Court File and Parties

COURT FILE NO.: 1568/15

DATE: 2019-01-16

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: FIORI PAGLIUSO, Plaintiff

AND:

PRIMERICA FINANCIAL SERVICES LTD., PRIMERICA LIFE INSURANCE COMPANY OF CANADA, PFSL INVESTMENTS CANADA LTD., PRIMERICA CLIENT SERVICES INC., JOSEPH “JOE” MURO (discontinued), GIUSEPPE “JOE” MOZZONE (discontinued), STEVE BATTISTON (discontinued), PATRIZIA BATTISTON (discontinued), JULIAN SERENA (discontinued), and FRANCO GRECO (discontinued), Defendants

BEFORE: Gray J.

COUNSEL: Daniel Yudashkin, for the Plaintiff

Caitlin R. Sainsbury and Maureen Doherty, for the Defendants

HEARD: January 15, 2019

ENDORSEMENT

[1] The plaintiff claims that he was wrongfully dismissed by the corporate defendants (referred to hereafter as “Primerica”). The action has been discontinued as against the individual defendants.

[2] There is an issue as to whether the plaintiff was an employee, a dependent contractor, or an independent contractor. I take it that it is also Primerica’s position that the relationship with the plaintiff was terminated for cause, after he started a competing business.

[3] What is now before me is a motion by the plaintiff to extend time for service of the Statement of Claim. The Statement of Claim was issued on March 18, 2015.

[4] In his affidavit, the plaintiff deposes that he did not have funds to immediately proceed with the litigation, and states “As such, I instructed my previous counsel not to serve any of the defendants until I had funds to proceed with this action.” He further deposes that he was fearful that Primerica would put him to significant costs and legal fees by bringing various motions and taking various legal steps once the Statement of Claim was served on the defendants. At that time, he was not prepared to bear that expense. Thus, he intended to get out of his debts and accumulate funds and then proceed to serve the defendants with the Statement of Claim.

[5] The plaintiff deposes in or about May 2015, he was sued for negligence in his capacity as an agent of Primerica, and he was forced to fund that litigation on his own because Primerica refused to extend coverage under its Errors and Omissions policy.

[6] After the settlement of that action, the plaintiff deposes that he was able to recuperate financially, and is now prepared to proceed with the litigation and serve the Statement of Claim. He has moved to discontinue as against the individual defendants, and has now instructed his counsel to bring a motion to extend time for service of the Statement of Claim.

[7] The plaintiff deposes that there will be no prejudice to Primerica as they knew about a potential claim, which was the subject of a letter that his counsel sent on December 17, 2012. It should be noted that the subjects raised in that letter had to do with an alleged malicious campaign on the part of certain other agents of Primerica to allegedly destroy the plaintiff’s business. He deposes “Furthermore, all the documents and witnesses that are material to this matter are still available.”

[8] Primerica has filed two affidavits. In one, the deponent says it was unable to obtain all of the documents in the plaintiff’s possession after the relationship with him was terminated. In the other, it is deposed that three individuals who would be critical witnesses have been terminated and no longer have contact with the company. It is deposed that securing their evidence will be much more difficult to obtain than it would have been in 2013, when the allegations arose. That deponent was cross-examined, and it is fair to say that Primerica has made little effort to contact the potential witnesses themselves.

Submissions

[9] Counsel for the plaintiff submits that an extension of time should be granted to serve the Statement of Claim.

[10] Counsel submits that the plaintiff has given a reasonable explanation for the delay, based on his lack of funds and his position that Primerica is responsible for his lack of funds since they destroyed his business.

[11] Counsel submits that Primerica will not be prejudiced by any delay. The plaintiff has deposed as much in his affidavit, and Primerica has provided virtually no evidence of any prejudice.

[12] Counsel for Primerica submits that the motion should be dismissed. She submits that the delay on the part of the plaintiff was intentional, and thus is unlike most other cases, in which delay can be laid at the feet of plaintiff’s counsel or for some other reason that is not directly the fault of the plaintiff. Counsel submits that in this case the issue of prejudice is far less relevant.

[13] Counsel submits that in any case Primerica has shown that it is prejudiced by the delay. Had the Statement of Claim been served promptly, it is likely that the witnesses who have departed from Primerica would still have had a contractual relationship with Primerica, and it will now be much more difficult to secure their evidence, if it can be secured cooperatively at all.

Analysis

[14] The factors to be considered in determining whether an extension of time to serve the Statement of Claim should be granted have been expressed in similar ways in different cases.

[15] In Beckwith v. Salmon, 2014 ONSC 3528, Master Haberman set out what she considered to be the appropriate factors at para.6 as follows:

6. In balancing the concepts of “just resolution” and “no prejudice or unfairness to either party”, the court will generally look at:

• The length of the delay;

• The evidence filed that explains the delay;

• whether the evidence regarding delay is sufficient;

• the extent to which the defendant, himself, bears some or all of the responsibility for this delay;

• whether the applicable limitation period for the action has already expired; and

• whether the defendant would suffer prejudice if the motion is granted.

[16] In Tarsitano v. Drutz, 2013 ONSC 5605, DiTomaso J. stated at para. 22:

22. In considering whether to grant the plaintiffs an extension of time, the jurisprudence provides that the court may consider the following factors:

a) Whether the defendant had notice before the expiry of the limitation period that the plaintiff was asserting a claim against him;

b) whether or not the plaintiff moved promptly for an extension of time after the period expired;

c) whether or not it was reasonable for a defendant to infer from all the circumstances that the plaintiff had abandoned his claim;

d) whether or not the delay in serving the claim resulted from the direction, participation or involvement of the plaintiff personally in the service of the claim; and

e) prejudice to the defendant.

[17] It should be noted that in both cases it was held that a relevant factor is the degree of personal involvement by the plaintiff in the delay in serving the Statement of Claim.

[18] It seems to me that the principles to be applied in a case such as this are similar to those applied on a motion to dismiss an action for delay. LeMay J. appears to have accepted as much in Kuner v. Nguyen, 2015 ONSC 730, at para. 33. He quoted with approval what was said by Borins J.A. in Armstrong v. McCall (2006), 2006 17248 (ON CA), 213 O.A.C. 229 (C.A.) at para. 11:

11. The test for dismissal of an action for delay is not in dispute. In my view, it is correctly stated at paragraph 4 of the reasons of the Divisional Court in an appeal from the master in Woodheath Developments Ltd. v. Goldman (2003), 2003 46735 (ON SCDC), 66 O.R. (3d) 731 at 732:

Specifically, I accept as correct the principles applicable to motions to dismiss for delay derived by the learned Master from the case law and accurately summarized in the headnote at (2001), 2001 28019 (ON SC), 56 O.R. (3d) 658 as follows:

The principle to be applied on a motion to dismiss for delay is that the action should not be dismissed unless: (1) the default is intentional and contumelious; or (2) the plaintiff of his or her lawyers are responsible for the inexcusable delay that gives rise to a substantial risk that a fair trial might not now be possible. It is presumed that memories fade over time, and an inordinate delay after the cause of action arose or after the passage of limitation period gives rise to a presumption of prejudice. Where there is a presumption of prejudice, the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebuts the presumption. 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 the events. If the presumption is rebutted then the action may still be dismissed if the defendant leads convincing evidence of actual prejudice. [Emphasis added]

[19] It seems clear that where default is “intentional and contumelious”, the issue of prejudice is not relevant on a motion to dismiss under Rule 24. Clearly, if the plaintiff has made a conscious decision to delay, he or she has elected to take a calculated risk. In such a case, there is little need to balance any equities since the plaintiff has made a decision and must live with the consequences.

[20] I agree with counsel for Primerica that the cases relied on by the plaintiff are cases in which the delay cannot be laid at the feet of the plaintiff personally, but rather flow from inaction by the plaintiff’s counsel or for other reasons that do not rise directly from action or inaction on the part of the plaintiff personally. Those cases include Chiarelli v. Weins (2000), 2000 3904 (ON CA), 46 O.R. (3d) 780 (C.A.); Desjardins v. Mooney, [2001] O.J. No. 697 (S.C.J.); Heaps Estate v. Jesson, 2007 12892 (ON SC), [2007] O.J. No. 1478 (S.C.J.); Kuner v. Nguyen, supra; and Lico v. Griffiths (1996), 1996 7990 (ON SC), 28 O.R. (3d) 688 (Gen. Div.).

[21] In this case, it is clear that the plaintiff made a deliberate decision to not serve the Statement of Claim. Accordingly, pursuant to the test set out in Armstrong v. McCall, supra, the default must be considered to be “intentional and contumelious”. That being the case, pursuant to the test applied there, the issue of prejudice would not be relevant. That was certainly the view of Quinn J. in Elltoft v. Mann, [2001] O.J. No.1521 (S.C.J.), at para. 21, where he stated:

However, must prejudice always exist before rule 24 can be said to apply? Almost always; but not always. A lawsuit requires a demonstrable commitment on the part of a plaintiff to have the case tried. Granted, some actions do not progress at a fast or even a steady speed. Many move glacially. Others are marked by spurts of activity, incited, perhaps, by urging from the plaintiff, interjections of money or the lawyer’s doleful acceptance that he or she cannot indefinitely continue to move the file from one flat surface to another. Generally, delay has either of two fathers: the client or the lawyer. Delay by the lawyer is frequently forgiven so as to not to punish the client. Delay by the client requires closer scrutiny.

[22] At para. 22, he stated:

Here, the plaintiff, effectively, has abdicated his role as plaintiff. He has chosen to sojourn rather than litigate. This cannot be countenanced by the court and I believe rule 24 is wide enough to encompass the situation. Consequently, for this reason, as well, the action must be dismissed. The conduct of the plaintiff is offensive to the administration of justice.

[23] In other cases under Rule 24, the court has required the plaintiff to provide an explanation that any delay was not intentional: Berg v. Robbins (2009) 206 O.A.C. 200 (Div. Ct.); Nugent v. Crook (1969), 1969 389 (ON CA), 40 O.R. (2d) 110 (C.A.); and Purkis v. 736007 Ontario Ltd. (2001), 143 O.A.C. 344 (Div. Ct.).

[24] I am prepared to dismiss this motion on the sole ground that the delay in serving the Statement of Claim was as a result of a personal decision made by the plaintiff, and was not the fault of his counsel or some other cause. In effect, the plaintiff took a risk that he would be successful on a motion of this sort. I do not think it is appropriate to allow the plaintiff to play fast and loose with the rules in this way.

[25] In the alternative, I think the motion should be dismissed on the ground that the plaintiff has not satisfied his onus to show that there will not be prejudice on the part of the defendant.

[26] Prejudice is of two sorts: presumed prejudice, and actual prejudice.

[27] Presumed prejudice will arise upon the expiry of a limitation period. It is clear that the limitation period has expired sometime after the Statement of Claim was issued. Thus, there is presumed prejudice here.

[28] I also think the defendant has shown that there is at least some actual prejudice. Some witnesses who can give relevant evidence are no longer in a relationship with the defendant. Clearly, it will be more difficulty for the defendant to secure their cooperation in providing evidence.

[29] The plaintiff, in his affidavit, has made the bald statement that the defendant will not suffer prejudice. This sort of bald statement is of no value, and cannot satisfy the plaintiff’s obligation to show that the defendant will not be prejudiced.

Disposition

[30] For the foregoing reasons, the motion is dismissed.

[31] I will invite brief written submissions as to costs, not to exceed three pages, together with a cost s outline. Counsel for Primerica will have five days, and counsel for the plaintiff shall have five days to respond. Counsel for Primerica will have three days to reply.

Gray J.

Date: January 16, 2019