Williams v. Whitefish River First Nation

Ontario Reports

Ontario Superior Court of Justice,

Master Muir

March 20, 2014

119 O.R. (3d) 551 | 2014 ONSC 1817

Case Summary

Civil procedure — Dismissal for delay — Setting aside — Plaintiff failing to provide satisfactory explanation for delay in setting action down [page552] for trial or for delay in bringing motion to set aside order dismissing action for delay — Failure to set action down for trial resulting from inadvertence on part of plaintiff's lawyer — Defendant not suffering any prejudice — Motion to set aside dismissal granted.

The plaintiff sued the defendant after the defendant failed to pay his invoice for legal services. The action was not set down for trial within two years of the statement of defence being filed. As a result, the action was dismissed by the registrar in June 2012. The plaintiff brought a motion in February 2013 to set aside that order.

Held, the motion should be granted.

The plaintiff failed to provide any satisfactory explanation for the delay in setting the action down for trial or for the delay in bringing the motion to set aside the dismissal. However, it was clear that the plaintiff intended to carry on with the claim and that the deadline was missed due to inadvertence on the part of the plaintiff's lawyer. The defendant suffered no prejudice as the claim would be decided, for the most part, on the basis of documentary evidence, and all documents appeared to have been preserved and to be in the hands of the defendant's lawyers. It was in the interests of justice that the dismissal order be set aside.

Cases referred to

744142 Ontario Ltd. v. Ticknor Estate, [2012] O.J. No. 1119, 2012 ONSC 1640, 76 E.T.R. (3d) 134 (Master); Aguas v. Rivard Estate (2011), 107 O.R. (3d) 142, [2011] O.J. No. 3108, 2011 ONCA 494, 7 C.P.C. (7th) 16, 282 O.A.C. 39, 335 D.L.R. (4th) 365, 203 A.C.W.S. (3d) 741; Evans v. Revenue Properties Co., [2011] O.J. No. 1560, 2011 ONSC 2132 (Master); Finlay v. Van Paassen (2010), 101 O.R. (3d) 390, [2010] O.J. No. 1097, 2010 ONCA 204, 266 O.A.C. 239, 318 D.L.R. (4th) 686, 188 A.C.W.S. (3d) 675; Habib v. Mucaj, [2012] O.J. No. 5946, 2012 ONCA 880, 31 C.P.C. (7th) 1; Hamilton (City) v. Svedas Koyanagi Architects Inc. (2010), 104 O.R. (3d) 689, [2010] O.J. No. 5572, 2010 ONCA 887, 271 O.A.C. 205, 328 D.L.R. (4th) 540, 97 C.L.R. (3d) 1, 2 C.P.C. (7th) 114; Machacek v. Ontario Cycling Assn., [2011] O.J. No. 2379, 2011 ONCA 410; Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd. (2007), 87 O.R. (3d) 660, [2007] O.J. No. 3872, 2007 ONCA 695, 47 C.P.C. (6th) 233, 286 D.L.R. (4th) 487, 247 O.A.C. 22; MDM Plastics Ltd. v. Vincor International Inc., [2013] O.J. No. 576, 2013 ONSC 710, 303 O.A.C. 208 (Div. Ct.); Scaini v. Prochnicki (2007), 85 O.R. (3d) 179, [2007] O.J. No. 299, 2007 ONCA 63, 219 O.A.C. 317, 39 C.P.C. (6th) 1, 154 A.C.W.S. (3d) 1075; Wellwood v. Ontario (Provincial Police) (2010), 102 O.R. (3d) 555, [2010] O.J. No. 2225, 2010 ONCA 386, 262 O.A.C. 349, 90 C.P.C. (6th) 101

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 37.14, (1), 48.14, 57.01(1), (2)

MOTION to set aside an order dismissing an action for delay.

R. Aaron Detlor, for plaintiff.

Stephanie Kearns, for defendant.

[1] MASTER MUIR: — The plaintiff brings this motion pursuant to rule 37.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the "Rules") [page553] for an order setting aside the order of the registrar dated June 19, 2012, dismissing this action for delay. This action was dismissed by the registrar due to the failure on the part of the plaintiff to comply with the requirements of rule 48.14. An action may be dismissed by the registrar under rule 48.14 if an action has not been set down for trial within two years of the first defence being filed.

[2] The defendant opposes the granting of the relief requested on this motion.

Preliminary Issue

[3] At the outset of the argument of this motion, the defendant raised an objection to the inclusion in the plaintiff's material of certain statements and documents relating to the parties' attempts to resolve the issues in this action. It was agreed that the fact of the settlement effort could be referred to but the specifics of any settlement offers would not form part of the evidence on this motion. I have therefore not considered the contents of any of the various settlement related correspondence filed on this motion.

Background and Progress of the Litigation

[4] The plaintiff is a lawyer. Between 1985 and 2009, the plaintiff provided legal services to the defendant. For the most part, the work involved representing the defendant in connection with certain land claims and a claim relating to the delineation of the boundaries of the Whitefish River First Nation reserve.

[5] It appears that the plaintiff's retainer was terminated on or about January 11, 2009. The plaintiff then delivered an invoice to the defendant for legal services rendered. The plaintiff alleges that he is owed $163,000.

[6] The defendant denies that it owes anything to the plaintiff. The defendant takes the position that a portion of the work undertaken by the plaintiff was done on a contingency basis and that his fee was conditional upon a successful resolution of the claims. The defendant also takes the position that the contingency agreement is unenforceable in any event. In addition, the defendant takes issue with the plaintiff's accounting and alleges that the fees charged by the plaintiff are excessive.

[7] The statement of claim in this action was issued on January 8, 2010. A notice of intent to defend was filed on March 8, 2010. A statement of defence was filed on March 18, 2010. Between July 2010 and November 2010, the parties were [page554] engaged in various settlement discussions. Those discussions appear to have come to an end in November 2010.

[8] The plaintiff then began the process of assembling his productions and preparing an affidavit of documents. The record is silent as to the specific steps that were taken by the plaintiff in connection with this task between November 2010 and September 2011.

[9] In the fall of 2011, a concern developed regarding the documents and a potential for conflict. It appears that the plaintiff turned over his documents to the law firm that assumed carriage of the boundary claim after the plaintiff's retainer was terminated in 2009. That firm appears to have the documents in its possession and gave an undertaking to the plaintiff that it would provide him with access to the documents in connection with any claim he may choose to advance against the defendant in connection with his unpaid fees. The difficulty apparently related to Mr. Detlor. Counsel for the defendant on the boundary claim was concerned about Mr. Detlor's ongoing representation of Whitefish Lake First Nation in connection with a claim that may overlap with the defendant's boundary claim.

[10] It appears that a solution to the conflict issue was arrived at some time in November 2011. However, it appears that the plaintiff has done nothing to prepare and serve his affidavit documents since that date, notwithstanding the resolution of the conflict issue.

[11] A further period of delay occurs between November 2011 and April 2012. On March 8, 2012, the court issued a status notice. On April 18, 2012, Mr. Detlor wrote to the lawyer for the defendant suggesting that the parties agree to a timetable. There then ensued an exchange of correspondence regarding the timetable and settlement of the action as a whole. Those discussions continued until June 5, 2012, when the lawyer for the defendant sent an e-mail to Mr. Detlor with a proposed timetable that included a new set down date of June 14, 2013.

[12] It appears that Mr. Detlor failed to respond to this e-mail and failed to requisition a status hearing. This action was then dismissed by the registrar on June 19, 2012.

[13] The dismissal order was received by Mr. Detlor's office on July 4, 2012. It did not come to Mr. Detlor's attention, however, until the middle of August 2012. Mr. Detlor explains the inaction and delay after June 5, 2012 as a result of an extended vacation and the absence of his assistant.

[14] Mr. Detlor immediately contacted the lawyer for the defendant and asked for its consent to an order setting aside the dismissal order. A series of exchanges then took place between [page555] counsel throughout the summer and fall of 2012, but no agreement could be reached. Mr. Detlor finally served his motion record in support of this motion in early February 2013. However, no motion date was booked until May 2013, with the initial return date of October 9, 2013. The motion was then adjourned and ultimately heard by me as a long motion on March 17, 2014.

Setting Aside a Dismissal Order

[15] The law relating to motions for an order setting aside an administrative dismissal order is summarized in my decision in 744142 Ontario Ltd. v. Ticknor Estate, [2012] O.J. No. 1119, 2012 ONSC 1640 (Master). At para. 32 of that decision, I set out the applicable principles as follows:[^1]

In the last five years, the law relating to setting aside registrar's dismissal orders has been the subject of seven decisions of the Court of Appeal for Ontario. Although each of those decisions brings a slightly different approach to the decision making process, the general approach first set out by the Court of Appeal in Scaini has been followed consistently. The principles that emerge from those decisions can be summarized as follows:

the court must consider and weigh all relevant factors, including the four Reid factors which are likely to be of central importance in most cases;

the Reid factors, as cited by the Court of Appeal in Giant Tiger, are as follows:

(1) 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. . . . 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.

(2) 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 [page556] status hearing, but failed to do so through inadvertence. In other words the penultimate dismissal order was made as a result of inadvertence.

(3) 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.

(4) 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;

a plaintiff need not satisfy all four of the Reid factors but rather a contextual approach is required;

the key point is that the court is to consider and weigh all relevant factors to determine the order that is just in the circumstances of each particular case;

all factors are important but prejudice is the key consideration;

prejudice to a defendant may be presumed, particularly if a lengthy period of time has passed since the order was made or a limitation period has expired, in which case the plaintiff must lead evidence to rebut the presumption;

once a plaintiff has rebutted the presumption of prejudice, the onus shifts to the defendant to establish actual prejudice;

prejudice to a defendant is not prejudice inherent in facing an action in the first place but prejudice in reviving the action after it has been dismissed as a result of the plaintiff's delay or as a result of steps taken following the dismissal of the action;

the party who commences the litigation bears the primary responsibility under the Rules for the progress of the action;

in weighing the relevant factors, the court should not ordinarily engage in speculation concerning the rights of action a plaintiff may have against his or her lawyer but it may be a factor in certain circumstances, particularly where a lawyer's conduct has been deliberate. The primary focus should be on the rights of the litigants and not with the conduct of their counsel.

(Footnotes omitted)

[16] I am also mindful of the observations of the Court of Appeal in its decision in Hamilton (City). At paras. 20‑22 of that decision, Justice Laskin notes as follows:

Two principles of our civil justice system and our Rules of Civil Procedure come into play. The first, reflected in rule 1.04(1), is that civil actions should be decided on their merits. As the motion judge said at para. 31 of his reasons: "the court's bias is in favour of deciding matters on their merits rather than terminating rights on procedural grounds."

The second principle, reflected in the various time limits mandated by our rules, and indeed, as noted by the motion judge, in the provision for a status notice and hearing, is that civil actions should be resolved within a reasonable timeframe. In Marché, at para. 25, my colleague Sharpe J.A. [page557] wrote about the strong public interest in promoting the timely resolution of disputes. Both the litigants and the public have an interest in timely justice. Their confidence in the administration of our civil justice system depends on it.

On motions to set aside an order dismissing an action for delay, invariably there is tension between these two principles.

[17] I also note that the Court of Appeal has recently emphasized the principle that these motions involve an exercise of the court's discretion. The court must weigh all relevant considerations to determine the result that is just in the circumstances. See Habib v. Mucaj, 2012 ONCA 880, at para. 6.

[18] Finally, it should be emphasized that the general preference in our system of civil justice is for disputes to be decided on their merits. See MDM Plastics Ltd. v. Vincor International Inc., 2013 ONSC 710 (Div. Ct.), at paras. 24 and 28.

[19] These are the factors and principles I have considered and applied in determining the issues on this motion. My analysis leads me to the conclusion that the order of the registrar should be set aside.

Motion Brought Promptly

[20] Rule 37.14(1) requires that motions of this nature be brought by way of a notice of motion served forthwith after the order in question comes to the attention of the person affected. The applicable authorities also require these motions to be brought promptly. In my view, the plaintiff has not done so. I accept that Mr. Detlor made a genuine effort to obtain the consent of the defendant to an order setting aside the dismissal. However, once it became clear that the defendant's consent would not be immediately forthcoming, Mr. Detlor should have booked a motion date and served his material. Instead, he waited for almost six months to serve his motion record and then a further three months to actually book a date for this motion. This cannot be described as prompt under the circumstances.

[21] In my view, the plaintiff has not satisfied this element of the Reid test.

Litigation Delay

[22] I am also of the view that the plaintiff has failed to provide a satisfactory explanation for the delay encountered with this action. Some of the delay can be attributed to settlement discussions and difficulty with securing the documents. [page558] However, large gaps in the evidence remain. No specific explanation is provided for the delay between November 2010 and September 2011. No specific explanation is provided for the delay between November 2011 and April 2012. No explanation has been provided for why the plaintiff's affidavit of documents has still not been served. Nothing has been done to advance this litigation in terms of the steps contemplated by the Rules.

[23] For these reasons, I am not satisfied that the plaintiff has met this element of the Reid test.

Inadvertence

[24] In my view, the plaintiff has satisfied this factor. I am satisfied that the deadline was missed due to inadvertence. After the status notice was received Mr. Detlor contacted the lawyer for the defendant and attempted to come to terms on a timetable. Various exchanges took place over the course of almost two months. It is clear that the plaintiff intended to carry on with this claim. I accept Mr. Detlor's explanation for the default and I find that the failure to convene a status hearing was inadvertent. No other explanation makes sense.

[25] In my view, the plaintiff has satisfied this element of the Reid test.

Prejudice

[26] I am also satisfied that the plaintiff has met the onus placed upon him to rebut the presumption of prejudice. Where a limitation period has passed, as it has here, a presumption of prejudice arises and the onus rests with the plaintiff to rebut that presumption. The strength of this presumptive prejudice increases with the passage of time. See Wellwood, at para. 60.

[27] A plaintiff can overcome the presumption of prejudice by leading evidence that all relevant documents have been preserved, that key witnesses are available or that certain aspects of the claim are not in issue. See Wellwood, at para. 62.

[28] This claim involves an assessment of the value of legal services provided to the defendant. In my view, the claim will, for the most part, be decided on the basis of documentary evidence. All documents appear to have been preserved and are largely in the hands of the defendant's lawyers. Mr. Williams is the only lawyer who performed services that are the subject of the dispute. He is available to give evidence.

[29] The defendant's allegations of actual prejudice simply amount to vague and general suggestions of fading memories and lost documents. No specifics are provided. There is no suggestion that any potential witnesses are unable or unwilling to [page559] give evidence. I do not accept the argument that the defendant is prejudiced by having this potential liability on its financial statements. No evidence was provided as to the annual operating budget of the defendant. I have no idea whether this claim is significant or not. I also note that in June 2012, the defendant was prepared to agree to a June 2013 set down date. It could not have been too concerned about prejudice, at least at that point.

[30] For these reasons, it is my view that this element of the Reid test has been satisfied.

Conclusion

[31] When deciding motions of this nature, the court is to adopt a contextual approach in which it weighs all relevant considerations to determine the result that is just in the circumstances. The court must, of course, balance the strong public and private interest in promoting the timely resolution of disputes with the entitlement of a plaintiff to have his claim decided on the merits. However, the preference in our system of civil justice is for the determination of disputes on their merits.

[32] The plaintiff has failed to provide a satisfactory explanation for the delay encountered with this action as a whole and in bringing this motion. However, I am satisfied that the failure to meet the rule 48.14 deadline was a result of inadvertence on the part of his lawyer. Importantly, the plaintiff has also satisfied the key consideration of prejudice.

[33] In my view, it is in the interest of justice that the dismissal order of the registrar be set aside.

Costs

[34] The plaintiff does not seek his costs of this motion. There is authority for the proposition that an unsuccessful defendant may be entitled to its costs on a motion such as this. See Evans v. Revenue Properties Co., 2011 ONSC 2132 (Master), at para. 31; and rule 57.01(2). In my view, it was not unreasonable for the defendant to have opposed this motion. The plaintiff has been granted a significant indulgence and has not met two of the four important considerations. The plaintiff and his lawyer have failed to satisfactorily explain long periods of delay. It took Mr. Detlor far too long to schedule this motion. The defendant should have its costs.

[35] I have reviewed the defendant's costs outline. It identifies substantial indemnity costs of $10,872.17 and partial indemnity costs of $7,332.17. I see no reprehensible conduct on the part of [page560] the plaintiff that would give rise to an elevated costs order. Partial indemnity costs are appropriate.

[36] This motion involved the exchange of motion records, the preparation of a factum by the defendant and two hours of oral argument. In my view, the amounts claimed by the defendant are somewhat excessive having regard to the factors set out in rule 57.01(1). The law applicable to this motion is well settled and the facts were not complicated. The volume of evidence was not significant. In my view, it is fair and reasonable that the plaintiff pay the defendant's costs of this motion, fixed in the amount of $4,000, inclusive of HST and disbursements. These costs shall be paid within 30 days.

Order

[37] I therefore order as follows:

(a) the dismissal order of the registrar dated June 19, 2012 is hereby set aside;

(b) the parties shall serve their respective affidavits of documents and copies of Schedule A productions by May 31, 2014;

(c) mediation shall take place by July 31, 2014;

(d) examinations for discovery shall be completed by September 30, 2014, with the plaintiff being examined first;

(e) discovery motions shall be heard by January 30, 2015;

(f) this action shall be set down for trial or otherwise disposed of by February 27, 2015, failing which it shall be dismissed by the registrar without further notice; and

(g) the plaintiff shall pay the defendant's costs of this motion on a partial indemnity basis, fixed in the amount of $4,000, inclusive of HST and disbursements, payable within 30 days.

Motion granted.

Notes

[^1]: The applicable principles are derived from seven decisions of the Court of Appeal for Ontario released over the last several years: Scaini v. Prochnicki (2007), 2007 ONCA 63, 85 O.R. (3d) 179; Marché D'Alimentation Denis Thériault Lteé v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660; Finlay v. Van Paassen (2010), 2010 ONCA 204, 101 O.R. (3d) 390; Wellwood v. Ontario (Provincial Police) (2010), 2010 ONCA 386, 102 O.R. (3d) 555; Hamilton (City) v. Svedas Koyanagi Architects Inc. (2010), 2010 ONCA 887, 104 O.R. (3d) 689; Machacek v. Ontario Cycling Assn., 2011 ONCA 410; Aguas v. Rivard Estate (2011), 2011 ONCA 494, 107 O.R. (3d) 142.