SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-09-39405
DATE: 2012/10/12

RE: Deverett Professional Corporation v. Canpages Inc.

BEFORE: MASTER GRAHAM

HEARD: October 10, 2012

COUNSEL:
Michael S. Deverett for the plaintiff
C. Latulippe for the defendant

ENDORSEMENT

(Contested Status Hearing)

[ 1 ] The plaintiff is a law firm. It alleges breach of contract and negligence on the part of the defendant in failing to publish its advertisements in local telephone directories. It also alleges that the defendant failed to publish the advertisements in retaliation for the plaintiff having acted for a former employee of the defendant. The date of the contract is stated to be January 22, 2009.

[ 2 ] The statement of claim was issued on December 22, 2009. The defendant served its statement of defence and counterclaim on February 12, 2010. There was subsequently no communication between the parties until March 14, 2012 when the plaintiff, after having received the status notice on January 13, 2012, contacted the defendant’s counsel to request consent to a timetable for the further steps in the action.

[ 3 ] The matter first came before me at a status hearing on June 13, 2012. At that time, the defendant requested that the action be dismissed for delay and filed an affidavit in support of its position. After hearing submissions from both counsel, I concluded that the matter was vulnerable to dismissal for delay and based on Bolohan v. Hull , 2012 ONCA 121 , I adjourned the matter to a full hearing. The plaintiff subsequently delivered an affidavit and conducted a cross-examination of the defendant’s deponent and both parties delivered factums and books of authorities.

[ 4 ] Before hearing argument on the contested status hearing, I was asked to make a ruling on whether the defendant should be required to provide the plaintiff with a copy of the defendant’s written policy regarding the retention of written records. At the cross-examination of the defendant’s deponent Ms. Lapierre, counsel for the defendant undertook to produce a copy of any policy regarding the retention of written records, subject to confidentiality. Counsel subsequently provided plaintiff’s counsel with a document titled “Record Management Policy, Appendix B – Record Retention Schedule”.

[ 5 ] The plaintiff sought a copy of this document and defendant’s counsel refuses to provide a copy on the basis that the document is confidential.

[ 6 ] I reviewed the document. It is not marked “confidential”, there is no evidence that it is confidential and the information in it is not commercially sensitive. Accordingly, the defendant’s counsel shall provide the plaintiff’s counsel with a copy of the document.

[ 7 ] The test on this contested status hearing is whether the plaintiff has met the onus of demonstrating first, that there is an acceptable explanation for the litigation delay and second, that if the action were permitted to proceed, the defendant would suffer no non-compensable prejudice. (See: Khan v. Sun Life Assurance , 2011 ONCA 650 at paragraph 1 ) Despite the comments of Master Dash at paragraph 18 of Koepcke v. Webster , 2012 ONSC 357 , [2012] O.J. No. 230 that the two factors must be considered on a contextual basis, the Court of Appeal, at paragraph 32 of 1196158 Ontario Inc. v. 6274013 Canada Limited , 2012 ONCA 544 , states:

“The test is conjunctive, not disjunctive. Even if the plaintiff can provide a satisfactory explanation for the delay, the action will be dismissed if there would be prejudice to the defendant. And if the plaintiff is not able to provide a satisfactory explanation for the delay, it is still open to the judge to dismiss the action, even if there is no proof of actual prejudice to the defendant”.

[ 8 ] Finally, as stated in Koepcke , supra , “there is a dominant theme in the civil justice system to discourage delay and encourage judicial involvement to ensure timely justice”.

[ 9 ] The issue with respect to the explanations offered by the plaintiff is whether any of them constitute an “acceptable explanation” for the delay as contemplated by Khan, supra . I will address each of these three explanations in turn.

1. There was no communication to the plaintiff from defendant’s counsel.

The fact that the defendant’s counsel did not communicate with the plaintiff between the delivery of the statement of defence on February 12, 2010 and the plaintiff’s request to the defendant’s counsel to discuss a timetable on March 14, 2012 is not a reasonable explanation for the plaintiff’s failure to advance the action during that period of time. When a party commences litigation, the onus is on that party to proceed with its lawsuit. It is not the responsibility of the defendant to prompt the plaintiff into action. As in Malik v. 1645156 Ontario Ltd. , 2011 ONSC 4495 , there is no evidence that the defendant Canpages failed to co-operate in arranging further steps in the action. Absent a lack of co-operation on the part of the defendant, the plaintiff cannot point to the defendant’s lack of activity as an explanation for its own failure to discharge its responsibility to move the action forward.

2. Neither of the lawyers at the plaintiff law firm had carriage of the file.

This explanation is essentially that the file “fell through the cracks” at the plaintiff’s office and as a consequence, no one was responsible for the file. However, someone prepared the statement of claim and arranged to issue it on December 22, 2012 and given that the name of the individual lawyer on the back page of the statement of claim is Mr. Deverett, it is reasonable to infer that he was the lawyer responsible. In addition, someone must have arranged to serve the statement of claim because the defendant knew to retain counsel and to arrange for delivery of a statement of defence. Further, Ms. Fowler, the deponent of the plaintiff’s affidavit, prepared (but did not serve) a draft affidavit of documents, and presumably did so pursuant to instructions. Accordingly, I do not accept that no one at the plaintiff’s office had carriage of the file, and I do not accept this as a reasonable explanation of the litigation delay.

3. There was no client to monitor the progress of the file.

The third explanation is that because the law firm is representing itself, it did not have the benefit of an independent client seeking updates as to the status of the action. However, the law firm, once it made the decision to commence the action, was responsible for making sure that the action proceeded in accordance with the Rules of Civil Procedure and ought to have been aware of those Rules. When a firm represents a client, it assumes responsibility for ensuring that the action progresses expeditiously and for meeting litigation deadlines on behalf of the client. This responsibility is no different when the firm represents itself. Accordingly, I do not find the third explanation to be reasonable.

[ 10 ] A review of the plaintiff’s explanations for the litigation delay leads to the conclusion that none of those explanations are reasonable or acceptable. Over two years passed subsequent to the delivery of the statement of defence with no steps taken by the plaintiff to advance the litigation. As in Khan , supra , it appears that the file had “simply been ignored” and the plaintiff abdicated its responsibility to prosecute its action diligently.

[ 11 ] Although based on Khan and 1196158 Ontario Inc., supra , inexcusable delay can in itself be the basis for the dismissal of an action at a status hearing, for the sake of completeness, I will review the evidence with respect to prejudice.

[ 12 ] The evidence from the plaintiff is that it has preserved all of its documents relevant to the issues. Further, the defendant’s deponent Ms. Lapierre admitted on cross-examination that the defendant both reviewed and preserved those of its documents that were necessary to respond to the statement of claim and to prepare its statement of defence. However, at Ms. Lapierre’s cross-examination, her counsel refused to produce a list of the relevant documents in the defendant’s possession.

[ 13 ] I accept the plaintiff’s position that the documents in the defendant’s possession are relevant to the motion because Ms. Lapierre deposed in her affidavit that the defendant was prejudiced in its ability to secure evidence from its own internal records. Although defendant’s counsel argued at the hearing that she refused to produce the documents because counsel for the plaintiff conducted the cross-examination less than two weeks before the date of the hearing, the transcript does not reflect a refusal on that basis. Rather, at the cross-examination, counsel’s reason for the refusal was that the request was essentially for an affidavit of documents. Absent disclosure of documents, only the defendant can know what documents it does or does not have, and based on this refusal I draw the adverse inference that the defendant still has all necessary relevant documents and is not prejudiced with respect to the availability of documents.

[ 14 ] With respect to the availability of witnesses, the plaintiff’s evidence is that it intends to call as witnesses at trial Alam Suleman and Mike Roman, who were representatives of the defendant who are named in numerous documents referred to in the plaintiff’s affidavit of documents. Although the plaintiff’s deponent states that she has spoken to both of these witnesses by telephone and confirmed that they are available to testify and that their memories are intact, she does not say anything about what evidence these witnesses would give or how any such evidence relates to the issues raised in the pleadings. Accordingly, the plaintiff’s evidence is incomplete with respect to whether there is any prejudice to the defendant relating to the possible unavailability of viva voce evidence.

[ 15 ] In summary, the plaintiff has not provided an acceptable explanation for the litigation delay, which, based on the passage from 1196158 Ontario Inc. at paragraph [7] above, is sufficient reason to dismiss the action. In addition, however, the plaintiff has only partly met its onus to demonstrate that if the action proceeded, there would be no prejudice to the defendant. Therefore, the action must be and is hereby dismissed.

[ 16 ] At the conclusion of the hearing, I told counsel that I would accept written submissions on costs following the release of my decision. Given that the defendant has been successful in achieving a dismissal of the action, the defendant should have the costs of the action, including those of the hearing. If the parties cannot agree to costs, they may make written submissions, not exceeding three pages each, the defendant within 20 days and the plaintiff within 10 days thereafter.

Master Graham

DATE: October 12, 2012