Court File and Parties

COURT FILE NO.: 06-CV-316483 PD1

MOTION HEARD: March 4, 2015

SUPERIOR COURT OF JUSTICE - ONTARIO

Re: ANJU MALHOTRA, SHAUN MALHOTRA, by his Litigation Guardian, SERESH MALHOTRA, RAJ CHOPRA, 1299253 ONTARlO INC. PREETI PUNCHHI, YASH PAL CHHABRA, GLOBAL FINANCIAL MANAGEMENT INC., GLOBAL INVESTMENT HOLDINGS INC., HARISH SETHI, VRINDA SETHI, NEIL SETHI, ARJUN JASUJA SUSHILA JASUJA and ANIL JASUJA Plaintiffs

v.

ATIQ KHOKHAR, WASEEM KHOKHAR, IMRAN KHOKHAR, RANJIT KHOKHAR a.k.a. RANJIT MARWAH, IHSAN KHOKHAR, MASOOD ELAHI a.k.a. MAQSOOD HAWTHORNE BUSINESS CENTRE INC., NIPISSING BUSINESS CENTRE INC., ELAHI, MOHAMMED ZAFAR IQBAL, HAWTHORNE INVESTMENT GROUP LTD., 1393282 ONTARIO LTD., DREAM HOME INVESTMENTS CORP., CLAIRE L. GRAHAM, JULIE JOCELYN NILES, NILES & ASSOCIATES PARALEGAL SERVICES INC. LORAMB & ASSOCIATES, UMA RAJKUMAR operating as GRABASC & ASSOCIATES LEGAL SERVICES, WINSTON GAUNTLETT MATTIS, and FIONA ANN DOCHERTY, DOMINION MORTGAGE CORPORATION, THE GRABASC GROUP INC., AAMIR MASOOD, VARUN MEDIRATTA, THE HAWTHORNE INVESTMENT GROUP LTD., SAMIR KHAMISA, MEHNAZ KHOKHAR and INDRA MEDIRATTA c.o.b. as SELENA CUSTOM HOMES Defendants

BEFORE: Master Lou Ann M. Pope

COUNSELS: Lawyer for the plaintiffs: Anju Malhotra, Shaun Malhotra, by his Litigation Guardian, Suresh Malhotra, 1299253 Ontario Inc., Yash Pal Chhabra, Global Financial Management Inc., Global Investment Holdings Inc., Arjen Jasuja, Sushila Jasuja, Anil Jasuja George Gligoric Fax: 905-545-3274

Plaintiffs, Harish Sethi, Raj Chopra, Preeti Punchhi, Vrinda Sethi, Neil Sehti unrepresented

Lawyer for the defendants, Winston Gauntlett Mattis and Fiona Ann Docherty Robin Squires Borden Ladner Gervais LLP Fax: 416-682-2838

REASONS FOR ENDORSEMENT

[1] The defendants, Winston Gauntlett Mattis and Fiona Ann Docherty (“Mattis and Docherty”) seek an order dismissing this action for delay pursuant to Rule 24.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[2] The plaintiffs who are represented by lawyer, George Gligoric, who are set out in more detail below, oppose this motion (“plaintiffs”).

[3] The unrepresented plaintiffs filed no responding material to this motion despite being properly served. However, the unrepresented plaintiff, Harish Sethi, appeared at the hearing and indicated to the court that he was appearing for himself and for the plaintiffs, Raj Chopra and Preeti Punchhi. Mr. Sethi was permitted to make oral submissions.

Background

[4] This action arises out of a claim for $6,000,000 as a result of alleged mortgage fraud. Allegations include fraudulent misappropriation of funds, conspiracy, negligence, negligent misrepresentation, breach of contract, breach of fiduciary duty and vicarious liability against the defendant lawyers, Mattis and Docherty, and others, in relation to mortgage transactions that took place starting in 2003.

[5] In particular, the allegations relate to the purchase, sale or transfer of 33 properties, damages alleged by 14 plaintiffs against 27 defendants. The defendants include two lawyers, paralegals, and real estate agents. Since the commencement of this action, two defendants have gone bankrupt; namely, Mohammad Zafar Iqbal on January 28, 2009, and Varum Mediratta on September 4, 2014. The action against those defendants is stayed. It appears that 8 of the 27 defendants did not defend the action.

[6] Numerous other proceedings were commenced by many of the plaintiffs herein after the commencement of the within action in order to protect, preserve and collect upon various properties. In particular, an action was commenced in Hamilton, Ontario in 2006, which was stayed by order on April 27, 2010 at the request of defendant, Winston Gauntlett Mattis. The costs of that action were ordered to be dealt with after the conclusion of this action.

[7] The following is a chronology of steps in this action:

August 8, 2006 Statement of claim issued

November 2, 2006 Order granting leave to the plaintiffs to amend the statement of claim

November 17, 2006 Amended statement of claim served on Mattis and Docherty

February 9, 2007 Order requiring Mattis and Docherty to produce certain documents no later than March 16, 2007

February 13, 2007 Statement of defence and crossclaim of Mattis and Docherty served on February 14, 2007

October 9, 2007 Order transferring action to case management under Rule 77 at plaintiffs’ request and not opposed by Mattis and Docherty; certificates of pending litigation discharged

October 2007 Letter from plaintiffs’ counsel regarding transfer of action to case management

October 2010 Plaintiffs serve affidavit of documents and contact defence counsel to schedule examinations for discovery

November 15, 2010 Letter from defence counsel advising that Mattis and Docherty refuse to schedule discoveries given lengthy delay by the plaintiffs, possibility of bringing a rule 24 motion, and request an explanation for the delay

December 23, 2013 The within motion was served on the plaintiffs first returnable January 7, 2014; subsequent adjournments at the plaintiffs’ request

August 15, 2014 Notice of Change of Lawyer filed on behalf of the plaintiffs represented by Mr. Gligoric

August 18, 2014 Mr. Gligoric advises that his clients will oppose the motion to dismiss for delay and proposes a discovery plan

August 19, 2014 Order removing Davis & Co., counsel for the current self-represented plaintiffs

September 23, 2014 Mr. Gligoric’s clients serve their responding material to this motion

March 2015 Action against defendant, Uma Rajkumar, operating as Grabasc & Associates Legal Services, and Uma Rajkumar’s counterclaim, dismissed without costs

[8] None of the unrepresented plaintiffs filed a notice of appointment of lawyer or a notice of intention to act in person following the order made on August 19, 2014 removing their former counsel.

[9] The plaintiffs rely on the affidavit of the plaintiff, Yash Pal Chhabra. Mr. Chhabra sued in his personal capacity. In addition, he is the president of the plaintiffs, 1299253 Ontario Inc., Global Financial Management Inc. and Global Investment Holdings Inc.

[10] Mattis and Docherty argue that there are two periods of unexplained delay in this action; namely, between 2007 and 2010, and between 2010 and 2013, for a total of six years delay caused by the plaintiffs.

Law

[11] Rule 24.01(1) provides that 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 failed to take any of the enumerated steps. These defendants seek relief under subrule (c) on the grounds that the plaintiffs have failed to set the action down for trial within six months after the close of pleadings.

[12] The principle to be applied on a motion to dismiss for delay is that the action should not be dismissed unless (1) the default is intentional and contumelious, or (2) the plaintiff or his or her lawyers are responsible for the inexcusable delay that gives rise to a substantial risk that a fair trial might not now be possible. (Armstrong v. McCall, [2006] O.J. No. 2055, 2006 CanLII 17248, at paras. 11-12 (O.C.A.))

[13] It has been held that any delay in the prosecution of an action requires an explanation. In the absence of an explanation by the plaintiff, the presumption is that the delay was intentional. (Berg v. Robbins, 2009 CarswellOnt 8705, 266 O.A.C. 200 (Div.Ct.))

[14] It has also been held that inexcusable delay exists if there is no reasonable and cogent excuse for the delay, (New Solutions Financial Corp. v. Zilkey, 2011 ONSC 448; DeMarco v. Mascitelli [2001] O.J. No. 3582 (Ont. S.C.J.) at para. 22), or in a “contemptible” manner (Woodheath Developments Ltd. v. Goldman (2003), 2003 CanLII 46735 (ON SCDC), 175 O.A.C. 259, at para. 15).

[15] Inordinate delay after the cause of action arose or after the passage of the limitation period gives rise to a presumption of prejudice.

[16] The court of appeal in Armstrong, at para. 12, confirmed that court’s decision in Christie Corp. v. Lee (1999), 29 C.P.C. (4th) 181, at pp. 471-472, regarding the factors to be taken into account by the court on a Rule 24 motion:

In order to succeed on a motion to dismiss a plaintiff’s claim for delay the defendant must establish that the delay has been unreasonable in the sense that it is inordinate and inexcusable and that there is a substantial risk that a fair trial will not be possible for the defendant at the time the action is tried if it is allowed to continue. The second part of this proposition is often expressed as the likelihood of prejudice to the defendant giving rise to a substantial risk that a fair trial will not be possible when the case is actually tried. Examples of prejudice are the death of a witness, the inability to locate a witness, the inability of a witness to recall important facts or the loss of important evidence. In determining whether the delay has been unreasonable the court should consider the issues raised by the case, the complexity of the issues, the explanation for the delay and all relevant surrounding circumstances. In considering whether the defendant has sustained prejudice the court should consider the availability of its witnesses, whether the evidence is largely documentary or based on the recollection of individuals, the efforts made by the defendant to preserve its evidence and any other relevant consideration. Prejudice to the defendant is to be considered relative to the time the case will likely be reached for trial if permitted to proceed. The court will then balance the right of the plaintiff to proceed to trial with the defendant’s right to a fair trial and make its decision.

Were Mattis and Docherty in default under the Rules?

[17] The plaintiffs argue that Mattis and Docherty were in default under the Rules as they had not delivered their affidavit of documents when the motion was brought. (Rule 24.01(1))

[18] Mattis and Docherty submit that although they had not delivered a sworn affidavit of documents prior to bringing this motion, they had produced all non-privileged relevant documents by March 16, 2007, pursuant to the order dated February 9, 2007. They argue further that they delivered sworn affidavits of documents subsequent to being served with responding material on this motion. They point out that the documents listed in Schedule “A” of their affidavits of documents contain the same documents that were produced in 2007, with no additional documents. Therefore, these defendants submit that the fact they had not served an affidavit of documents was an irregularity under the Rules which has been rectified.

[19] The plaintiffs also argue that Mattis and Docherty refused to schedule examinations for discovery in late 2010 when requested to do so by plaintiffs’ counsel. The evidence is that Mattis and Docherty refused to schedule examinations for discovery in late 2010 because the plaintiffs had not taken any steps to move the action forward in several years and their failure to respond to letters from defence counsel. They requested an explanation for the delay before agreeing to schedule the discoveries, which was never forthcoming from the plaintiffs. Alleging serious prejudice to Mattis and Docherty, counsel indicated that she expected to receive instructions to bring a motion for dismissal for delay.

[20] The plaintiffs also submit that Mattis and Docherty were in default under the Rules as they refused to agree to a discovery plan. The evidence is that Mattis and Docherty refused to enter into a discovery plan as requested by Mr. Gligoric in August 2014 given this pending motion.

[21] This action was commenced in 2006. Former Rule 30.03(1) in effect at that time required that parties serve an affidavit of documents within 10 days after the close of pleadings. There is no dispute that none of the parties had served an affidavit of documents by January 1, 2010 when Rule 30.03(1) was amended.

[22] Effective January 1, 2010, under rule 30.03(1), the timeline for delivery of an affidavit of documents was changed. This amendment applied to all actions that had been commenced prior to January 1, 2010. Thereafter every party was required to serve an affidavit of documents by the date required by the discovery plan. Unless the parties agreed otherwise, the service of an affidavit of documents was a pre-condition to a party’s right to examine for discovery. Under the newly enacted rule 29.1.03(2), a discovery plan had to be agreed to before the earlier of (a) 60 days after the close of pleadings or a later date as agreed, and (b) attempting to obtain the evidence.

[23] In summary, no party to this action was in compliance with former rule 30.03(1). After the rule amendment on January 1, 2010, Mr. Gligoric’s clients served their affidavit of documents in October 2010; however, as the parties had not agreed to a discovery plan after the rule amendment, Mattis and Docherty were not in default of the rules.

[24] The plaintiffs rely on Susin v. Harper, Haney & White, 1992 CarswellOnt 462, 9 C.P.C. (3d) 135, for the proposition that any failure to deliver an affidavit of document is an inexcusable default. In my view, this case does not apply in the circumstances herein as it pre-dates the amendments on January 1, 2010 and the elimination of a strict timeline for delivery of affidavits of documents.

[25] For the above reasons, it is my view that Mattis and Docherty were not in default under the Rules when they brought this motion for failing to serve an affidavit of documents.

[26] It is also my view that Mattis and Docherty were not in default under the Rules by the fact that their counsel refused to schedule discoveries in late 2010. Firstly, there is no rule requiring parties to conduct examinations for discovery. Secondly, the plaintiffs failed to provide defence counsel with an explanation for the delay as requested. Lastly, the plaintiffs could have exercised their rights to examinations for discovery by serving a notice of examination; however, they did not do so -- rather they did nothing further.

[27] It is also my view that Mattis and Docherty were not in default under the Rules when they did not agree to a discovery plan. Although Mr. Gligoric proposed a discovery plan in August 2014, Mattis and Docherty had brought this motion first returnable in January 2014 which had been adjourned several times at the plaintiffs’ requests. Further, Mattis and Docherty had not sought to conduct examinations for discovery of any of the plaintiffs. Therefore, in my view, the timing requirement under Rule 29.01.02(2) cannot be invoked against Mattis and Docherty.

Delay

[28] Mattis and Docherty submit that more than eight years have elapsed since this action was commenced in 2006 and that the action relates to events that occurred beginning in 2003, some twelve years ago.

[29] They submit that there have been two periods of delay since the close of pleadings in February 2007 which are set out in more detail below.

First three-year gap: October 2007 and October 2010

[30] The first three-year gap in communications occurred between October 2007 and October 2010. In October 2007, the plaintiffs obtained an order transferring this action to case management which Mattis and Docherty did not oppose. The order was made on October 9, 2007; however, the action was never transferred to case management. The plaintiffs provided no explanation why the action was not transferred. Mattis and Docherty submit that the plaintiffs took no steps to transfer the action.

[31] Following the order in October 2007, no steps were taken by the plaintiffs to move the action forward and there were no communications with Mattis and Docherty for three years when on October 25, 2010 the plaintiffs served their affidavit of documents and requested that examinations for discovery be scheduled.

Second three-year gap: November 15, 2010 and December 2013

[32] By letter dated November 15, 2010, counsel for Mattis and Docherty responded to plaintiffs’ counsels’ letter of October 25, 2010 which indicated that they required an explanation for the significant delays prior to agreeing to schedule examinations. No response was ever received from plaintiffs’ counsel to that letter.

[33] There was no further communication between the parties until December 2013 when Mattis and Docherty served this motion.

[34] Mattis and Docherty also rely on delays in the hearing of this motion caused by the plaintiffs. While I accept that some of the delay in hearing this motion was caused by the plaintiffs, in my view, approximately one half of the delay was due to counsel for Mattis and Docherty failing to comply with the Toronto region practice direction which requires that counsel seeking to schedule a motion consult with opposing counsel regarding the return date before scheduling the motion. Further, they served the motion on December 23, 2013 on the eve of the Christmas holidays, returnable on January 7, 2014 giving plaintiffs’ counsel minimal notice. Clearly, counsel for Mattis and Docherty scheduled the motion date well in advance of January 7, 2014 without giving plaintiffs’ counsel any notice of their intention to bring the motion.

[35] The motion was adjourned until June 5, 2014 in order to provide plaintiffs’ former counsel sufficient time to bring a motion to be removed as counsel for the plaintiffs. The evidence is that plaintiffs’ former counsel was unable to obtain instructions from his clients.

[36] This motion was adjourned again to October 3, 2014, as plaintiffs’ former counsel had not brought his motion to be removed as counsel for the plaintiffs. That motion was scheduled for August 19, 2014. Mr. Gligoric was retained by some of the plaintiffs and he served a Notice of Change of Lawyer in mid-August 2014.

[37] This motion was adjourned again to March 4, 2015 as Mr. Gligoric needed time to obtain the file from plaintiffs’ former counsel and to file responding material.

Explanation for Delay

[38] The plaintiffs’ evidence does not clearly set out an explanation for the delay. Notably, the affidavit of Yash Pal Chhabra, sworn September 20, 2014, contains many subheadings; however, not one of them is entitled “Explanation for the Delay”. Therefore, I will attempt to list below what appears to be the plaintiffs’ explanations for the delay.

a) This action involves complex claims that involve allegations of mortgage fraud and negligence that resulted in damages to the plaintiffs in the approximate sum of $6,000,000. At paragraph 20(a) of Mr. Chhabra’s affidavit, he states that “given such claims more than the usual amount of time would be expected to be required given such allegations and the resulting complexity”;

b) Numerous other actions and/or applications and motions had to be brought by many of the plaintiffs herein after the commencement of this action in order to “protect, preserve or collect upon various properties”. The evidence on this point is as follows:

(i) In April 2007, an interpleader motion was brought in this action by a non-party, Firm Capital Mortgage Fund Inc., in which Forestell J. ordered that Firm Capital Mortgage Fund Inc. pay into court the sum of $77,140.42 to await the outcome of this proceeding. These funds related to the sale of property located in Oshawa, Ontario. None of the plaintiffs herein filed responding material to this motion, nor did plaintiffs’ counsel appear at the hearing;

(ii) In February 2009, several lien claimants relating to the Oshawa property brought a motion regarding their potential claim to the funds paid into court in this action. Their claims were ordered to await the outcome of this proceeding as in (i) above. There is no evidence that the plaintiffs herein filed responding material to that motion or that plaintiffs’ counsel appeared at the hearing.

(iii) The plaintiff, Sushila Jasuja, in this action, commenced another action in Hamilton, Ontario in 2006 against three of the same defendants in this action, including Mattis (Mattis was represented by the same counsel who represents him in this action). Mattis brought a motion which resulted in an order dated April 27, 2010, staying that action and ordering costs of that action ordered to be dealt with in this action.

c) In October 2007 the action was ordered to be transferred to case management under rule 77; however, the transfer never took place;

d) Some of the plaintiffs changed counsel in August 2014; however, plaintiffs’ former counsel had to bring a motion to be removed for the balance of the plaintiffs who have not retained new counsel since that time, nor have they delivered a notice of intention to act in person;

e) In 2007, the plaintiffs had to bring a motion to compel Mattis and Docherty to produce relevant documents;

f) Mattis and Docherty had not delivered an affidavit of documents;

g) Mattis and Docherty refused to set up examinations for discovery in November 2010;

h) Mattis and Docherty refused to discuss a discovery plan until after the completion of this motion;

i) Law Society of Upper Canada (“LSUC”) proceeding with respect to Mattis’ licence to practise law; an undertaking given by Mattis to the LSUC in July 2006 not to act on any real estate or mortgage transaction; letter from LSUC to plaintiffs’ counsel in January 2009 indicating that Mattis was found guilty of professional misconduct and lost his license to practise law in Ontario;

j) The statement of claim was amended in November 2006 to add numerous defendants;

k) The claims involve in excess of 35 pieces of real estate as set out in Schedules A and B to the Amended Statement of Claim;

l) The claims involve obtaining of injunctions and certificates of pending litigation;

m) Numerous plaintiffs and defendants which lead to delays;

n) Several months’ delay in Mr. Gligoric obtaining former plaintiffs’ counsels’ files between August and September 2014.

[39] It is Mr. Chhabra’s evidence that there was no intentional delay on the part of the plaintiffs.

[40] The plaintiff, Harish Sethi, made brief submissions as he did not file responding material to this motion. He stated that he had lost over $300,000 plus legal fees as a result of the defendants’ action and that he was emotionally and financially unable to continue to prosecute this action. Further, he intends to discontinue this action against the defendants.

[41] The only evidence of the plaintiffs regarding an explanation for the delay during the two periods of delay cited by Mattis and Docherty is in in February 2009 when several lien claimants to the Oshawa property brought a motion regarding their potential claim to the funds paid into court in this action. However, as noted above, there is no evidence that the plaintiffs herein filed responding material to that motion or that plaintiffs’ counsel appeared at the hearing.

[42] The only other evidence of the plaintiffs regarding an explanation for delay during the two periods of delay is in April 2010 when Mattis brought a motion in the Hamilton action, which resulted in a stay of that action. However, there is no evidence that the plaintiffs filed responding material to that motion or that plaintiffs’ counsel appeared at the hearing.

[43] For the above reasons, it is my view that the plaintiffs’ evidence is wholly inadequate to explain the two periods of delay. The fact that the plaintiffs herein were involved in other actions does not explain adequately the delay in this action. In my view, the two periods of delay are inexcusable as no reasonable explanation has been given. Therefore, I find that the plaintiffs failed to prosecute this action with due diligence during the period of approximately six years.

Prejudice

[44] Given the passage of time since 2003 when it is alleged that the impugned transactions began, the commencement of the action in 2006, the inordinate delay after the cause of action arose, and the passage of the limitation period, there is a presumption of prejudice.

[45] Where there is a presumption of prejudice, it is accepted that due to the passage of time, memories have faded.

[46] Mattis and Docherty submit that the trial of this action will rely heavily on witness recollections about specific transactions, conversations, interactions and their role in all those things throughout the history of these transactions, more than 11 years ago. They further state that given the nature of the allegations such as fraud, conspiracy, directing others to mislead the plaintiffs, and preparing false documentation, the court will need to understand, among other things, what various parties said or were told by others at various times, what various parties knew, understood or expect at various times, and what various parties did or failed to do at various times.

[47] Another consideration according to Mattis and Docherty, as stated in 1196158 Ontario Inc. v. 6274013 Canada Ltd, 2012 ONCA 544 at para. 44, in the context of a status hearing, is that delay “leaves the litigant with the claim hanging over its head in a kind of perpetual limbo”. The court further stated that fairness requires allowing parties to plan their lives on the assumption that litigation timelines will be enforced barring exceptional circumstances.

[48] They submit that in the context of this action, allegations of solicitor’s negligence are serious and significantly affect the reputation of these defendants.

[49] Mattis and Docherty state that due to memories having faded and that the trial will rely heavily on witness recollections, their ability to properly defend this action has been prejudiced.

[50] The plaintiffs have the onus to rebut the presumption of prejudice.

[51] They submit that there will be no prejudice to these defendants should this action continue as the primary evidence at trial will be the documents that have been produced as a result of their efforts by obtaining an order compelling Mattis and Docherty to make production. They contend that the claims against Mattis and Docherty, in particular, relate primarily to improper handling or mismanagement of their law practices and trust funds which will be borne out by the documents. These claims will be determined at trial by Mattis and Docherty’s recording keeping or lack thereof, which records have been produced.

[52] While I accept that a large portion of the trial evidence will be focussed on the relevant documents that were exchanged during the impunged real estate and mortgage transactions, I expect there will also be a significant number of witnesses called to give evidence regarding their interactions with Mattis and Docherty, including the instructions given to them by these defendants. For example, referring to paragraphs 17 through 19 of the statement of claim, it is likely that former office staff will be called to trial and be questioned regarding their recollections of the subject transactions and instructions from these defendants in performing their duties. A further example arises out of the allegations in paragraph 12 of the statement of claim. It is expected that witnesses will be required to give evidence on specific transactions that allegedly were performed without authority of the client. This particular transaction allegedly occurred in 2005, which will be more than ten years prior to the trial.

[53] Therefore, in my view, it is fair to state that the trial will be based equally on the documents and the recollection of individuals.

[54] It is not expected that this action will reach trial for another two years at a minimum given that examinations for discovery have not taken place, nor has mediation and a pre-trial conference been held.

[55] Notably, there is no evidence that a potential witness had died or that a potential witness is unable to be located, although, in fairness, it is not expected that the parties have attempted to locate potential witnesses at this stage of the litigation. Further, there is no evidence that important evidence has been lost.

[56] The predominant consideration in my view regarding prejudice in these circumstances is given the substantial passage of time, the inability of witnesses to recall very specific transactions that occurred on a specific date in time as alleged. In my view, it is reasonable to assume in these circumstances that, for example, an employee of Mattis and Docherty will have great difficulty remembering specific instructions she was or was not given on any particular day dating back some ten or more years. It is well known that in a legal real estate practice, a lawyer may represent thousands of clients every year, and similarly their employees or agents will be responsible for performing the work on that same volume of transactions. Given those circumstances, in my view, it makes the issue of memory recollection even more important. It follows that if witnesses are unable to recall important facts it may impede Mattis and Docherty’s abilities to properly defend this action. In my view, this risk cannot go understated given the allegations and the significant passage of time in this action.

[57] For the above reasons, it is my view that the plaintiffs have rebutted the presumption of prejudice only regarding the preservation of the documentary evidence.

[58] However, I do agree that the issues in this action are complex. I also accept that this action would take longer to get to trial given the excessive number of parties, the complex issues and the significant number of documents involved. Combined with the length of time that the impugned transactions took place, in my view, these factors would lead inevitably to this action taking more time to get to trial. The difficulty is that accepting that this action would take longer than a few years to get to trial, the unexplained and inordinate delay by the plaintiffs has lengthened the process by some six years.

[59] One factor in the plaintiffs’ favour is that they retained new counsel in August 2014 and their new counsel is familiar with the issues in this action having represented some of them in the related actions. Immediately upon being retained Mr. Gligoric advised opposing counsel that the plaintiffs would be opposing this motion and proposed a discovery plan that contained specific dates for completion of the steps in this action including setting the action down for trial within and year and a half. I view the timelines in the discovery plan as realistic given the number of parties expected to be examined.

[60] A dismissal of an action is a drastic step and should not be done except in exceptional circumstances. Had the plaintiffs not retained new counsel who attempted promptly to move this action to the next step, I would be more inclined to dismiss this action. Another consideration in the plaintiffs’ favour is that they took steps early in the action to preserve the evidence by bringing a motion and obtaining an order compelling Mattis and Docherty to make production. Early steps by the plaintiffs to preserve the evidence have lessened the risk of documents going missing which could lead to prejudice.

[61] I am also comforted by the fact that there will be fewer parties involved at trial given the bankruptcy of two defendants, the default of numerous defendants to enter a defence, and the likelihood that several plaintiffs will no longer be pursuing their actions, as indicated by Harish Sethi.

[62] I arriving at my decision, I have also taken into consideration the nature of the plaintiffs’ claims and the alleged emotional and financial impact on them. This was fortified by Harish Sethi’s submissions at the hearing. To terminate their rights to seek redress against the alleged wrongdoers would no doubt be devastating. On the other hand, these defendants, one of whom I understand continues to practice law, have had these serious allegations outstanding for some eight and a half years. They are entitled to have the issues tried by a court within a reasonable time given the circumstances.

[63] Although I found that the plaintiffs caused unexplained and inexcusable delay and that they have only rebutted the presumption of prejudice regarding documentary evidence, I must consider all of the relevant circumstances.

[64] For the reasons above, I dismiss Mattis and Docherty’s motion as it relates to the plaintiffs who are represented by Mr. Gligoric. However, I grant the motion and dismiss the actions brought by plaintiffs, Harish Sethi, Raj Chopra, Preeti Punchi, Vrinda Sethi, Neil Sehti, as they filed no responding material to this motion, and Mr. Sethi’s stated intention to discontinue his action.

[65] The remaining parties shall enter into a discovery plan within 30 days of the release of this decision which shall be based on timelines substantially the same as those proposed by Mr. Gligoric in August 2014.

[66] Mattis and Docherty shall be entitled to their costs of this motion and of the action against the unrepresented plaintiffs. The plaintiffs, Harish Sethi, Raj Chopra, Preeti Punchi, Vrinda Sethi, Neil Sehti, shall pay the Mattis and Docherty costs of the action and the motion in the amount of $10,000 inclusive of HST, within 90 days of the date this decision is released.

[67] Although the plaintiffs represented by Mr. Gligoric were successful on this motion, in my view, given the inordinate delay caused by them, they should have to bear their own costs.

(original signed)_

April 21, 2015 Master Lou Ann Pope