SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 05-CV-304380PD 1

MOTION HEARD: 20120203 and 20120206 and by way of supplementary written submissions

RE: Lilydale Cooperative Limited

AND:
Meyn Canada et al.

AND:
Allied Boiler Services et al.

BEFORE: Master Abrams

COUNSEL:
C. McKibbin, for the plaintiff

T. Whillier, for the Meyn defendants

K. Digambar, for Weishaupt Corporation

E. Hoult, for the EMK defendants

REASONS FOR DECISION

[ 1 ] The plaintiff moves to extend the set down date herein and to transfer this action and a related action (CV-08-355563) into case management. The relief sought is not opposed by the third parties but is opposed by the Meyn defendants and EMK defendants.

[ 2 ] These proceedings involve a $16 million product liability claim. The plaintiff, a poultry processor, suffered a fire at its plant in Alberta which it alleges was caused by a boiler manufactured by the EMK defendants and sold to Lilydale by the Meyn defendants.

[ 3 ] The history of this litigation is as follows. The action was commenced in January 2006; the claim was served in March 2006; a forum non conveniens motion, brought by the Meyn defendants, was heard in November 2006—the decision for which was released in February 2007 and was appealed in early 2008; claims were made by the Meyn defendants against the third parties in April 2008; a related action was commenced by Lilydale in June 2009; third party claims were brought by the EMK and Meyn defendants against Allied and Weishaupt in November 2008; Lilydale discontinued its claims against Allied in the related action; EMK lost a summary judgment motion brought by Allied in July of 2010; in the Fall of 2010, Lilydale served its affidavit of documents and productions and EMK served its productions; also in the Fall of 2010, Lilydale prepared and served a draft testing protocol for destructive testing of the boiler and made arrangements for an initial examination of physical evidence by the parties’ experts; in January 2011, the experts attended to inspect the physical evidence; in February 2011, the Meyn defendants served their affidavit of documents; in October 2011, Lilydale’s counsel sought to discuss with all counsel the need for a R. 22 motion to deal with choice of law issues (i.e. Should Ontario or Alberta law apply to the claims made by it? ), with an Agreed Statement of Facts having been circulated in May 2011 among “all defending parties”; and, in the Fall of 2011, Lilydale delivered summary judgment motion materials on the choice of law issue.

[ 4 ] This motion was made returnable on February 3/12, with the plaintiff’s motion record served in December 2011 and with the parties scheduled to attend in Motions Scheduling Court to set a date for Lilydale’s summary judgment motion on February 17/12.

[ 5 ] The timetable that Lilydale wishes to have me vary was set by Master Muir in February 2011. It followed two earlier court-ordered timetables set by the court in October 2008 and February 2010, respectively. The deadline established by Master Muir for setting this action down was January 13, 2012.

[ 6 ] The defendants resist the establishment of a new timetable and extension of the set down date citing excessive delay on the part of Lilydale and what they consider to be a wanton disregard for the mandated timelines in three court Orders. The EMK defendants characterize Lilydale’s prosecution of its claims as taking place “at its leisure and at the eleventh hour” pointing to, inter alia , a failure to formalize a discovery plan by April 20/10 as ordered, service of an affidavit of documents after two court-imposed deadlines, a failure to address the issue of choice of law until October 2011, and the fact of two Registrar’s dismissals already (each of which was set aside).

[ 7 ] As for the issue of prejudice, the EMK defendants do not point to any prejudice suffered by them--but the Meyn defendants do. They agree with the EMK defendants’ submissions and, in addition, say that the Meyn defendants have removed from storage and destroyed many relevant documents. Further, they say, some of their potential witnesses have left their employ. The Meyn defendants state (albeit baldly) that they have no contact information for these persons.

[ 8 ] The question that I have been asked to answer is whether the proceedings should be permitted to continue. I must determine whether there is an explanation for the delay to date, sufficient to satisfy the court that the action should proceed (as requested by Lilydale) and whether there is actual prejudice to the defendants that militates against the action proceeding. In this latter regard, the plaintiff must show, on a prima facie basis, that the defendants have suffered no actual prejudice; and, if this onus is met, the evidentiary burden shifts to the defendants to show actual prejudice (see: Kostruba v. Pervez , 2011 ONSC 2411 and 1001411 Ontario Ltd. v. City of Toronto Economic Development Corporation , 2011 ONSC 6993 ).

[ 9 ] Mr. McKibbin points out that, until July 2010, the proceedings were peppered with a number of preliminary motions and appeals in respect of which Lilydale was successful. That being so, he posits, the fault (as it were) does not lie with Lilydale for the early delays. By virtue of its successes, he says, Lilydale cannot be said to have taken an untenable position or acted unreasonably in the first few years since the action was commenced.

[ 10 ] And while Lilydale recognizes that it has moved slower than it could have (with counsel attributing part of the slow pace to turnover within its firm after July 2010 and the small number of lawyers within the firm), there is no question but that it did take some steps to prosecute its claims as of late and, in any event, since July 2010. Those steps are set out above (in paragraph 3).

[ 11 ] As for court-mandated timelines that have not been met, Lilydale argues that ascribing to it all of the fault, in this regard, is unfair. While it agrees that it might have moved with greater alacrity, there is no question but that the three timetabling Orders herein obliged ALL parties (and not just it) to meet certain deadlines that were not met (see pp. 51, 55 and 81 of the EMK defendants’ responding motion record). Mr. McKibbin argues, fairly, that all parties were at fault in failing to abide by the court’s Orders.

[ 12 ] Lilydale’s explanations for its delays—though not perfect—are sufficient. They are plausible and, in the context of the whole, not unreasonable. Further, it is not as though Lilydale has been in stasis throughout the currency of the litigation and even since 2010. Lilydale has taken halting but continued steps to advance its claims.

[ 13 ] As for the issue of prejudice, Lilydale says that the defendants’ evidence, in this regard, is weak. I agree. When the Meyn defendants’ documents were destroyed is not known (and why they would be destroyed in the context of ongoing litigation—if that is when some documents were destroyed—is not explained). It seems, from a plain reading of the affidavit evidence filed by the Meyn defendants, that documents were discarded at or about the time of the Meyn defendants’ downsizing and reorganization in 2001 (long before this action was commenced and before the incident that gives rise to this litigation). Further, there is no indication by the Meyn defendants as to what efforts were made to locate their former employees. For his part, Mr. McKibbin says that he was able to locate Mr. William Cooper, the person identified by the Meyn defendants as being a key defence witness whom they could not locate.

[ 14 ] That said, the onus is on Lilydale and not the defendants to persuade me, on a prima facie basis, that there is an absence of prejudice that would tend to compromise the parties’ ability to fairly try the proceedings. In this regard, note that there is a lacuna in the evidence adduced by Lilydale: there is no reference in the plaintiff’s motion material to the availability of witnesses. When considered in context, though, I do not think the lacuna to be fatal to Lilydale’s motion. Why do I say this? Documentary discovery has been conducted; the boiler at issue has been preserved; Mr. Cooper has been located (and has indicated that he has already been contacted by “the folks from Meyn” about these proceedings); Lilydale has advised that Anderson Associates Consulting Engineers have confirmed that they will “maintain all records”; there is no evidence of prejudice from any party save for the Meyn defendants and their evidence is skeletal and generalized evidence (which, at least in part, has been rebutted by Lilydale locating and speaking with Mr. Cooper); and, as late as February 2/11, when Master Muir imposed a new timetable (on consent), prejudice was not raised as an issue, by anyone, for a January 13/12 set down date. There is no evidence before me that documents were destroyed or people went missing since February 2/11.

[ 15 ] Taking into account all of the circumstances here at play and balancing the interests of the parties, I have considered whether it would be unfair to dismiss the proceedings (see: Samborski v. Pristine Capital Inc. , 2011 ONSC 3383 , at para. 5 ). Given the quantum of damages at issue, given that the plaintiff has moved forward (albeit at a slower pace than is ideal), and given my findings on prejudice--and with all parties being in breach of the court Orders by which the moving defendants say that Lilydale ought to have abided--I am not prepared to dismiss the plaintiff’s proceedings.

[ 16 ] I am also not prepared to move the proceedings into case management, with the request being opposed by the responding defendants. As at now, I am not persuaded that the criteria set out in R. 77.05(4) have been met. With a bit of effort and co-operation, I expect that the parties will be able to move these proceedings forward in a timely and appropriate fashion. That said, any party is at liberty to renew the motion to bring the proceedings into case management at a later date, if so advised.

[ 17 ] The parties are directed to confer and to attempt to settle on a proposed timetable for the conduct of this and the related action. If they are unable to agree, I will decide what timelines ought to apply after hearing submissions from counsel. In this regard, Mr. McKibbin is to report back to me with a proposed timetable or a request for a case conference--by August 7/12. For now, and pending further Order, the set down date in each of this and the related action (CV-08-355563) is extended to December 31/12.

[ 18 ] Failing agreement as to the costs of the motion, I may be spoken to.

Master Abrams

Date: July 5/12