Court File and Parties
COURT FILE NO.: 05-CV-299825PD3 MOTION HEARD: 2021-01-08 REASONS RELEASED: 2021-04-09
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
VALENTINA AVDEEVA Plaintiff
- and-
CAROLINE KHOUSHABEH, in her capacity as estate trustee for the estate of LEVON KHANKALDIYAN a.k.a. LEVON KHANKALDIYAN HAFTVAN, deceased Defendant
BEFORE: MASTER M.P. McGRAW
COUNSEL: D. Wagner, for the Defendant Email: dwagner@wagnersidlofsky.com
R. Thapar, for the Plaintiff Email: ray@thaparlaw.ca
REASONS RELEASED: April 9, 2021
Reasons for Endorsement
I. Overview
[1] This is the Defendant’s third motion to dismiss this 15-year old action for delay. There have been over 30 court attendances and the unfortunate procedural history has been criticized by numerous courts. This motion is complicated by the passing of the Defendant since the last motion to dismiss and the Defendant Estate’s outstanding Application against the Plaintiff which overlaps with the relief sought by the Plaintiff in this action.
II. Background and Procedural History
[2] The Defendant, Levon Khankaldiyna Haftvan (“Levon”) was in a common law relationship with Elena Klevstov (“Elena”), the daughter of the Plaintiff Valentina Avdeeva who resides in Russia. Levon passed away on March 10, 2018.
[3] The Plaintiff commenced this action by Statement of Claim issued on November 7, 2005. She seeks an order declaring that she is the sole beneficial owner of the property at 43 Bowan Court in Toronto (the “Property”). She also seeks the same relief with respect to a condominium located at 2721 Victoria Park Avenue in Toronto (the “Condominium”), however, it has since been sold under power of sale. The Plaintiff also claims repayment of alleged loans to the Defendant and seeks damages of $750,000 for breach of trust, conversion and mental distress and aggravated, exemplary and punitive damages of $100,000. The Plaintiff alleges that the Defendant executed a trust agreement acknowledging that he held a 1% interest in the Property in trust for the Plaintiff with the remaining 99% owned by the Plaintiff. Plaintiff’s counsel advises that she is no longer seeking aggravated, exemplary and punitive damages.
[4] The Defendant delivered his Statement of Defence on December 9, 2005. No further steps were taken until February 2, 2009 when the Plaintiff brought an ex parte motion for judgment. By Order dated March 6, 2009, granted in the Defendant’s absence, Belobaba J. declared that the Plaintiff was the 100% beneficial owner of the Property and ordered that Levon be removed from title (the “Belobaba Order”). The Plaintiff advised the court that she attempted to serve Levon without success.
[5] The Defendant first learned about the Belobaba Order on January 26, 2012 while preparing his application. In the Notice of Application issued on February 1, 2012, the Defendant seeks, among other things, a declaration that he holds a 50% interest in the Property and punitive damages of $100,000 (the “Application”). Levon obtained an injunction and CPL on February 10, 2012 on an ex parte basis and filed a Motion Record on February 24, 2012 to set aside the Belobaba Order (the “Set Aside Motion”).
[6] The Application and the Set Aside Motion were not heard for over two years. Quigley J. ordered a timetable on May 2, 2012, however, the matters were adjourned 5 times, 3 times at the Plaintiff’s request and twice because it was not on the list. Levon was awarded costs on 3 occasions in the aggregate amount of $6,250. Cross-examinations were held on February 26-27, 2013 and the Plaintiff brought a refusals motion which she did not pursue.
[7] By Endorsement dated January 8, 2014, Chiappetta J. granted the Plaintiff’s fourth adjournment request to March 25, 2014 peremptory on the Plaintiff noting that she did so “with regret and suspect, given the history of adjournment requests and the reasons offered for the relief granted.” The Plaintiff was ordered to pay costs thrown away of $2,500.
[8] The Application and the Set Aside Motion proceeded before Myers J. on March 25, 2014, the seventh return date, at which another adjournment request was denied. In his Endorsement dated March 26, 2014 (Khankaldiyan v. Avdeeva, 2014 ONSC 1935)(the “March 2014 Endorsement”), Myers J. set aside the Belobaba Order finding that he had “little difficulty” concluding that the Plaintiff had the ability to communicate with Levon and therefore failed to make full and fair disclosure of all material facts (March 2014 Endorsement at para. 10).
[9] Myers J. held that he could not resolve the issue as to which of the parties has title to the Property and in what shares (March 2014 Endorsement at para. 12). Myers J. offered to conduct a quick case managed trial with limited disclosure and discovery to address the dispute as to whether Levon put any funds into the Property and whether, in any event, he signed an agreement confirming that he held only a 1% interest in the Property as a bare trustee for the Plaintiff. The Plaintiff refused this option.
[10] Myers J. also ordered that the remaining issues in the Application proceed to a trial of the issues with respect to whether the Defendant has a 50% interest in the Property; punitive damages of $100,000; costs; and any other relief permitted. Myers J. also directed that the trial of the issues in the Application occur at the same time as the trial of this action, that no further evidence be filed in the Application and examinations for discovery and evidence presented at trial serve as the evidence for the Application (March 2014 Endorsement at para. 15).
[11] In his Costs Endorsement dated May 12, 2014 (Khankaldiyan v. Avdeeva, 2014 ONSC 2931), Myers J. ordered the Plaintiff to pay costs of $43,736.57 on a full indemnity scale, including a “top up” for prior partial indemnity awards. In the Costs Endorsement, Myers J. found that the Plaintiff requested repeated adjournments to bring motions that she never brought or deliver materials that were never delivered; the Plaintiff’s “deception of Belobaba J. falls within that narrow band of rare exceptional circumstances that deserve an exceptional costs award”; and “was just a part of a larger tactic to undermine the course of justice”, “compounded by her wrongdoing by her efforts to lengthen and frustrate these proceedings as found by Chiappetta J. and me”, “calculated and intentional” and her “entire strategy to hive off the Property from the rest of claim has been a big, deceptive tactic to try to get title to the Property while avoiding whatever myriad of issues Ms. Avdeeva believes she has to win in order to do so fairly” (March 2014 Endorsement at paras. 6-8, 12, 14). Myers J. was also critical of Plaintiff’s former counsel noting his failure to attend court on numerous occasions, deliberate strategy of delivering of affidavits contrary to the Rules and refusal to agree to a narrow, quick trial concerning the purchase of the Property (March 2014 Endorsement at paras. 8-9, 13).
[12] Over the next 9 months, the Defendant unsuccessfully attempted to collect the costs totaling $46,236.57 awarded by Chiappetta J. and Myers J. On March 2, 2015, the Defendant brought the first motion to dismiss this action for delay and non-payment of the costs awards (the “First Motion”). The Plaintiff retained new counsel on March 20, 2015. Elena states in her affidavit filed on this motion that the Plaintiff retained new counsel as a result of former counsel’s conduct and the court’s criticism.
[13] The First Motion was heard by Master Abrams on May 8 and June 5, 2015. In her Endorsement dated August 6, 2015 (Avdeeva v. Khankaldiyan, 2015 ONSC 4984)(the “Abrams Endorsement”), Master Abrams declined to dismiss this action ordering the Plaintiff to deliver her Affidavit of Documents and pay the outstanding costs awards by September 21, 2015 and/or make arrangements to be examined in aid of execution by the Defendant no later than October 23, 2015. Master Abrams held that “the evidence adduced suggests that it is more likely than not that the pattern and pace of this litigation have been matters of choice”, and “while I am not now dismissing the plaintiff’s claims, I do note that the plaintiff is perilously skirting the edge” and that she was “giving the plaintiff one last chance to do what she ought to have done before now – failing which she risks having her claims dismissed, with costs” (Abrams Endorsement at paras. 12, 14, and 17-18). In her Costs Endorsement dated June 28, 2016, Master Abrams ordered the Plaintiff to pay costs of $16,461.57.
[14] The Plaintiff subsequently served her unsworn Affidavit of Documents and paid the outstanding costs on September 21, 2015. The Defendant served his Affidavit of Documents on May 31, 2016. Defendant’s counsel initiated discussions regarding a timetable including examinations for discovery on September 1, 2016 following up numerous times. Counsel agreed on or about October 6, 2016 that discoveries would take place on April 24-25, 2017 (the almost 7- month delay was largely attributable to counsel’s availability). However, the examinations were cancelled when the Plaintiff was hospitalized in Russia due to complications arising from a previous stroke. The Plaintiff refused to participate in an examination by video conference, offered to complete her examination in writing and the examination did not proceed.
[15] On August 8, 2017, the Defendant brought the second motion to dismiss this action for delay or alternatively, compel the Plaintiff to attend her examination for discovery which came before me on September 1, 2017 (the “Second Motion”). As set out in my Endorsement dated September 1, 2017 (the “September 2017 Endorsement”):
“The Plaintiff has been hospitalized in Russia and recently released, however, all promises to make her available previously have not been fulfilled. Plaintiff’s counsel advises that the Plaintiff is available to be examined for discovery in person or by video conference in the next 30-45 days. While I am mindful of the history and circumstances of these proceedings and the Plaintiff’s conduct, in my view, it would not be proportionate, efficient or consistent with Rule 1.04 to proceed with the Defendant’s dismissal motion in the face of these latest efforts to schedule the Plaintiff’s examination for discovery particularly when considering the recent appellate jurisprudence on dismissal motions. However, it is imperative that the Plaintiff follow through particularly in light of the history of these proceedings. No further indulgences of this court will be granted and the Plaintiff will be provided with a very short time period to move this action forward, barring which, the Defendant’s dismissal motion shall proceed in short order.” (September 2017 Endorsement at p. 2)
[16] I adjourned the Second Motion on the condition that it would proceed on November 3, 2017 peremptory on the parties if the Plaintiff did not serve her sworn Affidavit of Documents by September 8, 2017 and her examination for discovery was not completed in person or by video conference on or before October 20, 2017 (September 2017 Endorsement at p. 3). The Plaintiff delivered her sworn Affidavit of Documents on or before September 8, 2017 and offered to complete her examination for discovery by Skype on October 3, 2017. However, disputes arose over arrangements for the Plaintiff’s examination including the start time given the time difference with Russia, location and accreditation of the translator and who could attend. Counsel appeared before me again on November 3, 2017. While my Endorsement from that attendance is not available, I provided directions and case management and the Plaintiff’s examination for discovery was completed on December 14-15, 2017. Levon’s examination for discovery was completed on October 20, 2017.
[17] After Levon passed away on March 10, 2018, this action was stayed pending his Estate obtaining an Order to Continue. An Application for Certificate of Appointment of Estate Trustee was submitted on June 28, 2018, a Certificate of Appointment was issued on January 9, 2019 and an Order to Continue was issued on February 21, 2019. The Plaintiff delivered her answers to undertakings on May 11, 2018 and the Defendant delivered answers to undertakings on October 31, 2019. Before the delivery of the Defendant’s answers, Plaintiff’s counsel requested that the Defendant consent to the Plaintiff setting the action down for trial without prejudice to the right to move on any refusals once the Defendant delivered answers to undertakings. The Defendant declined. The Defendant also declined the Plaintiff’s request to schedule a case managed trial of the issues as offered by Myers J. in 2012.
[18] Counsel attended before T. Archibald J. on January 20, 2020 to schedule this third dismissal motion and a motion for undertakings and refusals. The motions were referred to the Masters’ office and a telephone case conference proceeded before me on February 24, 2020. I scheduled the dismissal motion to proceed before me on June 5, 2020, however, it was adjourned due to the suspension of regular court operations resulting from the COVID-19 pandemic. Further telephone case conferences were held on June 12, July 10 and September 16, 2020 to speak to scheduling, timetabling, materials and potential settlement. The motion was scheduled to proceed before me on October 7, 2020 but adjourned again to today due to disputes over supplementary materials. During a telephone case conference on October 7, 2020 the parties agreed with my suggestion to file all motion materials without prejudice to their rights to make submissions with respect to what materials I should consider and what weight to give them.
III. The Law and Analysis
[19] Rule 24.01(1) provides that a defendant who is not in default under the Rules or an order of the court may move to have an action dismissed for delay where, among other grounds, the plaintiff has failed to set the action down for trial within six months after the close of pleadings.
[20] Dismissing an action for delay is a severe remedy which denies a plaintiff the adjudication of their claim on the merits, however, sometimes it is the only order that can adequately protect the integrity of the civil justice process and prevent an adjudication on the merits that is unfair to the defendant (Langenecker v. Sauve, 2011 ONCA 803 at para. 3).
[21] Master Graham summarized the relevant considerations on a Rule 24.01 motion in Szpakowsky v. Tenenbaum, 2017 ONSC 18:
(1) To dismiss an action for delay, the court must be satisfied that the plaintiff's default has been intentional and contumelious, or that there has been inordinate and inexcusable delay for which the plaintiff or his lawyers are responsible resulting in a substantial risk that a fair trial will not be possible. (Armstrong v. McCall, 2006 17248 (ON CA), [2006] O.J. No. 2055 (C.A.), Langenecker v. Sauve, 2011 ONCA 803, [2011] O.J. No. 5777 (C.A.), Francis v. Peel (Regional Municipality) Police, [2015] O.J. No. 5001 (SCJ))
(2) A dismissal on the basis of intentional and contumelious delay would be warranted in cases "in which the delay is caused by the intentional conduct of the plaintiff or his counsel that demonstrates a disdain or disrespect for the court process." (Langenecker, supra, para. 6)
(3) The plaintiff is responsible for moving the action along. (Wallace v. Crate's Marine Sales Ltd., 2014 ONCA 671, [2014] O.J. No. 4606 (C.A.) at para. 18)
(4) Any delay in the prosecution of an action requires an explanation. The onus rests with the plaintiff to show that the delay was not intentional. In the absence of an explanation from the plaintiff for the delay, it is to be presumed that the delay was intentional. (Berg v. Robbins, [2009] O.J. No. 6169 (Div. Ct.) at para. 13)
The onus is on the plaintiff to rebut the presumption of prejudice arising from the unexplained delay by showing that documents have been preserved, and that the issues in dispute do not require the recollection of witnesses, or that necessary witnesses are available with detailed recollection of events. (Berg, para. 14)
(5) The requirement that the delay be "inexcusable" requires a determination of the reasons for the delay and an assessment of whether those reasons afford an adequate explanation for the delay. . . [E]xplanations that are "reasonable and cogent" or "sensible and persuasive" will excuse the delay at least to the extent that an order dismissing the action would be inappropriate.
In assessing the explanations offered, the court will consider not only the credibility of those explanations and the explanations offered for individual parts of the delay, but also the overall delay and the effect of the explanations considered as a whole. (Langenecker, supra at paragraphs 9 and 10)
(6) An inordinate delay after the cause of action arose or after the passage of a limitation period gives rise to a presumption of prejudice in which case the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebuts the presumption. The plaintiff's onus is to persuade the court with convincing evidence that there is no substantial risk that a fair trial is not possible. (Armstrong, supra and Woodheath Developments Ltd. v. Goldman, 2003 46735 (ON SCDC), [2003] O.J. No. 3440)
(7) Courts may dismiss actions for delay even when the relevant rules do not mandate it. A court has inherent jurisdiction to control its own process, which includes the discretionary power to dismiss an action for delay. The power of a superior court to dismiss an action for delay is not limited to that conferred by any specific Rules of Civil Procedure, but also flows from the inherent power of the court to prevent an abuse of its own process. (Marché D'Alimentation Denis Thériault v. Giant Tiger Stores Ltd., 2007 ONCA 695 at paragraph 24, Wallace, supra at para. 21)
As stated in Wallace at para. 22 "There comes a time, in short, when enough is enough, and the civil justice system will no longer tolerate inordinate and inexplicable delay. A court may then eject the action as an exercise of its inherent jurisdiction, whether or not the relevant rules expressly mandate it." (Szpakowsky at para. 19)
[22] If the court concludes that a plaintiff’s default was not intentional or contumelious, then the court must consider whether there has been inordinate and inexcusable delay for which the plaintiff or its lawyers are responsible resulting in a substantial risk that a fair trial will not be possible (Zaatar v. Aviva, 2018 ONSC 2871 at para. 19; Ticchiarelli v. Ticchiarelli, 2017 ONCA 1 at para. 15; Langenecker at para. 7).
[23] The inordinance of the delay is measured simply by reference to the length of time from the commencement of the proceeding to the motion to dismiss (Langenecker at para. 8; Ticchiarelli at para. 15). Whether the delay is inexcusable requires an examination of the reasons for it and whether an adequate explanation which is "reasonable and cogent" or "sensible and persuasive" has been provided (Langenecker at paras. 9-10; Ticchiarelli at para. 16). The court will consider not only the explanations offered for individual parts of the delay but also the overall delay and the effect of the explanations considered as a whole and through this examination, the delay could then be excused, at least to the extent that an order dismissing the action would be inappropriate (Langenecker at paras. 9-10; Ticchiarelli at para. 16).
[24] Determining whether there is a substantial risk that a fair trial is no longer possible is directed at the prejudice caused by the delay to the defendant’s ability to put its case forward for adjudication on the merits (Langenecker at para. 11). Inordinate delay generates a presumption of prejudice which is inherent in long delays as memories fade, witnesses become unavailable and documents are lost such that the longer the delay the stronger the inference of prejudice (Langenecker at para. 11; Ticchiarelli v. Ticchiarelli, 2017 ONCA 1 at para. 28). The plaintiff bears the onus of rebutting the presumption of prejudice (Cardillo v. Willowdale Int’l Contracting Ltd., 2020 ONSC 2193 at para. 38).
[25] It is also open to a defendant to lead evidence of actual prejudice which may also form the basis for dismissal (Ticchiarelli at para. 29; Cardillo at para. 38; Canadian National Railway Company v. Kitchener (City), 2015 ONCA 131 at para. 12). The unavailability or death of key witnesses, the loss of material documents and the loss of opportunities to conduct a proper investigation may constitute actual prejudice (Sultan v. Hurst, [2018] O.J. No. 223 (C.A.) at para. 4; 1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544, at paras. 31, 41-43).
[26] This motion also requires a careful balancing between efficiency and deciding disputes on their merits:
“ ....On the one hand, the Rules of Civil Procedure need to be enforced in a way that ensures timely and efficient justice, in the interests of plaintiffs, defendants, and society in general. On the other hand, society in general, and the parties, have an interest in the resolution of disputes on their merits and in the availability of flexibility to avoid potentially draconian results, by providing the opportunity for parties to offer a reasonable explanation for delay when it takes them beyond established timelines.” (Kara v. Arnold, 2014 ONCA 871 at para. 9).
[27] The Court of Appeal has also stated the preference that matters be resolved on their merits:
“Expeditious justice must be balanced with the public interest in having disputes determined on their merits. Where, despite the delay, the defendant would not be unfairly prejudiced should the matter proceed for resolution on the merits, according the plaintiff an indulgence is generally favoured.” (D’Alimentation Denis Theriault Ltee v. Giant Tiger Stores Ltd., 2007 ONCA 695 at para. 34)
[28] Given that the Defendant has brought two previous motions to dismiss this action for delay, it is necessary to determine the emphasis to be placed on the time periods considered and findings made on the previous motions. The Plaintiff initially submitted that the doctrine of res judicata should apply such that any issues ruled on by Master Abrams should be barred from my analysis (Klurfeld v. Nova Quest Logistic Inc., 2018 ONSC 1559 at para. 10). The Plaintiff also conceded that it is appropriate for me to consider the overall delay since the commencement of this action. However, the only case referred to me which provides guidance on multiple dismissal for delay motions and the effect of previous findings is the Court of Appeal’s decision in Armstrong v. McCall, 2006 17248 (ON CA), [2006] O.J. No. 2055 (C.A.).
[29] In Armstrong, the Court of Appeal overturned the dismissal of an action on a third motion to dismiss for delay on the basis that the motion judge should have focused on the delay subsequent to the second motion rather than the period from the commencement of the action until the date of the third motion (Armstrong at paras. 18 and 20). The Court of Appeal concluded that since the judges on the two previous motions did not dismiss the action and ordered timetables, they must be taken as having found that the test for dismissal for delay had not been met (Armstrong at paras. 16 and 18). The Court of Appeal held as follows:
“18 As two judges are to be taken as having found that the test for dismissal for delay had not been met, and as O'Driscoll J. did not doubt the correctness of the order of B. Wright J., one issue is whether the motion judge in her analysis placed too much emphasis on the period from the commencement of the action until the date of the motion before her. This raises the question: what happened in the 17 months from the release of O'Driscoll J.'s reasons on February 20, 2004 until the hearing before the motion judge that tipped the scales in favour of the defendants? If the delay was taken by O'Driscoll J. to be excusable on February 20, 2004, what was it that worsened the defendants' position thereafter? In my view, there is nothing in the record that shows that the subsequent delay worsened the situation so far as the defendants were concerned. Indeed, when the motion was argued before Swinton J. the action had already been set down for trial and the trial co-ordinator was awaiting the co-operation of counsel for the physicians to provide available dates for trial.
20 While it was not wrong for the motion judge to consider "the whole course" of the action in determining whether it should have been dismissed, as the appellant contended, given that the respondents had failed to establish a fatal delay before Sachs J. and B. Wright J, she should have focused on the delay subsequent to the decision of O'Driscoll J. The question which the court must address is whether delay that is properly described as inordinate and inexcusable has given rise to a substantial risk that a fair trial for the defendant will not be possible. In the unusual circumstances of this case there were two concurrent findings - on March 7, 2003 and September 23, 2003 - that the plaintiff had not engaged in inordinate and inexcusable delay. In the absence of a finding of grounds on which the delay subsequently became inordinate and inexcusable, not to mention the absence of direct evidence concerning the fairness of the trial, it cannot be right, in my judgment, for the court to dismiss the action for delay.
21 In my view, the motion judge's error was the same as that of the motion judge in Christie Corp. v. Lee, supra. I would adopt and apply what this court said at paragraph 4 to the circumstances of this case:
In some cases, under Rule 24, it will be appropriate to consider the time elapsed from the time an action was commenced in considering the reasonableness of the delay relied on by the defendant. In the circumstances of this case, however, it is our view that the motions judge erred in principle in placing undue weight on this factor.
In that case, as the delay was the result of the plaintiff's failure to set the action down for trial within the required six months, the court was of the view that the proper starting time for measuring the delay was the date on which the action should have been set down for trial. At paragraph 7 the court added that it was significant that the evidence in respect to the claim and the defence was largely documentary.
22 I would also refer to Saikaley v. Commonwealth Insurance Co. (1978), 1978 1575 (ON SC), 21 O.R. (2d) 629 (H.C.J.) at 635 where the circumstances were similar to those in this case. The master had granted the defendants' motion to dismiss the action for delay, but on appeal was reversed by Van Camp J. On a subsequent motion to dismiss the action, the same master denied the motion. On appeal from that decision of the master, Hollingworth J. was of the opinion that the starting point for considering the delay was the date of Van Camp J.'s decision because "she properly dealt with the matter then, or must have taken the matter into consideration". Similarly, in this case, there were two judges, each of whom found that the factors necessary to dismiss the action for delay were absent.”
[30] I adopt the Court of Appeal’s approach in Armstrong which is applicable to the current motion. Unique cases such as the present one and Armstrong involving multiple dismissal motions have been distinguished from the more typical situation where there is one dismissal motion (Robbs v. Lee, 2012 ONSC 6853 at para. 38).
[31] As in Armstrong, this is the Defendant’s third motion to dismiss this action for delay. Therefore, Master Abrams and I must be taken as having found that the test for dismissal for delay was not met on the first two motions. In the Abrams Endorsement, Master Abrams explicitly held that the test had not been met on the First Motion ordering a timetable while finding that “the plaintiff is perilously skirting the edge” and “giving the plaintiff one last chance”. On the Second Motion, I ordered the Plaintiff to deliver her sworn Affidavit of Documents and attend on her examination for discovery and set deadlines for her to do so, the alternative relief sought by the Defendant on the Second Motion. I also noted that no further indulgences would be provided to the Plaintiff. Accordingly, while I will consider the overall delay from the commencement of this action until the return of this third motion, my focus must be on the period after the September 2017 Endorsement.
[32] With this emphasis in mind, I reject the Defendant’s submission that the Plaintiff’s delay has been intentional and contumelious. Master Abrams and I are taken to have concluded that this test was not met on the previous motions. On the First Motion, Master Abrams considered the previous findings regarding delay and the conduct of the Plaintiff and her counsel, including those made by Myers J. and Chiappetta J. While she found that that it was “more likely than not that the pattern and pace of this litigation have been matters of choice”, she did not conclude that the delay was intentional or contumelious. I made no such findings on the Second Motion. Any previous findings of delay or disregard for the court’s process on the first two motions cannot on their own constitute intentional or contumelious delay in the absence of any additional delay or disregard by the Plaintiff after the 2017 Endorsement. Put another way, for me to conclude that the Plaintiff’s delay was intentional or contumelious, I would have to find that there was intentional delay or other conduct which worsened the Defendant’s situation after the September 2017 Endorsement. Given my conclusions below regarding the nature of any delay since the September 2017 Endorsement, I am unable to do so.
[33] Having concluded that the Defendant has not established that the delay was intentional or contumelious, I must consider whether there has been inordinate and inexcusable delay for which the plaintiff or its lawyers are responsible resulting in a substantial risk that a fair trial will not be possible. Again, given that Master Abrams and I are taken to have concluded that the delay was not inordinate and inexcusable on the first two motions, my focus must necessarily be on the Plaintiff’s conduct after the September 2017 Endorsement and whether the delay subsequently became inordinate and inexcusable so as to worsen the Defendant’s position and “tip the scales” in the Defendant’s favour.
[34] In the absence of the previous motions, it would appear on its face that the passage of 15 years from the commencement of this action to this motion is inordinate. This was the conclusion in Langenecker where the time from commencement of the action to the dismissal motion was 15 years. However, Langenecker is distinguishable from the present case in that it did not involve 2 previous dismissal for delay motions which considered the first 12 years of the litigation.
[35] Focusing on the period after the September 2017 Endorsement, I am not satisfied that there has been inordinate delay, and to the extent there has been any delay, the Plaintiff has provided a reasonable explanation while some delay was inevitable after Levon’s passing. The Plaintiff complied with the September 2017 Endorsement by delivering her sworn Affidavit of Documents by September 8, 2017 and offering to make herself available for examination for discovery by Skype on October 2, 2017. The disagreements over arrangements related to the Plaintiff’s examination necessitated the attendance before me on November 3, 2017 and ultimately examinations for discovery were concluded by December 15, 2017. Levon passed away on March 10, 2018 causing the action to be stayed for almost one year until February 21, 2019 when the Defendant Estate obtained the Order to Continue. In the interim, the Plaintiff delivered her undertakings on May 11, 2018 then in 2019 requested that the Defendant consent to set the action down for trial without prejudice to the Plaintiff’s right to move on refusals which was declined. The Defendant’s answers to undertakings were delivered on October 31, 2019.
[36] In my view, there has been no inordinate delay since the 2017 Endorsement and any delay has been reasonably explained or is attributable to the necessary procedural steps due to Levon’s passing. The overall period since the 2017 Endorsement until this third motion is approximately 3 years and 4 months. As the above summary illustrates, 3 months is attributable to discussions and disputes over examination arrangements, case management and completion of examinations for discovery; one year is attributable to the stay and necessary steps to obtain the Order to Continue; and one year is as a result of the pandemic and scheduling and case management related to this third motion. Other than the Plaintiff’s delay in delivering her undertakings, which were provided while the action was stayed, there is no delay attributable to the Plaintiff and much of the delay was out of the parties’ control. It is also relevant that the Plaintiff was prepared to set this action down for trial in or about Fall 2019 (Cardillo at para. 62). Accordingly, I cannot conclude that there has been inordinate and inexcusable delay that has worsened the Defendant’s position since the September 2017 Endorsement. In fact, since the 2017 Endorsement, examinations for discovery have been completed and the Plaintiff has been trying to set her action down for trial subject to the possible need to move on refusals.
[37] Even if I had concluded that there was inordinate and inexcusable delay, I cannot conclude that it has resulted in a substantial risk that a fair trial is no longer possible. To the extent to which a presumption of prejudice arises, the Plaintiff has rebutted it. I also conclude that in the circumstances the Defendant has not demonstrated that there would be actual prejudice to the Defendant if this action continues.
[38] The Defendant submits that the Plaintiff cannot rebut the presumption of prejudice which arises due to the passage of time and that there is actual prejudice some of which arose and existed prior to Levon’s passing and some as a result of his death. The Defendant argues that key documents or their originals are missing and the authenticity of certain documents is at issue which, like numerous issues in this litigation, involves credibility and requires witness testimony. Due to Levon’s death, the Defendant claims that there is serious and actual prejudice even though his examination for discovery was completed given that the questions were put to him by Plaintiff’s counsel only and he is no longer available to present his case in an organized fashion, all of which cannot be remedied by the use of discovery transcripts (Khan v. Subhani, 2017 ONSC 246 at para. 92; Lingard Estate v. Nesbitt Thomson Inc., 2001 CarswellOnt 1157 (S.C.J.) at para. 36; Jacob v. Playa El Agua Development Limited Partnership, 2014 ONSC 6581 at para. 59). The Defendant further argues that the prejudice resulting from Levon’s death should be ascribed to the Plaintiff given her considerable delay in pursuing this action (Faris v. Eftimovski, 2013 ONCA 360 at para. 50). Notwithstanding these submissions, the Defendant concedes that some of the Plaintiff’s claims in this action could proceed on the discrete issues of the parties’ respective ownership interests in the Property.
[39] The difficulty with the Defendant’s argument in the circumstances is that the Estate is still pursuing the Application. Myers J. ordered the Application to be tried together with this action. As such, the Application is inextricably linked to this action and, as the Defendant concedes, there is significant overlap between the relief sought by the Plaintiff in this action and the relief sought by the Defendant in the Application as they relate to the Property. This is not a case where, if this action is dismissed, all claims between the parties with respect to the Property will end.
[40] As set out in the March 2014 Endorsement, in the Application the Defendant will be seeking a declaration that the Defendant is entitled to a 50% share in the Property and punitive damages of $100,000. In this action, the Plaintiff is seeking a declaration that she is the sole beneficial owner of the Property, the return of funds allegedly loaned to the Defendant and damages of $750,000 for breach of trust, conversion and mental distress. In the Application, the Defendant intends to rely on Levon’s affidavit affirmed January 30, 2012 (the “2012 Affidavit”) which was filed on the Application and the Set Aside Motion, transcripts from examinations for discovery and the productions in this action. There will also be viva voce testimony from among others, the Plaintiff, Elena and Donald Grant, the lawyer who acted on the purchase of the Property and the trust agreement. The evidence will be the same for this action.
[41] I agree with the Defendant that this is not exclusively a document driven case. However, given the overlap in the relief sought, the disputed issues and the evidentiary record with respect to the Property on the Application and this action, I am satisfied that a fair trial of this action is possible. As set out in the March 2014 Endorsement, the primary issues in both the Application and the action relate to the parties’ respective interests in the Property. The Plaintiff’s claim for damages for breach of trust, conversion and mental distress and the Defendant’s claim for punitive damages largely arise from the same issues, evidence and record with respect to the Property. Notwithstanding Levon’s passing, he filed the 2012 Affidavit on the Application which stands as his evidence in chief with respect to his claims related to the Property while the circumstances related to the trust agreement, including a paragraph by paragraph review and related documentation and payments with respect to the Property were canvassed in detail on his examination for discovery (Questions 966-1556).
[42] Further, though not entirely a document driven case, given the nature of the claims and the transaction with respect to the Property, this still remains document heavy litigation for which many of the material documents are available. I am also not satisfied, based on the record, the discovery transcripts and counsel’s submissions, that all efforts have been exhausted by both parties to locate and obtain relevant documents, including bank records, which may supplement the existing record together with answers to outstanding undertakings and refusals. It is also apparent that some of the missing documents may have been lost or were unavailable before Levon’s passing and this motion, and it is not clear which of the parties had or should have had possession. Accordingly, I cannot conclude that any prejudice arises due to the passage of time or Levon’s passing or that any prejudice is attributable due to the Plaintiff’s delay particularly in the absence of a finding of inordinate delay.
[43] As the Defendant is not seeking any relief on the Application with respect to the Condominium and it was sold under power of sale, it raises different considerations. The only possible remaining claims in this action with respect to the Condominium are any damages (other than punitive damages) that the Plaintiff is claiming for conversion and mental distress and any alleged loan amounts. While the amount and basis for any remaining claims by the Plaintiff with respect to the Condominium are not clear, it would appear that given the power of sale and the circumstances with respect to its purchase that any issues or claims are more limited than those with respect to the Property. The relevant issues with respect to the Condominium including Levon’s evidence that it was a gift, material documents and the power of sale were all canvassed in detail on his examination for discovery (Questions 272-965). In light of the limited remaining claims and issues with respect to the Condominium and the existing record, which may also be supplemented by additional productions, I am of the view that it would not be appropriate for me to dismiss any such claims. Any claims that remain should be left for consideration by the trial Judge.
[44] Considering all of the relevant factors and circumstances, I conclude that it is not appropriate to dismiss this action. However, in light of the history of these proceedings it is imperative that these matters move promptly to a conclusion. Therefore, I dismiss this motion on terms to ensure that this action and the Application move as expeditiously, efficiently and cost-effectively as possible to a trial of the issues and/or trial including any remaining steps without further delay. Accordingly, the Defendant’s motion to dismiss this action for delay is dismissed on the following terms which, in my view, are just, consistent with Rule 1.04(1), proportionate and reflect an appropriate balancing of the parties’ rights in the circumstances:
i.) this action shall be set down for trial within 30 days;
ii.) the parties shall schedule an attendance at Civil Practice Court or a judicial Chambers appointment within 30 days to speak to the possibility of a case managed trial of the issues and/or trial scheduling with respect to this action and the Application, as appropriate and subject to the discretion of the presiding Judge;
iii.) if necessary, the parties shall schedule a telephone case conference before me within 30 days to speak to the terms of this order, any further motions including motions to compel answers to undertakings and refusals and an Order to Continue with respect to the Application and/or for further directions or case management, all subject to the direction and discretion of the Judge presiding at Civil Practice Court or the Chambers appointment;
iv.) the Plaintiff shall not be entitled to seek aggravated, exemplary and punitive damages in this action.
IV. Disposition and Costs
[45] The Defendant’s motion to dismiss this action for delay is dismissed on the terms set out above. Counsel may file a form of order with me through the Masters’ Administration Office for my review and approval.
[46] If the parties are unable to agree on the costs of this motion, they may file written costs submissions with me (not to exceed 4 pages, excluding Costs Outlines) on a timetable to be agreed upon by counsel. If counsel cannot agree on a timetable, they may schedule a telephone case conference to speak to one.
[47] As requested by counsel, I shall remain seized of this matter and counsel may schedule a telephone case conference with me as necessary.
Released: April 9, 2021
Master M.P. McGraw