SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-09-375167
MOTION HEARD: DECEMBER 18, 2012

RE: Giovanna Alessandro-Cristiano

v.

Gregorina Alessandro

BEFORE: MASTER R.A. MUIR

COUNSEL: William G. Scott, counsel to the lawyer for the plaintiff Megan W. Sanford for the defendant

REASONS FOR DECISION

[ 1 ] The plaintiff 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 October 24, 2011 dismissing this action for delay. This action was dismissed by the registrar due to the failure on the part of the plaintiff to have this action set down for trial within the time limits prescribed by Rule 48.14. The defendant opposes the granting of the relief requested on this motion.

NATURE AND PROGRESS OF THE ACTION

[ 2 ] This action involves a dispute between a daughter and her mother. It concerns a mortgage that was previously registered against title to a property located at 23 Eden Valley Drive, Toronto (the “Property”). On September 30, 1988, the father of the plaintiff Joe Alessandro (“Joe”), who was also the husband of the defendant, purchased the Property, in trust for the plaintiff. On September 18, 1996, Joe transferred the Property to the plaintiff as beneficial owner for no consideration. At the time of the transfer the Property was encumbered by a mortgage in favour of Royal Bank of Canada (the “RBC Mortgage”). It appears that in June, 1997, the defendant paid the amounts owing on the RBC Mortgage and took an assignment of that mortgage. The defendant later agreed to postpone her mortgage in favour of another mortgage obtained by the plaintiff. This further mortgage was given by Home Savings and Loan Corporation (the “Home Savings Mortgage”).

[ 3 ] In December 2008, the plaintiff issued a notice of application seeking an order that the defendant’s mortgage was null and void. The defendant initially responded to that application but ultimately she agreed that her mortgage would have to be discharged as the limitation period to enforce her mortgage had expired. A discharge was registered against title to the Property on February 4, 2009. On February 23, 2009, the application went before Justice Strathy, at which time he marked the matter as settled.

[ 4 ] This action was then commenced by the plaintiff on March 25, 2009. In this action, the plaintiff seeks damages from her mother in an amount equal to the balance owing on the Home Savings Mortgage at the time the statement of claim was issued. The plaintiff alleges that the Home Savings Mortgage was registered at the request of the defendant and that the defendant received the benefit of the funds advanced by Home Savings. The plaintiff alleges that the Home Savings Mortgage was needed by the defendant and Joe for business purposes and the defendant promised that it would be fully repaid within one year.

[ 5 ] The defendant denies the plaintiff’s allegations. She alleges that the Home Savings Mortgage was really taken out in order to facilitate a settlement of the RBC Mortgage, for the benefit of the plaintiff.

[ 6 ] It appears that the statement of claim in this action was served shortly after it was issued. The defendant retained McLauchlin & Associates as her lawyers and a notice of intent to defend was filed on July 7, 2009. A statement of defence was filed on August 17, 2009.

[ 7 ] Shortly after the notice of intent to defend was served, the plaintiff decided to bring a motion for an order removing McLauchlin & Associates as the defendant’s lawyers of record (the “Removal Motion”). At the same time, the plaintiff also sought an order granting her leave to issue a certificate of pending litigation (the “CPL Motion”) over certain property allegedly owned by her mother. These motions were initially made returnable on July 16, 2009. They were adjourned on a number of occasions. On October 5, 2009, Master Sproat made an order that the Removal Motion was to proceed before the CPL Motion. The Removal Motion was heard by Master McAfee over the course of two days, December 8, 2009 and April 21, 2010. On August 30, 2010, Master McAfee released her reasons for decision, dismissing the Removal Motion.

[ 8 ] While Master McAfee’s decision was pending, the plaintiff changed lawyers. On August 5, 2010, the plaintiff’s current lawyer, Joseph Maggisano, served a notice of change of lawyers on behalf of the plaintiff. On September 18, 2010, Mr. Maggisano wrote to the defendant’s lawyer proposing that counsel meet to discuss the possibility of settlement. Mr. Maggisano also indicated that if settlement was not possible, it would be necessary to make certain amendments to the statement of claim and proceed with documentary and oral discovery.

[ 9 ] It appears that rather than make amendments to the existing statement of claim, Mr. Maggisano chose instead to issue a further claim which included much of the same relief found in this action. That claim was initiated by way of a notice of action issued December 10, 2010 and a statement of claim dated January 7, 2011 (the “Second Action”). It appears that very little was done to advance the Second Action and it was ultimately dismissed by the registrar as abandoned on August 8, 2011.

[ 10 ] While all of this was happening, Mr. Maggisano was undergoing treatment for a serious medical condition. Those treatments took place between October and December 2010. Mr. Maggisano’s evidence is that he developed further complications in the summer of 2011, requiring a number of surgical procedures. He has deposed that during this time period he lacked sufficient energy and stamina to fully attend to all of his files.

[ 11 ] On July 11, 2011, the court issued a status notice. Mr. Maggisano’s evidence is that he did not receive a copy of the status notice at the time. On October 24, 2011, the registrar dismissed this action for delay.

[ 12 ] Mr Maggisano did receive a copy of the dismissal order from the court. Upon receipt of the order he immediately contacted the defendant’s lawyer and requested the defendant’s consent to an order setting aside the dismissal. On November 29, 2011, the defendant’s lawyer advised Mr. Maggisano that his client would not consent to an order setting aside the dismissal.

[ 13 ] This motion was first booked for February 9, 2012. A few days before the motion was to be heard, Mr. Maggisano advised that the motion date would have to be changed. No explanation has been provided for why the date had to be changed. This motion was then rescheduled to be heard on May 4, 2012. It was then adjourned once again due to the fact that Mr. Maggisano had reported this matter to his insurer. The plaintiff’s notice of motion and motion record were not served until July 20, 2012, after I had established a timetable for this motion at a case conference on July 5, 2012. This motion was ultimately heard by me on December 18, 2012.

APPLICABLE LAW AND ANALYSIS

[ 14 ] The law relating to motions of this nature is summarized in my decision in 744142 Ontario Ltd. v. Ticknor Estate , 2012 ONSC 1640 (Master). At paragraph 32 of that decision I set out the applicable principles as follows: [1]

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]

[ 15 ] I am also mindful of the observations of the Court of Appeal in its decision in Hamilton (City) . At paragraphs 20-22 of that decision Justice Laskin notes as follows:

20 Two principles of our civil justice system and our Rules of Civil Procedure come into play. The first, reflected in rule 1.04(1) , is that civil actions should be decided on their merits. As the motion judge said at para. 31 of his reasons: "the court's bias is in favour of deciding matters on their merits rather than terminating rights on procedural grounds."

21 The second principle, reflected in the various time limits mandated by our rules, and indeed, as noted by the motion judge, in the provision for a status notice and hearing, is that civil actions should be resolved within a reasonable timeframe. In Marché , at para. 25, my colleague Sharpe J.A. wrote about the strong public interest in promoting the timely resolution of disputes. Both the litigants and the public have an interest in timely justice. Their confidence in the administration of our civil justice system depends on it.

22 On motions to set aside an order dismissing an action for delay, invariably there is tension between these two principles.

[ 16 ] Finally, I note that the Court of Appeal has recently emphasized the principle that these motions involve an exercise of the court’s discretion. The court must weigh all relevant considerations to determine the result that is just in the circumstances. See Habib v. Mucaj , 2012 ONCA 880 at paragraph 6 .

[ 17 ] These are the factors and principles I have considered and applied in determining the issues on this motion. My analysis leads me to the conclusion that it is in the interest of justice that the dismissal order of the registrar be set aside.

MOTION BROUGHT PROMPTLY

[ 18 ] Rule 37.14(1) requires that motions of this nature be brought by way of a notice of motion served forthwith after the order in question comes to the attention of the person affected. The applicable authorities also require these motions to be brought promptly. As of November 29, 2011, the plaintiff knew that the defendant would not consent to an order setting aside the dismissal order. In my view, it was incumbent on the plaintiff to serve her motion material as soon as possible after that date. A date for this motion was booked for February 2012 but the plaintiff did not follow up with service of a notice of motion and supporting affidavit and the date was lost. No explanation for not doing so has been provided.

[ 19 ] It appears that the plaintiff’s lawyer then waited until April or May 2012 before he reported this matter to his insurer. This resulted in even more delay. Ultimately, the notice of motion required by Rule 37.14(1) was not served until July 20, 2012, nearly nine months after the dismissal order was received by the plaintiff’s lawyer and eight months after the plaintiff knew that this motion would not proceed on a consent basis. Given these facts, it is my view that this motion was not brought promptly.

[ 20 ] The plaintiff has not satisfied this element of the Reid test.

LITIGATION DELAY

[ 21 ] I am, however, satisfied that the plaintiff has satisfactorily explained the delay encountered with this action to date. The statement of claim was served promptly and certainly within the time limits prescribed by the Rules . At the same time, the plaintiff was pursuing her motion to have the defendant’s lawyers removed from the record. The Removal Motion took much longer to be argued and decided than anyone could have reasonably anticipated. However, I can see nothing in the evidence that would allow me to conclude that the delay encountered with the Removal Motion was primarily the responsibility of the plaintiff. It may be that in hindsight the Removal Motion was ill-advised but there is certainly no evidence to suggest that the motion was brought by the plaintiff for tactical reasons or for some other improper purpose.

[ 22 ] Shortly after Master McAfee released her reasons for decision in August 2010, Mr. Maggisano contacted the defendant’s lawyer with a view to moving this action forward. It is certainly clear from Mr. Maggisano’s letter of September 18, 2010, that the plaintiff fully intended to pursue her claim. This conclusion is reinforced by the fact that the plaintiff instructed Mr. Maggisano to commence the Second Action in December 2010.

[ 23 ] At the same time, Mr. Maggisano was dealing with his health issues. His unchallenged evidence is that those serious health issues contributed to the delay encountered with this action. He was simply unable to devote his full attention and energy to his practice between the fall of 2010 and the summer of 2011. I also note that while no concrete steps were taken to advance this action during that time period, Mr. Maggisano did not ignore the file completely. He did prepare and issue the Second Action. There is evidence that he spoke to the defendant’s lawyer in the early summer of 2011. The defendant’s own evidence makes reference to a telephone call on July 18, 2011. Ironically, it also appears that Mr. Maggisano contacted the defendant’s lawyer again on October 24, 2011, the very day the registrar was dismissing this action.

[ 24 ] I have therefore concluded that the plaintiff has adequately explained the delay encountered with this action to date. The delay can be attributed to the extended time required to deal with the Removal Motion and Mr. Maggisano’s health issues. In my view, the periods of delay the defendant points to were relatively short-lived and cannot in any way be described inordinate or egregious. The plaintiff has given direct evidence that she always intended to pursue her claim. There is no other evidence from which the court could reasonably infer an intention to abandon this claim.

[ 25 ] I am therefore satisfied that this element of the Reid test has been met by the plaintiff.

INADVERTENCE

[ 26 ] I am also satisfied that the plaintiff has established that her failure to set this action down for trial in a timely manner was a result of her lawyer’s inadvertence and not an intentional decision to abandon the action. As indicated above, the plaintiff has provided direct evidence that it was always her intention to proceed with this litigation. Mr. Maggisano’s unchallenged evidence is that he did not receive the status notice from the court when it was issued in July 2011 and that he inadvertently overlooked the set down deadline prescribed by Rule 48.14. In my view, no other explanation makes sense. In the summer and fall of 2011, Mr. Maggisano was making at least some effort to contact the defendant’s lawyer, despite his health issues. He even contacted the defendant’s lawyer on the very day the action was dismissed. There is no indication in the evidence that Mr. Maggisano knew of the pending dismissal order or that he made a deliberate decision to ignore the deadline. The court should be concerned primarily with the rights of the litigants and not with the conduct of their counsel, unless that conduct can be said to be deliberate. See Habib at paragraph 7 .

[ 27 ] I am therefore satisfied that the failure to set this action down for trial in a timely manner was inadvertent and that this element of the Reid test has also been met.

PREJUDICE

[ 28 ] I am satisfied that the plaintiff has met the onus placed upon her to rebut the presumption of prejudice. Where a limitation period has passed, as it appears to have here, 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 at paragraph 60 .

[ 29 ] 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 . I have concluded that the plaintiff has done so.

[ 30 ] In my view, the presumption of prejudice, on the facts of this action, is not particularly strong. It is true that some of the events giving rise to this action took place many years ago. However, in my view, the issues in this action will turn largely on an examination of relevant documents. It appears that most, if not all, of the transactions and agreements in questions were formalized in writing with the assistance of lawyers. The records of those transactions and agreements appear to have been preserved. Indeed, many of those records were reproduced in the evidence filed on this motion and on the earlier application. Evidence remains available from that earlier application and still more evidence was prepared and filed in connection with the Removal Motion. I note that the defendant’s lawyer gave evidence on the Removal Motion that the defendant had provided him with her information and documentation regarding this litigation. The two main witnesses are the plaintiff and the defendant. Both are available to give evidence.

[ 31 ] The defendant has argued, however, that she has suffered actual prejudice because Joe passed away on November 22, 2009. However, it must be remembered that the prejudice relevant to motions of this nature must arise from a plaintiff’s delay. See Amaprop Canada Inc. v. Connon , 2011 ONSC 2028 (Master) at paragraph 14 . Joe passed away long before any alleged delay on the part of the plaintiff. This action was only eight months old at the time. Joe is a non-party. He would not have been examined for discovery. The defendant would have been in the same position she is today, with or without the plaintiff’s delay.

[ 32 ] Finally, the defendant argues that she has been prejudiced by the fact that the Property has now been sold by the plaintiff and the Home Savings Mortgage has been discharged. I do not see how this fact changes anything. The alleged damages the plaintiff is seeking can easily be calculated despite the fact that the Home Savings Mortgage has been discharged. It would be a simple accounting exercise. In fact, it may make it easier. I fail to understand how any of the underlying issues in this action will be affected by the sale of the Property or the discharge of the Home Savings Mortgage.

[ 33 ] I am therefore satisfied that the plaintiff has also met this element of the Reid test.

OTHER FACTORS – THE MERITS OF THE ACTION

[ 34 ] The defendant argued in her factum that the merits of the plaintiff’s claim may be an appropriate consideration on this motion. In my view, on a motion of this nature, the merits of the action are relevant only in the clearest of cases and where the action is so clearly devoid of merit that it has no chance of success. See Hakim Optical Laboratory Ltd. v. Phillips , [2009] O.J. No. 486 (SCJ – Master) at paragraph 128 and Tribar Industries Inc. v. KPMG LLP , 2011 ONSC 1699 (Master) at paragraphs 34-39 . I am unable to conclude, on the evidence before me, that the plaintiff’s claim has no chance of success. The question of whether the Home Savings Mortgage was taken out to cover the business debts of the defendant and Joe or whether it was part of a settlement of the RBC Mortgage is a question to be determined by a full examination of all of the relevant documents and a consideration of the oral evidence of the parties. It is certainly not a matter that can or should be resolved on this motion.

CONCLUSION

[ 35 ] When deciding motions of this nature, the court is to adopt a contextual approach in which it weighs all relevant considerations to determine the result that is just in the circumstances. The court must, of course, balance the strong public and private interest in promoting the timely resolution of disputes with the entitlement of a plaintiff to have her claim decided on its merits.

[ 36 ] When applying the test set out above, 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, the plaintiff has satisfied most of the relevant factors, including the key factor of prejudice. In addition, the delay to date has been satisfactorily explained and, in any event, cannot be described as inordinate or excessive. Finally, the set down deadline was missed due to inadvertence. Despite the fact that I have found that this motion was not brought in a timely manner, I am nevertheless satisfied on a contextual analysis that it is just that the order of the registrar of October 24, 2011 be set aside.

COSTS

[ 37 ] The plaintiff does not seek her costs of this motion. There is some authority for the proposition that an unsuccessful defendant may be entitled to her costs on a motion such as this. See Evans v. Revenue Properties Co. , 2011 ONSC 2132 (Master) at paragraph 31 and Rule 57.01(2). However, I do not view this motion as being one of those cases. The plaintiff has received an indulgence (although not a significant one in my view) and it took too long for this motion to be scheduled. On the other hand, however, the delay to date has been well explained, the dismissal was a result of inadvertence and the defendant will suffer no prejudice. In these circumstances, it is my view that it is fair and reasonable that there be no order with respect to the costs of this motion.

ORDER

[ 38 ] I therefore order as follows:

(a) the dismissal order of the registrar dated October 24, 2011 is hereby set aside;

(b) the parties shall serve their affidavits of documents by February 28, 2013;

(c) examinations for discovery shall be completed by July 31, 2013;

(d) discovery motions shall be heard by October 31, 2013;

(e) mediation shall take place by November 29, 2013;

(f) this action shall be set down for trial by December 20, 2013, failing which it shall be dismissed by the registrar without further notice; and,

(g) there shall be no order with respect to the costs of this motion.

Master R.A. Muir

DATE: December 20, 2012

[1] The applicable principles are derived from seven decisions of the Court of Appeal for Ontario released over the last several years: Scaini v. Prochnicki , 2007 ONCA 63 , [2007] O.J. No. 299 (C.A.); Marché D’Alimentation Denis Thériault Lteé v. Giant Tiger Stores Ltd. , 2007 ONCA 695 , [2007] O.J. No. 3872 (C.A.); Finlay v. Van Paassen , 2010 ONCA 204 , [2010] O.J. No. 1097 (C.A.); Wellwood v. Ontario (Provincial Police) , 2010 ONCA 386 , [2010] O.J. No. 2225 (C.A.); Hamilton (City) v. Svedas Koyanagi Architects Inc. , 2010 ONCA 887 , [2010] O.J. No. 5572 (C.A.); Machacek v. Ontario Cycling Assn. , 2011 ONCA 410 , [2011] O.J. No. 2379 (C.A.); Aguas v. Rivard Estate , 2011 ONCA 494 , [2011] O.J. No. 3108 (C.A.).