SUPERIOR COURT OF JUSTICE - ONTARIO

RE: C.O.U. Holding Association Inc. v. Royal Bank of Canada

CV-10-398314 2014 ONSC 5178

HEARD: September 8, 2014

BEFORE: MASTER R.A. MUIR

COUNSEL: T. Martin for the plaintiff A. Bak for the defendant

ENDORSEMENT

[1] The plaintiff brings this motion pursuant to Rule 37.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) for an order setting aside the order of the registrar dated February 5, 2014 dismissing this action for delay.

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

[3] This claim arises out of the theft of approximately $750,000.00 from the plaintiff by a former employee. The defendant was the plaintiff’s bank and was also the bank of the former employee. The plaintiff alleges that the defendant is liable to it for conversion and alleges that the bank was negligent in the manner in which it handled the plaintiff’s account. The bank denies the plaintiff’s allegations.

[4] The statement of claim was issued on March 3, 2010. By agreement of the parties, a statement of defence was not served until February 2012. The plaintiff did very little to move this action forward between February 2012 and the date on which it was dismissed. The plaintiff did requisition a status hearing and obtained a timetable order from Master Dash on March 13, 2013. However, the plaintiff then did nothing to comply with the terms of that order.

[5] The order of Master Dash included a set down deadline of January 31, 2014. As that date approached, the plaintiff’s lawyer contacted the defendant’s lawyer in an attempt the arrange dates for examinations for discovery. However, this was not done until approximately six months after the discovery deadline set out in Master Dash’s order and even before the plaintiff had served its affidavit of documents.

[6] The parties were unable to agree on dates for the examinations for discovery and this action was dismissed by the registrar on February 5, 2014. This motion was then brought immediately after the dismissal order came to the attention of the plaintiff’s lawyer.

[7] The law relating to motions for an order setting aside an administrative dismissal order is summarized in my decision in Williams v. Whitefish River First Nation, 2014 ONSC 1817 at paragraphs 15-18. Four factors are of central importance. The court must consider the explanation for the delay, whether the deadline was missed due to inadvertence, any delay in bringing the motion to set aside the dismissal order and prejudice to the defendant. I have considered and applied those factors and the other principles set out in Williams. In my view, it is just that the dismissal order be set aside.

[8] The defendant does not dispute that this motion was brought promptly. This factor has been met.

[9] I am also satisfied that the deadline was missed due to inadvertence. The plaintiff was aware of the pending deadline. It attempted to arrange for dates for the examinations for discovery. It immediately contacted the defendant’s counsel after the action was dismissed. In my view, these steps show an intention to pursue this claim. The failure to comply with the set down deadline or seek a further extension of time must have been inadvertent. No other explanation makes sense. This factor has been satisfied.

[10] It is my view, however, that the plaintiff has not provided a satisfactory explanation for the delay encountered with this action. The plaintiff’s chief explanation is that it was busy pursuing its former employee and her estate for the recovery of the amounts in issue. However, no explanation has been provided for why the two actions could not have proceeded at the same time. I agree with the defendant that it should have been clear to the plaintiff, at an early stage, that it would not be made whole through its claim against its former employee. This action would need to be pursued. This part of the test has not been met.

[11] Despite this unexplained delay, I am satisfied that the plaintiff has met the onus placed upon it to rebut the presumption of prejudice. The plaintiff’s documents have been preserved and an affidavit of documents has been prepared and served along with copies of its productions. All important witnesses are available to give evidence. The defendant has provided no evidence of actual prejudice. Moreover, it is my view that this action will largely turn on an examination of documents and expert evidence. Finally, the defendant could not have been too concerned about delay prejudicing its ability to defend itself at trial as it waited for nearly two years before serving its statement of defence. In my view, this element of the test has been met as well.

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

[13] The plaintiff has satisfied three of the four Reid factors, including the key consideration of prejudice.

[14] For these reasons, I have concluded that it is just in the circumstances of this action that the dismissal order of the registrar dated February 5, 2014 be set aside.

[15] The plaintiff seeks costs. In my view, the plaintiff has been afforded an indulgence. It did very little to pursue this action over the course of several years. It failed to comply with Master Dash’s timetable order. In my view, it is fair and reasonable that there be no order for the costs of this motion.

[16] I therefore order as follows:

(a) the order of the registrar of February 5, 2014 is hereby set aside;

(b) the defendant shall serve a sworn affidavit of documents by December 31, 2014;

(c) examinations for discovery shall be completed by May 31, 2015;

(d) mediation shall take place by July 31, 2015;

(e) this action shall be set down by August 31, 2015; and,

(f) there shall be no order with respect to the costs of this motion.

Master R.A. Muir

DATE: September 9, 2014