CITATION: Whapmagoostui First Nation v. MPT 39 Inc. and Perron, 2017 ONSC 4311
COURT FILE NO.: 11-51769
DATE: 2017/07/13
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Whapmagoostui First Nation and MPT 39 Inc. and Marc Perron
BEFORE: Master Marie Fortier
COUNSEL: Susanne Sviergula, for the plaintiff
Chris Rutherford, for the defendants
REASONS FOR DECISION
OVERVIEW
[1] The plaintiff’s claim for damages for breach of contract and unjust enrichment was administratively dismissed on January 12, 2017. The plaintiff, through inadvertence, missed the deadline to set the matter down for trial.
[2] The defendants did not deliver a notice to proceed with their counterclaim within 30 days after the action was dismissed as required under Rule 24.03 of the Rules of Civil Procedure. Consequently, their counterclaim for unpaid services was discontinued.
[3] The plaintiff brought this motion asking the Court to set aside the dismissal of the action, to reinstate the action, and to extend the time to set it down for trial.
[4] The defendants oppose the plaintiff’s motion to reinstate the claim and have brought a cross-motion to reinstate the defendants’ counterclaim in the event that the plaintiff is successful on its motion.
[5] The plaintiff described the history of the litigation, the transfer of the file to new counsel in late 2015, the ordering of transcripts in January 2016, the reason for the missed deadline and the time spent in 2016 analyzing an issue that was identified based on a review of the file.
[6] There are several factors that the court must examine and weigh when considering setting aside a dismissal order, including what are known as the four Reid factors.[^1] The Reid factors can be said to be of primary importance in most cases.[^2] They are:
(1) Explanation of the Litigation Delay;
(2) Inadvertence in Missing the Deadline;
(3) The Motion was brought promptly;
(4) No Prejudice to the defendant.
[7] The plaintiff is not required to satisfy all four Reid factors. The court should take a contextual approach by considering and weighing the material factors in determining what is just in the circumstances of each case.[^3]
[8] The defendants concede that two of the four Reid factors do not apply in this case. In particular, the defendants accept that the deadline was missed due to inadvertence and agree that the motion was brought promptly.
[9] The defendants argue that the plaintiff’s claim should not be reinstated because:
a) The plaintiff has not adequately explained the litigation delay;
b) There would be prejudice to the defendant;
c) The court should come to the conclusion based on a contextual analysis.
[10] The issues are:
a) Has the plaintiff adequately explained the litigation delay?
b) Would there be prejudice to the defendant if the claim is reinstated?
c) What other factors should the court consider and weigh in determining what is just in the circumstances?
[11] For the reasons that follow, I find that the order dismissing the action for delay should be set aside and the action reinstated.
HAS THE PLAINTIFF ADEQUATELY EXPLAINED THE LITIGATION DELAY?
[12] The defendants argue that the plaintiffs did not adequately explain the delay in the process of the litigation from the institution of the action until the deadline for setting the action down for trial. In particular:
a) The defendants argue that the Court should be less inclined to allow litigation delay when the events giving rise to the claim took place several years ago. Although the claim was issued in 2011, the services giving rise to the litigation were provided by the defendants between July 2008 and December 2009.
b) The defendants question the legitimacy of the legal issue that was identified and examined by plaintiff’s counsel in 2016 because:
• the plaintiff did not identify the issue in its materials;
• the issue was identified four years into the action and several months after the discoveries of both parties; and
• there were no communications between counsel from May 2015 to February 2017.
c) There were delays in producing answers to undertakings and gaps in time following the discovery of the plaintiff.
[13] There is no doubt that there are gaps in this litigation. However, there will be gaps in time with any litigation and a distinction must be made where actions proceed slowly and actions that are put into abeyance or abandoned.[^4]
[14] I find that this action has moved through pleadings, mediation, exchange of affidavits of documents and discoveries. The transcripts of the discoveries have been ordered and prepared. The pace of the litigation was complicated by the change of plaintiff’s counsel. I accept that plaintiff’s counsel identified a legal issue to be examined and I don’t believe that it is necessary or indeed prudent to identify that issue as it may be privileged or disclose the plaintiff’s strategy. There is no evidence that the plaintiff abandoned the lawsuit, taken any steps to delay its progress or refused to participate in any steps in the action. Although there are gaps in time in this litigation, as there are with any litigation, I find that the plaintiff has adequately explained the delay in the progress of this action and has shown that steps were taken to advance the litigation.
[15] As a result, it is my view that the plaintiff has satisfied this element of the Reid test.
WOULD THERE BE PREJUDICE TO THE DEFENDANT IF THE CLAIM IS REINSTATED?
[16] The defendants submit that there would be prejudice to the defendants if the claim is reinstated because:
a) Certain records that the defendants undertook to produce at discoveries are no longer available as of May 2015;
b) Two witnesses that the defendants would have relied upon are no longer resident in the jurisdiction; one is currently residing in Halifax and the other in the Central African Republic.
c) The plaintiffs have outstanding undertakings.
d) The matters in issue took place approximately 8 years ago. The defendants argue that they are prejudiced because the memories of their witnesses may have faded,
given the lengthy passage of time after the cause of action arose.[^5]
[17] The defendants argue that the prejudice analysis goes beyond what may have taken place after the action was dismissed and can also arise as a result of the plaintiff’s delay.[^6]
[18] The plaintiff argues that the prejudice must be significant and actual and that there is no such prejudice in this case because:
a) The loss of records in May 2015 predates the dismissal of the action for delay and the defendants have been aware of this issue for some time;
b) Although two of the defendants’ witnesses have moved, there is no information about when the witnesses moved and furthermore, the defendants are aware of their location. The witnesses are still available to testify and can be accommodated so that they can give their evidence via video-conferencing if necessary.
c) Although there may be outstanding answers to undertakings, the defendants have made no effort to obtain the answers and have not followed up since the examination for discovery of the representative for the plaintiff in September 2014.
d) The passage of time and fading of memories is not enough to show prejudice.[^7]
[19] The plaintiff has the onus of convincing the Court that the defendants have not shown any significant prejudice in presenting their case at trial because of the plaintiff’s delay or as a result of steps taken after the dismissal of the action.[^8]
[20] There is no evidence before me that the defendants are prejudiced as a result of steps taken after the dismissal of the action.
[21] In my view, the prejudice that I must consider is to the defendant’s ability to defend the action if the claim were reinstated. This prejudice must be balanced against the prejudice to the plaintiff from having the case dismissed.[^9]
[22] I am satisfied that the plaintiff has met the onus placed upon them to rebut the presumption of prejudice. In particular,
• I do not find that there was an inordinate length of time since the cause of action arose. In addition, steps were taken by the plaintiff to move the matter along.
• Although two of the defendants’ witnesses have moved, their location is known and there is no evidence before me that they would not be able to provide evidence at trial. There is no evidence before me that the witness’s memories have faded with the passage of time. To establish actual prejudice, the defendants must lead evidence of prejudice beyond bald assertions that there will be difficulties in locating witnesses or those witnesses’ memories will fade with the passing of time.
• The defendants were aware of the loss of certain records almost two years before the dismissal of the action.
• The defendants made no effort to obtain answers to outstanding undertakings since the examination for discovery in September 2014.
[23] I am not satisfied that the defendants have demonstrated that they would suffer actual prejudice in the event that this action is allowed to proceed.
[24] For these reasons, it is my view that this element of the Reid test has been satisfied.
WHAT OTHER FACTORS SHOULD THE COURT CONSIDER AND WEIGH IN DETERMINING WHAT IS JUST IN THE CIRCUMSTANCES?
[25] The court is to adopt a contextual approach in which it weighs all relevant considerations to determine the result that is just in the circumstances, when deciding motions of this nature.
[26] The defendants argue that the Court should consider the strong public interest in promoting timely resolution of disputes and that delay breeds frustration and unfairness and multiplies costs. Although I agree that these are considerations, they must be balanced with the preference in our civil judicial system for the determination of disputes on their merits.[^10]
[27] Another relevant consideration in my view, is the shift in the extent of delay the public will tolerate as a result of the January 1, 2015 amendment to Rule 48.14 of the Rules of Civil Procedure. The amendment extended the time for an action to be dismissed for delay from two years to five years after the commencement of the action. That deadline could be extended by up to another two years in certain situations. Recent case law has confirmed that this shift is a proper consideration as part of the contextual approach on motions to set aside rule 48.14 dismissals.[^11]
CONLUSION
[28] Considering all the circumstances, including the explanation for the delay, the absence of prejudice and the change in toleration of delay resulting from the amendment to rule 48.14, this is a case where the determination of disputes on the merits outweighs the principles of timely resolution of disputes. It is just, in all of the circumstances, to set aside the registrar’s dismissal.
[29] The plaintiff did not take a position regarding the defendants’ cross-motion to reinstate the defendants’ counterclaim. In my view, it is just in all of the circumstances to reinstate the defendants’ counterclaim.
[31] I therefore order as follows:
a) The dismissal order of the registrar dated January 12, 2017 is hereby set aside and the plaintiff is permitted to continue the action on the timetable set out below;
b) The defendant’s counterclaim is hereby reinstated;
c) The parties shall answer outstanding undertakings by August 31, 2017;
d) This action shall be set down for trial by September 15, 2017, failing which it shall be dismissed by the registrar without further notice.
[32] Although the plaintiff was successful in its motion to have the action re-instated, it was through the court granting an indulgence. Not only was it was reasonable for the defendants to oppose the motion but the issues were narrowed at the outset of the motion by the defendants conceding that two of the four Reid factors do not apply in this case. Consequently, there will be no costs of the motion.
Master Marie Fortier
DATE: July 13, 2017
COURT FILE NO.: Click here and type
DATE: [yyyymmdd]
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Click here - copy/paste name(s) of Plaintiff(s)/Applicant(s)/Defendant(s)/Respondent(s) from style of cause
BEFORE: Click here - type name of justice
COUNSEL: Click here - copy/paste name of counsel from style of cause, for the Click here - type Plaintiff(s)/ Defendant(s)/Applicant(s)/Respondent(s)
Click here - copy/paste name of counsel from style of cause, for the Click here - type Plaintiff(s)/ Defendant(s)/Applicant(s)/Respondent(s)
ENDORSEMENT
Click here - type judge's name
DATE: Click here - type date
[^1]: Reid v. Dow Corning Corp., 2001 CarswellOnt 2213 (S.C.J.) reversed on other grounds 2002 48 C.P.C. (5th) 93 (Ont. Div. Ct.)
[^2]: Vogrin v. Ticknor, 2012 CarswellOnt 2791
[^3]: Habib v. Mucaj, 2012 ONCA 880, 2012 CarswellOnt 15760 at paragraph 6; Finlay v. Van Paassen, 2010 CarswellOnt 15713, at paragraph 27.
[^4]: Aguas v.Rivard Estate, 2011 ONCA 494, 2011 CarswellOnt 5822 at paragraph 16.
[^5]: Wellwood v. Ontario (Provincial Police), 2010 ONCA 386 2010 CarswellOnt 3521 at paragraph 72.
[^6]: Vogrin at paragraph 57.
[^7]: Finlay v. Van Paassen, 2010 ONCA 204 2010 CarswellOnt 1543 at paragraph 29.
[^8]: Vogrin at paragraph 32.
[^9]: MDM Plastics Limited v. Vincor International Inc. 2015 ONCA 28 2015 CarswellOnt 602 at paragraphs 25-26.
[^10]: Williams v. Whitefish River First Nation, 2014 ONSC 1818 at paragraph 31.
[^11]: Elkhouli v. Senathirajah et al. 2014 ONSC 6140 at paragraph 48; Croy Properties Inc. v. 2273865 Ontario Inc., 2015 ONSC 3332 at paragraph 26; Belay v. Ages, 2015 ONSC 2377 at paragraph 55.