Carioca's Import & Export Inc. v. Canadian Pacific Railway Limited

[Indexed as: Carioca's Import & Export Inc. v. Canadian Pacific Railway Ltd.]

Ontario Reports

Court of Appeal for Ontario,

Sharpe, Lauwers and van Rensburg JJ.A.

September 2, 2015

128 O.R. (3d) 143 | 2015 ONCA 592

Case Summary

Civil procedure — Dismissal for delay — Restoration of action to trial list — Motion judge dismissing motion to restore action to trial list — Plaintiff's appeal allowed — Motion judge erring in allocating blame for delay instead of deciding whether there was reasonable explanation for delay and in deciding issue of prejudice to defendant by mechanical application of presumption based on passage of time.

The plaintiff commenced an action against the defendant in March 2007 for damages for negligence after a fire which started on railway lands spread to the plaintiff's business, resulting in damage and loss. Affidavits of documents were exchanged and examinations for discovery took place in 2008. The plaintiff set the action down for trial in June 2009. The defendant refused to sign a certification form to set pre-trial and trial dates on the basis that the plaintiff still had outstanding undertakings from discovery. The plaintiff attempted to comply with those undertakings, and by order dated January 6, 2012, following an unopposed motion by the plaintiff, the action was restored to the trial list. At that time, there was no indication of any outstanding undertakings. At "to be spoken to" court on October 28, 2013, the presiding judge struck the action from the trial list, endorsing "Not ready. Expert reports yet to be served." The plaintiff brought a motion to restore the action to the trial list. The motion was dismissed. The plaintiff appealed.

Held, the appeal should be allowed.

Where failing to restore an action to the trial list will result in it being dismissed for delay, the legal test for determining whether an action should be dismissed for delay is applicable. The plaintiff is required to provide an "acceptable" or "reasonable" explanation for the delay and to satisfy the court that there would be no prejudice to the defendant if the action were to proceed. Although the motion judge set out the correct test, he decided the delay issue based on an allocation of blame for the delay rather than on whether there was a reasonable explanation for the delay, and he decided the prejudice issue by a mechanical application of a presumption based on the passage of time, rather than considering prejudice as a question of fact in the particular circumstances of this case. The plaintiff had provided an acceptable explanation for any delay that occurred, and had demonstrated that there was no non-compensable prejudice to the defendant in its defence of the action as a result of the delay in restoring the action to the trial list.

Nissar v. Toronto Transit Commission (2013), 115 O.R. (3d) 713, [2013] O.J. No. 2553, 2013 ONCA 361, 309 O.A.C. 8, consd

Other cases referred to

1196158 Ontario Inc. v. 6274013 Canada Ltd. (2012), 112 O.R. (3d) 67, [2012] O.J. No. 3877, 2012 ONCA 544, 295 O.A.C. 244, 353 D.L.R. (4th) 129, 220 A.C.W.S. (3d) 533; Faris v. Eftimovski, [2013] O.J. No. 2551, 2013 ONCA 360, 42 C.P.C. (7th) 258, 363 D.L.R. (4th) 111, 87 E.T.R. (3d) 204, 306 O.A.C. 264, 228 A.C.W.S. (3d) 89; [page144] H.B. Fuller Co. v. Rogers (c.o.b. Rogers Law Office), [2015] O.J. No. 1260, 2015 ONCA 173, 330 O.A.C. 378, 386 D.L.R. (4th) 262, 250 A.C.W.S. (3d) 591; Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641, J.E. 2014-162; Kara v. Arnold, [2014] O.J. No. 5818, 2014 ONCA 871, 328 O.A.C. 382, 247 A.C.W.S. (3d) 552; Kerr v. CIBC World Markets Inc., [2013] O.J. No. 5775, 2013 ONSC 7685, 316 O.A.C. 192 (Div. Ct.); MDM Plastics Ltd. v. Vincor International Inc. (2015), 124 O.R. (3d) 420, [2015] O.J. No. 265, 2015 ONCA 28, 381 D.L.R. (4th) 249, 65 C.P.C. (7th) 225, 249 A.C.W.S. (3d) 562

Rules and regulations referred to

O. Reg. 170/14

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 24, 48, 48.01, 48.02, 48.04(2)(a), 48.06, 48.11, 48.14, (2), (10), 52.01, 53.03

APPEAL from the order of Aston J., [2014] O.J. No. 3837, 2014 ONSC 4818 (S.C.J.) dismissing a motion to restore an action to the trial list.

Robin B. Cumine, Q.C., and Kirryn G. Hashmi, for appellant.

Christopher J. Rae, for respondent.

The judgment of the court was delivered by

VAN RENSBURG J.A.: —

A. Introduction

[1] This is an appeal from an order of a motion judge refusing to restore an action to the trial list under rule 48.11 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. As a consequence of the judge's order, the action was subsequently administratively dismissed with costs pursuant to rule 48.14.

[2] The motion to restore the action to the trial list was brought after the action had been struck from the list at civil "to be spoken to" court in Toronto, six months earlier.

[3] There is no issue that the motion judge identified the correct test in considering whether to restore the action to the trial list. He asked whether the plaintiff (the appellant) had shown on a balance of probabilities that there was a reasonable explanation for the delay; and that if the action were allowed to proceed, the defendant (the respondent) would suffer no non-compensable prejudice: Nissar v. Toronto Transit Commission (2013), 115 O.R. (3d) 713, [2013] O.J. No. 2553, 2013 ONCA 361, at paras. 30-31. This is the appropriate test where a refusal to restore an action to the trial list would result in its dismissal (in this case, because the parties had received notice of an impending administrative [page145] dismissal after the action had not been restored to the trial list within 180 days of being struck).

[4] A decision on a rule 48.11 motion is discretionary and entitled to deference by this court. It may therefore only be set aside if made on an erroneous legal principle or infected by a palpable and overriding error of fact: Kerr v. CIBC World Markets Inc., [2013] O.J. No. 5775, 2013 ONSC 7685, 316 O.A.C. 192 (Div. Ct.), at para. 39; 1196158 Ontario Inc. v. 6274013 Canada Ltd. (2012), 112 O.R. (3d) 67, [2012] O.J. No. 3877, 2012 ONCA 544, at para. 16.

[5] I would allow the appeal. Although the motion judge set out the correct test, his analysis reveals errors in legal principle in applying both parts of the test. He decided the delay issue based on an allocation of blame for delay rather than whether there was a reasonable explanation for it. He decided the prejudice issue by a mechanical application of a presumption based on the passage of time, rather than considering prejudice as a question of fact in the particular circumstances of this case.

[6] Given the errors in legal principle, it falls to this court to reweigh the evidence: H.B. Fuller Co. v. Rogers (c.o.b. Rogers Law Office), [2015] O.J. No. 1260, 2015 ONCA 173, 330 O.A.C. 378, at para. 45. After doing so, I find that the appellant has provided an acceptable explanation for the delay, and that the respondent will not suffer non-compensable prejudice if the action is restored to the trial list. In order to explain these conclusions, the history of the litigation must be examined in some detail.

B. Facts

[7] The action arises out of a fire that took place August 10, 2006 on railway lands owned or occupied by the respondent, which spread to the appellant's business, resulting in the alleged damage and loss.

[8] The appellant commenced the action by statement of claim issued March 14, 2007, claiming damages of $125,000 for negligence. The respondent defended the action and commenced third party proceedings against the appellant's landlords at the time of the loss.

[9] Affidavits of documents were exchanged and examinations for discovery took place in February, June and September 2008. Some 39 undertakings were given in the examination for discovery of the appellant's representative.

[10] On June 11, 2009, the appellant set down the action for trial. The third party claim was dismissed on consent in August 2009. [page146]

[11] In November 2009 there was a mediation, which did not resolve the action.

[12] The appellant then followed the procedure for obtaining pre-trial and trial dates, as required by the then applicable Toronto Region Practice Direction. On November 5, 2009, the appellant delivered a notice of readiness for pre-trial conference. Several months later, the court sent the appellant's counsel a list of available pre-trial and trial dates, together with a Certification Form to Set Pre-Trial and Trial Dates ("certification form") that would permit the parties to schedule such dates on consent. At the time they were looking at pre-trial dates in November and December 2010, and a trial in January 2011.

[13] The respondent's counsel refused to execute the certification form, on the basis that the appellant still had outstanding undertakings from discovery. In accordance with the practice direction, because a completed certification form was not returned by the date specified on the court's covering memo, and the appellant did not arrange an appearance before a judge in a "to be spoken to" court, the action was struck from the trial list by the court office.

[14] Commencing in January 2010, the respondent's counsel began pressing for answers to outstanding undertakings, and there were numerous exchanges between counsel in the subsequent months. Most of the undertakings were answered, some remained outstanding, and additional information and clarification were requested by the respondent's counsel with respect to some of the answers provided. By late 2010, the appellant was seeking the respondent's consent to restore the action to the trial list. The respondent's counsel advised that they required "full answers to undertakings" before considering whether to provide such consent. Correspondence respecting undertakings continued, with additional responses provided by the appellant, and further requests for complete answers and clarification by the respondent.

[15] By order dated January 6, 2012, following an unopposed motion by the appellant, the action was restored to the trial list. At that time, there was no indication of any outstanding undertakings, although the respondent's counsel noted that they had not received "sufficient documentary evidence or explanation of the damages claimed".

[16] In October 2012, the court sent out a certification form to the appellant's counsel, with available dates. After consultation with the respondent's counsel, a completed certification form was submitted to the court, with agreed upon dates for pre-trial and trial. On consent, a pre-trial conference was scheduled for [page147] September 26, 2013, with the trial to commence November 12, 2013 for a period of eight or nine days.

[17] When the respondent's counsel provided his available dates for pre-trial and trial, he also requested "responsive" answers to three undertakings from the appellant's discovery relating to (i) all inventory records of the appellant for one year prior to the fire; (ii) copies of the respondent's income tax returns and notices of assessment from 2008 going forward (after the fire); and (iii) complete GST returns for the years 2005, 2006 and 2007.

[18] During the next six months, the respondent's counsel wrote each month to inquire about the status of the three undertakings, and received a telephone update from the appellant's counsel. The appellant's counsel explained that there were delays in getting the necessary documents from the appellant's accountant during tax season. In June 2013, the respondent's counsel advised that, "if we do not have these records very shortly for our expert's review, we will not be able to proceed with the trial on the dates currently scheduled and the dates will need to be adjourned".

[19] On July 18, 2013, the appellant's counsel advised opposing counsel that she had the majority of the records, and stated, "we're still missing the complete [corporate tax] returns for 2008, 2009, although we do have the notices of assessment for these years. We obtained an authorization from our client and have written to the CRA directly for the remaining tax records." She agreed that the pre-trial and trial dates should be adjourned "to facilitate the preparation of expert reports". At that point, expert reports on liability had been exchanged, the respondent had delivered an expert report on damages, but intended to update its report with reference to the additional documents produced, and the appellant had not delivered an expert report on damages.

[20] Counsel agreed to adjourn the pre-trial and trial dates, and agreed to a deadline of no later than mid-December 2013 for the remaining documentation to be provided. The respondent's counsel suggested that the parties discuss whether there was a possibility of resolving the action "without having to incur further expenses preparing expert reports".

[21] Counsel attended at "to be spoken to" court on October 28, 2013 to seek new dates on consent. The presiding judge, however, struck the action from the trial list and endorsed: "Not ready. Expert reports yet to be served. Plaintiff's damages disclosure to be completed. Struck from the list." [page148]

[22] On December 9, 2013, the respondent was provided with the remaining damages documents it had requested, except for the appellant's 2012 tax return, which was to be provided once received by the appellant's counsel.

[23] There followed exchanges of correspondence in which some documents which had already been produced to the respondent were requested and provided again. Also in the first few months of 2014, in response to the respondent's concern that tax returns were incomplete, the appellant obtained copies from the Canada Revenue Agency ("CRA") that confirmed that the documents already produced were in fact complete (including the 2008 corporate tax return). In the course of the communications about documents, the appellant's counsel indicated that her client was trying to secure funds to retain an expert accountant to quantify the appellant's damages. By the time of the motion to restore the action to the trial list, an expert had been retained, some work had been done and counsel confirmed that the necessary funds would be secured and the expert report would be delivered by the end of October 2014.

[24] The appellant served and filed a motion to restore the action to the trial list, returnable April 17, 2014. The motion was not confirmed and could not proceed. The respondent refused to adjourn the motion on consent to a new date and required that the appellant serve and file a fresh motion.

[25] On May 5, 2014, the appellant served a new motion to restore the action to the trial list. A status notice was issued by the court on May 16, 2014 under rule 48.14(2), as more than 180 days had passed without the action being restored to the trial list.[^1] The status notice advised that the action would be dismissed unless within 90 days (a) the action was restored to a trial list; (b) the action was terminated by any means; (c) documents had been filed in accordance with rule 48.14(10) (providing a consent timetable); or (d) a judge or case management master ordered otherwise. [page149]

[26] The motion to restore the action to the trial list was heard August 14, 2014 and dismissed on August 20, 2014. The action was then administratively dismissed with costs on September 9, 2014.

C. Decision of the Motion Judge

[27] The motion judge's endorsement stated at the outset that the parties were agreed as to the applicable test to restore a case to the trial list. He articulated this as whether the appellant had provided a reasonable explanation for the delay in bringing the case to trial, and had demonstrated that the respondent would not suffer any prejudice that could not be compensated for in costs if the matter were restored to the trial list. He held that the appellant had failed to meet both branches of the test.

[28] In reviewing the history of the litigation set out above, the motion judge made several findings of fact, and weighed them as he was required to do. He characterized the manner in which the appellant prosecuted the case between 2007 and 2010 as "dilatory", although he did not criticize any particular conduct of the appellant during that time, and stated that he did not place much emphasis on the early pace of the litigation.

[29] The motion judge found that, regarding the circumstances under which the case was first (administratively) struck from the trial list on October 27, 2010, there may have been "something to" the appellant's argument that the respondent was using unfulfilled undertakings as a pretext not to sign the certification form. He noted that, although the appellant admitted the undertakings were in fact outstanding, the respondent had made no real effort to compel satisfaction of those undertakings since oral discoveries were completed in the summer of 2008. Nonetheless, in his view the striking of the case from the list in 2010 should have been a "wake up call" for the appellant.

[30] Although the motion judge stated that it was "not clear" what steps were taken in the following year to satisfy the outstanding undertakings, he noted that the respondent did not oppose the appellant's motion to restore the case to the trial list in January 2012.

[31] The motion judge reviewed the efforts of the appellant to deliver answers to undertakings, some of which had to be obtained from third parties, throughout 2012 and 2013. He said that although there were only three or four undertakings outstanding in the fall of 2012, those undertakings were "not completely satisfied until approximately twenty-seven months" after the matter was restored to the list in January 2012. He observed [page150] that this work was ongoing when the matter was again struck from the list on October 28, 2013. Although the respondent did not seek to have the case struck the second time, it opposed the motion to have it restored to the list in 2014. The respondent also refused to waive the technical requirement (the filing of a confirmation form) that caused the motion to restore to be de-listed, so that the appellant had to re-file the motion before it was heard.

[32] The motion judge accepted that the appellant was still not ready for trial because the expert report remained a work in progress. He thought that if he restored the matter to the trial list, it would not be tried until 2015.

[33] The motion judge accepted the appellant's submission that it had no motive to delay the case. Further, in his view [at para. 10], "it may well be that the unfulfilled undertakings are only marginally important". Nonetheless, he held that the delay was "mainly, if not entirely, attributable to the plaintiff". He concluded that he was not satisfied that the delay had been reasonably explained.

[34] The motion judge dealt with the prejudice issue in two paragraphs. He found that the case would, "probably, in large part" be decided upon oral evidence, and that the credibility and reliability of witnesses "may" be critical to the outcome on both liability and damages. He rejected the respondent's submission that it would suffer actual prejudice because one of the authors of certain business records (which had been produced) had retired. However, he held that even if this witness was located [at para. 15], "it is apparent that his recollection of events . . . and the recollection of other witnesses will presumptively have faded".

[35] The motion judge awarded the costs of the motion to restore to the respondent in the amount of $7,500 plus costs thrown away of $1,500.

D. Issues

[36] The question in this appeal is whether the motion judge committed reversible errors in exercising his discretion not to restore the appellant's action to the trial list, where the necessary result was a dismissal of the action. The issues are whether he made this decision on an erroneous legal principle or infected by a palpable and overriding error of fact on each branch of the conjunctive test recently set out in Nissar, at paras. 30-31. This is whether the plaintiff has demonstrated that [page151]

(1) there is an acceptable explanation for the delay in the litigation; and

(2) if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice.

E. Positions of the Parties

[37] The appellant submits that the motion judge erred in a number of respects. Its position is that the motion judge made palpable and overriding errors of fact respecting the appellant's fulfillment of undertakings, the exchange of expert reports, and in concluding that there was unreasonable delay for which the appellant was solely or almost entirely responsible. The motion judge erred in his interpretation and application of the legal test for restoring an action to the trial list. The appellant did in fact provide an acceptable explanation for the delay in the action, and the motion judge erred in finding that the respondent would presumptively suffer prejudice. Finally, the appellant argues that the motion judge erred in law in failing to consider whether it was fair and just that the action was dismissed in all of the relevant circumstances, including the respondent's conduct.

[38] The respondent points out that the motion judge's decision was discretionary and entitled to deference. It submits that the motion judge applied the correct legal test, which consists of two parts, and is not subject to other considerations or factors such as overall fairness. The respondent contends that its own conduct in the litigation is irrelevant, as the appellant was responsible for moving the action forward. Finally, the respondent asserts that the motion judge did not make any errors of fact, let alone any palpable and overriding error.

F. Analysis

[39] My analysis will proceed in the following way: first, I will address the applicable test under rule 48.11, in circumstances where the refusal to restore an action would result in its dismissal. In particular, I will discuss how the questions of whether "an acceptable explanation" for delay and prejudice should be approached. Then I will apply the test to the present case, pointing out where the motion judge erred in his application of the test. Last, in light of the errors in legal principle identified, I will reweigh the evidence on delay and prejudice and explain why I have come to a different conclusion. [page152]

(1) The applicable test under rule 48.11

[40] While the Rules of Civil Procedure provide for either party to set down a civil action for trial (rule 48.02), and for its placement on a trial list by the registrar (rule 48.06), and recognize that an action that has been struck from a trial list may be restored (rule 48.11), there is no rule that explicitly provides for an action which is not yet before a trial judge to be struck from a trial list.[^2]

[41] Rule 48.11 states:

48.11 Where an action is struck off a trial list, it shall not thereafter be placed on any trial list except,

(a) in the case of an action struck off the list by a judge, with leave of a judge; or

(b) in any other case, with leave of the court.

[42] The decision whether to restore an action to the trial list is discretionary. Where there is no impending dismissal, the question on a rule 48.11 motion is simply whether the plaintiff has shown that the action is "ready for trial" within the meaning of rule 48.01, that is, whether it is at a stage where pre-trial and trial dates can be scheduled. If restoration to the trial list is premature, the court should consider the imposition of a timetable or terms.

[43] Where, as here, the refusal to restore an action to the trial list will result in its dismissal, the Nissar test, informed by the case law respecting rule 48.14 dismissals, will apply. This is because the inevitable result of the failure to restore the action to the trial list would be dismissal, as occurred here. As discussed in several decisions of this court concerning dismissal for delay, a motion judge must strike a balance between the need for efficiency and the need for flexibility, such that cases can be tried on the merits where there is a reasonable explanation for non-compliance with the rules: see 1196158 Ontario Inc., at para. 20; Fuller, at para. 25; Faris v. Eftimovski, [2013] O.J. No. 2551, 2013 ONCA 360, 306 O.A.C. 264, at para. 24; and Kara v. Arnold, [2014] O.J. No. 5818, 2014 ONCA 871, 328 O.A.C. 382, at para. 9. [page153]

(i) Delay

[44] Nissar was an appeal from a refusal to restore an action to the trial list, where there had been many years of completely unexplained delay and no resistance by the defendant to moving the case along. The primary issue in Nissar was whether a Rule 48 or a Rule 24 test should be applied in a contested motion to restore. At para. 29, this court stated that the legal test for determining whether an action should be dismissed under rule 48.14 should be "adapt[ed]" to determine when an action should be restored the trial list. The plaintiff is required to provide an "acceptable explanation" for the delay and to satisfy the court that there would be no prejudice to the defendant if the action were to proceed: Nissar, at paras. 29-31. The court dismissed the appeal.

[45] As to the nature of the explanation for delay, in the judgment followed in Nissar, 1196158 Ontario Inc., Sharpe J.A. referred variously to the requirement for the plaintiff to show an "acceptable", "satisfactory" or "reasonable" explanation for the delay. Therefore, I take these adjectives to be interchangeable in this context. The motion judge in this case referred to the appellant's requirement to show a "reasonable explanation" for the delay, not an "acceptable explanation" as worded in Nissar. No error is alleged by either party with regard to the articulation of the test.

[46] A motion to restore an action to the trial list is not a "blame game", where counsel should be required or encouraged to take a defensive stance and justify their conduct of the litigation on a month-by-month basis. Rather, in assessing whether a plaintiff's explanation for delay is reasonable, a motion judge should consider the overall conduct of the litigation, in the context of local practices, which can vary quite widely between jurisdictions. Practices for scheduling pre-trial conferences and trials differ throughout the province, because they must meet the needs of particular regions and courthouses. These practices can affect the expectations of the parties, their counsel and the courts as to timing.

[47] In practice, an action may be removed from a trial list when, for whatever reason, it is determined not to be trial-ready. This can occur in a variety of ways: by administrative action (as per the Toronto Region Practice Direction when a certification form has not been filed and a speak-to attendance has not been arranged), on consent (which may or may not require a court attendance), in a trial scheduling or assignment court by order of a judge, even when not requested by a party [page154] (as occurred in this case when the action was struck at "to be spoken to" court), or at any other time by order of the court.

[48] It is a waste of resources to have trials adjourned on or near the trial date, at a juncture when court time that has been set aside may not be able to be filled with other matters. The ability to remove and restore actions to a trial list is part of the function of the local court to manage the timing and progress of civil actions commenced within its jurisdiction in the context of its available resources. If the test to restore an action to the trial list is applied too rigidly, "speak to" and other attendances where matters may be struck will become lengthy and contentious, preventing efficient case management. Therefore, a proper delay analysis does not consider the conduct of an action in a vacuum.

(ii) Prejudice

[49] The issue of prejudice is a factual question. The plaintiff bears the onus of demonstrating that the defendant would suffer no non-compensable prejudice if the action were allowed to proceed. The mere passage of time cannot be an insurmountable hurdle in determining prejudice, otherwise timelines would become inflexible and explanations futile.

[50] A defendant is not required to offer evidence of actual prejudice. However, the court is entitled to consider the conduct of the defendant in light of its assertions of prejudice. As Weiler J.A. noted in Fuller, it is an error for a judge considering dismissal for delay to fail to consider the respondent's conduct in relation to the question of prejudice: at para. 39.

(2) The errors in legal principle

(i) Delay

[51] The motion judge's analysis focused mechanically on whether blame could be attributed to the appellant at each stage of the litigation. Once he found delay, he failed to go on to weigh the evidence and evaluate whether the explanation provided was reasonable. Had he done so, he would have taken into account important factors such as the circumstances in which the action came to be struck from the trial list and the fact that the case was now ready for trial.

[52] Applying too exacting a standard for restoring an action which has been struck from the trial list may well hinder the objective of an efficient justice system, as parties and counsel would argue over keeping matters on the trial list for fear that, once struck, they might never be restored. Fighting highly [page155] contested motions over cases being struck and restored to the trial list is not an effective use of scarce judicial and legal resources. Ontario courts are actively discouraging a "motions culture" among counsel, and the Supreme Court of Canada has called for a "shift in culture", citing the need for a process that is proportionate, timely and affordable: Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, at para. 28.

[53] While this court has stated frequently that the plaintiff bears the primary responsibility for moving a case forward, it has also acknowledged that the conduct of a defendant is a factor, especially where a plaintiff encounters some resistance when trying to move the action along: 1196158 Ontario Inc., at para. 29. The suggestion that it is normal and acceptable for a defendant, if not to actively delay, to simply wait for the plaintiff to make the next move, may be based on a conventional view of litigation strategy. The objectives of timely and efficient access to justice, and effective use of court resources require all parties to play their part in moving actions forward, and for counsel to act in a way that facilitates rather than frustrates access to justice: Hryniak, at para. 32. For these reasons, although the burden of proof on the motion is on the plaintiff, the conduct of all parties in relation to the litigation is relevant in determining whether to restore an action to the trial list.

[54] The motion judge's approach here focused almost exclusively on the appellant's conduct, and did not consider the overall dynamics of the litigation. This resulted in an imbalanced view of at least four aspects of the appellant's actions. First, at the time the motion below was heard, the case was ready to proceed to trial. Any objection raised by the respondent had been met, and the parties were capable of complying with the requirements of rule 53.03 for the exchange of expert reports. Keeping an action that is ready for trial off the list is punitive rather than efficient. Second, the action sought to be restored had been summarily struck from the trial list by a judge's order at an appearance where the parties were jointly seeking new dates for a pre-trial and trial, and not at the respondent's request. Third, the appellant had never lost sight of the need to restore the action to the trial list, had brought its motion reasonably promptly after the action had been struck, and, as the motion judge observed [at para. 10], "had no motive to delay the [action]". Finally, the respondent had not indicated any serious concerns about the pace of the litigation until it opposed the motion to restore the action to the trial list.

[55] The first part of the Nissar test involves a consideration of any relevant delay, but asks whether an "acceptable explanation" [page156] for any such delay has been provided. The context of the action and any other relevant factors that are specific to the case must be considered. These will include the overall progress of the action before it was listed for trial, the circumstances of how the action came to be struck from the trial list and the conduct of all parties. Procedural rules cannot be mechanically applied but have to be interpreted in a contextual manner that pays heed to all relevant circumstances and consequences.

[56] In failing to conduct the required analysis, the motion judge erred in concluding that the appellant had not provided an acceptable explanation for the delay.

(ii) Prejudice

[57] The second part of the test involves a consideration of prejudice to the respondent if the action were allowed to proceed. The prejudice at issue is to the respondent's ability to defend the action as a result of the appellant's delay, not as a result of the sheer passage of time: MDM Plastics Ltd. v. Vincor International Inc. (2015), 124 O.R. (3d) 420, [2015] O.J. No. 265, 2015 ONCA 28, at paras. 25 and 33. This portion of the analysis does require some apportionment of responsibility for the delay.

[58] The motion judge ultimately decided against the appellant on the prejudice issue based on an assumption that the passage of time would impair the memory of the one missing witness even if he was found. This was despite being skeptical that this individual was a key witness.

[59] The motion judge was required to consider the evidence in deciding the prejudice issue: Fuller, at paras. 38-39. In this case, the action was ready for trial, oral discoveries had been completed relatively soon after the events in question, transcripts were available (unlike in Nissar) and the documents authored by the missing witness were available. The record of the litigation did not indicate any serious concern on the respondent's part about the delay. Its consent to the previous motion to restore the action to the trial list, and its passivity in "to be spoken to" court when the court struck the action of its own motion, both suggest that no non-compensable prejudice would result from the action being restored to the trial list: MDM Plastics, at paras. 34-36 and 39; Fuller, at para. 42.

[60] In my view, the motion judge's consideration of prejudice reveals errors of principle that justify appellate intervention. [page157]

(3) Reweighing the evidence

[61] Given that I have found that the motion judge's decision was based on erroneous legal principles, I must now reweigh the evidence respecting delay and prejudice: Fuller, at para. 45.

(i) Delay

[62] First, although the motion judge said he did not place much weight on this, he characterized the progress of the action before it was first set down for trial as "dilatory". The evidence does not support this characterization of the early stages of this litigation. In fact, the action was commenced in 2007 within six months of the fire, pleadings were closed that year, documents were produced and examinations for discovery were conducted in 2008, expert reports on liability had been exchanged and the respondent delivered a report on damages. By the time the appellant set down the action for trial in 2009, the parties had attended mediation, and the appellant had answered many of the 39 undertakings from its discovery. There was certainly no unreasonable delay on the part of the appellant in prosecuting the action before it set the action down for trial the first time.

[63] While the appellant thereafter should have moved this case along to trial more briskly, when all the circumstances are considered, the action ought to have been restored to the trial list. Of the 39 undertakings from the appellant's examination for discovery, several were answered in 2009 without any demand or request from the appellant. There was no effort to compel answers to undertakings, by motion or letter, before the respondent relied on unfulfilled undertakings in refusing to agree to pre-trial and trial dates after the action was first set down for trial.

[64] The appellant, a small business with limited resources, advanced a rather modest claim against the respondent, a large and well-resourced corporation. The respondent insisted upon strict compliance with a list of undertakings. The appellant struggled to fulfill the undertakings and the respondent was not prepared to make any concession that would facilitate moving the case along to trial.

[65] The appellant made slow but steady progress in fulfilling the undertakings, in some instances following up with the appellant's accountant and the CRA. When the appellant sought to restore the action to the trial list the first time, the respondent insisted on "full answers to undertakings" (notwithstanding rule 48.04(2)(a), which provides that a party who lists an action for trial is not relieved "from complying with undertakings given [page158] by the party on an examination for discovery", and therefore contemplates actions being listed for trial with outstanding undertakings).

[66] When the motion to restore the action to the trial list was brought, there were no outstanding undertakings on the part of the appellant. The motion judge erred in stating that the final undertaking was answered in April 2014, and in suggesting that the appellant had delayed because it took 27 months after the case was restored to the trial list in January 2012 to satisfy three or four outstanding undertakings. In fact, answers to undertakings had been provided, and it was not until October 2012 that a request for "responsive" answers was made. Thereafter, these three undertakings, as well as the respondent's additional requests for clarification, better copies and additional documents, had been satisfied by December 2013, within 14 months, and by the deadline agreed upon between the parties.

[67] In referring to the "27 month" period, the motion judge overstated both the delay and the appellant's responsibility for the delay with respect to the fulfillment of its undertakings.

[68] This was not a case where a plaintiff ignored its obligations respecting undertakings, or where its counsel made little effort to respond to undertakings or to requests from opposing counsel. There were reasonably frequent communications between counsel, which reflected efforts to obtain and to produce the documents requested and to respond to various requests for additional documents, some of which were requested from third parties, and some of which had already been provided to the respondent's former counsel. In any event, the motion judge observed that the unfulfilled undertakings may well have been "marginally important".

[69] The motion judge noted [at para. 9] that "in addition to the delay occasioned by plaintiff's failure to satisfy its undertakings, the plaintiff is still not ready for trial because its expert report remains a work in progress . . . The plaintiff's expert report is expected to be complete by the end of October. It may in turn necessitate a report from an expert on behalf of the defendant."

[70] It is not a condition of setting down an action, or an action remaining on the trial list, that all expert reports have been delivered. Rule 53.03 provides for the timing of delivery of expert reports, requiring reports to be delivered 90 days before a pre-trial conference (60 days for a responding report). Supplementary reports are required not less than 30 days before the commencement of trial. These time periods can be extended or [page159] abridged by the court. Rule 48.04(2) (a) provides that setting an action down for trial does not relieve a party from the requirements of rule 53.03 respecting expert reports.

[71] In this case, expert reports on liability had been exchanged, and the respondent had delivered an expert report on damages. The appellant's counsel explained that the delay in obtaining an expert report on damages was due to his client's financial constraints. The motion judge accepted the assertion that a report would be provided by October. In any event, the respondent's affidavits in opposition to the motion to restore the action to the trial list relied only on the appellant's delay in answering undertakings, and did not raise the issue of delay in providing an expert report.

[72] This action was not struck at the request of the respondent after a contested motion. It was struck in the setting of a busy "to be spoken to" court, on the court's own motion. The respondent was consenting to an adjournment, but later changed its position on the motion to restore. This context weighs in favour of restoring the action to the trial list.

[73] After reweighing the above evidence, I conclude that the appellant provided an acceptable explanation for the delay.

(ii) Prejudice

[74] The only evidence of actual prejudice asserted by the respondent in opposition to the motion was in relation to Mr. Jabar, the City of Toronto employee who had attended at the appellant's premises on August 10, 2006, the day of the fire and before the appellant disposed of the inventory allegedly damaged by the fire, and again on various occasions in August 2006 to verify the removal of the inventory reported to him to have been damaged by the fire.

[75] If this witness was important to the defence, it is surprising that the respondent only attempted to contact Mr. Jabar in 2014, on the eve of the motion to restore the action to the trial list. Notwithstanding that the action had been outstanding for several years, no efforts had been made by the respondent to contact this potential witness. These circumstances undermine any claim that the respondent would be prejudiced in its defence as a result of the possible unavailability of the evidence this particular witness might have provided.

[76] I do not accept that speculation that a case may depend in part on oral evidence, coupled with the assumption that witnesses' memories generally fade over time will, without more, prevent a plaintiff from satisfying the prejudice prong of the test. Counsel routinely address the reality of the passage of time [page160] in the litigation process by collecting and producing documents, undertaking oral examinations for discovery and taking witness statements. There are other methods under the rules to preserve evidence that may disappear or be lost before trial.

[77] In the present case, the appellant adduced evidence stating that its witnesses, including its experts, were available for trial, and that transcripts of examinations for discovery had been ordered and were available. In these circumstances, the appellant demonstrated that there was no non-compensable prejudice that would have resulted from the action being restored to the trial list.

G. Conclusion and Disposition

[78] The motion judge's errors rose to a level that warrant appellate intervention, despite the deference due to his discretionary decision.

[79] After reweighing the evidence in the circumstances of this case, I have concluded that the action ought to be restored to the trial list. The appellant provided an acceptable explanation for any delay that occurred, and demonstrated that there was no non-compensable prejudice to the respondent in its defence of the action as a result of the delay in restoring the action to the trial list. A fair trial on the merits is still possible in this case.

[80] For these reasons, I would allow the appeal. I would set aside the order of the motion judge, including his order for costs, and the subsequent order of the local registrar dismissing the action, and order that the action be restored to the trial list in Toronto, so that pre-trial and trial dates may be set without delay. I would set aside the costs award and order no costs on the original motion. Finally, I would award the appellant costs of the appeal in the sum of $9,000, inclusive of disbursements and HST.

Appeal allowed.

Notes

[^1]: The relevant events in this case took place prior to the changes to rule 48.14, which came into force on January 1, 2015: O. Reg. 170/14. Actions will now be automatically dismissed for delay without notice the later of January 1, 2017 and the fifth anniversary of the commencement of the action, unless they have been listed for trial, terminated by any means or the court orders otherwise. Any action struck from the trial list after January 1, 2015, and not restored by the later of January 1, 2017 and the second anniversary of being struck off, will be dismissed on that date, without notice to parties or their counsel, unless the court orders otherwise.

[^2]: Rule 52.01 provides that a trial judge may strike an action off the trial list where the action is called for trial and the parties fail to attend.