COURT FILE NO.: 06-CV-323127

MOTION HEARD: July 10, 2012

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jeanne Grzenda v. Stuart Scott, James Marelli and Brian Campbell

BEFORE: MASTER R.A. MUIR

COUNSEL: Ronald Allan for the plaintiff James D. Higginson for the defendant Stuart Scott

REASONS FOR DECISION

[1] The plaintiff Jeanne Grzenda (“Grzenda”) brings 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 10, 2012 dismissing this action for delay. This action was dismissed by the registrar due to the failure on the part of Grzenda to have it set down for trial within the time limits prescribed by the order of Master Glustein of May 11, 2011. This action was settled and then dismissed on a consent basis against the defendants James Marelli and Brian Campbell on December 23, 2009. The remaining defendant, Stuart Scott (“Scott”), opposes the granting of the relief requested on this motion.

[2] In fact, the January 10, 2012 order was the third time the registrar has dismissed this action for delay. The first dismissal, on May 12, 2009, was due to the failure of Grzenda to comply with Rule 48.14. The second dismissal, on August 5, 2010, was due to the failure of Grzenda to set this action down for trial in compliance with the deadline set out in Master Sproat’s order of June 23, 2009, which set aside the first dismissal order. This third dismissal arises from the failure of Grzenda to set this action down for trial in compliance with the deadline set out in Master Glustein’s order, which set aside the second dismissal. The orders setting aside the previous dismissals were both made on a consent or unopposed basis.

NATURE OF THE ACTION

[3] This action was commenced on November 28, 2006. It was started as a response to a counterclaim in another action commenced by Grzenda and currently pending before this court. In an action bearing court file number 98-CV-155406 (the “1998 Action”), the defendant Scott, Pichelli & Graci Ltd. (“Pichelli”) is counterclaiming against Grzenda for payment of amounts allegedly owing pursuant to a promissory note. Grzenda has brought this action in order to seek contribution and indemnity from Scott for the claims Pichelli is making against her in the 1998 Action. Her claim against Scott is based on an alleged breach of an undertaking given by Scott in yet another piece of litigation involving Grzenda and Scott. That further action was commenced in 2001 and bears court file number 01-CL-4276 (the “2001 Action”). As part of the settlement of the 2001 Action, Scott gave an undertaking to Grzenda to use his best efforts to attempt to resolve the 1998 Action. Rather than doing that, Grzenda alleges that Scott breached that undertaking by in fact encouraging and assisting Pichelli in its claims against Grzenda. Grzenda further alleges that it was Scott, and not Grzenda, who received the benefit of the proceeds for which the promissory note was provided. For his part, Scott has denied any liability to Grzenda in connection with the claims being made by her in this action.

[4] Pleadings have been exchanged and affidavits of documents have been served. A mediation session was held on December 2, 2009. Oral discovery has yet to take place in this action, although it appears that at least some discovery took place in connection with the 2001 Action.

APPLICABLE LAW

[5] The law relating to motions of this nature is summarized in my decision in 744142 Ontario Ltd. v. Ticknor, 2012 ONSC 1640 (S.C.J. – Master). At paragraph 32 of that decision I set out the applicable principles as follows:

32. 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]

[6] 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

[7] I am satisfied, in the circumstances of this action, that Grzenda has 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 10, 2012. Grzenda’s lawyer, John Vitulli Jr., immediately contacted Mr. Higginson and the motions scheduling office. Although dates for this motion were available in March 2012, counsel were not available until April. The initial return date of April 12, 2012 was then agreed to and scheduled with the court. However, Grzenda did not serve her motion materials until March 30, 2012 which left Scott with insufficient time within which to prepare responding materials. In addition, only 15 minutes had been booked for this motion, which was clearly insufficient. As a result, the motion was adjourned to be heard by me on July 10, 2012. In my view, this motion has been brought promptly having regard to the nature of the evidence required and the availability of the court and counsel.

[8] Grzenda has therefore satisfied this element of the Reid test.

INADVERTENCE

[9] I am also satisfied that Grzenda has established that her failure to set this action down for trial in a timely manner, and in compliance with the order of Master Glustein, was a result of her lawyer’s inadvertence. As part of Master Glustein’s order of May 11, 2011, he ordered that this action and the 1998 Action be tried together. Mr. Vitulli’s unchallenged evidence is that in his mind he incorrectly thought that this action and the 1998 Action had been consolidated and not simply ordered to be tried together. Consequently, he assumed that the onus rested on Pichelli to move the matters forward. In addition, it is clear from the evidence that Grzenda and Mr. Vitulli intended to move ahead with this action after Master Glustein’s order was made, as discoveries were proposed for dates in July, 2011. There is simply no evidence that would support an inference that Grzenda ever intended to abandon her claim. I am therefore satisfied, on balance, that the failure to comply with the set down date in Master Glustein’s order was inadvertent and that this element of the Reid test has been met.

LITIGATION DELAY

[10] I am also satisfied that Grzenda has provided a reasonable explanation for virtually all of the delay associated with this action. There was an initial period of delay between 2006 and 2008 due to serious health problems on the part of Grzenda’s first lawyer. Mr. Vitulli assumed carriage of this matter in April, 2008 at which time he contacted the other parties and suggested that a timetable be agreed to for the conduct of examinations and answering undertakings. He also proposed that the parties discuss settlement and perhaps participate in a mediation session. A review of the evidence makes it clear that throughout 2008 and 2009 Mr. Vitulli made serious, timely and regular efforts to schedule a mediation session. He was frustrated in these efforts by a lack of timely responses from some of the other lawyers involved and by some of the usual scheduling difficulties often encountered when attempting to accommodate the schedules of several lawyers, parties and the mediator. The mediation was eventually held on December 2, 2009 at which time this action was settled with respect to the defendants James Marelli and Brian Campbell. In my view, the settlement of those parts of Grzenda’s claim points to the wisdom of Mr. Vitulli’s approach.

[11] Following the mediation, Mr. Vitulli turned his efforts to scheduling discoveries with Mr. Higginson and Pichelli’s lawyer. The evidence shows that he pursued the scheduling of discoveries diligently, with numerous letters and follow up letters. Discoveries were scheduled several times but cancelled on each occasion. The responsibility for the cancellations can be assigned solely to Mr. Vitulli on only one of those occasions when he unilaterally cancelled the September 20, 2010 examination date for unspecified reasons (which, I note, he immediately attempted to reschedule). The August, 2010 examinations were cancelled due to a disagreement over who would be participating and whether they would include the 1998 Action. The November 23, 2010 examinations were cancelled because none of the parties had made proper production. The July, 2011 examinations had to be cancelled because of what appears to be a miscommunication between counsel.

[12] Throughout this entire period, Mr. Vitulli actively took steps to move this matter forward by attempting to schedule a mediation session and discoveries, both in this action and in the 1998 Action. I agree with Mr. Higginson that it remains the responsibility of Grzenda to advance the litigation. However, it is my view that Mr. Vitulli was making repeated efforts to do just that. In my view, neither he nor Grzenda can be held responsible for the difficulties encountered in scheduling the mediation session or the examinations for discovery.

[13] There is, however, no evidence explaining the delay between the cancellation of the July 2011 discoveries and the dismissal of this action on January 10, 2012. It appears that nothing was done to advance this litigation over the course of those six months. However, this period of delay cannot be described as inordinate or unusual within the context of this litigation. It is certainly not, by itself, sufficiently egregious to deprive Grzenda of her day in court.

[14] As I indicated above, this is the third time this action has been dismissed. Where the court is dealing with multiple dismissal orders, greater scrutiny must be applied to a plaintiff’s conduct of the litigation. See Wetzel v. Ontario Realty Corp., [2009] O.J. No. 5147 (S.C.J. – Master) at paragraphs 44-47. While the evidence certainly shows a remarkable disregard for the requirements of Rule 48.14 and compliance with court ordered set down dates, it also shows that Grzenda and her counsel were actively pursuing this matter with reasonable diligence. I am therefore satisfied that Grzenda has met the requirement for greater scrutiny as described in Wetzel.

[15] During the course of argument, Mr. Higginson placed significant emphasis on the fact that Grzenda herself did not file any evidence on this motion indicating that it was always her intention to proceed with her claim. I agree that ordinarily such evidence ought to be provided. However, it is my view that direct evidence from Grzenda is not required in the circumstances of this motion. There are simply no significant periods of unexplained delay that need to be addressed with such evidence. The evidence of Mr. Vitulli is sufficient.

[16] I have therefore concluded that Grzenda has also satisfied this element of the Reid test.

PREJUDICE

[17] I am satisfied that Grzenda has met the onus placed upon her 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, a presumption of prejudice arises and the onus rests with the plaintiff to rebut that presumption. The strength of this presumptive prejudice increases with the passage of time. See Wellwood v. Ontario Provincial Police, 2010 ONCA 386 at paragraph 60.

[18] 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. See Wellwood at paragraph 62. In my view, Grzenda has done so despite the fact that many years have passed since the events giving rise to this action took place. Relevant documents appear to have been preserved. Grzenda and Scott have served their affidavits of documents. There is no indication that any of the key witnesses are unavailable. Other court proceedings are pending which involve some of the same parties and issues as are present in this action. Indeed, Mr. Higginson acknowledges as much in his letter to Mr. Vitulli of November 22, 2010 in which he states:

Each of these parties have been involved in litigation since shortly after the turn of the century. They have been through multiple Examinations for Discovery, they have been through mediations, Pre-trials and documentation has been exchanged by the box full.

Clearly, a great deal of evidence has been collected and preserved.

[19] Finally, Scott has not provided any evidence of actual prejudice.

[20] As a result, it is my view that Grzenda has satisfied this element of the Reid test.

CONCLUSION

[21] 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, Grzenda has 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 10, 2012, be set aside.

ORDER

[22] I therefore order as follows:

(a) the dismissal order of the registrar dated January 10, 2012 is hereby set aside;

(b) the parties shall confer and attempt to agree on an appropriate timetable order for the completion of the remaining steps in this action and the 1998 Action;

(c) any such consent timetable shall be provided to the court for its consideration and approval by no later than August 13, 2012;

(d) if the parties are unable to agree on such a timetable, the parties shall provide the court with written submissions by no later than August 13, 2012;

(e) if the parties cannot agree on the issue of the costs of this motion, they may make brief submissions in writing by no later than August 13, 2012.

Master R.A. Muir

DATE: July 23, 2012