Court File and Parties
COURT FILE NO.: CV-07-343028-00 DATE: 20170330 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Greg Stokker AND: Carolyn Storoschuk and 1641516 Ontario Inc.
BEFORE: Madam Justice J. T. Akbarali.
COUNSEL: James Lawson, for the Plaintiff Christopher Lee, for the Defendants
HEARD: March 21, 2017
Endorsement
Overview
1The appellants/defendants appeal from the order of Master Graham restoring this action to the trial list. They argue that the master erred in failing to find they have suffered non-compensable prejudice by reason of the respondent/plaintiff’s unexplained delay in prosecuting this action.
Facts
2The events giving rise to this action occurred in 2005-2007. A claim was issued on November 5, 2007.
3The action was administratively dismissed for delay twice, on March 3, 2010 and on November 9, 2011. The appellants cooperated in setting aside those dismissals.
4By December 2015, three court-ordered timetables had been imposed, all on consent, with the most recent of these dated June 26, 2013. The respondent complied with none of them.
5In December 2015, the appellants brought a motion before Master Wiebe to dismiss this action for delay. Master Wiebe adjourned the motion to allow the respondent time to file his own record to seek, among other things, yet another timetable. Master Wiebe granted a three month adjournment for that purpose, noting medical evidence that was before him that the respondent was suffering from an ongoing, undetermined, medical condition.
6At the return of the motion, the parties entered into a consent order dated March 17, 2016, setting another timetable. The consent order provided that “pursuant to Rule 48.14(1), the Registrar shall dismiss this action for delay with costs unless the action has been restored to the trial list on or before August 18, 2016”. The motion to dismiss the action for delay was adjourned sine die.
7The respondent mostly complied with the fourth timetable, though at least some of the steps required were completed late.
8On August 11, 2016, the respondent moved before Master Graham to restore the action to the trial list. The appellants resisted the motion. They had learned, since consenting to the fourth timetable, that two witnesses that they describe as key to their defence had died. Tom Cole, the real estate lawyer who handled transactions at issue in the litigation, died on March 3, 2014. David Victor, the accountant who calculated taxes owing to the CRA which are in dispute in this litigation, died on July 27, 2014. The appellants learned of the deaths of Mr. Cole and Mr. Victor in August, 2016. Thus, they had no knowledge of those deaths at the time they brought the motion to dismiss for delay, or at either of the return dates of that motion. They did not know Mr. Cole and Mr. Victor had died when they entered into the March 17, 2016 consent order.
The Master’s Decision
9Master Graham directed himself to the test set out in Nissar v. TTC, 2013 ONCA 361, that a plaintiff seeking to restore an action to the trial list is required to establish an acceptable explanation for the delay the absence of non-compensable prejudice.
10He concluded that the issues of delay and prejudice had to be considered in the context of Master Wiebe’s order of March 17, 2016, specifically that plaintiff had complied with that order by serving the motion to restore the action to the trial list within the set deadline. He held that the delays in the action were partially explained by the plaintiff’s health problems, evidenced by a note from the plaintiff’s physician in October 2015 recommending legal proceedings be postponed for nine months.
11The master found that although the appellants were prejudiced by the deaths of Mr. Cole and Mr. Victor, the respondent was in a position to file the required forms to obtain pre-trial and trial dates between July 27, 2014 and February 27, 2015. Had he done so, the appellants would have had to go to trial without the deceased witnesses. As a result, he found that the prejudice did not result from the delay and in filing the certification forms.
12In the context of Master Wiebe’s order, and taking into account the time and money the plaintiff spent to comply with it, Master Graham concluded that the action should be restored to the trial list.
Issue
13The appellant raises a single issue on this appeal: whether the master erred in restoring the action to the trial list.
Standard of Review
14The parties agree the applicable standard of review of the master’s decision is set out in Zeitoun v. Economical Insurance Group, (2008), 91 O.R. (3d) 131 (Div. Ct.) at paras. 40-41, aff’d 2009 ONCA 415, 96 O.R. (3d) 639 (C.A.): for an appellate court to interfere with the master’s decision, the master must have made an error of law, or exercised his discretion on the wrong principles, or misapprehended the evidence such that there is a palpable and overriding error.
Analysis
15As the master correctly noted, the plaintiff bears the burden of demonstrating an acceptable explanation for the litigation delay and that, if the action were allowed to proceed, the defendant would not suffer non-compensable prejudice: Nissar at paras. 30-31.
16This test was reiterated in Carioca’s Import & Export Inc. v. Canadian Pacific Railway Ltd., 2015 ONCA 592 at para. 43, where the Court of Appeal held that the Nissar test applies in cases like this one, where the refusal to restore an action to the trial list will result in its dismissal.
17It was open to the master to judge some periods of delay to be of greater significance than others.
18However, I conclude that the master made a palpable and overriding error in failing to consider the evidence that the appellants only learned of the deaths of Mr. Cole and Mr. Victor in August, 2016. This error led him to place too much emphasis on the March 17, 2016 consent order and to focus on only the most recent period of delay. In these circumstances, he should have considered the entirety of the delay.
19While I accept that the context of the March 17, 2016 consent order was relevant to assessing prejudice and delay, an important part of that context is that the appellants consented to the order without knowledge that Mr. Cole and Mr. Victor had died. The consent cannot thus be considered a cooperative step in the litigation that excuses prior delay: Gill v. Khindria, 2016 ONSC 5057 at paras. 24-25. In my view, for consent to a procedural step to operate to excuse prior delay, the consent must be given with knowledge of the relevant facts.
20The respondent argues that the appellants were not reasonably diligent and should have known that these two witnesses had died before August 2016. I accept that a party’s lack of diligence could be a relevant factor in this analysis. However, I find the respondent is not in a position to criticize the appellants for their diligence, having had this action dismissed twice and having failed to comply with multiple court-ordered timetables. Where a plaintiff pursues litigation in a half-hearted fashion, perpetually standing at the brink of dismissal and presuming indulgence for repeated breaches of court-ordered timetables, a defendant cannot be expected to maintain a continual state of trial-readiness.
21The respondent also argues that the appellants should have taken steps to preserve the evidence of Mr. Cole and Mr. Victor. I disagree. This is not like the situation in Khindria, where the actual prejudice advanced was the gradual, and entirely predictable, fading of memories. There is no evidence to suggest that the appellants had any reason to believe they ought to have taken steps to preserve the evidence. It is not the responsibility of a defendant to incur costs to preserve evidence of witnesses when there is no apparent reason to do so.
22As a result, I conclude the master erred in restoring this action to the trial list. First, it is not clear that the test in Nissar requires that the non-compensable prejudice be caused by the delay. I accept that the test to set aside an administrative dismissal makes relevant only that prejudice that results from the delay: Labelle v. Canada Border Services Agency, 2016 ONCA 187 at para. 23. However, the respondent could point me to no law that imports this requirement into the test to restore an action to the trial list.
23Second, even if that is a relevant element of the test, the master erred by not considering the overall delay, including the delay in the litigation that resulted in the prejudice suffered by the appellants. Had the action been prosecuted diligently, the action could have been tried before the deaths of Mr. Cole and Mr. Victor.
24The respondent argues that Mr. Cole and Mr. Victor are not key witnesses and their deaths do not prejudice the appellants’ defence of the action. Master Graham, however, made a finding that the deaths of the witnesses were prejudicial to the appellants. That finding was open to him and supported by the record. There is no basis on which this court could interfere with that finding.
25Furthermore, when one considers the delay that occurred over the entirety of the action, it also becomes clear that the respondent did not establish an explanation for the delay. He explained at most a year and a half of delay beginning in 2015 as a result of his health concerns. By that time, the action was already over seven years old. The previous delay was not adequately explained. Counsel made some suggestion that a parallel proceeding dealing with the same issues delayed this action for a year around 2011. Even assuming that is a valid reason for delay, significant delay remains unexplained.
26I appreciate the master’s concern that money and time were spent to comply with the fourth timetable. In most circumstances, having readied an action for trial in accordance with such a timetable, a party could reasonably expect to have his action restored to the trial list. In this case, the key evidence, which the master ignored, was that the appellants only learned of the deaths of Mr. Cole and Mr. Victor after the consent order, and before the action was restored to the trial list. For the reasons I have explained, the master erred by failing to consider that evidence.
Disposition
27Accordingly, the appeal is allowed.
28The parties agreed that costs of the appeal shall be $4000, inclusive of HST and disbursements. The respondent thus owes this amount to the appellants.
29The appellants also seek their costs of the motion below. I note the master’s endorsement indicates that the parties agreed no costs would be awarded on that motion. This reflects the parties’ agreement after the result of the motion was known. There is thus no reason that the appellants should not receive their costs of the motion below given the success of their appeal.
30The appellants have provided a bill of costs on the motion. They seek $11,788.46 on a partial indemnity scale, inclusive of HST and disbursements. The respondent argues this amount is too high, both because it reflects excessive time spent on the motion to consent to extend the timetable, and because it includes costs of the motion to dismiss for delay. I agree with the respondent. In my view, costs of $8,500 inclusive of HST and disbursements are fair and reasonable for the motion below.
Madam Justice J. T. Akbarali Date: March 30, 2017