CITATION: Gilman v. Hui 2015 ONSC 1598
COURT FILE NO.: 08-CV-360738
MOTION HEARD: July 2, 2014 and January 7, 2015
SUPERIOR COURT OF JUSTICE - ONTARIO
BETWEEN: John Gilman
Plaintiff
v.
Christine Hui and K’Nexx Management & Consulting Inc and 1167268 Ontario Inc. carrying on business as Scarborough North Multidisciplinary Assessment Centre and 1289828 Ontario Inc. carrying on business as Ontario Neurocognitive Centre
Defendants
BEFORE: Master Thomas Hawkins
APPEARANCES: John H. McNair for moving and responding plaintiff
F 1 (519) 672-2674
John K. C. Au for moving and responding defendants
F (416) 502-8617
REASONS FOR DECISION
First Motion
[1] I have two motions before me. First I will deal with the motion of the defendants under subrule 39.02(2) for leave to use the affidavit of Christine Hui sworn on September 23, 2013 after the defendants had cross-examined the plaintiff John Gilman on August 20, 2013 and the plaintiff’s former counsel Amy ter Haar on August 21, 2013.
[2] I have considered the various factors laid down by the Divisional Court in First Capital Realty Inc. v. Centrecorp Management Services Ltd., [2009] O.J. No. 4492 at paragraphs 13 and 14. The defendants have met most of these factors. For the most part, Ms. Hui’s affidavit covers points that her counsel might have asked her on re-examination immediately following her cross-examination on August 20, 2013. Plaintiff’s counsel did not ask for an opportunity to cross-examine Ms. Hui and to deliver responding material if I decided to admit her September 23, 2013 affidavit. In that affidavit Ms. Hui does not offer any explanation as to why this affidavit could not have been sworn before her counsel began to cross-examine Mr. Gilman and Ms. ter Haar
[3] Nevertheless, I am of the view that if I admit Ms. Hui’s September 23, 2013 affidavit for use on the main motion before me, I will be better able to decide that motion justly and on its merits. I therefore grant leave to the defendants to use Ms. Hui’s September 23, 2013 affidavit on the main motion.
Second Motion
[4] The second and main motion before me is a motion under subrules 37.14(1) and (2) made by the plaintiff for an order setting aside the registrar’s order of March 13, 2012 dismissing this action for delay with costs.
[5] These subrules provide as follows.
37.14 (1) A party or other person who,
(a) is affected by an order obtained on motion without notice;
(b) fails to appear on a motion through accident, mistake or insufficient notice; or
(c) is affected by an order of a registrar,
may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.
(2) On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.
[6] The plaintiff is a person affected by an order of a registrar.
Legal Test for Setting Aside Registrar’s Dismissal Order
[7] In Scaini v. Prochnicki, 2007 ONCA 63, 2007 ONCA63, 85 O.R. (3d) 179, Goudge J.A., speaking for the Court of Appeal for Ontario, allowed an appeal from a motion judge. The motion judge had dismissed a plaintiff’s motion to set aside a registrar’s dismissal order because the plaintiff had failed to satisfy one of four criteria often used in deciding such motions. Master Dash originally laid down these four criteria in Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80.
[8] At paragraphs 21 to 24 of his decision, Goudge J.A. expressed himself as follows.
21 More importantly, I do not agree that the case law reviewed in Reid, supra, yields the proposition that an appellant must satisfy each relevant criterion in order to have the registrar’s order set aside. None of the cases referred to say so expressly and several proceed on a more contextual basis. For example, in Steele v. Ottawa-Carleton (Regional Municipality), [1998] O.J. No. 3154 (Gen. Div.) Master Beaudoin, at para. 17, described the guiding principle in deciding whether to set aside a Rule 48.14 dismissal by the registrar as follows:
… Ultimately, the Court will exercise its discretion upon a consideration of the relevant factors and will attempt to balance the interests of the parties.
22 I agree with Master Beaudoin.
23 In my view, a contextual approach to this question is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria. The latter approach is not mandated by the jurisprudence. On the other hand, the applicable rules clearly point to the former. In particular, the motion to set aside the registrar’s order dismissing the action for delay engages rule 37.14(1) (c) and (2). The latter invites the court to make the order that is just in the circumstances. A fixed formula like that applied by the motion judge is simply too inflexible to allow the court in each case to reach the just result contemplated by the rules.
24 That is not to say that there are no criteria to guide the court. Indeed I view the criteria used by the motion judge as likely to be of central importance in most cases. While there may be other relevant factors in any particular case, these will be the main ones. The key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case.
[9] Because Goudge J.A. said that the four Reid criteria used by the motion judge were likely to be of central importance in most cases, I will consider these four criteria, using a contextual approach respecting the facts underlying this motion while attempting to balance the interests of the parties.
[10] The first Reid factor may be expressed as follows;
Has the plaintiff provided a satisfactory explanation for the litigation delay?
[11] This explanation must cover all delays in the prosecution of this action from its inception on August 15, 2008 forward.
[12] Part of the context in which this motion was argued is the fact that effective January 1, 2015 rule 48.14 was significantly amended. Plaintiffs now have about twice as long to set their actions down for trial or otherwise conclude them than was previously the case. While the amendments to rule 48.14 were not made retroactive to March 13, 2012 (the date of the registrar’s dismissal order) these amendments must be considered on a motion like the present one. See Elkhouli v. Senathirajah 2014 ONSC 6140 per Short M. at paragraphs 44 to 48.
[13] The history of this action may be divided into two periods. The first period runs from August 15, 2008 when this action was commenced, to March 7, 2011 when Short M. conducted a status hearing of this action and approved a timetable for the action. The second period runs from the date of that status hearing in writing to March 13, 2012 when the registrar dismissed this action for delay with costs.
[14] The pleadings stage of this action covered a period of over eleven months. Both sides contributed to this delay. The plaintiff brought a successful motion to amend the statement of claim. The defendants then amended their statement of defence and counterclaim. Pleadings closed on September 28, 2009 when the plaintiff delivered a reply and defence to the counterclaim.
[15] Plaintiff’s counsel Ms. ter Haar viewed this action as primarily a documents case. I agree. She felt that if complete production of documents were made, the action would probably be capable of resolution. She describes the production of documents by the plaintiff as an exhaustive exercise. The plaintiff’s unsworn affidavit of documents served on May 5, 2010, listed 1,800 pages of documents.
[16] The defendants’ affidavit of documents was not served until August 31, 2010. That affidavit did not describe individually each document produced. In many cases the affidavit simply listed categories of documents. It did not describe the specific contents of client files.
[17] Neither side drafted a discovery plan. No such plan was ever signed in this action.
[18] On November 1, 2010, Ms. ter Haar attended at defence counsel’s office and picked up copies of the defendants’ schedule “A” productions.
[19] On November 19, 2010 the registrar sent out a Status Notice: Action not on a Trial List. Ms. ter Haar then requested a status hearing.
[20] The parties proceeded to mediation on January 12, 2012. The mediation was not successful.
[21] The status hearing of this action proceeded before Short M. on a consent basis as a status hearing in writing. The parties had agreed to a timetable which Short M. approved. The parties were to complete examinations for discovery by September 30, 2011. The plaintiff was to set this action down for trial by March 7, 2012.
[22] During the year after the status hearing of March 7, 2011 neither side took any steps to move this action and counterclaim forward. No examinations for discovery were ever held. Ms. ter Haar never set this action down for trial. In consequence on March 13, 2012, the registrar dismissed this action for delay with costs.
[23] Ms. ter Haar has an explanation for the failure to prosecute this action. In 2007 her husband was diagnosed with a brain tumour. He ceased working in September 2007. During the next five years Ms. ter Haar was his primary caregiver. His condition progressively worsened during 2011 and 2012. In the spring of 2011 Ms. ter Haar began winding down her law practice. She closed her law office around April 2011. However, she held onto her file on this action with the intention that it be pursued. Because of the complexity of this litigation, Ms. ter Haar felt she could not simply hand it over to another lawyer.
[24] In the summer of 2011, Ms. ter Haar began working for a startup company engaged in the design and development of applications in mobile technologies.
[25] Ms. ter Haar says that amidst the turmoil of winding up her law practice, working for the startup company and caring for her husband, she overlooked the term in the order of Short M. which directed the registrar to dismiss this action for delay if the action were not set down for trial or otherwise terminated by March 7, 2012
[26] Ms. ter Haar’s husband passed away on August 6, 2012.
[27] The plaintiff Dr. Gilman became aware at least by 2010 that Ms. ter Haar’s husband was terminally ill and that she was caring for him. Dr. Gilman tried to contact Ms. ter Haar in order to learn about the status of this action and any deadlines. He says that he and his assistant Paula Steel made several phone calls and sent her a lot of emails but that she never responded. Eventually, he retained another lawyer to find out the status of this action.
[28] Dr. Gilman never retained another lawyer to take over prosecution of this action from Ms. ter Haar.
[29] After March 7, 2011 the defendants did nothing to prosecute their counterclaim. When the registrar dismissed this action for delay, under rule 24.03 the defendants had 30 days within which to deliver a notice of election to proceed with their counterclaim. They did not do so. In consequence, under rule 24.03 their counterclaim is deemed to be discontinued without costs.
[30] In summary, the plaintiff has satisfactorily explained some but not all of the delay on the prosecution of this action. The plaintiff Dr. Gilman has therefore failed to meet the first Reid criteria. However, because both sides have contributed to the delay and because of the major role that the terminal illness of Ms. ter Haar’s husband played respecting the overall delay, I decline to dismiss this motion on this ground alone.
[31] The second Reid factor may be expressed as follows.
Has the plaintiff led satisfactory evidence that he always intended to set this action down for trial within the time limits set out in a court order but failed to do so through inadvertence?
[32] In my view, the main purpose of this criterion is to identify those situations in which a plaintiff or a plaintiff’s counsel with the approval of his or her client, has deliberately flouted the Rules of Civil Procedure or orders of the court.
[33] Some of the cases describe this attitude as contumacious or stubbornly disobedient behaviour. I do not regard Dr. Gilman and Ms. ter Haar as stubbornly disobedient people.
[34] In one of the affidavits which he swore in support of this motion, Dr. Gilman says that he always wished to pursue this action and never intended to abandon it. He left matters in the hands of Ms. ter Haar. His efforts to contact her and learn the status of this action were not successful.
[35] In paragraph [25] above I have summarized the reasons why Ms. ter Haar failed to meet the deadline for setting this action down for trial found in the order of Short M. This is clearly a case of inadvertence.
[36] The plaintiff has therefore met the second Reid criterion.
[37] The third Reid factor is the following.
Has the present motion been brought promptly?
[38] Ms. ter Haar was not immediately aware of the registrar’s dismissal order. She discovered the order in September 2012 when sorting through personal papers and documents from her law practice.
[39] She immediately contacted defence counsel and requested his consent to an order setting aside the registrar’s dismissal order. Defence counsel did not state his position at that time.
[40] Ms. ter Haar then drafted a motion record dated September 20, 2012 for a motion in writing with an affidavit from Dr. Gilman and a draft consent. The motion record was served the same day.
[41] Defence counsel finally advised Ms. ter Haar in March 2013 that the defendants would not consent to the motion.
[42] Ms ter Haar then notified her insurers of the situation. The insurers then retained repair counsel who prepared supplementary materials. When lawyers notify their insurers in a situation like this one, this usually delays the bringing of motions like the present one by several months.
[43] This motion was initially returnable on April 15, 2013. It did not proceed at that time. Both sides wanted to deliver additional materials and conduct cross-examinations.
[44] This motion was next returnable on October 9, 2013. Cross-examinations were conducted in August 2013. The motion did not proceed on October 9, 2013 because (I believe) sufficient time for argument was not available. I convened a case conference for November 4, 2013. At that time I set July 2, 2014 for argument of the motion as an all day special appointment. Argument of this motion and the defendants’ cross-motion for leave to use the September 23, 2013 affidavit of Ms. Hui began that day but was not completed. Both motions were adjourned uncompleted to January 7, 2015. Argument was completed at that time.
[45] On balance, I am of the view that the plaintiff’s motion has been brought reasonably promptly. The plaintiff has therefore met the third Reid criterion.
[46] I now turn to the fourth Reid factor. This factor may be expressed as follows.
Has the plaintiff shown that the defendants will not suffer any significant prejudice in presenting their case at trial as a result of the plaintiff’s delay in the prosecution of this action or as a result of steps taken following the dismissal of this action?
[47] This criterion is the most important one of the four.
[48] In her September 23, 2013 affidavit Ms. Hui says that the dispute with the plaintiff Dr. Gilman involves a total of 163 client files. She further says that on April 11, 2012 (less than a month after the date of the registrar’s dismissal order) the corporate defendants shredded 77 boxes of files more than five years old. These boxes contained 88 files which relate to the matters in dispute in this action. Ms. Hui says that this shredding was done in the ordinary course of the business of the corporate defendants and in conjunction with their downsizing and moving to office premises half the size of their former premises.
[49] I find it very significant that Ms. Hui does not say that these 88 files were shredded in the mistaken belief that Dr. Gilman had abandoned this action.
[50] Ms. Hui did not take legal advice before having these files shredded. She did not ask Mr. Au whether it was advisable to destroy these files so soon after the registrar’s dismissal order.
[51] The corporate defendants have a counterclaim. They allege in part that they have overpaid Dr. Gilman by more than $65,000. It seems to me that the 88 destroyed files were to some extent relevant to this counterclaim.
[52] There is a dispute between the parties as to whether the destroyed files can be reconstructed using Dr. Gilman’s records. Dr. Gilman feels that this can be done. Ms. Hui does not agree.
[53] To the extent the defendants are prejudiced by the shredding of these 88 files, I regard this as a self-inflicted wound and not as a reason for dismissing the plaintiff’s motion.
[54] The defendants also complain that about one month after this action was commenced, Paula Steel deleted a number of emails that had been in the email inbox of the defendant Ontario Neurocognitive Centre. Attempts to recover these emails were not successful.
[55] If these email deletion allegations are true, this seems to me to be a potential case of spoliation with evidentiary inferences adverse to Dr. Gilman. However, this is not a basis for dismissing Dr. Gilman’s motion. Any such deletion took place before any delay in the prosecution of this action.
[56] There is no evidence that any witness helpful to the defendants has died or disappeared and cannot be located despite reasonable efforts to do so.
[57] For the above reasons I conclude that the plaintiff has met the fourth Reid criterion.
[58] Finally, I must balance the interests of the parties. In my view the best way to do so is to set aside the registrar’s dismissal order and to allow the defendants to pursue their counterclaim. So ordered.
[59] Within 60 days the parties are to agree on a timetable for all remaining steps they wish to take before this action and counterclaim are both set down for trial. If they cannot agree, either side may write me requesting a telephone case conference at which time I will set a litigation timetable in consultation with counsel. I have given the parties 60 days to agree to a timetable because I understand that both sides will be retaining new counsel.
Costs
[57] The plaintiff has been successful on the main motion and should have the costs of it. I fix those costs at $15,000 and order the defendants jointly and severally to pay such costs to plaintiff within 60 days. There will be no costs of the defendants’ motion.
(original signed)__
Date: March 26, 2015 Master Thomas Hawkins