Court of Appeal for Ontario

Date: 2018-01-02 Docket: C63668

Judges: Laskin, Huscroft and Paciocco JJ.A.

Between

Greg Stokker Plaintiff (Appellant)

and

Carolyn Storoschuk and 1641516 Ontario Inc. Defendants (Respondents)

Counsel

James Lawson, for the appellant

Christopher Lee, for the respondents

Heard: December 18, 2017

On appeal from: the order of Justice Jasmine T. Akbarali of the Superior Court of Justice, dated March 30, 2017, with reasons reported at 2017 ONSC 1931.

Reasons for Decision

Background and Procedural History

[1] Beginning in 2005, Mr. Stokker and Ms. Storoschuk were in a romantic relationship. Throughout their relationship, the parties were involved in a number of business transactions. Disagreements emerged over land and money. In 2007, Mr. Stokker, the appellant, sued Ms. Storoschuk and her corporation, 1641516 Ontario Inc., the respondents. Since then, the appellant's lawsuit has languished. It was dismissed administratively twice for delay and then reinstated on consent. Three court-ordered timetables imposed on the appellant were not met.

[2] In December 2015 the action had, once again, been removed from the list. The respondents, unaware of this, brought a motion under r. 48.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to have the appellant's action dismissed for delay. The motion was adjourned for a short time. On the return date, March 17, 2016, the appellant was not called upon to show cause as to why his action should not be dismissed. Instead, the parties agreed to a fourth timetable, as well as a consent order under r. 48.14(4). The timetable set out a series of completion dates that the appellant would have to meet to ready the matter for trial. Clause 3 of the order provided that, "pursuant to Rule 48.14(1), the Registrar shall dismiss this action for delay with costs unless the action has been restored to the trial list on or before August 18, 2016."

[3] The appellant was late in performing some of the steps in the fourth timetable, but managed to complete the required tasks and to bring a r. 48.11(b) motion to reinstate the action before the August 18, 2016 deadline. The respondents opposed the motion, but the master reinstated the action to the trial list. The respondents appealed to a single judge of the Superior Court of Justice and the appeal was allowed. The appellant now comes before us, arguing that the appeal judge erred in law in allowing the appeal. We agree with the appellant. The order reinstating the action should not have been set aside.

Legal Test for Restoration

[4] The parties agree that each level of court applied the proper legal test for restoring an action. In Nissar v. Toronto Transit Commission, 2013 ONCA 361, 115 O.R. (3d) 713, at para. 31, this court said:

[T]he applicable test is conjunctive: a plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation, and that, if the action was allowed to proceed, the defendant would suffer no non-compensable prejudice. [Emphasis in original.]

Application of the Test: Relevant Period of Delay

[5] The appeal judge held that the master erred in applying the first leg of the test by not considering the overall delay from the inception of the litigation. In our view, the master was correct to give focus to the period following the March 17, 2016 consent order and timetable. Where delay has been addressed in a prior court order, or consented to, it is any subsequent delay that requires explanation.

[6] For this reason, in Christie Corp. v. Lee, 29 C.P.C. (4th) 181 (Ont. C.A.), this court confined the relevant period of delay in a r. 24 motion to dismiss for delay to the period of delay that occurred after a consent amendment to the plaintiff's statement of claim. Prior delay was implicitly excused by the defendant when they consented to the amendment. The same principle applies to a motions under r. 48 to restore an action to the trial list.

[7] Thus, in Gill v. Khindria, 2016 ONSC 5057 it was held, correctly in our view, that in a r. 48.11 motion, the court should only consider delay subsequent to a consent order withdrawing a motion to dismiss.

[8] The master did not err, therefore, in focusing on the period after the r. 48.14(4) consent order was made. Indeed, in this case there was no delay subsequent to the order, as the appellant had met the imposed deadline of August 18, 2016. The master was therefore correct to reinstate the action to the trial list.

Respondents' Additional Arguments

[9] The respondents offered three additional arguments in support of the appeal judge's decision to the contrary. None of the arguments can sustain the appeal judge's decision.

First Argument: Implicit Terms of the Consent Order

[10] First, the respondents argued that the March 17, 2016 order should not prevent them from opposing reinstatement based on prior delay because the order did not say that, if the timetable was met, the action would be restored. The respondents claim that they always reserved the right to oppose the reinstatement motion, even if the timetable was met. Their position is untenable. The essence of the consent order was to impose a deadline on the appellant in preparing for trial. It is necessarily implicit in the order the respondents agreed that, if the deadline was met, the action would be fit to be restored.

Second Argument: Consent Ineffective Due to Ignorance of Facts

[11] Second, the respondents argued that the appeal judge was correct in finding that they are not bound by their agreement to the r. 48.14(4) order because they were not aware when they agreed to that order that two of their witnesses had died in 2014. In our view, the appeal judge was incorrect in treating the respondents' consent as ineffective on this basis. No authority was cited for the proposition that the failure of a party to know the state of its own case makes its consent to an order ineffective. That is not a proposition we would endorse. When one party provides consent, the other parties to the action are entitled to rely on that consent. The appellant in this case relied to his detriment on the timetable that the respondents had agreed to, in the reasonable expectation that the action could then move forward. The master was correct to treat the consent order of March 17, 2016 as a seminal event in determining whether to reinstate the action to the trial list.

Third Argument: Prejudice from Death of Witnesses

[12] Finally, the respondents argued that the appeal judge was correct to find that the master erred by failing to appreciate the significance of the prejudice caused by the 2014 death of the respondents' witnesses. The master had concluded that since the witnesses died before the action was struck from the list, prejudice from the deaths was unrelated to the motion to restore the action.

[13] We agree, on other grounds, with the master's conclusion that the identified prejudice was irrelevant to the motion. As indicated, it is only where there is relevant delay that a plaintiff seeking to restore an action is required to meet the Nissar burden of "demonstrating that there is an acceptable explanation for the delay in the litigation, and that, if the action was allowed to proceed, the defendant would suffer no non-compensable prejudice" (emphasis in original). Since there is no delay requiring explanation in this case, there is no need to inquire into prejudice.

Clarification on Consideration of Delay History

[14] Before concluding, we want to make clear that although the focus is on subsequent delay during a motion to restore an action to the trial list after a r. 48.14(4) order has been made, if there has been material delay in meeting the timetable, it is appropriate to consider the entire history of delay in the action when deciding whether to reinstate. That history of delay and the difficulties it has caused is relevant when considering whether the defendant will experience non-compensable prejudice if the action is restored to the trial list.

Disposition

[15] The appeal is allowed and the order of the master restoring the action to the trial list is affirmed. The costs order made by the appeal judge is vacated. As agreed, we order partial indemnity costs to Mr. Stokker in the appeal below in the amount of $5,000 inclusive of HST and disbursements. We also order costs on this appeal on a partial indemnity basis in the amount of $4,000 inclusive of HST and disbursements.

"John Laskin J.A."

"Grant Huscroft J.A."

"David M. Paciocco J.A."