Case Summary

The Appellants appealed a Master's order that dismissed their motion to dismiss an action for delay. The action, concerning condominium construction deficiencies from 2004, was commenced in 2014, but the plaintiff failed to serve most defendants or advance the litigation. The Master found the plaintiff's explanation for delay unsatisfactory but dismissed the motion, inferring document preservation. The Superior Court found the Master erred in fact and law, particularly regarding the plaintiff's lack of explanation for delay, the strong presumption of prejudice due to the expired limitation period and passage of time, and the plaintiff's failure to rebut this presumption with evidence of available witnesses and documents. The appeal was allowed, and the action was dismissed against the Appellants. interesting_citations_summary: > This decision clarifies the application of Rule 24.01(1)(a) for dismissal for delay, emphasizing the plaintiff's onus to provide a reasonable explanation for delay and to rebut the presumption of prejudice, especially when a limitation period has expired. It reiterates that the absence of an explanation for delay can be fatal and highlights the "culture shift" in litigation towards timely resolution, as articulated in Hyrniak and Jordan. The case also reinforces the standard of review for Master's orders, requiring palpable and overriding error for factual findings and correctness for errors of law or principle. final_judgement: > The order of Master Muir dated February 13, 2015, is set aside, and the action is dismissed as against the Appellants for delay. The Plaintiff is ordered to pay the Appellants’ costs of the appeal on a partial indemnity scale, with submissions to follow. winning_degree_applicant: 1 winning_degree_respondent: 5 judge_bias_applicant: 0 judge_bias_respondent: 0 year: 2017 decision_number: 6868 file_number: "CV-14-119561-00" source: "https://www.canlii.org/en/on/onsc/doc/2017/2017onsc6868/2017onsc6868.html" keywords: - dismissal for delay - civil procedure - appeal - Master's order - prejudice - limitation period - Rules of Civil Procedure - construction litigation - condominium - Hyrniak - Jordan areas_of_law: - Civil Procedure - Civil Litigation - Construction Law cited_cases: legislation: - title: "Rules of Civil Procedure" url: "https://www.ontario.ca/laws/regulation/900194" case_law: - title: "Housen v. Nikolaisen, 2002 SCC 33" url: "https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/1964/index.do" - title: "Berg v. Robbins, 2009 ONSC 6159" url: "https://www.canlii.org/en/on/onsc/doc/2009/2009onsc6159/2009onsc6159.html" --- 2017 ONSC 6868 # Court File and Parties **COURT FILE NO.:** CV-14-119561-00 **DATE:** 20171116 **ONTARIO SUPERIOR COURT OF JUSTICE** **BETWEEN:** **York Region Standard Condominium Corporation No. 1039** Plaintiff – and – **The Corporation of the Town of Richmond Hill, Rosehill Suites Inc., Tarion Warranty Corporation, Dean Artenosi, Joseph Battaglia Architect, Arten Developments Inc., The Arten Group Inc., Principally Green Limited, 1041549 Ontario Limited carrying on business under the firm name and style Tristar Engineering, Arten Developments carrying on business under the firm name and style The Manners of Roseview Grand, Arten Developments on business under the firm name and style The Rosehill, Socia Engineering Limited, John Doe Bricklayers, Jane Doe, Adam Doe, Andrew Doe, Anthony Doe, Alex Doe, Adrian Doe, Anna Doe, Alicia Doe, Alice Doe, Amy Doe and Amanda Doe** Defendants **COUNSEL:** Patrick Di Monte for the Plaintiffs/Responding Parties K. Sherkin, R. Wozniak for the Defendants/Moving Parties **HEARD:** September 1, 2017 **Woodley, J.** # REASONS FOR DECISION ON APPEAL OF MASTER’S ORDER ## OVERVIEW [1] The Appellants, (Rosehill Suites Inc., Dean Artenosi, Arten Developments Inc., The Arten Group Inc., Principally Green Limited and Arten Developments), appeal the Order of Master Muir dated February 13, 2017 which dismissed the Appellants’ motion to dismiss the action against them (but not all of the defendants) for delay pursuant to [Rule 24.01(1)(a) of the Rules of Civil Procedure](https://www.ontario.ca/laws/regulation/900194) (the “Rules”). [2] The Appellants submit that the Master erred in fact and in law in finding that the Plaintiff has: a) Provided a reasonable explanation for its failure to take any steps to prosecute this action concerning a construction project completed in 2004 since it was filed on August 1, 2014; b) Rebutted the presumption of prejudice to the Appellants resulting from the Plaintiff’s delay; and, c) Proven that all material witnesses and documents are available such that a fair trial of this action is possible. ## FACTS [3] The Plaintiff’s action arose out of the construction of a condominium complex located in Richmond Hill, Ontario (the “Development”). Construction of the Development was completed in 2004. [4] The Plaintiff commenced the within action on August 1, 2014. The Plaintiff claims damages of $1,000,000.00 as against all Defendants, jointly and severally, for negligence. [5] The Plaintiff alleges that the Development was negligently constructed resulting in visible defects in the brick exterior of the structure (the “Deficiencies”). The Plaintiff further alleges that it first learned of the Deficiencies on August 5, 2012 when it received an inspection report from “Best Consultants, Martin Gersup Architect Inc.” [6] As of February 2017, the Plaintiff had served only two (2) of the 23 Defendants; The Corporation of the Town of Richmond Hill (“Richmond Hill”) and Tarion Warranty Corporation (“Tarion”). [7] On February 13, 2017, the Appellants (after previously advising the Plaintiff’s lawyer several times of the need to obtain an order extending the time for service of the Statement of Claim) moved before Master Muir for an order pursuant to [rule 24.01(1)(a) of the Rules](https://www.ontario.ca/laws/regulation/900194) dismissing this action as against them for delay. [8] In support of the February 13, 2017 motion, the Appellants filed an affidavit sworn by the Defendant Dino Artenosi (“Artenosi”) confirming that: a) He was, at all material times, the controlling mind of the Appellants; b) Construction of the Development was completed in 2004; c) The Appellants’ records have been purged, as it has been over 12 years since the Development was built; d) The Appellants did not learn of the existence of the Statement of Claim until on or about June 25, 2015, when Artenosi was served with the Cross-claims of Richmond Hill and Tarion; e) On October 21, 2015, November 10, 2015 and December 1, 2015, the Appellants’ lawyers wrote to the Plaintiff’s lawyer, Patrick Di Monte (“Di Monte”), advising that the Appellants had not been served with a copy of the Statement of Claim in accordance with [rule 14.08 (1) of the Rules](https://www.ontario.ca/laws/regulation/900194) and as such the Plaintiff requires an order extending the time for service of the Statement of Claim; f) Despite the above-referenced correspondence, the Plaintiff took no steps to seek an order for an extension of time to serve the Statement of Claim on the Appellants; and g) The Claim has not advanced beyond the pleadings stage. [9] The Plaintiff did not seek to cross-examine Artenosi on his affidavit. [10] On January 31, 2017 and February 8, 2017, Di Monte faxed to the Appellants’ lawyers two (2) affidavits sworn by Di Monte’s legal assistant, Ms. Deborah Merrill (“Merrill”), wherein Merrill details Di Monte’s unsuccessful efforts to serve some of the named Defendants in this action. [11] Merrill’s affidavit does not provide any explanation for: (i) the Plaintiff’s delay; (ii) for the Plaintiff’s failure to seek an order for substituted service in light of Di Monte’s unsuccessful attempts to serve all of the Defendants in accordance with the Rules; or, (iii) for the Plaintiff’s failure to seek an order extending the time for serving the Statement of Claim. [12] Moreover, Merrill’s affidavit does not provide any evidence that: (a) demonstrates that all relevant witnesses and documents are available; or (b) refutes Artenosi’ affidavit evidence. [13] By Endorsement dated February 13, 2015, Master Muir dismissed the Appellants’ motion for the following reasons: “I am not satisfied with the Plaintiff’s explanation for delay. Even accepting the inaccuracy of the information on the Moving Defendants’ corporation profile reports, there is simply no evidence of any follow up or investigation once the Plaintiff knew the Defendants could not be found at the registered addresses. Moreover, the Plaintiff has still not brought a motion to extend time or to validate service. Although the principal obligation regarding prejudice rests with the Plaintiff, there is at least some obligation on the Moving Parties to demonstrate actual prejudice if it exists. They point to the fact that they no longer have their documents and the project took place many years ago. However, the Defendants have not stated when their documents were destroyed…It does appear that the Plaintiff’s documents are available and I infer that the documents of the individual Defendants have been preserved. Overall, the Plaintiff’s explanation need not be perfect. It simply needs to be adequate and I am of the view that the Plaintiff has met its onus, although barely so.” ## GROUNDS FOR APPEAL [14] The Appellants submit that Master Muir erred in fact and in law by: a) Finding that the Plaintiff furnished evidence of a satisfactory explanation for its delay despite: (i) the fact that the Plaintiff did not, provide any explanation for its delay; and (ii) Master Muir’s finding that he was “not satisfied with the Plaintiff’s explanation for delay”; b) Finding that “the Plaintiff’s documents are available” and inferring that the documents of the individual defendants have been preserved despite the fact that the Plaintiff filed no evidence addressing that aspect of the motion; and c) Finding as a matter of law, the onus of demonstrating actual prejudice rested with the Appellants despite the fact that the applicable limitation period expired in August 2014 (i.e., during the period of the Plaintiff’s delay) and the material events in question occurred in 2004. ## ANALYSIS AND THE LAW ### Standard of Review [15] An appeal from a decision of a master will only succeed if there has been an error of law, if the master exercised his discretion on wrong principle or if he misapprehended the evidence such that the decision contains a palpable and overriding error: [Housen v. Nikolaisen, 2002 SCC 33](https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/1964/index.do), [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 211 D.L.R. (4th) 577. ### Applicable Test for Dismissal for Delay [16] [Rule 14.08(1)](https://www.ontario.ca/laws/regulation/900194) states that where an action is commenced by a statement of claim, the claim “shall be served within six months after it is issued”. [17] [Rule 24.01(1)(a)](https://www.ontario.ca/laws/regulation/900194) allows a defendant who is not in default under the Rules, or an order of the court, to move to have an action dismissed for delay where the plaintiff has failed to serve a statement of claim “on all of the defendants” within the a time prescribed by [Rule 14.08](https://www.ontario.ca/laws/regulation/900194). [18] On a motion to dismiss brought pursuant to [rule 24.01(1)](https://www.ontario.ca/laws/regulation/900194) the defendant must show either that: a) The plaintiff’s default has been “intentional and contumelious” – i.e., that the plaintiff or his or her lawyers have demonstrated a disdain or disrespect for the court’s process; or that b) There has been: i. An inordinate delay for which the plaintiff or his or her lawyers are responsible; ii. The delay is “inexcusable”, meaning that the plaintiff has failed to proffer evidence that adequately explains the delay; and, iii. The delay has given rise to a substantial risk that a fair trial of the action will not be possible – i.e. that the defendant has suffered real prejudice as a result of the delay. [19] Any delay by a plaintiff in the prosecution of an action requires an explanation. The onus rests with the plaintiff to show that the delay was not intentional. In order to be accepted, the plaintiff’s explanation must be “reasonable and cogent” or “sensible and persuasive”. [20] However, as the Ontario Divisional Court held in [Berg v. Robbins, [2009] O.J. No. 6159](https://www.canlii.org/en/on/onsc/doc/2009/2009onsc6159/2009onsc6159.html) (“Berg”) at paragraph 13, “[i]n the absence of an explanation from the plaintiff for the delay, it is to be presumed that the delay was intentional, and that would appear to be the end of the matter.” [21] The inordinance of the delay is measured by reference to the length of time from the commencement of the proceeding to the motion to dismiss. [22] Lastly, in deciding whether a fair trial is still possible notwithstanding a plaintiff’s delay, the court must determine whether the defendant has suffered either deemed prejudice or actual case-specific prejudice. [23] Deemed prejudice will arise where the applicable limitation period expired during the applicable period of delay. [24] Prejudice is also inherent in long delays since memories fade and fail, witnesses become unavailable, and documents and other potential exhibits are lost. Thus, the longer the delay, the stronger the inference of prejudice to the defences’ case flowing from that delay. [25] Where a presumption of prejudice arises, the evidentiary onus shifts to the plaintiff to rebut the presumption by leading credible evidence showing: (a) that all necessary documents have been preserved; (b) the identities of all necessary witnesses; and (c) that all of the necessary documents and witnesses “with detailed recollection of events” are available. [26] For instance, in [Berg, supra](https://www.canlii.org/en/on/onsc/doc/2009/2009onsc6159/2009onsc6159.html), the Divisional Court held that the passage of 11 years between the occurrence of the events that give rise to the action and the defendant’s motion to dismiss for delay gave rise to a presumption of prejudice that the plaintiff failed to rebut. As a result, the Divisional Court allowed the appeal and dismissed the action. [27] In the absence of deemed prejudice, a defendant must lead evidence demonstrating that it has suffered actual, or case-specific, non-compensable prejudice, such as evidence that a material witness has died or is no longer capable of recalling material events, or that evidence has been lost. [28] An order of a master, whether final or interlocutory, will only be interfered with if the master made an error of law or exercised his or her discretion on the wrong principles or misapprehended the evidence such that there is a palpable and overriding error. [29] Thus, if a master errs in law, or exercises his or her discretion on an incorrect principles, the applicable standard of review will be correctness. Otherwise, the applicable standard of review will be palpable and overriding error. ### Palpable and Overriding Errors of Fact [30] The Appellants submit that there was no reasonable basis on the evidence filed with the Court for the Master’s finding that the Plaintiff adequately explained its delay or demonstrated that all material witnesses and documents are available such that a fair trial is possible. [31] I accept the Appellants’ submissions in this regard on the basis of the following: a. the only evidence filed by the Plaintiff explaining delay was the affidavit evidence of the Plaintiff counsel’s legal assistant, who details unsuccessful attempts to serve some but not all of the defendants. However, no explanation is provided why the Plaintiff has not moved the action forward, brought a motion for substituted service, or, brought a motion extending the time for service since the claim was issued on August 1, 2014; and b. the Master found that the “Plaintiff’s documents are available” and inferred that the “documents of the individual Defendants have been preserved” despite the fact that the Plaintiff did not adduce any evidence demonstrating that relevant documents have been preserved or that necessary witnesses are available and despite the fact that the Appellants specifically advised that the Appellant’s records have been purged and are no longer available. ### Errors in Law [32] The Appellants further submit that the Master committed several errors of law in dismissing the Appellants’ motion. [33] I accept the Appellants’ submissions in this regard based on the following: a. the Plaintiff’s failure to provide any explanation for its delay is in and of itself fatal. As noted by the Divisional Court in [Berg, supra](https://www.canlii.org/en/on/onsc/doc/2009/2009onsc6159/2009onsc6159.html), “the absence of an explanation from the plaintiff for the delay…would appear to be the end of the matter”; b. the expiration of the applicable limitation period (being August 5, 2014), and the passage of 13 years since the completion of the Development gives rise to a strong presumption of prejudice. The Plaintiff therefore had the onus of rebutting that presumption by filing credible evidence demonstrating that material witnesses and documents are available, which it did not do; and c. Finally, the Master failed to apply the proper legal principles that apply on a motion brought pursuant to [rule 24.01(1)(a)](https://www.ontario.ca/laws/regulation/900194) - namely: i. The delay in this case was excessive as no steps were taken to advance the litigation since the Statement of Claim was filed on August 1, 2014; ii. The Plaintiff provided no explanation for its delay; iii. There is a strong presumption of prejudice given the expiration of the limitation period and the passage of time since the events occurred; iv. The Plaintiff did not file any evidence capable of demonstrating that material witnesses and documents are available; and v. The Appellants provided evidence of specific prejudice (purging of documents and unavailability of witnesses) which evidence was not considered. ## Conclusion [34] There is a culture shift in the litigation landscape heralded by the Supreme Court of Canada in Hyrniak which shift has been aided and abetted by Jordan. [35] Civil matters are not exempt from the modern litigation cultural shift. The days are past when civil actions are allowed to slumber in court filing cabinets for years on end. [36] Procedural fairness, proportionality, and a timely hearing on the merits are attainable objectives. The Rules of Civil Procedure safeguard the litigation process and where lengthy unexplained delays lead to specific prejudice the Rules must be strictly applied. # ORDER ON APPEAL [37] For the reasons noted herein, I hereby Order: a) That the order of Master Muir dated February 13, 2015, is set aside and the within action is dismissed as against the Appellants for delay; and b) Subject to any Offers to Settle that may affect costs, the Plaintiff shall be required to pay the Appellants’ costs of the within appeal on a partial indemnity scale, inclusive of taxes and disbursements. The Appellants shall serve and file their costs submissions within 30 days of the date herein limited to three pages with any offers to settle and a bill of costs attached. The Plaintiff shall serve and file their reply cost submissions within 45 days of the date herein limited to three pages with any offers to settle and a bill of costs attached. The Appellants shall serve and file and responding cost submissions within 60 days of the date herein limited to one page. Justice S.J. Woodley Released: November 16, 2017 York Region Stnd. Condo Corp. v. Corp. Town of Richmond Hill et al CV-14-119561-00 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: York Region Stnd. Condo Corp. v. Corp. Town of Richmond Hill et all REASONS FOR JUDGMENT on appeal Justice S.J. Woodley Released: November 16, 2017