Court File and Parties
COURT FILE NO.: CV-12-444239 MOTION HEARD: 20 July 2018
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Aaron Goldman and Naila Seunath, Plaintiffs AND: Joseph Powers, Defendant
BEFORE: Master Jolley
COUNSEL: Alexander Melfi, Counsel for the Moving Party Defendant No one appearing for the Responding Party Plaintiff Aaron Goldman
HEARD: 20 July 2018
Reasons for Decision
Overview
[1] The plaintiffs commenced this action on 17 January 2012. Mr. Goldman is the only remaining plaintiff in the action, the co-plaintiff Naila Seunath having discontinued her action on 25 June 2014. Mr. Goldman claims damages in the amount of $25,000,000 against the defendant, his former lawyer whom he retained in 2009 to bring a motion to have him added as a party to matrimonial litigation involving Ms. Seunath.
[2] By consent order made 4 October 2013 in this action the parties agreed that affidavits of documents would be delivered by 15 December 2013, examinations for discovery would be completed by 28 February 2014 and the action set down for trial by 30 June 2014. Discoveries did not take place and the action was not set down for trial.
[3] As a result of a status notice dated 28 July 2014, a further consent order was made 24 March 2015 whereby the parties agreed that affidavits of documents would be delivered by 1 May 2015, examinations for discovery would be completed by 16 October 2015 and mediation by 30 November 2015. It was further agreed that the action would be set down for trial by 31 December 2015. Again, examinations for discovery did not take place, mediation did not occur and the action was not set down for trial.
[4] The timetable order also contemplated a motion by the defendant for security for costs. That motion was first scheduled to be heard in March 2015 but was adjourned multiple times, usually at the request of the plaintiff. Master Brott ultimately heard the motion on 7 July 2016 and on 31 October 2016. On 10 March 2017 Master Brott ordered Mr. Goldman to post $60,000 as security for costs within 60 days of 10 March 2017 and to pay costs of the motion in the amount of $7,500 within 90 days of 24 May 2017.
[5] As of today’s date, the plaintiff has not complied with the security for costs order and has not paid the costs ordered paid. In addition, examinations for discovery have not taken place, mediation has not taken place and the action has not been set down for trial.
[6] The defendant seeks an order dismissing the action as a result of the plaintiff’s non-compliance with the order of Master Brott and as a result of his delay in moving the action forward and setting it down for trial. The five year anniversary for setting the action down passed almost 18 months ago, on 27 January 2017.
[7] The defendant served the plaintiff with this motion record on 9 March 2018. The matter was before me on 30 April 2018 and was adjourned at the request of the plaintiff, peremptory to him, to be heard today. Since March 2018, the plaintiff has not complied with the order of Master Brott or set the action down for trial or taken any step to move the action forward.
[8] Today the plaintiff seeks a further adjournment, this time for an additional six months. In an affidavit sworn last evening and delivered to the court this morning he advised that he was under the impression that his lawyer, Mr. Kary was going to represent him at this motion. Mr. Kary attended at the last motion date to obtain an adjournment for Mr. Goldman. The plaintiff advised that he learned from Mr. Kary last evening that Mr. Kary did not consider himself retained to argue this motion. I have reviewed the plaintiff’s affidavit sworn 19 July 2018. Mr. Goldman deposed in that affidavit that he was in Winnipeg yesterday and cannot attend today. I have also reviewed his emails to Mr. Melfi that he sent on 19 July 2018 and that he asked be put before me in support of his request for an adjournment.
[9] The plaintiff’s request for an adjournment is denied. This motion has been outstanding for many months and was peremptory to him. In his affidavit he deposed that he was aware of this motion date but was not aware until recently that it was peremptory to him. Even if that were the case, he was aware that the motion was returnable today. There is no evidence that he contacted Mr. Kary or any other lawyer between 30 April 2018 and 17 July 2018 to prepare responding materials for this motion, including any affidavit to explain his non-compliance with the order of Master Brott and to explain his failure to move the action forward.
[10] According to the timetable set on 30 April 2018, the plaintiff’s responding materials were due on 15 June 2018 and the deadline for cross examinations was set for 5 July 2018. His factum was to be served by 16 July 2018. It appears from his affidavit that the plaintiff was aware that there were interim deadlines to be met as he deposes that he did not diarize the date of the motion or the interim deadlines that he was told about. If the plaintiff has some cognitive issues, as he suggests in his affidavit, this would be all the more reason for him to have written those dates down so he did not forget them. This is particularly so where he knew this motion sought an order to dismiss his action.
[11] Even if the plaintiff were unaware of or forgot about the timetable, he would have been aware of his obligation to put responding materials before the court as he has been involved in this and other litigation matters for some years.
[12] It would be unfair for the defendant to have to wait a further six months to have his motion to dismiss this action heard, particularly where the action alleges fraud in his professional capacity, breach of duty, defamation, libel, deceit and conspiracy, among other things and seeks $25,000,000 in damages.
Failure to comply with the Order of Master Brott made in March 2017
[13] The plaintiff was required to post security for costs more than a year ago. He was to pay costs of the motion almost 11 months ago. He has done neither.
[14] Rule 56.06 of the Rules of Civil Procedure provides that where a plaintiff fails to post the required security for costs, the court may dismiss the action against the defendant in whose favour the order was made.
[15] On a motion such as this, the court is to analyze the efforts made by the plaintiff to comply with the order. There is no evidence before me that the plaintiff has taken any steps to comply with the order of Master Brott. The affidavit he did file in support of his adjournment request does not contain any information that would assist in explaining why he has not complied with the order either to post security for costs or to pay the costs of the motion.
[16] In fact, the affidavit raises more questions than answers as to why the plaintiff had not paid what he was ordered to pay. His affidavit indicates that he has travelled to Taiwan with his family in April 2018 and has funds from a company that he does work for. In the emails that he asked be put before me, the plaintiff indicates that he is working in northern Manitoba.
[17] I find, as did the court in 2287376 Ontario Inc. v. PCL Constructors Canada Ltd. 2017 ONSC 7149 that the plaintiff’s failure to comply with this court order is sufficient grounds to dismiss his action.
Dismissal for Delay
[18] The defendant brings this motion under Rule 24.01 of the Rules of Civil Procedure to dismiss the action for delay. Rule 24.01(2) provides that the court shall, subject to subrule 24.02(2), dismiss an action for delay if either of the circumstances described in paragraphs 1 and 2 of subrule 48.14(1) applies to the action, unless the plaintiff demonstrates that dismissal of the action would be unjust.
[19] Rule 48.14(1) provides that unless the court orders otherwise, the registrar shall dismiss an action for delay in either of the following circumstances, subject to subrules (4) to (8):
- The action has not been set down for trial or terminated by any means by the fifth anniversary of the commencement of the action.
- The action was struck off a trial list and has not been restored to a trial list or otherwise terminated by any means by the second anniversary of being struck off.
[20] This action was commenced by way of notice of action issued 17 January 2012. As noted by the Court of Appeal in Langenecker v Sauvé 2011 ONCA 803 at paragraph 3, “[a]n order dismissing an action for delay is obviously a severe remedy. The plaintiff is denied an adjudication on the merits of his or her claim. Equally obviously, however, an order dismissing an action for delay is sometimes the only order that can adequately protect the integrity of the civil justice process and prevent an adjudication on the merits that is unfair to a defendant.”
[21] Under Rule 24.01, an action may be dismissed where the delay is caused by the intentional conduct of the plaintiff or his counsel that demonstrates a disdain or disrespect for the court process. The court has noted that these types of cases are rare and feature at least one and usually serial violations of court orders.
[22] Cases may also be dismissed for delay where the delay has been inordinate, inexcusable and such that it gives rise to a substantial risk that a fair trial of the issues in the litigation would not be possible because of the delay (Langenecker v Sauvé, supra at paragraph 7).
[23] In determining whether the delay is inordinate, a court will measure the length of time from the commencement of the proceeding to the motion to dismiss to determine if the delay is inordinate (Sickinger v. Krek 2016 ONCA 459 at paragraph 30). The action is now 6 ½ years old. The events giving rise to the action occurred in August or October 2009, some 8 ¾ years ago. The action was originally to have been set down for trial by 30 June 2014. That did not happen. It was then ordered to be set down for trial by 31 December 2015, a date similarly disregarded. I find the delay to be inordinate, particularly as the matter has not even moved to the examination for discovery stage.
[24] In determining whether the delay is inexcusable, a court is to consider the reasons offered for the delay and whether those reasons provide an adequate explanation with regard to the credibility of the explanations, the explanations for the individual parts of the delay, the overall delay and the effect of the explanations considered as a whole (Sickinger, supra).
[25] Here, the plaintiff has offered no explanation for the delay or for his failure to miss all deadlines to conduct examinations for discovery or set the action down for trial.
[26] In considering prejudice, the court is to consider the prejudice caused by the delay to a defendant’s ability to put forward his case for adjudication on the merits. Where there has been inordinate delay, as here, a presumption of prejudice arises which may result in an action being dismissed unless the presumption is rebutted (Musselman v Estate of Robert Carbin 2016 ONSC 7745 at paragraph 24).
[27] Rule 24.01(2) directs the court to dismiss an action that has not been set down for trial within five years, unless the plaintiff demonstrates that dismissal of the action would be unjust. The plaintiff has not led any evidence that would suggest dismissal of this action would be unjust. The plaintiff has not taken any steps to move the action forward since the security for costs order was made in March 2017. Although it is a 2012 action, examinations for discovery have not even taken place. As noted in Meriano v. Benoot 2016 ONSC 4839 at paragraphs 150 and 152, “the longer the delay, the stronger the inference of prejudice to the defendant’s case…. Moreover, prejudice to the defendant is to be considered relative to the time the case will likely be reached for trial, if permitted to proceed.” If this action were allowed to proceed, it is unlikely that it would be set down for trial for some years, given its present preliminary stage.
[28] Here not only has the presumption of prejudice not been rebutted, there is evidence of actual prejudice to the defendant caused by the delay. In response to the complaint of Ms. Seunath filed against him with the Law Society in 2011, Mr. Powers wrote a responding letter dated 23 January 2012. In that letter, written some 6 years ago, he noted: “… given the lapse of time my memory of some specifics is certainly not as clear as when I completed this work”. I find the delay has caused actual prejudice to the defendant. Further, the plaintiff has failed to rebut any prejudice presumed due to the passage of time.
[29] Given the very significant delay from the time of the events in question to the date the action could be tried, if it were restored, I find that there is a substantial risk that a fair trial of the issues in the litigation would not be possible because of this delay.
[30] In summary, I find the delay to have been inordinate, inexcusable and one that prejudices the fair trial of this action. I find that the plaintiff has not demonstrated that it would be unjust to him to dismiss his action. He has plenty of time to move the matter forward and has failed to do so.
[31] The court has considered similar principles on motions by plaintiffs to set aside dismissal orders. There the court has noted that as some point the interest in finality must trump the opposite party’s plea for an indulgence (Marché d’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd. 2007 ONCA 695). While motions to set aside dismissals for delay are determined using a test different from motions to dismiss for delay, the policy reason for weighing the interest in finality is equally pertinent.
[32] After this length of time, the defendant is entitled to finality. The plaintiff claims $25,000,000 from the defendant. He alleges that the defendant is guilty of fraud, breach of duty, defamation, libel, deceit and conspiracy. I adopt the following from the decision of Nightingale, J. in Black v. Chmiel, C-395-12 released 26 June 2018, which dismissed a motion to set aside a dismissal arising out of the plaintiff’s failure to comply with a timetable order.
… There is the real and substantial prejudice when professionals such as the defendant are sued for substantial damages and accused of professional misconduct and then “left hung out to dry” for two years by the plaintiff. C.O. Capital Growth Inc. v. Miller 2018 ONSC 7; Gravelle (c.o.b. Code Pro Manufacturing) v. Denis Grigoras Law Office 2013 ONSC 339.
In this case, the action has been outstanding against the defendant, a practicing lawyer, since the commencement of this action in May 2012 which is not reasonable.
In addition, there is a strong public interest in promoting the timely resolution of disputes. Litigants are entitled to have the dispute resolved quickly so that they can get on with their lives. Delay multiplies costs and breeds frustration and unfairness. Marché d’Alimentation Denis Thériault Ltée v Giant Tiger 2007 ONCA 695. In this case, the interest of finality must trump the plaintiff’s plea for an indulgence to set aside the court order, especially in the absence of any sufficient explanatory evidence from the plaintiff, as indicated above, regarding the other three tests described above.
[33] I find that the delay is sufficient grounds to dismiss this action, in the alternative to a dismissal as a result of the plaintiff’s failure to comply with the court order of 10 March 2017.
Costs
[34] For the reasons noted above, this action is dismissed. The defendant seeks his costs of the motion and of the action. Costs were sought on a substantial indemnity basis. While the plaintiff’s conduct has no doubt been frustrating and has caused the defendant to have this action held over him for some years, that is remedied more appropriately through this order dismissing the action than through a substantial indemnity costs sanction.
[35] The defendant’s partial indemnity costs total $23,575.54, inclusive of HST and disbursements. Having reviewed the bill of costs and the time allocated to pleadings, discovery of documents, the motion to set aside the noting in default that was required and the motion attendance in March 2015 to set a new timetable, I find the time spent and the costs incurred to be reasonable in the circumstances.
[36] The defendant seeks costs of the motion in the amount of $3,200, inclusive of HST and disbursements. This is an exceedingly reasonable amount given the material provided to the court, including a factum and brief of authorities and given that this also includes the initial attendance before me on 30 April 2018.
Disposition
[37] The action is dismissed with costs of the motion and the action in the all-inclusive amount of $25,000 payable by the plaintiff Aaron Goldman to the defendant within 30 days of this decision.
Master Jolley Date: 23 July 2018