Court File and Parties

COURT FILE NO.: CV-13-478671 MOTION HEARD: 20201021 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Halton Place Horse and Country Limited, Plaintiff AND: 1754537 Ontario Limited and Guery Goyo, Defendants

BEFORE: Master Jolley

COUNSEL: Tim Gleason, Agent for Counsel for the Moving Party Plaintiff Avrum Slodovnick, Counsel for the Responding Party Defendant Guery Goyo

HEARD: 21 January 2020

Reasons for Decision

[1] The plaintiff brings this motion to set aside the order of the registrar made 11 March 2019 dismissing its action.

Background Facts

[2] The plaintiff is the assignee of a mortgage registered 31 December 2007 securing a loan to the defendant 1754537 Ontario Limited (“175”) in the amount of $2,700,000. The plaintiff alleges that, on or about 26 April 2010, Guery Goyo (“Goyo”) became a guarantor of that mortgage, something Goyo disputes. 175 was noted in default and, on 13 August 2013 judgment granted against it in the amount of $4,835,776.67 and costs. 175 was also ordered to deliver up possession of the property. On 9 June 2016 the plaintiff transferred the property to a related entity.

[3] It is undisputed that the plaintiff took no steps to move the litigation forward from the close of pleadings in August 2013 to January 2018. By way of explanation, the plaintiff deposed that the sale of the property was complex and it took from 2013 to 2016 to market it, attempt to find a buyer and then finally transfer it as it did. The plaintiff argues that it was not in a position to move the matter forward until it crystallized its damages through the transfer in June 2016. I note that Goyo was unable to test this assertion as most if not all questions about the marketing and sale of the property were refused on the plaintiff’s cross examination. I put little weight on this explanation, as a result.

[4] The alleged complications in selling the property might have assisted in explaining the delay up to June 2016 but do not explain the 18 month delay from June 2016 to the retainer of new counsel in January 2018, which was the next step in the action.

[5] Immediately upon their retainer, new counsel noted that the five year anniversary of the action was approaching and proposed a timetable. Agreement was reached and the parties consented to a timetable order dated 19 April 2018. Among other things, that timetable extended the set down date to 1 March 2019.

[6] Pursuant to that timetable, the parties were to exchange affidavits of documents by 15 May 2018. The plaintiff, who should have been anxious to move the matter along, did not comply with that deadline. The defendant Goyo requested a slight extension, to which the plaintiff agreed, advising that he also might need another week to finalize his client’s affidavit as well. Ultimately, it seems that neither party served an affidavit of documents.

[7] Examinations for discovery were to be held by 15 July 2018. Starting in October 2018, plaintiff’s counsel contacted Goyo’s counsel to schedule discovery dates on three occasions, the last being in January 2019. Counsel did not receive a response.

[8] In March 2019 the plaintiff received the dismissal order. On March 18, it requested the consent of Goyo to set the order aside and impose a revised timetable. Counsel followed up in late March and was advised on March 28 that Goyo would not consent.

[9] It is agreed that on a motion to set aside an administrative dismissal, the moving party must address whether there is an acceptable explanation for the litigation delay, whether the motion to restore the action was brought promptly, whether the deadline was missed through inadvertence and whether there is an absence of non-compensable prejudice to the defendant should be action be restored (Reid v. Dow Corning Corp. (2001) 11 C.P.C. (5th) 80 at paragraph 41). However, the court is not to adhere to a rote application of those factors. The approach is to be a contextual one (Habib v. Mucaj 2012 ONCA 880 at paragraph 6).

[10] On the first factor, while there is a weak explanation for the gap from August 2013 to June 2016 and no explanation for the gap from June 2016 to January 2018, the other periods in the litigation have been accounted for. The plaintiff had obtained a timetable, discussed the exchange of affidavits of documents and attempted to arrange examinations for discovery. I also note that had the defendant responded to the plaintiff’s requests for discovery dates, that step could have been completed and the action set down before it was dismissed. I accept that Goyo’s failure to respond was inadvertent, their position being that the emails never came to counsel’s attention.

[11] The court is not to assess motions such as this by considering litigation delay through a forensic month by month examination of the action, but to make an overall assessment of the steps taken to determine whether the plaintiff has provided an acceptable explanation for the delay (Toscano v. Anselmo 2019 ONSC 5420 at paragraph 20). While not every period of inaction has been addressed, I am satisfied that, overall, the delay has been explained. Even if the delay had not been sufficiently explained, I accept the dicta in Scaini v. Prochnicki 2007 ONCA 63 that all relevant factors should be considered and failure on one factor, while important, need not be fatal depending on the circumstances. Further, there is good law to suggest that a party who has entered into a consent timetable order has implicitly excused the prior delay and the court’s focus should be on the period after the order was entered into, here the period after March 2018 (see Stokker v. Storoschuk 2018 ONCA 2 at paragraphs 5, 6). I do not take Stokker as a blanket get out of jail free card for a plaintiff for its past inaction. I interpret the case to mean that a defendant will have difficulty arguing that it suffers prejudice because of delay up to the point of that order when it did not argue at the timetable hearing that it would be prejudiced if an extension were granted. Presumably here Goyo would not have consented to the extension timetable if the delay to that point had caused him actual prejudice in his ability to defend himself. In March 2018, he was content to have the matter set down for trial by March 2019.

[12] Plaintiff’s counsel advised that, through his inadvertence, a status hearing was not sought prior to the 1 March 2019 set down date. There is no evidence before me that the plaintiff intended to abandon the action. Indeed, the plaintiff’s principal deposes otherwise. I do have evidence of plaintiff’s counsel attempting to arrange discoveries and I do not infer that the firm was taking those steps to move the action forward without its client’s instructions. Counsel for the defendant argues that the plaintiff’s action in transferring the property to a related party demonstrate that it never intended to pursue this action. It had effectively foreclosed on the property, eliminating any cause of action it had against the defendants for damages and bringing this action for damages to an end. There is not sufficient evidence on this motion to make that finding but Goyo is free to make this argument at trial.

[13] I find the motion was brought promptly. After being advised at the end of March 2019 that Goyo would not consent to set aside the registrar’s order, the plaintiff served this notice of motion in May. The motion was originally to be heard in July and adjourned ultimately until today’s date.

[14] On the issue of prejudice, Goyo argues first, that the plaintiff has adduced no evidence that the defendant will not suffer non-compensable prejudice should the action be restored. He is correct that the plaintiff’s materials fail to address this issue. I am advised that both parties have prepared affidavits of documents that can be promptly served if this action proceeds, so it seems infer that no documents have been lost, at a minimum.

[15] Goyo further argues that he will suffer actual prejudice if the action is permitted to continue as 175’s then lawyer, Barry Browning, is now 89 years old, unwell and has memory issues. It is apparent from the emails in evidence that Mr. Browning was involved in discussions in 2012 concerning the guarantee that the plaintiff alleges Goyo signed in 2010.

[16] Had the plaintiff set the matter down by 1 March 2019, Mr. Browning would have been 88 years old at that time. There is no indication that Mr. Browning’s memory has worsened between that original consent set down date and present. I cannot find that the potential prejudice caused by Mr. Browning’s situation arises from any delay in setting this action down.

[17] In the circumstances of this case, I find it just that the court exercise its discretion to grant the plaintiff leave to restore the action to the trial list. The action must be subject to an aggressive timetable, given its age. I am advised that, if the matter were restored, the parties have agreed to a timetable, which I have now included as part of this order.

[18] The plaintiff seeks its costs of the motion. I would find it unfair in the circumstances for the defendant to pay those costs. The plaintiff did not move the matter forward for 4 ½ years, from 2013 to 2018 or, at least, did not keep the defendant apprised of the steps it was taking to move the matter along by attempting to market and sell the property. Further, it did not comply with the terms of the extension it did obtain through the consent of the defendant. Had that consent not been granted, the plaintiff would have had difficulty explaining its inaction from 2013 to March 2019. In the circumstances there shall be no order as to costs.

[19] Counsel may obtain a signed copy of the signed order at the Masters’ counter at 393 University Avenue, 6th floor.

Master Jolley Date: 23 January 2020