SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 6968/11

DATE: 20130425

RE: PAYAM GHAED – AMINI HARUNI, Plaintiffs

AND:

ALIREZA KHOSHNESAR AND STATE FARM INSURANCE COMPANIES, Defendants

BEFORE: HOURIGAN J.

COUNSEL:
Elena Elnaz Mazinani, Counsel for the Plaintiffs

P. Horak, Counsel for the Defendants

Joyce Tam, Counsel for the Proposed Defendant

HEARD: April 23, 2013

ENDORSEMENT

Introduction

[1] The plaintiff brings a motion to set aside the Order Dismissing Action as Abandoned as issued by the Milton Registrar. The plaintiff also seeks an order extending the time for the service of the statement of claim and an order permitting him to amend the statement of claim to assert a claim for accident benefits.

[2] The defendants oppose the relief sought by the plaintiff.

[3] The proposed defendant, State Farm Mutual Automobile Insurance Company (“State Farm”), does not oppose the amendment of the statement of claim provided that it is afforded thirty days to defend and provided that the amendment is without prejudice to its right to assert a limitation defence. The plaintiff is agreeable to those terms for the issuance of the amended statement of claim.

Facts

[4] This action arises out of injuries alleged to have been suffered by the plaintiff in a motor vehicle accident that occurred on either December 16, 2009 or December 6, 2009. In the plaintiff’s materials filed with this court both dates are used.

[5] At the time of the accident the plaintiff was a front seat passenger in an automobile owned and operated by the defendant, Alireza Khoshnesar. State Farm was the insurer of Mr. Khoshnesar’s vehicle.

[6] As a consequence of the accident, the plaintiff retained a paralegal, Shawn Jafari, as an accident benefit representative.

[7] Unsatisfied with Mr. Jafari’s representation, in July of 2010 the plaintiff retained a new paralegal, Bita Maftoun. Contact was made by Ms Maftoun with State Farm. She was informed that accident benefits had been denied because of fraud concerns that State Farm had with respect to Mr. Jafari and a chiropractor that was involved in the file. Benefits had also been denied because the plaintiff had missed an examination. State Farm continues to refuse to pay accident benefits to the plaintiff.

[8] Ms Maftoun swore that at the time of making her initial contact with State Farm she was informed that a law firm was retained to act for the plaintiff in a tort action. She subsequently discovered that no tort adjuster had been assigned and no notice of a tort claim had been sent. She sent a notice on the plaintiff’s behalf to State Farm on February 25, 2011. Ms Maftoun also assisted the plaintiff in preparing and issuing the statement of claim in this action on December 12, 2011.

[9] I note that the statement of claim does not disclose a cause of action against State Farm. Instead, it simply asserts that State Farm is the insurer of Mr. Khoshnesar.

[10] Because neither the plaintiff nor Ms Maftoun took any steps to immediately serve the statement of claim, the first notice received by State Farm of this action came through receipt of a Notice That Action Will Be Dismissed which was received by State Farm on or about June 11, 2012. Pursuant to that notice, State Farm was advised that the action would be dismissed as abandoned pursuant to subrule 48.15(1) unless within 45 days a defence was filed, a final order was entered or the action was set down for trial.

[11] Ms Maftoun did take steps in August of 2012 to arrange for the retention of counsel for the plaintiff. However, there were delays in that process and she proceeded to serve the statement of claim on State Farm on August 20, 2012 in order to protect his interests. This service was outside of the six month period for service prescribed by the Rules of Civil Procedure. At no time has Mr. Khoshnesar been served with the statement of claim.

[12] State Farm did not respond to the statement of claim and received notice from the court on or about September 11, 2012 that the action was dismissed as abandoned.

[13] On November 6, 2012, Helen Ilkanic of State Farm received a call from Ms Maftoun. Ms Ilkanic advised Ms Maftoun that the action had been dismissed.

[14] The plaintiff brought this motion by way of a notice of motion dated November 6, 2012.

Review of the Court File

[15] Counsel for the plaintiff argued on the motion that his client was never served with the Notice That Action Will Be Dismissed and noted that the document on its face was addressed only to “State Farm Insurance Companies”. Counsel also argued that her client never received the Order Dismissing Action As Abandoned and noted again that the document on its face was addressed only to “State Farm Insurance Companies”.

[16] After the motion was argued I reviewed the contents of the court file. It is clear from the file that a separate copy of the Notice That Action Will Be Dismissed was addressed to the plaintiff at 45 Marsh St., Richmond Hill, Ontario, CA L4C 7R6. However, the file also contains an envelope with a “Moved/Unknown Return to Sender” sticker affixed thereon. That sticker obscures some of the handwriting on the envelope but there is clearly a handwritten note that states “wrong house number” and the number 45 is circled in ink. There is another handwritten notation on the envelope as follows: “10870 Yonge St Rexall”. The envelope is date stamped July 11, 2012, signifying that it was received at the courthouse in Milton on or about that date.

[17] I note that the address for the plaintiff listed in the statement of claim was 49 Marsh St., Richmond Hill, Ontario, L4C 7R6.

[18] The court file also contains an Order Dismissing Action As Abandoned which is addressed to the plaintiff and date stamped September 11, 2012. The address listed for the plaintiff in that document is 45 Marsh St., Richmond Hill, Ontario, CA L4C 7R6.

Analysis

[19] Rule 37.14 of the Rules of Civil Procedure provides a mechanism for setting aside a registrar’s order but is silent on the factors to be considered aside from promptness in moving.

[20] Both parties agree that the factors for consideration were properly enumerated by Master Dash in Reid v. Dow Corning Corp.(2001) 11 CPC (5th) 80 (Ont. S.C.J. Master), reversed on other grounds (2001) 48 CPC (5th) 93 (Div. Ct.), as follows:

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. For example the complexities of the case and the number of parties may have required significantly more time to move the action toward trial, or the delay was caused by interlocutory matters or appeals. The plaintiff could explain that the action was stalled due to the inattention of negligence of her solicitors which was contrary to her own instructions or expectations. It is absolutely essential that the plaintiff lead satisfactory evidence that she personally always intended the action to proceed to trial without delay, that she did not assent to the delay, and that she always reasonably assumed it was so proceeding or made appropriate inquiries of her solicitors. 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.

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.

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.

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. The court takes note that witnesses’ memories generally tend to fade over time and that sometime it is difficult to locate witnesses or documents. However to bar the plaintiff from proceeding with her action on the ground of prejudice, the defendant must lead evidence of actual prejudice. This might include evidence of specified documents lost over time, or destroyed following a dismissal, or of specific witnesses who have died, or have disappeared and the defendant has been unable to locate them with due diligence. While litigation is outstanding the defendants must take care to obtain and preserve evidence.

[21] The Ontario Court of Appeal considered the issue of setting aside a registrar’s order in Finlay v. Paassen, 2010 ONCA 204. In that case counsel failed to set the action down for trial and in January 2007 the registrar issued a status notice stating that the action would be dismissed unless it was set down for trial within 90 days. However, the status notice was not sent to the plaintiff or his counsel. On April 30, 2007, unbeknownst to them, the registrar issued an order dismissing the action for delay. Counsel for the plaintiff first obtained a copy of the registrar’s order in May 2007 but did not move to set aside the order until May 2009.

[22] In reversing the motion judge who dismissed the motion to set aside the dismissal order, the Court of Appeal considered the proper analytical approach to be taken on such motions:

[27] The motion judge determined that because Finlay could not satisfy the third factor his motion must fail. In effect, on the motion judge’s approach, in order to set aside the registrar’s order Finlay had to satisfy each of the four factors. In approaching the motion that way, the motion judge made the very error identified by Goudge J.A. in Scaini v. Prochnicki 2007 ONCA 63, (2007), 85 O.R. (3d) 179. There, Goudge J.A. rejected as too “rigid” the notion that to set aside a registrar’s dismissal order, a moving party must satisfy each factor. Instead he favoured a “contextual” approach in which the court weighs all relevant considerations to determine the result that is just:

[21] More importantly, I do not agree that the case law reviewed in Reid, supra, yields the proposition that an appellant must satisfy each relevant criterion in order to have the registrar’s order set aside. None of the cases referred to say so expressly and several proceed on a more contextual basis. For example, in Steele v. Ottawa-Carleton (Regional Municipality), [1998] O.J. No. 3154 (Gen. Div.) Master Beaudoin, at para. 17, described the guiding principle in deciding whether to set aside a rule 48.14 dismissal by the registrar as follows:

Ultimately, the Court will exercise its discretion upon a consideration of the relevant factors and will attempt to balance the interests of the parties.

[22] I agree with Master Beaudoin.

[23] In my view, a contextual approach to this question is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria. The latter approach is not mandated by the jurisprudence. On the other hand, the applicable rules clearly point to the former. In particular, the motion to set aside the registrar’s order dismissing the action for delay engages rule 37.14(1)(c) and (2). The latter invites the court to make the order that is just in the circumstances. A fixed formula like that applied by the motion judge is simply too inflexible to allow the court in each case to reach the just result contemplated by the rules.

[23] Thus in determining whether the order should be set aside it is necessary to consider this case from a contextual approach weighing all relevant considerations to determine the result that is just.

[24] Turning first to the issue of litigation delay, I note that the court’s assessment of the litigation delay must cover the entire period from the date the action was commenced to the date upon which the action should have been set down for trial (see Wetzel v. Ontario Realty Corporation (2009), 66897 (ON S.C.)).

[25] In the case at bar the plaintiff missed the six month deadline for the service of the statement of claim on State Farm and never served the claim on the individual defendant. I am satisfied that he has provided the court with an adequate explanation for missing the service deadline. After the issuance of the claim he was attempting to obtain counsel and, according to Ms Maftoun, his efforts in this regard were hampered by his ill health. I attribute his failure to serve the individual defendant to a lack of understanding of the court process on his part and on the part of his paralegal whose primary task was to obtain accident benefits. I am also satisfied that the plaintiff intended to proceed with his action and the fact that he was taking steps to obtain counsel demonstrates that he wished to proceed with his claim.

[26] There was no inadvertence on the part of the plaintiff in missing the deadline for responding to the notice issued by the registrar. It is clear to me that both the notice and the order were sent to the wrong address. No explanation is required from the plaintiff as to why he did not respond given that he did not receive those documents.

[27] There is also no issue that the plaintiff moved immediately when he became aware of the order dismissing the action. I note that in Finlay Justice Laskin commented that where a party did not receive notice of a pending dismissal and moved promptly on becoming aware of the dismissal order to set it aside that “his motion would undoubtedly been granted” (see paragraph 4) and further stated that “if Finlay’s counsel had moved promptly after learning of the dismissal order, the interests of justice would demand that the order be set aside” (see paragraph 16).

[28] The defendants submit that “the delay in the serving the statement of claim has caused a substantial risk that a fair trial of the issues in the litigation will not be possible.” I disagree. The deadline for service was missed by approximately two months. I am not satisfied that that period of delay caused any specific prejudice to the defendants.

[29] The defendants argue that they have lost the ability to obtain full medical records, that their ability to obtain information regarding road conditions may be impaired, that their ability to conduct a defence medical has been delayed as has their ability to conduct a vocational assessment, and, finally, they have lost the opportunity to investigate damage to the vehicle involved.

[30] The types of prejudice asserted are in the nature of presumed prejudiced. They are not of the same nature as the specific examples of actual prejudice listed by Mater Dash in Reid (i.e. a specific document lost over time, or destroyed following a dismissal, or specific witnesses who have died or disappeared and the defendant has been unable to locate them with due diligence). Moreover, for the most part, the claimed prejudice arises not from the brief delay in serving the statement of claim but from the fact that the plaintiff waited until at or near the expiry of the limitation period to commence his claim.

[31] Taking a contextual approach and weighing all relevant considerations to determine the result that is just as mandated by our Court of Appeal, I find that the just result is to grant the motion for the following reasons:

(a) the delay in the litigation was very slight and was the result of the fact that the plaintiff was during that brief period unrepresented by counsel;

(b) due to an error by court staff the plaintiff was not made aware of the pending dismissal;

(c) the plaintiff moved promptly to set aside the order when he became aware that the action had been dismissed; and

(d) the defendants will not suffer 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.

[32] It would be fundamentally unfair to deny the plaintiff his opportunity to proceed with his action in these circumstances. This is especially the case given that he had no notice from the court of the impending dismissal of his action. The interests of justice demand that the dismissal be set aside.

Disposition

[33] The motion is granted. The registrar’s order dismissing the action is set aside. An order will go permitting the plaintiff to amend the statement of claim to assert a claim for accident benefits as set forth in the draft statement of claim filed. However, that amendment is without prejudice to the right of State Farm to assert a limitation defence. The plaintiff shall have thirty days from today’s date to serve the amended statement of claim on both defendants and the defendants shall have thirty days from service to serve and file statements of defence.

[34] If the parties cannot agree on the issue of costs they may make brief written submissions. The plaintiff’s submissions are due on or before May 15, 2013. The defendants’ submissions are due on or before May 30, 2013 and any reply submissions are due on or before June 6, 2013.

HOURIGAN J.

Date: April 25, 2013