Court File and Parties

COURT FILE NO.: CV-12-468349

MOTION HEARD: 26 July 2018

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Hanson Manufacturing Inc., Plaintiff

AND:

SF Partners Inc. and Danbury Sales Limited, Defendants

BEFORE: Master Jolley

COUNSEL: Bronwyn Martin, Agent for Counsel for the Moving Party Plaintiff Megan Marrie, Counsel for the Responding Party Defendant SF Partners Inc. Jane Lo, counsel for the Responding Party Defendant Danbury Sales Limited

HEARD: 26 July 2018

REASONS FOR DECISION

[1] The plaintiff brings this motion under Rule 48.14 of the Rules of Civil Procedure for a status hearing and timetable. The defendants oppose the motion and take the position that the action should be dismissed as a result of the plaintiff’s delay.

[2] Rule 48.14 provides as follows:

(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.

(5) If the parties do not consent to a timetable under subrule (4), any party may, before the expiry of the applicable period referred to in subrule (1), bring a motion for a status hearing.

(6) For the purposes of subrule (5), the hearing of the motion shall be convened as a status hearing.

(7) At a status hearing, the plaintiff shall show cause why the action should not be dismissed for delay, and the court may,

(a) dismiss the action for delay; or

(b) if the court is satisfied that the action should proceed,

(i) set deadlines for the completion of the remaining steps necessary to have the action set down for trial or restored to a trial list, as the case may be, and order that it be set down for trial or restored to a trial list within a specified time,

(ii) adjourn the status hearing on such terms as are just,

(iii) if Rule 77 may apply to the action, assign the action for case management under that Rule, subject to the direction of the regional senior judge, or

(iv) make such other order as is just.

[3] All parties agree that the onus is on the plaintiff to demonstrate why the action should not be dismissed for delay. The plaintiff must demonstrate that there is an acceptable explanation for the delay and establish that, if the action were allowed to proceed, the defendants would suffer no non-compensable prejudice (Khan v. Sun Life Assurance Co. of Canada 2011 ONCA 650). This is a two part test and the plaintiff must satisfy both branches of the test.

[4] When exercising its discretion under Rule 48.14, the court must balance the plaintiff’s interest in having a hearing on the merits against the defendant’s interest in having the matter resolved in an expedient and time-efficient manner. (Koepcke v. Webster 2012 ONSC 357 at paragraph 23).

Has the plaintiff provided a reasonable explanation for the delay?

[5] The action was commenced in November 2012 and pleadings closed in April 2013.

[6] The next 18 months were spent on the defendant SF Partner’s unsuccessful motion for security for costs. The motion was brought in 2013 and ultimately heard in May 2014. On 3 October 2014 the motion was dismissed with costs. The order was issued on 25 November 2014.

[7] Thereafter starts the first period of delay to be addressed, from December 2014 to January 2016.

[8] The evidence on this motion is that some time shortly after the motion for security for costs was heard, the plaintiff’s lawyer advised that it could not continue to act for the plaintiff. There is no evidence from the plaintiff on this motion but the plaintiff’s lawyer deposes that the client took from December 2014 to January 2016 to find new counsel. The defendants challenge the weight to be given to this evidence, given the deponent has no first-hand information about the stated facts and does not provide this evidence on the information and belief of his client. Further, the client was available to provide this information and did not swear an affidavit. I agree that it is less than ideal to have this information from a source who does not have first-hand knowledge of the efforts undertaken and without detailing what those efforts were, but it is uncontested for the purposes of this motion.

[9] Unfortunately, during this time, no one was in contact with the defendants to advise that the plaintiff was searching for new counsel. There was simply silence. I do accept that the plaintiff was taking steps to move the matter forward with new counsel and in January 2016, the plaintiff retained its current counsel. I find that there is an adequate explanation for this first period of delay.

[10] There was activity by new counsel between February 2016 and May 2016 when they notified the defendants of their intention to bring a motion for summary judgment. In May 2016 plaintiff’s counsel wrote to advise the defendants that “we have gathered our evidence. We will provide you with our motion materials as soon as possible”.

[11] Thereafter began the second period of delay, which stretched from May 2016 to November 2017. During this period, the defendants again heard nothing at all from the plaintiff, other than a brief contact in August 2017. However, the record does demonstrate, the plaintiff was continuing to move its matter forward, although unbeknownst to the defendants, by preparing its summary judgment motion materials.

[12] The motion turned out to be more complex than originally anticipated. In July 2016 counsel for the plaintiff determined that additional documents were needed and it took time to find those documents as they had been put into moving boxes. In December 2016 the draft affidavits were finalized, including at least one affidavit from a non-party who was expected to provide supporting evidence. The plaintiff and its lawyer were in contact in December 2016 and January 2017 about the affidavits and in February 2017 it was learned that the non-party would not swear an affidavit in support of the summary judgment motion. In March 2017 plaintiff’s counsel contacted a different non-party to see if they would provide an affidavit and did not hear back.

[13] In March 2017 the senior lawyer on the file left the firm and the junior lawyer, who had been preparing the summary judgment materials commenced her maternity leave. The filed was transferred to a different lawyer in the firm. There was no gap in the plaintiff’s representation but there was time taken to transition the file from lawyer to lawyer to lawyer. On 21 August 2017 plaintiff’s counsel who then had carriage of the file arranged a conference call with the defendants’ lawyer for August 28 or 29. However, 22 August 2017 the plaintiff’s lawyer gave birth and the call was overlooked. On August 29 she got in touch with counsel for the defendant SF Partners to re-arrange the call but the call did not take place until November 2017.

[14] After that November 2017 call, the plaintiff served its motion record for summary judgment and this motion for a status hearing. The summary judgment motion could not proceed until this status motion was heard. This motion was originally returnable in January, then adjourned to March and ultimately heard today.

[15] While a plaintiff on a motion such as this need not explain “every single minute of delay, it must explain most of the delay and all periods of material delay” (Madore v Metropolitan Toronto Condominium Corp. No. 1228 at paragraph 26). Reviewing the chronology above, most of the periods of delay are accounted for. For the most significant period of time plaintiff’s counsel was working on the motion for summary judgment. Counsel continued to work on that motion but did not reach out to counsel for the defendants to provide them with any update.

[16] As counsel for the defendants points out, at this 5 ½ year mark the parties have not exchanged affidavits of documents and there have been no examinations for discovery. However, that is not because the file has been ignored. It is because the plaintiff has chosen to proceed by way of a summary judgment motion. If the motion is unsuccessful, it is likely that the cross examinations on the affidavits filed in that motion may take the place in whole or in part of examinations for discovery.

[17] There is evidence before me that the plaintiff did and intended to move the litigation forward throughout this second period of delay. Here, as in Koepcke, supra, the plaintiff has provided a credible explanation for the delay.

Has the plaintiff established that the defendants will not suffer non-compensable prejudice?

[18] The defendant SF Partners argues that after all this time it has lost contact with the individual who has the most knowledge of the matters in issue, a former employee. However, the plaintiff retained a skip trace firm who was able to locate the witness and provide the name of her present employer and position there, her personal and work phone number and her LinkedIn profile. It also confirmed that she left the defendant SF Partners before the action was commenced. I find that the plaintiff has established that the defendants will not suffer non-compensable prejudice should the action be permitted to continue.

[19] The plaintiff takes the position that this is primarily a documentary case in any event. I am not prepared to accept that for the purposes of this motion, given a very significant part of the second period of delay was due to the plaintiff’s attempts to obtain affidavit evidence from key non-parties for its motion. Further, in its materials on this motion it took the position that it intended to subpoena witnesses for that motion.

[20] I am satisfied that material presented justifies the continuance of the action. It is unfortunate that during the time his lawyers were working on his materials, they were not in contact with the defendants, who were faced with only long periods of silence. However, the plaintiff has demonstrated that he intended to proceed throughout. (Hubergroup Canada v. 2049669 Ontario Inc. 2017 ONSC 3784 at paragraph 32). I find that the explanation justifies continuance of the action, as does fairness.

[21] While the case has proceeded at less than an ideal pace, the appropriate remedy is the imposition of a timetable rather than an order dismissing the action. The timetable that was included in the motion materials is out of date. Counsel shall provide me with an agreed upon timetable within 30 days of the release of this decision and it must move the action along with dispatch. That timetable shall form part of the order permitting this matter to continue. If counsel cannot agree, they shall submit their preferred timetable to my attention with a short explanation for any difference between their version and that of the other side and I will impose a timetable to move the action forward expeditiously.

[22] If the parties cannot agree on costs within 30 days of this decision, they may each submit a costs outline and costs submissions of no more than three pages in length by 31 August 2018.

Master Jolley

Date: 30 July 2018