ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-08-00359867-0000
DATE: 20120529

BETWEEN:

SALMAN HABIB Plaintiff (Respondent) – and – KLORETA MUCAJ and LEVIQ TUNAJ Defendants (Appellants)

Ken Singh, for the Plaintiff/Respondent

Josephine Stark, for the Defendants/Appellants

HEARD: March 27, 2012

reasons for decision

B. P. o’MARRA J.

[ 1 ] This is an appeal from the Order of Master Graham setting aside an administrative dismissal of a claim as abandoned. I would allow the appeal based on three errors by the Master:

1. He misapprehended the totality of the evidence in regard to the explanation of the litigation delay such that there is a palpable and overriding error;

2. He misapprehended the totality of the evidence when he characterized the missing of crucial deadlines by counsel for the Plaintiff as mere sloppiness or inadvertence such that there was a palpable overriding error;

3. He failed to factor in the significant public interest in finality of proceedings.

The facts

[ 2 ] The Plaintiff was involved in a motor vehicle accident on August 9, 2006. On August 23, 2006 he obtained a copy of the motor vehicle accident report to confirm the name of the Defendants’ insurer. On August 20, 2006 he advised the insurer by phone that he intended to sue both Defendants.

[ 3 ] In July of 2008 the Plaintiff retained Mr. Misir as counsel to commence an action on his behalf. Mr. Misir sent notice letters dated July 22, 2008 of the claim addressed to each Defendant by ordinary mail. The action was commenced by a Statement of Claim dated July 31, 2008.

[ 4 ] In July of 2008 Mr. Misir instructed an associate lawyer with his firm to take carriage of the file.

[ 5 ] From July through September of 2008 the associate lawyer made efforts to locate and serve the Defendants to no avail. The Affidavit of Attempted Service on the Defendant Mucaj indicated he had moved approximately one year before the attempt at service in mid September 2008. The Affidavit of Attempted Service on the Defendant Tunaj indicated he had moved approximately two years previously. No further attempts were made to serve the Statement of Claim.

[ 6 ] Mr. Misir was advised by the assigned lawyer that he was trying to locate and serve the Defendants failing which he would bring a motion for substituted service or to extend time for service or both.

[ 7 ] The associate lawyer left the firm in September of 2009. He failed to update Mr. Misir as to the status of the file. He also failed to schedule or diarize any motion dates on this file as he did on others that required motions. He did not inform Mr. Misir that the service issues had not been resolved. Mr. Misir claims he was under the impression that the Defendants had either been served or orders had been obtained to extend service or for substituted service.

[ 8 ] The Master found that Mr. Misir provided no specific evidence of what he did to monitor the associate’s work although he deposed that the associate led him to believe “he was working on it.”

[ 9 ] In January of 2010 Mr. Misir met the Plaintiff and became aware that the Defendants had not been served, nor had motions been brought to extend service or for substituted service.

[ 10 ] On February 1, 2010 Mr. Misir instructed his articling student to bring a motion to extend the deadline for service of the Claim. The student was also instructed to seek an order for substitute service on the insurer if the Defendants could not be located.

[ 11 ] On February 22, 2010 the student advised the insurance adjusters of the claim and the Plaintiff’s intention to seek an order for substituted service.

[ 12 ] On August 11, 2010 the student scheduled a motion returnable October 13, 2010 seeking substituted service of the claim on the insurer. The student also advised the insurer of that date and requested their consent to the order as well as current address information for the Defendants.

[ 13 ] Mr. Misir deposed that he spoke to the student about the order for substituted service on two dates in February 2010 as well as August 11, 2010.

[ 14 ] The student erroneously advised Mr. Misir that the motion was returnable in September 2010 when in fact the target date was October 13, 2010. The motion did not proceed in any event on that latter date as no materials were filed with the court.

[ 15 ] On August 19, 2010 Mr. Misir sent a letter to the insurer with a copy of the Statement of Claim and a copy of the Affidavit of Attempted Service on the insured. He requested that the insurer accept service of the Statement of Claim or provide a current address for the insured. There was no reply to this letter until August of 2011 when the insurer retained counsel.

[ 16 ] In late September of 2010 the student left the Misir firm and did not update Mr. Misir on the file.

[ 17 ] The Master found that Mr. Misir blamed the student for not updating him on the file but provided no evidence of what proactive steps he took to ensure that the work was done.

[ 18 ] On October 26, 2010 the action was dismissed as abandoned by the Registrar. A copy of the dismissal order was served on Mr. Misir as solicitor of record by ordinary mail at the correct address of his firm. Mr. Misir deposed he did not receive this letter.

[ 19 ] On December 14, 2010 counsel for the insurer sent a letter to Mr. Misir advising that the action had been dismissed on October 26, 2010. The letter was sent by regular mail to Mr. Misir’s proper address and was not returned. Mr. Misir deposed he did not receive this letter.

[ 20 ] Counsel for the insurer closed its file in May of 2011 as a result of receiving no reply from Mr. Misir’s firm.

[ 21 ] In June of 2011 the file came up for “annual review” in the Misir firm. Later that month Mr. Misir obtained a copy of the Registrar’s order dismissing the action dated October 26, 2010. He deposed that until June of 2011 he understood that the student had obtained the order for substituted service.

[ 22 ] On July 15, 2011 Plaintiff’s counsel scheduled a motion to set aside the Registrar’s order returnable September 9, 2011, the first available date.

[ 23 ] The Plaintiff personally was not aware of either issues of service of the claim or the Registrar’s order until he was informed by his counsel in August of 2011.

[ 24 ] On August 25, 2011 counsel for the insurer advised Mr. Misir by letter that they had been retained by the insurer to defend the motion seeking to set aside the Registrar’s order. Mr. Misir appears to have received this letter.

[ 25 ] The original return date of September 19, 2011 was adjourned at the request of counsel for the Defendants to November 3, 2011 to allow them to file responding material. The motion was ultimately adjourned to December 15, 2011 because counsel for the Plaintiff failed to confirm the November 3, 2011 date.

[ 26 ] Mr. Misir requested production of his client’s medical records by letters dated November 10 and 24, 2011. These appear to be the first requests for those records since the action was commenced in July of 2008.

[ 27 ] The motion proceeded before the Master on December 15, 2011.

ruling of master graham

[ 28 ] Based on the record before him the Master made the following important findings:

1. Mr. Misir deposed that he did not receive critical letters sent to him by ordinary mail addressed to his office from the Court and counsel for the Defendants. Since there was no cross examination on the affidavit the Master felt bound to accept that evidence. However, he also found it was “peculiar” that properly addressed mail was not received by Mr. Misir.

2. There was a weak explanation for the litigation delay but there was no intentional delay on the part of the solicitor and certainly not on the part of the Plaintiff himself.

3. The Plaintiff moved promptly to set aside the order.

4. There was no evidence of actual prejudice to the Defendants.

Analysis

[ 29 ] Four factors have been identified as relevant to the determination of whether relief should be granted from an administrative dismissal of action.

1. Explanation of the litigation delay which led to the dismissal notice and order in the first place;

2. inadvertence in missing the deadline set out in the notice;

3. promptly moving to set aside the order once it comes to the attention of the moving party; and

4. prejudice or lack of prejudice to the Defendant.

Reid v. Dow Corning Corp. (2001) 11 C.P.C. (5th) 80 rev’d on other grounds (2002) 48 C.P.C. (5th) 93 (Ont. Div. Crt.)

[ 30 ] A contextual approach which seeks to balance the respective interests of the parties rather than a rigid application of the Reid factors is required. The four Reid factors are likely to be of central importance in most cases but they are not exhaustive. The key point is that the Court considers and weighs all relevant factors to determine the order that is just in the circumstances of the particular case.

Scaini v Prochnicki , (2007) 2007 ONCA 63 , 85 O.R. (3d) 179 (O.C.A.) paras 23 and 24 .

[ 31 ] The contextual approach mandated by Scaini invites the application of important underlying principles and values of the civil justice system that are inherent in the Reid factors. Those principles and values can be summarized as follows:

(i) Discouragement of delay and enhancement of an active judicial role to ensure timely justice;

(ii) a strong public interest in promoting the timely resolution of disputes;

(iii) excusing significant delay risks undermining public confidence in the administration of justice; and

(iv) on the other hand, our civil justice system and the consideration of prejudice under the Reid criteria favours the goal of having disputes resolved on their merits.

Marché D’Alimentation Denis Thériault Lteé v. Giant Tiger Stores Ltd. (2007) 2007 ONCA 695 , 87 O.R. (3d) 660 (O.C.A.) at paras 23 , 25, 32 and 34.

[ 32 ] There is a significant public interest in finality to litigation. Even where the Defendant could still defend itself despite the delay at some point the interest in finality of litigation must trump the other party’s plea for an indulgence.

Giant Tiger ( supra ) paras. 30, 31, 35, 37and 38.

Wellwood v. O.P.P. 2010 ONCA 386 , [2010] O.J. No. 2225 (O.C.A.) para. 48 .

Machacek v. Ontario Cycling Assn . 2011 ONCA 410 , [2011] O.J. No. 2379 (O.C.A.) para. 10 .

[ 33 ] Where a lawyer’s conduct goes beyond inadvertence to effectively abandoning the file the Plaintiff may lose it’s right to proceed against the Defendant. This would include cases where the delay was caused by negligence or lack of proper organization bordering on negligence.

Giant Tiger (supra) para. 14.

[ 34 ] The Court of Appeal in Finlay indicated that such application should be considered primarily with the rights of the litigants and not the conduct of their counsel. In that case pleading and discoveries had been completed but Plaintiff’s counsel failed to set the matter down for trial.

Finlay v. Van Paassen 2010 ONCA 204 , [2010] O. J. No. 1097 paras. 32 , 33.

[ 35 ] The decision of a Master on such an application will be interfered with only if the Master made an error of law or exercised his discretion on the wrong principles or misapprehended the evidence such that there is a palpable and overriding error.

Zeitoun v. Economical Insurance Group (2008), 91 O.R. (3d) 131 (Div. Crt) affirmed 2009 ONCA 415 , 96 O.R. (3d) 639 (O.C.A.)

[ 36 ] In regard to two of the Reid factors (being explanation for the litigation delay and whether there was inadvertence in missing deadlines), counsel for the Plaintiff relied on the following:

1. he blames an associate lawyer and articling student for failing to carry out his instructions and keep him informed;

2. he claims he did not receive critical correspondence from the Court and counsel for the insurer. Those letters were sent by ordinary mail to the proper address. There was no evidence they were returned to sender.

[ 37 ] By the lack of organization, attention, communication and oversight to this matter Plaintiff’s counsel effectively abandoned the file for critical and extended periods. An examination of the entire course of conduct (and inaction) by that law firm reveals a completely unsatisfactory explanation for the litigation delay. Further, the delay in this litigation was caused by negligence or lack of proper organization bordering on negligence.

[ 38 ] The associate lawyer and articling student who were assigned critical tasks both reported to counsel for the Plaintiff. They left the firm in September of 2009 and September of 2010 respectively. There was no evidence of any internal review within the firm to review files they were working on after their departure.

[ 39 ] The Master found that Mr. Misir did not personally receive critical correspondence addressed to his firm. I do not revisit that finding. However, the Master went on to refer to the failure to receive the letters as “peculiar”. With respect to the Master, he failed to consider this important aspect in light of all the other lack of organization and miscommunication within that office. There is no mention in the ruling of the very plausible explanation that the correspondence was conveyed to the law firm but was not brought to Mr. Misir’s attention. That explanation is entirely consistent with the lack of organization within the firm.

[ 40 ] The associate lawyer and articling student were staff members that Mr. Misir was professionally bound to supervise and direct. The associate lawyer left the firm in September of 2009, more than 14 months after the Statement of Claim was issued. The Master found there was no specific evidence of what Mr. Misir did to monitor the associate’s work. It was not until January 2010 that Mr. Misir met his client and learned that the Defendants had not been served, nor had alternate motions been brought regarding service. Mr. Misir knew then that 18 months had passed since issuance of the claim. Counsel should have realized the urgency of taking immediate steps to get the action back on the rails. He chose to delegate those next steps to a student in February of 2010.

[ 41 ] The student left the firm in late September of 2010. The action was dismissed as abandoned by the Registrar in October of 2010. Counsel for the Plaintiff states he did not learn of the dismissal order until an “annual review” within the firm in June of 2011.

[ 42 ] There was no evidence before the Master of “annual reviews” within the Misir law firm in 2009 and 2010. The overwhelming evidence and conclusion on all the evidence is that the lack of organization and oversight within the firm amounted to negligence or bordered on negligence. On any view it was far beyond mere sloppiness or inadvertence. In my view, the Master committed palpable and overriding error in characterizing the omissions of counsel as mere inadvertence.

[ 43 ] As of February 1, 2010 at the latest Mr. Misir was aware that there had been no service of the Statement of Claim, or applications for alternative orders. By that date 18 months had elapsed from the issuance of the Statement of Claim. As counsel Mr. Misir should have realized that this file required immediate attention. He chose to instruct his articling student to deal with the issues related to service.

[ 44 ] The student left the firm in September of 2010. Mr. Misir deposed that until June of 2011 he understood that the student had obtained the order for substitute service. There was no evidence before the Master that any review was done after September of 2010 within the firm of files being worked on by the student. Such a review would have revealed the problem by October of 2010 at the latest.

[ 45 ] There is no mention in the Master’s ruling of the significant public interest in the finality of proceedings. This is a factor that must be considered along with the Reid and Scaini analysis. The administrative dismissal was in October of 2010. The motion to set aside the dismissal was in December of 2011. The incident giving rise to the action occurred in August of 2006.

[ 46 ] The Statement of Claim was never served. Alternate orders for service had not been obtained. The efforts of counsel for the Plaintiff’s in this case fell far short of what the public, the courts and the parties are entitled to expect.

result

[ 47 ] Appeal allowed. The administrative dismissal order of October 26, 2010 is reinstated. I will consider brief written submissions (up to three pages) to be sent to Judicial Administration within 14 days of the release of this ruling.

B. P. O’Marra J.

Released: May 29, 2012

COURT FILE NO.: CV-08-00359867-0000
DATE: 20120529

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

SALMAN HABIB Plaintiff (Respondent) – and – KLORETA MUCAJ and LEVIQ TUNAJ Defendants (Appellants)

REASONS FOR DECISION

B. P. O’Marra J.

Released: May 29, 2012