Court File and Parties

Court File No.: CV-14-00504418 Date Heard: 2016-08-17 Endorsement Released: 2016-08-26

Superior Court of Justice - Ontario

Re: Economical Mutual Insurance Company, Perth Insurance Company and Waterloo Insurance Company v. Century Diagnostic & Assessment Centre Inc., Paulo Tsysar, Paul Benchetrit, Julia Pershutov, Anna Semenov and Danny Grossi

Before: Master B. McAfee

Counsel: L. Quan for the Moving Parties, the Plaintiffs M. Katzman for the Responding Parties, the Defendants, Century Diagnostic & Assessment Centre Inc., Paulo Tsysar, Paul Benchetrit, Julia Pershutov and Anna Semenov

Reasons for Decision

[1] This is a motion brought by the plaintiffs for the following relief:

(a) an order extending the time for service of the amended statement of claim on the defendants Century Diagnostic & Assessment Centre Inc., Paulo Tsysar, Paul Benchetrit, Julia Pershutov and Anna Semenov (the responding defendants);

(b) an order dispensing with service and, in the alternative, extending the time for service and substitute service of the amended statement of claim on the defendant Danny Grossi; and,

(c) leave to amend the statement of claim to correct the misspelling of the first name of one defendant.

[2] The responding defendants oppose the relief requested for an extension of time for service as it relates to the responding defendants. The defendant Grossi did not appear on the motion.

[3] Rule 14.08(1) provides that when an action is commenced by statement of claim, the statement of claim shall be served within six months after it is issued.

[4] Rule 3.02(1) permits the court to extend the time prescribed by the Rules on such terms as are just.

[5] Rule 3.02(2) states that a motion to extend the time may be made before or after the expiration of the time.

[6] Rule 1.04 provides that the Rules shall be liberally construed to secure the just, most expeditious and least expensive determination of the proceeding.

[7] Rule 2.01(1) provides that a failure to comply with the Rules is an irregularity and the court may grant relief on such terms as are just to secure the just determination of the real matters in dispute.

[8] The applicable test on a motion to extend the time for service is set forth by the Court of Appeal in Chiarelli v. Wiens (2000), 46 O.R. (3d) 780 (Ont.C.A.) at paras 13-17 as summarized in Khroad v. Hill, 2010 ONSC 945 (Ont.S.C.J.) at para 34:

(a) Prejudice is the key issue on the motion to extend time for service of the statement of claim. The court should not extend the time for service if to do so would prejudice the defendant. The plaintiff has the onus of showing that extending the time for service will not prejudice the defendant;

(b) If the defence is claiming that it will be prejudiced by an extension, it has, at least, an evidentiary obligation to provide some details; the plaintiff cannot be expected to speculate on what witnesses or records might be relevant to the defence and then attempt to show that these witnesses and records are still available or that their unavailability will not cause prejudice;

(c) The defendant cannot create prejudice by failing to do something that it reasonably could have or ought to have done;

(d) Prejudice that will defeat a request for an extension of time for service must be caused by the delay; and

(e) The court should not fix in advance rules or guidelines as to when an extension should be refused. Each case should be decided on its own facts with the focus on determining whether the defendant is prejudiced by the delay.

[9] It is the role of the court to exercise its discretion on the facts of each case and prejudice is the key consideration.

[10] I am satisfied that the granting of the extension sought will advance the just resolution of the dispute without unfairness or prejudice to the defendants.

[11] The statement of claim was issued on May 16, 2014. The statement of claim ought to have been served by November 16, 2014. The responding defendants had actual notice of the statement of claim and the within motion to extend the time for service on October 21, 2015. On the motion, the parties made their submissions based on a period of delay of approximately 11 months.

[12] There were some missteps resulting in the delay. An updated corporate profile search should have been conducted when the statement of claim was issued and when attempts to serve the statement of claim were made. The memorandum from the process server of June 3, 2014, did not come to the attention of the lawyer with carriage of this matter in a timely manner.

[13] On a motion to extend the time for service, the court should be concerned mainly with the rights of the parties and not the conduct of counsel. I am not satisfied that there was any “steadied neglect of the Rules” (Tarsitano v. Drutz, 2013 ONSC 5605 (Ont.S.C.J.) at para 32). The memorandum from the process server came to the attention plaintiffs’ counsel in late July or early August 2015, and this motion was brought promptly thereafter.

[14] I am satisfied that there is no prejudice to the defendants arising out of the 11 month delay.

[15] To the extent that there is a presumption of prejudice, the plaintiffs have rebutted the presumption. The plaintiffs’ affidavit of documents is prepared in draft. The draft affidavit of documents sets out the specifics of each claim that is the subject matter of this action (see cross-examination transcript at q. 10).

[16] There were proceedings before the Financial Services Commission of Ontario (FSCO) for offences under the Insurance Act involving the subject matter of the allegations made in the within action. There are a number of other actions involving the defendants concerning similar allegations. I am satisfied that relevant documents would not have been reasonably destroyed by the defendants in these circumstances.

[17] A delay of a period of 11 months is not so significant such that it could reasonably be assumed that memories of witnesses have faded as a result of that delay.

[18] There is no evidence of actual prejudice arising from the period of delay in serving the statement of claim.

[19] The responding defendants also argue that the time for service should not be extended because the action is statute barred. A motion to extend the time for service is not a motion for summary judgment. In my view, the merits of a limitation period defence are not an appropriate consideration on this motion. The responding defendants are at liberty to plead any limitation period defence and bring any motion that may be appropriate in that regard after their defence has been delivered.

[20] For these reasons, an extension of time to serve the amended statement of claim is granted.

[21] In the event that an extension of time was granted, the responding defendants did not take a position with respect to the request for leave to amend the statement of claim and the relief sought with respect to the defendant Grossi.

[22] There was a submission on the motion that the defendant Grossi has a lawyer acting for him in other matters. The evidence before me is that the defendant Grossi no longer resides at the address proposed for substitute service. As the information concerning a lawyer of record for the defendant Grossi in other matters may lead to an alternative method of serving him or a further address for service, I am not satisfied that an order dispensing with service or substitute service should be made at this time. A further motion for substitute service or dispensing with service on the defendant Grossi may be brought on further evidence, if required.

[23] For the reasons above, I am also satisfied that an extension of time for service ought to be granted with respect to the defendant Grossi and I extend that time to December 31, 2016.

[24] I award some costs to the responding defendants but not the amount sought by the responding defendants. I am satisfied that costs payable other than within 30 days is more just. Although the plaintiffs were successful on the motion, the plaintiffs are being granted an indulgence. In my view, costs in the all-inclusive amount of $2,500.00 is a fair and reasonable amount that the plaintiffs could expect to pay for the costs of the responding defendants. No costs of the cross-examination are awarded to the plaintiffs. Costs are payable to the responding defendants in the cause.

[25] Order to go as follows:

(a) Leave is granted to the plaintiffs to amend the statement of claim to reflect the correct spelling of the defendant Paulo Tsysar’s name in accordance with the draft amended statement of claim attached as Schedule “A” to the notice of motion;

(b) The time for service of the amended statement of claim on the defendants, Century Diagnostic & Assessment Centre Inc., Paulo Tsysar, Paul Benchetrit and Julia Pershutov and Anna Semenov is hereby extended to September 30, 2016.

(c) The time for service of the amended statement of claim on the defendant Danny Grossi is hereby extended to December 31, 2016;

(d) The motion for an order dispensing with service and, in the alternative, substitute service of the amended statement of claim on the defendant Grossi is dismissed without prejudice; and

(e) Costs of the motion are fixed in the all-inclusive sum of $2,500.00, payable by the plaintiffs to the defendants Century Diagnostic & Assessment Centre Inc., Paulo Tsysar, Paul Benchetrit, Julia Pershutov and Anna Semenov in the cause.

Master B. McAfee

Date: August 26, 2016