Court File and Parties
COURT FILE NO.: CV-09-386834 MOTION HEARD: 2019-06-03 REASONS RELEASED: 2019-07-19
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
BETTY DALE AND THE ESTATE OF SADIE MORANIS Plaintiffs
- and-
THE CORPORATION OF THE TOWNSHIP OF TINY AND GEORGE CORNELL Defendants
BEFORE: MASTER M.P. McGRAW
COUNSEL: C. DiMarco, for the Defendants, The Corporation of the Township of Tiny and George Cornell
REASONS RELEASED: July 19, 2019
Reasons for Endorsement
I. Introduction
[1] The Defendants, The Corporation of the Township of Tiny (the “Township”) and George Cornell (together with the Township, the “Defendants”) move to dismiss this action due to the Plaintiffs’ failure to comply with numerous court orders. This includes the failure of the Plaintiffs, Betty Dale and the Estate of Sadie Moranis (the “Estate”, together with Ms. Dale, the “Plaintiffs”) to pay security for costs and Ms. Dale’s failure to pay two outstanding costs awards.
[2] This is the fourth return of this motion and is peremptory on the Plaintiffs. Although properly served and aware of today’s motion, no-one appeared on behalf of the Plaintiffs and they filed no responding motion materials or costs submissions. Stephen Moranis, who has been acting as a representative of the Estate, filed email and fax messages dated May 29, 2019 requesting a further adjournment until Fall 2019.
II. The Action and Procedural History
[3] The Plaintiffs commenced this action by Statement of Claim issued on September 11, 2009. This action arises from a boundary dispute related to properties owned by the Plaintiffs located on Georgian Bay within the Township (the “Properties”). Mr. Cornell is a former Councillor for the Township.
[4] In October 2007, the Plaintiffs commenced an application pursuant to the Boundaries Act (Ontario) which they abandoned in April 2008. On December 21, 2010, the Plaintiffs commenced a new boundary application under the Boundaries Act. On July 11, 2011, the Township commenced an application pursuant to the Surveys Act (Ontario) to determine the position of the original road allowance and all adjacent lots. On March 22, 2012, the Ontario Deputy Director of Titles placed the Boundaries Act proceedings in abeyance in favour of the mandatory procedure under the Surveys Act.
[5] On October 24, 2013, the Surveyor General issued a Decision and Reasons confirming the position of the disputed road allowance (the “Survey Decision”). On December 3, 2015, the Divisional Court dismissed Ms. Dale’s appeal of the Survey Decision and ordered Ms. Dale to pay costs of $12,000 to the Township. On March 11, 2016, the Court of Appeal denied leave to appeal the Divisional Court’s decision and ordered Ms. Dale to pay costs of $1,500 to the Township. Ms. Dale has not paid the two costs awards totaling $13,500 (the “Costs Orders”). On April 6, 2016, the survey as determined by the Surveyor General was registered on title to the Properties.
[6] In this action, the Plaintiffs claim, among other things, interlocutory and permanent injunctions enjoining the Defendants from removing or damaging any of the Plaintiffs’ property; trespassing onto the Properties and encouraging and advising others to trespass onto the Properties; damages of $10,000,000 for trespass, loss of use of enjoyment and wrongful interference with economic interests and relations; $10,000,000 for actions intended to reduce the value of the Properties; $10,000,000 for the civil tort of conspiracy and punitive damages of $1,000,000.
[7] This action was stayed by Order of Justice Allen dated July 10, 2010 pending a determination of the boundary (the “Stay”). By Order dated August 22, 2016, Justice Kristjanson vacated the Stay and ordered the following timetable; i.) Ms. Dale to appoint new counsel or deliver a Notice of Intention to Act in Person by September 20, 2016; ii.) the Plaintiffs to deliver their Fresh As Amended Statement of Claim, if any, by October 20, 2016; iii.) the Defendants to deliver their Statement of Defence by November 20, 2016; iv.) the parties to exchange Affidavits of Documents by December 14, 2016; v.) the Plaintiffs to set the action down for trial by September 15, 2017 (the “August 2016 Order”). The Plaintiffs have not complied with any of their obligations under the August 2016 Order.
[8] Pursuant to the Order of Justice Glustein dated January 12, 2017, the Plaintiffs were ordered to appoint new counsel or deliver Notices of Intention to Act in Person by April 21, 2017 barring which Ms. Dale would deemed to be acting in person and could be served with motions by mail and email, and the Estate could be served by mail and email on Mr. Moranis (the “January 12 Order”). The Plaintiffs have not complied with the January 12 Order.
[9] On July 14, 2017, the Defendants brought a motion before me seeking security for costs. At the request of the Plaintiffs, I adjourned the motion to October 4, 2017 to provide the Plaintiffs with additional time to retain counsel, file responding materials and engage in further discussions with Defendants’ counsel with a view to resolving the action in its entirety. As set out in my Endorsement dated October 4, 2017, the Plaintiffs did not retain counsel or file materials and the actions did not settle. On the return of the motion, the Plaintiffs reiterated their intention to discontinue or dismiss their actions but needed more time to clarify certain real property issues and Mr. Moranis’ authority to consent to a dismissal or discontinuance on behalf of the Estate.
[10] Pursuant to my Order dated October 4, 2017, Ms. Dale was ordered to pay the Costs Orders on or before November 15, 2017 and if the Plaintiffs, or either of them, had not discontinued or dismissed their respective actions by December 20, 2017, then one or both, as applicable, were required to pay security for costs of $17,500 each (the “October 4 Order”). The Plaintiffs have not complied with the October 4 Order.
[11] During a telephone case conference on January 12, 2018, the Defendants sought a return date for this motion to dismiss. I declined to schedule a date given that Mr. Dale had scheduled a motion for directions before a Judge returnable February 14, 2018 at which he intended to seek a costs determination in order to facilitate a settlement of the action. However, this motion date was vacated due to Mr. Dale’s failure to file a Notice of Motion within 10 days of the motion requisition date.
[12] The current motion first came before me on July 26, 2018. The Plaintiffs requested an adjournment. Mr. Moranis attended and filed a letter from his surgeon advising that he was undergoing cancer treatments until late Spring 2019. Mr. Dale filed an email message through Defendants’ counsel advising of Ms. Dale’s health issues and other family matters. In granting the adjournment, I stated as follows in my Endorsement dated July 26, 2018 (the “July 26 Endorsement”):
“….I am empathetic and sensitive to these situations and requests and in the circumstances conclude that it is reasonable and appropriate to grant an adjournment.
However, given the history of these proceedings, including the delays and the ongoing non-compliance with the October 4 Order and previous court orders, the adjournment will be granted with conditions. In particular, I am not prepared to permit the Plaintiffs, who have responsibility for moving their actions forward, to ignore the fact that each was required to pay security for costs of $17,500 by December 20, 2017 and that Ms. Dale has an outstanding costs order of $13,500 dating back to March 2016, which pursuant to the October 4 Order was to have been paid by November 15, 2017.”
[13] In the July 26 Endorsement, I adjourned this motion to November 15, 2018 peremptory on the Plaintiffs and ordered the Plaintiffs to, if the Costs Orders and outstanding security for costs had not been paid, advise the Township in writing of their proposals to pay any outstanding amounts and file them with the Court on or before November 8, 2018. The Plaintiffs did not do so.
[14] Due to an inadvertent scheduling error, I was not sitting on November 15, 2018 and the motion came back before me on January 3, 2019. Mr. Moranis attended and advised that he was still undergoing cancer treatments and remained unable to address these proceedings until late Spring 2019 as explained in his physician’s letter filed on July 26, 2018. Mr. Dale advised by email through Defendants’ counsel that he was unable to attend due to the recent death of his partner.
[15] Given these extraordinary circumstances, pursuant to my Order dated January 3, 2019: the motion was adjourned until today peremptory on the Plaintiffs; the Plaintiffs were ordered to deliver any responding motion materials by May 10, 2019; a telephone case conference was scheduled for March 1, 2019 to obtain an update including with respect to Mr. Moranis’ health and to determine if the motion could be heard sooner; Mr. Dale was ordered to advise Defendants’ counsel and Mr. Moranis before February 1, 2019 as to whether he continued to purport to act for Ms. Dale; the Defendants were permitted to make submissions with respect to the costs of the action, this motion, the security for costs motion and all related attendances at today’s motion and the parties were required to exchange Bills of Costs and be prepared to make costs submissions (the “January 3 Order”).
[16] My Endorsement dated January 3, 2019 states:
“…The Plaintiffs should understand that no further indulgences or adjournments will be granted and that the Defendants’ motion will proceed on June 3. More importantly, if the Plaintiffs intend to pursue their actions, they should immediately take steps to pay the outstanding costs awards and outstanding security for costs award together with other steps set out in previous court orders.”
[17] Defendants’ counsel and Mr. Moranis attended on the March 1, 2019 telephone case conference. No-one attended on behalf of Ms. Dale and Mr. Dale did not comply with my direction to advise Defendants’ counsel and Mr. Moranis as to whether he continued to purport to act for Ms. Dale. My Endorsement dated March 1, 2019 states:
“The Plaintiffs are reminded that no further adjournments will be granted. If, as they have indicated, the Plaintiffs wish to resolve this litigation and discontinue these proceedings, they are encouraged to contact Defendants’ counsel to engage in settlement discussions.”
[18] Mr. Moranis’ email and fax messages requesting a further adjournment filed today include a new letter from his physician advising that Mr. Moranis has a medical condition that would likely be exacerbated by attending today’s motion. Mr. Moranis further states that he has discovered evidence that the Township was involved in a conspiracy which new counsel will present in the Fall.
III. The Law and Analysis
[19] The Defendants rely on Rules 30.08(2), 57.03 and 60.12 of the Rules of Civil Procedure.
[20] Rule 30.08(2) states:
“Where a party fails to serve an affidavit of documents or produce a document for inspection in compliance with these rules or fails to comply with an order of the court under rules 30.02 to 30.11, the court may,
(a) revoke or suspend the party’s right, if any, to initiate or continue an examination for discovery;
(b) dismiss the action, if the party is a plaintiff, or strike out the statement of defence, if the party is a defendant; and
(c) make such other order as is just.”
[21] Rule 57.03 states:
“(1) On the hearing of a contested motion, unless the court is satisfied that a different order would be more just, the court shall,
(a) fix the costs of the motion and order them to be paid within 30 days; or
(b) in an exceptional case, refer the costs of the motion for assessment under Rule 58 and order them to be paid within 30 days after assessment.
(2) Where a party fails to pay the costs of a motion as required under subrule (1), the court may dismiss or stay the party’s proceeding, strike out the party’s defence or make such other order as is just.”
[22] Rule 60.12 states:
“Where a party fails to comply with an interlocutory order, the court may, in addition to any other sanction provided by these rules,
(a) stay the party’s proceeding;
(b) dismiss the party’s proceeding or strike out the party’s defence; or
(c) make such other order as is just.”
[23] The following comments by Gray J. in Broniek-Harren v. Osborne, 2008 ONSC 19782 are applicable to the present case:
“24 Counsel for the plaintiffs filed no material on the motion. He appeared before me and offered no excuse for the degree of non-compliance. It would have been difficult, if not impossible, for him to do so. All he could do, and all he did do, was offer vague assurances that he would get started on complying with the undertakings as soon as possible. He offered no explanation of why, in the face of court orders requiring compliance, no efforts to comply had been made to date.
28 The policy underlying the Rules of Civil Procedure is twofold: to ensure that cases that are not settled are tried on their merits; and to ensure that cases are processed, and heard, in an orderly way. A civilized society must ensure that a credible system of justice is in place, and the Rules of Civil Procedure, made pursuant to the Courts of Justice Act, reflect the scheme created by the Province for the orderly handling of civil cases.
29 The Rules reflect a balance. The litigant does not have an untrammelled right to have his or her case heard. In order to be heard, a case must be processed in accordance with the Rules. By the same token, adherence to the Rules must not be slavish in all circumstances. They are, after all, designed to ensure that cases are heard. Throughout the Rules, the principle is reflected that strict compliance may be dispensed with where the interests of justice require it: see, for example, Rules 1.04(1), 2.01, 2.03, 3.02, and 26.01. The difficult issue, in any particular case, is to determine when non-compliance reaches the point that it can no longer be excused. The Court, and society as a whole, have an interest in ensuring that the system remains viable. If the Rules can be ignored with impunity, they might as well not exist.
30 In determining matters of this sort, Courts in this province have had to wrestle with these competing objectives: see, for example, Cardoso v. Cardoso (1998), 22 C.P.C. (4th) 134 (Ont.Gen.Div.); Baksh v. Sun Media (Toronto) Corp. (2003), 63 O.R. (3d) 51 (Master); Provato v. Burgantin (2003), 33 C.P.C. (5th) 385 (Master); 1066087 Ontario Inc. v. Church of the First Born Apostolic Inc. (2004), 1 C.P.C. (6th) 199 (Ont.Div.Ct.); and Vacca v. Banks (2005), 6 C.P.C. (6th) 22 (Ont.Div.Ct.).
31 Non-compliance with procedural requirements is taken more seriously when those requirements are set out in court orders. An example is the Vacca case, supra. At para. 21 of his judgment, Ferrier J. stated:
Furthermore, the order dismissing the action was not made because the plaintiffs had failed to comply with undertakings but because the plaintiffs had repeatedly breached court orders to comply with undertakings and to produce documents, especially concerning damages calculations. When an order is made, and it is not appealed, it must be complied with.
32 Ferrier J. noted that failure to comply with procedural orders does not simply affect the parties to the action, but also affects the administration of justice as a whole. At para. 23, he stated:
Repeated delays and failures to comply with procedural orders affect not only the parties to the action. They significantly increase the cost of the administration of justice due to the impact on administrative and judicial resources. Repeated breaches of orders must attract significant sanctions otherwise the Case Management Rules will become ineffectual and the ultimate goal of the rules will be unattainable.
33 In the paragraph immediately following the paragraph just quoted, Ferrier J. noted that "The rules must not be rendered nugatory by failure to impose appropriate sanctions in cases of breaches of orders", and at paragraph 27 of his judgment, he said:
There comes a time when this court is obliged to meet its responsibility for the effective administration of justice through case management by dismissing an action. Such is the case when the plaintiff repeatedly fails to comply with orders of the court whether or not there has been prejudice to the defendants.
34 With respect, I entirely agree with Ferrier J. As he noted, there comes a time when the Court must meet its responsibility for the effective administration of justice by dismissing an action where procedural requirements imposed by court orders are not observed. In my view, that time has arrived in this case.
35 As noted earlier, counsel for the plaintiff filed no material on this motion. He offered only vague assurances that the undertakings will be complied with, notwithstanding that they had not yet been complied with in the face of two orders of this Court. In my view, it would sanction repeated flouting of not only the Rules but orders of this Court to permit this action to continue in these circumstances. Effective administration of justice requires that the action be dismissed.” (Broniek-Harren at paras. 24, 28-35).”
[24] The present circumstances are also similar to those considered by Nordheimer J. in Bottan v. Vroom, [2001] O.J. No. 2737:
“26 Finally, the submission that the striking out of pleadings is not justified because it results in a determination of an action other than on its merits is one which is contradicted by the very existence of rules 57.03(2) and 60.12. The rationale for those rules is predicated on the fact that there will be situations where a party's position ought to be determined for procedural reasons arising from the failure of that party to abide by orders made by the court. If it was the case that the merits of the matter always had to be determined before such remedies could be imposed, there would be little room for the effective application of either of these rules.
27 Mr. & Mrs. Bottan make an emotional plea that they be entitled to have "our side of the story told". They say that if the motion for summary judgment is never heard, they will be denied that opportunity. At the commencement of this action, Mr. & Mrs. Bottan were represented by counsel. At least in the proceedings before Jenkins J. and Somers J., there was considerable material filed on behalf of the plaintiffs because the formal orders recite the presence of that material. While I do not have those various motion records in order to determine exactly what material was filed, I must assume that it had something to do with their side of the story otherwise I am not sure of what use or relevance the material could have been. In any event, this action has been outstanding for something in the order of fifteen months. If Mr. & Mrs. Bottan have not told their side of the story by now, I can only conclude that such an eventuality is one of their own making.
28 If the procedural history of this action, and the clear failing of the plaintiffs and Antonio Bottan to obey orders of this court, are not sufficient to warrant the invocation of rule 57.03(2) and 60.12 then I am at a loss to determine what circumstances would so warrant. The conduct of this litigation by the plaintiffs and Antonio Bottan has been the subject of criticism by a number of judges. Further, it is apparent that the plaintiffs and Antonio Bottan have no intention of ever obeying the order of Somers J. nor of paying the costs that have been awarded against them. If the court does not act in such a case, then the defendants here could legitimately wonder what justice they were receiving from this court. (Bottan at paras. 26-28).
[25] Notwithstanding multiple indulgences granted by the Court over the last 3 years, the Plaintiffs have not complied with any of the following court-ordered obligations:
i.) Ms. Dale has not paid the Costs Orders totaling $13,500, the bulk of which was ordered in 2015, which she was again ordered to pay by November 15, 2017 pursuant to the October 4 Order;
ii.) the Plaintiffs have not complied with any obligations under the August 2016 Order including delivering their Affidavits of Documents;
iii.) the Plaintiffs have not complied with the January 12 Order and the July 26 Endorsement;
iv.) the Plaintiffs have not paid security for costs of $17,500 which they were ordered to post by December 20, 2017 pursuant to the October 4 Order if their respective actions were not dismissed or discontinued;
v.) Mr. Dale, on behalf of Ms. Dale, did not advise the other parties by February 1, 2019 if he continued to purport to act for Ms. Dale as required by the January 3 Order.
[26] In my view, the Plaintiffs’ complete and ongoing non-compliance demonstrates a blatant disregard for orders of this Court. Other than advising at previous attendances of their intention to settle and discontinue these proceedings, the Plaintiffs have provided no meaningful explanation for their non-compliance or evidence of any efforts they have taken to comply. More recently, they have provided no explanation at all.
[27] The Plaintiffs have also not offered any reassurance that they intend to take any steps to comply with their outstanding obligations let alone when they intend to do so. The Plaintiffs’ efforts have largely focused on seeking adjournments, previously due to their intention to retain legal counsel (which they did not do) and pursue settlement discussions (which appear to have been minimal) and more recently due to legitimate health and personal issues. Rather than comply with this Court’s orders, the Plaintiffs have ignored their obvious breaches and focused their limited efforts on buying more time to keep these proceedings alive.
[28] With respect to Ms. Dale, in addition to her non-compliance with at least 7 court orders, she has not participated in these proceedings since Mr. Dale filed his email requesting an adjournment on January 3, 2019. Notwithstanding that today’s return date is peremptory upon the Plaintiffs, no-one appeared on Ms. Dale’s behalf, and no correspondence was filed explaining the non-attendance or communicating her position to the Court. Ms. Dale’s breaches are more pronounced than the Estate’s given the outstanding Costs Orders which she shows no intention of paying.
[29] Taking all of the relevant factors and circumstances into consideration, given the multiple, repeated and unexplained breaches of court orders, I conclude that Ms. Dale’s ongoing non-compliance can no longer be tolerated and it is appropriate to dismiss her action. Given Ms. Dale’s blatant disregard of orders granted in these proceedings, I am satisfied that the proper administration of justice requires this result. Dismissal is also consistent with a proper balancing of the parties’ rights including Ms. Dale forfeiting her right to have her action heard on its merits.
[30] Absent Mr. Moranis’ ongoing health issues, I would also be inclined to dismiss the Estate’s action. However, given the serious medical concerns documented by his physician which prevent him from attending today, I am prepared to grant the Estate a final, limited indulgence to move its action forward. However, this indulgence is granted on the condition that the Estate finally comply with its outstanding obligations to this Court. Accordingly, the Estate must complete the following steps on or before September 30, 2019, barring which, the Estate’s action shall be dismissed:
i.) the Estate shall post security for costs of $17,500 with the Accountant of the Superior Court of Justice to the credit of this action;
ii.) the Estate shall deliver its sworn Affidavit of Documents;
iii.) the Estate shall serve a Notice of Intention to Act in Person or appoint new counsel.
[31] In my view, these terms are reasonable, appropriate and properly balance the parties’ rights in the circumstances. They do not require Mr. Moranis to attend before September 30, 2019 but rather to take long overdue steps to comply with the Estate’s obligations. If, as Mr. Moranis has advised, the Estate has or will be retaining new counsel, then one would expect counsel would also assist the Estate in complying with its outstanding obligations to the Court. If the Estate does not comply with these terms, then I conclude that it too should lose its right to have its action tried on its merits.
IV. Costs
[32] The Defendants seek the following costs from the Plaintiffs:
i.) $44,575.18 on a partial indemnity scale for the action;
ii.) $25,882.11 on a substantial indemnity scale for the security for costs motion (or alternatively, $20,763.23 on a partial indemnity scale);
iii.) $7,453.15 on a partial indemnity scale for this dismissal motion.
[33] The Plaintiffs filed no costs submissions.
[34] The issue of costs as against the Estate is reserved until it is known whether the Estate complies with the terms set out above. The Defendants may bring their claims for costs as against the Estate back before me at that time, and in any event, after September 30, 2019.
[35] Turning to a consideration of costs as against Ms. Dale, the general rule is that costs on a partial indemnity scale should follow the event (394 Lakeshore Oakville Holdings Inc. v. Misek, 2010 ONSC 7238 at para. 12). In determining costs and considering the factors under Rule 57.01(1) of the Rules of Civil Procedure, the overriding principles are fairness and reasonableness (Boucher v. Public Accountants Council for the Province of Ontario, (2004), 71 O.R. (3d) 291 (C.A.)). The principle that costs should follow the event should only be departed from for very good reasons such as misconduct of the party, miscarriage in procedure, or oppressive or vexatious conduct of proceedings (1318706 Ontario Ltd. v. Niagara (Regional Municipality) (2005), 75 O.R. (3d) 405 (C.A.); 394 Lakeshore at para. 14). Rules 1.04(1) and 1.04(1.1) are also relevant to costs.
[36] Given the dismissal of Ms. Dale’s claim, the complete success of the Defendants and all of the circumstances set out above, I am satisfied that that there is no reason to depart from the general rule that costs should follow the event. As such, the Defendants are entitled to costs of the action, the security for costs motion and the current motion from Ms. Dale.
[37] In determining the quantum of costs to be awarded against Ms. Dale, I have considered the factors under Rule 57.01(1) placing particular emphasis on the conduct of Ms. Dale described above which contributed to the length of these proceedings and the costs incurred by the Defendants. I have also considered the reasonable expectations of the parties including the fact that the amounts sought by the Defendants represent costs claimed from both Plaintiffs. I have also taken into consideration that the Defendants, quite reasonably, are relying on Bills of Costs dated July 12, 2018 which they have not updated.
[38] With respect to the action, having reviewed the Bill of Costs and considered the relevant factors (including the significant damages claimed and serious allegations made), I conclude that $23,000 on a partial indemnity scale is fair and reasonable in the circumstances.
[39] With respect to the security for costs motion, the situations in which costs on a substantial indemnity scale are appropriate are rare such as where one party has behaved in an abusive manner, brought proceedings wholly devoid of merit, and unnecessarily ran up the costs of the litigation (Standard Life Assurance Co. v. Elliot, [2007] O.J. No. 2031 (S.C.J.) at paras. 9-10). While I have expressed concerns regarding Ms. Dale’s conduct in these proceedings, I am not satisfied that any conduct specific to the security for costs motion calls for costs on a higher scale. As such, based on all relevant factors, I am satisfied that $11,000 on a partial indemnity scale is fair and reasonable in the circumstances.
[40] With respect to this dismissal motion, I conclude that, largely as a result of Ms. Dale’s non-responsiveness, $4,000 on a partial indemnity scale is fair and reasonable in the circumstances.
[41] The total costs award of $38,000 for the action, the security for costs motion and the current motion plus the outstanding Costs Orders in the amount of $13,500 shall be paid by Ms. Dale within 60 days.
V. Disposition
[42] Order to go on the terms set out above. Defendants’ counsel may file a form of order through the Masters Administration Office for my review and approval. As with previous orders in these proceedings, approval from the Plaintiffs as to form and content is not required.
[43] I shall remain seized of this matter. The parties may contact me to schedule a telephone case conference to speak to any outstanding issues or for further directions or case management.
[44] Defendants’ counsel shall provide a copy of these Reasons to the Plaintiffs.
Released: July 19, 2019
Master M.P. McGraw