Elliott v. Fasken Martineau DuMoulin LLP, 2019 ONSC 2764
CITATION: Elliott v. Fasken Martineau DuMoulin LLP, 2019 ONSC 2764
DIVISIONAL COURT FILE NO.: 462/18
DATE: 20190502
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
John Darragh Maynard Elliott also known as J. Darragh M. Elliott
Appellant
– and –
Fasken Martineau DuMoulin LLP and Paul R. King
Respondents
Ryan Atkinson, for the Appellant
Peter Wardle and Evan Rankin, for the Respondents
HEARD at Toronto: April 23, 2019
H. sachs J.
Overview
[1] Mr. Elliott, the Appellant, appeals the decision of Master Sugunasiri dated June 21, 2018 dismissing the Appellant’s counterclaim for delay.
[2] The Appellant’s counterclaim was a claim alleging solicitor’s negligence, which the Appellant filed 16 years ago in response to a claim by the Respondents for unpaid legal fees. The events giving rise to the alleged claim for negligence occurred in 1991, 28 years ago.
[3] The matter came before the Master by way of a status hearing. In her decision, the Master found that with respect to both the claim and the counterclaim there had been undue delay that had not been satisfactorily explained and that had caused prejudice. Thus, she dismissed both the claim and the counterclaim. The Respondents do not seek to appeal the Master’s dismissal of their claim for legal fees.
[4] On this appeal the Appellant sought leave to file fresh evidence. He also argued that the Master made her decision under the wrong rule in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and that she made palpable and overriding errors of fact when she found that he had not adequately explained his delay and when she found that this delay had caused prejudice.
[5] For the reasons that follow I would dismiss both the motion to admit fresh evidence and the appeal.
Did the Master Proceed Under the Wrong Rule?
[6] In her decision the Master states as follows, at para. 22:
Both parties have cited Rule 48.14 and Rule 24 as the basis of their motions. These two rules have different tests. However, the parties only discussed the test for Rule 48.14 and I proceed on that basis.
[7] The Appellant acknowledges that the Master was correct in her decision; at the hearing his counsel only argued the test under Rule 48.14 (the difference between the two tests is largely a question of onus). In spite of this, the Appellant now asserts that Rule 48.14 does not apply.
[8] Under the applicable version of Rule 48.14(1), the Registrar was required to dismiss the action at issue for delay if it had not been set down for trial by January 1, 2017. Under Rule 48.14(4), an action would not be struck off the list if, 30 days prior to January 1, 2017, the parties had consented to and filed a timetable setting out when and what steps would be taken to make sure that the action was tried by January 1, 2019. Under Rule 48.14(5), if the parties did not consent to a timetable, any party could bring a motion for a status hearing before January 1, 2017. At a status hearing “the plaintiff shall show cause why the action should not be dismissed for delay” and the court could dismiss the action for delay (Rule 48.14(7)).
[9] On December 14, 2016, the Respondents brought a motion seeking to have the court establish a time table. By the time the motion was heard, it was clear that many of the documents contained in the original productions could not be located. Thus, the Respondents amended their claim for relief to request that the Appellant’s counterclaim be dismissed.
[10] When the Respondents brought their motion they did not have a signed consent to a timetable. Thus, they could not proceed under Rule 48.14(4). Their remedy was to proceed under Rule 48.14(5),which provided that if there was no consent to a timetable a party who did not want its action dismissed for delay by the Registrar could move for a status hearing (as long as the motion was brought before January 1, 2017).
[11] The Respondents moved for a status hearing before January 1, 2017. At first they asked for relief in the form of a timetable; later they amended their request for relief to seeking dismissal. The change in the request for relief did not change the nature of the motion they were bringing, which was a status hearing pursuant to Rule 48.14(5).
[12] Thus, the Master correctly applied the test under Rule 48.14 when she considered the matter. As noted by the Master, that test involved considering whether the Appellant had provided an acceptable explanation for the delay and whether, if the counterclaim was allowed to proceed, the Respondents would not suffer non-compensable prejudice.
Did The Master Commit a Palpable and Overriding Error In Her Analysis of the Appellant’s Explanation for the Delay?
[13] In this case it was acknowledged that the delay at issue was inordinate (2008 to 2016).
[14] The Appellant attributed his delay in prosecuting his counterclaim to three related problems: his health, his financial difficulties, and his inability to retain counsel.
[15] According to the Appellant’s factum (at para. 24(b), the Master made a palpable and overriding error of fact when she found the “any delay by Elliott due to financial hardship was a bald assertion.”
[16] The Master analyzed the medical evidence and did not accept that the Appellant’s health issues prevented him from pursuing his counterclaim. She also reviewed his evidence concerning his efforts to retain counsel and did not find that it established that his failure to find counsel was due to financial reasons.
[17] With respect to the Appellant’s financial circumstances, the Master stated as follows, at para. 40:
Further, aside from a bald assertion of financial hardship arising from health problems and having not been paid from the Sagl action, Elliott did not provide any evidence of his financial status during the time when his counterclaim lay stagnant. I also take Elliott’s claim of financial hardship with a grain of salt as the same claim was made with respect to why he lost Mr. Kostyniuk as a lawyer in this action. This assertion was patently denied by Mr. Kostyniuk in a sworn affidavit.
[18] According to the Appellant it was a palpable and overriding error to find that his assertion of financial hardship was patently denied by Mr. Kostyniuk. Mr. Kostyniuk’s Affidavit does not contain such a denial. Further, according to the Appellant, if Mr. Kostyniuk’s Affidavit is read as a whole, it is clear that Mr. Kostyniuk terminated his services because he was not being paid.
[19] At para. 4 of his Affidavit filed in opposition to the motion to dismiss his counterclaim for delay, Mr. Elliott stated:
I was represented by Robert N. Kostyniuk of Kostyniuk & Bruggerman until shortly after the filing of the Statement of Defence and Counterclaim. I retained Mr. Kostyniuk’s services until such time as I could no longer afford them.
[20] In support of their motion, the Respondents filed a copy of an Affidavit from Mr. Kostyniuk in which he discusses why he got off the record in the action involving Mr. Elliott’s counterclaim against the Respondents. In that Affidavit, Mr. Kostyniuk deposed that he was accused by Mr. Elliott of having forced him into a settlement that was costing him his home. Mr. Kostyniuk then goes on to discuss the claim by the Respondents for legal fees and states the following, at para. 15:
By way of counterclaim [to the action for legal fees], Elliott insisted he could prove liability and damages of $40,000,000.00. I did not feel comfortable with this claim since I had no idea of the work Fasken Martineau’s solicitors had done, the results of their lawsuits, etc. I was advised by Faskens that the firm had over 45 boxes of material supporting its claims. The counterclaim was in fact prepared and filed by Elliott, without my approbation, but at his insistence. After Elliott’s accusation, I secured an Order getting off the record in that action. [Emphasis added.]
[21] Thus, while Mr. Elliott deposed that Mr. Kostyniuk ceased to act for him because he could no longer afford his services, Mr. Kostyniuk was clear that he got off the record for an entirely different reason; Mr. Elliott had accused him of forcing him into a settlement. In the face of this evidence it cannot be said that the Master made an error, let alone a palpable and overriding error, when she found that Mr. Kostyniuk’s evidence did not support Mr. Elliott’s when it came to the reason why Mr. Kostyniuk ceased to act for Mr. Elliott in the action at issue.
[22] The Master was also correct when she found that Mr. Elliott’s evidence regarding his financial difficulties on the motion before her consisted of bald assertions.
[23] This brings me to the Appellant’s request to file fresh evidence. The fresh evidence he seeks to file consists of material that would arguably support his assertions regarding his financial situation – income tax returns, a Request for Information, and a Request for Taxpayer Relief sent to the Canada Revenue Agency by the Taxpayer’s Ombudsman on Mr. Elliott’s behalf.
[24] The test for the admission of fresh evidence is set out in R. v. Palmer 1979 8 (SCC), [1980] 1 S.C.R. 759, 106 D.L.R. (3d) 212 (“Palmer”). Under that test:
(a) The evidence should generally not be admitted if, by due diligence, it could have been adduced a trial;
(b) The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the trial;
(c) The evidence must be credible; and
(d) It must be such that if believed it could reasonably, when taken with the other evidence, be expected to have affected the result.
[25] Mr. Elliott’s request to admit fresh evidence does not meet the Palmer test for two reasons.
[26] First, the evidence could have been obtained for the motion through the exercise of due diligence. The status motion to dismiss Mr. Elliott’s counterclaim was adjourned on January 26, 2018 to March 21, 2018. This gave Mr. Elliott almost two months to obtain the evidence at issue, which was available at the time. To allow the evidence to be admitted on appeal when it could have been put before the Master would undermine one of the important policy interests of the civil litigation system – finality. In St. Amand v. Tisi, 2018 ONCA 106, the Court of Appeal held, at para. 10, that finality concerns, which “are especially important in civil proceedings, demand a restrictive approach to the admissibility of evidence on appeal.”
[27] Second, the fresh evidence would not have affected the outcome of the motion. The Master based her decision both on the lack of a reasonable explanation for the delay and on the existence of prejudice that compromised the fairness of the trial.
Did the Master Make A Palpable and Overriding Error in Her Assessment of Prejudice?
[28] In assessing prejudice the Master found that of the 238 documents listed in Schedule “A” of the Appellant’s Affidavit of Documents, only 13 (Mr. Elliott argues the actual number is 22) had been produced. The rest could not be located by either side.
[29] According to Mr. Elliott the Master made a palpable and overriding error when she failed to examine the documents that had been produced in light of the essence of Mr. Elliott’s counterclaim, which, according to him, needed very few documents to support it, all of which were available.
[30] In her analysis on prejudice, the Master compared Mr. Elliott’s Fresh Affidavit of Documents with his original Affidavit. She found both that many of the documents deemed relevant in the original Affidavit do not appear in the Fresh Affidavit and also that the majority of the documents listed in the Fresh Affidavit do not appear in the original Affidavit. This might well necessitate further discovery, which would require the Respondent law firm to review the documents. The associates who worked on the file have left the firm and Mr. King is retired. As the Master noted, memories fade with time. The Master concluded her analysis on prejudice as follows, at para. 53:
The reality is that the loss of production and the inevitability of faded memories significantly compromise trial fairness, not only to the parties, but to the administration of justice itself, Even where summary judgment cross-examination transcripts are available, that cannot replace the two things that are required at trial- documents and oral evidence. These parties cannot fairly proceed to trial on the main action and counterclaim with incomplete or non-existent productions that can never be retrieved, recreated and incomplete affidavit of documents that do not match the affidavit originally examined on, discovery transcripts that have limited use at trial, and the faded viva voce evidence from parties to transactions that occurred decades ago.
[31] Thus, the Master based her finding on prejudice on more than just the loss of documents. She also based it on the fact that after 28 years, people’s memories about the kind of events at issue in the counterclaim will have faded such their capacity to testify at trial about these events will inevitably be significantly compromised.
[32] In short, the Master’s analysis on prejudice does not contain a palpable and overriding error.
Conclusion
[33] For these reasons, the appeal is dismissed as is the motion for fresh evidence. The parties agreed on costs. In accordance with that agreement, the Appellant shall pay the Respondents their costs of this appeal and the motion fixed in the amount of $10,000, all inclusive.
H. Sachs J.
Released: May 2, 2019
CITATION: Elliott v. Fasken Martineau DuMoulin LLP, 2019 ONSC 2764
DIVISIONAL COURT FILE NO.: 462/18
DATE: 20190502
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
John Darragh Maynard Elliott also known as J. Darragh M. Elliott
Appellant
– and –
Fasken Martineau DuMoulin LLP and Paul R. King
Respondents
REASONS FOR JUDGMENT
H. Sachs J.
Released: May 2, 2019