COURT OF APPEAL FOR ONTARIO DATE: 20220516 DOCKET: C69879

Lauwers, Nordheimer and Zarnett JJ.A.

BETWEEN

M. Janice Henderson and James A. Henderson Plaintiffs (Appellants)

and

Kenora-Rainy River Districts Child & Family Services and the Estate of Betty Zimmerman by Estate Trustees Bernard Martin Zimmerman and Elisabeth Forrester, and the Estate of Mike Zimmerman by Estate Trustees Bernard Martin Zimmerman and Elisabeth Forrester Defendants (Respondents)

and

Her Majesty the Queen in Right of Ontario and Attorney General of Canada Third Parties (Respondents)

Counsel: Jeff Van Bakel and Samantha Gordon, for the appellants Harvey Stone and Jessica Tze-Ning Yuan, for the responding party Kenora-Rainy River Districts Child & Family Services Robert Sinding, for the responding parties the Estates of Betty Zimmerman and Mike Zimmerman Diane Fernandes, for the third party the Attorney General of Canada Rina Li and Nadia Laeeque, for the third party Her Majesty the Queen in Right of Ontario

Heard: April 26, 2022

On appeal from the order of Justice John Fregeau of the Superior Court of Justice dated August 23, 2021, reported at 2021 ONSC 5631.

REASONS FOR DECISION

Overview

[1] The appellants’ action was dismissed for delay after a status hearing under r. 48.14(7) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the basis that they had not provided an acceptable explanation for their delay in prosecuting the action. The appellants ask this court to set aside the status hearing order. For the reasons that follow, the appeal is dismissed.

The Factual and Procedural Context

[2] Between 1966 and 1974, the appellants, who are siblings, were under the care of Kenora-Rainy River Districts Child & Family Services (“KRRDCFS”) and were placed in the foster home of Betty Zimmerman and Mike Zimmerman. In the statement of claim, filed February 17, 2015, the appellants claim that they were abused while in the care of their former foster parents, who are now deceased. Their estates are respondents.

[3] From August 2017 to February 2019, the appellants’ former counsel was contemplating the possibility of converting the claim into a class action. This approach was abandoned after one of the appellants, Janice Henderson, refused to be a representative plaintiff. In March 2019, the appellants’ former counsel advised that she was going to “kickstart” the action by amending the statement of claim, but did not do so.

[4] On January 15, 2020, the appellants retained new counsel, who emailed all other counsel re-circulating a timetable that former counsel had proposed in November 2019. Counsel for the respondents declined to consent to a timetable, therefore requiring the appellants to bring the motion for a status hearing.

The Issues

[5] The appellants make two arguments: first, the judge failed to take into account, as a contextual factor in assessing the delay, that there is no limitation period applicable to their claims; and second, the judge erred in finding that the appellants’ “former counsel essentially suspended the prosecution of this action indefinitely” while she considered starting a class action as the better way to proceed. Neither of these arguments can be accepted.

The Governing Principles

[6] The legal test to be applied by a status hearing judge in considering whether to dismiss an action under r. 48.14 was prescribed in Faris v. Eftimovski, 2013 ONCA 360, 363 D.L.R. (4th) 111. The test has two parts. The plaintiff must demonstrate: first, that there is an acceptable explanation for the delay in prosecuting the action; and second, that if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice. We focus on the first part of the test.

[7] The appellants argue that the first part of the test should be contextualized just as the test for setting aside a registrar’s dismissal for delay under r. 37.14 has been contextualized. Pepall J.A. explained in Prescott v. Barbon, 2018 ONCA 504, 141 O.R. (3d) 616, at para. 14 that:

The legal test for setting aside a registrar's order dismissing an action for delay was originally described by Master Dash in Reid and adopted by this court in Scaini v. Prochnicki, 2007 ONCA 63, 85 O.R. (3d) 179:

(i) have the plaintiffs provided a satisfactory explanation for the litigation delay;

(ii) have the plaintiffs led satisfactory evidence to explain that they always intended to prosecute this action within the time limit set out in the rules or a court order but failed to do so through inadvertence;

(iii) have the plaintiffs demonstrated that they moved forthwith to set aside the dismissal order as soon as the order came to their attention; and

(iv) have the plaintiffs convinced the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiffs' delay or as a result of steps taken following the dismissal of the action?

[8] Pepall J.A. added, at para. 15:

This is not a rigid, one-size fits all test. Rather, a contextual approach is required: Scaini, at paras. 23-25. Prior to Scaini, a plaintiff had to satisfy each of the four elements. Thereafter, courts were to consider and weigh all relevant factors to determine the order that is just. See, also, Marché d'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd., 2007 ONCA 695, 87 O.R. (3d) 660. In Hamilton (City) v. Svedas Koyanagi Architects Inc., 2010 ONCA 887 104 O.R. (3d) 689, at para. 23, Laskin J.A. observed that the overriding objective is to achieve a result that balances the interests of the parties and takes account of the public's interest in the timely resolution of disputes. The four Reid factors provide a structured approach to achieving this result.

[9] The appellants argue that the motion judge erred by taking a “rigid and formalistic” approach to the analysis. They submit that a status hearing judge should take a contextualized approach to the exercise of authority under r. 48.14(7).

[10] We agree that the first part of the Faris v. Eftimovski test should be contextualized. In our view the elements of the Reid test should be considered by a status hearing judge as part of the chain of reasoning, with the issue of prejudice continuing to be assessed under the second part of the test. We see no reason not to adopt the statement made by Goudge J.A. in Scaini, at para. 23, that “a contextual approach to this question is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria”. He identified the Reid factors, at para. 24, as “criteria to guide the court”, which he thought would be the “main ones”. He concluded: “The key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case”. Indeed, this is just another articulation of the “general principle” of the Rules of Civil Procedure found, for example, in r. 1.04 and r. 2.01.

The Principles Applied

[11] The appellants argue that the policy considerations that led to the elimination of the limitation periods for certain assaults must form part of the context that the judge ought to have taken into account but did not. They submit that: “The passing of the Sexual Violence and Harassment Action Plan Act, and the amendments to the Limitations Act, 2002, represent a pronounced signal from the legislature that claims of this nature should be adjudicated on their merits, where possible, and not dismissed based upon technicalities related to timeliness”.

[12] The appellants note carefully that they “are not taking the position that the Rules of Civil Procedure, or the finality principle, do not apply to cases alleging historic sexual abuse”. They acknowledge that the legislative changes “relate to the commencement of a claim, as opposed to the progress on an action already initiated”. However, they assert that “the policy considerations that led to the enactment of the Sexual Violence and Harassment Action Plan Act are also relevant to assessing the progress of an action already commenced”. Because “[t]here is a societal interest in having the justice system adjudicate claims of this nature on their merits”, this action should have been allowed to proceed.

[13] The legislation does permit abuse victims to bring an action at anytime, without regard to a limitation period. But it does not give them licence to ignore the requirements of the Rules of Civil Procedure once the action is started. That said, we agree that the nature of the action is a contextual factor that can affect the exercise of a status hearing judge’s discretion in deciding whether to dismiss an action for delay or to let it continue. But this does not assist the appellants.

[14] The judge was alive to the issue and did take the absence of a limitation period into account. He stated: “The plaintiffs submit that the essence of their claim is historic sexual and physical abuse and that in such cases, different considerations apply with respect to the prejudice analysis”. He also noted: “KRRDCFS submits that there are limitation periods applicable to the plaintiffs’ claims which have passed, including under the Trustee Act and the Limitations Act, 2002”. There is no doubt he was fully conversant with the law. The appellants made the argument at the status hearing that they now make to this court. Their factum before the judge stated:

Part of the contextual assessment here requires consideration of the fact there is no limitation period for cases of historical sexual abuse or assault of a minor by a person who was responsible for the victim. Ms. Bright [the appellants’ former counsel] was operating under the assumption she had more time, and was being guided by a motivation to have her clients’ claims determined in an efficient and effective manner. An institutional class proceeding for historic abuse could have been that vehicle. In that context, any litigation delay in the within action related to the time Mr. Bright was exploring a class proceeding was explainable and acceptable.

From February 2019 (being the time Ms. Henderson advised Ms. Bright she did not want to be a representative plaintiff) until November 2019 (when Ms. Bright circulated a proposed timetable) there was a nine-month period of delay where the action was not progressed. An adequate explanation for this period of delay has not been proffered. However, (i) within the context of this larger action, (ii) the fact no limitation period exists, and (iii) in light of the plaintiffs’ uncontroverted evidence that they always wanted to pursue the Zimmermans and the KRRDCFS for their claims, this period or delay does not warrant this court exercising its discretion to dismiss the plaintiffs’ action.

[15] There is no evidence that “Ms. Bright was operating under the assumption she had more time” in the context of abuse claims to which a limitation period does not apply. Although Ms. Bright swore an affidavit and was cross-examined, she did not give this explanation. It is speculative.

[16] The appellants extract one line from the judge’s decision and argue that it demonstrates a legal error, to repeat: “[t]he plaintiffs submit that the essence of their claim is historic sexual and physical abuse and that in such cases, different considerations apply with respect to the prejudice analysis”. The appellants argue that the judge misconstrued their argument, which was that the nature of the case should inform both the delay analysis and the prejudice analysis. But this takes the judge’s language out of context. He was well-aware of the operation of the legislation. That he might have found it more cogent in the prejudice analysis than in evaluating delay does not mean that he made a legal error. The judge was not obliged to account for every argument made by a party: R. v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788, at para. 30; R. v. Alekozai, 2021 ONCA 633, at para. 65. In the overall context, he found the delay to be egregious and unexplained.

[17] The judge meticulously recounted the painfully slow progress of this action and its byzantine procedural tangles over the years. That set the context for his decision to dismiss the action for delay, and is captured in two paragraphs of the reasons:

The incidents which form the subject matter of the plaintiffs’ claims are alleged to have occurred between 1966 and 1974, approximately 45 - 50 years prior to the issuance of the Statement of Claim on February 17, 2015. The defendants’ Statements of Defence were delivered in June 2015 and pleadings in the main action closed in July 2015. This motion for a status hearing was initiated in January 2020.

In January 2020, five years following the issuance of the Statement of Claim, the action remained in its infancy with examinations for discovery not yet having been conducted. As observed in Slota and Cedron-Sni Inc., it is reasonable to approach the plaintiffs’ explanation for the delay in this action on the basis that “the longer the delay, the more cogent the explanation must be”.

[18] The judge was not persuaded that the delay was justified. As for the 18-month time period in which the appellants’ former counsel was considering the class action, he held: “The stated reason for this extensive delay is, in my opinion, without substance and inadequate in the overall context of the action”. He added: “the plaintiffs concede that there is no acceptable explanation for the delay between February 2019 and January 2020”. The judge concluded: “I find that the plaintiffs have failed to demonstrate that there is an acceptable explanation for the delay in prosecuting this action and that the plaintiffs have therefore failed to show cause why the action should not be dismissed for delay”. We see no error in his conclusion.

[19] The appellants’ second argument is that the judge “made a palpable and overriding error in determining that the Appellants’ former counsel made a deliberate decision to suspend this action”. This overstates the judge’s finding. He said: “[O]n August 2, 2017, two and one-half years after the Statement of Claim was issued, plaintiffs’ former counsel essentially suspended the prosecution of this action indefinitely”. He continued: “Approximately 18 months passed while plaintiff’s former counsel contemplated the ‘viability of pursuing claims against the KRRDCFS as class actions’”. The judge described this as “a unilateral decision of plaintiffs’ former counsel to suspend this action while contemplating an alternative litigation strategy which ultimately went nowhere”. This was not an unfair characterization in the circumstances. The respondents noted that plaintiffs’ counsel did not advise defendants’ counsel of her approach. Nor did she respond to regular inquiries by defence counsel as to whether the action was proceeding at all, as the record shows.

[20] With respect, the appellants have shown no legal error in the judge’s reasoning or in any of his self-instruction on the applicable law. There is a sense of exasperation that is completely justified. As this court noted in Wallace v. Crate’s Marine Sales Ltd., 2014 ONCA 671, at para. 22: “There comes a time, in short, when enough is enough, and the civil justice system will no longer tolerate inordinate and inexplicable delay”.

[21] In light of the judge’s conclusion about the delay, he did not carry out the prejudice assessment required at the second step of the test in Faris v. Eftimovski. In our view judges should routinely complete this assessment in order to approach the matter contextually and provide an adequate record on appeal. However, the failure to carry out that analysis here does not affect the result even if the matter is viewed contextually. In light of the judge’s conclusions, it is clear that the factors other than prejudice made dismissal the just order regardless of the result of a prejudice assessment.

Disposition

[22] The appeal is dismissed with costs payable to the respondents in the amount of $10,000 all-inclusive, as agreed.

“P. Lauwers J.A.”

“I.V.B. Nordheimer J.A.”

“B. Zarnett J.A.”