Sickinger et al. v. Krek et al.; 585043 Ontario Limited Carrying on Business as B.T. Petroleums, Third Party

[Indexed as: Sickinger v. Krek]

Ontario Reports

Court of Appeal for Ontario,

Hoy A.C.J.O., Blair and L.B. Roberts JJ.A.

June 13, 2016

132 O.R. (3d) 548 | 2016 ONCA 459

Case Summary

Civil procedure — Dismissal for delay — Defendant commencing third party claim in January 2001 — Pleadings closed in June 2004 — Third party moving successfully in 2015 to dismiss third party claim for delay — Delay inordinate and not sufficiently explained — Delay giving rise to presumed prejudice which was not rebutted — Third party also suffering actual prejudice — Motion judge not bound by decision of another judge dismissing defendant's motion to dismiss main action for delay.

Civil procedure — Parties — Status — Dissolved corporation having capacity to bring motion to dismiss third party claim against it for delay.

The plaintiffs' action, which arose from an oil spill that occurred in May 1990, was commenced in August 2000. The defendant delivered a statement of defence and delivered a third party claim for contribution and indemnity in January 2001. The pleadings were closed in June 2004. The defendant had never conducted an examination for discovery, had not served an affidavit of documents, had never requested an affidavit of documents from the third party, and had never tried to list the third party claim for trial. The defendant brought an unsuccessful motion to dismiss the main action for delay. The judge on that motion found that the delay in the main action was not inexcusable because of parallel proceedings involving the Ministry of the Environment and because the plaintiffs were diligently proceeding with the action; there was no presumption of prejudice given the steps taken by the plaintiffs in the main action; and the defendant had not discharged his onus to establish real prejudice. The third party moved successfully in 2015 to dismiss the third party claim for delay. The defendant appealed, arguing that the motion judge erred in concluding that (1) the third party, [page549] a corporation which was dissolved in 2006, had the capacity to bring the motion to dismiss; and (2) the third party claim should be dismissed for delay.

Held, the appeal should be dismissed.

Section 242(1)(a) of the Business Corporations Act, R.S.O. 1990, c. B.16 provides that a civil action commenced against a corporation before its dissolution may be continued as if the corporation had not been dissolved. The motion judge did not err in finding that a dissolved corporation has the capacity to defend a motion, bring its own motion and proceed with a counterclaim, and that the right to defend must include the right to take whatever reasonable action counsel for a dissolved corporation deems advisable to further his or her client's interest. The third party did not seek to commence a legal action or a proceeding, which s. 242(1) does not provide for. Nothing in s. 242 requires that a corporation be revived before an action can be continued.

The motion judge did not err in finding that the delay was inordinate, that the explanation for the delay, i.e., that the defendant's energies were absorbed by the main action and related proceedings, was not a sufficient justification, and that there was both presumed prejudice and actual prejudice. One of the third party's principal's had died, and the other was elderly and had no recollection of the events in question. The motion judge was not bound by the conclusions reached by the judge who declined to dismiss the main action for delay. The plaintiffs had diligently pursued their claims and there was no presumed or actual prejudice. In contrast, the defendant had not demonstrated comparable diligence in prosecuting the third party claim.

Langenecker v. Sauvé, [2011] O.J. No. 5777, 2011 ONCA 803, 286 O.A.C. 268, apld

1455257 Ontario Inc. v. Canada, [2016] F.C.J. No. 321, 2016 FCA 100, 2016 D.T.C. 5046, 483 N.R. 7, 400 D.L.R. (4th) 371, 264 A.C.W.S. (3d) 255, distd

Other cases referred to

052987 N.B. Inc. v. ADI Ltd., [2000] N.B.J. No. 467, 2000 NBCA 55, 232 N.B.R. (2d) 47, 22 C.B.R. (4th) 1, 101 A.C.W.S. (3d) 931; Ali v. Fruci (2014), 122 O.R. (3d) 517, [2014] O.J. No. 3831, 2014 ONCA 596, 99 E.T.R. (3d) 49, 243 A.C.W.S. (3d) 841; Armstrong v. McCall, 2006 17248 (ON CA), [2006] O.J. No. 2055, 213 O.A.C. 229, 28 C.P.C. (6th) 12, 148 A.C.W.S. (3d) 229 (C.A.); Canadian National Railway Co. v. Kitchener (City), [2015] O.J. No. 916, 2015 ONCA 131, 33 M.P.L.R. (5th) 173, 250 A.C.W.S. (3d) 54; GMC Distribution Ltd. v. Canada, [2012] T.C.J. No. 206, 2012 TCC 262, 4 B.L.R. (5th) 95, 2012 G.T.C. 37, [2012] G.S.T.C. 71, 219 A.C.W.S. (3d) 698; International Display and Lighting Group Ltd. v. R.A.E. Industrial Electronics Ltd., [1993] O.J. No. 363, 15 C.P.C. (3d) 165, 38 A.C.W.S. (3d) 682 (Gen. Div.); Malamas v. Crerar Properties Corp., [2009] O.J. No. 4726, 65 B.L.R. (4th) 277, 181 A.C.W.S. (3d) 891 (S.C.J.); Meta Energy Inc. v. Algatec Solarwerke Brandenberg GmbH, [2012] O.J. No. 1044, 2012 ONSC 175 (S.C.J.); Reliable Life Insurance v. Ingle, 2009 80101 (ON SC), [2009] O.J. No. 5903, 83 C.C.L.I. (4th) 290, 186 A.C.W.S. (3d) 58 (S.C.J.), affg [2009] O.J. No. 2312, 2009 28225 (Master); Sickinger v. Krek, [2015] O.J. No. 4021, 2015 ONSC 1243 (S.C.J.); Sickinger v. Krek, [2015] O.J. No. 384, 2015 ONSC 637 (S.C.J.); Sickinger v. Krek, [2015] O.J. No. 4022, 2015 ONSC 4470 (S.C.J.); Tomken Kamato (V) Ltd. v. 752458 Ontario Ltd. (2014), 121 O.R. (3d) 378, [2014] O.J. No. 3598, 2014 ONSC 4484, 32 B.L.R. (5th) 154, 243 A.C.W.S. (3d) 575 (S.C.J.); Wallace v. Crate's Marine Sales Ltd., [2014] O.J. No. 4606, 2014 ONCA 671 [page550]

Statutes referred to

Business Corporations Act, R.S.N.B. 1981, c. B-9.1, s. 152(2)(a)

Business Corporations Act, R.S.O. 1990, c. B.16 [as am.], ss. 241(5) [as am.], 242 [as am.], (1) [as am.], (a), (b), (c), 243 [as am.]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 1.03(1), 24.01, 29.08(1), (2)

Tax Court of Canada Rules (General Procedure), SOR/ 90-688a [as am.]

Authorities referred to

Martel, Paul, Business Corporations in Canada — Legal and Practical Aspects, loose-leaf (2016-Rel. 3) (Toronto: Carswell, 2004)

APPEAL from the order of Wood J., [2015] O.J. No. 4021, 2015 ONSC 1243 (S.C.J.) and [2015] O.J. No. 4022, 2015 ONSC 4470 (S.C.J.) allowing a motion to dismiss a third party claim for delay.

Darrell March, for appellant.

Donald J. Dacquisto and James B. Tausendfreund, for respondent.

[1] BY THE COURT: -- The appellant appeals from the dismissal for delay of his third party claim under rule 24.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[2] This matter arises out of an oil spill that occurred in Muskoka, Ontario in May 1990. The appellant, a defendant in the main action, commenced the third party claim for contribution and indemnity from the respondent for damages claimed against him by the plaintiffs in the main action. The third party claim was commenced on January 31, 2001, and pleadings closed in June 2004.

[3] Both the main action and the third party claim remain unresolved. The respondent moved to dismiss the third party claim for delay. The motion judge granted the motion and dismissed the third party claim.

[4] The appellant submits that the motion judge erred in concluding that (1) the respondent, a dissolved corporation, had the capacity to bring its motion to dismiss; and (2) the third party claim should be dismissed for delay.

[5] For the reasons that follow, we would dismiss the appeal. We address the errors alleged by the appellant in turn.

1. The Capacity of the Respondent to Bring the Motion

1.1 Background

[6] In August 2013, counsel for the respondent obtained a corporation profile report, which indicated that articles of [page551] dissolution for the respondent had been filed on December 27, 2006. There is no evidence of the circumstances of the dissolution. However, the corporation profile report stated that the respondent had been voluntarily dissolved, which the appellant does not dispute.

[7] The respondent was incorporated under the Business Corporations Act, R.S.O. 1990, c. B.16 ("OBCA"). Therefore, the issue of the respondent's standing turns on the meaning of s. 242(1) of the OBCA, which provides as follows:

242(1) Despite the dissolution of a corporation under this Act,

(a) a civil, criminal or administrative action or proceeding commenced by or against the corporation before its dissolution may be continued as if the corporation had not been dissolved;

(b) a civil, criminal or administrative action or proceeding may be brought against the corporation as if the corporation had not been dissolved;

(c) any property that would have been available to satisfy any judgment or order if the corporation had not been dissolved remains available for such purpose; and

(d) title to land belonging to the corporation immediately before the dissolution remains available to be sold in power of sale proceedings.

(Emphasis added)

[8] There is only one provision in the OBCA that provides for the revival of a dissolved corporation, namely, s. 241(5). That provision applies in a narrow set of circumstances, essentially only in cases where a corporation was dissolved for a failure to comply with enumerated statutory obligations. There is no other provision providing for the revival of a dissolved corporation in the OBCA: Paul Martel, Business Corporations in Canada -- Legal and Practical Aspects, loose-leaf (2016-Rel. 3) (Toronto: Carswell, 2004), at p. 34-81. Where, as here, a corporation is dissolved voluntarily, a private act of the legislature is necessary to revive it.

[9] The appellant acknowledges that he did not challenge the respondent's ability to defend the third party claim until the respondent brought its motion to dismiss. However, he raised the issue in response to the motion.

[10] The motion judge addressed the preliminary issue of the respondent's standing in reasons released on February 26, 2015. He concluded that the respondent had standing to bring the motion: Sickinger v. Krek, [2015] O.J. No. 4021, 2015 ONSC 1243 (S.C.J.).

[11] The motion judge highlighted what he characterized as conflicting jurisprudence on this issue at the trial level. On the one hand, certain decisions held that a corporation that is [page552] dissolved ceases to exist and is therefore incapable of defending or prosecuting a case or even appointing counsel: Reliable Life Insurance v. Ingle, [2009] O.J. No. 2312, 2009 28225 (Master), affd 2009 80101 (ON SC), [2009] O.J. No. 5903, 83 C.C.L.I. (4th) 290 (S.C.J.); and GMC Distribution Ltd. v. Canada, [2012] T.C.J. No. 206, 2012 TCC 262, 4 B.L.R. (5th) 95.

[12] On the other hand, the motion judge noted that Superior Court decisions after 2009 had adopted a different view. In particular, he referred to the decisions in Malamas v. Crerar Properties Corp., [2009] O.J. No. 4726, 65 B.L.R. (4th) 277 (S.C.J.) and Tomken Kamato (V) Ltd. v. 752458 Ontario Ltd. (2014), 121 O.R. (3d) 378, [2014] O.J. No. 3598, 2014 ONSC 4484 (S.C.J.), which held that a dissolved corporation can defend an action brought against it.

[13] The motion judge agreed with Malamas and Tomken. He adopted the conclusion of Chapnik J. in Tomken, at para. 23, that a dissolved corporation has the capacity to defend a motion, bring its own motion and proceed with a counterclaim. The motion judge, at para. 9 of his reasons, added that "[t]he right to defend must include the right to take whatever reasonable action counsel for a dissolved corporation deems advisable to further his or her client's interest".

1.2. Alleged errors and analysis

[14] The appellant argues that the motion judge erred in concluding that the respondent, a dissolved corporation, could defend against the appellant's third party claim and bring a motion seeking a dismissal of its claim on the ground of delay. He also relies on the decision in 1455257 Ontario Inc. v. Canada, [2016] F.C.J. No. 321, 2016 FCA 100 ("145 Ontario"), a decision released after the motion judge's decision.

[15] We agree with the motion judge's decision. In our view, his conclusion is supported by s. 242 of the OBCA, properly construed.

[16] It is clear from s. 242 that a dissolved corporation remains capable of taking certain actions after it is dissolved, without first being revived, and does not cease to exist for all purposes upon dissolution. Section 242(1) (a) permits a dissolved corporation to continue an action or proceeding commenced by it "as if the corporation had not been dissolved". "Continuing" an action or proceeding clearly contemplates that the dissolved corporation can take steps. Moreover, the natural construction of the words "as if the corporation had not been dissolved" permits a dissolved corporation to take steps in order to defend an action or proceeding against it. Simply put, the motion to dismiss is [page553] a step taken by the respondent in defending the third party claim and if the respondent had not been dissolved, it could have brought the motion to dismiss the third party claim.

[17] The Court of Appeal of New Brunswick adopted a similar interpretation in 052987 N.B. Inc. v. ADI Ltd., [2000] N.B.J. No. 467, 2000 NBCA 55, 232 N.B.R. (2d) 47. Robertson J.A., for the court on this issue, at para. 81, concluded that a dissolved corporation had a right to take steps like initiating an appeal in a civil proceeding commenced before its dissolution.[^1] He relied on both the broad language employed by the statute and basic principles of fairness, noting that "[i]f a plaintiff is entitled to continue with an action initiated prior to the defendant's dissolution, surely that defendant must be entitled to defend the action".

[18] We also note that nothing in s. 242 requires that a corporation be revived before an action can be continued. Presumably, if the legislation had intended such a requirement, it would have provided for it: International Display and Lighting Group Ltd. v. R.A.E. Industrial Electronics Ltd., [1993] O.J. No. 363, 15 C.P.C. (3d) 165 (Gen. Div.).

[19] As indicated above, the appellant relies on 145 Ontario for the proposition that the respondent cannot take any steps in this litigation unless it is first revived. In our view, 145 Ontario does not stand for such a broad proposition.

[20] In 145 Ontario, the Federal Court of Appeal held that the filing of a notice of appeal in the Tax Court constitutes the initiation of a legal proceeding under the Tax Court of Canada Rules (General Procedure), SOR/ 90-688a. Because s. 242(1) does not permit a dissolved corporation to initiate a legal proceeding, the taxpayer could not file a notice of appeal until it had revived its corporate status.

[21] Unlike the taxpayer in 145 Ontario, the respondent was not trying to commence a legal proceeding after its dissolution. In this case, the Rules of Civil Procedure apply. Rule 1.03(1) defines both "action" and "proceeding" as follows:

"action" means a proceeding that is not an application and includes a proceeding commenced by,

(a) statement of claim, [page554]

(b) notice of action,

(c) counterclaim,

(d) crossclaim, or

(e) third or subsequent party claim;

"proceeding" means an action or application.

[22] From these definitions, it is clear that a motion brought by a defendant in a third party claim is not an action or a proceeding.

[23] The respondent did not seek to commence a legal action or a proceeding, something s. 242(1) does not provide for. Rather, in its defence of an action brought against it by the appellant, the respondent brought a motion to dismiss that action for delay. As noted, in our view, the respondent had the standing necessary to take this step in an ongoing proceeding.

[24] In support of his position, the appellant argues that it is unclear who would instruct counsel representing a dissolved corporation and who would pay a judgment or costs order against such a corporation. He submits that these concerns justify reading s. 242 narrowly as not conferring the ability to defend an action on a dissolved corporation.

[25] This case illustrates that it will not always be necessary to revive a dissolved corporation in order to effectively continue a claim brought by it before dissolution or defend a claim made against it. As we have noted, the appellant did not challenge the respondent's ability to defend before the respondent brought its motion to dismiss. The record does not indicate who instructed defending counsel on behalf of the respondent or who funded the defence. It may well be that the respondent's insurers assumed the defence of the appellant's third party claim.

[26] But even if that were not the case, where, as here, s. 241(5) of the OBCA does not apply, there may well be effective ways of advancing the dissolved corporation's interests without first reviving it through a private act of the legislature. For instance, in Malamas, Matlow J. commented that s. 242(1)(a) might empower the board of directors in place before dissolution to instruct counsel: see, also, Meta Energy Inc. v. Algatec Solarwerke Brandenberg GmbH, [2012] O.J. No. 1044, 2012 ONSC 175 (S.C.J.). And in Tomken, Chapnik J. gave leave to a former director of the dissolved corporation to provide instructions.

[27] Furthermore, the OBCA provides an avenue for satisfying a judgment or costs order made against a dissolved corporation. Under s. 242(1)(c), any property that would have been available [page555] to satisfy any judgment or order if the corporation had not been dissolved remains available to satisfy the judgment or order. Under s. 243, each shareholder to whom any property of the dissolved corporation has been distributed remains "liable to any person claiming under section 242 to the extent of the amount received by that shareholder upon the distribution, and an action to enforce such liability may be brought".

[28] Accordingly, in our view, s. 242 should not be narrowly construed in the manner suggested by the appellant and the motion judge did not err by concluding that the respondent could bring the motion to dismiss the third party claim for delay.

2. Dismissal for Delay

2.1 Legal principles

[29] The principles that apply on a motion to dismiss an action for delay were set out by this court in Langenecker v. Sauvé, [2011] O.J. No. 5777, 2011 ONCA 803, 286 O.A.C. 268. As noted in paras. 6-7 of that decision, an action may be dismissed for delay where the delay is (1) inordinate; (2) inexcusable; and (3) such that it gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible because of the delay.

[30] The jurisprudence provides guidelines for evaluating the three requirements:

Inordinate: A court will measure the length of time from the commencement of the proceeding to the motion to dismiss to determine if the delay is inordinate: Langenecker, at para. 8; Ali v. Fruci (2014), 122 O.R. (3d) 517, [2014] O.J. No. 3831, 2014 ONCA 596, at para. 11. When considering the delay, the court should remember that some cases will move slower than others because of the issues raised, the parties involved and/or the nature of the action: Langenecker, at para. 8.

Inexcusable: A court should consider the reasons offered for the delay and whether those reasons provide an adequate explanation, with regard to the credibility of the explanations, the explanations for individual parts of the delay, the overall delay and the effect of the explanations considered as a whole: Langenecker, at paras. 9-10.

Prejudice: The third factor considers the prejudice caused by the delay to a defendant's ability to put forward its case for adjudication on the merits: Langenecker, at para. 11. An inordinate delay will give rise to a presumption of prejudice and, unless rebutted, that presumption may result in the action being dismissed: Armstrong v. McCall, 2006 17248 (ON CA), [2006] O.J. No. 2055, 213 O.A.C. 229 (C.A.), at para. 11. [page556] A defendant may also suffer, and demonstrate, case-specific prejudice: Langenecker, at para. 12.

[31] An order dismissing an action for delay is discretionary and entitled to deference from an appellate court: Ali, at para. 10; Canadian National Railway Co. v. Kitchener (City), [2015] O.J. No. 916, 2015 ONCA 131, 33 M.P.L.R. (5th) 173, at para. 14.

2.2 History of the proceedings and motion judge's reasons

[32] As noted, both the main action and the third party claim arise from an oil spill that occurred in May 1990. The main action was commenced on August 14, 2000. The appellant delivered a statement of defence on January 19, 2001. A trial was scheduled to begin in April 2004 but, on the eve of trial, the main action was struck from the trial list with an order stating that it would not be restored until all parties had indicated that they were ready to proceed. There is no evidence that any of the parties to the main action have indicated readiness to proceed with the trial at any time since.

[33] The appellant brought a motion to dismiss the main action for delay but that motion was dismissed by Mulligan J., with reasons released on January 28, 2015: Sickinger v. Krek, [2015] O.J. No. 384, 2015 ONSC 637 (S.C.J.). In coming to his decision, Mulligan J. noted that (i) the delay in the main action was not inexcusable because of parallel proceedings involving the Ministry of the Environment and because the plaintiffs were diligently proceeding with the action; (ii) there was no presumption of prejudice given the steps taken by the plaintiffs in the main action; and (iii) the appellant had not discharged his onus to establish real prejudice and, in any event, there was no real prejudice because the witnesses remain available.

[34] The appellant issued his third party claim on January 31, 2001. The respondent delivered a statement of defence on April 29, 2004. The appellant has never conducted an examination for discovery, has not served an affidavit of documents, has never requested an affidavit of documents from the respondent and has never tried or indicated a desire to list the third party claim for trial. Furthermore, the respondent tendered unchallenged evidence that the appellant has repeatedly ignored messages and correspondence from counsel representing the respondent. [page557]

[35] Significantly, the respondent's principals at the time of the oil spill, Gary Beatty and Barry Brown, sold their interest in the respondent in 1996. All of the respondent's documents were transferred to the purchaser at that time. Mr. Beatty passed away in 2005. Mr. Brown retired after the sale of the respondent. In his affidavit, Mr. Brown stated that he had no knowledge or recollection of the events at issue, nor was he aware of anyone else with such knowledge.

[36] As noted, the motion judge granted the respondent's motion to dismiss the third party claim for delay, with reasons released on July 9, 2015: Sickinger v. Krek, [2015] O.J. No. 4022, 2015 ONSC 4470 (S.C.J.).

[37] He concluded that (i) the delay was inordinate given that ten years had passed, with little communication between counsel, since the close of pleadings; (ii) the explanation for the delay, i.e., that the appellant's energies were absorbed by the main action and related proceedings, was not a sufficient justification as the appellant failed to even keep the third party claim in a state of readiness for trial; and (iii) there was both presumed prejudice and actual prejudice as the respondent's ability to defend itself had been compromised.

[38] On the issue of prejudice, the motion judge focused on Mr. Beatty's death and how it compromised the respondent's ability to defend itself because he was the principal of the company who seemed to have the best knowledge of the events in question. Mr. Brown, the other principal, was of an advanced age and had no recollection of the events in question. Furthermore, the respondent no longer had access to relevant documents and the chance of finding a former employee with relevant knowledge had "faded almost to nothing".

2.3 Alleged errors and analysis

[39] The appellant alleges a number of errors on the part of the motion judge. In our view, only two lines of argument advanced by the appellant warrant review.

2.3.1 Derivative nature of the third party claim

[40] The appellant raises a number of arguments based on the "derivative" nature of a third party claim: the motion judge was bound by the findings of Mulligan J.; a third party claim cannot be dismissed for delay when the main action has not been dismissed for delay; the reason the appellant failed to proceed with the third party claim is because it is not possible to list a third party claim unless the main action has been listed; and, in any [page558] event, the appellant's focus on the main action and related proceedings justified his inaction in respect of the third party claim.

[41] We would not give effect to these submissions.

[42] The motion judge was not bound by the conclusions reached by Mulligan J. in excusing the delay in the main action. The motion judge and Mulligan J. had to evaluate the delay in the particular and different circumstances of the proceeding before them. As a result, the fact that Mulligan J. concluded that the plaintiffs had a reasonable explanation for the delay in the main action did not preclude the motion judge from concluding that the delay in the third party claim was inexcusable.

[43] We would also reject the appellant's categorical assertion that a third party claim must always take a back seat to the main action. We agree with the respondent's submission that the third party claim could have been set down for trial before the main action. Rule 29.08(1) provides that after the close of pleadings, a third party claim "shall be listed for trial as an action as provided in Rule 48 without undue delay and placed on the trial list immediately after the main action" (emphasis added). However, rule 29.08(2) allows the court "to order otherwise", that is, to order that the trial of the third party claim take place before, rather than at or immediately after, the trial of the main action.

[44] The third party claim in the present case involved discrete issues unrelated to the main action, in particular, whether the appellant ordered heating oil from the respondent and whether the respondent installed a locked cap on the tank as requested by the appellant. The determination of those issues did not depend on the outcome of the main action.

[45] Moreover, the March 2004 order adjourning the trial of the main action did not prevent the third party claim from proceeding or being set down for trial. Rather, the order simply required that the parties indicate their readiness for trial. The appellant did not do so and, as the motion judge also correctly found, did nothing to ready the third party claim for trial. While we agree that the appellant was not required to conduct an examination for discovery, he was obliged to serve an affidavit of documents, respond to inquiries from the respondent's counsel and to set the third party claim down for trial without "undue delay". The appellant did not do any of those things.

[46] We agree with the appellant that, practically speaking, a main action and a related third party proceeding are intertwined and that delay in the main action may justify delay in a third party claim. However, we do not agree that this result must necessarily follow. [page559]

[47] As the motion judge correctly observed, in this case, the conduct of the main action was different from that of the third party claim. In particular, we note that Mulligan J. found that the plaintiffs in the main action had diligently pursued their claims and that there was no presumed or actual prejudice, in large part because of the plaintiffs' actions. In sharp contrast, the appellant has not demonstrated comparable diligence in prosecuting the third party claim. The unchallenged evidence is that the appellant has not advanced the third party claim and, in fact, has often failed to respond to communications from the respondent's counsel. That inaction cannot be excused because of the appellant's purported focus on the main action.

2.3.2 Prejudice attributable to appellant

[48] The appellant takes issue with the motion judge's conclusion that the delay in question resulted in prejudice to the respondent, and argues that the motion judge committed the following errors: holding the appellant responsible for delay not attributable to him; considering prejudice caused by pre-litigation delay; and failing to take into account the fact that some of the prejudice was created by the respondent.

[49] We would not give effect to these submissions.

[50] First, the motion judge's conclusion is supported by the appellant's failure to rebut the presumption of prejudice. As noted, the motion judge concluded that the inordinate delay in this case gave rise to a presumption of prejudice. The appellant was required to lead evidence to rebut that presumption. He did not do that.

[51] The only evidence provided by the appellant was an affidavit of a law clerk at his counsel's office. That affidavit largely recites the history of proceedings in the main action and asserts that the delay in the third party claim was attributable to delay in the main action. It does not address any potential prejudice suffered by the respondent, nor does it provide any basis for rejecting the presumption of prejudice resulting from the delay.

[52] Moreover, the motion judge's conclusions were justified on the record before him. In particular, the motion judge did not err in attributing to the appellant responsibility for the prejudice resulting from Mr. Beatty's death.

[53] The appellant argues that the motion judge erred in taking the prejudice resulting from Mr. Beatty's death into account. He emphasizes that, as noted by the motion judge at para. 18 of his reasons [[2015] O.J. No. 4022], the respondent "did not deliver a statement of defence until 2004. So any delay from 2001 to 2004 must be laid as much at its door as that of [page560] [the appellant]". Mr. Beatty died in 2005, and the delay until that time was not unreasonable. Therefore, the appellant argues, the motion judge erred in attributing responsibility for the prejudice caused by Mr. Beatty's death to the appellant.

[54] The motion judge held that the parties shared responsibility for the first three years of delay. However, that does not mean that the appellant does not bear any responsibility for that portion of the delay. As noted by this court in Wallace v. Crate's Marine Sales Ltd., [2014] O.J. No. 4606, 2014 ONCA 671, at para. 18, a plaintiff bears the responsibility for moving an action along. And, in this case, the appellant had been put on notice, by the pleading of laches in the defence to the third party claim, that the respondent was alleging prejudice because of the delay up to that point. As a result, it was incumbent on the appellant to ready the third party claim for trial with reasonable dispatch in order not to exacerbate the existing delay. As noted, the appellant did not do so.

[55] In any event, the motion judge concluded that the responsibility for the delay after June 2004, when the respondent filed its statement of defence and pleadings had closed, lay with the appellant. Mr. Beatty died in 2005. At the time of Mr. Beatty's death in 2005, the appellant had not delivered an affidavit of documents, as required under the Rules of Civil Procedure, nor had he attempted to take other steps to ready the third party claim for trial, other than participating in an unsuccessful mediation. As such, the motion judge was entitled to take any prejudice caused by Mr. Beatty's death into account.

[56] The motion judge's references to the delay since the oil spill in 1990 and the transfer of the respondent's documents serve as context relevant to understanding the impact of Mr. Beatty's death on the respondent's ability to defend itself. The motion judge was entitled to take this context into account when determining the extent of the prejudice resulting from Mr. Beatty's death. By taking this context into account, the motion judge did not improperly hold the appellant responsible for prejudice not caused by his delay.

Disposition

[57] Accordingly, the appeal is dismissed. The respondent is entitled to its partial indemnity costs in the amount of $8,500.

Appeal dismissed.

Notes

[^1]: The court was considering s. 152(2)(a) of the Business Corporations Act, S.N.B. 1981, c. B-9.1, which provides that "[n]otwithstanding the dissolution of a corporation under this Act . . . (b) a civil, criminal or administrative action or proceeding commenced by or against the corporation before its dissolution may be continued as if the corporation had not been dissolved".