SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 09-CV-384693

STATUS HEARING CONDUCTED: March 20, 2013

Re: 1745361 Ontario Inc.

Plaintiff

v.

St. Paul’s Investments Ltd., 801800

Ontario Limited, Empire Freehouse Concepts

Inc., Lance Anderson, Claes Ericsson and

Dale Hancock

Defendants

BEFORE: Master Thomas Hawkins

COUNSEL:
Michael Courneyea for moving plaintiff
F (416) 362-2211

Joshua R. Freeman for defendants
801800 Ontario Limited, Empire Freehouse
Concepts Inc. and Lance Anderson
F (416) 941-8852

Mario Delgado, student-at-law, for
defendants Claes Ericsson and Dale Hancock
Fax (416) 361-1530

REASONS FOR DECISION

Nature of Proceedings

[1] On March 20, 2013 I conducted a status hearing of this action pursuant to subrule 48.14(13). This subrule provides as follows.

At the status hearing, the plaintiff shall show cause why the action should not be dismissed for delay and,

(a) if the presiding judge or case management master is satisfied that the action should proceed, the judge or case management master may,

(i) set time periods for the completion of the remaining steps necessary to have the action placed on or restored to a trial list and order that it be placed on or restored to a trial list within a specified time,

(ii) adjourn the status hearing to a specified date on such terms as are just, or

(iii) if the action is an action to which Rule 77 may apply under rule 77.02, assign the action for case management under that Rule, subject to the direction of the regional senior judge,

(iv) make such other order as is just; or

(b) if the presiding judge or case management master is not satisfied that the action should proceed, the judge or case management master may dismiss the action for delay.

[2] The opening words of subrule 48.14(13) make it clear that at a status hearing, the plaintiff has the onus of persuading the presiding judge or case management master that the action should not be dismissed for delay. It is important to realize this.

[3] All four of the cases which plaintiff’s counsel relied upon in his brief of authorities involved motions by defendants for an order under subrule 24.01(1) dismissing an action for delay. In a motion under subrule 24.01(1) the defendant has the onus of persuading the court that the action should be dismissed for delay. This is not such a motion. It is a status hearing with the onus on the plaintiff, not the defendant, of persuading me that this action should not be dismissed for delay.

[4] In Faris v. Eftimovski, 2013 ONCA 360 the Court of Appeal for Ontario heard an appeal from a judge’s order dismissing the action for delay at a status hearing. Tullock J.A. delivered the judgment of the court. After quoting subrule 48.14(13) (which I have set out in paragraph [1] above), Tullock J.A. expressed himself as follows (at paragraphs 32 and 33).

[32] The plain wording of rule 48.14(13) makes clear that the onus is on the plaintiff to demonstrate why the action should not be dismissed for delay. The test, as stated by the status hearing judge in the case at bar, requires the plaintiff to demonstrate that there was an acceptable explanation for the delay and establish that, if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice: Khan v. Sun Life Assurance, 2011 ONCA 650, at para. 1

[33] Since the purpose of Rule 48 is to enable the court to control the pace of litigation and ensure that disputes are resolved in a time-effective manner, imposing the onus on the plaintiff to show cause why the action should not be dismissed for delay is fair. This court has held that the responsibility to move the action along lies chiefly with the plaintiff. Accordingly, the plaintiff also bears the consequences of conducting its action in a dilatory manner: see Wellwood v. Ontario Provincial Police, 2010 ONCA 385, 102 O.R. (3d) 555, at para. 48.

[5] From this decision in Faris, it is clear that at a status hearing, a plaintiff has to demonstrate two things. First, the plaintiff must demonstrate that she, he or it has provided an acceptable explanation for any litigation delay. Secondly, the plaintiff must establish that if the action is allowed to proceed, the defendant will suffer no non-compensable prejudice.

[6] By the time I conducted the status hearing of this action, the action had been dismissed on consent as against the defendant St. Paul’s Investments Ltd. The defendants Claes Ericsson and Dale Hancock had delivered a notice of intent to defend but did not otherwise defend this action. Mr. Delgado appeared for them at the status hearing essentially as an observer. He did not participate in argument. They delivered no material for use at the status hearing. The status hearing was basically a dispute between the plaintiff and the defendants 801800 Ontario Limited, Empire Freehouse Concepts Inc. and Lance Anderson (the “Empire defendants”) Mr. Anderson has described himself as a principal of these two corporations.

[7] The following is a chronology of events in this action.

Date

Event

August 7, 2009

Plaintiff commences action.

August 2009

Plaintiff brings comprehensive motion to regain possession of its restaurant at 474 Adelaide Street East, Toronto.

September 4, 2009

Empire defendants deliver notice of intent to defend.

September 14, 2009

Claes Ericsson and Dale Hancock deliver notice of intent to defend.

October 16, 2009

Plaintiff delivers amended statement of claim.

January 8, 2010

Empire defendants deliver their statement of defence and counterclaim.

March 7, 2010

Action dismissed on consent as against defendant St. Paul’s Investments Ltd.

May 19, 2010

Plaintiff’s comprehensive motion dismissed on consent.

January 19, 2011

Plaintiff serves affidavit of documents.

September 6, 2011

Registrar issues status notice.

December 6, 2011

Plaintiff requests status hearing.

February 27, 2012

Status hearing adjourned for service of notice of status hearing on defendants Ericsson and Hancock.

April 12, 2012

Status hearing adjourned again.

May 7, 2012

At a case conference I make timetable order setting deadlines for delivery of material for use at status hearing. Plaintiff completely fails to meet deadlines.

September 12, 2012

Status hearing does not proceed in part owing to miscommunication between my assistant, me and plaintiff’s counsel Lawrence Pick.

September 24, 2012

At a case conference I issue new timetable order setting new hearing date for status hearing and new deadlines for delivery of material for use at status hearing. Plaintiff delivers material late.

March 20, 2013

Status hearing finally proceeds. I reserve judgment.

Comments on Chronology of Events

[8] I have several comments on this chronology.

[9] First, in his short affidavit in support of the plaintiff’s position at this status hearing, Lawrence Pick, one of the plaintiff’s lawyers, says that the plaintiff “delivered” its affidavit of documents on January 9, 2011. The case history for this action is silent on this point. Because of subrule 30.03(5) affidavits of documents are not normally filed. Perhaps Mr. Pick meant to say “served” rather than “delivered”.

[10] In an affidavit delivered for use at the status hearing Bruce Batist, one of the lawyers for the Empire defendants, disputes that the plaintiff served any affidavit of documents. Mr. Batist says in his affidavit that the plaintiff abandoned its comprehensive motion shortly after mid-August 2009 and that apart from taking out a formal order dismissing that motion in March 2010, the plaintiff took no steps to move this action forward from the beginning of 2010 until after the plaintiff’s lawyers received the registrar’s status notice in September 2011.

[11] If Mr. Pick’s affidavit is correct and the plaintiff did serve an affidavit of comments on January 9, 2011, there are two periods of delay in the prosecution of this action. The first runs from January 9, 2011 to September 2011, a period of about nine months. The second period of delay runs from May 7, 2012 when I timetabled the delivery of material for use at the status hearing but the plaintiff completely failed to deliver any material. This second period of delay ends on September 24, 2012 when I made a new timetable order for delivery of material for use at the March 20, 2013 status hearing. This is a period of delay of over four months.

[12] In calculating the second period of delay in this manner, I am being generous to the plaintiff because the material which the plaintiff did deliver for use on the March 20, 2013 status hearing was delivered late.

[13] Calculated this way, the plaintiff’s periods of delay in the prosecution of this action total about 13 months.

[14] If Mr. Batist’s affidavit is correct and the plaintiff did not serve an affidavit of documents, the initial period of delay runs from January 2000 to September 2011, a period of about 21 months. When one adds four months for the second period of delay, the plaintiff’s total delays in the prosecution of this action become 25 months.

[15] I am unable to resolve this conflict between Mr. Pick’s affidavit and that of Mr. Batist. Mr. Pick did not include as an exhibit to his affidavit a copy of any affidavit of documents of the plaintiff with proof of service. The plaintiff did not serve any affidavit in reply to Mr. Batist’s affidavit.

[16] My second comment on the chronology has reference to the circumstances in which the status hearing did not proceed on September 12, 2012. I have referred to miscommunication between me, my assistant and Mr. Pick.

[17] By the afternoon of September 11, 2012, I had not received any material from the motions office for use on the September 12, 2012 status hearing. (Although a status hearing is not a motion, the motions office still gathers material filed for use on status hearings and distributes that material to the appropriate master before the hearing.)

[18] My assistant called the motions office and was advised that the motions office had withdrawn the status hearing from my list for September 12, 2012 because no one had sent a confirmation form advising that the status hearing was proceeding the next day. Since the plaintiff had requested the status hearing, plaintiff’s counsel should have sent a confirmation form to the motions office.

[19] I asked my assistant to call counsel and find out what was going to happen on September 12, 2012. She called Mr. Pick who advised her that he wanted the status hearing adjourned. I now know that Mr. Pick did not tell my assistant that his adjournment request was on consent. However, in speaking with my assistant on September 11, 2012 I formed the impression (which I now know to be erroneous) that Mr. Pick’s adjournment request was on consent.

[20] Since the status hearing was the only court appointment which I had scheduled for September 12, 2012 and I thought that the status hearing was not proceeding, I worked at home that day and did not come to the court house.

[21] Joshua Freeman, one of the lawyers for the Empire defendants, came to the court house on September 12, 2012 and could not find the status hearing for this action on any courtroom list. He then spoke with my assistant and learned that the status hearing was not proceeding that day.

[22] Mr. Freeman wrote me later that day advising that he had not consented to any adjournment of the status hearing and that he had not received any material from the plaintiff’s lawyers for use at the status hearing.

[23] I then convened a case conference for September 24, 2012 at which time I issued a new timetable order and set a new date of March 20, 2013 as a hearing date for the status hearing.

[24] The status hearing for this action did proceed before me on March 20, 2013.

Evidence at Status Hearing: First Factor Explanation for Delay

[25] Mr. Pick delivered a short affidavit in support of the plaintiff’s position at this status hearing. Mr. Pick’s affidavit is about two pages in length. He describes some of the history of this action. However, his affidavit does not offer any explanation whatsoever for either of the two periods of delay in this action, described above in paragraphs [10] to [14]. He offers not a word of explanation as to why he did not deliver any material for use on the status hearing scheduled for September 12, 2012.

[26] The periods of delay in the prosecution of this action are shorter than the periods of delay I have encountered in conducting many other status hearings. Nevertheless, the fact remains that the plaintiff has completely failed to explain the two periods of delay in the prosecution of this action.

[27] Mr. Pick’s short affidavit is the only affidavit delivered in direct support of the plaintiff’s position at this status hearing. There was no affidavit from any officer, director, employee or shareholder of the plaintiff. (I was also provided with two affidavits of attempted service of notice of the status hearing on the defendants Ericsson and Hancock. These affidavits are discussed in more detail at paragraphs [39] and [43] below.)

[28] In these circumstances I have come to the conclusion that the plaintiff has failed to discharge the onus which the plaintiff has of persuading me that this action should not be dismissed for delay because the plaintiff has not offered any explanation for the litigation delays that have occurred in this action.

Second Factor: Prejudice to Defendant

[29] At a status hearing the plaintiff also has the onus of establishing that if the action is allowed to proceed the defendant will not suffer any non-compensable prejudice.

[30] I have already dealt with the issue of whether the plaintiff in this action has provided an acceptable explanation for any litigation delay which has occurred. Here the plaintiff has not provided any explanation at all for the litigation delays.

[31] I will now turn to the second issue, namely that of whether the plaintiff has established that if this action is allowed to proceed, the remaining defendants will not suffer any non-compensable prejudice.

[32] Establishing this sometimes takes the form of showing that the overall litigation delay is not so egregious that a fair trial can no longer be had. More commonly and in this case, establishing this takes the form of demonstrating that during any period of delay in the prosecution of the action, nothing has happened that would materially impair the ability of the defendant to present its case at trial.

[33] I have mentioned that the only affidavit which the plaintiff delivered on this status hearing (apart from affidavits of attempted service) is a short affidavit of Mr. Pick. That affidavit is silent on the subject of whether the defendants will or will not suffer any non-compensable prejudice if this action is allowed to proceed to trial.

[34] I have also mentioned that Mr. Batist has delivered an affidavit supporting the position of the Empire defendants on this status hearing. His affidavit is over six pages in length and deals in some detail with the subject of prejudice to the Empire defendants should this action proceed to trial.

[35] In his affidavit Mr. Batist says that the main prejudice to the Empire defendants is the fact that the defendants Ericsson and Hancock have disappeared.

[36] Mr. Batist says that Mr. Armstrong has advised him that the Empire defendants have lost all contact with the defendants Ericsson and Hancock and that despite efforts to locate them he (Mr. Armstrong) has no knowledge of their whereabouts or how to locate them.

[37] Mr. Batist says that the defendants Ericsson and Hancock are critical witnesses whose evidence is not available from other sources and is essential to assist the Empire defendants in responding to the plaintiff’s claims against them.

[38] The plaintiff neither cross-examined Mr. Batist nor delivered any affidavit responding to Mr. Batist’s affidavit. Mr. Batist’s affidavit evidence, including his evidence about the defendants Ericsson and Hancock as witnesses, is uncontradicted.

[39] In my chronology of events I have mentioned that I adjourned this status hearing so that the plaintiff could serve the defendants Ericsson and Hancock with notice of the status hearing. On April 12, 2012 I was provided with an affidavit form Laura Dawson on the subject of her attempts to have the defendants Ericsson and Hancock served with notice of the status hearing.

[40] Ms. Dawson is a legal assistant in the office of the lawyers for the plaintiff. In her affidavit she describes her efforts to locate the defendants Ericsson and Hancock and serve them with notice of the status hearing. She instructed a firm of process servers to serve the defendants Ericsson and Hancock at 474 Adelaide Street East, Toronto. This was the address where they had been successfully served with a motion record earlier in this action and the location which the defendant Ericsson gave as his address in an affidavit which he sore earlier in this action. The process server advised Ms. Dawson that the defendants Ericsson and Hancock were not located and could not be found at this address. The process server later provided an affidavit confirming this information.

[41] In her affidavit Ms. Dawson goes on to state she carried out address and telephone number searches for the defendants Ericsson and Hancock at Canada 411 and on the internet and was unable to locate new addresses for them.

[42] Ms. Dawson did not instruct anyone to serve the defendants Ericsson and Hancock by serving their lawyers of record. Perhaps she was unaware or had forgotten that they had lawyers of record.

[43] Neither Ms. Dawson’s affidavit nor that of the process server deals with the subjects of an explanation for the delays in the prosecution of this action or of prejudice or lack of prejudice to the Empire defendants.

[44] It seems to me that Ms. Dawson’s affidavit and in particular, her statement that her attempts to locate the defendants Ericsson and Hancock by means of Canada 411 and internet searches, which attempts were unsuccessful, lends support to the information which Mr. Armstrong provided to Mr. Batist. I refer to Mr. Armstrong’s information that in effect the defendants Ericsson and Hancock have disappeared and cannot be located despite searches for them.

[45] On this state of the evidence, I have come to the conclusion that the plaintiff has failed to establish that if this action were allowed to proceed to trial the defendants and particularly the Empire defendants would not suffer any non-compensable prejudice.

[46] That being so, the plaintiff has failed to meet either of the two tests which a plaintiff must pass at a status hearing, as laid down in Faris, supra. To paraphrase the words of subrule 48.14(13), the plaintiff has failed to show cause why this action should not be dismissed for delay. This action is therefore dismissed with costs to the remaining defendants.

[47] At the conclusion of argument, Mr. Freeman tendered a costs outline respecting the costs of this status hearing. However, he also asked that if I dismissed this action he be permitted to serve a costs outline for the whole action for assessment by me. Mr. Delgado did not ask for this same relief for the defendants Ericsson and Hancock.

[48] I therefore direct the Empire defendants to serve and file with me within 15 days of the final disposition of this action a costs outline for the whole of this action. I will then convene a case conference and give directions on how I will proceed to assess those costs.

(original signed)__

Master Thomas Hawkins

DATE: July 10, 2013