Court File and Parties
Court File No.: CV-13-478915 Motion Heard: November 22, 2018
Superior Court of Justice - Ontario
Re: Ampscon Inc., Plaintiff/Moving Party And: Melloul-Blamey Construction Inc., Defendant/Respondent
Before: Master J. Josefo
Counsel: A. Vishwanth, Counsel for the Moving Party on the Motion Email: admin@vishwanths.com J. Dalton, Counsel for the Responding Party on the Motion Email: jdalton@kwlaw.net
Heard: November 22, 2018
Reasons for Decision and Order
[1] As described in the Notice of Return of Motion, Ampscon Inc, the plaintiff in this within action (“Ampscon” or “the plaintiff”), seeks “to set aside the Registrar’s Order dismissing the action for delay” pursuant to Rules 48.14(10) and Rule 37.14 of the Rules of Civil Procedure. Melloul-Blamey Construction Inc., the defendant (“Melloul” or “the defendant”), resists that result. Melloul asserts that the action should remain dismissed because:
- there is insufficient explanation for the purported litigation delay,
- the inadvertence on the part of the plaintiff leading to the delay is not adequately explained,
- this motion was not brought with sufficient promptness, and,
- the plaintiff has not rebutted the presumption that the defendant will purportedly suffer prejudice in attempting to defend itself if the action is restored.
[2] The above bullet points paraphrase from the reasons for decision in Reid v. Dow Corning Corp (2001), 11 C.P.C (5th) (“Reid”). Yet, since that important decision, the law has been revised and refined. Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592 (“Carioca”) pertained to a matter denied restoration to the trial list and as a result, being administratively dismissed pursuant to Rule 48.14. In the appeal of the decision not to restore the matter to the trial list, the Court of Appeal explained that “the decision whether to restore an action to the trial list is discretionary”. The Court of Appeal further held that if a dismissal of an action would then result, the Court:
…must strike a balance between the need for efficiency and the need for flexibility, such that cases can be tried on the merits where there is a reasonable explanation for non-compliance with the rules [emphasis added].
[3] The use by the Court of Appeal of the word “reasonable” is, I find, informative. In my view, it means that parties and their counsel are not held to a standard of perfection. Rather, so long as counsel (and the parties) have acted and are acting reasonably in the conduct of the particular case, the preference is that cases should be determined on their merits. This policy, that cases should preferably be decided on their merits, was recently re-stated by the Court of Appeal in H. B. Fuller Company v. Roger (“Fuller”), 2015 ONCA 173. Justice Weiler for the Court also concluded that the above-referenced Reid factors “are not an end to themselves”, emphasizing that a decision-maker must “arrive at a just result in the particular circumstances of the case”. Referencing earlier decisions with favour, Justice Weiler approved the following as was stated by Justice Laskin:
The Court’s bias is in favour of deciding matters on their merits rather than terminating rights on procedural grounds.
[4] The issue of prejudice is very important in cases such as this within one. As a result of the delay in a particular case, is the defendant prejudiced so that a fair trial is impossible? Can it be concluded that, as a result of the delay, the defendant is no longer able to make full answer and defend the action on its merits? If the answer to those questions is “yes”, then a dismissal will most likely stand. Yet, if the defendant in a particular case is able to respond to the claim, and can lead evidence, so that a fair trial for both (or all) parties remains the likely outcome, then an Order of dismissal should be overturned. Justice Weiler in Fuller quoted Justice Sharpe as follows:
Procedural rules are the servants of justice, not its master…we should strive to avoid a purely formalistic and mechanical application of timelines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. The Rules and procedural orders are [to be] construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute.
[5] Applying these legal principles to the within case, I now review the facts which I find to be of particular importance. The action in this case was commenced on April 23, 2013. There is no question that the claim was commenced within the limitation period. The basis for the claim was in essence alleged unpaid extra work on a construction project, on which project the plaintiff was to supply certain services to the defendant. Pursuant to Rule 48.14(1), as the action had not been set down for trial on the fifth anniversary of commencement, the Registrar dismissed it.
[6] This was the first time that the matter was dismissed. In my view, that fact is important given that a number of the cases cited by both counsel in their well-made submissions involved a prior automatic dismissal, followed by a restoration on consent, with a second dismissal then following. In those cases it was only after the second dismissal that the party opposite took the position that the matter should not be restored.
[7] Moreover, in this case the delay was five years. Yet a number of the cases to which I was referenced involved much longer delay. While in an ideal world there would never or rarely be any delay, in the “real world” in which we live, lawyers are busy, clients have problems or conflicting demands on their time, and sometimes, unfortunately, matters are pushed off. I am by no means stating that one should be complacent about delay. Indeed, it is to be guarded against. Yet, we are all human. Delay can ensue, even when parties are acting to the afore-mentioned reasonable standard in the conduct of the litigation. The question, again, is whether the delay has led to prejudice to the other side which would prevent a fair trial from occurring on the merits.
[8] Addressing the length of time which has elapsed in this case, in my view, five years is unlikely to be, absent other factors which demonstrate prejudice, a delay which causes, on its own, consternation or shock. Rather, five years, half a decade, is I find fairly minimal delay in the overall scheme of things. This timeline does not lead me to conclude that prejudice must or likely will result, absent evidence so demonstrating such prejudice.
[9] Pursuant to the timeline, it appears that, after the statement of defence was delivered on June 24, 2013, nothing much happened until nearly four years later. Examinations for discovery of a representative of both the plaintiff and defendant occurred only in April 2017. Yet, while the plaintiff took seemingly no steps during those intervening years, neither seemingly did the defendant. There is no evidence of any motion brought, any request for a case-conference made, or even any correspondence adduced by the defendant, to demonstrate that it was not content with this period of delay, and that it sought to move the matter forward. Rather, the defendant seemingly was content to, using the old litigation expression, “lay in the weeds”. Yet that litigation strategy, as the Court of Appeal discussed in Carioca, is no longer acceptable. The Court noted that “effective use of court resources require all parties to play their part in moving actions forward”.
[10] Accordingly, I attribute no significance to the delay through to 2017. Indeed, starting in 2017 both sides participated in discoveries. Then, as of September 28, 2017, the former lawyer for the plaintiff was, at his request, removed from the record. The defendant has tendered into evidence the complete motion record of that former lawyer, which contains his rather detailed affidavit explaining his difficulties with the plaintiff. One of those difficulties, indeed I find likely a key difficulty, was the lack of payment. The included material documents the plaintiff’s concern over the cost of the discoveries, and the unfortunate breakdown in the relationship that resulted.
[11] Pausing at this juncture, financial difficulties or even impecuniosity ought not bar a matter from being determined on its merits, noting that such determination does not necessarily mean a full trial. It may mean a disposition summarily, based on affidavit evidence. Yet by whatever means findings on the merits are ultimately made, that the plaintiff was then having financial difficulties should not necessarily lead to a case dismissed absent a disposition on the merits of it.
[12] As of October 18, 2017, about three weeks after his former solicitor removed himself (by court Order), the plaintiff appointed his present counsel. Clearly, the plaintiff did not delay in retaining new counsel (Mr. Vishwanth). I find no genuine delay in this regard. Yet the former lawyer on November 6, 2017 asserted his solicitor’s lien over the file. Contained in the amended supplementary motion record is the letter from that lawyer to Mr. Vishwanth in which the lien rights are asserted. Ideally, there should have been a simple affidavit to which this letter was attached—counsel for the defendant is correct in that regard. Yet, she did not dispute the authenticity of the letter. Nor was the former lawyer sought to be examined as a witness for this pending motion.
[13] Despite Mr. Vishwanth believing it was prejudicial to the plaintiff, I have considered the motion record for the removal of the former lawyer for the plaintiff. I find that the November 6, 2017 letter from that lawyer is a continuation of that evidence. It would not be just to disregard it because of a failure of form. I thus accept that letter for what it states, and which fact is in any case undisputed: the former lawyer for the plaintiff exercised his lien rights on the file.
[14] While lawyers are entitled to be paid for their services, in this case the at the time legitimate exercise of the lien right in this case was what led to a degree of delay (from the late Fall 2017) until the May 3, 2018 Registrar’s dismissal. I make no finding about any ongoing exercise of the lien rights in this case, as I have no evidence of what the plaintiff’s former lawyer knew about this within motion, and when he knew it. Moreover, that lawyer was not a party to this motion. It would thus be manifestly unfair to him for me to draw any conclusions about the propriety of his actions. I thus do not do so.
[15] In any event, the period of delay from the appointment of Mr. Vishwanth in mid-October 2017 until the dismissal of the action was just over six months. This I find is hardly excessive. Nor is there evidence that the defendant objected to the delay. There was, for example, no motion to compel answers to undertakings brought during that six month period. Moreover, a factor for this period of delay was the plaintiff’s inability to pay his former lawyer, so his new lawyer could obtain the file. Again, financial difficulty of a party should not be the basis, in and of itself, for an action not addressed on the merits.
[16] Ms. Dalton submitted that Mr. Vishwanth could have reviewed the pleadings in the court file, so he thus would have known when the Registrar would automatically have dismissed the action. That is true—yet that would not in my view likely have put the plaintiff any further ahead absent access to the former lawyer’s file. Moreover, while in a perfect world counsel would have accessed the court file, Mr. Vishwanth was, I find, acting reasonably in waiting to get the actual file, and the not insignificant amount of documents that, as the evidence informs me ( inter alia, the evidence pertaining to the plaintiff’s answers to undertakings) exist in this case.
[17] It also must be observed that counsel for the defendant would have known full well when the five year anniversary of this matter was to occur. Yet there is no evidence that, subsequent to Mr. Vishwanth appearing on the record in October 2017, the defendant raised this issue or, indeed, raised any concern about purported delay. Again, the defendant was content to lie in the weeds, without objection, until the Registrar dismissed the matter.
[18] Further addressing the timelines within the context of the allegation of delay, on reflection, I do not see genuine delay which causes me concern or which “shocks the Court”. Rather, I see a civil action that was dormant for a period of time, with no objection from either party to that period of dormancy. Thereafter, I see activity 18 months ago which involved discoveries and, subsequently, the plaintiff attempting to answer its undertakings. As discussed, financial difficulties of the plaintiff and the exercise of the solicitor’s lien led to a degree of delay. Yet again, I find this subsequent delay to be hardly inordinate. Moreover, since the dismissal counsel for the plaintiff has continued to press onward. He has sent several letters providing answers to undertakings and has attempted to obtain consent on a timetable. While on balance I find it not unreasonable for the defendant to await the disposition of this motion before responding, it is clear that counsel for plaintiff is still attempting to move this case along.
[19] In my view, this motion was also brought with reasonable dispatch. There were the typical scheduling issues between busy lawyers. Yet ultimately a date in October was agreed upon. I do not find that Mr. Vishwanth was tardy in preparing and filing his material, in the context of initially not having the file, and then to ultimately have to sort through two boxes of documents with his new client. While it was unfortunate that the motion was not confirmed in October, leading to it being re-scheduled before me, again, a standard of perfection is not required. This type of error (a failure to confirm a booked motion) unfortunately happens from time to time.
[20] Further addressing the question of prejudice, obviously, the quality of the plaintiff’s answers to undertakings is not an issue before me on this motion. Accordingly, I make no finding in that regard. Yet Ms. Dalton asserted that those answers are insufficient, and there are missing documents, leading to her submission that there is insufficient explanation for the basis for the plaintiff’s claim, and this as a result prejudices the defendant.
[21] Assuming without deciding that this is correct, then the plaintiff lacking sufficient evidence for, or explanation of, how it arrives at its claim arguably benefits rather than prejudices the defendant. After all, the plaintiff must prove its case at trial (or in response to a summary judgement motion). If the defendant asserts that the plaintiff has not done so to the requisite standard of proof, then the lack of documentation, or alleged lack of specificity in answers to undertakings, or in explaining the basis for the quantum of the claim, all benefits the defendant in the litigation. It does not hinder or prejudice the defendant.
[22] The defendant of course retains all its usual rights pursuant to the Rules. It may seek to further examine the representative of the plaintiff, it may bring a motion to address undertakings, and it could seek summary judgment, or follow whatever options suit it best pursuant to its appreciation of its case. The evidence before me is that the plaintiff has provided responses addressing its undertakings—again, the substantive quality (or lack thereof) of the responses, and whether these answers suffice, are different questions. I do not find, however, that the defendant is prejudiced by these normal vicissitudes of civil litigation.
[23] Applying the Fuller decision, and the cases discussed therein when Justice Weiler addressed the issue of prejudice, it is clear that a contextual approach is required. Moreover, the Court of Appeal made clear the following:
“The prejudice that the motion judge or master must consider is to the defendant’s ability to defend the action that would arise from steps taken following dismissal, or which would result from restoration of the action following the registrar’s dismissal”.
[24] Again, this case seemingly involves a fair amount of documents, as the answers to undertakings demonstrate. Affidavits of documents would have been exchanged prior to discoveries, if the parties chose to follow the Rules in that regard. If they did not, then again, it is not for a party which waived its rights in that regard to now assert prejudice as arising from its own waiver.
[25] Discoveries have been held. There is no evidence that witnesses are deceased. Telephone numbers were provided for witnesses pursuant to the response for question # 19 (the request was for “contact information” and phone numbers were reasonably provided in response).
[26] I agree that “prejudice is inherent in long delays”, as was held by Justice C. F de Sa in Papp Plastics & Distributing Ltd. v. Unity Insurance Brokers (Windsor) Ltd., 2018 ONSC 5009. Yet in this case, again, even taking the overall period, the total timeline is only five years. Half a decade is again not the type of delay I find to be inherently prejudicial. In any case, from 2013 to 2017, both parties accepted the dormancy. That time period thus is not particularly relevant. The actual period of delay to which the defendant objected (only after the dismissal by the Registrar and in response to this motion by the plaintiff) is again quite minimal—involving months, not years. As I find no “long delay” in this case, there is no inherent prejudice.
[27] While the plaintiff’s representative’s affidavit simply disavowed the likelihood of prejudice, that lack of specificity in and of itself does not condemn the affidavit as inadequate. After all, it is hard to see how the other side would be prejudiced on the facts of this case as I have reviewed them in these reasons. Moreover, as the Fuller decision makes clear, the plaintiff does not fail to rebut the presumption of prejudice “simply because he or she does not adduce affirmative evidence”. As Justice Weiler further explained, I must “consider all of the circumstances” in deciding whether there is likely to be prejudice on these particular facts, and in these particular circumstances.
[28] In this case I find the explanation for the minor and not unusual amount of delay on the part of the plaintiff to be reasonable. The non-compliance, which led to the dismissal by the Registrar, while unfortunate, I find has been explained. This was the first, and hopefully will be the only, time this matter was dismissed, unlike other cases which involved far longer delay. In those cases, such longer delay would inherently lead to prejudice being assumed (however, even then, in appropriate cases the dismissal was overturned). Yet those are not the facts before me in this case.
[29] Weighing the facts and evidence, applying my discretion, and favouring the disposition of matters on the merits of them, I do not find the defendant likely to be prejudiced by this case proceeding further. Rather, and as I have discussed, the defendant maintains its rights in the ongoing conduct of this litigation, and can oblige the plaintiff to prove its case. The defendant would, on the facts of this matter, be well able to make full answer and defence to the claim.
[30] The Registrar’s Order of May 3, 2018 is thus set aside. The motion is accordingly granted pursuant to the amended supplementary motion record.
[31] Going forward, Mr. Vishwanth was amenable to a timetable being established, and he had proposed a draft timetable to the defendant. Rather than me confirming that timetable, as the case will be going forward I urge both counsel to candidly discuss all outstanding issues, including whether the defendant has outstanding undertakings arising from the examination for discovery of its representative. The parties should consider if re-examinations are required, etc., and jointly prepare a realistic timetable. The parties may (hopefully on consent) propose a timetable to the Court if desired.
[32] I now turn to the issue of costs. This was not argued before me. Thus, if the parties wish to address the issue of costs, they may seek a 15 minute tele-conference call with me for that purpose. To that end, they may contact the Master’s Office. To guide the parties, however, as to whether they wish to or should pursue costs, I now set out my preliminary impressions.
[33] Referring again to the case-law on which each party relied, my impression is that the cases where the issue of a Registrar’s dismissal was hard-fought as was this one was where the delay was greater and/or where there had been a prior dismissal, a restoration on consent, followed by a second dismissal. Again, neither of these scenarios applies to the facts of this case.
[34] It would have behooved the defendant to have considered the matter holistically rather than, as is my impression from the evidence, pursuing what it perceived was an opportunity to gain a tactical advantage and rid itself of this claim. The costs of this motion in part arose because the defendant did not consent to (or at least did not oppose), on this first occasion, the setting aside of the Registrar’s Order.
[35] Similarly, it was the plaintiff which let this matter get to this stage. The plaintiff has its obligations to not let this matter languish, and to avoid the matter being dismissed. That means proceeding with the litigation. To be fair, however, once new counsel for the plaintiff became involved, efforts were made to carry on the litigation.
[36] Overall, it is my preliminary view that neither side is without blame in this matter. Thus, in these circumstances, again preliminarily, I rule that costs of this motion be “in the cause”. Ultimately the trial Judge can then conclude, if the parties wish to address the costs of this motion as part of their overall cost submissions at the end of the day, which, if any, party is entitled to costs of this motion.
(original signed by the Master)
Master J. Josefo