CITATION: 1482241 Ontario Ltd v. North York Family Physicians, 2017 ONSC 5981

COURT FILE NO.: CV-12-456185

MOTION HEARD: 20170615

REASONS RELEASED: 20171012

SUPERIOR COURT OF JUSTICE – ONTARIO

BETWEEN:

1482241 Ontario Limited

Applicant

and

North York Family Physicians Holdings Inc.

Respondents

BEFORE: MASTER D. E. SHORT

COUNSEL: Natasha Carew, for moving Applicant F (416) 862-7661

Michael Brzezinski, for Respondent F (416) 865-1398

RELEASED: October 12, 2017

Reasons for Decision

I. Overview

[1] The Applicant 1482241 Ontario Limited (“148”) is the landlord of the Respondent in a commercial tenancy that has been in existence for a number of years. The parties have had ongoing disputes with respect to the correct interpretation of the provisions of their lease.

[2] 148 commenced the present application in 2012. Shortly thereafter, in 2013, an order was made with respect to the manner of trying this dispute. No real progress towards a resolution has been made since that time.

[3] Apparently, because the fifth anniversary of the commencement of the litigation was approaching, the relatively newly retained counsel, now representing the Applicant, sought to ensure that the action was not going to be administratively dismissed by seeking before me, inter alia:

(a) An order pursuant to subsection 48.11 of the Rules granting leave to place the Application on the trial list; and

(b) In the alternative, an order granting leave to restore the Application to the trial list and establishing a timetable for the completion of any steps before the Application is set down for trial;

[4] I am not entirely convinced that such a motion was required. Rule 48.11 (with my emphasis added) provides:

48.11 Where an action is struck off a trial list, it shall not thereafter be placed on any trial list except,

(a) in the case of an action struck off the list by a judge, with leave of a judge; or

(b) in any other case, with leave of the court.

[5] Returning to first principles, it will be recalled that rule 1.03 defines an “action” as “a proceeding that is not an application”.

[6] In the grounds for the motion set out before me, the Gowling firm (which was retained by 148 on or around October 12, 2016), asserts in part:

“(b) Gowling attended Civil Practice Court on February 27, 2017, to set new dates for the trial of both the Application and the Companion Application, but counsel to North York Family Physicians Holdings Inc. ("North York") took the position that the Application should not be placed on the trial list without leave of the court, and refused to consent to an order granting leave. Accordingly, it was necessary for 148 to schedule this motion for leave to place the Application on the trial list in accordance with subsection 48.11 of the Rules;

(c) 148 is unaware of North York's position with respect to the continuation of the Companion Application;

(d) The Application is a document-driven claim arising out of a breach of a commercial lease between 148 and North York;

(e) North York has suffered no prejudice that would compromise its ability to defend itself at trial;

(f) The Application will be administratively dismissed if it is not set down for trial by June 14, 2017; …..”

[7] This motion came before me on June 15, 2017, having been commenced by Notice of Motion dated March 17, 2017, which was filed well prior to the fifth anniversary of the application.

[8] For normal actions, the court staff does not dismiss actions for delay, while a motion to extend the set down date is pending.

[9] For the reasons that follow, and to the extent that an order extending the time for setting the matter down for a hearing is required, I have determined that I have jurisdiction to make, and that it is appropriate to make, such an order.

II. Masters and Applications

[10] While Masters have jurisdiction to deal with most civil motions, Rule 38.02 succinctly provides that “An application shall be made to a judge”.

[11] As a consequence, Masters have limited involvement with respect to most applications. However, the Toronto practice direction does provide that “any motion, which is within the jurisdiction of a master” should be heard by one.

[12] The present motion before me, seeks an order dismissing an application for failing to set it down for trial on a timely basis.

[13] In his commentary with respect to Rule 38, Justice Archibald in Ontario Superior Court Practice 2016 notes:

“An application must be brought before a judge. The procedure is highly structured, with the object of providing an expeditious way to resolve legal disputes between parties, where there are no material facts in dispute. See r. 14.05 (3).”

[14] Nevertheless, what is restricted to only being dealt with by a judge is the actual determination of the interpretation sought under an application. Interlocutory matters and procedural questions arising preliminary to that determination, in the Toronto Region, are required to be addressed by my colleagues and me:

11. Motions to be Heard by Masters. A master has jurisdiction to hear any motion in a civil proceeding except those specified rule 37.02(2) Masters' motions must be made to a master. Unless the relief requested in the motion is within the exclusive jurisdiction of a judge, a motion returnable by attendance or in writing must be made to “the Court" and heard by a master. Judges may refuse to hear any motion that is within the jurisdiction of a master.[my emphasis]

[15] Here, the parties submitted 10 volumes of material with a combined thickness in excess of 6 inches to in effect simply address whether this application should be dismissed for delay.

[16] I see no specific provision in the Rules that would address the rare case where an application had not been determined in five years.

III. Progress to Date

[17] The present application was dealt with at an early stage by Justice D. Wilson who made an order consolidating both parties’ applications and setting a date for their determination. Her handwritten endorsement of July 10, 2013 (with my emphasis added) read:

“1. This application and to companion application (CV-12-462542) are to be converted into a trial of issues, such trial to take place 14 & 15 November 2013, this date has been confirmed with counsel and the Court. Counsel will provide a statement of the issues to be determined at trial on or before 1 November 2013;

2. A settlement conference will be held before me with the parties in attendance 10 September 2013;

3. In the interim, on consent the Landlord will ensure that all access cards for the 25 underground parking spaces are in good working order;

4. In the interim, the parties shall maintain the status quo so that the tenant will continue to pay the undisputed amount of rent and the landlord will not interfere with the tenant’s and their guests quiet enjoyment of the leased premises;

5. If there are other matters arising from these applications that need to addressed prior to the trial date, I may be contacted by counsel.”

[18] In accord with these directions, it appears that the parties were ready to proceed on November 14 and 15, 2013; however, the Toronto trial scheduling system got in the way. Apparently it was not possible to schedule specific fixed days for hearing a two day trial of these issues.

[19] Only “the week of” scheduling was possible and both sides had conflicts the rest of the week of November 14. As a consequence, the parties agreed that it was necessary to put the matter over.

[20] Counsel for the applicant advised Justice Wilson of this development on the Friday of the week prior to the scheduled hearing by email, reading in part:

We were contacted by the Trial Office this week advising that our matter was on the list for the Week of November 11, 2013 and that we did not have fixed dates. … Further, the Trial Office advised that they may not have a Judge for us, and that they did not have our materials. They also stated that we needed to file Trial Records.

…. We also did not want our clients to incur the costs of our preparation time if we ultimately were not going to be called on the dates previously set. We therefore advised the Trial Office to take us off the list for the week of November 11, 2013 and that we would return to you for scheduling and other issues. If we still cannot reach resolution, Mr. Shapiro and I are hopeful that we can set firm dates through you and the Trial Office so that we are not placed on a weekly list and our materials can be properly directed to the appropriate office.”

[21] Surprisingly, nothing further appears on the case history until April of 2015 when the Applicant’s then counsel obtained an Order removing them as counsel of record

[22] Two years later, the next Case History entry is for April 26, 2017 when this motion came before Justice Glustein who adjourned the matter on consent “subject to counsel’s consideration of whether motion should be heard by a master.” Apparently that consideration lead to the hearing before me.

[23] In coming to my decision on the present motion, it was necessary to consider the overall context of the present applications.

IV. Background Applications

[24] The present Application is a document-driven claim arising out of alleged breaches of a commercial lease between 148 and North York. Notwithstanding these disputes, the tenancy has continued through what appears to be more than seven years of litigation.

[25] Initially in 2010, the tenant North York, brought an Application (CV-10-403067) against the landlord 148, (i.e. the applicant in the present matter). There, in the more normal consequence of an application to construe a document, the matter came on before Justice Corrick who delivered her judgment interpreting the lease on March 22, 2011. The preamble to her judgment indicated:

THIS APPLICATION made by the Applicant for, inter alia, a determination of rights with respect to a lease between the Applicant and the Respondent (the "Lease") of the property municipally known as Unit #103 and 181 parking spaces at 240 Duncan Mills Road, Toronto, Ontario, was heard November 2, 2010 at the Courthouse at 361 University Avenue, 6th Floor, Toronto, Ontario.

[26] The operative portion of formal judgment granted North York relief from forfeiture in respect of the Lease. As well, a determination of the net amounts of rent payable and other matters were addressed, and the date upon which rent first became payable by the Applicant under the Lease was established as June 22, 2009.

[27] Specifically, the court ordered that the landlord was to pay the tenant amounts determined to be owing with respect to “the Leasehold Improvement Allowance”. In particular, she determined that an amount in excess of $10,000 representing the amount the Applicant paid the Respondent on account of base and additional rent during the months of April, May and June 2009, would stand as a credit against future base and additional rent payable by the Applicant under the Lease.

[28] Justice Corrick’s decision was appealed to the Court of Appeal, which released its decision on January 16, 2012. The appellate panel modified the original judgment to this extent:

“(a) the sum of $29,097.50 paid by the Respondent to the Accountant of the Superior Court of Justice to the credit of the Application in Court File No. CV-10-403067 …shall be paid to the Appellant, together with accrued interest; and

(b) at the same time, the Appellant shall pay to Shoppers Drug Mart the sum of $39,275.00, plus applicable interest, if any.

[29] The Appeal Court also awarded costs of the appeal against 148 fixed in the amount of $9,000 inclusive of H.S.T. and disbursements. Interest was awarded as well at the rate of 3% per annum commencing the 16th day of January, 2012. North York asserted before me that these costs have still not been paid.

[30] These financial obligations established as a result of the 2010 Application by North York have been raised as factors to consider on the motion before me.

[31] I note that the present Application brought by the landlord was launched on June 14, 2012, some five months after the Court of Appeal’s decision was released with respect to the original two applications.

[32] It seems to me that the current application is again about construing written lease terms with a view to determining who ultimately owes who, what , as a result of all the litigation between the parties.

[33] It is my understanding that there is again a counter application now brought by North York, in response to the landlord’s 2012 application.

[34] That counter application has also been dormant and now seems to have been left to be raised if, and only if, the landlord’s application before me is allowed to continue to trial.

[35] The delays to date have been somewhat exasperated by virtue of various law firms coming and going from the record. For whatever reasons, over the past few years these matters seem to have been largely dormant until the present counsel for the moving party was retained in October 2016.

V. Rule 48: “Listing for Trial” and Applications

[36] In the Rules of Civil Procedure, the heading for Rule 48 reads “Listing for Trial – When and by Whom Action May Be Set Down for Trial”. In this section of my reasons I am presenting annotated extracts from various provisions within Rule 48.

[37] Rule 48.01, for example, provides :

“48.01 After the close of pleadings, any party to an action or to a counterclaim or crossclaim in the action who is not in default under these rules or an order of the court and who is ready for trial may set the action down for trial,...”

[38] In particular rule 48.14 (as it read at the date of the argument of this motion) deals with the dismissal of an 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 later of the fifth anniversary of the commencement of the action and January 1, 2017.

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 later of the second anniversary of being struck off and January 1, 2017.

[39] Thus, if this subrule actually applied to the present situation the registrar would have been obligated to dismiss both parties’ applications on January 1, 2017, as both applications were removed from the trial list more than two years ago, in 2013.

[40] As noted above, the subject application was commenced on June 14, 2012, the respondent in this application commenced its own application on August 30, 2012 (CV-12-462542).

[41] If the respondent’s position on this motion was correct, then it would seem to follow that, not having moved prior to the end of the five-year period, North York’s counter application would have been dismissed by the registrar. That did not happen.

[42] A case history obtained within the last week indicates that the “Case Timeline” was identified as “NN” [Not Needed] , which is to be contrasted with the normal indication that field where timelines are to be enforced of “CM”[ Case Management]

[43] While trial of an issue was directed, that does not turn the application into an “ordinary action”. There was no requirement for affidavits of documents, nor examinations for discovery in this case. Cross examinations of the affidavits of both sides took place and there is a possibility of viva voce evidence at the trial of issues. That does not in my view convert each application into an “ordinary action”.

[44] Similarly, with respect to an application it is my belief that there is not normally a requirement that a trial record has been filed, prior to attending a trial scheduling court with respect to the application.

[45] What is clear in this case is that the original November 2013 hearing date was obtained from the court. Significantly, it was that at that point counsel were directed to file their trial record prior to the scheduled hearing date.

VI. Moving Forward

[46] Currently the practice in Toronto, I believe, is that a judge presiding over Civil Practice Court establishes the date for the trial of an action within an application and not the trial office. As far as I am concerned the Application rules are designed to get the matter that is a relatively narrowly defined issue dealt with much more quickly than an ordinary action.

[47] Rule 1.04. I believe supports and enhances my reasoning in this case:

General Principle

1.04 (1) These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. Proportionality

(1.1) In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding.

[48] In particular, rule 1.04 (2) provides:

(2) Where matters are not provided for in these rules, the practice shall be determined by analogy to them.

[49] I regard this subrule as authority for the approach I have taken in dealing with the trial of issue within these applications.

[50] In making the determinations. I am also mindful of the provisions of rule 48.13, which reads:

48.13 Rules 48.01 to 48.12 apply to any proceeding in which the court has directed the trial of an issue, unless the court orders otherwise.

[51] If necessary, I am invoking foregoing powers, in determining that rule 48.14 was not intended to import all the obligations of the rule as they apply to actions as being applicable to applications.

[52] Thus I am satisfied that I am not obliged to, for example, require that the parties participate in a mediation this case.

[53] My recent experience has been that a significant portion of the profession in Toronto was not aware of a change with respect to when a mediation needs to have been held for the purposes of setting an action down for trial. Previously, the parties were only are required to have a mediation scheduled before setting a matter down for trial. Now it must have been completed prior an action being set down for trial.

[54] This motion was argued in May of 2017. The Toronto Civil Practice Direction was amended as of May 1, 2017 to provide:

57. Court staff will not accept for filing a trial record (ordinary action) or a notice of readiness for pre-trial conference (Simplified Procedure action) unless the party setting the action down for trial files a Certificate that:

a) Form 24.1A-(Notice of Name of Mediator and Date of Session) has been filed with the mediation coordinator and the mediation session has taken place;

b) the report by mediator (indicating that the mediation .has been concluded) has been filed with Mediator mediation coordinator;

c) an order has been obtained from a judge or case management master exempting the action from mediation…. [my emphasis]

[55] Relying upon this latter provision, upon my own motion, I am granting an order exempting these disputes from mediation.

[56] As well, I note that the Practice Direction goes on to specifically provide:

59. In keeping with the requirement for mandatory mediation and Rule 1.05, a judge may, at any stage in the proceeding, order that the parties not take any further steps in the proceeding, without leave of a judge, until a mandatory mediation has taken place.

[57] Clearly no such order has been made in this case, and it seems inconsistent with the history of the action and the previous judicial involvement to treat an application to construe a lease as having the broader requirements of an ordinary action simply because trial of an issue has been directed.

VII. Carioca's Import & Export Inc.

[58] While the parties placed the number of authorities in front of me; I am satisfied that this is the type of case where having weighed all the factors put before me. I am in a position to exercise my discretion in deciding not take any steps that would result in the application being dismissed for delay. In that regard, I simply look to the decision of the Court of Appeal in Carioca's Import & Export Inc. v. Canadian Pacific Railway Ltd.,[2015] O.J. No. 4569; 2015 ONCA 592. There R.J. Sharpe, P.D. Lauwers and K.M. van Rensburg JJ.A. dealt with a refusal of the judge at first instance to return a matter to the trial list on the basis of delay.

[59] Justice van Rensburg writing for the Court made a number of useful observations. For example (with my emphasis added throughout):

48 It is a waste of resources to have trials adjourned on or near the trial date, at a juncture when court time that has been set aside may not be able to be filled with other matters. The ability to remove and restore actions to a trial list is part of the function of the local court to manage the timing and progress of civil actions commenced within its jurisdiction in the context of its available resources. If the test to restore an action to the trial list is applied too rigidly, "speak to" and other attendances where matters may be struck will become lengthy and contentious, preventing efficient case management. Therefore a proper delay analysis does not consider the conduct of an action in a vacuum.

(ii) Prejudice

49 The issue of prejudice is a factual question. The plaintiff bears the onus of demonstrating that the defendant would suffer no non-compensable prejudice if the action were allowed to proceed. The mere passage of time cannot be an insurmountable hurdle in determining prejudice, otherwise timelines would become inflexible and explanations futile.

[60] Turning to responsibility for delay and the appropriate consequences the court continued:

51 The motion judge's analysis focussed mechanically on whether blame could be attributed to the appellant at each stage of the litigation. Once he found delay, he failed to go on to weigh the evidence and evaluate whether the explanation provided was reasonable. Had he done so, he would have taken into account important factors such as the circumstances in which the action came to be struck from the trial list and the fact that the case was now ready for trial.

52 Applying too exacting a standard for restoring an action which has been struck from the trial list may well hinder the objective of an efficient justice system, as parties and counsel would argue over keeping matters on the trial list for fear that, once struck, they might never be restored. Fighting highly contested motions over cases being struck and restored to the trial list is not an effective use of scarce judicial and legal resources. Ontario courts are actively discouraging a "motions culture" among counsel, and the Supreme Court of Canada has called for a "shift in culture", citing the need for a process that is proportionate, timely and affordable: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 28.

53. While this court has stated frequently that the plaintiff bears the primary responsibility for moving a case forward, it has also acknowledged that the conduct of a defendant is a factor, especially where a plaintiff encounters some resistance when trying to move the action along: 1196158 Ontario Inc., at para. 29. The suggestion that it is normal and acceptable for a defendant, if not to actively delay, to simply wait for the plaintiff to make the next move, may be based on a conventional view of litigation strategy. The objectives of timely and efficient access to justice, and effective use of court resources require all parties to play their part in moving actions forward, and for counsel to act in a way that facilitates rather than frustrates access to justice: Hryniak, at para. 32. For these reasons, although the burden of proof on the motion is on the plaintiff, the conduct of all parties in relation to the litigation is relevant in determining whether to restore an action to the trial list.

54 The motion judge's approach here focussed almost exclusively on the appellant's conduct, and did not consider the overall dynamics of the litigation. This resulted in an imbalanced view of at least four aspects of the appellant's actions. First, at the time the motion below was heard, the case was ready to proceed to trial. ….Keeping an action that is ready for trial off the list is punitive rather than efficient. …. Third, the appellant had never lost sight of the need to restore the action to the trial list, had brought its motion reasonably promptly after the action had been struck, and, as the motion judge observed "had no motive to delay the action". Finally, the respondent had not indicated any serious concerns about the pace of the litigation until it opposed the motion to restore the action to the trial list.

[61] In their factum the resisting defendants rely upon Nissar v. Toronto Transit Commission, 2013 ONCA 361; 3 CarswellOnt 7174; 115 OR (3d) 713; 309 O.A.C 8; [2013] OJ. No. 2553. In Nissar the court refused to restore the action struck from the list seven years earlier. In considering Nissar the court in Carioca’s clarified:

55 The first part of the Nissar test involves a consideration of any relevant delay, but asks whether an "acceptable explanation" for any such delay has been provided. The context of the action and any other relevant factors that are specific to the case must be considered. These will include the overall progress of the action before it was listed for trial, the circumstances of how the action came to be struck from the trial list, and the conduct of all parties. Procedural rules cannot be mechanically applied but have to be interpreted in a contextual manner that pays heed to all relevant circumstances and consequences.

[62] I believe my determination follows this guidance.

VIII. Disposition

[63] I have established through informal inquiries that the appropriate way of moving these applications and the mandated trial of issues is for counsel to attend the Civil Trial “To Be Spoken To” court with a view to establishing a fixed trial date for the hearing of both Applications.

[64] This assumes that both Applications are proceeding. However, I cannot force the tenant to proceed with its application. If it chooses not to continue with its application, then the landlord should seek directions from the judge dealing with the matter at TBST Court.

[65] I am directing that counsel agree on a date for such an attendance, which is within 60 days of the release of these reasons. If that presents a problem I will convene telephone case conference with counsel.

[66] Relying upon the Toronto Practice Direction, I am granting an order exempting these disputes from mediation if there ever was an obligation to mediate.

[67] Rule 3 deals with matters of Time and provides in part::

3.02 (1) Subject to subrule (3), the court may by order extend or abridge any time prescribed by these rules or an order, on such terms as are just.

[68] I am satisfied that it is appropriate in this case, to take such steps as are necessary, and to make an order allowing these applications to proceed to a hearing. Relying upon the above subrule, I am making such order on conditions:

(a) Unless proof of prior payment (as opposed to a set off or credit on account) is delivered within 30 days the moving party is to make payment, to North York, within 45 days of the release of these reasons payment of the costs award of the Court of Appeal in the amount of $9,000, together with interest at the rate of 3% per annum commencing the 16th day of January, 2012 . In default of payment (In the result the moving party’s motion is granted to the extent that their application may proceed. Nevertheless, I think it is in everyone’s interest to establish a timeline, and to have some court established deadline both sides focused on resolving the outstanding issues between them.

(b) The parties shall attend To Be Spoken to Court within 60 days of the date of these reasons the purpose of scheduling a date for the hearing of these applications.

(c) The parties shall endeavor to obtain a hearing date no later than June 30, 2018.

[69] The reasons in this case presented some difficulties in that the Rules do not specifically address the manner in which an application which is directed to be heard by way of a trial of an issue is to be addressed.

[70] Nevertheless I am satisfied that it was appropriate in all the circumstances for the applicant to bring this motion and as a consequence I am awarding costs on a partial indemnity basis to the moving party payable within 45 days of the release of these reasons.

[71] If the parties cannot agree on an appropriate quantum in the circumstances, a costs outline, maximum five pages in length together with no more than 5 pages of schedules and appendices, shall be delivered to the respondent by not later than November 30, 2017.

[72] Responding costs submissions, maximum five pages in length together with no more than 5 pages of schedules and appendices, shall be delivered within 15 days of receipt of the costs outline; and a Reply, if needed, maximum two pages in length inclusive of schedules and appendices, shall be delivered within 7 days of receipt of the responding submissions.

[73] The party seeking costs shall deliver all written costs submissions in one complete package within 30 days following the delivery of the responding costs submissions, directly to my Assistant Trial Coordinator in the Masters’ Office, 6th Floor, 393 University Avenue.

October 12, 2017

R. 191/DS __________________

Master D.E. Short