CITATION: Air Wilga Inc. v. Orenda Recip Inc. et al., 2017 ONSC 5820
COURT FILE NO.: C-9468/06
DATE: 2017-12-06
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Air Wilga Inc.
Plaintiff
– and –
Orenda Recip Inc., Orenda Aerospace Corporation and Magellan Aerospace Company
Defendants
Richard Pharand, for the plaintiff
Benedict Wray, for the defendants
HEARD: September 25, 2017
DECISION ON MOTION
DEL FRATE J.
Introduction
[1] The defendants bring this motion for dismissal of the action on the basis of delay. Alternatively, the defendants seek compliance with the undertakings and a re-attendance at examinations for discovery, if necessary.
[2] The parties agreed that only the relief of dismissal would be argued. The remaining relief is adjourned to another date, if necessary.
Background
[3] The parties agreed that the chronology of events as filed is an accurate representation of what has transpired. Accordingly, I am reproducing that particular chronology:
Date
Event (according to the Defendants)
Answers by the Plaintiffs
July-Dec. 1997
Initial dealings between the parties resulting in an alleged “Oral Contract” including allegations of false representations.
There is no dispute that the Plaintiffs commenced their actions against the Defendants within the applicable limitation period. As such, the dates of events prior to the Plaintiffs commencing their actions on April 12, 2006 are not relevant for the purposes of the motion to dismiss for delay.
Although not relevant for the purposes of this motion, the Plaintiffs withdrew their proceeding before the Federal Court (it was not dismissed).
April 14, 2003
Alleged breach of “Oral Contract” (Plaintiff Informed production of engine ceased).
July 30, 2003
Initial demand letter (“mise en demeure”)
2006
The Plaintiffs file statements of claim before the Federal Court
April 12, 2006
The Plaintiffs file statements of claim before the Ontario Superior Court.
May 3, 2006
The Plaintiffs dismiss the claims brought before the Federal Court
September 29, 2006
The Defendants serve their statements of defence to both claims, Counsel for the Defendants requests that counsel for the Plaintiff agree to the following: (I) that the actions be moved to Toronto, where Orenda Recip Inc. is located, as there is no nexus with Sudbury; (ii) that the actions be consolidated or at least be heard together; and (iii) that the statement of claim be amended to remove Orenda Aerospace Corporation and Magellan Aerospaoe Company (which is actually called Magellan Aerospace Corporation) as Defendants or, alternatively, to discontinue the actions as against those entities.
The Defendants claim the action was brought in the wrong jurisdiction. However, the Defendants ultimately abandoned this claim rather than bringing a motion to change venue.
Procedural issues including: whether the two actions should be heard simultaneously, or one after the other, or be consolidated; the guarantees to be provided for costs; and persons to be examined for discoveries were first raised in September, 2006. However, the Defendants advised they were awaiting instructions from their clients. It was not until October 2008, two years later, that the Defendants finally obtained instructions on these issues.
On August 28, 2007, the Plaintiffs sent the Defendants their Affidavit of Documents. The Plaintiffs requested that the Defendants produce their Affidavit of Documents and further requested that the Defendants provide their availability for discovery examinations.
The Plaintiffs reject the Defendants assertion that the Plaintiffs affidavit of documents was known to be “manifestly deficient”.
Despite repeated requests, the Defendants did not file their Affidavit of Documents until February 12, 2008
It is disingenuous for the Defendants to complain of delay during this period as they themselves failed to file their Affidavit of Documents until long after the Plaintiffs. Further, it was the Defendants who caused delay during this time as they continued to advise they were waiting on instructions from their client regarding procedural issues.
September 2006 to May 2007
No communications received from Plaintiffs.
May 15, 2007
Counsel for the Plaintiffs responds to Defendants’ counsel. The Plaintiffs refuse to consent to the Defendants’ requests to move the actions to Toronto and remove the improper Defendants from the action.
August 25, 2007
The Plaintiffs serve their affidavit of documents, as well as a book of exhibits which appears to have been filed in Federal Court and known by the Plaintiffs to be manifestly deficient.
February 12, 2008
The Defendants serve their affidavit of documents,
Counsel for the Defendants requests that Plaintiffs’ counsel consent to identical draft motions for security for costs. The Defendants were forced to move for security given that the Plaintiffs, located out of province, refused to consolidate the actions or withdraw one of the two actions and issued out of Sudbury which has no nexus to the claims.
The parties agreed as to the form of the costs guarantee and counsel for the Defendants advised in November, 2008 that they would prepare the letter of credit form to be completed by the Plaintiffs. Despite a reminder in January, 2009 by the Plaintiffs’ lawyer, this matter was not resolved until May, 2009.
It is important to note that the Plaintiffs agreed to security for costs in the amount requested and the Defendants were not required to bring a motion for security for costs.
In September 2009, issues surrounding discovery examinations remained unresolved. The Plaintiffs’ lawyer wrote to the Defendants in September, 2009 requesting that the Defendants contact him to set up dates for discovery examinations. The Defendants advised that Peter Jackson could not be questioned as he was currently in Europe.
October 3, 2008
The issue of security for costs is settled on consent.
November 21, 2008
A status hearing is held and adjourned to May 8, 2009 on the order that examinations for discovery are to be held by May 8, 2009
May 6 2009
A status hearing is held without the examinations for discovery having been conducted as previously ordered. A new order is issued that examinations for discovery are to be completed by December 4, 2009.
The Defendants representative was unavailable for discovery examinations because he was in Europe.
November 23, 2009
The Plaintiffs serve the Defendants with a supplementary affidavit of documents listing over 100 additional documents many of which are either improperly identified or not identified at all, three days before the scheduled examinations for discovery.
The Plaintiffs discovered additional relevant documents and filed a supplementary Affidavit of Documents in October, 2009. An unsworn Affidavit of Documents was served on the Defendants. At discovery examinations, the Plaintiffs’ Affidavit of Documents was sworn and a copy was provided to the Defendants’ lawyer.
The Plaintiffs deny the documents were improperly identified as alleged by the Defendants. In fact, this is the first time the Defendants have raised this claim. This issue was never raised during the discovery examination or prior to this motion.
November 26-27, 2009
Examinations for discovery are held. The examinations are subsequently adjourned in order to allow the productions of additional documents.
It is important to note that both parties were required to produce additional documents. It is not a situation where the Plaintiffs alone caused a delay.
December 4, 2009
A third status hearing is held. The court orders that examinations for discovery are to be completed by June 30, 3010, undertakings answered by September 1, 2010, and that the actions be set down for trial by October 1, 2010. None of this happened.
The Timetable was not complied with by either party. Specifically, both the Plaintiffs and the Defendants failed to provide answers to the undertakings given during the discovery examinations by the deadline imposed by the consent order. As such, the action was dismissed for delay on October 4, 2010. The dismissal order was set aside on consent on October 22, 2010.
The Plaintiffs failed to complete the undertakings by the agreed upon September 1, 2010 deadline given the massive time and energy required to properly answer the undertakings. Donald Bérubé was required to retrace and reread hundreds of documents to ensure he properly answered the undertakings.
October 22, 2010 is a very important date. Since the order dismissing the action for delay was set aside on this date, it is submitted that pursuant to Armstrong v. McCall, 2006 CanLII 17248 (ON CA), [2006] O.J. No. 2055 (CA), Factum and Book of Authorities of the Responding Parties, Tab 3, at paras. 20-23, the focus should be only on any delay that occurred subsequent to October 22, 2010.
October 4, 2010
The Court orders that the actions be dismissed for delay.
October 22, 2010
The Defendants consent to have the orders set aside.
October 2010 to April 2012
No communications received from the Plaintiffs.
During this time, Donald Bérubé was working hard at answering his undertakings. During the course of answering the undertakings, Donald Bérubé found a large number of documents, mainly of a technical nature. Donald Bérubé devoted more than 26 months of work to answering his undertakings and indexing and digitizing hundreds of documents to fully and completely respond to the undertakings he provided.
During this time, the Defendants provided no response to their undertakings.
June 12, 2012
The Defendants serve answers to undertakings given during the examination of Peter Jackson on November 27, 2009.
Counsel for the Defendants requests answers to the undertakings given by Donald Bérubé on November 26, 2009, and reminds counsel for the Plaintiffs that the examinations remain incomplete.
September 12, 2012
Counsel for the Defendants queries whether the Plaintiffs still intend to proceed with the actions, given that examinations for discovery were adjourned in 2009 and that the Plaintiffs had yet to provide answers to undertakings.
In completing the undertaking responses, it was determined that the Plaintiffs would require an expert’s opinion to quantify the damages suffered by the Plaintiffs as a result of the Defendants stopping production of the OE600 aircraft engine. The Plaintiffs retained François Filion in April 2011 to prepare an expert report. Mr. Filion spent almost two years working on his report, which was completed in March, 2013.
The covering letter enclosing the Plaintiffs’ undertaking responses stated that the answers were a “preliminary response” as a bound copy would follow. As such, the response was called a “preliminary response” simply because a bound and translated copy would follow.
Given the massive quantity of documents that had to be reviewed, the large amount of time it took to provide answers the undertakings by both parties was understandable.
October 2, 2012
The Plaintiffs serve the Defendants with a preliminary response to undertakings.
July 12, 2013
Counsel for the Defendants again asks Plaintiffs counsel as to whether the Plaintiffs intend to proceed with the actions in view of these lengthy delays.
August 29, 2013
Plaintiffs’ counsel request that the Defendants consent to amended statements of claim in both actions.
After Mr. Filion completed his expert report, the Plaintiffs prepared an Amended Statement of Claim which was submitted to the Defendants on August 29, 2013 along with Mr. Filion’s expert report.
The Plaintiffs requested the Defendants’ consent to amend their Statement of Claim. The Defendants advised they would seek instructions. Despite repeated requests, the Defendants did not provide their consent for the Plaintiffs to amend the Statement of Claim until March 28, 2014.
[4] Discussions between the parties for fixing the dates for the continued examination of Mr. Bérubé were held. However, the Defendants’ lawyer was unavailable for the continued discovery examinations before May, 2015.
October 28, 2013
Counsel for the Defendants advises counsel for the Plaintiffs that it intends to complete its examination of Mr. Bérubé and enquires as to whether the Plaintiffs wish to continue the examination of the Defendants. Plaintiffs’ counsel is also advised that the Defendants’ former representative, Mr. Jackson, no longer an employee of Orenda.
August 18, 2014
The Plaintiffs serve their respective amended statements of claim.
June 4-5, 2015
The continued examination for discovery of Donald Bérubé is held.
Mr. Bérubé agreed to provide answers to approximately 50 additional undertakings during his examination. In the following months, Mr. Bérubé spent at least 4 months of full-time work to provide full and complete answers to the undertakings. Mr. Bérubé’s responses were served on the Defendants on February 10, 2016.
June 2015 to February 2016
No communication received from Plaintiffs.
The Plaintiffs set the matter down for trial as the action was ready to proceed to trial. The Plaintiffs did not require the Defendants’ consent to set the matter down for trial
Well after the matter was set down for trial the Defendants brought this motion to dismiss for delay.
February 10, 2016
The Plaintiffs serve partial answers to undertakings
August 30, 2016
The Plaintiffs unilaterally file trial records.
Position of the Defendants
[5] The defendants contend that the action should be dismissed since the 11 year delay, from the commencement of the actions to now, is an inordinate period of time. Further, the defendants contend that no reasonable explanation for this inordinate delay has been provided by the Plaintiff. Last, the defendants contend that the delay has created a presumption of inherent prejudice which will create a substantial risk that a fair trial of the issues will not be possible.
Position of the Plaintiff
[6] The plaintiff submits that although a lengthy time has expired since the issuance of the statement of claim, the delay was caused by the mutual conduct of the parties. This delay was enhanced due to the complicated nature of the litigation, the large quantity of documents involved, and the conduct of the defendants.
[7] Most importantly, in spite of the passage of time, no prejudice has ensued to the defendants since the primary witnesses for both parties are still available to testify. Also, the extensive documentary evidence, being some 21,000 thousand documents, has been preserved. Accordingly, there is no substantial risk that a fair trial will be precluded.
The Law
[8] Rule 24 of the Rules of Civil Procedure, R.R.O, Reg. 194 provides for the dismissal of an action for delay under certain circumstances. Numerous decisions have resulted pursuant to this rule. Most recently, the Ontario Court of Appeal has addressed the issue in the following cases: Langenecker v. Sauvé, 2011 ONCA 803, 286 O.A.C. 268; Wallace v. Crate’s Marine Sales Ltd., 2014 ONCA 671; and Ticchiarelli v. Ticchiarelli, 2017 ONCA 1.
[9] Simply stated, the law is that an action may be dismissed for delay if the default is intentional and contumelious, or the plaintiff and his or her lawyers are responsible for an inexcusable delay that gives rise to a substantial risk that a fair trial may not now be possible.
[10] Quite fairly, the defendants do not allege that the first grounds for dismissal applies to the facts of this case. Accordingly, I must now determine if the plaintiff is responsible for the delay and if such delay creates a substantial risk that a fair trial would not be possible.
[11] In Langenecker, Doherty J.A. outlines the law applicable to this case as follows, at para. 7:
The delay must be inordinate, inexcusable and such that it gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible because of the delay: see De Marco, at paras. 22, 26; Armstrong, at paras. 11-12.
[12] In defining these principles, Doherty J.A. states that reference must be made to the length of time from “the commencement of the proceedings to the motion to dismiss.” Then he states that a finding of “inexcusable” requires a determination of the reasons for the delay, and an assessment of whether those reasons afford an adequate explanation for the delay.
[13] As LaForme J. explained in De Marco v. Mascitelli (2001), 14 C.P.C. (5th) 384 (Ont. S.C.), at para. 26, explanations that are “reasonable and cogent” or “sensible and persuasive” will excuse the delay at least to the extent that an order dismissing the action would be inappropriate. See Langenecker, at para. 9.
[14] Last, a determination must be made if the delay has prejudiced the defendant to the point that it cannot put its case forward for adjudication on the merits. Justice Doherty in Langenecker goes on to add, “Prejudice is inherent in long delays. Memories fade and fail, witnesses become unavailable, and documents and other potential exhibits are lost.”
[15] The same reasoning was adopted by Lauwers J.A. in Wallace and by H.S. LaForme J.A. in Ticchiarelli.
[16] The party who commences the proceeding primarily bears the responsibility for the action’s progress: Wellwood v. Ontario Provincial Police, 2010 ONCA 386, 102 O.R. (3d) 555, at para. 48. This is not to say that the responsibility lies with the plaintiff alone—it is shared with the respondent: Danrus Construction Ltd. v. Underwood McLellan Ltd., 17 C.P.C. (4th) 89 (Ont. C.A.).
Discussion
Inordinate and inexcusable delay
[17] This action arose as a result “oral contract” which created between July and December of 1997. The alleged breach of contract took place on April 14, 2003, and a demand letter was forwarded on July 30, 2003.
[18] In 2006, the plaintiffs filed a statement of claim at the Federal Court, and subsequently, on April 12, 2006, a statement of claim was filed at the Ontario Superior Court of Justice. A statement of defence was entered on September 29, 2006.
[19] Strictly on the length of time from the issuance of the statement of claim to the date of the motion, a reasonable person would conclude that some 11 years constitutes an inordinate delay.
[20] Next what must be analysed is whether such a delay was inexcusable.
[21] The chronology would indicate that early on the case was proceeding in “its usual course.” Then a lull took place from September 2006 to May 2007. Although discussions took place about procedural issues and the setting of discoveries, nothing happened. The plaintiff did not press the issue and was waiting for a reply on these issues.
[22] In August 2007, the plaintiff served its affidavit of documents and it received the defendants’ affidavit of document in February 2008.
[23] Further procedural issues such as security for costs arose and that issue was not resolved by the parties until October of 2008.
[24] In November 2008 a status hearing was held. A time table for the completion of the discoveries was agreed. In May 2009, at a further status hearing and an extension of the time, a time table was agreed upon. Further disclosure was made and eventually the discoveries took place in November 2009. Again, at the third status hearing in December 2009, an extension for the completion of the discoveries and for answering the undertakings was granted. The action was to be set down for trial by October 1, 2010.
[25] Since the action was not set down, an administrative order dismissing the actions was granted; however, on consent, the dismissal order was set aside on October 22, 2010.
[26] From October 2010 to April 2012, no communications were exchanged by the parties. The plaintiff’s representative, Donald Bérubé, explains his inaction was due to answering the undertakings. During the course of this endeavour, it was discovered that some 21,000 documents might be relevant to these proceedings. These documents were indexed and digitized and eventually served on the defendants.
[27] From June to September 2012, some correspondences were exchanged between counsel regarding answers to undertakings and the completion of the discoveries. A preliminary response to the undertakings was provided by the plaintiff.
[28] Nothing then transpired until July 2013, when the defendants asked whether the plaintiff intended to proceed with the action. This request was answered by the plaintiffs asking for their consent for proposed amendments to the statement of claim. The defendants consented to the amendments, and then discussions took place as to the continuation of the discovery of the defendants’ representative.
[29] Although the defendants consented to the amended statement of claim in October 2013, the amended statement of claim was not served until August 2014.
[30] Discussion then took place for the continued examination for the discovery of the plaintiffs’ representative, Donald Bérubé, and this took place in June 2015. Following the completion of the discovery, no further communication was exchanged by the parties until February 2016, at which time the plaintiff provided partial answers to the undertakings. The matter was eventually set down for trial by the plaintiff on August 30, 2016.
[31] As previously mentioned, it appears that early on the matter was proceeding slowly from both perspectives, but it was proceeding. Then, from November 2008 to September 2012, very little took place on either party’s end. This inaction resulted in three status hearings and administrative dismissal of the plaintiff’s case with a consent reinstatement of the action on October 22, 2010. Then, from October 2010 to April 2012, no communication took place between the parties. This discovery of some 21,000 documents by the plaintiff would require considerable time to index and digitize the documents. In fact, it took the Plaintiff some 18 months to accomplish this task.
[32] Although such a task would eventually facilitate the proceedings, a more expedient way of completing this task could have been found. I appreciate that the plaintiff had limited resources and thus completed the task on his own. Still, there is an obligation on the plaintiff to move the action along at a quicker pace. It also appears that during this period the defendants were not enthusiastic in advancing the action, since no communication was exchanged between the parties.
[33] It was not until July 2013 that the defendants directly asked the plaintiff whether it intended to proceed with the action. At this time, there was a request to amend the statement of claim, and the defendants consented to the amendments.
[34] Had the defendants been adamant in pursuing the completion of the case, a refusal of the amendment of the statement of claim might have been in order. Again, I keep in mind that the onus is on the plaintiff to advance its action.
[35] This onus was not met in my view from October 2013 to August 2014. Even though the defendants consented to the amended statement of claim, it was not until August 2014 that the amended statement of claim was served. It appeared that neither party was all that anxious to continue since it was not until June of 2015 when the examination of the plaintiff resumed. Again, a further eight months elapsed before some answers to the undertakings were provided.
[36] From this history, it appears that neither party was all that interested in advancing its respective case. The plaintiff submits that the defendants’ consent in setting aside the dismissal order in October 2010 and more recently in permitting the plaintiff to amend its statement of claim in October 2013, precludes the defendants from alleging delay since the delay would be calculated from the most recent amendments.
[37] Although there are some cases that support the plaintiff’s position, a court should still look at the entirety of the proceedings. See Robbs v. Lee, 2012 ONSC 6853.
[38] Accordingly, I conclude that the 11 years it has taken to get to this stage is inordinate and inexcusable. However, such delay was condoned until recently by the defendants.
Prejudice to the defendants that there is a substantial risk of an unfair trial
[39] Prejudice can arise in various forms. Courts have stated over and over that a delay can create prejudice due to failing memories, loss of witnesses, and loss of real evidence. These are the actual realities in any case, especially in one that will be proceeding to trial some 12 years after its inception.
[40] There is no direct evidence before me that any of these factors will impact this case. Discoveries of the parties have taken place and no one has alleged that the witnesses discovered had difficulties in recollecting their respective evidence. This evidence is now on record and the parties can refresh their memories from what they have testified to at the discoveries. There is no loss of documents and all witnesses are available.
[41] To some extent, the delay has been useful and helpful since some 21,000 documents which originally were not thought to be relevant have now been located. These documents should assist the parties and the trial judge in determining liability and damages. Therefore, I conclude that although there has been inordinate and inexcusable delay, a fair trial can be obtained.
[42] Accordingly, the defendants’ motion is dismissed.
[43] Since I have been appointed the trial management judge in this matter, I invite the parties to obtain a date for a teleconference to set dates to expedite this matter. Such a telephone conference should be held before the end of December 2017. At that conference, I would also ask that the parties obtain guidance regarding the costs of this application in the event that the parties cannot agree.
[44] All efforts should be made to have this trial completed by the end of 2018.
[45] Order to issue as per reasons.
The Honourable Mr. Justice R.S. Del Frate
Released: December 06, 2017
CITATION: Wilga Inc. v. Orenda Recip Inc. et al., 2017 ONSC 5820
COURT FILE NO.: C-9468/06
DATE: 2017-12-06
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Air Wilga Inc.
Plaintiff
– and –
Orenda Recip Inc., Orenda Aerospace Corporation and Magellan Aerospace Company
Defendants
DECISION ON MOTION
Del Frate, J.
Released: December 06, 2017