Court of Appeal for Ontario

Date: 2018-05-01 Docket: C64438 Judges: MacFarland, LaForme and Epstein JJ.A.

Parties

Between

Iroquois Falls Power Corp. Plaintiff (Appellant)

and

Jacobs Canada Inc. and McDermott Incorporated and Chubb Insurance Company of Canada and American Home Assurance Company Defendants (Respondents)

And Between

Jacobs Canada Inc. and McDermott Incorporated Plaintiffs by Counterclaim

and

Iroquois Falls Power Corp. and Computershare Trust Company of Canada, in its capacity as Trustee of Northland Power Income Fund and Iroquois Falls Power Management Inc. Defendants by Counterclaim

Counsel

Paul A. Ivanoff and Evan Thomas, for the appellant, Iroquois Falls Power Corp.

Brennan Maynard, for the respondents, Chubb Insurance Company of Canada and American Home Assurance Company

Robert Rueter, for the respondents, Jacobs Canada Inc. and McDermott Incorporated

Heard: April 11, 2018

On appeal from the orders of Justice Mario D. Faieta of the Superior Court of Justice, dated September 20, 2017, reported at 2017 ONSC 5515 and October 17, 2017, reported at 2017 ONSC 6187.

Reasons for Decision

Background

[1] Iroquois Falls Power Corp. ("IFPC") appeals from the orders of the Superior Court of Justice dismissing its action for delay and awarding costs to the respondents.

[2] The action was commenced in 2005. IFPC alleged that the engineering work related to two natural gas turbines at a power generating station was negligently performed. This action was dismissed in March 2007 when the respondents obtained summary judgment. This court allowed IFPC's appeal in part. IFPC then brought a motion to amend its statement of claim, which was dismissed in September 2008. This court overturned the decision in 2009. No further steps have been taken since then to bring the action to trial.

[3] As of January 1, 2017, Rule 48.14(1) now requires the registrar to dismiss all actions in Ontario that were five or more years old and had not been set down for trial. There is no authority for the registrar to order costs.

[4] The respondents brought a motion on January 4, 2017 under Rule 24.01(1) to dismiss IFPC's action for delay and for their costs of the action. IFPC did not dispute that the action should be dismissed for delay. Rather, in response, on August 2, 2017, it brought its own motion – as it says - to require the court give effect to Rule 48.14(1) and dismiss the action, but without costs.

[5] In particular, IFPC took the position that its action should have been dismissed by the registrar on January 1, 2017 pursuant to Rule 48.14(1) with no costs. IFPC, therefore, asked the motion judge for an order, nunc pro tunc, that this action be administratively dismissed effective January 1, 2017.

[6] The motion judge granted the respondents' motion under Rule 24.01(1) and under the court's inherent jurisdiction and ordered that the action of IFPC be dismissed for delay. Further, he found that the registrar had acted appropriately in not dismissing the action under Rule 48.14(1). He held that the Rule does not apply to case managed actions, such as this one. And, he declined IFPC's request to grant an order under the Rule, nunc pro tunc dismissing the action effective January 1, 2017.

[7] Finally, the motion judge declined to award substantial indemnity costs to the respondents and found that the circumstances warranted having costs assessed.

Discussion

[8] At the hearing of this appeal we advised the parties that we were dismissing it with reasons to follow. These are the reasons.

[9] Before this court, IFPC submits the motion judge made several errors. We disagree with each of IFPC's submissions and dismiss the appeal for the following reasons.

[10] IFPC submits that in dismissing the action for delay under Rule 24, the motion judge failed to recognize that the "new regime" that has been ushered in by the legislature under Rule 48.14 takes precedence over Rule 24. In fact, IFPC counsel on appeal goes so far as to argue that Rule 48.14 ousts the jurisdiction of the court from dealing with any action that is subject to dismissal by the registrar under Rule 48.14, except to enforce compliance with the Rule. That is to say, pursuant to Rule 48.14, after five years, and subject to the exceptions identified in the rule, the court's jurisdiction is ended awaiting the registrar's mandated dismissal.

[11] We cannot accept this rather incongruous submission for several reasons.

[12] First, as this court has previously found, there is no hierarchy as between Rule 24.01 and Rule 48.14. Each of the Rules simply provide a different means that may lead to the dismissal of the plaintiff's action for delay: see *Faris v. Eftimovski*, 2013 ONCA 360, at para. 34.

[13] Second, there is nothing in the language of Rule 48.14 to even suggest an intention that the jurisdiction of the registrar to issue an administrative order under Rule 48.14 takes precedence over the jurisdiction of the court. To the contrary, Rule 24.01 specifically notes the court's jurisdiction to dismiss an action for delay under Rule 24 "where the circumstances described in paragraphs 1 and 2 of subrule 48.14(1) apply". Moreover, Rule 48.14(1) expressly recognizes the paramount authority of the court, which supersedes that of the registrar — the opening words provide: "Unless the court orders otherwise…".

[14] Third, non-compliance with a rule is an irregularity and a court "may grant all necessary amendments or other relief, on such terms as are just" and where "necessary in the interest of justice, may set aside the proceeding or a step, document or order in the proceeding in whole or in part": Rule 2.01(1). Thus, rather than Rule 48.14 ousting the jurisdiction of the court in favour of the registrar, the court's paramount jurisdiction is manifestly recognized.

[15] Simply put, Rule 48.14 does not take precedence over Rule 24.01, nor does it oust the jurisdiction of the court from dealing with any action that is subject to dismissal by the registrar under Rule 48.14. Given that the registrar had not dismissed IFPC's action under Rule 48.14, it was entirely open to the respondents to proceed with their motion under Rule 24.01 and for the motion judge to exercise jurisdiction in accordance with that rule.

[16] Also, we reject IFPC's assertion that the motion judge failed to appreciate the costs implications of Rule 48.14 in these circumstances. Given there was no Rule 48.14(1) registrar's order, IFPC's argument that such an order does not include costs, simply has no significance. The motion judge ultimately considered his jurisdiction and authority under Rule 24.01. IFPC's observation that the registrar could not have ordered costs under Rule 48.14 is not relevant.

[17] Finally, we reject IFPC's submission that the motion judge erroneously concluded that IFPC was not entitled to an order that its action be dismissed under Rule 48.14 nunc pro tunc. As we explained, in the final analysis, because the respondents properly proceeded under Rule 24.01, Rule 48.14 had no application to this case. More importantly, IFPC ignores the fact that while the Rules allow a plaintiff to discontinue its own action, they do not permit a plaintiff to bring a motion to dismiss it: *Dubuc v. 1663066 Ontario Inc.*, 2009 ONCA 914, at paras. 12-13.

Costs

[18] On the issue of costs, IFPC seeks leave to appeal the motion judge's order insofar as he awarded costs of the action, the summary judgment motion, and the motion before him. IFPC submits that in doing so he took the wrong approach. Furthermore, IFPC argues that the motion judge's reasons fail to adequately explain his decision. We disagree.

[19] The motion judge considered detailed submissions from all parties. These included IFPC's claim for relief and supporting submissions and its entitlement to costs. All parties relied on s. 131 of the Courts of Justice Act, the court's inherent jurisdiction, and Rule 57. Furthermore, Rule 24.05.1(1) expressly provides for the right of any party to make a motion respecting the costs of the action, where an action is dismissed for delay. There is nothing in the record to suggest the motion judge ignored any of this in reaching his decision, and IFPC has not satisfied us that he did.

[20] IFPC accepts that "the court has complete discretion to fashion a costs award that is in the interests of justice". In this regard, there are numerous cases where costs of an action are awarded to the defendant after dismissal of the action for delay, including costs of motions within the action not otherwise adjudicated: see for example, *North Toronto Chinese Alliance Church v. Gartner Lee Limited*, 2012 ONCA 251, at para. 14. Here, the motion judge provided reasons for his costs decision that adequately explain his award and are satisfactory for purposes of appellate review.

[21] In the end, IFPC's arguments do not present "strong grounds upon which [this court] could find that the judge erred in exercising his discretion": *OrthoArm Incorporated v. GAC International LLC*, 2017 ONCA 418, at para. 44. We therefore refuse leave to appeal costs.

Disposition

[22] The appeal is dismissed. Costs are awarded to the respondents, Jacobs Canada Inc. and McDermott Incorporated in the amount of $24,000 and to the respondents, Chubb Insurance Company of Canada and American Home Assurance Company in the amount of $14,000. Costs are inclusive of disbursements and HST.

J. MacFarland J.A.

H.S. LaForme J.A.

Gloria Epstein J.A.