Court File and Parties
COURT FILE NO.: 92-CU-595790 DATE: 20160518 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Theodore G. Marton, Tina Marton, Natasha Marton, a minor by her Litigation Guardian, Theodore G. Marton, and Santa Passarelli, Executor of the Estate of Rita Passarelli, Plaintiffs AND: Wood Gundy Inc., Stephen Dunn, Donald Morris and Angelo Papas, Defendants
BEFORE: Stewart J.
COUNSEL: Alan J. Davis, for the Plaintiffs Laura Paglia and James Gibson, for the Defendants Wood Gundy Inc., Stephen Dunn and Donald Morris
HEARD: December 14 and 15, 2015
Endorsement
Nature of the Motion
[1] The Plaintiff Theodore G. Marton and the other related Plaintiffs (the “Marton Plaintiffs”) have commenced an action seeking damages against Angelo Papas (“Papas”), an investment advisor with Wood Gundy Inc. (“Wood Gundy”) formally Wood Gundy and two Wood Gundy managers, Donald Morris and Stephen Dunn.
[2] Papas could not be located for the purpose of service of the claim and has been noted in default.
[3] Wood Gundy, Morris and Dunn have defended the action. They now have brought this motion to dismiss all claims on the basis of delay or as an abuse of the court’s process. They argue that a dismissal of the action is appropriate in these circumstances in order to sustain the confidence of the public in the administration of justice.
[4] The Marton Plaintiffs resist the relief sought on the motion, and blame their various former counsel for failing to move the action forward in a timely manner. They have brought claims against three of those former counsel alleging negligence for failure to prosecute the action properly.
History of the Action
[5] On September 24, 1991, this action was commenced. That is almost 24 years ago. Over the course of the action, the Marton Plaintiffs have engaged at least six different counsel to pursue their claims for damages of approximately $150,000.00 resulting from investment losses sustained by them.
[6] In April, 1995, the parties conducted examinations for discovery.
[7] It was not until 2001 that the Marton Plaintiffs had finally fulfilled answers to undertakings given by them on examinations for discovery.
[8] By order dated November 6, 2001, Master MacLeod required that the Marton Plaintiffs deliver an expert report addressing the issues raised by them. This was to be done by no later than February 1, 2002. They failed to do so. On February 20, 2002, Swinton, J. ordered the expert report to be delivered by the Marton Plaintiffs by March 8, 2002. They failed to do so.
[9] On February 5, 2005, counsel for the Marton Plaintiffs sent a letter to Master MacLeod requesting assistance “to move the matter along”.
[10] No step to follow up on that request was ever taken on behalf of the Marton Plaintiffs. No court attendance was scheduled by the Marton Plaintiffs to address the progress (or lack thereof) of the action.
[11] In June, 2006, the Marton Plaintiffs retained Morris Singer. Singer recommended that they focus on recovering from Papas. In 2007, steps were undertaken to note Papas in default.
[12] On June 9, 2008, counsel attended before Campbell J. to seek default judgment. Campbell, J. reportedly advised that an assessment could only be made following a judgment against the remaining Defendants.
[13] Although Theodore G. Marton says he had consistently indicated to Singer his desire to pursue the Wood Gundy Defendants, no steps were taken in that regard.
[14] On November 18, 2009, Singer advised the Marton Plaintiffs by letter that he was unable to assist them further.
[15] On February 21, 2010, Singer died.
[16] On April 13, 2012, some 7 years since the Defendants had heard anything from them about this action, the Marton Plaintiffs suddenly served a Notice of Change of Solicitors and an expert report along with a suggestion that the parties attempt to mediate the claims they had advanced.
[17] On May 22, 2012, counsel for the Defendants told counsel for the Marton Plaintiffs that they took the simple view that the action should be dismissed for delay. Their clients were not willing to proceed to mediation.
[18] On June 19, 2012, counsel for the Marton Plaintiffs served counsel for the Defendants with a Trial Record and proceeded to set the action down for trial.
[19] On August 15, 2012, counsel for the Defendants brought a motion to dismiss the action for delay. That motion was originally returnable on September 28, 2012.
[20] On September 7, 2012, the Marton Plaintiffs delivered a Cross-Motion and Responding Record seeking an order exempting the proceedings from mandatory mediation and placing the action on the trial list.
[21] The parties agreed to adjourn the motions to a later date in order to work out a mutually agreeable schedule to accommodate third party examinations of former counsel for the Marton Plaintiffs sought by counsel for the Wood Gundy defendants.
[22] In furtherance of their request to examine these third party witnesses, counsel for the Defendants delivered a motion record returnable February 25, 2013 seeking orders compelling the attendance of Jack Berkow, Ori Niedzviecki, Harvey Margel, Jason Singer and Moishe Reiter for examination pursuant to Rule 39.03. Master Dash heard the motion and ordered the attendance of Jack Berkow, Harvey Margel, Jason Singer and Moishe Reiter for examination.
[23] Master Dash also set out a framework for the examinations of these prior counsel and further ordered that the Rule 39.03 examinations of these prior counsel take place after any cross-examinations of the Marton Plaintiffs.
[24] The Defendants' motion seeking an order to dismiss for delay and the Marton Plaintiffs' motion seeking to exempt these proceedings from mandatory mediation and other relief as referenced above were adjourned to a date to be fixed following completion of cross-examinations and related examinations.
[25] In April, 2013, Theodore G. Marton and Tina Marton were cross-examined on affidavits sworn by them.
[26] The Civil Trial Office sent to Aird & Berlis LLP, then counsel for the Marton Plaintiffs, a copy of a Certification Form required to be completed by counsel for the parties and submitted for the purpose of fixing dates for pre-trial and trial. The Certification Form imposed a deadline of August 30, 2013 to fix a trial date, failing which the action would be struck from the trial list.
[27] On July 9, 2013, Theodore Marton, Tina Marton and Natasha Marton retained Davis Barristers to assume carriage of this action on their behalf. A Notice of Change of Lawyers was served on Defendants' counsel accordingly.
[28] On July 9, 2013, Davis Barristers sent correspondence to Aird & Berlis LLP to request delivery of all file documents relating to the proceedings. That letter included a request of Aird & Berlis LLP to advise whether there was in place any timetable or dates fixed for further proceedings in relation to this action, dates for cross-examinations of the Marton Plaintiffs' former counsel and a date for return of the Defendants' motion.
[29] On July 11, 2013, Davis Barristers were advised that there was no timetable in place and that there were no fixed dates, no deadlines and no motion return dates for the action.
[30] On September 3, 2013, Davis Barristers received delivery of the requested documents relating to the proceedings. In the course of reviewing the documents, counsel discovered a copy of the Certification Form which had not been completed or submitted.
[31] Davis Barristers made inquiries with the Court office to obtain confirmation as to the status of these proceedings. They received confirmation that the action had been struck from the trial list on August 30, 2013.
[32] On November 11, 2013, Davis Barristers requested the consent of the Defendants to an order restoring this action to the trial list. The Defendants refused to consent.
[33] On December 16, 2013, Davis Barristers attempted to schedule a motion to restore these proceedings to the trial list by submitting a Requisition to Schedule a Long Motion with the Master's Administration Office.
[34] On December 18, 2013, Davis Barristers received a Long Motion Special Assignment Form from the Master's Administration Office stating that Master Graham was assigned to hear the long motion as requested. Efforts were then made to schedule mutually convenient dates for both of the motions to be heard.
[35] On agreement, and pursuant to the Order of Master Dash of March 12, 2013, examinations of prior counsel for the Marton Plaintiffs were undertaken. These included Jason Singer, Jack Berkow, Harvey Margel and Moishe Reiter.
[36] On January 15, 2014, counsel for the Defendants advised counsel for the Marton Plaintiffs that their motion seeking to restore the proceedings to the trial list should not be heard until after adjudication of the motion to dismiss the proceedings for delay. In addition, counsel wished to receive answers to undertakings arising from any and all examinations in relation to the motion to dismiss for delay prior to scheduling the motion.
[37] On April 25, 2014, Davis Barristers received from the Court a Status Notice: Action Struck from Trial List dated April 10, 2014. On April 29, 2015 Davis Barristers wrote to counsel for the Defendants providing a copy of the Status Notice and requesting available dates to schedule a motion seeking leave to restore the proceedings to the trial list.
[38] The motion was scheduled to be heard on October 22, 2014.
[39] In August and October, 2014, Davis Barristers undertook to fix a return date for the hearing of the motion to dismiss these proceedings for delay and the motion brought on behalf of Marton Plaintiffs seeking leave to restore the proceedings to the trial list to be heard on the same day.
[40] On October 22, 2014, Master Short made an Order compelling Jack Berkow to provide answers to undertakings arising from his examination and to attend for continued cross-examination prior to December 31, 2014.
[41] In addition, Master Short indicated that the dismissal motion should have a return date established as soon as possible and that the Marton Plaintiffs' motion should be adjourned to January 20, 2015 for scheduling.
[42] On December 22, 2014, Davis Barristers sent a draft Order and Consent with a view to restoring these proceedings to the trial list without prejudice to the Defendants' right to continue their motion seeking to dismiss these proceedings for delay. Counsel for the Wood Gundy defendants refused to provide consent to such Order.
[43] On January, 2015, counsel for the parties attended before Master Short for the scheduling of the Marton Plaintiffs' motion seeking leave to restore the proceedings to the trial list and the Defendants' motion seeking dismissal for delay. During such attendance, Defendants' counsel provided to counsel for the Marton Plaintiffs a copy of a fax sent from the office of Master Glustein dated March 27, 2013 with a Long Motion Special Assignments and a note advising the Defendants to ensure that all persons affected who ought to have notice for the purpose of fixing a date for the hearing of the motion to dismiss for delay brought by the Defendants be served.
[44] Counsel for the Marton Plaintiffs was not aware prior to January 20, 2015 of these communications. Counsel for the Defendants had not scheduled a new return date for their motion.
[45] The Marton Plaintiffs accordingly take the position that the alleged failure on the part of counsel for the Defendants to undertake follow-up action for the purpose of scheduling their motion caused or contributed to additional delays.
[46] On May 7, 2015, the motion brought by the Defendants seeking to dismiss for delay and the Marton Plaintiffs’ motion seeking a order granting leave to restore these proceedings to the trial list were scheduled to be heard together before Master Short.
[47] On May 7, 2015, counsel for the Marton Plaintiffs and counsel for the Defendants attended before Master Short for the scheduled hearing of the motions. Counsel for the Defendants requested that these motions be adjourned to be heard before a judge. Master Short adjourned both motions to be heard by a judge at the earliest opportunity.
[48] On May 14, 2015, counsel for the Defendants served an Amended Notice of Motion seeking to dismiss these proceedings for delay.
[49] The motions ultimately were scheduled to be heard before a judge on September 28, 2015.
[50] Counsel for the Marton Plaintiffs and counsel for the Defendants have agreed that all motion materials and related documents filed with respect to the Defendants' motion seeking to dismiss these proceedings for delay and the Marton Plaintiffs’ motion seeking to restore these proceedings to the trial list may be utilized by counsel for the parties and the Court in submissions and adjudication of the two motions.
[51] A preliminary issue relevant to the motions was dealt with on September 28, 2015. The motions were then adjourned on consent of the parties to be heard on December 14 and 15, 2015.
Issue
[52] Should this action be dismissed for delay and/or abuse of process?
Law and Discussion
[53] Rule 24 provides for the dismissal of an action for delay. An action is to be dismissed if it is established that a plaintiffs’ default is intentional and contumelious (conduct that is abusive or shows disrespect or the court’s process) or the plaintiffs or their lawyers are responsible for inexcusable delay that gives rise to a substantial risk that a fair trial might not now be possible (see: 1051841 Ontario Inc. v. Toronto, 2014 ONSC 4327; Pari v. CT Investment Management Group Inc., 2011 ONSC 5744).
[54] In assessing whether delay has prejudiced any defendant, prejudice will be presumed whenever there is an inordinate delay. This presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and that the issues in the lawsuit do not depend on the recollection of witnesses, or that all necessary witnesses are available with a detailed recollection of events.
[55] In addition to the application of Rule 24, the Court has inherent jurisdiction to dismiss an action for delay as an abuse of process. An action may be dismissed even if the requirements set out in Rule 24 and the case law thereunder are not met. There comes a time, in short, when enough is enough, and the civil justice system will no longer tolerate inordinate and inexplicable delay (see: Wallace v. Crate’s Marine Sales Ltd, 2014 ONCA 671; Novin Toronto Chinese Alliance Church v. Gartner Lee Limited, 2011 ONSC).
[56] Where the Court exercises its inherent jurisdiction in this regard, an action may be dismissed for severe delay even where there is no actual prejudice to a defendant’s right to a fair trial (see: Leblanc v. Glass, 2015 ONSC 1477).
[57] Similarly, where a delay is sufficiently severe, the court has inherent jurisdiction to dismiss the action even though there may be an arguable explanation for the delay.
[58] In this case, the defendants argue that the Marton Plaintiffs do not have an acceptable or credible explanation for the delay. Further, the Defendants say that as a result of the delay they cannot have a fair trial of the action.
[59] In support of their position, the Defendants point to the available evidence of former counsel which suggests that the Marton Plaintiffs did not pursue the matter with adequate diligence. They failed to deliver documents required for undertakings (during the retainer of Moishe Reiter), delayed in engaging an expert and then finally rejected the expert’s report (during the retainer of Jack Berkow), accepted counsel’s recommendation to pursue a settlement with the Defendants rather than obtaining an expert report and setting the matter down for trial (during the retainer of Harvey Margel), accepted counsel’s recommendation to pursue Papas for default judgment and not proceed against the other Defendants (during the retainer of Moris, Singer), and then took almost two years to obtain a second expert report (during the retainer of Aird & Berlis).
[60] It is manifestly evident that the delay in this case is inordinate and inexcusable. Even if the events that occurred following retainer of Aird & Berlis and the Marton Plaintiffs’ current counsel are removed from the timeline, the delay of more than 20 years in getting the action disposed of is grossly severe.
[61] In my view, for the purposes of this motion, it is virtually immaterial to determine which parts of the delay are due to the Marton Plaintiffs and which are due to previous counsel. In any event, the record before me supports a conclusion that the Marton Plaintiffs bear primary responsibility for the delay. Having said that, even if it were to be determined that their counsel are at fault, that would not serve to change the necessary outcome of this motion given the overall circumstances and context.
[62] In my view, the prejudice presumed from the delay has not been rebutted. An inordinate amount of time has passed since the action was started. Inevitably, memories have faded. At least one former counsel/witness has passed away. Not all relevant documents have been preserved. The Defendants cannot be blamed for any of this.
[63] In my opinion, this delay has given rise to a substantial risk that a fair trial might not now be possible. The action must be dismissed on that basis alone.
[64] In addition, I consider that the severity of this delay amounts to an abuse of process. This delay is aggravated by a series of breaches by the Marton Plaintiffs of court-ordered deadlines. For a period of 7 years, the Defendants heard nothing from the Marton Plaintifs or their counsel. This history and the circumstances warrant the exercise of the Court’s inherent jurisdiction to manage its own process.
[65] In summary, I am of the opinion that if there ever were a case that deserved to be dismissed for delay, it is this one.
Conclusion
[66] For these reasons, the motion is granted and this action is dismissed.
[67] In my view of this determination, it is unnecessary to consider any motion to restore the action to the list for trial.
Costs
[68] If the parties are unable to agree on costs, written submissions on that subject may be delivered within 30 days of the date of release of this decision by the Defendants and by the Plaintiffs within 20 days thereafter.
Stewart J. Date: May 18, 2016