Court File and Parties

CITATION: Logger Town Homes Limited v. Sadeghian, 2017 ONSC 5005

COURT FILE NO.: CV-12-00458677

MOTION HEARD: 20170823

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Logger Town Homes Limited, 2243746 Ontario Limited and Akbari Homes Limited, Plaintiffs

AND:

Jalil Sadeghian and Hamideh Yavari, Defendants

BEFORE: Master B. McAfee

COUNSEL: H. Minz, Counsel for the Moving Parties, the Plaintiffs S. Robinson, Counsel for the Responding Parties, the Defendants

HEARD: August 16, 2017

REASONS FOR DECISION

[1] The plaintiffs bring this motion for a status hearing pursuant to Rule 48.14(5) of the Rules of Civil Procedure. The plaintiffs seek a timetable for the balance of the steps in the action. The defendants ask that the action be dismissed with costs.

[2] The onus is on the plaintiffs to establish an acceptable explanation for the litigation delay and that the defendants will not suffer non-compensable prejudice if the action proceeds to trial (Khan v. Sun Life Assurance Company of Canada, 2011 ONCA 650 (Ont.C.A.) at para 1, Faris v. Eftimovski, 2013 ONCA 360 (Ont.C.A.) at paras 11, 41, 42), 1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544 (Ont.C.A.) at paras 28, 32, 34).

[3] In 1196158 Ontario, the following general principles are stated at paragraphs 17 to 20:

[17] The civil justice system aims to resolve disputes fairly, on the merits and in a timely and efficient manner. The Rules of Civil Procedure provide that the rules are to be “liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits”: rule 1.04(1).

[18] Achieving that goal in cases involving dismissal for delay requires a careful balance of two fundamental principles. The first is that civil actions should, if possible, be decided on their merits and procedural rules should be interpreted accordingly. The second is that the procedural rules that aim to resolve disputes in a timely and efficient manner can only achieve their goal if they are respected and enforced.

[19] Timelines prescribed by the Rules of Civil Procedure or imposed by judicial orders should be complied with. Failure to enforce rules and orders undermines public confidence in the capacity of the justice system to process disputes fairly and efficiently. On the other hand, procedural rules are the servants of justice not its master. We must allow some latitude for unexpected and unusual contingencies that make it difficult or impossible for a party to comply. We should strive to avoid a purely formalistic and mechanical application of timelines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. As Laskin J.A. stated in Finlay v. Van Paassen (2010), 101 O.R. (3d) 390, [2010] O.J. No. 1097, 2010 ONCA 204, at para. 14, “the Rules and procedural orders are construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute”.

[20] The challenge posed in cases involving dismissal for delay is to find the right balance between, on the one hand, the need to ensure that the rules are enforced to ensure timely and efficient justice and, on the other, the need to ensure sufficient flexibility to allow parties able to provide a reasonable explanation for failing to comply with the rules to have their disputes decided on the merits.

[4] On July 12, 2012, the action was commenced under the Construction Lien Act, R.S.O. 1990, c.C.30. The plaintiffs allege that they are owed $268,065.89 for the building of the defendants’ custom home.

[5] On October 6, 2012, the statement of claim was served.

[6] On November 2, 2012, the defendants served a statement of defence and counterclaim. In their counterclaim the defendants claim $500,000.00 for breach of contract and/or negligence.

[7] On December 4, 2012, a statement of defence to the counterclaim was served.

[8] On February 5, 2013, the plaintiffs were cross-examined pursuant to section 40 of the Construction Lien Act. While the length of the cross-examination was not known, both counsel agreed that the cross-examination took place over the course of at least 2 days.

[9] On April 22, 2013, the defendants moved before Master Albert seeking a declaration that the lien had expired. The motion was granted. Master Albert determined that the date of the last work was March 27, 2012, and the lien, which was registered on June 4, 2012, was registered more than 45 days from such date.

[10] On September 9, 2013, Justice Wilton-Siegel dismissed the appeal from Master Albert’s order.

[11] On October 1, 2013, plaintiffs’ counsel wrote to defendants’ counsel to advise that the plaintiffs would appeal to the Court of Appeal. That appeal was not pursued.

[12] On December 5, 2016, the plaintiffs changed lawyers and a notice of change of lawyers was served.

[13] On March 21, 2017, defendants’ counsel wrote to plaintiffs’ counsel concerning a notice that had been registered on title on or about July 12, 2012. The plaintiffs instructed their lawyers to discharge the notice. The notice was discharged on March 24, 2017.

[14] On May 31, 2017, plaintiffs’ counsel wrote to defendants’ counsel seeking consent to a timetable.

[15] Defendants’ counsel did not respond to the letter.

[16] On June 26, 2017, the plaintiff’s moved before Master Albert for a status hearing. Master Albert ordered the action to proceed as an ordinary action under the Rules of Civil Procedure and ordered that a status hearing be conducted.

[17] On August 16, 2017, the status hearing proceeded before me.

[18] The plaintiffs acknowledge that no steps to advance the action took place between September 2013 and December 2016. I do not view the service of a notice of change of lawyer as an advancement of the action. In my view, no steps took place to advance the action following dismissal of the appeal on September 9, 2013, and May 30, 2017, when plaintiffs’ counsel wrote seeking a consent timetable.

[19] There is evidence before me from the director of the plaintiff corporations that during the period September 2013 to December 2016, he left numerous voicemails and sent numerous emails to the plaintiffs’ former lawyer requesting status updates. On September 20, 2016, after several failed attempts to elicit a response from the plaintiffs’ former lawyer, he sent an email to the plaintiffs’ former lawyer requesting the release of the file so a new lawyer could be retained. There is evidence before me from the director of the plaintiff corporations that during this period it was his intention to prosecute this action.

[20] During the period September 9, 2013 to May 30, 2017, the defendants did not take any steps to advance their counterclaim. While the plaintiffs bear burden of moving action forward, the defendants have a counterclaim and must bear some onus to move the counterclaim forward as well. While there is evidence before me that the plaintiffs were phoning and emailing their former lawyer concerning the progress of the action, there is no such evidence before me from the defendants concerning their counterclaim or the action. There is no evidence that the defendants complained to the plaintiffs or their lawyers about the delay. This is not a case where the plaintiffs’ lawyer ignored requests from the defendants. The defendants appear to have been content to let the action and their counterclaim drift.

[21] There is an acceptable explanation for the delay. Notwithstanding the plaintiffs’ efforts, the plaintiffs’ former lawyer was not taking steps to advance the action. There is no evidence before me that the delay on the part of plaintiffs’ counsel or the plaintiffs was intentional or deliberate.

[22] As set forth at paragraphs 24 and 25 of the affidavit of the plaintiffs’ representative, the bulk of the documents to be relied upon have been preserved, many of which were subject of the section 40 cross-examination and all potential witnesses continue to be available. The defendants continue to reside in the custom home at issue. While the plaintiff’s evidence is that the property has been listed for sale, the defendants made no submissions in that regard. If the defendants were concerned with fading memories and unspecified documents that may no longer be available, they had ample opportunity to interview witnesses and preserve evidence and they ought to have taken steps to do so, particularly when advancing a counterclaim. Any presumption of prejudice has been rebutted. There is no evidence of actual prejudice.

[23] In all of these circumstances I am satisfied that the plaintiff has shown cause why the action should not be dismissed for delay. I am satisfied that it is just that the action proceed.

[24] The parties agree to a set down date of one year from today’s date and an order shall go accordingly. The parties advise that they will be able to agree to a timetable for the balance of the steps.

[25] If the motion for a status hearing was successful, the plaintiffs sought $3,300.00 in costs. In either event, the defendants sought $3,898.00 in costs on the basis that the plaintiffs are being granted an indulgence.

[26] I award no costs of the motion to any party. The plaintiffs are being granted an indulgence. However, the defendants advanced a counterclaim and had some responsibility to move their counterclaim forward as well.

[27] Order to go as follows:

1. The new deadline to set the action down for trial is August 23, 2018.
2. There shall be no costs of this status hearing.

Master McAfee

Date: August 23, 2017