COURT FILE NO.: 07-1404

DATE: 2012-02-15

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Robert Faris, Plaintiff

AND: Chris Eftimovski, CLE 72330 Limited, Wally Magee, Horst Rosner, Carriage South Simcoe Real Estate Services Ltd., Exit Realty (or Exit Realty Advanced), RE-Max Rouge River Realty Ltd., Anthony John Laskowsky (first named in these proceedings as Anthony Laskowsky, Jr.) in his own capacity and as Litigation Administrator representing the interest of the Estate of Anthony Edward Laskowsky (first named in these proceedings as Anthony Laskowsky, and now deceased), Defendants

BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY

COUNSEL:
D. Yiokaris, Counsel for the Plaintiff’s Lawyer

K.A. Charlebois, Counsel for the Defendant Re/Max Rouge River Realty Ltd.

T. Robinson for the Defendant, The Estate of Wally Magee

The Defendant, Horst Rosner, Self-Represented

HEARD: February 2, 2012

ENDORSEMENT ON STATUS HEARING

[ 1 ] This is a status hearing pursuant to Rule 48.14 requiring the plaintiff to show cause why the action should not be dismissed for delay. The defendants Re/Max Rouge River Realty Ltd. (“Re/Max”), The Estate of Wally McGee, Eftimovski, CLE 723330 Limited, and Rosner all support a dismissal order. The Laskowsky defendants take no position. The plaintiff’s counsel advised the court that the position of some of the defendants had changed by the time of the status hearing; in the period leading up to it, the Laskowsky defendants, Eftimovski, CLE 723330 Limited and Carriage South Simcoe Real Estate Services Ltd. (“Carriage South”) had expressly consented to the action proceeding.

[ 2 ] The onus is on the plaintiff to show why the action should not be dismissed for delay at the status hearing. The following principles have been set out to guide this exercise in Savundranayagam v. Sun Life Assurance Co. of Canada, 2007 CarswellOnt 6255 (Div.Ct.) :

(a) the plaintiff must explain the delay so as to satisfy the court that the action should proceed; and

(b) the plaintiff must satisfy the court that there would be no prejudice to the defendants.

[ 3 ] This action concerns two separate real estate transactions that occurred in 2003 and 2005 in respect of the plaintiff’s former lands. The first deal was made on February 28, 2003 and the second on December 12, 2005. In his statement of claim the plaintiff alleges breach of contract and breach of fiduciary duties on the part of Magee in his representation of the plaintiff as a real estate agent in the listing, marketing and selling of the property. Re/Max is alleged to be vicariously liable for Magee in relation to the 2005 transaction only; Magee was not associated with Re/Max at the time of the 2003 transaction. The Laskowsky defendants are solicitors alleged to have been retained by the plaintiff in relation to the transaction. The claims against them involve allegations of professional negligence and an accounting of the proceeds of sale.

[ 4 ] The steps taken in this action are as follows:

• The action was commenced on December 12, 2007 by way of notice of action, and the claim issued on or about January 11, 2008.

• Within the six month time period permitted for service of that pleading, the plaintiff had served only four of the nine defendants.

• On the last day on which service could be effected without an order extending the time for service, the plaintiff’s lawyer wrote to the firm of Miller, Thomson, who represented Magee in a 2005 Toronto action with respect to the 2003 transaction, to ask that they accept service on Magee’s behalf. Miller Thomson declined as they were not in a position to accept service on his behalf.

• In separate correspondence delivered in June and July, 2008, McLarens Canada, the independent adjuster appointed by Re/Max and Carriage South's insurer, confirmed that they had been given an open indulgence by the plaintiff’s solicitor in order for them to carry out their investigation of the matter.

• On December 9, 2008 the plaintiff obtained an order extending the time for service of the claim. With only five days left to serve Magee under the extension order, the plaintiff obtained an order for substituted service on Magee, which order was obtained on February 10, 2009.

• On February 19, 2009 the plaintiff's lawyer follows up with McLarens and requested that a statement of defence be delivered by the end of the month. On that same date, McLarens delivered correspondence indicating that their investigation had been completed and requesting that the time frame for filing the statement of defence for Carriage South be extended to the end of March 2009.

• On April 12, 2009 the defendant Anthony Laskowsky died.

• On May 6, 2009 Miller Thompson served its notice of intent to defend, and requested that the action be dismissed against Re/Max without costs. Having had no response from the plaintiff's lawyer, follow up correspondence was sent on August 20 and November 24, 2009, making the same request to have Re/Max let out of the action. The plaintiff's lawyer finally responded on April 12, 2010, at which time he acknowledged receipt of the several letters sent throughout the previous year and indicated that he would get instructions on or before the end of the month. He did not provide an answer to Re/Max’s request until after the status hearing notice had been issued.

• On July 4, 2010 the defendant Wally Magee died.

• On July 23, 2010 the plaintiff obtained in order to continue against Laskowsky's estate.

• In November 2010 the plaintiff’s counsel suggested mediation. In his correspondence the plaintiff’s lawyer acknowledges that there are evidentiary difficulties because of the intervening deaths of Magee and Laskowsky. At the time that this request was made the pleadings had not been finalized, no affidavits of documents had been exchanged nor had any examinations taken place.

• At some point a Demand for Particulars had been made by Carriage South, although the date on which that document was served was not in evidence.

• In January 2011 counsel for the defendant Laskowsky requested that a Status Notice be issued, and such Notice was issued on April 5, 2011.

• A status hearing was set for June 29, 2011. Between the time that the status notice was issued and the first attendance at the status hearing, the plaintiff took no steps to move this action forward.

• On the day before the hearing the plaintiff filed an affidavit and the hearing was adjourned to permit the defendants to file responding materials. In that affidavit the plaintiff deposed that "the defendant Carriage South Simcoe Realty Limited has been pressing us for particulars of my claims against them and we have just completed a formal response to their demand for particulars".

• The status hearing was ultimately adjourned to February 2, 2012. At the time of the hearing, pleadings had not been finalized, no documentary productions had been exchanged and no examinations for discovery had taken place.

[ 5 ] I have reviewed the affidavits of the plaintiff sworn June 28, 2011 and July 21, 2011, along with the affidavit of Peter Card sworn September 29, 2011 and the affidavit of Jalo Edards, all filed in support of attempting to show cause why the action should not be dismissed. None of those affidavits provide any reasonable explanation for the delay. Both the plaintiff and Mr. Card have prepared lengthy affidavits relating to various proceedings commenced in other jurisdictions that relate to the subject property, some of which have common parties with this action. However, there is nothing in the conduct of those other actions that provides any basis for rationalizing the delay in this proceeding. While the plaintiff attempts to lay the blame for his lack of attention to this case on the defendants, it is not their responsibility to ensure that the claim was served in a timely manner, or to thereafter prosecute the action. The plaintiff did not seek statements of defence, affidavits of documents, dates for examinations, or take any other step normally taken in the course of an action. No correspondence showing such steps exists in this case other than the one letter to McLarens requesting a defence. What the plaintiff has not explained is:

• why he did not serve 5 of the defendants within the initial six month period, including Eftimovski with whom he was already engaged in other litigation, or Re/Max, on whom service would be straight forward;

• why he waited until the very last day to attempt to serve Magee, or why it took a further six months to obtain an order extending the time for service;

• what attempts he made to serve the outstanding defendants, and any problems encountered with service;

• why he delayed in responding to Miller Thompson’s correspondence for over two years;

• why he did nothing to advance this action in 2009 other than to obtain an order validating service on Magee and writing one letter to seek a defence;

• why he did nothing in 2010 to advance this action other than to obtain an order to continue against Laskowsky’s estate;

• why Carriage South had to press him for a response to its Request for Particulars and why he was responding to one approximately 3 ½ years after the action was commenced;

• why following the issuance of the Notice of Status Hearing and prior to the first date set for the hearing, he did nothing.

[ 6 ] The plaintiff relies upon the cases of Kostruba and Sons Inc. v. Pervez, [2011] O.J. No. 2088 (S.C.J.) and 1001411 Ontario Ltd. (c.o.b. Cinespace Studios Management) v. City of Toronto Economic Development Corp. , [2011] O.J. No. 5369 (Master) for the following principles:

1. the threshold for showing cause at a status hearing is low; the plaintiff must provide some reasonable explanation and justification for the delay;

2. such an order would be drastic and unusual;

3. the prejudice must be non-compensable prejudice; and

4. the delay must be considered in context.

[ 7 ] The plaintiff also relies on Amaprop Canada Inc. v. Connon , [2011] O.J. No. 1586 (S.C.J.) in support of his argument that the death of a witness before any litigation delay attributable to the plaintiff is not prejudice for which the plaintiff is accountable. The problem with this argument is that the deceased are both parties rather than witnesses, and as will be discussed below, their testimony is of central importance. But equally important, prior to the death of Mr. Laskowsky a period of one and a half years elapsed in which there was unexplained delay. And as the above account shows, very little else was accomplished by the plaintiff to advance the action in the next year before Magee’s death.

[ 8 ] The plaintiff offers an explanation to the effect that his attention was taken up by another action commenced in London, Ontario, in which he was working to have default judgment set aside as against him. He also argues that the steps taken in the London action prove his intent to proceed with this action. Yet there is nothing about the progress of this action that depended on steps being taken in the London action. And even if the London action arises out of the same transactions, as is alleged, the fact that he plaintiff took steps in that action to avoid a judgment cannot somehow be interpreted to mean that he was moving this action forward.

[ 9 ] Taking all of the above into account, the explanation provided by the plaintiff for the delay is entirely unsatisfactory, and the points made by the plaintiff fall far short of offering any rational justification for the inaction.

[ 10 ] The criteria set out in Savundranayagam v. Sun Life Assurance Co. of Canada are conjunctive. On the basis of failing to meet this first branch of the test the relief sought by the plaintiff should not be granted. However in the interest of thoroughness I will consider the other branch of the test, which is that the plaintiff must satisfy the court that there is no prejudice to the defendant in allowing the action to proceed.

[ 11 ] The subject transactions occurred more than six and eight years ago, respectively. In the case of the 2005 transaction, the limitation period has expired more than three times over. In the case of Vivace Tavern v. Ontario 2011 CarswellOnt 8 Master Dash reviewed the Court of Appeal authorities dealing with the presumption of prejudice by the passing of a limitation period. In dealing with the presumption of prejudice that must be discharged by the plaintiff in the context of an administrative dismissal, he concluded on the basis of Wellwood v. Ontario Provincial Police (2010), 2010 ONCA 386 () , 102 O.R. (3d) 555 (C.A.) and other cases referenced therein that there is a presumption of prejudice that arises when an action is dismissed after the passage of the limitation period, even if the action was commenced within the applicable limitation.

[ 12 ] In this case, however, there is more than the prejudice caused by memories fading over time. There is, as previously mentioned, the death of two defendants, both key witnesses to the events giving rise to the allegations in question. Neither had ever been examined in connection with the 2005 transaction. This prejudice was acknowledged in the letter from the plaintiff's counsel in November 2010. The death of a key witness has been held by the Court of Appeal to constitute sufficient prejudice to dismiss the action for delay: Pezzolesi v. Skeggs , 2011 CarswellOnt 2168 ; Quon & Associates Ltd. v. Kwiatkowski Enterprises Ltd ., 2003 CarswellOnt 6236 .

[ 13 ] The allegations in the statement of claim deal with Magee’s interactions with the plaintiff and Eftimovski. Similarly, the allegations against Laskowsky involve him preparing the documents required for the transaction and interactions involving the plaintiff, Magee, and himself at a number of meetings in his office. There is no way to capture their evidence. They are the professionals who were directly involved in the impugned dealings and who are alleged to have been negligent. The allegation against Re/Max is that it is vicariously liable for the negligence of Magee during the 2005 transaction. The evidence of Re/Max is that it has no information as to Mr. McGee's or Mr. Laskowsky's dealings or interaction with the plaintiff or with Eftimovski. The only information available to Re/Max is contained in the transactional documentation surrounding the purchase, but it has no knowledge as to how the agreement was put together or why certain terms formed part of the agreement. Similarly, the defendant Eftimovski has no ability to examine Laskowsky on the documents and obtain his evidence on the impugned 2005 transactions.

[ 14 ] In applications commenced in Toronto in 2003, Magee provided an affidavit and was examined with respect to the 2003 deal. Laskowsky was not a party to the Toronto applications and was never examined with respect to either transaction. The plaintiff argues that Magee’s evidence is therefore preserved. One can hardly begin to articulate the jeopardy faced by the parties who would have to mount a defence based on an examination in another proceeding, by lawyers other than their own, without the ability to cross-examine. Further, that examination cannot assist Re/Max, who has no exposure with respect to the 2003 deal.

[ 15 ] The plaintiff refers to findings made by another judge in a separate proceeding as constituting evidence of what transpired during the 2003 transaction. Yet those findings cannot bind the parties to this action or constitute the evidence to be taken into account by a judge determining this action.

[ 16 ] Accordingly, I find that the plaintiff has not met the test of demonstrating that there will be no prejudice to the defendants if he is allowed to proceed. To the contrary, there is most definitely non-compensable prejudice created for the defendants by the deaths of Laskowsky and Magee.

[ 17 ] For the reasons articulated by the Court of Appeal in Marche D’Alimentation Denis Theriault Ltee v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695 () , 87 O.R. (3d) 660 (C.A.), status hearings bring to the fore the important principles of promoting the timely resolution of disputes, the necessity of the court ensuring that litigants do not abuse its own processes, and ensuring that the administration of justice is not brought into disrepute by permitting a gross lack of diligence on the part of the plaintiff to be indulged. I find that this is one of those rare cases in which the plaintiff has been wholly unable to show that there is a satisfactory explanation for the delay and that there is no prejudice to the defendants. He is unable to meet either branch of the test.

[ 18 ] Taking into account all of the circumstances before the court I am not satisfied that the action should proceed and it is therefore dismissed for delay.

[ 19 ] The defendants are entitled to their costs of the action and of this status hearing. If the parties are unable to agree upon costs they may make submissions in writing attaching a Bill of Costs, all of the defendants’ to be served and filed by no later than February 22, the plaintiff’s by February 29, any reply, if necessary, by March 5.

HEALEY J.

Date: February 15, 2012