Grillo Barristers P.C. v. Kagan Law Firm P.C. et al.

COURT FILE NO.: CV-13-00474209-0000

MOTION HEARD: August 19 and September 11, 2019

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Grillo Barristers P.C.

Plaintiff

AND:

Kagan Law Firm P.C., Daria Kagan and Natasha Baksh

Defendants

BEFORE: Master J. Josefo

Date of Decision: September 18, 2019

Counsel: S. Hodge, Counsel for Gary Farb, et al, former law firm and lawyers,

for the Moving Party Plaintiff

Email: shodge@kmlaw.ca

C. Trivisonno, Counsel for the Defendants,

Email: ctrivisonno@litigate.com

Overview of the Issue:

[1] Salvatore Grillo, the self-described (paragraph four of the statement of claim) principle of the plaintiff law firm Grillo Barristers P.C. (collectively, “Grillo”), sued lawyer Daria Kagan and the Kagan law firm for, inter alia, alleged breach of a contract made October 4, 2012. Grillo also sued law clerk Natasha Baksh, who purportedly joined Grillo through Kagan, who left Grillo when Kagan did, and who also inter alia, allegedly breached her fiduciary duties to Grillo.

[2] Litigation commenced February 14, 2013. Pleadings closed, albeit with a twist to be discussed ahead, on or about March 12, 2014 when a Reply and Defence to Counterclaim was delivered (served and filed). On February 22, 2018, pursuant to Rule 48.14, the Registrar dismissed the action for delay. Grillo’s lawyer, through counsel for the insurer, seeks reinstatement. This motion to reinstate the action was brought on April 3, 2018. Defendants oppose, asserting that the case is “dead on the vine”.

[3] What I must decide is whether the action should or should not be reinstated.

My Approach to these Reasons:

[4] Counsel for both parties provided not only thorough, thoughtful, and helpful oral submissions, each filed a large amount of material. Counsel were also before me several prior times. Since this motion was brought I have given pre-hearing direction and made several orders, the details of which need not be herein repeated.

[5] In these reasons I will not attempt to go through every document, affidavit, brief/compendium, or other piece of evidence filed. Nor will I reiterate to counsel what each well stated in their submissions. Rather, in coming to my conclusions, I will focus on what I find is important. To do otherwise would lead to this decision rivalling War and Peace in length. If the standard is that the jurist must discuss all evidence and all submissions, indeed, even simple cases (which this one is not) would take pages upon pages to write. Complex cases would consume a forest. Happily, that is not what counsel likely expect in this matter; nor is it the requisite standard for judicial writing.

Important Facts and the Timeline:

[6] After the claim was served and filed, defendants delivered what I agree with Ms. Hodge was a lengthy Demand for Particulars. The Response to the Demand for Particulars was made on or about September 16, 2013. The Statement of Defence and Counterclaim was only thereafter delivered on or about February 13, 2014. On or about March 12, 2014, the Reply and Defence to Counterclaim (“reply”) was delivered. Pleadings were then closed.

There arose two issues pertaining to the reply:

1. In paragraph 2(f), Grillo pleaded, “In fact, when it became apparent that Kagan had settled a number of files for less than their true value, Grillo required that Kagan consult with him prior to settling any of her files…”. In essence, Grillo pleaded that Kagan made improvident settlements.

Counsel for the defendant on various occasions raised concern about this pleading, the potential issues of solicitor-client privilege arising out of it, and whether it could render even more complex this already complex case. In that regard I refer to emails from Mr. A. Parley, lead counsel for the defendant. Mr. K. Borg-Olivier, then counsel for Grillo, initiated the email exchange with Mr. Parley on May 26, 2015 by suggesting that the parties prepare a discovery plan. In his responding email of the same date, Mr. Parley wrote as follows:

“I actually think the discovery issues in these cases [there is another case, “Cervini”, yet it does not factor into the issues before me on this motion] are a little complicated and will require some careful consideration by both of us. You may recall that I raised some of the discovery issues that arose out of your pleading in Kagan last year. At the time, I think you said that you would consider these questions and get back to me as to whether you were going to amend your pleading. Let me know if you want to have a call to discuss.”

Mr. Borg-Olivier responded, agreeing to a call.

In another email exchange between Mr. Parley and Mr. Borg-Oliver on August 20, 2015, Mr. Borg-Oliver provided a draft discovery plan, and asked Mr. Parley for comment. In response, Mr. Parley reiterated his concern regarding paragraph 2(f) of the reply, asking if Grillo would be prepared to amend the pleading.

2. The second issue with the reply was that, for some reason, there was confusion and uncertainty for both parties as to whether it had actually been delivered (served and filed). In that regard, I note the March 28, 2016 email of D. Vasilko, assistant to Mr. Parley, to the second counsel for Grillo, Mr. G. Cohen, who had replaced Mr. Borg-Oliver. That email, responding to Mr. Cohen’s March 3, 2016 letter, was “…to confirm that the Reply and Defence to Counterclaim was not filed in either file [again, “either file” refers to both the Kagan and Cervini litigation].

Yet that was not correct. Both sides were equally confused in that regard because the Reply had indeed been filed in the Kagan matter.

[7] Before this above correspondence pertaining to the reply, other events, which I find relevant when considering the timeline, occurred. Commencing in June 2014, Mr. Borg-Oliver, after pleadings were closed (even though neither side seemingly thought pleadings were closed), took a four-month paternity leave of absence. Upon his return, pursuant to his June 28, 2019 testimony as a witness on this pending motion (question 24), Mr. Borg-Olivier’s “focus was primarily in trying to set up a settlement meeting…”. He had no recollection of attempts to “…nail down the document collection until after it became clear that settlement talks weren’t going to take place, and that being in early 2015”.

[8] As noted above, once it was clear that settlement discussions would not occur, Mr. Borg-Oliver in later August 2015 attempted to move onto discoveries. In response to that, as described above Mr. Parley raised concerns with respect to paragraph 2(f) of the reply.

[9] Subsequently, Grillo and Mr. Borg-Oliver parted ways. As noted above, the second counsel retained by Grillo was Mr. Cohen. Mr. Cohen forthrightly told Grillo that he was too busy to take on the case immediately. There was thus a short, and in my view, understandable, period of resulting dormancy arising after August 20, 2015, lasting until February 22, 2016, when Mr. Cohen served his Notice of Change of Lawyer form. As also discussed above, there was ongoing confusion about whether the reply had ever been filed, which led to Mr. Cohen’s March 3, 2016 enquiry and the above-quoted March 28, 2016 response from the office of counsel for the defendant, stating that it had not.

[10] In May 2016, Grillo and Mr. Cohen finally met. Thereafter, as the record shows, for a period of time Grillo dithered. For reasons unknown, he did not turn the necessary attention to his case which he had commenced, despite repeated admonitions to that end from Mr. Cohen. The August 6, 2016 email of Mr. Cohen to Grillo, which reads in part as follows, well demonstrates the urgings of Mr. Cohen to his client:

“I have heard nothing from your office since our meeting in May. …if you don’t want to proceed, if you don’t have time to proceed, if you recognize that there are more lucrative ways to spend your time—and I would not be surprised that there are—then please let me know now and let’s get rid of this litigation.”

[11] I also flag the October 6, 2016 letter of Mr. Cohen to Grillo. Therein it is observed that almost five months has elapsed since they met, with Mr. Cohen reiterating concerns about the “inadequacy of our productions”, warning that Grillo must pay attention to his case or else he will face the administrative dismissal of the action on the fifth anniversary of commencement. Mr. Cohen asks, frankly, if Grillo is interested in moving the cases forward and, if not, he urges that they be ended.

[12] Soon after, Grillo ends his relationship with Mr. Cohen. For his third lawyer on this file, in or about April 2017 Grillo retains Mr. G. Farb. On April 26, 2017 Mr. Farb serves and files a Notice of Change of Lawyer form. Thus, counsel for defendants are aware that he is now on record. Mr. Farb and his associate Mr. G. Matushansky were the two lawyers on record when the fifth anniversary occurred, and the Registrar dismissed the action.

[13] Initially, and unfortunately, the same stasis occurs with the third law firm on record. A June 20, 2017 email from Mr. Farb to Grillo references the August 20, 2015 discovery plan and the “inadequate” draft Affidavit of Documents. Grillo is told by his lawyer to gather the documents so that discoveries can be scheduled for the summer of 2017.

[14] Yet while the case is then stalled while Grillo decides what he wants to do, by no means can it be concluded that the plaintiff had vanished. Rather, lawyers for plaintiff remained in communication with lawyers for the defendant. For example, in a September 15, 2017 email update to Grillo, Mr. Farb relates his recent discussion with Mr. Parley about both the Kagan and Cervini files. Pertaining to the Kagan file, it appears at that time that Mr. Parley was more certain that a reply was likely filed (yet subsequently, as I discuss below, he was less certain). To that end, Mr. Farb wrote in part as follows to Grillo:

“However, Andrew referred me to the additional pleading in the Kagan file and in particular the Statement of Defence and Counterclaim to which there was a Rely and Defence to Counterclaim and he asked me how we would deal with the complicated issues of solicitor-client privilege regarding Grillo firm files and the allegations of improvident settlements of files before we go to Discovery where those very same issues will be raised. He said all this had been previously raised with your previous counsel…and that as I was new to the file and [these] previous conversations he asked that I review the pleadings in Kagan in anticipation of a further call next week to discuss dealing with issues of solicitor-client privileges and a new Discovery plan.”

[15] In other words, Mr. Parley again raised his concerns regarding paragraph 2(f) of the reply, which concerns I find once again contributed to the matter not advancing until this issue, which Mr. Parley raised several times, was resolved. Importantly, in my view, Mr. Farb makes no mention in his report to Grillo of Mr. Parley expressing concern about the delay to date or raising the specter of dismissal. Given the detailed email of Mr. Farb, I find it likely that if Mr. Parley had raised such concerns, Mr. Farb would have shared them with his client.

[16] Mr. Farb did in his email reiterate to Grillo the need for additional documents—a familiar refrain that each of Grillo’s lawyers had previously sung. There are further emails from Mr. Matushansky to either Grillo or to his managing partner, Ms. P. Sim, seeking the additional documents. Again, Grillo is being prodded by his latest lawyer/law firm, as he had previously been prodded in that regard.

[17] In November 2017, the issue of improvident settlement pleaded at paragraph 2(f) of the reply was seemingly to be resolved. On November 10, 2017, Mr. Matushansky emails Mr. Parley, following up to their discussion of the day prior. That email reads in part as follows:

“You noted that the stumbling block was the allegation in the Kagan Reply of improvident settlements made while at Grillo. While we are both uncertain that the Reply was ever filed, you noted that you would allow us to file a Reply and Defence to Counterclaim in Cervini, and allow us to amend the Reply or file a new one in the Kagan matter. I have now been instructed to drop the allegation in the Kagan reply, and to not raise it in the Cervini matter. We will be filing a Reply in Cervini, and amending/filing a new response in Kagan (I am hoping to have confirmation of whether the Reply was filed ASAP). When are you available for a call to discuss the timetable moving forward?”.

[18] In my view, this email shows that the logjam which helped stall the progress of the matter from moving onto discoveries, as pertains to the one issue in the reply which caused concern to the defendant, was seemingly broken. It is also clear that Mr. Matushansky then sought to discuss the timetable, given the pending fifth anniversary.

To that November 10^th^ email, Mr. Parley replies as follows on November 13, 2017:

“I think pleadings need to be closed before we can discuss next steps. The pleadings raise a lot of issues, both procedural and substantive, that will need to be considered. I have been asking for a response on this issue for three and a half years without any response. Please send me your pleading so that I can confer with my client regarding next steps.”

[19] As was subsequently confirmed, however, pleadings were closed, and had always been closed in this matter since the reply was delivered on or about March 12, 2014. What occurred was that, after Mr. Parley on May 26, 2015 reiterated the concerns of his client regarding paragraph 2(f) of the reply, the plaintiff ultimately in November 2017 acquiesced to those concerns of defendants.

[20] I agree that Mr. Parley, in his November 13^th^ email responding to Mr. Matushansky, did not agree to simply accept a new or amended pleading, as Mr. Matushansky seemingly, and perhaps over-optimistically, believed. In my view, it would be rare that any counsel would likely agree to such a “blank cheque”, as it were. It is instead normal that counsel would agree to a short period of time to review a new pleading so to obtain instructions in that regard. Yet, in his email of November 13, 2017, Mr. Parley again did not raise any issue of prejudice, time-limits, or in any way suggest that a timetable extension may be problematic or would not be granted.

[21] In his email, there was only an oblique reference to delay by his noting, with some justifiable frustration, that he had been awaiting a response on the issue he raised for three and a half years. Still, it could fairly be observed that, by being patient, Mr. Parley achieved his objective of agreement to have the problematic allegation from the reply expunged.

[22] On December 5, 2017, Mr. Matushansky responded to Mr. Parley as follows:

“We are in process of drafting a new Reply for both matters. Which other procedural and substantive issues do you have with the pleadings? I am hoping to narrow the issues to help us get this matter going.”

[23] On December 11, 2017, Mr. Parley responds:

“It’s not that I have issues with the pleadings but that there are a lot of issues raised by the pleadings. When can we expect to receive these pleadings?”

[24] Again, there is not even an allusion to prejudice or time-limits in this correspondence. Mr. Parley does, moreover, not set out his expectation of a deadline by when the new pleadings must be delivered, failing which deadline being met, his position could change.

[25] On February 6, 2018, the new reply is delivered to Mr. Parley pursuant to correspondence of that date from Mr. Farb. Yet the Court office informs Mr. Matushansky that a reply was already filed so, if there was to be a replacement, it must be styled as an amended reply. At least as of that date, the parties knew that, contrary what they at least at times seemed to understand, the reply had always been filed. Also by that date, Mr. Parley clearly had the substantive new pleading, however it had to be styled.

[26] On February 8, 2018, Mr. Matushansky’s then assistant re-served the pleading as a “Fresh as Amended Reply. Draft consents were also provided for Mr. Parley to complete to allow the filing of the amended pleading. On February 13, 2018, Mr. Matushansky followed up with an email to Mr. Parley, noting that his assistant was no longer with their firm, wondering if Mr. Parley had sent the consents back to her, and asking him to re-send them to him. Mr. Matushansky also offered to “discuss the timetable at your earliest convenience”.

[27] Pursuant to his affidavit sworn April 2, 2018, on February 15, 2018 Mr. Matushansky left Mr. Parley a follow-up voicemail. Given no response, on February 21, 2018, Mr. Matushansky emailed Mr. Parley again. Therein he noted that unless he hears back he will be compelled to “bring a motion in respect of the Replies and timetables in both actions”. He noted that he would be “happy to discuss how we can move forward”.

[28] On February 22, 2018, Mr. Parley finally replied. He wrote as follows to Mr. Matushansky:

“I sought instructions after receiving your request to amend your client’s pleading. My clients were not prepared to provide their consent and were considering their responses. I believe that the issue is now moot as we were advised today by the Court that both of these actions have been administratively dismissed.”

[29] Subsequent to the administrative dismissal, in addition to bringing this motion on April 3, 2018, on April 25, 2019 Grillo delivered an Affidavit of Documents. Mr. Trivisonno argued that it is woefully incomplete. He specifically noted that it did not contain client retainer letters, amongst other items which he believes would be necessary for the plaintiff to prove his case. Yet, as discussed below, his own client swore in her affidavit that most of her dealings with the clients was by oral communication, not by retainer letter.

[30] Having reviewed the Affidavit of Documents, I am loath to opine one way or the other, as there could be a further motion brought to address the adequacy of it, if I allow reinstatement. Yet, as Grillo is the plaintiff, I will observe that if it is correct that his affidavit of documents and thus his evidence is incomplete or insufficient to prove his claims, then proceeding with the case is at his risk, given the potential for a large cost award against him if he is unsuccessful, in addition to a lack of success in proving his case. After all, the burden of proof remains with the plaintiff.

[31] Still, I find it relevant that the affidavit of documents was produced, even when this action was essentially hanging in the wind. I also observe that, while there arguably may be items missing, it cannot credibly be said to be “bare-bones”. Rather, it demonstrates to me that Grillo was then, in Spring 2019, still a litigant and was no longer a “sojourner” as he was until early November 2017. I discuss the word “sojourner” ahead in these reasons, as well as why I find it an apt description, for a period of time, of Grillo.

Further Findings Arising from the Facts/Timeline:

[32] There was clearly delay on the part of the plaintiff in this within matter (the Cervini matter, again, is not before me on this motion; all I address herein is the “Kagan” action). I find that the delay arose after August 20, 2015, when Mr. Borg-Olivier delivered a draft Discovery plan. The starting point of August 20, 2015 in my view is appropriate, even though, earlier in these reasons, I found that a period of dormancy while Grillo changed lawyers, and Mr. Cohen needed some months to clear his desk to start work on this file, to be understandable. That resulting period of dormancy, however, while understandable and not particularly unusual in litigation, in my view does not “stop the clock” when considering the various deadlines.

[33] Until August 20, 2015 I find that the matter was proceeding along, taking into account a reasonable time-out for paternity leave for counsel, and for when settlement opportunities were being explored. When it became clear that there was then no appetite for settlement, moreover, Mr. Borg-Olivier attempted to move onto the next step.

[34] Several things prevented that from happening in later August 2015. First, Mr. Parley raised again the issue of the pleading of improvident settlement in the reply. He again urged that consideration be given to removing that pleading. Secondly, Grillo changed lawyers—first, to Mr. Cohen, who was not immediately available to take the case on—and then again, to Mr. Farb. Finally, as is clear, the delay also and, I make clear, mainly, stemmed from Grillo not then turning the requisite attention to his case, by not searching for and obtaining the documents which his lawyers were all, and repeatedly, asking him for.

[35] Thus, for a period of time Grillo became a “sojourner” rather than a litigant, as that word was used by Justice Quinn at paragraph 21 in Elltoft v. Mann [2001] O.J. No. 1521. In the context of observing that delay by counsel which can prejudice a client is more easily forgiven than delay by a client, Justice Quinn, in discussing the plaintiff in that case, stated:

“Here, the plaintiff effectively abdicated his role as plaintiff. He has chosen to sojourn rather than litigate. This cannot be countenanced by the court…”.

[36] Of course, in that case the plaintiff sojourned for quite some long time, also essentially abandoning his action without communication. Those are not the same facts as in this matter. In this matter, again, Grillo indeed became, for a period of time, a sojourner. Yet he never went silent or vanished. Rather, his several lawyers continued to communicate with counsel for defendants even if nothing substantive was happening with the case for various reasons.

[37] When did Grillo reclaim the mantle of litigant? In my view, it was November 9, 2017, when Mr. Parley and Mr. Matushansky discussed the matter, and Mr. Matushansky communicated the new position that the reply would be amended to remove the allegation of improvident settlement. As I wrote above, that was when the logjam was broken and the case began to again move forward.

[38] Thus, the case was stalled for about two and a quarter years, during which time (from August 20, 2015 to November 9, 2017) the plaintiff slumbered. It is correct that Mr. Parley had earlier, in 2014, first raised with Grillo’s first counsel his concerns regarding paragraph 2(f) of the Reply. Yet, despite that, considering a short leave of absence taken by Mr. Borg-Olivier, followed by attempts to settle, and then at least some movement with the provision of a draft Discovery plan, until August 20, 2015 I find that the litigation was still advancing, albeit not rapidly. Yet the relatively slow pace was not objected to by the defendants. Nor did counsel for defendants express concern about the delay in proceeding.

[39] On November 9, 2017 I find that the plaintiff regained the will to move the case forward. To that end, as communicated by Mr. Matushansky to Mr. Parley, the plaintiff was thereafter trying to move the case along.

[40] During oral argument, Mr. Trivisonno noted that the Amended Reply raised new issues, in addition to eliminating the improvident settlement allegation. Yet, when one reviews the latter part of the timeline (from early 2018) set out above, the impression I have is that counsel for the defendants was content to become far less responsive, in a far less timely way, to communications from counsel for plaintiff. As an example, the defendants had the new version of the reply from February 6, 2018. If there were concerns about it, in my view it should not have taken until only after the administrative dismissal on February 22, 2018 for counsel to respond. If there were genuine concerns about the reply, a motion could have been scheduled on consent to address those concerns. To take the position that the matter was moot, because the clock ran out when defendants I find purposely “ragged the puck”, was in my view “hard-ball”.

[41] Another relevant factor leading to delay in this matter is the mutual mistake of the parties that pleadings in this matter had not closed, as it was believed that a reply had not been delivered. That, however, was untrue. Yet that everyone was equally misled by this mistaken belief in my view militates against a finding that delay was solely caused by the plaintiff in all aspects of the case. As I wrote above, Grillo must bear his large share of responsibility for the two and a quarter year of stall or stasis. The question is, whether such ought to lead to the motion of the plaintiff to reinstate the action being denied.

[42] Before turning to the principles arising from Rule 48.14 and the case-law, I address at this juncture the submission by counsel for defendants that because Grillo was, as was submitted, a disingenuous witness, that alone would allow me to dismiss his motion. It was argued by Mr. Trivisonno that, as an Officer of the Court, Grillo, who it is submitted misrepresented matters in his affidavit evidence by inter alia blaming his lawyers instead of himself for the resulting delay, should not be rewarded with an indulgence. Rather, he should be held to a high standard as a lawyer, and, having not met the standard, should not be granted the relief he seeks. Mr. Trivisonno made the specific point that none of the lawyers or law firms retained by Grillo were negligent; rather, it was Grillo himself who failed to be a candid witness and who should not be relieved from his alleged conduct.

[43] Having reviewed the affidavit evidence and the cross-examination transcripts carefully, I agree that Grillo was at least somewhat disingenuous by attempting to off-load the blame onto his lawyers for his becoming, as I have found, a sojourner for a period of time. While Mr. Matushansky falls on his sword by claiming to have been lulled into a point of view by Mr. Parley (that Mr. Parley would allow him to amend the reply), even if so, I do not find that in and of itself to be determinative. As I noted above, it would be the rare (and unwise) lawyer who would simply agree to an amended pleading without first seeing it. More relevant is if Mr. Parley lulled Mr. Matushansky into believing that a request for extension of the timeline would not be problematic. As the correspondence referenced above shows, there is at least some merit in that view.

[44] The subsequent delay in responding by Mr. Parley and the stretching out of the timeline until it expired is I find, in the context of this matter, problematic. Such in my view resembles a strategic response to use the pending fifth year anniversary to gain a highly tactical advantage for the defendants when, until then, the issue of prejudice was not raised, no concerns in that regard had been even whispered, and the plaintiff was once again attempting to continue with his case.

[45] In any event, what is to me, in answering the question I must answer, important is not the quality of Grillo as a witness. If the case goes forward he will have to live with his stated beliefs pursuant to his sworn evidence, and any resulting inconsistencies therein as exposed by defendants. Moreover, like most clients, when matters do not proceed well, Grillo alas, and unfortunately, blamed his lawyers. There is nothing new in that perspective, and Grillo is entitled to his own perceptions and perspective in that regard, as indeed is anyone. That the evidence shows his perception in this regard is for the most part wrong in my view is not determinative of nor particularly relevant to the motion to reinstate.

Applying the Case-Law to the Facts:

[46] Again, the test of whether to reinstate this action does not lie with the quality of Grillo as a witness, or with his perceptions about how his case was conducted. The legal tests are well known, even if the case-law is impossible to fully reconcile.

[47] That all the cases cannot be reconciled is in part arguably because of the demarcation after 2015 when the Rule changed, as was submitted by Mr. Trivisonno. Yet mainly it is likely because, when considering each case in the unique context of its own facts, each case, while perhaps in some ways like another one, also must stand-alone. The decider, while applying the legal principles that have over the years developed, must arrive at a fair and just result in the context of the particular case and its own unique facts, taking into account both parties and their respective arguments.

[48] In other words, pursuant to Rule 48.14 (7), whether to allow a case to proceed, or not, is discretionary. There is no rigid rule. Rather, the approach taken by the decision-maker is in the context of the facts of the case at bar. Such discretion is to be exercised fairly, considering the facts of the case, and the case-law as it has developed and evolved.

[49] Consideration of the law typically includes the following factors as were explained more fully in Reid v. Dow Corning Corp (2001), 11 C.P.C (5th) (“Reid”):

• is there sufficient explanation for the purported litigation delay,

• is the inadvertence on the part of the plaintiff leading to the delay adequately explained,

• was this motion brought with sufficient promptness, and,

• did the plaintiff rebut the presumption that the defendant will purportedly suffer prejudice in attempting to defend itself if the action is restored.

[50] At one time, it was thought that the plaintiff had to satisfy all four of these factors. Yet, since Reid, the law has evolved. Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited 2015 ONCA 592 (“Carioca”) addressed a case not restored to the trial list. It was thus administratively dismissed pursuant to Rule 48.14. In the appeal of the decision not to restore the matter to the trial list, the Court of Appeal emphasized, as I have referenced above, that “the decision whether to restore an action to the trial list is discretionary”. The Court of Appeal further held that if a dismissal of an action would then result, the Court:

“…must strike a balance between the need for efficiency and the need for flexibility, such that cases can be tried on the merits where there is a reasonable explanation for non-compliance with the rules [my emphasis].

[51] The use of the word “reasonable” as a modifier of the obligation to explain non-compliance, as the Court of Appeal used in Carioca, is important. I find that it means that neither the parties nor their counsel are held to a standard of perfection. Rather, so long as counsel (and the parties) act reasonably overall in the conduct and context of the particular case, the preference is that cases be decided on their merits.

[52] That cases should preferably be decided on their merits was reiterated by the Court of Appeal in H. B. Fuller Company v. Roger (“Fuller”) 2015 ONCA 173. Justice Weiler opined that the above-referenced four Reid factors “are not an end to themselves”, emphasizing that a decision-maker must “arrive at a just result in the particular circumstances of the case”. Referencing earlier decisions with favour, Justice Weiler approved the following as was stated by Justice Laskin:

“The Court’s bias is in favour of deciding matters on their merits rather than terminating rights on procedural grounds.

[53] In my view, while Grillo is by no means a perfect litigant, on the evidence I cannot find that he has acted in an unreasonable way, at least not throughout the litigation. As Justice Quinn discussed in the Elltoft decision cited above, a party may become, for a period of time, a sojourner. Yet in my view, so long as he or she reverts to being a litigant before too long, I find that the party has not forever forfeited his or her rights to proceed to a decision on the merits of his or her claim. In this case, in particular, the delay was relatively short, and the evidence demonstrates that Grillo, through his counsel, did revert to being a litigant, and to seeking to advance his case. Notably, he also acquiesced to the repeated request of the defendants, to amend his reply and remove the contentious pleading.

[54] The issue of prejudice is also significant. In this case, it was argued by the defendant that the clients of the lawyers, their cases long ago settled, have vanished or they would be unreachable, and the documents produced by the plaintiff to date are insufficient.

[55] Can it be thus concluded that, as result of the relatively short delay in this case, the defendant is significantly prejudiced, so that a fair trial is impossible? Can it be herein concluded that, due to the, again, relatively short delay, the defendant is no longer able to defend the case? If the answer to those questions is “yes”, then the auto-dismissal by the Registrar will stand. Yet, if the defendant can still respond to and defend the claim, with a fair trial likely, then the motion to reinstate should be granted. Justice Weiler in Fuller quoted Justice Sharpe as follows:

“…the Rules and procedural orders are [to be] construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute.”

[56] The defendants further rely on the case of Prescott v. Barbon, (“Prescott”) 2018 ONCA 504, generally, and for the proposition that the primary burden rests with a plaintiff to advance his or her case. With that last point, I agree. Yet, in Prescott, unlike in this within matter, the action was dormant for quite some long time. The case arose out of a 2008 MVA. Litigation leisurely commenced two years later, on December 29, 2010. On July 11, 2011, the Registrar gave a 45-day warning of a pending dismissal for abandonment. On August 11, 2011, the case was dismissed as abandoned, based on the Rules in place at that time.

[57] Then, following dismissal by the Registrar, yet another full two years elapsed when, due to the seeming negligence of counsel, nothing happened. The Court of Appeal upheld the Motions Judge who maintained the Registrar’s dismissal.

[58] Those facts again are quite different from the facts in this matter. In this matter, again, the case, while not moving forward for two and a quarter years, never went dormant. As I have observed, the various counsel for Grillo were responsive to and regularly communicating with Mr. Parley. There was also not a two-year gap from dismissal to when the motion was brought. Indeed, the motion in this within matter was brought with alacrity. I thus do not find the Prescott decision on point.

[59] Similarly, Mr. Trivisonno relies on the Deverett Professional Corp. v. Canpages Inc decision (“Deverett”) [2013 ONSC 6954]. Yet other than also involving a law firm found to have failed to advance its own claim, that is where in my view the similarities end. In Deverett, again decided under the Rule as it existed before January 2015, the plaintiff law firm simply sat on the matter, doing nothing until receiving a status notice from the court.

[60] In this case, during the middle of the matter, and again, for a period of time, the plaintiff sat still or dithered. Yet at the outset of the case, and after the period of stall, the plaintiff seemingly recovered the will to litigate months before the expiry of the fifth anniversary. Prior to that deadline, the plaintiff was trying to advance the matter. Thus, on the facts I do not find Deverett particularly applicable to this matter, other than for the sensible principle that it is indeed up to the plaintiff to advance a case while a defendant, even with a counterclaim, does not have the same obligation. That principle was confirmed in the Unlimited Motors Inc. v. Automobili Lamborghini Spa decision (“Unlimited”) [2019 ONSC 1423], also relied on by defendants.

[61] In Unlimited, again, however, the facts are different, and frankly, far more egregious than are the facts before me as pertaining to Grillo’s delay and the various reasons for it (which are not entirely the fault of Grillo, as I have earlier reviewed in these reasons). In Unlimited, by contrast, the delay was entirely the fault of the plaintiff. The individual responsible for the plaintiff corporation explained, as is recorded in the decision, that he had other litigation, so he deliberately chose to put this case on hold; and his health and family issues also precluded his attention being paid to this matter which he commenced until after it was too late. Those poor excuses were found to be insufficient.

[62] Again, however, those facts are not similar to the facts in this within matter. In the within matter, there still were steps taken, and the parties through their lawyers continued to interact, including about the somewhat confused issue of the reply pleading. I thus do not find the facts of the Unlimited case assisting me.

[63] Is this case simply too old, too stale, so that prejudice would result if it continued? Ms. Kagan believes so, pursuant to her affidavit sworn June 8, 2018. She testifies therein that, regarding the disputed clients between the two firms, the “vast majority” of the retainers were made orally (paragraph 65), such evidence would be important to her counterclaim yet, given the passage of years, she believes that the reliability of evidence from the clients would be undermined (paragraph 68). Ms. Kagan also attests that there is no longer communication with these persons as their claims were resolved (paragraph 70). At paragraph 79, Ms. Kagan attests that, if there are any documents, such documents would be with Grillo.

[64] I note that this affidavit was sworn prior to the Affidavit of Documents being delivered by Grillo. While, as discussed, defendants’ counsel asserted that the Affidavit of Documents was quite inadequate, I have already addressed that above. In my view, the subsequent delivery of the Affidavit of Documents well addresses and rebuts at least some of the concerns earlier expressed by Ms. Kagan.

[65] About her specific concern regarding her ability to prove her counterclaim, as a litigant Ms. Kagan could have taken steps to preserve relevant information as she saw fit. As a defendant I agree that she has very limited, if any, obligation to advance the case, pursuant to recent case-law relied on by Mr. Trivisonno. Yet there is a difference between not advancing the case, and not leading or encouraging counsel opposite down the wrong path, as I have noted above.

[66] As pertains to her own claim, if Ms. Kagan had concerns about its viability, that is a different matter. In that regard she would have the obligation to take whatever steps were necessary so to be able to advance her counterclaim, if desired. She cannot now rely on her inaction in that regard as justification to not reinstate the overall matter.

[67] My view, when considering the entirety of the affidavit of Ms. Kagan, is that significant prejudice is not shown in the context of the passage of five years, as well as in the context of this case, generally. Yet, pursuant to the Iacolucci v. TD Waterhouse Canada Inc. decision (“Iacolucci”) [2018 ONSC 1027], there must be more than “some prejudice” for the defendants to prevail on this motion.

[68] In Iacolucci, the delay was much greater than in the within matter. The parties in Iacolucci had agreed on four prior timetable extensions until, with the final one, also on consent, the Master attempted to convene a case-conference (for which notice, unfortunately, went astray). It also must be observed that, in that case, counsel for the defendant had successfully stymied the matter from advancing by insisting on third party documentation being produced, and by refusing to proceed to discoveries until such production was made. That is not altogether too far different from the defendants in this within matter, whenever moving forward was suggested by plaintiff, returning to the same complaint about paragraph 2(f) in the Reply, and requesting that a decision be made on that point before the case could be advanced. In any event, Justice Spies reinstated the Iacolucci action. As the facts in that case demonstrate far greater delay than the facts in this case, in this case, is not reinstatement also justified?

[69] Returning to the questions which emerge from the Reid decision, my conclusions are as follows:

• I find that there is an explanation for the relatively limited period of litigation delay, when Grillo became, for a period of time, a sojourner before he reverted to again being a litigant. The period of delay is not unforgivable. Considering the tension between addressing matters on their merits, while not countenancing delay, in this case I find the delay not undue or unreasonable, albeit still regrettable. Costs can be an effective sanction, however.

• There was no true inadvertence on the part of Grillo, or any of his counsel, for the limited period of delay. As I have written above, he dithered for a while, and he stalled the process with his own lawyers. Yet as was also observed in the Iacolucci decision, defendants in this matter also never protested the delay nor even raised the issue until after-the-fact, when it tactically suited them.

• This motion was brought in about six weeks’ time from the dismissal. In my view, again, it was brought promptly.

• I find that the plaintiff has through the subsequent delivery of an Affidavit of Documents and the production of documents, as well as through its submissions, demonstrated that while there may be some prejudice to the defendants, such is not significant in the context of this matter where the key witnesses, after all, will likely be the main protagonists, along with some others.

[70] Addressing, again, this matter in the context of the entire case, in my view it would be more just if the matter was reinstated, so it could proceed to a disposition on the merits. To allow the matter to end now would, in my view, be far more unfair to the plaintiff. Given:

• the lack of objection by the defendant until it tactically suited them to object,

• that this was the first dismissal of this matter, and,

• for all the reasons expressed herein,

I reinstate this case. I thus overturn the Registrar’s February 22, 2018 dismissal for delay.

Costs; and Timetable Going Forward:

[71] The parties did not make costs submissions. Hopefully, the parties can agree on costs. To assist them to that end, I would observe that the plaintiff is being granted an indulgence by the Court. As should be clear from these reasons, preliminarily, I am by no means certain that Grillo should be awarded costs along with such an indulgence. I have also indicated herein my concern about tactical steps taken by the defendants. Given that, options which the parties may consider would be either no costs for this motion to either side, or costs “in the cause”.

[72] If, however, the parties want to argue costs, they can within 30 days of the date of this decision seek to book either a tele—case-conference or in-person case-conference with me, through ATC Mr. Backes. In advance of such a conference, they may each file a submission limited to four pages, in addition to their respective Bills of Costs.

[73] I also urge the parties to agree on a litigation timetable going forward. I would be pleased to sign a consent Order to that purpose. For that, the parties may also contact ATC Mr. Backes within 30 days. If the parties are unable to agree on a timetable, however, then a motion will have to be brought in the usual course. If such a motion is to be brought, it should be brought promptly.

[74] I thank both counsel for their most professional approach to this matter.

Master J. Josefo

Date: September 18, 2019