Court File and Parties

COURT FILE NO.: CV-10-417357 DATE: 20170214

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ANDREA PRESCOTT, AMANDA BURT and BARBARA RAMSEY Plaintiffs (Respondents) – and – RAMON BARBON and EDUARDO RAMON-SAGASTUME Defendants (Appellant is Ramon Barbon)

Counsel: William Scott, for the Plaintiffs (Respondents) Derek V. Abreu, for the Defendant (Appellant Ramon Barbon) Derek Fulton, for the Defendant, Eduardo Ramon-Sagastume Donna Polgar, for the Intervenor, Economical Insurance Company

HEARD: September 23, 2016

REASONS FOR JUDGMENT

kristjanson j.

[1] The appellants appeal the decision of Master Hawkins setting aside an administrative dismissal of a personal injury action. The motor vehicle accident took place in December, 2008. The claim was commenced in December, 2010. The Registrar dismissed the action as abandoned August 25, 2011. Plaintiffs’ counsel became aware of the dismissal in September, 2011. A Notice of Motion to set aside was served in February, 2014, and the motion record was filed in June, 2014. The motion before Master Hawkins was heard June 10 and September 16, 2015, four years after the dismissal.

[2] I have determined that there were errors of law in the Master’s approach, relating both to the contextual framework and the evaluation of the Reid factors. Notably, the entire statutory scheme as it applies to the facts of the case must be considered in evaluating context. In addition, the finality principle is an important element of context. It must be considered, and the finality principle grows stronger with time. I have also identified some factual findings or inferences which show palpable and overriding error, or error in principle. As a result, I allow the appeal and determine that the administrative dismissal should not be set aside.

FACTS

1. The Accident

[3] This motor vehicle accident occurred on December 28, 2008. The plaintiffs Andrea Prescott and Barbara Ramsey were passengers in an automobile owned and operated by the plaintiff Amanda Burt. The motor vehicle owned and operated by the defendant Ramon Barbon stopped behind the Burt vehicle. A third motor vehicle operated by the defendant Eduardo Ramon struck the Barbon motor vehicle from behind, driving the Barbon motor vehicle into the rear of the Burt motor vehicle. The plaintiffs sued for injuries sustained in the accident by a claim issued December 29, 2010 and served January 11, 2011.

[4] Ramon had been consuming alcohol. He was charged with and pleaded guilty to impaired driving.

[5] The motor vehicle was owned by Ramon’s father. The liability insurer, Wawanesa, denied coverage to Ramon on the grounds that he was operating the vehicle without the consent of its owner. Plaintiff’s counsel, D. Czutrin, was advised by counsel for Ramon on April 21, 2011 of the denial of coverage. He recommended that the plaintiffs add their respective uninsured/underinsured carriers to the action. Ramon’s counsel further wrote May 18th and June 20, 2011, about Mr. Czutrin’s intentions. On August 30, 2011, Mr. Czutrin confirmed that he intended to commence an action against the uninsured/underinsured carriers in light of the alleged consent issue. He did not do so.

[6] The intervenor/appellant Economical Insurance Company (“Economical”) insures the vehicle the plaintiffs were in the time of the accident. If the dismissal is set aside, the plaintiffs intend to bring a motion to add Economical to the action in order to access the uninsured motorist provisions of its policy.

[7] Economical did not learn of the existence of this action until it received notice of a motion to set aside the dismissal Order in February, 2014. Burt and Prescott claimed accident benefits under the Economical policy and settled those claims in July, 2011.

2. The Administrative Dismissal

[8] Mr. Czutrin, lawyer for the plaintiffs, received a notice that the action would be administratively dismissed on July 22, 2011. On August 25, 2011, the court issued an order dismissing the action as abandoned pursuant to Rule 48.15(1) of the Rules of Civil Procedure. There is an issue regarding a waiver of defence which I will return to but it is clear that no defence was requested.

[9] Mr. Czutrin attempted to avoid the administrative dismissal by noting the defendants in default on August 30, 2011. The process server called Mr. Czutrin personally on September 1, 2011 when the default materials were rejected at the courthouse since the claim had been administratively dismissed. The claim was dismissed 34 days after issuance of the Registrar’s Notice under Rule 48.15, although Rule 48.15(1)5 provided that 45 days’ notice was required.

[10] The file languished for almost two years. On August 13, 2013 Mr. Czutrin wrote to Ramon’s lawyer seeking to obtain his consent to set aside the dismissal order. His explanation is that he was carrying an unmanageable file load, and this one fell out of his tickler system. I will return to that explanation.

[11] Ramon’s lawyer responded September 3, 2013 advising he was looking forward to receiving Mr. Czutrin’s materials for the motion to set aside the dismissal. Mr. Czutrin never responded.

3. Steps in the Litigation

[12] Very little was done to move the file along before the dismissal. The only records obtained before the dismissal were the police report, which was sought on May 1, 2011. It was not until November 28 and December 12, 2013 that Mr. Czutrin requested various medical and income records for Ms. Prescott. He did not request productions for Amanda Burt until February, 2014 and Barbara Ramsey until April, 2014. No defences have been filed, no affidavits of documents have been served, and there have been no discoveries.

4. Contacts with the Plaintiffs

[13] Of note, Mr. Czutrin did not inform his clients of the dismissal for 2.5 years. In February, 2014, Mr. Czutrin met with the three plaintiffs and for the first time informed them of the dismissal. He had very little contact with his clients between the date he became aware of the dismissal (September 1, 2011) and the date of the client meeting (February, 2014). In this 2.5 year period he had one phone call with Prescott, on November 22, 2011. He had no contact with Burt. He had three contacts with Ramsay (phone call November 30, 2011, meeting December 6, 2011, and phone call January 3, 2012). None of the plaintiffs filed affidavit evidence on the motion to set aside the dismissal. Mr. Czutrin, however, swore an affidavit stating that it had always been his intention and the intention of the plaintiffs to proceed with the action.

5. Motion to Set Aside Dismissal

[14] Mr. Czutrin reported this matter to LawPro on December 16, 2013. LawPro retained counsel for Mr. Czutrin. Notice of motion to set the administrative dismissal was served February 20-23, 2014. The motion record was served in June, 2014 and originally scheduled for argument October 28, 2014, three years and two months after the dismissal. The motion was argued before the Master June 10 and September 16, 2015. The Master’s decision was released December 11, 2015. The matter was argued before me September 23, 2016.

DECISION OF THE MASTER

[15] The Master applied the contextual approach to setting aside dismissal orders of the Registrar as set out in Scaini v. Prochnicki, 2007 ONCA 63, 85 O.R. (3d) 179, which requires the court to exercise its discretion upon a consideration of the relevant factors, balancing the interests of the parties to make the order that is just in the circumstances. Scaini confirmed that the four criteria set out in Reid v. Dow Corning Corp., [2001] O.J. No. 2365 would in most cases be of central importance, and the Master analyzed the case and applied the four Reid criteria. The four Reid factors as set out in Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80 (Ont. Master) at para. 41 are:

(1) Explanation of the Litigation Delay: The plaintiff must adequately explain the delay in the progress of the litigation from the institution of the action until the deadline for setting the action down for trial as set out in the status notice. She must satisfy the court that steps were being taken to advance the litigation toward trial, or if such steps were not taken to explain why.... 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.

(2) Inadvertence in Missing the Deadline: The plaintiff or her solicitor must lead satisfactory evidence to explain that they always intended to set the action down within the time limit set out in the status notice, or request a status hearing, but failed to do so through inadvertence. In other words the penultimate dismissal order was made as a result of inadvertence.

(3) The Motion is Brought Promptly: The plaintiff must demonstrate that she moved forthwith to set aside the dismissal order as soon as the order came to her attention.

(4) No Prejudice to the Defendant: The plaintiff must convince the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiff's delay or as a result of steps taken following the dismissal of the action.

[16] The Master also relied on the Court of Appeal’s decision in H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173, which recognized the tension between two policies: the first that civil actions should be decided on their merits, the second that civil actions should be resolved in a timely and efficient manner in order to maintain public confidence in the administration of justice. The Master emphasized the court’s preference for deciding matters on their merits, and indicated this is all the more pronounced for delay resulting from an error committed by counsel.

[17] The Master determined that the plaintiffs had failed to meet the first three Reid criteria, but that the defendants did not suffer significant prejudice. The Master set aside Registrar’s dismissal order.

STANDARD OF REVIEW

[18] The decision of a Master pursuant to Rule 37.14 to set aside an administrative dismissal is discretionary and is entitled to significant deference. It may be set aside only if the Master made an error of law; made a palpable and overriding error as to the facts; or gave no weight or insufficient weight to relevant factors: Labelle v. Canada (Border Services Agency), 2016 ONCA 187 at para. 21.

[19] In General Motors of Canada Ltd. v. Johnson, 2013 ONCA 502, 2013 CarswellOnt 10496 (Ont. C.A.), the Court of Appeal held that a trial judge’s findings of fact and inferences from fact cannot be disturbed on appeal unless they are “infected by palpable and overriding error or are otherwise clearly wrong, unreasonable, or unsupported by the evidence.” (Paras. 50-51).

[20] However, the findings of fact and factual inferences made by a Master are not immune from review on appeal. In L. (H.) v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401 Fish, J. for the majority in held that "there is no meaningful difference between a standard of "clearly wrong" and a standard of "palpable and overriding error", affirming that a "palpable" error is "clear to the mind or plain to see", and an "overriding" error is one that "discredits the result."(para. 55 and 69)

[21] With respect to inferences of fact, Fish J. held at paras. 74-75:

74 I would explain the matter this way. Not infrequently, different inferences may reasonably be drawn from facts found by the trial judge to have been directly proven. Appellate scrutiny determines whether inferences drawn by the judge are "reasonably supported by the evidence". If they are, the reviewing court cannot reweigh the evidence by substituting, for the reasonable inference preferred by the trial judge, an equally — or even more — persuasive inference of its own. This fundamental rule is, once again, entirely consistent with both the majority and the minority reasons in Housen.

75 In short, appellate courts not only may — but must — set aside all palpable and overriding errors of fact shown to have been made at trial. This applies no less to inferences than to findings of "primary" facts, or facts proved by direct evidence. (emphasis in original)

[22] In this case, the defendants raise a number of errors of law, errors of principle based on the consideration of irrelevant factors or failure to consider relevant factors, and palpable and overriding errors of fact. In order to situate the analysis, I review the alleged errors in the discussion of the Master’s findings of fact, application of the four Reid criteria, and the contextual analysis mandated by Scaini.

The Context

[23] A contextual analysis is critical. I find that the Master erred in law in the contextual analysis of the repeal of Rule 48.15, in failing to consider the entire statutory scheme both at the time of repeal and the transition to the new scheme. I also find that the Master erred in law in finding the defendants blameworthy. Finally, as discussed in the section on prejudice, but equally applicable to context, I find the Master erred in law and principle in failing to consider the principle of finality, and the strength of the principle which grows over time.

1. Context and the Repeal of Rule 48.15

[24] Rule 48.15(1), which was in effect on the date of the dismissal in August 2011, provided in part that the Registrar shall make an Order dismissing a case as abandoned where more than 180 days had passed since the originating process was issued, and no statement of defence or notice of intent to defend had been filed. Rule 48.15(5) provided that an order dismissing the action could be set aside under Rule 37.14, which provided then, as it does now, that a person affected by a Registrar’s order may move to set aside or vary the order, by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date that is at least three days after service of the notice of motion.

[25] While the dismissal order came to the attention of plaintiffs’ counsel in September, 2011, the notice of motion was not served for 2.5 years, until February, 2014; the motion record was not served until June, 2014, three years and 2 months after the dismissal; it was not argued until June, 2015, more than four years after the dismissal.

[26] The Master found that the repeal of Rule 48.15 was part of the context within which the plaintiffs’ motion should be evaluated. Rule 48.15 was repealed on January 1, 2015 and replaced with Rule 48.14, which provides that the registrar shall dismiss an action if it has not been set down for trial or terminated five years after commencement of the action, subject to court orders or agreements on timetables. The repeal of Rule 48.15 clearly weighed heavily on the side of the plaintiff’s case in the Master’s reasons: in a sense, he treated it as a “get out of jail free” card.

[27] The Master failed to consider the complete statutory context, thereby falling into error. Rule 48.14 was not in force at the time of dismissal; Rule 48.15 was in full force and effect on the date of the dismissal, August 25, 2011. Rule 37.14, which was in force, required the plaintiffs to move “forthwith” after the order comes to the person’s attention to set aside. In addition, the Master failed to consider the transitional provisions associated with the coming into force of the five year under Rule 48.14. The transitional provisions enacted by the Legislature set out in Rule 48.14(13) that:

Every notice that an action will be dismissed as abandoned that was given by the registrar under rule 48.15, as it read immediately before January 1, 2015, ceases to have effect on that date, if the action was not dismissed before that date.

[28] The transitional provisions thus set aside notices of dismissal, not dismissal orders. As importantly, the new Rule contemplates five years from inception to termination or listing for trial. The case at bar has been dismissed for five years, and has not progressed beyond the pleadings stage. The Master made a specific finding that although the action is “almost five years old and is still at the pleadings stage, owing to the amendments to Rule 48.14, I do not find this delay to be inordinate. If this action is allowed to proceed the registrar will not dismiss this action for delay before January 1, 2017 at the earliest.” The Master’s interpretation, however, failed to consider these aspects of the legislative context, essentially giving retroactive effect to the new Rule without properly situating this case in the complete legislative context.

[29] In additional, a contextual analysis which considers the legislative change must also consider the relevance of the plaintiff’s delay as it relates to the date of legislative change. This issue was specifically considered by the Divisional Court in Nadarajah v. Lad, 2015 ONSC 4626, 2015 CarswellOnt 11012, where Molloy J. held as follows at para. 64:

There is authority for the proposition that the amendment to the Rule is part of the context to be taken into account in weighing the benefits of timely justice against the determination of cases on their merits. The argument of the motion in this case should have been completed in 2012, two years before the amendment to the Rule. In that event, the amendment could clearly not have been raised at all. The unconscionable delay by the defendant in bringing the motion forward should not be permitted to stand in his favour. In this case, I would give no weight to that particular factor.

[30] This motion to set aside the dismissal order should have been argued in 2012, before the repeal was in contemplation; the effect of the repeal given the lengthy delay by the plaintiffs in serving a motion record on the motion to set aside the dismissal order three years and two months after the dismissal should not have been permitted to stand in favour of the plaintiffs.

2. Context and the Blameworthiness of the Defendants

[31] The second contextual factor considered by the Master was the failure of the defendants to file a notice of intent or defence, since the registrar would not have dismissed the action as abandoned if this had been done. He concluded that “both defendants must accept part of the blame for the fact that this action has been administratively dismissed.” This is an error in law which infects the judgment, both because this finding was applied to the first Reid factor, explanation for delay, and it is linked to a finding of blameworthiness based on a palpable and overriding error of fact relating to an adjuster’s assurance. There is no legal basis for finding the defendants at fault for not filing a defence. A defendant is under no obligation to file a defence to prevent a registrar’s dismissal of a plaintiff’s claim. Both issues are discussed below.

[32] The failure of the defendants to issue a notice of intent to defend on a motion to set aside a registrar’s dismissal on the basis of abandonment is not properly a contextual factor for which the defendants are to “accept part of the blame.” Based on the wording of the Rule, a notice of intent or defence will never have been filed in an action administratively dismissed as abandoned. The context requires consideration that a separate Rule applied to cases in which a defence or notice of intent had been filed (Rule 48.14, in which a status notice would issue two years after the filing of a defence if not listed for trial or terminated, with a dismissal 90 days after issuance unless action was taken.) The approach of the Master would find all defendants blameworthy, even though the Rules do not create that categorization.

[33] Moreover, the finding of “blameworthiness” for failure to file a defence or notice of intent disregards the fact that it is the actions of the plaintiffs, not defendants, that are in issue. The Court of Appeal has established that the conduct of a defendant may be relevant, especially where a plaintiff is faced by “some resistance” or tactics designed to interfere with expeditious progress of litigation, which is not the case here: 1196158 Ontario Inc. v. 6274013 Canada Limited, 2012 ONCA 544, 112 O.R. (3d) 67 at para. 29. Otherwise, “the party who commences the proceeding bears primary responsibility for its progress”, and therefore “the initiating litigant generally suffers the consequences of a dilatory regard for the pace of litigation”: (para. 28).

[34] The Master found as a fact that Mr. Czutrin had granted an indulgence to Barbon “because the Wawanesa adjuster assured him that Barbon’s defence would be delivered in sufficient time to prevent an administrative dismissal.” I find this to be a palpable and overriding error of fact. The Master misapprehended the evidence, or failed to consider the entirety of the evidence. The Master failed to advert to significant contradictory evidence which required consideration if he were to reach this conclusion, as follows:

(1) Mr. Czutrin, in both his affidavit and supplementary affidavit, failed to mention that he had a conversation with Barbon’s insurance adjuster in which the adjuster “assured him that Barbon’s defence would be delivered in sufficient time to prevent an administrative dismissal”. There is no mention in either affidavit of phone calls, assurance or reliance;

(2) The statement was made for the first time in cross-examination on his affidavit, in which he said that “if my memory serves me correctly….; a review of the transcript demonstrates that he was confused who he spoke with, and thought it was the adjuster for Ramon, not Barbon;

(3) The answer given on cross was immediately followed by an answer that he had “granted the indulgence of a waiver on the assumption that there would be a defence filed in a timely manner”;

(4) The alleged conversation contradicts two unanswered letters from the Wawanesa adjuster, Hudson. In the January 17, 2011 letter, Wawanesa adjuster Hudson wrote seeking to be released from the action, requesting a waiver of defence, and requesting notice should a defence be required. In a March 13, 2012 letter, Ms. Hudson wrote to inquire if Wawanesa had been released from the action;

(5) Czutrin wrote two detailed letters setting out all his actions in the file, one which may or may not have been sent dated November 6, 2012, and a detailed letter sent to Barbon’s lawyer and the adjuster Hudson August 13, 2013. There is no reference to any such call, and no reference to a waiver of defence, in the detailed letters;

(6) In any event, the suit claims punitive damages not covered by the policy. An adjuster may make decisions within policy limits, but cannot bind a party represented by counsel (in this case, Barbon) with respect to claims not covered by the policy; and

(7) There is no evidence either Barbon or his lawyer sought or abused an indulgence.

[35] Thus, the Master erred in law and principle in finding the defendants partly liable for the administrative dismissal, given the statutory scheme (Rule 48.15 only applied to cases where no defence or intent was filed), the palpable and overriding error of fact regarding a finding that Barbon’s adjuster assured him Barbon’s defence would be delivered to avoid an administrative dismissal; and the burden on the plaintiffs, not defendants, to move the litigation along.

ERRORS IN ANALYSIS OF REID FACTORS

[36] The Master made errors in his approach to the Reid factors in this case. The most significant was the failure to consider the finality principle in the analysis of prejudice.

Reid Factor #1: Explanation for Litigation Delay

[37] The Master found that the plaintiffs failed to meet the first criterion, but in the circumstances, was not prepared to dismiss on this ground alone. The key points were that (1) based on Czutrin’s evidence, neither he nor the plaintiffs ever made a conscious decision to abandon the action, and the delays are explained by Czutrin’s overwhelming caseload and the action falling out of his tickler system; (2) owing to the amendments to Rule 48.14, the delay in not inordinate; and (3) the defendants must accept part of the blame for the fact that the Registrar dismissed this action as moot, as discussed above.

[38] As noted above, the reliance on the second and third factors, discussed in the Context section above, is in error. This strengthens the significance of the first factor, and the only explanation offered is the disorganization of the plaintiffs’ lawyer.

Reid Factor #2: Intention to Prosecute Claim but Failed Due to Inadvertence

[39] The Master found that the main purpose of this criterion is to identify those situations in which plaintiff or plaintiff’s counsel has “deliberately flouted the Rules of Civil Procedure or orders of the court”, and he went on to find that Czutrin and the plaintiffs “did not engage in stubbornly disobedient behaviour.” This view of the second factor is not in keeping with the jurisprudence, and is an error in principle. Rather, the plaintiff must lead satisfactory evidence that the deadline was missed due to inadvertence – not stubbornly disobedient behavior - and the plaintiffs had a continuing intention to proceed. The balancing is about fairness, not punishment for disobedience. Molloy J. held in Nadarajah, supra at para. 32 that there is a continuum of conduct to be considered:

There is a continuum of conduct under this umbrella. If counsel deliberately did not do something for tactical or strategic reasons and a dismissal order was the result, this would be a strong factor weighing against setting aside the dismissal order. On the other end of the continuum is a slight misstep or oversight in otherwise conscientious conduct, such that a deadline gets missed notwithstanding the existence of an efficient tickler system and careful supervision of it. No individual and no system can be perfect and mistakes can sometimes occur. Such circumstances would be inadvertent at the other end of the continuum from deliberate conduct and would weigh strongly towards granting relief to the plaintiff. However, within the spectrum of inadvertent conduct there are vast differences. The conduct of the plaintiff's counsel in this case, while not deliberate, was egregious. It is at the opposite end of the spectrum from inadvertent conduct that could be considered to be a mere slip. As such, in weighing all of the factors, this factor would tend to weigh against the plaintiff notwithstanding that the conduct itself was inadvertent, as opposed to deliberate. The weighing process is qualitative, not quantitative. It is not a matter of how many of the four tests are satisfied by the plaintiff, but the relative merits and weaknesses of the circumstances in each of the categories.

[40] A more nuanced approach applying the proper legal test would analyze Czutrin’s conduct, including the tickler system explanation, on the spectrum:

(1) Correspondence from defence counsel and an adjuster were repeatedly ignored;

(2) No action was taken on the file from September 1, 2011 to a letter in August, 2013 seeking consent to set aside the dismissal;

(3) The utter failure of plaintiffs’ counsel to rectify the default in a timely manner after discovering the administrative dismissal;

(4) There was very little contact with the plaintiffs. Mr. Czutrin did not inform his clients of the dismissal for 2.5 years. In February, 2014, Mr. Czutrin met with the plaintiffs and for the first time informed them of the dismissal. He had very little contact with his clients between the date he became aware of the dismissal (September 1, 2011) and the date of the client meeting (February, 2014). In this 2.5 year period he had one phone call with Prescott, on November 22, 2011. He had no contact with Burt in 2.5 years. He had three contacts with Ramsay (phone call November 30, 2011, meeting December 6, 2011, and phone call January 3, 2012, with no indication of reasons for the contacts), but no contact with Ramsay for over two years between January, 2012 and February, 2014. The first meeting with the plaintiffs after the dismissal was after he had reported himself to LawPro;

(5) Although Czutrin said the matter fell out of his tickler system, his tickler system depended on clerks bringing notices to the attention of lawyers which he admitted was not always the case; together with what he testified on cross-examination was “probably” keeping track of deadlines on a piece of paper with a “to do” list as he has a tendency to keep notes on “scraps of paper”; and he had a good memory for deadlines, for remembering the things that need to get to done to avoid LawPro problems. This is not a reliable tickler system;

(6) The claim was commenced in December, 2010. Before the dismissal, the only production obtained was the police report sought in May, 2011. It was not until November 28 and December 12, 2013 that Mr. Czutrin requested various medical and income records for Ms. Prescott. He did not request productions for Amanda Burt until February, 2014 and Barbara Ramsey until April, 2014.

[41] In terms of the intention to proceed, the Master reversed the onus and applied the wrong legal test (no evidence that the plaintiffs intended to abandon the action). Evidence of intention to proceed is different from a lack of evidence of an intention to abandon an action. In addition, the plaintiffs filed no direct evidence of their continuing intention to proceed.

[42] The only evidence upon which the Master could have relied is a bald statement by Mr. Czutrin that: “It has always been my intention and the intention of the plaintiffs to proceed with the action.” This statement does not set out any conversations with the plaintiffs, or a basis for making this assertion. Care must be taken in reliance on bald statements by counsel with respect to a plaintiff’s intentions. This is particularly the case where, as here, there is no evidence of any contact with any of the plaintiffs between January 3, 2012 and February, 2014, and only minimal contact before that time. There is no evidence that any of the plaintiffs asked about the status of their action in over two years. Although the Master found “clear evidence” of the plaintiffs’ continuing intention, this is unreasonable in light of the full factual context: Van Harten v. Fey, [2004] O.J. No. 2306 at para. 13; O’Connor v. Dominion of Canada General Insurance Company, 2013 ONSC 3184 at paras. 17-19; Hernandez v. Lariviere, 2014 ONSC 7158 at para. 44; Jadid v. Toronto Transit Commission, 2016 ONSC 1176 at para. 91.

Reid Factor #3: Promptly Move to Set Aside Dismissal

[43] It was conceded that the motion was not brought promptly. Czutrin reported himself to Law Pro on December 16, 2013, and Law Pro counsel served a notice of motion in February, 2014.

Reid Factor #4: Prejudice and Finality

[44] The most significant error of law and principle was the failure of the Master to consider the principle of finality and the rights of the defendants and the intervenor, including their reliance on the security of their position given the passage of time: HB Fuller Company v Rogers Law Office), 2015 ONCA 173 at para. 28. The significance of the finality principle must, as a matter of law, be considered in the analysis of prejudice where it is applicable. The failure to consider it is an error of law.

[45] As Sharpe, J.A. held for the Court in Marché d'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd, 2007 ONCA 695, 2007 CarswellOnt 6522, at paras. 37-38:

37 Finality, like the avoidance of unnecessary delay, is a central principle in the administration of justice. "The law rightly seeks a finality to litigation" and finality is "a compelling consideration": Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460 (S.C.C.) at paras 18 and 19.

38 When an action has been disposed of in favour of a party, that party's entitlement to rely on the finality principle grows stronger as the years pass. Even when the order dismissing the action was made for delay or default and not on the merits, and even when the party relying on the order could still defend itself despite the delay, it seems to me that at some point the interest in finality must trump the opposite party's plea for an indulgence. This is especially true where, as in the present case, the opposite party appears to have another remedy available. (emphasis added)

[46] In this case, the Master formulated the test on prejudice as follows:

Has either of the defendants suffered any significant prejudice in presenting his case at trial as a result of the plaintiffs’ delay or as a result of steps taken following the dismissal of the action?

[47] The Master then reviewed the extensive evidence filed by the defendants and intervenor, concluding ultimately that significant prejudice was not established. The onus is not on the defendants to demonstrate significant and actual prejudice, but on the plaintiffs to rebut the inference of prejudice, in the context of a presumption which grows stronger with time. The prejudice must be evaluated in the context of the finality principle, which also grows stronger with time. The Master did not consider the growth over time in the presumption of prejudice and the finality principle, which was an error.

[48] The defendants and intervenor filed evidence of actual prejudice:

(1) No OHIP summaries prior to the accident are available except for the prior seven months, preventing the defendants/intervenor from obtaining pre-accident medical records. The Master held that: “apart from the fact that they apparently would have preferred to see OHIP summaries on the plaintiff that cover a longer pre-accident period, they do not point to any particular document that is missing.” This overlooks the fact that the defendants cannot know what documents are missing because they cannot inspect the OHIP summaries, effectively faulting the defendants for not knowing what information no longer exists due to the plaintiffs’ delay. Plaintiffs’ counsel could have obtained OHIP summaries for the full 7 year pre-accident period had he made the inquiry following the accident or the issuance of the claim;

(2) In his affidavit, Ramon swears that evidence in his possession is no longer available because it was not preserved after receipt of the dismissal order. There was evidence in his criminal file, including photographs of the vehicle, that are no longer available as the criminal lawyer and his file cannot be located. The vehicle was sold and wouldn’t have been or pictures would have been taken if the action were alive. The Master found that because of the availability of other information, the loss of evidence has not caused prejudice of such magnitude that he should dismiss the motion, while giving no weight to the finality principle.

(3) Ramon also gave evidence that he borrowed funds and acquired property in his own name which he would not have done had the action been alive; he has also lost the ability to file in bankruptcy; this is also relevant to the finality principle.

(4) Economical points to significant prejudice in reviving the action, with the potential to be added many years after the accident with no chance for surveillance, loss of the information in OHIP summaries, and impairment of fair trial issues.

CONCLUSION

[49] In the circumstances, I have determined that the errors sufficiently undermine the reliability of the Master’s conclusion that I should set aside the decision and weigh the factors myself. That is the approach taken by the Court of Appeal in Finlay v. Van Paasen, 2010 ONCA 204 at paras. 29-30.

[50] In terms of context, the most important contextual factors are the statutory scheme relating to repeal and the timing of both the dismissal order and the motion to set aside, and the finality principle and prejudice. I have reviewed the appropriate contextual and Reid criteria at length above, and adopt and apply that discussion here.

[51] More than eight years ago, the plaintiffs were involved in a minor car accident; all three vehicles drove away from the accident. The lawyer issued a Statement of Claim, then took virtually no steps to prosecute the action. He did not request a defence. He ignored correspondence from defence counsel and adjusters. Counsel became aware the case would be dismissed in August, 2011 and initially sought to note the defendants in default, although he was aware by September, 2011 that the case had been dismissed and he could not note the defendants in default. After the case was administratively dismissed in August, 2011, he did not inform his clients for more than 2.5 years, until February, 2014. There is no evidence the plaintiffs contacted their lawyer in this two year period to inquire about the status of the case. The notice of motion to set aside the dismissal was served in February, 2014; the motion record was served in June, 2014. The motion was argued in June and December, 2015.

[52] While Rule 48.15 had been repealed by the time the motion was argued, it should have been argued in 2012, or even 2013 – well before the repeal. At all times, Rule 37.14 required the plaintiffs to move “forthwith” to set aside a dismissal order. There is no satisfactory evidence for the delay. Given the complete lack of contact between the plaintiffs and their lawyer for two years or more, and the complete lack of action by the lawyer, the lawyer’s bald statement that it had always been his intention and that of the plaintiffs to proceed is not sufficient to satisfy the court that steps were being taken to advance the litigation, or that an adequate explanation has been proffered. The lack of direct evidence of the plaintiffs is notable in this regard. The evidence does not establish inadvertence. The motion was not brought promptly. The lawyer’s tickler system was completely inadequate, and was a missed deadline waiting to happen.

[53] Finally, given the evidence filed by the defendants, the presumption of prejudice, and the importance of the finality principle in this case, I find that the plaintiffs have not met their burden with respect to prejudice. There is evidence of reliance by Barbon and Ramon on the finality of the order, and the intervenor stands to be added for the first time seven years after the accident. In addition, this is not a case which would depend on documents, but one which would depend on witnesses. Seven years after the accident, the case is at the pleadings stage.

[54] While the court is always reluctant to dismiss an action without adjudication on the merits, counsel and parties must move matters along. Defendants are entitled to organize their affairs and lives based on the finality of court orders. The passage of time in this case, without adequate explanation, is simply too long to permit the action to fairly be continued. Balancing all the Reid factors, and contextual factors, the dismissal order should not be set aside.

COSTS

[55] The defendants are successful on this motion. Costs submissions may be made to me in writing. The defendants may each file no more than three pages, by February 23rd. The plaintiffs should respond by March 9th.

Kristjanson J.

Date: February 14, 2017

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

ANDREA PRESCOTT, AMANDA BURT and BARBARA RAMSEY Plaintiffs (Respondents) – and – RAMON BARBON and EDUARDO RAMON-SAGASTUME Defendants (Appellant is Ramon Barbon)

REASONS FOR JUDGMENT Kristjanson J. Released: February 14, 2017