ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-09-138
DATE: 2014-08-22
B E T W E E N:
The Corporation of the Municipality of Sioux Lookout
Allan McKitrick for the Plaintiff/Defendant by Counterclaim
Plaintiff/Defendant by Counterclaim
- and -
David Warren Goodfellow
Morris Holervich for the Plaintiff by Counterclaim.
Nicholas Macos for the Defendant in the Main Action.
Defendant/Plaintiff by Counterclaim
HEARD: May 30, 2014 at Kenora, Ontario
Mr. Justice J.S. Fregeau
Reasons on Motion
Introduction
[1] The Corporation of the Municipality of Sioux Lookout (“Sioux Lookout”), the plaintiff/defendant by counterclaim, has brought a motion requesting an order dismissing the counterclaim of David Warren Goodfellow (“Goodfellow”), the defendant/plaintiff by counterclaim, alleging non-compliance with a Status Order and delay. In the alternative, Sioux Lookout requests an order for partial summary judgement on Goodfellow’s counterclaim.
[2] The motion brought by Sioux Lookout also includes requests for relief in the main action. The main action against Goodfellow is being defended by different counsel than the counterclaim. That portion of this motion was heard on a different date.
[3] These reasons pertain only to Sioux Lookout’s motion requesting dismissal of, or partial summary judgement on, Goodfellow’s counterclaim against Sioux Lookout. The reasons applicable to the relief sought by Sioux Lookout on the portion of the motion dealing with the main action will be delivered separately.
BACKGROUND ON PLAINTIFF BY COUNTERCLAIM’S NON-COMPLIANCE WITH STATUS ORDER
[4] Goodfellow is the owner of a substantial amount of land in the area which is the subject matter of this dispute. On May 12, 1988, Goodfellow submitted the Pelto Subdivision application to the Ontario Ministry of Municipal Affairs, then the approval authority for the proposed subdivision as the lands which were the subject of the application were in unorganized territory. These lands now form part of the geographic area of Sioux Lookout.
[5] The Pelto Subdivision application was approved and the subdivision plan was registered in the Land Registry Office in Kenora, Ontario on November 27, 1991. The subdivision consists of 16 lots. Goodfellow is a registered owner of each of the lots.
[6] Goodfellow is also an owner of lands in the Phase I Dairycow Subdivision and the Phase II Dairycow Subdivision. The Phase I Dairycow Subdivision consists of four lots. This subdivision is the subject of a Subdivision Agreement between Sioux Lookout and Goodfellow dated July 25, 2000. The Phase I Dairycow Subdivision Plan was registered August 1, 2000.
[7] The Phase II Dairycow Subdivision consists of 16 lots. This subdivision is the subject of a Subdivision Agreement made between Sioux Lookout and Goodfellow dated August 27, 2003. The Phase II Dairycow Subdivision Plan was registered October 10, 2006.
[8] Sioux Lookout has jurisdiction over and responsibility for public highways in and around the three subdivisions referred to above, including Sturgeon Meadows Road, Sturgeon River Road and Pelto Road. Phase I and Phase II Dairycow Subdivisions are adjacent to one another and abut Sturgeon Meadows road to the west. The Pelto Subdivision abuts Sturgeon Meadows road to the east. Pelto Road is within the Pelto Subdivision.
[9] Central to this entire dispute is the allegation of Sioux Lookout that Goodfellow, in creating the Pelto Subdivision, established a drainage system, utilizing what Sioux Lookout alleges to be a “natural drainage course” within the Pelto Subdivision. This drainage system is alleged by Sioux Lookout to receive run-off from lands to the west of the Pelto Subdivision, including Sturgeon Meadows Road, Phase I and Phase II Dairycow Subdivisions, and from the Pelto Subdivision itself.
[10] In 2007, Sioux Lookout undertook improvement work to Sturgeon Meadows Road, including clean out and rehabilitation of the drainage ditches on both the east and west sides of the road and the replacements of the culvert running under Sturgeon Meadows Road. The full extent of Sioux Lookout’s work on the ditches running parallel to the road is very much at issue in this dispute. Sioux Lookout maintains that they merely cleaned out existing ditches; Goodfellow alleges that Sioux Lookout did substantially more work on these drainage ditches resulting in an increased volume and velocity of water run-off to and through the Pelto Subdivision.
[11] In late October/early November 2007, Goodfellow constructed a dam on or about Lots 5 and 6 of the Pelto Subdivision in close proximity to the easterly side of Sturgeon Meadows Road. This dam is at the location where Sioux Lookout alleges that run-off from the Sturgeon Road drainage ditches enters the natural drainage course within the Pelto Subdivision. It is also adjacent to the location where Sioux Lookout replaced a culvert under Sturgeon Meadows Road as part of their 2007 road improvement project.
[12] In 2011, in the midst of this litigation, Goodfellow constructed a more substantial berm in the same general area as the dam constructed in 2007.
[13] In general terms, Goodfellow alleges that no “natural drainage watercourse” existed within the Pelto Subdivision, as alleged by Sioux Lookout. Goodfellow alleges that Sioux Lookout has caused the flooding of his property as a result of which he has sustained damages. Finally, Goodfellow alleges that he was within his rights to construct the dam and berm in 2007 to prevent further damage to his property.
[14] Between October 22, 2008 and October 8, 2009, Goodfellow initiated 10 separate Small Claims Court actions against Sioux Lookout. Eight of these claims alleged damages to entrances to Pelto Subdivision lands; two were claims for the costs of construction of the dam and/or berm. The total sum claimed by Goodfellow in these 10 claims was $41,418.44.
[15] On October 7, 2009, Sioux Lookout initiated this proceeding in Superior Court seeking relief regarding alleged drainage issues in the ditches adjacent to Sturgeon Meadows Road and to further require Goodfellow to comply with obligations contained within the Phase I and Phase II Dairycow Subdivision agreements which they allege he is in default of.
[16] On November 16, 2009, Goodfellow served a Statement of Defence and Counterclaim on Sioux Lookout. This pleading contained some claims not previously advanced in any of the Small Claims Court proceedings and some which overlapped claims previously made. All material facts were essentially the same. The damage claim in the counterclaim had increased from the $41,418.44 claimed in the Small Claims Court proceedings to $330,000.00 in the Superior Court counterclaim.
[17] Sioux Lookout brought a motion to consolidate all of the above proceedings and to strike certain paragraphs from the Statement of Defence and Counterclaim. This motion was heard March 3, 2010. On March 29, 2010, Shaw J. struck certain paragraphs from Goodfellow’s pleadings and ordered the consolidation of all proceedings into one action. Goodfellow was ordered to deliver an Amended Statement of Defence and Counterclaim within 60 days of March 29, 2010. This pleading was served on Sioux Lookout on May 28, 2010, with the amount being claimed now increased to $415,000.00.
[18] In the winter/spring of 2011, Mr. N. Macos was retained by Goodfellow’s insurer to represent Goodfellow in regard to Sioux Lookout’s main action against Goodfellow. In June 2011, Mr. M. Holervich was retained by Goodfellow to assume carriage of his counterclaim against Sioux Lookout.
[19] By order dated October 26, 2011, Goodfellow was formally permitted to have dual representation in these proceedings, with Mr. Macos representing him with respect to the defence of the main action and Mr. Holervich representing him with respect to his counterclaim. This order also established a timetable which required Goodfellow to provide a defence to the main action by November 30, 2011 and to provide a Counterclaim as a separate document by November 30, 2011.
[20] Mr. Holervich served Goodfellow’s Counterclaim on December 2, 2011. The Counterclaim contained claims in addition to those contained in the Small Claims Court actions and the previous counterclaim in the Superior Court action. In addition, Goodfellow’s Counterclaim now sought damages in excess of $1,500,000.00.
[21] A Status Notice was issued on November 21, 2011. Mr. Holervich requested a Status Hearing and this was scheduled for January 31, 2012. Prior to the Status Hearing, all counsel agreed to a timetable and consented to an order establishing such a timetable. The Status Hearing Order of Stach J. dated January 24, 2012 established the following new timetable:
a) Reply and Defence to Counterclaim to be served by February 28, 2012;
b) Discovery Plan to be prepared by the parties by March 31, 2012;
c) Affidavits of Documents to be served by May 15, 2012;
d) Discoveries to be held by September 30, 2012;
e) Answers to Undertakings to be provided by October 31, 2012;
f) Motions arising from Discoveries to be brought by October 31, 2012;
g) Action to be set down for trial before January 30, 2013.
[22] Sioux Lookout drafted a proposed discovery plan which was emailed to both of Goodfellow’s counsel on March 27, 2012. On March 27, 2012, Mr. Macos, Goodfellow’s defence counsel provided a substantive response to the proposed discovery plan. On March 29, Mr. Holervich, Goodfellow’s counterclaim counsel, provided the following response to Sioux Lookout’s proposed discovery plan:
I have reviewed this and forwarded same to my client for instructions. I have asked him to get back to me before Monday morning, April 2.
My only questions are whether we will want to examine Mr. Rasetti or is there someone else, and, whether we want to agree to conduct all exams in Sioux Lookout, or in Thunder Bay instead (less expense for the clients).
Mr. Goodfellow may or may not have these and/or other concerns.
I will get back to both of you asap.
[23] On March 29, 2012, Goodfellow’s counterclaim counsel provided the proposed discovery plan to Goodfellow, seeking instructions as to the points raised in his earlier email to plaintiff’s counsel. Goodfellow provided his instructions on these points to his counterclaim counsel on April 2, 2012. On April 3, 2012, Goodfellow’s counterclaim counsel responded to him as follows:
Thanks David, I have a call in to Nick (defence counsel Mr. Macos) to discuss this with him – I want to see if he agrees with this, before responding/proposing this to Mr. McKitrick (counsel for Sioux Lookout).
[24] The affidavit of Goodfellow, dated May 26, 2014, and filed on this motion, states that Mr. Holervich’s file contains no indication of him having either followed these matters up with Mr. Macos or of having further responded in any way to Sioux Lookout’s proposed discovery plan. No further communication took place between Sioux Lookout’s counsel and Goodfellow’s counterclaim counsel in regard to a discovery plan.
[25] Sioux Lookout served its affidavit of documents on May 14, 2012. This affidavit of documents consists of nine volumes, large maps, drawings and historical records. Goodfellow’s defence counsel provided a draft affidavit of documents to Sioux Lookout on July 23, 2012. The email of Mr. Macos which accompanied his draft affidavit of documents included the following statement:
I attach our draft affidavit of documents that I have. I am pressing Morris (Mr. Holervich, Goodfellow’s counterclaim counsel) to get his side done to make sure we have everything covered.
[26] Goodfellow’s defence counsel has since sworn and served his affidavit of documents.
[27] Goodfellow’s counterclaim counsel began work on Goodfellow’s affidavit of documents beginning in July, 2012. No affidavit of documents, draft or otherwise has ever been provided by Goodfellow’s counterclaim counsel nor has Sioux Lookout’s counsel ever received any communication from Goodfellow’s counterclaim counsel on the issue of the outstanding affidavit of documents. There is no evidence that Sioux Lookout’s counsel has followed up with the counterclaim counsel in regard to the outstanding discovery plan or Goodfellow’s counterclaim affidavit of documents.
[28] At the request of Goodfellow’s defence counsel, a settlement meeting took place on October 2, 2012 at the offices of Goodfellow’s counterclaim counsel. Goodfellow’s counterclaim counsel advised the other counsel that he would not be taking a substantive part in the settlement meeting. In fact, Goodfellow’s counterclaim counsel participated only very briefly in this meeting, advising that he would be providing a written response respecting some of the proposed settlement issues in the near future. No such response has ever been received from Goodfellow’s counterclaim counsel.
[29] Sioux Lookout alleges that the Municipality has been prejudiced by the delay resulting from Goodfellow failing to agree to their proposed discovery plan, failing to provide his affidavit of documents in the counterclaim and by Goodfellow’s actions during the period of delay. Sioux Lookout alleges that:
Key municipal officials have retired or left the employ of Sioux Lookout;
Goodfellow has refused to permit Sioux Lookout access to his property to investigate drainage issues and his alleged property damage claims;
Goodfellow has not provided any expert reports to substantiate his property damage claims;
The Sturgeon Meadows Road drainage ditches are now substantially different in nature than they were in 2007 when the damage to Goodfellow’s property was alleged to have occurred;
Factors such as lake level fluctuations and precipitation events in or about the times the alleged property damage occurred are relevant to Goodfellow’s counterclaim and Sioux Lookout now has no way to reasonably investigate his property damage claim.
[30] Goodfellow denies that Sioux Lookout has suffered any actual prejudice resulting from the passage of time. Goodfellow submits that there is no evidence before the court on this motion that persons having knowledge of the matters in issue are no longer available to give evidence in this proceeding or that Sioux Lookout will suffer any prejudice as a result.
THE POSITIONS OF THE PARTIES
SIOUX LOOKOUT/DEFENDANT BY COUNTERCLAIM
[31] Sioux Lookout, the defendant by counterclaim, submits that Goodfellow’s counterclaim, essentially a claim against the Municipality for alleged property and flood damage resulting from Sioux Lookout’s 2007 Sturgeon Road improvement work, is without merit and has been unduly delayed without excuse to the point where it cannot now be properly investigated. Sioux Lookout also submits that Goodfellow’s counterclaim is an impediment to the orderly resolution, or progress, of the main action.
[32] Sioux Lookout submits that the court has jurisdiction to dismiss Goodfellow’s counterclaim for delay pursuant to either Rule 24 or Rule 48.14 of the Rules of Civil Procedure. In reference to Rule 48.14, Sioux Lookout submits that the same principles should apply to Goodfellow’s non-compliance with the terms of an order establishing a timetable resulting from a Status Hearing as apply at a Status Hearing itself.
[33] The Status hearing order of Stach J., dated January 24, 2012, required that a discovery plan be agreed upon by March 31, 2012. Sioux Lookout submits that they provided a proposed discovery plan to each of Goodfellow’s counsel on March 27, 2012. Mr. Macos, Goodfellow’s defence counsel on the main action, responded in a timely fashion. Goodfellow’s counterclaim counsel has never provided a substantive response to Sioux Lookout’s proposed discovery plan.
[34] Sioux Lookout submits that it is now more than two years beyond the agreed upon March 31, 2012 deadline. Their discovery representative is no longer employed by Sioux Lookout. Sioux Lookout submits that there is no evidence before the court on this motion to explain why Goodfellow’s counterclaim counsel has failed to reply to Sioux Lookout’s proposed discovery plan. Sioux Lookout submits that the only evidence on this issue provided by Goodfellow is the statement in his affidavit of May 26, 2014 that his counterclaim counsel’s file contains no indication that Mr. Holervich ever provided a substantive response to Sioux Lookout’s proposed discovery plan. Sioux Lookout submits that they are not and should not be obliged to follow up and “spur” Goodfellow on to honour the timetable which he agreed to.
[35] The Status Hearing order of Stach J. also required that affidavits of documents be served by May 15, 2012. Sioux Lookout served their affidavit of documents on May 14, 2012. Goodfellow’s defence counsel has served their affidavit of documents in the main action. Goodfellow’s defence counsel has never provided Goodfellow’s affidavit of documents in the counterclaim.
[36] Sioux Lookout submits that they cannot, without Goodfellow’s counterclaim affidavit of documents, properly investigate the merits of the counterclaim and its damage components. Now, some seven years after any damages are alleged to have occurred, Sioux Lookout submits that it is impossible to do so. Sioux Lookout submits that there is no evidence of any communication from Goodfellow’s counterclaim counsel as to his default in regard to this obligation. Sioux Lookout further submits, once again, that it is not incumbent upon them to urge the plaintiff by counterclaim to organize and provide the relevant documentation in light of an unambiguous consent timetable.
[37] Sioux Lookout further submits that the case law does not place an onus upon them to demonstrate actual prejudice on their motion to dismiss for delay. Rather, Sioux Lookout submits that the onus is upon the party allegedly responsible for the delay to establish that Sioux Lookout has not suffered non-compensable prejudice. Sioux Lookout submits that the plaintiff by counterclaim has failed to do so.
GOODFELLOW/PLAINTIFF BY COUNTERCLAIM
[38] Goodfellow acknowledges that he did not provide a final response to the plaintiff’s proposed discovery plan and that he has never provided an affidavit of documents in regard to his counterclaim against Sioux Lookout. It is further acknowledged that his counterclaim counsel has not addressed either of these longstanding deficiencies in any way with counsel for Sioux Lookout. However, Goodfellow submits that the plaintiff has never communicated any concern to his counterclaim counsel that the discovery plan had not been agreed to or that they had not received Goodfellow’s counterclaim affidavit of documents.
[39] Goodfellow’s explanation for this is that settlement discussions took place between May 2012 and the spring of 2013. It is further submitted that it was appropriate that resources be expended on these discussions and that they were never advised by Sioux Lookout that such discussions were at an end. Goodfellow submits that his lack of compliance with the timetable order has to be considered in the context of these ongoing settlement discussions, during which he deferred to Goodfellow’s defence counsel to do the “heavy lifting”.
[40] Goodfellow further submits that there is no merit to the suggestion that Sioux Lookout has suffered prejudice as a result of delay. It is submitted that, while the plaintiff’s discovery representative has retired, there is no evidence he is not available to give evidence in this proceeding or that Sioux Lookout has or will sustain any prejudice as a result.
[41] Finally, Goodfellow submits Rule 48.14 does not provide this court with jurisdiction to dismiss the counterclaim for delay. It is suggested that Rule 48.14 be strictly construed to deal only with matters of delay at a status hearing. Goodfellow submits that the provisions of Rule 48.14 and the cases interpreting the rule do not apply to the non-compliance with an order, in this case a timetable, arising from a status hearing.
DISCUSSION REGARDING MOTION TO DISMISS COUNTERCLAIM FOR DELAY
[42] Rules 24.01 and 48.14(13) of the Rules of Civil Procedure provide procedural mechanisms enabling a court to dismiss an action for delay. Rule 1.04(1) states that the “rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.” When exercising its discretion under Rules 24.01 or 48.14(13) to dismiss an action for delay, a court is required to balance the plaintiff’s interest in having a hearing on the merits and the defendant’s interest in having the matter resolved in an expedient and time-efficient manner.
[43] The tests to be applied under rules 24.01 and 48.14(13) are distinct from one another. Rule 24.01 enables a defendant who has complied with the rules to take a procedural step to dismiss an action where the plaintiff has been delinquent in a manner enumerated in the rule.
[44] I find that the provisions of Rule 24 have no application to the situation before me. In this case, the delay has occurred after the close of pleadings and subsequent to a consent order establishing a litigation timetable, all resulting from the issuance of a Rule 48.14(1) status notice which led to a status hearing.
[45] If Sioux Lookout, the moving party and defendant by counterclaim, is to be successful in its motion to dismiss the counterclaim for delay, authority and jurisdiction to do so must be found in Rule 48.14.
[46] Rule 48 provides a number of mechanisms to enable the court to control the pace of the litigation. Rules 48.14(1) and Rule 48.14(2) allow the registrar to serve a status notice. Rule 48.14(8) allows any party served with a status notice to request a status hearing. The disposition of a status hearing is governed by Rule 48.14(13), which provides as follows:
- At the status hearing, the plaintiff shall show cause why the action should not be dismissed for delay and,
a) if the presiding judge or case management master is satisfied that the action should proceed, the judge or case management master may,
i) set time periods for the completion of the remaining steps necessary to have the action placed on or restored to a trial list and order that it be placed on or restored to a trial list within a specified time,
ii) adjourn the status hearing to a specified date on such terms as are just, or
iii) if the action is an action to which Rule 77 may apply under rule 77.02, assign the action for case management under that Rule, subject to the direction of the regional senior judge,
iv) make such other order as is just; or
b) if the presiding judge or case management master is not satisfied that the action should proceed, the judge or case management master may dismiss the action fro delay.
[47] The issues before the court on this motion by Sioux Lookout, as I see it, are as follows:
Does this court have jurisdiction to dismiss a counterclaim for delay pursuant to Rule 48.14(13)(b) on a motion where it is established that a party has failed to comply with an order/timetable resulting from a status hearing;
If so, do the same principles apply to this motion as apply to dismissal for delay at a status hearing; and, if so,
Has the plaintiff by counterclaim discharged the onus on him such that the counterclaim should not be dismissed for delay.
[48] In Khan v. Sun Life Assurance Co. of Canada, 2011 CarswellOnt 10750 (C.A.), the Ontario Court of Appeal heard an appeal by the plaintiff from a judgement which dismissed the plaintiff’s action at a status hearing. In dismissing the appeal, the Court found that the motion judge had correctly applied the two part test to be applied when dismissal is sought at a status hearing – the plaintiff has the burden of demonstrating that there was an acceptable explanation for the delay and that, if the action was allowed to proceed, the respondent would suffer no non-compensable prejudice.
[49] In 1196158 Ontario Inc. v. 6274013 Canada Ltd. 2012 ONCA 544, 2012 CarswellOnt 10154 (C.A.), the Ontario Court of Appeal heard an appeal by a plaintiff from an order dismissing the action for delay at a second status hearing. The second status hearing was necessary because the plaintiff had failed to complete steps mandated by a timetable agreed upon at the first status hearing.
[50] In 1196158 Ontario Inc., the Court provided some general comments on the subject of delay and fairness in civil litigation. At paragraph 17, 18 and 19, the Ontario Court of Appeal stated the following:
The civil justice system aims to resolve disputes fairly, on the merits and in a timely and efficient manner. The Rules of Civil Procedure provide that the rules are to be “liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits”: rule 1.04(a).
Achieving that goal in cases involving dismissal for delay requires a careful balance of two fundamental principles. The first is that civil actions should, if possible, be decided on their merits and procedural rules should be interpreted accordingly. The second is that the procedural rules that aim to resolve disputes in a timely and efficient manner can only achieve their goal if they are respected and enforced.
Timelines prescribed by the Rules of Civil Procedure or imposed by judicial orders should be complied with. Failure to enforce rules and orders undermines public confidence in the capacity of the justice system to process disputes fairly and efficiently. On the other hand, procedural rules are the servants of justice not its master. We must allow some latitude for unexpected and unusual contingencies that make it difficult or impossible for a party to comply. We should strive to avoid a purely formalistic and mechanical application of timelines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. As Laskin J.A. stated in Finlay v. Van Paassen, 2010 ONCA 204, 101 O.R. (3d) 390 (Ont. C.A.), at para. 14: “the Rules and procedural orders are construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute.”
[51] The Court confirmed the test to be applied as earlier stated in Khan, as noted above. As to the issue of prejudice, the Court stated the following, at para. 32:
…it is certainly not the law that an action cannot be dismissed for delay at a rule 48.14 status hearing without proof of actual prejudice…the test (from Khan) is conjunctive, not disjunctive. Even if the plaintiff can provide a satisfactory explanation for the delay, the action will be dismissed if there would be prejudice to the defendant. And if the plaintiff is not able to provide a satisfactory explanation for the delay, it is still open to the judge to dismiss the action, even if there is no proof of actual prejudice to the defendant.
[52] Dismissal of an action following a status hearing was again considered by the Ontario Court of Appeal in Faris v. Eftimovski 2013 CarswellOnt 7172 (C.A.). The Court, at paragraph 32, reiterated the Khan test applicable to a request to dismiss an action for delay at a status hearing. The Court noted that the plain wording of rule 48.14(13) makes clear that the onus is on the plaintiff to demonstrate why the action should not be dismissed for delay.
[53] Noting that the purpose of Rule 48 is to enable the court to control the pace of litigation and ensure that disputes are resolved in a time-effective manner, the Court was of the view that “imposing the onus on the plaintiff to show cause why the action should not be dismissed for delay is fair. This court has held that the responsibility to move the action along lies chiefly with the plaintiff. Accordingly, the plaintiff also bears the consequences of conducting the action in a dilatory manner.” Para. 33.
[54] In contrasting the relative thresholds established to dismiss an action for delay under rules 24.01 and 48.14(13), the Court further explained, at para. 41, that “the onus placed on the plaintiff under rule 48.14(13), therefore, is mandated not only by the plain wording of the rule but also by the greater severity of the plaintiff’s delinquency in pursuing its claim. In other words, at this juncture, the emphasis on the objectives expressed in rule 1.04(1) to ”secure the just, most expeditious and least expensive determination of every civil proceeding on its merits” must necessarily shift towards ensuring that disputes be resolved expeditiously and in a time-efficient manner.”
[55] In conclusion, the Court in Faris endorsed the test the court earlier confirmed in 1196158 Ontario Inc.:
A plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation and that, if the action was allowed to proceed, the defendant would suffer no non-compensable prejudice. (emphasis in original)
[56] In Deverett Professional Corp. v. Canpages Inc., 2013 CarswellOnt 15492 (Div. Ct.), the Court reviewed the above cases from the Ontario Court of Appeal and went on to specifically address whether the modern approach to a status hearing is to manage the case or to determine whether the relevant party has an adequate explanation for the delay.
[57] The Divisional Court in Deverett adopted the finding of the Ontario Superior Court of Justice in Saini v. Sun Life, 2013 ONSC 4463 which held, at para. 8, that:
The thrust of the recent case law from the Court of Appeal is that the judge or master presiding at a status hearing is not to aim at fixing a tardy action but at dismissing it, unless there is cogent evidence in the record establishing a reason not to do so.
[58] In the case at bar, a full and complete evidentiary record was placed before the court. This record provided a detailed chronology of the progress of this entire proceeding to date, as reviewed above. Goodfellow’s counterclaim counsel was retained in June of 2011 for the purpose of prosecuting the counterclaim against Sioux Lookout. By order dated October 26, 2011, Goodfellow was formally permitted to have such dual representation. This same order established the first timetable which required Goodfellow’s counterclaim counsel to provide a Counterclaim as a separate document by November 30, 2011. This Counterclaim was served December 2, 2011.
[59] A Status Notice issued on November 21, 2011. A Status hearing was scheduled for January 31, 2012 at the request of Goodfellow’s counterclaim counsel. Prior to the hearing all parties consented to a timetable that was incorporated into an order dated January 24, 2012. Goodfellow’s counterclaim counsel concedes that he has not met the discovery and affidavit of document components of that timetable. Sioux Lookout, the defendant by counterclaim, has brought this motion asking, among other things, that the counterclaim be dismissed for delay pursuant to Rule 48.14(13)(b).
[60] In these circumstances, I find that I have jurisdiction to determine this motion pursuant to Rule 48.14(13(b). I see no difference in principle between hearing this issue by way of a motion on a full evidentiary record as opposed to Sioux Lookout convening a second status hearing where the same record would be filed and the same submissions made. It follows that the same legal principles, as set out above, apply to this motion seeking dismissal for delay as would apply if the relief was sought at a second status hearing.
[61] The plaintiff by counterclaim bears the burden of demonstrating that there is an acceptable explanation for the litigation delay and that, if the counterclaim is allowed to proceed, the defendant by counterclaim will suffer no non-compensable prejudice.
[62] Goodfellow’s counterclaim counsel provides a two-fold explanation for why he has neither responded to a discovery plan proposed by counsel for the defendant by counterclaim or provided an affidavit of documents. First, it is submitted that there has been no follow-up initiated by Sioux Lookout urging him to comply with the consent timetable. Secondly, it is submitted that his time and his client’s resources were directed at settlement discussions which, if successful, would have resolved all claims and counterclaims.
[63] I do not accept either of these explanations as reasonable. It is the obligation of the counterclaim counsel to move the counterclaim along according to the timetable. While evidence of actions by opposing counsel hindering the progress of a matter would be relevant, there is no suggestion that this was the case in this matter. It is not the obligation of the defendant by counterclaim to monitor the counterclaim counsel’s compliance with the consent timetable. The responsibility to move the counterclaim along lies with the plaintiff by counterclaim. The fact that there was not any follow-up by Sioux Lookout demanding that Goodfellow’s counterclaim counsel comply with the timetable is not, in my opinion, a reasonable explanation for failing to honour it.
[64] The record is extremely thin as to the submission that counsel’s time and resources were more properly directed at settlement discussions. The record does confirm that a settlement meeting did take place in Thunder Bay in the fall of 2012 at Mr. Holervich’s office. However, the record is also clear that Mr. Holervich chose to participate in this meeting in a minimal, rather than substantive, fashion. His assurance that he would provide his client’s position on issues pertaining to the counterclaim was not honoured.
[65] In any event, I am not persuaded that settlement discussions, even assuming they were meaningful and progressive, would or should preclude counterclaim counsel from honouring the timetable as to the discovery plan and provision of his affidavit of documents. I do not see the two as necessarily mutually exclusive. Further, I fail to see how meaningful settlement discussions could have taken place as to the damage claims in Goodfellow’s counterclaim without the counterclaim affidavit of documents. The counterclaim affidavit of documents would by necessity include expert reports and other evidence supporting the damage claims in the counterclaim, without which it would be difficult, if not impossible, for Sioux Lookout to assess the merits, or otherwise, of the counterclaim.
[66] What is clear to me, as essentially conceded by Mr. Holervich in oral argument, is that he and Goodfellow were content to allow Goodfellow’s defence counsel to take the primary role in all discussions with counsel for Sioux Lookout, during which time the counterclaim file was held in abeyance and the January 24, 2012 order/timetable ignored.
[67] The issue of prejudice is more difficult. While Sioux Lookout’s discovery representative is now retired, there is no evidence to suggest that he, or other potential witnesses, are unavailable should the matter proceed to trial. While it may be more difficult, and therefore more expensive, to proceed to trial given the delay, this is compensable prejudice.
[68] On the other hand, there is some merit to Sioux Lookout’s submission that the flood and property damage claims from 2007, as set out in the counterclaim are now much more difficult, if not impossible to investigate and defend against in 2014. I am not persuaded that the defendant by counterclaim would suffer no non-compensable prejudice if the action were allowed to proceed.
[69] In all the circumstances, the plaintiff by counterclaim has failed to discharge the onus on him. The counterclaim is hereby dismissed for delay. This dismissal shall be a defence to any subsequent proceeding by Goodfellow against Sioux Lookout on the issues set out in the counterclaim.
[70] Given the disposition of the dismissal for delay aspect of this motion, it is not necessary for me to address Sioux Lookout’s claim for partial summary judgement on the counterclaim.
[71] If the parties cannot agree on the costs of this motion, they shall file written submissions as to costs, not to exceed 5 pages, exclusive of their respective Bills of Costs. Sioux Lookout’s cost submissions shall be filed within 21 days of the release of this decision; Goodfellow’s costs submissions shall be filed within 31 days of the release of this decision.
The Hon. Mr. Justice J.S. Fregeau
Released: August 22, 2014
COURT FILE NO.: CV-09-138
DATE: 2014-08-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
THE CORPORATION OF THE MUNICIPALITY OF SIOUX LOOKOUT
Plaintiff/Defendant by Counterclaim
- and –
DAVID WARREN GOODFELLOW
Defendant/Plaintiff by Counterclaim
REASONS ON MOTION
Fregeau J.
Released: August 22, 2014