SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-12-457354
DATE: 20140924
RE: 1016824 Ontario Limited v. Peter Broadhurst et al.
BEFORE: Master Glustein
COUNSEL:
Patrick Di Monte for the plaintiff
James Riewald for the defendant Home Savings & Loan Corporation
Ahmed Shafey for the defendant The Estate of John Baranyai by its Estate Trustee Margaret Baranyai
HEARD: September 23, 2014
Endorsement
[1] The plaintiff at this status hearing seeks to show cause why the action should be permitted to continue. For the reasons that follow, I find that the plaintiff has failed to establish an acceptable explanation for the litigation delay and as such I dismiss the action with costs.
[2] The plaintiff must satisfy a conjunctive test to show cause why the action should be permitted to continue. The test requires the plaintiff to (i) demonstrate an acceptable explanation for the delay and (ii) establish that, if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice (Faris v. Eftimovski, 2013 ONCA 360 at para. 32).
[3] On the evidence before me, there is no acceptable explanation for the litigation delay of approximately 10 years during the 11 year period from the date the claim was issued (November 3, 2000) until the trial record was served (December 30, 2011).
[4] The action was later struck from the trial list which resulted in a status notice dated October 24, 2013.
[5] For the two-month period between the issuance of the statement of claim on November 3, 2000 until the defendants John Baranyai (“Baranyai”) (now his estate) and Home Savings & Loan Corporation (“Home Savings”) delivered their statements of defence on January 11 and 12, 2001 respectively, the litigation delay is explained.
[6] However, there is no evidence as to any steps taken in the litigation between January 12, 2001 and March 26, 2004, a period of 38 months.
[7] In 2004, Baranyai brought a motion for (i) summary judgment and (ii) dismissal of the action for delay. Justice Bryant dismissed the motion by endorsement dated March 26, 2004.
[8] In the fall of 2004, the plaintiff sought an injunction to restrain the sale of the property which is the subject matter of this action. Madam Justice Ferguson dismissed the motion by endorsement dated December 2, 2004. She noted in her reasons that “1016824 also seeks an accounting by Baranyai for all the rentals collected and monies paid out on the subject property during his period of possession. Although there is a dispute as to the items requested by counsel and when this information was provided, I no longer need to decide this issue as counsel for [the plaintiff] confirmed that this information has been provided”.
[9] For the seven year period between December 2, 2004 and December 30, 2011, there is no evidence of any steps taken by the plaintiff to advance the action. There was no correspondence between Home Savings and the plaintiff between April 2004 and December 2011 with respect to the action.
[10] There is evidence of a few pieces of correspondence in 2004 and 2005 from the plaintiff in relation to a demand for assignment and particulars of the sale from Baranyai, but no evidence of any steps taken to advance the litigation.
[11] In the context of an action brought in 2000 to address issues which occurred in 1993, an unexplained delay of more than 10 years is not acceptable.
[12] The plaintiff relies on three paragraphs in the affidavit of its principal, Mohinder Sandhu (“Sandhu”) to support an explanation for the litigation delay. Those paragraphs are:
The second loss of this property devastated me and I turned to alcohol to dull the pain and it affected myself, my family and my children. My wife went into chronic and clinical depression and continues to suffer.
As for myself, I turned to alcohol and I could not rehabilitate myself and I continued to drive while my driver’s licence was suspended (not now of course) and I re-offended and re-offended and each time there were long periods of incarceration. This explains the great gaps of time where nothing transpired.
My wife was clinically unable to proceed with these matters and my children did not wish to get involved in all of this litigation. We were also very short of funds and could not order my own forensic accounting.
[13] The above statements in Sandhu’s affidavit do not support an acceptable explanation for the litigation delay.
[14] With respect to Sandhu’s alcoholism, there is no evidence that it prevented him from instructing his lawyer, and his lawyer filed no evidence to that effect. Sandhu was able to instruct his counsel in November 2000 to issue a statement of claim, even though it was 6 years after Baranyai took possession of the property in 1994, which event was alleged to have “devastated me and I turned to alcohol to dull the pain”.
[15] Further, Sandhu was able to participate in litigation and to instruct his counsel in 2004 to (i) respond to a motion for summary judgment and dismissal for delay and (ii) bring a motion for an injunction to restrain the sale of the property, 10 years after Baranyai took possession of the property.
[16] There is no evidence to explain why Sandhu could not instruct counsel at other dates in the litigation yet was able to do so both in 2000 and in 2004.
[17] Consequently, I do not accept that Sandhu’s alcoholism is an acceptable explanation for the litigation delay.
[18] As for the condition of Sandhu’s wife, there is no evidence that she had any role in instructing counsel during the action. To the contrary, Sandhu’s affidavit evidence is that he “managed the affairs [of the plaintiff] with respect to the issues that have arisen as a result of the various transactions that have transpired relating to the pleadings herein”.
[19] Sandhu’s bald assertion that he had “long periods of incarceration” due to alcoholism arising from the events at issue and that “this explains the great gaps of time where nothing transpired”, is not supported either on the evidence or by any logical connection between the two statements.
[20] First, on the evidence, Sandhu was not incarcerated for at least 7 ½ years during the 11 year period from the issuance of the statement of claim until the action was set down for trial. Sandhu was not incarcerated in November 2000 or in 2004, when counsel took steps to issue the action and address motion issues, and Sandhu was outside of prison for significant periods of time both before and after 2004. There is no evidence before the court as to why Sandhu could instruct counsel during certain periods of freedom (e.g. in 2000 and 2004) but not during other periods of freedom. On this basis alone, the bald assertion by Sandhu cannot stand.
[21] Second, there is no evidence as to why Sandhu could not have instructed counsel from prison. Sandhu did not lead evidence as to why he could not have instructed counsel, and there is no logical connection between incarceration and an inability to instruct counsel in a civil matter. Civil actions can proceed while a plaintiff or defendant is incarcerated, with arrangements made for examinations for discovery and other procedural matters.
[22] I further note (although not necessary to my conclusion) that Sandhu was incarcerated on numerous occasions from 1983 until 1993, prior to the date of the events at issue in the action. This suggests that the issues of alcoholism and incarceration did not arise from the “second loss of the property”.
[23] Consequently, I do not accept that Sandhu’s incarceration explains the litigation delay.
[24] Finally, Sandhu’s statement that he was “very short of funds and could not order my own forsensic accounting” does not explain the litigation delay.
[25] First, Sandhu was able to retain counsel to bring the action in 2000 and to engage in substantial procedural motions in 2004, including responding to a summary judgment and dismissal motion, as well as bringing a motion for injunctive relief. Those steps do not support an inability to pursue an action due to lack of funds.
[26] Second, Sandhu set the action down for trial in December 2011. There is no evidence that a lack of funding prevented Sandhu from taking this step for 11 years from the date the claim was issued.
[27] Impecuniosity can be a contextual factor to explain litigation delay (see 3 Dogs Real Estate Corporation v. XCG Consultants Limited, 2014 ONSC 2251 (S.C.J.)). However, there must be evidence before the court that the impecuniosity caused the plaintiff to be unable to proceed with the action. The evidence does not support such a finding in this case.
[28] For the above reasons, I find that the plaintiff has not led evidence to establish an acceptable explanation for the litigation delay. Consequently, I do not address whether the plaintiff has established that the defendants would suffer no non-compensable prejudice, including the evidence of actual prejudice led by the estate of Baranyai (based on the death of the defendant on March 30, 2008).
[29] Consequently, I find that the plaintiff has failed to show cause why the action should continue and I dismiss the action with costs, including costs of this status hearing.
Master Benjamin Glustein
DATE: September 24, 2014