2022 ONSC 4189
DIVISIONAL COURT FILE NO.: DC-21-349
DATE: 20220718
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
BLOT INTERACTIVE INC.
Applicant
– and –
ONTARIO MEDIA DEVELOPMENT CORPORATION and ATTORNEY GENERAL OF ONTARIO
Respondents
Hussein Olleik, for the Applicant
Judie Im and Marcus Campbell, for the Respondent
HEARD at Toronto: May 19, 2022
Davies J.
REASONS FOR DECISION
A. Overview
[1] Blot Interactive Inc. is a digital media developer. Blot received funding from the Ontario Media Development Corporation (OMDC) to develop a digital word game. In 2016, Blot applied to OMDC for a certificate of eligibility for the Ontario Interactive Digital Media Tax Credit for its game, Chat Fu. On June 18, 2018, OMDC denied Blot’s request for a certificate of eligibility for the tax credit. OMDC found that Chat Fu did not meet the eligibility criteria for the tax credit.
[2] Blot now brings a motion for an order extending the time within which to file it judicial review application from the June 18, 2018 decision.
[3] The primary consideration on a motion for an extension of time is whether the justice of the case justifies granting an extension: Go Fleet Corporation v. So, 2021 ONSC 2199 at para. 10; Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131. In exercising my discretion to grant or deny Blot an extension of time, I must consider all the relevant factors, including
a. whether the applicant formed an intention to apply for judicial review within the applicable timeline;
b. the length of an explanation for the delay;
c. any prejudice caused to the respondent party by the delay; and
d. the merits of the application for judicial review.[^1]
No one factor is determinative. Rather, I must balance all the factors and determine whether an extension is warranted.
[4] On balance, I find it is in the interests of justice to grant Blot an extension of time despite the extensive delay and the motion is allowed.
Intention to challenge OMDC’s decision
[5] There is no dispute that Blot formed the intention to appeal the ineligibility decision shortly after the decision was made. Blot launched an appeal of OMDC’s decision in December 2018. However, Blot first appealed the decision through the tax process and the Tax Court, rather than by way of judicial review application.
Length of Delay and Explanation for Delay
[6] The delay in this case is excessive – 43 months from June 2018 when OMDC rejected Blot’s application for tax credit eligibility to January 2022 when Blot finally served OMDC with its judicial review application – and it far exceeds the six-month common law timeframe for commencing an application for judicial review: Bettes v. Boeing Canada De Havilland Division, [2000] OJ No. 5413 at para. 6; Gigliotti at para. 29.[^2]
[7] The issue for me to decide is whether there is a reasonable explanation for the delay. Blot has different explanations for different periods.
[8] From June 2018 to March 2020, Blot was pursuing its appeal through the tax system. Blot submitted an appeal to the Ontario Ministry of Finance on December 17, 2018 (i.e., within the six-month common law timeline for appealing an administrative decision). The Ontario Minister of Finance forwarded Blot’s appeal to the Canada Revenue Agency. The CRA refused to consider Blot’s appeal because it was not filed on time and in April 2019 Blot filed an appeal in the Tax Court of Canada. On March 2, 2020, the Tax Court ruled that Blot’s appeal should be brought in the Superior Court of Justice. Blot then pursued an application for judicial review in this Court.
[9] OMDC argues that before Blot filed the notice of appeal with the Ontario Minister of Finance it knew or ought to have known that a judicial review application was the appropriate way to challenge the decision. Blot was aware of another case in which a digital media developer challenged a denial of a certificate of eligibility in the Divisional Court (Pong Marketing and Promotions Inc. v. Ontario Media Development Corporation, 2018 ONCA 555). Blot referred to the Pong decision in its appeal to the Ontario Minister of Finance. OMDC argues that Blot pursued its appeal in the wrong forum and the delay that caused is not reasonable. I disagree.
[10] The question is not whether Blot could have commenced an application for judicial review in 2018. The question is whether Blot’s decision to pursue its appeal through the tax process rather than through an application for judicial review provides a reasonable explanation for the delay between June 2018 and March 2020. I find it does.
[11] When Blot asked about the process for appealing the OMDC ineligibility decision, a Business Officer at OMDC directed Blot to an Ontario government website with information about filing appeals and objections through the provincial tax system. The tax credit was jointly administered by OMDC and the Canada Revenue Agency so it was reasonable for Blot to believe it could challenge the decision through the tax system. OMDC is to blame for misleading Blot or providing misinformation about the route(s) of appeal. It is not OMDC’s role to advise companies on how to review its eligibility decisions. However, it was reasonable for Blot to pursue its appeal through the Department of Finance rather than through the court, particularly because the tax credit was jointly administered by the provincial and federal tax authorities. I find that Blot pursued its appeal through the tax system in good faith and its decision to do so provides a reasonable explanation for the delay between June 2018 and March 2020.
[12] Almost immediately after the Tax Court’s ruling, normal court operations were interrupted by the COVID-19 pandemic. From March 2020 to September 2020, limitation periods were suspended in Ontario so, as a matter of law, that period cannot count against Blot: O. Reg 73/20.
[13] From September 2020 to January 2021, Blot claims it was confused about how to commence a judicial review application under the new COVID-19 protocols. OMDC argues that even if true, Blot’s confusion does not provide a reasonable explanation for this delay. I find that Blot’s confusion is reasonable.
[14] The Court issued several Notices to Profession between March 2020 and February 2021 to explain how to schedule matters, file materials and commence new proceedings. The new procedures were radically different from the pre-pandemic procedures. In addition, the Notices to Profession were iterative – they evolved as the Court developed and refined the process for scheduling virtual hearings and filing materials electronically.
[15] Blot made many attempts to file its judicial review application before January 2021. For example, Blot sent a copy of its application for judicial review to the Divisional Court office by email in July 2020 and asked that it be processed. On July 20, 2020, Blot received an email from the Court which states as follows:
Due to the unforeseen circumstances of COVID-19 our office is currently closed. All Division Court matters are currently suspended until further notice. Timelines for filing documents will not be in effect and will be adjusted accordingly when the courts/office resume. You may file your documents and materials when the court resumes without penalty as we are currently not accepting general filing by email. As per the directive below, service is still required to follow timelines.
[16] Unfortunately, the information Blot received from the Court in July 2020 was incorrect and inconsistent with the Notices to Profession that had been issued in May and June 2020. By July 2020, the Court was accepting materials electronically and new applications for judicial review could be issued with authorization from an Administrative Judge of the Divisional Court.
[17] Blot contacted the Court again on September 25, 2020 to ask if the Court had started accepting applications for judicial review. The Court staff directed counsel to the June 2020 Notice to Profession. Blot’s counsel sent several other emails asking for clarification on the procedure set out in the Notice. On January 6, 2021, a clerk at the Divisional Court clearly explained the process to Blot’s counsel for the first time.
[18] OMDC argues that counsel is expected to understand and comply with the Notices to Profession and Blot’s confusion over the procedure is not a reasonable explanation for the delay. I agree that counsel must make best efforts to understand and comply with all Notices to Profession: Go Fleet Corporation v. So, 2021 ONSC 2199 at para. 20. However, the Court has been quite forgiving of counsel who, despite good faith efforts, had difficulty filing materials with the Court in the early stages of the post-pandemic procedures. The period between March 2020 and January 2021 saw many, many changes to the procedure for accessing the Court and filing materials. Blot’s confusion was reasonable, particularly when they were given inaccurate information by the Court in July 2020 that conflicted with the Notices to Profession.
[19] This case is not like Go Fleet Corporation v. So, 2021 ONSC 2199 where the Court refused to grant an extension of time. Like Blot, Go Fleet blamed the delay on the confusion over the filing procedures during the pandemic and on misinformation it received from Court staff. However, two important facts distinguish this case from Go Fleet. First, in Go Fleet the Court found that counsel had not taken any steps to comply with the Notice to Profession before the deadline for filing their appeal had passed. Here, counsel for Blot made several good faith efforts to file its judicial review application as early as July 2020. Second, in Go Fleet, the Court found there was no admissible evidence to prove the Court gave Go Fleet incorrect or misleading information. Here, Blot filed the email from the Court that shows that Court staff gave its counsel incorrect information that was inconsistent with the Notices to Profession.
[20] To be clear, I am not blaming the court staff for the delay. The issue is not who is to blame for the delay. The question is whether Blot’s explanation for the delay – namely its confusion about how to have its application for judicial review issued – is reasonable. Given the drastic and frequent changes to the Court procedures in the wake of COVID-19 and the inaccurate information Blot received, I am satisfied its explanation for the delay from March 2020 to January 2021 is reasonable.
[21] However, by January 6, 2021, Blot’s counsel knew exactly how to obtain authorization to file its notice of application for judicial review. Blot was told to submit a scheduling request form to the Court together with its application for judicial review. Blot was also told to copy OMDC on its correspondence with the Court. The matter should have proceeded expeditiously after January 6, 2021. However, Blot made several mistakes that contributed to the delay after January 2021. Blot failed to complete the scheduling request form, which requires contact information for the respondent’s counsel. Blot also failed to copy OMDC on its correspondence to the court as directed, so OMDC was not aware of Blot’s efforts to initiate its judicial review application. And OMDC did not receive several important directions from the Court. This error was discovered and corrected in January 2022. I find that most of the delay between January 2021 and January 2022 would have been avoided if Blot had submitted a scheduling request form as directed (with OMDC’s counsel information) or simply copied OMDC on its correspondence with the Court. Although the errors explain the delay between January 2021 and January 2022, the errors are not a reasonable excuse for the delay.
[22] I find there is a reasonable explanation for the delay between June 2018 and January 2021. The explanation for the delay between January 2021 and January 2022 is not reasonable.
Prejudice to the Respondent
[23] OMDC has not adduced evidence of actual prejudice. Of course, some prejudice can be presumed from excessive delay: Toronto District School Board v. Child and Family Services Review Board, 2019 ONSC 7064 at para. 28. There is both an individual and institutional interest in the finality of administrative decisions and the timeliness of any review. Those interests are prejudiced when decisions are challenged years later: Taylor v. Pivotal Integrated HR Solutions, 2020 ONSC 6108 at para. 45.
[24] There are, however, three factors that significantly mitigate any prejudice to OMDC. First, the decision to deny Blot a certificate of eligibility for the tax credit was based on a paper record, which is not adversely affected by the passage of time. OMDC’s eligibility decision did not involve any witnesses whose evidence would be compromised by the passage of time, for example. The full record will be available if Blot succeeds on its judicial review application and if OMDC is ordered to reconsider Blot’s application.
[25] Second, OMDC is a government agency that does not experience the stress and anxiety that individual parties experience when appeals are delayed.
[26] Third, OMDC has been aware of the nature of Blot’s concerns about the eligibility decision since shortly after the decision was made. Blot filed extensive submissions with the Ontario Ministry of Finance in December 2018 setting out its objection to the OMDC decision. OMDC has known what issues it might have to address on a review of its decision for many years.
Merits of the Application for Judicial Review
[27] The test for establishing merit on a motion for an extension of time is not high. My task is not to consider the merits in detail: Sazant v. Criminal Injuries Compensation Board, 2011 ONSC 2060 at para. 9.
[28] Blot argues the ineligibility decision is inconsistent with OMDC’s earlier decision to grant Blot funding to develop Chat Fu. Blot also argues that OMDC considered irrelevant factors in denying a certificate of eligibility. Without prejudging the merits of the judicial review application, I am satisfied that Blot’s application has apparent merit.
Does the justice of the case justify an extension of time?
[29] How the competing factors should be balanced in this case is not obvious.
[30] On the one hand, the 43-month delay is extraordinary and far exceeds timelines set by this court. On the other hand, I found that most of the delay has been reasonably explained. Blot initially pursued its appeal in the wrong forum but did so diligently. Within a few months of the Tax Court’s decision, Blot made efforts to commence an application for judicial review. At that point, the process for initiating a new Divisional Court proceeding was constantly changing in response to the realities of the COVID-19 pandemic. Blot made good faith efforts to file its notice and made repeated requests for assistance. The delay after January 2021, when the process was made clear to Blot, is not reasonable. However, I find it would be unfair to deprive Blot of the opportunity to pursue its appeal because its counsel made errors that caused most of the last 12 months of delay.
[31] I have also found that the prejudice to OMDC is minimal. I am confident OMDC can fully respond to Blot’s judicial review application, the substance of which has been known to OMDC for years. I am also satisfied that if a reconsideration of Blot’s tax credit application is ordered the full record is still available for OMDC’s full consideration.
[32] On balance, I am satisfied that the justice of the case justifies granting Blot an extension of time. Blot formed the intention and took steps to appeal OMDC’s ineligibility decision within the six-month common law timeline. The motion is granted without costs.
[33] The Registrar of the Divisional Court shall forthwith issue Blot’s notice of application for judicial review. Blot shall serve and file its application record and factum no later than September 16, 2022 in accordance with the most recent Notice to Profession. Once the application for leave to appeal is perfected, the Registrar shall set a date for the hearing of the appeal. OMDC shall file its responding record and factum in accordance with the rules.
___________________________ DAVIES J.
Released: July 18, 2022
2022 ONSC 4189
DIVISIONAL COURT FILE NO.: DC-21-349
DATE: 20220718
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
BLOT INTERACTIVE INC.
Applicant
– and –
ONTARIO MEDIA DEVELOPMENT CORPORATION and ATTORNEY GENERAL OF ONTARIO
Respondents
REASONS FOR DECISION
DAVIES J.
Released: July 18, 2022
[^1]: The parties jointly submitted there are just three factors to consider on this application: the length of the delay, the explanation for the delay and any prejudice caused. That test applies when the Court decides a motion to dismiss a judicial review application for delay, not a motion for an extension of time: Gigliotti c College des Grands Lacs at para. 28; Savic v. College of Physicians and Surgeons of Ontario, 2021 ONSC 4756 at para. 42; Canadian Western Trust Co. v. 1324789 Ontario Inc., 2021 ONCA 23, at para. 24; Kounsil v. Kounsil, 2021 ONSC 7486 at para. 8.
[^2]: The 30-day deadline for commencing a judicial review application in the Judicial Review Procedure Act does not apply in this case because OMDC’s ineligibility decision was made before the JRPA was amended in 2000: Democracy Watch v. Ontario Integrity Commissioner, 2021 ONSC 7383 at para. 50.