CITATION: Jack v. Gluckstein, 2015 ONSC 3381

COURT FILE NO.: 71147/04

DATE: 20150527

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

HEATHER JACK

Plaintiff

– and –

GOWLING LAFLEUR HENDERSON, HARRY DEHME, RHONDA JANSEN, GLUCKSTEIN NEINSTEIN, MICHAEL HUCLACK, NEINSTEIN & ASSOCIATES, and ZAK A. MUSCOVITCH

Defendants

William Scott, for the Plaintiff

Robin Squires, for the Defendants Gluckstein, Neinstein and Michael Huclack

Brian Pickard, for the Defendants Neinstein and Zak Muscovitch

HEARD: March 6, 2015

RULING ON MOTION

VALLEE J.

Nature of the Motion

[1] The plaintiff alleges she sustained injuries in the late 1980s while renting 2 different houses owned by the Crown. She alleges that prior to her tenancy in the first house, toxic chemicals which were used to fumigate it for a flea infestation. She was exposed to these chemicals during her tenancy and they caused her certain injuries. The plaintiff then moved to another house, also owned by the Crown, which contained mould. Her exposure to the mould also caused her certain injuries.

[2] The action has been the subject of six court orders between 2007 and 2013. They relate to whether the plaintiff answered her undertakings and refusals from an examination for discovery held on August 2, 2006 and whether the action ought to be dismissed for failure to do so as well as delay. On June 25, 2013, Glass J. made the last order in which he dismissed the action.

[3] The plaintiff brings this motion to set aside Glass, J.’s order together with a preceding order of McCarthy J. dated October 30, 2012 on the grounds that in a motion argued in June, 2009, Lauwers J. wholly and finally disposed of issues as to whether the plaintiff had answered her undertakings and refusals and whether the plaintiff’s action should be dismissed for failure to answer them. Accordingly, the issue was res judicata and McCarthy J. and Glass J. had no jurisdiction to make their orders.

[4] The defendants oppose the motion on the grounds that the issues before Lauwers J. were not the same as those before McCarthy J. and Glass J. Glass J. properly dismissed the action. Further, the defendants state that Glass J’s order should not be set aside because the plaintiff has not complied with the requirements of Rule 37.14(1). They allege that this motion has not been brought in a timely way, there was no evidence of a mistake and there was no explanation for the delay. In response, the plaintiff states that the test does not apply to this motion because no indulgence is being requested. The plaintiff’s argument is based solely on the principle of res judicata.

Chronology

[5] Given the fact that six court orders have been made regarding this action, it is important to understand the chronology of the matter.

1993 Initially, the plaintiff retained Harry Dahme of Gowling, Strathy and Henderson (“Gowlings’) to represent her.

1995 Subsequently, she retained Michael Huclack of Gluckstein Neinstein (“Gluckstein”).

1999 Gluckstein became Neinstein and Associates (“Neinstein”). Zak Muscovitch assumed carriage of the file.

The plaintiff alleges that none of these firms commenced an action. The plaintiff then encountered a limitation issue.

2000 The plaintiff retained Borland Howe which commenced this action in 2004, alleging professional negligence against the three law firms and the specific lawyers at those firms who are the defendants to this action.

April 13, 2000 The plaintiff issued action no. 55221/00 against Her Majesty the Queen in the Right of Canada regarding her tenancy in the first house. Borland Howe acted for the plaintiff.

April 28, 2004 The plaintiff issued this action against Gowlings, Gluckstein and Neinstein.

August 5, 2004 DiTomaso J. dismissed action no. 55221/00, finding that the action had been commenced outside of the limitation period.

December 22, 2004 The plaintiff’s roommate, Christopher Cuddy, issued action no. 74062/04 against the Crown regarding the mould contamination in the second house.

January 10, 2005 The plaintiff issued action no. 74223/05 against the Crown regarding the mould contamination in the second house.

August 2, 2006 The plaintiff was examined for discovery. Certain undertakings were given. The plaintiff refused to answer certain questions.

August 30, 2007 DiTomaso J. ordered that the plaintiff answer undertakings and refusals.

April 10, 2008 At a status hearing, Boswell J. ordered that the plaintiff comply and provide evidence of efforts by May 15, 2008.

October 14, 2008 The defendant Neinstein brought a motion to dismiss the claim for failure to answer undertakings and refusals. In its motion materials, Neinstein included a chart of 52 undertakings and refusals which it alleged were outstanding.

June, 2009 Neinstein’s motion was heard on three days: June 18, June 29 and July 16, 2009. During the hearing of the motion, Lauwers J. (as he then was) requested that the plaintiff provide to the defendants copies of documents that were available but had not yet been produced. The plaintiff provided several bankers boxes of documents. Within the time frame of the motion, the defendants were unable to review all of these documents and determine whether the plaintiff answered the undertakings and refusals.

March 4, 2011 Lauwers J. released his decision. He stated, “Despite its earlier poor efforts, Borland Howe made some progress towards answering the outstanding undertakings and refusals over the days of the argument of the motion. I am not prepared to find that the plaintiff or her counsel deliberately failed to comply with the orders…This does not excuse the failure to comply with the orders but does move the failure into a less culpable range. Accordingly, I decline to dismiss the action on the basis of non-compliance with the orders alone…” (see Heather Jack, et al. v. Gowling et al., 2011 ONSC 1863 paras 32 and 33).

It should be noted that Lauwers J. did not conclude that all of the undertakings and refusals had been answered.

Lauwers J. went on to consider the issue of prejudice. The plaintiff had seen Dr. Zazula, an allergist, who had an extensive plan to evaluate the plaintiff involving testing for toxic inhalants in her environment. Apparently, the testing was done but the records with the results were not available. Neinstein stated that Dr. Zazlua had destroyed the clinical notes and records in 2007, more than a year after the discovery. The plaintiff did not contest this point. Dr. Zazula’s consultation report dated August 25, 1993 was produced because it was in another doctor’s file.

Lauwers J. stated that he was, “especially concerned about the missing evidence underlying the consultation report of Dr. Zazula which appears to be the most pertinent to the issues.” (see par 72) He found that, “there is a substantial risk that a fair trial will not be possible for the defendants…” (see par 75) Accordingly, he dismissed the action.

It is important to note that delay was not an issue before Lauwers J.

November 25, 2011 The plaintiff appealed Lauwers J.’s decision. The Court of Appeal allowed the appeal stating, “there is no evidence to support the assertion that Dr. Zazula’s records were destroyed in that time period [after the examination and before the plaintiff requested them]…Dr. Zazula would have been free to destroy his records in 2005, before the examination for discovery….Accordingly, there was no basis on the evidence for the motion judge to have concluded that the respondents did suffer actual or potential prejudice from the appellant’s failure to comply with her obligations to comply with the undertakings given on discovery pertaining to the production of materials relating to her consultation with Dr. Zazula or with the order.” (see paras 5 and 7)

October 30, 2012 Neinstein brought a motion before McCarthy J. to compel the plaintiff to answer her undertakings from the August 2, 2006 examination. Neinstein again included a chart of undertakings and refusals which it alleged were outstanding. There were 14 undertakings and refusals on this chart. They were the same as 14 of the undertakings and refusals in the chart containing 52 which was before Lauwers J. Neinstein alleged that they were still outstanding. Regarding four of them, Neinstein alleged that the plaintiff had not made adequate efforts to locate certain doctors and obtain their clinical notes and records. Regarding another four, Neinstein had asked for the productions and transcripts from the other litigation against the Crown as well as the plaintiff’s letters putting the Crown on notice of the claim. These had not been produced. Regarding the balance, Neinstein alleged that the answers were either incomplete or not responsive to the question. Neinstein also raised the issue of delay in this motion.

There is no question that this motion was served on opposing counsel; however, due to inadvertence, the plaintiff did not serve responding materials nor did her counsel attend on the motion.

McCarthy J. ordered the plaintiff to answer the undertakings and refusals by November 30, 2012, failing which the defendants were at liberty to bring a motion without notice to dismiss the action for delay.

November 15, 2012 Plaintiff’s counsel wrote a letter to Neinstein’s counsel stating that the undertakings were answered and that he would pay the costs in McCarthy J.’s order on the agreement that the plaintiff’s undertakings had been answered; otherwise, he would bring a motion to set aside the order. He included another chart which he stated showed that nearly all of the undertakings had been answered or that best efforts had been made.

November 20, 2012 Counsel for Neinstein wrote a letter to plaintiff’s counsel stating that the motion before McCarthy J. concerned 13 out of 54 undertakings which clearly had not been answered. He commented that he and counsel for Gluckstein had written to the plaintiff’s lawyer seven times between July 24, 2012 and October 26, 2012. There was no response. The motion documents were served on October 10, 2012. He stated that he would request instructions from his principal regarding the offer.

January 28, 2013 Counsel for Neinstein wrote a letter to plaintiff’s counsel stating that his offer was rejected and there was no basis for varying the order of McCarthy J. If the plaintiff intended to bring such a motion, a long motion ought to be scheduled.

The plaintiff did not bring a motion to vary McCarthy J’s order within the next five months.

June 23, 2013 Neinstein brought a motion without notice before Glass J. to dismiss the action for the plaintiff’s failure to comply with McCarthy J’s order. Glass J. granted the motion based on failure to answer undertakings and delay. He dismissed the action. Neinstein sent a copy of this order to the plaintiff within a few days.

July 19, 2013 Plaintiff’s counsel sent a letter to Neinstein advising that he would bring a motion to set aside the orders of McCarthy J. and Glass J.

October 21, 2013 The plaintiff served the notice of motion and record naming a date to be set at long motions assignment court on November 6, 2013.

November 6, 2013 The motion date was set for March 6, 2015. It was heard on that date.

Issues

1. Did the orders of Lauwers J. dated March 4, 2011 and the Court of Appeal dated November 25, 2011 fully dispose of the issues as to whether the plaintiff had answered her undertakings and refusals from her examination for discovery on August 2, 2006 and whether the plaintiff’s action should be dismissed for failure to answer any of them?

2. If so, was the issue res judicata when the motion was brought before McCarthy J. and subsequently before Glass J.?

Legal Principles to be Applied

[6] The law in this area is well settled. One branch of res judicata is issue estoppel which precludes the re-litigation of issues previously decided by a court in another proceeding.

[7] In order for issue estoppel to apply, there are 3 preconditions:

1. The issue must be the same as the one decided in the prior decision;

2. The prior decision must be final; and,

3. The parties to both proceedings must be the same or their privies.

(see Toronto (City) v. C.U.P.E., 2003 SCC 63, [2003] 3 S.C.R. 77, paras 94 and 95)

[8] Furthermore, the question out of which the estoppel is said to arise must have been fundamental to the decision arrived at in the earlier proceedings. (see Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. page 460)

Position of the plaintiff’s lawyers

[9] The plaintiff’s lawyers argue that Lauwers J. dismissed the action as he found that “there is a substantial risk that a fair trial will not be possible and the plaintiff’s failure to answer undertakings caused prejudice to the defendants.” When the plaintiff appealed this decision, the defendants did not cross-appeal Lauwers J’s decision not to dismiss the action for failure to comply with undertakings. The Court of Appeal allowed the plaintiff’s appeal and set aside Lauwers J’s order. It wholly and finally disposed of issues as to whether the plaintiff had answered her undertakings and refusals and whether the plaintiff’s action should be dismissed for failure to answer them.

[10] Neinstein’s motion before McCarthy J. sought the same relief as was requested in the motion before Lauwers J. The undertakings in the chart before McCarthy J. are exactly the same as some of the undertakings in the chart that was before Lauwers J.

[11] The motion before McCarthy J. proceeded as though it was unopposed because, through inadvertence, the plaintiff’s lawyers failed to diarize the motion. They did not serve any responding materials nor did they attend on the motion.

[12] The issue of whether the plaintiff had answered her undertakings and refusals and whether her claim ought to be dismissed for failure to answer them was res judicata when the motion was brought before McCarthy J. Accordingly, McCarthy J. did not have jurisdiction to make the order. This second motion was an attempt to re-litigate the issues that were before Lauwers J. Accordingly, McCarthy J.’s order should be set aside as a matter of right. The order of Glass J. flows from the order of McCarthy J.

[13] If the undertakings and refusals had been the only issue before Lauwers J., he would not have dismissed the action for failure to answer them.

Analysis

[14] There is no dispute that Lauwers J’s decision was final and that the parties in that motion were the same as they are in this motion. The second and third branches of the issue estoppel test have been satisfied. Accordingly, the only question to be answered is whether the issues were before Lauwers J. were the same as those before McCarthy J.

[15] Counsel for the plaintiff’s lawyers states that Lauwers J’s order wholly and finally disposed of issues as to whether the plaintiff had answered her undertakings and refusals and whether the plaintiff’s action should be dismissed for failure to answer them. I do not agree with this interpretation of Lauwers J’s order. As noted above, in his decision, Lauwers J. states,

Despite its earlier poor efforts, Borland Howe made some progress towards answering the outstanding undertakings and refusals over the days of the argument of the motion. I am not prepared to find that the plaintiff or her counsel deliberately failed to comply with the orders…This does not excuse the failure to comply with the orders but does move the failure into a less culpable range. Accordingly, I decline to dismiss the action on the basis of non-compliance with the orders alone… (emphasis added)

[16] The fact that “some progress was made” cannot be taken to mean that Lauwers J. decided that the plaintiff had answered all of her undertakings and refusals. It is obvious from the language used that some answers remained outstanding. On March 4, 2011, Lauwers J. declined to dismiss the motion for failure to answer undertakings alone because he was, “not prepared to find that the plaintiff or her counsel deliberately failed to comply with the orders [of DiTomaso J. and Boswell J.]. This did not relieve the plaintiff from her obligations to answer the remaining undertakings.

[17] Neinstein’s counsel submitted that the defendants reviewed the boxes of documents provided by the plaintiff during the motion before Lauwers J. They believed that 14 critical undertakings had not been answered. There was no explanation for the plaintiff’s lawyers’ failure to respond to the defendants’ seven letters between July 24, 2012 and October 26, 2012.

[18] Neinstein’s motion before McCarthy J. alleged that the plaintiff had still not answered 14 of her undertakings that were included in the 52 outstanding undertakings before Lauwers J. Neinstein states that the plaintiff’s failure to file responding materials and attend on the motion before McCarthy J. was not an “inadvertence” but rather the culmination of a pattern of behaviour and delay.

[19] As noted above, after the plaintiff received McCarthy J’s order dated October 30, 2012, counsel for the plaintiff sent a letter to Neinstein’s counsel dated November 15, 2012 with another chart, stating that the undertakings had been answered. Obviously, Neinstein’s counsel disagreed that the undertakings had been answered and was clear in his letter dated January 28, 2013 that plaintiff’s counsel should book a long motion if he wished to vary McCarthy J’s order. Nothing happened for five months. Accordingly, the order remained in force. The plaintiff was required to answer the remaining undertakings by November 30, 2012. The order permitted Neinstein to bring a motion without notice to dismiss the action for delay if the plaintiff had not answered the undertakings by November 30, 2012,

[20] The plaintiff did not take any steps to vary McCarthy J.’s order. Neinstein continued in its position that the plaintiff had not answered the undertakings. It did not bring its motion before Glass J. precipitously. Rather, seven months later, in June, 2013, Neinstein brought its motion without notice, before Glass J., which it was entitled to do. The facts before Glass J. were the same as those before McCarthy J. Neinstein states that the motion materials before both McCarthy J. and Glass J. contained a chart of the outstanding undertakings, the plaintiff’s response and the plaintiff’s supplementary affidavait of documents in which she stated that she had answered the undertakings. There was a clear and fulsome evidentiary record before McCarthy J. and Glass J. Neither of them was misled.

[21] The plaintiff’s lawyers failed to file any materials or attend on the motion before McCarthy J. Furthermore, despite the passage of seven months, they failed to bring a motion to set aside McCarthy J’s order even though they were aware of it immediately after it was made. I find that the issues before McCarthy J. and Glass J. were not res judicata. Accordingly, the court had jurisdiction to make the two orders. Glass J. dismissed the action in its entirety.

Conclusion

[22] The order of Glass J. dated June 25, 2013, dismissing the action, shall not be set aside. The plaintiff’s motion dismissed.

[23] If the parties cannot agree on costs, I will receive written submissions, limited to three pages using 1.5 line spacing, together with costs outlines and any relevant offers. The plaintiffs shall serve and file submissions within 15 days of the release date of this endorsement. The defendant shall serve and file responding submissions within a further 10 days following which the plaintiffs may serve and file reply submissions within a further 10 days. These submissions shall be filed with my assistant, Nicole Anderson, at Barrie.

VALLEE J.

Released: May 27, 2015