COURT FILE NO.: 433/09

DATE: 2018 11 27

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DR. DAVID SCOTT CORNELL, Plaintiff

AND:

DR. CHARLES STANLEY TUCK, Defendant

BEFORE: Coats J.

COUNSEL: David Silver, for Robert A. Watson (who is counsel for the Plaintiff)

Chris Tonks, for the Defendant

HEARD: June 24, 2018, and September 4, 2018

ENDORSEMENT

coats J.

Part 1 – Issue

[1] By this Motion, the Plaintiff seeks an order to set aside the Registrar’s order dated June 1, 2012, dismissing this action for delay (the “Dismissal Order”).

Part 2 – the Uncontroverted Background Facts

[2] The following chronology is not contested.

[3] The nature of the action is that the Plaintiff seeks damages in the amount of $256,000 for, inter alia, breach of contract arising from the Defendant’s alleged failure to remit payment for the purchase of the Plaintiff’s dental practice. In the alternative, the Plaintiff seeks equitable relief for the revenues generated from his dental practice after the Defendant assumed control of it.

[4] The Defendant is an undischarged bankrupt. However, the parties agreed in argument on the motion date of June 25, 2018, that since his status as an undischarged bankrupt arose prior to this claim, it has no impact on this motion.

[5] The Plaintiff commenced this action by Statement of Claim on January 21, 2009. The Plaintiff’s former counsel, Robert A. Watson (“Watson”), received the Defendant’s Statement of Defence on March 13, 2009.

[6] On March 20, 2009, Watson wrote to the Plaintiff requesting that he gather all relevant documents for the purpose of preparing his Affidavit of Documents. Watson received the Plaintiff’s documents in August 2009. Watson began preparing the Affidavit of Documents in or around December 2009.

[7] The Plaintiff followed up with Watson in mid-December 2009 and on January 14, 2010, to inquire as to the progress of the action. Watson responded on January 19, 2010, to advise that his office was still in the process of reviewing and preparing the Affidavit of Documents.

[8] The Plaintiff followed up with Watson by phone on April 27, 2010, and by email on June 17, 2010. The Plaintiff and Watson met on June 30, 2010, at which time Watson requested further documents from the Plaintiff. The Plaintiff delivered these documents to Watson around late July 2010 and then requested status updates from Watson by email on August 25, September 7, and September 16, 2010. Watson responded on September 16^th by email and subsequently provided the Plaintiff with a draft of the Affidavit of Documents on October 22, 2010.

[9] On November 5, 2010, the Plaintiff swore his Affidavit of Documents. The Plaintiff’s sworn Affidavit of Document and Schedule “A” productions were served on the Defendant on November 24, 2010. On the same date, a Notice of Examination was served to examine the Defendant on January 19, 2011. Watson received the Defendant’s sworn Affidavit of Documents and Schedule “A” productions the day before the Defendant’s examination, on January 18, 2011.

[10] On January 19, 2011, the Defendant was examined for discovery.

[11] On February 4, 2011, Watson tendered a draft Amended Statement of Claim to plead, inter alia, fraud and fraudulent misrepresentation. He requested consent so he could proceed to set the action down for trial. Watson also requested the Defendant’s answers to undertakings.

[12] The Defendant’s solicitor, Chris Tonks (“Tonks”), responded to Watson on February 9, 2011, requesting an underlined version of the amended claim reflecting the changes. Tonks also conveyed his position that the Reply was “premature”, given that he should first have an opportunity to amend the Statement of Defence.

[13] On February 13, 2011, Watson requested from the Plaintiff his availability for discovery. The Plaintiff advised that he would return to Ontario from British Columbia at the end of April 2011. Based on the Plaintiff’s availability, the Plaintiff’s examination for discovery was scheduled to proceed on April 26, 2011.

[14] On March 8, 2011, Watson followed up with Tonks regarding Watson’s earlier request for consent to amend the Statement of Claim, and Watson requested that the Amended Statement of Defence be delivered so that Watson could revise the Plaintiff’s Reply. Watson also reminded Tonks that the Defendant’s undertakings remained outstanding.

[15] Tonks delivered the Defendant’s Amended Statement of Defence on April 21, 2011.

[16] The Plaintiff was examined for discovery on April 26, 2011.

[17] On May 30, 2011, Watson provided his consent to file the Amended Statement of Defence, together with a consent to file the claim, defence and reply.

[18] On June 9, 2011, Tonks’ assistant advised Watson’s assistant that their office would not be able to file the pleadings because the amended claim had not yet been issued.

[19] On July 26, 2011, Watson delivered a draft order and consent to have the claim and defence amended, a reply filed and a consent to have the action set down for trial. Watson wrote to Tonks on July 26, 2011, enclosing the trial record.

[20] On August 8, 2011, Watson wrote to Tonks to follow up on obtaining the consent. Tonks provided consent on the same date.

[21] On August 18, 2011, Watson wrote to the Superior Court of Justice enclosing the “over the counter” motion record, trial record, executed consent and draft order. On September 28, 2011, Watson received a Status Notice from the court.

[22] In early October 2011, Watson’s assistant advised him that the current draft order was rejected by Hourigan J. (as he then was) by Endorsement dated August 26, 2011, as the “consent was not in the proper form”.

[23] The Dismissal Order was issued on June 1, 2012. Watson did not tell the Plaintiff about the Status Notice, the Endorsement, or the Dismissal Order.

[24] Watson ceased practicing at the firm he had been at on January 31, 2017. Following his departure, a lawyer at the firm, Orie Niedzviecki, conducted a file review and first discovered that the action had been administratively dismissed in 2012. Mr. Niedzviecki reported the matter to LawPRO on or about February 7, 2017.

[25] LawPRO appointed David Silver of Koskie Minsky LLP (“K.M.”) as counsel to Watson to assume carriage of this motion.

[26] Following K.M. being retained in February 2017, K.M. attempted to contact Watson several times in March, April and May 2017. Watson responded in early June 2017. A conference call was arranged. During the conference call, Watson advised that he had experienced health issues. K.M. asked Watson to obtain a copy of his medical records. Watson arranged a doctor’s appointment in July 2017 and requested these records, and K.M. received the records in mid-September 2017.

[27] Following a review of Watson’s medical records, K.M. requested further medical information and documentation, including the Guscott Report, dated May 16, 2011, and the House Report, dated January 15, 2018 (which will both be discussed below).

[28] K.M. served Tonks with a Notice of Motion on November 16, 2017, and requested Tonks’ availability for the hearing of this Motion. After canvassing Tonks’ availability, counsel agreed to the Long Motion date of June 25, 2018.

[29] The Motion was argued on June 25 and September 4, 2018.

Part 3 – The Law

[30] The Defendant’s counsel agrees that K.M. has accurately set out the law applicable on this motion in the Factum of the Moving Party, at paras. 68-79.

[31] The Plaintiff is seeking an order pursuant to rr. 1.04(1), 37.14(1)(c) and 37.14(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), to set aside the Dismissal Order.

[32] Pursuant to the above noted Rules, any party affected by an order may move to set it aside. The court may set aside the order on such terms as are just. In Royal Bank of Canada v. Guy Sanders (October 24, 2017), M48114 (Ont. C.A.), in the context of a request for an order extending the time to perfect an appeal, Epstein J.A. stated, at para. 28, that there is a “general principle found in r. 1.04(1) that animates all of our Rules of Civil Procedure; namely, that the rules be liberally construed to secure the just determination of every civil proceeding ‘on its merits’.”

[33] In terms of a general approach, counsel also referred to Nobosoft Corporation v. No Borders, Inc., 2007 ONCA 444, 225 O.A.C. 36, which dealt with a motion for an order setting aside a noting in default. That decision, at para. 7, provides as follows:

[7] We agree with the observations of Molloy J. of the Superior Court of Justice at para. 2 of McNeill Electronics Ltd. v. American Sensors Electronics Inc. (1996), 5 C.P.C. (4th) 266 (Ont. Gen. Div.), reversed on other grounds (1998), 1998 CanLII 17693 (ON CA), 108 O.A.C. 257 (C.A.):

Motions to extend the time for delivery of pleadings and to relieve against defaults are frequently made and are typically granted on an almost routine basis. Usually opposing counsel will consent to such relief as a matter of professional courtesy. Where there is opposition to a motion of this kind, it is usually related to additional terms which are sought as a condition to the indulgence being granted or to issues of costs…It is not in the interests of justice to strike pleadings or grant judgments based solely on technical defaults. Rather, the Court will always strive to see that issues between litigants are resolved on their merits whenever that can be done with fairness to the parties.

[34] The initial approach to setting aside a Registrar’s dismissal order was set out in Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5^th) 80 (Ont. S.C.), rev’d on other grounds (2002), 48 C.P.C. (5th) 93 (Ont. Div. Ct.). Reid, at paras. 40-41, provides as follows:

40 While I agree there must be some balancing of interests, I find, upon review of the caselaw presented to me, that in determining whether to set aside a registrar's order dismissing an action made under rule 48.14(3), a plaintiff must satisfy four criteria. If the plaintiff fails to satisfy any one of these criteria, the registrar's order will stand. [Emphasis added.]

41 The four criteria to be met are as follows:

1. Explanation of the Litigation Delay: The plaintiff must adequately explain the delay in the progress of the litigation from the institution of the action until the deadline for setting the action down for trial as set out in the status notice. She must satisfy the court that steps were being taken to advance the litigation toward trial, or if such steps were not taken to explain why. For example the complexities of the case and the number of parties may have required significantly more time to move the action toward trial, or the delay was caused by interlocutory matters or appeals. The plaintiff could explain that the action was stalled due to the inattention or negligence of her solicitors which was contrary to her own instructions or expectations. It is absolutely essential that the plaintiff lead satisfactory evidence that she personally always intended the action to proceed to trial without delay, that she did not assent to the delay, and that she always reasonably assumed it was so proceeding or made appropriate inquiries of her solicitors. If either the solicitor or the client made a deliberate decision not to advance the litigation toward trial then the motion to set aside the dismissal will fail.

2. Inadvertence in Missing the Deadline: The plaintiff or her solicitor must lead satisfactory evidence to explain that they always intended to set the action down within the time limit set out in the status notice, or request a status hearing, but failed to do so through inadvertence. In other words the penultimate dismissal order was made as a result of inadvertence.

3. The Motion is Brought Promptly: The plaintiff must demonstrate that she moved forthwith to set aside the dismissal order as soon as the order came to her attention.

4. No Prejudice to the Defendant: The plaintiff must convince the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiff's delay or as a result of steps taken following the dismissal of the action. The court takes note that witnesses' memories generally tend to fade over time and that sometime it is difficult to locate witnesses or documents. However to bar the plaintiff from proceeding with her action on the ground of prejudice, the defendant must lead evidence of actual prejudice. This might include evidence of specified documents lost over time, or destroyed following a dismissal, or of specific witnesses who have died, or have disappeared and the defendant has been unable to locate them with due diligence. While litigation is outstanding the defendants must take care to obtain and preserve evidence.

[35] Reid stands for the proposition, as set out in para. 40, that the moving party must satisfy all four criteria to succeed on the motion. The Court of Appeal rejected this rigid approach in Scaini v. Prochnicki, 2007 ONCA 63, 85 O.R. (3d) 179. A new contextual approach was set out in Scaini, at paras. 2, 3, 12, and 19-28, as follows:

[2] On March 15, 2006, Hambly J. dismissed the appellant's motion to set aside the registrar's order, brought pursuant to rule 48.14(11) and rule 37.14(1)(c). The motion judge required the appellant to satisfy each of four criteria in order to succeed. Since the appellant fell short on one, the motion failed, even though he met the other three. This is the appeal from that order.

[3] For the reasons that follow, I conclude that the motion judge erred in principle in taking this approach rather than considering all the relevant factors in order to determine the just order in the circumstances.

[12] On March 15, 2006, the motion judge dismissed the motion. He set out his view of the applicable test at para. 13 as follows:

In Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th ) 80 (affirmed as to the four-pronged test (2002), 48 C.P.C. (5th) 93 (Ont. Div. Ct.)), Master Dash stated that the plaintiff must satisfy four criteria to obtain an order setting aside a registrar's order dismissing an action pursuant to [r]ule 48.14(13). The four criteria are as follows:

(1) explanation of the litigation delay;

(2) inadvertence in missing the deadline;

(3) the motion is brought promptly; and,

(4) no prejudice to the defendant.

[19] In coming to his view the motion judge relied on the decision of Master Dash in Reid, supra, which sets out the four criteria and the appellant's obligation to meet each one separately. It was put this way in that decision at para. 40:

While I agree there must be some balancing of interests, I find, upon review of the caselaw presented to me, that in determining whether to set aside a registrar's order dismissing an action made under rule 48.14(3), a plaintiff must satisfy four criteria. If the plaintiff fails to satisfy any one of these criteria, the registrar's order will stand.

[20] The motion judge went on to find that this approach had been upheld by the Divisional Court in that case. With respect, I do not agree. Writing for the Divisional Court, Then J. simply recited the criteria used by the master in his description of the decision appealed from. He did so without approval, before going on to allow the appeal on other grounds, without commenting on the criteria or the proposed requirement that each one must be met.

[21] More importantly, I do not agree that the case law reviewed in Reid, supra, yields the proposition that an appellant must satisfy each relevant criterion in order to have the registrar's order set aside. None of the cases referred to say so expressly and several proceed on a more contextual basis. For example, in Steele v. Ottawa-Carleton (Regional Municipality), [1998] O.J. No. 3154, 74 O.T.C. 259 (Gen. Div.), Master Beaudoin, at para. 17, described the guiding principle in deciding whether to set aside a rule 48.14 dismissal by the registrar as follows:

Ultimately, the Court will exercise its discretion upon a consideration of the relevant factors and will attempt to balance the interests of the parties.

[22] I agree with Master Beaudoin.

[23] In my view, a contextual approach to this question is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria. The latter approach is not mandated by the jurisprudence. On the other hand, the applicable rules clearly point to the former. In particular, the motion to set aside the registrar's order dismissing the action for delay engages rule 37.14(1)(c) and (2). The latter invites the court to make the order that is just in the circumstances. A fixed formula like that applied by the motion judge is simply too inflexible to allow the court in each case to reach the just result contemplated by the rules.

[24] That is not to say that there are no criteria to guide the court. Indeed I view the criteria used by the motion judge as likely to be of central importance in most cases. While there may be other relevant factors in any particular case, these will be the main ones. The key point is that the court consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case.

[25] It may be that in a particular case, one factor on which the appellant comes up short is of such importance that, taken together with the other factors, the appellant must fail. What is important is that the analysis be contextual to permit the court to make the order that is just.

[26] Thus, in my view, the motion judge erred in principle by requiring the appellant to satisfy each of the four criteria separately in order to succeed in setting aside the registrar's order, without considering and weighing all the relevant factors. I would therefore set aside his order.

[27] I conclude that a contextual approach leads to the opposite result. There is no doubt that the appellant missed the 90-day deadline set out in rule 48.14(1) because of the inadvertence of his lawyer. The motion to set aside the registrar's order was brought promptly. And the respondent can point to no prejudice. Importantly, no limitation period has passed. Finally, while it would have been preferable if the appellant had provided more details, he did provide an explanation of the litigation delay. Moreover, his assertion that he always intended to proceed with the lawsuit and is eager to go to trial is unchallenged.

[28] In this case, I do not think that the shortage of detail in the appellant's explanation of delay is determinative, given the inadvertence of the appellant's solicitor, the prompt motion to set aside the order, and, particularly, the complete absence of prejudice. Taking these factors together, I conclude that the just order is to set aside the registrar's order on terms that the appellant either set the action down for trial or arrange a status hearing within 60 days of this decision.

[36] The Court of Appeal in H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173, 386 D.L.R. (4^th) 262, at paras. 25-27, outlined the approach to the two underlying policies brought into focus on a motion such as the one before the court as follows:

25 The factors that guide the court's choice between ending the plaintiff's action before trial and forcing the opposite party to defend the case despite the delay require a judge to resolve the tension between two underlying policies. The first is that civil actions should be decided on their merits. The second is that civil actions should be resolved in a timely and efficient manner in order to maintain public confidence in the administration of justice: Kara, at para. 9; Hamilton (City), at paras. 20-21; Marché, at para. 25.

26 When reviewing a registrar's dismissal for delay under the former rule 48.14, the weight of authority from this court has leaned towards the first policy consideration. As Laskin J.A. stated in Hamilton (City), at para. 20, quoting with approval the motion judge's comment, “[T]he court's bias is in favour of deciding matters on their merits rather than terminating rights on procedural grounds.” While failure to enforce the rules may undermine public confidence in the capacity of the justice system to process disputes fairly and efficiently, as Sharpe J.A. observed in 119, at para. 19, nonetheless:

[P]rocedural rules are the servants of justice not its master ... We should strive to avoid a purely formalistic and mechanical application of time lines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. [T]he Rules and procedural orders are construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute. [119, at para. 19. Citations omitted.]

27 The court's preference for deciding matters on their merits is all the more pronounced where delay results from an error committed by counsel. As the court stated in Habib, at para. 7, “[O]n 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.” In Marché, Sharpe J.A. stated, at para. 28, “The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor” (citations omitted).

[37] In H.B. Fuller, the Court of Appeal also set out the contextual approach, at paras. 20-23, as follows:

20 When hearing a motion to set aside a registrar's order dismissing an action for delay, a judge must consider and weigh the following four well-known factors: the length of the litigation delay and whether the plaintiff has provided an adequate explanation for it; whether the failure to meet the mandated time limits was due to inadvertence; whether the motion to set aside the dismissal order was brought promptly; and whether the delay has prejudiced the defendant: Habib v. Mucaj, 2012 ONCA 880, 31 C.P.C. (7th) 1, at para. 5; Hamilton (City) v. Svedas Koyanagi Architects Inc., 2010 ONCA 887, 328 D.L.R. (4th) 540, at para. 22.

21 Requiring a party moving to set aside the order dismissing its action for delay to satisfy each of the four factors is too rigid an approach. That approach, derived from Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80 (Ont. S.C.), at para. 41, rev’d on other grounds (2002), 48 C.P.C. (5th) 93 (Ont. Div. Ct.), was overruled in Scaini v. Prochnicki, 2007 ONCA 63, 85 O.R. (3d) 179. See Marché D'Alimentation Denis Theriault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695, 286 D.L.R. (4th) 487, at para. 20. Instead, the judge must adopt an overall contextual approach and, as well, take factors unique to the case into consideration. The factors are not an end in themselves. Rule 37.14(2) requires that a judge arrive at a just result in the particular circumstances of the case: Scaini, at paras. 23-24.

22 Some of the later authorities from this court have applied a two-part test that is conjunctive, requiring a plaintiff both to provide an acceptable explanation for the delay and to show that the defendant would suffer no non-compensable prejudice if the action were allowed to proceed: see e.g. Kara v. Arnold, 2014 ONCA 871, [2014] O.J. No. 5818, at para. 8. This test emerged in the context of the similar consideration of whether an action should be dismissed for delay following a status hearing under the old rule 48.14(13).

23 As Blair J.A. stated on behalf of the court in Kara, at para.13:

[L]ittle is to be gained by debating whether there is a bright line between the "contextual approach" [enunciated in Scaini] and the approach enunciated in later authorities such as Faris and 1196158 Ontario Inc. v. 6274013 Canada Ltd.

Neither the four-factor approach nor the two-part test provides an exhaustive list of considerations. Regardless of which is followed, all of the circumstances of the case must be considered in order to arrive at a just result: see e.g. Hamilton (City), at paras. 22-23; Marché, at para. 20; Finlay, at paras. 27-30; Kara, at paras. 13-15. Furthermore, it is not only the plaintiff's conduct that must be considered. While the plaintiff bears primary responsibility for the conduct of the action, the defendant's conduct in the litigation is a relevant circumstance: see Aguas v. Rivard Estate, 2011 ONCA 494, 107 O.R. (3d) 142, at paras. 18-19, 21.

[38] Micallef v. Dodig (2009), 2009 CanLII 72091 (ON SCDC), 256 O.A.C. 342 (Ont. Div. Ct.), involved an appeal from a Master’s refusal to set aside an order of the registrar which dismissed the Plaintiff’s action for delay. The Divisional Court applied the contextual approach, at paras. 18, 29-33, 35, as follows:

18 In considering whether or not to set aside the registrar's order, the Master recognized that, as a result of the decision of the Court of Appeal in Scaini v. Prochnicki (2007), 2007 ONCA 63, 85 O.R. (3d) 179, he was obliged to consider and weigh all relevant factors to determine the order that was just in the circumstances of the particular case, and that the analysis must be contextual in order to permit the court to make the order that is just. In applying this test, he placed primary, if not exclusive emphasis on the four factors mention by Master Dash in Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80, namely, in the language of the decision: (i) an explanation of the litigation delay, (ii) inadvertence in missing the deadline, (iii) the motion is brought promptly, and (iv) no prejudice to the defendant.

29 No reader of the judgment of Master Glustein could fail to be impressed by his thoughtful, careful and learned discussion of this issue. Nonetheless, I am of the view that he fell into error.

30 Without doubt the Master understood that the issue under consideration involved more than a rote application of a four part test. He understood that his analysis must be contextual, and that it was necessary to weigh all relevant factors to make an order that is just in the circumstances of the case. But I am of the view, nonetheless, that he failed to look at the matter in context, other than the context of Case Management, and as a result, he did not make the order that is just.

31 The Master did thoroughly examine the four so-called Reid factors, and concluded that the absence of prejudice was outweighed by the insufficiently explained delay, and that the motion should be dismissed. Only then did he turn his mind to an examination of the context. When he did this, he concluded that the fact that the case was subject to case management supported his conclusion, and that there was no merit to the plaintiff's argument that the defendant was acting improperly in resisting the motion. What he did not do was to step back and answer the ultimate question that resides at the core of the exercise: what order would do justice in all of the circumstances. Had he done so, I am confident that he would have come to a different decision.

32 In the end, this case involves:

▪ a plaintiff who apparently suffered serious and permanent injury as a result of a motor vehicle accident with the defendant Dodig

▪ a series of lawyers acting for the plaintiff who through their unprofessional conduct, and through no fault of the plaintiff, missed a litigation deadline that was neither occasioned by inadvertence nor adequately explained, and occasioned unconscionable delay in bringing on this motion (I reiterate that I leave aside for the moment the effect of my determination of the bankruptcy stay issue)

▪ a defendant who went bankrupt immediately after being served with the claim, who never notified his insurer of the accident, who was not served personally with the claim and who has never been located by the plaintiff or ING

▪ an insurer that was notified of the accident by the plaintiff, albeit imperfectly, that waited four and a half years to add itself as a party, that was then prepared to proceed to trial, and that had actually served a statement of defence and a jury notice, and that had scheduled discoveries

▪ a complete absence of prejudice to ING

33 Despite the importance of moving cases forward expeditiously, these circumstances cry out for relief. I agree with the Master that lack of prejudice is not a determinative factor, but I am equally of the view that the absence of prejudice should not too easily be swept aside in the name of efficiency and finality.

35 In this case, as I have already noted, the Master correctly stated, in accordance with Scaini v. Prochnicki, that a court asked to set aside a registrar's order dismissing a claim under Rule 77.08 must consider and weigh all relevant factors to determine the order that is just in the circumstances of the particular case, that the analysis must be contextual to permit the court to make an order that is just, and that among the factors to be considered are: an explanation of the litigation delay; inadvertence in missing the deadline; whether the motion was brought promptly; and whether there was prejudice to the defendant. I am of the view that although the Master addressed these factors with care, his failure to address the ultimate question of what order would do justice in all of the circumstances discloses a palpable and overriding error in the exercise of his discretion.

Part 4 – Parties’ Positions and Analysis

A. The length of the litigation delay and the explanation for the delay

[39] The length of the delay in this matter depends on the date from which the delay is calculated. The Defendant submits that the delay is calculated from the date on which Watson became aware of Hourigan J.’s Endorsement in October 2011, amounting to a delay of just over six years from October 2011 to November 2017, when the motion was served. Alternatively, the starting point is the dismissal order on June 1, 2012, and approximately five and a half years have elapsed between the dismissal order and when the motion was served.

[40] As noted above, Reid requires the court to consider an explanation for delay from the institution of the action until the deadline for setting the action down for trial. In that decision, however, the court also addressed delay after the action was dismissed: at para. 60. Other decisions have also considered delay both before and after the dismissal order in assessing this criterion (see Finlay v. Van Paassen, 2010 ONCA 204, 101 O.R. (3d) 390, at paras. 18-24; H.B. Fuller, at para. 32; Wellwood v. Ontario Provincial Police, 2010 ONCA 386, 102 O.R. (3d) 555, at paras. 37-51; Marché D’Alimentation Denis Thériault Ltée. v. Giant Tiger Stores Ltd., 2007 ONCA 695, 87 O.R. (3d) 660, at para. 13; Armstrong v. McCall (2006), 2006 CanLII 17248 (ON CA), 28 C.P.C. (6^th) 12 (Ont. C.A.), at para. 6). Conduct after the dismissal is also relevant to the Plaintiff’s intention in advancing or not advancing the litigation, and whether the Plaintiff’s explanation for the delay is satisfactory (see e.g. Prescott v. Barbon, 2018 ONCA 504, 141 O.R. (3d) 616, at para. 31).

[41] The court is therefore required to consider all of the delay, both before and after the dismissal of the action, in assessing the first Reid factor. Which period of delay is most relevant may differ based on the factual context; for instance, where the motion to set aside the dismissal is brought very promptly within a short period of time after the dismissal, the delay prior to the dismissal may become more relevant. Conversely, where there is no significant delay prior to the dismissal, but a long period of time between the dismissal and the motion to set aside that dismissal, the period after the dismissal may require more consideration.

[42] In this case, the Defendant acknowledges that up to October 2011, there had not been any inordinate delay. Each party had taken more time than the Rules permit to perform some tasks, yet in August 2011 there was a consent to set the matter down for trial and the issue of delay had not been raised. This is acknowledged in the Defendant’s Factum, at paras. 43-44, wherein the Defendant’s position is that the primary focus on the litigation delay the court should be concerned with in this case is the time period between October 2011 ­(when Watson received Hourigan J.’s decision rejecting the consent order) and November 16, 2017 ­(the date on which the motion to set aside the dismissal order was served).

[43] I am of the view that any delay prior to October 2011 is not relevant to my determination, given that the Defendant consented to the matter being set down for trial in August 2011 with no discussion of delay. Further, both parties exceeded timelines in the Rules in the period prior to August 2011. Any delay before October 2011 was reasonable in the overall context of the litigation. The matter had progressed to the point that it was ready to be set down for trial in the period from January 21, 2009 ­(when the Claim was issued), to August 2011.

[44] Calculating the delay as starting from October 2011 or June 2012 and not from an earlier date is consistent with the case law that supports that counsel should not be required to justify their conduct in the litigation on a week-by-week or month-to-month basis; rather, the Court should look at the overall conduct of the litigation. (See Carioca’s Import and Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592, 128 O.R. (3d) 143, at para. 46; Tarion Warranty Corporation v. 1398796 Ontario Inc., 2017 ONSC 1742, at para. 22; and Goldman v. Pace, 2017 ONSC 1797, at para. 5.)

[45] Before I turn to the positions of the parties on this first factor, it is important to note that the explanation for litigation delay must be “reasonable, acceptable or satisfactory” as set out in Kupets v. Bonavista Pools Limited, 2015 ONSC 7348 (Div. Ct.), which involved a consideration of delay in the context of an appeal from a Master’s order that dismissed an action for delay following a status hearing. The Divisional Court, at para. 18, provides as follows:

[18] The Master set out the test to be applied at para. 5 of her endorsement. There is language in the paragraph that suggests she imposed a higher standard of proof on the appellant than she should have. She stated that the plaintiffs had an onus to provide “an acceptable or cogent explanation for the delay” (emphasis added). The Court of Appeal has used the language of reasonable, acceptable or satisfactory explanation (Carioca’s at para. 45), not a “cogent” explanation.

a) The Moving Party’s Position

[46] A brief summary of the moving party’s position on delay is as follows:

i) None of the litigation delay resulted from a deliberate decision to not move the action forward to trial. The Plaintiff always intended to proceed with the action to trial.

ii) The explanation for the delay is that the Plaintiff’s counsel, Watson, was preoccupied with medical/health issues and did not take steps to set the action down for trial upon receipt of the status notice.

iii) Watson misled the Plaintiff to believe the action was extant, and that his case was awaiting the appointment of a trial judge.

iv) All parties play a part in moving actions forward and therefore the conduct of all parties in relation to the litigation, including the Defendant’s conduct, is relevant in considering the delay.

b) Responding Party’s Position

[47] The Defendant’s position on delay is briefly summarized as follows:

i) Watson was able to move the action forward in a completely normal and routine manner from the time the action was commenced on January 21, 2009, up to October 2011 when he received Hourigan J.’s decision. The Defendant’s position is that this must be considered, given that the tragedy that struck Watson and his family occurred in 2006.

ii) The medical evidence adduced by Watson does not sufficiently correlate a link between issues he faced in his personal life and their effect on the decisions he made in his legal practice during the period of delay. The Defendant specifically references that there was no evidence provided by Watson of other reported LawPRO insurance claims, potential or actual, which might support the conclusion that his legal practice was broadly affected by issues related to his personal life during the delay period.

iii) The Defendant’s position is that there are limitations in the Guscott report and House report, which were two medical reports Watson provided. (The two reports will be discussed in detail below, as will the Defendant’s submissions concerning the reports.)

c. Analysis

[48] In my view, the Plaintiff’s uncontested evidence demonstrates that he had maintained an unwavering intention to pursue this action to be determined on its merits at trial.

[49] On September 6, 2011, the Plaintiff sent Watson email correspondence to request an update on Watson’s progress in setting the matter down for trial. Watson advised him by email on September 10, 2011, that he had obtained the Defendant’s counsel’s “consent to a court order that would grant everyone permission to deliver the amended pleadings and to allow you to ‘set down’ the lawsuit for trial without further formality.” Watson also advised that the order had been submitted to the court weeks ago, “over the counter”.

[50] Sometime after this exchange, the Plaintiff met with Watson in person. Watson advised the Plaintiff that there was no use in the Plaintiff contacting Watson again to follow up, as Watson would reach out to him when a judge had selected the Plaintiff’s case for trial. Watson advised the Plaintiff that it could be several years before the trial was heard, as a result of limited judicial availability.

[51] The Plaintiff did contact Watson several times thereafter, including on February 24 and June 3, 2012, both times by email correspondence. When the Plaintiff received no response from Watson, the Plaintiff did not contact him again for some time. The Plaintiff’s evidence is that he had no legal background or experience with litigation or court proceedings, and trusted his legal counsel. His legal counsel had advised him that there would be significant delay until the trial could proceed.

[52] Having received no response from Watson for three years, the Plaintiff reached out to Watson again on August 11 and December 6, 2015, both times by email, expressing serious concern about the delay while waiting for a judge to select his case for trial. Watson never responded to the Plaintiff’s correspondence.

[53] On the basis of Watson’s prior advice to him, the Plaintiff still believed that the action was still active and awaiting selection of a trial judge. As a result, the Plaintiff did not contact Watson again. The Plaintiff believed Watson would contact him once a trial date was set.

[54] The Plaintiff did not become aware of the existence of Hourigan J.’s Endorsement, the Status Notice, or the Dismissal Order until K.M. provided him with copies of same after Mr. Silver was appointed as counsel to Watson by his professional indemnity insurer.

[55] The Plaintiff has new counsel–Mark Arnold of Gardiner Miller Arnold LLP–who is prepared to assume carriage of the trial in an expeditious manner should the action be restored.

[56] Based on the above evidence, I find that the Plaintiff always intended to pursue this action to trial. He trusted his lawyer. The Plaintiff was told it would take significant time for the matter to be called for trial. He had no reason not to rely on Watson’s advice. From time to time, the Plaintiff made efforts to reach out to Watson. It is true the Plaintiff did not take such specific action as calling the Law Society or a partner at Mr. Watson’s firm. However, the failure to do so is understandable, given what Watson had told the Plaintiff about anticipated delay.

[57] The Defendant submits that the Plaintiff, although not primarily responsible for the delay, is not wholly excused from contributing to some of the delay. The Defendant argues that the Plaintiff did not take proactive steps to inquire of Watson in the period from 2012 to 2017. The Defendant asserts that emailing twice in 2012 and twice in 2015 was insufficient, particularly in light of Watson’s non-responsiveness. As set out above, I disagree. The Plaintiff trusted his lawyer. His lawyer had told him it could take several years for a judge to be available for the trial and, as the Plaintiff states in his Affidavit, Watson seemed dismissive of him when he met face to face with him in 2011. According to the Plaintiff, Watson told him that there was no use in him contacting Watson again. Watson would contact him when a judge was selected.

[58] The Defendant further submits that because the Plaintiff is a dentist, he is part of a regulated college and is not an unsophisticated party. He would have and should have known that he had recourse available to him. I am unable to draw any connection between the fact that the Plaintiff is a dentist and any knowledge he might have about recourses available to him. The Plaintiff’s uncontroverted evidence was that he had no legal background or experience with litigation or court proceedings. The Plaintiff’s trust in Watson explains why he did not call a senior partner at Watson’s firm or contact a regulatory body.

[59] In terms of the explanation for the delay, discussed further below, I have carefully considered Watson’s two Affidavits, including the Guscott report and the House report, and find that Watson has provided a reasonable, acceptable and satisfactory explanation for the delay. (See Kupets.) I also find that Watson has established a link between his health/medical problems and his inability to move this matter forward. The necessity of this link is mentioned in Chrisjohn v. Riley Estate, 2015 ONCA 713, 391 D.L.R. (4^th) 695, at para. 25.

[60] In Watson’s first Affidavit sworn March 12, 2018, he provided the following explanation for his not moving the matter forward between 2011 and 2017:

1. His daughter died in a motor vehicle/pedestrian accident on February 13, 2006, at the age of 19. Watson described that he has not yet recovered from this traumatic event.

2. As a result of the loss of his daughter, Watson described that he suffered recurrent bouts of severe grief and major depression, which have impacted all aspect of his life, including his work.

3. Watson described that he felt continuously anxious and unmotivated and experienced difficulty completing tasks and concentrating for prolonged periods of time. He slept poorly, or sometimes not at all, and had very little energy.

4. Dr. Richard Guscott, a psychiatrist, examined Watson on March 10, 2011, for the purposes of obtaining an independent medical report for a lawsuit commenced relating to his daughter’s death.

5. He has taken anti-depressant medication and has sought counselling from Dr. Stephen Swallow and Dr. Susan Williams at various times since 2011. He has declined further treatment as he struggles to motivate himself to deal with the ongoing grief and strain. He states that the grief and strain have caused immense challenges in his work and in his relationships with others. He has had difficulty taking steps to improve his situation and largely avoids dealing with his issues.

6. He also has diabetes and hypertension and was in a serious accident in December 2015 that resulted in his suffering recurring infections, pain and swelling until July 2016.

7. He describes that he struggled to manage his practice, often avoiding issues instead of fixing them.

8. He states that in or around October 2011, he experienced significant difficulty working in general, which included difficulty attempting to rectify the filing of the trial record in this action.

[61] In his Affidavit sworn May 30, 2018, Watson states the following:

1. Specifically, beginning in or about October 2011, he experienced significant difficulty working as a result of his health issues. As a result, he did not take any steps to rectify the issue of filing the trial record after becoming aware of Hourigan J.’s Endorsement.

2. He was so overwhelmed by his health issues that he inadvertently omitted to take steps to have the action set down for trial within 90 days after receipt of the Status Notice on or about September 28, 2011.

[62] Watson’s explanation is supported by Dr. Guscott’s report. Dr. Guscott saw Watson on March 10, 2011, and his report is dated May 16, 2011. Key components of the report related to this motion are as follows:

1. Watson developed complicated grief/major depressive disorder. It has been over five years since his loss, and he is highly symptomatic with grief and depression. He requires psychiatric and psychological treatment. Given the duration of his symptoms, his prognosis is guarded to poor.

2. After the accident, Watson reported that he thought he managed at work fairly well.

3. At the time of the examination, Watson stated that he was getting behind at work, which was very out of character for him. He was not looking after his accounts receivable and felt that he was in a huge hole. The invoices had been sent out but he was not chasing them.

4. Watson described his mood as depressed. He felt sad all the time. He stated that on the other hand he always thought he was doing well in terms of his functioning. However, in the past year, prior to the examination, he thought he was doing poorly at work.

5. He described his sleep as disturbed and described that he wakes up thinking about how far behind he is at work and he does not want to go back to work.

6. Watson reported that he is chronically anxious and is worried that he will end up on disability. His senior partner at work has helped to discuss the difficulties that Watson is having with the other lawyers.

7. Watson describes that he had too much work to do. He states that he can make decisions at work. He tries to make sure his anger does not interfere with his decision-making with his clients.

8. Watson described problems with concentration, focus and memory.

9. Watson is diagnosed with complicated grief/major depressive disorder. His global assessment of functioning score was approximately 45-50. A score of 50 is given when there are severe symptoms or severe impairments in social, occupational or school functioning.

[63] On p. 8 of Dr. Guscott’s report, he describes Watson as follows:

Mr. Watson’s functioning in various domains has been challenged by his loss. He is having difficulty in the workplace, his marriage has been impacted, his family functioning has been adversely impacted, and his social life has been negatively impacted. His overall enjoyment of life is much diminished to the point of being nonexistent and he is mostly hopeless about his future. He feels useless and worthless and hopeless and helpless. He feels diminished as a partner and, as a parent to his surviving daughter Allison.

In my opinion, Mr. Watson’s psychiatric conditions are directly attributable to the loss of his daughter Heather in the motor vehicle/pedestrian accident of February 16, 2006.

[64] Dr. Sheilagh House, Watson’s family doctor, prepared a report dated January 15, 2018. The key components of this report related to this motion are as follows:

1. Watson suffers from diabetes, hypertension, dyslipidemia and depression.

2. Following the death of his daughter, Watson suffered severe grief and major depression. This impacted all aspects of his life, including his work. He lacked motivation, found it difficult to get things done and had a limited ability to concentrate for prolonged periods. He felt anxious and worried excessively.

3. Watson’s sleep was poor and his energy decreased. He continued to attend work, but was concerned regarding the impact this was having on his work and his ability to keep up with his work requirements.

4. He started anti-depression medication in 2011 and felt some improvement. He was not able to stay on the medication due to perceived side effects that were intolerable to him. Over the next several years he remained depressed, struggling daily with anxiety about his future, suffered poor self-esteem and had an inability to improve things. He saw Dr. Swallow in 2012. Watson declined further treatment with anti-depressant medication.

5. In December 2015, Watson was injured by slipping on ice. He suffered recurring infections, pain and swelling, which continued until July 2016.

6. In October 2016, Watson saw Dr. Swallow again. A relapse in his depressive disorder was noted. Watson again declined medication.

[65] In my view, the totality of the evidence demonstrates that Watson was suffering from grief and depression in 2011 and that this impacted his work. Watson states this. The reports support this. Watson described falling behind at his work and being unable to tackle problems.

[66] The Defendant argues that because Watson told Dr. Guscott he could make decisions at work, this means there is no link between his illness and his lack of action. In my view, this is incorrect. He could make decisions, but he was avoiding things and falling behind.

[67] In my view, the evidence supports that the depression was ongoing from 2011 to 2017. Watson describes that he struggled to manage his practice. Dr. House’s report confirms the depression continued past 2011. Dr. House confirms that in both 2012 and 2016, Watson sought assistance from Dr. Swallow.

[68] The Defendant argues that Watson has made a deliberate decision not to engage in further treatment, and therefore he cannot use his continued depression as a reasonable excuse for his delay. I disagree. I accept Watson’s explanation that he has struggled with motivating himself to deal with his grief and strain and has had difficulty taking steps to improve his situation.

[69] I find that Watson’s own evidence and the two reports correlate with Watson’s mental health issues and his work problems. This is described in both reports and by Watson himself.

[70] The Defendant argued that because there is no evidence that Watson has been reported to LawPRO in other files, potential or actual, this is indicative that his legal practice was not broadly affected by his mental health. Again, I disagree. Watson reported to Dr. Guscott that he was getting behind, and that his inattention to his receivables had put him in a hole. This was not file-specific but a general description of his practice. Watson told Dr. Guscott in 2011 that he was afraid he would have to go on disability. This is indicative of a practice-wide concern.

[71] The Defendant argues that Watson managed the file, more or less satisfactorily, until 2011, and that this is indicative that his depression did not affect his practice. I do not accept this assertion. Watson described that initially after his daughter’s death, he handled things at work. By 2011 this was not the case, given his description to Dr. Guscott. It is understandable that grief took an increasing toll on his life and his work.

[72] I disagree with the Defendant’s assertion that Watson’s feeling overwhelmed at work and being concerned over accounts receivable were not uncommon to many lawyers. Dr. Guscott’s report confirms that Watson was suffering significantly, far more than a lawyer dealing with the everyday strains of practice.

[73] Watson did try to deal with the file in the summer of 2011, this being in the time period immediately after Dr. Guscott’s report. The Defendant argues that this was indicative that Watson was able to take proactive steps. I disagree. Apparently, the consent he prepared was not in proper form. As Watson stated, he avoided tackling problems. The file became a “problem” when the consent was rejected and the status notice was issued.

[74] The Defendant points to Watson’s statement that he saw Dr. Williams for counselling since 2011 and that Dr. House did not state this in her report. In my view, nothing turns on this. Perhaps Dr. House did not know or did not include a note of this, or perhaps Watson was wrong in his time frame. The overwhelming evidence is that Watson was suffering significantly in 2011, his prognosis was poor and, from Watson’s own account and Dr. House’s report, his depression and suffering continued.

[75] There are two final points to consider on the factor of the explanation for the delay. First, the conduct of the Defendant is a consideration. This is referred to by the Ontario Court of Appeal in Carioca’s, at paras. 53-55, as follows:

[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. Any objection raised by the respondent had been met, and the parties were capable of complying with the requirements of rule 53.03 for the exchange of expert reports. Keeping an action that is ready for trial off the list is punitive rather than efficient. Second, the action sought to be restored had been summarily struck from the trial list by a judge’s order at an appearance where the parties were jointly seeking new dates for a pre-trial and trial, and not at the respondent’s request. 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.

[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.

[76] In Prescott, at para. 30, the Court of Appeal reemphasized that there is “no burden on the defendant to explain the delay or to move the action to trial” and “the primary responsibility for the progress of an action lies with the plaintiff”. The Defendant in that case could not be faulted for failing to file a notice of intent to defend or a statement of defence in the period leading up to the dismissal.

[77] The Defendant’s conduct is relevant at three stages of the test to set aside a motion for dismissal:

(a) The Defendant’s conduct is relevant on the whole of the case as part of the contextual approach: see H.B. Fuller, at para. 23; Carioca’s, at para. 55; Richardson v. Cuddy, 2017 ONSC 3186.

(b) The Defendant’s conduct may on some occasions be relevant in assessing the first Reid factor: Prescott, at para. 30; Kupets, at para. 4. This is especially so where a plaintiff encounters some resistance when trying to move the action along: Carioca’s, at para. 53. However, the Plaintiff bears the primary responsibility for the progress of the action.

(c) In the analysis of prejudice, the fourth Reid factor, a Defendant’s passivity or a “lack of display of any sense of urgency” in the litigation may undermine their claim of prejudice. This can include post-dismissal conduct, uncooperative conduct in moving the case forward, or failure to take steps to pursue or preserve claims during the proceedings prior to the dismissal: see Aguas v. Rivard Estate, 2011 ONCA 494, 107 O.R. (3d) 142, at paras. 18-21; Armstrong, at para. 26; Labelle v. Canada (Border Services Agency), 2016 ONCA 187, 346 O.A.C. 155, at paras. 23-28; Iacolucci et al v. TD Waterhouse Canada Inc. et al, 2018 ONSC 1027 (Div. Ct.), at paras. 78-83; Kupets, at para. 4; MDM Plastics Ltd. v. Vincor International Inc., 2015 ONCA 28, 124 O.R. (3d) 420, at paras. 32­­-39.

[78] At this stage, the starting point is that the plaintiff assumes carriage of moving the case forward. The Plaintiff does not suggest that the Defendant’s conduct leading up to the dismissal delayed the action and, as noted above, the action was moving along without inordinate delay before the Status Notice was received. In cross-examination of the Defendant, Plaintiff’s counsel questioned whether the Defendant or his lawyer at any point reached out to the Plaintiff or Watson about the Status Notice. The Defendant indicated that he believed the Plaintiff may have decided not to pursue the action, and he and his counsel were waiting to see if the case would be dismissed. In my view, the Defendant cannot be faulted for failing to reach out to the Plaintiff, either concerning the Status Notice or the Dismissal Order. Indeed, it would seem an unusual result and contrary to the adversarial system that the Defendant be obliged to discuss with the Plaintiff whether the Plaintiff wished to reinstate an action after its dismissal.

[79] The length of the delay is also relevant–whether it be five and a half years or six years and one month. There is jurisprudence where relief has been granted with a delay of this significance. In Chiarelli v. Wiens (2000), 2000 CanLII 3904 (ON CA), 46 O.R. (3d) 780 (C.A.), the Court of Appeal agreed with the motion decision to extend the time for service of a statement of claim approximately six years after the deadline for service. The motions judge had correctly identified that the court should be mainly concerned with the rights of the litigants, not the conduct of counsel. In Micallef, the Divisional Court set aside the registrar’s order for dismissal, even though five years and ten months elapsed between the dismissal order and the Master’s initial decision on the Motion to set the dismissal order aside.

[80] Overall, for all the reasons set out above, the moving party has satisfied the first criterion. There is evidence that the Plaintiff always intended to proceed with the case, and the Plaintiff’s reliance on Watson’s advice coupled with Watson’s extensive health and medical issues provides a reasonable, acceptable and satisfactory explanation for the delay. Before the dismissal order, there was no inordinate delay and steps were taken to move the action forward. While the period of delay between the dismissal and this motion is lengthy, both the jurisprudence and the context of the case demonstrate that this is not a bar to the Plaintiff’s claim.

B. Inadvertence in Missing the Deadline

[81] Inadvertence in missing the deadline has been described in Reid, at paras. 2, 41. As noted above, this second criterion requires the Plaintiff or his solicitor to provide evidence explaining that they always intended to pursue the action, but failed due to inadvertence.

a) The Moving Party’s Position

[82] The moving party’s position is summarized as follows:

1. The Plaintiff always wanted to move the matter forward. Despite these instructions from his client, Watson omitted to take any steps to rectify the issue by filing the trial record within 90 days of the Status Notice or at any time thereafter. A litigant should not be faulted for the delays caused by counsel, particularly when the litigant provides express instructions to move the matter forward. The moving party references Finlay, at para. 33, which provides as follows:

[33] In my view, 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. As Sharpe J.A. noted in Marché, at para. 28, “The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor.” Sharpe J.A. went on to recognize that the situation may be different where the lawyer's conduct is not inadvertent but deliberate. In the case before us, however, the conduct of Finlay's law firm was not deliberate, which affords a further basis to call into question whether the motion judge's decision was just: see Chiarelli v. Weins 2000 CanLII 3904 (ON CA), [2000 CarswellOnt 280 (Ont. C.A.)]; Gao v. De Keyser, [2008] O.J. No. 2225, 61 C.P.C. (6th) 89 (Ont. Div. Ct.), at para. 27.

2. The moving party submits that Watson’s health concerns and practice management issues should not be visited on the Plaintiff who at all material times instructed Watson to protect his interests and move the action toward trial.

3. In cases where counsel’s mental health issues occasioned an administrative dismissal of the action or caused litigation delay, courts have held that this conduct does not demonstrate a “deliberate” intention on the part of the lawyer not to prosecute the action.

4. The moving party relies on three cases in this regard: Facchini v. Rosen et al. (June 7, 2017), CV-10-01445 (Ont. S.C.), Sproat J.; Iacolucci, at paras. 49-50, 54, 88; and Kerr v. CIBC World Markets Inc., 2013 ONSC 7685, 316 O.A.C. 192 (Div. Ct.), at paras. 68-70.

b) The Defendant’s Position

[83] The Defendant’s position on this factor is summarized as follows:

1. The conduct of Watson during the period of delay was not born out of mere inadvertence. Rather, his conduct and failure to act arose from his own intentional conduct and he was aware of the consequences. The Defendant relies on the definition of inadvertence found in Lico v. Griffith (1996), 1996 CanLII 7990 (ON SC), 28 O.R. (3d) 688, at paras. 40-43 (C.J.), which provide as follows:

40 Having investigated the meaning of the words “inadvertence” and “inadvertent” I proffer the following definition found in the Shorter Oxford English Dictionary:

“The fact or habit of being inadvertent; failure to observe or pay attention; inattention; not properly attentive; inobservant; negligent.”

41 In Black's Law Dictionary 5th ed. inadvertence is defined as:

“Heedlessness; lack of attention; want of care; failure of a person to pay careful and prudent attention to the progress of a negotiation or a proceeding in court by which rights may be affected. Used chiefly in statutory and rule enumerations of the grounds on which a judgment or decree may be vacated or set aside; as, ‘mistake, inadvertence, surprise, or excusable neglect.’”

42 I take the meaning of “inadvertence” to essentially mean negligence. In these reasons I make no legal determination on the actions of Mr. Sondola. I cannot because no solicitor negligence claim is presently before me for determination. Furthermore, evidence presented before the Court by way of an affidavit from Mr. Sondola indicates that Mr. Sondola's neurological health at the material time may have been poor. However, even if Mr. Sondola was negligent in not filing the Statement of Claim in this proceeding, that is still not a factor for this Court to consider in deciding against granting an extension of time as set out in Crook v. Nugent supra.

43 In reviewing the case law, I derive the following propositions that are applicable to the present case. Firstly, the Court may order time for filing a Statement of Claim be extended where it will advance the just resolution of the dispute, without prejudice or unfairness to one or both of the parties. Secondly, the assessment of whether an extension of time is appropriate on this principle will turn on the facts of each individual case. Thirdly, a plaintiff's solicitor's inadvertence in not issuing or serving the Statement of Claim, should not undermine the just resolution of the dispute on its merits, where the defendant's ability to defend the proceeding has not been jeopardized by the delay caused by the plaintiff's solicitor.

2. Watson was on notice during the period of delay and failed to act, even though he knew or ought to have known that he had to act. He read the Status Notice. He received the Dismissal Order, and he received four emails from the Plaintiff (two in 2012 and two in 2015).

3. The Defendant relies on the case of Marché as to the distinction between solicitor inadvertence and deliberate solicitor conduct. Marché, at paras. 27-33, provides as follows:

[27] The Master and the Divisional Court disagreed as to whether the solicitor's conduct constituted “inadvertence” for the purposes of the second branch of the test. The Master, focusing on the conduct of the solicitor, held that it was not. The Divisional Court judge, focusing on the fact that the client believed that the action was proceeding to trial, held that the solicitor's neglect of the file should be considered inadvertent. I agree with the Master that, in light of the length of the delay and the fact that it was caused by the solicitor effectively abandoning the file, this is not a case where the failure to move the case along to trial can be considered as mere inadvertence.

[28] One important consideration is that the plaintiff will not be left without a remedy. I recognize here the need to ensure that adequate remedies are afforded where a right has been infringed. The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor: see e.g. Chiarelli v. Wiens (2000), 2000 CanLII 3904 (ON CA), 46 O.R. (3d) 780 (Ont. C.A.) at para. 9.

[29] However, this calculus implicitly assumes that the court is left with a stark choice between defeating the client's rights and forcing the opposite party to defend the case on its merits. That assumption is faulty where, as in this case, the solicitor's conduct is not mere inadvertence, but amounts to conduct very likely to expose the solicitor to liability to the client. When the solicitor is exposed in this way, the choice is different; refusing the client an indulgence for delay will not necessarily deny the client a legal remedy.

[30] In these circumstances, and contrary to the view expressed by the Divisional Court judge, the Master properly distinguished inadvertence from negligence. Leaving the Registrar's order in place would not necessarily deprive the respondents of a remedy. It was appropriate on these facts for the Master to tell the respondents that they should “consider what other remedies are available to them”.

[31] A second consideration is that the nature of the delay and the solicitors' conduct in this case amount to more than that kind of lapse or inadvertent mistake that the legal system can countenance. We should opt for a resolution that discourages this type of conduct which undermines the important value of having disputes resolved in a timely fashion. The decision of the Master sends the right message and provides appropriate incentives to those involved in the civil justice system.

[32] Moreover, excusing a delay of this magnitude and gravity risks undermining public confidence in the administration of justice. Lawyers who fail to serve their clients threaten public confidence in the administration of justice. The legal profession itself has recognized this danger: Commentary to rule 2.01 of the Law Society of Upper Canada's Rules of Professional Conduct states, “A lawyer who is incompetent does the client a disservice, brings discredit to the profession, and may bring the administration of justice into disrepute.” [Emphasis added.] There is a risk that the public would perceive disregarding the solicitor's conduct in the circumstances of this case as the legal system protecting its own. Excusing a delay of this kind would [throw] into question the willingness of the courts to live up to the stated goal of timely justice.

[33] Overall, reinstating this action would excuse a five-year delay after the dismissal of an action, explained only by the fact that a lawyer formed “a deliberate intention not to advance the litigation toward trial” and “put the file in abeyance”. That would risk undermining the integrity and repute of the administration of justice.

4. The Defendant submits that Watson effectively abandoned the Plaintiff’s case. He formed a deliberate intention to not act on behalf of his client. The Defendant argues Watson’s conduct cannot be mere inadvertence or mere inattention, particularly in light of the fact that he continued to work at the law firm throughout the period of delay and that there is no evidence that his difficulties impacted other files.

c) Analysis

[84] I find for the reasons as outlined above that the Plaintiff always intended to proceed with his action to trial and that he bears no responsibility for the delay. As set out in Finlay, at para. 33, an innocent client should not suffer the loss of the right to proceed by reason of inadvertence of his counsel.

[85] I find that Watson’s mental health issues led him to inadvertently not proceed to set the matter down for trial. He did not put the file in abeyance. He did not deliberately decide not to proceed. His mental health status rendered him unable to deal with some issues, this case being one of them. As set out above, I have found that his inadvertence was not limited to this file. His work fell behind. He could not deal with his receivables. He had a lack of attention or want of care. He failed to pay careful attention.

[86] The Court of Appeal in Prescott, at para. 39, cites Nadarajah v. Lad, 2015 ONSC 4626, 336 O.A.C. 297 (Div. Ct.), at para. 32, for the proposition that inadvertence exists on a “continuum of conduct”:

32 There is a continuum of conduct under this umbrella. If counsel deliberately did not do something for tactical or strategic reasons and a dismissal order was the result, this would be a strong factor weighing against setting aside the dismissal order. On the other end of the continuum is a slight misstep or oversight in otherwise conscientious conduct, such that a deadline gets missed notwithstanding the existence of an efficient tickler system and careful supervision of it. No individual and no system can be perfect and mistakes can sometimes occur. Such circumstances would be inadvertent at the other end of the continuum from deliberate conduct and would weigh strongly towards granting relief to the plaintiff. However, within the spectrum of inadvertent conduct there are vast differences. The conduct of the plaintiff's counsel in this case, while not deliberate, was egregious. It is at the opposite end of the spectrum from inadvertent conduct that could be considered to be a mere slip. As such, in weighing all of the factors, this factor would tend to weigh against the plaintiff notwithstanding that the conduct itself was inadvertent, as opposed to deliberate. The weighing process is qualitative, not quantitative. It is not a matter of how many of the four tests are satisfied by the plaintiff, but the relative merits and weaknesses of the circumstances in each of the categories.

[87] Taking up this position, on the far end of the spectrum of conduct, “deliberate” conduct has also been described as including “stubbornly disobedient behaviour” (Prescott v. Barbon, 2017 ONSC 1048, 65 C.C.L.I. (5th) 87, at para. 39, aff’d in Prescott v. Barbon, 2018 ONCA 504, 141 O.R. (3d) 616, at para. 41) or deliberately flouting the Rules of Civil Procedure or orders of the court (Polihronakos v. Anselm, 2015 ONSC 4326, at para. 28). The effective abandonment of a file, described in Marché above, at para. 28, would fall on this side of the spectrum, but would not be as severe as, say, stubbornly disobedient behaviour. As an example of conduct that may fall on the far side of inadvertence, consider cases where the status notice and dismissal order are not sent to the Plaintiff or their counsel, through no fault of their own (see Aguas). It is generally unhelpful to define inadvertent conduct as “negligent,” given that this is a legal concept and doesn’t account for the continuum described above (see Nadarajah, at para. 29).

[88] Here, the evidence shows that Watson felt “overwhelmed” by his medical problems, was unmotivated, and had difficulty concentrating and completing tasks. Dr. Guscott described Watson as suffering from complicated grief/major depressive disorder. Such evidence falls far more neatly on the side of inadvertence on the continuum than on the side of deliberate conduct. Other decisions have also found that mental health issues may result in inadvertent conduct (see Ross v. Hertz Canada, 2013 ONSC 1797, 21 C.C.L.I. (5^th) 131, at paras. 23-27; Barrey v. Amsterdam and Dashwood, 2018 ONSC 960, at para. 48; Iacolucci, at para. 58; Facchini).

[89] This case is distinguishable from Marché. In Marché, the Master found that the solicitor had put the file in abeyance. The Court of Appeal saw no reason to disagree with this finding. There was no reference in Marché to the solicitor suffering from any personal problems or mental health problems.

[90] I do not accept the Defendant’s argument that because Watson could make some decisions in his practice and because he did not produce evidence of other LawPRO matters, his actions are deliberate. I accept Watson’s evidence and the reports of Dr. Guscott and Dr. House and find that his ability to manage his practice was impaired by grief and depression.

[91] In Marché, the Court of Appeal referenced that the Plaintiff would not be without a remedy. The Defendant submits that in the case before me, the Plaintiff could sue his counsel. In Marché this was a significant factor, given that the Court of Appeal agreed with the Master that a reasonable explanation for the delay had not been provided by the party or counsel, and that the counsel had acted deliberately. I have found that in this case, there is a reasonable explanation and that the failure to act was inadvertent. Further, in the more recent decision of Finlay, at para. 32, the Court of Appeal determined that “[s]peculation about whether a party has a lawsuit against its own lawyer, or the potential success of that lawsuit, should not inform the court’s analysis of whether the registrar’s dismissal order ought to be set aside.” In my view, although this Plaintiff may have a remedy against Mr. Watson, the overriding policy consideration in this case is that the matter be determined on the merits between the parties.

[92] The Plaintiff’s success on this criterion would not bring the administration of justice into disrepute or be seen as the judicial system protecting its own. As noted in Marché, at para. 28, innocent clients should not suffer irrevocable loss of the right to proceed due to their solicitor’s negligence. Here, the court is not protecting Watson; rather, the judicial system is protecting the innocent Plaintiff, who not only was not remiss in contacting his lawyer several times about the action and intended to pursue the case to trial, but should also not suffer the “irrevocable loss” of his rights as a result of major health problems suffered by his solicitor.

C. Motion Brought Promptly following Appointment of LawPRO Counsel

a) The Moving Party’s Position

[93] LawPRO counsel was appointed in February 2017. LawPRO counsel argue that they moved promptly. Counsel made diligent efforts to contact Watson and then to have Watson obtain the significant medical evidence detailing his health issues for the purposes of explaining the litigation delay. The Notice of Motion was served on November 16, 2017. This is when Tonks and the Defendant became aware of LawPRO’s involvement and the moving party’s intention to bring this Motion.

b) The Defendant’s Position

[94] The Defendant’s position is that it would have been appropriate, in the circumstances of this case, for the Defendant to be put on notice immediately, or shortly thereafter, that LawPRO counsel was investigating the circumstances related to Watson’s conduct. The Defendant’s position is that during this period, the Defendant became further secure in his belief that there was ongoing and continued finality to the dismissal order.

c) Analysis re Motion Brought Promptly Criterion

[95] In Reid, the question on this third factor is whether the “plaintiff” moved to set aside the dismissal order as soon as it came to her attention. At paras. 66-69, the court then assessed both whether the plaintiff’s solicitors moved promptly and if the plaintiff herself moved promptly to set aside the dismissal. There, the plaintiff knew nothing about the status proceeding.

[96] In other decisions, different approaches have been taken toward whether a solicitor’s conduct or the plaintiff’s personal conduct is relevant. In Trajkovski v. Toronto Transit Commission, 2010 ONSC 4809, the court found that the motion was not brought promptly. There, the plaintiff did not know of the dismissal order, and LawPRO was appointed in 2009 to carry the motion. The court focussed on the plaintiff’s former solicitor’s actions, however, noting that he received the dismissal order two years prior but did not act on it. It is noteworthy that this was not necessarily fatal under the contextual analysis, and the dismissal order was nonetheless set aside in that case. (See, similarly, Polihronakos, at para. 39, where the court was not prepared to dismiss solely on the ground that the motion was not promptly appealed, particularly given that there was an explanation for the delay.)

[97] Both parties argue this case on the basis of whether K.M. moved promptly. If the relevant conduct is that of this LawPRO appointee, I find that the moving party did move promptly. It was reasonable for counsel to contact Watson and request, receive and review information from him before advising the Defendant’s counsel of the Motion. A decision as to whether to proceed with the Motion could not be made until counsel spoke with Watson and reviewed the medical evidence. It is not reasonable to require counsel to notify the Defendant’s counsel of a motion that might not have been brought absent ascertaining pertinent facts from Watson. Recalling that LawPRO only managed to contact Watson in June 2017 and received his medical records in September 2017, it was not unreasonable to serve the Notice of Motion in November 2017.

[98] The Plaintiff therefore also succeeds on this factor.

[99] While the parties only argued on the basis of K.M.’s conduct, it is worth noting that even if the parties had argued on whether Watson or the Plaintiff personally had moved promptly, this would not have changed the result in this case. If the relevant conduct was that of the Plaintiff, he also was not aware of the dismissal until K.M. provided this information in 2017, and the same analysis as the one detailed for K.M. applies to the Plaintiff personally. He therefore also moved promptly. If the relevant conduct is the conduct of the Plaintiff’s former counsel, Watson, I find that he did not move promptly. He received the Dismissal Order in 2012 and did not act. However, as in Polihronakos, given that there is an explanation for Watson’s delay, I would not dismiss this motion solely on Watson’s failure to move promptly in the context of this case.

D. Prejudice

[100] The criterion of prejudice is described in Reid, at paras. 4, 41. As noted above, the fourth factor requires the Plaintiff to show that the Defendant has not suffered significant prejudice. Prejudice is a key consideration on this motion: Finlay, at para. 28.

a) The Moving Party’s Position

[101] The moving party’s position that there is no prejudice to the Defendant is summarized as follows:

1. The Plaintiff has the onus to demonstrate that the Defendant will not suffer any significant prejudice occasioned by litigation delay to having a fair trial. If the Plaintiff satisfies this onus by rebutting the notional presumption of prejudice, the onus shifts to the Defendant to lead evidence of actual prejudice. A defendant cannot argue that there is an insufficient evidentiary basis to make a finding that he or she will suffer no prejudice if no evidence of actual prejudice is adduced. The moving party relies on Richards-Wilcox Door Systems Ltd. v. Ilsco of Canada Co., 2015 CarswellOnt 31 (S.C.), at para. 13, which provides as follows:

13 The onus is on the plaintiff to demonstrate that the defendants will not suffer prejudice if the action proceeds. If the plaintiff can meet this onus, then the defendants may attempt to establish actual prejudice by leading evidence to that effect. In this case, none of the defendants have led evidence of actual prejudice so the only issue is whether the plaintiff has rebutted the presumption of prejudice.

2. The moving party relies on Cobalt Capital CA Textile Investments, L.P. v. Pantziris, 2017 ONSC 4664, at paras. 29-30, as follows:

29. It is my view that the rule changes discussed earlier make it unnecessary to establish both “no prejudice” to the defendant, as well as, an acceptable explanation from the plaintiff for the delay.

30. Justice Faieta discussed the appropriate test in these terms:

23 The Appellant submits that the Master erred in finding that there was no prejudice to her if the action was to be reinstated. The Appellant submits that the Court of Appeal places the burden on the plaintiff to establish no prejudice and that the bald assertion of no prejudice provided by affidavit evidence is an insufficient basis to do so.

24 The Appellant relies upon Faris v. Eftimovski, 2013 ONCA 360, 363 D.L.R. (4th) 111, at para. 32:

The plain wording of rule 48.14(13) makes clear that the onus is on the plaintiff to demonstrate why the action should not be dismissed for delay. The test, as stated by the status hearing judge in the case at bar, requires the plaintiff to demonstrate that there was an acceptable explanation for the delay and establish that, if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice... [emphasis added]

25 The Appellant also relies upon Nissar v. Toronto Transit Commission, 2013 ONCA 361, 115 O.R. (3d) 713, at paras. 30-31:

In my view, it is preferable to place the onus on a plaintiff to explain the delay and satisfy the court that it would not be unfairly prejudicial for the defendant to have the action restored to the trial list. ...

Therefore, the applicable test is conjunctive: a plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation and that, if the action was allowed to proceed, the defendant would suffer no non-compensable prejudice. [emphasis added]

26 Neither Faris nor Nissar address the extent of affirmative evidence that must be adduced by the plaintiff. In my view, it is open to the plaintiff to baldly assert that there would be no prejudice to the defendant if the action were to proceed. In face of that position, it is open to defendant to counter such evidence. The defendant is best suited to identify and explain how her ability to defend the action has been prejudiced. Nevertheless, the burden rests on the plaintiff to demonstrate no prejudice. However, if the defendant chooses to file no evidence in face of an affidavit from the plaintiff which states that the defendant will not be prejudiced by the reinstatement of the action, then the defendant should not complain that the Master did not have a sufficient evidentiary basis to find that there was no prejudice to the defendant in the reinstatement of the action.

27 In any event, in MDM Plastics Ltd. v. Vincor International Inc., 2015 ONCA 28, the Ontario Court of Appeal has taken a more flexible approach on the need for affirmative evidence to show that no prejudice will result from setting aside a dismissal. In MDM the Court stated that the plaintiff is not required to adduce affirmative evidence that the reinstatement of an action will not result in prejudice. Instead, the Court must consider all the circumstances in evaluating prejudice. The Court stated, at para. 32:

I do not read Wellwood as standing for the general proposition that the plaintiff must lead affirmative evidence to rebut a presumption of prejudice that arises from the passage of time in prosecuting an action or from the expiry of a limitation period. Rather, in evaluating the strength of the presumption of prejudice, the master or motion judge must consider all of the circumstances, including the defendant's conduct in the litigation.

28 For all of the above reasons, it is my view that the Master did not commit an error of law. It appears that, in accordance with Fuller, the Master took into account a variety of considerations, including the inadvertence of counsel that led to the administrative dismissal and the broader context of this action in arriving at a just result.

3. It is an error of law to mechanically apply the presumption of prejudice based on the passage of time. Prejudice is a question of fact in the particular circumstances of the case. The mere passage of time cannot be an insurmountable hurdle in determining prejudice. (See Carioca’s, at paras. 5, 49.)

4. The court must link the question of prejudice to whether a fair trial is still possible. (See H.B. Fuller, at paras. 28, 44.)

5. The presumption of prejudice has been rebutted. It is still possible for the Defendant to have a fair trial. The moving party has adduced uncontroverted evidence of the following:

i. All of the parties are available to testify;

ii. All relevant documents have been obtained and preserved;

iii. All relevant witnesses were examined for discovery. The transcripts from the discoveries have been ordered and are available for trial. The parties have completed all answers to undertakings; and

iv. The Defendant had timely notice of the claims and had every opportunity to preserve the evidence.

6. The Defendant has not filed any evidence to assert that his ability to have a fair trial has been impaired by litigation delay. The Defendant has not provided any details as to how the defence will be prejudiced by setting aside the Dismissal Order. The moving party relies on Chiarelli, at para. 14, which provides as follows:

[14] I make three observations in response to the Divisional Court's finding. First, the passages from the reasons of the motions judge have to be considered in their context. The motions judge was obviously unimpressed, as am I, with the defence's assertion of prejudice. The only allegation of prejudice in the material filed by the defence on the motion is the following very general statement in the affidavit of State Farm's claims adjuster:

It is my belief that the defence of this action has been seriously prejudiced due to the passage of time and the strong possibility that pre-accident and post-accident records and witnesses may not be available or that their recollections may not be accurate.

Although the onus remains on the plaintiffs to show that the defendant will not be prejudiced by an extension, in the face of such a general allegation, the plaintiffs cannot be expected to speculate on what witnesses or records might be relevant to the defence and then attempt to show that these witnesses and records are still available or that their unavailability will not cause prejudice. It seems to me that if the defence is seriously claiming that it will be prejudiced by an extension it has at least an evidentiary obligation to provide some details. The defence did not do that in this case.

7. The Defendant relies upon the principle of finality to argue that he will face financial uncertainty if the action is permitted to proceed. The Defendant claims it will interfere with his retirement plans. The moving party makes two arguments in response. First, the moving party acknowledged in his cross-examination that his financial uncertainty predates the motion and that he may not be in a position to retire in any event due to his ongoing debts for which he remains an undercharged bankrupt. Second, the moving party argues that economic prejudice arising from delay does not constitute prejudice within the meaning of the Reid test. Delay prejudice must relate to the Defendant’s ability to have a fair trial (see Remai Financial Corp. v. 562789 Saskatchewan Ltd. (1996), 1996 CanLII 7099 (SK QB), 151 Sask. R. 200 (Q.B.), at paras. 22-23, aff’d (September 23, 1997), 2640 (Sask. C.A.)).

8. The Defendant asserts health issues without providing medical documentation or any cogent evidence as to how any such issues would impair his ability to have a fair trial.

9. The Defendant asserts he has general memory loss, which he acknowledged in cross-examination could be alleviated by reviewing his discovery transcript before trial. The Court of Appeal has considered the availability of productions and transcripts of examinations for discovery as adequate to enable defendants to refresh their memories. (See Armstrong, at para. 25.)

b) The Defendant’s Position on Prejudice

[102] It is the Defendant’s position that substantial prejudice to the Defendant will occur if the Dismissal Order is set aside. A summary of the Defendant’s position is as follows:

1. With the present age of the Defendant, being 72 years of age, it is generally recognized that as time passes, memories fade. Even if documents are not lost, their significance becomes shrouded. Fairness requires allowing parties to plan their lives with the assumption that litigation timelines will be enforced. The Defendant relies on 1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544, 112 O.R. (3d) 67, at paras. 43-44, which provides as follows:

[43] The allegations made in the statement of claim in this case reach back many years, to a period earlier than the date of sale in 2005. In my view, it was open to the status hearing judge to find that as time went on, it would be more and more difficult to defend a claim that related to events that had transpired at least six years ago and that would be even more remote by the time a trial could be held. The more time that passes, the more difficult it is to defend the case. Memories fade and even if documents are not lost, their significance becomes shrouded.

[44] Another harm that flows from delay, properly relied on by the status hearing judge, is that it leaves the litigant with the claim hanging over its head in a kind of perpetual limbo. Fairness requires allowing parties to plan their lives on the assumption that, barring exceptional or unusual circumstances, litigation timelines will be enforced. “Litigants are entitled to have their disputes resolved quickly so that they can get on with their lives” and “[d]elay multiplies costs and breeds frustration and unfairness”: Marché d’Alimentation Denis Thériault Ltée, at para. 25; see, also, Hamilton (City), at para. 21. In my view, it was entirely proper for the status hearing judge to weigh in the balance the fact that the defendants would inevitably suffer some harm if, after more than five years and no significant movement by the plaintiff, they were forced to continue to face this contingent claim.

2. The Defendant has submitted that his memory has not improved with age and that he can be a bit slower or forgetful in remembering certain things. The events that gave rise to this action occurred ten years ago when the Defendant was 62. He was examined for discovery at the age of 65. As set out above, he is now 72. The Defendant asserts that it is commonly known that brain function does not get better with age, and that there are common changes to memory associated with aging.

3. In reference to Armstrong, the Defendant asserts that the consideration of the age of the witness is relevant to the determination of whether transcripts and documents can be used to refresh the Defendant’s memory. The Defendant asserts that inherent prejudice arising from the substantial passage of time cannot be compensated for on the basis of the Defendant, at his present age, having to study and memorize the transcripts.

4. The Defendant has suffered stress, anxiety and difficulty sleeping since receiving the motion and given the possibility of the action being revived. The Defendant asserts that the health effects of stress and anxiety related to the potential revival of this action, at the Defendant’s age, is actual prejudice.

5. The Defendant relies on the finality principle set out in Marché, at paras. 37-40, as follows:

[37] Finality, like the avoidance of unnecessary delay, is a central principle in the administration of justice. “The law rightly seeks a finality to litigation” and finality is “a compelling consideration”: Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, at paras. 18 and 19.

[38] When an action has been disposed of in favour of a party, that party's entitlement to rely on the finality principle grows stronger as the years pass. Even when the order dismissing the action was made for delay or default and not on the merits, and even when the party relying on the order could still defend itself despite the delay, it seems to me that at some point the interest in finality must trump the opposite party's plea for an indulgence. This is especially true where, as in the present case, the opposite party appears to have another remedy available.

[39] The delay in this case was inordinate. From the appellant's perspective, the respondents did absolutely nothing to move this file forward for more than five years, and before that, the respondents had proceeded in what could only be described as a desultory fashion for two and one-half years after commencing the action.

[40] I agree with the Master that, when viewed in the light of a delay of this magnitude, the security of the legal position obtained by the appellant becomes an important factor to consider. Five years after the action against it had been dismissed, the appellant was entitled to rest on the assurance that the judicial system had disposed of the respondents' claim once and for all.

The Defendant submits that this finality principle weighs in favor of the Defendant even if it is found that prejudice to the Defendant does not exist.

6. The Defendant states that he is on the verge of retirement. He has committed to spending more time with his wife, given her health concerns and age. Financial uncertainty may affect his retirement plans. He has suffered health effects such as stress and anxiety related to this motion and the potential of the action being revived. He may require treatment for the return of his prostate cancer.

7. The Defendant submits that the finality principle is aimed at protecting and safeguarding against the negative impacts arising from litigation on a party’s personal life after a substantial period of time has passed, and the party believed that the litigation was over. To set aside the Dismissal Order in this case risks overriding the fundamental objectives of the finality principle.

c) Analysis – Prejudice Criterion

[103] Some cases have held that a “presumption of prejudice can arise from the passage of time, such as the expiry of a limitation period”, though this does not necessitate that the Plaintiff provide affirmative evidence to rebut the presumption (H.B. Fuller, at para. 38). Recently, however, in Prescott, at para. 37, the Court of Appeal held that “[t]here is no need to resort to presumptions or inferences of prejudice. The question … is simply whether the interest in finality must trump the opposite party’s pleas for an indulgence.”

[104] The Court of Appeal, at para. 36, also noted that in considering the fourth factor of Reid, the Court must address:

(i) whether the appellants satisfied their onus to establish no significant actual prejudice to the respondents’ ability to defend the action as a result of the appellants’ delay; and

(ii) whether in light of the delay, the principle of finality and respondents’ reliance on the security of its position should nevertheless prevail. [Citations omitted.]

[105] In my view, even if there were a presumption of prejudice, the Plaintiff has rebutted that presumption that the Defendant will suffer any significant prejudice. There is also no actual prejudice. This is based on the facts of this case.

[106] The following are uncontroverted facts:

i. All parties are available to testify;

ii. All relevant documents have been obtained and preserved; and

iii. All witnesses were examined, and transcripts and undertaking are available.

[107] I do not accept the Defendant’s submission that his age or memory loss affect his ability to have a fair trial. With respect to his age, I am not prepared to rely on any general knowledge about brain function with aging. I have instead considered what this Defendant has stated both in his Affidavit and in his cross-examination.

[108] In his Affidavit, he has stated that he is not as physically fit as he was ten years ago. His memory has not got better with age. He has not been diagnosed with any physical or mental conditions by his doctor. He has noticed that he has not been as mentally agile as he used to be and can be a bit slower or forgetful in recollecting certain things. He is concerned he may be inconsistent at trial in respect of his recollection of events given the passage of time.

[109] In his cross-examination, the Defendant confirmed that he has not been diagnosed with any cognitive conditions that evidence any issues with memory. He also confirmed that he could refresh his memory by reviewing his examination transcript. He has continued to work 38 hours per week for the past ten years as a dentist, including during a period when he was previously being treated for prostate cancer in 2014. He continues to accept new patients in his practice. He maintains an active lifestyle, gardening and cycling in his spare time.

[110] The Defendant did not provide any medical evidence that age or memory would impact his ability to have a fair trial.

[111] I conclude that the Defendant’s age is not a factor, nor is his being a “bit slower”. He is working 38 hours a week as a dentist. He has no medical diagnosis of cognitive impairment. He can refresh his memory from the transcripts and undertakings (see Armstrong).

[112] In terms of his physical condition, in his Affidavit the Defendant says that since receiving the motion he has suffered significant stress, anxiety and difficulty sleeping. He also stated, as set out above, that he is not as physically fit as he was nine years ago. The Defendant has produced no medical evidence. I am not satisfied that the Defendant has any physical health issues which would impact his ability to have a fair trial.

[113] In his cross-examination, the Defendant stated that on a recent visit to his doctor, he was diagnosed with high blood pressure and referred for further tests. He also stated that he had prostate cancer surgery in 2014 and that recent testing several months ago revealed he had elevated levels of protein indicating that the cancer has returned. He will require further treatment in the next six to twelve months. Again, no medical evidence was provided. I cannot assume this will impact on his ability to have a fair trial. He is still working 38 hours a week as a dentist.

[114] As in Armstrong, and in regards to the first factor in assessing prejudice identified in Prescott, given the lack of any evidence of actual prejudice and the availability of documents and transcripts, there would be no significant actual prejudice to the Defendant in setting aside the Dismissal Order.

[115] In terms of the finality principle, the Defendant has stated in his Affidavit that he plans to retire in the next couple of years, prior to turning 75 years of age. He states that if the dismissal order is set aside, it will present an unanticipated financial uncertainty that he did not expect. The prospect of significant legal costs and the possibility of judgment against him will affect his retirement plans. He says that he has not actively sought to obtain new clients or business through marketing or advertising over the past couple of years and that he has made an effort to reduce his workload, given his age and retirement plans. He stated he has the equivalent of one less hygienist working for him and has reduced another hygienist’s hours as compared to five and a half years ago. He says this is due to his not actively trying to procure new business in the last few years. The Defendant states that he does not have the physical strength or ability to reinvent himself to increase business to address the financial uncertainty that may occur if the Dismissal Order is set aside.

[116] The Defendant has also stated in this Affidavit that part of his retirement plans are driven by his desire to spend more time with his wife, who is also 72 and retired. He indicated his wife has deteriorating health issues. She also suffers from depression and takes medication for this. She has serious back issues. He wishes to be more available to support his wife mentally and physically.

[117] In his cross-examination, the Defendant indicated he remains an undischarged bankrupt with approximately $6,000 in a tax-tree savings account. He acknowledged that his wife has been encouraging him to retire in the spring of 2019, but that he is not in a position to do so given his current outstanding liabilities. He confirmed that while the hygienists’ hours have steadily reduced, he has continued to work at least the 38 hours per week for the past ten years. He continues to accept new patients in his practice. His practice was built predominately by referrals and not through marketing or advertising. The Defendant also confirmed that his wife’s depression was diagnosed before the Dismissal Order and is currently controlled by medication. She has two compressed discs in her back, but he does not believe that she takes medication. She does not use medical devices or require assistance. She runs errands and goes for walks.

[118] On the basis of the evidence, I am not satisfied that the Defendant is in the process of retiring. He has debts from his bankruptcy which remain unresolved.

[119] While it has been noted in the case law that the finality principle becomes more important as time wears on, in this context, and in light of the statement in Carioca’s that the mere passage of time cannot bar the Plaintiff from showing that there is no significant prejudice, this principle does not warrant a finding in favour of the Defendant. In the circumstances of this case, I am not satisfied that the finality principle warrants the Dismissal Order not being set aside when the moving party has satisfied this court that there is an explanation for the delay; Watson was inadvertent; the Plaintiff always intended to pursue the action; K.M. moved promptly to set aside the dismissal upon learning of it; and there is no other prejudice, noting that the Defendant’s stated plans for retirement are far from clear.

[120] This is not a case like Prescott, where there was evidence that the Defendant relied on the dismissal: in that case, the Defendant lost the ability to file in bankruptcy, and he borrowed funds and acquired property he would not otherwise have borrowed and acquired had the action been alive. The Defendant’s claims of having medical issues and of his Wife’s declining health would have existed regardless of this action. His status as an undischarged bankrupt and its impact on his retirement is unrelated to this action and arose before the Statement of Claim was issued. As such, finality does not trump the Plaintiff’s pleas for indulgence in this case.

F. Contextual Analysis

[121] The contextual approach has been referred to in Scaini, at paras. 21-27, and in H.B. Fuller, at para. 21. The contextual analysis is also described in Micallef, at paras. 18, 29-31. At para. 31 of Micallef, Dambrot J. sets out that what the court is required to do is “step back and answer the ultimate question that resides at the core of the exercise: what order would do justice in all of the circumstances.”

[122] As noted in Prescott, at para. 15, in discussing the contextual approach, the “overriding objective is to achieve a result that balances the interests of the parties and takes account of the public’s interest in the timely resolution of disputes.”

a) The Moving Party’s Position

[123] The moving party’s position is summarized as follows:

1. The Plaintiff was misled by his counsel. Watson never disclosed Hourigan J.’s Endorsement, the Status Notice or the Dismissal Order to the Plaintiff. At no time did the Plaintiff believe that his action was in jeopardy. The moving party relies on Draskovic v. Toronto Transit Commission, 2017 ONSC 7582, at para. 28, where the plaintiff did all that was expected of her and could not have expected her lawyer to lie to her about the state of the action. Watson misled the Plaintiff and the Plaintiff could not have expected that he was being misled. The moving party also relies on 8697469 Canada Inc., cob as Rev Install 360 v. Kimberly Medica cob as BBK Enterprises, 2018 ONSC 1876, at paras. 28-29, wherein a default judgment was set aside in circumstances where an innocent party relied on her lawyer and the lawyer was deceptive to his own client. At para. 29, Harper J. stated that in such circumstances, “the administration of justice would be held in disrepute if [the plaintiff] would be prevented from participating in this action if I find that she has an arguable and prima facie case.”

2. There is no evidence that the Plaintiff intentionally delayed matters. Watson did not intentionally delay matters. The moving party relies on Kerr, at paras. 68, 70.

3. The Plaintiff is blameless. The inaction on the file was solely as a result of the default of the solicitor. In these circumstances, where there is no prejudice, the order of dismissal should be set aside. The moving party references Cavanagh v. Ontario (Minister of Health), [1999] O.J. 2243 (S.C.), at paras. 39-44. In Cavanagh, at para. 44, the Court found that in circumstances where the dismissal of an action arose solely as a result of the default of the lawyer and not the client, and there is no prejudice to the defendant, “it would be a travesty of justice not to allow [the plaintiff] the opportunity to be heard on the merits of her case.”

4. There is uncontroverted evidence of the Plaintiff’s unwavering intention to move the action forward to be determined on the merits. Any delays were caused by his counsel and ought not to be visited upon him. He believed that the action was extant and was awaiting the court to select trial dates.

5. This is a mature action ready for trial and ready to be determined on the merits. The absence of prejudice is a key factor which supports restoring the action. Keeping an action off the trial list that is ready for trial is punitive rather than efficient (see Carioca’s, at para. 54).

6. The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed on the merits by reason of the inadvertence of counsel (Marché, at para. 28).

7. The court’s bias is in the favour of deciding cases on their merits (see H.B. Fuller, at para. 26).

b) The Defendant’s Position on the Contextual Approach

[124] The Defendant’s position on the contextual approach is as follows:

1. Solicitor negligence is something the court can and should consider in its deliberations within the contextual approach. The Defendant refers to Khan v. Mander, 2011 ONSC 5276, at paras. 122-25, which provides as follows:

122 While the court suggested that the court's "primary" focus should be with the rights of the litigants, that phrase must be read as embracing the rights of all litigants, not simply those of plaintiffs who have run afoul of Rule-imposed deadlines. When considering the respective rights of litigants, which includes a defendant's right to have the matter come to an end by settlement or trial within a reasonable period of time, there is no direct statement from the court suggesting that solicitor's negligence, and the possible suit the plaintiff can bring against such a counsel, must be completely excluded from consideration.

123 As I read Finlay, it leaves room for the court to consider solicitor negligence as part of the contextual approach when balancing the rights of the parties with a view to doing justice between them. The fact that Laskin J. then goes on to refer to Sharp J's discussion in Marché reinforces that this is clearly what the court intended.

124 In Machocek v. Ontario Cycling Association, 2011 ONCA 410, the court considered Marché (supra) in the context of a dismissal caused by a solicitor whose conduct was responsible for delay. There, the court held:

... the appellants are not left without a remedy as they still have recourse through an action in solicitor's negligence.

125 This is a clear and current statement of how the court views the issue and its place in the contextual approach.

2. The Plaintiff is not without recourse. Based on the record before the Court, the Defendant submits that the Plaintiff has an action in negligence against his solicitor.

3. Adopting a contextual approach, based on all the evidence before the court and considering the finality principle, the ability for the Plaintiff to pursue a negligence action against Watson, and the evolution of the Reid factors which on the whole balance in favour of the Defendant, the Plaintiff’s motion must fail.

c) Analysis – Contextual Approach

[125] In my view, it would do justice, in all of the circumstances, for the Dismissal Order to be set aside. This is based on the following:

1. The Plaintiff has met all four of the Reid criteria. As noted earlier, the Plaintiff succeeded in the arguments regarding K.M.’s failure to move promptly; however, even if the parties had argued on the basis of Watson’s conduct, who did not move promptly, this would not have been fatal to this motion.

2. The Plaintiff was misled by his counsel. At no time did the Plaintiff believe that his action was in jeopardy. The Plaintiff did all that was expected of him, including reaching out from time to time to his lawyer to request information about the progress of the file.

3. The Plaintiff did not intentionally delay matters. As I have found above, the solicitor’s failure to move the matter forward was inadvertent.

4. The Plaintiff is blameless.

5. There is no prejudice to the Defendant.

6. The Plaintiff always intended to move the matter forward.

7. This is a mature action. The Plaintiff’s counsel was moving the case along without undue delay up to the date of the Status Notice. To keep this mature action from trial would be punitive rather than efficient (see Carioca’s, at para. 54).

[126] I have considered the Defendant’s submission that the Plaintiff would not be left without a remedy if the motion is dismissed. The principle of finality is important; however, in the circumstances of this case, the Plaintiff ought not to lose the right to proceed on the merits. The Plaintiff has met four of the Reid criteria, and the contextual approach supports the Dismissal Order being set aside. See also the discussion on Finlay, above, regarding speculation on alternative remedies. Based on all of the above, it would be just in the circumstances of this case for the matter to be decided on the merits. In balancing the interests of the parties, and the public’s interest in the timely resolution of disputes, the Plaintiff’s interests prevail.

Part 5 - Conclusion and Costs

[127] The moving party’s motion is granted. The registrar’s Dismissal Order dated June 1, 2012, is set aside. Mr. Arnold and Mr. Tonks shall schedule a date before me to discuss trial dates and the steps that need to be taken to get the Trial Record filed.

[128] If the parties are unable to agree on costs, the Plaintiff may serve and file brief written submissions on costs, not exceeding three pages, plus any attachments, to be served and filed within 15 days of today. The Defendant may serve and file brief written responding submissions on costs, not exceeding three pages, plus any attachments, to be served and filed within 30 days of today. The Plaintiff may serve and file brief written reply submissions on costs, not exceeding one page, to be served and filed within 35 days of today.

Coats J.

Released: November 27, 2018