ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-06-00291-00
DATE: 2014-03-06

BETWEEN:

Herlon Jones
Plaintiff

– and –

Gurmeet Kaur Sidhu
Defendant

Edward Goldentuler, Counsel for the Plaintiff

Fraser Gow, Counsel for the Defendant

HEARD: February 21, 2014

REASONS FOR JUDGMENT

Trimble J.

[1] The Plaintiff seeks an order setting aside the Order of Justice Goodman dated, June 3rd, 2011, dismissing the action and fixing costs at $1,000, payable within 30 days of its date. The Order simply says that the matter is dismissed “for delay”. The endorsement says that the motion is for the “Dismissal of the action pursuant to the Rules. There has been no action in this file for the past 5 years – well beyond the 6 months after the close of pleading.” The Rule relied on by Justice Goodman is not stated in the motion record before me. The motion record before Justice Goodman is not before me.

[2] For the reasons that follow, this motion is dismissed, with costs to the Defendant fixed at $4,000, all inclusive.

CHRONOLOGY:

Jan. 29/04 Motor Vehicle Association (“MVA”). In the circumstances of this accident, the Defendant’s insurer is both the tort insurer for the Defendant and the Accident Benefit insurer for the Plaintiff.

Jan. 25/06 Statement of Claim (“SOC’) is issued by Peter Abraham, solicitor for the Plaintiff, four days before expiry of the two year limitation.

Jan. 26/06 SOC is served.

Feb. 15/06 Time expires to serve a Statement of Defence (“SOD”). No step is taken to put the Defendant in default.

Mar. 5/06 Time expires for the Plaintiff to serve a Reply and the earliest time in which the Plaintiff could have noted pleadings closed. No such action was taken.

Mar 22/06 Wawanesa, as Insurer for the Defendant, acknowledges receiving SOC, asks for confirmation of a waiver of defence, asks for the AB file, and provides an authorization to produce the Accident Benefit (“AB”) file. Plaintiff never responds to this letter.

Oct. 30/06 Wawanesa follows up to its March 22 letter and asks Plaintiff’s solicitor to confirm the waiver of Defence or ask for a Defence. Plaintiff never responds to this letter.

June 3/07 Goldentuler & Associates, specifically Henry Goldentuler, is retained to act for the Plaintiff and writes to Abrahams and asks for a copy of the file.

June 3/07 Henry Goldentuler writes to Wawanesa advising of his retainer. The Plaintiff never notifies Wawanesa in its capacity as tort insurer for the Defendant, that he has changed lawyers in the tort claim. The June 3 letter, in all aspects, refers only to Goldentuler as solicitor for the Plaintiff in his AB Claim. There is nothing in the letter which refers, even inferentially, to Goldentuler & Associates being retained in the tort claim.

June 20/07 Abrahams acknowledges the change in solicitor and advises he will release the file to Goldenthuler on payment of his account.

Nov. 5/07 Goldentuler writes to Abraham again asking for the file. An assessment of the account was also scheduled for that day. It appears to have been adjourned to allow Abrahams to provide dockets and other documents, including correspondence with the Defendants.

Nov. 6/07 Goldentuler writes to Abraham confirming an agreement whereby Abrahams’ fees were set at $2,000, and requests a copy of the full file, again.

Mar. 11/08 Wawanesa, as tort insurer for the Defendant, writes to Abraham, still solicitor of record in the tort claim, asking again for confirmation of a waiver of a Defence, for a copy of the AB file and for an update on the tort file. The Plaintiff never responds to this letter.

Mar. 20/08 Goldentuler writes Abrahams, again, for the file.

Mar. 24/08 Goldentuler writes Abrahams, again, for the file.

Oct. 2/08 Henry Goldentuler dies. The firm remained as solicitor of record for the AB insurer.

Dec. 13/10 Wawanesa’s newly appointed counsel for the Defendant writes to Abrahams, 33 months after its last letter, asking for immediate release of the AB file and a complete copy of the damages file. The Plaintiff never responds to this letter.

May 25/11 Counsel for the Defendant serves Abrahams, solicitor of record for the Plaintiff, with his motion to dismiss the action.

June 2/11 Abrahams writes to the tort defendant’s lawyer, advising that he had no instructions to respond to the motion and would not be attending.

June 3/11 Goodman J., having been provided with a copy of Abrahams’ letter, dismisses the action.

June 14/11 Counsel for the Defendant provides Abrahams with Goodman J.’s endorsement.

Dec. 2-5/11 Edward Goldentuler, Henry Goldentuler’s brother and law partner, reviews the file and has an agent search the court file to determine the status of the tort claim. It is now 38 months after Henry Goldentuler’s death, 94 months after the MVA, 70 months after the SOC was issued, and 69.50 months after pleadings could have been noted closed. The Plaintiffs concede that there was no activity in the tort file for the 38 months between Henry. Goldentuler’s death in October, 2008 and December, 2011. They also concede that there was no activity in the tort file in the 22 months between June, 2011 and August, 2013. Mr. Goldentuler did not appeal from the decision of Goodman J., nor seek leave to extend the time to bring the appeal from his final order.

Jan. 2/12 Goldentuler called Defence counsel to advise that he has taken over the action from Abrahams, following the death of Henry. He also advised that he would be moving to set aside Goodman J.’s order. Defence counsel advised that this phone call was the Defendant’s first notice of Goldentuler’s involvement in the tort file.

Aug. 12/13 Goldentuler serves his Motion Record for this motion [19 months after the phone call with Defence Counsel].

Aug 14/13 Goldentuler’s office files its Notice of Change of Solicitor.

ADDITIONAL FACTS:

[3] At no time before the Motion was Wawanesa, in its capacity as tort insurer for the Defendant, specifically advised of Mr. Goldentuler’s retainer.

[4] The Motion Record before Goodman J., was not put in evidence before this Court.

[5] Goodman J’s, cost order has not been paid.

[6] Counsel for the Plaintiff advises that he still does not have the file from solicitor Abrahams. His knowledge of the matter comes from his search of the court file in early December, 2011 which revealed the motion record supporting the order dismissing.

[7] The parties concede that Goldentuler & Associates never brought a motion to force solicitor Abrahams to disgorge the file, subject to a solicitor’s lien or charging order for fees.

[8] The parties agree that the passage of time since August 12, 2013 should not be considered on this motion.

[9] There has been no exchange of Affidavits of Documents or of any Schedule A documents. The AB file was never produced to the tort Defendant. There is no evidence that the police report was ordered in the past ten years, or that such things as tax records or OHIP records have been requested or produced. The parties agree that there is no indication that records normally destroyed in keeping the police CRA’s and OHIP’s seven year retention policies, have been retained. Counsel concede that if OHIP and CRA records were not requested those records older than seven years at the time the request is made, are no longer likely available.

POSITIONS OF THE PARTIES:

[10] The Plaintiff says that the Order of Goodman J. should be set aside as it should never have been made. The order was made under R. 24.01(1). The pleadings were never closed and, as such, the six months referred to in 24.01(1)(c) has never begun to run. The Plaintiff relies, in support of this argument, on Housser v. Savin Canada Inc., 2005 35779 (ONSC) at para.s 6, 7, 10-16, and Garofalo v. All Type Financial Services Ltd., 2008 32832 (ONSC), para. 21. The Plaintiff says that the Court should only refuse to set aside the order where the delay is contumelious (see Hutchinson v. Hirosik, [2007] O.J. No. 1042 (OnSC)). Ultimately, the Court must do what is just and fair.

[11] The Plaintiff argues that, even using the test in Reid v. Dow Corning Corp. [2001] O.J. No. 2365 (Master Dash) and Scaini v. Prochnicki et al., 2007 ONCA 63, 85 O.R. (3d) 179 (C.A.), the order should be set aside because the sins of the solicitors should not be visited on the client, and the action should be allowed to proceed on its merits (see Goldentuler Estate v. Crosbie et al., 2012 ONSC 926 paras. 1, 45, 55-56).

[12] In relation to the Reid/Scaini test, the Plaintiff says that notice of the change of solicitor was given immediately to Wawanesa, and notice to the insurer was notice both in the AB and tort files. Therefore, there is no prejudice to Wawanesa. In addition, the onus is on Wawanesa to undertake its own investigation, and not lie in the weeds for time to expire (see Housser para 22 and 25).

[13] The Defendant says that the Reid/Scaini test applies, and that the Plaintiff fails to meet it.

ANALYSIS:

1. Jurisdiction to Set Aside Goodman J.’s, Order.

[14] At the outset of the Motion, I asked counsel for the moving party to provide me with the source for my jurisdiction to set aside Goodman J.’s order, since the Plaintiff provided only a shopping list of nine Rules on which he was relying, without reference to any rule or sub rule in relation to any specific ground of his motion. The Plaintiff did not address this issue in writing as he prepared no factum. He did not expect this question. No cases were put before me in respect of which Rule provides me with jurisdiction to amend or vary Goodman J.’s order. Accordingly, while I express my thoughts on the Plaintiff’s submissions on jurisdiction, below, my decision, ultimately, does not turn on it.

[15] Plaintiffs’ counsel identified Rules 37.14(1)(b) and 59.06(2)(b) as providing me with authority to set aside Goodman J.’s order.

[16] Rule 37.14(1)(b) does not apply to this case. There is no evidence that counsel for the Plaintiff failed to appear at the motion to dismiss, because of “accident, mistake or insufficient notice”.

[17] Rule 59.06(2)(b) provides that a party who seeks to suspend the operation of an order, may make amotion for that relief. I do not think, however, that I have jurisdiction to grant the order the Plaintiff seeks under this Rule. There are no grounds under the Rule to set aside or vary an Order where it arises through a mistake which was avoidable through reasonable diligence (see Goodman Investments v. Abraham (1976), 1 C.P.C. 258 (Ont. H.C.)). In this case, all of the events that led to the dismissal arose through action (or inaction) which was avoidable with reasonable diligence. Specifically, the existence of the order would have been determined quickly if Mr. Goldentuler’s office acted with dispatch to obtain a copy of the file.

[18] On this point, and at several other points, the Plaintiff says that the sins of the solicitor should not be visited on the client, if in so doing the client is prevented from having the case heard on its merits. He points to Goldentuler Estate v. Crosbie et al., 2012 ONSC 926 paras. 1, 45, 55-56. In that case, the Court was asked to determine at which point the client could no longer shield behind the failure of the lawyer to take action. In determining that the action could proceed (under R. 59.06(2)(a)) the Court relied on the decision of the Court of Appeal in Halton Community Credit Union Ltd. v. ICL Computers (1985) 1 C.P.C. (2d) 24 which held that “…it is a principle of very long standing that the client is not to be placed irrevocably in jeopardy by reason of the neglect or inattention of his solicitor, if relief to the client can be given on terms that protect his innocent adversary as to costs thrown away and as to the security of the legal position gained.” However, the Court of Appeal in Scherer vs. Platta (1966), 1966 286 (ON CA), 57 D.L.R. (2nd) 532 clearly states that where a solicitor acts, he acts as agent for the client, and the client is bound by the actions (or inactions) of his agent.

[19] In this case, the Plaintiff is bound by the actions or inactions of the agent Abrahams and/or Goldentuler.

2. Rule 24.01

[20] Rule 24.01(1)(c) provides that a defendant “who is not in default under these Rules” may move to have an action dismissed for delay where the plaintiff has failed “to set the action down for trial within six months after the close of pleadings”.

[21] The Plaintiff argued that Goodman J. based his decision on 24.01(1)(c). He contends that since the Defendant never defended the action, the six month time period under R. 24 within which to set the matter down never began to run, and Goodman J., should not have made his Order. He also contends that if Goodman J. had before him the full facts of what transpired in the file, he would not have made the Order. The Plaintiff requests that I can set aside the Order on the basis of the fuller facts.

[22] I disagree, for several reasons.

(a) The record that was before Goodman J., was not put before me. I cannot tell what facts were before Goodman J., and hence what he determined as the factual basis of the order.

(b) While counsel for the Plaintiff represented that the Rule the learned motions judge applied was R. 24, there is no evidence of that. I do not know what Rule the learned motions judge applied, or whether his decision was based on the inherent jurisdiction of the Court. Since I do not know the basis on which the learned motions judge dismissed the action, I cannot determine whether the Housser, Garofalo and Hutchinson cases apply.

(c) In any event, the Housser, Garofalo and Hutchinson cases are all cases in which the Court was asked to determine, at first instance, whether the matter should be dismissed under R. 24. They do not speak to the test to be applied in setting aside an Order under R. 24, once made. As I indicate below, once the order is made, I conclude that the proper test to setting aside the order is the Reid/Scaini test, not the test laid out in Housser, etc.

(d) This motion is really an appeal from the Order of Goodman J., brought in the guise of a motion to vary under R. 59.60(2)(b). In my view, the proper procedure would have been to bring an appeal seeking leave to extend the time for filing a Notice of Appeal, based on the issues arising from lack of disclosure largely by solicitor Abrahams.

3. The Reid/Scaini Test.

[23] The Defendant says that the test to set aside this dismissal is that set out in Reid and Scaini. The Plaintiff says that the Reid/Scaini test applies only to setting aside dismissals under R. 48, and that the test should be that as in Housser. For reasons stated above, I reject that proposition. Counsel for the Plaintiff could not point to any authority holding that the Reid/Scaini test was limited only to setting aside dismissals under R. 48, or did not apply to setting aside dismissals under R. 24.01 (assuming R. 24 applied in this case). Having been referred to no authority or policy reason limiting the application of the Reid/Sciani test to circumstances in this case, I think that the Reid/Sciani test does apply.

[24] Under Reid (at para. 41), the moving party must:

a) Explain the litigation delay (the delay in the progress in the litigation between the initiation of the action and the deadline for the setting the action down);

b) Show that the missing of the deadline was through inadvertence. In other words, the Plaintiff must show the intention to set the action down in a timely way, and that it was missed through inadvertence;

c) Move promptly to set aside the dismissal. In Reid, the Court says the motion must be brought “as soon as possible” (para. 41, item 3);

d) Show that there is no significant prejudice to the Defendant in defending the case as a result of the plaintiff’s delay. There is a presumption of prejudice in terms of witnesses’ memories fading and the difficulty in locating witnesses or documents. The Defendant must also show specific evidence of prejudice.

[25] The Court of Appeal, in Scaini (at para. 24 et seq.) tells us that the Reid criteria ought not to be applied rigidly. Rather, they should be applied flexibly, using a contextual approach.

[26] Litigation Delay: In this case, the Plaintiff has no adequate explanation for the litigation delay. Master Dash says (Reid para. 41, item 1) “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”.

[27] In this case, there is no evidence of the nature Master Dash said is required. Aside from issuing a Statement of Claim in January 2008, Henry Goldentuler’s notifying the insurer (as AB insurer) of his retainer as acting in the AB file, and moving to set the dismissal order aside, there is no evidence of any action in the tort file in the ten years since the accident occurred, or the eight years since the action was commenced. The Plaintiff’s previous solicitor did nothing. There is no evidence to explain why nothing has occurred, either from solicitor Abraham or the Plaintiff directly.

[28] Plaintiff’s counsel argues that following his firm’s being retained in June 2007, he was prevented from dealing with the file (other than to write letters to the Plaintiff’s former tort lawyer) because of a number of issues including solicitor Abraham’s failure to send the file, Henry Goldentuler’s death in October, 2008 and staffing problems within the firm, including junior’s departure from the firm. None of this explains, adequately, the lack of activity in the 74 years between Henry Goldentuler’s retainer and when Ed Goldentuler searched the court file to find that the dismissal was granted, or the 38 months between when Henry died and the court file was searched. No doubt, Henry Goldentuler’s death and changes in staff in the office must contribute to the delay, but there is no evidence as to the extent to which those factors contributed to the inordinate delay in moving this matter along.

[29] In terms of relying on the inaction of solicitor Abrahams, evidence detailing the attempts (and results thereof) to contact Mr. Abrahams must be given in detail (see Hall v. Ma [2012] O.J. No. 577 para. 96). The explanation of events in this case shows that the actions taken are clearly inadequate. Sometime in the 74 months between when Mr. Goldentuler was retained and the Motion to Dismiss was served, the Plaintiff could, and should have moved for an order forcing Mr. Abrahams to surrender the file, subject to a lien for his fees. The actions Mr. Goldentuler took were anemic, at best.

[30] The hurly-burly of a plaintiff lawyer’s busy practice, with a large number of files and a turn-over of staff, does create some unavoidable delay, and can be used to excuse short periods of delay. However, the lawyer must staff his office and move files appropriately. His resourcing in his office and files should never become a client’s problem and cannot be used as an excuse for failing to move an action forward promptly. I agree with Master Haberman’s view in Kamboj v. Sidhu [2013] O.J. No. 2149, at para. 27. In this case, the delay between either a) Goldentuler’s retainer, or b) Henry Goldentuler’s death, and the Notice of Motion to Dismiss, is not explained adequately.

[31] Inadvertance: In this case, the Plaintiff must show inadvertence in not responding to the Notice of Motion to Dismiss. The fact that solicitor Abrahams responded to the tort Defendant’s solicitor and said he could not get instructions and would not attend, is evidence that there was specific attention paid to the Notice of Motion to Dismiss.

[32] There is no evidence from the Plaintiff, himself, to explain inadvertence. In this case, such evidence should have been provided. The bald assertion of the Plaintiff’s lawyer, in paragraph 36 of the Affidavit that “The Plaintiff at all times intended to proceed with this action.” is insufficient.

[33] Promptness in Bringing the Motion: Twenty months elapsed between when the fact of the Dismissal was discovered (sometime in early December, 2011) and the Motion being brought (August, 2013). Aside from the issues in Mr. Goldentuler’s office, discussed above, there is no evidence, from Goldentuler or the client, explaining this delay. The Motion to set aside Goodman J.’s order, was not brought promptly.

[34] Prejudice: There is a presumption of prejudice in this matter. The Plaintiff has a low onus to rebut the presumption. The evidentiary onus shifts to the Defendant to show actual prejudice.

[35] I accept that witness’ memories fade over time. It has been ten years and one month since the MVA. More important is the availability of documents. Both parties agreed that police, tax authorities and OHIP only keep records going back seven years, and that if police, tax and OHIP records have not been requested to date, they may no longer exist for any period before seven years ago. In addition, both parties agree that records from these offices can only be released to, or on the authorization of the Plaintiff, and the Defendant could not have obtained these records without an authorization.

[36] There is no evidence before the Court indicating whether the Plaintiff requested any police, tax or OHIP records. I find that there is actual prejudice. That the Defendant did not conduct surveillance or other investigation it could have done, on its own, does not create prejudice. A reasonable Defendant, once sued, must do what is required to defend itself. Prejudice only arises from those investigations no longer available to the Defendant because of the Plaintiff’s delay (see Hutchinson, para.11 g to l).

[37] The Plaintiff offers little to rebut the evidence of actual prejudice. The only evidence with respect to what document assembly has been done is that Mr. Goldentuler’s office received a copy of the AB file, and “made document requests to third parties to reconstruct the file.” This is insufficient.

[38] The Plaintiff also says that there is no prejudice since the insurer of the defendant (the “real” litigant”) knew that his firm was retained effective June, 2007, when Mr. Goldentuler wrote to the insurer as AB insurer, and implicitly, that the service of the Motion on and any correspondence with solicitor Abrahams thereafter, was inappropriate.

[39] I reject this submission for three reasons. First, in the tort action, solicitor Abraham was the solicitor of record. The insurer was obliged to deal with him, not Goldentuler. Second, Wawanesa, in its capacity as insurer of the tort defendant, was never notified of Goldentuler’s retainer as solicitor for the Plaintiff in the tort action. The June 3, 2007 letter from Goldentuler to Wawanesa referred only to his retainer on the Accident Benefit file. There is no reason to suppose or infer from that letter that Goldentuler was retained on the Plaintiff’s tort claim.

[40] Third, notice to an insurer for one purpose is not notice for all purposes. In Klingbiel v. Worthington Trucking (1997), 36 .R. (3d) 656 (rev’d on other grounds, 1999 19927 (ON SC), 43 O.R. (3d) 697), the Court approved of Insurance Bureau of Canada Bulletin 184’s procedure whereby the IBC directed that information gathered in the accident benefit file should not be given to anyone outside of that file. In effect, insurers, where they act in defence of an AB claim and the tort claim, must maintain Chinese Walls between their files. This would have prevented the Goldentuler letter from being filed in the tort file or being notice in the tort matter of their appointment.

[41] Contextual approach: Taking the contextual approach does not assist the Plaintiff. Sciani requires the court to avoid a formulistic application of the Reid factors. Instead, the Court is required to look at all factors affecting the delay. Scaini recognizes that the Reid factors are the most obvious and important ones to consider, but adds that there are others. Looking at only the Reid tests, the Plaintiff fails to meet any of them. If the Plaintiff cannot meet the most obvious and important tests, I do not see how a contextual analysis helps. In any event, the evidentiary record is so sparse as to make a contextual analysis impossible.

[42] The Plaintiff submitted that, ultimately, it was fair and just in this case to set aside Goodman J.’s order, since the dismissal arose, predominantly, from solicitor Abrahams’ inactivity. As indicated above, I disagree with this characterization of the evidence. Counsel also stressed that the Court ought to seek to err on the side of allowing matters to proceed on their merits. I note that the Court of Appeal has said that these motions involve an exercise of discretion in which the Court must weigh all relevant considerations and decide the matter on this merits (see Habib v. Mucaj, 2012 ONCA 880 at para. 6, MDM Plastics Ltd. V. Vincor Int’l Inc, 2013 ONSC 710 at paras. 24 and 28). In my view, these broad statements are interpretive guides. I come to the conclusion that the interests of justice dictate that the dismissal order not be set aside.

COSTS

[43] The Plaintiff agreed that were he successful, he would not seek costs. The parties also agreed that if the Plaintiff lost the motion, costs would be fixed in favour of the Defendant, at $4,000, all inclusive. I so order.

Trimble J.

Released: March 6, 2014

COURT FILE NO.: CV-06-00291-00
DATE: 2014-03-06

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Herlon Jones
Plaintiff

– and –

Gurmeet Kaur Sidhu
Defendant

REASONS FOR JUDGMENT

Trimble J.

Released: March 6, 2014