Canadian National Railway Company v. The Corporation of the City of Kitchener et al.

[Indexed as: Canadian National Railway Co. v. Kitchener (City)]

Ontario Reports

Ontario Superior Court of Justice,

Myers J.

August 25, 2014

122 O.R. (3d) 372 | 2014 ONSC 4929

Case Summary

Civil procedure — Dismissal for delay — Plaintiff commencing action in 1989 — Defendants moving successfully under Rule 24 to dismiss action for delay — Plaintiff's delay for first 14 years excusable as parties were attempting to resolve matters consensually — Plaintiff realizing after changes to Rules of Civil Procedure in 2003 that it had to move case along but making little effort to do so — Plaintiff offering no reasonable explanation for post-2003 delay — Presumption of prejudice to defendants very strong — Plaintiff failing to rebut presumption as it did nothing to preserve evidence of any witness or potential witness.

The plaintiff claimed that the city or the Public Utilities Commission dumped coal tar waste on H Ltd.'s property and that the waste migrated to the plaintiff's property. In 1989, the plaintiff commenced an action against all three parties. In 2014, the defendants brought a motion under Rule 24 of the Rules of Civil Procedure to dismiss the action for delay.

Held, the motion should be granted.

While the plaintiff had not been disdainful or disrespectful of the court, its delay was clearly intentional. It preferred to resolve the question of responsibility for remediation costs consensually. The plaintiff's delay for the first 14 years was excusable, as the parties were attempting to resolve matters. The plaintiff realized after changes to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 in 2003 that it had to move the case along, yet it made little effort to do so. There were no reasonable and cogent reasons for the ongoing delay after 2003. The presumption of prejudice to the defendants was very strong. The issue of who dumped the coal tar and where it was dumped was one of fact requiring witnesses. There were no witnesses left with memory of the relevant events. The plaintiff had done nothing to preserve the evidence of any witness or potential witness. It had not rebutted the presumption of prejudice arising [page373] from the inordinate and inexcusable delay. There was nothing in the defendants' conduct to counter the plaintiff's failure to rebut the presumption of prejudice or to explain the inexcusable elements of the plaintiff's delay. There was a substantial risk that the case could not be fairly tried.

Faris v. Eftimovski, [2013] O.J. No. 2551, 2013 ONCA 360, 42 C.P.C. (7th) 258, 363 D.L.R. (4th) 111, 87 E.T.R. (3d) 204, 306 O.A.C. 264, 228 A.C.W.S. (3d) 89; Langenecker v. Sauvé, [2011] O.J. No. 5777, 2011 ONCA 803, 286 O.A.C. 268, apld

Other cases referred to

1196158 Ontario Inc. v. 6274013 Canada Ltd. (2012), 112 O.R. (3d) 67, [2012] O.J. No. 3877, 2012 ONCA 544, 295 O.A.C. 244, 353 D.L.R. (4th) 129, 220 A.C.W.S. (3d) 533; 806480 Ontario Ltd. v. RNG Equipment Inc., [2014] O.J. No. 2979, 2014 ONCA 488; Armstrong v. McCall, [2006] O.J. No. 2055, 213 O.A.C. 229, 28 C.P.C. (6th) 12, 2006 17248, 148 A.C.W.S. (3d) 229 (C.A.); Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 188 O.A.C. 201, 48 C.P.C. (5th) 56, 2004 14579, 132 A.C.W.S. (3d) 15 (C.A.); Gravelle (c.o.b. CodePro Manufacturing) v. Denis Grigoras Law Office, [2013] O.J. No. 2363, 2013 ONCA 339; Housser v. Savin Canada Inc., 2005 35779 (ON SC), [2005] O.J. No. 4217 (S.C.J.); Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641; Khan v. Metroland Printing, Publishing & Distributing Ltd., [2013] O.J. No. 4260, 2013 ONCA 571, affg [2013] O.J. No. 1639, 2013 ONSC 944 (S.C.J.); 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; Nissar v. Toronto Transit Commission (2013), 115 O.R. (3d) 713, [2013] O.J. No. 2553, 2013 ONCA 361, 309 O.A.C. 8; Orsi Estate v. Fromstein, [2014] O.J. No. 1946, 2014 ONSC 2508 (S.C.J.); Reid v. Dow Corning Corp., [2002] O.J. No. 3414, 48 C.P.C. (5th) 93, 134 A.C.W.S. (3d) 751 (Div. Ct.), revg [2001] O.J. No. 2365, [2001] O.T.C. 459, 11 C.P.C. (5th) 80, 105 A.C.W.S. (3d) 649 (Master); Saini v. Sun Life Assurance Co. of Canada, [2013] O.J. No. 3125, 2013 ONSC 4463, 25 C.C.L.I. (5th) 119, 229 A.C.W.S. (3d) 997 (S.C.J.); 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; Wojdat v. Ventawood Management Inc., [2014] O.J. No. 1151, 2014 ONSC 1516 (S.C.J.); Young v. Succession Strategies Inc., [2012] O.J. No. 3602, 2012 ONSC 4075 (S.C.J.)

Statutes referred to

Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 106, 131 [as am.]

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 24, 24.01, 36, 48, 48.14, (13), 57.01, (1)(0.a), (0.b), (a), (c), 77

MOTION by the defendants to dismiss an action for delay.

Jeremy Devereux and Andrea Campbell, for plaintiff.

Karen Perron, for defendants the Corporation of the City of Kitchener and Public Utilities Commission of Kitchener.

Michael Binetti, for defendant Hogg Fuel & Supply Limited. [page374]

MYERS J.: —

Background

[1] Canadian National Railway Company started this lawsuit in 1989, over 25 years ago. The defendants move to dismiss the lawsuit for delay.

[2] For the reasons that follow, CN has not met the burden upon it to allow the lawsuit to continue to trial. A trial at this late date would not provide a fair and just resolution of the dispute between the parties on the merits. Therefore, the lawsuit must be dismissed.

The Facts

[3] CN claims that from 1924 to 1958, the Public Utilities Commission of Kitchener owned and operated a coal gasification plant on Gaukel Street in Kitchener, Ontario. CN alleges that coal tar, a black to black-brown liquid or semi-solid which solidifies in contact with air, was produced as a by-product of the manufacturing of gas at the plant. CN alleges further that the Public Utilities Commission or the City of Kitchener dumped coal tar waste on nearby lands that are now owned by the defendant Hogg Fuel & Supply Limited and that the coal tar waste has migrated onto CN's adjoining land. CN asserts a number of causes of action against all of the defendants essentially for the cost of cleaning its land. The prayer for relief claims damages of either $1 million or $2 million (depending if it is read as setting out alternatives or cumulative pleas) plus injunctive relief, interest and costs.

[4] The Public Utilities Commission of Kitchener no longer existed in 1989. In its statement of claim, CN alleges that the city is liable as the successor to that body.

[5] The litigation was prompted by reports prepared for the Ontario Ministry of the Environment in 1986 and 1987 concerning coal gasification plant waste located on the property of CN and some it its neighbours. The provincial ministry advised CN that it was preparing to order the owners of polluted sites and the former gas plant operators to clean up the contaminated lands. By the time the litigation commenced in June 1989, the issues were already 30 to 65 years old. Limitation period defenses have been raised. There is no indication of any documents having been lost after the litigation commenced. However, in light of the historic nature of the events at the time the claim commenced, there are very limited historical documents available. Not only is there no documentation concerning the alleged dumping of coal tar wastes from 1924 to 1958, but CN also has [page375] no records of its own apparent efforts to investigate and, perhaps, partially clean up its own land in or around 1977.

[6] There does not appear to be any real dispute that some pollutants have and continue to leach from the Hogg Fuel land downhill onto CN's land. However, this may represent a fairly small proportion of the waste located on or under CN's property. There is a substantial issue in the litigation as to how the vast bulk of the pollution found on or under CN's property got there. Hogg Fuel has always asserted that the city or the Public Utilities Commission was responsible for dumping any coal tar on both Hogg Fuel's land and on CN's land. Hogg Fuel denied and denies that the bulk of the coal tar on CN's land came from its property. It is fair to characterize Hogg Fuel as having adopted a "show me" attitude. It was waiting for CN to prove that the pollution on its property came from Hogg Fuel's property or from anything done by it. The city went further and alleged that CN may have transported coal tar to its own property or, at minimum, consented to the dumping of coal tar there.

[7] It was apparent from the outset of the litigation that CN preferred taking a co-operative approach with the defendants to try to satisfy the Ministry of the Environment in the mutual interests of all of the parties. By letter dated August 22, 1989, CN's legal department discussed holding a series of meetings to attempt to resolve the matter among all parties. The letter continues for several redacted pages representing settlement negotiations and concludes as follows:

For the time being, and as discussed, I'm not requiring that the defendants deliver their statement of defense, as that is not the priority at this moment. Thank you for your cooperation in this regard.

[8] One or more meetings among the parties were held in 1990, which were documented by contemporaneous correspondence among counsel. It appears that further meetings and some site investigations occurred from 1990 until early 1994. But nothing happened in the litigation itself during the first five-year period. In a letter from CN's legal department to the city's legal department dated September 13, 1994, the status of the litigation was described as follows:

I reiterate the position expressed both on September 12th, as well as in the meeting of July 20, 1994. The existing litigation, in which the City of Kitchener and its Utility as well as Hogg Fuel, are named as defendants, has effectively been in abeyance, after consultation between the parties, pending the development of the further soils and other information which are now largely before us in the report from Green Plan Environmental Corporation. I have indicated a willingness to continue to leave the litigation in abeyance while the parties in good faith progress the terms of some form of mutually agreeable settlement of the issues of remediation and contribution towards [page376] the cost thereof, and I have indicated that as part of any such minutes of settlement steps could be taken to provide for dismissal of the action on an agreed basis.

[9] While there does not appear to have been any formal agreement as to the terms upon which the litigation would be held "in abeyance", the correspondence and conduct of the parties strikes me as consistent with the practice at the time. There is no suggestion that the defendants ever agreed to prejudice their rights. But it is clear that they were participants in a joint collaborative enterprise to focus on a consensual outcome for the first several years at minimum.

[10] In July 1994, a working group was formed by CN, the city, Hogg Fuel, the Ministry of the Environment and other affected neighbours (including Parks Canada, as represented by Environment Canada) to study mitigation and remediation for the Hogg Fuel and CN properties. The minutes of the first meeting of the working group record the following statement by counsel to CN: "CN is willing to negotiate, and may consider dropping litigation, but right now CN is using litigation as a tool to get action."

[11] In November 1994, CN demanded that the defendants deliver their statements of defence in the litigation. CN's use of the litigation as a tool to spur other action apparently had some effect. The collaborative effort accelerated before pleadings were delivered. In 1996, the city, Hogg Fuel and CN jointly retained consultants to prepare reports for them all at shared cost. Under cross-examination, the representative of Hogg Fuel confirmed that the parties were working towards an understanding to see who was responsible for the pollution problem and "then that party would take responsibility for the issue". The issue of financial responsibility is the principle legal issue in the lawsuit. It was part of the collaborative effort as well.

[12] Ultimately, the city delivered its statement of defence in July 1996. Hogg Fuel delivered its statement of defence, counterclaim and cross-claim in November 1997. Hogg Fuel advanced claims, not simply for contribution and indemnity, but seeking damages for $10 million from the other parties for injury to its land. In light of the collaborative process moving forward since 1994, CN was content to allow almost two years to elapse from its November 1994 demand until the city delivered its statement of defense and for Hogg Fuel to have three years to deliver its pleading.

[13] It is significant that in 1997, the city proposed that examinations be conducted of five witnesses who, by that time, were becoming quite elderly or whose health was failing. The [page377] examinations were to be conducted under Rule 36 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] (the "Rules"), so as to have a transcript of the witnesses' testimony available for trial. The city had also proposed in 1995 that the parties conduct a similar examination of a Mr. Bielstein, who had worked for the Public Utilities Commission as a foreman from 1935 to 1968. CN's counsel did not respond to the city's request and no examination of this witness occurred. He passed away in 1999. Notwithstanding the leadership shown by the city in obtaining the orders necessary to preserve some oral evidence, CN never suggested that any other witnesses' testimony be preserved as time ticked by over the ensuing 17 years.

[14] After delivering their pleadings, the parties seem to have resumed their collaborative process to try to keep the Ministry of the Environment at bay. By letter dated January 9, 1997, one of the parties' jointly retained experts advised the ministry"[i]t is the desire of the . . . parties to co-operatively demonstrate an initiative to remediate this area and defer the MOEE Control Order".

[15] Five more years passed with no activity in the litigation. By 2002, the jointly retained experts had delivered ten reports to the parties concerning mitigation and remediation possibilities. Although no settlement agreement was ever reached, there is little doubt that all of the parties were, at that stage, working together. Hogg Fuel's position as stated by counsel during cross-examinations was that in light of the collaboration that had been ongoing for a number of years through the late 1990s and over the turn of the century"practically, it would have seemed silly" to advance the litigation at that time.

[16] On July 3, 2001, Rule 77 of the Rules of Civil Procedure came into force. It applied case management to all newly commenced lawsuits. At that time, according to the court's notice that was sent to the parties, there were approximately 46,000 existing lawsuits outstanding. In an effort to determine the status of the outstanding actions and to transition them all into case management, counsel were required to attend "call-over court". In a letter dated January 20, 2003, counsel for Hogg Fuel confirmed that he attended call-over court with CN's counsel to request an adjournment to November 21, 2003. The adjournment was granted. Hogg Fuel's counsel then suggested that counsel convene a conference call"for the purpose of re-commencing our settlement discussions".

[17] Counsel for CN and Hogg Fuel attended before Wilkins J. in call-over court on November 21, 2003. The court rejected counsels' joint request to set a schedule under which examinations [page378] for discovery were to be completed by June 2004. Instead, Wilkins J. directed that the 14-year-old lawsuit be case managed by Master Dash. Counsel for CN reported this development to the other parties, including writing the following:

It is apparent that progress has "stalled", in relation to approving and moving ahead with the proposed remedial action plan . . . The action has been kept secondary for these many years, but it is clear that the patience of the court (and no doubt of my client) in dealing with it has worn thin.

[18] By letter dated June 8, 2004, CN's counsel proposed a case timetable to Master Dash with the consent of the other parties. The master refused to approve the consent schedule and by fax communication required the parties to agree to earlier, fixed dates for discoveries and mediation.

[19] By letter dated January 13, 2004, CN's counsel submitted a revised consent schedule proposing fixed dates for various steps as required. CN's counsel went on to explain the status of the litigation to the master as follows:

The matter is an unusual one, involving the discovery of a contaminant (coal tar wastes) emerging on the lands of the plaintiff, (apart from lesser issues of siltation and runoff, also included in the Claim). These were the subject of substantial investigation by government agencies (Ministries of the Environment and their representatives) and issues of jurisdiction, followed by a substantive process of environmental review and investigation, the development of a proposed remedial action plan, which is been in co-operative development among all parties to this action, in anticipation of further submission to and approval by the Ontario Ministry of the Environment. The parties have, therefore, focused upon the regulatory issues and their respective responsibilities in relation to environmental damage, investigation, containment and proposed remediation.

In addition, and in relation to the "holding" action which was commenced, as a precaution the parties on consent conducted examinations of certain non-party witnesses, in light of their ill health, and the fact that question apparently giving rise to the coal tar contamination had occurred some 50 years or so prior. The balance of the matter may be expected to be principally addressed through documentation, as little viva voce evidence is expected to be available to the parties.

[20] Master Dash approved the parties' proposed schedule which included a requirement for the parties to conduct examinations for discovery, to mediate the dispute on October 14, 2004 and to appear in trial scheduling court on December 1, 2004.

[21] By letter dated November 30, 2004, counsel for CN requested that Master Dash allow the parties to adjourn the trial scheduling court appearance scheduled for the next day. He reported that discoveries had proceeded although substantial undertakings remained outstanding. CN's counsel continued: [page379]

The parties have agreed to meet, with persons with authority, on December 3, 2004 for a review of outstanding issues, and to address the proposed submission to the Ministry of the Environment of a site specific risk assessment and remediation proposal, in relation to the complained-of environmental contamination of the lands of CN and Hogg Fuel. Steps have been taken to secure a final form of engineer's site specific risk assessment and related soils information and report, and it is this regulatory and environmental focus which is to be addressed December 3rd as well as the state of related progress towards resolution of issues between the parties and the suit. Mediation has been deferred to accommodate this initiative of parties[.]

We therefore, on consent of the parties, respectfully request that this matter be removed from Trial Scheduling Court of December 1, 2004, and the trial scheduling be deferred six months hence.

This should allow sufficient time to secure the transcript of the last discovery, to proceed to compliance (best efforts) with undertakings by February 15, 2005, and to allow for any necessary scheduling of discovery motions by May 1, 2005, and an intervening mediation.

[22] This may be a convenient point to note that CN delivered its last responses to undertakings on August 15, 2014, the Friday before the hearing of this motion and some ten years and six months after its best efforts were due.

[23] It appears that the settlement meeting proposed for December 3, 2004 did not occur and was rescheduled to April 22, 2005. The meeting was cancelled by counsel for Hogg Fuel on April 13, 2005, with an offer to reschedule the meeting to a later date. The parties received a notice of trial scheduling court returnable June 29, 2005. On consent, the matter was adjourned pending filing of a trial record. In reporting to counsel opposite on the trial scheduling court appearance, counsel for CN wrote:

Accordingly, the matter is stalled pending completion of the ground work required to better inform the parties, and to enable us to move to settlement conference [sic], which had been earlier intended although without mediator [sic]. We look forward to getting this matter moving forward.

In this connection I anticipate that it will be necessary to turn to the outstanding undertakings, although I am troubled by the indication that Hogg Fuel's principal witness has, as a result of a deteriorating medical condition, little recall and may be of limited further assistance to the parties.

[24] The collaborative process had been stalled by that time since at least November 2003. Counsel understood that case management efforts were directing the parties to ready the litigation for trial by completing interlocutory matters and CN filing its trial record. At about that time, the parties' jointly retained experts advised that the data upon which they had been working for nearly a decade had become outdated and had to be refreshed. The site-specific risk assessment required for the Ministry of the Environment could not be filed without [page380] updated data. CN's counsel confirmed in cross-examination that no further instructions were given by the parties to their jointly retained experts. In fact, not one of the events submitted to Master Dash as the bases to adjourn trial scheduling court from December 1, 2004 occurred. None of the client meeting, the submission to the Ministry of the Environment of a site-specific risk assessment and remediation proposal, compliance with undertakings by February 15, 2005, scheduling of discovery motions by May 1, 2005, or an intervening mediation happened as represented.

[25] Some correspondence was exchanged concerning undertakings in December 2005. A meeting was then scheduled among the principals for March 27, 2007 -- apparently the same meeting that had been scheduled for April 22, 2005. The meeting was again cancelled unilaterally by Hogg Fuel on March 26, 2007, while people were already travelling to meet. Once again, however, counsel for Hogg Fuel confirmed that they would follow up with a new date. They never did. In fact, in late 2008, counsel for Hogg Fuel had itself removed from the record due to an inability to obtain instructions from Hogg Fuel. One may question whether Hogg Fuel was engaging in negotiations in good faith or if it was just stalling in the 2004-2008 period.

[26] In March 2008, CN change lawyers. Hogg Fuel appointed new counsel in February 2009. A meeting was held among the parties in June 2009. In November 2009, a further meeting was scheduled for February 2010, at which CN's counsel would provide copies of a report by CN's new consultant Golder Associates. By letter dated February 12, 2010, new counsel for Hogg Fuel advised that it is not willing to attend a settlement meeting as Hogg Fuel believed it has no liability and was entitled to full indemnification from the city. Counsel continued:

Given my client's position, I would respectfully suggest that [CN's counsel] either get on with the prosecution of the action or alternatively, although I have no instructions to agree to such, I would recommend a dismissal of the action without costs.

Gentlemen, you have our position and as such let's not further waste our respective clients' monies discussing the subject matter of a meeting. Let's get on with it or not.

[27] Recognizing that settlement efforts had finally failed, counsel for CN confirmed, by letter dated February 16, 2010, that "[i]t appears that we need to move forward with this litigation".

[28] CN then did nothing to advance the litigation for the next two years. [page381]

[29] In light of another transition in the Rules governing the monitoring of the status of lawsuits (Rule 48), it appeared that this action might be automatically dismissed if CN did not take steps before the end of 2011. Accordingly, on December 16, 2011, CN delivered a trial record and set the action down for trial. Under the Rules then in place, it also appeared that a mandatory mediation session would be required. Accordingly, commencing in early 2012, the parties discussed holding a mediation session which never came to pass. It took most of 2012 for CN to file the certification form required to ask for pre-trial conference and trial dates. It is telling that in that form, counsel for CN certified that its pleadings will require amendment, its discoveries have not been completed, all of its requests to admit have not been delivered and its document productions are not complete.

[30] While CN's counsel concedes that it is no longer open to CN to continue with discoveries or motions without leave of the court, it is obvious that the statement of claim will require amendment before trial to increase the damages claimed to reflect the passage of time and to update the legal bases for the claims which are now 25 years old. In addition, CN is required to complete productions if it has not yet done so.

The Applicable Law

The policy of promoting timely resolution of civil disputes

[31] The management of civil litigation has evolved considerably over the past 25 years. Earlier this year, the Supreme Court of Canada gave voice to long-standing concerns that the civil justice system had become so slow, inefficient and expensive as to put access to civil justice beyond the reach of most Canadians. In response to this crisis of access to justice (or inaccessibility of civil justice), the Supreme Court has required implementation of a "culture shift" that gives primacy to justly and fairly resolving civil disputes by implementing processes to make civil litigation proportionate, affordable and timely (Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7).

[32] But Hryniak did not arise on the sudden. As the factual outline recited above demonstrates, the issue of reducing delays in civil litigation has been the subject of ongoing regulatory reform efforts since the turn of the century at least. CN's lawyer recognized that the court and his client were losing patience with the litigation delays in 2003. Yet CN never actively advanced the litigation. Another eight years passed before CN set the action down for trial at the very last minute in face of a possible administrative dismissal and with the action still not being trial ready. [page382]

[33] In this case, the court is confronted with a motion for dismissal for delay under Rule 24. That rule does not exist in a vacuum. The Court of Appeal discussed the overlap between Rule 24 and the common law in 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, paras. 23-25:

Dismissal for delay is not, of course, an invention of case management. Rule 24.01 allows a party to move to dismiss an action for delay where the plaintiff has failed to prosecute the action in a timely fashion in accordance with the rules. Moreover, courts may dismiss actions for delay even when the relevant rules do not mandate it. A court has inherent jurisdiction to control its own process, which "includes the discretionary power to dismiss an action for delay": Housser v. Savin Canada Inc. (2005), 2005 35779 (ON SC), 77 O.R. (3d) 251, at para. 9 (S.C.J.). As the Manitoba Court of Appeal wrote"The power of a superior court to strike a matter for want of prosecution does not hinge on [page 668] the niceties of the wording of the rules, but rather flows from the inherent power of the court to prevent an abuse of its own process"[.]

These rules and cases rest upon an important principle: there is a strong public interest in promoting the timely resolution of disputes. "The notion that justice delayed is justice denied reaches back to the mists of time . . . For centuries, those working with our legal system have recognized that unnecessary delay strikes against its core values and have done everything within their powers to combat it": Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44, [2000] 2 S.C.R. 307 at para. 146.

(Emphasis added; citations omitted)

[34] In addition to Rule 24 and the common law doctrine of abuse of process, Rule 48 provides another mechanism under which the court manages the pace of litigation. In 1196158 Ontario Inc. v. 6274013 Canada Ltd. (2012), 112 O.R. (3d) 67, [2012] O.J. No. 3877, 2012 ONCA 544, the Court of Appeal discussed the importance of timeliness and the purposes of court control of the pace of litigation as follows [at paras. 33-35, 40-42]:

As I have noted, the goal of the civil justice system is ensure "the just, most expeditious and least expensive determination of every civil proceeding on its merits". Consideration of actual prejudice focuses on the just determination of the dispute on its merits. The absence of actual prejudice does not automatically or inevitably trump the values of timeliness and efficiency. At some point, a party who has failed to respect the rules designed to ensure timely and efficient justice loses the right to have its dispute decided on the merits. If that were not the case, the rules and the timelines they impose would cease to have any meaning and any hope of ensuring timely and efficient justice would be seriously jeopardized.

Modern civil procedure recognizes the need to deal with unexplained delay and, through rules such as rule 48.14, provides for an active judicial role "to promote the timely resolution of disputes, to discourage delay in civil litigation and to give the courts a significant role in reducing delays": Todd Archibald, Gordon Killeen and James C. Morton, Ontario Superior Court Practice (Markham, Ont.: LexisNexis Canada, 2011), at p. 1205. As judgments of this court and the Superior Court recognize, if an action could [page383] not be dismissed for delay unless there was proof of actual prejudice, timelines would become meaningless. Where a party fails to prosecute an action in a timely fashion, the court is entitled to exercise the powers conferred by the rules to dismiss actions absent an adequate explanation for the delay: Riggitano v. Standard Life Assurance Co., [2009] O.J. No. 1997 (S.C.), at para. 45, affd 2010 ONCA 70, [2010] O.J. No. 292.

It is surely not too much to expect a party to either set a matter down for trial within two years of the close of pleadings or be able to offer a reasonable explanation for why that is not possible to do so. In this case, the plaintiff had no explanation for an initial lengthy period of inaction. Despite that unexplained delay, the plaintiff was permitted to proceed with the action, but again failed to take any meaningful step towards trial for another period of almost 18 months. In these circumstances, the status hearing judge did not err by concluding that the time for any further indulgence had passed.

As Professor Stephen G.A. Pitel observed in "Revival after Dismissal for Delay: Marche D'Alimentation Denis Theriault Ltee v. Giant Tiger Stores Ltd." (2008), 34 Advocates' Q. 240: ". . . our system of civil justice is under almost constant scrutiny. One of the most fundamental concerns is that the process is far too complex, too expensive and takes too long". In his review of the civil justice system the Honourable Coulter Osborne, Q.C. observed that the related issues of cost and delay "continue to be cited nationally and provincially as formidable barriers that prevent average Canadians from accessing the civil justice system": Civil Justice Reform Project, Summary of Findings & Recommendations (Toronto: Ontario Ministry of the Attorney General, 2007), at p. 1. A system that tolerates unexplained delay will not attract public confidence.

The civil justice regime should deliver timely justice to both plaintiffs and defendants. Failure to enforce timelines frustrates the legitimate expectations of both those who claim and those who defend. Unless the basic ground rules of litigation -- including time requirements -- are enforced in a principled way, counsel cannot provide reliable advice and clients cannot plan their affairs in an orderly manner.

If flexibility is permitted to descend into toleration of laxness, fairness itself will be frustrated[.]

The test for dismissal for delay under rule 24.01

[35] Although in each case the underlying policy of promoting timely justice is the same, at least three different tests have emerged for assessing whether a lawsuit has taken too long to be allowed to proceed. As described by the Court of Appeal in Faris v. Eftimovski, [2013] O.J. No. 2551, 2013 ONCA 360, the first test deals with a motion under Rule 24 [at paras. 27-28]:

Rule 24.01 provides:

(1) A defendant who is not in default under these rules or an order of the court may move to have an action dismissed for delay where the plaintiff has failed, [page384]

(a) to serve the statement of claim on all the defendants within the prescribed time;

(b) to have noted in default any defendant who has failed to deliver a statement of defence, within thirty days after the default;

(c) to set the action down for trial within six months after the close of pleadings;

[Revoked.]

(e) to move for leave to restore to a trial list an action that has been struck off the trial list, within thirty days after the action was struck off.

Therefore, rule 24.01 enables a defendant who has complied with the rules to take a deliberate procedural step to dismiss an action where the plaintiff has been delinquent in an enumerated manner. In Langenecker v. Sauvé, 2011 ONCA 803, 2011 ONCA 803, 286 O.A.C. 268, Doherty J.A. described the two types of cases resolved by the exercise of a motion judge's discretion under rule 24.01:

The first type of case . . . refers to those cases in which the delay is caused by the intentional conduct of the plaintiff or his counsel that demonstrates a disdain or disrespect for the court's process. In dismissing cases which fall within this category, the court effectively declares that a continuation of the action in the face of the plaintiff's conduct would constitute an abuse of the court's process. These cases, thankfully rare, feature at least one, and usually several violations of court orders. . . .

The second type of case that will justify an order dismissing for delay has three characteristics. The delay must be inordinate, inexcusable and such that it gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible because of the delay[.]

[36] In Langenecker, supra, Doherty J.A. commented on the elements of the test as follows [at paras. 8-12]:

The inordinance of the delay is measured simply by reference to the length of time from the commencement of the proceeding to the motion to dismiss. Most litigation does not move at a quick pace. However, even accepting that litigation customarily moves at a somewhat stately pace and that this kind of litigation can move even more slowly than most, there can be no doubt that 15 years from the commencement of the action to the motion to dismiss constitutes inordinate delay.

The requirement that the delay be "inexcusable" requires a determination of the reasons for the delay and an assessment of whether those reasons afford an adequate explanation for the delay. As LaForme J. explained in De Marco, at para. 26, explanations that are "reasonable and cogent" or "sensible and persuasive" will excuse the delay at least to the extent that an order dismissing the action would be inappropriate.

In assessing the explanations offered, the court will consider not only the credibility of those explanations and the explanations offered for individual parts of the delay, but also the overall delay and the effect of the explanations considered as a whole. For example, in this case, the appellants offered a "sensible and persuasive" explanation for part of the lengthy delay in [page385] completing the discovery process, but offered little by way of cogent explanation for the many other lengthy delays that occurred in the course of the 15 years since this action was commenced.

The third requirement is directed at the prejudice caused by the delay to the defence's ability to put its case forward for adjudication on the merits. Prejudice is inherent in long delays. Memories fade and fail, witnesses become unavailable, and documents and other potential exhibits are lost. The longer the delay, the stronger the inference of prejudice to the defence case flowing from that delay: Tanguay v. Brouse, 2010 ONCA 73, at para. 2.

In addition to the prejudice inherent in lengthy delays, a long delay can cause case-specific prejudice. In this case, the respondents led evidence on the motion that their expert had died in June 2009 and that counsel for the respondents had been unable to find a replacement. The respondents argued that their inability to obtain an expert was caused by the delay in the prosecution of the claim and resulted in prejudice to their defence. Clearly, if the appellants' delay left the respondents in a position where they could not obtain a medical opinion in a medical malpractice case, that delay would cause serious prejudice to the defence. I will return to this submission below.

[37] The assessment of prejudice in these cases has two components. First, there is a presumption or an inference of prejudice to the parties being caused by the delay. The longer the delay, the stronger the inference of prejudice given the natural tendencies of memories to fade, etc. The inference can be rebutted by establishing that the nature of the issues in the case make the trial principally an assessment of documentary evidence that has been preserved and is not subject to degradation of memory over time. See, for example, Housser v. Savin Canada Inc., 2005 35779 (ON SC), [2005] O.J. No. 4217 (S.C.J.), at para. 35. Second, if the presumption or inference of prejudice is rebutted by the plaintiff establishing that evidence has been sufficiently preserved to ensure the fairness of the trial in light of the nature of the issues, then it is open to the defendants to try to establish that they have suffered a particular, actual prejudice on the facts of the case that renders continuation of the proceeding unfair.

The relationship between the tests for dismissal for delay under rules 24.01 and 48.14

[38] In Faris, supra, the Court of Appeal set out a different test to govern another aspect of the management of delay -- status hearings. Under rule 48.14, parties are required to attend status hearings where certain established targets for the progress of the litigation are not met. rule 48.14(13) provides that at a status hearing the burden is on the plaintiff to show cause why the action should not be dismissed for delay. The Court of Appeal compared and contrasted the requirement sunder Rule 48 with a motion for dismissal for delay under Rule 24 as follows [at paras. 34-37, 39-42]: [page386]

In my view, rules 24.01 and 48.14(13) each offer distinct means that may lead to the same end; the dismissal of the plaintiff's action for delay.

In the case of a motion to dismiss for delay brought by the defendant, the defendant must not be in default under the rules and the plaintiff must be delinquent by having failed to: serve the statement of claim on all defendants within the prescribed time; note in default any defendant who has failed to deliver a statement of defence within thirty days after the default; set the action down for trial within six months after the close of pleadings; or move for leave to restore an action to the trial list within thirty days after the action was struck off.

[Emphasis in original]

These are short timelines. As P.M. Perell & J.W. Morden describe in The Law of Civil Procedure in Ontario, 1st ed. (Markham: LexisNexis Canada, 2010), at p. 418, motions to dismiss for delay are rarely brought by defendants despite the fact that many actions do not advance within the time standards prescribed by rule 24.01. The authors explain that this is because judges and masters are reluctant to deny a plaintiff his or her day in court at a point that might be quite early in the proceedings.

Accordingly, a high threshold has been established to dismiss an action for delay under rule 24.01.

In the case of a status hearing, however, an opportunity for the court to consider dismissing an action for delay will not arise for a considerable period of time after the proceedings have been imitated. Rules 48.14(1) and 48.14(2), which trigger the requirement that the registrar issue a status notice, contemplate delinquency by plaintiffs which exceeds that under rule 24.01.

Rules 48.14(1) and 48.14(2) provide that where a defended action has not been placed on a trial list within two years after the first defence is filed or restored to the trial list within 180 days of being struck out, the registrar shall serve a status notice on the parties indicating that the action will be dismissed for delay unless it is set down for trial within 90 days after service of the notice.

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.

Therefore, I conclude that the status hearing judge in the case at bar was correct to place the onus on the appellant and to apply a test similar in principle to one recently confirmed by this court in 1196158 Ontario Inc. At para. 32 of 1196158, the court held that 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 added) [page387]

[39] On status hearings (and motions to restore struck actions to the trial list see Nissar v. Toronto Transit Commission (2013), 115 O.R. (3d) 713, [2013] O.J. No. 2553, 2013 ONCA 361) the test is both simpler and stricter. There is a double-barrelled burden on the plaintiff to positively prove that there is an acceptable reason for the delay and that there is no prejudice to the defendant caused by the delay.

[40] Faris and Nissar were released on the same day by the Court of Appeal and marked a significant simplification of the handling of motions under Rule 48. As subsequently explained by Morgan J. of this court in Saini v. Sun Life Assurance Co. of Canada, [2013] O.J. No. 3125, 2013 ONSC 4463 (S.C.J.) [at para. 8],

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.[^1]

The Reid factors -- A third test assessing dismissal for delay

[41] As set out above, the Court of Appeal has imposed a stricter burden upon a plaintiff who fails to set an action down for trial within two years of the filing of the first statement of defense under Rule 48 than one who fails to do so within six months of the close of pleadings under Rule 24. A third line of cases, also dealing with delay and prejudice, involves the test to set aside an order made by the registrar dismissing an action for delay without a status hearing (i.e., due to a plaintiff's failure to file a required document in a set time, for example). Despite Faris and Nissar, the Court of Appeal has continued to apply the four-part "Reid test" in such cases. Reid v. Dow Corning Corp., [2001] O.J. No. 2365, 11 C.P.C. (5th) 80 (Master), revd on other grounds [2002] O.J. No. 3414, 48 C.P.C. (5th) 93 (Div. Ct.). See 806480 Ontario Ltd. v. RNG Equipment Inc., [2014] O.J. No. 2979, 2014 ONCA 488; Gravelle (c.o.b. CodePro Manufacturing) v. Denis Grigoras Law Office, [2013] O.J. No. 2363, 2013 ONCA 339. Under this test, the court considers the following matters: [page388]

(1) explanation of the litigation delay;

(2) inadvertence in missing the deadline;

(3) the motion is brought promptly; and

(4) no prejudice to the defendant.

[42] If litigation is dismissed for delay by the registrar, then to have the litigation reinstated the plaintiff is not required to prove each factor under the Reid test. Rather, the court is to engage in a contextual analysis to weigh all the relevant factors to determine the most just outcome in the circumstances of the particular case (Scaini v. Prochnicki (2007), 85 O.R. (3d) 179, [2007] O.J. No. 299, 2007 ONCA 63, at paras. 23 and 24). This appears to be a more nuanced approach than the strict Faris test.

The practical difficulty in determining which of the various tests should apply

[43] There is a possible fourth test applicable to a dismissal for delay, as alluded to above, which flows from the common law doctrine of abuse of process and the power of the court to stay proceedings under s. 106 of the Court of Justice Act, R.S.O. 1990, c. C.43. For reasons mentioned below, I do not need to deal with this issue.

[44] The one policy of promoting timely access to justice has produced at least three different expressions of the test to measure the length and negative effects of delay. The burden flows from a "high threshold" expressing the court's reluctance to dismiss lawsuits other than on their merits, to a strict burden on the plaintiff in which the court's "aim" is to dismiss slow claims. However, there are factual anomalies in the cases that make the rigour of the various tests difficult to understand. For example, in Faris, the Court of Appeal noted that the test under Rule 24 has traditionally been difficult to meet because Rule 24 becomes active just six months after the close of pleadings. This trigger is so short that some greater reluctance to dismiss an action under Rule 24 is justified. Under Rule 48, a plaintiff has had two years to get its claim set down for trial. A higher burden on the plaintiff is justified under Rule 48 therefore by the "greater severity of the plaintiff's delinquency". However, there is an ironic circularity to these two contrasting positions. Since Rule 24 motions have a high threshold, as the Court of Appeal noted, motions under Rule 24 are rarely brought. The practice is to bring a Rule 24 motion only once a claim is very old. In Langenecker, the case cited by the Court of Appeal [page389] for the Rule 24 test, the litigation was 16 years old. Notwithstanding the earlier trigger in the formal wording of Rule 24, the actual delay in Rule 24 cases is generally far worse than the delay in Rule 48 cases. In Wojdat, supra, for example, the claim was just two years and five months old when it was dismissed by the registrar under Rule 48. The cause of action arose just one month before the claim was issued in that case. By contrast, the case at bar is 25 years old. The cause of action is another 30 to 65 years older than that. But Rule 48 has not been invoked in this case. The reason Rule 48 has not been invoked in this case is that while CN's lawyer sat on the case for almost two years after receiving Hogg Fuel's "bring it on" letter, he filed a trial record 14 days before the Rule 48 deadline. Had counsel waited two more weeks the action could have been dismissed for delay (and subject to review under the contextual approach of the Reid factors) or a status hearing could have been held (subjecting the plaintiff to the strict Faris test).

[45] Practically speaking, the severity of the burden to be applied varies inversely with the length of the delay. That is, the courts are now applying the stricter test to actions that are just two years old with an "aim" to dismiss those cases while the law applies a "high threshold" to very old cases showing reluctance to dismiss those cases except on the merits. Even in two-year-old cases, the burden shifts from the strict two-pronged burden of Faris to the nuanced, contextual balancing of four or more factors under the Reid test depending on whether an administrative official dismisses the case or sends out a notice of status hearing. In this case, the choice of the applicable legal test turns on the fact that after 22 years, CN's lawyer filed a trial record two weeks before Rule 48 would have been triggered although the case was not yet ready for trial. While not technically improper, the filing of the trial record in this case did not meet the spirit of the Rules given that the case was not trial ready as confirmed by counsel's certification. I am not sure why it is that after 22 years, a two-week difference in a step that was not properly taken should crucially affect the assessment of the issues arising from justice delayed.

[46] However, I am bound by Faris to apply the Rule 24 test as set out in Langenecker and cases such as Armstrong v. McCall, [2006] O.J. No. 2055, 2006 17248, 213 O.A.C. 229 (C.A.). [page390]

Analysis

Delay

[47] The first step in the Langenecker analysis is to determine if the delay was intentional, disdainful and disrespectful of the processes of the court. Although the delay in this case is exceptionally long, I do not see CN as having been disdainful or disrespectful of the court or its process. As I have noted above, for at least the first decade, and in my view, up to the time of the order made by Wilkins J. (if not a little beyond), the parties were acting in accordance with practice of the day. If there was not an express agreement to defer the proceedings, there was more than ample conduct on all sides to demonstrate that the parties were engaging in a joint effort to try to come to grips with the need for environmental remediation and, to some degree at least, resolve the issue of responsibility for the costs of remediation. Whether Hogg Fuel would have ever agreed to pay anything to CN cannot be determined at this point. But it paid its share of the joint experts' accounts in a decade-long process designed, as Hogg Fuel's witness conceded, to determine both the cause and the responsibility for cleanup. Hogg Fuel's counsel expressly suggested recommencing settlement discussions in November 2003. While CN's counsel was more than lax in his efforts to push matters along, even when he thought that he had to use his litigation "tool", I accept CN's good faith desire to come to an agreement with a municipal government party opposite whom it could rightfully expect to want to do the right thing in the public interest.

[48] Having said that, it is equally clear that CN's delay was intentional. It plainly preferred to resolve the question of responsibility for remediation costs consensually. Whether this is a reflection of its views as to the strength of its case (or the lack thereof) or a simple policy preference for a consensual process over an adversarial one, CN made clear and repeated choices to refrain from moving ahead with its litigation. It did so even after it knew that the court was requiring that it adopt a more efficient process and that its collaborative effort had failed.

[49] That leaves me to consider if the delay was of the second type identified by Doherty J.A. in Langenecker, namely"inordinate, inexcusable and such that it gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible". It seems clear to me that the delay in this case has been both inordinate and inexcusable. The overall 25-year period is among the longest in any reported case. I accept that the period [page391] in which the parties were deferring the case as they pursued their collaborative approach is excusable. It is not clear that much was done during the first four to five years from 1989 to early 1994. But, the correspondence, such as it is, and the Green Plan report of 1994, establish that the parties were pursuing some settlement efforts and investigations at a time when lengthy deferral of litigation was more the norm.

[50] However, commencing at least by late 2003, the Rules had changed and yet CN continued to conduct business as usual. As cited above, CN's lawyer realized that the patience of court and even of his own client was wearing thin. Yet he did little to move the case along. Both Wilkins J. and Master Dash rejected the first consensual approaches brought forward by CN's lawyer. He continued to refer to the action as a "holding action" in January 2004. Discoveries were held in 2004. But nothing happened from then to 2011 besides a few letters back and forth calling for undertakings to be answered. As noted above, even in face of this motion being outstanding for the past ten months, CN fulfilled its undertakings (to the extent that it says it can do so) just days before the hearing. As was rightly argued by counsel for the city, CN has taken steps in the litigation only when it was absolutely required to do so.

[51] The collaborative process was over by 2005. By then, the decade of work by the jointly retained consultants was out of date. No site-specific assessment and remediation proposal could be made to the Ministry of the Environment. Hogg Fuel was not attending meetings. Although its counsel offered to reschedule the meetings they cancelled, there were no discussions being held to justify any further belief that the collaborative approach was continuing. As noted above, not one of the events that CN's counsel represented to Master Dash as upcoming in late 2004 actually happened. Counsel are expected to fulfill their representations to the court or have very strong reasons for a failure to do so. There is no reason for CN's failure to advance matters in 2005 except that CN continued to choose to try to engage the defendants into discussions rather than moving the litigation forward as it committed to Master Dash. In 2008, Hogg Fuel's counsel went off the record because it could not get instructions after 18 years. It had to be clear by then, at the very, very latest, that Hogg Fuel had withdrawn as an active participant in any collaborative effort. The letter from Hogg Fuel's new counsel in February 2010 could not have been any clearer. Year after year passed with no further collaboration or settlement discussions and yet CN did not advance the litigation either. [page392]

[52] In 2010, CN's counsel recognized expressly that the litigation would have to proceed. Yet, the only thing CN points to as advancing the case over the next two years until December 2011, when it filed the trial record, is that behind the scenes CN's consultant Golder Associates was preparing its expert report for trial at substantial cost to CN. The timing of that effort is not before the court. The report was only delivered to the other parties in CN's materials for this motion in 2014, despite being promised to the other parties in correspondence over four years ago.

[53] I accept CN's counsel's good faith certification in 2012 of the things that needed to be done for trial. There was no effort made by CN on this motion to explain why its pleadings were not amended; its production not completed; its discoveries not completed; its undertakings not fulfilled; its requests to admit not delivered; and its expert's report not produced at any time after discoveries before it filed the trial record at the last second to avoid a feared dismissal under Rule 48 in December 2011. Why did CN take ten years to fulfill its own undertakings? Why would it allow the defendants to take ten years to fulfill their undertakings without making forceful demands and bringing appropriate motions if necessary? No explanation is provided in the record for CN's complete failure to advance the litigation and get it ready for trial once it understood that it was required to do so in 2003.

[54] Thus, while I see the first 14 years of delay as excusable (although the first five of those weakly so), I can see no "reasonable and cogent" or "sensible and persuasive" reasons for the ongoing delays after 2003. CN and its counsel understood that the litigation had to move forward and yet they kept it on the backburner for another eight years.

Prejudice

[55] The presumption or inference of prejudice is very strong in this case. It is 25 years old. There are no witnesses left with memory of the events. CN says that the fact that the case was already 30 to 65 years old when it commenced means that the prejudice of faded memories and lost documents had already occurred by the time the case started. Its case, it says, has always been short of evidence, but it should go to trial and the trial judge can assess if it is able to prove its case on what evidence it has.

[56] At its core, CN argues that its case is entirely based on its expert's report. As all of the documents that were available in 1989 have been preserved and are referred to in the expert's [page393] report as needed, there is no need to presume prejudice or, alternatively, any presumption or inference has been rebutted.

[57] In Langenecker, supra, at paras. 18 et seq., Doherty J.A. warned that although a case may appear to turn on experts' reports, the experts' opinions are only as good as the facts upon which they are based. The assessment of the rebuttal of the presumption or inference of prejudice may include an assessment of the validity of the facts or the reasonableness of the evidentiary basis for the facts relied upon by the experts.

[58] While the issues of remediation and the costs of remediation are certainly issues for experts, CN ignores or downplays one key issue. That is, how did the coal tar get onto CN's land? Did it get dumped there by the city? Did it get dumped there by the Public Utilities Commission? Was it dumped on Hogg Fuel's land and then migrated onto CN's land? The ongoing leaching of 0.5 kg per year is a side issue as was confirmed by CN's counsel in his January 13, 2004 letter to Master Dash. The city denies that it dumped the coal tar on CN's land and denies that it is responsible for the defunct Public Utilities Commission (if it was the dumper). To succeed in the litigation, CN needs to prove factually how the coal tar waste got onto its land.

[59] At the hearing of the motion, CN's counsel submitted that the city could be liable as a prior owner of Hogg Fuel's land as well as being the dumper. This is not pleaded in the statement of claim. Perhaps that was one of the amendments that CN's counsel had hoped to make before he prevented himself from doing so by filing the trial record. Moreover, while the city owned part of the Hogg Fuel's land, there are several other owners of other parts of the Hogg Fuel land noted on the title history. This issue just raises further factual questions involving possible claims against other parties.

[60] There is some evidence as to the history of the contamination. In 1986, the Ministry of the Environment wrote to CN to advise that it had determined that the coal tar had been transported from the Gaulker Street gas plant on a trolley line that used to parallel the CN railway tracks. The ministry's consultants reported in 1987 that "tar wastes were apparently dumped on both sides of the [trolley] tracks . . . More investigative work is required to confirm the origin and extent of buried waste on this property". No witnesses were specifically named for these recited conclusions.

[61] In the Green Plan report to Environment Canada in 1994, Laverne Hett, a former employee of the Public Utilities Commission, is quoted as advising that the trolley line did not have any dumping cars on it. Also, he used to play in the former dump site [page394] (that is part of the Hogg Fuel's land) as a child in the 1930s and does not recall seeing any coal tar there at the time. An Alan Verch was quoted as well. He was the son of the foreman of the city dump. He recalls ashes being dumped but did not see any coal tar. As concluded by the consultants in 1994"These two interviews give sharply conflicting accounts to those conducted previously" (emphasis added). So 20 years ago, there was already recognition that there was a dispute in witnesses' recollections on this issue of fact.

[62] As noted above, in 1997 the evidence of five witnesses was taken under Rule 36. All supported the fact that black tarry stuff was dumped into the ditch beside the defunct trolley tracks. One said that CN employees must have seen it. But all also had credibility issues. They were calling upon old memories. Some identified the Public Utilities Commission as the dumper, but they had little, if any, factual basis to do so. These witnesses were not called because they were the only ones with relevant information. The city chose them at the time because their testimony was the most in need of preservation. The city interviewed another seven witnesses or potential witnesses before it delivered is statement of defence. They have all passed away now. There are a number of relevant documents being various forms of witness statements identified in Schedule B to the parties' affidavits of documents. Documents and notes concerning some 40 potential witnesses are identified in the city's Schedule B. Many of those witnesses or potential witnesses have now passed away, including Mr. Bielstein (referred to above) and Allan Verch.

[63] CN argues that absent evidence that these potential witnesses actually had relevant knowledge, anyone can list a large number of people who used to work for one party or another and then point to some who have passed away. It argues that the city took the Rule 36 examinations that it wanted to take so the case should go to trial.

[64] This raised for me an issue of proof. Am I supposed to be looking at all of the privileged counsels' notes, all the witness statements and files, and all the Rule 36 transcripts to try to determine if any of the people who have died had relevant information? Is this a job for a judge at a motion or is that an assessment of relevancy and weight for the trial judge? The answer, in my view, lies in the presumption or inference of prejudice. In Armstrong, supra, at para. 11, the Court of Appeal discussed the rebuttal of the presumption or inference of prejudice as follows: [page395]

Where there is a presumption of prejudice, the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebuts the presumption. The presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and the issues in the lawsuit do not depend on the recollection of witnesses or that all necessary witnesses are available with detailed recollection of the events. If the presumption is rebutted then the action may still be dismissed if the defendant leads convincing evidence of actual prejudice.

(Emphasis added)

[65] In CN's expert report, Golder Associates relies on the oral account of two eyewitnesses who were long time both local residents, Bob Dauberger and Allan Kilbasco. Mr. Kilbasco is one of the witnesses who was examined under Rule 36.

[66] The city also has a summary of a witness interview of Doug Howe, a former employee of Hogg Fuel, that was taken in 1996. It is not clear in the transcript if the city's counsel was reading from witness notes from the interview with Mr. Howe or a Ken McLeod, but counsel read a considerable amount of information into the record about the state of Hogg Fuel's property as its predecessor company assembled various parts of its land from the 1950s. Mr. Howe then was reported to have spoken of a conversation with a CN employee in 1977 about excavation work being done on the Hogg Fuel property that the CN employee said was "squeezing the coal tar from the Hogg Fuel's property onto the CN property". Mr. Howe told the CN employee that "there was no coal tar on the whole of Hogg Fuel's property" and continued:

I suggested to CN that they dig onto their own property where they said the coal tar was bubbling up. The CN employee then dug up their own property and found drums which contained a black tar like substance. The CN [sic] dug up some five gallons of drums. This is the only location where I saw coal tar. I don't think CN took the drums away. I think the drums may have been unsealed. In 1977 someone from the press called me and was asking me questions about coal tar. The man that called told me that horses would bring coal tar from the [Public Utilities Commission] to the dump. He also told me that one day some horses got stuck in gooey substance and they could not get out of the substance so they had to be shot.

[67] Mr. Howe passed away in 1997.

[68] CN did nothing to preserve the evidence of any of the witnesses relied upon in the various expert reports, or Mr. Howe, Mr. McLeod, Mr. Bielstein and the many other witnesses who were available when the litigation commenced. By 1989, there was no documentary evidence available. This left eyewitness evidence, such as it was, as all that was available and therefore crucial. CN is not correct when it submits that there was no witnesses' evidence to be preserved when the case commenced. This is not a case of a party making vague suggestions that there [page396] might have been some evidence as was the case in Young v. Succession Strategies Inc., [2012] O.J. No. 3602, 2012 ONSC 4075 (S.C.J.), see para. 23. In this case, in 1987 (MOE), 1994 (Green Plan), and in the past few years (Golder) consultants have gone out and interviewed people with various degrees of eyewitness information. To the extent that the experts' reports are put forward as proof of the facts of who dumped the coal tar waste, they are just untested hearsay and not expert opinion at all. The warning given by Justice Doherty in Langenecker is especially apt here. The issue of who dumped the coal tar and where it was dumped is one of fact requiring witnesses.

[69] CN says that the city could have conducted as many witness examinations as it wished under Rule 36. Ignoring that CN's counsel did not bother to respond to the city's request to set up an examination of Mr. Bielstein, the burden of preserving evidence was on CN not the city. If CN wished to delay bringing its litigation to trial, then it bore the burden of preserving witnesses' evidence as time passed. It was for CN to establish that "all witnesses are available with detailed recollection of the events" under Armstrong, supra. The availability of counsels' notes of interviews is unsatisfactory (Khan v. Metroland Printing, Publishing & Distributing Ltd., [2013] O.J. No. 1639, 2013 ONSC 944 (S.C.J.), affd [2013] O.J. No. 4260, 2013 ONCA 571). It seems to me that "all" is a big word. CN may not have known the identities of all of the people interviewed by opposing counsel until CN received the affidavits of documents listing the witnesses' names in 2004. But whose fault is it that the affidavits of documents were not required for 15 years when the Rules require them to be delivered ten days after the close of pleadings? Pleadings did not close until 1997 or whenever CN defended the counterclaim brought by Hogg Fuel that year. CN bears the consequences of those delays. I do not need to decide if CN preserved "all" or even a sufficient amount of evidence. I need not decide if it took reasonable or sufficient steps based on what was known to it at any point in time. As the matter lingered from 1989 to 1994 while the parties got organized to collaborate, to 1996 when they actually hired their joint consultants, to the order made by Wilkins J. in 2003, to Hogg Fuel's ceasing instructing its lawyers in 2008, to the two-year dead period preceding the filing of the trial record in 2011, CN did nothing to preserve the evidence of any witnesses or potential witness.

[70] Had CN preserved even some eyewitnesses' testimony, then if the city came forward and said that it suffered particular prejudice because the testimony of X or Y was missed, the [page397] court could look at that potential testimony and have something to compare it to in order to assess whether there is actual prejudice. But without CN meeting its baseline requirement to rebut the presumption or inference of prejudice, the court is not in a position to embark on a freewheeling assessment of what every single identified person may or may not have known; nor is it appropriate for the court to assume that role on a motion of this type.

[71] Without the evidence of eyewitnesses being preserved, the trial cannot fairly assess the key factual issue in the litigation. While the regulatory process is concerned with the clean-up of the sites, the litigation is concerned primarily with legal responsibility. CN hoped to resolve both issues in its collaborative effort. But the litigation includes questions of who dumped coal tar wastes on CN's land, or did the coal tar migrate there and, if so, from whose lands and when? All that exists now is a very fragmented set of a few witness interviews quoted by consultants (including the 1994 Green Plan recognition that there were sharply conflicting accounts even then) and a few Rule 36 examinations that were conducted due to the witnesses' frailty at the time and not due to any consideration of getting the best evidence from the most knowledgeable witnesses or a complete and comprehensive set of examinations that covered all of the relevant issues as best as was reasonably possible at the time.

[72] In all, the absence of witnesses, or the availability of testimony of just a very few in very fragmented form, renders a trial unfair. The judge may be able to make findings based on what is put before him or her. But what exists is not complete and is little more than a sampling of evidence. Due to CN's delays and its failure to preserve evidence to rebut the presumption or inference of prejudice, the parties have been denied the ability to put before the trial judge the evidence needed to paint a fair and complete picture. A trial in these circumstances would not be a fair and just resolution of the dispute.

The defendants' conduct

[73] While CN recognizes that the filing of the trial record does not preclude the defendants from bringing this motion, they point to the rather opportunistic nature of the defendants' conduct to undermine the credibility of their plea of prejudice. In light of CN's failure to rebut the presumption of prejudice, the credibility of the defendants' plea is not really in issue. It is worth noting however, that when Hogg Fuel wrote the "bring it on" letter in 2010, it was daring the plaintiff to proceed and not [page398] claiming to have suffered prejudice preventing a trial. Moreover, after the action was set down, both defendants participated in initial planning of what was thought (incorrectly) to be a mandatory mediation requirement. The defendants waited almost one-and-one-half years to bring their motions from the time they were first threatened in mediation discussions in mid-2012. To this, I might add, that the defendants quite happily dragged their feet throughout and, as noted above, there is reason to question the good faith of Hogg Fuel in its participation (or lack of real participation) in the last few years of the collaborative process -- in the 2005 to 2008 time frame at least.

The answer to all of that is that our system is an adversarial one. If the defendants stalled, they had a willing partner in CN. CN was the party charged with moving the action along. If it was meeting stalling, it had all of the weaponry the Rules of Civil Procedure and a bench that is all too willing to push cases forward. It is not for the court to assess whether Hogg Fuel's counsel was engaging in bravado in 2010 and perhaps egging on CN knowing full well that they were planning this motion or not. Motions for dismissal for delay focus primarily on the plaintiff. The plaintiff bears the consequences of conducting its action in a dilatory manner: Faris, supra, at para. 33. I see nothing in the defendants' conduct of the litigation to counter the failure of CN to rebut the presumption of prejudice or to explain the inexcusable elements of CN's delay that are identified above.

Result

[74] I do not make any finding of actual prejudice based on the passing of any particular witness. It is not necessary to do so because I am satisfied that the presumption of prejudice flowing from the inordinate and inexcusable delay has not been rebutted and is sufficiently strong to give rise to a substantial risk that the parties cannot fairly try their case so long after the relevant events.

[75] In terms of Faris, I would find that CN has failed to demonstrate that (a) there is an acceptable explanation for the delay in the litigation; and that (b) if the action was allowed to proceed, the defendants would suffer no non-compensable prejudice. In terms of the Reid factors, I would find that in the context of a 25-year delay, given CN's deliberate failure to proceed on a timely basis and balancing the risk of prejudice to the parties' ability to have a fair hearing on the merits, the assessment favours dismissal of the claim. I do not address the test for abuse of process and whether elements of vexatiousness [page399] are required or whether it simply mirrors the Rule 24 test: see Young, supra.

[76] No matter which formulation is used, this action offends the strong public interest in promoting the timely resolution of civil disputes. I note as well that although CN's failure to amend its pleadings and finish its discovery arguably prejudiced it more that the defendants, from the court's point of view, the trial would be most unsatisfactory. Would there be amendment motions at the opening of trial to allow CN to update its legal theories of liability and vastly increase its damages? Would amendment result in an adjournment of the trial that would have been scheduled for three years by that time? If there are no amendments, would a trial based on 25-year-old pleadings and legal theories be sensible and yield a fair and just resolution of the dispute on the merits? I raise this only to highlight the artificiality of the plaintiff's last-minute effort to set the action down for trial when it was not ready. While these considerations bolster the decision to dismiss the case, they do not form part of my assessment of the formal test that I was bound to apply as set out above.

[77] I do not see this result as being an unfortunate deprivation of CN's opportunity to have its civil dispute resolved at a trial. CN chose to carry on its negotiations and its litigation as it saw fit. It managed, inexplicably, to keep the Ministry of the Environment mollified for 25 years. That seems to have been its primary goal and, at that, it has succeeded brilliantly. It does not appear that CN ever actually wanted the case to go to trial. It has been pushed towards trial as a most reluctant plaintiff. It has not been a plaintiff in pursuit of an affordable, timely and proportionate resolution of its civil dispute.

[78] Counsel for Hogg Fuel rightly concedes that if CN's action is dismissed, its claims over must likewise be dismissed. Hogg Fuels will now be denied its opportunity to seek contribution and indemnity from CN and the city if the Ministry of the Environment makes cleanup order(s) against it. But it too is the author of its misfortune. Especially if it ever intended to advance its cross-claim and counterclaim for more than contribution and indemnity, then it was plaintiff in those claims and did as little as or less than CN in respect of advancing those parts of the litigation.

[79] The motion is granted. The action, including all counterclaims and cross-claims, is dismissed.

[80] The city seeks costs of the motion on a partial indemnity basis of almost $83,000. Hogg Fuel seeks approximately $29,000. CN calculates its partial indemnity costs at approximately [page400] $60,000. The fixing of costs is a discretionary decision under s. 131 of the Courts of Justice Act. That discretion is generally to be exercised in accordance with the factors listed in rule 57.01 of the Rules of Civil Procedure. These include the principle of indemnity for the successful party (rule 57.01(1)(0.a)), the expectations of the unsuccessful party (rule 57.01(1)(0.b)), the amount claimed and recovered (rule 57.01(1)(a)), and the complexity of the issues (rule 57.01(1)(c)). Overall, the court is required to consider what is "fair and reasonable" in fixing costs, and is to do so with a view to balancing compensation of the successful party with the goal of fostering access to justice: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291, [2004] O.J. No. 2634, 2004 14579 (C.A.), at paras. 26, 37.

[81] In all, it is both fair and reasonable for the moving defendants to have their costs of these motions. I have reviewed their costs outlines and bills of costs filed. The amounts claimed are reasonable given the volume of material and the factual complexity of the motion. CN will pay costs of the motion forthwith to the City of Kitchener in the amount of $83,000 and to Hogg Fuel in the amount of $29,000, both inclusive of disbursements and HST. CN is also liable to pay the defendants their costs of the action on a partial indemnity basis in an amount to be agreed upon or assessed.

[82] I am grateful to counsel for their comprehensive and persuasive arguments. I note that counsel for CN on this motion is not the lawyer of record for CN in the litigation.

Motion granted.

Notes

[^1]: I have previously commented that the court must guard against setting the burden on the plaintiff at a status hearing so high as to encourage defendants to adopt tactical approaches to put the plaintiff to its proof to try to defeat claims in which there is really very little real delay or prejudice (Orsi Estate v. Fromstein, [2014] O.J. No. 1946, 2014 ONSC 2508 (S.C.J.), at para. 20; Wojdat v. Ventawood Management Inc., [2014] O.J. No. 1151, 2014 ONSC 1516 (S.C.J.), at para. 27).

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