ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 93-CQ-45703
DATE: 20150814

BETWEEN:

PREMIUM PROPERTIES LIMITED
Plaintiff

– and –

AIRD & BERLIS
Defendant

A.J. Esterbauer, for the Plaintiff

Jason Beitchman & Abbey Sinclair, for the Defendant

HEARD: July 16, 2015

S.A.Q. Akhtar J.

INTRODUCTION

[1] Aird & Berlis acted as lawyers for Premium Properties. One of the partners in their firm, Richard Arblaster, provided legal advice in respect of an appeal conducted before the Ontario Building Code Commission. That was in 1987.

[2] Aird & Berlis also represented another firm, IPCF Properties Inc., in respect of a proposed development and planning approval application to the Ontario Municipal Board. That was in 1990.

[3] Premium Properties thought the advice given in 1987 was negligent. They also thought Aird & Berlis had placed themselves in a position of conflict by acting for IPCF when retained by Premium Properties. As a result they commenced an action against Aird & Berlis with respect to both sets of allegations. That was in 1993.

[4] Premium Properties’ Statement of Claim sought recovery of damages of $1.75 million in addition to $100,000 in punitive damages. The pleadings disclosed an intention to produce expert evidence proving professional negligence. That was in 1994.

[5] Premium Properties finally provided that expert evidence to Aird & Berlis in the form of three different experts. That was in June 2015.

[6] Aird & Berlis bring an application under Rule 24.01 of the Rules of Civil Procedure to have this case dismissed for delay. For the reasons below, I conclude that their application must succeed.

FACTUAL BACKGROUND

[7] Premium Properties’ action comprises two claims:

(1) Professional negligence emanating from faulty legal advice

(2) A conflict of interest created because Aird & Berlis represented both Premium Properties and a rival company.

The Negligence Claim

[8] Richard Arblaster of Aird & Berlis was retained by Premium Properties in November 1987 to conduct an appeal before the Ontario Building Code Commission. The subject matter of the appeal was the issuance of a building permit from the City of Scarborough permitting renovations to land owned by Premium Properties. Arblaster’s participation on the appeal ended in 1988. Subsequently, Premium Properties discovered information that gave them cause to believe that Arblaster had been negligent. They alleged Arblaster had failed to properly prepare and present the case, and also failed to advise Premium Properties of alternative routes of appeal.

The Conflict Claim

[9] While representing Premium Properties, Aird & Berlis also acted on behalf of another property firm, IPCF Properties Inc. They commenced work in January 1990 in respect of IPCF’s proposed development of the Golden Mile Plaza lands and planning approval application to the Ontario Municipal Board. Premium Properties opposed IPCF’s application. This conflict led Premium Properties to apply to have Aird & Berlis removed as lawyers of the record for IPCF before the Ontario Municipal Board. They were unsuccessful in doing so and sought a judicial review of the Board’s decision. In order to prevent further delays, Aird & Berlis withdrew from its representation of IPCF in January 1993 before the review could be concluded.

The Commencement of Proceedings

[10] On 7 December 1993, one day before the expiry date of the limitation period, Premium Properties commenced an action against Aird & Berlis with respect to the Building Code Commission’s decision. The Notice of Action and Statement of Claim were served upon Aird & Berlis on 6 January 1994. Premium Properties claimed damages in the amount of $1,750,000 and $100,000 in punitive damages plus interest and costs. On 8 July 1994, Aird & Berlis delivered a Notice of Intent to Defend. On 9 August 1994, Aird & Berlis delivered their Statement of Defence, the reply to which was delivered by Premium on 23 August 1994.

[11] Nineteen years later, a trial date was set. On 10 April 2013, however, the matter was struck off the trial list in error. On 14 March 2014, Premium Properties notified Aird & Berlis that they would be seeking to restore the action to the trial list. Aird & Berlis consented to this move indicating that it was doing so without prejudice to any legal argument concerning delay.

LEGAL PRINCIPLES

[12] Aird & Berlis advance a two-pronged argument. They seek a dismissal of the action based on either or both of the following:

(1) Rule 24.01 of the Rules of the Civil Procedure, R.R.O. 1990, Reg. 194

(2) The court’s inherent jurisdiction to control its process.

Rule 24.01 of the Rules of Civil Procedure

[13] Rule 24.01(1)(e) of the Rules provides that:

24.01(1) 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 has failed,

(e) to move for leave to restore to a trial list an action that has been struck off the trial list, within thirty days after the action was struck off.

[14] In Langenecker v. Sauvé, 2011 ONCA 803, 286 O.A.C. 268, the court defined the parameters of Rule 24.01(1)(e) as encompassing the following types of cases:

(1) Where the plaintiff had intentionally caused the delay which demonstrates a disdain and disrespect for the court process;

(2) Where the delay has been (a) inordinate, (b) inexcusable and (c) gives rise to a substantial risk that a fair trial of the issues in litigation will not be possible because of the delay.

[15] There is no dispute that there is a high threshold to be overcome when seeking the dismissal of a case under Rule 24.01: Faris v. Eftimovski, 2013 ONCA 360, 206 O.A.C. 264, at para. 37.

The Court’s Inherent Jurisdiction to Control Its Process

[16] Aird & Berlis’s alternative route in seeking a stay of proceedings is that the court has the inherent jurisdiction to control its own process. When a case is burdened with a substantial amount of delay which, on examination, cannot be justified, the court can dismiss the action regardless of the operation of any rules: Marché D’Alimnentation Denish Thériault Ltée v. Giant Tiger Stores Ltd., 2007 ONCA 695, 87 O.R. (3d) 660.

[17] In Wallace v. Crate’s Marine Sales, 2014 ONCA 671, the sale of a defective yacht was the subject of litigation that had taken ten years, at which time the defendant brought an application to dismiss for delay. The Court of Appeal for Ontario upheld the motion judge’s decision to dismiss the matter both under Rule 21.04 and his own inherent jurisdiction. Lauwers J.A., writing for the court, noted that that “the motion judge’s invocation of inherent jurisdiction” was consistent with earlier authority from the court. He added, at para. 22:

There comes a time, in short, when enough is enough, and the civil justice system will no longer tolerate inordinate and inexplicable delay. A court may then eject the action as an exercise of its jurisdiction, whether or not the relevant rules expressly mandate it.

[18] In bringing this application, Aird & Berlis do not rely on the first limb of the Langenecker test – i.e. that the delay was intentional - but submit the delay was inordinate, inexcusable and causes prejudice to Aird & Berlis in putting forward its best case on the merits.

[19] Premium Properties, on the other hand, claim that this motion is “ill-advised”. They argue that Aird & Berlis agreed to the speed at which the matter progressed and that the length of time is excusable. They maintain that, despite the passage of time, a fair trial is still possible.

I - WAS THE DELAY INORDINATE AND INEXCUSABLE?

[20] In Langenecker, at para. 8, Doherty J.A. defined what is meant by “inordinate and inexcusable” in the Rule 24.01 context:

The inordinance of the delay is measured simply by reference to the length of time from the commencement of the proceeding to the motion to dismiss. Most litigation does not move at a quick pace. Some litigation, because of the issues raised and/or the parties involved, will move even more slowly than the average case. It is fair to say that many medical malpractice actions are among those cases that move slowly. However, even accepting that litigation customarily moves at a somewhat stately pace and that this kind of litigation can move even more slowly than most, there can be no doubt that 15 years from the commencement of the action to the motion to dismiss constitutes inordinate delay.

[21] In the case at bar, 22 years have elapsed from the time the matter commenced to the date of this motion. There can be no serious dispute that this length of time falls within the meaning of “inordinate” for the purposes of the Rule 24.01 test.

[22] I turn to the question of whether the delay was inexcusable. At paras. 9 and 10 of Langenecker, Doherty J.A. provided further guidance on this criterion:

The requirement that the delay be “inexcusable” requires a determination of the reasons for the delay and an assessment of whether those reasons afford an adequate explanation for the delay. As LaForme J. explained in De Marco, at para. 26, explanations that are “reasonable and cogent” or “sensible and persuasive” will excuse the delay at least to the extent that an order dismissing the action would be inappropriate.

In assessing the explanations offered, the court will consider not only the credibility of those explanations and the explanations offered for individual parts of the delay, but also the overall delay and the effect of the explanations considered as a whole. For example, in this case, the appellants offered a “sensible and persuasive” explanation for part of the lengthy delay in completing the discovery process, but offered little by way of cogent explanation for the many other lengthy delays that occurred in the course of the 15 years since this action was commenced.

[23] Aird & Berlis focus on three time periods which they argue are determinative of this case.

1995-2000

[24] During this period of time, Aird & Berlis served five notices of examination for discovery of Milton Winberg, Premium Properties’ representative. The first notice was served on 9 August 1994 and was met with Premium Properties’ response that they wished to examine Richard Arblaster before Aird & Berlis’ examination of Winberg. As the parties could not agree on the order of discoveries, a pre-trial motion was brought in front of Master Sedgwick in December 1994, and he ordered that Premium Properties was entitled to proceed first. Their examination of Arblaster did not commence, however, until 18 November 1997, finishing two days later on 20 November 1997.

[25] There is no explanation as to why, having received permission to proceed first with the examinations, Premium Properties took almost three years to do so. Aird & Berlis connects this lengthy interval to Premium Properties’ tardiness in producing its Affidavit of Documents.

[26] After examining Arblaster, it was incumbent on Premium Properties to produce Winberg with convenient speed bearing in mind the action was now close to four years old. That, however, proved not to be the case. Aird & Berlis served two further notices on 24 July 1998 and 18 November 1998, both of which went unanswered. Finally, Aird & Berlis returned to court requesting an order forcing Premium Properties to produce Winberg for examination. Their motion was granted on 8 February 1999, by Master Polika who ordered discovery dates in March 1999. These were rescheduled, on consent, after Premium Properties failed to provide complete materials to Aird & Berlis. Winberg was examined on 27-29 April 1999. By then, the matter was now almost six years old.

2000-2004

[27] The proceedings came to a halt in 2000 and would not resume until 2005. The reason for the cessation is the subject of some controversy.

[28] According to Aird & Berlis, counsel for both parties discussed the matter and its level of importance in terms of litigation. Bruce Engell, Premium Properties’ lawyer, informed Barry Weintraub, counsel for Aird & Berlis, that it would not make sense to proceed with the case as, at this point in time, Premium Properties and Winberg were in settlement discussions with IPCF. If that litigation could be settled, Engell indicated that Winberg’s interest in prosecuting the case against Aird & Berlis “may wane”. Weintraub insisted that there was no agreement to hold the matter in abeyance.

[29] Premium Properties has a different view. Engell, in his affidavit on this motion, confirms that he had discussions with Weintraub regarding the IPCF litigation and its impact on the action against Aird & Berlis. According to Engell, the discussions “were in relation to the potential for there to be fruitful settlement discussions.” Engell expressed his belief that it would not be fruitful to discuss any settlement with Aird & Berlis until after the IPCF matter had been settled. Significantly, he added that “in order to fully explore settlement, expert reports and drawings would be needed.” Weintraub aired no objection to these views.

[30] This proved to be a false dawn. Once the IPCF litigation was resolved, Premium Properties resumed its action against Aird & Berlis. Examinations for discovery resumed and Winberg was examined on 18 May 2005, 2 June 2005, and 7 November 2006.

[31] Aird & Berlis complains that nothing was done in this four year period. They criticise Premium Properties for leading them to believe that resolution of the IPCF litigation would lead to an abandonment of the case against them. They submit that Premium Properties did nothing to move the case forward and it simply languished at their convenience.

[32] Premium Properties, on the other hand, argue that Aird & Berlis acquiesced to the halting of proceedings in the hope that they would benefit from the resolution of the IPCF case. Engell’s recollection is that Weintraub never suggested the action ought to proceed nor did he object to the hiatus. Premium Properties also ask this court to take notice of the fact that Aird & Berlis did not protest when proceedings were restarted. They argue that Aird & Berlis shares responsibility for this period of delay and consented to it.

[33] I reject Premium Properties’ position as it fails to acknowledge an important principle: the plaintiff bears the responsibility for moving the case forward. There is no burden on the defendant to progress an action although it is open for them to do so: Wallace at para. 18; Standard Civil Trust v. Jackson, [1993] O.J. No. 2764 at para. 15; DeMarco v. Mascitelli, [2001] O.J. No. 3582 (S.C.) at para. 22; Layland v. Canadian Co-operative Association, 2015 ONSC 835.

[34] Premium Properties did nothing to progress the case or resolve it. It is clear from the record that the IPCF litigation took pre-eminence in its list of litigation concerns. Even though that might have been the case, it did not absolve it from proceeding with the required amount of expedition against Aird & Berlis. I discern no legal reason for putting this case aside in favour of proceeding against IPCF.

[35] It is also worth noting that even though Engell explained the need for expert reports and drawings to help facilitate the avenue of a settlement, Premium Properties did nothing about obtaining that material during this period. Engell indicates that Premium Properties’ first expert was retained in May 2008. As will be discussed shortly, it was a further seven years before Premium Properties actually served any expert reports on Aird & Berlis.

2008 - present

[36] After matters had resumed, there was an even greater urgency for the proceedings to move swiftly. That, however, did not happen. On 27 March 2008, Premium Properties completed its delivery of Answers to Undertakings. No further ostensible steps were taken until 21 December 2011, when Premium Properties served and filed the Trial Record ten days before the expiry of the deadline for doing so. The Certification Form was served on 27 March 2013, two days prior to the deadline set for the scheduling of the trial. The matter was struck from the trial list on April 10, 2013.

[37] I agree with Aird & Berlis that Premium Properties’ behaviour was consistent with a party working on a “last minute” basis to ensure matters did not fall foul of legal deadlines. Nothing meaningful was accomplished in this period. Most notably, the expert evidence promised in Premium Properties’ Statement of Claim of 1994 had still not been served on Aird & Berlis.

[38] Engell, in his affidavit of 19 May 2015, attempts to explain what happened in this period of time. In 2008, Premium Properties made efforts to obtain an expert report on the issue of damages. Experts were retained but their reports were rejected as Premium Properties expressed doubts about the level of qualifications. A further search led to the selection of a new damages expert (“the damages expert”) in “late 2009”. The expectation was that a report would be received by mid-2010. By late 2012, however, the report was still outstanding.

[39] The damages expert informed Premium Properties that an additional expert was required to address an issue that he had only just identified. This second expert was retained in the “first half of 2013:, however his report was not received until 20 April 2015. Premium Properties claim that they made continued efforts to press the second expert for his report during this lengthy period but scheduling issues prevented him from providing it earlier. The report was sent to the damages expert upon receipt and, despite his “being embroiled in a lengthy lease arbitration”, he completed his own report on 19 May 2015. The report was finally served on Aird & Berlis on 7 July 2015.

[40] The time taken by Premium Properties to get an expert report is mystifying. Premium Properties were aware that a report was required at the outset of the litigation as evidenced by the 1994 Statement of Claim. Engell informed Weintraub of the necessity to secure expert evidence if the parties were to resolve the matter in the 2000-2004. Yet, despite these clear signs that a report was essential, both in resolving or proceeding with the action, the first attempt in retaining an expert was made in 2008, fourteen years after service of the Statement of Claim.

[41] At the risk of repetition, I stress that the responsibility to progress the litigation rested on Premium Properties’ shoulders. By 2008, obtaining a report without delay was the priority, a sentiment that should have been communicated by Premium Properties to any experts they chose to retain.

[42] The rejection of experts selected fourteen years after the initiation of proceedings reflects the lax and almost leisurely approach taken by Premium Properties. I ask rhetorically: if Premium Properties took fourteen years to retain an expert, why did it not have time to check their qualifications? As noted earlier, in Langenecker, Doherty J.A. observed that in assessing the reasons for delay, a court was entitled to assess the credibility of the explanations given. I find the explanations provided in this case to be completely unsatisfactory.

[43] The matter was restored to the trial list by Master Graham’s order of 15 July 2014. During the intervening period, Premium Properties appear not to have taken any meaningful steps to bring the matter to trial. As noted, the first expert reports were served on Aird & Berlis in July of this year.

[44] I find the delay that has occurred in this case to be both inordinate and inexcusable. Despite their onus, Premium Properties did little to ensure that a trial date was set in the appropriate time frame. I find that they have failed to provide a convincing explanation for the delays that have occurred in this case. Their wholly inadequate attempts to retain an expert coupled with their apparent contentment that the matter languish whilst they sought a resolution with IPCF indicates an attitude totally incompatible with the need for efficient and timely justice.

II - PREJUDICE

[45] A lengthy delay of itself creates a strong inference or presumption of prejudice to a defendant’s ability to present their case in the face of a plaintiff’s allegations: Langenecker at para. 23; Wellwood v. Ontario Provincial Police, 2010 ONCA 386, 102 O.R. (3d) 555, at para. 72; Berg v. Robbins, [2009] O.J. No. 6169 (S.C.J.).

[46] As Doherty J.A., in Langenecker, put it at para. 11:

Prejudice is inherent in long delays. Memories fade and fail, witnesses become unavailable, and documents and other potential exhibits are lost. The longer the delay, the stronger the inference of prejudice to the defence case flowing from that delay: Tanguay v. Brouse, 2010 ONCA 73, at para. 2.

[47] The presumption is rebuttable by Premium Properties although a period of 21 years is, on its face, a significant period of time. Cases have been dismissed where the delay was of a lesser period: Morrell v. Boulton, 2006 CarswellOnt 2268 (S.C.J.); Leblanc v. Glass, 2015 ONSC 1477; Okafor v. Market Insurance Co. of Canada, 2009 Carswell Ont 4335.

[48] Actual prejudice may also be shown to exist in cases of delay. In this case, Aird & Berlis argues that a potential witness in this case, Jim Lewis, formerly employed as a lawyer with Aird & Berlis, died in 2006. Aird & Berlis submit that Lewis’ evidence would have been of great import in deciding whether Arblaster was held out as an expert in Building Code matters. Premium Properties’ basis for this claim is that they allege Lewis introduced Arblaster to Winberg as an expert, something that Aird & Berlis deny. In order to rebut this allegation, Lewis would have been an essential witness.

[49] Premium Properties, in response, argue that Lewis’ death has no impact on this litigation as he had no relevant evidence to give on the controversial matters in the case. Lewis was not involved in the IPCF case where conflict is alleged. There is also no dispute that Lewis introduced Winberg to Arblaster. In any event, Arblaster may give the evidence of how he was presented when introduced to Winberg. Finally, although Arblaster interviewed Lewis, they declined to provide the interview note to Premium Properties.

[50] There is some merit to these submissions. The test, however, rests on broader basis than that advanced by Premium Properties. There has to be a substantial risk that Aird & Berlis cannot fairly present its case due to the passage of time. If Premium Properties allege, and as Winberg testified to at the discovery hearings, that Lewis’ representations were relied upon when Winberg retained Aird & Berlis, as a matter of fairness, it should be open to Aird & Berlis to refute this with witnesses of their own.

[51] Even if I am wrong on the issue of actual prejudice, I would hold, for the reasons set out previously, that Premium Properties has failed to rebut the presumption of prejudice flowing from the delay. In my view, the passage of time itself gives rise to a substantial risk that Aird & Berlis would be unable to present their case fairly.

III - INHERENT JURISDICTION TO CONTROL THE PROCESS

[52] As well as finding that the test under s. 21.04 of the Rules has been met, I also find the unexplained delay in this case to be an abuse of the court’s process. The Court of Appeal for Ontario, in Wallace at para. 20, approved of the of the motion judge’s remarks on the history of that case where he said:

A lengthy, unexplained delay in a case of this nature could well be defined as an abuse of the court's process. There is, indeed, a strong public interest in promoting the timely resolution of disputes in our civil justice system, which is already overburdened. Litigants and the public regularly complain about inordinate delays in obtaining civil motions and trial dates. The delay in this matter, of over a decade, strains the empathy of the court to excuse a delay of this "magnitude and gravity" and further undermines public confidence in the administration of our civil justice system.

[53] Those words are equally apposite to the case at bar. This case is now almost 21 years old. As set out above, Premium Properties was a lax plaintiff in moving this case to trial, doing nothing for four years and, on occasion, forcing Aird & Berlis to seek court orders in order to ensure the matter progressed. Even if this matter was allowed to proceed, it is unlikely that a trial date would be available until mid-2016. To echo Lauwers J.A.’s words in Wallace: “enough is enough” (at para. 22).

CONCLUSION AND COSTS

[54] For these reasons, Premium Properties’ action is dismissed.

[55] If the parties cannot agree on costs, I invite Aird & Berlis to file a written application for costs no longer than five pages within 30 days of these reasons. Premium Properties is to file written reasons of the same length within a further 30 days.

S.A.Q. Akhtar J.

Released: August 14, 2015

COURT FILE NO.: 93-CQ-45703
DATE: 20150814

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

PREMIUM PROPERTIES LIMITED
Plaintiff

– and –

AIRD & BERLIS
Defendant

REASONS FOR JUDGMENT

S.A.Q. Akhtar J.