COURT FILE NO.: 09-4037-SR
DATE: 2012-05-25
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Darlene Roch, Plaintiff
and
Deutschmann Construction Limited, Defendant
BEFORE: The Honourable Mr. Justice R.D. Reilly
COUNSEL: Sean Lawler, for the Plaintiff/Moving Party
Edward L. D’Agostino, for the Respondent/Responding Party
HEARD: April 16, 2012
ruling on a MOTION
by the honourable mr. justice r.d. reilly
[ 1 ] By this motion, the plaintiff seeks to have this court set aside the administrative dismissal by the registrar, of the action, dated December 9, 2010. The chronology of events leading to the administrative dismissal and to the bringing of this motion is of some significance.
The Facts
[ 2 ] On January 29, 2009, the plaintiff issued a Statement of Claim against the defendant. The plaintiff and defendant had entered into a contract for the construction of a new home located in Conestogo. The construction included a deck at the back of the home. The statement of claim essentially alleged negligent construction of the deck, which caused water damage to the home.
[ 3 ] On March 9, 2009, the defendant delivered its statement of defence asserting a variety of defences, both in tort and in contract.
[ 4 ] At least by mid-March of 2009, the plaintiff had instructed her original counsel to also launch a claim against the Township of Woolwich, alleging negligent inspection on the part of the Township. The law firm originally retained by the plaintiff felt it could no longer act for her. There appeared to be a clear conflict of interest as the law firm also represented Woolwich Township on a regular basis. Following that decision, the plaintiff requested her counsel to return her file to her so that she could continue with the action. The law firm declined to do so, claiming a solicitor’s lien.
[ 5 ] As a result of no further steps having been taken in the litigation, on June 5, 2009, the registrar issued a notice of action dismissal. On June 11, 2009, the plaintiff’s original counsel gave her a copy of the notice of dismissal, but took no further steps to preserve her action. On July 23, 2009, the plaintiff’s original law firm obtained an order removing themselves as counsel of record. Shortly thereafter, on July 28, 2009, the law firm advised the plaintiff what steps she must take in order to represent herself. On July 30, 2009, the plaintiff served a notice of intention to act in person and a notice of readiness for pre-trial conference. She also served a motion record to amend her statement of claim to add Woolwich Township as a defendant. On July 31, 2009, the plaintiff attempted to file her notices and her motion record at the court office. She was advised that the action had already been dismissed earlier that day.
[ 6 ] On or about August 24, 2009, the plaintiff retained new counsel, Mr. Edward Claxton. Learning of the administrative dismissal, on August 27, 2009, he moved to set aside the order of dismissal. The order was granted on consent.
[ 7 ] On September 10, 2009, the parties exchanged affidavits of documents. On September 25, 2009, the parties had a settlement meeting. Attempts to settle were unsuccessful.
[ 8 ] On October 8, 2009, Mr. Claxton, on behalf of the plaintiff, served and filed a notice of readiness for a pre-trial conference. On October 9, 2009, counsel for the defendant advised he would not proceed to a pre-trial conference, without copies of the plaintiff’s Schedule “A” documents. Counsel for the plaintiff then brought a motion requiring release of the documents. The motion was successful, by endorsement dated February 26, 2010. On that same day, the action was struck from the trial list on consent to allow Mr. Claxton time to review the plaintiff’s file and to prepare pre-trial memoranda.
[ 9 ] On April 15, 2010, Mr. Claxton served a compendium of documents on defendant’s counsel.
[ 10 ] On August 30, 2010, Mr. Claxton received a status notice from the registrar. He concedes he did not diarize the appropriate deadline and did nothing to address the issue. Therefore, on December 9, 2010, for the second time, the registrar dismissed the action for delay, with costs to the defendant. Mr. Claxton testified in his affidavit that he did not become aware of the dismissal until on November 16, 2011, almost one year later, he was served with a notice of appointment to assess the defendant’s costs.
[ 11 ] In the meantime, however, Mr. Claxton was acting on his client’s instructions to commence an action against Woolwich Township. On February 23, 2011, a notice of action was issued and on March 25, 2011, a statement of claim was filed. Thereafter, Mr. Claxton entered into settlement discussions with the Township. On August 30, 2011, the registrar issued a notice of dismissal with respect to the action against Woolwich Township. On September 19, 2011, Woolwich Township filed a notice of intent to defend in that action.
[ 12 ] As noted above, on November 16, 2011, Mr. Claxton learned of the administrative dismissal of the action against Deutschmann Construction when he was served with a notice of appointment to assess the defendant’s costs. On November 17, 2011, Mr. Claxton reported these events to the Lawyers’ Professional Indemnity Corporation (LawPro) via LawPro’s online claims form. On the same day he contacted the plaintiff and advised her of the administrative dismissal. He further advised her that she should retain new counsel to represent her with respect to the action. On November 30, 2011, the plaintiff attended at Mr. Claxton’s office to pick up her file.
[ 13 ] On December 5, 2011, Mr. Claxton advised counsel for the defendant, by letter, of the plaintiff’s anticipated change of counsel and requested, on her behalf, an adjournment of the costs assessment originally set for December 6, 2011. The defendant consented to the adjournment. On December 6, 2011, the costs assessment was adjourned to the Spring of 2012.
[ 14 ] Having heard nothing from LawPro, Mr. Claxton contacted his insurer again on December 29, 2011 and learned that LawPro, perhaps through a technical error, did not receive his original report. LawPro then began to process the issue and on January 20, 2012, Mr. Sean Lawler was appointed to bring this motion on behalf of the plaintiff. On February 13, 2012, Mr. Claxton served the plaintiff’s material for a motion to set aside the administrative dismissal.
[ 15 ] Looked at globally, it may be noted that the period of time from the issuing of the statement of claim (29 January 2009) to the administrative dismissal by the registrar (9 December 2010) is some 22 months. The period of time from the administrative dismissal to the serving of the motion material to set aside the administrative dismissal (13 February 2012) is some 14 months. The defendant says that these delays should not be countenanced by the court and that the administrative dismissal should not be set aside.
The Law and Analysis
[ 16 ] The administrative dismissal in this case was directed by the registrar pursuant to rule 48.14(2). As the status notice sent to Mr. Claxton states, the action was placed on a trial list, was subsequently struck off and was not restored to the trial list within 180 days after being struck off. Therefore, the plaintiff was advised that the action would be dismissed for delay with costs unless, within 90 days of service of the status notice, the action was restored to the trial list, the action was terminated by any means, documents were filed in accordance with subrule 48.14(10) or a judge or case management master were to order otherwise. This court has jurisdiction, however, to strike the administrative dismissal pursuant to rule 37.02.
[ 17 ] Although each case must be judged based upon its own circumstances, there are certain factors which the jurisprudence makes clear must be considered by the court in coming to a decision. These factors were set out by Master Dash in the seminal case of Reid v. Dow Corning Corp., [2001] O.J. No. 2365 (Ont. S.C.J.). It will be remembered that in Reid v. Dow Corning Corp. Master Dash declined to set aside an administrative dismissal. The action (for medical malpractice and product liability) was commenced in 1995. In February of 2000, the action was dismissed administratively for delay. The motion to strike the dismissal was brought in October 2000. In the circumstances of that case, Master Dash concluded that in effect, some five years was too long a delay.
[ 18 ] The learned Master stated at paras. 40-41:
40 While I agree there must be some balancing of interests, I find, upon review of the caselaw presented to me, that in determining whether to set aside a registrar’s order dismissing an action made under rule 48.14(3), a plaintiff must satisfy four criteria. If the plaintiff fails to satisfy any one of these criteria, the registrar’s order will stand.
41 The four criteria to be met are as follows:
Explanation of the Litigation Delay: The plaintiff must adequately explain the delay in the progress of the litigation from the institution of the action until the deadline for setting the action down for trial as set out in the status notice. She must satisfy the court that steps were being taken to advance the litigation toward trial, or if such steps were not taken to explain why. For example the complexities of the case and the number of parties may have required significantly more time to move the action toward trial, or the delay was caused by interlocutory matters or appeals. The plaintiff could explain that the action was stalled due to the inattention or negligence of her solicitors which was contrary to her own instructions or expectations. It is absolutely essential that the plaintiff lead satisfactory evidence that she personally always intended the action to trial without delay, that she did not assent to the delay, and that she always reasonably assumed it was so proceeding or made appropriate inquiries of her solicitors. 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.
Inadvertence in Missing the Deadline: The plaintiff or her solicitor must lead satisfactory evidence to explain that they always intended to set the action down within the time limit set out in the status notice, or request a status hearing, but failed to do so through inadvertence. In other words the penultimate dismissal order was made as a result of inadvertence.
The Motion is Brought Promptly: The plaintiff must demonstrate that she moved forthwith to set aside the dismissal order as soon as the order came to her attention.
No Prejudice to the Defendant: 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. The court takes note that witnesses’ memories generally tend to fade over time and that sometime it is difficult to locate witnesses or documents. However to bar the plaintiff from proceeding with her action on the ground of prejudice, the defendant must lead evidence of actual prejudice. This might include evidence of specified documents lost over time, or destroyed following a dismissal, or of specific witnesses who have died, or have disappeared and the defendant has been unable to locate them with due diligence. While litigation is outstanding the defendants must take care to obtain and preserve evidence.
[ 19 ] The four criteria set out by Master Dash have been accepted without exception in subsequent cases dealing with the issue of setting aside an administrative dismissal. However, it is now clear law that the plaintiff need not satisfy all four criteria. In Scaini v. Prochnicki et al (2007), 2007 ONCA 63, 85 O.R. (3d) 179 (C.A.). Justice Goudge for a unanimous Court of Appeal stated at paras. 23-25:
[23] In my view, a contextual approach to this question is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria. The latter approach is not mandated by the jurisprudence. On the other, hand, the applicable rules clearly point to the former. In particular, the motion to set aside the registrar’s order dismissing the action for delay engages rule 37.14(1)(c) and (2). The latter invites the court to make the order that is just in the circumstances. A fixed formula like that applied by the motion judge is simply too inflexible to allow the court in each case to reach the just result contemplated by the rules.
[24] That is not to say that there are no criteria to guide the court. Indeed I view the criteria used by the motion judge as likely to be of central importance in most cases. While there may be other relevant factors in any particular case, these will be the main ones. The key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case.
[25] It may be that in a particular case, one factor on which the appellant comes up short is of such importance that, taken together with the other factors, the appellant must fail. What is important is that the analysis be contextual to permit the court to make the order that is just.
[ 20 ] In Scaini the statement of claim was filed in April 2002. The registrar dismissed the action with costs on January 7, 2005. On February 1, 2005, the motion was brought to set aside the registrar’s order. The Court of Appeal ruled that an overall delay of some two years and nine months did not justify a dismissal in the circumstances of the case.
[ 21 ] The importance of finality has also been recognized in the jurisprudence. See for instance Wellwood v. Ontario Provincial Police (2010), 2010 ONCA 386, 102 O.R. (3d) 555 (C.A.) and Marche D’Alimentation Denis Theriault Ltee et al v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660 (C.A.). In the latter case the plaintiffs commenced an action in October of 1996. In March 1999 the registrar dismissed the action for failure to set it down for trial in the time prescribed by rule 48.14 of the Rules of Civil Procedure. A motion to set aside the order dismissing the action was brought in December 2003 and was not heard until February 2005, almost six years after the order was made. A Master dismissed the motion to set aside the order. The plaintiffs’ appeal to the Divisional Court was however allowed and the action was reinstated. The Court of Appeal allowed the appeal and restored the Master’s order dismissing the motion. At para. 41, for a unanimous court, Justice Sharpe stated:
I conclude that the Master’s analysis is appropriate because it takes account of important principles and values of the civil justice system. The solicitor’s behaviour resulted in an excessive delay. Delays of this kind are inimical to the important goal of timely justice. The legal system should not condone the solicitor’s behaviour as to do so would fail to provide appropriate incentives to those engaged in the justice system and would risk harming the integrity and repute of the administration of justice. Reinstating the action at this point would undermine the finality principle while refusing [to] reinstate the action does not interfere with the need to ensure adequate remedies.
[ 22 ] Thus in the Marche D’Alimentation case, the court concluded that approximately two and a half years from the launching of the action to the administrative order dismissing the action, plus another three years and nine months to the hearing of the motion. should not be countenanced.
[ 23 ] The many cases cited by counsel are instructive in this court’s application of the principles enunciated in Reid.
[ 24 ] In Hayes v. Kealey, [1999] O.J. No. 4281 (Ont. S.C.J.) the action was commenced on November 26, 1993. On June 30, 1998, the registrar dismissed the action for delay. Thus some four years and eight months was not accepted as a tolerable delay.
[ 25 ] In Machacek v. Ontario Cycling Association, 2011 ONCA 410, [2011] O.J. No. 2379 (O.C.A.), the action was commenced on February 20, 2003. The action was then dismissed by the registrar for delay on August 15, 2007. The motion to set aside the dismissal was not brought until 2010. The Court of Appeal determined that given that the initial delay of four years and six months to the administrative dismissal, plus some three years until the bringing of the motion, such delay was not acceptable and refused to set aside the administrative dismissal.
[ 26 ] In Finlay v. Van Paassen et al (2010), 2010 ONCA 204, 101 O.R. (3d) 390 (C.A.) the action was dismissed for delay by the registrar some two years after the statement of claim was issued. The motion to set aside the dismissal was brought some two years after the action was dismissed. Justice Laskin, for a unanimous court stated at para. 29:
... the two-year delay in moving against the registrar’s order was obviously undesirable, especially as Finlay’s law firm had been alerted to the need to take some action. However, the two-year period is not so long that by itself it warranted denying relief. Moreover, the two-year delay has to be assessed in the context of the time frame preceding it – a time frame in which the lawsuit proceeded reasonably promptly;
Thus the dismissal was set aside, notwithstanding a delay of over four years from the commencement of the action to the bringing of the motion to set aside the administrative dismissal.
[ 27 ] In Trajkovski v. Toronto Transit Commission, [2010] O.J. No 3784 (Ont. S.C.J.), the statement of claim was issued in September 2004. In June of 2008, the action was dismissed for delay by the registrar. The motion to set aside the dismissal was brought some two years later. The Court of Appeal confirmed that the action should continue and the administrative dismissal should be set aside, notwithstanding the passage of almost six years from the time the action was commenced until the motion to set aside the dismissal was brought.
[ 28 ] In Trajkovski, the court also confirmed that the plaintiff need not demonstrate the merits of his action, only that it is indeed a viable action. Master Glustein stated at para. 75:
A motion to set aside a dismissal order should not be transformed into a motion for summary judgment in which the court must determine whether there is a genuine issue requiring trial. In those cases when it is clear that there is no viability to the action, this may be an important (and perhaps decisive) factor on the motion. However, on the facts of this case, the court cannot find that the action against the TTC Defendants is not viable, and as such, this factor does not assist the TTC Defendants.
[ 29 ] In Perera v. Pierre (2010), O.N.S.C. 1858 (Div. Ct.), Justice Lederman was sitting as a single judge of the Divisional Court. The statement of claim was issued on January 25, 2006. The registrar dismissed the action for delay on June 18, 2009. Applying the principles in Reid, Justice Lederman determined that a delay of some three years and six months from commencement of action to administrative dismissal did not justify preventing the action from continuing and set aside the administrative dismissal.
[ 30 ] Thus there are a number of cases in which, depending on the circumstances, significant delays, even longer than in the case at bar, do not justify a refusal by the court to set aside an administrative dismissal for delay.
[ 31 ] I now return to a consideration of the factors enunciated in Reid as they apply to the circumstances of this case.
[ 32 ] I shall deal first with the explanation of the litigation delay. It will be remembered that on January 29, 2009, the statement of claim was issued. On March 9, 2009, the statement of defence was delivered. On March 17, 2009, the plaintiff’s original solicitors advised that they could no longer represent her as she had directed them to commence an action against the Township of Woolwich. Shortly thereafter, the plaintiff requested that her file be returned to her by her original solicitors and on June 5, 2009, the registrar issued a notice of action dismissal. There followed a period of “separation” between the plaintiff’s solicitors and the plaintiff resulting in on July 23, 2009, her solicitors obtaining an order removing themselves as counsel of record. The plaintiff then served a notice of intention to act in person and a notice of readiness for pre-trial conference, together with a motion record to amend the statement of claim to add Woolwich Township as a defendant. On July 31, 2009, the action was dismissed administratively (the original dismissal).
[ 33 ] The plaintiff then retained new counsel, Mr. Edward Claxton. On August 27, 2009, on consent, Mr. Claxton obtained an order setting aside the dismissal of action.
[ 34 ] As noted above, matters then proceeded expeditiously, hampered by the plaintiff’s original counsel declining to produce to her new counsel, Mr. Claxton, her file, claiming a solicitor’s lien. The file was ultimately ordered produced by the court.
[ 35 ] I then come to the next significant date, August 30, 2010, when Mr. Claxton received the status notice and did not diarize the deadline. On December 9, 2010, the registrar dismissed the action for delay. Mr. Claxton has testified by affidavit that he learned of the administrative dismissal on November 16, 2011 when he was served with a notice of appointment to assess costs. The period between August 30, 2010 and November 16, 2011 is of obvious concern to the court. Mr. Claxton has testified by affidavit that he failed to diarize the deadline set out in the status notice because of a lack of staff. That is to be regretted, but as practising counsel, Mr. Claxton is expected to have adequate staff to support his practise. In the event of a problem, he would be expected to give priority to any file, on a personal level, which has deadlines such as stated in the status notice of October 30, 2010. His failure to do so is characterized as inadvertence while the defendant attributes it to negligence. If it is inadvertence, it certainly borders on negligence.
[ 36 ] However, it is clear that during this period Mr. Claxton did not simply “abandon” the file nor take no steps to pursue the action. Through late Winter of 2011 and through the spring, Mr. Claxton followed his client’s instructions to pursue an action against Woolwich Township (the parallel action).
[ 37 ] I conclude from the affidavit evidence that the plaintiff, at no time intended to abandon the action or let if lay fallow. She always intended Mr. Claxton to pursue the action against Deutschmann Construction Limited and against the Township of Woolwich.
[ 38 ] It is in all candour difficult to understand how Mr. Claxton could have forgotten the status notice which he clearly received on August 30, 2010. His failure to take appropriate conduct, which he describes as inadvertence, clearly borders on negligence and is a factor I take into account in my determination. However, I conclude it is not determinative. It is clear that throughout this period, the plaintiff intended her action against the defendant (together with the Township of Woolwich) to continue. There was clearly no intention on the part of the plaintiff or indeed plaintiff’s counsel, Mr. Claxton, not to advance the litigation toward trial.
[ 39 ] Dealing with “inadvertence in missing the deadline”, as I have already noted above, the “inadvertence” of counsel, Mr. Claxton, borders on negligence. However, this is simply one of the factors the court must consider in deciding whether the administrative dismissals should be set aside.
[ 40 ] I then turn to whether the motion to set aside was brought promptly. I conclude that the motion was indeed brought as soon as reasonably practicable in the circumstances. On November 16, 2011, Mr. Claxton, counsel for the plaintiff learned of the administrative dismissal when he was served with a notice of appointment to assess the defendant’s costs. The next day Mr. Claxton reported to LawPro and advised his client that the action had been dismissed and she should retain new counsel. Mr. Claxton did indeed act for his client and obtained an adjournment of the costs assessment.
[ 41 ] On December 29, 2011, Mr. Claxton learned of the error in communication between himself and LawPro and shortly thereafter counsel, Mr. Sean Lawler, was appointed to represent the plaintiff on the motion. Mr. Claxton continued to act, serving the motion material for the motion to set aside the administrative dismissal on February 13, 2012. In all the circumstances, I conclude the motion was brought promptly.
[ 42 ] I then turn to the issue of any prejudice to the defendant as a result of the delay. I conclude that in effect there has been none. Both parties will have a full opportunity to present their respective positions on the merits. Representing the defendant corporation, Robert Deutschmann, has testified by affidavit that he stopped “monitoring” the property after the administrative dismissal. In my view that should not in any way affect his ability to cross examine plaintiff’s witnesses and question the allegations lodged against his company.
[ 43 ] In sum, when I consider all the factors enunciated in Reid and consider the principle of finality as it impacts upon the repute of the administration of justice, in the circumstances of this case, I conclude the action should continue. Therefore, I direct that the order of the registrar dismissing the action on December 9, 2010, be set aside.
[ 44 ] Given that the plaintiff has now retained new counsel (Mr. Lawler), having been retained only for the motion, I am directing that the plaintiff will set this action down for trial within 90 days of publication of this ruling. Given the delay that has already occurred, if the defendant requires further time for preparation of its defence, such submission, I am sure, will be heard with sympathy at the assignment court.
[ 45 ] The parties shall have 30 days from publication of this ruling to make brief submissions in writing to me at my chambers in Kitchener on the issue of costs. Such submissions should occupy no more than three pages in length, together with respective bills of costs. Given the somewhat unusual circumstances, this may be a case in which the defendant, though unsuccessful on the motion will seek costs of the motion.
[ 46 ] I would be remiss if I did not thank counsel for their preparation and for their helpful submissions on this motion.
R.D. Reilly J.
Released: May 25, 2012