Ontario-Superior Court of Justice

Fly Agency Inc. v. Elm Developments Corporation, et al.

CV-12-445091
Motion Heard in Toronto: March 13/13

In attendance:

R. Macdonald, for plaintiff 416-869-0369, f.

A. Huggins, for defendant Norstar 416-204-2888, f.

By the Court:

This action was dismissed as abandoned, by the registrar, on September 21/12. I accept that the action was not abandoned and, for the reasons that follow, am setting aside the Registrar’s Order--on terms.

This action was commenced by way of notice of action on January 27/12. On or about August 29/12, all of the defendants--save for Norstar Acquisition Corporation (“Norstar”)--served a notice of intent to defend on the plaintiff. On or about September 26/12, the same defendants (the “Elm defendants”) served their statement of defence. When they went to file the statement of defence, they learned that there were errors in the title of proceedings: the title of proceedings did not match the title of proceedings on the notice of action.

On October 1/12, a revised statement of defence was served by the Elm defendants (with the understanding that the title of proceedings would match that of the notice of action but that the plaintiff would discontinue as against some of the Elm defendants). When they tried to file their pleading this time, the Elm defendants were unable to do so because, they were told by the court, the action had been dismissed as abandoned on September 21/12.

The evidence before me is that plaintiff’s counsel never received notice from the court that the action would be dismissed; and, neither did he receive (from the court) a copy of the Order that the action had been dismissed. Then too, and as counsel for the plaintiff points out, with the Elm defendants having served their notice of intend to defend in August/12, “…there was no concern on [his] part regarding an impending dismissal”. What plaintiff’s counsel did not know (and, I accept, it was reasonable that he did not know this) was that the notice of intent to defend, though served, had not been filed.

The Elm defendants are agreeable to the action being reinstated. Norstar, who has yet to respond to the statement of claim (and claims it was never properly served with the claim), is opposed to the action being reinstated as against it. It says that it would not be just to set aside the dismissal Order as it relates to Norstar because the claims made herein are identical to those in a 2010 action in which judgment has already been obtained. Norstar argues that this action “…is, at best, wholly redundant and is precluded by the doctrine of cause of action estoppel and the principles of merger and election.” Norstar says that this action constitutes an abuse of process.

Norstar raises serious issues with respect to the propriety of the claims asserted herein: issues which I am not foreclosing; issues which, I confess, give me pause; and, issues which Norstar ought to be at liberty to have determined. But however persuasive the submissions made by Norstar on these issues, they are not for me to decide on this motion.

What is for me to decide is whether the test for setting aside the Registrar’s dismissal Order has been met and, if so, what terms, if any, ought to be imposed by me so that justice is done. In considering these issues, I have had regard to the helpful summary of the principles to be applied set out in Taheem v. Palmer, 2012 ONSC 2914 (at paragraphs 19-20), and highlighted at paragraphs 30-31 of the plaintiff’s factum.

Counsel for the plaintiff points out, fairly, that had he received the requisite notice from the court that the action would be dismissed, he could have taken steps to ensure that the action not be dismissed, including filing with the court the Elm defendants’ notice of intent to defend. I accept that there was only negligible delay, caused by a misstep that could easily have been cured.

I accept too that the deadline imposed by the court was not “missed” in the traditional sense, in that, with no notice from the court and no indication from counsel for the Elm defendants that the notice of intent to defence had not been filed at or about the time that it was served on counsel for the plaintiff, the plaintiff was lulled into a false sense of security.

The evidence before me is that the plaintiff learned that the action had been dismissed in mid-October/12, and first saw copies of the court’s notice and the Order dismissing the action on October 22/12. This motion was first made returnable in late November/12 and was adjourned for a hearing to March 13/13. I accept that the motion was brought promptly.

As for the issue of prejudice, the evidence before me is that all documents have been preserved; there is no suggestion or evidence that prospective witnesses are no longer available; and, this action was commenced and dismissed within the relevant limitation period. While I accept that there are procedural defects in respect of the inconsistencies between the notice of action and statement of claim, I do not accept that it follows that the notice of action is a nullity. The circumstances of this action differ than those in Young v. Progressive Insurance, 2002 CarswellOnt 746 (S.C.J.) in that in Young, unlike here (and in respect of Norstar), there was “no claim endorsed…and no mention of an event which might give rise to a claim”.

The question however remains as to whether this action is duplicative and, as such, an abuse of process. It may be; but, legal validity is within the jurisdiction of a judge, and not a master, to decide. That being so and while I am content to and do restore the action, I am doing so on terms.

Acknowledging that there is a dispute between the plaintiff and Norstar as to whether Norstar has been served, properly, I am validating service on Norstar effective March 13/13 (i.e. the return date of this motion). I am building in time for Norstar to bring a motion to strike the statement of claim or to defend the action, as it may prefer. Provided that Norstar books a motion by the 5th of April/13, the plaintiff shall take no steps to note it in default. If by April 5th no motion is booked, the plaintiff shall accord Norstar at least until April 22/13 to deliver its statement of defence.

Failing agreement as to the costs of this motion, I may be spoken to.

March 15/13 _________________________