COURT FILE NO.: CV-12-0069 and CV-11-1858

DATE: 2019 11 20

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: NANAK HOMES INC. (Plaintiff/Responding Party)

v.

DEVENDER ARORA, VISHWAS DHEKNEY and BANERJEE & ASSOCIATES LTD. (Defendants/Moving Party)

and between

NANAK HOMES INC. (Plaintiff/Responding Party)

v.

ONTARIO CORPORATION 1238585 operating as KAMCO TECHNIQUES LTEE, and/or ONTARIO CORPORATION 2061584 operating as KAMCO ENGINEERING SERVICES LTD. (Defendants/Moving Party)

v.

EMCON CONSTRUCTION LTD., AQUA MECHANICAL CONTRACTING LTD., AIRWILL ELECTRICAL SUPPLY LTD., BATTAGLI ASSOCIATES INC. and DEVENDER ARORA (Third Parties)

v.

VISHWAS DHEKNEY, BANERJEE & ASSOCIATES LTD. now carrying on business as EXP SERVICES INC. (Fourth Parties)

BEFORE: McSweeney J.

COUNSEL: Maria Ruberto and Jill Snelgrove, for Nanak Homes Inc. (Plaintiff/Responding Party) for the Plaintiff

Peter J. Mitchell, for Ontario Corporation 1238585 operating as Kamco Techniques Ltee (Defendant/Moving Party)

Adrian Visheau and Jeffrey A. Armel, for Vishmas Dhekney and Banerjee & Associates Ltd. (Defendants/Moving Party)

Luisa J. Ritacca and Edward L. Marrocco, for Former Counsel of the Plaintiff (LawPRO)

HEARD: July 3, 2019

ENDORSEMENT

OVERVIEW

[1] In 2006, the Plaintiff, Nanak Homes Inc. (“Nanak”) hired several parties to construct residential townhouses. The sole owner and principal of Nanak was Dr. Verinder Malhotra. The townhouse project was completed in 2008. On behalf of the Plaintiff, Dr. Malhotra subsequently commenced two civil actions against the parties to the townhouse construction contracts for negligent construction and design, as well as breach of contract.

[2] On July 3, 2019, I heard motions to dismiss both of the Plaintiff’s actions on the basis of delay. In action CV-12-69 (“Kamco Action”) and CV-12-69-A1 (“Kamco Third Party Action”), the Defendant Ontario Corporation 1238585 operating as Kamco Techniques Ltee and/or Ontario Corporation 2061584 operating as Kamco Engineering Services Ltd. (“Kamco Defendants”) seeks dismissal for delay. The same relief is sought by the Defendants Vishwas Dhekney and Banerjee & Associates Ltd. (“Dhekney Defendants”) in action CV-11-1858 (“Dhekney Action”).

[3] In brief, the Defendants argue that they are no longer able to have a fair trial due to the Plaintiff’s delay. The actions were commenced in 2011 and 2012 and have not yet progressed to discoveries. Further, the moving Defendants argue that, while the Plaintiff’s former counsel is responsible for some of the delay, Dr. Malhotra, on behalf of the Plaintiff, did not take steps to move the actions forward. In addition to the prejudice which can be inferred from the passage of time, the Kamco Defendants argue real prejudice arising from the death of a key witness in 2016, and its inability to defend against a third party’s motion for dismissal for delay.

[4] The motions are defended on behalf of the Plaintiff corporation by LawPRO, on behalf of the Plaintiff’s former counsel. LawPRO argues that the delay complained of was caused solely by the Plaintiff’s former counsel, who: was unable to handle the size and complexity of the file; developed a “mental block”; and, unbeknownst to the Plaintiff, did not take any steps to advance the Plaintiff’s interests for several years. LawPRO argues that, at all times, the Plaintiff intended to advance the actions.

[5] For the reasons set out further below, the Defendants’ motions to dismiss the Plaintiff’s actions for delay are granted.

CHRONOLOGY OF EVENTS

[6] The following dates were established by the evidence and not disputed by the parties except where noted:

DATE	DETAILS
September 2006	Dr. Malhotra, sole owner and director of the Plaintiff corporation, contracted on behalf of Nanak Homes Inc. to build 61 residential townhouses at 7405 Goreway Drive in Mississauga, Ontario.
November 2008	Construction of the residential townhouses was completed.
May 4, 2011	Malhotra for Nanak commences Dhekney Action (CV-11-1858) by issuing Notice of Action. Malhotra retained Davis Webb LLP to assist.
June 3, 2011	Malhotra for Nanak issues Statement of Claim (amended June 27, 2011) in Dhekney Action seeking $5,000,000 damages for breach of contract and negligence.
November 11, 2011	Dhekney Action: Defendants make a demand for particulars. Plaintiff responds two years later on December 9, 2013.
December 21, 2011	Malhotra for Nanak retains lawyer Ben Fortino.
January 6, 2012	Notice of Action: Kamco Action (CV-12-69). Statement of Claim sought general damages of $1,000,000 for breach of contract and negligence.
August 30, 2012 -October 22, 2013	Kamco Action: Defendants demand particulars. There is a dispute on the record whether the Plaintiff ever responded to the November 2011 demand: Kamco Defendants claim no particulars provided; Plaintiff claims it responded on October 22, 2013.
December 9, 2013	Plaintiff responds to Dhekney Action’s November 2011 demand for particulars.
February 5, 2014	Kamco Third Party Action (CV-12-69-A1) commenced against third party contractors.
April 30, 2014	Plaintiff’s own proposed Discovery Plan, distributed on December 9, 2013, requires delivery of Affidavit of Documents by this date. No Affidavit of Documents are delivered.
September 3, 2015	Consent Order (Emery J.): Kamco moves to dismiss the Plaintiff’s action for delay. Motion is resolved by consent. Emery J. orders that “the Plaintiff shall serve an Affidavit of Documents and a Discovery Plan within 45 days of the date of this Order failing which the Defendant may move without notice for an Order dismissing the within action and the Plaintiff shall not oppose that motion”.
October 14, 2015	Plaintiff delivers an unsworn Affidavit of Documents to all parties.
July 7, 2016	Defendant’s counsel agree to mediation on the condition that the Plaintiff serve a Damages Brief and Expert Report by October 28, 2016.
September 16, 2016	Death of electrical design manager at Kamco.
October 28, 2016	Plaintiff fails to provide Damages Brief and Expert Report in either action.
December 15, 2016	Timetable Extension Order (Lemay J.): Plaintiff obtains a timetable extension order from Lemay J, unopposed. The order requires both actions to be set down for trial by December 30, 2017.
December 15, 2016	Consolidated Actions: Plaintiff obtains order to consolidate Dhekney and Kamco Actions.
December 30, 2017	Plaintiff fails to comply with the deadline in its timetable extension order to set both actions down for trial.
August 14, 2018	Defendants file Notice of Motion to dismiss the Plaintiff’s actions for delay
December 14, 2018	Ben Fortino, Plaintiff’s former counsel, reports himself to LawPRO regarding these proceedings.
December 31, 2018	LawPRO-appointed counsel for the Plaintiff obtains an adjournment of the dismissal motions from (Seppi J.) to permit filing of responding evidence.
January 1, 2019	Absent a timetable extension, the Dhekney Action was to be administratively dismissed on this date for delay (based on the December 2016 timetable extension order).
January 6, 2019	Absent a timetable extension, the Kamco Action was to be administratively dismissed on this date for delay (based on the December 2016 timetable extension order).
July 3, 2019	Defendants’ dismissal motions are heard.

ISSUES

[7] The issue to be decided in this case is whether either or both of the Plaintiff’s actions should be dismissed for delay. There are three sub-issues to be determined as part of the analysis: (a) whether the delay is inordinate; (b) whether the delay is excusable; and (c) whether there is prejudice to the Defendants.

LEGAL FRAMEWORK

[8] The Defendants move under r. 24.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:

24.01 (1) A defendant who is not in default under these rules or an order of the court may move to have an action dismissed for delay where the plaintiff has failed,

(a) to serve the statement of claim on all the defendants within the prescribed time;

(b) to have noted in default any defendant who has failed to deliver a statement of defence, within thirty days after the default;

(c) to set the action down for trial within six months after the close of pleadings; or

(e) to move for leave to restore to a trial list an action that has been struck off the trial list, within thirty days after the action was struck off.

(2) The court shall, subject to subrule 24.02 (2), dismiss an action for delay if either of the circumstances described in paragraphs 1 and 2 of subrule 48.14 (1) applies to the action, unless the plaintiff demonstrates that dismissal of the action would be unjust.

[9] To ensure fairness to all parties in an action, the courts are often asked to assist one party in enforcing a litigation timeline which accords with the Rules of Civil Procedure. Public confidence in the administration of justice requires that individuals and businesses who comply with the Rules of Civil Procedure may rely on those rules for assistance when their right to a fair trial is compromised by delay created by another party.

[10] To further this goal, r. 48.14(1) of the Rules of Civil Procedure therefore specifies that, unless the court orders otherwise, the registrar shall dismiss an action for delay if the action has not been set down for trial by the fifth anniversary of the commencement of the action.

[11] Case law has established, however, that r. 24.01(2) does not create an ironclad presumption of prejudice after the passage of five years, nor does it modify the r. 24.01 test for dismissal due to delay.

[12] The Court of Appeal for Ontario has characterized lengthy, unexplained delays as an abuse of the court’s process: Marche d’Alimentation Denis Theriault Ltee. v. Giant Tiger Stores Ltd., 2007 ONCA 695, at para. 24. Litigants are also entitled to timely justice so that they can move on with their lives: Marche d’Alimentation, at para. 25; Letang v. Hertz Canada Ltd., 2015 ONSC 72, at para. 18.

[13] In Landmark Vehicle Leasing v. TAC Mechanical, 2018 ONSC 5956, at paras. 17-18, Master Graham stated:

As indicated in the text of the rule itself, rule 24.01(2) does not specifically state that a passage of five years since the commencement of the action creates a “presumption of prejudice”. However, this rule does create a rebuttable presumption that in the event of a five year delay, the court shall dismiss the action, which implies the presumption of prejudice referred to by MacLeod J. in Marrello, which in turn is consistent with previous authority that a lengthy delay gives rise to a presumption of prejudice to the defendant (see Berg v. Robbins, [2009] O.J. 6169 (Div. Ct.) at paragraph 14). The term “prejudice” is equivalent to the “substantial risk that a fair trial of the issues in the litigation will not be possible” referred to in paragraph 7 of Langenecker, supra.

Essentially, rule 24.01(2) codifies the existing case law that places the onus on the plaintiff to demonstrate why an action in which there has been a lengthy delay should be permitted to continue, and at the same time establishes a clear line of five years from the commencement of the action following which the plaintiff must rebut the presumption in favour of a dismissal.

[14] The test to dismiss an action for delay is contextual. The Court of Appeal for Ontario is clear that a matter will be dismissed for delay where the delay is: (1) inordinate; (2) inexcusable; and (3) prejudicial to the defendant’s right to a fair trial: Langenecker v. Sauvé, 2011 ONCA 803, at para. 7. A plaintiff must provide an explanation that satisfies the court that the delay was not intentional and has not prejudiced the defendants’ ability to defend the claim.

[15] The passage of time gives rise to a presumed prejudice. The Court of Appeal for Ontario has held that presumed prejudice must be viewed in the context of the other parts of the test (i.e. the length of delay and excuse for the delay). In Langenecker, Doherty J.A. observed that perhaps “presumption” of prejudice in the context of long delays may more properly be called “a strong inference”: para. 23.

[16] That Court has also held that the presumption of prejudice increases with the length of delay. In some cases, the length of the delay and the reasons for that delay are sufficient to give rise to a presumption of prejudice, such that a court may conclude, on that basis alone, that a fair trial is no longer possible in the circumstances. In such cases, the court may dismiss an action for delay without finding proof of actual prejudice. However, where such presumed prejudice is not sufficient to establish that the defendants’ right to a fair trial is substantially at risk, they must also demonstrate actual (also described as “real”) prejudice: Ali v. Fruci, 2014 ONCA 596, at paras. 16-17.

DISCUSSION

[17] To resolve the issue on this motion, I will now consider the three factors outlined in Langenecker: whether the Plaintiff’s delay is inordinate, excusable, and has caused prejudice to the Defendants.

i. Is the Delay Inordinate?

[18] The first consideration is whether the delay, on the facts of these actions, can be characterized as inordinate.

[19] The evidence on the record before me establishes many delays and breaches of scheduling orders by the Plaintiff. The Plaintiff:

▪ Failed to provide timely or proper disclosure;

▪ Failed to adequately respond to demands for particulars in a timely manner;

▪ Failed to abide by its own proposed Discovery Plan;

▪ Failed to serve a sworn Affidavit of Documents as required to comply with the consent order of Emery J. of September 3, 2015;

▪ Failed to comply with its agreement to provide a Damages Brief and Expert Report to the Defendants by October 28, 2016, as a precondition to proceeding to mediation; and

▪ Failed to comply with the timelines in Lemay J.’s timetable extension order and failed to set the actions down for trial by December 30, 2017.

The Law

[20] The Court of Appeal for Ontario has held that the in ordinance of the delay is measured simply by reference to the length of time from the commencement of the proceeding to the motion for dismissal for delay: Langenecker, at para. 8. Each case must be looked at contextually, as some cases will inevitably take longer than others: Klein v. Krek, 2019 ONSC 1711, at para. 32. Most litigation does not move at a quick pace. However, there comes a time when the civil justice system can no longer tolerate inordinate and inexplicable delay: Courtney v. Sprunt, 2019 ONSC 3722, at para. 18.

Factual Findings and Analysis

[21] As noted above, r. 48.14(1) provides for administrative dismissal if the action has not been set down for trial by the fifth anniversary of the commencement of the action. There is no dispute that the Plaintiff’s actions have not been set down for trial, despite the actions being commenced in 2011 and 2012, and despite the timetable extension order of Lemay J. The townhouse construction project which is the subject of the actions was completed eleven years ago. The actions were commenced seven and eight years ago. As of the date of the dismissal motions before me, no examinations for discovery had taken place or been scheduled.

[22] On this record, I have no difficulty in characterizing the Plaintiff’s delay in both actions as inordinate.

ii. Is the Delay Excusable?

[23] The next consideration is whether the delay, on the evidence before me, can be characterized as excusable. The determination of this question requires an assessment of the alleged reasons for the delay. Once the facts are determined on the evidence, the court must assess whether they constitute “an adequate explanation for the delay”: Langenecker, at para. 9.

Positions of the Parties

[24] The Defendants argue that in no way did they contribute to the delay in this case. Rather, counsel for the Defendants followed up with the Plaintiff periodically to progress these proceedings. It would be unreasonable to expect the Defendants to be responsible for the Plaintiff’s actions.

[25] The Plaintiff does not disagree on this point. The Plaintiff lays the blame for the inordinate delay at the feet of its counsel, Mr. Fortino. The Plaintiff argues that it always had an intention to move the two actions along. The Plaintiff submits that Mr. Fortino did not move the actions along because he had a psychological problem that left him unable to do his job. The Plaintiff claims that it was unaware of Mr. Fortino’s psychological issue and did not know that its actions were at risk of dismissal.

[26] Dr. Malhotra for the Plaintiff deposed that his expectation was that civil litigation files take a long time to proceed. He claims that he relied entirely on the knowledge and expertise of his solicitor. The Plaintiff relies on Paul v. Shewnarain, [1996] O.J. No. 2603 (Ont. Gen. Div.), which holds that such reliance can be the basis for setting aside dismissal of an action.

Evidence on the Record

[27] The evidence tendered to support the Plaintiff’s position are the Affidavits of Dr. Malhotra and Mr. Fortino, both sworn on May 31, 2019. Both were cross-examined on their Affidavits, and those transcripts were part of the evidence before me.

(a) Dr. Malhotra’s Evidence:

[28] Dr. Malhotra stated by Affidavit that the he relied entirely on his lawyer, was unsophisticated in matters of litigation, and did not know his claims were at risk of being dismissed. He does not allege that Mr. Fortino lied or misled him regarding the progress on the two actions.

[29] Dr. Malhotra submits that he wanted Nanak’s actions to proceed and that he, at all times, wanted Nanak’s two actions to proceed and believed they were both advancing in a typical manner.

[30] On cross-examination, Dr. Malhotra admitted:

▪ That he was the sole director and guiding mind of Nanak Homes Inc. at the time of the townhouse contracts and construction;

▪ That Nanak Homes Inc. was built for the sole purpose of constructing the townhouses;

▪ That he oversaw the townhouse construction;

▪ That he did not recall significant details relating to the construction project and associated contracts;

▪ That it was he who gave instructions to commence the actions in 2011 and 2012;

▪ That he did not remember when he provided documents to Mr. Fortino on behalf of Nanak;

▪ That he communicated with his lawyer through telephone and email about the progress of the litigation;

▪ That he was aware that mediation was being arranged, and that mediation was conditional upon Mr. Fortino providing a Damages Brief;

▪ That he was not sure if Mr. Fortino or the other lawyers on the file were responsible for the delay;

▪ That he did not turn his own mind to the concept of delay;

▪ That he never considered replacing Mr. Fortino as his lawyer;

▪ That he did not remember whether he started one or more than one action on behalf of Nanak Homes Inc. relating to the townhouse construction contracts;

▪ That he did not remember whether his lawyer billed him regularly; whether his lawyer was holding funds in trust for Nanak Homes Inc.; nor whether he was ever billed for costs payable by Nanak as part of the consent resolution of an earlier motion to dismiss which resulted in the order for Emery J.

(b) Mr. Fortino’s Evidence:

[31] Mr. Fortino’s Affidavit states that a psychological issues prevented him from advancing the litigation. Mr. Fortino claims that he should not have accepted the file as he did not have the requisite competence. He contends that he did not move the matter forward as he psychologically “shut down” and developed a “mental block” regarding this file. His evidence is that the delay is solely attributable to him, not the Plaintiff, nor was it a result of instructions received from the Plaintiff.

[32] On cross-examination, Mr. Fortino admitted:

▪ That there were other lawyers and support staff at his law firm who did work on the Nanak’s two actions;

▪ That there was no specific event or specific date when he became overcome with stress relating to Nanak’s actions;

▪ That he did not have a “mental block” or any similar psychological issue on any of his other files, only Nanak’s;

▪ That he never sought professional help with respect to his psychological issues;

▪ That Dr. Malhotra gave his counsel full authority to make decisions on his behalf;

▪ That he was communicating with Dr. Malhotra and his wife through e-mail and phone; and

▪ That Dr. Malhotra or his wife knew about the Damages Brief and delivered the calculations and supporting documentation to him to complete it.

The Law

[33] The Court of Appeal for Ontario has held that the responsibility to move an action along lies chiefly with the plaintiff: Faris v. Eftimovski, 2013 ONCA 360, at para. 33. The party who commences a proceeding bears primary responsibility for its progress and must move the litigation forward: Wellwood v. Ontario Provincial Police, 2010 ONCA 386, at para. 48; Sickinger v. Krek, 2016 ONCA 459, at para 54, citing Wallace v. Crate's Marine Sales Ltd., 2014 ONCA 671, at para. 18.

[34] The case of Hiscock v. Pasher, 2008 NSSC 36, discusses a lawyer’s “mental block” in the context of a dismissal for delay and deals with a motion to set aside a dismissal order. This case involved a motor vehicle collision whereby the Plaintiff sustained injuries. After an eight-year delay, a Prothonotary dismissed the Plaintiff’s action. The Plaintiff’s lawyer argued that he experienced a “mental block”. In Hiscock, Edwards J. characterized the “mental block” as “no explanation” for the delay: para. 40. In finding that the action should remain dismissed, Edwards J. noted that the Plaintiff may pursue her former lawyer for damages, but found that the lawyer’s conduct could not be countenanced and must be denounced and discouraged: Hiscock, at paras. 46-48.

[35] The Nova Scotia Court of Appeal disagreed with Edwards J. In Hiscock v. Pasher, 2008 NSCA 101, Roscoe J.A. held that the action should be reinstated because the delay was not the Plaintiff’s fault. The Plaintiff had intended for the matter to proceed, and the Defendant had not been prejudiced by the delay: Hiscock (NSCA), at paras. 24-26.

[36] For the reasons set out below, the case before me can be distinguished from the Nova Scotia Court of Appeal’s decision in Hiscock, as I cannot conclude on this record that the Plaintiff intended for his actions to proceed, and that in the motions before me that I find the Defendants have suffered prejudice.

[37] Further, Hiscock can be distinguished with respect to the degree of obligation on the Plaintiff to ensure that their counsel is advancing the litigation. In a motor vehicle action in which the Plaintiffs would not have commenced a law suit if he or she had not been injured, and unsophisticated and injured individual may be wholly reliant on his or her lawyer to advance the litigation. In this case, by contrast, Dr. Malhotra was the directing mind that conceived of and instructed the commencement on the actions in a commercial construction contract. As described further below, I conclude that the Nanak Plaintiff did not in fact intend for his actions to proceed in a timely way and that the slow pace of his lawyer’s handling of his files was coincident with that aim. In this case, I have also found prejudice to the Defendants’ as a result of the delay.

Factual Findings and Analysis

[38] Upon reviewing the evidence on this motion, I find that the Plaintiff did not fulfil its obligation to move the proceedings along and contributed to the inordinate delay in this case, without excuse.

[39] The record establishes that Dr. Malhotra incorporated Nanak Homes Inc. in order to contract with others to build a townhouse development. He himself oversaw the project from its commencement in September 2006 to its completion. Two and again three years following completion of the development, Dr. Malhotra retained and instructed counsel on behalf of Nanak to start two actions against the other parties to the construction contract. The first action sought $5 million in damages and the other $1 million, a total of nine parties were named as Defendants between the two actions.

[40] I do not find Dr. Malhotra’s evidence that he always wanted to move the matter along to be credible. As the directing mind of the Plaintiff corporation, if Dr. Malhotra truly did not remember the number and details of the actions brought against the different Defendants, it is reasonable to infer that – even during his cross-examination in response to the delay motions – he did not have the litigation at the front of his mind. He admitted that he did not turn his own mind to the delay in this case.

[41] This inattention and forgetfulness support a finding that the Plaintiff was not fulfilling its obligation to move the litigation along. Dr. Malhotra’s professed ignorance of the construction matters – of the number of actions he had commenced for Nanak, of the details of those actions, of whether he had paid a retainer, of whether he had been billed regularly, or even whether he had paid the $4,000 costs award – is difficult to believe. It is particularly difficult to believe given that Dr. Malhotra was obligated to put his best foot forward in response to the motions in order to avert a decision that both actions should be dismissed for delay.

[42] Dr. Malhotra cross-examined in order to support Nanak’s position that all delay should be laid at the feet of his counsel, who had a “mental block”. The vagueness of Dr. Malhotra’s memory is inconsistent with his overall position that he was ready, willing and able to instruct and proceed in his role as instructing client but for the undisclosed inability of his counsel to follow through on dates which had been agreed to on the Plaintiff’s behalf. It is convenient for Dr. Malhotra, and also for LawPro – defending on behalf of Mr. Fortino as the former lawyer – to characterize all delay as related to the psychological condition of counsel.

[43] Dr. Malhotra is an educated man, a trained medical doctor. For the purpose of making money in residential home development, he incorporated a corporation through which to contract with others. At all times, he had direct financial interest, both in Nanak’s contracts and in both of the actions he commenced on behalf of Nanak. Dr. Malhotra does not allege that Mr. Fortino lied to him or misled him about the steps being taken on his file. Dr. Malhotra concedes that he was aware, in general, of the documentary production stage of the litigation, and the importance of production of an affidavit of documents, and the need for damages brief and expert reports as a planned mediation process was prepared for.

[44] Having been made so generally aware, I find that on the evidence that Dr. Malhotra failed to make reasonable inquires and follow up with either Mr. Fortino or his lawyer’s office regarding the progress and completion of these steps. It is reasonable to expect that Dr. Malhotra was the party who commenced both actions, would continue to take steps to monitor the progress of the litigation and the fulfillment of the litigation stages described to him by his lawyer. I am not able to determine, on this record, whether Dr. Malhotra simply became uninterested in the litigation and was content to let it move ahead without his particular attention or whether his lack of attention was deliberate. I can find, however, that his inattention, including his lack of preparation and failure to familiarize himself with the file prior to being cross-examined, support an overall finding that he did not take the steps required of a Plaintiff in a commercial matter to move litigation along.

[45] The record supports a finding that Dr. Malhotra’s inattention and/or lack of motivation to move Nanak’s two actions forward, has contributed significantly to what I have characterized as the inordinate delay in these two actions.

[46] LawPro counsel, on behalf of Mr. Fortino, argues that the delay in the advancement of both actions was solely the responsibility of Mr. Fortino. I do not agree. Certainly, some delay was the result of Mr. Fortino’s mental difficulty in working specifically on the Nanak actions. However, I find that overall Dr. Malhotra was kept sufficiently aware of the key steps in the litigation and key obligations on the Plaintiff for him to bear significant responsibility for the delay. His follow up should reasonably have been expected to include, for example, confirming the date of the scheduled mediation so that he could book such dates in his calendar to ensure his own attendance.

[47] Mr. Fortino’s behaviour as Plaintiff’s counsel amounted to inattention and non-prioritization of Nanak’s litigation files. The evidence also makes reference to other lawyers and staff at Mr. Fortino’s law firm who were involved in the Nanak files. Mr. Fortino also deposed that the Nanak file was referred to him as a new client by a colleague. In such a law firm environment it is not credible, in my view, that regular and repeated non-compliance with court-imposed scheduling timelines would have continued without those legal representatives insisting on the Nanak file being satisfied that such delay was consistent with their client’s interests or instructions.

[48] Mr. Fortino deposes that he had no such issues in moving matters ahead on any of his other files and that he did not need mental health treatment or any other follow up.

[49] I therefore conclude on this issue that Mr. Fortino’s professed difficulty in moving the Nanak files forward contributed to the inordinate delay in the advancing of the litigation. Dr. Malhotra, however, as noted earlier, had also failed to monitor the litigation or follow up with the lawyer or his office to check whether the next litigation steps were moving along.

The Effect of the Emery J. Order of September 3, 2015

[50] As referenced earlier in these reasons in the chronology, in September 2015, the Kamco Defendants moved to dismiss the Plaintiff’s action for delay. The motion was resolved by a consent order by Emery J. permitting the Plaintiff a further 45 days to serve its Affidavit of Documents and Discovery Plan. If the Plaintiff failed to do so, the Defendants would be permitted to move for dismissal of the actions without notice, to which the Plaintiff could not oppose.

Positions of the Parties

[51] The Defendants argue that the Emery J. Order of September 3, 2015, operates as a complete bar to prevent the Plaintiff from opposing the dismissal motions before me. The Plaintiff argues that it cannot be bound by the Emery J. Order, principally because Mr. Fortino entered into the consent order without consulting the Plaintiff.

[52] The order of Emery J. is only one part of the chronology in this matter. The Defendants do not move to dismiss the actions solely on the basis of the Emery Order. My determination on whether to dismiss the actions for delay, is based on all the evidence on the motion, and does not turn on an interpretation of the Emery Order.

[53] With respect to Emery J.’s Order, I note that the Plaintiff did not comply with the substantive requirements of that Order. It does not lie with the Plaintiff to use, as a bar to the motion, the fact of its continuing non-compliance with an Order, even after the Plaintiff became aware of its obligation under that Order. Further, I note that the Defendants do not move to dismiss the actions on the basis of that Order, specifically. On these motions, I must consider the totality of the evidence.

Conclusion on Excusable Delay

[54] In conclusion on this point, I find that the evidence does not persuade me on a balance of probabilities that the Plaintiff’s delay was solely attributable to Mr. Fortino. I find that, having commenced two actions seeking a total of $6 million in damages, Dr. Malhotra failed to take reasonable steps on behalf of the Plaintiff to monitor the progress of those actions. His assertion that he lacked knowledge of the legal process is not credible when considering that Dr. Malhotra is an educated party who engaged in for-profit business activities. He incorporated a company and contracted to build a whole townhouse project. Such enterprises are undertaken for financial gain. I do not accept Dr. Malhotra’s characterization of himself as somewhat unsophisticated in business and litigation matters. Whether or not he had previously participated in, or instructed, the commencement of commercial litigation actions, I do not find it credible that he would have taken such steps without informing himself of the costs, risks, and benefits of doing so.

[55] In other words, having commenced this litigation, it is not open to Dr. Malhotra to take a “hands-off” approach to the progress of the actions. Such an approach by Dr. Malhotra for Nanak supports an inference that, in this commercial litigation context, it was more beneficial to the Plaintiff corporation to have the actions “hanging out there” than to move promptly to a negotiated resolution or to have adjudication on the merits.

[56] The vagueness of Dr. Malhotra’s memory on cross-examination in preparation for this motion also supports an inference that inattention to the proceedings was more beneficial to the Plaintiff than forward movement. It is particularly revealing that, in my view – even at the eleventh hour in which Dr. Malhotra was required to put his best foot forward to resist the dismissal of his actions – he presented himself for cross-examination without any recollection of basic details of the litigation, his relationship or the details of his work with his lawyer as the litigation progressed.

[57] Given my findings regarding Dr. Malhotra’s inattention to the actions, I am not persuaded that the actions would have proceeded in a timelier manner than they did, even if Mr. Fortino had not had personal difficulty in advancing the Nanak files.

[58] I have considered the evidence of Dr. Malhotra, as the directing mind of Nanak, and that of Nanak’s former lawyer, Mr. Fortino. For the reasons above, I find the evidence is not sufficient for me to characterize the delays in advancing these actions “excusable” within the meaning of the test in Langenecker.

iii. Is There Prejudice to the Defendants?

[59] The third consideration is whether the delay, in the circumstances, has caused prejudice to the Defendants’ ability to advance their case for an adjudication on the merits: Langenecker, at para. 11.

Positions of the Parties

[60] The Defendants argue that the delay in this case is presumptively too long and that they are no longer able to have a fair trial due to the delay. In addition to the prejudice inferred from the passage of time, the Kamco Defendants argue real prejudice arising from the 2016 death of a key witness, Kamco’s electrical design manager. The Kamco Defendants allege further that they have actual prejudice relating to their inability to mount a defence to a third party’s motion for dismissal as a result of the Plaintiff’s delay.

[61] The Plaintiff submits that there is no direct evidence demonstrating prejudice.

[62] Regarding the deceased witness, the Plaintiff argues that he cannot be an important witness because the Kamco Defendants continued to defend the action and agreed to schedule mediation after his death.

[63] Further, the Plaintiff argues that all delays prior to 2016 were on consent or acceded to by the Defendants. The Plaintiff further argues that the litigation will be mostly document-based, and that no party has argued that any documents are missing.

The Evidence of Prejudice

[64] As referenced earlier in the chronology of these actions, the Plaintiff breached several scheduling orders. Examinations for discovery have not yet occurred, and neither action has been set down for trial.

[65] Kamco’s Affidavit on the motion states that Jamal Salame, the manager responsible for the preparation of the townhome project’s electrical design and its conformity reviews, died on September 16, 2016. Nanak’s claim in the Kamco’s action alleges that the Kamco Defendants were retained to manage, implement, oversee, approve, and were responsible for all of the electrical and mechanical engineering aspects of the project. It goes on to allege that the Kamco Defendants breached its duty of care and contractual obligations, by, for example, failing to ensure the electrical panels and rooms were designed in accordance with regulations and codes. The Kamco Defendants contend that Salame, the deceased manager, was Kamco’s key witness in response to all electrical-related deficiency allegations.

[66] Kamco also states that the Plaintiff’s delay has delayed the prosecution of Kamco’s Third Party Claim, which has prompted the third party Mircom Inc. to move for dismissal of Kamco’s Third Party Claim for delay.

The Law

[67] The Court of Appeal for Ontario has held that prejudice is inherent in long delays as memories fade and fail, witnesses become unavailable, and evidence may be lost: Langenecker, at para. 11.

[68] The Plaintiff has the burden to explain that the delay was not intentional and has not prejudiced the ability of the Defendant to defend its claim. However, the absence of actual prejudice is not dispositive and does not necessarily mean that the action will not be dismissed for delay.

[69] A presumption of prejudice arises on the basis of inordinate delay: Canadian Champion Auto Services Ltd. v. Petro-Canada, 2011 ONSC 6794, at para. 44. The Plaintiff then has the onus of showing that the Defendants would suffer no non-compensable prejudice if the action were to proceed: Canadian Champion, at para. 88.

[70] Case law establishes that prejudice is a sliding scale. Ontario courts have dismissed proceedings for delay, inferring prejudice from the passage of eight years since the events underlying the action (Canadian Champion) and five years since the action was commenced (1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544).

Factual Findings and Analysis Re: Prejudice

[71] In this case, it has been 11 years since the parties completed their work together on the townhome project. Further, it has been eight years since the commencement of the Dhekney Action and seven years since the commencement of the Kamco Action.

[72] I also note that in this case, the party’s representatives have not yet been examined for discovery. Full documents exchange has not yet taken place. Opportunities have been lost to identify key witnesses in a timely way, and to make relevant inquiries following discoveries. Evidence may well have been lost. The risk of memories failing and fading over time, was demonstrated through the evidence of Dr. Malhotra himself. As reference earlier he had significant difficulty in recalling even the number of actions he had commenced on behalf of Nanak. The proceedings in both actions are still at an early stage of the litigation process. In these circumstances the passage of time itself, supports a finding of prejudice to the Defendants. That is, the length of delay is sufficient on this record to support a finding that the Defendant’s right to fair trial in both actions has been compromised.

[73] Although it is not necessary, in light of this finding, for the Defendants to establish actual prejudice, I find that the Plaintiff’s delay is also caused real prejudice to the Kamco Defendants. That prejudice arises from the death of a key witness, the electrical design manager at Kamco. As in the case of Sickinger, a witness’ death was found to be a prejudice attributable to the Plaintiff: paras. 53-54. Actual prejudice also arises in the Kamco action due to the impact of the delay on Kamco’s ability to defend a motion for delay brought against it in its Third Party Action.

[74] In conclusion with respect to prejudice, the Plaintiff has not rebutted the presumption of prejudice to the Defendants arising from the delay in the prosecution of these two actions. The Plaintiff has failed to meet its onus of demonstrating the absence of non-compensable prejudice to the Defendants, I have found specifically that the passage of time has created prejudice to the Defendants.

CONCLUSION

[75] A court has inherent jurisdiction to control its own processes, which includes the discretionary power to dismiss an action for delay pursuant to r. 24.02.

[76] While the court will rarely deprive a party of the opportunity to have its day in court, a plaintiff does not have an untrammeled right to have its case heard: Broniek-Harren v. Osborne, 2008 CanLII 19782 (Ont. S.C.), at para. 29. Litigants are entitled to have their disputes resolved quickly so that they can move on with their lives: Marche d’Alimentation, at para. 25. Delay in moving a proceeding forward leaves the defending litigant with a claim hanging over its head and frustrates the legitimate expectation that a matter will be dealt with in a timely manner: 1196158 Ontario Inc, at para. 44. Excusing such delay would ultimately undermine public confidence in the administration of justice: Marche d’Alimentation, at para. 32.

[77] In this case, there is a number of Defendants and third parties have been drawn into litigation by the Plaintiff. There has been little forward movement for approximately eight years, and the defending litigants continue to have this claim hanging over their head. The record shows reasonable steps by the Defendants to move the actions toward a resolution. However, the Plaintiff moved slowly, failed to follow up with the Defendants, and failed to comply with the agreed upon timelines and orders. This is not a case where the moving Defendants have contributed to the delay.

[78] For the above reasons, I find that the Plaintiff’s delay in this case is inordinate, inexcusable, and has caused prejudice to the Defendants. I am not satisfied that a fair trial remains possible for the Defendants in either of Nanak’s two actions.

[79] The Defendants’ motions to dismiss the Plaintiff’s actions for delay are therefore granted.

COSTS

[80] The Defendants were successful in having the Plaintiff’s actions dismissed for delay and are, therefore, entitled to the costs of this motion.

[81] If the Defendants also seek their costs of the respective actions, they may return a motion before me as provided in r. 24.05.1. Further, the relief requested on the Defendants’ motions to dismiss also included a request for indemnity for third party costs. Such relief may also be sought by a motion before me as provided in r. 24.05.1. This motion will be heard in writing.

[82] The following dates shall apply to the service and filing of costs submissions to determine costs of this motion, costs of the action, and any claims relating to third parties. This timeline applies to both actions and the third party action:

▪ The Defendants shall serve and file all written costs submissions by December 2, 2019.

▪ The Plaintiff shall serve and file responding costs submissions by December 16, 2019.

▪ The Defendants shall serve and file any reply submissions by December 24, 2019.

[83] Costs submissions and responding submissions are not to exceed five pages (three pages for reply), double spaced, exclusive of any offers to settle, Bills of Costs and authorities.

[84] All costs submissions and materials shall be filed in the Brampton Superior Court of Justice Registrar’s Office, to my attention.

McSweeney J.

DATE: November 20, 2019

COURT FILE NO.: CV-12-0069 and CV-11-1858

DATE: 2019 11 20

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E N:

NANAK HOMES INC.

(Applicant/Responding Party)

• and -

DEVENDER ARORA, VISHWAS DHEKNEY and BANERJEE & ASSOCIATES LTD.

(Defendants/Moving Party)

and between

NANAK HOMES INC. (Plaintiff/Responding Party)

• and -

ONTARIO CORPORATION 1238585 operating as KAMCO TECHNIQUES LTEE, and/or ONTARIO CORPORATION 2061584 operating as KAMCO ENGINEERING SERVICES LTD. (Defendants/Moving Party)

• and -

EMCON CONSTRUCTION LTD., AQUA MECHANICAL CONTRACTING LTD., AIRWILL ELECTRICAL SUPPLY LTD., BATTAGLI ASSOCIATES INC. and DEVENDER ARORA (Third Parties)

• and -

VISHWAS DHEKNEY, BANERJEE & ASSOCIATES LTD. now carrying on business as EXP SERVICES INC. (Fourth Parties)

ENDORSEMENT

McSweeney J.

Released: November 20, 2019