Court File and Parties

COURT FILE NO.: CV-14-506168

MOTION HEARD: 20200807

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Wasiem A. Diab, Plaintiff

AND:

Georgia Tsitsos and Haralabos Tsitsos, Defendants

BEFORE: Master Jolley

COUNSEL: Andrea Habas, Counsel for the Moving Party Plaintiff

Alex Van Kralingen and Katherine Chau, Counsel for the Responding Party Defendants

HEARD: 7 August 2020

REASONS FOR DECISION

Overview and Legal Framework

[1] The plaintiff brings this motion to set aside the order of the Registrar made 16 July 2019 dismissing this action for delay. In order to succeed, he must (a) provide a reasonable explanation for the delay; (b) satisfy the court that the deadline was missed through inadvertence; (c) demonstrate that this motion was brought promptly; and (d) rebut the presumption of prejudice. If the presumption is rebutted, the burden then shifts to the defendants to demonstrate they would suffer actual prejudice should the dismissal order be set aside. (see Reid v. Dow Corning Corp. 2001 CarswellOnt 2213). The order sought is a discretionary one.

[2] “None of the Reid factors have automatic priority over any others. The Reid test provides a structured approach to reconciling the principle that civil actions should be decided on their merits, with the principle that the public interest is served by enforcing procedural rules that promote the timely and efficient resolution of disputes (1196158 Ontario Inc. v. 62474013 Canada Ltd., 2012 ONCA 544, 112 O.R. (3d) 67, at para. 18). It guides the exercise of judicial discretion and thereby reduces the risk of overlooking relevant considerations. It does not set out a formula, prioritize any enumerated factors over any others, or categorically exclude the consideration of other factors not listed: H.B. Fuller Co. v. Rogers, 2015 ONCA 173, 386 D.L.R. (4th) 262, at para. 23 (“Fuller”); Marche d’Alimentation Denis Theriault Ltée v. Giant Tiger Stores Ltd., 2007 ONCA 695, 87 O.R. (3d) 660, at para 20.” (Jadid v. Toronto Transit Commission 2016 ONCA 936).

[3] The analysis is a contextual one which considers the overall dynamics of the litigation and its goal is to determine what is just in the circumstances (see Carioca’s Import and Export Inc. v. Canadian Pacific Railway 2015 ONCA 592 (“Carioca’s”) at paragraph 46 and Scaini v. Prochnicki 2007 ONCA 63 at paragraph 23).

This Action and the Related Tsitsos v Poka action CV-13-494353 (the “Tsitsos Action”)

[4] The plaintiff’s wife, Kakouli Poka (“Kakouli”) and the defendant Georgia Tsitsos are sisters. Together with Georgia’s husband, the defendant Haralabos Tsitsos, Georgia and Kakouli purchased property located at 41 Hill Crescent, Toronto in 2012 (the “Hill Property”). The purchase price was $3,350,000. Each of the three parties was to contribute roughly $419,000 on closing. Kakouli and Georgia funded their share. Diab and Kakouli allege that Haralabos was unable to fund his share and that Diab agreed to loan him $161,000 to put toward his portion of the purchase of the Hill Property. The Tsitsos deny that they required any additional funds to close. However, they do admit that they received $160,000, although from Kakouli, not from Diab. They also take the position that they have since repaid those funds.

[5] In the present action, Diab seeks repayment of that alleged loan to the defendants. They, in turn, sought possession of the Hill Property in the Tsitsos Action, and now an accounting of the sale proceeds. While Diab is not a party to that action, it is evident from a review of the pleadings that the $161,000 loan is a live issue in that proceeding as well.

Has the plaintiff provided a reasonable explanation for the delay?

[6] The plaintiff has been unable to provide a reasonable, acceptable or satisfactory explanation for the delay for a good part of the life of this action. The action started in June 2014. When the plaintiff’s counsel removed themselves from the record almost two years later, in March 2016, the action had not advanced beyond the pleadings stage. The plaintiff offered no explanation for the delay during this period.

[7] From March 2016 until December 2018, the plaintiff was self-represented. Throughout that period at least until October 2018, there was no activity on this file. The plaintiff explained that he felt that his interests were being protected through the related Tsitsos Action because it encompassed or at least involved the loan at issue in this action and he did not understand the need to move this action along as well. He also felt he was not required to speak to defence counsel and so he did not.

[8] It is plausible that, from a layman’s perspective, Diab may have believed that this action was going to be resolved along with the Tsitsos Action as the “loan” was a key issue there. The Tsitsos Action was moving forward throughout the period when this action was dormant.

[9] The explanation is not perfect as Diab knew they were two separate actions, knew he was not a party to the Tsitsos Action and knew that the Tsitsos had different counsel representing them in that action than in this action. Nonetheless, given the overlap of issues and the factual matrix, I find that the explanation for the delay during Diab’s period of self-representation to be acceptable.

[10] In October 2018 Diab came to understand through his stepson, who was a lawyer, that there was a five year deadline to set the action down for trial. That motivated Diab to take a number of steps to ensure his action would not be dismissed.

[11] First, on 22 October 2018, Diab wrote to the lawyer for Tsitsos in the Tsitsos Action. He did not write to the firm that was representing them in this action, lending some credibility to his assertion that he believed the issues to be interwoven. In his email to counsel, he asked for his comments for a proposed timeline for the exchange of affidavits of documents, examinations for discovery and for trial. He also raised the possibility of a global settlement of his action with the Tsitsos Action.

[12] When Diab received no response, he followed up on November 6 and 7. On 9 November 2018, he sent Tsitsos’ lawyer in the Tsitsos Action his affidavit of documents and copies of his productions. He also requested that examinations for discovery be completed in early to mid-December and proposed a three day trial be scheduled for January 2019.

[13] The Tsitsos’ lawyer went on the record for the defendants in this action on 13 November 2018 and then needed to obtain the file from former counsel. As a result, he objected to the aggressive timetable being proposed, also noting that the file had been inactive for a lengthy period of time.

[14] In his email response of 16 November 2018, Diab inquired about the Tsitsos’ affidavit of documents, examinations for discovery and mediation and trial. He also made it clear that he understood this action was separate from the Tsitsos Action, as he objected to any proposal to have them joined.

[15] Not having made headway on the schedule, Diab took steps in December 2018 to move the matter to mediation. Counsel for the Tsitsos objected to mediation on the basis that it was premature and suggested the parties work on a reasonable discovery plan and deal with the joinder of the two actions before proceeding to mediation.

[16] In December 2018, Diab realized he was in over his head, as he put it, and retained counsel (not Ms. Habas, who was his counsel on this motion). To say he was ill served by the lawyer he retained would be a serious understatement. Without revisiting the entire litany of issues, they included serving but then not filing her notice of change of lawyer (which had ramifications when the court delivered the administrative dismissal order). She raised the issue of a motion for summary judgment in January 2019 but did nothing to follow through. She attended in court on the Tsitsos Action in the spring of 2019 to set dates (she was Poka’s lawyer on that file) but neglected to mention at any time Diab’s now view that he wished the actions to be tried together. As she failed to raise the issue of trial together at the various case conferences throughout the spring, the Tsitsos Action proceeded at a quick pace toward trial without any accommodation for this action ever being joined. In her defence, Diab’s then lawyer indicated that she had been in a motor vehicle accident and her staff had been away caring for an ill spouse at various key times in this action. This action did not move forward and was ultimately dismissed in July 2019, due to the various missteps and inaction of Diab’s then lawyer.

[17] As noted by the Court of Appeal in Fuller, supra, at paragraph 27:

“the court’s preference for deciding matters on their merits is all the more pronounced where delay results form an error committed by counsel. As the court stated in Habib, at para. 7, “[O]n a motion to set aside a dismissal order, the court should be concerned primarily with the rights of the litigants not with the conduct of their counsel.” In Marché, Sharpe J.A. stated, at para. 28, “The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor”.

[18] Diab’s explanation for the delay over the life of the action is not perfect but a perfect explanation is not the test. I am satisfied that the explanation is reasonable, particularly starting in the fall of 2018 when he took active steps to try to move the matter forward, once he learned of the five year deadline.

Has the plaintiff shown that the deadline was missed through inadvertence?

[19] Diab must also demonstrate that the deadline was missed through inadvertence. Diab’s evidence is that he always intended to pursue his claim. He became aware in October 2018 that there was a deadline and took steps to ensure his action got back up to speed. When he felt he needed help, he retained counsel who was familiar with the issue, having been Poka’s counsel in the Tsitsos Action.

[20] Further, there is direct evidence from plaintiff’s then counsel that she had not properly diarized the set down date and it was overlooked inadvertently. Her office did not use any electronic calendar or reminder. She was aware that the action was coming up to its five year mark but failed to even use her paper system of putting a piece of paper in the front of the file setting out important dates.

[21] I am satisfied that the deadline was missed through inadvertence.

Was the motion brought promptly?

[22] The action was dismissed on 16 July 2019. Because Diab’s then counsel had failed to file her notice of appointment, she did not receive a copy of the dismissal order.

[23] As noted, Diab’s counsel did not raise the issue of joinder of the two actions before any judicial officer. To the contrary, she agreed to a detailed trial procedure agreement in the Tsitsos Action and participated in the steps set out in that agreement to ensure it would be ready for trial. Then, in early July 2019 she wrote to the defendants’ counsel out of the blue, asking “we are still joining those actions or no?”. The defendants’ lawyer responded on 25 July 2019 advising that it would no longer be appropriate to join the actions, something he had advocated for much earlier, as the trial affidavits had been delivered in the Tsitsos Action and joinder had not been raised at any of the pre-trial conferences. The two actions were at very different stages. Shortly after sending that email, the defendants received the dismissal order.

[24] Diab’s lawyer next advised in August 2019 that she intended to bring a motion for summary judgment. In response, the defendants’ lawyer sent her the dismissal order. Within two days of that email, Diab’s lawyer advised that she intended to bring a motion to set aide the dismissal and the defendants advised that they would oppose the motion.

[25] What followed was a further series of mishaps by Diab’s lawyer. For his part, Diab attended in her office on 9 September 2019 and affirmed an affidavit in support of the motion. He also forwarded to her the funds to cover the filing fee.

[26] Although the motion was prepared, Diab’s lawyer neglected to actually serve it until October 29, when it was discovered in her office. The motion was made returnable on 1 November 2019 but, true to form, it was not filed with the court. It was then booked for December 17. At that point, Diab filed his own motion record, even though he had counsel, which he proposed to walk in. Ultimately the motion was adjourned twice ntil it was argued before me.

[27] While the motion was not brought in a timely manner, I am not prepared to fault Diab for that. Counsel was notified within two days of Diab’s lawyer receiving the dismissal order that he intended to bring a motion to set it aside. Diab then did what he was required to do so ensure the dismissal order was dealt with in a timely manner. Unfortunately due to the missteps of his lawyer, that did not occur.

Has the plaintiff rebutted the presumption of prejudice?

[28] Diab has deposed that all relevant documents are available. In fact, he served his affidavit of documents and productions more than 19 months ago. The defendants have yet to serve their affidavit of documents. Further, each of the key players, including Diab, has sworn affidavits in the Tsitsos Action that, inter alia, touch on the alleged loan.

[29] The defendants argue that they will be prejudiced because Diab has confirmed he intends to bring a motion to have this action tried together with the Tsitsos Action. They argue that such an order would jeopardize their ten day trial which is now fixed to commence on 21 September 2020 and which has already been adjourned twice even though the dates were peremptory to Poka each time

[30] There are two answers to this argument. First, that motion is not before me. To the extent the defendants believe they will be jeopardized by a trial together order, they may make those arguments fully in opposition before the judicial officer hearing that motion. Second, there is a protective order by Justice Kimmel made in the Tsitsos Action on 10 January 2020, which states in part: “I have indicated to counsel that any order sought in respect of the Diab Action cannot jeopardize the trial in this action.”

[31] Defendants’ counsel argued before me that the need to respond to a motion for trial together was in and of itself prejudicial to his clients as it would require time and monetary resources that the defendants should be directing to the pending trial. I do not find that this constitutes prejudice that should defeat this motion. If the defendants have to incur costs to respond to the motion, the motion’s judge or master is in the best position to make a reasoned judgment on responsibility for those costs.

[32] It cannot be said that the defendants will suffer any prejudice in their ability to defend this action in light of the uncontested evidence that the oral and documentary evidence relating to the alleged loan has been preserved. In considering all of the circumstances, I find that the defendants will not suffer prejudice if the dismissal order is set aside.

Conclusion

[33] Stepping back and considering what outcome would do justice in all of the circumstances of the case (Micallef v Dodig [2009] O.J. No. 5564 at paragraph 31 (Div. Ct.)), I am satisfied that it is in the interest of justice that I exercise my discretion to set aside the dismissal order and allow this action to be determined on its merits.

[34] The matter cannot be allowed to linger. The parties are to discuss an accelerated timetable to move this matter forward. The plaintiff suggested that it would be reasonable to propose delivery of the defendants’ affidavit of documents and productions within 15-30 days of the release of this decision, examinations for discovery 15-30 days thereafter and then have the matter set down for trial. If the parties cannot agree on a timetable, they are to submit their preferred timetable to me, with a short explanation by 30 September 2020. I have not ordered an earlier date, to account for the fact that the defendants and their lawyer will be preparing for trial and likely be conducting the trial until the end of September.

[35] If the parties are unable to resolve the issue of costs, they may each submit a costs outline, and submissions no more than three pages in length to my assistant trial coordinator, Ms. Meditskos by email to christine.meditskos@ontario.ca, also by 30 September 2020.

Master Jolley

Date: 20 August 2020