Bray v. Fijnheer, 2016 ONSC 1546

CITATION: Bray v. Fijnheer 2016 ONSC 1546

COURT FILE NO.: 50137

DATE: 20160329

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Mary Bray

Plaintiff

– and –

Willem Fijnheer, The H.E.L.P. Sign Inc., Cohen Highley, Rose Finance Corp., Rose London Inc., The Rose Corporation, 2040262 Ontario Inc., and Tim Bankier

Defendants

A. Murray, for the plaintiff

G. MacKenzie, for the defendant Cohen Highley

HEARD: February 10, 2016

leitch j.

1The defendant Cohen Highley (“Cohen Highley”) moves for an order pursuant to r. 24.01 dismissing this action for delay.

Background Facts

2On April 18, 2006 by way of a Notice of Action, the plaintiff commenced this action, which relates to events that occurred more than 11 years ago.

3The action is against five defendants (who can collectively be referred to as the “Rose defendants”) as well as against Cohen Highley, who represented the other defendant, Willem Fijnheer. Mr. Fijnheer no longer lives in Canada and is believed to be residing in the Netherlands. He has been noted in default. The action has been dismissed against one of the Rose defendants, Mr. Bankier.

4In October 2006 Cohen Highley corresponded with the plaintiff’s then counsel requesting advice as to whether or not he intended to pursue an action against Cohen Highley. However, Cohen Highley was not served with the statement of claim until more than two years after the Notice of Action was issued. Service of the claim on Cohen Highley was extended from time to time and eventually to June 30, 2008 by court order.

5Cohen Highley delivered a Notice of Intent to defend on July 16, 2008.

6It is fair to say that very serious allegations are made against Cohen Highley. The plaintiff claims damages as against Cohen Highley for their “knowing participation in and assistance of the dishonest breach by the defendants Willem Fijnheer and The H.E.L.P. Sign Inc. of their fiduciary obligations to the plaintiff”.

7On September 24, 2008 Cohen Highley brought a motion to strike the plaintiff’s claim on the basis that it disclosed no reasonable cause of action.

8On December 8, 2008 a notice of status hearing was issued. The status hearing was adjourned on a number of occasions while the motion to strike was outstanding.

9Cohen Highley’s motion to strike was adjourned on a number of occasions and when ultimately heard on May 6, 2009 Cohen Highley was successful and the action was dismissed against it. Thereafter, the plaintiff successfully appealed the dismissal order and was granted leave to amend her statement of claim.

10The status hearing eventually proceeded on December 18, 2009 and Rady J. made a timetable order requiring completion of examinations for discovery by October 10, 2009 and the action be set down for trial by December 15, 2010.

11An amended statement of claim was issued on February 18, 2010.

12In October 2010 Cohen Highley brought a motion to strike the amended statement of claim. This motion was dismissed.

13On January 31, 2011 Cohen Highley served its statement of defence.

14In its statement of defence at para. 8, Cohen Highley states that it was retained by Mr. Fijnheer and The H.E.L.P. Sign Inc. and had no involvement in the transactions referenced in the statement of claim except as solicitors for those parties and it has not received a waiver of solicitor-client privilege from either of their clients. Cohen Highley states that it “has a duty in law to protect its clients’ substantive legal right to solicitor-client privilege”. Cohen Highley asserts that it is “restricted in its defence from disclosing facts that are subject to solicitor-client privilege”.

15The action was administratively dismissed for delay on March 4, 2011.

16On May 10, 2011 the plaintiff successfully brought a motion to set aside the administrative dismissal. On May 29, 2011 Rady J. made another timetable order requiring completion of examinations for discovery by July 2010 and the action be set down for trial by March 31, 2012.

17The May 29, 2011 timetable order was twice amended and the time periods for the completion of the procedural steps extended such that examinations for discovery were to be completed by October 15, 2013 and the action was to be set down for trial by December 15, 2013.

18In June 2013 the Rose defendants brought a motion to dismiss the action against them based on an alleged settlement. The action was dismissed only against Mr. Bankier.

19Examinations for discovery of the defendants were completed in September 2013 and the plaintiff was examined for discovery in September and December 2013. The plaintiff’s examination for discovery on the issue of damages was adjourned with the consent of counsel pending delivery of the plaintiff’s expert report on damages. Plaintiff’s counsel served a trial record on December 9, 2013 in accordance with the timetable order and the matter was to be spoken to in an assignment court on February 21, 2014.

20In correspondence dated February 7, 2014 Mr. Murray, the plaintiff’s current co-counsel, acknowledged he had not provided a report on damages nor had the defendants examined the plaintiff on the issue of damages. He agreed with the defendants that it was premature in the circumstances to set a date for trial and agreed to adjourn the matter to June 20 by which time he expected to provide his position on damages and/or supply any expert report on which he intended to rely and the plaintiff's discovery on the issue of damages would be completed.

21Counsel exchanged emails in June 2014 in which they agreed that the matter should be struck from the trial list, as it was not ready for trial because the plaintiff's examination for discovery on damages had not been completed.

22On June 20, 2014 the action was struck from the trial list as agreed.

23On this motion, counsel for Cohen Highley submits that since June 20, 2014 plaintiff’s counsel has not taken any steps to move the action forward.

24Mr. Dewar, who was counsel of record for the plaintiff until 2008 (and now remains as co-counsel), swore an affidavit in response to this motion. He deposed that he endeavoured to obtain an economic loss report from an accountant in May 2014. However, the first accountant retained by Mr. Dewar advised that a forensic accountant should be engaged.

25Mr. MacKenzie, counsel for Cohen Highley, warned plaintiff’s counsel in correspondence dated March 3, 2015 that if the plaintiff’s productions and/or expert report respecting the issue of damages were not served within a few weeks, he would seek instructions to bring a motion to dismiss the action for delay. These productions were not forthcoming and as a result this motion was brought on August 25, 2015, first returnable September 29, 2015. At that time, the plaintiff’s counsel still had not delivered the outstanding productions and expert report.

26The plaintiff did retain the services of a forensic accountant in August 2015. A report from the forensic accountant dated October 14, 2015, but received November 18, 2015, was served on Mr. MacKenzie on November 18, 2015. A supplementary affidavit of documents was also produced.

The Position of the Moving Party

27Mr. MacKenzie does not argue that there has been any intentional or contumelious delay, however he takes the position that there is an inordinate and inexcusable delay following October 2010 for which the plaintiff is responsible and there is now a substantial risk that a fair trial is not possible. He submits that prejudice to the moving party is presumed at this point in time. Cohen Highley is not able to communicate with its client. Memories have faded due to the lapse of time and unfairness will result.

28Mr. MacKenzie asserts that the plaintiff ought not to be given “a second chance” in these circumstances where the plaintiff has had many chances and the litigation timetable has been repeatedly adjusted; the scale of fairness does not weigh in the plaintiff’s favour considering the serious allegations that have remained outstanding against a practicing solicitor for many years; and, these circumstances should be considered from the perspective that our system of justice is now particularly focused on expeditious resolution of issues. He noted that there was very little accomplished between October 2009 and June 2014 and promises made in February 2014 regarding the production of documents and an expert report, were not kept.

The Position of the Plaintiff

29Mr. Murray acknowledges that how this action has proceeded is not “flattering”, however he takes the position that to a significant extent the delay in the action is explained by the delay in service of the statement of claim and the time spent on interlocutory motions advanced by the defendants. He notes that counsel worked cooperatively and corroboratively in creating timetables, and amending them as required, in scheduling examinations for discovery and in agreeing to strike the action from the trial list because the examinations for discovery had not been completed. He acknowledges that there is a “gap which is unexplained” after February 2014, although there was further communication and agreement to strike the action from the trial list in June 2014.

30Mr. Murray’s position is that there has not been a sufficient delinquency to justify a dismissal of the action and most importantly there is no prejudice arising from the delay when the issue of liability has been the subject of examination for discovery and the only witness who is “not available” is the co-defendant who has been noted in default and whose absence is not a new event which occurred during the period of alleged delay.

Analysis and Disposition

31Counsel very helpfully produced a joint book of authorities, which outlined the relevant test and relevant factors relating to the issue on this motion. As counsel agreed, the test on a motion to dismiss for delay is well established in Ontario. Before dismissing an action for delay a court must find that the delay is inordinate; that the delay is inexcusable; and, that the delay gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible because of the delay.

32The authorities also make clear that when a court considers the issue of delay, the period of time under consideration is the time period from the commencement of the proceeding up to the date of the motion to dismiss. In this case, the delay is the period from April 18, 2006 to September 29, 2015. However, Mr. MacKenzie fairly acknowledged that the time during which Cohen Highley pursued its interlocutory motions to dismiss the action – September 2008 to October 2010, when their second motion to strike the statement of claim was dismissed - should not be considered part of the delay in issue on this motion.

33Having considered the relevant factors set out above and the jurisprudence provided by counsel, I am satisfied that at this point in time the action should not be dismissed for delay. I find that the delay in issue is not inordinate, it is not inexcusable and it does not give rise to a substantial risk that a fair trial is impossible. I find that these circumstances are distinct from those considered by the courts in the cases presented in the joint book of authorities.

34In Marché d'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd., 2007 ONCA 695, 87 O.R. (3d) 660 where the action had stalled after the pleadings, the plaintiff was unsuccessful in its efforts to restore an action five years after it had been administratively dismissed because the delay was completely unexplained and the solicitors' conduct amounted to more than lapse or inadvertent mistake.

35In Farhi Holdings Corp. v. Lambton (County), [2009] O.J. No. 5475, 183 A.C.W.S. (3d) 709, the defendants successfully brought a motion to dismiss for delay an action commenced in December 1998 when nothing had taken place from November 2001 to May 2008 and when, although sworn a year earlier, the sworn affidavit of documents was not delivered until May 2009, eight years after it had been promised. Hockin J. found that the delay was inordinate, inexcusable and in all likelihood intentional and concluded that the plaintiff failed to meet its burden to explain the great delay and did not rebut the presumption of prejudice.

36In Langenecker v. Sauvé, 2011 ONCA 803, 286 O.A.C. 268, the plaintiff unsuccessfully appealed a dismissal of a 1995 action for delay. The Court of Appeal concluded the 15 year delay was inordinate and unexplained and the motions judge properly found a possibility of prejudice to the defence as not all of the evidence had been preserved, recollections after 16 years would likely be faulty and one expert witness for the defence had died.

37In Wallace v. Crate's Marine Sales Ltd., 2014 ONCA 671, [2014] O.J. No. 4606, the plaintiff again unsuccessfully appealed the dismissal for delay of a 2003 action. Little was undertaken until partial examinations for discovery in 2005 and then there was again a lull in activity (other than exchanges in correspondence) until 2010 and 2011.

38Again in Kara v. Arnold, 2014 ONCA 871, 328 O.A.C. 382, the plaintiffs unsuccessfully appealed the dismissal for delay at a contested status hearing of a 2000 action. The plaintiff’s explanation that the delay was caused in part by both the defendant and the plaintiff's health problems and the time needed to get expert reports was found to be inadequate to explain the 11 year delay.

39In Jacob v. Playa El Agua Development Limited Partnership, 2015 ONCA 372, [2015] O.J. No. 2622, the plaintiff unsuccessfully appealed the dismissal of a 16 year old action for delay. The Court of Appeal found that there was a long list of steps, missteps, inactivity and silence during the 16 year life of the action, and the overwhelming majority of such missteps, inactivity and silence clearly rested at the feet of the plaintiff. Further, two of the principal defendants had died during the action's long life.

40Finally, in Premium Properties Ltd. v. Aird & Berlis, 2015 ONSC 5067, 78 C.P.C. (7th) 123, the plaintiff brought an action in 1993 in relation to advice given in 1987 and the plaintiff served three expert reports in 2015. The court concluded that the plaintiff’s wholly inadequate attempts to retain an expert, coupled with apparent contentment that the matter languish whilst resolution was pursued with a third party indicated an attitude totally incompatible with the need for efficient and timely justice. The defendant lawyer had died and the plaintiff failed to rebut the presumption of prejudice to the law firm.

41In this case, while the facts underpinning the action occurred more than 11 years ago, the delay in issue is 7 ½ years. I do not find such delay inordinate. I note that in Farhi the delay was just over 10 years, in Langenecker the delay was 16 years, in Wallace the delay was almost 10 years, in Kara the delay was 11 years, in Jacob the delay was 16 years and in Premium the delay was 22 years.

42I also do not find the delay in this case inexcusable. Significantly, in the cases in the joint book of authorities where the action had been dismissed for delay, the delay was intentional, the action had stalled, little was accomplished, there was inactivity and/or silence or the matter had languished during the whole or a large portion of the time period in issue.

43In Marché the court of appeal found inordinate delay arising from solicitor’s conduct that was not mere inadvertence where the motion to set aside administrative dismissal was brought five years after such dismissal and prior to that time, as the court observed at para. 39, the plaintiffs “had proceeded in what could only be described as a desultory fashion for two and a half years after commencing the action”. In Farhi, there was a six year period of inactivity. In Langenecker the court of appeal observed at para. 10 that “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 lengthy delays that occurred in the course of the 15 years since the action was commenced. In Wallace the action had never moved beyond the pleadings stage and there was “unexplained” 10 year litigation delay after the issuance of the statement of claim when the plaintiff’s only explanation was that counsel was involved in other cases. In Kara the action “meandered”, the defendant had not been examined for discovery, the plaintiff’s counsel had last contacted the defendant’s counsel more than three years before the status hearing and the only explanation from the plaintiff’s counsel was that he had spent those years obtaining experts’ reports. In Jacob the court of appeal found a long list of steps, missteps, inactivity and silence during the 16 year life of the action as clearly inexcusable as it was inordinate. In Premium, amongst other things, the proceedings “came to a halt” for a five year period which the plaintiff was responsible for and the plaintiff’s proffered explanation for further delay because of difficulties in obtaining expert reports was found inadequate when the plaintiff’s first attempt to obtain an expert’s report was made 14 years after service of the statement of claim.

44In contrast to the above cases, in this case although shortly after Cohen Highley filed its statement of defence on January 31, 2011 the action was administratively dismissed pursuant to r. 48.14 on March 4, 2011, it was promptly restored by the plaintiff, without opposition by the defendants, on May 10, 2011; the timetable set by the court May 10, 2011 was extended on consent March 9, 2012 and March 1, 2013; the motion brought by the Rose defendants was heard in June 2013; discoveries were scheduled and the action was set for trial as required by the 2013 timetable order; in January 2014 counsel exchanged communications to schedule the plaintiff’s continued examination for discovery; counsel for the Rose defendants indicated that he would not commit to the continued examination until the plaintiff produced all evidence that the plaintiff intended to rely on in support of her damage claim; this position prompted Mr. Murray's letter of February 2014 indicating he expected to deliver the evidence and expert report by June 2014 and complete the plaintiff’s discovery by that date; and when this did not occur the parties agreed to strike the matter from the trial list.

45Therefore once the interlocutory motions, which were critical to the survival of the action, were concluded in October 2010, the parties worked cooperatively and collaboratively pursuant to court approved timetables and all agreed to remove the action from the trial list in June 2014. While the plaintiff should have pursued the retention of a forensic accountant more promptly to fulfil the promise made in February 2014 this observation does not lead me to conclude that overall the delay is inordinate and unexplained.

46Finally, while prejudice can be strongly inferred or presumed from the passage of time as Mr. MacKenzie asserts (as was the case in Farhi and in Langenecker where the delay was 16.5 years), I cannot find that the delay in issue here gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible because of the delay.

47Farhi was not “a case where the documents will tell the tale”. In Langenecker significant testimony was dependent upon witnesses’ abilities to recall statements and observations over 16 years earlier. Similarly in Wallace the litigation was not driven by documentation and the parties had to rely upon memories of events that occurred over a decade previously. In Kara and in Premium potential witnesses had died and in Jacob two of the principal defendants had died.

48I am satisfied that even if prejudice can be inferred from the passage of time in this case, considering all of the circumstances of this action the plaintiff has rebutted such presumption. In other words, there is not a substantial risk that a fair trial of the issues in this action will not be possible because of the delay. In this case, the transaction in issue will have been documented and Cohen Highley will have preserved the working file. As Mr. Murray noted, the only witness who is “not available” is the co-defendant who has been noted in default and whose absence is not a new event which occurred during the period of delay. Discoveries on the issue of liability were completed in 2013 and there has been substantial documentary production. It is also relevant that all defendants consented to removing the action from the trial list in June 2014.

49For the foregoing reasons the motion is dismissed. No costs are awarded to the plaintiff in accordance with Mr. Murray’s submission when asked to address costs at the hearing of the motion.

50I note that in hindsight, it would have been preferable if a timetable had been set when the action was struck from the trial list in June 2014.

51I also note that because the action has now been struck from the trial list by a judge, leave of the court is required pursuant to r. 48.11 to restore the action to the trial list. That relief is not before the court but will have to be addressed forthwith.

52In addition, as I drew to counsel's attention, pursuant to the new r. 48 this action could be dismissed for delay on January 1, 2017 unless before that date the parties consent to a timetable or one of the parties brings a motion for a status hearing where the plaintiff will be required to show cause why the action should not be dismissed for delay.