Court File and Parties
COURT FILE NO.: CV-08-00355639 MOTION HEARD: 20180622 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Matrix Integrated Solutions Limited, Plaintiff AND: Frank Naccarato, Radeon Technologies Ltd., Gus Markou and Radiant Hospitality Systems Ltd., Defendants
BEFORE: Master B. McAfee
COUNSEL: Susan M. Sack, Agent for Counsel for the Plaintiff Charles Baker, Counsel for the Defendant Frank Naccarato and, for the limited purposes of this motion, Counsel for the Defendant Radeon Technologies Ltd. Christopher Rae, Counsel for the Defendant Radiant Hospitality Systems Ltd.
HEARD: June 22, 2018
Reasons for Decision
Nature of the Motion
1This is a motion brought by the plaintiff Matrix Integrated Solutions Limited (the plaintiff) for an order setting aside the order of the Registrar dismissing the action for delay dated January 26, 2018.
2The defendants Frank Naccarato (Naccarato) and Radeon Technologies Ltd. (Radeon) (collectively the Naccarato defendants) oppose the motion.
3The defendant Radiant Hospitality Systems Ltd. (Radiant), states that it is not acquiescing or condoning any actions or inactions of the plaintiff and takes no position on the motion.
4The plaintiff confirms that the action against the defendant Gus Markou (Markou) is stayed following an assignment in bankruptcy in 2014.
Nature of the Action
5The plaintiff provided point of sale and other equipment for restaurants. Naccarato and Markou are former employees of the plaintiff. Naccarato and Markou formed Radeon following their resignation from the plaintiff. Radeon competes with the plaintiff. Radiant is a supplier of point of sale hardware and software. The plaintiff was a reseller of Radiant’s products.
6The plaintiff alleges that contrary to the contractual and common law obligations to the plaintiff, Naccarato and Markou used the plaintiff’s confidential information to target the plaintiff’s employees and clients in breach of their post-employment obligations to the plaintiff. The plaintiff alleges that Radiant had knowledge of these unlawful acts and assisted in the conduct that has caused harm to the plaintiff.
The Applicable Test
7The court will apply a contextual approach and consider all relevant factors in determining whether it is just to set aside the dismissal order in the circumstances of the particular case (see Finlay v. Van Paassen, 2010 ONCA 204 at paras. 25-28, Habib v. Mucaj, 2012 ONCA 880 at paras. 5-6, Jadid v. Toronto Transit Commission, 2016 ONCA 936 at paras. 9-12).
8In determining whether the order of the Registrar ought to be set aside, I am mindful of the tension between two principles of our civil justice system: the preference to have civil actions decided on their merits and the promotion of timely resolution of actions.
9In making this determination, I am also mindful of the importance of finality of litigation.
10I am also mindful of the provisions of rule 1.04(1) of the Rules of Civil Procedure:
These rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
11As the Court of Appeal stated in Habib, at para. 7: …on a motion to set aside a dismissal order, the court should be concerned primarily with the rights of the litigants, not with the conduct of their counsel. However, where the lawyer’s conduct is not inadvertent but deliberate, this may be different: Marché d’Alimentation Denis Thériault Ltée. v. Giant Tiger Stores Ltd. (2007), 2007 ONCA 695, 87 O.R. (3d) 660 (O.C.A.), at para. 28.
12Having regard to the above principles and the relevant factors, I am satisfied that it is in the interests of justice that I exercise my discretion to set aside the dismissal order.
Explanation of the Litigation Delay
13I am satisfied that the litigation delay has been adequately explained.
14The action was commenced on May 28, 2008. The statement of defence of the Naccarato defendants and Markou is dated July 10, 2008. The statement of defence and counterclaim of Radiant is dated December 15, 2009. The reply and defence to counterclaim is dated January 7, 2010.
15On January 23, 2009, a Judge made an order granting leave to amend the statement of claim and stayed the action against Radiant. The Judge’s order was appealed to the Court of Appeal. On July 28, 2009, the appeal was allowed and the stay against Radiant was dismissed.
16The statement of claim was amended on July 10, 2010.
17After the close of pleadings and prior to examinations for discovery, the parties attended mediation in an attempt to achieve an early resolution of the action.
18On September 2, 2010, a Master ordered a consent timetable including a set down date of October 16, 2011.
19Following the failed mediation, the parties exchanged affidavits of documents and conducted examinations for discovery.
20By June 2011, the documentary and oral discoveries had been completed. There were approximately nine days of discovery, including five days of examination of the plaintiff’s representative, Brian Hall.
21On October 13, 2011, a Master ordered a timetable including a set down date of October 14, 2012.
22The plaintiff provided most of its answers to voluminous undertakings in March 2012. The plaintiff provided the remaining answers to undertakings in February 2013. Radiant answered its undertakings and certain refusals on November 30, 2012. In February 2013, the Naccarato defendants provided answers to its undertakings. Although the plaintiff takes issue with some of the answers provided, the plaintiff did not pursue additional information or documentation from the Naccarato defendants.
23On October 12, 2012, the plaintiff scheduled a motion returnable February 15, 2013, to extend the set down date. The February 15, 2013, motion date was not confirmed. The motion was then rescheduled for May 22, 2013. The Registrar dismissed the action for delay on February 28, 2013, while the motion to extend the set down date was pending.
24On May 22, 2013, the motion was adjourned by the Master because only 15 minutes had been booked.
25In January 2013, Radiant indicated that it intended to advance a motion to compel the plaintiff’s answers to approximately 65 refusals.
26On October 24, 2013, on consent, the Registrar’s dismissal order dated February 28, 2013, was granted on terms requested by the Naccarato defendants. The time to set the action down for trial was extended to October 31, 2014.
27In or about December 2013, Radiant’s refusals motion was assigned to a Master to proceed as a long motion. From 2013 to 2016, the Master conducted approximately seven case conferences in connection with the refusals motion. At the last case conference of November 22, 2016, the Master ordered a set down date of October 2, 2017.
28By the time that Radiant’s refusals motion was heard and determined on February 8, 2017, only ten refusals remained at issue.
29By October 2017, the plaintiff provided all of the answers to refusals to plaintiff’s counsel. A flood at the office of the plaintiff preventing the answers from being provided sooner.
30On January 24, 2018, Radiant’s counsel wrote to directly to the court office, and copied counsel, requesting that the action be dismissed for delay pursuant to the order of the Master dated November 22, 2016.
31Upon receipt of a copy of the letter from Radiant’s counsel to the Registrar, plaintiff’s counsel telephoned Radiant’s counsel and asked that the request to have the action dismissed for delay be withdrawn. Plaintiff’s counsel advised Radiant’s counsel that she was preparing a trial record for service. Radiant’s counsel refused to withdraw the request.
32On January 26, 2018, the plaintiff served the trial record. The plaintiff attempted to file the trial record on January 26, 2018, but was unable to do so because the action had been dismissed for delay earlier that same day.
33Although the Naccarato defendants and Radiant now argue that the plaintiff could have set the action down for trial notwithstanding Radiant’s refusals motion, there is no evidence before me that any defendant ever contested the set down date extensions or ever made such a submission when the issue of an extension of the set down date was before the court.
34I am satisfied that the delay has been adequately explained. Pleadings have been delivered. Mediation has taken place. Documentary discovery has taken place. Oral discoveries took place over approximately nine days. Approximately seven case conferences with respect to Radiant’s refusals motion took place from 2013 to 2016. Radiant’s refusals motion was ultimately heard and determined in 2017. The action is mature. A trial record has been served.
Inadvertence in Missing the Deadline
35I am satisfied that the deadline was missed as a result of inadvertence.
36The lawyer who attended on the case conference on behalf of the plaintiff before the Master on November 22, 2016, did not diarize the set down date or advise anyone of the set down date. When the lawyer who attended on the case conference left the firm in April 2017, the lawyer did not prepare a transfer memorandum or bring the set down date to anyone’s attention.
37There is no evidence of a deliberate intention not to advance the action nor is there evidence of a deliberate intention not to set the action down for trial.
Motion Brought Promptly
38The defendants concede that the motion was brought promptly.
No Prejudice to the Naccarato Defendants
39Prejudice may be presumed in light of the passage of time or if a limitation period has passed. The plaintiff bears the burden of rebutting the presumption. Where the presumption is rebutted, the onus shifts to the defendant to establish actual prejudice.
40As stated by Justice van Rensburg in Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592 at para. 57: The prejudice at issue is to the respondent’s ability to defend the action as a result of the appellant’s delay, not as a result of the sheer passage of time: MDM Plastics Ltd. v. Vincor International Inc., 2015 ONCA 28, at paras. 25 and 33.
41To the extent that prejudice is presumed, any presumption of prejudice has been rebutted. Documentary discovery has taken place. Examinations for discovery have taken place.
42I am not satisfied of any actual prejudice. The evidence of the Naccarato defendants is that there is prejudice as a result what they allege to be the plaintiff’s repeated and continued bad-mouthing of them resulting in lost business and an inability to raise sufficient capital to operate to their potential. Any such prejudice would not be prejudice affecting the Naccarato defendants’ ability to defend the action.
43In addition, while not determinative, there is no evidence that any of the previous extensions of the set down date were opposed, including the last extension ordered on November 22, 2016. This suggests that there was no actual prejudice to the defendants’ ability to defend the action at least as of the date of the last agreed upon set down date (Carioca at para. 59).
Finality
44With respect to finality, there is no issue that the motion was brought promptly. There is no evidence of detrimental reliance on the dismissal order.
Decision
45Applying a contextual approach and considering the relevant factors and principles, I am satisfied that it is just that I exercise my discretion to set aside the dismissal order.
Costs
46In the event that the motion was granted, the parties agreed that there would be no costs of the motion.
Summary of Order
47Order to go as follows:
- The order of the Registrar dismissing the action for delay dated January 26, 2018, is set aside.
- The time to set the action down for trial is extended to July 31, 2018.
- There shall be no costs of the motion.
Master B. McAfee
Date: June 26, 2018