SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: 29646/12

DATE: 2013-03-28

RE: Mark Waters Plaintiff

AND:

Gerry Carter and State Farm Insurance Company Defendants

BEFORE: The Honourable Mr. Justice R. Nightingale

COUNSEL:
William Scott, Counsel, for the Plaintiff

Arthur Camporese, Counsel, for the Defendant Gerry Cortez

HEARD: March 20, 2013

ENDORSEMENT

OVERVIEW

[1] In this action, the Plaintiff sued the Defendants for damages for personal injuries arising out of a motor vehicle accident on August 17, 2009. The Statement of Claim was issued on August 22, 2011 and was served on the Defendant State Farm on September 6, 2011 but not served on the Defendant Gerry Carter (whose last name correctly is Cortez) although service was attempted in September 2011.

[2] Neither defendant had delivered a Statement of Defence and the Registrar issued a Notice that Action will be Dismissed as Abandoned under Rule 48.15. As no defence had been filed, the Registrar issued an Order Dismissing Action As Abandoned on April 16, 2012.

[3] The Plaintiff’s motion under Rule 37.14(2) is for an order setting aside that Order. It also asks for an order amending the Statement of Claim to name Gerry Cortez as the Defendant in place of the improperly named Defendant Gerry Carter as well as an order extending the time for service of the Statement of Claim on the Defendant Gerry Cortez to January 26, 2013, the date he was actually served.

[4] For the reasons that follow, as a result of balancing all the material considerations including the absence of prejudice to the Defendant, the Plaintiff’s motion for all the relief sought is granted.

FACTUAL BACKROUND

[5] The Plaintiff was the operator of a motor vehicle owned by Judy Collins that was involved in a motor vehicle accident on August 17, 2009 with the motor vehicle owned and operated by Gerry Cortez and insured by Gore Mutual Insurance Company.

[6] Although liability for the accident has not been admitted, the facts are clear that the Plaintiff’s vehicle was stopped behind the Cortez motor vehicle at a stop sign when the Cortez vehicle backed up into the Plaintiff’s vehicle.

[7] The accident itself was initially reported to Gore Mutual by the insurance broker on August 19, 2009 but no injuries or property damage were initially reported and the file was closed on August 20, 2009.

[8] On August 22, 2011, the Statement of Claim in this action was issued by Mr. Ferro against Gerry Carter and State Farm Insurance Company, the Plaintiff’s uninsured and underinsured carrier. The owner and driver of the Defendant motor vehicle was named as a Defendant in this action as Gerry Carter instead of Gerry Cortez due to a misreading of the police accident report.

[9] The Statement of Claim was served on State Farm on September 6, 2011.

[10] On September 9, 2011, Judy Collins, who was a passenger in the Plaintiff motor vehicle, also through Mr. Ferro issued a separate Statement of Claim in which Cortez was properly named as the Defendant owner and operator of the other motor vehicle involved in the accident.

[11] An attempt was made by Mr. Ferro’s office to serve the Statement of Claim in this action on the Defendant Gerry Carter at the address for Gerry Cortez shown in the police report. The process server confirmed that after making several attempts at serving the Plaintiff’s Statement of Claim on September 22, 2011, a male individual was present at the address and advised him that no individual by the name of Gerry Carter resided there. Rather his name was Gerry Cortez and he provided his driver’s license as evidence to confirm that statement.

[12] On October 13, 2011, State Farm sent the Statement of Claim in this action to the defendant Cortez’s motor vehicle liability insurer, Gore Mutual.

[13] Gore Mutual then spoke to the Defendant Gerry Cortez by telephone on October 19, 2011 who advised Gore Mutual that a process server had come to his house but did not leave the Statement of Claim with them as he was not “Gerry Carter”.

[14] On October 26, 2011, State Farm wrote to Mr. Ferro’s office acknowledging receipt of the Statement of Claim and advising that the Defendant Cortez was insured with Gore Mutual and requested a Notice of Discontinuance against State Farm.

[15] Mr. Camporese was retained by Gore Mutual to defend both this action and the Judy Collins action. The Defendant’s lawyer received the Statement of Claim in this action on November 22, 2011 and the Statement of Claim in the Collins action on December 12, 2011.

[16] By letter dated November 23, 2011, Mr. Camporese wrote to Mr. Ferro confirming that he was retained by Gore Mutual to represent the interests of its insured Gerry Cortez asking for Mr. Ferro’s indulgence so that he could review the file and serve pleadings if required. He also asked for the Affidavit of Service of the Statement of Claim and an index of the Plaintiff’s medical and accident benefit briefs.

[17] Mr. Ferro responded by letter December 5, 2011 advising he would provide the affidavit of service at the earliest opportunity and requesting confirmation of the Defendant’s policy limits.

[18] On December 9, Mr. Ferro wrote to Mr. Camporese enclosing a draft Notice of Discontinuance and a consent for the discontinuance of this action against State Farm.

[19] On December 22, 2011, Mr. Camporese wrote to Mr. Ferro suggesting that he had improperly named the defendant as Genny [sic Gerry] Carter as opposed to Genny [sic Gerry] Cortez. He advised he was therefore unable to respond to Mr. Ferro’s letter of December 9, 2011 or provide a Statement of Defence until the pleading was amended and again requested a copy of the affidavit of service.

[20] On or about January 5, 2012, Mr. Ferro received the affidavit of attempted service of the Statement of Claim on Gerry Carter.

[21] On February 7, 2012, Mr. Camporese wrote to Mr. Ferro requesting medical documentation, accident benefits files, financial documentation and the police file regarding both this action and the Collins action.

[22] On February 21, 2012, the Registrar issued a Notice That Action Will Be Dismissed as no Statement of Defence had been filed. Mr. Camporese had not delivered a Statement of Defence in this action because Cortez had not been served with a Statement of Claim and he was not properly named.

[23] On March 2 and 16th 2012, Mr. Ferro wrote to Gore Mutual inadvertently instead of to Mr. Camporese requesting a Statement of Defence. Neither Gore Mutual nor the Defendant’s lawyer responded to these letters.

[24] On March 9, 2012, Mr. Ferro wrote to State Farm requesting the Plaintiff’s accident benefits file.

[25] On April 16, 2012, the Registrar issued an Order Dismissing Action As Abandoned.

[26] The evidence before me was that Mr. Ferro did not have sufficient time to permit him to proceed with a motion to amend the Statement of Claim and extend the time for service of it upon the Defendant Cortez prior to the dismissal of the action by the Registrar.

[27] On May 2, 2012, Mr. Camporese wrote to Mr. Ferro requesting a copy of the affidavit of service for the Statement of Claim in this action. He noted again that the Defendant Cortez had been wrongly named and that he could not complete his pleadings and serve a defence until such time as the pleading had been amended.

[28] On May 10, 2012 Mr. Ferro wrote to the Defendant’s lawyer enclosing the Plaintiff’s Affidavit of Documents and on May 15, 2012 enclosing a copy of the affidavit of attempted service upon the Defendant Cortez. He confirmed that his office was drafting a motion to amend the pleading and to set aside the Order Dismissing Action As Abandoned dated April 16, 2012. He requested the Defendant lawyer’s position regarding the motion to amend the Statement of Claim and to set aside the Order dismissing the action.

[29] On May 22, 2012 Mr. Camporese wrote to Mr. Ferro confirming he would advise him of his position with respect to the motion to amend the Statement of Claim and to set aside the dismissal of the action upon receipt of the motion materials.

[30] Mr. Ferro prepared this motion record likely in late June 2012 and served it on Mr. Camporese on July 3, 2012.

[31] Mr. Cortez was personally served with the Statement of Claim in this action on January 26, 2013.

[32] The Plaintiff served a Supplementary Notice of Motion returnable at the hearing of this motion to amend the Statement of Claim by pleading that this action had been brought within two years of when it was discoverable pursuant to ss. 4 and 5 of the Limitations Act 2002 and that the Plaintiff’s injuries met the requirements of s. 267 (5) of the Insurance Act and ss. 4 .1 and 4.3 of O. Reg. 461/96.

[33] The Defendant State Farm is not taking any position on this motion and has agreed to the action being discontinued against it.

[34] The Plaintiff Collins in the other action has been examined by Mr. Camporese’s office recently. The Defendant Mr. Cortez has not been examined yet in that action wherein liability has not been formally admitted. However, the Defendant’s lawyer on the Collins examination for discovery confirmed the information he had from Mr. Cortez that Mr. Cortez admitted his vehicle was stopped at the stop sign and then he decided to back up striking the Collins motor vehicle which had been stopped behind it.

THE LAW

[35] The Court in Reid v. Dow Corning Corp. [2001] O.J.No.2365 established four main factors that should generally be considered when dealing with motions to set aside administrative dismissal Orders by the Registrar as follows:

a) explanation for delay which led to the dismissal notice and order in the first place;

b) inadvertence in having missed the deadline;

c) promptness in bringing the motion to set aside the dismissal;

d) no prejudice to the defendant if the dismissal order is set aside.

[36] The Ontario Court of Appeal in Scaini v. Prochnicki (2007) 2007 ONCA 63, 85 O. R. (3d) 179 confirmed that the Court’s approach should not be restricted to a rigid application of the test involving these four elements but rather that a contextual approach is required such that all relevant factors are considered after balancing the interests of both parties with the ultimate goal of arriving at a just result in the circumstances of the particular case.

[37] Accordingly, the Plaintiff is not required to satisfy all four factors in order to be successful in his motion but the Court also recognizes that there is a strong public interest in promoting the timely resolution of disputes. The party who commences the proceeding bears the responsibility for its progress and accordingly generally suffers the consequences of a dilatory regard for the pace of litigation. Marche D’aimentation Denis Theriault Ltee v. Giant Tiger Stores Ltd. (2007) 2007 ONCA 695, 87 O.R. (3d) 660; Wellwood v. OPP et al, 2010 ONCA 386.

[38] In Wellwood, supra, the Court of Appeal confirmed that prejudice would be presumed where the action, although started within the limitation period, was dismissed after the limitation period had expired. The Defendant need not prove prejudice when the limitation period had passed and the onus is on the Plaintiff to rebut the presumption. However, the force of the presumption will depend on the length of time which has passed after the expiration of the limitation period as well as the nature of the action.

[39] The Court should not engage in speculation concerning any potential rights of action of the Plaintiff against a lawyer or former lawyer but should focus on the rights of the parties rather than on the conduct of his Counsel when weighing the relevant factors. Finlay v. Vanpaassen, 2010 ONCA 204.

ANALYSIS

[40] All of the relevant factors to be considered in a contextual approach in this particular case are as follows:

a) Explanation of the Litigation Delay.

[41] There is no inordinate delay relatively speaking in this litigation. The Statement of Claim was issued on August 22, 2011 and service was attempted in December 2011 with a demand then made by the Plaintiff for the Statement of Defence of the Defendant Cortez. The Plaintiff did provide the Defendant with his Affidavit of Documents in May 2012 and the evidence of the Plaintiff was that he never intended for this action to be discontinued or abandoned and had never given instructions to abandon or discontinue the action and it is his wish that the action continue.

[42] Mr. Ferro’s evidence confirmed that after he received the Notice from the Registrar on February 1, 2012, he wrote, although inadvertently, directly to the Defendant’s insurer rather than his lawyer asking for their Statement of Defence as well as from State Farm in early March 2012. He also renewed his request for his client’s accident benefits file. The evidence disclosed that the lawyer for the Defendant Cortez needed an amendment to the Statement of Claim to correct the misnomer of the Defendant Cortez’s name before the Statement of Defence would be filed.

[43] Mr. Ferro’s explanation was that time did not permit his office to proceed with a motion to amend the Statement of Claim and extend the time for service upon Cortez prior to the action being dismissed by the Registrar. Although this would clearly be negligence on his part, there is no evidence before me that his conduct was a deliberate decision not to advance the litigation at the time. He was cross-examined on his affidavit but I had no evidence from that cross-examination to contradict that evidence. Furthermore Mr. Ferro continued to provide disclosure of his client’s case by forwarding his Affidavit of Documents after the Dismissal Order was obtained.

[44] In any event, Cortez’s lawyer implied by his letter of May 2, 2012, after the Registrar’s Order had been obtained, that he would serve his Statement of Defence after the misnomer in the Statement of Claim had been corrected. Aside from the issue of the non-service of the Statement of Claim, it would not be unusual practice for defence Counsel to have delivered a Statement of Defence on behalf of Gerry Cortez noting therein that he was improperly named in the Statement of Claim as Gerry Carter.

b) Inadvertence in Missing the Deadline.

[45] As indicated in the previous paragraph, the explanation provided by Mr. Ferro was that he did not have the time to bring the appropriate motion to amend the Statement of Claim and for an Order extending a time for service on the Defendant Cortez. The evidence does not disclose a deliberate intention not to proceed with the required motion.

[46] Obviously, Mr. Ferro could and should have been more detailed in his explanation to satisfy the Court that his omission was inadvertent. However, the evidence before me confirms that there was no intention on either his part or his client’s to abandon the action or that that action had effectively been abandoned. In fact, the evidence confirms their taking steps both before and after the dismissal Order to provide disclosure of his documentation to the Defendant.

[47] Justice Laskin in Finlay v. VanPaassen, supra, noted that the court should be concerned primarily with the rights of the litigants not with the inadvertent and non-deliberate conduct of their Counsel. See also Halton Community Credit Union Ltd. v. ICL Computers Ltd. (1985) 1 C.P. C. (2d) 24.

[48] In any event, on a contextual basis, given the relatively short time lines involved and the other factors noted herein and in particular the lack of prejudice to the Defendant, I should not and do not place too much significance on this one factor in the circumstances as it is not the sole criteria.

c) The Motion Is Brought Promptly.

[49] The Plaintiff’s lawyer within a few weeks of being notified of the Registrar’s dismissal Order contacted the Defendant’s lawyer requesting his consent to an order setting it aside. Obviously that confirmed his client’s intention to proceed with the action. When notified towards the end of May that the Defendant required his motion record first, Mr. Ferro prepared it within a few weeks after that and had it served in the first week of July returnable on July 19, 2012.

[50] The Defendant’s lawyer asked for an adjournment pending his receipt of instructions. The motion was adjourned to permit cross-examinations on the Deponents on their affidavits and was adjourned on consent on several occasions until it was heard by this court on March 20, 2013.

[51] In the circumstances, this was not an unreasonable or inordinate delay in bringing the motion nor does it come close to the delay in excess of two years considered by the Court of Appeal in the decision of Finlay v. Van Paassen, supra which was not fatal to the Plaintiff’s motion in that case to set aside the Registrar’s dismissal Order.

d) Prejudice to the Defendant.

[52] In my view the absence of prejudice to the defendant is the key consideration in this case.

[53] On the merits, it appears clear that liability for the Plaintiff’s injuries and damages should not be in dispute and the Defendant’s insurer and its lawyers have always been aware that Mr. Cortez’s version of the incident confirms that he is liable for the Plaintiff’s injuries.

[54] The Defendant’s insurer was notified of the claim immediately after the accident and there is no suggestion the Defendant is prejudiced by reason of witnesses now being unavailable for trial. The Defendant has not asserted that it is prejudiced in bringing its case forward at trial or that it will suffer hardship as a result of the Plaintiff’s delay. The Defendant’s insurer had throughout the opportunity to carry out whatever investigation it considered necessary in the circumstances of the claim.

[55] Even after the dismissal Order was obtained, the Defendant’s lawyer confirmed at least implicitly that it would file a Statement of defence once the misnomer of the Defendant’s surname had been corrected.

[56] Even though the misnomer had not yet been corrected, the Defendant’s lawyer still requested the Plaintiff’s medical documentation and accident benefits files, financial documentation and the police file on February 7, 2012. They received the Plaintiff’s Affidavit of Documents shortly after May 10, 2012.

[57] The Defendant’s lawyer also had the opportunity to and in fact completed the examination for discovery of the Collins passenger in the Plaintiff’s motor vehicle in the companion action. He would have been able to obtain the details of the accident itself and information on the Plaintiff’s driving and no doubt, those actions would likely be tried together if they both proceeded.

[58] As the action involves a claim for personal injuries, the medical evidence and loss of income documents regarding the Plaintiff’s damages, injuries and pre-existing condition will no doubt still be available and indeed, the Plaintiff has already provided his Affidavit of Documents.

[59] Although the principle of finality is a central principle in the administration of justice, expeditious justice is only one value to be weighed against others and delay may be excused where necessary to ensure complete justice. Marche D’Alimentation Denis Theriault Ltee, supra.

[60] In this case the Defendant is not entitled to rely on the finality of the Registrar’s Order. He did not proceed as if he was acting on the principle of finality as confirmed by his readiness to deliver a Statement of Defence even after the dismissal Order was obtained and he continued to be involved in the litigation. There being no display of urgency by the Defendant’s Counsel undercuts his claim of actual prejudice. Aguas v . Rivard Estate (2001)2011 ONCA 494, 107 O.R. (3d) 142 (C.A.).

[61] The Defendant’s lawyer Mr. Camporese in his affidavit simply stated that he verily believed that the Defendant will suffer considerable prejudice if the requested order was granted. However he gave no specifics of what the prejudice would be if the Registrar’s dismissal Order was set aside. He made a further reference that he verily believed “that the Plaintiff is barred by the Limitations Act” but that was not with respect to the setting aside of the dismissal Order but rather was with respect to the request to add an additional party, Gerry Cortez, to the Statement of Claim.

[62] Although the Statement of Claim was issued just a few days after the two-year limitation under the Highway Traffic Act, the Plaintiff’s motion before me includes a motion to amend the Statement of Claim to plead the applicability of the discoverability rule and accordingly extending the time for commencement of the action. I have decided to grant that motion which in my view is appropriate and required under Rule 26.01. The Plaintiff would still be obligated now just as he was prior to the amendment to establish the essential facts regarding the application of the discoverability rule in order to avoid the two-year limitation period. Accordingly, there is no proof at this stage of prejudice to the Defendant by reason of the application of the limitation period.

[63] Furthermore, there is no doubt in this case that naming Mr. Cortez as Mr. Carter is simply a misnomer of only two letters and the Defendant’s insurer and lawyer have always well been aware that the Plaintiff’s intention was to proceed against Mr. Cortez just as the same Plaintiff’s lawyer had proceeded against him in the Collins action.

[64] Although the expiry of a limitation period can give rise to some presumptive prejudice, the strength of that presumption increases with the passage of time. Where the presumption arises, the Plaintiff bears the burden of rebutting the presumption on proper evidence. Where the presumption is so displaced, the onus shifts to the Defendant to establish actual prejudice. Wellwood v. Ontario Provincial Police, supra.

[65] The Wellwood decision involved the finding of the Master that the prospects for a fair trial had been compromised with the two year passage of time in light of the nature of the evidence that would be required to meet the Plaintiff’s allegation of malicious or negligent prosecution. The Master was unable to conclude that a fair trial was available.

[66] That is not this case as liability for the Plaintiff’s injuries should not be in dispute, the Defendant has had full opportunity to investigate the claim and all documentation and evidence regarding the Plaintiff’s damages should be readily available.

[67] Furthermore, unlike the Wellwood case, this lawsuit proceeded without any unreasonable delay before the dismissal Order of the Registrar of April 16, 2012 and there was no significant passage of time after the granting of the dismissal Order before this motion was brought. Finlay v. VanPaassen, supra.

[68] In my view, the Plaintiff has met his onus to convince the Court that the Defendant has not demonstrated any significant prejudice as a result of the Plaintiffs’ delay or as a result of steps taken following the dismissal of the action especially as the Defendant has filed no affidavit evidence providing any details of such prejudice.

[69] I have considered the overriding objective in balancing the interests of the parties, the principles of timely resolution of disputes and finality in the administration of justice and the four factors noted in Reid v. Dow Corning Corp, supra on a contextual approach. I conclude that the fair and just result is to let this action proceed for a determination on the merits of the Plaintiff’s case and that the motion should be granted. Accordingly, an Order is granted setting aside the Registrar’s Order Dismissing Action As Abandoned dated April 16, 2012.

[70] In addition, as it is clear that naming the Defendant as Gerry Carter instead of Gerry Cortez is a simple misnomer and because the Defendant has not been prejudiced, the Plaintiff’s motion to amend the Statement of Claim naming Gerry Cortez in the style of cause and throughout the body of the Statement of Claim in lieu of Gerry Carter is granted.

[71] The Plaintiff attempted to serve the Statement of Claim on the Defendant Gerry Cortez well within the six-month period from the time of issuing of the Statement of Claim. He was simply not successful because of the misnomer of that Defendant. The Defendant’s motor vehicle liability insurer and its lawyer were always throughout this matter aware of the claim and that attempted service and in fact had a copy of the Statement of Claim in question shortly thereafter. Because of the total lack of any prejudice on the part of the Defendant, this is an appropriate case for an Order extending the time for service of the Statement of Claim to the actual date of service of January 16, 2013 and I make that Order accordingly.

[72] Lastly, as indicated above, the Plaintiff’s second further supplementary motion to amend the Statement of Claim as noted in paragraph (d) of the Notice of Motion is granted.

[73] With respect to costs, the Plaintiff understandably is not asking for costs of the motion.

[74] The Defendant nevertheless asked for costs of the motion but on the basis that it would be successful in the motion which is not the case.

In the circumstances, I make no order as to costs.

The Honourable Mr. Justice R. J. Nightingale

Date: March 28, 2013