ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 98-CV-140288
DATE: 20130211

B E T W E E N:

COLLEEN KHAN, RAY KHAN, SHELLY KHAN, JAMES KHAN and SONNY KHAN

Philip P. Healey, for the Plaintiffs other than Shelly Khan

Plaintiffs

• and -

Metroland Printing, Publishing & Distributing Ltd., Ian Proudfoot, Brenda Larson, Debora Kelly, David Teetzel, Christopher Douris and WILLIAM BELL

Ryder Gilliland, for the defendants, Metroland Printing, Publishing & Distributing Ltd., Ian Proudfoot, Brenda Larson, Debora Kelly, David Teetzel and Christopher Douris

Charles M. Loopstra, Q.C. for the defendant, William Bell

Defendants

HEARD: January 4, 2013

Nordheimer J.:

[1] The defendants move to dismiss this action for delay.

[2] The claim is this action is one based in libel. It arises out of certain statements published by the defendant Metroland during the course of the municipal election held in November 1997. The alleged statements were published in a newspaper called “The Liberal” that serves the communities of Richmond Hill, Thornhill and Vaughan. The plaintiff, Colleen Khan (now deceased), was a candidate for the office of Mayor of Richmond Hill in the November 1997 election. The defendant, William Bell, was also a candidate for that same office. Mr. Bell won the election.

[3] The plaintiffs complain in particular about an article that appeared in The Liberal on October 28, 1997 allegedly written by the defendant, Christopher Douris, who is described as a staff writer for the newspaper. The plaintiffs refer to certain statements made in the article that they complain are defamatory of them. Included in the statements complained of by the plaintiffs are specific statements allegedly made by William Bell, as set out in paragraph 45 of the statement of claim, that were included in the article. The plaintiffs seek general damages in the amount of $2 million, punitive or exemplary damages in the amount of $5 million and aggravated damages in the amount of $1 million.

[4] The defendants delivered statements of defence, and, in the case of Wiliam Bell, a counterclaim, in February 1998. In the counterclaim, Mr. Bell alleged libel and slander against the plaintiffs arising of the publication and distribution of campaign literature by the plaintiffs.

[5] The plaintiffs delivered a reply to each of the statements of defence in March 1998.

[6] The examination for discovery of Mr. Bell took place on October 7 and 21, 1998. The examination for discovery of Mr. Douris took place on October 8 and 20, 1998. No other examinations for discovery have taken place.

[7] In February 2000, I was appointed the rule 37.l5 judge for this proceeding. I dealt with various motions directly thereafter. In June 2001, I was appointed the case management judge.

[8] In September 2000, the plaintiffs (save and except for Shelly Khan) changed counsel to their current counsel of record. Shelly Khan commenced to act in person.

[9] In June, 2001, the defendants brought a motion to dismiss or stay the claim of Shelly Khan arising from his failure to pay previous orders of this court regarding awards of costs. The defendants also sought to stay the claims of the other plaintiffs on the same basis or, alternatively, sought an order requiring those plaintiffs to post security for costs. On July 4, 2001, I made an order requiring the plaintiffs (other than Shelly Khan) to post security for costs. Within the same order, I stayed the claim of Shelly Khan for a period of 90 days to permit him to regularize his further participation in this proceeding. Shelly Khan failed to do so and, as a consequence, his claim was dismissed on December 3, 2001.

[10] The plaintiffs (again other than Shelly Khan) sought leave to appeal from the order requiring them to post security for costs. Leave to appeal was granted. On the appeal, for reasons given on October 27, 2003, the Divisional Court allowed the appeal and the order for security for costs was set aside. The defendants appealed that decision to the Court of Appeal but that appeal was dismissed for reasons given on May 6, 2005. No further steps by any of the parties have been taken in this action since that time, save, of course, for the bringing of this motion.

[11] One further fact should be mentioned. In 2008, Colleen Khan and Ray Khan commenced an action against the Town of Richmond Hill. For reasons that are not clear, Colleen Khan is described in that proceeding as “Khaleen” Khan. The statement of claim in that proceeding seeks damages for illegally towing, storing and demolishing the plaintiffs’ vehicles as well as damages for malicious prosecution, harassment, abuse of power and damage to property. The claim arises out of alleged violations by the plaintiffs of property standard by-laws.

[12] The 2008 action is, I am told, set for a pre-trial in May, 2013 and scheduled to go to trial in July, 2013.

[13] On December 5, 2009, Colleen Khan passed away.

Analysis

[14] This motion is brought pursuant to rule 24.01(1) of the Rules of Civil Procedure, R.R.O 1990, Reg. 194 that reads, in part:

A defendant who is not in default under these rules or an order of the court may move to have an action dismissed for delay where the plaintiff has failed,

(c) to set the action down for trial within six months after the close of pleadings;

[15] The principle applicable to the granting of such applications is well-established. Indeed, there does not appear to be any issue between the parties here regarding that principle. It is set out in Armstrong v. McCall, 2006 17248 (ON CA), [2006] O.J. No. 2055 (C.A.) where Borins J.A. said, at para. 11:

The test for dismissal of an action for delay is not in dispute. In my view, it is correctly stated at paragraph 4 of the reasons of the Divisional Court in an appeal from the master in Woodheath Developments Ltd. v. Goldman (2003), 2003 46735 (ON SCDC), 66 O.R. (3d) 731 at 732:

Specifically, I accept as correct the principles applicable to motions to dismiss for delay derived by the learned Master from the case law and accurately summarized in the headnote at (2001), 2001 28019 (ON SC), 56 O.R. (3d) 658 as follows:

The principle to be applied on a motion to dismiss for delay is that the action should not be dismissed unless: (1) the default is intentional and contumelious; or (2) the plaintiff or his or her lawyers are responsible for the inexcusable delay that gives rise to a substantial risk that a fair trial might not now be possible. It is presumed that memories fade over time, and an inordinate delay after the cause of action arose or after the passage of limitation period gives rise to a presumption of prejudice. Where there is a presumption of prejudice, the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebuts the presumption. The presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and the issues in the lawsuit do not depend on the recollection of witnesses or that all necessary witnesses are available with detailed recollection of the events. If the presumption is rebutted then the action may still be dismissed if the defendant leads convincing evidence of actual prejudice.

[16] The defendants rely on both prongs of this principle. They point to the fact that the cause of action arose more than fifteen years ago. Indeed, this action was commenced almost fifteen years ago and yet it has barely passed the pleadings stage. The two examinations for discovery that were conducted were completed more than fourteen years ago. Those examinations for discovery represent only two of the seven defendants who the plaintiffs are entitled to examine. None of the five plaintiffs have been examined for discovery.

[17] In addition to those considerations, there are a number of relevant factors that speak to the state of the evidence that would be available if this matter were now to go to trial. Those factors include:

(a) The plaintiff, Ray Kahn, is now eighty-three years old;

(b) The plaintiff, Colleen Kahn, passed away in 2009;

(c) The defendant, William Bell, is now seventy-three years old;

(d) The defendant, David Teetzel, passed away in 2008;

(e) The defendant, Brenda Larsen, left her position as Editor-in-Chief of The Liberal in 2003 and now lives in the United States of America;

(f) The defendant, Christopher Douris, left his position with The Liberal about twelve years ago. His current whereabouts are unknown.

[18] These facts add further elements of prejudice. They also reinforce the presumed prejudice that arises in this case from the amount of time that has passed since the cause of action arose. On the point about the facts surrounding the claim, I am told that there was no recording made of the interview conducted of Mr. Bell from which the allegedly defamatory statements were drawn. There are only what are referred to as “sketchy” notes of that interview made by Mr. Douris. While Mr. Douris has been examined for discovery, that fact does not address the problems that would arise if Mr. Douris is not located and is not available for trial.

[19] In response to the above, the remaining plaintiffs rely on two basic submissions. One is their reliance on the fact that the 2008 action has been progressing. Time spent on that action is said to explain some of the lack of attention to this action. It is also asserted that, in some fashion that is not clear to me, effort spent on the 2008 action helps to preserve or advance this action. On that latter point, the plaintiffs assert that the two actions are “related”. Indeed, the plaintiffs now contend that the two actions should be “consolidated”.

[20] The submission that the delay in this action can be explained, at least in part, by the existence of the 2008 action is one that I find to be entirely unpersuasive. First, there is no reason that both proceedings could not have proceeded concurrently. Neither action is so complex, unique, document intensive or otherwise of a kind that would suggest that counsel would have to be completely absorbed in the prosecution of one proceeding to the exclusion of the other. Second, the existence of the 2008 action does not explain the lack of activity in this action in the ten years between 1998 and 2008 and certainly does not explain the complete lack of anything being done between the decision of the Court of Appeal in 2005 and 2008. Third, it is very difficult to accept the contention that these two actions are so related that steps taken in one can somehow explain the lack of steps being taken in the other. I appreciate that there is some overlap in the subject matter between the two in the sense that the 2008 action involves complaints about the enforcement of property standard by-laws and some of the allegedly defamatory statements refer to violations of such by-laws but that overlap is pretty tangential. Fourth, it is even more difficult to see how these two actions would ever be consolidated. The parties are different, the causes of action are different and the actions are at very different stages. Fifth, even if consolidation is available and the plaintiffs are truly serious about the need to consolidate these two actions, one must question why nothing has been done about that in the past four years. Moreover, the suggestion that the two actions should be consolidated appears to have arisen entirely in response to this motion to dismiss for delay.

[21] The plaintiffs’ other submission is that there is no proper basis for dismissing this action for delay because there is no real prejudice to the defendants from the passage of time and, to the extent that some prejudice might exist, it is entirely of the defendants’ own making because the defendants have failed in their obligation to preserve evidence.

[22] This submission is, in my view, an inadequate response to the presumption of prejudice that is referred to in Armstrong v. McCall and that is recognized to arise from the passage of time. If the obligation to preserve evidence was a complete answer to the presumption of prejudice (which is, in essence, the effect for which the plaintiffs contend), it would be the rarest of cases where an application under r. 24.01(1) could ever succeed. Where the obligation to preserve evidence does arise is when a defendant is seeking to establish actual prejudice (as opposed to presumed prejudice) and the foundation for that prejudice is the asserted loss of evidence that the defendant could have preserved. Most often it relates to the loss of documents. Indeed, the only authority on this point offered by the plaintiffs, Schmidt v. Hamilton (City), 2010 ONSC 542, [2010] O.J. No. 539 (S.C.J.) is just such a case. As noted in Schmidt, that case was “primarily documentary” and some relevant documents had been destroyed by the defendant.

[23] In terms of existing authorities, the plaintiffs place their main reliance on the handwritten endorsement of Master McAfee in Angelo Boujos et al. v. Yorkton Securities Inc et al. (unreported, April 23, 2012, court file no. 99-CV-182338). In that case, which the plaintiffs assert is very factually similar to this case, the Master refused to dismiss the action for delay. The plaintiffs contend that, because of the similarities in the two cases, the result in that case should direct the result in this case. I do not agree.

[24] As might be expected, there are factual differences between the two cases. Of particular importance is that the Boujos case was again “predominantly” a documentary case. This action is not a documentary case. This action will rely on the recollections of the individuals involved in the construction of the article that gives rise to the allegedly defamatory statements including the contents of the interview involving Mr. Bell. The whereabouts of the person who conducted that interview are not currently known. One of the editors is deceased. Another has left the country. All of the persons involved in the article are going to be asked to recollect their actions and their thought processes from fifteen years ago. The problems with all of that in terms of the state and quality of the available evidence should be self-evident.

[25] Also in Boujos, the Master was not satisfied that the plaintiffs or their lawyers were responsible for inexcusable delay. The same cannot be said here. Even accepting that the appeal process adequately explains the lack of steps taken between my ruling in 2001 and the Court of Appeal’s decision in 2005, it does not explain the plaintiffs’ lack of activity prior to 2001 and certainly does not explain the complete absence of any steps from 2005 to today.

[26] Finally on the issue of Boujos, I note the Master also acceded to the submission in that case that the defendants had failed to preserve evidence “such as obtaining witness statements” from those who might have relevant evidence. The Master cited the decision in Schmidt for this proposition.

[27] As I earlier noted, the decision in Schmidt turned on the destruction of documentary evidence. There is nothing in Schmidt that stands for the proposition that a party is, as part of its duty to preserve evidence, required to obtain witness statements. The lack of any such requirement may follow from the reality that a witness statement is of little use if the witness turns out not to be available at trial. If the witness is deceased or cannot be located, a witness statement is going to be of little, if any, evidentiary value. There are a number of authorities that consider the death of, or inability to locate, a witness as examples of the type of prejudice that arises from delay.[^1] There is no suggestion in those authorities that the failure to obtain a witness statement would have eliminated the prejudice.

[28] One final contention of the plaintiffs must be addressed. The plaintiffs contend that the defendants are precluded from bringing this application because there are undertakings that are outstanding from the examination for discovery of Mr. Bell. This issue was raised through the delivery of an affidavit from the assistant to counsel for the plaintiffs on the morning that the motion was re-scheduled to be heard. By way of background, the motion itself was launched in September 2012 and was originally to be heard on December 14, 2012 but was adjourned due to the illness of plaintiffs’ counsel. The last minute delivery of an affidavit raising this type of issue would, in and of itself, be a sufficient reason to summarily dispose of it. However, the issue itself is not truly raised when one considers the exact wording of the affidavit. Counsel’s assistant states:

I am advised by Mr. Healey, who has reviewed the file, that there is no evidence in the file that these undertakings have been answered.

The affidavit then attaches an index from the examination for discovery that is entitled “Index of Refusals/Advisements”.

[29] This is not the proper way to raise such an issue even if it had been advanced in a timely way. A list of refusals/advisements is not necessarily the same thing as a list of undertakings. It may well depend on the practice of the individual reporter. Adding to that concern, the affidavit refers to eight undertakings whereas the attached index lists eleven questions. Also, saying that there is “no evidence” in the file that the undertakings have been answered is not the same thing as saying that the undertakings have not been answered. On that point, I have the representation of counsel for Mr. Bell that he believes that all undertakings have been satisfied although he fairly does not claim an express recollection of that fact given that the examination for discovery occurred fourteen years ago.

[30] The plaintiffs assert that there is an absolute prohibition on defendants bringing motions for delay if undertakings are outstanding. They rely on Greslik v. Ontario Legal Aid Plan (1988), 1988 4842 (ON SCDC), 65 O.R. (2d) 110 (Div. Ct.) as support for this proposition. The decision in Greslik does not stand for such an absolute bar. Rather, it stands for the proposition that the failure of a defendant to comply with his/her/its obligation to fulfill undertakings is a matter that the court can take into consideration in deciding whether to exercise its discretion to grant the motion. As Callaghan A.C.J.H.C. expressly observed:

In our view when the drafters of the new rules used the words “not in default” in rule 24.01, they intended those words as a condition that must be satisfied before a defendant could launch a motion to dismiss, but those words cannot and should not be read to take away the jurisdiction of the master to exercise his discretion to dismiss such a motion where it appears that a defendant, although perhaps not in technical default of any specific rule or rules, has been dilatory in complying with undertakings and has ignored requests for compliance over a lengthy period of time.

[31] Here, there is an insufficient evidentiary base for any conclusion that there are undertakings that are outstanding. In any event, of more importance, is the fact that there is no evidence that demands have been made for fulfillment of those undertakings and a corresponding and repeated failure of the defendants to comply.

[32] Finally, in addition to all of these considerations, there is the salient fact that all of the plaintiffs’ submissions in opposition to the motion are directed at matters involving Mr. Bell. None of the submissions address the other defendants. Those defendants are not connected to the 2008 action and those defendants are the ones who have suffered the most serious losses of available evidence.

[33] In the end result, more than fifteen years have passed since the alleged libel took place. Fourteen years have passed since the action was commenced. Outside of some discovery steps taken in 1998, nothing has been done by the plaintiffs to bring this action to trial. The plaintiffs make the bald allegation in their responding affidavit that they “attempted to set this matter down for trial but were unable to” with nothing more. In addition, now faced with this motion, the plaintiffs say that they “have conducted what discoveries that they wish to conduct and want to proceed to trial”. If that is true, given that those discoveries were conducted in 1998, it poses the obvious question why the action was not set down for trial at any point in the last fourteen years unless, of course, this realization has only occurred very recently and solely in response to this motion.

[34] The fact is that there has been inordinate delay in this proceeding and that delay lies almost entirely at the feet of the plaintiffs and their lawyers. The length of the delay and the nature of the delay cannot reasonably be characterized as being other than “intentional and contumelious”. There is a presumption of prejudice that arises from this delay that is reinforced by evidence of actual prejudice through the loss of witnesses.

[35] There have been some recent decisions of the Court of Appeal that have addressed the concerns that arise when actions do not proceed in an appropriate pace towards trial.[^2] In my view, those cases demonstrate an increased emphasis on the obligation of all parties to proceed in a timely fashion with their proceedings or risk their dismissal, whether at the instance of one of the parties or at the instance of the court itself. This reflects a reiteration of the fact that the proper administration of any system of justice demands that there be a timely adjudication of disputes. This fundamental requirement is also reflected in new mechanisms that have been included in the Rules of Civil Procedure in recent years such as case management, status hearings and the like. It also reflects one of the fundamental principles behind the Rules of Civil Procedure, that is, that they are designed to “secure the just, most expeditious and least expensive determination of every civil proceeding”.[^3]

[36] In the end result, the situation here falls squarely within the principles enunciated in 1196158 Ontario Inc. v. 6274013 Canada Ltd. (2012), 2012 ONCA 544, 112 O.R. (3d) 67 (C.A.) and, in particular, where Sharpe J.A. said, at para. 33:

At some point, a party who has failed to respect the rules designed to ensure timely and efficient justice loses the right to have its dispute decided on the merits. If that were not the case, the rules and the timelines they impose would cease to have any meaning and any hope of ensuring timely and efficient justice would be seriously jeopardized.

[37] If the requirement established by r. 24.01(1) is not applied in a situation such as is presented here, it is difficult to foresee the type of case where realistically it would ever be applied.

[38] I am satisfied that the defendants have met their burden on the facts of this case to show that the plaintiffs’ claims should be dismissed for delay.

[39] There is then the issue of Mr. Bell’s outstanding counterclaim. Mr. Bell fairly concedes that, if the plaintiffs’ claims are dismissed for delay, he would have considerable difficulty trying to establish why his counterclaim ought not to suffer the same fate. Mr. Bell therefore consents to his counterclaim being dismissed upon the dismissal of the plaintiff’s claims.

[40] For the sake of completeness, I will add that regardless of the outcome of this motion, it is evident that the claim of Colleen Khan would have to be dismissed given that she is deceased and her claim of libel passed with her.

[41] In summary, the plaintiffs’ claims are dismissed. The counterclaim of the defendant, William Bell, is also dismissed.

[42] The parties may make written submissions on the costs of this motion and any costs that may remain to be determined from the action. The defendants shall file their written submissions within 30 days of the date of this endorsement and the plaintiffs shall file their responding submissions within 30 days thereafter. None of the submissions is to exceed five pages in length. No reply submissions are to be filed.

NORDHEIMER J.

Released: February 11, 2013

Footnotes

[^1]: See, for example, Belanger v. Southwestern Insulation Contractors Ltd. (1993), 1993 5503 (ON SC), 16 O.R. (3d) 457 (Gen. Div.) and DeMarco v. Mascitelli, [2001] O.J. No. 3582 (S.C.J.)

[^2]: see North Toronto Chinese Alliance Church v. Gartner Lee Ltd., [2012] O.J. No. 1710 (C.A.) and 1196158 Ontario Inc. v. 6274013 Canada Ltd. (2012), 2012 ONCA 544, 112 O.R. (3d) 67 (C.A.)

[^3]: see r. 1.04(1)