Court File and Parties

Court File No.: 10-CV-395172 Motion Heard: 20170510 Superior Court of Justice - Ontario

Re: James Richardson, Maureen Richardson and Maureen Richardson, In Trust, Plaintiffs And: Loftus John Robert Cuddy, Defendant

Before: Master Mills

Counsel: D. Silver, Counsel for the Plaintiffs C. Tucker, Counsel for the Defendant

Heard: May 10, 2017

Reasons for Decision

[1] Each party has brought a motion in this matter – the plaintiffs seek to have a Registrar’s dismissal set aside and if that motion is granted, the defendant seeks to have the action dismissed for delay. For the reasons to follow, the plaintiffs’ motion is granted; the defendant’s motion is denied.

[2] It is admitted by both counsel that the relevant test to set aside a Registrar’s Dismissal Order is the application of the Reid Factors with a contextual analysis in an effort to balance the interests of the parties and to ensure justice is done in all of the circumstances. [1]

[3] The Reid Factors require the moving party to

a. provide an adequate explanation for the litigation delay;

b. lead evidence to establish inadvertence in missing the deadline;

c. demonstrate the motion was brought promptly; and

d. establish there was no significant prejudice to the defendant in presenting their case at trial as a result of the plaintiff’s delay.

While it is not necessary to satisfy all four factors, the court will give due consideration to each when exercising its discretion. [2] Prejudice will be the key consideration. [3]

[4] The plaintiff bears the primary onus to address the Reid Factors with respect to the conduct of the action, however the defendant’s conduct will also be a relevant consideration in the court’s analysis. [4]

[5] In the exercise of my discretion in this matter, I am particularly cognizant of the Court of Appeal decision in H. B. Fuller Company v. Rogers wherein the court considered the countervailing policies of deciding actions on their merits but in a manner that is timely and efficient so as to ensure public confidence in the administration of justice is maintained at all times. The bias must always favour resolving disputes on their merits. “Procedural rules are the servants of justice not its master … We should strive to avoid a purely formalistic and mechanical application of time lines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits.” [5]

[6] This approach is all the more pronounced when the dismissal for delay is as a result of an error committed by counsel. The inadvertence of counsel ought not to result in the irrevocable loss by the client of the right to proceed to a determination of the action on its merits. [6]

[7] Examining the Reid Factors in the context of this action, it is conceded the motion to set aside the dismissal order was brought promptly, without delay.

[8] This action is a solicitor’s negligence claim in respect of five civil actions commenced by the plaintiffs and for which the defendant provided legal services. The Statement of Claim was issued on January 15, 2010 and amended on January 27, 2010. The Statement of Defence was filed on June 24, 2011. Documentary production followed with ten volumes of documents being delivered by the plaintiffs on April 12, 2012. The underlying civil actions were also proceeding during this timeframe.

[9] There were delays in the prosecution of this action for various reasons, including efforts being exerted to settle the matter which unfortunately proved to be unsuccessful. A month by month analysis of the delay is not appropriate. [7] The end result of this period of delay was a consent order dated December 24, 2014 setting a timetable which was peremptory to the plaintiff. Mediation, examinations for discovery, motions for undertakings and refusals were all to be completed by May 29, 2015 and the action was to be set down for trial by June 30, 2105. Significant steps were to be taken to move this action forward within a tight six month timetable.

[10] The parties did participate in a mediation on February 23, 2015 in accordance with the consent timetable. Mr. Richardson’s examination for discovery was held over three days in April 2015 – not strictly within the time limit of the order but with the agreement of counsel for the defendant on a “without prejudice” basis. A similar concession was given to postpone Mrs. Richardson examination for discovery until June 2015 as the plaintiffs’ daughter was diagnosed with a malignant tumour which required surgery and treatment during March and April 2015. Counsel indicated a willingness to consider a further extension of time if one was needed. The plaintiffs have agreed to proceed to trial without an examination for discovery of the defendant.

[11] A Small Claims Court action was commenced in February 2014 against the defendant to recover an adverse cost order issued in one of the underlying civil actions, which the plaintiffs allege was as a result of solicitor’s negligence. The defendant failed to defend the Small Claims Court action and was noted in default. The plaintiffs agreed to set aside the noting in default and dismiss the action in exchange for the defendant’s consent to permit a further amendment to the within Statement of Claim so as to include the relief initially sought in the Small Claims Court action. The draft Further Amended Statement of Claim was to be delivered by June 30, 2015 but an indulgence was granted by defendant’s counsel to permit counsel to take advantage of the July 1st statutory holiday and delivery of the draft claim was extended to 5:00 p.m. on July 2, 2015.

[12] This indulgence resulted in the draft Further Amended Statement of Claim being delivered two days beyond the mandated set down date of June 30, 2015. The action was administratively dismissed.

[13] The plaintiffs did exert substantial efforts to comply with the consent timetable and, where they did not, the defendant consented to the flexibility – albeit on a “without prejudice” basis. This is not a case where the plaintiffs simply ignored their obligations to move the action forward with an utter disregard for the court ordered timetable. They had serious, unforeseen family circumstances intervene which adversely impacted their efforts.

[14] I accept the uncontroverted evidence that the failure to set the action down for trial on June 30, 2015 was as a result of counsel’s own inadvertence. His attention was focussed on providing a draft Further Amended Statement of Claim and the deadline to set the action down was overlooked in the process. He was lulled into a false sense of security by the defendant’s willingness to accommodate changes to the timetable and to permit the delivery of the draft Further Amended Statement of Claim on July 2, 2015. Although frequently reminded in various correspondence from the defendant’s counsel that strict adherence to the timetable was required, the June 30th set down date was simply missed by counsel for the plaintiffs as he addressed other issues in the litigation.

[15] The significant steps taken by the plaintiffs in the six months of the peremptory timetable reflects an intention to proceed with the action. The defendant’s characterization of a reckless disregard for the timetable is unreasonable and unfair. The plaintiffs ought not lose their right to proceed to a trial on the merits of their claim solely as a result of the inadvertence of counsel.

[16] There is no evidence before me of real prejudice to the defendant in presenting his case at trial. There has been extensive documentary production by both parties, the defendant has his own file available for review, there are transcripts available from the plaintiff’s examination for discovery and all parties continue to be available for trial. I do not imply any prejudice simply from the passage of time and I have not been persuaded that it is not possible for the defendant to receive a fair trial as a result of the delays in this litigation. [8]

[17] Moreover, the conduct of the defendant does not support any suggestion of prejudice as a result of the delay. Timetables were established on a consent basis and varied to accommodate the needs of the plaintiffs. It is noted those accommodations were granted on a without prejudice basis to the defendant’s right to strictly rely on the provisions of the consent timetable order. Those without prejudice waivers do not however establish evidence of real prejudice.

[18] In the context of the litigation as a whole, balancing the interests of both parties, I am satisfied the plaintiffs have met their burden under the Reid Factors and the defendant has failed to establish real prejudice as a result of the overall delays in the litigation or as a result of the Registrar’s Dismissal for failing to set the action down for trial in accordance with the consent timetable. It is in the interests of justice that this action be permitted to proceed to an adjudication of the merits.

[19] The Registrar’s Dismissal Order of June 30, 2015 is hereby set aside.

[20] The defendant’s cross-motion seeks an order dismissing the action for delay and for failing to comply with the consent timetable order of December 24, 2014 pursuant to Rules 24 and 60.12 of the Rules of Civil Procedure.

[21] As noted above, the delay has been adequately explained and there is no evidence of real or presumptive prejudice from the defendant to suggest a fair trial cannot occur in the circumstances. I have not been persuaded that the delay in the prosecution of this action has been intentional or contumelious. [9]

[22] The defendant has failed to meet the test for an order to dismiss this action for delay pursuant to Rule 24.01(1)(c).

[23] Turning to Rule 60.12 of the Rules of Civil Procedure, the defendant seeks an order dismissing the action as a result of the plaintiffs’ failure to adhere to the terms of the interlocutory order establishing the timetable for setting this action down for trial. The order was obtained on a consent basis with the plaintiffs having the benefit of legal advice. A term of the order provided that “if the Plaintiffs, or any of them, breach the attached timetable, the action shall be dismissed with costs on a without-notice motion of the Defendant”.

[24] There is no dispute the plaintiffs failed to attend examinations for discovery and failed to set the action down for trial strictly in accordance with the timetable. They did breach the timetable.

[25] The defendant now seeks to enforce this provision of the order to dismiss the action, although he did not proceed on a without notice basis.

[26] Dismissing an action for failure to adhere to an interlocutory order is an “extreme remedy and a last resort” which ought to be very cautiously considered by the court. It is draconian in nature and should be invoked only in circumstances where there is demonstrated conduct of complete disregard for the court’s procedures and flagrant disrespect of the court’s authority. [10]

[27] The threshold test for dismissing an action under Rule 60.12 is high. The breach of interlocutory order(s) must be “intentional, contumelious or without reasonable excuse or otherwise constitute an abuse of the court’s process”. [11]

[28] The plaintiffs conduct cannot be so characterized in this matter. I am not persuaded therefore that the threshold test has been met to warrant dismissing the action under Rule 60.12, even giving due consideration to the fact the relief was agreed upon in a consent order at a time when the plaintiffs were represented by counsel.

[29] The court has the inherent jurisdiction to enforce consent orders. Finality is important in litigation and therefore courts ought to be cautious in setting aside orders, particularly those made on consent. [12] However, the interest of finality must never compromise the interests of justice, particularly when the order is procedural in nature. [13] Again, the court’s bias must always favour resolving disputes on their merits.

[30] I accept there is no evidence before me to suggest the plaintiffs did not understand the consequences of consenting to an order permitting the dismissal of their action for noncompliance with the fixed timetable. That does not however lessen the draconian effect of enforcing the order under the present circumstances.

[31] As noted above, the plaintiffs endeavoured to comply with the timetable requirements. Where they did not, it was largely with the indulgence of counsel for the defendant. Mediation was conducted as required; the examination for discovery of Mr. Richardson was conducted; the examination for discovery of Mrs. Richardson was deferred to accommodate her need to be with their daughter while she underwent cancer treatment. The failure to set the action down was an oversight by counsel for which the plaintiffs ought not to be penalized.

[32] In all of the circumstances, to enforce the order dismissing this action for the plaintiffs’ breach of the timetable would be a clear injustice and contrary to the fundamental goal of the court to resolve this action on its merits.

[33] As such, I decline to enforce paragraph 3 of the December 24, 2015 order fixing the timetable for this action. The defendant’s motion is denied.

[34] If costs cannot be agreed upon, counsel may make submissions, not exceeding three pages in length together with a Costs Outline, within ten days hereof.

Master J. E. Mills Date: May 23, 2017

Footnotes

[1] Reid v. Dow Corning Corp., [2001] O.J. No. 2365 at paras. 40-41; reversed on other grounds, [2002] O.J. No. 3414 (Div. Ct.); H. B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173 at paras. 20-27. [2] Scaini v. Prochnicki, 2007 ONCA 63. [3] Chiarelli, et al. v. Wiens; Micallef v. Dodig, at paras. 31-33. [4] H. B. Fuller, supra., at para. 23. [5] Ibid., at paras. 25-26. [6] Ibid., at para. 27. [7] Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592, at para. 52. [8] Ibid. at para. 6, 49 & 57. [9] Armstrong v. McCall. [10] Dew Point Insulation Systems Incorporated v. JV Mechanical Limited at paras. 35-36; Richardson v. James, 2017 ONSC 1124 at para.27. [11] Provato v. Burgantin, 2003 CarswellOnt 2255 at para. 22. [12] Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377 at para. 57. [13] Re Beetown Honey Products Inc., 2004 CarswellOnt 4316 at para. 1.