ONTARIO
SUPERIOR COURT OF JUSTICE
CITATION: 1731431 ONTARIO INC v Crestwood Apartments et al, 2015 ONSC 1479
COURT FILE NO.: CV-09-0331
DATE: 2015-03-09
B E T W E E N:
1731431 ONTARIO LIMITED
Kristen Bucci, for the Plaintiff
Plaintiff
- and -
CRESTWOOD APARTMENTS (THUNDER BAY) LTD., VICTORIA WIEJAK, MARK WIEJAK, KATHY WIEJAK, MICHAEL CAVANAGH, JOHN COVELLO, THE ESTATE OF JAMES R. JOHNSON by its ESTATE TRUSTEE, JUDY JOHNSON,
CHEADLES LAWYERS AND TRADEMARK AGENTS, FIRST AMERICAN TITLE INSURANCE COMPANY
Brian A. Babcock, for the Defendants, Crestwood Apartments, V.Wiejak, M. Wiejak, K. Weijak.
Brendan Hardick, for the Defendants, The Estate of James R. Johnson by Estate Trustee, J. Johnson and Cheadles Lawyers and Trademark Agents
Defendant(s)
HEARD: February 26, 2015,
at Thunder Bay, Ontario
Mr. Justice W.D. Newton
Reasons on Crestwood Apartments Status Hearing
Overview
[1] At this status hearing, the defendants Crestwood Apartments (Thunder Bay) Ltd., Victoria Wiejak, Mark Wiejak and Kathy Wiejak (collectively referred to as "Crestwood") ask the court to dismiss this action on the grounds that the plaintiff has failed to show cause why the action should not be dismissed for delay.
[2] The other defendants did not make submissions or take a position at the status hearing.
[3] As this status hearing was scheduled but not held before January 1, 2015, rule 48.14 (13) as it read prior to January 1, 2015 applies (see current rule 48.14(12)).
[4] The evidence on this hearing consisted of an affidavit from new counsel for the Plaintiff, an affidavit from the defendant Mark Wiejak who is also the president of Crestwood and a supplementary affidavit from the new counsel for the Plaintiff. Counsel for Crestwood objected to the use of the supplementary affidavit but given the balancing I must do between the competing rights of the parties I elected to receive the supplementary affidavit.
Chronology of Litigation to Date
[5] This action arises from alleged misrepresentations surrounding the purchase of a 152 unit townhouse development in Thunder Bay. The transaction closed in July 2007.
[6] The statement of claim was issued in July 2009. Defences were delivered in March 2010.
[7] Fregeau J. was appointed case management Judge on January 11, 2011. Thereafter, case management conferences were held regarding scheduling. Completion of discoveries was delayed pending the outcome of a security for costs motion and the posting of security. Letters of credit in the amount of $400,000 were filed as security for costs in early 2012.
[8] Current counsel for the plaintiff assumed carriage of this matter in March 2012. Prior counsel for the plaintiff asserted a Solicitor's Lien and refused to release the file to new counsel. An assessment under the Solicitors Act proceeded through the Toronto courts commencing July 2012. That dispute was ultimately resolved in September 2013 and, then, the file was released by the former solicitor to the plaintiff on September 26, 2013. New counsel received the litigation file from the plaintiff in December 2013.
[9] The new lawyer deposes that he spent some time reviewing the file, which was contained in eight bankers boxes, and that, thereafter, he entered into settlement discussions with counsel for the defendant law firm and, later, with the defendant, First American Title. The plaintiff's claims against these defendants are settled but settlement is contingent upon Crestwood consenting to the dismissal of the cross-claims.
[10] Counsel for the plaintiff wrote to counsel for all parties on September 8, 2014 confirming that settlement and advising that approval of all parties was necessary to deal with the cross-claims. He stated that he would like to meet with counsel for Crestwood, the primary defendant.
[11] It appears that counsel for Crestwood did not contact counsel for the plaintiff but instead wrote to the Senior Regional Justice asking her to direct the Registrar to place this action on the next status court list. That was ordered on October 20, 2014. Counsel for Crestwood was candid in admitting that he chose not to return to the case management judge, as he could have, but rather elected to trigger the status hearing because of the tactical advantage that the onus under rule 48.14 (13) places upon the plaintiff.
[12] By letter dated October 16, 2014 counsel for the plaintiff wrote Crestwood's counsel enclosing a draft timetable. To date, counsel for Crestwood has not responded to that draft timetable.
[13] This action was therefore placed on the November 20, 2014 Status Court list but it appears that counsel were not notified. The matter ultimately came before Shaw J on January 30, 2015 who, on consent, adjourned this hearing to February 26, 2015.
Position of the Parties
[14] The plaintiff's position is that there is an acceptable explanation for the delay and that the defendant would suffer no non-compensable prejudice. The plaintiff states that no further discoveries are required and that the only outstanding matters are undertakings and possibly undertakings/refusal motions. Upon completion of these stages, the action can be set down. The draft time table delivered to counsel in October proposed that the action be set down by April 30, 2015.
[15] On the other hand, Crestwood argues that there is unexplained delay of 2 1/2 years from March, 2012 to September, 2014. Further, Crestwood asserts that there is prejudice.
[16] The prejudice alleged includes an assertion that a business opportunity has been lost based on inability to obtain credit because of this litigation.
[17] Mark Weijak deposes that the fraud allegations are stressful for his mother and that she has lost her enjoyment of life. Similarly, he deposes that his wife has stress-related health problems which pre-existed this lawsuit but that "the longer this lawsuit is pending, the worse it is for her."
[18] He also asserts that the availability of witnesses such as the lawyer who acted for Crestwood and his clerk, may be compromised and, generally, that the availability or recollection of all witnesses will be impaired by the delay.
[19] Crestwood states that a discovery of the defendant Cavanagh is required. Mark Wiejak deposes that he suspects that Cavanagh is "an ally" of the plaintiff and that the delay in obtaining his evidence may be prejudicial to Crestwood.
[20] Crestwood relies on 1196158 Ontario Inc. v. 6274013 Canada Ltd, 2012 ONCA 544 in which it was stated:
[32] …The test is conjunctive, not disjunctive. Even if the plaintiff can provide a satisfactory explanation for the delay, the action will be dismissed if there would be prejudice to the defendant. And if the plaintiff is not able to provide a satisfactory explanation for the delay, it is still open to the judge to dismiss the action, even if there is no proof of actual prejudice to the defendant.
[33] …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.
[21] Relying upon Letang v. Hertz Canada Limited, 2015 ONSC 72, Crestview argues that distress does matter:
Delay and the distress that it brings to litigants do matter. Procedural gamesmanship, incessant delay, and discovery without end have brought the civil justice system to the brink of a crisis. There are real people behind lawsuits – even claims involving sophisticated corporations. These people are entitled to timely justice. (para. 18)
Analysis
[22] Rule 48.14 (13) provides:
Disposition at Status Hearing
(13) At the status hearing, the plaintiff shall show cause why the action should not be dismissed for delay and,
(a) If the presiding judge or case management master is satisfied that the action should proceed, the judge or case management master may,
(i) Set time periods for the completion of the remaining steps necessary to have the action placed on or restored to a trial list and order that it be placed on or restored to a trial list within a specified time,
(ii) Adjourn the status hearing to a specified date on such terms as are just, or
(iii) If the action is an action to which Rule 77 may apply under rule 77.02, assign the action for case management under that Rule, subject to the direction of the regional senior judge,
(iv) make such other order as is just; or
(b) if the presiding judge or case management master is not satisfied that the action should proceed, the judge or case management master may dismiss the action for delay.
[23] In Faris v. Eftimovksi, 2013 ONCA 360 the Court of Appeal stated that when exercising its discretion under this rule to dismiss an action for delay "a court must balance the plaintiff's interest in having a hearing on the merits and the defendant's interest in having the matter resolved in an expedient and time efficient manner". (at para. 24)
[24] The Court stated that the "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." (at para. 42)
Delay
[25] Each case will turn on it specific facts. An unexplained delay of modest duration may trigger dismissal depending upon the facts of that case.
[26] In 1196158 Ontario Inc. v. 6274013 Canada Ltd the action had not proceeded beyond the close of pleadings in five years. Further, a status hearing judge had given a "lifeline" that allowed the plaintiff to proceed on the basis of the timetable ordered. It was only after the failure to comply with that timetable that the action was dismissed at a further status hearing.
[27] One should be cautious in looking at the progress of litigation with hindsight alone. The action or inaction of the parties must be looked at in context. This is particularly so when scrutinizing the conduct of the plaintiff in attempting to transfer his file to new counsel. While perhaps some of the blame for this delay can be laid at the plaintiff's feet much of it is outside its practical control. In the circumstances, I do not view the actions of the plantiff and the delay in this case as sufficient to deprive the plaintiff of a trial on the merits.
[28] Indeed, some of the continuing delay can be attributed to Crestwood. I note that there was not any response to the timetable presented October 16, 2014. Crestwood did not seek to have the delay addressed by the Case management Judge earlier but instead triggered the status hearing upon receipt of information from the plaintiff that there was a potential resolution with the co-defendants.
Prejudice
[29] I am mindful of the comments from the Court of Appeal in 1196158 Ontario Inc. v. 6274013 Canada Ltd. I do not find, however, that the prejudice alleged is sufficient to warrant dismissal of the action. Much of what Crestwood alleges as prejudice is prejudice that results from the claim itself rather than the delay. It is true that the longer this proceeding lasts then the longer there will be stress or the inability to obtain credit, for example. But, that is not new prejudice that results solely from the delay.
[30] Similarly, in the circumstances, I do not find that the delay has resulted in a real risk that a fair trial will not be possible because of the availability or recollection of witnesses. And, with respect to the defendant Cavanagh, I give little weight to the assertion that "the delay in obtaining his evidence may be prejudicial to our case."
Conclusion
[31] In submissions, counsel for Crestwood asked that I not impose a timetable which may be unworkable if I did not dismiss the action. Rather, counsel for Crestwood asked that I set a deadline for counsel to agree to a timetable failing which the parties are to return to the case management Judge for further direction. Counsel for the plaintiff agreed. I agree that this is appropriate.
[32] I order that the parties have until April 30, 2015 to agree to and file a timetable. Failing the filing of a timetable by April 30, 2015, the parties are to return to the case management Judge for further direction.
[33] Should the parties not be able to agree on costs then brief submissions (2 pages only plus costs outline) are to be submitted to me within 30 days.
_ “original signed by” __
The Hon. Mr. Justice W.D. Newton
Released: March 9, 2015
CITATION: 1731431 ONTARIO INC v Crestwood Apartments et al, 2015 ONSC 1479
COURT FILE NO.: CV-09-0331
DATE: 2015-03-09
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
1731431 ONTARIO LIMITED
Plaintiff
- and -
CRESTWOOD APARTMENTS (THUNDER BAY) LTD., VICTORIA WIEJAK, MARK WIEJAK, KATHY WIEJAK, MICHAEL CAVANAGH, JOHN COVELLO, THE ESTATE OF JAMES R. JOHNSON by its ESTATE TRUSTEE, JUDY JOHNSON,
CHEADLES LAWYERS AND TRADEMARK AGENTS, FIRST AMERICAN TITLE INSURANCE COMPANY
Defendant(s)
REASONS ON CRESTWOOD APARTMENTS STATUS HEARING
Newton J.
Released: March 9, 2015
/cs