ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SOUTHWESTERN SALES CORPORATION LIMITED
Plaintiff
– and –
SPURR BROS. LTD., SPURR (CONTRACTING) INC., DONALD KELLY SPURR, MARY SPURR and JOHN RANDALL KOOP
Defendants
James Cooke, for the Plaintiff
Celina DeVuono, for the Defendants
HEARD: September 14, 2015
HEBNER, J.
RULING ON MOTION
1This is a motion brought by the plaintiff for an order setting aside the dismissal of this action and an order setting aside the dismissal orders in actions 01-GD-50665, 01-GD-50666, 01-GD-50667, 01-GD-50669, 01-GD-50540 and 01-GD-50541.
BACKGROUND
2The actions for which an order setting aside the dismissal orders are sought are all construction lien actions or, in the case of one of the proceedings, a breach of trust claim. In December 2000, the plaintiff, Southwestern Sales Corporation Limited (“Southwestern Sales”), registered six claims for lien (the “liens”) against properties in Windsor, Ontario which it claims to have supplied materials to under contracts with the defendant, Spurr Bros. Ltd. (“Spurr Bros”). Spur Bros. disputes the amount claimed under the liens and maintains that the plaintiff does not have general lien rights. On December 20, 2000, Spurr Bros. obtained orders vacating the claims for lien following payment into court of amounts for security. The total amount paid into court was $331,497.21. The monies paid into court were in the form of cash monies as opposed to a bond.
3It is necessary on a motion such as this to set out the facts in detail.
4The plaintiff commenced the lien actions in January 2001 respecting its six claims for lien. Spurr Bros. filed its statement of defence on April 24, 2001. Affidavits of documents respecting the lien actions were exchanged by the parties in March and April 2001. Thereafter, the following occurred:
a) On August 2, 2001, an unsuccessful settlement meeting was held by the parties with respect to the lien actions.
b) An examination for discovery of a representative of the plaintiff was completed on March 6, 2002.
c) On April 23, 2002, the plaintiff brought a motion in one of the lien actions seeking an order consolidating the lien actions and granting full or partial summary judgment.
d) The motion was originally returnable on May 7, 2002. It was adjourned to allow the parties to conduct cross-examinations on the affidavits. In the summer of 2002, cross-examinations of Donald Spurr, the representative of Spurr Bros., were conducted. Jacob Koehl was never cross-examined on his affidavit filed in support of the plaintiff’s motion. Subsequently, the plaintiff took no steps to have the motion returned to the court for argument,
e) On January 6, 2003, the plaintiff filed a trial record with respect to the lien actions.
f) On January 24, 2003, the plaintiff commenced an action, being Ontario Superior Court of Justice Court File Number 03-CV-000100-CM00 (the “trust action”). The defendants in the trust action were Spurr Bros., Spurr (Contracting) Inc., Donald Kelly Spurr, Mary Spurr and John Randall Koop. In the trust action, the plaintiff sought damages for alleged nonpayment for material supplied by the plaintiff respecting the six claims for lien and for breach of trust.
g) A status hearing was held on February 4, 2003 in respect of the lien actions. The status hearing was adjourned to June 10, 2003 as the plaintiff had just recently served the defendants with the trust action. The status hearing was held on June 10, 2003 in both the lien actions and the trust action and it was determined that Mr. Robert Istl, counsel for the plaintiff, was to file a timetable respecting the actions.
h) The defendants filed a Notice of Intent to Defend on February 3, 2003 and a Statement of Defence on February 27, 2003 in the trust action.
i) On March 10, 2003, Mr. Fred Berenbaun, a roster mediator, was assigned by the court to complete the mandatory mediation respecting the actions. The mandatory mediation respecting the actions was held on May 16, 2003. The mediation failed.
j) Subsequently, the parties agreed to a timetable for the actions, which was submitted to the court for approval by Mr. Istl on or about December 9, 2003. The timetable indicated that the settlement conference was to take place by November 30, 2004.
k) On March 11, 2004, a status hearing was held with regard to all of the actions. At that time, Master Pope made the following endorsement, “Amended timetable in the trust claim is to be submitted by the plaintiff...30 days to file an amended timetable since the one proposed at status hearing didn’t have a settlement date. All actions will be called together at the next status hearing.”
l) Between March 2004 and January 2006, no steps were taken by the plaintiff to advance the actions.
m) A case conference was held on February 17, 2006 regarding all of the actions. At that time, the parties agreed to a new timetable for the actions which required, in part, that the examinations for discovery be completed by July 31, 2006 and a settlement conference be held by December 11, 2006.
n) Between 2006 and 2007, the examinations for discovery were scheduled and rescheduled. No other substantive steps were taken to move the action forward.
o) On September 27, 2007, a settlement conference took place. It was noted that examinations for discovery were still not complete. The settlement conference was adjourned to a case conference to be held on November 16, 2007.
p) The examinations for discovery were scheduled and rescheduled to take place first in October 2007 and then in February 2008. They were subsequently cancelled.
q) A case conference was held on March 28, 2008. As examinations for discovery had not been completed, it was adjourned to April 23, 2008. At the April 23 case conference, Master Pope made the following endorsement, “On consent examinations for discovery shall be completed on July 22, 2008 on a peremptory basis. If examinations for discovery are not held by July 22, 2008 the cancelling party is at serious risk of having pleadings struck or action dismissed.”
r) A settlement conference was held on December 18, 2008. Master Pope made an endorsement that included, “Further discoveries of the plaintiff were waived by defence therefore no further such discoveries will be permitted. Trial management conference forms shall be filed by September 7, 2009. Trial record filed previously in lien actions...Order to go that the lien actions be tried before the trust action.” The matters were added to the trial list for the week of September 21, 2009.
s) The trial did not take place during the week of September 21, 2009. Instead, in August and September 2010, case conferences were held during which Mr. Istl requested various documents, including bank records, respecting the trust claim. On October 22, 2010, Mr. Martini, counsel for the defendants, advised Mr. Istl that the defendants did not have in their possession any of the documentation that he was looking for. He advised that the relevant documents were in the possession of the National Bank of Canada. He suggested that, “the proper course of action at this time would be to bring a motion for third-party production from the National Bank of Canada.” He also offered to make Mr. Spurr available for examination for discovery.
t) Subsequently, no efforts or requests were made by Mr. Istl to schedule or conduct examinations for discovery of the defendants or to bring a motion to obtain third-party production from the National Bank of Canada. Mr. Martini wrote to the National Bank of Canada requesting the documentation on November 1, 2010. By letter dated January 7, 2011, Mr. Martini provided a copy of the November 1, 2010 letter to Mr. Istl and advised that he would consent to the plaintiff’s motion for third-party production.
u) A case conference was held on January 7, 2011. The case conference endorsement of Master Pope includes, “Further to case conference of October 25, 2010, Mr. Istl is in receipt of Mr. Martini’s letter of November 1, 2010 to Bank and Receiver requesting production of documents. No documents produced to date. Mr. Istl agrees to bring 30.10 motion within two weeks.”
v) At a case conference held on March 21, 2011, Master Pope included in her endorsement, “Mr. Istl shall have 30.10 motion served and returnable by April 21/11.”
w) Throughout 2010 and 2011, Mr. Istl took no steps to bring a motion to obtain third-party production from the National Bank of Canada. Mr. Istl took no other steps to advance the actions.
x) On February 13, 2012, the court sent status notices to the parties as a result of the actions being struck from the trial list. On April 5, 2012, Mr. Istl wrote to the court to request a status hearing as a result of the status notice. Subsequently, the court sent notices of status hearings to the parties requiring the parties to attend various status hearings in respect of the actions. A status hearing was held on March 22, 2013. Master Pope made the following endorsement:
“Mr. Istl has not brought 30.10 motions as ordered on Sept 26/11 by Oct 31/11 on peremptory basis. Mr. Istl has no reason for the delay. Ms. Marusic (counsel for the defendants) indicates her client is considering bringing a motion to dismiss for delay however takes no position if the court permits a short period for Mr. Istl to bring the motion.
Pls shall have motion against Bank and Receiver (30.10) returnable by (& material served per rules) April 30/13.
If motion not returnable by April 30/13, then defendant may bring a motion to dismiss thereafter – this delay from today will not prejudice def’s case.
If Mr. Istl gets production from non-parties, he may require ED of plaintiff rep (Don Spurr &/or John Koop).”
y) Status hearings were held on September 6, 2013, September 20, 2013 and October 21, 2013. The status hearings were continually adjourned as Mr. Istl advised he was in the process of receiving instructions to make a settlement proposal. Despite many promises, a settlement proposal was never forthcoming. At the status hearing on December 2, 2013, Master Pope set a date for a contested status hearing to be heard on April 3, 2014. Master Pope’s endorsement provided as follows:
“Further to SH on October 21/13, def seeks to have all actions dismissed for delay. Mr. Istl still awaiting instructions re: settlement proposal.
Hearing – April 3, 2014 at 2:00 PM – two hours.”
A timetable was set out for the service and filing of materials to be used at the hearing. The plaintiff was required to serve its materials by January 10, 2014. It failed to do so.
z) On April 3, 2014, counsel for the defendants attended the contested status hearing. Mr. Istl requested an adjournment. The adjournment was granted and the plaintiff was ordered to pay the defendants’ costs thrown away in the amount of $1,000 plus HST within 30 days.
aa) The contested status hearing was rescheduled to June 6, 2014. Mr. Istl attended on that day and delivered a cheque in the amount of $1,000 to counsel for the defendants. Mr. Istl also requested another adjournment. The adjournment was opposed. Master Pope made the following endorsement:
“1. SH adjourned for a date to be set by CMC within 2 weeks, within which time Mr. Istl undertakes to advise Ms. DeVuono whether there will be new counsel representing the PLs.
If there is new counsel representing the PLs then the SH shall be scheduled for a hearing no later than August 29/14.
If there is not going to be new counsel then SH shall be scheduled for a hearing by August 22/14.
If Ms. DeVuono does not hear from Mr. Istl within 2 weeks, then CMC shall schedule the SH for the first available court date.
Pl shall have until July 25/14 to deliver material. The above timelines for the hearing and to file material is made on a peremptory basis with no further extensions to be granted. Costs to the Pl for today including preparation and attendance, $1,000 plus HST payable within 30 days.”
bb) A contested status hearing motion was rescheduled for October 6, 2014 before Master Pope. The plaintiff did not deliver any materials in respect of the contested status hearing. The plaintiff failed to comply with the costs order that was made on June 6, 2014. No one attended at the contested status hearing motion on October 6, 2014 on behalf of the plaintiff. Master Pope endorsed the record as follows:
“No one appeared for Southwestern Sales Corp. by 12:15 pm after being paged. Mr. Istl remains as counsel of record for Southwestern in all 7 actions (1 trust and 6 lien actions). Mr. Martini and Ms. DeVuono have not been contacted by the Plaintiff or Mr. Istl to date since SH June 6/14. Mr. Istl’s status with LSUC is voluntarily resigned his membership (it is believed) in late August/14 (August 22nd/14 likely). Rule 15 requires a party to retain new counsel within 30 days of former counsel being removed. This is not the case here however it is my view that the 30 days timeline ought to apply to the Pls herein. Defs requests that Pl show cause why these actions ought not to be dismissed on December 2/13 SH. Thereafter Pl sought numerous adjournments. Pl paid first cost order made April 3/14 (but not HST as ordered). Pl has not paid cost order made on June 6/14. Given the extensive delay by Pl as outlined in Def’s material and outstanding costs orders as well as no attendance today, all actions are hereby dismissed for delay under Rule 48.14(13). Draft order to be submitted as well as Bill of Costs.”
cc) Pursuant to Master Pope’s endorsement, all actions were dismissed and the plaintiff was ordered to pay the defendants costs of each of the actions in the amount of $2,726.46, totalling $19,085.22.
dd) After the expiration of the 30 day appeal period, counsel for the defendants requisitioned payment from the accountant of the Superior Court of Justice of the funds previously paid into court by the defendants to vacate the construction liens. On November 14 and 18, 2014, then counsel for the defendants received payment of the funds which, along with interest, totalled $517,131.89. All of the funds have been disbursed. None of the funds remain in the trust account of the former counsel for the defendants.
ee) On February 19, 2015, counsel for the defendants took steps to garnish the plaintiff’s bank account at Scotia Bank in respect of the outstanding costs awards. On March 16, 2015, counsel for the defendants received e-mail correspondence from Mr. James Cooke who advised that he had been retained as counsel for the plaintiff. Mr. Cooke requested a copy of the materials filed by the defendants to obtain the orders dismissing the actions. Copies of the materials were provided by e-mail on March 17, 2015. On April 15, 2015, the sum of $20,349.07 was paid into court by Scotia Bank pursuant to the garnishments. Pursuant to the Order of Justice B. Thomas, made on consent on May 12, 2015, the funds are being held in court until the disposition of this motion.
5Mr. Cooke proceeded expeditiously with the plaintiff’s motion to set aside the dismissal orders. The evidence filed on behalf of the plaintiff can be summarized as follows:
a) Sometime after February 18, 2015, the plaintiff received notices of garnishment directed to its bank, Scotia Bank, in Windsor, Ontario. On reading the affidavit, attached to the Notice of Garnishment, the plaintiff became aware that its actions had been dismissed.
b) The Plaintiff’s evidence is that this was the first time it became aware that its actions had been dismissed. The plaintiff retained Mr. Cooke on March 13, 2015. Mr. Cooke requested copies of the motion material that was used on the status hearing at which time the actions were dismissed. The material was provided by counsel for the defendants immediately.
c) The plaintiff’s evidence is that it was not aware of the status hearing that took place on October 6, 2014. The plaintiff’s evidence is that Mr. Istl did not advise the plaintiff that the hearing was taking place. The plaintiff’s evidence is that it was not aware that Mr. Istl had resigned his membership in the Law Society of Upper Canada.
d) The Plaintiff’s evidence is that Mr. Istl rarely communicated with the plaintiff. When he did, he never reported that he had failed to take necessary steps in the proceedings or that he was, in effect, doing nothing to advance the proceedings. The plaintiff’s evidence is that Mr. Istl would tell the plaintiff that the matter was progressing or that it would soon settle. The plaintiff was misled by Mr. Istl.
6As it turns out, the Law Society of Upper Canada ordered on July 11, 2014 that Mr. Istl was permitted to surrender his license to practice by August 22, 2014 failing which his license would be revoked. I note that this event occurred after the first return date of the contested status hearing on June 6, 2014 and before the contested status hearing was actually heard on October 6, 2014. The plaintiff’s evidence is that it was not informed by Mr. Istl or anyone else that a hearing was scheduled on October 6, 2014. It is clear that Mr. Istl is no longer licensed to practice law. I am told that he did not respond to requests for information to assist the plaintiff in its motion.
7Two more points were noted by the plaintiff:
e) The plaintiff points out that after a settlement meeting held on August 9, 2001, a series of “statement of settlement” documents were delivered indicating the parties agreed that there were valid liens totalling $174,804.33. The plaintiff takes the statements of settlement as an admission on the part of the defendants of monies owed. The statements of settlement do not go that far. Instead, the statements indicate that the liens were registered in time and therefore constitute a valid lien claim. The following statement appears in one of the statements of settlement:
“Spurr acknowledges delivery of the stone representing the invoiced amount of $48,379.71, being the amount based on the weigh tickets bearing jobs #139 and 093, and acknowledges that the claim for the amount of $48,379.71 is in time and constitutes a valid lien claim.”
All of the other statements of settlement have a similar paragraph.
f) Mr. Cooke has requested details of the payout of the trust funds to the plaintiff or anyone else. Mr. Cooke has requested a copy of the cheque making the payment. Counsel for the defendants, Ms. DeVuono took the position that the plaintiff was not entitled to this information. She took the position that the information was privileged and irrelevant to the issues to be determined on the motions.
THE LAW
8The dismissal orders were made under rule 48.14 of the Rules of Civil Procedure. The motion to set aside the dismissal orders is made under rule 37.14 of the Rules of Civil Procedure. The test to be applied on a motion of this type is the four-pronged test (the Reid factors) described in Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80 at para. 41. The test is summarized in the case of Marché D’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd., 2007 ONCA 695, as follows:
(1) Explanation of the Litigation Delay: The plaintiff must adequately explain the delay in the progress of the litigation from the institution of the action until the deadline for setting the action down for trial as set out in the status notice. She must satisfy the court that steps were being taken to advance the litigation toward trial, or if such steps were not taken to explain why.... If either the solicitor or the client made a deliberate decision not to advance the litigation toward trial then the motion to set aside the dismissal will fail.
(2) Inadvertence in Missing the Deadline: The plaintiff or her solicitor must lead satisfactory evidence to explain that they always intended to set the action down within the time limit set out in the status notice, or request a status hearing, but failed to do so through inadvertence. In other words the penultimate dismissal order was made as a result of inadvertence.
(3) The Motion is Brought Promptly: The plaintiff must demonstrate that she moved forthwith to set aside the dismissal order as soon as the order came to her attention.
(4) No Prejudice to the Defendant: The plaintiff must convince the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiff's delay or as a result of steps taken following the dismissal of the action.
9In the case of Scaini v. Prochnicki, 2007 ONCA 63, the Court of Appeal provided further guidance in the application of the test set out in Reid. That guidance is set out in paras. 21-24, which read as follows:
21More 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, 74 O.T.C. 259 (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.
22I agree with Master Beaudoin.
23In 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.
24That 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.
10Counsel for the plaintiff also directed me to the case of the 1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544. This case involved an appeal by the plaintiff from an order dismissing its action for delay. The Court of Appeal said the following:
“The challenge posed in cases involving dismissal for delay is to find the right balance between, on the one hand, the need to ensure that the rules are enforced to ensure timely and efficient justice and, on the other, the need to ensure sufficient flexibility to allow parties able to provide a reasonable explanation for failing to comply with the rules to have their disputes decided on the merits.” (at para. 20)
“Actual prejudice or the lack thereof is an important factor to consider in cases of dismissal for delay: Hamilton, at para. 33. However, it is certainly not the law that an action cannot be dismissed for delay at a rule 48.14 status hearing without proof of actual prejudice…The test is conjunctive, not disjunctive. Even if the plaintiff can provide a satisfactory explanation for the delay, the action will be dismissed if there would be prejudice to the defendant. And if the plaintiff is not able to provide a satisfactory explanation for the delay, it is still open to the judge to dismiss the action, even if there is no proof of actual prejudice to the defendant.” (at para. 32)
“…the goal of the civil justice system is to ensure ‘the just, most expeditious and least expensive determination of every civil proceeding on its merits’. Consideration of actual prejudice focuses on the just determination of the dispute on its merits. The absence of actual prejudice does not automatically or inevitably trump the values of timeliness and efficiency. At some point, a party who has failed to respect the rules designed to ensure timely and efficient justice loses the right to have its dispute decided on the merits. If that were not the case, the rules and the time lines they impose would cease to have any meaning and any hope of ensuring timely and efficient justice would be seriously jeopardized.” (at para. 33)
“…if an action could not be dismissed for delay unless there was proof of actual prejudice, time lines would become meaningless. Where a party fails to prosecute an action in a timely fashion, the court is entitled to exercise the powers conferred by the rules to dismiss actions absent an adequate explanation for the delay…” (at para. 34)
“Another harm that flows from delay, properly relied on by the status hearing judge, is that it leaves the litigant with the claim hanging over its head in a kind of perpetual limbo. Fairness requires allowing parties to plan their lives on the assumption that, barring exceptional or unusual circumstances, litigation time lines will be enforced.” (at para. 44)
ANALYSIS
11An analysis requires the application of the Reid factors to the facts in this case.
- Explanation of the Litigation Delay
12There is no reasonable explanation for the litigation delay. Clearly, Mr. Istl was negligent in failing to move the action forward for the plaintiff. However, the plaintiff must also bear some responsibility. The plaintiff commenced its action in January 2001. The actions were finally dismissed in October 2014. Counsel for the plaintiff suggests that the lien claims are straightforward, the claim is document driven and, even now after all this time has elapsed, a trial should be a relatively simple undertaking. If that be the case, one must question why it has not happened to date. The plaintiff’s evidence is that Mr. Istl did not keep it informed as to the progress of the action. Mr. Istl did not advise the plaintiff that he was failing to move the matter along. Mr. Istl misled the plaintiff as to the status of its action. I have no doubt that all of this is true. What the plaintiff did not address in its evidence is how often the plaintiff contacted Mr. Istl to inquire as to the progress of the action. When years had passed without any substantive steps being taken towards a resolution, why did the plaintiff not investigate and demand that steps be taken? Why did the plaintiff not retain another counsel to move the action forward? There was no evidence offered to answer these questions.
13I cannot find that any reasonable explanation has been provided for the litigation delay. The plaintiff has failed on the first factor.
- Inadvertence in missing the deadline
14The facts in this case are similar to the facts in the case of Marché D’Alimentation Denis Thériault Ltée. v. Giant Tiger Stores Ltd., supra. That case involved an action which was commenced in October 1996 and dismissed in March 1999. Nothing was done about the dismissal order until May 2003. In that case, as in this case, the conduct of the plaintiff’s solicitor did not constitute “inadvertence.” At paragraph 31, the Court of Appeal said, “...the nature of the delay and the solicitor’s conduct in this case amount to more than that kind of lapse or inadvertent mistake that the legal system can countenance. We should opt for a resolution that discourages this type of conduct which undermines the important value of having disputes resolved in a timely fashion.” At paragraph 32, the Court of Appeal said, “Moreover, excusing a delay of this magnitude and gravity risks undermining public confidence in the administration of justice. Lawyers who fail to serve their clients threaten public confidence in the administration of justice.” Lastly, also at paragraph 32, the Court of Appeal said, “There is risk that the public would perceive disregarding the solicitor’s conduct in the circumstances of this case as the legal system protecting its own. Excusing a delay of this kind would throw into question the willingness of the courts to live up to the stated goal of timely justice.”
15Mr. Istl missed deadline after deadline after deadline imposed by the master in her attempt to move the matter forward. Until the last status hearing, Mr. Istl continued to seek the court’s indulgence to grant him extensions to do the work he needed to do to move the plaintiff’s case forward. There was no inadvertence here. Mr. Istl did not serve his client. Counsel for the plaintiff suggests that there was no conscious decision on the part of Mr. Istl not to proceed with the file. Mr. Istl simply did not do the work required. I cannot find that Mr. Istl did not do the work required as a result of inadvertence. The plaintiff has failed on the second factor.
- The Motion is Brought Promptly
16As previously indicated, Mr. Cooke proceeded expeditiously with this motion. The motion was brought promptly. This factor is found in favour of the plaintiff.
- No Prejudice to the Defendant
17There is no evidence provided by the defendants that witnesses and/or records are unavailable. There is no evidence that a fair trial cannot take place even at this late stage. The plaintiff submits that the action is a straightforward commercial case relying on documents as opposed to witnesses recollections. The plaintiff points out the difference between a commercial case that is document driven and a motor vehicle accident case where the recollections of witnesses will be important.
18It seems to me that any prejudice to the defendants can be described as follows:
a) In the event the plaintiff is successful, it will be seeking a reinstatement of its liens registered against the defendants’ properties. The defendants will be required to post the same monies it had previously paid into court in order to discharge the liens.
b) It cannot be forgotten that there is a trust claim outstanding against the defendants. If the plaintiff is successful, the order dismissing the trust claim will be set aside and the allegations of breach of trust will proceed against the personal defendants.
19I find that the prejudice described above is real and self-evident in this case. A lien claim can be an onerous thing for a defendant. A defendant is faced with the prospect of either having its land tied up as a result of the registration of a claim for lien or, alternatively, having to finance sometimes substantial payments into court in order to free up title to the land. Similarly, a breach of trust claim can also be an onerous thing for defendants. They are faced with the possibility of being personally responsible for a corporate debt. For these reasons, it seems to me that a lengthy delay in a claim for lien case (and a breach of trust case) constitutes prejudice to the defendants of the kind described above. If the lien claimant wants to take advantage of the provisions of the Construction Lien Act and tie up title to a defendant’s property, it ought to proceed expeditiously to have its claim determined. Similarly, if a lien claimant wants to take advantage of the trust provisions of the Construction Lien Act it ought to be prepared to proceed expeditiously to have its claim determined. A lien claimant ought not to be entitled to sit back and allow years to pass while the defendant’s property (or, as in this case, the defendant’s money) is held hostage. I find that the fourth factor is found in favour of the defendants.
20As I read the direction from the Court of Appeal in Scaini, supra and Finlay v. Van Paassen, 2010 ONCA 204, 101 O.R. (3d) 390; 2010 ONCA 204, a failure to satisfy each and every one of the Reid factors does not mean the motion must fail. The court ought to take a contextual approach and weigh all the relevant considerations to determine a just result. I have considered and weighed all the relevant factors and conclude that the contextual approach requires the court to uphold the dismissal orders and, consequently, dismiss the motion. The inordinate length of the delay, coupled by the plaintiff’s complete disregard of many timelines imposed by the master, tip the balance heavily in favour of the defendants.
21Counsel for the plaintiff has urged the court to consider whether the plaintiff will be left without a remedy. In the Marché case, at paragraphs 28 and 29, the court stated the following:
28One important consideration is that the plaintiff will not be left without a remedy. I recognize here the need to ensure that adequate remedies are afforded where a right has been infringed. 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: see e.g. Chiarelli v. Wiens (2000), 2000 3904 (ON CA), 46 O.R. (3d) 780.”
29However, this calculus implicitly assumes that the court is left with a stark choice between defeating the client’s rights and forcing the opposite party to defend the case on its merits. That assumption is faulty where, as in this case, the solicitor’s conduct is not mere inadvertence, but amounts to conduct very likely to expose the solicitor to liability to the client. When the solicitor is exposed in this way, the choice is different; refusing the client an indulgence for delay will not necessarily deny the client a legal remedy.
22Counsel for the plaintiff has urged the court to consider that a remedy may not be available given that Mr. Istl surrendered his license to practice law. Counsel for the plaintiff pointed out that any claims that the plaintiff may make may not be covered by Mr. Istl’s error and omissions insurer. If Mr. Istl did not obtain runoff insurance, there may be no insurer to answer to any claim the plaintiff may bring against Mr. Istl. I find that to be a factor the court ought not to take into account. The plaintiff suggests that the chances of collection of any claim the plaintiff may make against Mr. Istl ought to be taken into account by the court on this motion. I cannot agree with that suggestion. I find that the chances of collection of any claim that may be made against Mr. Istl are irrelevant to the court’s consideration on this motion.
23For the reasons set out above, an Order will go as follows:
The plaintiff’s motion for an order setting aside the Orders of Master Pope dated October 6, 2014 dismissing actions CV-03-CV00100-CM00, 01-GD-50665, 01-GD-50666, 01-GD-50667, 01-GD-50669, 01-GD-50540 and 01-GD-50541 is dismissed.
The Order of the Honourable Mr. Justice Thomas dated May 12, 2015 is set aside.
The parties may make written submissions on costs according to the following timeline:
a) the defendants may make submissions within 15 days;
b) the plaintiff may make submissions within 30 days;
c) the defendants may make reply submissions within 40 days.
24The cost submissions shall be accompanied with a costs outline and any relevant offers to settle.
“original signed by P.L. Hebner and released”
Pamela L. Hebner
Justice
Released: November 9, 2015
COURT FILE NO.: CV-03-CV000100-CM00
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SOUTHWESTERN SALES CORPORATION LIMITED
Plaintiff
– and –
SPURR BROS. LTD., SPURR (CONTRACTING) INC., DONALD KELLY SPURR, MARY SPURR and JOHN RANDALL KOOP
Defendants
RULING ON MOTION
Pamela L. Hebner
Justice
Released: November 9, 2015
