Court of Appeal for Ontario

Date: 2026-02-13 Docket: COA-25-CV-0362

Roberts, Coroza and Rahman JJ.A.

Between

Gunarathy Arumugasamy and Vivekananthan Thiyagarajan Plaintiffs/Defendants by Counterclaim (Appellants)

and

Sundarraj Subaschandiran also known as Sundararaj Suba Chandran also known as Subaschandiran Sundarraj Defendant/Plaintiff by Counterclaim (Respondent)

David Silver, for the appellants

Glen M. Perinot, for the respondent

Heard: January 20, 2026

On appeal from the order of Justice Erika Chozik of the Superior Court of Justice, dated January 29, 2025.

Reasons for Decision

I. Overview

[1] The motion judge dismissed the appellants' motion to set aside the Registrar's dismissal order and restore their action to the trial list. The appellants appeal from this order. As we explain below, we agree with the appellants that the appeal must be allowed.

[2] The motion judge made two errors that justify appellate intervention. First, she erred in principle in her prejudice assessment by failing to consider the respondent's lackadaisical approach to the litigation. Second, she made a palpable and overriding error in finding that the appellants showed disinterest in the action. Considering the matter afresh, the appropriate remedy is to set aside the motion judge's order and restore the action to the trial list.

II. Background

[3] The procedural history of the matter is summarized in two unchallenged affidavits filed on the motion — one sworn by the appellants' lawyer in the action (not Mr. Silver) and the other sworn by the appellant Vivekananthan Thiyagarajan ("Vivek").

[4] The appellants' action against the respondent is for damages for unpaid loans in the aggregate amount of approximately $70,000. Their statement of claim was issued in November 2017. The respondent filed a statement of defence and counterclaim a month later. The counterclaim sought approximately $730,000 in damages. After both sides had filed their respective replies, they engaged in settlement discussions in early 2018. In the spring of 2018, the appellants served their affidavit of documents. In June they examined the respondent for discovery.

[5] In August 2018, the respondent's then-lawyer (not Mr. Perinot) filed a notice of intention to act in person on his client's behalf. The action was to proceed with the respondent representing himself. Despite this, a few months later, in October 2018, the respondent's lawyer told the appellants' lawyer that he would continue acting to examine the appellants for discovery. The parties' lawyers exchanged emails on October 5, 2018 about selecting a suitable date for these discoveries. After this, the appellants' lawyer heard nothing more from the respondent's lawyer.

[6] Though the appellants' lawyer had discussed bringing a summary judgment motion with his clients in 2018, it appears that a decision was made to set the matter down for trial instead. In October 2021, the appellants' lawyer served the appellants' trial record on the respondent by mail to the address on the notice of intention to act in person. He also filed the record with the court. The appellants' lawyer also served the respondent's now former lawyer with the trial record by email, in case he had some renewed involvement with the matter. The appellants' lawyer also asked the respondent's former lawyer for any updated contact information for the respondent. The respondent's former lawyer did not respond.

[7] On November 26, 2021, over a month after serving the trial record on the respondent, the appellants' lawyer received a letter from a paralegal who was representing the respondent in a small claims court action. The letter said that the respondent had never lived at the address on the notice of intention to act in person and that the paralegal had received the trial record from the residents of that address at the respondent's request. The paralegal provided the appellants' lawyer with an email address for the respondent. On the same day, the appellants' lawyer emailed the trial record to the respondent at that email address. The respondent never replied to that email.

[8] Despite having pursued the action diligently until this point, things inexplicably went off the rails in 2022. The appellants' lawyer acknowledges that he missed the assignment court date in February 2022. His only explanation is that he "lost sight of [it]." Consequently, the action was struck from the trial list.

[9] The appellants emailed their lawyer in September 2022, January 2023, and January 2024 asking for updates. The January 2023 email said that they were "[a]nxiously awaiting" hearing about their trial date and asked if there was "any option to expedite the [trial] date." The January 2024 email expressed concern that nine years had passed without setting a trial date and asked about the appellants' "next move." The appellants' lawyer did not reply to any of these emails.

[10] The appellants' lawyer realized his oversight on May 9, 2024. His affidavit does not explain what caused him to realize the error, why he had not responded to his clients, or why he had done nothing in more than two years to fix his oversight. He booked a motion for August 15, 2024 to restore the action to the trial list, pursuant to r. 37.14(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The motion was later adjourned to December 4, 2024 and then to January 29, 2025, when the motion under appeal was ultimately heard. In the interim, on September 13, 2024, the action was administratively dismissed for delay by the Registrar pursuant to r. 48.14. [^1]

III. Decision Below

[11] In brief reasons, the motion judge said that she had considered the four factors that she was required to consider in determining the motion: 1) the length of litigation delay and the adequacy of the appellants' explanation for it; 2) whether the appellants' failure to meet the mandated time limits was the result of inadvertence; 3) whether the motion to set aside the dismissal order was brought promptly; and 4) whether the delay had prejudiced the respondent: H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173, 386 D.L.R. (4th) 262, at para. 20.

[12] The motion judge noted that the appellants' delay between February 2022 and May 2024 had not been adequately explained. She said that the only explanation for the delay was that counsel had lost sight of the matter. The motion judge found this to be an inadequate explanation. She observed that "[a] plaintiff who is interested in pursuing [an] action would have noticed that nothing was happening with his case." This apparently led the motion judge to conclude that "[t]his is not a case of mere inadvertence by counsel, for which the client should not be punished."

[13] The motion judge addressed the issue of prejudice as follows: "I am not satisfied that there is no prejudice to the defendant … from the delay." The motion judge also concluded that she was not satisfied that the respondent had been properly served with the notice of motion because it had been sent to an email address from which the respondent had never replied.

IV. Discussion

[14] A motion judge's decision in refusing to set aside a Registrar's dismissal order is discretionary and entitled to deference on appeal: Finlay v. Paassen, 2010 ONCA 204, 101 O.R. (3d) 390, at para. 6. This court will only intervene if the reasons reveal an error in principle or palpable and overriding errors in relation to the motion judge's findings of fact: H.B. Fuller Co., at para. 19. We find that the motion judge committed two errors warranting intervention.

[15] First, the motion judge erred in principle by not considering the respondent's conduct in her prejudice analysis. The motion judge's brief treatment of this issue said that the appellants had not shown that there was no prejudice. It is true that prejudice may be presumed where a delay is lengthy and that the onus was on the appellants to rebut this presumption: Ali v. Fruci, 2014 ONCA 596, 122 O.R. (3d) 517, at paras. 15-17. Nevertheless, it was an error for the motion judge not to consider the respondent's conduct at all. This court has held that a judge hearing a motion to set aside a dismissal order must consider the respondent's conduct as part of the question of prejudice: H.B. Fuller Co., at paras. 37-39. As noted above, there was evidence before the motion judge about the respondent's inaction. He had not responded to the appellants' lawyer. He had also filed a counterclaim and had done nothing to advance it.

[16] All of this conduct suggests the absence of real prejudice to the respondent's ability to "put its case forward on the merits" and the motion judge was obliged to consider it in her analysis of whether the presumption of prejudice was rebutted: Fruci, at para. 15; H.B. Fuller Co., at paras. 38-39. Unless a delay is truly inordinate, which it is not here, presumed prejudice alone will not usually justify depriving a plaintiff of their substantive rights: Fruci, at paras. 16-17. Furthermore, as in H.B. Fuller Co., the motion judge was obliged and failed to "link the question of prejudice to whether a fair trial was still possible and made no finding in that regard": at para. 44.

[17] Second, the motion judge's finding about the appellants' lack of interest in the action discloses a palpable and overriding error. The motion judge noted that "[a] plaintiff who is interested in pursuing an action would have noticed that nothing was happening with his case." This finding of disinterest was inconsistent with the evidence before her. The evidence before the motion judge was that Vivek had emailed his counsel on three occasions to ask when the matter would be listed for trial. While it is true that the appellants did not follow up with their lawyer extensively, they did notice the delay and asked their lawyer about it at least three times from 2022 to 2024, and even asked about expediting the trial date. The motion judge's conclusion about the appellants' apparent disinterest was connected to her conclusion that it was not unfair to punish the appellants for their lawyer's inadvertence. Thus, this error affected her decision to dismiss the motion. It is therefore palpable in the sense that it is obvious and overriding in the sense that it goes to the core of the outcome of the motion: Benhaim v. St-Germain, 2016 SCC 48, [2016] 2 S.C.R. 352, at para. 38.

[18] Finally, we address the motion judge's finding that the respondent did not have notice of the motion. It is not clear from the motion judge's reasons that the lack of notice affected her decision to dismiss the motion. However, we address it here for the sake of completeness. The evidence before the motion judge established that the appellants had served their motion both physically and electronically. The appellants served the motion materials at the only address that they had for the respondent – the one that appeared on the notice of intention to act in person. The appellants also served the motion by email to the email address that they had been given by a paralegal acting for the respondent. The lack of any response from the respondent from the email address was consistent with the other evidence on his inaction, including not pursuing his own counterclaim. In these circumstances, if the motion judge had concerns that the appellants did not have notice, she could have adjourned the motion and provided directions about how the motion could be served.

The matter should be restored to the trial list

[19] Having found that the motion judge committed reviewable errors, this court can consider the motion afresh. We agree with the appellants that the motion should be granted, and the matter restored to the trial list.

[20] The appellants pursued this action with diligence until 2022, when their lawyer missed the assignment court date. Indeed, they had the matter listed for trial two years before the deadline for doing so. Although the appellants' counsel's unexplained delay is concerning, it is not a controlling factor. The appellants did not lose interest in the litigation. They cannot be faulted for their lawyer's unexplained inaction. This court has made clear that "[t]he law will not ordinarily allow an innocent client to suffer irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor": Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695, 87 O.R. (3d) 660, at para. 28.

[21] Moreover, as noted above, the respondent's inaction is significant. The respondent filed a counterclaim in an amount that was approximately ten times larger than the appellants' claim and then took no steps to advance it. After parting ways with his lawyer, the respondent did not make any effort to communicate with the appellants' lawyer. It also seems that the respondent has never answered the undertakings from his examination for discovery in June 2018. The respondent's inaction demonstrated that he was content with the pace of the litigation and would have suffered no real prejudice from the Registrar's order being set aside.

[22] The overarching consideration is whether it is in the interests of justice to set aside the Registrar's order and restore this matter to the trial list. In our view, it is. The delay is not unduly lengthy in the overall circumstances of this case, and resulted from inadvertence by the appellants' counsel for which the appellants are not responsible in this case. Importantly, there is no prejudice to the action continuing. This is a straightforward collection action that is document-driven. The action is ready for trial.

V. Disposition

[23] The appeal is allowed, and the motion judge's order is set aside. We order that the Registrar's order dismissing the action for delay be set aside and the action be restored to the trial list. The appellants are entitled to costs of the appeal in the amount of $9,785 all inclusive, as agreed to by the parties.

"L.B. Roberts J.A."

"S. Coroza J.A."

"M. Rahman J.A."

[^1]: Though the original motion only sought to restore the matter to the trial list, the parties on appeal agree that the appellants also sought to have Registrar's dismissal order set aside when they appeared before the motion judge.