Court File and Parties

COURT FILE NO.: CV-11-439295 MOTION HEARD: 2017-05-02 REASONS RELEASED: 2017-05-23 SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

RACHEL CHAVISA BRETT Plaintiff

• and-

SVETLANA CREIGHTON Defendant

BEFORE: MASTER M.P. McGRAW

COUNSEL: William G. Scott, for counsel for the Plaintiff, Rachel Chavisa Brett Svetlana Creighton, Defendant, Self-Represented

REASONS RELEASED: May 23, 2017

Reasons for Endorsement

I. Overview

[1] This is a motion by the plaintiff, Rachel Chavisa Brett under Rule 37.14(8) of the Rules of Civil Procedure seeking to set aside the Order of the Registrar Dismissing Action as Abandoned dated July 5, 2012 (the “Dismissal Order”). This motion is opposed by the defendant, Svetlana Creighton.

[2] The procedural history of this matter is long, complicated and riddled with oversights. This action arises out of an undefended pedestrian-motor vehicle accident in 2009 in which the defendant was noted in default. This action was subsequently dismissed pursuant to the Dismissal Order which plaintiff’s former counsel claims was not brought to his attention by his staff. To add further complexity, both parties were uninsured, engaging the interests of the Ontario Motor Vehicle Accident Claims Fund (the “Fund”); the plaintiff was injured more seriously in a second accident in 2012; and the plaintiff commenced an action against her former counsel for negligence for failing to advance this action.

[3] The plaintiff relies on the affidavit of her former counsel, Joseph Mazurek. Mr. Scott, retained by LawPro for counsel for the plaintiff, appears on this motion as agent for the plaintiff.

II. Background

[4] This action arises from an accident which occurred on November 14, 2009 in which the plaintiff, a pedestrian, was struck by a vehicle driven by the defendant. This action was commenced by Notice of Action issued September 10, 2011. The Statement of Claim was issued on December 9, 2011. As a result of her alleged injuries, the plaintiff claims general damages in the amount of $150,000 and special damages of $200,000.

[5] The plaintiff initially retained Aronovitch Macaulay Rollo LLP (“AMR”) with respect to her claim. AMR sent a letter to Ms. Creighton dated 2, 2009 in which they put her on notice regarding the plaintiff’s claim and advised that it was their understanding that she was not insured at the time of the accident.

[6] After Mr. Mazurek was retained, he had the Notice of Action and Statement of Claim issued. Prior to service, Mr. Mazurek’s assistant sent 3 letters to Ms. Creighton enclosing copies of the Notice of Action and Statement of Claim along with an Acknowledgement of Receipt card which she requested the defendant sign and return. No response was received. Mr. Mazurek’s assistant, in accordance with standard office procedure, requested that the defendant forward these documents to her insurer. In doing so, Mr. Mazurek states that his assistant overlooked the information in the file that the defendant had likely been driving without insurance at the time of the accident.

[7] On March 27, 2012, Ms. Creighton was personally served with the Notice of Action and Statement of Claim at 159 Brooklawn Avenue, Toronto, Ontario, the same address where Mr. Mazurek’s assistant had sent the 3 letters. Ms. Creighton did not respond or deliver a defence.

[8] On May 9, 2012, the Registrar issued a Notice That Action Will Be Dismissed (the “Notice”) pursuant to the now revoked Rule 48.15(1). The Notice stated that this action would be dismissed as abandoned unless, within 45 days of being served with the Notice, a defence was filed, it was disposed of by final order or judgment or it was set down for trial.

[9] As a result of receiving the Notice, Mr. Mazurek filed a Requisition for default judgment dated June 20, 2012. The defendant was noted in default by the Registrar on June 27, 2012. Mr. Mazurek erroneously believed that having the defendant noted in default would prevent the dismissal of this action by the Registrar and therefore, took no steps to obtain default judgment.

[10] In any event, Mr. Mazurek states that he did not have sufficient time take any steps to obtain default judgment prior to the Dismissal Order. He further states that it was and remains his understanding that any steps he may have taken to obtain default judgment would have been moot as a default judgment is not binding on the Fund pursuant to the Motor Vehicle Accident Claims Act, R.S.O. c. M.41, as amended (the “MVAC”). In particular, the MVAC provides that the Fund has a statutory right to have any noting in default set aside and has no obligation to pay any claims unless they have been provided with notice of and a chance to defend an action.

[11] Although the Dismissal Order was delivered to Mr. Mazurek’s office, Mr. Mazurek states that it was never brought to his attention. Mr. Mazurek states that his staff were under the mistaken impression that “the case management requirements had been met” and therefore, did not bring the Dismissal Order to his attention. The Dismissal Order was put in the plaintiff’s file and no further action was taken.

[12] In the summer of 2012, Mr. Mazurek states that his office corresponded with medical professionals in order to obtain information in support of the plaintiff’s claim for presentation to the Fund. In September 2012, the plaintiff advised Mr. Mazurek that she had been involved in a second accident in which she was struck by a vehicle while riding her bicycle and had suffered more serious injuries.

[13] Mr. Mazurek states that from Fall 2012 until August 2015, he continued his efforts to obtain relevant documentation in support of the plaintiff’s claims arising from both accidents. He states that he intended to arrange a meeting or call with the Fund after he had compiled all relevant documentation with respect to the 2009 accident.

[14] Prior to a scheduled mediation of the plaintiff’s accident benefits claim from the 2012 accident, Mr. Mazurek was advised that the plaintiff had retained new counsel. A Notice of Change of Solicitors was served on September 4, 2015. The plaintiff’s new counsel discovered the Dismissal Order by court file search on or about July 30, 2015.

[15] By Statement of Claim dated December 18, 2015, the plaintiff commenced an action against Mr. Mazurek and his Firm seeking damages for alleged negligence in advancing this action, her accident benefits claim and her claims against the Fund (the “Solicitor Action”). Mr. Mazurek and his Firm delivered a Statement of Defence dated June 29, 2016.

[16] The plaintiff commenced this motion by serving a Notice of Motion on the Fund and Ms. Creighton on August 16-18, 2016. Given the noting in default, this is the first correspondence that Ms. Creighton received since she was served with the Notice of Action and Statement of Claim in 2012.

[17] At the first attendance, Mr. Scott appeared before Master McAfee who adjourned the motion on consent to January 31, 2017. After Master McAfee made her order, Ms. Creighton attended court late. Master McAfee advised Ms. Creighton of the new return date of January 31, 2017, suggested that she contact Mr. Scott and advised her of the Law Help Ontario office.

[18] On January 31, 2017, Ms. Creighton did not attend. Mr. Scott advised Master Mills that he was unaware that Ms. Creighton subsequently attended court on November 2, 2016. As set out in Master Mills’ Endorsement, Mr. Scott had explained the importance of the motion to Ms. Creighton, but as opposing counsel, it would be improper for him to provide her with legal advice. Therefore, Mr. Scott consented to a further adjournment to permit the defendant to meet with counsel for the Fund and to seek independent counsel. Master Mills adjourned the motion to May 2, 2017, peremptory to the defendant and noted in her Endorsement that Ms. Creighton had been advised that no further adjournments would be granted to permit her to seek legal counsel.

[19] Ms. Creighton has sought independent counsel at Law Help Ontario. The Fund takes no position on this motion and has confirmed that it will not respond to the plaintiff’s claim unless the Dismissal Order is set aside and Ms. Creighton does not defend this action.

III. The Law and Analysis

[20] Rule 37.14 of the Rules of Civil Procedure provides as follows:

(1) A party or other person who, (c) is affected by an order of a registrar, 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.

(2) On a motion under subrule (1), the court may set aside or vary the order on such terms as are just.

(3) A motion under subrule (1) or any other rule to set aside, vary or amend an order of a registrar may be made to a judge or master, at a place determined in accordance with rule 37.03 (place of hearing of motions).

[21] The four (4) relevant factors on a motion to set aside a dismissal order of the Registrar under Rule 37.14 are set out at paragraph 41 of Reid v. Dow Corning Corp., [2001] O.J. No. 2365 (S.C.J.):

i.) 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, satisfying the court that steps were being taken to advance the litigation toward trial or if such steps were not taken to explain why. For example, the complexities of the case and the number of parties may have required significantly more time to move the action toward trial or the delay was caused by interlocutory matters or appeals. The plaintiff could also explain that the action was stalled due to the inattention or negligence of her solicitors which was contrary to her instructions or expectations. It is absolutely essential that the plaintiff lead satisfactory evidence that she personally always intended the action to proceed to trial without delay;

ii.) The plaintiff or her counsel must lead satisfactory evidence to explain that she always intended to set the action down within the applicable time limit but failed to do so out of inadvertence such that the dismissal order was made as a result of inadvertence;

iii.) The plaintiff must demonstrate that she moved forthwith to set aside the dismissal order as soon as it came to their attention;

iv.) 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. The court takes note that witnesses’ memories generally tend to fade over time and that sometimes it is difficult to locate witnesses or documents, however, to bar the plaintiff from proceeding with her action on the ground of prejudice, the defendant must lead evidence of actual prejudice. This might include evidence of specified documents lost over time, or destroyed following a dismissal, or of specific witnesses who have died, or have disappeared and the defendant has been unable to locate them with due diligence. While litigation is outstanding the defendants must take care to obtain and preserve evidence;

[22] The Court of Appeal has held in numerous decisions that a plaintiff is not required to satisfy each of the 4 factors set out in Reid. Rather than applying a rigid test, the court is to take a contextual approach considering and weighing all relevant factors to determine the order that is just in the circumstances of the particular case (see Scaini v. Prochnicki, 2007 ONCA 63 at paras. 21-28). At paragraphs 5-7 in Habib v. Mucaj, 2012 ONCA 880, the Court of Appeal stated:

[5] There are four well established factors to consider when deciding to set aside an order to dismiss an action: (i) explanation of the litigation delay - a deliberate decision not to advance the litigation will usually be fatal; (ii) inadvertence in missing the deadline - the intention always was to set the action down within the time limit; (iii) the motion is brought promptly - as soon as possible after the order came to the party's attention; and (iv) no prejudice to the defendant - the prejudice must be significant and arise out of the delay: Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80 (Ont. Div. Crt.).

[6] No one factor is necessarily decisive of the issue. Rather, a "contextual" approach is required where the court weighs all relevant considerations to determine the result that is just. …

[7] Furthermore, on a motion to set aside a dismissal order, the court should be concerned primarily with the rights of the litigants, not with the conduct of their counsel. However, where the lawyer's conduct is not inadvertent but deliberate, this may be different: Marché d'Alimentation Denis Thériault Ltée. v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660 (O.C.A.), at para. 28. Here, the plaintiff lawyers' conduct was found by the Master not to be deliberate. Simply because the appeal judge's view is that the conduct was "negligent" or "bordering on negligent", does not mean the Master was not entitled to find the conduct not to be deliberate or not intentional.

[23] I am also mindful of the comments of Sharpe J.A. at para. 34 of Giant Tiger regarding the court’s preference that matters be resolved on their merits:

“Expeditious justice must be balanced with the public interest in having disputes determined on their merits. Where, despite the delay, the defendant would not be unfairly prejudiced should the matter proceed for resolution on the merits, according the plaintiff an indulgence is generally favoured.”

[24] In H.B. Fuller Company et al. v. Rogers (Rogers Law Office), 2015 ONCA 173, the Court of Appeal addressed the court’s preference for deciding matters on their merits in the context of cases where the delay has resulted from an error by counsel:

[27] The court's preference for deciding matters on their merits is all the more pronounced where delay results from an error committed by counsel. As the court stated in Habib, at para. 7, "[O]n a motion to set aside a dismissal order, the court should be concerned primarily with the rights of the litigants, not with the conduct of their counsel." In Marché, Sharpe J.A. stated, at para. 28, "The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor" (citations omitted).

[25] In Giant Tiger and MDM Plastics Limited v. Vincor International Inc., 2015 ONCA 28, the Court of Appeal held that the principle of finality is also relevant to the fourth Reid factor. That is, when an action has been disposed of in a party’s favour, even as a result of delay and not on the merits, the party’s entitlement to rely on the finality principle grows stronger as the years pass. Even where the party relying on the order could still defend itself despite the delay, at some point the interest in finality must trump the plaintiff’s request for an indulgence (see MDM Plastics, para. 27).

[26] The present action was also dismissed before the revoking of Rule 48.15 and the extension of the time period for dismissal for delay under Rule 48.14 was extended from 2 years to 5 years as of January 1, 2015. Therefore, it is open for the court to consider, as part of this contextual approach, whether this action would have been dismissed under the amended Rules (Klaczkowski v. Blackmont Capital Inc., 2015 ONSC 1650 at paras. 29-33).

[27] Applying the first two Reid factors, I agree with the plaintiff that the litigation delay with respect to this action was unintentional and that the Dismissal Order was issued a result of inadvertence. Notwithstanding the numerous oversights and erroneous beliefs of Mr. Mazurek and his staff, the evidence demonstrates that the plaintiff always intended that this action proceed. After receiving the Notice, Mr. Mazurek had the defendant noted in default. The fact that he did not obtain default judgment was due to his erroneous belief that noting the defendant in default was sufficient to prevent this action from being dismissed by the Registrar. Even if he had taken steps to obtain default judgment, it is not clear that, because of his earlier inadvertence, he would have had sufficient time to do so before the Dismissal Order was issued. It is also apparent that Mr. Mazurek may have been operating with a false sense of comfort given his understanding of how the Fund operates.

[28] These errors were compounded when Mr. Mazurek’s staff, in reliance on his earlier mis-steps, then failed to provide him with a copy of the Dismissal Order which was filed and forgotten until the search conducted by the plaintiff’s new counsel over 3 years later. However, Mr. Mazurek continued to advance the plaintiff’s claim by obtaining medical information and evidence with the intention of contacting the Fund. As of September 2012, Mr. Mazurek was preoccupied with the plaintiff’s second, more serious accident though the work with respect to both claims overlapped to an extent. All along, the plaintiff believed that this action was proceeding.

[29] In my view, this demonstrates that the plaintiff and Mr. Mazurek always intended her claim to proceed and in fact, believed that it was. It was only as a result of the actions and inaction of Mr. Mazurek and his staff that the Dismissal Order was issued.

[30] In any event, the primary concern of the court is the right of the plaintiff, not the conduct of her counsel. In this regard, the plaintiff should not lose her right to proceed with this action simply due to the oversights of Mr. Mazurek and his staff which resulted in the Dismissal Order.

[31] The application of the third Reid factor is more problematic for the plaintiff. While the Dismissal Order was discovered by the plaintiff’s new counsel on or about July 30, 2015, this motion was not commenced until August 16, 2016, over one year later. The only explanation that Mr. Scott could provide was that the plaintiff and her new counsel were focused on the Solicitor Action. Once Mr. Scott was retained by LawPro, the Fund advised that it would not respond to the plaintiff’s claim unless and until the Dismissal Order was set aside and the defendant did not defend this action. It was also determined that this motion was necessary in order to mitigate any damages suffered by the plaintiff as alleged in the Solicitor Action.

[32] Whatever the reason, it is clear that this motion was not brought forthwith. This is one factor in the contextual approach which does not assist the plaintiff in satisfying the test under Rule 37.14.

[33] With respect to the fourth Reid factor, the plaintiff submits that Ms. Creighton would not suffer any actual prejudice if the Dismissal Order is set aside and this action proceeds. The plaintiff submits that liability is not at issue given that Ms. Creighton struck a pedestrian and has admitted fault. Further, the plaintiff confirms that all information and documentation has either been produced or preserved such that if the defendant chooses to defend the action, she would not be prejudiced in making her case.

[34] The plaintiff further submits that Ms. Creighton would not be prejudiced because she never intended to and did not defend this action in the first place. The plaintiff is also not convinced that Ms. Creighton will defend this action given her previous failure to do so and given that she has the option of not defending and allowing the Fund to respond.

[35] Ms. Creighton submits that she would suffer great prejudice if she is required to defend this action after such a long period of time. She does not deny that she is responsible for the accident and feels great remorse. She says that she did not defend this action due to numerous personal circumstances including the death of her husband and father and a personal bankruptcy. She has also moved numerous times and at age 58, has struggled to rebuild her life and believes that having to now defend this action would make this extremely difficult.

[36] When pressed, Ms. Creighton states that if the Dismissal Order is set aside she intends to defend this action even if only to dispute the plaintiff’s injuries and entitlement to damages. She submits that it would make more sense and be fairer for the plaintiff to pursue the Solicitor Action first, then, if necessary, pursue this action.

[37] I am mindful of Ms. Creighton’s personal circumstances, the difficulties she has endured and the unrest which the re-introduction of this action into her life has caused. However, I am unable to conclude that Ms. Creighton would suffer any actual prejudice if the Dismissal Order is set aside. The fact that she did not receive any notice of these proceedings for over 4 years was a result of her own failure to defend or respond at all to this action in 2012. The circumstances which she says caused her to not to defend or respond to this action in 2011-12 would carry greater weight if she was seeking to set aside the noting in default in order to deliver a defence.

[38] Further, even if Ms. Creighton chooses to defend this action, liability is not an issue and the evidence which she or her counsel would require to rebut the plaintiff’s claims for damages have either been preserved or produced and, along with the documentation with respect to the plaintiff’s 2012 accident, are available. Therefore, her ability to defend this action, if she chooses to do so, would not be materially compromised. It is also not entirely clear whether, notwithstanding her comments in court and the fact that she sought pro bono counsel for this motion, Ms. Creighton will actually defend this action given her history of unresponsiveness and spotty court attendance. She may also choose not to defend this action and allow the Fund to respond, which would have been the result in the absence of the Dismissal Order.

[39] Ms. Creighton’s suggestion that the plaintiff should first exhaust her remedies against Mr. Mazurek in the Solicitor Action first is implausible. The plaintiff is not required to do so and must mitigate any damages claimed in the Solicitor Action.

[40] I have also considered the application of the finality principle in these circumstances. While the Dismissal Order was issued almost 5 years ago, Ms. Creighton was unaware of its existence until she was served with the plaintiff’s motion materials. In my view, to the extent to which Ms. Creighton was relying on the finality of this action, it arose not from the Dismissal Order, but from the fact that she did not defend this action and was noted in default. This is of little weight when contrasted with the plaintiff’s request for the court’s indulgence.

[41] I also note that were the amended Rule 48.14 applicable to this action, it would not have been dismissed for delay until December 9, 2016, 5 years after the action was commenced. In the circumstances, this may have avoided a dismissal of this action entirely.

[42] Having weighed all of the factors and applied the contextual approach, I conclude that the most just result in the circumstances is that the Dismissal Order be set aside so that this action can proceed. Although this motion was not brought forthwith after discovery of the Dismissal Order, I am satisfied that the weight of the other factors and considerations favour the plaintiff, particularly the explanation for the delay and the prejudice that would be visited on the plaintiff as a result of the oversights of her previous counsel if she were deprived of her ability to proceed with this action.

[43] Accordingly, the plaintiff’s motion is granted, the Dismissal Order is set aside and the plaintiff is granted leave to restore this action to the trial list. In order to provide sufficient time to complete the remaining steps while ensuring that this action proceeds efficiently, it is appropriate to extend the time to set this matter down for trial until June 30, 2018.

IV. Disposition

[44] Order to go as follows:

i.) the Dismissal Order is set aside; ii.) the plaintiff is granted leave to restore this action to the trial list; iii.) this action shall be set down for trial on or before June 30, 2018.

[45] With respect to the costs of this motion, the plaintiff has requested and received an indulgence from the court to allow her action to proceed. Although the circumstances giving rise to this motion were not caused by the plaintiff herself, they were the result of oversights and omissions by her previous counsel. In my view, it was not unreasonable for Ms. Creighton, in the face of these unique circumstances, to have opposed the plaintiff’s motion. Accordingly, and having considered the relevant factors under Rule 57.01, it is appropriate that the parties bear their own costs of this motion.

[46] Mr. Scott shall forthwith send a copy of this Endorsement to Ms. Creighton by regular and registered mail.

Released: May 23, 2017

Master M.P. McGraw