Court File and Parties

2018 ONSC 7414

Court File No.: CV-07-23931 Date: 20181212

Ontario Superior Court of Justice

Between:

Algoma District School Board Plaintiff – and – Algoma Insurance Brokers Ltd. Defendant

Counsel: Elisha Jamieson-Davies, for the Plaintiff. Orlando M. Rosa, for the Defendant.

Heard: October 17, 2018

R. D. Gordon, R.S.J.

Overview

[1] This long outstanding litigation involves a claim by the Plaintiff Algoma District School Board (“ADSB”) that the Defendant Algoma Insurance Brokers Ltd. (“AIB”) was negligent or in breach of contract when it provided insurance brokerage services between 1965 and 1986.

[2] In 2002, 14 former students of the Sault Ste. Marie Board of Education brought an action against ADSB claiming $40 million in damages arising from sexual assaults alleged to have been committed upon them by a former teacher (“the 2002 Action”). ADSB is a successor to the Sault Ste. Marie Board of Education. The sexual assaults were alleged to have occurred between 1965 and 1986.

[3] Upon receiving the claim in the 2002 Action, ADSB conducted a search for insurance policies that would provide it with coverage. Although it located records which demonstrated that the Sault Ste. Marie Board of Education had insurance coverage during a portion of the period of time at issue, no insurance policy could be located. Without proof of coverage, the insurers refused to defend ADSB.

[4] The claim against AIB was initiated in March of 2005 and alleges that it had been engaged to look after the insurance needs of the Plaintiff during the relevant times and failed to meet the duty of care required of the relationship.

[5] The Plaintiff has brought a motion seeking partial summary judgment.

[6] The Defendant, in addition to contesting the motion for partial summary judgment, asks that the claim of the Plaintiff’s claim be dismissed for delay.

The Motion for Partial Summary Judgment

[7] The Plaintiff’s motion for partial summary judgment essentially seeks an order declaring that AIB owed it a duty of care and declaring the scope of that duty. The motion seeks the following relief:

(a) A declaration that AIB owed a duty of care to ADSB to advise it of the necessity to maintain and preserve its own liability policies;

(b) A declaration that AIB owed a duty of care to ADSB to advise it of the possibility of claims arising under its own liability policies many years after the expiry of the policy period;

(c) A declaration that AIB owed a duty of care to ADSB to preserve and/or maintain an appropriate record system for the preservation and location of all policies of insurance, in particular all liability policies of insurance, which AIB negotiated, arranged, entered into and managed on behalf of ADSB.

(d) A declaration that AIB owed a duty of care to ADSB to advise ADSB of its intention to destroy ADSB’s policies of insurance, in particular liability policies of insurance which AIB negotiated, arranged, entered into and managed on behalf of ADSB.

[8] Because the motion was being brought after the Plaintiff has set the action down for trial, the Plaintiff also seeks leave to bring the motion.

[9] In my view, this is not an appropriate case for summary judgment. In its factum and submissions, the Plaintiff relied heavily upon the decision of Myers J. in Mason v. Perras Mongenais, 2018 ONSC 1477. The Court of Appeal has recently overturned that decision confirming, as it had stated in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 and Butera v. Chown, Cairns LLP, 2017 ONCA 783, that a motion for partial summary judgment should be considered a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that can be dealt with expeditiously and in a cost effective manner. The Court of Appeal also took the opportunity to observe that in its view the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 encouraged a culture shift away from the very restrictive use of summary judgment, but did not suggest that trials are now to be viewed as the resolution option of last resort. The Court of Appeal summed it up as follows: “Put simply, summary judgment remains the exception, not the rule” [See Mason v. Perras Mongenais, 2018 ONCA 978].

[10] Having regard to the difficulties with partial summary judgment noted in Butera, I note the following. First, this motion for partial summary judgment seeks declaratory relief not claimed in the Statement of Claim. Secondly, the granting of partial summary judgment would not have the effect of ending the litigation against any party. Thirdly, this is not an issue that would occupy significant trial time. It involves the evidence of two experts and the evidence of representatives of AIB (who would be expected to give evidence at trial in any event). Consequently, the time, effort and expense of the partial summary judgment motion will not result in any significant efficiencies; in fact, it is likely to increase costs and has already resulted in further delay getting this matter to trial. Fourthly, as presented, the motion for partial summary judgment largely requires the court to choose between two experts who have provided reports for the parties and whose evidence extends to the standard of care expected of insurance brokers during a time long past – that is, some 30 to 50 years ago. There has been no cross-examination of those experts. Not on their qualifications and not on their opinions. In my view it would be most difficult to conduct any critical evaluation of the opinions offered without cross-examination of the experts to better understand their areas of expertise and the assumptions upon which their opinions are based.

[11] For these reasons, the Plaintiff’s motion for partial summary judgment is dismissed.

The Motion for Dismissal for Delay

Background Facts

[12] On March 24, 2004, ADSB issued a Statement of Claim against Frank Cowan Company Ltd. and Guarantee Company of North America (the “Cowan Action”) seeking, among other things, a declaration that the Defendants were obligated under a contract of insurance in place between January 1, 1977 and January 1, 1979, to defend and indemnify ADSB in the 2002 Action.

[13] Also on March 24, 2004, ADSB issued a Statement of Claim against Aviva Canada Inc. (the “Aviva Action”) seeking, among other things, a declaration that it was obligated under a contract or contracts of insurance in place between January 1977 and June 1979 and June 1985 to June 1986, to defend and indemnify ADSB in the 2002 Action.

[14] Examinations for Discovery were undertaken in the Cowan Action in September of 2004.

[15] Examinations for Discovery in the Aviva Action were scheduled for October 18, 2004 but were cancelled at the behest of Aviva due to a scheduling issue. They were scheduled again for November 8, 2004 and although counsel for the Plaintiff and Aviva then attended, no one appeared to give evidence on behalf of Aviva. The discovery did not proceed.

[16] Following mediation in early November of 2004, ADSB settled the 2002 Action for $1.85 million.

[17] In March of 2005, ADSB amended its Statements of Claim in the Cowan Action and Aviva Action to add AIB as a Defendant, alleging, inter alia, that ADSB had engaged AIB to look after its insurance needs during the period 1965 to 1986 and owed it a duty to:

(a) Advise ADSB of the necessity to maintain and preserve each policy of liability insurance;

(b) Advise ADSB of the possibility that claims under such policies would be made many years after the expiry of the policy period;

(c) Advise ADSB of the distinction between and implications arising from a claims-based and occurrence-based policy;

(d) Advise ADSB that it was going to destroy ADSB’s policies; and

(e) Maintain all necessary documentation relating to the liability policies of insurance for all purposes.

[18] ADSB claims that AIB breached the standard of care owed and that, as a result of its actions/omissions, ADSB suffered damages, namely the costs of defending and settling the 2002 Action.

[19] In March of 2005, ADSB amended its Statements of Claim in the Cowan Action and in November of 2005, AIB served its Statements of Defence in the Cowan Action and Aviva Action and served a Notice of Motion to consolidate the two actions, transfer them to Sault Ste. Marie from Toronto, and remove Hicks Morley as counsel for ADSB. After considerable procedural wrangling with respect to AIB’s motion to have Hicks Morley removed as counsel, a consent order was granted on August 28, 2006 consolidating the actions, transferring them to Sault Ste. Marie, and dismissing the motion to remove Hicks Morley.

[20] On February 13, 2007, ADSB served a Fresh as Amended Statement of Claim. In March of 2007, AIB, Aviva and Guarantee Company of North America served their various amended Statements of Defence to the Consolidated Claim. Frank Cowan Company Ltd. followed suit in July and asserted a crossclaim against AIB. AIB delivered its Defence to Crossclaim in November.

[21] On February 21 and 22 of 2008, representatives of AIB and ADSB were examined. Undertakings were given by both parties. Compliance with those undertakings ensued over the balance of the year.

[22] On June 11, 2009, counsel for Frank Cowan Company Ltd, served a motion for summary judgment to dismiss the claims of ADSB as against it. The motion was returnable August 27, 2009. On August 6, 2009, Guarantee Company of North America served a motion for summary judgment to dismiss the claims of ADSB as against it, also returnable on August 27, 2009. On August 27 the motions for summary judgment were adjourned to October 22, 2009. On October 22 the motions for summary judgment were again adjourned, this time to March 11, 2010.

[23] On February 19, 2010 ADSB brought a cross-motion for summary judgment against Frank Cowan Company Ltd. and Guarantee Company of North America, returnable on March 11, 2010. Predictably, this resulted in an adjournment of all the summary judgment motions so that further cross-examinations could take place. September 9, 2010 was the next date available to all counsel and the court.

[24] Just prior to the September 9 date it was discovered that the judge scheduled to preside over the summary judgment motions was in a position of conflict. No other judge was available. The matter was adjourned to December 20, 2010, the next date available to all parties and the court. The motions were argued on that date.

[25] On January 10, 2011 the court released its decisions on the motions for summary judgment. Frank Cowan Company Ltd. was successful in having the ADSB’s claims against it dismissed. The summary judgment motions by ADSB and Guarantee Company of North America were dismissed.

[26] On May 31, 2011, counsel for ADSB sent a letter to all counsel outlining what it would require to set the action down for trial. With respect to Guarantee Company of North America it asked for confirmation if it was maintaining its refusal to answer two questions posed at discovery and sought an answer to one undertaking that remained outstanding. With respect to Aviva, it sought a sworn affidavit of documents and completion of discoveries. With respect to AIB it sought an answer to one unanswered undertaking, more complete answers to three other undertakings, and confirmation of whether a refusal would be maintained with respect to one other question.

[27] Over the balance of 2011, ADSB continued correspondence with each Defendant with a view to having its May 31 inquiries answered. Agreement was reached with Aviva to have discoveries conducted on March 28 and 30, 2012.

[28] On March 27, 2012 ADSB and Aviva agreed to adjourn the discovery to allow a meeting of all parties to discuss settlement. The meeting was held on June 27, 2012 but was unsuccessful. During the balance of 2012, ADSB had further settlement discussions with Guarantee Company of North America and Aviva. In November 2012, ADSB and Aviva agree to conduct discoveries in April of 2013.

[29] On April 9, 2013 the discoveries between Aviva and ADSB were conducted.

[30] Aside from working to answer undertakings given at the April 9 discovery, no further steps were taken by ADSB in 2013.

[31] In 2014 ADSB was involved in regular settlement discussions with Guarantee Company of North America. No further steps were taken to otherwise advance any of the litigation.

[32] In 2015, settlement discussions between ADSB and Guarantee Company of North America continued. Between June and November of 2015 ADSB and Aviva worked towards fulfillment of the undertakings given in April 2013.

[33] On October 14, 2015, ADSB wrote to AIB referencing AIB’s letter of August 25, 2011 in which it advised that it would review its records and advise on the status of undertakings and refusals, and requested a further response.

[34] On February 12, 2016 AIB confirmed its position that all undertakings had been answered and advised of its position that the action should be dismissed for delay.

[35] On February 22, 2016 ADSB served its trial record. The matter was subsequently placed on an assignment court list and a pre-trial was scheduled for April 11, 2017.

[36] On August 30, 2016 ADSB and Guarantee Company of North America settled the action as between them.

[37] On October 31, 2016 AIB served its motion record seeking dismissal for delay.

[38] Pre-Trial conferences were held on April 11 and June 9, 2017. Case management conferences were held on July 2, October 11 and December 18 of 2017 and January 3, 12, May 31 and September 11 of 2018.

[39] This motion was heard on October 18 along with ADSB’s motion for partial summary judgment, some thirteen and a half years after AIB became a defendant.

Applicable Law

[40] Rule 24.01(c) of the Rules of Civil Procedure provides that a Defendant who is not in default under the Rules or an Order of the Court may move to have an action dismissed for delay where the Plaintiff has failed to set the action down within six months after the close of pleadings.

[41] In Langenecker et al v. Sauve et al, 2011 ONCA 803 the Ontario Court of Appeal, recognizing that dismissal for delay is a severe remedy, acknowledged that it is sometimes the only order that can adequately protect the integrity of the civil justice process. It identified two types of cases which would justify dismissal for delay:

1. Delay which is caused by the intentional conduct of the Plaintiff or his counsel which demonstrates a disdain or disrespect for the court process. In dismissing such a case, the Court in effect declares that a continuation of the action in the face of the Plaintiff’s conduct would constitute an abuse of the Court’s process. The Court pointed out that such cases are rare and feature at least one, and usually serial violations of court orders.

2. The second type of case has three characteristics. The delay must be inordinate, inexcusable and such that it gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible because of the delay.

[42] Whether the delay is ordinate is measured simply by reference to the length of time from the commencement of the proceeding to the motion to dismiss.

[43] Whether delay is inexcusable requires an examination of the reasons for it and whether they present an adequate explanation. Such an examination looks for explanations that are “reasonable and cogent” or “sensible and persuasive”. The court is to consider not only the explanations offered for individual parts of the delay, but also for the overall delay and the effect of the explanations considered as a whole.

[44] Prejudice is inherent in long delays because memories fail, witnesses become unavailable, and documents and other potential exhibits are lost. The longer the delay, the stronger the presumption of prejudice to the defence case flowing from that delay. The onus falls upon the Plaintiff to demonstrate that the Defendants have not been prejudiced. If the Plaintiff is able to adequately rebut the presumption of prejudice, it remains open to the Defendant to establish a substantial risk that a fair trial of the issues will not be possible by persuading the court that there has been actual prejudice to the defence case caused by the delay.

Analysis

Has the Delay Been Intentional and Contumelious?

[45] There is no evidence before me that ADSB or its counsel has conducted itself in a manner indicating disrespect or disdain for the court process. It is not in breach of any orders of the court. There is no basis for a finding that the delay has been intentional and contumelious.

Is the Delay Inordinate?

[46] The action against AIB was commenced in March of 2005. The motion to dismiss was heard more than 13.5 years later.

[47] Although the Court of Appeal in Langenecker acknowledged that most litigation does not move at a quick pace and that some litigation, because of the issues raised and/or the parties involved, will move even more slowly than the average case, there can be little doubt that a delay of this length is inordinate. In my view, to suggest otherwise fails to appreciate the important principle of promoting timely resolution of disputes. As stated by the Ontario Court of Appeal in 2007 case of Marche D’Alimentation Denis Theriault Ltd. v. Giant Tiger Stores Ltd., 2007 ONCA 695, 87 O.R. (3d) 660:

These rules and cases rest upon an important principle: there is a strong public interest in promoting the timely resolution of disputes. “The notion that justice delayed is justice denied reaches back to the mists of time…For centuries, those working with our legal system have recognized that unnecessary delay strikes against its core values and have done everything within their powers to combat it”: Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44, [2000] 2 S.C.R. 307, [2000] S.C.J. No. 43, at para. 146. The interest of litigants involved in the civil justice system in timely justice is obvious. Litigants are entitled to have their disputes resolved quickly so that they can get on with their lives. Delay multiplies costs and breeds frustration and unfairness.

Is the Delay Inexcusable?

[48] The action against AIB, with the exception of AIB’s motion to have Hicks Morley removed as counsel for the Plaintiff, moved at a slow but steady pace through to the end of 2008, by which time discoveries had been completed and the vast majority of undertakings answered. For the ensuing eight years, aside from one settlement meeting in which AIB participated and an inquiry of AIB concerning one unanswered undertaking, incomplete answers to three undertakings and one refusal to answer, ADSB did nothing to advance the litigation against AIB.

[49] Its explanation is basically twofold: Firstly, that AIB was not actively pursuing the litigation and did not, until February of 2016, indicate any concern with the manner in which the litigation was progressing; and secondly, that it was actively pursuing its rights against the other Defendants during that period of time.

[50] In my view, the inaction of AIB does not offer an excuse for the Plaintiff’s delay. As the Court of Appeal has said, the Plaintiff has responsibility for moving the action along [see Wallace v. Crate’s Marine Sales Ltd., 2014 ONCA 671; DeMarco v. Marcitelli, [2001] O.J. 3582; Ticchiarelli v. Ticchiarelli, 2017 ONCA 1].

[51] The second explanation provided by ADSB raises an interesting issue, namely, in what circumstances does the pursuit of legitimate litigation objectives with a co-defendant “B” render delay with respect to co-defendant “A” excusable. I am prepared to accept, as a general proposition, that litigation involving co-defendants is sufficiently intertwined that delay in proceeding against one may well justify delay in proceeding against another. However, that surely cannot be the case in every instance. There must come a point when a co-defendant against whom a case has sat idle for a number of years can come before the court and say that the delay is no longer excusable. The issue is determining when that point is reached, and what factors should be considered in reaching that conclusion.

[52] Counsel provided me with two decisions of interest relative to this issue. The first is Sickinger v. Krek, 2016 ONCA 459, which dealt with dismissal for delay of a third party action when a similar motion in the main action had been dismissed. In that case, the Court held that practically speaking, a main action and a related third party proceeding are intertwined and that delay in the main action may justify delay in a third party claim. The Court held, however, that such a result does not necessarily follow. It held that the third party claim involved discrete issues unrelated to the main action that did not depend on the outcome of the main action, that an order adjourning the trial of the main action did not prevent the third party claim from proceeding or being set down for trial, and that the conduct of the main action had been very different than that of the third party claim. In particular, the main action had been diligently pursued and there was no presumed or actual prejudice. This was to be contrasted with the third party action in which the claim had not been advanced and counsel had often failed to respond to communications from opposing counsel. In these circumstances, the Court held that inaction in the third party action could not be excused due to focus on the main action.

[53] The second case is H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173. In that case the defendants were Computer Packages Inc. (“CPI”) and David Rogers, c.o.b. as Rogers Law Office (“Rogers”). A motion was brought by the Plaintiff to set aside a registrar’s order dismissing the action against CPI for delay. In examining the delay in proceedings relative to CPI the court observed that CPI had been content to let the Plaintiff focus on Rogers, as any settlement they might reach with him potentially reduced its liability, and that assuming serious negotiations with Rogers were taking place, forcing CPI to incur the cost of filing a statement of defence earlier and pushing ahead with discovery would not have been in keeping with one of the requirements of rule 1.04, namely, to secure the least expensive determination of a civil proceeding. In granting the appeal and allowing the motion, the Court of Appeal determined that, in the circumstances of that case, the delay in CPI’s case caused by the legitimate settlement negotiations with Rogers constituted a reasonable explanation for that delay.

[54] A consideration of these cases and the principles upon which they are based lead me to the following conclusions:

i) In considering whether delay relating to the conduct of the case against Defendant “A” is excusable, it is appropriate to consider whether and to what extent that delay has been caused by the pursuit of legitimate litigation objectives involving the Plaintiff and Defendant “B”.

ii) In determining the reasonableness of this excuse, the litigation involving the Plaintiff and Defendant “B” must be examined to determine: (a) whether the case against Defendant “A” could have been advanced notwithstanding; (b) whether it was undertaken over a reasonable period of time; (c) if it was not, to what extent any delay was the responsibility of the co-defendant as opposed to the Plaintiff; (d) whether the Plaintiff considered the impact of the delay on Defendant “A”; (e) whether Defendant “A” was kept advised of the developments in the litigation involving Defendant “B”; and (f) whether Defendant “A” might ultimately benefit from the litigation against its co-defendant.

[55] ADSB says that much of the delay since the end of 2008 can be attributed to the following dealings with the co-defendants: (1) Motions and Cross-motions for summary judgment; (2) Documentary and oral discovery with Aviva; (3) Settlement negotiations, primarily with Guarantee Company of North America.

The Summary Judgment Motions

[56] On June 11, 2009, Frank Cowan Company served a motion for summary judgment seeking dismissal of the claims of ADSB against it. Guarantee Company of North America served its summary judgment motion for dismissal on August 6, 2009. A hearing date of March 11, 2010 was eventually set. On February 19, 2010, just three weeks before the scheduled hearing, ADSB served a cross-motion for summary judgment. Due to this late filing, all motions had to be adjourned. But for the late filing of ADSB the matters would have been heard on March 11, 2010. The matter could not thereafter be heard until December 20, 2010.

[57] Although it was appropriate that the action not be set down for trial until the motions for summary judgment were heard, there is no good reason why ADSB could not, during that same time, have pursued AIB for undertakings or refusals it considered to be outstanding. It did not. There is also no good reason why the discovery process relative to Aviva was not pursued during this period of time. The motions took almost eighteen months to be heard. Half of that time was the result of late filing of the motion by ADSB. It does not appear that any consideration was given to the delay resulting to AIB. AIB did not participate in the motions and it does not appear that they were of any immediate import to them. In all, it is perhaps fair to attribute 9 months of delay to these motions.

Discovery of Aviva

[58] Discovery with Aviva took place on April 9, 2013. Compliance with undertakings from that discovery was pursued through the balance of that year. Again, it was reasonable for ADSB to delay setting down the action until discovery of Aviva had been completed. However, that discovery process had sat largely dormant since Aviva’s representative failed to appear in November of 2004. I have been provided with no good reason why discovery of Aviva did not take place long before 2013. Certainly there seems no good reason why it could not have been completed by the end of 2008 and perhaps long before that as well. The delay in pursuing discovery seems to have been ADSB’s. There is no explanation for it. No consideration seems to have been given to the delay and potential prejudice this was causing AIB. AIB is not argued to have benefitted from ADSB’s discovery of Aviva. In these circumstances, it is not appropriate to excuse any of the delay after 2008 based upon ADSB’s discovery of Aviva. It ought to have been completed by then.

Settlement Negotiations

[59] I am prepared to accept that legitimate settlement negotiations may constitute a reasonable explanation for the delay in proceeding not just against that defendant, but co-defendants as well.

[60] I also accept that for some 30 months between the start of 2014 and August of 2016 there were regular albeit intermittent settlement negotiations between ADSB and Guarantee Company of North America. However, there has been no suggestion that these negotiations were expected to end the litigation against the co-defendants and no good explanation of why the action otherwise sat dormant during those negotiations.

[61] If ADSB was of the view that undertakings and refusals were outstanding from AIB, it is difficult to understand why they were not pursued during that time.

[62] Clearly the negotiations with Guarantee Company of North America took place over a protracted period of time. It is not clear to me why those negotiations took so long, but as is often the case with litigation, it can be difficult to move parties to action until such time as their feet are held to the fire. In this case there was no fire. The action had not been set down. No one was preparing for trial. There seems to have been no hurry, notwithstanding that the action was then at least ten years old.

[63] It does not appear that ADSB turned its mind to the effect of this delay on AIB. AIB was not kept apprised of the negotiations. Although ADSB now takes the view the negotiations and eventual settlement will in fact benefit AIB by reducing any damages they may ultimately be found liable for, the terms of the settlement have not been provided in the materials, and there can be no assessment of the extent of any benefit to AIB.

[64] Although settlement negotiations are always to be encouraged, it cannot be done with total disregard for other Defendants involved in the proceeding and should, absent a good explanation, be done while continuing to otherwise advance the matter towards trial. I am prepared to attribute perhaps six months of delay to ADSB’s settlement negotiations with Guarantee Company of North America.

Other

[65] A further argument advanced by the Plaintiff was that significant delay was caused by AIB’s delay in responding to its inquiry, made on May 31, 2011, concerning certain undertakings. In my view, this argument is disingenuous.

[66] To begin with, the inquiry of AIB was not made until May of 2011, for more than three years after the undertakings had been made. In August of 2011, AIB replied that it believed all undertakings had been complied with but would revisit the file to ensure that was the case. When no further reply was forthcoming from AIB it was not until another four years had passed that any further inquiry was made by ADSB. Furthermore, when AIB eventually answered to once again advise that it had complied with all undertakings, no further action was taken by ADSB. This indicates one of two things: Either ADSB came to agree that the undertakings had been fulfilled, or although they had not been fulfilled they were not of sufficient importance to warrant a motion to compel fulfillment. In either event, that determination ought to have been made many years earlier.

[67] In summary, by the end of 2008 there is no good reason why all discoveries had not been completed and most undertakings and refusals addressed. For perhaps another year or 18 months, it was appropriate for ADSB to pursue any remaining undertakings, conduct the motions for summary judgment and enter into negotiations. After that, until the matter was set down in February of 2016, the delay is difficult to explain or accept. Although the Plaintiff was moving the litigation forward against the co-defendants Guarantee Company of North America and Aviva, it was doing so at a glacial pace and with little or no regard to the delay that was accruing relative to AIB.

[68] In my view, the explanations offered by the Plaintiff whether considered individually or as a whole, do not excuse the more than 13.5 years that have passed since the action was started.

The Issue of Presumptive Prejudice

[69] As indicated in Langenecker, an inordinate delay results in a presumption of prejudice. The longer the delay, the stronger the presumption. As in Ticchiarelli, delay of this length mandates a heavy onus of rebuttal.

[70] The Plaintiff takes the following positions relative to the presumption of prejudice. First, that AIB’s conduct in this case is inconsistent with the court finding that a presumption of prejudice should arise because it has done nothing to move the matter forward and did nothing to complain about the pace of the litigation until 2016; and second, that any presumption of prejudice can be rebutted by ADSB.

[71] Dealing first with AIB’s conduct, I note that, unlike MDM Plastic Limited v. Vincor International Inc., 2015 ONCA 28, this is not a case where there was affirmative conduct on the part of the Defendant inconsistent with prejudice. Nor is it a case in which the Defendant is alleging prejudice in the nature of ongoing damage to its reputation, which might be questioned by long periods of inactivity on its part. This is a case in which the Plaintiff, having begun an action more than 13.5 years ago, has not yet had the matter tried. There is a strong presumption of prejudice arising from that delay. It is for the Plaintiff to rebut that presumption. It was the Plaintiff’s action to prosecute. Pointing to the Defendant and saying it did not move the action along and must therefore not be prejudiced as a result of the delay is not sufficient.

[72] Typically, the presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and the issues in the lawsuit do not depend on the recollection of witnesses or that all necessary witnesses are available with detailed recollection of events.

[73] This action is based on overlapping claims of negligence and breach of contract. It is largely agreed that AIB was the insurance agent or broker for ADSB during the period in question. It will or ought reasonably to be conceded that in that capacity it owed a duty of care to ADSB. What this case is really about is the difference, if any, between: (1) What was to be expected of AIB in its role as the insurance agent or broker for ADSB; and (2) What it, in fact, did as the insurance agent or broker for ADSB. One of the difficulties with the case is that it requires a determination of expectations and conduct arising out of a business relationship that existed between 1965 and 1986.

[74] The Plaintiff alleges, and it is not seriously disputed, that all relevant documentary evidence that existed at the commencement of this action has been preserved. Although AIB points out that many documents (perhaps most) from the years 1965 and 1986 no longer exist, that deficiency in the evidence arises not from the delay in this case, but from inherent nature of the case.

[75] Given the paucity of documentary evidence from the years in question, much is likely to depend on the evidence of the people involved in the transactions between ADSB and AIB all those years ago.

[76] Four witnesses have been identified for AIB: William Horbatuk, Aldo Borrelli, Carol Marcil and James Horbatuk. William Horbatuck was the main point of contact between AIB and ADSB. He became mentally incapacitated as early as 2008 and died in 2013. Aldo Borrelli was discovered in 2008 as a representative of AIB. A transcript from his discovery is available to assist with his recollection of events. Carol Marcil was an employee of AIB during the relevant time period. She was asked for answers to several undertakings made by Mr. Borrelli but was never examined. James Horbatuck began working for AIB in 1987 and is unlikely to have significant relevant evidence.

[77] Two significant witnesses have been identified for ADSB, namely Lorne Findlay and Robert Backstrom. Mr. Findlay was the Superintendent for Finance for ADSB’s predecessor and was the main contact with AIB during the relevant years. He died in 2007. He swore an affidavit on June 1, 2005 which addressed the issues in this case. He was not subject to examination for discovery. Mr. Backstrom was a former Superintendent of Business for ADSB. He was examined for discovery as a representative of ADSB and transcripts from those discoveries remain available to assist with his recollection of events.

[78] ADSB is of the view that the delay in this case did not affect the unavailability of evidence from William Horbatuk or Mr. Findlay, and that because there are discovery transcripts for all other witnesses, they are available with detailed recollections of events.

[79] In my view, it is not sufficient in every case to say that the main witnesses have been subject to discovery and transcripts or other aids are available to assist them with their recollection of events. If this were the case, the presumption of prejudice would be overcome in every case in which affidavits of documents had been served, documents preserved and discoveries completed, regardless of the delay thereafter.

[80] The witnesses in this case are elderly. Some have not been questioned under oath. Others have not been subject to cross-examination under oath.

[81] Delay results in the fading of memories. The fading of memories affects the veracity of testimony given at trial and the effectiveness of cross-examination, even when transcripts from discovery are available. All the more so when those discoveries were conducted more than ten years ago.

[82] Although documents and expert evidence would be expected to play a significant role in the determination of the issues in this case, it is not a case that I would describe as document driven. In the circumstances, I am not satisfied that the Plaintiff has rebutted the presumption of prejudice in this case.

Actual Prejudice

[83] AIB argues that the death of William Horbatuk and Lorne Findlay, the two main players for the parties during the years in question, amounts to actual prejudice to its ability to have this case fairly decided. Although that may be correct, the prejudice did not arise from the delay in this action. Mr. Horbatuk was mentally incapacitated since at least 2008 and therefore would not have been available to give evidence at the trial even if it had been reached in a timely fashion. The same is true with respect to Mr. Findlay who died in 2007.

Conclusion

[84] The delay in having this matter proceed to trial has been inordinate and has not been adequately explained. There is a strong presumption of prejudice to the Defendant that has not be adequately rebutted by the Plaintiff.

[85] The motion for dismissal based on delay is granted.

[86] If the parties are unable to agree on the issue of costs for these two motions they may make written submissions to me, not to exceed five pages plus attachments each, within 45 days.

R. D. Gordon, R.S.J. Released: December 12, 2018