Cobalt Capital CA Textile Investments, L.P. v. Pantziris, 2017 ONSC 4664

CITATION: Cobalt Capital CA Textile Investments, L.P. v. Pantziris, 2017 ONSC 4664 COURT FILE NO.: CV-12-446017 MOTION HEARD: 20170421 REASONS RELEASED: 20170801

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

COBALT CAPITAL CA TEXTILE INVESTMENTS, L.P. Plaintiff

• and -

SPIROS PANTZIRIS and JULIE PANTZIRIS also known as JULIE TAYLOR also known as JULIE TAYLOR PANTZIRIS Defendants

BEFORE: MASTER D. E. SHORT

COUNSEL: Aaron Grossman, for the Plaintiff. Steve Bellissimo, for the Defendant Julie Pantziris.

REASONS RELEASED: August 1, 2017

Reasons on Motion

I. Rule 48.14 in Context

[1] In the 2016 edition of Ontario Superior Court Practice, Mr. Justice Todd Archibald, and his co-editors (with my emphasis added) commented upon the present application of Rule 48.14 as follows:

•Judicial discretion The determination whether to allow the action to proceed is discretionary. Rule 48,14(7)(a) provides that the court "may" dismiss for delay. P need not rigidly satisfy both aspects of the test but the two factors, acceptable explanation for the delay and demonstrating absence of prejudice to D, must be considered, together with any other relevant factors, on a contextual basis. There will be some cases where P can show cause that on the whole, it would be unfair for the action to be dismissed. Determining fairness or unfairness requires a consideration of all the circumstances and a certain balancing of the respective interests of the parties. [Koepcke v. Webster, [2012] O.J. No. 230, 2012 ONSC 357 (Ont. Master). See also Sepehr Industrial Mineral exports Co. v. Alterative Marketing Bridge Enterprises Inc.,.2007 CanLII 23175 (ON SC), [2007] O.J. No.2438, 86 O.R (3d) 550 (Ont. S.C.J.).]

[2] This extract effectively capsulizes my approach on this motion seeking to extend the time to set this matter down for trial.

[3] Because there were amendments made to this subrule in 2016, before this motion was argued in 2017, I have considered the impact on those changes to the existing caselaw and practice established under the former wording.

[4] The following extracts have been highlighted to note the elements upon which my analysis of the present requirements of Rule 48 has, in part, focused:

DISMISSAL OF ACTION FOR DELAY

48.14 (1) Unless the court orders otherwise, the registrar shall dismiss an action for delay in either of the following circumstances, subject to subrules (4) to (8):

1. The action has not been set down for trial or terminated by any means by the fifth anniversary of the commencement of the action.

2. The action was struck off a trial list and has not been restored to a trial list or otherwise terminated by any means by the second anniversary of being struck off. O. Reg. 170/14, s. 10; O. Reg. 487/16, s. 8 (1).

Exceptions

(1.1) Subrule (1) does not apply to,

(a) actions placed on the Commercial List established by practice direction in the Toronto Region; and

(b) actions under the Class Proceedings Act, 1992. O. Reg. 487/16, s. 8 (2).

Timetable

(4) Subrule (1) does not apply if, at least 30 days before the expiry of the applicable period referred to in that subrule, a party files the following documents:

1. A timetable, signed by all the parties, that,

i. identifies the steps to be completed before the action may be set down for trial or restored to a trial list, as the case may be,

ii. shows the date or dates by which the steps will be completed, and

iii. shows a date, which shall be no more than two years after the day the applicable period referred to in subrule (1) expires, before which the action shall be set down for trial or restored to a trial list.

2. A draft order establishing the timetable. O. Reg. 170/14, s. 10.

Status Hearing

(5) If the parties do not consent to a timetable under subrule (4), any party may, before the expiry of the applicable period referred to in subrule (1), bring a motion for a status hearing. O. Reg. 170/14, s. 10.

(6) For the purposes of subrule (5), the hearing of the motion shall be convened as a status hearing. O. Reg. 170/14, s. 10.

(7) At a status hearing, the plaintiff shall show cause why the action should not be dismissed for delay, and the court may,

(a) dismiss the action for delay; or

(b) if the court is satisfied that the action should proceed,

(i) set deadlines for the completion of the remaining steps necessary to have the action set down for trial or restored to a trial list, as the case may be, and order that it be set down for trial or restored to a trial list within a specified time,

(ii) adjourn the status hearing on such terms as are just,

(iii) if Rule 77 may apply to the action, assign the action for case management under that Rule, subject to the direction of the regional senior judge, or

(iv) make such other order as is just. O. Reg. 170/14, s. 10.

[5] With respect to subrules 48.14 (11) to (13) is important to note that in 2016 those subrules were deleted as is indicated in the current editions of the Rules of Civil Procedure: “Revoked: O. Reg. 487/16, s. 8 (5).”

[6] Previous subrule (13), was similar, but somewhat different from the present form of subrule (7). It read:

(13) DISPOSITION AT STATUS HEARING - At the status hearing, the plaintiff shall show cause why the action should not be disrnissed for delay and,

(a) if the presiding judge or case management master is satisfled that the action should proceed, the judge or case management master may,

(i) set time periods for the completion of the remaining steps necessary to have the action placed on or restored to a trial list and order that it be placed on or restored to a trial list within a specified time,

(ii) adjourn the status hearing to a specified date on such terms as are just, or

(iii) if the action is an action to which Rule 77 may apply under rule 77.02, assign the action for case management under that Rule, subject to the direction of the regional senior judge,

(iv) make such other order as is just; or

(b) if the presiding judge or case management master is not satisfied that the action should proceed, the judge or case management master may dismiss the action for delay.

[7] Here is the original statement of claim was filed on February 9, 2012. The plaintiffs present motion for a new timetable was issued on February 6, 2017 (within the now five year period) and the motion was argued on April 27, 2017.

[8] Following the argument before me, I advised counsel that I was granting the plaintiff’s motion and provided a handwritten endorsement which read in its entirety:

For reasons to follow (brief) I have determined that the setdown date of this matter shall be April 30, 2018. The plaintiff is being given a degree of indulgence and I am inclined to award $3500 plus HST to the plaintiff in the cause of the issues in this action. Matter is referred to Justice Myers, so that he may determine if case [is] to be added to the Commercial List.”

[9] I have now been asked to deliver the balance of my reasons, and have obtained a up-to-date Case History report from the court office

[10] The Case Hstory report for this action now reflects that on May 25, 2017 Justice Myers made an endorsement indicating that he is now seized of this matter. The Case History reflects the following portions of his endorsement:

“There is a later action on the same alleged fraud Conveyance about to go to trial on the Commercial List. DEF argues it was brought late in should be dismissed for delay. The purpose of the civil justice system is to resolve cases fairly and justly… This action is therefore added to the Commercial List. August 30 [motion] is to be brought by the plaintiff to deal with steps to have this action readied for trial, with or after the other action.”

[11] My decision, a month prior to Justice Myers observations was based on exactly the same criteria. The purpose of the civil justice system is to resolve cases fairly and justly. The plaintiff did not fail to comply with the requirements of rule 48. Rather, it brought a motion and the defendant was unprepared to participate in establishing the timetable. Rather, responding counsel relied on the possibility that the action would be at dismissed for delay.

[12] It should be noted that the defendants have extended the life of this matter by making not one, but two challenges of my earlier decision of March 11, 2015 extending the set down date at the two year point.

[13] It hardly lies in their mouths to now oppose a one year extension at this point, where it would seem they consumed nine months unsuccessfully challenging my earlier decision granting an extension at the two year point in the life of this action.

[14] The resisting parties on the present motion caused the related procedural delays when my March decision was appealed, first to Justice Faieta in July 2015, and then leave was sought from Justice Sanderson, who delivered her reasons denying the application for leave to appeal to the Divisional Court on December 1, 2015

II. Background

[15] There are a number of Masters sitting in Toronto, but this file seems to keep coming back to my lists. Originally, I heard the application of the ex parte application for a Certificate of Pending Litigation in February 2012. The named defendants were Spiros Pantziris and his spouse, Julie Pantziris (Taylor)

[16] I understand that there was a bankruptcy order regarding of Mr. Pantziris made on October 8, 2013, which probably stayed this action, for all intents and purposes, for at least some portion of the five-year period. I further understand that the Trustee in Bankruptcy, subsequently became involved in the matter in February of 2014 when this action was assigned to him for the benefit of all the creditors. Inasmuch as this transaction involves a conveyance to a family member, the trustee has broad powers to endeavor to set aside conveyances not made for valuable consideration within 5 years of the insolvency.

[17] Under the Rules of Civil Procedure, in 2014 an action could be dismissed for delay two years after its commencement. Following consent adjournments, the plaintiff’s request to extend the set down date in this case (originally brought within 34 days) eventually came before me in March 2015.

[18] At that time I made an order setting aside the order dismissing the action. I observe that up to that point, three years of the now 5 year period contemplated by the current Rules had already elapsed.

[19] As well, up to this point in time no one seems to have brought a motion to set aside my 2012 order permitting the filing of a Certificate of Pending Litigation on the matrimonial home.

III. Context

[20] It is my view that in determining whether or not to grant an extension in cases such as this, it is necessary to examine the entire contextual environment involving the parties and to consider the nature of the claims asserted in the main action,as well as any companion litigation.

[21] The original factum filed before me in 2012, contained inter alia the following assertions relating to why a CPL was appropriate:

PART I - OVERVIEW

1. In accordance with a Shareholders Agreement dated July 13, 2007 between Cobalt Capital and Spiros Pantziris ("Pantziris"), among others (the "Shareholders Agreement"), Cobalt Capital commenced an arbitration by way of Notice of Arbitration dated June 19, 2009 (the "Arbitration"), and claimed relief in the approximate amount of $3 .5 million.

2. The Arbitration concerned a straightforward claim against Pantziris for purchase of Cobalt Capital's investment in Texspin S.A. de C.V. ("Texspin") and a second company, 1635278 Ontario Inc., ("163"), based on Pantziris’ termination for cause as CEO of Texspin. Pantziris’s termination for cause triggered a "put right" in favour of Cobalt Capital (the termination for cause is referred to as a "Triggering Event").

3. On January 24, 2012, Cobalt Capital received the award on the merits dated (December 16, 2011) in the Arbitration … from the arbitral panel, comprising the Honourable John D. Ground, Q.C., the Honourable Dennis Lane, Q.C. and John A.M. Judge . The Award was certified and entered with the Court on January 27, 2012.

4. Cobalt Capital was entirely successful in the Arbitration. On disputed evidence, the Panel found that Pantziris failed in several material respects to fulfill his contractual obligations as CEO of Texspin, that Pantziris had misled the Texspin Board of Directors and that he was justifiably terminated for cause. In the result, the Panel awarded Cobalt Capital the principal amount of approximately $3.5 million arising from "put rights" contained in the Shareholders Agreement.

5. In reaching its conclusions, the Panel determined that Pantziris had clearly failed to meet the substantial performance obligations relating to the management of Texspin and lacked candor and honesty in some of his dealings with the Texspin Board. Pantziris's evidence throughout the hearing was in direct conflict in almost every material respect with that of Cobalt Capital's. In its reasons, the Panel rejected Pantziris's explanations and defences on every material point.

6. Leading up to the Arbitration, in which Cobalt Capital was ultimately successful against Pantziris, and less than 48 hours following his termination for cause as Texpin's. CEO, Pantziris transferred his interest in [his home] (the "Property") to his spouse, Taylor, for nominal consideration.

7. As a result, Cobalt Capital commenced an action against Pantziris and Taylor for fraudulent conveyance and Cobalt Capital seeks leave to issue a Certificate of Pending Litigation ("CPL") in respect of the Property.

Background

13. In the course of Pantziris's role as Texspin's CEO, it became apparent to Cobalt Capital that Pantziris was not fulfilling his duties under the Professional Services

Agreement, for example:

(a) Pantziris had not been forthcoming with information and updates on its financial performance to Cobalt Capital and had in fact been dishonest with the Board;

(b) An independent consultant confirmed that Texspin had serious operational problems, including a lack of quality control, a lack of technical capability and serious organizational problems that contributed to its failure to meet its business targets; and

(c) Under Pantziris's leadership, Texspin was on the verge of bankruptcy.

16. In the Award, the Panel determined that Pantziris was justifiably terminated for cause. It accepted that the termination of the Professional Services Agreement by the board of Texspin was a reasonable exercise of the business judgment of the Cobalt Capital representatives. Its principal findings in this regard are as follows:

(a) "the under-performance by Pantziris as CEO of Texspin constituted a "material and substantial breach" of the Professional Services Agreement, therefore constituting cause for termination of the Professional Services Agreement";

18. Pantziris was therefore terminated for cause on August 20, 2008.

Cobalt Capital's Put Right

19. As a result of his termination for cause as Texspin's CEO, Pantziris became immediately exposed to the provisions of the Shareholder Agreement and to Cobalt Capital's right to demand the repurchase by Pantziris of the Cobalt Shares.

20. Pantziris left El Salvador and returned to Toronto following the meeting on August 20 and his termination. Within 48 hours, he had transferred his interest in the Property to Taylor for nominal consideration.

The Fraudulent Conveyance

23. Pantziris and Taylor purchased the Property for $1,380,000 on August 6, 2002….

24. On or about August 22, 2008, Pantziris, as a joint tenant with Taylor of the Property, transferred his interest in the Property to Taylor, his spouse, for nominal consideration (the "Conveyance").

As stated as the explanation for nominal considerations in the Land Transfer Tax Statement, the Conveyance was "(an) inter­spousal transfer for natural love and affection." The Conveyance was registered on August 22, 2008,

25. Cobalt Capital became aware of the Conveyance in December 2010 before the

Arbitration had concluded and in advance of receiving the Award.

Keane Affidavit at para. 48.

26. On September 20, 2011, when the hearing of the Arbitration had concluded and both sides were waiting for the Award, Taylor took out a $950,000 mortgage on the Property… which was registered on title on September 20, 2011

[22] In support of the application for the CPL, counsel referred me to the reasons of the Honourable Madam Justice Chapnik in a similar decision concerning the granting of leave to issue a CPL:

“. . . I am satisfied on the evidence before me that the plaintiff has, on the facts, raised a prima facie case of fraudulent conveyances, as against the defendants. Clearly, the transfers were non-arms length and made for inadequate consideration. In these circumstances, an inference of knowledge and intent must be made.

[23] On the motion before me. I was satisfied that in these circumstances, an inference of knowledge and intent must be made and thus this was an appropriate case to issue a CPL.

IV. The First Extension

[24] By coincidence, two years later, in 2014 the plaintiffs application to set aside a dismissal for failing to set the action down within the then two year window, came before me. Mr. Bellissimo who is counsel on the present motion for Julie Pantziris was also counsel at that time. I made an order permitting the action to proceed in March 2014. As indicated above, that decision was appealed to Justice Faieta.

[25] His reasons in this action, found at 2015 ONSC 4741, dismissing the appeal outlined developments that had occurred after the CPL was issued.

[26] In the following extracts I have added emphasis to indicate elements of the contextual environment considered by me in reaching my conclusion on this motion:

2 Cobalt is a judgment creditor of the defendant Spiros Pantziris. Cobalt issued this claim on February 9, 2012. Cobalt alleges that Spiros fraudulently conveyed his interest in a property to his spouse, the defendant Julie Pantziris, with the intent to defeat Cobalt and other creditors. Cobalt seeks to set aside the conveyance. A Certificate of Pending Litigation was obtained and remains registered against the property.

3 Spiros and Julie filed a Statement of Defence on April 16, 2012.

4 A judgment debtor examination was held in June 2012. Spiros refused to answer any questions at the examination because a representative of Cobalt was present. As a result of a motion held on February 27, 2013 Spiros was ordered to attend a further judgment debtor examination in May 2013. At the judgment debtor examination held in May 2013, Spiros refused to answer any questions after being served with Cobalt's application for a bankruptcy order.

5 Spiros disputed the application for a bankruptcy order. A trial was ordered. However, on October 8, 2013 and with the consent of Spiros, Justice Morawetz issued a Bankruptcy Order against Spiros and appointed Albert Gelman Inc. as Trustee of his Estate.

6 The affidavit of Mr. O'Brien, counsel for Cobalt, sworn September 15, 2014, states:

While these steps were taking place this action did not proceed because of the likelihood that if there was a bankruptcy the matter might be pursued by the Trustee for the general benefit of creditors and if not the examinations in aid of execution process would provide evidence in regard to the action. There was always an intention to proceed either by Cobalt or to transfer the action to a Trustee should one be appointed.

7 A Notice of Pending Dismissal was received by counsel for Cobalt in April, 2014. A Notice of Request for a Status Hearing was sent by fax to counsel for Spiros and Julie on April 23, 2014. It indicated that the action cannot be listed for trial because an "Order to continue with Trustee taking over action required" and "[h]ave to determine who will be pursuing action and in what venue."

[27] In his decision, Justice Faieta considered whether or not I erred in law in failing to apply the test, set out by the Ontario Court of Appeal, on the issue of "prejudice"?

[28] There, as here, my view was that the spouse would suffer no prejudice of the nature entitled to be relied upon in challenging an extension of the time for setting an action down for trial..

[29] Similar arguments were made in this case, once again by Mr. Bellissimo. It is my view that the rule changes discussed earlier make it unnecessary to establish both “no prejudice” to the defendant, as well as, an acceptable explanation from the plaintiff for the delay.

[30] Justice Faieta discussed the appropriate test in these terms:

23 The Appellant submits that the Master erred in finding that there was no prejudice to her if the action was to be reinstated. The Appellant submits that the Court of Appeal places the burden on the plaintiff to establish no prejudice and that the bald assertion of no prejudice provided by affidavit evidence is an insufficient basis to do so.

24 The Appellant relies upon Faris v.Eftimovski,2013 ONCA 360, 363 D.L.R. (4th) 111, at para. 32:

The plain wording of rule 48.14(13) makes clear that the onus is on the plaintiff to demonstrate why the action should not be dismissed for delay. The test, as stated by the status hearing judge in the case at bar, requires the plaintiff to demonstrate that there was an acceptable explanation for the delay and establish that, if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice... [emphasis added]

25 The Appellant also relies upon Nissar v.Toronto Transit Commission ,2013 ONCA 361, 115 O.R. (3d) 713, at paras. 30-31:

In my view, it is preferable to place the onus on a plaintiff to explain the delay and satisfy the court that it would not be unfairly prejudicial for the defendant to have the action restored to the trial list. ...

Therefore, the applicable test is conjunctive: a plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation and that, if the action was allowed to proceed, the defendant would suffer no non-compensable prejudice. [emphasis added]

26 Neither Faris nor Nissar address the extent of affirmative evidence that must be adduced by the plaintiff. In my view, it is open to the plaintiff to baldly assert that there would be no prejudice to the defendant if the action were to proceed. In face of that position, it is open to defendant to counter such evidence. The defendant is best suited to identify and explain how her ability to defend the action has been prejudiced. Nevertheless, the burden rests on the plaintiff to demonstrate no prejudice. However, if the defendant chooses to file no evidence in face of an affidavit from the plaintiff which states that the defendant will not be prejudiced by the reinstatement of the action, then the defendant should not complain that the Master did not have a sufficient evidentiary basis to find that there was no prejudice to the defendant in the reinstatement of the action.

27 In any event, in MDM Plastics Ltd. v. Vincor International Inc., 2015 ONCA 28, the Ontario Court of Appeal has taken a more flexible approach on the need for affirmative evidence to show that no prejudice will result from setting aside a dismissal. In MDM the Court stated that the plaintiff is not required to adduce affirmative evidence that the reinstatement of an action will not result in prejudice. Instead, the Court must consider all the circumstances in evaluating prejudice. The Court stated, at para. 32:

I do not read Wellwood as standing for the general proposition that the plaintiff must lead affirmative evidence to rebut a presumption of prejudice that arises from the passage of time in prosecuting an action or from the expiry of a limitation period. Rather, in evaluating the strength of the presumption of prejudice, the master or motion judge must consider all of the circumstances, including the defendant's conduct in the litigation.

28 For all of the above reasons, it is my view that the Master did not commit an error of law. It appears that, in accordance with Fuller, the Master took into account a variety of considerations, including the inadvertence of counsel that led to the administrative dismissal and the broader context of this action in arriving at a just result.

[31] My approach on this occasion was no different. I have endeavoured to consider all the circumstances in this case including the parallel action for the same and other relief before Justice Myers As well the apparent facts presented before me, (which as similarly the case before in Justice Chapnik’s matter) leads me to conclude, in these particular circumstances, that an inference of knowledge and intent must be made.

[32] Moreover this case has the additional factor of claims being asserted on behalf of all the creditors of the bankrupt. Many of the delays in getting to this point seem to have flowed from procedural requirements resulting from the bankruptcy of Mr. Pantziris.

V. Leave Application

[33] In her reasons on the leave to appeal to the Divisional Court application before M.A. Sanderson J. (found at 2015 ONSC 7090) she referred to a 2015 decision of the Court of Appeal:

26 Counsel for Cobalt submitted citing the Court of Appeal in HB. Fuller v. Rogers 2015 ONCA 173 at para 23:

"Neither the four-factor approach nor the two-part test provides an exhaustive list of considerations. Regardless of which is followed, all of the circumstances of the case must be considered in order to arrive at a just result".

27 Counsel for Cobalt submitted that the applicable principles on a motion to set aside a Rule 48.14 dismissal required the Court to consider that while the four Reid factors are "likely to be of central importance in most cases", there is no requirement that the plaintiff satisfy all four.. There is no rigid, one size fits all test for setting aside a Rule 48 dismissal. Instead, the court must take a "contextual approach" and "consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case".

34 Counsel for Cobalt submitted that at paragraph 26 of his Reasons, Faieta J. did specifically turn his mind to both Nassir and Faris and he expressly acknowledged that the burden rests on the Plaintiff to demonstrate no prejudice.

35 He referred to Carioca's Import & Export Inc. v. Canadian Pacific Railway Limited 2015 ONCA 592 ("Carioca").where Van Rensburg JA noted that the legal test for determining whether an action should be dismissed under Rule 48.14 should be adapted to determine when an action should be restored to the trial list. The plaintiff is required to provide an "acceptable", "satisfactory", or "reasonable" explanation for the delay. A motion to restore an action to the trial list is not a "blame game", where counsel should be required or encouraged to take a defensive stance and justify their conduct of the litigation on a month-by-month basis. Rather, in assessing whether an explanation of delay is reasonable, a motion judge should consider the overall conduct of the litigation, among other factors (para 46). While the plaintiff bears the onus of demonstrating that the defendant would suffer no non-compensable prejudice if the action were allowed to proceed, the issue of prejudice is a factual question. A defendant is not required to offer evidence of actual prejudice. However, if the defendant asserts that he has been prejudiced, the court is entitled to consider the conduct of the defendant in light of its assertions. (para 50).The conduct of all parties in relation to the litigation is relevant in determining whether to restore an action to the trial list (para 53). [my emphasis throughout]

VI. Circumstances Alter Cases

[34] Justice Sanderson’s reasons contained a timeline. These excepts help frame the later delay issues:

[3] A Statement of Defence was filed on April 16, 2012.

[4] A judgment debtor exam of Spiros was held in June 2012.

[5] On February 27, 2013, Spiros was ordered to attend a further judgment debtor examination.

[6] At the examination in May of 2013, Spiros refused to answer questions after he was served with an application for a bankruptcy order.

[7] On October 8, 2013 with Spiros's consent, Morawetz J. issued a bankruptcy order against Spiros and appointed Albert Gelman Inc. as Trustee.

[8] In February 2014, Cobalt agreed to assign this action to the Trustee to be pursued for the benefit of all creditors.

[35] The same Trustee also has brought an action to set aside a number of allegedly improper conveyances by the bankrupt to various entities prior to his bankruptcy. That action is current, in good standing and being dealt with by Justice Myers on the Commercial List.

[36] Apparently at some stage counsel for the defence in this action brought a motion before Justice Newbould seeking to prevent the trustee’s present counsel from representing it in these matters.

[37] I am advised that Justice Newbould’s endorsement expressed his displeasure with respect to what I regard is yet another reason this action has unnecessarily been delayed to this stage. Before me counsel for the plaintiff submitted in argument:

“….In dismissing the motion to remove us lawyers of record Newbould, J stated, "In my view the motion is completely miscast and tactical and it is dismissed." He went on to say, "The motion was clearly tactical for the purpose of delaying the action against the defendants. Attempts by the trustee to compel Mrs. Pantziris to answers/refusals from her examination for discovery have been delayed." And if you look through the affidavit I've set out quite clearly the steps that we've taken to move this matter forward. Frankly the, the allegations with respect to this action, all the evidence has been produced already. We examined - and just to clarify, what steps have been taken to examine Julie Pantziris, the defendant in this action, we cross-examined her for the Mareva injunction which the trustee's motion record for the Mareva injunction was comprehensive, included all of the evidence that the trustee has –( the trustee and Cobalt has) against Ms. Pantziris, and on her cross-examination, which we agreed with counsel would serve as examination for discovery.

We obtained all the evidence we need in respect of the fraudulent conveyance action, so there's no need to further examine Ms. Pantziris, and the remaining steps in the action have all been related to the, Ms. Spiros Pantziris's mother, Aglea, and her numbered company and her role as directing that numbered company, and the steps that she's taken to, to dissipate assets that are in that company, which could be used to satisfy the debt or the, the estate. Which is to say that there is a reasonable explanation for why this matter hasn't moved forward and that, that answer is this matter has moved forward. As… the Court has pointed out the facts, the allegations are identical. There has to be one trial for both of these actions. Any attempts to have two trials would/could result in contradictory findings and would be frankly a waste of money and time.”

[38] The existence of these companion claims is yet another justification in my view for the granting of an order extending the time for setting down this action.

[39] The only case dealing with such a situation that either counsel could refer me to was 1239122 Ontario Inc. v. Russell , 2012 ONSC 2375 this was a Sudbury decision of R.G.S. Del Frate J. The catchlines wirth respect to the decision, with my emphasis read in part include:

Sudbury action was commenced January 2003 and Ottawa action December 2004 -- Actions had been ordered tried together and defendants in both actions were fully aware of what was happening in other -- Defendants own motions caused significant delay -- … -- Dismissal at this stage draconian given plaintiffs always had clear intention to pursue actions –

[40] The reasons in Russell read in part

Discussion

25 It is clear from the history of these proceedings that even though the two actions have not been consolidated as of yet, the defendants in both actions were fully aware of what was happen-ing in both actions. Both participated actively in many of the interlocutory proceedings brought by any of the parties…

27 These have been convoluted proceedings where the defendants in both actions were satisfied to proceed in tandem on certain aspects of the action and, when not to their liking, decided to proceed individually without notice that those proceedings were intended to be separate and apart from the other action.

28 Some of the defendants' proceedings have contributed to the delay as well. The motion for security of costs took some fifteen months from its inception to the finalization of the appeal.

29 In my view, there was never any indication by the plaintiffs in either action that they intended to abandon their actions. In fact, it was clear that the plaintiffs intended to pursue these actions vigorously.

30 I find that the plaintiffs at certain times were lax in advancing these actions in a timely fashion. I also find that the defendants have not been prejudiced….

[41] In my view based on submissions from counsel for both sides. I am satisfied that the plaintiffs intended to pursue these actions vigorously. In argument counsel for the plaintiff recounted situations such as the following:

“…to take a step back, in September we had an undertakings and refusals motion compelling the defendants in the trustees action, which include Ms. Julie Pantziris, who’s the defendant here today, to answer questions improperly refused and to produce further, further documents. That motion was successful in its entirety and answers to undertakings or answers to questions refused were ordered.

… That was in September 2016.

[42] In response to my question as to what it happened since counsel advised with respect to the property other than that, upon which the CPL is presently filed:

.” We allege the exact same allegations related to the fraudulent conveyance perpetrated by the defendant in, in the action in the Commercial List. There’s a number of other matters that are also at issue in that, in that action, including the fraudulent transfer of some shares in, in a numbered company from the bankrupt to his mother. The mother is also the director of that numbered company and has since engaged in the campaign of dissipating the assets of that corporation. We examined her and, and she refused to produce – the defendants refused to produce any financial information for the numbered company until ordered to do so by, by Mr. Justice Newbould.

[43] Apparently discovery scheduled for December 23, 2016, and the productions were made on the day before the discovery. Counsel reports that:

“We did do the discovery almost under protest, if you will, Master, putting on the record that we would proceed with the discovery but reserved our rights to examine Ms. Pantziris further if, if necessary, given that the document – and it was a voluminous record of documents, Master, that was produced the day before the discovery.”

[44] I see nothing in this overall context which inclines me to find any meaningful prejudice to the defendant in this action.

VII. What Test?

[45] It is my view that the changes made by the Rules Committee to rule 48.14 suggest that there is no longer a need nor a requirement for a conjunctive test of a full explanation for the delay and the establishment of lack of prejudice.

[46] Rather, the rule now makes it clear that if the court is satisfied that the action should proceed, it may make any order as is just.

[47] At the conclusion of their argument on this motion, I indicated to counsel the following:

“Basically my view is that the contextual approach takes into account the overall situation and the paragraph in Russell that talks about the parties being aware of the factual situation applies in spades to this case, as far as I am concerned. This is a case where Rule 1.04 directs that you are supposed to have the just, most expeditious resolution, and the expeditious resolution of this matter is to have it dealt with, with the other.

The endorsement by Justice Newbould that appears in the motion record somewhere was dated January 25th, 2016 and it says, "Justice Myers to be case management judge. Motion to be scheduled through commercial list office or with Myers, J." I suggest that you do the same thing in this case.

VIII. Disposition

[48] Thus as I said in my original ruling, in my view, allowing this action to proceed is the just result in this case. Therefore I am confirming that I am making an Order that, , unless Justice Myers orders otherwise, this action be set down for trial by April 30, 2018.

[49] Having re-read the foregoing and analyses by other members of this court concerning the facts in this case and in light of my understanding of the circumstances of this case I believe it would be a gross injustice for this matter to be dismissed on a procedural basis at this stage. This determination is particularly justifies when it is companion action does not face these problems and the true issues as to whether or not the conveyance to the spouse was proper can and should be resolved in an appropriate form.

[50] Parties now have what I originally contemplated as brief reasons. Despite their length. I come to the same terse conclusion:

Plaintiff’s motion to extend the time for setting this matter down for trial is extended to April 30, 2018.

[51] Nevertheless, the plaintiff is still a degree of indulgence and I continue to be satisfied that an award in the amount of $3500 plus HST to the plaintiff, in the cause of the issues in this action, is the appropriate ruling in that respect.

Released: August 1, 2017

Master D. E. Short

DS/ R199