2015 ONSC 7437

COURT FILE NO.: 06-CV-306642

MOTION HEARD: 20150204

REASONS RELEASED: 20151130

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO

Plaintiff

• and-

CANADIAN PACIFIC RAILWAY COMPANY

Defendant

BEFORE: MASTER D. E. SHORT

COUNSEL: Sara Blake Fax: (416) 326-4181 -for the Plaintiff/Moving Party

Christopher Rae Fax: (416) 364-7813 -for the Defendant/Moving Party on Cross-motion

REASONS RELEASED: November 30, 2015

Reasons for Decision

“There's many a slip 'twixt the cup and the lip”

I. Overview

[1] This motion is brought by the Plaintiff, Her Majesty the Queen in right of Ontario ("Ontario"), for orders extending and setting deadlines and for case management.

[2] Ontario commenced this action against the Defendant, Canada Pacific Railway ("CPR"), in 2006. By order of Master Brott dated February 18, 2014, and the most recent agreed upon timetable, the matter was to be set down for trial by October 30, 2014. It was not.

[3] CPR opposes primarily on the basis that the parties agreed at the time of the most recent extension the parties agreed to an Order providing an extension “to October 30th, 2014, and, if not set down by October 30, 2014, the action will be dismissed with no reinstatement under any circumstances.” [my emphasis]

II. Background to Action

[4] The plaintiff, Her Majesty the Queen in Right of Ontario (the "Crown"), as represented by the Chair of the Management Board of Cabinet is the current registered owner of the lands and premises in the City of Thunder Bay (hereinafter referred to as the "Riverside Lands").

[5] CPR is the registered owner of the lands and premises situated adjacent to and south-west of the Riverside Lands (the "CPR Lands"). The CPR Lands include a freight yard, tracks, and spurs.

[6] Riverside Grain Production Inc. ("Riverside Grain") was incorporated under the laws of Ontario on February 25, 1997. Until on or about January 3, 2001, Riverside Grain was the registered owner of the Riverside Lands, where it operated a grain elevator complex. On or about January 3, 2001, Riverside Grain was dissolved for cause pursuant to section 240 of the Business Corporation Act, R.S.0. 1990, c.B.16, as amended, (the "OBCA "). Pursuant to s. 244(1) of the OBCA, upon Riverside Grain' s dissolution, the Riverside Lands forfeited to and vested in the Crown.

THE PROPERTY

[7] The Riverside Lands are approximately 15.8 hectares and are located near a residential area between the Kaministikwia River and a CPR railway line. CPR's property, which is adjacent to the Riverside Lands, contains a freight yard, locomotives, railway cars, tankers. tracks, spurs and other railway transportation vehicles, infrastructure and equipment.

[8] On or about May 3, 2001, as a result of substantial tax arrears, the City issued tax arrears certificates against the Riverside Lands. Eventually the City conducted a tax sale of the Riverside Lands. The sale was unsuccessful with the result that, on or about December 12, 2003, the City registered on title to the Riverside Lands notices of vesting in accordance with the provisions of s.379(5)(b) of the Municipal Act, 2001 which had the effect of vesting in the City an estate in fee simple in the Riverside Lands.

[9] On or about February 2, 2005, the City conveyed the Riverside Lands back to the Crown for the sum of $2.00 whereupon the Crown became the registered owner of the Riverside Lands, and took title thereto in the name of the Crown as represented by the Chair of the Management Board of Cabinet. By Order in Council dated September 21, 2005, approved and ordered by the Lieutenant Governor of Ontario, the Minister of Public Infrastructure Renewal became the representative owner of the Riverside Lands.

THE CONTAMINATION

[10] It is alleged that CPR's use of the CPR Lands has resulted in the contamination of the Riverside Lands with, among other things, unacceptably high levels of hydrocarbons including, without limitation, gas, diesel, and heavy oil (the "CPR Contamination").

[11] The Statement of Claim alleges;

“13. CPR's actions or omissions which caused the CPR Contamination includes, among other things within the knowledge of CPR, the following:

(a) CPR's site activities including its snow removal practices resulted in contaminated snow accumulating on the Riverside Lands;

(b) on occasions known to CPR, contaminants leaked from CPR's locomotives, tank cars, box cars, and other vehicles which were parked on or travelled across the CPR Lands and seeped onto and thereby contaminated the Riverside Lands;

(c) on or about March 1, 2004, oil was discovered spilling on to the Riverside Lands from the CPR Lands. The incident was reported to the Ministry of Environment (the "MOE") which, in turn, attended at the site and required CPR to take immediate steps to contain the spill; and

(d) contaminants seeped from CPR's property and equipment as a result of collisions, overturns, derailments, fires, lightning, explosions or other railway related accidents within the knowledge of CPR.

14. The CPR Contamination resulted in soil and groundwater contamination of the Riverside Lands which required immediate action to investigate, remediate and mitigate the resulting contamination, including, among other things, the excavation and removal of impacted soils.

15. There continues to be an impact in the soil and groundwater as a result of the CPR Contamination.”

[12] It is asserted on behalf of the plaintiff that the Crown has incurred and will continue to incur loss and damages, costs and expenses in respect of the CPR Contamination, including, without limitation, the cost of environmental and other professional advice to investigate and assess the extent of contamination and to plan and implement remedial measures, the cost for excavation and removal of contaminated soils. and consultants' and lawyers' fees in responding to claims by third parties.

[13] As a consequence Ontario has claimed inter alia:

“(a) damages in the amount of $5,000,000 for its losses, damages and expenses incurred as a result of the CPR Contamination;

(b) in the alternative an order requiring CPR to:

(i) delineate the extent of the contamination of the Riverside Lands, and

(ii) to remove the contamination from the Riverside Lands by, amongst other things, remediating the Riverside Lands to a pristine standard.”

[14] Ontario commenced this action on February 23, 2006. Over a year later, CPR filed its Statement of Defence on March 20, 2007.

IV. Previous Extensions and Orders

[15] Ontario seeks to extend the deadline for setting this matter down for trial, pursuant to Rule 3.02 of the Rules of Civil Procedure. The Province asserts that this extension will allow further time for CPR to produce its documents and for discoveries to take place.

[16] Further, Ontario requests that this matter be placed under case management pursuant to Rule 77 of the Rules of Civil Procedure. It submits that, “Given the lengthy delays and non-compliance with timetables by both parties”, the court's intervention in this matter is necessary to move the action forward.

[17] To put these requests in context I have assembled these extracts from the moving party’s factum, with my emphasis added:

The original timeline agreed to by the parties stipulated that the matter would be set down for trial by July 20, 2010. This timeline was accepted by Master Dash by way of an Order dated July 13, 2009. This order also established a timetable for productions and discovery. Neither party complied with the timetable.

In 2009 and 2010 Ontario compiled documents for the discovery process. Also during this time, Ontario and CPR agreed to exchange their respective expert reports for review and response.

On July 23, 2010, Ontario received an Order dismissing the action for delay. On September 24, 2010, CPR agreed to consent to Ontario's motion to set aside the administrative dismissal of the action.

[18] On October 26, 2010, the administrative dismissal of the action was set aside by me. In particular my order set out a new timetable which directed:

• Productions by February 28, 2011

• Examinations for Discovery by April 30, 2011

• Any Motions by June 30, 2011

[19] As well I required the matter to be set down for trial by August 31, 2011. NEITHER party complied with any of the dates established by me. These defaults are attempted to be explained by the following:

On November 5, 2010, Ontario requested additional information from CPR arising from Ontario's review of CPR's expert report. Between 2010 and 2012, Ontario repeatedly requested additional information from CPR in order to meet the new timetable set out in Master Short's order. During this time, Ontario was also working to compile a draft list of documents. Ontario sent the draft list of documents to CPR on January 12, 2012.

On January 25, 2012, CPR proposed a new timetable. After discussion between the parties, a revised timetable with a January 31, 2013 deadline for productions, discovery and setting the matter down for trial was agreed to. On March 19, 2012, Master Muir issued an order extending the deadline for setting the matter down for trial [from August 2011] to January 31, 2013. [my emphasis]

[20] It seems to me that up to this point the parties were mutually of the view that the case had not progressed to a point where the case could properly be set down for trial. Master Muir’s Order simply extended the set down date. It did not incorporate a timetable. However, counsel for Ontario did write to counsel for CPR on March 7, 2012 enclosing a timetable “incorporating the dates set out in your letter”. Those dates indicated that lists or affidavits of documents were to be exchanged by May 7, 2012 and examinations for discovery completed by September 7, 2012. As well any motions arising from the examinations for discovery were to be completed by December 7, 2012, with the action being set down for trial by January 31, 2013.

[21] Some months later, on July 11, 2012 counsel for Ontario wrote to counsel opposite, “to remind you that we need to adhere to our agreed upon timetable in order to be able to set this matter down for trial by January 2013.”

[22] With respect to the production of documents, another two months later, an email was sent by CPR’s counsel on September 11, 2012, which with my emphasis added read in part:

“Further to our discussion of the weeks ago, my clients are working on preparing an affidavit of documents. I expect we would be in a position to deliver same by the end of October at the latest (perhaps, sooner). Let me know if that is acceptable to you.”

[23] Notwithstanding this correspondence, other than Ontario’s draft list of documents, neither side had made any documentary production to the other in 2012. The factum extracts continue:

Following the March 19, 2012 order, Ontario attempted to schedule discoveries for November 2012. CPR did not respond to Ontario's scheduling request. Further, on September 11, 2012, CPR indicated that it would be in a position to deliver its affidavit of documents by November 2012. This did not occur.

On January 15, 2013, Ontario requested CPR's consent to extend the deadline for setting the matter down for trial so that the discovery process could be completed. On consent of the parties, the deadline for setting the matter down for trial was extended to January 3, 2014 by order of Master Graham dated February 6, 2013.

Once the order of Master Graham was received, Ontario worked to finalize their documentary productions. As Ontario's draft list of documents had been sent to CPR in 2012, this process included identifying any documents produced after Ontario first collected its productions.

[24] Once again, neither side seems to have been overly concerned about yet another approaching set down date. No reason for the defendant failing to deliver its affidavit of documents in 2012, or at any point thereafter appears in the record before me. I understand that there may have been some proposed settlement negotiations between the parties, nevertheless, yet another year seems to have elapsed, with virtually nothing happening with respect to this litigation. As a consequence on January 27, 2014 Ontario requested CPR's consent to extend the deadline for setting the matter down for trial.

[25] It is to be noted that the request took place after the timetable established by Master Graham would seem to have already expired.

V. Which Order?

[26] The summary observes with respect to this further request, that:

“On February 14, 2014 CPR consented to an order with the term that the action would not be reinstated under any circumstances.”

[27] In reliance upon that consent, an order was sought and issued by Master Brott. However the operative portion of the order obtained from and signed by the Master reads:

“THIS MOTION, made orally by the Plaintiff for an order pursuant to rule 37 extending the deadline by which the action must be set down for trial was heard this day at the Superior Court of Justice at 393 University Avenue in Toronto, Ontario.

UPON READING the notice of motion, time table, and consent of the parties filed,

THIS COURT ORDERS that the deadline by which this action must be listed for trial is extended from January 3, 2014 to October 30th, 2014, failing which the action will be dismissed by the Registrar.

THIS COURT ORDERS that the deadline may only be varied by court order.”

[28] Apparently due to an inadvertent error the form of Order prepared by the office of counsel for Ontario and the order that was endorsed by Master Brott on February 18, 2014 clearly did not reflect the agreement of the parties.

[29] The form of Order, which was Schedule A to the operative portion of the consent agreement that was exchanged by e-mails between counsel in 2014 read:

THIS COURT ORDERS that the deadline by which this action must be listed for trial is extended from January 3, 2014 to October 30th, 2014, and, if not set down by October 30, 2014, the action will be dismissed with no reinstatement under any circumstances. [my emphasis]

[30] While there is no reference to interim deadlines in the consent document, the affidavit filed on behalf of the province indicates that Ontario agreed to this term because CPR agreed to a timetable with the following deadlines:

“...the affidavits of documents would be produced by April 30, 2014, examinations for discovery would be completed by June 31, 2014, and a mediation would take place by August 31, 2014. The deadline for the production of the affidavits of documents was subsequently moved to May 30, 2014 by consent of both parties.”

[31] Even that extended production deadline appears to have been missed by both sides . On July 21, 2014, Ontario served their List of Documents on CPR, and electronic copies of the documents were served upon CPR on July 30, 2014.

[32] The plaintiff’s factum sets out events relating to this situation reports that CPR failed to deliver its affidavit of documents by the deadline (or at all), despite repeated requests by Ontario, and that this “prevented the parties from completing examinations for discovery by the agreed deadline.”

[33] Nevertheless neither side brought any motion in an effort to enforce any deadlines.

[34] Rule 59.06 (1) provides that an order that contains an error arising from an accidental slip or omission or requires amendment in any particular on which the court did not adjudicate may be amended on a motion in the proceeding.

[35] Under subsection (2) a party who seeks to, have an order set aside or varied on the ground of facts arising or discovered after it was made may bring a motion to obtain other relief than that originally awarded.

[36] In reliance on this rule, CPR brings a cross-motion to have the intended order substitutes for the Order made by Master Brott.

[37] Subsequent to this motion being brought, HMQ advised that it would consent to the Brott Order being set aside and substituted with the Consent Order. I made an Order in this regard on the hearing of the motion and ordered costs payable the CPR in that regard in the amount of $1,250. plus HST.

[38] Notwithstanding that neither side identified the “accidental slip” for a number of months; I see no reason not apply Rule 59 to provide that relief claimed. I am therefore addressing Ontario’s motion as if as if it included the agreed language set out above. However that does not dispose of the central issue.

VI. Once More to the Brink

[39] The moving party’s factum (with my emphasis added) asserts:

“28. On July 23, 2014 CPR requested a meeting between the parties to discuss settlement. In August and September of 2014, Ontario contacted CPR regarding the scheduling of this meeting. On September 19, 2014, CPR stated that they would not be in a position to schedule a settlement meeting until late October, 2014.

29. Ontario again requested an extension to the timeline in order to facilitate settlement discussions. Further, Ontario was still awaiting the CPR's affidavit of documents and answers to their request for additional information arising from CPR's expert report.

[40] On October 28, 2014, Ms. Cooper, counsel to CPR, wrote to Ms. Salmon to confirm that CPR would not consent to any extension of the deadline for setting the action down for trial and noted that CPR’s previous agreement to extend the deadline for doing so "was predicated on this being the last extension and that both parties agreed that, if the matter was not set down by October 30, 2014, that the action would be dismissed with no reinstatement under any circumstances."

[41] The CPR factum reports that “Ms. Cooper once again recommended to Ms. Salmon that HMQ should set the action down for trial. The Notice of motion to extend the deadline was filed with the Court on October 31, 2014, returnable in November of 2014 and that motion was subsequently adjourned, on consent, to a date early in 2015.

[42] CPR submits that before the Court entertains HMQ's motion to extend the dismissal deadline, the Court must first determine whether the Consent Order,providing for no further extensions, should be set aside.

[43] They argue that,

As set out in numerous decisions, including the Ontario Court of Appeal's decisions in Mohammed v. York Fire and Casualty Insurance Company, [2006 3954] and Royal Bank of Canada v. Korman, [2009 ONCA 590] “a Consent Order is akin to a contract and may ordinarily only be set aside on the same basis as that for setting aside a contract, namely, misrepresentation, fraud, duress, mistake of fact, lack of capacity or unconscionability. A party seeking to set aside a consent judgment bears a “heavy onus”.

[44] CPR’s factum continues:

36. HMQ relies on a statement in the two paragraph decision of the Ontario Court of Appeal in Stoughton Trailer Canada Corp. v. James Expedite Transport Inc.[2008 ONCA 817] for the proposition

that a Court's discretion to set aside a consent order is broader and should be exercised where necessary to achieve the justice of the case.

37. CPR does not dispute that the court retains a "residual discretion" to set aside an order where it is necessary to do so in the interests of justice. However, that discretion should only be exercised by the court in extraordinary circumstances, where the moving party is able to "demonstrate circumstances which warrant deviation from the fundamental principle that a final judgment, unless appealed, marks the end of the litigation line." As the Ontario Court of Appeal

noted in Cookish v. Paul Lee Associates Professional Corporation, [2013 ONCA 278] a decision commenting on Stoughton. courts should be cautious about setting aside consent orders.

[45] I understand the need for caution in varying such orders particularly where there has been meaningful reliance on the existence of the order made.

[46] In this regard I was directed to the recent decision of Justice C.J. Brown in Joshi v. Joshi, 2014 ONSC 4677 which addressed a similar issue in determining whether or not to set aside a consent order to extend the date for vacating possession of the matrimonial home, Her Honour commented that “A consent judgment is final and binding and should not be varied in the absence of extraordinary factors.”

[47] The CPR factum submits:

“39. No circumstances exist in this case that would justify this Court setting aside the Consent Order. The terms of the Consent Order clearly stipulate that the dismissal deadline of October 30. 2014 is final and will not be subject to any further extension. The consideration given by CPR for its consent to extend the deadline in February 2014 to October 30, 2014, was HMQ's agreement not to seek a further extension of the deadline. That is precisely what HMQ now seeks to do, in effect repudiating the terms of the contract it freely entered into with CPR. If HMQ did not want to be bound by the terms of the Consent Order, it was fully entitled to bring a motion to obtain a court order extending the deadline dismissing the action. HMQ chose not to do so. preferring the certainty of the Consent Order to the uncertainty of a motion before the Court.

40. There is absolutely no evidence before this court of any misrepresentation, fraud, duress. mistake of fact, lack of capacity or unconscionability. In fact. the evidence is to the contrary, and establishes that there was a clear meeting of the minds on the terms of the Consent Order. This leaves HMQ to resort to the court's residual discretion to set aside the Consent Order "in the interests of justice".

Again, there is no evidence of any extraordinary factors that

suggest the Court should exercise its discretion to set aside the Consent Order. Furthermore, faced with a similar situation in 2026125 Ontario Limited v. Ashland Paving Ltd., [2014 ONSC 5173] Justice David Brown (as he then was) confirmed that a peremptory timetable order is indeed appropriate. Accordingly, the terms of the Consent Order must stand and HMQ's action must therefore be dismissed in light of HMQ's failure to set the action down for trial by the October 30, 2014 deadline set out in the Consent Order.”

[48] My reading of Justice Brown’s decision in Ashland Paving indicates that he recognizes the ongoing need for a contextual analysis in such cases.

[49] In the particular fact situation in Ashland Paving his Honour upheld the master’s order dismissing an action for delay at a status hearing. In the course of his reviewing the history of the matter in his reasons Justice Brown observes:

23 Another month and one-half passed without any action by the plaintiff. Only on August 8, 2013, on the eve of the status hearing, did plaintiffs counsel circulate a draft timetable which anticipated the lapse of one more year before this rather simple action would be set down for trial. Ensuing negotiations amongst counsel shortened the timetable, and defendants' counsel bent over backwards to accommodate the work calendar of plaintiffs counsel in selecting discovery dates. Efforts to reach a sensible resolution of the matter floundered when plaintiffs counsel refused to agree that the dates set out in the proposed timetable would be peremptory to the plaintiff. I appreciate that at the time plaintiffs counsel expressed some concern about committing to a November, 2013 conclusion date for discoveries given the uncertainty about when his November trial would end. That said, in light of the two-year plus history of the plaintiff doing nothing in the action, quite understandably defendants' counsel were not prepared to agree to a timetable to which plaintiffs counsel would not give a binding commitment, and plaintiffs counsel did not offer up a timetable which would be peremptory to his client. The contested status hearing ensued.

24 In sum, the plaintiff did nothing to move the action along for five of the six months between the date of the Status Notice and the date of the status hearing, then unreasonably refused to bind the plaintiff in a peremptory way to timetable dates. Taken together, that evidence certainly does not demonstrate a strong desire by the plaintiff to move the matter forward to trial. I see nothing in the post-Status Notice evidence to suggest that the Master ignored cogent evidence which would make it unfair in all the circumstances to dismiss the action. In my view, the Master took into account all of the circumstances surrounding the litigation history of this action and reached a conclusion which fell within the reasonable scope of the exercise of his discretion.

[50] However, earlier in his reasons he also observed:

19 The appellant also argued that the Master failed to consider whether it would be fair to dismiss the action in the context of the particular case, especially in light of the post-Status Notice evidence that the plaintiff intended to proceed with its action. As the Court of Appeal has pointed out, courts must allow some latitude for unexpected and unusual contingencies that make it difficult or impossible for a party to comply with timelines. As well, courts should strive to avoid a purely formalistic and mechanical application of timelines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. [my emphasis throughout]

[51] In my view that assessment is more applicable in the present fact situation. Taking into account all of the circumstances surrounding the litigation history of this action, I see the approach of the CPR during the “final” extension as constituting cogent evidence of unexpected contingencies which would make it unfair to dismiss the action.

[52] I come to this conclusion taking into account the Province’s summation which continues:

31. To date, Ontario has still not received the CPR's affidavit of documents. Discoveries have not been scheduled and settlement discussions have yet to take place.

32. Ontario has a continuing intention to proceed with this action, and there is no evidence that CPR has suffered prejudice.

VII. About Time

[53] Rule 3.02(1) of the Rules states that "the court may by order extend or abridge any time prescribed by these rules or an order, on such terms as are just".

[54] Ontario argues that unlike the extension of time for service or for time in appeals, there is no clear test for the extension of a court-ordered timetable. However, the courts have set out various factors that should be considered when determining whether to extend a timetable. Their factum asserts

36. When deciding whether to vary a timeline set out in a previous order, the Ontario Court of Appeal has indicated that the motion judge should "put the plaintiffs' non-compliance in context" and consider "the justice of the case". Consideration should also be given to the "key issue of the prejudice to the parties that will result from its order".

Duffin v NBY Enterprises Inc., [2010] OJ No. 4841 at paras 12 and 14 (CA)..

[55] In effect the present situation parallels a Status Hearing. At a Status Hearing, the plaintiff bears the onus to establish both that (a) the matter should not be dismissed for delay and (b) there is no non-compensable prejudice to the defendants.

[56] On September 2, 2015, while this matter was under reserve, Justices Sharpe, Lauwers and van Rensburg of the Ontario Court of Appeal released a decision which provided fresh guidance on the approach to be taken in a similar situation, co-incidentally involving the same defendant.

[57] In Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592, Justice van Rensburg was addressing an appeal from a motion judge’s refusal to restore an action to the trial list under rule 48.11. In reversing the judge’s order which had resulted in the action subsequently being administratively dismissed, the Court articulated these concerns and directions indicating the preference in all but the clearest of cases that an action should not be dismissed for delay. Her analysis considers earlier decisions in this area including Nissar v. Toronto Transit Commission, 2013 ONCA 361;115 O.R. (3d) 713 and 1196158 Ontario Inc. v. 6274013 Canada Ltd. ,2012 ONCA 544; 112 O.R.(3d) 67:

“43. Where, as here, the refusal to restore an action to the trial list will result in its dismissal, the Nissar test, informed by the case law respecting rule 48.14 dismissals, will apply. This is because the inevitable result of the failure to restore the action to the trial list would be dismissal, as occurred here. As discussed in several decisions of this court concerning dismissal for delay, a motion judge must strike a balance between the need for efficiency and the need for flexibility, such that cases can be tried on the merits where there is a reasonable explanation for non-compliance with the rules: see 1196158 Ontario Inc., at para. 20, Fuller,[2015 ONCA 173] at para. 25, Faris v. Eftimovski, 2013 ONCA 360, 306 O.A.C. 264, at para. 24, and Kara v. Arnold, 2014 ONCA 871, 328 O.A.C. 382, at para. 9.

(i) Delay

44. Nissar was an appeal from a refusal to restore an action to the trial list, where there had been many years of completely unexplained delay and no resistance by the defendant to moving the case along. The primary issue in Nissar was whether a Rule 48 or a Rule 24 test should be applied in a contested motion to restore. At para. 29, this court stated that the legal test for determining whether an action should be dismissed under rule 48.14 should be "adapt[ed]" to determine when an action should be restored the trial list. The plaintiff is required to provide an "acceptable explanation" for the delay and to satisfy the court that there would be no prejudice to the defendant if the action were to proceed: Nissar, at paras. 29-31. The court dismissed the appeal.

45 As to the nature of the explanation for delay, in the judgment followed in Nissar, 1196158 Ontario Inc., Sharpe J.A. referred variously to the requirement for the plaintiff to show an "acceptable""satisfactory", or "reasonable" explanation for the delay. Therefore I take these adjectives to be interchangeable in this context. The motion judge in this case referred to the appellant's requirement to show a "reasonable explanation" for the delay, not an "acceptable explanation" as worded in Nissar. No error is alleged by either party with regard to the articulation of the test.

46. A motion to restore an action to the trial list is not a "blame game", where counsel should be required or encouraged to take a defensive stance and justify their conduct of the litigation on a month-by-month basis. Rather, in assessing whether a plaintiff's explanation for delay is reasonable, a motion judge should consider the overall conduct of the litigation, in the context of local practices, which can vary quite widely between jurisdictions. Practices for scheduling pre-trial conferences and trials differ throughout the province, because they must meet the needs of particular regions and courthouses. These practices can affect the expectations of the parties, their counsel and the courts as to timing.

47. …. a proper delay analysis does not consider the conduct of an action in a vacuum.” [my emphasis throughout]

VIII. The Governing Principles at a Contested Status Hearing

[58] As indicated above, is well settled that the test to be met at a status hearing is a two-fold test and the burden rests with the plaintiff to meet both elements of it.

[59] In Khan v. Sunlife, 2011 ONCA 650, the Court of Appeal confirmed that the plaintiff must demonstrate to the Court’s satisfaction that:

i. He has an acceptable explanation for the litigation delay; and

ii. If the action is allowed to proceed the defendants will not suffer non-compensable prejudice.

[60] With respect to the the applicable legal test to extend the dismissal deadline at a contested status hearing , CPR’s factum, with references omitted, asserts:

41. HMQ's motion to extend the deadline for setting the action down for trial is governed by rule 48.14. The motion arises in the context of a request to extend a dismissal deadline contained in a court-ordered timetable. which originated from a series of prior court- ordered timetables. the first of which was made by Master Dash on July 13. 2009 in response to a status notice dated March 27, 2009, and in accordance with the provisions for proceeding with a status hearing in writing set out in rule 48.14(10). Accordingly, HMQ's motion must be treated as a contested status hearing governed by rule 48.14(12) and (13).

42. In the event that the Court is inclined to consider the merits of HMQ's motion to extend the deadline for setting an action down for trial at a contested status hearing, the applicable test requires a plaintiff to show cause why the action should not be dismissed for delay with costs. In order to do so, the plaintiff bears the burden of demonstrating (a) an acceptable explanation for the delay in the litigation; and (b) that. if the action is allowed to proceed, the defendants would not suffer non-compensable prejudice. The requirements are conjunctive, and the plaintiff, therefore, must establish both elements for the Court to extend the deadline for dismissing this action.

Acceptable Explanation for the Litigation Delay

[61] The test is conjunctive; both elements must be met by the plaintiff. The type or category of evidence from the plaintiff that will satisfy the first element is evidence that unexpected or unusual contingencies have made it impossible for the plaintiff to comply with the timing provisions in the Rules of Civil Procedure. Otherwise, plaintiffs are expected to be able to set their actions down for trial within two years or to restored the action to the trial list within 180 days as required by Rule 48. [see 119658 Ontario v. 6274013 Canada Ltd., 2012 ONCA 544 at para. 19,]

[62] I recognize the guidance approved by our Court of Appeal in Riggitano v. The Standard Life Assurance Company at para. 45; aff’d 2010 ONCA 70:

“If the common submission, as made here, to the effect that a dismissal would be unfair to the plaintiff is permitted to always trump the provision in the rules contemplating a reasonably timely procedure for the disposition of actions, then the rule would be effectively gutted.”

[63] On a contested status hearing the court is asked to balance the interests of the parties. In 1196158 Ontario Inc. v. 6274013 Canada Ltd. the Ontario Court of Appeal stated:

[19] Time lines prescribed by the Rules of Civil Procedure or imposed by judicial orders should be complied with. Failure to enforce rules and orders undermines public confidence in the capacity of the justice system to process disputes fairly and efficiently. On the other hand, procedural rules are the servants of justice not its master. We must allow some latitude for unexpected and unusual contingencies that make it difficult or impossible for a party to comply. We should strive to avoid a purely formalistic and mechanical application of time lines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits.

[64] In assessing these arguments I reflected on these portions of the decision in Carioca’s:

“Prejudice

49 The issue of prejudice is a factual question. The plaintiff bears the onus of demonstrating that the defendant would suffer no non-compensable prejudice if the action were allowed to proceed. The mere passage of time cannot be an insurmountable hurdle in determining prejudice, otherwise timelines would become inflexible and explanations futile.

50 A defendant is not required to offer evidence of actual prejudice. However, the court is entitled to consider the conduct of the defendant in light of its assertions of prejudice. As Weiler J.A. noted in Fuller, it is an error for a judge considering dismissal for delay to fail to consider the respondent's conduct in relation to the question of prejudice: at para. 39.”

No Acceptable Explanation for the Delay

[65] I have added my emphasis to a number of extracts from Justice van Rensburg’s recent observations in Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592,:

“Delay

51 The motion judge's analysis focussed mechanically on whether blame could be attributed to the appellant at each stage of the litigation. Once he found delay, he failed to go on to weigh the evidence and evaluate whether the explanation provided was reasonable. Had he done so, he would have taken into account important factors such as the circumstances in which the action came to be struck from the trial list and the fact that the case was now ready for trial.

52 Applying too exacting a standard for restoring an action which has been struck from the trial list may well hinder the objective of an efficient justice system, as parties and counsel would argue over keeping matters on the trial list for fear that, once struck, they might never be restored. Fighting highly contested motions over cases being struck and restored to the trial list is not an effective use of scarce judicial and legal resources. Ontario courts are actively discouraging a "motions culture" among counsel, and the Supreme Court of Canada has called for a "shift in culture", citing the need for a process that is proportionate, timely and affordable: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 28.

53 While this court has stated frequently that the plaintiff bears the primary responsibility for moving a case forward, it has also acknowledged that the conduct of a defendant is a factor, especially where a plaintiff encounters some resistance when trying to move the action along: 1196158 Ontario Inc., at para. 29. The suggestion that it is normal and acceptable for a defendant, if not to actively delay, to simply wait for the plaintiff to make the next move, may be based on a conventional view of litigation strategy. The objectives of timely and efficient access to justice, and effective use of court resources require all parties to play their part in moving actions forward, and for counsel to act in a way that facilitates rather than frustrates access to justice: Hryniak, at para. 32. For these reasons, although the burden of proof on the motion is on the plaintiff, the conduct of all parties in relation to the litigation is relevant in determining whether to restore an action to the trial list.”

[66] I have endeavoured to weigh the role of each side in delaying this matter with a view to following the Court’s guidance in Carioca’s:

54 The motion judge's approach here focussed almost exclusively on the appellant's conduct, and did not consider the overall dynamics of the litigation. This resulted in an imbalanced view of at least four aspects of the appellant's actions. First, at the time the motion below was heard, the case was ready to proceed to trial. Any objection raised by the respondent had been met, and the parties were capable of complying with the requirements of rule 53.03 for the exchange of expert reports. Keeping an action that is ready for trial off the list is punitive rather than efficient. Second, the action sought to be restored had been summarily struck from the trial list by a judge's order at an appearance where the parties were jointly seeking new dates for a pre-trial and trial, and not at the respondent's request. Third, the appellant had never lost sight of the need to restore the action to the trial list, had brought its motion reasonably promptly after the action had been struck, and, as the motion judge observed "had no motive to delay the action". Finally, the respondent had not indicated any serious concerns about the pace of the litigation until it opposed the motion to restore the action to the trial list.

[67] In Carioca’s the Court reflects on the earlier decision in Nissar(supra):

55 The first part of the Nissar test involves a consideration of any relevant delay, but asks whether an "acceptable explanation" for any such delay has been provided. The context of the action and any other relevant factors that are specific to the case must be considered. These will include the overall progress of the action before it was listed for trial, the circumstances of how the action came to be struck from the trial list, and the conduct of all parties. Procedural rules cannot be mechanically applied but have to be interpreted in a contextual manner that pays heed to all relevant circumstances and consequences.

[68] Turning to the second half of the test Justice van Rensburg observes:

“Prejudice

57 The second part of the test involves a consideration of prejudice to the respondent if the action were allowed to proceed. The prejudice at issue is to the respondent's ability to defend the action as a result of the appellant's delay, not as a result of the sheer passage of time: MDM Plastics Ltd. v. Vincor International Inc., 2015 ONCA 28, at paras. 25 and 33. This portion of the analysis does require some apportionment of responsibility for the delay.

59 The motion judge was required to consider the evidence in deciding the prejudice issue: Fuller, at paras. 38-39. In this case, the action was ready for trial, oral discoveries had been completed relatively soon after the events in question, transcripts were available (unlike in Nissar), and the documents authored by the missing witness were available. The record of the litigation did not indicate any serious concern on the respondent's part about the delay. Its consent to the previous motion to restore the action to the trial list, and its passivity in "to be spoken to" court when the court struck the action of its own motion, both suggest that no non-compensable prejudice would result from the action being restored to the trial list: MDM Plastics, at paras. 34-36 and 39; Fuller, at para. 42.

IX. Discussion

[69] This is an action brought by the Crown to recover damages caused to what is now a public property.

[70] It appears that the matter has been allowed by both sides to drag on for some years, but at the time the order of Master Brott was first obtained there was an agreement to extend the matter only to October 31, 2014.

[71] Clearly there was an error made by the crown law office when they sought and obtained the order from Master Brott. It is clear to me that the counsel for both sides had intensely negotiated a compromise arrangement. Those discussions resulted in an agreement that the crown would have one last extension to October 31, 2014, and that no further extension would be granted.

[72] In my view, the parties cannot tie the hands of the court, even by consent.

[73] The role of this court is to apply rule 1.04 with a view to securing “ the just, most expeditious and least expensive determination of every civil proceeding on its merits.”

[74] Rule 1.04. Further provides that in applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved in the proceeding.

[75] The amount in issue in this case and the importance to the province to my mind directs that a proportional solution is one that permits the action to proceed, notwithstanding what had been discussed in the past and the errors that were made relating to it.

[76] The order of Master Brott was not appealed. Notwithstanding the agreement of the parties, I am bound by that order, but believe that I have the jurisdiction to amend it at this time.

[77] I find that Canadian Pacific has not established any real prejudice that would flow suffered by further delay in the trial of this case

[78] The failure of the province to be more proactive in trying to mover this case forward is nevertheless troubling. It seems to me that there has been aat least a two-year delay that can be laid at the province’s doorstep. As a consequence I am directing that as a condition of the exercise of my discretion in the the province’s favor that time. The two year period of 2014 and 2015 are to be exempted from any interest award that may ultimately be made in this case

X. Disposition

[79] The Order of Master Brott has thus been amended to reflect the parties contemporaneous original agreement as set out in paragraph [29] above, on a nunc pro tunc basis.

[80] I am nonetheless exercising my discretion to alter the case timetable. In that regard I am directing that a new set down date of October 30, 2016, be established at this time. If the parties cannot agree on a timetable within 45 days, I may be contacted for the purposes of establishing a timetable for them.

[81] I will be inclined to grant an Order dismissing this action on November 1, 2016 if it is not set down by that date. To facilitate the process I am as well directing that the Defendant deliver its Affidavit of Documents by January 15, 2016.

[82] I am not undertaking the overall case management of this matter but I will deal with any future scheduling issues that may arise.

[83] I considered awarding costs in favour Canadian Pacific inasmuch as they were not responsible in any way for the creation of the initial problem with Master Brott’s order.

[84] However, in reliance on Carioca’s it is clear that both sides have a duty to move a lawsuit forward. Ontario tried to conduct discoveries and obtain productions. They were not forthcoming. Notwithstanding counsel’s assurance in 2012 of an impending delivery, CPR has still failed to comply with its obligation to deliver an affidavit of documents. That is not the kind of cooperation that this court expects from parties on both sides of litigation.

[85] Blame is thus somewhat shared. In my view this is an appropriate case for costs of this motion to be awarded, “in the Cause” and I so Order.

Released: November 30, 2015

DS/ R122 ________________________

Master D. E. Short