COURT FILE NO.: CV-15-520443 (Toronto)

MOTION HEARD: 2020 01 22

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: J.M.L. Holding Corporation and Gary Muchula

v.

David Ryan and The Estate of William Colvin

BEFORE: MASTER R. A. MUIR

COUNSEL: Sabrina A. Lucenti for the defendant David Ryan, moving party Michael W. Carlson for the plaintiffs, responding parties

REASONS FOR DECISION

[1] The defendant David Ryan brings this motion for a status hearing pursuant to Rule 48.14(5) of the Rules of Civil Procedure, RRO 1990, Reg. 194 (the “Rules”). Mr. Ryan asks that this action be dismissed for delay. The defendant The Estate of William Colvin is unrepresented and has not participated in this action. The plaintiffs are opposed.

BACKGROUND

[2] This is a lawyer negligence action in relation to the sale of the plaintiffs’ property in Huntsville, Ontario in September 2013. Mr. Ryan acted as the plaintiffs’ lawyer on the sale. The plaintiffs allege that Mr. Ryan was negligent when drafting an agreement of purchase and sale (the “APS”). Mr. Ryan apparently included two parcels of land in the APS when the plaintiffs allege that only one parcel of land should have been subject to the APS.

PROGRESS OF THE ACTION

[3] The plaintiffs’ statement of claim was issued on January 23, 2015. A statement of defence was served by Mr. Ryan on or about August 24, 2015. Mr. Ryan’s lawyer then sent several letters to the plaintiffs’ lawyer requesting a discovery plan. The plaintiffs’ lawyer provided a discovery plan in March 2016. Mr. Ryan served his affidavit of documents in July 2016. The plaintiffs’ lawyer then requested copies of Mr. Ryan’s documents and those were delivered in October 2016.

[4] Over the next several months, Mr. Ryan’s lawyer made several attempts to schedule examinations for discovery. The plaintiffs’ lawyer was unable or unwilling to provide dates for the examinations.

[5] Eventually, the plaintiffs’ lawyer contacted Mr. Ryan’s lawyer on June 20, 2018. The plaintiffs’ lawyer advised Mr. Ryan’s lawyer that the delay with the action related to the preparation of an expert report which he needed to review in final form before deciding how to proceed.

[6] Nothing further was done by the plaintiffs until October 2019 when the plaintiffs’ lawyer contacted Mr. Ryan’s lawyer to advise that he had booked a motion to extend the pending set down deadline for this action. The plaintiffs’ lawyer included an affidavit from the plaintiff Gary Muchula which stated that Mr. Muchula had been injured in a motor vehicle accident as well as a second accident in his home and was also overwhelmed by difficult divorce proceedings.

[7] Later in October 2019, the plaintiffs’ lawyer advised Mr. Ryan’s lawyer that the plaintiffs would be bringing a summary judgment motion. Several appearances at civil practice court followed. Ultimately, Justice Firestone made an order on November 26, 2019 scheduling the summary judgment motion and establishing a timetable for the remaining steps in this action. Justice Firestone’s order included a provision extending the set down deadline for this action to December 15, 2020. It also included an order for a status hearing to be held on January 22, 2020. This order was made after the parties had filed an agreed upon timetable as initially requested by Justice Firestone.

[8] The plaintiffs served their summary judgment motion materials on December 9, 2019, which included an expert report. The plaintiffs have now served their affidavit of documents and delivered copies of their productions.

JUSTICE FIRESTONE’S ORDER

[9] The first issue on this motion is to determine the effect of Justice Firestone’s order of November 26, 2019.

[10] The relevant parts of Rule 48.14 provide as follows:

48.14 (1) Unless the court orders otherwise, the registrar shall dismiss an action for delay in either of the following circumstances, subject to subrules (4) to (8):

1. The action has not been set down for trial or terminated by any means by the fifth anniversary of the commencement of the action

(4) Subrule (1) does not apply if, at least 30 days before the expiry of the applicable period referred to in that subrule, a party files the following documents:

1. A timetable, signed by all the parties, that,

i. identifies the steps to be completed before the action may be set down for trial or restored to a trial list, as the case may be,

ii. shows the date or dates by which the steps will be completed, and

iii. shows a date, which shall be no more than two years after the day the applicable period referred to in subrule (1) expires, before which the action shall be set down for trial or restored to a trial list.

2. A draft order establishing the timetable.

(7) At a status hearing, the plaintiffs shall show cause why the action should not be dismissed for delay, and the court may,

(a) dismiss the action for delay; or

(b) if the court is satisfied that the action should proceed,

(i) set deadlines for the completion of the remaining steps necessary to have the action set down for trial or restored to a trial list, as the case may be, and order that it be set down for trial or restored to a trial list within a specified time,

(ii) adjourn the status hearing on such terms as are just,

(iii) if Rule 77 may apply to the action, assign the action for case management under that Rule, subject to the direction of the regional senior judge, or

(iv) make such other order as is just.

[11] The plaintiffs argued that this motion for a status hearing should be summarily dismissed because Justice Firestone’s order had effectively disposed of the matter. The plaintiffs also submitted that the status hearing motion should be similarly dismissed because the parties filed a consent timetable in accordance with Rule 48.14(4). Mr. Ryan argued that the court had the authority to hear the status hearing motion and to dismiss this action given the express reference to a status hearing in Justice Firestone’s order.

[12] Pursuant to Rule 48.14(1), this action was scheduled to be dismissed after the fifth anniversary of the commencement of the action, being January 23, 2020. Justice Firestone’s order extended the set down deadline to December 15, 2020. Nevertheless, his order included a provision for a status hearing to be held on January 22, 2020.

[13] In my view, Justice Firestone’s order must have been made without prejudice to Mr. Ryan’s right to seek a dismissal of this action at the January 22, 2020 status hearing. Rule 48.14(7) expressly provides that at a status hearing a plaintiff must show cause why an action should not be dismissed for delay. This is the central focus of a status hearing. The same Rule goes on to expressly state that the court may dismiss the action for delay. Justice Firestone would have been fully aware of those provisions. There is nothing in his order limiting the court’s discretion at the status hearing. No other interpretation of Justice Firestone’s order makes sense.

[14] Similarly, the plaintiffs cannot avoid this status hearing based on the timetable filed by the parties. The timetable was filed as part of the proceedings before Justice Firestone and at his request. His inclusion in the order of an express provision for a status hearing would make no sense if the timetable was deemed to be filed for the purposes of Rule 48.14(4).

[15] For these reasons, it is my view that Mr. Ryan’s motion for a status hearing must be considered on its merits. The plaintiffs must show cause why this action should not be dismissed for delay.

STATUS HEARING

[16] The principles to be applied on a motion for a status hearing are well settled and not in dispute. The test is conjunctive. The presiding judge or case management master may still dismiss a plaintiff’s action even in situations where the delay has been satisfactorily explained or where a plaintiff has demonstrated that the defendant would not be prejudiced. In 1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544, the Court of Appeal described the test as follows at paragraph 32:

The test is conjunctive, not disjunctive. Even if the plaintiffs can provide a satisfactory explanation for the delay, the action will be dismissed if there would be prejudice to the defendant. And if the plaintiff is not able to provide a satisfactory explanation for the delay, it is still open to the judge to dismiss the action, even if there is no proof of actual prejudice to the defendant.

[17] It is important to note, however, that Rule 48.14(7) provides that the presiding judicial officer at a status hearing may dismiss the action for delay. The Court of Appeal stated in 1196158 Ontario Inc. that it is “open to the judge to dismiss the action” [emphasis added]. The court’s decision is therefore a discretionary one. In applying the test, the court will almost invariably engage in a weighing of all relevant factors in order to reach a just result. See Kara v. Arnold, 2014 ONCA 871 at paragraphs 8 and 13.

[18] Dismissals for delay require a careful balance between the competing values of timely and efficient justice and a resolution of disputes based on the merits. However, the fundamental goal of our system of civil justice is for disputes to be resolved on their merits. See Kara at paragraphs 9 and 10.

[19] These are the factors and principles I have considered on this status hearing motion. I have concluded that it is just that this action be permitted to continue in accordance with the timetables ordered by Justice Firestone.

[20] The progress of this action has obviously not been perfect. It took the plaintiffs more than four years to get past the pleadings stage. The plaintiffs’ lawyer could and should have been more responsive to communications from Mr. Ryan’s lawyer.

[21] However, this was not an action that was forgotten and ignored. The plaintiffs’ lawyer and staff from his office were in contact with Mr. Ryan’s lawyer from time to time. A discovery plan was prepared. It appears that the plaintiffs’ reluctance to commit to dates for examinations for discovery or otherwise move this action forward was, in part, a function of the need for an expert report to prove the plaintiffs’ case in this lawyer negligence action. I also note that the plaintiff Mr. Muchula appears to have experienced personal and health related issues.

[22] Much has been done since October 2019. A timetable has been set and the plaintiffs’ affidavit of documents and productions, summary judgment motion materials and expert report have all been served.

[23] The evidence does not support a conclusion that the plaintiffs made a deliberate decision to abandon this claim.

[24] As I stated above, I do not interpret Justice Firestone’s order as preventing the court from making a dismissal order on this motion. However, his order is a relevant fact to consider as part of the court’s “weighing of all relevant factors”. Justice Firestone obviously concluded that this was an appropriate case in which to schedule a summary judgment motion and ordered the parties to confer and submit a timetable for the action in the event the summary judgment motion is unsuccessful. This factor also militates against a dismissal order.

[25] I have stated in several previous decisions dealing with similar issues that a plaintiff’s explanation for delay need not be perfect. It simply needs to be acceptable. The court’s consideration of litigation delay should not involve a month by month examination of the conduct of an action. The court must take a larger view and make an overall assessment of the steps taken in relation to the claim to determine whether a plaintiff has provided an acceptable explanation for any delay. In my view, the plaintiffs on this motion have met this element of the test.

[26] I am also satisfied that the plaintiffs have rebutted any presumption of prejudice. In my view, the presumption of prejudice is not particularly strong in this case. The claims being made in this action are related to Mr. Ryan’s examination of title and his drafting of the APS. It appears that for the most part, the plaintiffs’ claims will succeed or fail based on an examination of the historical real estate documents and expert evidence. Both sides have now served affidavits of documents and productions. The plaintiffs have served an expert report. The summary judgment motion appears to be on track pursuant to Justice Firestone’s timetable order.

[27] Mr. Ryan is a sophisticated party and has been aware of this claim from the beginning. He has been represented by capable counsel throughout. Mr. Ryan has had a full opportunity to investigate the plaintiffs’ claim. There is no suggestion of actual prejudice to Mr. Ryan in defending this action other than a general reference to fading memories and unavailable witnesses. As noted above, it is my view that this case will mostly involve an examination of documents and expert evidence. The plaintiffs have met this element of the test as well.

CONCLUSION AND ORDER

[28] I am therefore satisfied that it is just in the circumstances of this status hearing that this action be permitted to continue in accordance with the timetables ordered by Justice Firestone. This action shall be set down for trial by December 15, 2020, failing which it shall be dismissed by the registrar.

[29] If the parties are unable to agree on the issue of the costs of this motion, they shall provide the court with brief submissions in writing by February 28, 2020, which submissions may be sent directly to me by email.

Master R. A. Muir

DATE: 2020 01 29```