SUPERIOR COURT OF JUSTICE – ONTARIO

Court File No.: CV-08-359867
Date: 2012/12/18

RE: Salman Habib v. Kloreta Mucaj and Leviq Tunaj

BEFORE: MASTER GRAHAM

Heard: December 15, 2011

Counsel:
K. Singh for the plaintiff
J. Stark for the defendants

ENDORSEMENT

(Plaintiff’s motion to set aside registrar’s dismissal order; this is a typed transcription of a handwritten endorsement originally released on December 16, 2011)

[ 1 ] Counsel for the plaintiff challenges the standing of the defending insurer to oppose the motion on the basis that the defendants have not yet been served with the statement of claim and there is no evidence that they have instructed the insurer to oppose the motion. The insurer has acknowledged that it insures the defendants and that it is a signatory to the undertaking regarding the defence of actions in Ontario. Further, service of the statement of claim is not a requirement for the insurer to respond to the motion, nor is the insurer required to obtain instructions from the insured for that purpose. The defendants’ insurer has the required standing and the preliminary objection fails.

[ 2 ] The law on the issue of when the court should exercise its discretion to set aside a registrar’s dismissal order is thoroughly summarized in Master MacLeod’s decision in K. Laboratories v. Highland Export Inc ., 2010 ONSC 4032 , [2010] O.J. No. 3116, at paragraph 4 . Accordingly, the court will consider the four factors applied in Reid v. Dow Corning , [2001] O.J. No. 2365 using the contextual approach mandated by the Court of Appeal in Scaini v. Prochnicki (2007), 2007 ONCA 63 , 85 O.R. (3rd) 179. The court must be mindful that its objective is not to punish a party for non-compliance but to determine whether it is just in all the circumstances to set aside the registrar’s order. All of the Reid factors are important but prejudice will be the key consideration. My consideration of the Reid factors is as follows:

Explanation of litigation delay

[ 3 ] The plaintiff attempts to explain the litigation delay on the basis that his counsel assigned the task of locating the defendants and serving them with the statement of claim first to a junior associate lawyer (July, 2008 to September, 2009) who did nothing, and then to an articled student (February, 20120 to September, 2010) who conducted searches to locate the defendants, none of which revealed new addresses. The student also contacted the defendants’ insurer and scheduled a motion for substituted service for which no material was ever prepared. Plaintiff’s counsel provided no specific evidence of what he did to monitor the associate’s work although he does depose that this individual led him to belive that “he was working on it”. Counsel blames the student for not providing him with an update on the status of the file but provides no evidence of what proactive steps he took to ensure that the student did the work that was assigned. Counsel did not become aware of the registrar’s dismissal order of October 26, 2010 until late June, 2011 when the file “came up for annual review”. The plaintiff himself was not aware of the dismissal order until August 22, 2011.

[ 4 ] Although the plaintiff has provided some explanation for the litigation delay, the explanation is less than satisfactory, given counsel’s limited efforts to ensure that the subordinates to whom he delegated the task of serving the statement of claim actually did so.

Inadvertence in missing the deadline

[ 5 ] The evidence of plaintiff’s counsel is that he never received the Notice of Action Dismissal, and was of the understanding that an order for substituted service had been obtained. Although this evidence was questioned by defendant’s counsel on the motion, it was never challenged on cross-examination and must be accepted. More importantly, there is no evidence on the motion that would cause me to conclude that the deadline was deliberately ignored. I conclude that the deadline in the Notice of Action Dismissal was missed as a result of the inadvertence of plaintiff’s counsel.

Moving promptly to set aside the order

[ 6 ] Despite the evidence that defendants’ counsel informed plaintiff’s counsel of the dismissal of the action by correspondence of December 14, 2010, plaintiff’s counsel denies receiving the letter and deposes that he did not learn of the dismissal until June 2011, and further that he never received the letter informing him of the dismissal. Once again, although I find it peculiar that plaintiff’s counsel would not have received the letter of December 14, 2010, which is correctly addressed to his firm, I must accept his unchallenged evidence that he did not receive it. The motion to set aside the dismissal was first scheduled on July 15, 2011 returnable September 9, 2011, and was adjourned to enable defendants’ counsel to file responding materials. On this basis, I am satisfied that the plaintiff did move promptly on learning of the dismissal of the action.

Prejudice or lack thereof

[ 7 ] The fact that the action was dismissed on October, 2010, more than two years following the expiry of the two year limitation period applicable to the subject motor vehicle accident, gives rise to a presumption of prejudice to the defendants which the plaintiff must rebut. (See K. Laboratories , supra , at paragraph 4d. and Wellwood v. OPP (2010), 2010 ONCA 386 , 102 O.R. (3rd) 555 (C.A.), at paragraph 60 . If the plaintiff meets the onus, then the defendants must lead evidence of actual prejudice.

[ 8 ] The evidence provided by the plaintiff is that Mr. McDonald, the operator of the motor vehicle that was struck by the defendants’ vehicle before it struck the plaintiff, who would be an independent witness on the issue of liability, is available to provide evidence and has a clear recollection of the accident. Further, the plaintiff has provided the clinical notes and records of this family physician, Dr. Mughal, which commence in 1991 and include records of visits both before and after the accident, the hospital records for the attendance following the accident, the physiotherapy records of Mr. Johal, and the accident benefits file, including insurer’s examinations.

[ 9 ] Plaintiff’s counsel has also recently requested the plaintiff’s OHIP summary, income tax returns and employment records. The plaintiff still has his academic records, although he has not produced them.

[ 10 ] With respect to the plaintiff’s OHIP summary, counsel for the defendants submits that the defendants would be prejudiced by the fact that the summary will not be available for as many years pre-accident as would be available if it had been requested in a more timely manner. Counsel assumes that the summary will be available for seven years, which would provide information from November 2004, approximately one year and nine months before the accident. Although pre-accident information would generally be provided commencing at least three years pre-accident, the fact is that the family physician’s records are available commencing many years before the accident which would mitigate any prejudice arising out of an inability to get earlier OHIP records. It is unclear what income tax records or employment records will be available. However, if records are not available, it will be to the prejudice of the plaintiff, who will have deprived himself of the ability to rely on evidence of pre-accident employment and income.

[ 11 ] I conclude that the plaintiff has met the onus upon him to rebut the presumption of prejudice to defendants arising out of the passage of time subsequent to the dismissal of the action. As the defendants have not provided any evidence of actual prejudice, I conclude that there is no prejudice to the defendants that would preclude the setting aside of the dismissal order.

[ 12 ] What the consideration of the Reid factors leaves the court with is a weak explanation for the litigation delay in the face of an absence of prejudice to the defendants. Although the delay is undesirable, it arose from the same sort of “sloppiness” described by Laskin, J.A. in Finlay v. Van Passen , 2010 ONCA 204 , [2010] O.J. No. 1097 (C.A.) at paragraph 29 ; there was no intentional delay on the part of the solicitor and certainly not on the part of the plaintiff himself. In this case, the absence of prejudice, described by Master MacLeod in Key Laboratories , supra as “the key consideration”, trumps the unintentional delay on the part of the plaintiffs’ solicitor such that the registrar’s dismissal order shall be and is hereby set aside.

[ 13 ] The plaintiff also seeks an order extending the time for service of the statement of claim, and either dispensing with service or for substituted service on the insurer. As the most recent address information for the defendants is in paragraphs 19 and 20 of Mr. Misir’s affidavit sworn August 29, 2011, the court will make no order for substituted service or dispensing with service at this time. There is no prejudice to the defendants arising from the delay in service on the same basis that there is no prejudice arising from the delay in relation to the dismissal order.

[ 14 ] Accordingly, the time for service of the statement of claim is hereby extended to March 31, 2012. If a further motion for substituted service or for an order dispensing is brought on new evidence, it shall be brought before that date and if necessary, a further extension may be requested.

Costs

[ 15 ] The circumstances of this case are similar to those in Bains v. Morrow , [2011] O.J. No. 4764 (S.C.J.) in which the court set aside the dismissal order despite finding that the delay had not been satisfactorily explained, and notwithstanding the moving party’s success in having the order set aside, ordered costs against that party. Master Hawkins’s decision in this regard was upheld on appeal on the basis that there was some merit to the responding party’s position. In the case before me, as in Mollicone v. Caledon , 2011 ONSC 883 , (cited in Bains at paragraph 65), “the [defendants] had every right to oppose the plaintiff’s motion to reinstate [his] action, especially given the delays that were plain on the face of the record.” Similarly, I am of the view that the plaintiff must bear the costs of this motion.

[ 16 ] The costs of $18,414.92 set out in the defendants’ costs outline are grossly excessive for a motion of this nature which was booked and argued as a Regular Motion of no more than two hours. The plaintiff’s costs outline sets out costs of $3,351.27 but is based on rates for a lawyer considerably junior to defendants’ counsel. A fair and reasonable amount for the costs of the motion, which would be within the plaintiff’s reasonable expectations, is $5,000.00. The plaintiff shall pay the costs of the motion fixed at $5000.00, payable within 60 days.

Master Graham

DATE: December 16, 2011