Court File and Parties
COURT FILE NO.: 08-CV-366952 MOTION HEARD: June 6, 2012
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Miha Halik and Terezija Drazic v. Glenn Cooper, John Morielli, 580 Christie Street Co-Ownership Inc., Board of Directors of 580 Christie Street Co-Ownership Inc. and Caber Management Services Inc.
BEFORE: MASTER R.A. MUIR
COUNSEL: Miha Halik in person on his own behalf and in his capacity as estate trustee of the estate of Terezija Drazic, deceased Michael Burgar and Pavle Masic for the defendants John Morielli, 580 Christie Street Co-Ownership Inc., Board of Directors of 580 Christie Street Co-Ownership Inc. and Caber Management Services Inc.
REASONS FOR DECISION
[1] The plaintiffs bring this motion pursuant to Rule 37.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) for an order setting aside the order of the registrar dated January 6, 2012 dismissing this action for delay. This action was dismissed by the registrar due to the failure on the part of the plaintiffs to bring this action to a conclusion or to have it set down for trial within the time limits prescribed by Rule 48.14, as modified by the order of Master Graham of October 14, 2010 and by my order of September 8, 2011. The defendants represented by Mr. Burgar oppose the granting of the relief requested. Mr. Cooper did not appear at the argument of this motion although he was present in court on the initial return date and was aware that this matter would be argued on June 6, 2012.[^1] For the purpose of simplicity, I will refer to the defendants represented by Mr. Burgar as the “Responding Defendants”.
NATURE OF THE ACTION
[2] The plaintiffs are seeking damages in the amount of $25,000,000.00. The plaintiff Miha Halik resides at 580 Christie Street, Toronto (the “Property”). He is the owner of unit 707. The unit was previously owned by his mother, the plaintiff Terezija Drazic. Ms. Drazic is now deceased.
[3] The plaintiffs allege that the defendant Glenn Cooper was the superintendent of the Property at the relevant times. They allege that he engaged in criminal acts against both plaintiffs. The plaintiffs also allege that the Responding Defendants were aware of this conduct and took no steps to monitor Mr. Cooper and protect the plaintiffs. As a result, the plaintiffs allege that they have suffered severe emotional, psychological and physical distress and injuries, along with damage to their reputation. The defendants have denied all of the plaintiffs’ allegations.
APPLICABLE LAW
[4] The law relating to motions of this nature is summarized in my decision in Vogrin v. Ticknor, 2012 ONSC 1640 (S.C.J. – Master). At paragraph 32 of that decision I set out the applicable principles as follows:
- In the last five years, the law relating to setting aside registrar’s dismissal orders has been the subject of seven decisions of the Court of Appeal for Ontario. Although each of those decisions brings a slightly different approach to the decision making process, the general approach first set out by the Court of Appeal in Scaini has been followed consistently. The principles that emerge from those decisions can be summarized as follows:
● the court must consider and weigh all relevant factors, including the four Reid factors which are likely to be of central importance in most cases;
● the Reid factors, as cited by the Court of Appeal in Giant Tiger, are as follows:
(1) 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.... 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.
(2) 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.
(3) 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.
(4) 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;
● a plaintiff need not satisfy all four of the Reid factors but rather a contextual approach is required;
● the key point is that the court is to consider and weigh all relevant factors to determine the order that is just in the circumstances of each particular case;
● all factors are important but prejudice is the key consideration;
● prejudice to a defendant may be presumed, particularly if a lengthy period of time has passed since the order was made or a limitation period has expired, in which case the plaintiff must lead evidence to rebut the presumption;
● once a plaintiff has rebutted the presumption of prejudice, the onus shifts to the defendant to establish actual prejudice;
● prejudice to a defendant is not prejudice inherent in facing an action in the first place but prejudice in reviving the action after it has been dismissed as a result of the plaintiff’s delay or as a result of steps taken following the dismissal of the action;
● the party who commences the litigation bears the primary responsibility under the Rules for the progress of the action;
● in weighing the relevant factors, the court should not ordinarily engage in speculation concerning the rights of action a plaintiff may have against his or her lawyer but it may be a factor in certain circumstances, particularly where a lawyer’s conduct has been deliberate. The primary focus should be on the rights of the litigants and not with the conduct of their counsel.
[Footnotes Omitted]
[5] These are the principles I have considered and applied in determining the issues on this motion. My analysis in this regard leads me to the conclusion that it is in the interest of justice that the order of the registrar be set aside.
MOTION BROUGHT PROMPTLY
[6] I am satisfied, in the circumstances of this action, that the plaintiffs have brought this motion within an acceptable time period after becoming aware of the dismissal order. The relevant authorities and Rule 37.14(1) require that motions of this nature be brought forthwith after the order comes to the attention of a plaintiff or his or her lawyer. The dismissal order was made on January 6, 2012. However, it appears that Mr. Halik did not become aware of the dismissal order until I raised the issue when he appeared in court on March 28, 2012. A return date for this motion was booked that same day and Mr. Halik served a notice of motion seeking an order setting aside the dismissal on April 30, 2012. Under the circumstances, I am satisfied that this motion was brought promptly after Mr. Halik became aware of the dismissal order.
[7] The plaintiffs have therefore satisfied this element of the Reid test.
INADVERTENCE
[8] I am also satisfied that the plaintiffs have established that their failure to set this action down for trial in a timely manner, and in compliance with my order and the order of Master Graham, was a result of inadvertence. This action was commenced on November 24, 2008. In 2010 the defendants brought a motion to dismiss this action for delay. That motion was heard by Master Graham on October 14, 2010. Master Graham found that although there was some delay on the part of the plaintiffs it was not of a nature that required the court to dismiss this action. Master Graham did, however, impose a timetable. That timetable required, among other things, that the plaintiffs set this action down for trial by September 30, 2011. The full timetable provided as follows:
The plaintiff shall deliver a sworn affidavit of documents along with copies of all Schedule “A” documents by November 12, 2010. The defendants have served a sworn affidavit of documents (per # 5 of the affidavit of Christine Boyle) which Mr. Halik is uncertain whether he received, and defendant’s counsel shall provide him with a further copy by the same date.
The plaintiff shall conduct any oral examinations for discovery of the defendants by January 31, 2011. The plaintiff shall inform defendant’s counsel by no later than November 12, 2010 whether he intends to examine any of the defendants and shall also fix a date for the examinations by that deadline.
Counsel for the defendants shall notify the plaintiff within seven days of any oral examinations of the defendants whether he wishes to conduct an oral examination of the plaintiff and shall conduct any such examination by February 28, 2011.
All undertakings from examinations for discovery shall be answered by April 30, 2011.
Any motions arising out of examinations for discovery shall be argued by June 30, 2011.
The parties shall participate in a mandatory mediation by August 31, 2011.
The plaintiff shall set the action down for trial by September 30, 2011, failing which the registrar shall dismiss the action for delay.
The plaintiff shall take the necessary steps to obtain an order to continue the action of Terezija Drazic, now deceased, within 60 days. This deadline may be extended on consent of the defendants through their counsel.
[9] Following the order of Master Graham, the plaintiffs appear to have concluded that they would be unable to comply with the terms of the order. In particular, the plaintiffs encountered difficulty in obtaining the necessary order to continue. In addition, the plaintiffs decided to seek an order requiring the defendants to serve a further and better affidavit of documents and leave of the court to amend their statement of claim. The motion seeking that relief was served in August, 2011 and included a request that the timetable ordered by Master Graham be varied.
[10] That motion came before me on September 8, 2011. I concluded that the defendants’ affidavit of documents was deficient and that proper affidavits of documents needed to be served by October 31, 2011. As there was insufficient court time to deal with the plaintiffs’ extensive proposed amendments to the statement of claim, I adjourned that portion of the motion to November 3, 2011 and extended the set down deadline to December 30, 2011. On November 3, 2011, I granted a further adjournment of the motion to amend the statement of claim due to the fact that the defendants had served Mr. Halik with a factum shortly before the return of the motion and Mr. Halik wanted an opportunity to consider the issues raised by the defendants’ factum before arguing the motion to amend. The new return date was set for January 5, 2012.
[11] For some reason, Mr. Halik was under the impression that the new return date was January 9, 2012. He served a confirmation form on January 4, 2012 referencing the January 9, 2012 return date. It appears that court staff then advised Mr. Halik that the motion was in fact scheduled for January 5, 2012 and would not be placed on my list as it was not confirmed on time.
[12] Counsel for the defendants appeared in court on January 5, 2012 to speak to the matter. Mr. Halik did not appear as he had been told that the motion would not be on my list. In view of this, I made an endorsement adjourning the motion to amend the statement of claim (which also included relief related to amending the timetable) without a date. It was only after that motion was adjourned without a date that the registrar issued her order dismissing this action for delay.
[13] In my view, all this points to inadvertence and nothing more. It is clear that Mr. Halik always intended to continue with this action. He was actively pursuing a motion to amend the statement of claim when the action was dismissed. That motion included a request to vary the timetable. In my endorsement of September 8, 2011, I specifically stated that issues regarding the timetable would be dealt with by me at the next return date of the motion. It was only due to Mr. Halik’s confusion regarding the January return date that the timetable was not dealt with and this action was dismissed. There is simply nothing in the evidence to suggest a deliberate decision on the part of the plaintiffs to ignore court orders or to abandon their claims. In my view, Mr. Halik’s failure to meet the December 30, 2011 set down date was clearly inadvertent.
[14] The plaintiffs have therefore satisfied this element of the Reid test.
LITIGATION DELAY
[15] In my view, none of the alleged delay before October, 2010 is a relevant consideration on this motion. Master Graham made a finding that the delay up to that point was not of a nature that required the court to dismiss this action. From that I infer that Master Graham concluded that the plaintiffs had provided a satisfactory explanation for their delay up to that point or that it was not of such a length as to justify dismissal. I acknowledge that there is some authority to suggest that where a party fails to adhere to a court ordered timetable, and an action is subsequently dismissed as a result, the delay analysis on a motion to set aside the dismissal should cover the entire history of the action, from its inception. See Bayerische Landesbank Gironzentrale v. Sieber (Trustee of), [2008] O.J. No. 2372 (S.C.J. – Master); Perera v. Pierre, [2009] O.J. No. 4241 (S.C.J. – Master); Murphy v. Barron, 2008 CarswellOnt 7398 (S.C.J. – Master); Wetzel v. Ontario Realty Corp., [2009] O.J. No. 5147 (S.C.J. – Master); and MDM Plastics Limited v. Vincor International Inc., 2012 ONSC 3101 (S.C.J. – Master). However, it appears that in all of those cases the earlier order of the court had been made on a consent or on an unopposed basis.[^2] There was simply no adjudicative element to those decisions. That is not the situation on the facts before me. Master Graham made a finding that the delay up to October, 2010 was not of a nature that required the court to dismiss this action. I am not prepared to revisit that finding in the circumstances of this motion.
[16] As for any delay after Master Graham made his timetable order, I am satisfied that it has been adequately explained. On December 14, 2010, Mr. Halik advised Mr. Burgar that he was experiencing difficulty in obtaining the order to continue arising from delays in relation to his appointment as his mother’s estate trustee, despite Mr. Halik’s ongoing efforts to secure such an appointment. His appointment as estate trustee was finally obtained on March 23, 2011 and an order to continue this action was obtained on August 18, 2011.
[17] In early 2011, Mr. Halik advised Mr. Burgar that he wished to amend the timetable. Several pieces of correspondence dealing with this issue were exchanged between Mr. Halik and Mr. Burgar. It appears from those communications that Mr. Halik was working diligently to schedule a motion to vary the timetable. It appears that on June 29, 2011, Mr. Halik raised the issue of amendments to the statement of claim for the first time. The motion record seeking an order amending the timetable, amending the statement of claim and requiring the defendants to serve further and better affidavits of documents was ultimately served on August 30, 2011 with an initial return date of September 8, 2011. Portions of that motion were thereafter adjourned as I have set out above.
[18] In my view, the plaintiffs have provided a reasonable explanation for their delay after October, 2010. It must be remembered that the estate’s action was stayed until the order to continue was obtained. While there was some delay in obtaining the order to continue after Mr. Halik’s appointment as estate trustee and he could have brought his motion to amend sooner, I do not view either of those periods of delay as inordinate. I also note that after hearing the plaintiffs’ motion for an order requiring the defendants to serve a further and better affidavit of documents I determined that the defendants’ initial affidavit of documents was deficient. Clearly, the plaintiffs’ motion for such relief was not without merit. In my view, it is not unreasonable for a plaintiff to insist on a proper affidavit of documents before proceeding to discovery.
[19] I have therefore concluded that the plaintiffs have also satisfied this element of the Reid test.
PREJUDICE
[20] I am satisfied that the plaintiffs have met the onus placed upon them to rebut the presumption of prejudice. Where a limitation period has passed, as it has here under the Limitations Act, 2002, S.O. 2002, c. 24, Schedule B (the “Limitations Act”), there is a presumption of prejudice and the onus rests with the plaintiffs to rebut that presumption. The strength of this presumptive prejudice increases with the passage of time.[^3]
[21] The operation of this factor was succinctly summarized by Master Dash in Vaccaro v. Unifund Insurance Co., 2011 ONSC 5318 (S.C.J. - Master). At paragraph 22 of Vaccaro, Master Dash stated as follows:
The presumption arises when an action is dismissed after the passage of a limitation period, even if the action was commenced within the applicable limitation period. Because memories of witnesses fade over time a presumption of prejudice would arise after passage of an inordinate length of time after a cause of action arose or after an applicable limitation period has passed. The force of the presumption [...] will depend on the time which has passed after the expiration of a limitation period as well as on the nature of the action. While the presumption will speak as a barely audible caution immediately after a limitation period has expired, it may command with increasing imperativeness on the passage of a substantial time, depending on the cause of action.
[22] In my view, the strength of the presumptive prejudice is not particularly strong in this case. The events that gave rise to this action took place between 2005 and 2008. The defendants had notice of this claim within months after it was issued and were represented by counsel throughout. They certainly had an early opportunity to undertake any necessary investigations.
[23] A plaintiff can overcome the presumption of prejudice by leading evidence that all relevant documents have been preserved, that key witnesses are available or that certain aspects of the claim are not in issue.[^4] In my view, the plaintiffs have done so. Relevant documents appear to have been preserved. The plaintiffs have served their affidavit of documents. The defendants also appear to have preserved all of their documents as they have all served affidavits of documents as well. There is no indication that any of the key witnesses are unavailable (other than Terezija Drazic who passed away in January, 2009, prior to Master Graham’s decision on the defendants’ motion to dismiss for delay). There also appear to be other court proceedings pending which involve some of the same parties and issues as are present in this action.
[24] Finally, none of the defendants have provided any evidence of actual prejudice.
[25] As a result, it is my view that the plaintiffs have satisfied this element of the Reid test.
THE MERITS OF THE ACTION
[26] The Responding Defendants argued that the nature of the allegations made by the plaintiffs against the defendants should be considered as part of the court’s contextual analysis. The Responding Defendants submitted, and have expressly pleaded, that the allegations made by the plaintiffs are scandalous, frivolous, vexatious and an abuse of the process of this court.
[27] In my view, the merits of the action should not ordinarily be considered on a motion to set aside an administrative dismissal.[^5] However, the merits may be an appropriate consideration where the evidence is clear and unchallenged.[^6] It is true that the plaintiffs make some very serious and troubling allegations, especially with respect to the conduct of the defendant Glenn Cooper. The language used by the plaintiffs in their statement of claim is colourful to say the least. However, the Responding Defendants have not provided any evidence that would suggest that those claims are clearly without merit. In fact, there is no evidence on this motion from any of the defendants themselves. The responding affidavit that has been filed is from a law clerk in Mr. Burgar’s office and simply addresses some of the procedural aspects of this litigation. Given this lack of evidence, I am not prepared to give any significant weight to the Responding Defendants’ submissions in this regard. Of course, if the Responding Defendants remain of the view that the plaintiffs’ claims are scandalous, frivolous, vexatious and an abuse of the process of this court, they are free to bring the appropriate motion under the Rules.
CONCLUSION
[28] In deciding motions of this nature the court is to apply a contextual approach in which the court weighs all relevant factors to determine the result that is just in the circumstances. It is not necessary for the moving party to rigidly satisfy all of the Reid factors and any other relevant factors. Of the factors the court is to consider on motions such as this, prejudice is the key consideration. In my view, the plaintiffs have satisfied all of the relevant factors, including the key factor of prejudice. I am therefore satisfied that it is just that the order of the registrar of January 6, 2012, be set aside.
COSTS
[29] At the conclusion of the argument of this motion, Mr. Halik indicated that he was not seeking costs. In my view, it is appropriate that there be no order with respect to the costs of this motion. This is not a situation where costs should be ordered payable by the successful parties. The plaintiffs have satisfied all of the relevant factors. I appreciate that the defendants are frustrated with the pace of this litigation. However, it is also my view that under the circumstances, this motion should not have been opposed.
ORDER
[30] I therefore order as follows:
(a) the dismissal order of the registrar dated January 6, 2012 is hereby set aside;
(b) there shall be no order with respect to the costs of this motion; and,
(c) the parties shall, within 30 days, contact my assistant trial coordinator in order to schedule a case conference to set a date for the plaintiffs’ motion to amend their statement of claim and to address any other outstanding timetable issues.
Master R.A. Muir
DATE: June 7, 2012
[^1]: Mr Cooper was also represented by Mr. Burgar at the time the dismissal order was made. However, he delivered a notice of intention to act in person on February 28, 2012. [^2]: Except perhaps in Murphy. The report from that decision is not entirely clear on that point. [^3]: Wellwood v. Ontario (Provincial Police), 2010 ONCA 386, [2010] O.J. No. 2225 (C.A.) at paragraph 60. [^4]: Wellwood at paragraph 62. [^5]: See my discussion of this issue in Tribar Industries Inc. v. KPMG LLP, 2011 ONSC 1699 (S.C.J. - Master) at paragraphs 34-39. [^6]: Tribar at paragraph 39.