ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 1633/04
DATE: 2012-08-13

B E T W E E N:

Jan Kelly Spendiff and Rodney James Spendiff

Taylor B. Robertson, for the Plaintiffs

Plaintiffs

• and -

Janet Frances Schmiedl, Keith Sinclair Schmiedl and Philip J. McInerney carrying on business as Castlerock Professional Home Inspections

J. Ross Macfarlane, for the Defendants Janet Frances Schmiedl and Keith Sinclair Schmiedl Jay A. Stolberg, for the Defendant Philip J. McInerney carrying on business as Castlerock Professional Home Inspections

Defendants

HEARD: August 10, 2012

The Honourable Justice J. R. Henderson

DECISION ON STATUS HEARING

[ 1 ] This is my decision on the status hearing in this action.

[ 2 ] The plaintiffs listed this action for trial on March 19, 2010, and it first appeared in the assignment court on June 8, 2010. On May 10, 2011, after several adjournments in the assignment court, Justice Maddalena endorsed, “Matter is not ready for trial and thus is struck from the list”.

[ 3 ] Thereafter, the action was not restored to the trial list within 180 days. Therefore, on December 13, 2011, the Registrar issued a Status Notice pursuant to Rule 48.14(2). Subsequently, the plaintiffs requested a status hearing, and, after two adjournments, oral argument on the status hearing was heard on August 10, 2012.

Background History

[ 4 ] The plaintiffs purchased a house in the Town of Fonthill from the defendants Janet Frances Schmiedl and Keith Sinclair Schmiedl (hereinafter called “the Schmiedls”). The agreement of purchase and sale was dated March 18, 2004, and the transaction closed on April 23, 2004.

[ 5 ] Prior to closing the transaction the plaintiffs retained the defendant Philip J. McInerney carrying on business as Castlerock Professional Home Inspections (hereinafter called “McInerney”) to perform a home inspection on the property.

[ 6 ] The plaintiffs allege that after they had obtained possession of the property, they observed several substantial defects in the house, particularly in the concrete floors. Accordingly, the plaintiffs obtained an expert report from a contractor, Ed Klassen, dated May 26, 2004, and obtained an expert report from a structural engineer, Joseph Ha, dated August 26, 2004. A second report was obtained from Joseph Ha, dated September 29, 2005.

[ 7 ] The Statement of Claim was issued on October 7, 2004, and both Statements of Defence and Crossclaim were delivered by January 2005. Examinations for discovery of one plaintiff and one defendant were conducted in February 2006. No other examinations for discovery were conducted of any party.

[ 8 ] Very little took place with respect to this action between February 2006 and February 2010. During that four-year period the plaintiffs obtained a one-page quotation for repairs from Kenneth Homes dated June 13, 2008, and a short expert report from another engineer, Bruce Timms, dated June 23, 2009, but no other events of any significance took place.

[ 9 ] On February 9, 2010, the plaintiffs obtained a one-page report from Shoalts Engineering, and thereafter the plaintiffs listed the action for trial on March 19, 2010. A pre-trial conference was held on June 15, 2010. At each of the first four appearances in the assignment court the plaintiffs were not ready to set a trial date, and obtained an adjournment. The only report obtained by the plaintiffs during these adjournments was a follow-up report from Shoalts Engineering dated February 7, 2011. On the fifth appearance in assignment court, on May 10, 2011, the plaintiffs were still not ready to proceed to trial. Accordingly, Justice Maddalena struck the case from the trial list.

[ 10 ] After the case was struck from the trial list the plaintiffs obtained an updated repair quotation from Kenneth Homes dated May 25, 2011 and a one-page report from DeHaan Homes dated December 5, 2011.

[ 11 ] I note that throughout the course of this action, the plaintiffs state that they were uncertain as to whether they should repair the alleged defects in the house or demolish and rebuild the house. All of the abovementioned reports obtained by the plaintiffs dealt with one or both of those options. I also note that as of today’s date the house has not been demolished, and there is no evidence that the plaintiffs have undertaken any repairs to the house. Further, the plaintiffs have continued to occupy the house since April 2004.

[ 12 ] At the status hearing counsel for the plaintiffs informed this court that the plaintiffs are now ready to set a trial date and proceed with the trial.

The Legal Issues

[ 13 ] Rule 48.14(13) reads, “ At the status hearing, the plaintiff shall show cause why the action should not be dismissed for delay ”. It is now well established that the onus is on the plaintiff at a status hearing to show both:

(i) that there is a reasonable explanation for the delay that justifies continuation of the action, and

(ii) that there is no non-compensable prejudice to the defendants.

[ 14 ] The authority for the abovementioned two-part test is set out in the case of Savundranayagam v. Sun Life Assurance Company of Canada , 2008 54788 (ON SCDC) , [2008] O.J. No. 4215 (Ont. Div.) . That test has been confirmed in the Divisional Court case of Oberding v. Sun Life Financial Assurance Company , 2010 ONSC 3303 , and in the Ontario Court of Appeal case of Khan v. Sun Life Assurance Company , 2011 ONCA 650 .

[ 15 ] Plaintiffs’ counsel in this case suggests that this court should only consider the delay from the time the action was struck from the trial list, as it was the striking from the trial list that caused the 180-day period to start to run under Rule 48.14 (2). However, in my view because the case was struck from the trial list as a result of the case not being ready for trial, this court must consider all of the alleged delay from the time the cause of action arose.

Analysis

[ 16 ] Regarding prejudice, it is not always easy for a plaintiff to prove that there is no non-compensable prejudice to the defendants. It can be very difficult to prove a negative. Often a plaintiff can only depose that the plaintiff is not aware of any prejudice that may be suffered by the defendants. That being said, a court can infer prejudice to the defendants because of the passage of time, or the defendants can file evidence of actual prejudice.

[ 17 ] In the present case, the Schmiedls have raised two possible matters that may be prejudicial. Keith Schmiedl deposes first that his memory with respect to the events of 2004 has faded, and second that it may be difficult to ascertain the condition of the house as of 2004 because the house has not been repaired and its condition has likely deteriorated.

[ 18 ] I accept that memories fade over time, and Mr. Schmiedl’s memory of the relevant events may not be as good now as it was in 2004. However, Mr. Schmiedl was examined for discovery in February 2006 and his memory as at that date has been recorded. Moreover, McInerney videotaped the home inspection that he conducted in 2004, and expert reports were prepared in 2004 and 2005. Given these pieces of evidence, I find that any prejudice to the Schmiedls caused by fading memories is not significant.

[ 19 ] As to the deterioration of the house since 2004, I do not find that there is any prejudice to the defendants caused by any non-repair of the house as several experts were on site and examined the house in 2004 and 2005. Moreover, if there has been any deterioration to the house caused by the plaintiffs’ failure to repair the house, that deterioration may in fact be to the advantage of the Schmiedls.

[ 20 ] Regarding the plaintiffs’ onus to explain the delay, I repeat my observation that very little was done on this case between February 2006 and February 2010. It appears that nothing at all happened on this file between the examinations for discovery in February 2006 and June 2008 when the plaintiffs obtained the one-page repair quotation from Kenneth Homes. A few months later, the plaintiffs changed lawyers to their present lawyers, but this was followed by another period of little activity. The plaintiffs did not offer any explanation, let alone a reasonable explanation, for the delay in prosecuting this case during this four-year period.

[ 21 ] Furthermore, at the attendances in the assignment court between June 2010 and May 2011 it appears that the plaintiffs were in a state of uncertainty. Apparently, the plaintiffs could not decide whether they would repair the house or demolish it. Accordingly, the plaintiffs obtained four adjournments so that they could decide what to do, and perhaps obtain further expert reports to assist them. However, the plaintiffs did very little to determine a course of action during this period, and their uncertainty was still not resolved on May 10, 2011 when Justice Maddalena struck the matter from the trial list. Again, the plaintiffs offer no reasonable explanation for their failure to move this case forward while it lingered on the trial list.

[ 22 ] Still further, the plaintiffs did not attempt to restore this action to the trial list within 180 days after it was struck, resulting in the issuance of the Status Notice by the Registrar. In my view, there is no acceptable explanation for the plaintiffs’ failure to restore this action to the trial list within 180 days.

[ 23 ] The plaintiffs have suggested that some of the delay after the matter was struck from the trial list should be attributed to the defendant McInerney because on November 18, 2011, the plaintiffs informed counsel for McInerney that they intended to demolish the house and invited McInerney to arrange for an inspection of the house before it was demolished. Thereafter, counsel for McInerney informed plaintiffs’ counsel that he would seek instructions, but no inspection was ever arranged. Thus, the plaintiffs say that McInerney contributed to the delay as the plaintiffs were waiting for McInerney to arrange for an inspection.

[ 24 ] In my opinion this suggestion by the plaintiffs is irrelevant as the discussion about McInerney’s possible inspection of the property did not arise until more than 180 days had passed after the action had been struck from the list. That is, plaintiffs’ counsel did not inform defence counsel that the plaintiffs intended to demolish the house until after the Registrar was in a position to issue the Status Notice.

[ 25 ] Considering the significant lapse of time and the lack of an acceptable explanation for the delay, I find that the plaintiffs have not satisfied the onus of proving to this court that there is a reasonable explanation for the delay that justifies continuation of the action.

Conclusion

[ 26 ] For the reasons set out above, the plaintiffs’ action is hereby dismissed.

[ 27 ] If any of the parties wish to make submissions with respect to costs, they may do so in writing directed to the Trial Co-ordinator within 14 days of the date of this decision.

Henderson J.

Released: August 13, 2012

COURT FILE NO.: 1633/04
DATE: 2012-08-13

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: Jan Kelly Spendiff and Rodney James Spendiff Plaintiffs - and – Janet Frances Schmiedl, Keith Sinclair Schmiedl and Philip J. McInerney carrying on business as Castlerock Professional Home Inspections Defendants DECISION ON STATUS HEARING Henderson J.

Released: August 13, 2012