Dyke v. BMW Canada Inc., 2019 ONSC 4076

CITATION: Dyke v. BMW Canada Inc., 2019 ONSC 4076

COURT FILE NO.: CV-18-136509

DATE: 20190703

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

Elizabeth Dyke Plaintiff (Appellant)

– and –

BMW Canada Inc. Defendant (Respondent)

COUNSEL: Michael Kealy, for the Appellant Rachel Laurion, for the Respondent

HEARD: April 10, 2019

REASONS FOR DECISION

MULLINS J.:

[1] Elizabeth Dyke appeals the decision of Deputy Judge Davis dated June 6, 2018 made at Richmond Hill, Ontario, in which the Appellant’s motion to set aside an order of September 1, 2017, was dismissed.

Background

[2] On January 26, 2012, the Appellant was involved in a motor vehicle accident. In December 2013, the Appellant, as a self-represented litigant, commenced an action against the Respondent in Small Claims Court seeking damages in respect of the incident.

[3] The Appellant brought a motion before the Small Claims Court seeking to have the matter transferred to the Superior Court of Justice. On October 1, 2014, the Small Claims Court adjourned the motion and directed the Appellant to bring the motion before the Superior Court of Justice.

[4] In October 2014, the Appellant served and filed a motion in the Superior Court of Justice to have the action transferred to the Superior Court of Justice and to amend the claim. The motion was scheduled to be heard in August 2015.

[5] In February 2015, the Appellant retained Terrence Pochmurski. On February 27, 2015, Mr. Pochmurski issued a statement of claim in the Superior Court of Justice, on behalf of the Appellant, seeking damages against the Respondent and Bayerische Motoren Werke Aktiengesellschaft.

[6] In July 2015, the Respondent’s counsel emailed Mr. Pochmurski and asked, “Will your client be dismissing the small claims court action?” Mr. Pochmurski replied, “I believe so.”

[7] In November 2016, the parties executed a request to the clerk of the Small Claims Court to have the action dismissed on consent. The Small Claims Court declined to dismiss the action on the basis that the wrong forms were submitted.

[8] On September 1, 2017, the Small Claims Court ordered the action dismissed for delay pursuant to r. 11.1.01(1) of the Rules. The Appellant retained new counsel, Polley Faith LLP, in February 2017. Polley Faith LLP did not learn of the dismissal until January 2018.

[9] In March 2018, the Appellant brought a motion to set aside the order dismissing the action; this was heard by Deputy Judge Davis on June 1, 2018. In his Ruling dated June 6, 2018, Deputy Judge Davis cited H.B. Fuller Co. v. Rogers (Rogers Law Office), 2015 ONCA 173, 386 D.L.R. (4th) 262, and outlined the factors for consideration as the following:

1. Explanation of the litigation delay;

2. Inadvertence in missing the deadline;

3. Motion brought promptly; and

4. No prejudice to the defendant.

[10] Deputy Judge Davis cited Marché d’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd., 2007 ONCA 695, 87 O.R. (3d) 660 at para. 12, citing Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80 (Ont. S.C.), at para. 41, rev’d on other grounds (2002), 48 C.P.C. (5th) 93 (Ont. Div. Ct.), which said that “if either the solicitor or the client made a deliberate decision not to advance the litigation toward trial, then the motion to set aside the dismissal will fail.” Deputy Judge Davis found that the Appellant’s motions to transfer demonstrated a deliberate decision not to advance the Small Claims Court action to trial. Deputy Judge Davis further found that Mr. Pochmurski’s February 2015 Superior Court of Justice action, his advice to the Respondent’s counsel that the Small Claims Court action would be dismissed, his abandonment of the August 2015 motion to transfer, and his consent to have the action dismissed all demonstrated a deliberate decision not to advance the Small Claims Court action to trial. Also, due to the above factors, Deputy Judge Davis found that it cannot be said that the matter was not set down for trial through inadvertence.

[11] Deputy Judge Davis declined to accept the Appellant’s evidence and submissions that Mr. Pochmurski was acting against the instructions of the Appellant. He found that the motion was promptly brought, as the parties were unaware of the dismissal until January 2018 and the motion was brought two months after. He then considered whether prejudice would occur to the Respondent if the motion was granted. If the Appellant was allowed to bring another motion to transfer, and if it was successful, he reasoned, the Respondent would be precluded from raising the issue of the limitation period as a defence. The Respondent would also be prejudiced, he considered, due to costs incurred in defending the motion. There was no prejudice to the Appellant he determined, because she may have a cause of action against Mr. Pochmurski. He dismissed the Appellant’s motion.

Key Issues

[12] The following are the key issues in this appeal:

1. Did the Deputy Judge err in his consideration of the explanation of the litigation delay?

2. Did the Deputy Judge err in his consideration of inadvertence in missing the deadline?

3. Did the Deputy Judge err in his consideration of prejudice to the Respondent?

Court’s Jurisdiction

[13] The Appellant states that this is an appeal of a final order of the Small Claims Court in an action for the payment of money in excess of $2,500, and as such, there is an appeal as of right to the Divisional Court. The Respondent does address the court’s jurisdiction. The decision at issue made by Deputy Judge Davis appears to be a final order, rather than an interlocutory order.

Standard of Review

[14] Both the Appellant and the Respondent submit that Deputy Judge Davis’s order was discretionary and attracts significant deference on appeal. The Respondent submits that the issues at hand are issues of fact, and thus the Appellant must establish that Deputy Judge Davis made a palpable and overriding error.

[15] In Gilchrist v. Meraw, 2016 ONSC 1645, Thorburn J., sitting as a single judge of the Divisional Court, dealt with the same type of case as is at hand. The court found the following, at paras. 3 – 4:

An Order dismissing an action for delay is a discretionary order which is entitled to deference on appeal.

A decision will be interfered with only if the Court made an error of law, applied the wrong principles of law, or misapprehended the evidence such that there is a palpable and overriding error. (Zeitoun v. Economical Insurance Group, 2008 20996 (ON SCDC), 2008 CarswellOnt 2576 (Ont. Div. Ct.), aff'd (2009), 2009 ONCA 415, 96 O.R. (3d) 639 (Ont. C.A.)).

[16] The Supreme Court of Canada also set out the standard of review applicable in appeals from judges’ orders in Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235. On questions of law, the standard of review is correctness: para. 8. On questions of fact, the standard of review is palpable and overriding error: para. 10. On questions of mixed fact and law, the standard lies along a spectrum, and is stated as the following, at para. 36:

Where the legal principle is not readily extricable, then the matter is one of “mixed law and fact” and is subject to a more stringent standard. The general rule, as stated in Jaegli Enterprises, supra, is that, where the issue on appeal involves the trial judge's interpretation of the evidence as a whole, it should not be overturned absent palpable and overriding error.

[17] With respect to the Appellant’s counsel’s actions, in Kerr v. CIBC World Markets, 2013 ONSC 7685 (Div. Ct.), 316 O.A.C. 192, the court found the following, at para. 67:

In this case, the explanation given by the plaintiff is that she always wanted to proceed with the action and instructed her lawyers to do so and that she constantly enquired of her lawyers about a trial date. It was her lawyers that failed her. That in my view is an acceptable explanation for the delay in this case.

[18] Similarly, MDM Plastics Limited v. Vincor International Inc., 2013 ONSC 710 (Div. Ct.), 303 O.A.C. 208 at para. 40, aff’d on other grounds 2015 ONCA 28, 124 O.R. (3d) 420, the court found the following:

In Farmer’s Oil & Gas Inc. v. Ontario (Ministry of Natural Resources), the judge concluded that there was no binding authority that a party could not rely on the actions of its counsel to explain delay. Presumably, it depends on the circumstances. An offsetting factor where the delay is the fault of counsel is the demonstration that the plaintiff intended that the action proceed.

[19] The Deputy Judge’s finding that a motion to transfer is evidence of a deliberate decision to not advance the litigation to trial does not appear to be correct. This is a misunderstanding or misapplication of the law or a palpable and overriding error of fact. Clearly, this plaintiff had a continuous intention that her claims arising from one and the same incident be advanced against one and the same defendant, at least insofar as BMW was named from the outset.

[20] As to whether the Appellant’s counsel was acting outside of the Appellant’s instructions, this is a finding of fact which may only be reviewed if there was a palpable and overriding error. Due to the significant deference to be afforded here, I would not consider that the Deputy Judge erred in this regard.

[21] With respect to the Appellant’s potential claim against Mr. Pochmurski, the Deputy Judge should not have considered this. In Finlay v. Van Paassen, 2010 ONCA 204, 101 O.R. (3d) 390 at para. 32, the court found the following:

Speculation about whether a party has a lawsuit against its own lawyer, or the potential success of that lawsuit, should not inform the court’s analysis of whether the registrar’s dismissal order ought to be set aside.

[22] With respect to the Deputy Judge’s consideration of prejudice to the Respondent, the Deputy Judge misunderstood or misapplied the law. As articulated in Marché, the plaintiff must convince the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiff’s delay or as a result of steps taken following the dismissal of the action. There was no evidence of this.

[23] In this respect, the Respondent’s inability to bring a limitation period defence due to the Small Claims Court action being transferred to the Superior Court of Justice existed regardless of the delay in bringing the motion to transfer. The action had been started in time. The loss of a limitation defence cannot be said to be prejudice in the context of analyzing whether or not to set aside the dismissal due to delay. By analogy, in Chiarelli v. Wiens (2000), 2000 3904 (ON CA), 46 O.R. (3d) 780 (C.A.), the Court, at para. 16, found the following:

[P]rejudice that will defeat an extension of time for service must be caused by the delay. Prejudice to the defence that exists whether or not service is delayed ordinarily is not relevant on a motion to extend the time for service.

[24] With respect to the Deputy Judge’s analysis as a whole, case law suggests that the importance of actions being decided on their merits is typically weighted more heavily than the timely and efficient resolution of matters. In H.B., the Ontario Court of Appeal found the following, at paras. 25 – 27:

The factors that guide the court’s choice between ending the plaintiff’s action before trial and forcing the opposite party to defend the case despite the delay require a judge to resolve the tension between two underlying policies. The first is that civil actions should be decided on their merits. The second is that civil actions should be resolved in a timely and efficient manner in order to maintain public confidence in the administration of justice: Kara, at para. 9; Hamilton (City), at paras. 2021; Marché, at para. 25.

When reviewing a registrar’s dismissal for delay under the former rule 48.14, the weight of authority from this court has leaned towards the first policy consideration.

The court’s preference for deciding matters on their merits is all the more pronounced where delay results from an error committed by counsel. As the court stated in Habib, at para. 7, “[O]n a motion to set aside a dismissal order, the court should be concerned primarily with the rights of the litigants, not with the conduct of their counsel.” In Marché, Sharpe J.A. stated, at para. 28, “The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor” (citations omitted). [Emphasis added.]

[25] Lastly, in Iacolucci v. TD Waterhouse Canada Inc., 2018 ONSC 1027, the Court summarized the following, at para. 43:

While the Reid factors and common contextual factors are relevant, prejudice has been identified in many cases, as the “key consideration.” If a defendant can still have a fair trial, the manifestly just order is to determine an action on its merits; see Chiarelli v. Wiens, Micallef and Finlay. [footnotes omitted].

Conclusion

[26] Absent the incorrect application of the law as to delay and prejudice, the motion ought to have been granted. Accordingly, the appeal is granted, and the administrative dismissal of the Small Claims action is set aside. The order transferring the action to the Superior Court of Justice is granted. The actions shall be consolidated. For clarity’s sake, the right of the defendant Bayerische Motoren Werke Aktiengesellschaft to plead a limitation defence, not having been named in the action in the Small Claims Court, shall be unaffected by this order.

[27] The Appellant shall have costs, in the sum agreed between counsel of $7,500.00.

Justice A.M. Mullins

Released: July 3, 2019

CITATION: Dyke v. BMW Canada Inc., 2019 ONSC 4076

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

Elizabeth Dyke Plaintiff (Appellant)

– and –

BMW Canada Inc. Defendant (Respondent)

REASONS FOR DECISION

Justice A.M. Mullins

Released: July 3, 2019