mr. Barrese’s death prevented Mr. Langevin from prosecuting Ms. Szpakowsky’s claims.
[39] Mr. Langevin acknowledges the examination of Ms. Szpakowsky first proceeding on August 27 and 30, 2007 and then states that “there was a break in time before the next examination of our client during a period of when I had considered the necessity of amending our client’s statement of claim”. He also “began to analyze the necessity of expert opinions” with respect to the issues of liability and damages in the action. With respect to the damages issues, he deposes that he required time during 2008 through 2010 to consult with appraisers and accountants. He has no correspondence in this regard and explains that most of his enquiries were by telephone. Further, the expert whom he did retain, Mr. Quigley, was very busy which delayed the preparation and service of his report. Also, the plaintiff had limited resources which made it necessary for counsel to pursue the claim as parsimoniously as he could.
[40] Mr. Langevin attributes the delay in the plaintiff answering her undertakings and completing her examination for discovery to his challenges in consulting an expert.
[41] The balance of Mr. Langevin’s affidavit relates to the events leading to Master Hawkins’ order of May 20, 2014 and the course of the action since then. He comments that in consenting to that order, none of the parties considered the fact that mediation had not occurred. (Although Mr. Langevin suggests that the completion of mediation was necessary to enable the plaintiff to set the action down, the required step is actually the scheduling of mediation.)
[42] Mr. Langevin also refers to the fact that the incomplete filing of pleadings by the defendants was an obstacle to him setting the action down. When efforts were made in late August and early September, 2014 to set the action down, his firm learned that the action needed to be discontinued against several defendants who had not responded to the action and also that the statement of defence and crossclaims of the Harvey Tenenbaum defendants had not been filed. On December 4, 2014, Mr. Langevin was informed by Mr. Birken (counsel for Harvey Tenenbaum) that he could not file his pleadings because the court appeared to have dismissed the action.
[43] Following the service by the defendants on June 8, 2015 of the notices of motion for this motion, on August 5, 2015, Mr. Langevin served a motion record containing a notice of motion to set aside what he believed was the administrative dismissal of the action. As I informed counsel when they first appeared before me on August 12, 2015, the case history did not reflect a dismissal for delay so the plaintiff’s motion was not necessary. At Mr. Langevin’s request, I did adjourn the defendants’ motions because he informed me that the plaintiff had instructed him to report the matter to LawPro.
[44] Subsequent to the attendance on August 12, 2015, Mr. Langevin did not contact LawPro but instead wrote to defence counsel to ask their clients to consider abandoning their dismissal for delay motions. He acknowledges receiving Mr. Birken’s draft order to allow him to file his clients’ pleadings and providing his consent on November 19, 2015 “after a busy period of time in my practice”.
[45] On February 18, 2016, I rescheduled the motion to proceed on July 26, 2016. Despite my further order that Mr. Langevin report the matter to LawPro within 15 days, he failed to do so. He provides no explanation for this failure.
[46] Mr. Langevin suffered a stroke on June 30, 2016 which resulted in an adjournment of the hearing that had been re-scheduled to proceed on July 26, 2016. At the July 26, 2016 case conference, I also allowed the plaintiff to bring a motion on September 6, 2016 for leave to file further materials on the motion. Mr. Langevin baldly states that he had never filed any materials previously owing to “inadvertence”.
[47] With respect to the issue of prejudice, Mr. Langevin deposes: “I am aware of no specific prejudice to the defendants that would turn the balance in their favour on this motion. It’s true that memories fade, but as to the key aspects of these transactions I do not accept that matters have been forgotten, and in view of the extensive documentary record, a fair trial is not in jeopardy”.
Analysis and Decision
[48] Between the issuing of the statement of claim on August 8, 2006 and the arguing of the motion on October 19, 2016 is a period of 10 years. The first issue is whether any of the delay during this period was inordinate and inexcusable.
[49] Given the initial number of defendants and the inevitable delays with service and the delivery of affidavits of documents, the initial period of one year before the examinations for discovery of the plaintiff on August 27 and 30, 2007 is not inordinate. However, the delay of five years between those examinations and the plaintiff’s next examination on August 20, 2012 is inordinate. I accept that the death of the plaintiff Victor Barrese is an event that would require plaintiff’s counsel to take certain steps but, as the claims of the plaintiff Szpakowsky were separate from Barrese’s claims, there is no reason that Barrese’s death should have been an impediment to advancing Szpakowsky’s claims.
[50] Further, the fact that following the first examinations for discovery, plaintiff’s counsel considered amending the statement of claim would not justify any significant delay, particularly where the claim was never amended. Consultation with experts does take some time but any such consultation should realistically take a period of months, not years. Giving the plaintiff and her counsel every benefit of the doubt, the delay between the first and second examinations should not have been more than two years. Accordingly, prior to August, 2012 there are 3 years of inexcusable delay.
[51] The action was further delayed when plaintiff’s counsel cancelled the plaintiff’s examination scheduled to proceed on September 10, 2012. There is no evidence explaining this cancellation. Plaintiff’s counsel essentially did nothing subsequent to the examination of August 20, 2012 until the motion before Master Hawkins on May 20, 2014, despite various correspondence from counsel for various defendants to ascertain his intentions. This period amounts to another 1 year and 9 months of inexcusable delay.
[52] The plaintiff did partially comply with Master Hawkins’ order by answering undertakings and attending for a further examination for discovery. The initial delay subsequent to August 30, 2014 was attributable at least in part to the fact that the Harvey Tenenbaum statement of defence had not been filed and to misinformation provided by the court that the action had been dismissed for delay. However, once Tenenbaum’s counsel informed Mr. Langevin in December, 2014 that the court record indicated that the plaintiff’s action had been dismissed, it was incumbent on Mr. Langevin verify this and if so to bring the appropriate motion. Instead, Mr. Langevin did nothing until after June 8, 2015 when the defendants served the notices of motion for this motion. Mr. Langevin’s statement that he was prevented from addressing the obstacles to setting the action down by his inability to travel from Ottawa to Toronto between December, 2014 and July, 2015 to review the court file personally is not a “reasonable and cogent” explanation. This delay constitutes a further 6 months of unexplained delay.
[53] The fact that Master Hawkins’ order did not provide for the scheduling of mediation does not make the defendants in any way complicit in the delay. As soon as the plaintiff realized that the failure to schedule mediation was an impediment to setting the action down, it was incumbent on her to seek an extension of the deadline in that order.
[54] After the first appearance before me on August 12, 2015, the onus was clearly on Mr. Langevin to report the matter to LawPro, given that that was the basis for granting the adjournment, and for rescheduling the motions. The delay between August 12, 2015 and February 18, 2016 resulted from the failure of Mr. Langevin to do what he said that he was going to do which was to report the matter to LawPro and have their counsel reschedule the motions. This is a further 6 months of unexplained delay.
[55] On February 18, 2016 the motion was scheduled to proceed on July 26, 2016. As indicated above, Mr. Langevin provides no explanation for his failure to comply with my order to report the potential claim against him to LawPro within 15 days of the hearing on February 18, 2016. My February 18, 2016 order also required that Mr. Langevin deliver any further responding material by April 29, 2016 which he again failed to do, without explanation. Mr. Langevin’s stroke on June 30, 2016 would not have prevented the motion from being argued on July 26, 2016 if he had complied with my February 18, 2016 order because counsel for LawPro would have argued the motion. The delay between July 26, 2016 and October 19, 2016 is 3 months of unexplained delay.
[56] The various periods of unexplained delay calculated above total 6 years and significantly exceed the usual delays that are inevitable in litigation. This delay is both inordinate and inexcusable.
[57] As there has been inordinate and inexcusable delay in the action for which the plaintiff or her lawyers were responsible, the court must now consider whether this delay has resulted in a substantial risk that a fair trial is no longer possible, i.e. whether the delay has resulted in irremediable prejudice to the defendants.
[58] The decisions in Armstrong v. McCall and Woodheath, supra hold that inordinate and inexcusable delay in an action gives rise to a presumption of prejudice which the plaintiff has the onus to rebut. It is therefore necessary to consider the evidence presented by the plaintiff on the issue of prejudice and specifically (per Berg v. Robbins, supra) whether the plaintiff has demonstrated that documents have been preserved, and that the issues in dispute do not require the recollection of witnesses, or that necessary witnesses are available with detailed recollection of events.
[59] The only evidence from the plaintiff herself with respect to prejudice is a bald statement that “should my action be continued, it will not result in prejudice to the defendants”. This statement does not provide any of the details required to establish that documents are preserved and that the available witnesses have sufficient recollection of events.
[60] The evidence from Mr. Langevin on the issue of prejudice is similarly lacking in particularity. Rather than providing evidence to rebut the presumption of prejudice, as the case law requires, he simply states that he is unaware of any specific prejudice to the defendants. He acknowledges the inevitable fading of memories, but in that regard makes the further bald statement that he does not accept that matters have been forgotten. He refers to “the extensive documentary record” but provides no evidence of how that record would ensure a fair trial of the action, particularly in the context of the acknowledged fading memories of witnesses.
[61] The only possible conclusion is that the plaintiff’s evidence fails even to come close to rebutting the presumption of prejudice. This is a fatal flaw in the plaintiff’s position on this motion, particularly given the strength of the presumption of prejudice that arises from the fact that the events giving rise to the action occurred between 15 and 20 years ago. I also accept the submissions of Tenenbaum’s counsel and Callaghan’s counsel that the allegations of collusion between the defendants Kramar and Tenenbaum and the allegation that one of the subject properties was a matrimonial home will require oral evidence the quality of which, absent evidence to the contrary, has been compromised by the significant passage of time.
[62] I accept the evidence of Ms. Szpakowsky and Mr. Langevin that Ms. Szpakowsky’s conduct did not play a role in the delay of the action. I also accept that generally, a plaintiff should not suffer the consequences of her counsel’s lack of diligence. However, a delay for which counsel is responsible may be the basis for a dismissal of the action where that delay gives rise to a substantial risk that a fair trial will not be possible (see Langenecker, supra, at paragraph 5). Even if the delay is largely or entirely the fault of counsel, the defendants should not be forced to continue to defend an action if the delay has compromised their ability to do so fully. In such circumstances, it is the plaintiff and not the defendants that must bear the consequences of the delay.
[63] I therefore conclude that the plaintiff or her counsel has been responsible for inordinate and inexcusable delay in the action that has resulted in a substantial risk that a fair trial is no longer possible. For these reasons, the plaintiff’s action is hereby dismissed for delay.
Costs
[64] Counsel agreed at the conclusion of argument that they would defer submissions on costs until after I rendered my decision. If the parties cannot agree on costs, they may contact my ATC to arrange a case conference to schedule a hearing or other means to resolve the issue.
MASTER GRAHAM January 3, 2017