Court File and Parties

Court File No.: CV-11-439696 Date: May 25, 2016

Superior Court of Justice - Ontario

Re: Gemcorp International Limited also carrying on business as Gem Corp International Ltd., and Manas Titizian v. Sun Life Assurance Company of Canada;

Before: Master C. Wiebe

Counsel: Ted Frankel for Gemcorp International Limited also carrying on business as Gem Corp International Ltd., and Manas Titizian; Elizabeth Bennett-Martin for Sun Life Assurance Company of Canada;

Heard: May 19, 2016 at Toronto, Ontario.

Reasons for Decision

I. Introduction

[1] The plaintiff, Gemcorp International Limited (“Gemcorp”), brings a motion to set aside a Registrar’s dismissal order dated July 3, 2014 dismissing this action for delay pursuant to Rule 48.14. The defendant, Sun Life Assurance Company of Canada (“Sun Life”), opposes the motion.

[2] For the reasons stated herein, I dismiss the motion.

II. Background

[3] Based on the evidence presented in the motion, I find the following to be the relevant facts. Gemcorp had a term life insurance policy issued by Sun Life (“the Policy”) insuring the life of its principal, Manas Titizian (“Manas”). Manas speaks no English. The Policy lapsed in April, 2009 due to non-payment of premiums. By this time, Gemcorp had paid $160,000 in premiums. Sun Life notified Gemcorp that the Policy could be reinstated if premium arrears were received by a specified date, namely June 7, 2009. That did not happen.

[4] In October, 2010, Gemcorp alleges that a Sun Life agent, Raj Daryanani, represented to Manas that the Policy could be reinstated only by the payment of the premium arrears, $14,611.95. Gemcorp delivered these funds to Sun Life on October 19, 2010, and Sun Life accepted those funds. In November, 2010, Gemcorp formally applied for Policy reinstatement by the submission of medical documentation. Sun Life refused to reinstate the Policy for medical reasons. It reimbursed the premium arrears.

[5] Gemcorp and Manas relied on Manas’ daughter, Sevan Titizian (“Sevan”), throughout concerning the Policy. Sevan is fluent in English, has a master’s degree in business administration (“MBA”) from Queen’s University, and worked as a sales director for Gemcorp since 2004. Based on a recommendation, she hired and instructed a lawyer, Kirk Apel, on behalf of Gemcorp.

[6] Mr. Apel commenced this action for Gemcorp on November 17, 2011 as against Sun Life for inter alia a declaration that the Policy be reinstated upon the payment of the premium arrears, plus damages and punitive damages. In late 2011 Mr. Apel handed Sevan a draft of the statement of claim that had a different name for Gemcorp, and two invoices from him totaling $3,006, which Gemcorp paid. The invoices made reference to the issuance of the statement of claim.

[7] The statement of claim alleged that, through Mr. Daryanani’s representation and by accepting Gemcorp’s payment of the premium arrears, Sun Life had waived the insurability requirement for the Policy reinstatement. In one paragraph, Gemcorp also claimed punitive damages because Sun Life “has used health concerns regarding Manas Titizian as an excuse to wrongfully terminate the plaintiff’s policy.”

[8] On January 12, 2012, Sun Life delivered a statement of defence. It pleaded in response to the waiver allegation, denying any such representation. In describing the history of the issues, it stated at one point that it denied the Policy reinstatement “based on Sun Life’s review of the medical history submitted by or on behalf of the Plaintiff, Manas Titizian.”

[9] In January, 2012, Mr. Apel’s office stated in letters to Sun Life internal counsel, Valerie Greifenberger, that the plaintiffs intended to deliver a Reply. That did not happen.

[10] On February 16, 2012, Sun Life delivered its affidavit of documents and copies of documents. 64 documents were listed including the medical documentation Gemcorp delivered to Sun Life as a part of its application for Policy reinstatement.

[11] Nothing happened in this matter for the next 23 months. Sevan stated in cross-examination that she carried on an intermittent (once a month) verbal correspondence with Mr. Apel until the summer of 2014. She stated that Mr. Apel did not provide her with copies of the pleadings and the Sun Life affidavit of documents. During their intermittent conversations, Mr. Apel, according to Sevan, reassured her that things were “proceeding in the normal course” and that “things take time.” She stated that the plaintiffs trusted Mr. Apel to do what he was contractually obligated to do. There are no documents corroborating this evidence, such as emails. There is no evidence from Mr. Apel on this motion.

[12] On May 13, 2013, Mr. Apel wrote a letter to Manas seeking payment of an alleged outstanding account, documents to prepare an affidavit of documents and a retainer payment. The alleged outstanding account had actually been paid about 17 months earlier. The letter contains a wrong address for Manas. Sevan stated that it was never delivered to the plaintiffs. It appears in the Mr. Apel’s file.

[13] On January 29, 2014 a status notice was delivered. The notice stated that the action would be dismissed within 90 days unless inter alia a consent timetable was filed or a status hearing was scheduled in the meantime. The plaintiffs allege that Mr. Apel did not report this to them.

[14] On May 1, 2014, namely after the said 90 days, Mr. Apel left a voicemail message for counsel for Sun Life, Ms. Greifenberger, wherein he stated that he was completing the plaintiff’s affidavit of documents “within the next week or two,” and wanted to reach a consent timetable for the action in order to avoid an “administrative dismissal.”

[15] On May 5, 2014, Ms. Greifenberger responded by letter stating that, according to the notice, the action was already dismissed for delay, and that Sun Life would not be consenting to the requested timetable.

[16] On May 6, 2014, Mr. Apel wrote Manas another letter, again to the wrong address, advising that the plaintiffs needed to arrange for and attend a status hearing to avoid an administrative dismissal of the action. He stated that he wanted a $4,000 “further retainer payment.” He added as follows: “without the above steps being taken, your case may be dismissed.” Sevan stated that this letter again was never received. It appears in the Apel file.

[17] On May 14, 2014, Ms. Greifenberger wrote Mr. Apel a letter asking for a copy of any request for a status hearing, and advising that Sun Life would seek a dismissal of the action at the hearing. There was no response to this letter.

[18] A status hearing was not arranged. On July 3, 2014, the Registrar issued an order dismissing this action. It was sent to Sun Life the next day. Whether it was sent to Mr. Apel is unclear. In any event, it was not sent to Gemcorp. Sevan stated that she was not made aware of the order. She stated in her affidavit that, had Gemcorp known about the order, it would have immediately moved to have it set aside.

[19] Sevan stated that around this time, the summer of 2014, she became concerned that Mr. Apel ceased communicating with her. After three months, she emailed Mr. Frankel in November, 2014 about this case. Sevan gave Mr. Frankel the draft statement of claim in her possession and told him that she was not sure Mr. Apel had started an action. It took three months for the plaintiffs to formally retain Mr. Frankel and his firm in February, 2015.

[20] On December 9, 2014, Sun Life closed its file.

[21] In February, 2015, Mr. Frankel sent a direction to Mr. Apel requiring that he transfer the file to Mr. Frankel. It was ignored. Mr. Frankel’s office called Mr. Apel several times, but the calls were not answered. Sevan refers in her affidavit to a Law Society administrative dismissal notice concerning Mr. Apel at this time, but the motion material does not contain this notice.

[22] On March 31, 2015, Mr. Apel left a voicemail message for Mr. Frankel advising that “everything” would be ready for pick-up “probably in the next day or two.” Mr. Apel did not transfer the file.

[23] Mr. Frankel searched the Toronto court file using the names of Gemcorp and Sun Life, but did not find this action. As a result, he stated that he concluded by May, 2015 that Mr. Apel had not started an action. Mr. Frankel admitted to not having gone to Mr. Apel’s office to retrieve, or even look at, the file. He admitted to not calling Sun Life.

[24] On July 13, 2015, Mr. Frankel started an action against Mr. Apel on behalf of Gemcorp claiming damages for negligence and breach of contract due to his alleged failure to commence this action. There was also an allegation that Mr. Apel failed to inform Gemcorp about the status of the litigation. The Statement of Claim was served. This action will be called the “Apel Action.”

[25] On September 24, 2015, Michael Kestenberg, LawPro counsel retained for Mr. Apel in the Apel Action, wrote a letter to Mr. Frankel enclosing the pleadings in this action. He stated that there were many “credibility issues” between Mr. Apel and the plaintiffs. His list of “credibility issues” included whether retainers were paid, whether Gemcorp had a banking problem and whether Manas was insurable. He stated that Mr. Apel had contacted the court in writing on May 1, 2014 requesting a status hearing, which should have taken the matter out of the hands of the Registrar. The motion material did not contain this May 1, 2014 letter. Mr. Kestenberg stated in his letter that Mr. Apel did not hear from the court or from the plaintiffs. He stated the following: “. . . my client’s position is that he [Mr. Apel] received no response or no positive response to his request for a further retainer for the purpose of attending the status hearing, and no further steps were taken.” Mr. Kestenberg did not confirm whether the action was dismissed, but stated that, if it was dismissed, it is capable of being reinstated. He confirmed that Gemcorp did not require an immediate defence from Mr. Apel. To date, Mr. Apel has not delivered a Statement of Defence.

[26] On September 24, 2015, Mr. Kestenberg wrote Ms. Greifenberger a letter asking for a copy of any “Notice of Dismissal.” He added that Mr. Apel had not received a “Notice of Dismissal.” There was no response to this letter.

[27] At some point shortly after this date in September, 2015, Mr. Kestenberg confirmed (presumably from a court file search) that this action had been administratively dismissed on July 3, 2014, namely over a year earlier, and informed Mr. Frankel accordingly.

[28] About a month later, on October 28, 2015, Mr. Frankel wrote to Mr. Kestenberg advising that he had instructions to bring this motion. He requested a copy of the Apel file.

[29] On November 10, 2015, Mr. Frankel wrote Ms. Greifenberger a letter. This was his first letter to Sun Life. He enclosed a copy of a Notice of Change of Lawyers. He sought Sun Life’s consent to an order setting the dismissal order set aside. There is no issue between the parties about a delay in the motion after this date as it took Sun Life time to retrieve its file.

[30] On December 10, 2015, Mr. Kestenberg delivered a copy of the Apel file to Mr. Frankel. On January 13, 2016, Ms. Greifenberger advised Mr. Frankel by email that Sun Life would not consent to the motion. On February 8, 2016, the plaintiffs brought his motion, originally returnable April 22, 2016. The parties adjourned the motion on consent to May 19, 2016.

[31] The plaintiffs filed an affidavit Sevan swore on April 4, 2016. Sun Life filed an affidavit sworn by Ms. Greifenberger on April 21, 2016. Both were cross-examined on these affidavits. In her cross-examination, Ms. Greifenberger stated that, at the time of its review of Gemcorp’s reinstatement application in November, 2010, Sun Life was concerned about a June 12, 2008 report of an endoscopy procedure by a Dr. Skrinskas which, according to Mr. Griefenberger, indicated that Manas “was not compliant with his medications and with his blood tests, that he had colitis, and was at risk of cancer.” She added that Sun Life declined reinstatement for this reason “as well as some other factors, including the . . . blood level in the paramedical and some other tests in the paramedical.” The plaintiffs apparently have a January 6, 2011 note from Manas’ family physician, Dr. Kavazanjian, wherein this physician states that Dr. Skrinskas’ report was “not true” and that Manas was compliant with his medications. This note was submitted to Sun Life after its denial of reinstatement, but Sun Life refused to reverse its denial.

III. Issues

[32] Having reviewed the facta, authorities, the evidence and heard the arguments, I believe that the following are the issues to be determined:

a) What is the test to be applied in this motion? b) Is there an explanation for the litigation delay? c) Was there inadvertence in missing the deadline that led to the dismissal order? d) Was this motion brought promptly? e) Is there prejudice to Sun Life if the action is reinstated?

IV. Analysis

(a) What is the test to be applied in this motion?

[33] The test on such a motion was set out in the leading decision of Master Dash in Reid v. Dow Corning Corp., 2001 CarswellOnt 2213 (Ont. Master) at paragraph 41. The moving party has the onus of establishing the following four things:

1. Explanation of the litigation delay: The plaintiff has the onus of explaining the delay in the progress of the litigation from the institution of the action until the deadline for setting the action down for trial in the status notice. The plaintiff must establish that he or she always intended to move the action forward without delay. Master Dash stated that, “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.” He added that if the delay was caused by the inattention or negligence of counsel contrary to the client’s instructions or expectation, that has to be proven by the plaintiff.
2. Inadvertence in missing the deadline: The plaintiff must establish that he or she failed to set the action down for trial or call for a status hearing by the deadline in the status notice due to inadvertence.
3. The motion to set aside is brought promptly: The plaintiff must establish that he or she moved forthwith to set aside the dismissal order as soon as the order came to the plaintiff’s attention.
4. No prejudice to the defendant: The plaintiff must establish that the defendants will not be significantly prejudiced in presenting its case as a result of the plaintiff’s delay in the litigation or the steps following the dismissal of the action. However, to bring the action to an end on this ground alone, the defendant must lead evidence of actual prejudice due to the delay.

[34] In Scani v. Prochnicki, 2007 ONCA 63, the Court of Appeal required that these factors be applied within a broader review of what is just in the circumstances. This it called the “contextual approach,” namely a consideration of the Reid factors in the context of what is just as between the parties. This means, according to the Court, that a plaintiff does not necessarily have to establish each of the four Reid factors.

[35] Counsel were in agreement that I could assess the credibility of the evidence submitted in this motion. This was an important point, as significant issues turned on credibility.

[36] I will apply this test to the evidence in this motion.

(b) Is there an explanation for the litigation delay?

[37] The relevant delay was the two years between the delivery of the Sun Life statement of defence in January, 2012 and the service of the status notice in January, 2014. The plaintiffs did nothing the move the litigation forward during this time. The plaintiffs’ explanation for this delay is that it was due to the inattention or negligence of Mr. Apel, which delay the plaintiffs did not authorize or expect. Based on the evidence presented in the motion, I do not accept the credibility of this explanation.

[38] This explanation does not make sense in light of the evidence. Sevan stated in cross-examination that she received verbal updates from Mr. Apel from month to month up to the summer of 2014. She insisted that Mr. Apel never informed her as to the Sun Life affidavit of documents or as to the steps that needed to be taken by the plaintiffs to move the case forward. She insisted that Mr. Apel kept giving her general assurances that everything was fine.

[39] First, there are no written letters or emails from Sevan to Mr. Apel confirming this version of events. Sevan is an MBA degree holder who worked in management for Gemcorp for several years. It makes no sense that she would not have corroborated this advice from Mr. Apel on such an important case for the plaintiffs in writing. I also note that when she retained Mr. Frankel in November, 2014, Sevan immediately emailed him. It seems as plausible that Sevan wilfully did not corroborate Mr. Apel’s verbal advice in writing.

[40] Second, the verbal advice Sevan insisted she received from Mr. Apel contradicted the contents of the one letter Mr. Apel appears to have written during this time, namely the Apel letter dated May 13, 2013. This letter appears in the Apel file. I accept that it was not sent to the plaintiffs because of a mistake in the address on the letter. But the contents of the letter are important. Mr. Apel refers to an unpaid account (again a mistake), future work to be done (an affidavit of documents) and, most importantly, a retainer for future work. It makes no sense that Mr. Apel would not have referred to those same issues in his month to month verbal conversations with Sevan. Mr. Apel may have had difficulties in his practice, but I find it hard to believe that he would not have mentioned the issues he raised in his May 13, 2013 letter with Sevan verbally.

[41] Third, the plaintiffs did not put forward any evidence from Mr. Apel, the very person the plaintiffs blame for this entire issue. There is not even a pleading from Mr. Apel in the Apel Action. The only indication of what Mr. Apel might say appears in the Kestenberg letter to Mr. Frankel dated September 24, 2015. In this letter, Mr. Kestenberg stated that there were many “credibility issues” between the plaintiffs and Mr. Apel, including credibility issues over whether Gemcorp defaulted in payment of the Policy premiums, whether Manas was insurable and, most importantly, whether accounts were current and “retainers were paid.” This letter suggests to me that Mr. Apel’s evidence will not corroborate the plaintiffs’ version of the litigation delay. It suggests that Mr. Apel might well say that the plaintiffs deliberately chose not to invest more money in the litigation out of a concern over the merits of their case and a desire to extract a settlement. In the absence of evidence from Mr. Apel, I draw that inference for the purposes of this motion.

[42] I conclude that, based on the evidence on the motion as a whole, the plaintiffs have failed to meet their onus of proving that the delay was due to the conduct of Mr. Apel that was without the plaintiffs’ instruction or expectation. I, therefore, also conclude that the plaintiffs have not provided a satisfactory explanation for the litigation delay.

(c) Was there inadvertence in missing the deadline that led to the dismissal order?

[43] The relevant delay here is from the date of the service of the status notice, January 29, 2014, to the end of the 90 days specified in that notice, namely the end of April, 2014. Nothing happened during that time, including no request from the plaintiffs for a status hearing. As a result, the dismissal order took place. Interestingly, the dismissal order did not get issued for another two months, namely not until July 3, 2014.

[44] Again, the plaintiffs argue that the failure to request a status hearing was due to the inattention or negligence of Mr. Apel. In particular, they allege that Mr. Apel failed to inform them of these events and then failed to obtain and attend at a status hearing. Mr. Frankel called this alleged inattention or negligence, “inadvertence.”

[45] I do not accept this proposition. First, I do not accept that the plaintiffs were not informed of these events, as they allege. On May 9, 2014, Mr. Apel wrote the plaintiffs another letter advising them of the need for a status hearing to preserve the action. Importantly, the letter also asked for a $4,000 retainer. While I accept that the letter did not reach the plaintiffs, again due to a wrong address in the letter, the letter occurred during a time when Sevan admitted she was carrying on a month to month verbal correspondence with Mr. Apel. It makes no sense to me that Mr. Apel would not have mentioned to Sevan verbally the contents of his May 9, 2014 letter, particularly given the gravity of the issues in that letter.

[46] Second, the Kestenberg letter of September 24, 2015 indicates to me that Mr. Apel made a deliberate decision not to pursue a status hearing beyond a few steps. Mr. Kestenberg stated that Mr. Apel requested a status hearing in a May 1, 2014 letter to the court, which letter was not produced, and then did not pursue the matter further to a status hearing when the plaintiffs did not pay the requested retainer, presumably the requested $4,000 retainer.

[47] Whether this was a negligent decision on the part of Mr. Apel is an open question. However, there is little doubt, in my view, that it was a deliberate decision on the part of Mr. Apel. He did not proceed further because he was not being paid. That is not “inadvertence.” In Marche D’Alimentation Denis Theriault Ltee v. Giant Tiger Stores Ltd. 2007 ONCA 695 at paragraph 30, the Court of Appeal drew a distinction between a solicitor’s deliberate decision not to proceed with the necessary steps in an action, which in that case resulted in the lawyer’s failure to receive the status notice, and inadvertence. The Court noted that, with a deliberate but potentially negligent decision by the lawyer, a client may have recourse elsewhere. I make the same conclusions in the case before me.

[48] I, therefore, conclude that the plaintiffs have failed to establish that the deadline was missed due to inadvertence.

(d) Was this motion brought promptly?

[49] I am also having difficulty understanding the delays that took place in bringing this motion. First, it took some four months for Mr. Frankel to be retained after Sevan contacted him by email in November, 2014. There was no adequate explanation given for this delay.

[50] Second, when he was finally retained, Mr. Frankel was advised by the plaintiffs that they were not sure of the existence of this action. They said they only had the draft statement of claim. This assertion lacks credibility. The November 10, 2011 invoice to the plaintiffs from Mr. Apel (that the plaintiffs paid on January 4, 2012) clearly refers to the preparation of and filing fee for a “Statement of Claim.”

[51] Third, the work of allegedly discovering the existence of this action seems surprisingly difficult and drawn out. Mr. Frankel says that, upon being retained, he somehow unsuccessfully searched the Toronto court office for this action. He should have used a professional process server for this task, but did not. Mr. Frankel directed Mr. Apel to deliver the Apel file to Mr. Frankel’s firm, but Mr. Apel did not comply. Mr. Frankel did not ask Sun Life about the existence of the action and its status. He did not go directly to Mr. Apel’s office to review his file.

[52] Mr. Frankel, believing this action did not exist, advised the plaintiffs to sue Mr. Apel for missing the limitation period, which they did on July 13, 2015. It took time to get LawPro involved, which is not unusual. It was LawPro, and in particular Mr. Kestenberg, who finally confirmed the existence of this action, which Mr. Kestenberg did in his letter of September 24, 2015 to Mr. Frankel. It was Mr. Kestenberg who then presumably did a search of the court file of this action and discovered the dismissal order in late September, 2015, at which time he informed the plaintiffs of the order. He also suggested that the plaintiffs bring this motion.

[53] Fourth, it took Mr. Frankel then until October 28, 2015 to write Mr. Kestenberg demanding a copy of the Apel file in order to commence this motion. That file did not get transferred until December 10, 2015. Given the urgency of the motion, I do not understand why these events took so long.

[54] Fifth, it took Mr. Frankel until November 10, 2015 to write Ms. Greifenberger to ask Sun Life to consent to an order setting aside the dismissal order. I was given no explanation for the delay in getting this letter done. The parties are agreed that there is no issue with the timing of this motion after November 10, 2015 as it took time for Sun Life to retrieve its file.

[55] Given my suspicion that the plaintiffs were aware of the existence of the action and the status hearing process, this history makes me wonder whether the plaintiffs originally intended to bring this motion, and that they did so only when they sued Mr. Apel and when LawPro suggested that they bring this motion. Nevertheless, without more evidence, I will give the plaintiffs the benefit of the doubt on this point. I accept that Mr. Frankel was unaware of this action until the end of September, 2015. I accept that Mr. Apel, Mr. Frankel and the plaintiffs were all unaware of the existence of the dismissal order until the end of September, 2015. The delays in issue that took place thereafter, while unexplained, were not of the kind to justify a dismissal of the action.

[56] I will not dismiss the motion on this ground alone.

(e) Is there prejudice to Sun Life if the action is reinstated?

[57] The plaintiffs argue that there will be no prejudice to Sun Life if the action is reinstated. They give two reasons. First, they argue that the waiver issue can still be fully and fairly litigated as both persons involved in the alleged waiver – a Raj Daryanani for Sun Life and Manas for the plaintiffs – are still alive, available and capable of giving evidence. Second, they argue that the issue of the wrongful denial of Policy reinstatement due to Manas’ medical condition will not be prejudiced as that issue will turn on whether the Sun Life underwriters acted reasonably based on what was in the Sun Life file at the time. This file is contained in the Sun Life affidavit of documents. In particular, the plaintiffs argue that the second issue will turn on whether an expert’s report in Sun Life’s file as to Manas’ compliance with medication prescriptions was known to the Sun Life underwriters to be inaccurate.

[58] I disagree with both arguments. There is a presumption of prejudice after the expiry of the limitation period; see Wellwood v. Ontario (Provincial Police), 2010 ONCA 386 at paragraph 62. The plaintiff can overcome the presumption of prejudice by showing that relevant documents have been preserved, key witnesses are available and medical evidence of the injuries in question is available. In this case, the passage of the relevant limitation period happened in October, 2012, namely 3 ½ years ago. Therefore, the issue is whether the plaintiffs have rebutted the presumption of prejudice.

[59] Concerning the waiver issue, I note that this is the core pleading in this action. As pleaded, the alleged waiver of the insurability requirement was given verbally in October, 2010 by one, Raj Daryanani, an agent for Sun Life, to Manas. Sevan asserted in her cross-examination that Manas remains healthy, available and capable of giving evidence. There was no denial by Sun Life that Raj Daryanani is also healthy, available and capable of giving evidence.

[60] However, this is not the end of the matter. The plaintiffs provided no specific evidence as to what these witnesses will say. There was no affidavit or witness statement from Manas as to what Mr. Daryanani allegedly said, when he said it, where he said it, and what Manas did in response to this alleged statement. The plaintiffs have also not provided evidence as to what, if any, corroboration will be presented at trial to support Manas’ evidence. In Deverett Professional Corp. v. Canpages Inc. 2013 ONSC 6954 (S.C.J.) the court found in paragraph 25 that the absence of such detail rendered the plaintiff’s evidence as to the possible availability of viva voce evidence incomplete: “Without knowing what oral testimony the plaintiffs’ witnesses would be expected to provide, the defendant was not in a position to know or to address the identity of witnesses it would need to call and whether they would be unavailable.” I make the same observations in relation to the case before me.

[61] Furthermore, there is the question of faded memories. While this is always an issue in a case, there will come a time when a delay will justify dismissal due to faded memories. In this case, if the action is reinstated, it will take at least until the end of this year, 2016, to get to discovery and trial. That means that it will have been at least 6 years since the events in issue before detailed evidence is obtained about the alleged verbal waiver. There have been no discoveries that could have caused this evidence to be committed to writing in the meantime. In Nadarajah v. Lad 2015 ONSC 925 (Ont. Master) at paragraph 144, Master Haberman found that such a delay without discovery was enough to cause her to “be concerned” that the delay prejudiced the defendant due to the fading of memories. I am similarly concerned in this case, and find that the plaintiffs have not rebutted the presumption of prejudice on the waiver issue.

[62] Concerning the insurability issue, I note that the pleading of this allegation is obscure at best. Mr. Frankel admitted that he may have to amend the Statement of Claim to clarify this allegation. Assuming that such an amendment is made, I have nevertheless concluded that the plaintiffs have failed to meet their onus of showing that Sun Life will not be prejudiced on this issue if the action is reinstated.

[63] Here are my reasons for this conclusion. First, it seems clear to me from the cross-examination of Ms. Greifenberger that the Sun Life decision on Manas’ insurability was not confined to the issue of Manas’ medication compliance. Ms. Greifenberger referred to the following other concerns: blood tests; the existence of colitis, the existence of cancer; the “blood level in the paramedical”; and “other tests in the paramedical.” The plaintiffs provided no evidence as to what they will rely upon to prove that these concerns were inaccurate, much less what the defendants will need to rebut these points.

[64] Second, since the issue will be the accuracy of the medical information in the Sun Life file, there will be a need to branch out beyond the four corners of the Sun Life file to see whether this file information was indeed inaccurate. There will be a need to review the medical records of Drs. Kavazanjian and Skrinskas. Perhaps this broader medical evidence will show that it was Dr. Kavazanjian, not Dr. Skrinskas, who was wrong about Manas’ medication compliance. There was no evidence in the motion from the plaintiffs as to whether such broader medical evidence is available or has been obtained and preserved. Mr. Frankel argued that the parties can now still obtain a decoded OHIP summary dating back seven years to 2009. That proposition was accepted by Ms. Bennett-Martin. However, it was not at all clear to me whether that will be sufficient to give Sun Life a fair trial on this point.

[65] Mr. Frankel argued that, since Ms. Greifenberger admitted that the Sun Life underwriters did not require more medical information, there will be no need to go outside the four corners of the Sun Life file. I do not agree. Since the plaintiffs are questioning the accuracy of the Sun Life file, there will be an issue as to whether the underwriters were right in not requiring more information. This is in effect what Ms. Greifenberger stated in cross-examination. I agree with her.

[66] In the end, I have concluded that the plaintiffs have not met their onus of proving that Sun Life will not be prejudiced by a reinstatement of the action.

V. Conclusion

[67] Balancing all of these factors, and considering what is just as between the parties, I have decided not to set the dismissal order aside. The lack of credible evidence explaining the delay in the litigation and concerning inadvertence in missing the deadline in the status notice plus my concern over the risk of an unfair trial for Sun Life should the action proceed, does not justify reinstating the action. The plaintiffs have other remedies to pursue.

[68] As for the costs of this motion, both sides filed costs outlines at the close of argument. The plaintiffs’ costs outline shows a partial indemnity amount of $23,221.64. Sun Life’s costs outline appears to show a full indemnity amount of $23,202.40.

[69] Usually I would order further written submissions on costs. I do not do so in this case, as I assume that neither side exchanged offers to settle. This was not the kind of case that lends itself readily to offers to settle.

[70] Sun Life is entitled to costs, as it succeeded entirely in this motion. It is not entitled to a punitive award of costs, which is what its costs outline appears to contemplate. It should get partial indemnity costs, as the plaintiffs’ conduct did not merit sanction. Partial indemnity costs are usually in the 60% range of actual costs, which for Sun Life would be about $13,900. I will further reduce that figure, as I am not convinced that all of the work done by Sun Life counsel was necessary. The issues were not overly complex. The quantum of the Sun Life claim is reasonable, as its costs outline was lower in total than the cost outline of the plaintiff.

[71] In the end, I have decided to award Sun Life $10,000 in partial indemnity costs, to be paid in 30 days from the date of this order.

[72] This costs award is subject to one proviso. If the parties exchanged offers to settle, they may serve and file written submissions concerning these offers of no more than two pages on or before June 8, 2016. Responding written submissions of no more than two pages, may be served and filed on or before June 22, 2016. Should this happen, the above noted costs award will be suspended and will become subject to an amending order to be delivered by me in due course.

Released: May 25, 2016 Master C. Wiebe