SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-03-261394CM2
DATE: 20140430

BETWEEN:
P & J GENERAL CONTRACTING INC. in its own right and on behalf of 1422604 ONTARIO INC., Plaintiff

• and -

TAURASI HOLDINGS LTD, ROYAL TOWN MANAGEMENT LTD., ROYAL TOWN ENTERPRISES LTD., ROYAL TOWN HOMES LIMITED, EMILIO TAURASI and ROYAL BANK OF CANADA, Defendants

BEFORE: D.L. CORBETT J.

COUNSEL:
Robert G. Tanner, for the Plaintiff

Michael E. Caruso, Q.C., for the Defendants

HEARD: April 17, 2014

ENDORSEMENT

[1] The plaintiff moves to restore this action to the trial list after it was struck from the list by Moore J. on September 18, 2009. The defendants oppose on the basis of excessive and unexplained delay.

[2] For the reasons that follow the motion is granted.

[3] Rule 48.11 provides:

Where an action is struck off a trial list, it shall not thereafter be placed on any trial list except, (i) in the case of an action struck off the list by a judge, with leave of a judge….

[4] Rule 48.11 does not set out a test for deciding when to grant an order to restore an action to the trial list.

[5] In Waite v. Gershuny, an action was struck from the list because the plaintiff failed to appear for the first scheduled trial.[^1] The court held that to obtain an order restoring the case to the trial list the plaintiff had to (a) show that there was some merit to the action; and (b) explain any delay in seeking to restore the action to the trial list.[^2]

[6] In 1351428 Ontario Ltd. (c.o.b. The Wineyard) v. 1037598 Ontario Ltd., Backhouse J. adopted the delay analysis for motions to restore an action the trial list[^3] on the strength of two cases which were motions to dismiss for delay[^4] and the Master’s decision in Ruggiero v. FN Corp.[^5] In respect to Waite v. Gershuny, Backhouse J. found:

The facts of that case are very different from the facts of the case before me. Accordingly, the rule in Waite does not provide guidance. In that case, the plaintiff was in default of several court orders and had, in effect, his action dismissed because he failed to appear at trial. Accordingly, the Divisional Court held that issues of the merits of the proceeding required consideration as did the reasons for the failure of the plaintiff to attend the trial. The Court was skeptical as to the reasons for the plaintiff’s failure to attend the trial and was not satisfied with the material filed in support of the merits of the action.[^6]

Backhouse J. then focused the delay analysis on the period from the time the action was struck from the trial list to the time of the motion to restore the case to the trial list (the approach applied in Waite v. Gershuny).

[7] I agree with Backhouse J.’s observation that Waite v. Gershuny was an analysis arising from the circumstances of that case. It is neither necessary nor appropriate to do a merits assessment on every motion to restore a case to the trial list. I also agree with Master Graham’s observation in Ruggiero that there is no clear test in the case law for motions to restore an action to the trial list. I do not, however, agree that the test should be the same as the test for setting aside a dismissal for delay or for dismissing an action for delay.

[8] The proper principles to illuminate the exercise of discretion under R.48.11 are found in R.1.04(1), and not the jurisprudence concerning dismissal of actions for delay:

These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.

An order should be granted restoring an action to the trial list where it is fair and just to do so. In most cases, the action should be restored, so that the case can be determined “on its merits”. If the case is not ready to be listed again, then directions should be given to facilitate the process for getting the case to trial. In exceptional cases, like Waite v. Gershuny, the court may refuse to restore the action to the trial list altogether and then dismiss the action.

[9] Taking all of this into account, in my view, the proper analysis on a motion to restore an action to the trial list is:

(a) is the case now ready for trial; and

(b) are there reasons the action should not be restored to the trial list; and

(c) if the action is not restored to the trial list, what directions should be given to bring the case to a state where it will be ready to be placed on the trial list again?

This analysis does not preclude the court from dismissing a motion to place an action back on the trial list, and dismissing the action outright, on the basis of unexplained delay. This would be a “reason the action should not be restored to the trial list”. But this would be an unusual case. In most cases, if delay is to be a significant factor, it should be raised as a defence motion to dismiss for delay.

Application to this Case

[10] This case is now ready for trial.

[11] The primary allegation in this case is fraud. The plaintiffs allege that the defendant Taurasi misdirected funds belonging to the plaintiff 142 by signing cheques payable to himself or to his benefit. The fraud is alleged to aggregate about $1 million. The defendant bank is sued on the basis that it should not have honoured cheques bearing only one signature.

[12] For the purposes of this motion, I accept the summary of facts set out at paragraphs 20 to 33 and agree that the plaintiffs have established a prima facie case of improper payments of between $793,000 and $1,227,000. Without conceding anything about the merits of the case, the defendants do not pursue an argument that the case ought not to be restored to the trial list because of lack of merit, and rightly so.

[13] The defendants argue that the case should not be restored to the trial list because of delay.

[14] The plaintiffs set the case down for trial on September 30, 2005. Two trial dates were adjourned, and a third trial date was set for October 19, 2009. A month before the scheduled trial, Moore J. granted orders (a) removing plaintiffs’ counsel as solicitor of record, and (b) striking the action from the trial list. Since the plaintiffs are both corporations, Justice Moore’s order contains the standard terms requiring the plaintiffs to appoint new counsel within thirty days.

[15] The plaintiffs retained new counsel, their current counsel, on March 10, 2010.

[16] There was considerable activity on the file from the time new counsel was appointed until September 2013. It is clear that the plaintiffs took the initiative to move the case along between March 2010 and September 2013. The delays in this period are attributable to the inherent requirements of the case and delays caused by the defendants.

[17] In September 2013, the plaintiffs suggested further mediation of the case and signaled that they wished to have the matter case restored to the trial list. The defendants advised that they would not consent to an order restoring the case to the trial list. In December 2013, the parties agreed to a return date in April 2014 for the motion to restore the case to the trial list.

[18] Based on this history, the only period of unexplained delay is between the date of the order of Moore J. and appointment of new counsel by the plaintiffs – that is, between September 18, 2009 and March 10, 2010 – slightly less than six months, one month of which was encompassed by the order of Moore J. This is substantial litigation, and I cannot fault the plaintiffs for taking longer than one month to locate, retain and fund their new counsel. In the overall context of this case, the additional delay is minor. And, as I have indicated above, there was some considerable delay caused by the defendants’ approach to the litigation after new counsel was appointed.

[19] I am satisfied that the plaintiffs have explained the delay between the time of the order of Moore J. striking this action from the trial list and this motion to restore this action to the trial list. There is no reason why this action should not be restored to the trial list.

Decision

[20] The motion is granted: I order this action restored to the trial list. There shall be no costs of this motion: the plaintiffs should not have listed the action in the first place if they were not ready for trial. This decision does not preclude a defence motion to dismiss the action for delay.

D.L. CORBETT J.

Date: April 30, 2014

[^1]: (2005), 194 O.A.C. 326 (Div. Ct.).

[^2]: (2005), 194 O.A.C. 326 (Div. Ct.).

[^3]: 2011 ONSC 4767 (“The Wineyard”).

[^4]: Woodheath Developments Ltd. v. Goldman (2003), 2003 46735 (ON SCDC), 66 O.R. (3d) 731 and Armstrong v. McCall (2006), 2006 17248 (ON CA), 28 C.P.C. (6th) 12 (C.A.).

[^5]: Ruggiero v. FN Corp., 2011 ONSC 3212.

[^6]: Waite v. Gershuny (2005), 194 O.A.C. 326, 2005 CarswellOnt 640 (Div.Ct.)