RENE’S TOTAL HOME COMFORT LTD. et al, 2017 ONSC 5914

COURT FILE NO.: CV-12-0263-00 DATE: 2017-10-03

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

The Estate of WILLIAM MACDONALD and the Estate of DORELLE MACDONALD Plaintiffs

– and –

RENE’S TOTAL HOME COMFORT LTD. and UNIVERSAL CONTRACTORS LOGISTICS Defendants

COUNSEL: S. Daniel Baldwin, counsel for the Plaintiffs Gabrielle Kramer, counsel for the Defendant, Rene’s Total Home Comfort Ltd. Brendan Clancy, counsel for the Defendant, Universal Contractors Logistics

HEARD: August 28, 2017 in Belleville

Tausendfreund, J.

REASONS ON MOTION

OVERVIEW

[1] The Plaintiff Estates bring a motion for a timetable and to extend the time to set the matter down for trial.

[2] The Plaintiffs circulated letters of July 25, 2015, March 2 and June 19, 2017, proposing to set a timetable under R.48.12(4) of the Rules of Civil Procedure (“the Rules” or “R.”). For reasons which I will review in detail, the Defendants did not consent. This motion by the Plaintiffs and dated June 19, 2017 followed. Although not so stated by the Plaintiffs, in form and substance, it is a motion for a Status Hearing under R.48.14 (5) and (6).

[3] At a Status Hearing, the Plaintiffs shall show cause why the action should not be dismissed for delay: R.48.14 (7). To meet this onus, the Plaintiffs must “demonstrate that there [is] an acceptable explanation for the delay and establish that, if the action were allowed to proceed, the defendant[s] would suffer no non-compensable prejudice”[^1]

FACTS

[4] This is a subrogated action which arises out of an oil spill of September 15, 2010.

[5] The Statement of Claim was issued September 13, 2012.

[6] The defendant, Rene’s Total Home Comfort Ltd. (“Rene”) served its Statement of Defence and Crossclaim on January 25, 2013.

[7] The defendant, Universal Contractors Logistics (“UCL”) served its Statement of Defence and Crossclaim on February 11, 2013.

[8] The defendant, Rene followed with a defence to the Crossclaim of UCL on February 28, 2013.

[9] Some 19 months later, on November 19, 2014 the defendant, UCL obtained leave on its motion to amend its Statement of Defence and Crossclaim to reflect its proper corporate identity and to assert additional defences and claims for contribution and indemnity. It then served its Fresh as Amended Statement of Defence and Crossclaim on December 16, 2014. Neither the Plaintiffs nor Rene responded with amended pleadings of their own. As such, and on a generous reading of R.25.04, I find that pleadings closed March 11, 2013, some 10 days after Rene served its defence to the crossclaim of UCL on February 28, 2013.

[10] The plaintiffs, William MacDonald and Dorelle MacDonald respectively died February 28 and March 26, 2014. As this is a subrogated action, and essentially a contest between insurers, the passing of these nominal Plaintiffs did not immediately come to the attention of counsel.

[11] On April 10, 2015, counsel for Rene wrote to Plaintiffs’ counsel stating that she had just learned of the death of the male Plaintiff and inquired about the continuation of the action. Counsel also noted that she had yet to receive the Plaintiffs’ draft Affidavit of Documents and/or a Discovery Plan. Without specifically addressing these issues, Plaintiffs’ counsel circulated a letter of July 22, 2015 proposing discovery dates. Counsel for Rene answered the next day to advise of her information that both Plaintiffs had died and that in the absence of productions or a Discovery Plan, she was not prepared to schedule discovery dates.

[12] Counsel for Rene wrote again on March 10, 2016 noting her unanswered correspondence of April 10, and July 23, 2015. She referred to the Plaintiffs’ failure to have provided productions and a draft Discovery Plan to establish a litigation timetable. Additionally, she requested confirmation of reasons why no Orders to Continue had been obtained, as both Plaintiffs had died after the commencement of the action.

[13] On November 8, 2016, counsel for the Plaintiffs, “on requisition of the Plaintiff” (it being unclear which of the two deceased Plaintiffs purportedly requisitioned) obtained a Registrar’s Order to Continue issued the name of the estate of each of the two named Plaintiffs. That Order was served March 2, 2017 with a draft timetable and proposed dates for discovery.

[14] Counsel for Rene wrote on March 10, 2017, to state her view that the action was currently stayed under R.9.03 (2) and (6). I note in passing that R 9.03 (2) and (6) likely do not apply to this fact situation, as R. 9.03 (2) refers to “a proceeding commenced by or against the estate of the deceased person”. This action, of course, was commenced when the initally named Plaintiffs were alive.

[15] On June 19, 2017 Plaintiffs’ counsel circulated a draft Affidavit of Documents with Schedule “A” productions to follow, a draft timetable for completion of interlocutory matters, including a proposed date of April 30, 2018 to have the action set down for trial and yet another set of proposed discovery dates. I note that the Schedule “A” productions were indeed circulated. The same day, this motion was filed.

ANALYSIS

[16] As stated, this is a subrogated action. I make mention of that fact, as I do not find it unusual that the death of the Plaintiffs would not have come to the attention of counsel for more than a year after their passing.

[17] Once Plaintiffs’ counsel learned on April 10, 2015 of the death of the insured Plaintiffs, 19 months passed before he took steps to attempt to reconstitute the action by obtaining the Order to Continue. I accept that necessary steps were taken in the interim to confirm the death not only of one but of both of the Plaintiffs and to seek necessary instructions to continue the action. However, this extended time period does not come close to achieving the gold standard of expected efficiency and timeliness in moving this action forward to trial readiness. A further four months then passed before Plaintiffs’ counsel served the Order to Continue.

[18] The form of the Order then became an obstacle. Counsel for the Defendants, correctly in my view, took the position that this Order to Continue had not properly reconstituted the action. Reading R.9.03 (5) and (6) in conjunction with R.11.01, I find that this action remains stayed until properly constituted. I arrive at this conclusion as follows:

(a) Both Plaintiffs died after the action had been commenced in their names.

As such, it became an action “not properly constituted”, although not a nullity, as the court may order that the action be reconstituted “by analogy to the provisions of this rule”: see R.9.03 (5).

(b) R. 9.03 (6) states that no further steps in the proceeding referred to in

R 9.03 (5) shall be taken until properly constituted.

(c) The Order to Continue of November 8, 2016 was stated to have been issued “on requisition of the Plaintiff requesting that this matter be continued”. It provided that the proceeding continue and that the title of proceeding be as follows:

The Estate of WILLIAM MACDONALD and the Estate of DORELLE MACDONALD

To perhaps state the obvious, the requisition could hardly have been made by the Plaintiffs who by then had been dead for some time.

(d) The Rules do not appear to explicitly address the issue of whether an estate can carry on a proceeding without a representative or trustee named in an Order to Continue. However, case law addresses the point. Godkin Estate[^2], Wojnarowski[^3], all stand for the proposition that the estate of the deceased person has no legal standing on its own to sue or be sued. An estate acts through its representative, such as an executor, administrator or estate trustee.

[19] I find that this proposition applies to these facts.

LITIGATION DELAY

[20] As already stated, at this Status Hearing, the onus is on the Plaintiffs to show cause why the action should not be dismissed for delay. Is the Plaintiffs’ explanation acceptable?

[21] The time from the date the pleadings were deemed noted closed to the date of the status hearing is 4 years and 3 months.

[22] The Plaintiffs circulated proposed discovery dates July 22, 2015, January 15, 2016 and March 2, 2017. On June 19, 2017, the Plaintiffs served a draft Affidavit of Documents and circulated the Schedule “A” documents.

[23] As early as April 10, 2015, the Defendants asked for a draft Affidavit of Documents and a Discovery Plan. A year later, the Defendants made the same request and asked for the Order to Continue. On March 10, 2017, counsel for Rene raised issues with the Order to Continue.

[24] Counsel for Rene asserted that the action then was currently stayed pursuant to

R. 9.03 (6), as the estates names in the Order to Continue were not suitable entities as set out in R. 9.03 (2). However, this Rule pertains to “a proceeding commenced by or against the estate of a deceased person.” Here, the Plaintiffs both died after the action had been started in their names. Although the intent of R. 9.03 (6) appears to address a fact situation such as this, for reasons stated, it technically does not. We need to turn to R.10.02 to have the proceeding continue either with or without the appointment of a person to represent the estates.

[25] Both counsel for the Defendants remained unwilling to set discovery dates in the face of the present Order to Continue and in the absence of a draft Affidavit of Documents and a Discovery Plan.

[26] I accept the general proposition that “the party who commences the proceeding bears primary responsibility for its progress”.[^4] That said, I note the wording of R. 29.1 (03) that “the parties to the action shall agree to a Discovery Plan…” In my view, that contemplates some pro-active measures from both sides of an action. There was little activity, if any in this regard, from either side of this action.

[27] The delay here was the result largely of the sudden death of the Plaintiffs and the eventual Order to Continue obtained by Plaintiffs’ counsel, the form of which order understandably was unacceptable to counsel for the Defendants. Both sides appear to have misread the applicable Rules to move the action forward in the face of the passing of both Plaintiffs. By analogous application of R. 9.03, it appears that these facts required an Order to have the action continue. Until that is properly addressed, no further steps in the action may be taken until properly constituted.

[28] I note that an “acceptable explanation should not be read as necessitating a finding of a good explanation. An explanation that is adequate or passable ought to suffice.”[^5]

[29] There were gaps of inactivity by counsel for the Plaintiffs in moving this action forward. Yet, for purposes of this status hearing motion, I am not prepared to find that these gaps were sufficiently egregious to have the Plaintiffs fall below the accepted standard. The Plaintiffs have provided an explanation for the litigation delay which I accept as passable.

IS THERE NON-COMPENSABLE PREJUDICE?

[30] As already stated, this is a subrogated action for each of the parties. Plaintiffs’ counsel would have been retained by the insurer for the Plaintiffs. In the ordinary course, the Plaintiffs’ likely first contact with their counsel would have been to prepare the Affidavit of Documents and to prepare them for their examination for discovery. They both died before such contact was ever arranged.

[31] Following the fuel spill which is said to have happened on or about September 15, 2015, the insurer appears to have acted with dispatch. As part of the Plaintiffs’ Schedule “A” Productions are these documents:

(a) September 16, 2010 letter to William MacDonald from a Fuels Safety Inspector of the Technical Standards and Safety Authority (“TSSA”) enclosing a report regarding the fuel oil leak at the Plaintiffs property. It included the following comments:

• After inspection, it was discovered that the pinhole in the copper tubing leading from your fuel tank to the furnace was the cause of the contamination of your property. Only testing from a forensic lab can confirm the theory of a lightning strike that created the hole in the tubing.

• On inspection, it was discovered that a pinhole in the tubing was the cause of the leak. It was determined after questioning of the owner that lightning had struck close to the house on July 18, 2010. It is suspected that this may have caused the tubing to arc and breach the piping. Lab testing would determine, if in fact this was the cause.

• Pictures of the damage are with the owner, Mr. MacDonald. The tubing was left on site for the insurance company to examine. The amount of fuel oil believed to be lost is approximately 100-150 litres.

(b) The Amo report of April 27, 2011 detailed an opinion on the oil line failure at the property of the Plaintiffs:

• On September 17, 2010…met homeowner…in conversation, it was indicated that on September 8, 2010 Rene’s Total Home Comfort Ltd. arrived on site to perform a service call due to a furnace not operating. The heating contractor advised that the oil tank was empty and as an emergency measure, two containers were delivered to the tank.

• Inspection revealed that a hole in the copper oil supply line at the doorway entrance to the furnace room area was the cause of this oil leak.

• On or about February 18, 2011, an approximate 12 inch section length of the defective copper tubing was taken to CEP Forensic Engineering Inc…to try and determine the cause of the breach…in the copper.

• The testing of the copper specimen proved to be inconclusive, but it appears that a rapid fusion condition was the possible cause of the discovered breach.

• The oil supply line was installed in a very unacceptable workmanship like manner.

• The discovered oil code infraction and the lack of physical protection for the subject copper tubing was an oil leak accident waiting to happen.

• The CEP Forensic Engineering Inc. investigation…proved to be inconclusive.

(c) O’Connor Associates Environmental Inc. provided an opinion of February 25, 2011. Its conclusion states:

• …fuel oil entered the subsurface around the metal fitting at drain number 1 and soil impact was identified above the applicable MOE table 2 standards. Therefore, we recommend conducting additional assessment work to further assess the extent and options available to address the impacts.

[32] Plaintiffs’ counsel states that the copper tubing in question remains available for inspection by the Defendants.

[33] The Defendants state that there are a number of issues surrounding the reasons for the oil spill. They state that the Plaintiffs appear to be in the best position to address these issues and both are deceased. It may well be that the Defendants are prejudiced to some degree. However, I am not satisfied that it is appropriate on these facts to visit this prejudice on the estates of the Plaintiffs. In any event, the Defendants have the benefit of the documents arising from the prompt intervention at the instance of the insurer for the Plaintiffs, including details of observations and opinions and the detailed reports referred to above regarding the opinion of the oil line failure.

[34] I find that the Plaintiffs have shown cause why the action should not be dismissed.

[35] An Order will go as follows:

(a) The action is stayed until an order has been obtained to allow the proceeding to continue.

(b) Unless such an order (a) has been issued and served within 45 days, the Defendants may bring a motion to have the Plaintiffs show cause why the action should not be dismissed.

(c) All parties to this action shall take immediate and continued steps to attempt to reach an agreement on a Discovery Plan under R. 29.01.03.

(d) All matters raised by the expectant Discovery Plan shall be addressed and the action set down for trial not later than June 30, 2018.

[36] All interlocutory issues to the date the action is set down for trial will be case managed by me.

COSTS

[37] I do not consider the Plaintiffs to have succeeded on this motion. The best that can be said for them is that they have not lost the motion.

[38] This matter could and should have moved along with greater dispatch. The Order to Continue in its present form did not assist. It exacerbated the delay.

[39] The costs of this motion will be to the Defendants on a partial indemnity basis and to be paid within 90 days. If required, I may be spoken to within 45 days as to the quantum of costs.

[40] In addition, I Order that the Plaintiffs will not be entitled to prejudgment interest for the period of July 1, 2015 to August 31, 2017 on the damages to which they may be entitled, if any.

Honourable Mr. Justice Wolf Tausendfreund

Released: October 3, 2017

RENE’S TOTAL HOME COMFORT LTD. et al, 2017 ONSC 5914

COURT FILE NO.: CV-12-0263-00 DATE: 2017-10-03

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

The Estate of WILLIAM MACDONALD and the Estate of DORELLE MACDONALD Plaintiffs

– and –

RENE’S TOTAL HOME COMFORT LTD. and UNIVERSAL CONTRACTORS LOGISTICS Defendants

ORDER

Tausendfreund, J.

Released: October 3, 2017

[^1]: Faris v. Eftimovski, 2013 ONCA 360 at para. 32. [^2]: Godkin Estate v. MTN Financial Services (London) Corp. (1999,44 O.R.) (3D) 767 para. 12 [^3]: Wojnarowski v. Bomar Alarms Ltd., 2010 ONSC 273, – para. 21 [^4]: Faris v. Eftimovski, 2013 ONCA 360 at para. 46 [^5]: 2046085 Ontario Inc. v. Paul George Raby, 2014 ONSC 774 at para. 6