Court File and Parties
COURT FILE NO.: 2752/15 DATE: 20190426
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Allan McRobert Plaintiff
– and –
The Estate of Norman A. Peel, Deceased and Canadian Imperial Bank of Commerce Defendants
COUNSEL:
Stuart MacKay, for the plaintiff Susan N. Peel, for The Estate of Norman A. Peel James Riewald, for CIBC, defendants
HEARD: March 25, 2019
Leitch J.
[1] Each of the defendants has moved for an order dismissing the plaintiff’s action against them.
[2] The Canadian Imperial Bank of Commerce (“CIBC”) moved pursuant to r. 15.04(9) of the Rules of Civil Procedure to dismiss the action against it, noting that the plaintiff failed to appoint a new lawyer of record or serve a notice of intention to act in person within 30 days of an order removing his lawyer of record.
[3] The motion by the Estate of Norman A. Peel (the “Estate”) went further seeking an order dismissing the action against it for failure to comply with the removal order, but also for failing to pursue the litigation “in a meaningful way” and not providing evidence to support his claim.
Background Facts
[4] The plaintiff registered a claim for lien on property owned by Norman A. Peel and Susan Joan Peel on November 6, 2015.
[5] Both Susan and Norman Peel are deceased with Susan predeceasing Norman.
[6] The plaintiff alleges that he improved the property by the installation of drainage tile for which he billed Mr. Peel $226,000 on May 2, 2015.
[7] The property is subject to a mortgage in favour of CIBC. The plaintiff asserts priority over CIBC’s mortgage for the amount of his lien.
[8] The mortgage in favour of the CIBC has been default since December 15, 2015. CIBC issued a notice of sale on January 13, 2016. The property was ultimately sold to the plaintiff (although the agreement of purchase and sale was signed by a third party in trust).
[9] When the property was sold to the plaintiff, he refused to discharge the lien. As a result, CIBC paid sufficient monies into court to obtain an order vacating the lien dated October 21, 2016.
[10] From November 2015 to July 2017, the plaintiff was represented by his first counsel. The Estate raised an issue of conflict with this counsel in May 2016.
[11] The motion by the plaintiff’s first lawyer to be removed as counsel of record included correspondence dated September 14, 2016 advising the plaintiff that counsel for the Estate had taken the position that she could not act for the plaintiff. That correspondence was followed by a letter dated October 28, 2016 requesting the plaintiff to retain alternate counsel and if he failed to do so she would bring a motion to be removed from the record within seven days. However, her motion was not brought until June 2017 and was returnable by July 6, 2017.
[12] On July 4, 2017, the plaintiff’s second lawyer served a notice of change of lawyer on the plaintiff’s first lawyer and counsel for CIBC. In this correspondence, the plaintiff’s second lawyer indicated an intention to instruct the plaintiff to deliver to his first lawyer a direction authorizing the release of her file to his firm and a statement that he intended to review the file and contact the CIBC’s lawyer to discuss the claim.
[13] The plaintiff’s second lawyer set the action down for trial on September 28, 2017.
[14] Therefore, as required by s. 37 of the Construction Act, R.S.O. 1990 C. 30, the action was set down for trial prior to the second anniversary of the commencement of the action that perfected the lien.
[15] The matter proceeded to an assignment court January 19, 2018 at which time the plaintiff’s second counsel scheduled a pre-trial for July 20, 2018 and a trial for three days in September 2018.
[16] The affidavit evidence of the moving parties is that they were not advised of the assignment court date or consulted as to pre-trial and trial dates.
[17] As a result, counsel for the CIBC successfully moved to vacate the scheduled dates and the matter was set to the September 2018 assignment court to schedule new dates by Grace J. who noted his understanding that “there are production issues lingering”.
[18] On the return in the September 2018 assignment court, although counsel for the plaintiff sought to set pre-trial and trial dates, the matter was adjourned to November 23, 2018 because of outstanding productions.
[19] On November 13, 2018, the plaintiff’s second counsel brought a motion to be removed from the record.
[20] The removal order was granted November 13, 2018 and as required by r. 15.04 of the Rules of Civil Procedure, the order set out the plaintiff’s last known address and other addresses (the plaintiff’s employment address and an email address).
[21] Unfortunately, the last known address wrongly referenced the plaintiff’s place of residence as Sudbury, Ontario, when in fact his address is Strathroy, Ontario.
[22] Counsel for CIBC attended the November 23, 2018 assignment court and the action was struck from the trial list.
[23] CIBC next brought its motion to dismiss the action pursuant to r. 15.04(9) of the Rules of Civil Procedure because the plaintiff had not served a notice of intention to act in person or a notice of appointment of new counsel within the 30 day period described in the removal order.
[24] CIBC’s motion record was served on the plaintiff purportedly at the incorrect last known address in Sudbury, Ontario, however, it was also served at his employment address and via his email address.
[25] The plaintiff acknowledges receipt of CIBC’s motion record and thereafter took action and promptly retained his third counsel who appears on this motion.
The positions of the parties
[26] The defendants contend that the plaintiff’s assertion, as I will describe below, that he was not aware of the motion by his second counsel to be removed from the record and not aware of the removal order made November 13, 2018 is not credible.
[27] The positions of the defendant is that the plaintiff has failed to comply with the November 13, 2018 order and has failed to prosecute his case in a timely manner, noting that minimal steps have been taken over a three and a half year period.
[28] An executor of the Estate swore an affidavit in support of its motion, asserting that the plaintiff’s claim was groundless, that the plaintiff had failed to disclose evidence to support his claim, the “groundless claim” has caused “undue expense and delay” in the administration of the Estate, and the Estate has incurred interest on the mortgage in favour of the CIBC while the issues of the action remain outstanding.
[29] The plaintiff has sworn an affidavit in response to these motions in which he deposes that, amongst other things, i) he strongly disagreed with the position taken by the Estate that his first lawyer was in a position of conflict and he had instructed her to continue; ii) that he provided all relevant documents in relation to his claim to his first lawyer; iii) he provided instructions to his second lawyer to move the matter forward and as a result the action was set on the trial list and his second lawyer attended the assignment court in January 2018 securing a pre-trial and trial date; iv) he was not aware that his second lawyer removed himself as solicitor of record; v) he did not receive the motion seeking such an order and he disagreed with the basis for the order, that is non-payment of an account and a lack of instructions; and vi) while the address of his employment was correct, as was his email address, at the time the removal order was obtained and thereafter, he was receiving treatments for prostate cancer.
[30] As plaintiff’s counsel emphasizes, once the plaintiff became aware of the November 13, 2018 removal order when he was served with CIBC’s motion, he promptly retained his third counsel “right away”.
Disposition
[31] The defendants contend that non dismissal of the action amounts to an indulgence in favour of the plaintiff, which he is not entitled to. However, as the Court of Appeal made clear in Cunningham v. Hutchings, 2018 ONCA 365, the remedy contemplated in r. 15.04(8) of the Rules of Civil Procedure, that is, a dismissal of an action is “the most draconian remedy” that can be made. The jurisprudence is clear that dismissing an action is a severe remedy and should not be imposed as a remedy of first resort (see for example, Bell Expressvu Limited Partnership v. Corkery, 2009 ONCA 85, a case not referred to by counsel, but it provides important guidance when considering the “draconian” remedy sought on these motions).
[32] I am satisfied that the plaintiff’s action should not be dismissed.
[33] There are gaps and deficiencies in relation to how this matter has proceeded but the plaintiff does not bear the responsibility for all of the delay.
[34] While counsel for the Estate advised the plaintiff’s first lawyer by letter dated May 2, 2016 that she was conflicted in representing the plaintiff, the plaintiff’s first lawyer did not bring a motion to be removed from the record until many months later despite advising the plaintiff she would do so in October 2016. The evidentiary record on this motion does not establish that this over one year period of delay rests at the feet of the plaintiff. In fact, as soon as he was served with the motion for removal by his first lawyer, the plaintiff moved promptly and retained a second lawyer leading to her motion being withdrawn.
[35] Thereafter, as noted, the plaintiff’s second lawyer moved diligently to set the action down for trial and scheduled a pre-trial and trial dates. While counsel for the defendants indicate that they received no notification of the assignment court where the pretrial and trial were scheduled, that is a procedural deficiency for which there seems to be no explanation. In any event that deficiency is not the responsibility of the plaintiff.
[36] Further, while CIBC’s counsel cannot be criticized for not being available on the pre-trial and trial dates scheduled without his knowledge and input, the fact of the matter remains that those dates were vacated on motion by the CIBC. Again the delay caused by this rescheduling cannot be placed solely at the feet of the plaintiff.
[37] I note also that the Construction Act provides a process pursuant to which a claim for lien can be dealt with expeditiously. Cross-examination of a lien claimant can occur at any time, whether or not an action has been commenced and without a court order. It was open to the defendants to take steps to challenge the lien.
[38] Furthermore, it cannot be said that there is any prejudice to the defendants arising from the plaintiff’s failure to strictly comply with the timelines of r. 15.04 of the Rules of Civil Procedure (a conclusion consistent with the findings in Krates Kenswick Inc. v. Miller, 2016 ONSC 6467).
[39] Importantly also, these circumstances are far different from those before the court in Smith v. Armstrong 2018 ONSC 2435, a case relied on by the defendants, where the 17-year delay was found to be “inordinate”, over a decade of delay could not be reasonably explained by the plaintiff and the length of the delay created a strong presumption of prejudice to the defendants. These conclusions cannot be reached in this case.
[40] Similarly, it cannot be said that the plaintiff has shown “minimal intention to carry on with the litigation” as found in Pombo v. Canac Kitchens 2016 O.J. 724 where in addition to failing to appoint new counsel within the timeline required by r. 15.04 of the Rules of Civil Procedure, the plaintiff had also failed to comply with other procedural orders and requirements.
[41] Further, I cannot conclude that there is real and non-compensable prejudice to the defendants of the nature described in Pombo where memory of an incident more than 10 years ago was required.
[42] In these circumstances, the motions of the defendants are dismissed.
[43] However, in my view the defendants are entitled to some amount of costs in that there is no doubt that the motions prompted the retention of the plaintiff’s current counsel. I am mindful of the fact that the Estate has retained out of town counsel, however, the travel time and the costs incurred in relation to that retention are not recoverable on the motion. In addition, the result of the motion is relevant to the issue of costs. I order that the plaintiff pay the sum of $2000 to each of the CIBC and the Estate.
[44] I further order that the action be restored to the trial list and be set to the next assignment court at which time a pre-trial date and trial date shall be scheduled in accordance with a timetable in relation to all outstanding steps which the parties are directed to establish.
[45] I encourage counsel to obtain a date for the earliest pre-trial possible in the interest of working to resolve the issues on this action before pressing on to trial.
[46] I also draw to counsel’s attention that as provided in the Construction Act, the procedure in an action shall be as far as possible of a summary character, having regard to the amount and nature of the lien in question. I query whether it might be possible for the issues in the action to be dealt with more expeditiously and efficiently by an alternative to an ordinary trial such as a summary trial or special appointment motion.
“Justice L. C. Leitch” Justice L. C. Leitch
Released: April 26, 2019
COURT FILE NO.: 2752/15 DATE: 20190426
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Allan McRobert Plaintiff
– and –
The Estate of Norman A. Peel, Deceased and Canadian Imperial Bank of Commerce Defendants
REASONS FOR JUDGMENT
Justice L. C. Leitch
Released: April 26, 2019