Court File and Parties

COURT FILE NO.: CV-13-484178 MOTION HEARD: 2023-08-15 REASONS RELEASED: 2023-11-20

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

MANUBHAI LALLUB PATEL and MANJULA PATEL Plaintiffs

- and-

MAMATA R. PATEL, THE ESTATE OF RAMESHBHAI PATEL, DANIEL CARRIERE, JOAN CARON and ESKIMO EXPRESS INC. Defendants

BEFORE: ASSOCIATE JUSTICE McGRAW

COUNSEL: R. Jones, for the Plaintiffs P. Omeziri, for the Defendants Daniel Carriere and Eskimo Express Inc. D. Visschedyk, for the Defendants Mamata R. Patel and The Estate of Rameshbhai Patel

Reasons for Endorsement

I. Overview

[1] This is a motion by the Plaintiffs to set aside the Order of the Registrar Dismissing Action As Abandoned dated February 28, 2014 (the “Dismissal Order”).

II. Background

[2] The Plaintiff Manubhai Lallub Patel (“Manubhai”) was a passenger in a vehicle involved in a serious collision with a tractor trailer on July 7, 2011. Manubhai suffered serious injuries and was airlifted to the hospital. Manubhai and his wife Manjula Patel (“Manjula”) retained Alpesh Patel (“Alpesh”), a family member operating as AP Law. This action was commenced by Statement of Claim issued on July 5, 2013 claiming general damages of $500,000 and special damages of $1,000,000.

[3] The Statement of Claim was never served on the Defendants. Counsel for the Defendants Daniel Carriere and Eskimo Express Inc., the operator and owner of the truck, respectively (the “Carriere Defendants”) discovered this action on or about September 26, 2013 while seeking information regarding a companion action on a public view terminal at the courthouse. Counsel wrote to Alpesh on December 23, 2013 requesting that the Statement of Claim be served and inquiring into the Plaintiff’s intentions. On January 7, 2014, Alpesh falsely advised that all Defendants had been served and that the Plaintiffs intended to pursue the action. There is no evidence that the Defendants Mamata R. Patel and the Estate of Rameshbhai Patel, operator and owner of the vehicle, respectively (the “Patel Defendants”) were ever advised of this action. A Notice of Dismissal was issued on January 6, 2014 and the Dismissal Order on February 28, 2014. Alpesh received the Dismissal Order on March 14, 2014. Counsel also represented the Carriere Defendants in numerous companion actions which settled in or about October 2014.

[4] In early 2017, Alpesh advised the Plaintiffs that their claim had been settled for payment of approximately $1,113,400. Alpesh provided the Plaintiffs with fabricated documents bearing this action’s court file number including a court order, requisition for funds, release of settlement funds and another court document. Throughout 2017-2018, the Plaintiffs followed up with Alpesh regarding the settlement funds and were advised that they would be paid shortly. On July 12, 2019, the Plaintiffs retained their current counsel to investigate the status of the settlement. On July 17, 2019, Plaintiffs’ counsel contacted the Plaintiffs’ accident benefits insurer Unifund Assurance Company. On July 18, 2019, counsel for the Carriere Defendants advised that the action had been administratively dismissed, which Plaintiffs’ counsel confirmed the following day at the Toronto courthouse. Plaintiffs’ counsel made ongoing attempts to contact Alpesh and his new Firm, Johnston Law, to inquire into the status of the action and the settlement funds and to obtain the Plaintiffs’ files, however, received no response. On April 17, 2020, the Plaintiffs commenced an action against Alpesh and Johnston Law for false misrepresentation, breach of contract, duty of care and fiduciary duty and solicitor’s negligence (the “Solicitor Action”).

[5] On March 23, 2022, Alpesh was charged with fraud over $5,000. On April 23, 2022, a Law Society of Ontario tribunal ordered an interlocutory suspension of his license. Among other things, it is alleged that after this action was dismissed Alpesh misled his client by fabricating documents including a court order leading them to believe that it had been settled for $1.3 million.

[6] Plaintiffs’ counsel advised Defendants’ counsel on December 4, 2020 that the Plaintiffs would be bringing a motion to set aside the Dismissal Order. At a telephone case conference on January 11, 2021, I scheduled the motion for April 29, 2021. However, due to Alpesh’s failure to produce the files, at a telephone case conference on March 30, 2021 I ordered that the April 29 date be used for a Rule 30.10 motion to compel him to produce them. The Plaintiffs experienced difficulty re-scheduling the motion through the motions office and another telephone case conference was held on December 1, 2022 where it was re-scheduled for May 3, 2022. Another telephone case conference was held that day further adjourning the motion to September 6, 2022. There were subsequent issues filing materials necessitating another adjournment.

III. The Law and Analysis

[7] Rule 48.14(10) provides that an administrative dismissal of an action may be set aside under rule 37.14(1) of the Rules of Civil Procedure, which states:

(1) A party or other person who,

(c) is affected by an order of a registrar,

may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.

(2) On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.

[8] The four (4) factors which the court must consider when determining whether to exercise its discretion to set aside a Registrar’s dismissal order were established by Master Dash (as he then was) in Reid v. Dow Corning Corp., [2001] O.J. No. 2365 (S.C.J.):

“1.Explanation of the Litigation Delay: The plaintiff must adequately explain the delay in the progress of the litigation from the institution of the action until the deadline for setting the action down for trial as set out in the status notice. She must satisfy the court that steps were being taken to advance the litigation toward trial, or if such steps were not taken to explain why. For example the complexities of the case and the number of parties may have required significantly more time to move the action toward trial, or the delay was caused by interlocutory matters or appeals. The plaintiff could explain that the action was stalled due to the inattention or negligence of her solicitors which was contrary to her own instructions or expectations. It is absolutely essential that the plaintiff lead satisfactory evidence that she personally always intended the action to proceed to trial without delay, that she did not assent to the delay, and that she always reasonably assumed it was so proceeding or made appropriate inquiries of her solicitors. If either the solicitor or the client made a deliberate decision not to advance the litigation toward trial then the motion to set aside the dismissal will fail.

2.Inadvertence in Missing the Deadline: The plaintiff or her solicitor must lead satisfactory evidence to explain that they always intended to set the action down within the time limit set out in the status notice, or request a status hearing, but failed to do so through inadvertence. In other words the penultimate dismissal order was made as a result of inadvertence.

3.The Motion is Brought Promptly: The plaintiff must demonstrate that she moved forthwith to set aside the dismissal order as soon as the order came to her attention.

4.No Prejudice to the Defendant: The plaintiff must convince the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiff's delay or as a result of steps taken following the dismissal of the action. The court takes note that witnesses' memories generally tend to fade over time and that sometime it is difficult to locate witnesses or documents. However to bar the plaintiff from proceeding with her action on the ground of prejudice, the defendant must lead evidence of actual prejudice. This might include evidence of specified documents lost over time, or destroyed following a dismissal, or of specific witnesses who have died, or have disappeared and the defendant has been unable to locate them with due diligence. While litigation is outstanding the defendants must take care to obtain and preserve evidence.” (Reid at para. 41; Prescott v. Barbon, 2018 ONCA 504 at para. 14).

[9] The Reid factors are not a rigid test and the Plaintiffs are not required to satisfy each of the 4 factors. The court must take a contextual approach weighing all relevant factors to determine the order that is just in the circumstances of the particular case (Scaini v. Prochnicki, 2007 ONCA 63 at paras. 21-28; Prescott at para. 15). The Court of Appeal provided further guidance in Habib v. Mucaj, 2012 ONCA 880:

“[5] There are four well established factors to consider when deciding to set aside an order to dismiss an action: (i) explanation of the litigation delay - a deliberate decision not to advance the litigation will usually be fatal; (ii) inadvertence in missing the deadline - the intention always was to set the action down within the time limit; (iii) the motion is brought promptly - as soon as possible after the order came to the party's attention; and (iv) no prejudice to the defendant - the prejudice must be significant and arise out of the delay: Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80 (Ont. Div. Crt.).

[6] No one factor is necessarily decisive of the issue. Rather, a "contextual" approach is required where the court weighs all relevant considerations to determine the result that is just. …”

[10] The court must strike a balance between having matters determined on their merits and having them tried expeditiously:

“Expeditious justice must be balanced with the public interest in having disputes determined on their merits. Where, despite the delay, the defendant would not be unfairly prejudiced should the matter proceed for resolution on the merits, according the plaintiff an indulgence is generally favoured.” (Marché d'Alimentation Denis Thériault Ltée. v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660 (O.C.A.) at para. 34)

[11] The Court of Appeal has also established that the general preference for determining matters on their merits is stronger where there is delay due to an error or inadvertence of counsel:

“ The court's preference for deciding matters on their merits is all the more pronounced where delay results from an error committed by counsel. As the court stated in Habib, at para. 7, "[O]n a motion to set aside a dismissal order, the court should be concerned primarily with the rights of the litigants, not with the conduct of their counsel." In Marché, Sharpe J.A. stated, at para. 28, "The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor" (citations omitted). (H.B. Fuller Company et al. v. Rogers (Rogers Law Office), 2015 ONCA 173 at para. 27)

[12] This was discussed further in Graham v. Vandersloot, 2012 ONCA 60:

“[10] Finally, while the motion judge was justified in observing that the medical assessments should have been arranged prior to May 2010, she gave undue weight to the appellant's lawyer's failure to do so when all of the foregoing factors are taken into consideration. As Hambly J. noted [at para. 15] when granting leave to appeal to the Divisional Court [ [2011] O.J. No. 495, 2011 ONSC 377 ] in this matter, "the often applied principle that the sins of the lawyer should not be visited upon the client applies in this case". This principle was enunciated by this court in Halton Community Credit Union Ltd. v. ICL Computers Canada Ltd., [1985] O.J. No. 101, 8 O.A.C. 369 (C.A.), at para. 11:

Undoubtedly counsel is the agent of the client for many purposes . . . but it is a principle of very long standing that the client is not to be placed irrevocably in jeopardy by reason of the neglect or inattention of his solicitor, if relief to the client can be given on terms that protect his innocent adversary as to costs thrown away and as to the security of the legal position he has gained. There may be cases where the plaintiff has so changed his position that this is impossible.

[12] Apart from the understandable frustrations experienced by presiding judicial officials and opposing parties over delays in the processing of civil cases, it is the overall interests of justice that, at the end of the day, must govern. Perell J. expressed this sentiment well in Ariston Realty Corp., at para. 38:

In my opinion, a concern for the principles of natural justice and the appearance of justice being done explains why, perhaps to the chagrin of those opposing adjournments and indulgences, courts should tend to be generous rather than overly strict in granting indulgences, particularly where the request would promote a decision on the merits. This liberality follows because it is in the public interest that whatever the outcome, a litigant should perceive that he or she had their day in court and a fair chance to make out their case.” (Graham at paras. 10-12)

[13] For the reasons that follow, I conclude that it is just in the circumstances to dismiss the Plaintiffs’ motion to set aside the Dismissal Order.

[14] With respect to the first Reid factor, the Plaintiffs are required to provide an “acceptable”, “satisfactory” or “reasonable” explanation for the delay (Carioca’s Import & Export Inc. v. Canadian Pacific Railway, 2015 ONCA 592 at para. 45). In determining what constitutes an adequate explanation, the totality of the circumstances must be examined having regard to the competing interests at stake and the interests of justice (3 Dogs Real Estate Corp. v. XCG Consultants Ltd., 2014 ONSC 2251 at para. 37). In assessing the explanation, the court is to consider the overall conduct of the litigation and not to undertake a month-by-month review (Carioca’s at para. 46). A plaintiff bears the primary responsibility for the progress of an action and though there may be situations where the defendant’s conduct may be relevant, there is no burden on the defendant to explain the delay or move the action to trial (Prescott at para. 30). The longer the delay, the more robust the explanation which is required (Erland v. Ontario, 2019 ONSC 462 at para. 10).

[15] In my view, the first Reid factor favours the Defendants. I accept that generally speaking, the Plaintiffs reasonably relied on Alpesh as their lawyer and family member. Their reliance was even stronger given their issues with English, inexperience with the legal system and the severity and impact of the accident. They also made follow-up inquiries and reasonably relied on Alpesh’s representations that their claim was settled. However, there is an important distinction to be made between this action and the Plaintiffs’ accident benefits claim. On his examination for discovery in the Solicitor Action, Manubhai stated that he did not instruct Alpesh to commence this action, did not review the Statement of Claim and had no idea that this action had been commenced. Therefore, far from there being any evidence that the Plaintiffs intended to have this action proceed to trial, there is no evidence that the Plaintiffs intended to commence it at all. During cross-examination on his affidavit, Manubhai also stated that he did not instruct Alpesh to settle their accident benefits claim, only finding out about the purported settlement when Alpesh told him about it, which he understood to be a settlement of his accident benefits claim, not this action.

[16] Further, Alpesh testified at his examination for discovery in the Solicitor Action that he only had the Statement of Claim issued to preserve the limitation period and did not serve it or take any further steps because he was waiting to be paid by the Plaintiffs and did not want to incur any further expenses. Therefore, even if the Plaintiffs had demonstrated an intention to pursue this action to trial, their lawyer deliberately did not serve the Statement of Claim or take any steps to advance the action. Alpesh claims that he told the Plaintiffs that the action would be dismissed because they did not take any steps and that he attended the courthouse with them and showed them the dismissal on the public view terminal. Manubhai stated that he understood that he was being shown information regarding the settlement of the accident benefits claim. In all, the evidence demonstrates that the Plaintiffs’ reliance on Alpesh was not with respect to the progress of this action, which they did not know about, but with respect to the settlement of their benefits claim. Therefore, it cannot be said that the Plaintiffs reasonably assumed that this action was proceeding or would proceed (McNeill v. Sun Life Assurance, 2019 ONSC 4351 at para. 75). Even assuming reasonable reliance in these circumstances, given the lack of intention and the deliberate decision to not advance the litigation, the Plaintiffs have not provided a reasonable explanation for the delay.

[17] For similar reasons, in considering the second Reid factor, I cannot conclude that missing the deadline and the issuance of the Dismissal Order were due to inadvertence. The Plaintiffs did not provide instructions to commence this action, did not even know that the action had been commenced and Alpesh purposely did not advance the litigation, letting it be administratively dismissed as abandoned.

[18] The distinction between inadvertence and negligence and the whether the Plaintiffs would be left without a remedy are also relevant:

[28] One important consideration is that the plaintiff will not be left without a remedy. I recognize here the need to ensure that adequate remedies are afforded where a right has been infringed. The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor: see, e.g., Chiarelli v. Wiens (2000), 46 O.R. (3d) 780, [2000] O.J. No. 296 (C.A.), at para. 9.

[29] However, this calculus implicitly assumes that the court is left with a stark choice between defeating the client's rights and forcing the opposite party to defend the case on its merits. That assumption is faulty where, as in this case, the solicitor's conduct is not mere inadvertence, but amounts to conduct very likely to expose the solicitor to liability to the client. When the solicitor is exposed in this way, the choice is different; refusing the client an indulgence for delay will not necessarily deny the client a legal remedy.

[30] In these circumstances, and contrary to the view expressed by the Divisional Court judge, the Master properly distinguished inadvertence from negligence. Leaving the Registrar's order in place would not necessarily deprive the respondents of a remedy. It was appropriate on these facts for the Master to tell the respondents that they should "consider what other remedies are available to them".

[31] A second consideration is that the nature of the delay and the solicitors' conduct in this case amount to more than that kind of lapse or inadvertent mistake that the legal system can countenance. We should opt for a resolution that discourages this type of conduct which undermines the important value of having disputes resolved in a timely fashion. The decision of the Master sends the right message and provides appropriate incentives to those involved in the civil justice system.

[32] Moreover, excusing a delay of this magnitude and gravity risks undermining public confidence in the administration of justice. Lawyers who fail to serve their clients threaten public confidence in the administration of justice. The legal profession itself has recognized this danger: Commentary to rule 2.01 of the Law Society of Upper Canada's Rules of Professional Conduct states, "A [page670] lawyer who is incompetent does the client a disservice, brings discredit to the profession, and may bring the administration of justice into disrepute" (emphasis added). There is a risk that the public would perceive disregarding the solicitor's conduct in the circumstances of this case as the legal system protecting its own. Excusing a delay of this kind would [throw] into question the willingness of the courts to live up to the stated goal of timely justice.

[33] Overall, reinstating this action would excuse a five-year delay after the dismissal of an action, explained only by the fact that a lawyer formed "a deliberate intention not to advance the litigation toward trial" and "put the file in abeyance". That would risk undermining the integrity and repute of the administration of justice.” (Giant Tiger at paras. 28-33)

[19] In the present case, Alpesh’s conduct was deliberate and the Plaintiffs are pursuing remedies against him in the Solicitor Action. While Plaintiffs’ counsel submits that there may be no coverage for the Plaintiffs’ claims against Alpesh, there is no evidence before me that this is the case.

[20] Turning to the third Reid factor, the relevant date is whether the Plaintiffs moved in a timely manner after the Dismissal Order was brought to their attention, not when it was issued (Assaf at para. 17; Reid at para. 41; Habib at para. 5). The Plaintiffs became aware of the Dismissal Order through their new counsel on July 19, 2019. Although the motion to set aside the Dismissal Order was not brought for 18 months, I am satisfied that there is a reasonable explanation for this delay. In particular, the investigation by Plaintiffs’ new counsel was impeded by the failure of Alpesh and his new Firm to respond to inquiries regarding the status of the Plaintiffs’ claim and alleged settlement and the Plaintiffs’ inability to obtain their file. The investigation was further hampered by the onset of the pandemic in March 2020. While an 18-month delay might typically be considered too long to overcome, given these extraordinary circumstances, I am satisfied that the Plaintiffs have provided a reasonable explanation.

[21] With respect to the fourth Reid factor, I cannot conclude that the Plaintiffs have satisfied their onus of demonstrating that the Defendants would not suffer actual prejudice as a result of the overall delay if this action is permitted to proceed (1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544 at para. 32). The prejudice at issue is the Defendants’ ability to defend the action and present their case at trial as a result of the Plaintiffs’ delay, not due to the passage of time (Carioca’s at para. 57; H.B. Fuller at para. 37; Abou-Naoum v. Leon’s Furniture Ltd., 2016 ONSC 7341 at para. 66). The plaintiff’s evidence should identify the important witnesses and indicate whether or not they remain available to give evidence or whether their evidence and important documentary evidence has been preserved (Martin v. John Doe, 2017 ONSC 6955 at para. 33).

[22] Given that the accident occurred more than 12 years ago (more than 9 years at the time the motion was brought) there is a presumption that memories have faded (Jones v. Sidhu, 2014 ONSC 1487 at para. 35). More problematic is the fact that key evidence is no longer available. In particular, the earliest available OHIP summaries are dated March 29, 2014. This is consistent with the fact that OHIP summaries are only available 7 years prior to request. Therefore, due to the Plaintiffs’ delay, there are no pre-accident OHIP summaries or any for over 2 years after the accident. This has deprived the Defendants of material evidence and information regarding Manubhai’s medical history, condition and treatment which is required to properly defend themselves against the Plaintiffs’ claims. This raises a risk of trial unfairness and may have a material impact on the court’s ability to properly adjudicate this action. Further, given the delay, the Defendants have also been deprived of the opportunity to conduct timely independent medical assessments. The effect is magnified given the severity of the injuries, the amount of the claim and Manubhai’s admission that he has difficulty remembering the doctors who treated him after the accident. The fact that the Plaintiffs have made numerous, unfulfilled document requests is not sufficient to compensate for the loss of key evidence and information (Sidhu at para. 37). All of this makes it extremely difficult if not impossible to piece together adequate documentation of Manubhai’s medical history and treatment. There is also no evidence with respect to what records exist in support of Manjula’s claims for lost income.

[23] Even if the Defendants were able to properly defend this action, I conclude that the principle of finality is also applicable (Prescott at paras. 32-42; Giant Tiger at paras 38-40). This was summarized by the Court of Appeal in Giant Tiger:

“[36] Moreover, as the Master correctly observed, the jurisprudence from this court identifies as relevant to the fourth Reid factor the security of legal position gained by a litigant through a court order granted because of delay or default: see Halton Community Credit Union Ltd. v. ICL Computers Canada Ltd., supra. [page671]

[37] Finality, like the avoidance of unnecessary delay, is a central principle in the administration of justice. "The law rightly seeks a finality to litigation" and finality is "a compelling consideration": Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, [2001] S.C.J. No. 46, at paras. 18 and 19.

[38] When an action has been disposed of in favour of a party, that party's entitlement to rely on the finality principle grows stronger as the years pass. Even when the order dismissing the action was made for delay or default and not on the merits, and even when the party relying on the order could still defend itself despite the delay, it seems to me that at some point the interest in finality must trump the opposite party's plea for an indulgence. This is especially true where, as in the present case, the opposite party appears to have another remedy available.

[39] The delay in this case was inordinate. From the appellant's perspective, the respondents did absolutely nothing to move this file forward for more than five years, and before that, the respondents had proceeded in what could only be described as a desultory fashion for two and one-half years after commencing the action.

[40] I agree with the Master that, when viewed in the light of a delay of this magnitude, the security of the legal position obtained by the appellant becomes an important factor to consider. Five years after the action against it had been dismissed, the appellant was entitled to rest on the assurance that the judicial system had disposed of the respondents' claim once and for all.”

[24] From 2013-2020, a period of approximately 7 years, the Carriere Defendants had the security that this action was not proceeding. While they did not know about the Dismissal Order until 2019, they knew the action existed and that, notwithstanding their requests, they had not been served with the Statement of Claim or received any documents. While the Patel Defendants did not know about the action, they were able to rely on the fact that there was no action against them almost 10 years after the accident. In my view, given the significant passage of time without even being served with a Statement of Claim, the Defendants were entitled to rely on the security and assurance of legal position that the litigation was not proceeding or had not been commenced. The effect of finality is an even stronger consideration here given that the Plaintiffs are pursuing remedies against Alpesh.

[25] Applying a contextual approach, I conclude that it is just in the circumstances to dismiss the Plaintiffs’ motion. Balancing the competing interests, I am satisfied that the actual prejudice to the Defendants is too great and the finality of legal position too strong such that they outweigh the Plaintiffs’ request for a significant indulgence to have this action determined on the merits. This is particularly true in the face of the deliberate decision not to pursue the litigation along with the remedies the Plaintiffs are pursuing against Alpesh in the Solicitors’ Action.

IV. Disposition and Costs

[26] Order to go dismissing the Plaintiffs’ motion. If the parties cannot agree on the costs of this motion, they may file written costs submissions not to exceed 3 pages (excluding Costs Outlines) on a timetable to be agreed upon by counsel.

Released: November 20, 2023 Associate Justice McGraw