Citation and Court Information

CITATION: Sokoloff v. Bateriwala, 2020 ONSC 7569

COURT FILE NO.: DC 19/575

DATE: 2020-12-07

SUPERIOR COURT OF JUSTICE - DIVISIONAL COURT - ONTARIO

RE: Wendy Sokoloff et al. v. Sanjay Bateriwala et al.

BEFORE: D.L. Corbett J.

COUNSEL: Jack Parsekhian, for the Appellants Caroline Ursulak, for the Respondent Bateriwala Vladimira Ivanov, for the Respondent Surakasha Ted Kalnins for the Respondents other than Bateriwala and Surakasha

Decision

D.L. Corbett J.:

[1] This is an appeal from the final order of Master Jolley dismissing the appellants’ motion to set aside the Registrar’s dismissal of this action on April 26, 2018.[^1] This appeal is properly brought to a single judge of this court[^2] and the “appellate standard of review” applies[^3] with deference accorded to the Master’s exercise of discretion.[^4]

[2] For the following reasons the appeal is dismissed.

[3] The Master correctly stated and followed the test to be met by the moving party:

(a) provide a reasonable explanation for the delay;

(b) satisfy the court that the deadline was missed through inadvertence;

(c) demonstrate that the motion to set aside the dismissal was brought promptly; and

(d) rebut the presumption of prejudice; if the presumption is rebutted, the burden then shifts to the respondents to demonstrate that they would suffer prejudice if the dismissal order is set aside.

The test is to be applied contextually, weighing all four factors.[^5]

[4] The Master found that the appellants failed to meet any branch of the test. This finding was based on factual findings made after a careful review of the record and is entitled to deference: I see no basis on which to interfere with it. I agree with the appellants that the record on the issue of prejudice was not as definitive as was the record on the other three branches of the test, but I am satisfied that there was a proper basis for the Master’s finding that the presumption of prejudice was not rebutted. I also conclude that, in this case, there was near total abdication by the appellants of their responsibility to move their case forward for many years. The appellants are self-represented solicitors and not “innocent clients” suffering from the neglect or incompetence of their solicitors. In my view the Master’s decision would have been the proper result even if the presumption of prejudice had been rebutted.

No Reasonable Explanation for the Delay

[5] The events giving rise to this claim took place in 2011. The statement of claim was issued in April 2013. One respondent sought particulars and inspection of pleaded documents to draft a statement of defence. The appellants failed to respond, leading to a motion where the statement of claim was struck as against the moving respondent, with leave to amend. In the result, all pleadings were not served until the end of 2014.

[6] Then nothing happened for eighteen months.

[7] Then, in the summer of 2016, the appellants wrote to the respondents to canvass dates for examinations for discovery. The respondents declined to schedule examinations until the appellants served an affidavit of documents. No affidavit of documents was served by the appellants; it was still outstanding as of the time of the motion before Master Jolley.

[8] Then in December 2016, the appellants wrote to the respondents that they intended to move to strike one statement of defence, enclosing a notice of motion with a return date in March 2017. The appellants never served motion materials and the motion never happened.

[9] These were the only two steps taken by the appellants between April 2015 and January 2019: a premature request to schedule examinations for discovery and service of a notice of motion that was never pursued. As of January 2019, the action had not moved forward since completion of the pleadings.

[10] The Master found:

The action was administratively dismissed by order made 26 April 2018 and received by the appellants on or about 9 May 2018. At that time, the appellants had not delivered their affidavits of documents. No timetable had been proposed and no discoveries arranged. The appellants had written all of two letters. The action was just barely out of the gate.[^6]

This finding is fully justified on the record. Before me, as before the Master, the appellants argue that some delay was the result of actions taken – or not taken – by respondents. The Master rightly rejected this argument: it was the appellants’ obligation to move this action forward and the record discloses no meaningful effort to take steps to that end. Before me, as before the Master, the appellants argued that the appellants had a reasonable explanation for some of the delay: they were busy responding to other professional demands, including cases on behalf of clients and proceedings arising from departure of members of the firm. These are not explanations for failure to prosecute this action diligently, or really at all. As the Master noted, if the appellants did not have time to prosecute the action, they should have retained outside counsel.

Deadline Not Missed Through Inadvertence

[11] Ms Sokoloff gave evidence that the appellants always intended to set this matter down in a timely way; the deadline was missed through inadvertence. The Master characterized this statement as “just a statement on paper, six years after the issuance of the original statement of claim” and inconsistent with the record.

[12] In addition to the history described above, the Master noted that the appellants’ conduct was inconsistent with their professed intention to proceed with the case. Ms Bains, a director of the respondent Surakasha and the office manager of the respondent Complete Rehab (two respondents alleged to have conspired together against the appellants), was hired by the appellants in a paralegal capacity for several months in 2017. Ms Bains was invited to a retirement party at the appellants’ premises in 2018. These facts support the inference that the appellants had decided not to proceed with this litigation and to let bygones be bygones.

[13] It should be recalled that the appellants are a law firm and its principal. They chose to represent themselves in this action, which is not a matter of routine bill collection, but a claim sounding in economic tort and conspiracy brought against other professionals in the business of serving personal injury claimants. There was no miscommunication in this case between solicitor and client, and no concern that an unfortunate client was poorly served by a trusted legal advisor. It is reasonable to infer that the appellants’ intentions were reflected in their inattention to the case: the Master was not satisfied that the deadline was missed by inadvertence and this finding was available on the record before the court.

Undue Delay Moving To Set Aside the Dismissal Order

[14] The appellants acknowledged receiving the dismissal order on May 9, 2018.

[15] The first step taken by the appellants to move to set aside the dismissal was service of a notice of motion on January 30, 2019.

[16] The dismissal order was a litigation emergency. It required immediate attention. A letter should have gone out to the other parties within hours or days. Steps should have been taken to schedule the motion to set aside the dismissal, or to establish a schedule for that motion, within days or a couple of weeks. The exchange of materials and return date of the motion would then have depended on the response from opposing parties and the court’s response to the scheduling request. Time that passes after the motion has been served may well not be taken into account calculating delay from the time of the dismissal order, so long as the appellants show reasonable diligence moving the motion forward.

[17] In this case, the appellants’ response was to decide to assign the matter to a new lawyer scheduled to start at the appellant law firm at the end of May 2019. If this plan had been followed, that would have led to delay of at least three weeks before any action was taken to respond to the dismissal order – a response that is not consistent with the requirement to move with diligence. However, even that plan was not implemented. There is no evidence that the matter was, in fact, assigned to the new lawyer. Then that new lawyer left the firm after only a few months and nothing was done about the dismissal order. Apparently, this was discovered in December 2018, which then led to the notice of motion of January 30, 2019 (yet another month’s delay).

[18] As quoted by the Master:

… Being busy with other work cannot justify a lawyer taking no steps to serve the notice of motion immediately. A dismissal order cannot be taken lightly. It commands immediate attention. If a lawyer does not have time to take on new work he should not take it on. If a lawyer is faced with a dismissal order, setting it aside should be his first priority given the strong language of rule 37.14. If he does not have time to draft a motion record, he should retain other counsel to do so …[^7]

There are cases where lengthy delays in bringing a motion to set aside have been excused, but the Master was not satisfied that they applied in the circumstances of this case. She found:

The failure to serve a notice of motion for almost nine months after receiving the dismissal order is consistent contextually with the delay that led up to the dismissal. On the facts before me, I am not satisfied that the appellants moved promptly to set aside the dismissal order.[^8]

[19] This conclusion was available to the Master on the record before her.

Presumption of Prejudice

[20] Prejudice from delay is presumed where a limitation period has passed, as is the case here. The allegations in the claims against the respondents sound in conspiracy and alleged unlawful solicitation of clients. The events giving rise to these claims were roughly seven years in the past when the action was dismissed and nearly eight years in the past by the time the appellants brought a motion to set aside the dismissal.

[21] The Master found that some evidence has been lost over the years that would have been preserved had there been timely affidavits of documents and examinations for discovery. One aspect of the claim involves allegations that clients or potential clients were approached by the respondents, and it stands to reason that clients’ memories of these events, so many years after the fact, will have deteriorated.

[22] This is not a case where a crucial witness has died and it is not clear that the lost physical evidence would preclude a fair trial. But the onus is on the appellants, after the expiry of a limitation period, to rebut the presumption of prejudice. The Master concluded that this onus was not rebutted by bald statements that there is an absence of prejudice. The nature of this case and the fact that virtually nothing has been done to preserve evidence for so many years was a sufficient basis for the Master to conclude, as she did, that the presumption of prejudice had not been rebutted.

[23] In oral argument, the appellants submitted that the Master erred in finding prejudice where none was shown, and in over-emphasizing delay where there was no prejudice. The appellants submitted that it is a rare case where a Registrar’s dismissal is upheld absent prejudice.[^9]

[24] First, prejudice was shown – by reason of the unrebutted presumption. It was for the plaintiff to establish that evidence has been preserved and will be available for trial – that is the consequence of presumed prejudice. Where so much time has gone by, documentary evidence has not been preserved, an affidavit of documents has still not been prepared, and evidence of witnesses who are not parties to the litigation has not been preserved, it is open to the court to find that the presumption has not been rebutted.

[25] Second, I do not agree that it is only a “rare case” that will be dismissed for delay absent a finding of prejudice. In the words of the Court of Appeal, prejudice is a “key” consideration, but it is neither the sole nor a necessary condition for setting aside a dismissal order. In Finlay, relied upon by the appellants, the motions judge failed to consider all the Reid factors and to weigh his findings altogether when exercising his discretion.[^10] Thus the motions judge in Finlay “fell into the very error” identified in Scaini v. Prochnicki: the “too "rigid" approach that to set aside a registrar's dismissal order, a moving party must satisfy each factor. Instead, the Court of Appeal held that the motions judge should have followed a "contextual" approach in which all relevant considerations are weighed to determine the just result.[^11]

[26] On the record before her, the Master was entitled to find that the presumption of prejudice had not been rebutted. That is sufficient to dispose of this point and this appeal. Even if the presumption of prejudice had been rebutted, which it was not, the other three factors weigh so heavily against the appellants in this case that they would justify upholding the dismissal order. Such a conclusion is not precluded by Finlay and Scaini.

Conclusion

[27] The Master considered and applied the correct test on the motion to set aside the Registrar’s dismissal for delay. Her factual findings supported her conclusion that no branch of the test had been met by the appellants. With respect, this was not a close call: the appellants’ prosecution of this action, on their own behalf, was woefully inadequate and supported an inference that the appellants had decided not to pursue the matter.

[28] The competing inference, that the appellants were incompetent and negligent handling complex litigation on their own behalf, would not lead to a different result. The appellants are not assisted by the line of cases where a client is relieved of the consequences of counsel’s errors where no prejudice has been shown. Those cases have little force where it is shown that the client is self-represented, the matter was repeatedly brought to senior counsel’s attention, and dilatory prosecution of the action continued nonetheless.[^12]

[29] Having said this, it is important to note that counsel on the appeal was not responsible for managing the litigation. All counsel before me provided helpful materials and were of great assistance during oral argument, for which I thank them.

[30] The appeal is dismissed, with partial indemnity costs payable by the appellants fixed at $5,000 for the respondent Surakasha, $5,000 for the respondents other than Bateriwala and Surakasha, and $2,500 for the respondent Bateriwala, all inclusive, all payable forthwith.

D.L. Corbett J.

Date: December 7, 2020

[^1]: Sokoloff v. Bateriwala, 2019 ONSC 5442. [^2]: Courts of Justice Act, RSO 1990, c. C.34, ss.19(1)(c) and 21(2)(a). [^3]: Housen v. Nikolaisen, 2002 SCC 33; Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65. [^4]: H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173, para. 19. [^5]: Reid v. Dow Corning Corp., 2001 CarswellOnt 2213); Jadid v. Toronto Transit Commission 2016 ONCA 936; Scaini v. Prochnicki, 2007 ONCA 63; Carioca’s Import and Export Inc. v. Canadian Pacific Railway, 2015 ONCA 592; Finlay v. Van Paassen, 2010 ONCA 204, 101 OR (3d) 390. [^6]: Sokoloff v. Bateriwala, 2019 ONSC 5442, para. 13. [^7]: Shome v. Apotex 2012 ONSC 5708, para. 29. [^8]: Sokoloff v. Bateriwala, 2019 ONSC 5442, para. 31. [^9]: Finlay v. Van Paassen, 2010 ONCA 204, 101 OR (3d) 390. [^10]: Finlay v. Van Paassen, 2010 ONCA 204, 101 OR (3d) 390, paras, 26-27. [^11]: Scaini v. Prochnicki (2007), 2007 ONCA 63, 85 O.R. (3d) 179, [2007] O.J. No. 299 (C.A.) [^12]: H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173, paras. 25-28; Kara v. Arnold, 2014 ONCA 871; Hamilton (City) v. Svedas Koyanagi Architects Inc., 2010 ONCA 887; Marché d'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660 (C.A.); 1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544, 353 D.L.R. (4th) 129.