SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 08-CV-363386

MOTION HEARD: November 13, 2013

Re: Lake Avenue Resort Park Inc.

Plaintiff

v.

Kaveli Korpela and Marja Korpela

Defendants

BEFORE: Master Thomas Hawkins

COUNSEL:
Patrick Summers for moving plaintiff
F (416) 860-1937

Patrick E. Hurley for responding defendants
F 1 (613) 966-6182

REASONS FOR DECISION

Nature of Motion

[1] This is a motion by the plaintiff under subrules 37.14(1) and (2) for an order setting aside the order of the registrar of April 27, 2011 dismissing this action for delay, with costs.

[2] Subrules 37.14 (1) and (2) provide as follows.

(1) A party or other person who,

(a) is affected by an order obtained on motion without notice;

(b) fails to appear on a motion through accident, mistake or insufficient notice; or

(c) is affected by an order of a registrar,

may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.

(2) On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.

[3] The plaintiff is a party affected by an order of a registrar.

Nature of Action

[4] The plaintiff is the owner and operator of a recreational trailer park located in the Municipality of Prince Edward County, Ontario. The defendants are the prior shareholders, officers and directors of 581740 Ontario Inc., a corporation which previously owned and operated the same recreational trailer park.

[5] On March 11, 2008 the plaintiff entered into an agreement (the “Share Purchase Agreement”) with the defendants to purchase all their shares of 581740 Ontario Inc. The Share Purchase Agreement replaced and entirely superceded an earlier agreement of purchase and sale dated September 28, 2007 as amended between 581740 Ontario Inc. as vendor and the plaintiff as purchaser of the subject trailer park.

[6] The Share Purchase Agreement provided in part that the defendants represented and warranted to the plaintiff that the septic system and tanks in the recreational trailer park were in good working order. Other terms of the Share Purchase Agreement included a covenant by the defendants to indemnify the plaintiff in respect of any loss or damage which the plaintiff may incur arising out of any misrepresentation or breach of warranty by the defendants.

[7] As part of the purchase price for the shares, 581740 Ontario Inc. gave the defendants a mortgage in the sum of $800,000. Since 581740 Ontario Inc. amalgamated with the plaintiff the day after the Share Purchase Agreement transaction closed, the plaintiff is now the mortgagor under that mortgage.

[8] The terms of this mortgage gave the mortgagor (now the plaintiff) the right to set off against the mortgage debt any amount payable to the mortgagor by the defendants under the indemnity provisions of the Share Purchase Agreement.

[9] In this action the plaintiff alleges that the defendants breached their representation and warranty that the septic system was in good working order as follows.

The defendants were aware that on several occasions, including an occasion during the summer of 2007, the system suffered breakouts causing campers to leave the park. The defendants failed to disclose these events to the plaintiff.

[10] The defendants deny these allegations.

Chronology of Events

[11] The following is a chronology of the events leading to the registrar’s dismissal order of April 27, 2011 and to this motion. In this chronology Paul Colvin (“Colvin”) is the president of the plaintiff, while Dr. Daniel Perlitz (“Perlitz”) is the other principal of the plaintiff. Together they manage the plaintiff. References to the “property” are references to the subject recreational trailer park.

[12] References in this chronology to “plaintiff’s counsel” are references to the lawyer who first represented the plaintiff respecting the events leading to this action and in this action. References to “plaintiff’s counsel” are not references to Patrick Summers or his firm who next represented the plaintiff in this action.

Date

Event

Summer of 2007 and earlier

Septic field on the property suffers breakouts which the defendants cover with sand.

September 28, 2007

Plaintiff enters into an agreement of purchase and sale under which agreement as amended 581740 Ontario Inc. as vendor agrees to sell the property to the plaintiff as purchaser.

October 16, 2007

Plaintiff has Gunnell Engineering Ltd. (“Gunnell”) conduct an investigation of the septic system on the property. Defendant Kaveli Korpela tells Mark van Voorst of Gunnell that septic systems are working well with no problems.

March 11, 2008

Plaintiff enters into Share Purchase Agreement with defendants to buy all their shares of 581740 Ontario Inc., owner and operator of the property. This agreement replaces the September 28, 2007 agreement of purchase and sale.

March 31, 2008

Share Purchase Agreement transaction closes. 581740 Ontario Inc. gives promissory note for $800,000 to defendants as part of purchase price. This promissory note is secured by a mortgage in the same amount.

April 1, 2008

Plaintiff amalgamates with 581740 Ontario Inc.

May 27, 2008

Gunnell conducts detailed investigation of septic systems in the property. Some systems are in good condition but others are not and suffer breakouts. Some systems are not installed in accordance with Health Unit Certificate of Approval and one system is located in a sand beach area in violation of the Ontario Building Code.

June 20, 2008

Plaintiff’s counsel writes Christopher Williams (“Williams”) the solicitor for the defendants, complaining that defendant Kaveli Korpela misrepresented to Gunnell that the septic system was in good working order prior to the closing of the Share Purchase Agreement.

July 31, 2008

Williams responds to letter from the plaintiff’s counsel stating that the defendants made no misrepresentation about the property, denying that there was any septic system breakout and denying that the defendants tried to cover up any such breakout with sand.

September 29, 2008

Plaintiff’s counsel has statement of claim in present action issued.

October 31, 2008

Patrick Hurley (“Hurley”), litigation lawyer for defendants writes to plaintiff’s counsel enclosing notice of intent to defend and asks if the plaintiff will consent to an inspection of the property and its septic system.

November 28, 2008

Plaintiff’s counsel writes Hurley advising that plaintiff will agree to an inspection on reasonable notice to the manager of the property.

December 9, 2008

Defendants serve their statement of defence.

February 5, 2009

Plaintiff serves its reply and pleadings close. Plaintiff’s counsel advises Hurley that he would like to schedule examinations for discovery.

November 20, 2009

Hurley writes to plaintiff’s counsel inquiring as to status of this action and advising that if action is proceeding defendants would like to have an expert inspect the property. Plaintiff’s counsel does not respond.

February 5, 2010

Hurley writes to plaintiff’s counsel advising that he has received no response to his February 5, 2009 letter and assumes that plaintiff is not proceeding with this action. Plaintiff’s counsel does not respond.

April 6, 2010

Hurley writes plaintiff’s counsel stating that unless he (Hurley) hears from plaintiff’s counsel within 30 days the defendants will consider the action to be over and will proceed on that basis.

June 15, 2010

Perlitz emails plaintiff’s counsel stating “We need to litigate this matter aggressively … Its urgent that we move this forward expeditiously now.”

June 15, 2010

Plaintiff’s counsel finally responds to Hurley asking for defendants’ affidavit of documents and advising that he would like to set up examinations for discovery. Plaintiff’s counsel also advises Hurley that if defendants wish to inspect the property, Hurley should make the necessary arrangements “immediately.”

June 17, 2010

Hurley writes to plaintiff’s counsel complaining that invitation to inspect is so late that defendants will not be able to conduct an expert inspection before plaintiff’s contractor commences work on new sewage system.

June 18, 2010

Plaintiff’s counsel writes Hurley enclosing copy of Gunnell report of June 28, 2008 outlining problems which Gunnell found with septic system in the property.

July 5, 2010

Hurley writes plaintiff’s counsel advising he has arranged for an expert to inspect the property and asking plaintiff’s counsel to let him know immediately when expert can do so.

July 8, 2010

Plaintiff’s counsel writes Hurley advising that defence expert should contact Eric Gunnell to make arrangements for inspection as soon as possible because plaintiff’s contractor is pressing forward with installing new septic system.

August 19, 2010

Defendants’ expert Andy Schell inspects the property with Kaveli Korpela and the next day sends defendants preliminary report on inspection.

End of August 2010

New septic system on the property becomes operational.

September 2, 2010

Perlitz emails plaintiff’s counsel confirming that plaintiff’s counsel is preparing plaintiff’s affidavit of documents and will ask Colvin to execute it the next week. Perlitz also confirms that plaintiff’s counsel will then organsie examinations for discovery.

September 13, 2010

Perlitz emails plaintiff’s counsel stating “It has been a week – I haven’t heard anything on this – where is the Affidavit of Documents and when are you setting up the Discoveries?”

September 30, 2010

Perlitz emails plaintiff’s counsel confirming plaintiff’s counsel will forward plaintiff’s productions early next week and then get defendants’ productions. He concludes “If we don’t get their productions forthwith please bring a motion”.

October 18, 2010

Perlitz emails plaintiff’s counsel confirming he (plaintiff’s counsel) will serve plaintiff’s affidavit of documents this week and stating that Perlitz expects defendants to serve their documents within 30 days and then set up discoveries. Perlitz concludes “Please pursue this timeline as we want to accelerate this litigation.”

October 25, 2010

Perlitz emails plaintiff’s counsel complaining that he has not seen plaintiff’s affidavit of documents and that he expects it “out today”.

October 28, 2010

Plaintiff’s counsel sends plaintiff’s affidavit of documents to Hurley by courier and advises Hurley that plaintiff would like to schedule examinations for discovery as soon as possible and well before Christmas.

October 29, 2010

Perlitz emails plaintiff’s counsel asking when the defendants’ affidavit of documents can be expected and when examinations for discovery are expected. Perlitz concludes “What are the outside dates after which we bring a Motion?”

November 12, 2010

Perlitz emails plaintiff’s counsel stating “I don’t have an answer to my October 29th email below as to an outside date- what is the answer?”

November 17, 2010

Hurley writes plaintiff’s counsel advising that defendants’ affidavit of documents is being prepared and that he cannot agree to discoveries before Christmas. Hurley proposes that discoveries be held in Coburg.

November 18, 2010

Plaintiff’s counsel agrees to discoveries in Coburg and proposes that they take place in January 2011.

November 25, 2010

Plaintiff’s counsel writes Hurley and threatens to bring a motion if defendants’ affidavit of documents is not received by December 15, 2010.

December 14, 2010

Hurley writes plaintiff’s counsel enclosing defendants’ affidavit of documents and proposing discovery dates in April and May 2012.

January 10, 2011

Court registrar sends plaintiff’s counsel status notice action not on a trial list (Form 48 C.1) and threatens to dismiss action in 90 days unless specified action is taken.

January 12, 2011

Perlitz emails plaintiff’s counsel advising he wants to accelerate the process as much as productively possible. Perlitz looks forward to discoveries in April and the trial by the end of 2011 or early in 2012. Plaintiff’s counsel faxes status notice to Hurley (but not to plaintiff) and proposes litigation timetable.

January 25, 2011

Hurley writes plaintiff’s counsel advising that he is agreeable to a timetable but first wants place of trial of this action changed to Picton.

January 26 to April 26, 2011

Plaintiff’s counsel fails to take any further action in response to status notice and fails to diarise status notice deadline. He is preoccupied with other matters and overlooks this action.

April 27, 2011

Registrar dismisses action for delay with costs. Registrar’s dismissal order does not come to the attention of plaintiff’s counsel.

June 7, 2012

Perlitz terminates the retainer of plaintiff’s counsel and emails him confirming that plaintiff will pick up complete file on this action on June 12, 2012.

June 14, 2012

Real estate lawyer for plaintiff writes defendants asking them to sign a site plan agreement. Local municipality requires site plan agreement as part of the process of approving the changes which the plaintiff is making to the property.

June 26, 2012

Defendants sign site plan agreement.

July 2012

Plaintiff retains Basman Smith. Summers reviews litigation file and finds status notice of January 10, 2011 but no dismissal order. Summers has court file on this action searched and learns that registrar dismissed action on April 27, 2011. Summers then advises plaintiff of this dismissal order.

August 29, 2012

Summers has notice of change of lawyers filed.

August 30, 2012

Defendants refuse to consent to an order setting aside registrar’s dismissal order. Shortly thereafter Basman Smith begins process of bringing present motion.

Legal Test for Setting Aside Registrar’s Dismissal Order

[13] In Scaini v. Prochnicki, 2007 ONCA 63, 85 O.R. (3d) 179, Goudge J.A., speaking for the Court of Appeal for Ontario, allowed an appeal from a motion judge. The motion judge had dismissed a plaintiff’s motion to set aside a registrar’s dismissal order because the plaintiff had failed to satisfy one of four criteria often used in deciding such motions. Master Dash originally laid down these four criteria in Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80.

[14] At paragraphs 21 to 24 of his decision, Goudge J.A. expressed himself as follows.

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

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

22 I agree with Master Beaudoin.

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

24 That is not to say that there are no criteria to guide the court. Indeed I view the criteria used by the motion judge as likely to be of central importance in most cases. While there may be other relevant factors in any particular case, these will be the main ones. The key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case.

[15] Because Goudge J.A. said that the four Reid criteria used by the motion judge were likely to be of central importance in most cases, I will consider these four criteria, using a contextual approach respecting the facts underlying this motion while attempting to balance the interests of the parties, to determine the order that is just in the circumstances of this action.

First Reid Criterion

[16] The first Reid criterion is as follows.

Has the plaintiff provided a satisfactory explanation for the litigation delay?

[17] This explanation must cover all delays in the prosecution of this action from its inception on September 29, 2008 forward.

[18] There are two periods of significant litigation delay in this action. The first period of delay begins just after February 5, 2009 when the plaintiff served its reply and pleadings in this action closed. This period of delay ends on June 15, 2010 when plaintiff’s counsel wrote to Hurley requesting the defendants’ affidavit of documents. This is a period of delay of just over 16 months.

[19] Plaintiff’s counsel has provided an affidavit in support of this motion. In that affidavit plaintiff’s counsel says that during this period he was unable to make arrangements for examinations for discovery because he had to schedule them at a time convenient to Colvin and because Hurley had other commitments. In addition, plaintiff’s counsel says that he expected Hurley to contact him to make arrangements for a defence inspection of the property but that Hurley did not do so at this time. Why Hurley’s failure to contact plaintiff’s counsel about a defence inspection of the property justifies delaying examinations for discovery for over a year, I do not know. Hurley wrote plaintiff’s counsel several times during this period without getting a reply.

[20] Colvin says that he had a great deal of trust in plaintiff’s counsel and had used him in real estate and litigation matters for over 15 years. Colvin says that typically every month he would have two or three telephone conversations with plaintiff’s counsel and he would have personal meetings with plaintiff’s counsel every two months. He would ask plaintiff’s counsel for updates on the status of litigation including this action. He was initially satisfied with the responses he received. Plaintiff’s counsel never told Colvin that this action was at risk of dismissal or that it had been dismissed.

[21] The explanations which plaintiff’s counsel has offered excuse some of delay up to June 15, 2010. In my view, these explanations are not sufficient to excuse 16 months of delay.

[22] I find it significant that the first period of delay ended on June 15, 2010 when Perlitz sent plaintiff’s counsel an email stating in part “it’s urgent that we move this [action] forward expeditiously now”. Between then and January 12, 2011 Perlitz sent eight more emails to plaintiff’s counsel trying to prod him into action. This resulted in the parties preparing and exchanging affidavits of documents. It did not result in the parties conducting examinations for discovery.

[23] For reasons that were not explained to me, Perlitz did not send any more emails to plaintiff’s counsel trying to prod him into action after January 12, 2011. Colvin says that throughout 2011 and the winter and spring of 2012, he had conversations with plaintiff’s counsel about the status of this action. These conversations did not result in plaintiff’s counsel doing anything to move this action forward. All in all, plaintiff’s counsel seems to have given this action a very low priority.

[24] The second significant period of litigation delay begins on January 13, 2011 just after plaintiff’s counsel received the status notice and sent a copy of it to Hurley. This period of litigation delay ends almost 17 months later when Perlitz terminated the retainer of plaintiff’s counsel and made arrangements to pick up the file on this action. Perlitz and Colvin were not then aware that the registrar had dismissed this action for delay.

[25] The excuse plaintiff’s counsel offers for this second period of litigation delay is that he was busy with other matters and simply overlooked this action. I find this explanation unsatisfactory.

[26] Because this period of litigation delay lasted almost 17 months, I am of the view that Perlitz and Colvin must accept some but not all of the blame for that delay. They could have done more to prod plaintiff’s counsel into action, or replaced him sooner.

[27] In breach of subrule 48.14(3), plaintiff’s counsel did not send his client a copy of the Form 48C.1 status notice. This subrule provides as follows.

A lawyer who receives a status notice shall forthwith give a copy of the notice to his or her client.

[28] If plaintiff’s counsel had sent the status notice to the plaintiff forthwith after receiving it in January 2011, I am confident that events would have unfolded very differently. Colvin and Perlitz would either have taken the steps necessary to prod plaintiff’s counsel into action or failing that, they would have terminated his retainer long before June of 2012.

[29] On the evidence before me, the plaintiff has explained some but not all of the litigation delay in this action. The plaintiff has therefore failed to satisfy the first Reid criterion.

Second Reid Criterion

[30] I now turn to the second Reid criterion. That criterion (edited so as to apply to the facts underlying this motion) is as follows.

Has the plaintiff led satisfactory evidence to show that it always intended to set this action down for trial within the time limits set out in the Rules of Civil Procedure but failed to do so through inadvertence?

[31] In my view, the main purpose of this Reid criterion is to identify those situations in which a plaintiff or a plaintiff’s counsel, with the approval of his or her client, has deliberately flouted the Rules of Civil Procedure or an order of the court.

[32] Some of the cases describe this sort of behaviour as contumacious or stubbornly disobedient conduct. Such behaviour is a basis for dismissing motions of this kind.

[33] Here there was no court order setting a deadline by which this action was to be set down for trial. Rather the set down deadline was fixed by subrule 48.14(4). This subrule provides as follows.

The registrar shall dismiss the action for delay, with costs, 90 days after service of the status notice, unless,

(a) the action has been set down for trial or restored to a trial list, as the case may be;

(b) the action has been terminated by any means;

(c) documents have been filed in accordance with subrule (10); or

(d) the judge or case management master presiding at a status hearing has ordered otherwise.

[34] The registrar served the status notice in this action in mid-January 2011. The 90 day period for setting this action down for trial expired in mid-April 2011. There was no status hearing of this action because neither side requested one.

[35] As I have previously stated, the registrar dismissed this action for delay with costs on April 27, 2011.

[36] The uncontradicted evidence of plaintiff’s counsel is that after receiving the status notice from the registrar, he failed to diarise the deadline set by that status notice, became pre-occupied with other matters, and overlooked the file on this action. As a result, he missed the deadline for setting this action down for trial.

[37] During argument defence counsel conceded that plaintiff’s counsel missed the deadline for setting this action down for trial owing to inadvertence.

[38] The evidence which I have summarized in the above chronology shows that the plaintiff, through Colvin and Perlitz, tried to prod plaintiff’s counsel to move this action forward on many occasions up to mid-January 2011.

[39] The evidentiary record is silent on any efforts by Colvin and Perlitz to prod plaintiff’s counsel into action from then until June 2012. However there is no evidence that Colvin or Perlitz ever instructed plaintiff’s counsel to delay prosecution of this action.

[40] It appears that by June of 2012, Perlitz ran out of patience with plaintiff’s counsel. Perlitz then terminated the retainer of plaintiff’s counsel and the next month the plaintiff retained Basman Smith, the plaintiff’s current lawyers. This is clear evidence that the plaintiff still intended and intends to take this action to trial if this motion is successful.

[41] Based on these facts, I have come to the conclusion that the plaintiff has met the second Reid criterion.

Third Reid Criterion

[42] The third Reid criterion is whether the plaintiff has brought the present motion promptly. Without going into detail, defence counsel concedes that this motion has been brought promptly. The plaintiff has thus met the third Reid criterion.

Fourth Reid Criterion

[43] That brings me to the fourth Reid criterion. To my mind, this Reid criterion is by far the most important one. The fourth Reid criterion may be expressed as follows.

Have the defendants suffered any significant prejudice in presenting their case at trial as a result of the plaintiff’s delay in prosecuting this action, or as a result of steps taken following the dismissal of this action?

[44] The plaintiff has the onus of convincing me that the defendants have not suffered such prejudice. That said, in most motions like the present one, as between the plaintiff and the defendants, the defendants have the better means of knowledge as to whether they have suffered significant prejudice.

[45] The prejudice referred to in the fourth Reid criterion comes down to this. Did something happen while the plaintiff delayed in prosecuting the action or after the registrar dismissed this action, as a result of which it is now significantly more difficult to present the defence case at trial?

[46] The defendants submit that they have been prejudiced in a number of different ways. I will deal with these prejudice arguments in no particular order.

[47] The defendants submit based on Mr. Korpela’s affidavit that the old septic system could have been repaired inexpensively rather than replaced at much greater cost. The defendants argue that owing to the passage of time, one cannot now determine if the old system could have been repaired rather than replaced.

[48] The defendants’ expert Andy Schell inspected the property with Mr. Korpela on August 19, 2010. The defendants never requested any further inspection of the property. There is no affidavit from Mr. Schell to the effect that he is of the opinion that one cannot now determine if the old septic system could have been repaired rendering replacement unnecessary. This is a significant gap in the defence evidence on this motion.

[49] In one of his affidavits Colvin says that he old septic system and all of its components are still on site with the result that one can still test the old system and determine if it could have been repaired.

[50] On this state of the evidence, I reject this prejudice argument.

[51] Next the defendants submit that they are prejudiced because the damages which the plaintiff claims are excessive for a variety of reasons. The issue of whether or not the damages which the plaintiff claims are excessive is a matter for the trial judge. Apart from their argument that they can no longer determine if the old septic system could have been repaired (an argument I have rejected), the defendants do not claim that owing to delay by the plaintiff they can no longer prove that the damages which the plaintiff claims are excessive.

[52] I therefore reject this prejudice argument. It is not a basis for dismissing this motion.

[53] Next, Mr. Korpela says in his affidavit that he defendants do not have information on the current addresses of people who stayed at the subject trailer park in 2007 and earlier. Further he says that the memories of these park customers will have eroded with the passage of time.

[54] When cross-examined Mr. Korpela said that apart from himself and his wife (the other defendant) the defendants have not yet determined what witnesses they will call at trial if this motion is dismissed. Mr. Korpela did not have any named person in mind when he made his comments about trailer park customers. The defence has not interviewed and taken witness statements form anyone.

[55] The fact that while a plaintiff delayed in prosecuting an action a material witness helpful to the defence has died or disappeared and cannot be located despite reasonable efforts to find them is definitely a basis for dismissing a motion like the present one. That is not the situation before me. There is no evidence that any witness helpful to the defence has died or disappeared. The death or disappearance of a harmful witness is not prejudice. I have no idea whether any particular witness has died or disappeared and, if so, whether that witness would be helpful or harmful to the defence.

[56] The fact that the defence has not taken any witness statements is significant. A litigant who promptly interviews witnesses and takes statements form them can significantly reduce the problem of memories fading over time. The defence has not done so here. One cannot manufacture prejudice by failing to take prudent defensive measures.

[57] On the evidence before me, I reject this prejudice argument.

[58] In his affidavit and when cross-examined Mr. Korpela has stated that he and his wife have found this litigation to be stressful. Many litigants have this experience. However there is no evidence that the stress which the defendants have experienced has become so severe that they have needed and undergone medical or psychiatric treatment. I therefore decline to dismiss this motion on the basis of stress to the defendants.

[59] The last prejudice argument I will deal with is one which defence counsel strongly emphasized. The defendants consented to a site plan agreement respecting changes which the plaintiff proposed to make to the subject trailer park in the mistaken belief that the plaintiff had abandoned this action. The defendants complain that they have lost the opportunity to require the plaintiff to drop this action before they consented to the site plan agreement.

[60] The plaintiff never actively misled the defendants about its intention to take this action to trial. Before giving their consent to the site plan agreement, it was always open to the defendants to ask the plaintiff if it intended to take this action to trial. They did not do so.

[61] The fact that the defendants consented to the site plan agreement does not have the effect of making it more difficult for the defendants to present their case at trial. That being so, the site plan consent issue is not the sort of prejudice which forms a basis for dismissing this motion.

Result

[62] For all these reasons, having taken a contextual approach and having attempted to balance the interests of the parties, I have come to the following conclusion. The just order in the circumstances of this action, as demonstrated by the evidence before me, is an order setting aside the registrar’s dismissal order of April 27, 2011. So ordered.

[63] I have come to this conclusion despite the fact that the plaintiff has failed to meet the first Reid criterion. The evidence before me convinces me that the prejudice to the plaintiff in allowing the registrar’s dismissal order to stand far outweighs the prejudice to the defendants in allowing this action to proceed to trial.

[64] The registrar is not to dismiss this action for delay prior to April 30, 2015.

[65] I direct the parties within 30 days to agree upon and file with me for approval a timetable which will see this action set down for trial within the next year. If the parties cannot so agree, either side may write me requesting a telephone case conference at which time I will establish a timetable for this action in consultation with counsel.

Costs

[66] In disposing of this motion in the way that I have, despite the fact that the plaintiff did not meet the first Reid criterion. I have granted the plaintiff a significant indulgence. The price of an indulgence is the payment of the costs of those who have sought, unsuccessfully, to prevent its being granted. See Fox v. Bourget (1987), 17 C.P.C. (2d) 94 (Ont. Dist. Ct.). I therefore award the costs of this motion, fixed at $10,000, to the defendants and order the plaintiff to pay such costs to the defendants within 30 days.

(original signed)___

Date: April 17_, 2014
Master Thomas Hawkins