Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20220411 DOCKET: C69669

MacPherson, Paciocco and George JJ.A.

BETWEEN

1116227 Ontario Ltd. and 2115776 Ontario Inc. Plaintiffs (Appellants)

and

Telus Communication Company, Telus Communications Inc., Mark Bridgman and Joe Goodbaum Defendants (Respondents)

Counsel: Mohsen Seddigh, for the appellants Rachel Laurion, for the respondents

Heard: April 4, 2022

On appeal from the judgment of Justice Cory A. Gilmore of the Superior Court of Justice, dated June 15, 2021.

Reasons for Decision

[1] In April 2015, the appellants 1116227 Ontario Ltd. and 2115776 Ontario Inc. commenced a joint action against the respondents, Telus Communication Company, Telus Communications Inc., and two individual parties. [1] In that action, the appellants claimed recission and damages relating to what they contend were franchise agreements. Almost six years later, the appellants’ action had not been set down for trial. The adjusted fifth anniversary date of the commencement of the action of October 21, 2020 was approaching. [2] Facing the prospect of the dismissal of their action by the registrar for delay pursuant to r. 48.14(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the appellants brought a r. 48.14(5) motion requesting that their action not be dismissed, and seeking an order for a litigation timetable.

[2] In those circumstances, a status hearing was convened pursuant to r. 48.14(6). After hearing from the parties, the motion judge found that the appellants failed to meet their onus of demonstrating why the action should not be dismissed for delay. She held that they had not satisfied either of the two cumulative components of the relevant test affirmed in Faris v. Eftimovski, 2013 ONCA 360, 363 D.L.R. (4th) 111, at para. 42, by: (1) providing an acceptable explanation for the delay in the litigation (the “explained-delay component”) and (2) showing that the respondents would not suffer non-compensable prejudice (the “prejudice component”). Accordingly, the action was dismissed.

[3] The appellants appeal the motion judge’s decision to dismiss, claiming that she erred in her findings relating to both components of the Faris test. Since a plaintiff must satisfy both of those components to prevent an action caught by r. 48.14(1) from being dismissed, this appeal cannot succeed unless the appellants demonstrate reversible error relating to both the explained-delay component and the prejudice component.

[4] The appellants submit that the motion judge’s analysis of the two components of the test is intertwined, and that error in her prejudice analysis taints her findings relating to the explained-delay component. We do not agree. For the reasons that follow, we are not satisfied that the motion judge committed reversible error relating to the explained-delay component. Therefore, the appeal must be dismissed, and there is no need for us to address the appellants’ able submissions relating to the prejudice component.

[5] In challenging the motion judge’s finding that they failed to provide an acceptable explanation for the delay, the appellants do not contend that the motion judge committed any legal errors. Instead, they argue that she committed palpable and overriding errors of fact.

[6] We see no palpable or overriding errors in the motion judge’s key finding that the appellants’ action had become “mostly dormant” during a long period of delay after the Statement of Defence was filed on July 17, 2017, until the inception of efforts by the appellants in October 2020 to achieve an agreed upon litigation timetable. We are not persuaded that the motion judge committed palpable error by relying on incomplete dockets to assess the steps the appellants had taken. The undocketed correspondence identified by the appellants does not contradict her finding that during this period the appellants had not taken substantive steps in pursuing the action. Nor did the motion judge commit palpable and overriding error by apparently misreading one date on the docket as April 2020, when it was in fact December 1, 2020. The motion judge had ample other evidence before her to find the delay she identified.

[7] Nor did she commit palpable and overriding error in determining that the appellants’ explanation for that delay was not acceptable.

[8] The appellants attempted to explain that delay primarily by identifying unspecified challenges it experienced in gathering relevant documentary evidence. However, the action was underway for close to six years by the time the motion was heard, yet the appellants had still not proposed a discovery plan or provided a draft Affidavit of Documents. They also failed to establish that all of the documents had been gathered by the time of the motion. As well, they had missed a prior undertaking to provide documents. Moreover, the affidavit evidence offered by the appellants to advance this explanation lacked detail.

[9] The additional reason for delay identified – the need to reinstate the corporations so that the action could be pursued – does not begin to account for the period of delay that occurred, and the appellants were correct not to press this explanation in oral argument.

[10] The motion judge’s finding that the appellants failed to provide an acceptable explanation for the delay is entitled to deference, and we would not interfere with it.

[11] The appeal is dismissed. Costs are payable to the respondents in the amount of $2,100 inclusive of disbursements and applicable taxes. As requested by the respondents, this amount reflects the agreed upon costs on the appeal of $8,000, as set off by the outstanding $5,900 costs order in favour of the appellants arising from the respondents’ failed motion for security for costs in this appeal.

“J.C. MacPherson J.A.”

“David M. Paciocco J.A.”

“J. George J.A.”

Footnotes

[1] The action was discontinued on consent as against the individual parties.

[2] Some of that delay was attributable to the pandemic, requiring an adjustment in quantifying the anniversary date of the commencement of the action.