SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-09-094754-00
DATE: 20120621

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Nicholas Avlonitis Plaintiff – and – Fishercast Global Corporation, Fishercast Global Inc., Bank of Montreal, Bank of Montreal Capital Corporation, Royal Bank of Scotland, The Bank of Scotland PLC also known as The Governor and Company of the Bank of Scotland, Bryan Besbienes, Steve Bower, Dave Bignal, David Patterson, Jen Fisher, Peter Bryce Lillico, Jane Ulrich, Greg Walling, Audrey Knee-Kinoshita, William Davie, Michael Greco, Robert Espey, Douglas Frederick Fisher, Jane Doe and John Doe Defendants

Patrick DiMonte, for the Plaintiff
J.A. Caldwell, for the Defendants
HEARD: June 19, 2012

COURT FILE NO.: CV-09-094754-00
DATE: 20120621

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Barry Hales Plaintiff – and – Fishercast Global Corporation, Fishercast Global Inc., Bank of Montreal, Bank of Montreal Capital Corporation, Royal Bank of Scotland, The Bank of Scotland PLC also known as The Governor and Company of the Bank of Scotland, Bryan Besbienes, Steve Bower, Dave Bignal, David Patterson, Jen Fisher, Peter Bryce Lillico, Jane Ulrich, Greg Walling, Audrey Knee-Kinoshita, William Davie, Michael Greco, Robert Espey, Douglas Frederick Fisher, Jane Doe and John Doe Defendants

Patrick DiMonte, for the Plaintiff
J.A. Caldwell, for the Defendants
HEARD: June 19, 2012

COURT FILE NO.: CV-09-094754-00
DATE: 20120621

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Leonard Sedgwick Plaintiff – and – Fishercast Global Corporation, Fishercast Global Inc., Bank of Montreal, Bank of Montreal Capital Corporation, Royal Bank of Scotland, The Bank of Scotland PLC also known as The Governor and Company of the Bank of Scotland, Bryan Besbienes, Steve Bower, Dave Bignal, David Patterson, Jen Fisher, Peter Bryce Lillico, Jane Ulrich, Greg Walling, Audrey Knee-Kinoshita, William Davie, Michael Greco, Robert Espey, Douglas Frederick Fisher, Jane Doe and John Doe Defendants

Patrick DiMonte, for the Plaintiff
J.A. Caldwell, for the Defendants Audrey Knee-Kinoshita, Robert Espy and William Davie
HEARD: June 19, 2012

REASONS FOR DECISION

EDWARDS j.

[ 1 ] The plaintiff seeks an order validating service on the defendants Audrey Knee-Kinoshita (hereinafter “Knee”), Robert Espy (hereinafter “Espy”), and William Davie (hereinafter “Davie”). The effect of the order sought is essentially to extend the time period for service that was ordered by Healey J., on July 5, 2010. The order of Healey J. extended the time for service on all of the defendants including those that are the subject matter of this motion. Service was required to be effected on the defendants by no later than December 31, 2010 and service was to be effected in accordance with the Rules of Civil Procedure. The motion before this court to yet again seek an indulgence was not commenced until April 2012, some 16 months after the court date specified for service by Healey J.

Overview

[ 2 ] The three plaintiffs who are named in three separate actions are former employees of the defendant Fishercast Global Corporation and Fishercast Global Inc. (hereinafter “Fishercast”). All three plaintiffs were terminated on May 14, 2008.

[ 3 ] In an earlier action (“the first action”), which was commenced against Fishercast, a motion was brought by the plaintiffs on the Commercial List in Toronto to have a stay lifted arising from the bankruptcy of Fishercast. On October 31, 2008, Campbell J. amongst other things allowed the wrongful dismissal claims of the plaintiffs to proceed. It is noteworthy that in the first action Davie had retained the law firm of Heenan Blaikie. With the completion of the bankruptcy proceedings in the first action Davie would have had no further knowledge of the present actions until he would have been served with the statement of claim in this action. As is now evident Davie has never been served with the statement of claim in this action.

[ 4 ] The three actions involving the plaintiffs were commenced on May 29, 2009. While the list of defendants reflected in the style of cause suggests the involvement of many defendants I am advised that at the present time as a result of either dismissals or discontinuances the only remaining defendants are Knee, Davie and Espy. If an extension of time for service is not granted the plaintiffs will have no potential recourse for their claims.

[ 5 ] Despite the fact that plaintiffs’ counsel received an indulgence in the form of the order from Healey J. the evidence before me does not suggest that there was any urgency on the part of the plaintiffs, and/or their counsel to ensure that the order of Healey J. was complied with. The order of Healey J. makes clear that service had to be effected in accordance with the Rules of Civil Procedure. One of the means by which service can be effected of an originating process is by way of service on counsel who acknowledges that service is being accepted on behalf of his or her client in accordance with the Rules.

[ 6 ] On August 11, 2010 the statements of claim were delivered at a law firm which the plaintiffs’ counsel had reason to believe may have acted on behalf of Espy, Knee and Davie in the first action. The affidavit of service that is before this court, however, does not in any way confirm that service was being accepted by this law firm on behalf of these defendants in accordance with the Rules. The affidavit of service merely refers to the fact that a copy of the statement of claim was delivered to a lawyer at the particular law firm without any indication that the lawyer was accepting service on behalf of his clients.

[ 7 ] What is particularly egregious with respect to this attempted form of service is the fact that shortly after the statement of claim was delivered to the law firm, plaintiffs’ counsel received correspondence from the lawyer indicating that she did not have instructions to accept service on behalf of any of the defendants. As such as of September 3, 2010 plaintiffs counsel would have known, that service had not been effected as required by the order of Healey J.

[ 8 ] In oral argument plaintiffs’ counsel acknowledged that from September 3, 2010 until effectively the end of December 2010 there was no evidence before this court of any further attempts to effect service.

[ 9 ] On December 28, 2010 an envelope with the statement of claim was left at the residence of William Davie. Personal service was not effected on Mr. Davie nor was personal service effected on any adult person at the residence where the sealed envelope was left. Again service was not effected on Davie in accordance with the Rules of Civil Procedure as ordered by Healey J.

[ 10 ] The statement of claim was served on Espy on January 13, 2011 ie: thirteen days after the date contemplated by the order of Healey J. On the hearing of the motion before me plaintiffs’ counsel sought an order that would validate the service on Mr. Espy even though it occurred thirteen days after the final date for service as set forth in the order of Healey J.

[ 11 ] As it relates to service on the defendant Knee I have no evidence whatsoever with respect to any attempt of any kind whether within the Rules of Civil Procedure or otherwise to serve the statement of claim on Knee.

The Law

[ 12 ] On a motion to extend the time for service of a statement of claim the applicable Rules of Civil Procedure are Rules 1.04, 2.01, 3.01 and 14.08 (1)(2). In determining whether the court should extend the time for service this court must be concerned with the question of prejudice; that being prejudice to the defendants. The plaintiffs have the onus of establishing that the defendants would not be prejudiced by such an extension. In assessing prejudice caused by the delay in service this court is not to take into account the delay, if there is any, with respect to the commencement of the action, but rather the prejudice caused by the delay in service of the statement of claim. See McGroarty v. CIBC Mellon Trust Company , 2012 ONCA 241 .

[ 13 ] On a motion to extend the time for service this court should be concerned not with the conduct of the action as it relates to the conduct of counsel but rather with the rights of the litigants. The evidence before me would not suggest that counsel for the plaintiffs was doing everything that he could to comply with the order of Healey J. This is particularly so after that time when he was advised by the law firm upon whom he had thought he served the statement of claim that service was not being accepted. At that point in time plaintiffs’ counsel still had at least three months to comply with the order of Healey J. and the evidence then confirms that the only attempts that were being made to comply with the order are on the eve of the expiry of the order ie: December 31, 2010. While plaintiffs’ counsel can be faulted for his conduct in this regard that conduct should not be seen to prejudice the plaintiffs themselves.

[ 14 ] The real issue comes down to whether or not the plaintiffs can show that there will be no prejudice to the defendants in granting the order sought. While there is clearly an onus on the plaintiffs to show there is no prejudice it is equally clear from my review of the authorities that there is also some onus on the defence when prejudice is asserted to put evidence of such prejudice before the court. The Court of Appeal in Chiarelli v. Weins , 2000 3904 (ON CA) makes clear how the competing onus’ are to be dealt with. In that regard the comments of Laskin J.A. are apropos:

Although the onus remains on the plaintiffs to show that the defendant will not be prejudiced by any extension, in the face of such a general allegation, the plaintiffs cannot be expected to speculate on what witnesses or records might be relevant to the defence and then attempt to show that these witnesses and records are still available or that their unavailability will not cause prejudice. It seems to me that if the defence is seriously claiming that it will be prejudiced by an extension it has at least an evidentiary obligation to provide some details. The defence did not do that in this case.

[ 15 ] In oral argument counsel for the defendants opposing the motion before this court suggested that there is clear evidence of prejudice given the bankruptcy of Fishercast. By inference it is suggested that given the bankruptcy of Fishercast this court can conclude that the defendants may be prejudiced given the potential non availability or destruction of documentation that would have been available to these defendants if the statement of claim had been served in accordance with the Rules. Acknowledging that Fishercast has gone bankrupt I have no actual evidence before me that documents have gone missing nor do I have any evidence that witnesses who might be relevant to the issues pleaded are no longer available.

[ 16 ] As to the onus on the plaintiffs to establish lack of prejudice the evidence in this regard is extremely weak at best. At its highest it can be said that service was on a law firm whom it could be inferred may have had some involvement with the defendants in the past. The plaintiffs’ counsel suggests that it would be inconceivable that the lawyer who actually received the statement of claim would not then have brought it to the attention of the defendants, even though he did not have instructions to accept service. I have no evidence one way or the other as to what the lawyer who received the statement of claim would have done with it, but it is not an unreasonable inference to conclude that the defendants may have received a copy. While the evidence in this regard is extremely weak and almost bordering on the point of being nonexistent I am prepared to accept that there was at least some evidence before this court that the defendants are not prejudiced. Given the fact that the defendants have put no evidence before me of actual prejudice, the ultimate exercise of discretion of this court ultimately comes down to a consideration of whether the extension would advance the just resolution of the dispute, without prejudice or unfairness to either party.

[ 17 ] As it relates to the order sought relating to the validation of service on Espy it was suggested in argument by Espy’s counsel, that this court should apply similar principles to those where an extension of time was sought for the filing of a notice of appeal. In that regard it was suggested that this court should apply similar principles to those found in Boone v. Advantage Car and Truck Rentals Ltd ., [2008] O.J. No. 4173 170 A.C.W.S. (3d) 687 The factors that are considered relevant are set forth as follows:

(a) the continuing intention to appeal or in this case the continuing intention to pursue the claim;

(b) the length and reason for the delay;

(c) the prejudice to the opposing party arising from the delay;

(d) and the merits of the appeal or in this case the merits of the action.

[ 18 ] Counsel for Mr. Espy suggests that if one looks at the merits of the action as they relate to these defendants there is no legal basis for the claim pleaded in the statement of claim.

[ 19 ] In dealing with similar arguments the Court of Appeal in McGroarty (supra) makes clear that on a motion to extend the time for service arguments as they relate to whether or not the pleadings disclose any cause of action should generally speaking be left to that type of motion and not dealt with on the motion to extend the time for service. In that regard Doherty J.A. in McGroarty stated:

…however I do not think that a motion to extend the time for service of the claim is the proper forum in which to address the adequacy of the pleading. I think the adequacy of the pleadings is potentially relevant on a motion to extend the time for serving a statement of claim only where the pleadings clearly do not disclose any cause of action and the motion Judge sees no possibility, based on any material filed on the motion to extend for any amendment that could give legal life to the pleadings. However, even if the causes of action are badly pleaded and of doubtful merit, the court should not refuse an extension of time to serve the statement of claim on that basis. The defendant can attack the pleadings after the extension of granted. It would also be open to the plaintiff if the pleadings are attacked to take steps to attempt to cure any defects in the pleadings…However as tempting as it might be, I am satisfied that a motion to extend the time for service is not the stage at which to eliminate cases that seem to have little chance of success. On a motion to extend, the focus must be on the prejudice, if any, caused by the delay in the service of the claim and the justice of allowing the extension.

[ 20 ] The facts of this case are an extremely close call. The conduct of the plaintiffs’ counsel does not leave this court impressed with the adequacy of the steps taken to ensure that the order of Healey J. was complied with. Even when the order of Healy J. was not complied with the motion now before this court was not brought until 16 months later. That said, as previously noted, the conduct of plaintiffs’ counsel should not be visited on the plaintiffs. The lack of any potential prejudice to the defendants is extremely weak but offset by the lack of any evidence of prejudice advanced by the defendants. The Rules of Civil Procedure are intended to be liberally construed so as to secure the just, most expeditious, and least expensive determination of every civil proceeding on its merits see Rule 1.04(1). To disallow the relief now sought would be to deny the plaintiffs the ability to have their case determined on the merits. If there are inadequacies in the pleading of the statement of claim as it relates to the remaining defendants before this court, then as Doherty J.A. makes clear in McGroarty that motion can be dealt with in a different forum. An order will therefore issue extending the time for service on Davie and Knee.

[ 21 ] The plaintiff shall be given sixty days within which to effect service on Davie and Knee which service shall be in accordance with the Rules of Civil Procedure. If service is not effected within 60 days the statement of claim as it relates to Davie and Knee shall be dismissed. With respect to the order sought as it relates to the defendant Espy, an order shall issue validating service on Espy as of January 13, 2011. The defendant Espy shall have 60 days within which to file his statement of defence.

[ 22 ] The plaintiffs have sought an indulgence from this court. While the plaintiffs were ultimately successful, where such an indulgence is sought no costs in favour of the plaintiff should be awarded. While the defendants were unsuccessful in resisting the motion, the circumstances are such that this court will exercise its discretion in favour of those defendants and require the plaintiffs to pay the defendants costs, which costs I fix in the amount of $2,000.00 inclusive of HST and disbursements.

Justice Edwards

Released: June 21, 2012