SUPERIOR COURT OF JUSTICE – ONTARIO
COURT FILE NO.: CV-04-265351
DATE: 2012/07/05
RE: Kerr v. CIBC World Markets Inc. et al. and Transamerica Life Insurance Company of Canada
BEFORE: MASTER GRAHAM
HEARD: June 22, 2012
COUNSEL:
R. Conway for the moving defendants CIBC World Markets Inc. et al.
(“the brokerage defendants”)
J. Ormston for the plaintiff
N. Galanis for the defendant Transamerica Life Insurance Company (“Transamerica”)
REASONS FOR DECISION
[ 1 ] The plaintiff’s action against the brokerage defendants, commenced on March 12, 2004, is for alleged negligence and breach of contract and other obligations in providing investment advice to her. The action against the defendant Transamerica as well as the brokerage defendants is in relation to advice given regarding the purchase of life insurance policies as investments.
[ 2 ] The plaintiff set the action down for trial in December, 2006. The action was struck from the trial list on July 7, 2010. On January 14, 2011, the plaintiff brought a motion returnable before me to restore the action to the trial list. The brokerage defendants opposed the motion. At the hearing of the motion, the plaintiff’s current counsel requested that it be adjourned and sought leave to file an additional affidavit from the plaintiff’s former counsel and an affidavit from the plaintiff herself. I granted the adjournment, and ordered a timetable for further steps in the motion.
[ 3 ] The cross-examination of the plaintiff’s former solicitor was held on April 7, 2011. As set out in greater detail below, the plaintiff’s current solicitor subsequently took no steps to re-schedule the motion or communicate with the defendants’ counsel.
[ 4 ] The brokerage defendants now move for an order striking the affidavits filed on January 14, 2011 and dismissing the plaintiff’s motion originally returnable on that date to restore the action to the trial list.
[ 5 ] If the plaintiff’s motion to restore the action to the trial list is dismissed, then the action cannot proceed and the court will also dismiss the action. The defendant Transamerica supports the motion although its counsel on the motion made submissions with respect to costs only.
[ 6 ] Although the brokerage defendants seek an order striking the affidavits filed when the plaintiff’s motion to restore the action was originally returnable on January 14, 2011, the bulk of the argument related to whether the action should be restored to the trial list. This motion was therefore essentially a hearing of the plaintiff’s motion to restore the action to the trial list, although brought before the court on the initiative of the defendants.
[ 7 ] The issues to be addressed on the motion are as set out in my decision of Ruggiero v. FN Corp., 2011 ONSC 3212, [2011] O.J. No. 2732, which is based on Armstrong v. McCall, 2006 ONCA 370, [2006] O.J. No. 2055 (C.A.) and relied on by Backhouse J. in 1351428 Ontario Ltd. (c.o.b. The Wineyard) v. 1037598 Ontario Ltd., 2011 ONSC 4767, [2011] O.J. No. 3597, as follows:
Is the delay intentional and contumelious? If so, the action should not be restored to the trial list and should be dismissed.
If not, is there an inordinate and inexcusable delay in the litigation for which the plaintiff or his solicitors are responsible, such as would give rise to a presumption of prejudice?
If so, has the plaintiff provided evidence to rebut the presumption of prejudice arising from the delays?
If so, have the defendants provided evidence of actual prejudice?
Is the delay intentional and contumelious?
[ 8 ] It is first necessary to determine the period of delay to be considered. The action was set down for trial on December 15, 2006. The court sent a certification form to the plaintiff’s former counsel on February 20, 2007, but that counsel deposes that she did not receive it although it was sent to the correct fax number. Plaintiff’s counsel then did nothing until shortly before July 10, 2010, when the action was struck from the list, other than leaving “several” messages for the trial co-ordinator’s office, as deposed in her affidavit sworn in August, 2010. There are no details provided of when any such messages were left. No more proactive steps were taken until shortly before the case was struck from the list, when plaintiff’s counsel sent a process server to the court to make enquiries, although the affidavit is also silent as to when exactly that was done. Between December, 2006 and the striking of the action from the list on July 10, 2010, the plaintiff’s former counsel did not once communicate with the defendants’ counsel.
[ 9 ] Once the plaintiff’s counsel set the action down for trial, it was incumbent upon her to follow up with the court to obtain dates for a pre-trial conference and trial. Accepting that counsel did not receive the certification form sent on February 20, 2007, she should have begun taking proactive steps to obtain and complete the required form by June 2007, three years before the action was struck from the list. Other than her vague statement that she left several messages, there is no evidence of her doing anything in that regard. The period of delay during which plaintiff’s counsel ought to have been taking steps to obtain dates for a pre-trial conference and trial prior to the striking of the action from the list is three years.
[ 10 ] A further point with respect to the period of delay between the setting down of the action and the court striking it from the trial list is that on July 12, 2006, I ordered that the plaintiff answer her undertakings by November 19, 2006 and on October 19, 2006, I ordered that the plaintiff answer a number of questions refused at her examination for discovery. None of these undertakings or other questions ordered answered have been answered even to date.
[ 11 ] On August 24, 2011, the plaintiff’s former counsel contacted counsel for the defendants seeking their consent to an order restoring the action to the trial list. The plaintiff then retained new counsel who delivered a notice of change of lawyer on November 15, 2010 and served the motion record for the motion returnable January 14, 2011 to restore the action. The brokerage defendants served a responding record on December 17, 2011 and a factum and book of authorities on January 10, 2011.
[ 12 ] As indicated above, when the motion came before me on January 14, 2011, counsel for the plaintiff sought an adjournment to file a further affidavit from the former solicitor along with an affidavit from the plaintiff. For reasons given at that time, I granted the adjournment, allowed the further affidavits to be filed and set a timetable for the delivery of further responding affidavits and reply affidavits. I also set a deadline of April 15, 2011 for cross-examinations. The plaintiff’s former counsel was cross-examined on April 7, 2011. At that time, various undertakings were given, which were not answered until June 21, 2011, the day before this motion was argued, 14 months following the cross-examination.
[ 13 ] In addition, subsequent to the cross-examination, counsel for the plaintiff did not communicate with the defendants’ counsel either in respect of the undertakings from the cross-examination or to re-schedule the motion on which the court allowed the further affidavits to be filed. The only communication from plaintiff’s counsel between the cross-examination and the service of the motion record was to inform counsel for the moving parties that he was available on the proposed date to argue this motion. There is no explanation for the delay subsequent to April 7, 2011.
[ 14 ] The delays to be considered on this motion are as follows:
The three years between June, 2007, being the point at which plaintiff’s former counsel ought to have taken proactive steps to file the confirmation form to schedule the pre-trial conference and trial, and early July, 2010, when the action was struck from the trial list.
The four months between when plaintiff’s former counsel learned that the action was struck from the list and her current counsel served the motion record for the motion to restore the action.
The 14 months between the cross-examination of the plaintiff’s former solicitor and the date on which the moving defendants brought this motion.
[ 15 ] Accordingly, the total period of delay is 4.5 years. The first issue is whether this delay is both intentional and contumelious, or as I stated in Ruggiero, supra, whether it is intentional and abusive.
[ 16 ] In Allen v. Sir Alfred McAlpine & Sons Ltd., [1968] 2 Q.B. 229, cited in Ruggiero, supra, Diplock L.J. stated that “disobedience to a peremptory order of the court” would be sufficient to meet the test of whether a party’s conduct was intentional and contumelious. In this case, the plaintiff has failed to answer undertakings and questions refused which were the subject of an order that I made in 2006. Although not the subject of an order, the plaintiff’s undertakings from her former solicitor’s cross-examination were not answered until the day before this motion was argued.
[ 17 ] In addition, when the plaintiff’s motion to restore the action to the trial list first came before me on January 14, 2011, the plaintiff sought and obtained the indulgence of the court by way of an adjournment of the motion so that her counsel could file two more affidavits and cross-examinations could be conducted.
[ 18 ] Given the total period of delay of 4.5 years commencing in June, 2007, in an action commenced in 2004 arising out of alleged conduct in 2000, the court may now reasonably infer that the delay at some point became intentional rather than merely inadvertent or neglectful.
[ 19 ] Further, the plaintiff’s unexplained failure to take any steps to proceed with her motion in the 14 months following the cross-examination of her former counsel on April 7, 2011, after having been granted the indulgence of the adjournment to allow her to file new material on January 14, 2011, and following a previous delay of over three years, leads to the conclusion that the further delay arising out of both the motion and the adjournment was both intentional and an abuse of the court’s process.
[ 20 ] Accordingly, I find that the plaintiff’s delay in this matter is both intentional and abusive and accordingly, the plaintiff’s motion to restore the action to the trial list is hereby dismissed as is the action as a whole.
[ 21 ] Although I have concluded that the delay is “intentional and contumelious”, which is in itself a sufficient basis on which to dismiss the motion to restore the action to the trial list and to dismiss the action, I will also address the other parts of the test set out in paragraph 2 above.
Is there an inordinate and inexcusable delay in the litigation for which the plaintiff or his solicitors are responsible, such as would give rise to a presumption of prejudice?
[ 22 ] As stated above, the total period of delay is 4.5 years. On its face, this period of delay is inordinate. The vague evidence as to the former solicitor’s steps to ascertain the status of the matter after setting the action down for trial in December, 2006 is not sufficient to excuse the delay. There is no explanation whatsoever for the delay between the cross-examination of the plaintiff’s former solicitor on April 7, 2011 and this motion brought by the brokerage defendants 14 months later.
[ 23 ] In the statement of claim, the plaintiff alleges that the defendants were negligent in the investment advice that they gave her in 1999 and 2000. On the basis of these allegations, the applicable limitation period, which at the time was six years, would have expired no later than December 31, 2006. Even taking the date of the issuing of the statement of claim, being March 12, 2004, as the date on which the plaintiff’s claim first became discoverable, the limitation period expired on March 12, 2010. By any measure, the limitation period has expired and as a result, there is a presumption of prejudice to the defendants which the plaintiff has the onus to rebut. (See paragraph 33 of Ruggiero, supra)
Has the plaintiff provided evidence to rebut the presumption of prejudice arising from the delays? If so, have the defendants provided evidence of actual prejudice?
[ 24 ] The plaintiff has not put any evidence before the court to rebut the presumption of prejudice to the defendants arising out of the inordinate and unexplained delay in circumstances in which the applicable limitation period has expired.
[ 25 ] Counsel for the defendants submits that the fact that examinations for discovery are complete is sufficient to rebut the presumption of prejudice. Counsel further submits that the failure of the defendants to provide evidence of actual prejudice should be considered as part of a contextual analysis of all of the factors to be examined in determining whether or not the plaintiff should be permitted to continue with her action.
[ 26 ] The evidence required to rebut the presumption of prejudice arising from delay is set out in Woodheath Developments Ltd. v. Goldman (2003), 66 O.R. (3d) 731 (Div. Ct.) at 732 (Div. Ct.), quoted with approval in Armstrong v. McCall, supra:
“Where there is a presumption of prejudice, the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebuts the presumption. The presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and the issues in the lawsuit do not depend on the recollection of witnesses or that all necessary witnesses are available with detailed recollection of the events.”
[ 27 ] It is clear from this statement that the onus is on the plaintiff to provide evidence to rebut the presumption of prejudice, rather than relying on an inference based on the status of the action. In this case, no such evidence has been provided. In any event, the evidentiary record is not complete because the plaintiff has not answered the questions that were the subject of my order in 2006. Further, there is no requirement that the defendants lead evidence of actual prejudice unless the plaintiff has rebutted the presumption.
[ 28 ] The contextual approach advocated by counsel for the plaintiff requires a consideration of the parties’ conduct throughout the litigation. In this case, the plaintiff’s conduct since June, 2007 has consisted almost entirely of inordinate and unexplained delay of her action. Even after being given the indulgence of an adjournment of her own motion, the plaintiff or her counsel have continued to delay the matter. A consideration of the plaintiff’s conduct in the context of the action as a whole still supports the conclusion that the action should be dismissed.
[ 29 ] My decision in this regard is supported by the following statement of the Court of Appeal in Wellwood v. Ontario Provincial Police, 2010 ONCA 386 at paragraph 48 :
“ . . . Under Ontario’s Rules for contemporary litigation, the party who commences a proceeding bears primary responsibility for its progress. For this reason, the initiating litigant generally suffers the consequences of a dilatory regard for the pace of the litigation.”
[ 30 ] To summarize, the plaintiff’s motion to restore the action to the trial list and the action as a whole are dismissed for two reasons, either one of which would in itself be sufficient to warrant a dismissal. First, the plaintiff’s delay has been intentional and contumelious. Second, either the plaintiff or her solicitors are responsible for an inordinate and inexcusable delay in the litigation giving rise to a presumption of prejudice which the plaintiff has failed to rebut.
Costs
[ 31 ] The brokerage defendants seek both the costs of the motion and the costs of the action. The defendant Transamerica seeks the costs of the action. I accept the submission of counsel for the plaintiff that he cannot properly address the issue of the costs of the action based solely on the costs outlines and if counsel cannot resolve the costs of the action, they may make arrangements to speak to that issue through my assistant trial coordinator Mr. Chan.
[ 32 ] The brokerage defendants have submitted a bill of costs setting out their partial indemnity costs of this motion at $18,819.50 consisting of fees of $16,170.00, H.S.T. of $2,102.10 and disbursements of $547.40. The fees are based on 34.2 hours for Mr. Conway, who argued the motion, and 33.6 hours for Ms. Wise, who assisted in the preparation of the materials. The materials consist of the motion record, factum and book of authorities.
[ 33 ] Counsel for the plaintiff submits that the amount requested by the defendants is excessive, given that the motion record includes a six page affidavit from a solicitor. I do note that the affidavit has 26 exhibits. Plaintiff’s counsel submits that an appropriate figure for the costs of the motion is in the $4,000.00 to $5,000.00 range.
[ 34 ] The court’s objective when fixing costs is to award an amount that is fair and reasonable for the unsuccessful party or parties to pay, rather than to be strictly bound by the successful party’s mathematical calculation of costs. (See: Boucher v. Public Accounts Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.)) In this case, the motion took no more than two hours to argue, although the parties were in court for much of the day. I also note that there must be some duplication between the work done by Ms. Wise and the review of that work by Mr. Conway.
[ 35 ] Taking into account all of these factors, the plaintiff shall pay the costs of the brokerage defendants in respect of this motion, fixed at $9,000.00 inclusive of fees, H.S.T. and disbursements, payable within 30 days.
MASTER GRAHAM
DATE: July 5, 2012