Canadian Aesthetics Academy v. Torstar Corporation, 2015 ONSC 2986

Canadian Aesthetics Academy et al. v. Torstar Corporation et al.

Court File No.: CV-09-393783

Motion Heard: April 7/15

In attendance:

P. Baxi, for the plaintiffs 905-457-5641, f.

L.Dougan, for the defendants Torstar Corporation, Toronto Star Newspapers Limited and Robert Cribb 416-863-2653, f.

C. Donovan, for the intervenors (intervening on consent of the participating parties and without opposition from those not participating) 416-071-8001, f.

By the court:

[1] The plaintiffs move for an Order setting aside the Registrar’s Order dismissing this action for delay. The action was dismissed for delay in April/12. For the reasons that follow, the plaintiffs’ motion is denied.

[2] This action was commenced in December/09 and was defended in January/10. Nothing was done to advance the litigation save that pleadings were exchanged, a notice of change of lawyers was delivered on behalf of the plaintiffs in August/10 and, again, in March/14, and this motion was brought to reinstate the action (some two years after the action was dismissed: March/14).

[3] The plaintiffs bear the onus of persuading me that the dismissal Order should be set aside. To inform my analysis, they are to satisfy me that there is an adequate (if imperfect) explanation for the litigation delay, that missing the set down deadline was a matter of inadvertence, that their motion to reinstate the action was brought promptly, and that there will be no non-compensable prejudice to the defendants if the action is reinstated. These considerations, all, need to be considered contextually, with prejudice being the most cogent consideration and with allowance to be made if not all of these considerations come into play. I am to make an Order that is fair and just, balancing the plaintiffs’ right to have their day in court with the defendants’ right to rely upon finality. In my view, the balance, here, tips in favour of the defendants.

[4] The plaintiffs have failed to satisfy me that any (let alone some) of the Reid factors have been fulfilled; and, I cannot say that it is in the interests of justice that this action be reinstated.

[5] Why is this so?

[6] The evidence of the plaintiffs’ lawyer’s predecessor, Ms. Devine, is that the plaintiffs instructed her to refrain from taking steps to advance this litigation and that her failure to advance the litigation was deliberate. In an email dated September 5/11, filed in respect of this motion, Ms. Devine confirmed that the plaintiffs “…instructed [her firm] not to proceed…”. She advised the plaintiffs that they had “two years to pursue a claim” and that a new retainer would be required if inquiries were to be made, by her, to determine whether the plaintiffs’ claim was “still live” (see: Exhibit “B” to the affidavit of Heather C. Devine, sworn February 18/15). There is no evidence before me of any such retainer having been paid.

[7] But, even if the plaintiffs did intend to proceed and Ms. Devine was, as the plaintiffs suggest, mistaken in her stated views, the plaintiffs have failed to provide an adequate explanation for their delays herein. No explanation has been proffered as to why the action was not prosecuted from the time it was commenced until Ms. Devine became lawyer of record for the plaintiffs in August/10.

[8] And while there are some emails that have been filed by the plaintiffs that seem to indicate follow-up and an attempt to spur counsel to action, there are also emails and a memorandum that make it clear that, for Ms. Devine’s firm to move forward, a significant retainer was required. There is nothing before me to suggest that one was paid or, if it wasn’t paid, why it wasn’t paid.

[9] Ms. Lanzellotti has produced an email she says was sent by Ms. Devine in April/12 indicating that the plaintiffs “….have plenty of time to deal with the Tor. Star and CBC…”. Ms. Devine denies its authenticity and has adduced evidence to support the contention that no such email was written by her. I confess that the fact that this email (unlike other emails proffered by the plaintiffs on this motion) was printed after being forwarded[^1] is a bit curious. But even if it is an authentic document (and I do not say that it is or it isn’t), there is no indication that the plaintiffs took steps to pay the retainer they knew was required (or address the fees referenced in the email). If the plaintiffs could not pay the retainer, they could have (as they had before) changed lawyers. They also could have asked their counsel for a litigation timetable, with the plaintiffs not being unsophisticated litigants (both from a professional perspective and from the perspective of their involvement in other, coincident, litigation). If Ms. Lanzellotti knew that there was a “time limit” (paragraph 46 of her affidavit sworn November 23/14 and Exhibit “B” to Ms. Devine’s February 18/15 affidavit, referenced above), why did she not take steps to ensure that it was met (i.e. pay the retainer requested, confirm the time limit or change lawyers to ensure that the action did not languish)? Ms. Devine’s evidence is that she believed that the plaintiffs had engaged someone else to assist them.

[10] The plaintiffs say that they did not receive the status notice when sent (and Ms. Devine confirms that this is so). But, even if this is so, counsel should have known that failing to set the action down would result in a dismissal of the action, as the plaintiffs suggest. I agree with the plaintiffs in this regard. I also agree that the plaintiffs “lost the opportunity to prevent their action from being dismissed for delay” (see: H.N. Fuller v. Rogers, 2015 ONCA 173). But, that assumes that the plaintiffs would have availed themselves of that opportunity. If the failure to advance the claims and set the action down in a timely way was, as Ms. Devine says it was, a matter of choice, the fact that the status notice was misdirected is of little moment.

[11] Whether it was or wasn’t a matter of choice is an issue as between the plaintiffs and Ms. Devine. It is not for me to decide whether it was or wasn’t. But, the fact that Ms. Devine says that she was instructed not to proceed with this action whereas the plaintiffs say that she was negligent or breached her duty to follow her clients’ instructions (and, in this regard, have brought an action in negligence, which action will be decided on a full evidentiary record) merits consideration on this motion. I agree with Ms. Dougan when she says, citing Marché D’Alimentation Denis Theriault Ltée v. Giant Tiger Stores, 2007 ONCA 695, [2007] O.J. No. 3872 (C.A.) at para. 33, that “…excusing a delay of this magnitude and reinstating an action in circumstances where the solicitor has formed a deliberate intention not to advance the litigation toward trial risks undermining the integrity and repute of the administration of justice”.

[12] While the law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor, the situation is different where, as here, the lawyer’s conduct is said to be deliberate. A choice was made by Ms. Devine--she says on the instructions of her clients, which instructions her clients deny. When the lawyer is exposed in this way (particularly with a claim in negligence having already been brought against her), refusing the clients an indulgence for delay will not necessarily deny the clients a legal remedy (see Marché, supra, at paras. 29-30).[^2] Then too, and in any event, I do not understand why, if the plaintiffs received the notice of dismissal in November/13, they waited until March/14 to serve their notice of motion. While their delay in bringing this motion is not egregious, it is a delay nonetheless. I accept that the plaintiffs could have and should have moved with greater alacrity, particularly if, as they claim, they were anxious throughout the currency of the action to see their claims prosecuted.

[13] On the issue of prejudice, the limitation period for the alleged libel has long passed. Then too, with the passage of time, there is no question but that memories will have faded. The plaintiffs have adduced no evidence to rebut the presumption of prejudice. But, even so, I note that there is evidence of actual prejudice before me. Journalist (and defendant) Robert Cribb’s evidence is that he “disposed of [his interview notes after the action was dismissed] in the belief that they were no longer needed” (see: affidavit of Robert Cribb, sworn March 6/15, at para. 10). Mr. Cribb relied on the principle of finality, and reasonably so, given that the action had not progressed beyond the pleadings stage, since 2009.

[14] The plaintiffs say that the action is largely document-based. I do not know that it is. But if it is, without Mr. Cribb’s interview notes (and with no documentary or oral discovery, to date), there is real prejudice to the defendants. Further, two of the defendants did not defend and there is no information before me as to the whereabouts/availability of those two persons and others whom Mr. Cribb interviewed for his story. With documents having been lost and no information as to the location of any of the witnesses, save those participating in this motion, I cannot agree that “[t]here is no prejudice to the [d]efendant[s] due to the delay” (see: affidavit of Nella Lanzellotti, sworn November 23/14, at para. 44). The statement made by Ms. Lanzellotti is bald and contradicted by Mr. Cribb.

[15] The dismissal Order remains in place. Failing agreement as to the costs of the motion, I may be spoken to.

May 8/15 __________________________

Master Abrams

[^1]: With it being possible to edit forwarded emails.

[^2]: I note, parenthetically, that Ms. Devine could have, but chose not to, support the position advanced by the plaintiffs in order to minimize her exposure in the negligence action. The fact that she did not lends credibility to her position on this motion.