Marche D'Alimentation Denis Theriault Ltée et al. v. Giant Tiger Stores Ltd.

[Indexed as: Marche D'Alimentation Denis Theriault Ltée v. Giant Tiger Stores Ltd.]

87 O.R. (3d) 660

Court of Appeal for Ontario,

MacPherson, Sharpe and Juriansz JJ.A.

October 12, 2007

Civil procedure -- Dismissal for delay -- Action dismissed by Registrar for failure to set it down within prescribed time -- Plaintiffs' new solicitor not receiving Notice of Status Hearing or order dismissing action because of his failure to file Notice of Change of Solicitors -- Plaintiffs bringing motion to set aside order dismissing action almost six years after order was made -- Motion judge properly dismissing motion -- Plaintiffs failing to provide adequate explanation for delay -- Delay not caused by mere inadvertence on part of solicitor -- Plaintiffs having alternative remedy in form of action against solicitor -- Reinstating action would risk undermining integrity and repute of administration of justice.

The plaintiffs commenced an action in October 1996. Throughout 1997 and 1998, the plaintiffs did not answer undertakings on discovery and failed to deliver amended pleadings to comply with court orders. They changed solicitors, and their new solicitor failed to file a Notice of Change of Solicitors. In March 1999, the Registrar dismissed the action for failure to set it down for trial in the time prescribed by rule 48.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Because of his failure to file a Notice of Change of Solicitors, the plaintiffs' solicitor did not receive the Notice of Status Hearing or the order dismissing the action. In mid-2003, the file was transferred to another lawyer, who discovered that the action had been dismissed. A motion to set aside the order dismissing the action was brought in December 2003 and was not heard until February 2005, almost six years after the order was made. The Master dismissed the motion. The plaintiffs' appeal to the Divisional Court was allowed and the action was reinstated. The defendant appealed.

Held, the appeal should be allowed.

The plaintiffs failed to provide an adequate reason for the delay. Their solicitor's conduct was not mere inadvertence, but rather amounted to conduct which was very likely to expose him to liability to the plaintiffs. Refusing the plaintiffs an indulgence for delay would not necessarily deny the plaintiffs a legal remedy, since they had the option of suing the solicitor. Moreover, excusing a delay of this magnitude and gravity risked undermining public confidence in the administration of justice. 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. While the defendant would not be prejudiced in presenting its case despite the delay, that factor alone was not enough. 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, at some point the interest in finality had to trump the opposite party's plea for an indulgence. The delay in this case was inordinate. Reinstating the action at this point would undermine the finality principle, while refusing to reinstate it would not interfere with the need to ensure adequate remedies.

APPEAL from the judgment of the Divisional Court (Cameron J. sitting as a single judge), [2006] O.J. No. 2898, 150 A.C.W.S. (3d) 76 (Div. Ct.), allowing an appeal from the order of Master Beaudoin, dated April 6, 2005, dismissing a motion to set aside the Registrar's order dismissing an action for delay.

Cases referred to Reid v. Dow Corning Corp., [2002] O.J. No. 3414, 48 C.P.C. (5th) 93 (Div. Ct.), revg [2001] O.J. No. 2365, 11 C.P.C. (5th) 80 (S.C.J.); Scaini v. Prochnicki (2007), 85 O.R. (3d) 179, [2007] O.J. No. 299, 219 O.A.C. 317, 39 C.P.C. (6th) 1, 2007 ONCA 63 (C.A.), consd Other cases referred to Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44, [2000] 2 S.C.R. 307, [2000] S.C.J. No. 43, 81 B.C.L.R. (3d) 1, 190 D.L.R. (4th) 513, 260 N.R. 1, [2000] 10 W.W.R. 567, 77 C.R.R. (2d) 189, 2000 C.L.L.C. Â230-040, 2000 SCC 44, 3 C.C.E.L. (3d) 165; Chiarelli v. Wiens (2000), 2000 3904 (ON CA), 46 O.R. (3d) 780, [2000] O.J. No. 296, 34 C.P.C. (4th) 227 (C.A.); Convay v. Marsulex Inc., [2002] O.J. No. 4655, 118 A.C.W.S. (3d) 523 (C.A.); Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, [2001] S.C.J. No. 46, 54 O.R. (3d) 214n, 201 D.L.R. (4th) 193, 272 N.R. 1, 2001 C.L.L.C. Â210-033, 2001 SCC 44, 10 C.C.E.L. (3d) 1, 7 C.P.C. (5th) 199; Halton Community Credit Union Ltd. v. ICL Computors Canada Ltd., [1985] O.J. No. 101, 8 O.A.C. 369, 1 C.P.C. (2d) 24 (C.A.); Housser v. Savin Canada Inc. (2005), 2005 35779 (ON SC), 77 O.R. (3d) 251, [2005] O.J. No. 4217, 19 C.P.C. (6th) 156 (S.C.J.); Kuhr v. Pearlman, 1991 11776 (MB CA), [1991] M.J. No. 438, 76 Man. R. (2d) 67, 10 W.A.C. 67, [1991] 6 W.W.R. 399, 1 C.P.C. (3d) 229 (C.A.); Mandal v. 575419 Ontario Ltd., [1994] O.J. No. 34, 23 C.P.C. (3d) 172 (Gen. Div.); Susin v. Baker and Baker, [2004] O.J. No. 723, 129 A.C.W.S. (3d) 73 (C.A.) Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 1.04(1), 24.01 [as am.], 48.14 [as am.], 77.02 [as am.] Law Society of Upper Canada, Rules of Professional Conduct, rule 2.01 Authorities referred to Law Society of Upper Canada, Rules of Professional Conduct, Commentary to rule 2.01 Watson, G.D. and C. Perkins, Holmested and Watson: Ontario Civil Procedure, vol. 4 supplement (Toronto: Carswell, 1984)

Jim MacGillivray, for defendant (appellant). Allan R. O'Brien, for plaintiffs (respondents).

The judgment of the court was delivered by

[1] SHARPE J.A.: -- When should a litigant be permitted to revive an action that has been dismissed for delay?

[2] The respondents commenced this action in October 1996, but by early 1998 the matter had stalled. The respondents did not answer undertakings on discovery and failed to deliver amended pleadings to comply with court orders. The respondents changed solicitors, but the new solicitor failed to file a Notice of Change of Solicitors. On March 4, 1999, the Registrar dismissed the action pursuant to rule 48.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for failure to set the action down within the prescribed time. Because of the failure to file a Notice of Change of Solicitors, neither the respondents nor their new counsel were aware that the action had been dismissed. Nothing happened for over four years. The respondents' solicitor discovered in June 2003 that the action had been dismissed, but did not inform his client until October. The respondents' motion to set aside the Registrar's order dismissing the action was not brought until December 2003, and not heard until February 2005, almost six years after the order was made. The Master dismissed the motion, but the respondents successfully appealed that decision to a single judge of the Divisional Court who reinstated the action. The appellant appeals, with leave, to this court and asks that the Master's order be restored. For the following reasons, I would allow the appeal and restore the decision of the Master.

Facts

[3] The respondents commenced this action in October 1996 for damages arising from the appellant's agreement to lease, with an option to purchase, a building owned by the corporate respondent. The appellant terminated the lease agreement prior to its commencement, alleging breaches by the corporate respondent. The respondents deny these breaches and allege that without the appellant's rental payments, they were unable to maintain the mortgage on the building. Upon the respondents' default, the mortgagee took possession and eventually sold the building to the appellant for $225,000 less than the appellant had agreed to pay the respondents in the option agreement. The respondents claimed $3 million for loss of rent, as well as damages for loss of reputation, pain and suffering and mental distress. The appellant counterclaimed for $1.1 million.

[4] By mid-March 1997, the respondents had retained a new solicitor, but she failed to file a Notice of Change of Solicitors. Denis Thériault was examined for discovery in his personal capacity and as a representative of Thériault Ltée on May 29, 1997. The respondents did not examine a representative of the appellant. The appellant successfully moved to strike the claim of Josée Thériault in its entirety, to strike the claims of Denis Thériault and his company for pain and suffering, loss of amenities of life, mental distress and loss of reputation, and to strike the allegation that the appellant attempted to intimidate the respondents by breaching the lease agreement. This left only the claim for loss of rent.

[5] From June 1997 to January 1998, the appellant's solicitor made numerous requests for answers to undertakings given on discovery and for an amended statement of claim that would comply with the successful pleadings motion. A small number of undertakings were answered, but nothing further was heard from the respondents.

[6] In February 1998, the respondents retained a third lawyer who served a Notice of Change of Solicitors along with a Trial Record. However, his assistant was unable to file these materials as the respondent's original solicitor, still on the record, could not be found and consequently could not be served. The assistant failed to inform the solicitor of this problem and no further attempt was made to file either the Notice of Change of Solicitors or the Trial Record.

[7] The appellant continued to press for answers to undertakings on discovery and for a trial record that contained properly amended pleadings. The respondents' solicitor's sporadic responses to numerous letters from the appellant failed to satisfy those requests.

[8] On March 4, 1999, the Registrar dismissed the respondents' action for failure to set the action down for trial in the time prescribed by rule 48.14. The respondents' solicitor, who had not filed a Notice of Change of Solicitors, did not receive the Notice of Status Hearing or the order dismissing the action. He made no attempt to move the matter forward for over four years and indeed remained unaware of the dismissal of the action. In late May 2003, the solicitor left his partnership and the respondents' file was transferred to another lawyer in the office. In mid-June 2003, the new lawyer discovered that the action had been dismissed.

[9] Throughout, the respondents maintained regular contact with their solicitor. In 2001, the solicitor requested and received additional funds from them to prepare a motion to deal with outstanding issues concerning the pleadings in order to set the matter down for trial. That motion was never brought.

[10] The respondents were not advised of the dismissal until October 2003, and their motion to set aside the order dismissing the action was not served until December 2003.

[11] The limitation period for the respondents' cause of action expired in June 2002, and the appellant's Vice-President of Finance, the individual best able to substantiate the appellant's set-off and counterclaim, died in May 2000. In view of the dismissal of the action and the passage of time, the appellant's solicitors stripped their file, destroyed all their notes, and sent what was left in the file to storage. The appellant destroyed many of the documents relating to the litigation including a significant portion of its records relating to its set-off and counterclaim.

Master's decision refusing to set aside the order dismissing the action

[12] The Master applied the four-pronged test described in Reid v. Dow Corning Corp., [2001] O.J. No. 2365, 11 C.P.C. (5th) 80 (S.C.J.), at para. 41, revd on other grounds [2002] O.J. No. 3414, 48 C.P.C. (5th) 93 (Div. Ct.):

(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... 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.

[13] The Master found that the respondents failed to provide an adequate explanation for the delay. He found, at para. 14, that for the entire period of delay, from the institution of the action until the discovery of its dismissal"the explanations offered by the respondents and their counsel were less than satisfactory". Their correspondence with the appellant's solicitor ceased in February 1999, and the respondents failed to communicate to the appellant any intention to move the action toward trial. The Master concluded that the respondents' solicitor "had put the file in abeyance" and that his conduct spoke "to a deliberate intention not to advance the litigation toward trial".

[14] The Master also concluded that the second prong of the test -- that the dismissal resulted from inadvertence -- had not been met. The only evidence of inadvertence was the respondents' solicitor's statement in his affidavit: "Through inadvertence on my behalf, a motion to finalize the issue of the amendments to the pleadings was not brought before the court." The Master found that the failure to receive the Notice of Status Hearing and subsequent order dismissing the action resulted from the solicitor's failure to file a Notice of Change of Solicitors properly. He further found that the solicitor should have known that the respondents were required to set the action down for trial within two years following the delivery of the statement of defence as required by rule 48.14(1). The solicitor conceded on his cross-examination that the reason he had not moved the file forward was that he was simply too busy and that "there was no money in the file". The Master, quoting Rutherford J. in Mandal v. 575419 Ontario Ltd., [1994] O.J. No. 34, 23 C.P.C. (3d) 172 (Gen. Div.), concluded that the dismissal resulted not from the solicitor's inadvertence, but from "his negligence or lack of proper organization bordering on negligence" and that this failed to satisfy the second prong of the test.

[15] The Master found that the motion "could have been brought sooner and should have been pursued more expeditiously". Despite the delay of almost six months from when the solicitor discovered the dismissal to when he informed his clients, the Master concluded that he would not have refused relief "had this been the only factor in issue".

[16] The Master found that the evidence of prejudice related primarily to the set-off and counterclaim. With the help of the respondents' solicitor, it was possible to recreate the appellant's solicitor's file. The Master concluded"[w]hile there is some prejudice to the [appellant], I am not satisfied that it is so significant that it would prevent a fair trial of the action. The fact that [the respondents] may have met this branch of the test is not enough since each of the four criteria must be satisfied."

[17] The Master concluded that the respondents' failure rested "on the shoulders of their solicitor". He cited the oft-quoted passage from Halton Community Credit Union Ltd. v. ICL Computers Canada Ltd., [1985] O.J. No. 101, 1 C.P.C. (2d) 24 (C.A.):

[I]t 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.

[18] The Master found that as the appellant "properly believed that this action and a claim for nearly three million in damages had been dismissed nearly six years ago", costs thrown away would be insufficient "to protect the security of the legal position" the appellant had gained. He also found that "[t]he [respondents] must consider what other remedies are available to them", an obvious allusion to the respondents' potential claim for damages against their solicitors upon whose shoulders the Master rested the respondents' failure to move the action forward.

Decision of the Divisional Court judge to reinstate the action

[19] The Divisional Court judge found that the Master had erred in law by concluding that the second branch of the test could not be satisfied as the dismissal had resulted not from "inadvertence" but from "negligence". The Divisional Court judge found at para. 50 that as the fault for the delay was the "possible negligence" of the respondents' solicitors in failing to file a Notice of Change of Solicitors and the "laziness" of the third solicitor in failing to move the matter along, the respondents had shown that the dismissal had resulted from inadvertence. Indeed, he stated at para. 46, that the delay from 1998 to 2003 was an "intentional and a stubborn refusal to proceed with the action". He concluded, however, at para. 44, that "[t]here is no reason why inadvertence cannot include negligence as well". The respondents, he held, had always believed the action continued and were not at fault, and they should not be blamed for the negligence of their solicitors. The Divisional Court judge therefore reinstated the action.

Analysis

[20] In Scaini v. Prochnicki (2007), 2007 ONCA 63, 85 O.R. (3d) 179, [2007] O.J. No. 299 (C.A.), a decision handed down after those of both the Master and the Divisional Court, this court reversed the line of authority that had strictly required a moving party to satisfy each element of the four-part test in Reid v. Dow Corning Corp., supra. Writing for the court, Goudge J.A. stated at paras. 23-24 that "a contextual approach. . . is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria". The four Reid criteria are "likely to be of central importance in most cases", but they are not exhaustive and "[t]he key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case".

[21] The contextual approach mandated by Scaini to determine what "is just in the circumstances of the particular case" invites the application of important underlying principles and values of the civil justice system that are inherent in the four Reid factors. As I read his reasons, the Master's interpretation of the four Reid factors implicitly embraced these principles and values.

[22] On this appeal, three of the four elements from the Reid test are at issue, namely, explanation for the litigation delay, inadvertence in missing the deadline, and prejudice to the plaintiff.

Explanation for the litigation delay

[23] The Reid test's requirement of an explanation for the litigation delay ties into a dominant theme in modern civil procedure: the discouragement of delay and the enhancement of an active judicial role to ensure timely justice. This action was dismissed by the Registrar under rule 48.14: a status notice was sent because the action had not been placed on the trial list within two years of the filing of a statement of defence, and the respondents failed to set the action down for trial within 90 days after receiving the status notice. Rule 48.14 is one of many rules of civil procedure designed to promote the timely resolution of disputes, to discourage delay in civil litigation and to give the courts a significant role in reducing delays. Before the promulgation of rule 48.14, parties had total control over when cases were placed on the trial list. Rule 48.14 "establishes a procedure which gives the court a degree of control over the speed at which litigation proceeds to a conclusion. . . . In essence the rule provides for a very limited form of case management." Garry D. Watson & Craig Perkins, Holmested and Watson: Ontario Civil Procedure, vol. 4 supplement (Toronto: Carswell, 1984) [at] 4815. The case management regime, for which rule 48.14 was a precursor, was introduced in part to reduce "unnecessary cost and delay in civil litigation": rule 77.02.

[24] Dismissal for delay is not, of course, an invention of case management. Rule 24.01 allows a party to move to dismiss an action for delay where the plaintiff has failed to prosecute the action in a timely fashion in accordance with the rules. Moreover, 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": Housser v. Savin Canada Inc. (2005), 2005 35779 (ON SC), 77 O.R. (3d) 251, [2005] O.J. No. 4217 (S.C.J.), at para. 9. As the Manitoba Court of Appeal wrote"The power of a superior court to strike a matter for want of prosecution does not hinge on the niceties of the wording of the rules, but rather flows from the inherent power of the court to prevent an abuse of its own process": Kuhr v. Pearlman, 1991 11776 (MB CA), [1991] M.J. No. 438, 76 Man. R. (2d) 67 (C.A.), at para. 16. In at least two cases, this court has characterized lengthy, unexplained delays as "an abuse of the court's process". In Susin v. Baker and Baker, [2004] O.J. No. 723, 129 A.C.W.S. (3d) 73 (C.A.), at para. 7, the court wrote that "even if the action could not be dismissed under r. 24.01(1), given all of the circumstances, it could properly be dismissed as an abuse of the court's process". See also Convay v. Marsulex Inc., [2002] O.J. No. 4655, 118 A.C.W.S. (3d) 523 (C.A.).

[25] These rules and cases rest upon an important principle: there is a strong public interest in promoting the timely resolution of disputes. "The notion that justice delayed is justice denied reaches back to the mists of time . . . .For centuries, those working with our legal system have recognized that unnecessary delay strikes against its core values and have done everything within their powers to combat it": Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44, [2000] 2 S.C.R. 307, [2000] S.C.J. No. 43, at para. 146. The interest of litigants involved in the civil justice system in timely justice is obvious. Litigants are entitled to have their disputes resolved quickly so that they can get on with their lives. Delay multiplies costs and breeds frustration and unfairness.

[26] In the light of the important principle of promoting the timely resolution of disputes, I see no reason on the record before us to disagree with the Master's finding that the respondents failed to satisfy the first step of the Reid test. The solicitor "had put the file in abeyance" and that his conduct indicated "a deliberate intention not to advance the litigation toward trial". As the Divisional Court judge found, the delay flowed from the solicitor's "intentional and stubborn refusal to proceed with the action". The respondents' solicitors failed to observe the rules relating to filing Notices of Change of Solicitor or to ensure adequate communication within their office when the assistant encountered difficulties in that regard. This failure meant that the solicitor did not receive the Registrar's rule 48.14 Notice, but he nonetheless should have known that under the Rules of Court, failure to set the action down for trial within two years of the statement of defence would lead to the action being dismissed.

Inadvertence in missing the deadline

[27] The Master and the Divisional Court disagreed as to whether the solicitor's conduct constituted "inadvertence" for the purposes of the second branch of the test. The Master, focusing on the conduct of the solicitor, held that it was not. The Divisional Court judge, focusing on the fact that the client believed that the action was proceeding to trial, held that the solicitor's neglect of the file should be considered inadvertent. I agree with the Master that, in light of the length of the delay and the fact that it was caused by the solicitor effectively abandoning the file, this is not a case where the failure to move the case along to trial can be considered as mere inadvertence.

[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), 2000 3904 (ON CA), 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 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.

Prejudice to the plaintiff

[34] The fourth step in the Reid test focuses on prejudice to the defendant and the goal of having disputes resolved on their merits. The Rules of Civil Procedure must be interpreted in a manner that recognizes that expeditious justice is only one value to be weighed against others and that delay may be excused where necessary to ensure complete justice. As rule 1.04(1) states, the rules are to be "liberally construed to secure the just, most expeditious and least expensive determination or every civil proceeding on its merits" (emphasis added). 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.

[35] While I view the Master's finding that the appellant would not be prejudiced in presenting its case despite the delay to have been generous to the respondents, that finding was not challenged before us. This aspect of the fourth Reid factor and the underlying value of having disputes resolved on their merits favour the respondents. However, it is not enough for the respondents to show that the appellant could advance its case despite the delay if the matter were allowed to proceed to trial. There are four branches to the Reid test, and, according to Scaini, those four factors are not exhaustive.

[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.

[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.

Conclusion

[41] I conclude that the Master's analysis is appropriate because it takes account of important principles and values of the civil justice system. The solicitor's behaviour resulted in an excessive delay. Delays of this kind are inimical to the important goal of timely justice. The legal system should not condone the solicitor's behaviour as to do so would fail to provide appropriate incentives to those engaged in the justice system and would risk harming the integrity and repute of the administration of justice. Reinstating the action at this point would undermine the finality principle while refusing to reinstate the action does not interfere with the need to ensure adequate remedies.

[42] Accordingly, I would allow the appeal, set aside the order of the Divisional Court, and restore the order of the Master. The appellant is entitled to its costs of the application for leave to appeal and the appeal fixed at $7,500 inclusive of disbursements and GST.

Appeal allowed.