Major Air Systems Ltd v. York Condominium Corporation No. 366
COURT FILE NO.: CV- 13-487941
MOTION HEARD: 20200929
ENDORSEMENT RELEASED: 20210430
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
MAJOR AIR SYSTEMS LTD
Plaintiff
and
YORK CONDOMINIUM CORPORATION NO. 366
Defendant
BEFORE: Master D. E. Short
COUNSEL: Mikhail Shloznikov mshloznikov@beardwinter.com
Counsel to lawyer for the Plaintiff mshloznikov@beardwinter.com
Antoni Casalinuovo acasalinuovo@elia.org
for the Defendant (Moving Party)
DECISION: April 30, 2021
REasons for Decision
I. “If it weren’t for bad luck….”
[1] The Defendant brings a motion to dismiss the within action for delay, the Plaintiff opposes the motion. The action arises from a contractual dispute.
[2] The Plaintiff is a heating, ventilation, and air conditioning (HVAC) company that operates throughout Ontario.
[3] The Defendant is a condominium corporation that governs a condominium building located at 10 Tangreen Court in Toronto, Ontario (hereinafter, the “Property”).
[4] Starting in July 2010, the Plaintiff provided repair and maintenance services to the Defendant’s cooling systems at the Property.
[5] On April 10, 2013, the Defendant hired the Plaintiff to disassemble, inspect, and upgrade an air conditioning chiller. The Plaintiff completed the work by June 2013. Despite completing the job, the Defendant refused to pay the Plaintiff for services rendered in the sum of $63,726.35. The Defendant alleged that both the Plaintiff’s prior maintenance services and their work related to the April 10, 2013 agreement, were deficient.
[6] On July 17, 2013, the Plaintiff retained Vusumzi Msi (“Msi”) to commence legal proceedings on its behalf to recover payment of the contract.
[7] As a result, the Plaintiff registered a lien claim on title to preserve its claim under the Construction Lien Act against the Property, on July 29, 2013. Then on August 30, 2013, the Plaintiff issued a Statement of Claim, to properly perfect the lien, on a timely basis.
[8] Next, as is contemplated by the Act, counsel the Defendant, brought an ex parte motion, before my then colleague, Master Albert, who vacated the lien of July 29, 2013 on the condition that the Defendant to pay into Court, the sum of $79,657.94 to take the place of the lien on title.
[9] The proceeding then moved fairly promptly:
On November 19, 2013, the lawyers for the parties discussed settlement.
On December 13, 2013, the Defendant served a Statement of Defence. No counterclaim was advanced by the Defendant.
On December 20, 2013, the Plaintiff served and later filed a Reply.
On January 9, 2014, the Defendant served an Offer to Settle.
In or about January 2014, the lawyers for the parties had further settlement discussions.
[10] On March 11, 2014, Msi wrote to the lawyer for the Defendant following their earlier discussions. He provided particulars of the Plaintiff’s claim and including the date the Plaintiff completed the project and was last on the Property; evidence by way of a signed work order was enclosed in support. Msi requested payment of the Plaintiff’s invoice.
[11] No settlement was forthcoming. As distinct from normal civil litigation matters, the Act contemplates the possibility in Toronto for a judge to refer the case for trial before a Master. However, such an application needed to be brought within two years of the action being started
[12] On April 22, 2015, Msi wrote to the Motions Scheduling Unit and requested a motion date seeking a motion for a judgment of reference in the construction lien dispute. On April 24, 2015, the lawyer for the Defendant responded and advised the Court that he was unavailable and requested other dates in June 2015. Msi responded by noting that his previous voicemail messages were ignored but confirmed that he would consider a different motion date. The parties discussed the readiness of the matter, in the context of the lien system.
[13] On June 5, 2015, the lawyer for the Defendant wrote to Msi and enclosed documents in support of his client’s position. He also noted that no motion materials had been filed and that his client’s offer of January 9, 2014 remained open for acceptance.
II. Reference Deadline Date Missed
[14] Because it is undesirable to have land tied up indefinably, the Act provides that the action needs to be set down on a path to a lien trial within two years. If that deadline is missed the action can continue but the advantages given under the Act, to unpaid constructors, are discontinued and irrevocably lost.
[15] Just over 5 years ago, on February 23, 2016, an ex parte motion was brought before me, by the Defendant, on the basis that the two-year period had expired.
[16] The consequence of missing that deadline was that the Plaintiff’s Construction Lien and Certificate of Action, were discharged.
[17] The Plaintiff’s factum on this motion notes:
“On February 25, 2016, the lawyer for the Defendant wrote to Msi and enclosed a copy of Master Short’s Order dated February 23, 2016 and confirmed that the action would continue as a regular civil action.”
[18] Thereafter, the Plaintiff instructed Msi to proceed with a civil action. On March 14, 2016, Msi emailed the lawyer for the Defendant and advised that he would serve the Plaintiff’s Affidavit of Documents in the coming weeks and proposed discovery dates in July 2016.
[19] The Defendant did not respond to Msi’s March 14, 2016 letter and did not comment on the proposed discovery dates. It appears neither party took steps to progress the action or to deal with the delay, for the next 2 years.
III. If it can go wrong…
[20] In June 2018, Msi’s colleague and friend, Peter Clyne, took seriously ill and passed away the following month. In consultation with Trustee Services of the Law Society of Ontario, Msi assumed a sizeable portion of Mr. Clyne’s practice as there were no other suitable candidates. The additional responsibility strained Msi’s time and resources.
[21] On or about August 24, 2018, the action came up in Msi’s diary, ahead of the five-year anniversary of the issuance of the Statement of Claim.
[22] On August 24, 2018, Msi emailed the lawyer for the Defendant and requested his availability for a Status Hearing. Msi also provided a draft motion requisition form.
[23] Unfortunately, at the time, the Defendant’s lawyer was on holiday and did not respond.
[24] On August 28, 2018, the Plaintiff served a Notice of Motion for a status hearing, returnable on October 23, 2018.
[25] In September 2018, the lawyer for the Defendant requested an adjournment of the October 23, 2018 Status Hearing to prepare responding materials and to explore settlement. The Plaintiff agreed and the October 23, 2018 status hearing was adjourned. On or about November 20, 2018, the parties agreed on Jeff Morris to mediate the matter.
[26] In September and October 2018, Msi travelled to the United Kingdom to attend two funerals.
[27] On February 4, 2019, the parties attended at a private mediation but could not come to a resolution.
[28] The Plaintiff’s Status Hearing was eventually rescheduled for May 30, 2019.
[29] On May 14, 2019, the Defendant served a Responding Motion Record that necessitated reply motion materials and the motion was adjourned on consent to July 12, 2019. The Plaintiff served reply materials on June 25, 2019.
[30] On July 3, 2019, Msi’s aunt died. On July 9, 2019, Msi travelled to South Africa to attend her funeral. Msi advised the lawyer for the Defendant who agreed to adjourn the July 12, 2019 status hearing to August 21, 2019.
[31] Upon returning to Canada on July 17, 2019, Msi experienced his first symptoms of gout arthritis, which were debilitating and rendered him unable to walk. Furthermore, Msi was placed in quarantine as one of his relatives in South Africa tested positive for Tuberculosis.
[32] While in quarantine, on July 22, 2019, Msi’s office was struck with a ransomware attack locking him out of his computer system. Computer specialists were hired, and a ransom was paid to the culprits. Although Msi received the password key to unlock his computers, the process corrupted the majority of his computer files. As Msi’s system was primarily paperless, this resulted in the destruction and loss of extensive records.
[33] Less than a month after the commencement of the quarantine, on August 14, 2019, the Defendant served a Supplementary Responding Motion Record that included allegations of prejudice that had not been made before.
[34] At the August 21, 2019 status hearing before Master Graham, Msi objected to the supplementary motion materials being filed. Master Graham accepted them into evidence but granted the Plaintiff an adjournment to prepare a response, conduct cross-examinations, and to arrange for a special appointment.
[35] Msi purchased new computers that were up and running by September 4, 2019.
[36] On September 4, 2019, Msi requested a special appointment from the Master’s office.
[37] On October 7, 2019, Msi emailed the lawyer for the Defendant and confirmed that the Court received the Plaintiff’s requisition and requested that the parties provide their availability and a timetable so that the matter may be heard within 45 days. Msi provided dates in November and December 2019.
[38] On October 8, 2019, the lawyer for the Defendant emailed Msi and provided his availability and discussed reply affidavits and cross-examinations.
[39] Msi replied on October 23, 2019 and confirmed his intention to cross-examine the Defendant’s deponent; however, he was unavailable on the dates provided by counsel and advised he would contact the Court for further direction.
[40] On November 22, 2019, the lawyer for the Defendant wrote to Msi and advised that he received instructions to bring a motion to dismiss the action and suggested that Msi place his insurer on notice.
[41] Two weeks later on December 5, 2019, the Defendant served a Motion Record seeking to dismiss the action for delay returnable on January 6, 2020. Which was the Monday following New Year’s Day on the previous Wednesday.
[42] On December 16, 2019, Msi reported this matter to his insurer who retained counsel to assist him in responding to the Defendant’s motion.
[43] On January 6, 2020, the Defendant’s motion was adjourned to April 28, 2020 on consent. The parties agreed to proceed with the Defendant’s motion to dismiss the Plaintiff’s action for delay pursuant to Rule 24 and further agreed that if the Defendant’s motion failed, the Plaintiff’s motion for a Status Hearing and timetable would no longer be necessary and the Defendant would agree to a new timetable for the remainder of the action.
[44] In the interim, COVED19 was gaining momentum and normal in-person motions were largely suspended. The result was that the motion was not argued until the fall of 2020.
IV. ISSUES AND THE LAW
[45] Rule 24.01 states as follows:
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
(d) Revoked: R.R.O. 1990. Reg. 194, r. 24.01 (2).
(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. (my emphasis)
[46] Rule 48.14 provides in part:
Dismissal of Action for Delay
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):
The action has not been set down for trial or terminated by any means by the fifth anniversary of the commencement of the action.
The action was struck off a trial list and has not been restored to a trial list or otherwise terminated by any means by the second anniversary of being struck off.
Status Hearing
(5) If the parties do not consent to a timetable under subrule (4), any party may, before the expiry of the applicable period referred to in subrule (1), bring a motion for a status hearing.
(6) For the purposes of subrule (5), the hearing of the motion shall be convened as a status hearing.
(7) At a status hearing, the plaintiff 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.
[47] I turn now to some of the cases placed before me, which I found helpful in coming to my decision in this case.
[48] In Langenecker v. Sauve, 2011 ONCA 803, the Court of Appeal noted that on a motion to dismiss an action for delay, the moving party must establish the following three elements:
The delay in the action has been inordinate;
The delay in the action is inexcusable; and,
There is a substantial risk that a fair trial will not be possible.
[49] Five years later in Sickinger v. Krek, 2016 ONCA 459, that Court set out guidelines with respect to each of the three requirements starting at para. 30:
Inordinate: A court will measure the length of time from the commencement of the proceeding to the motion to dismiss to determine if the delay is inordinate: Langenecker, at para. 8; Ali v. Fruci, 2014 ONCA 596, 122 O.R. (3d) 517, at para. 11. When considering the delay, the court should remember that some cases will move slower than others because of the issues raised, the parties involved, and/or the nature of the action: Langenecker, at para. 8.
Inexcusable: A court should consider the reasons offered for the delay and whether those reasons provide an adequate explanation, with regard to the credibility of the explanations, the explanations for individual parts of the delay, the overall delay, and the effect of the explanations considered as a whole: Langenecker, at paras. 9-10.
Prejudice: The third factor considers the prejudice caused by the delay to a defendant's ability to put forward its case for adjudication on the merits: Langenecker, at para. 11. An inordinate delay will give rise to a presumption of prejudice and, unless rebutted, that presumption may result in the action being dismissed: Armstrong v. McCall (2006), 2006 17248 (ON CA), 213 O.A.C. 229 (C.A.), at para. 11. A defendant may also suffer, and demonstrate, case-specific prejudice: Langenecker, at para. 12.
[50] A party may also seek to dismiss the action on the basis that the delay is caused by the intentional conduct of the plaintiff or his counsel that demonstrates a disdain or disrespect for the court process. In dismissing cases which fall within this category, the court effectively declares that a continuation of the action in the face of the plaintiff’s conduct would constitute an abuse of the court’s process. These cases are rare and feature at least one, and usually serial violations of court orders. In my view this is not such a case.
[51] There would seem to be a consistent approach to these cases which is based on the view that an order dismissing an action for delay is a severe remedy as the plaintiff is denied adjudication on the merits of their claim.
[52] More recently, in Papp Plastics & Distributing Ltd. v. Unity Insurance Brokers (Windsor) Ltd., 2018 ONSC 5009 at para. 47, Justice C. F. de Sa, commented on the severity of the remedy and applicable principles:
The jurisprudence makes clear, however, that an order dismissing an action for delay is an extreme remedy. This is true whether the dismissal is under Rule 48.14 or Rule 24.01. The plaintiff is denied the opportunity to have his/her matter adjudicated on the merits. Accordingly, before taking this extraordinary step of dismissing an action for delay, the court must be satisfied that the remedy is appropriate having regard to all the circumstances. [my emphasis].
[53] His Honour notes as well that Sharpe J.A. observed in 1196158 Ontario Inc. v. 6274013 Canada Limited, 2012 ONCA 544, at para. 19:
Procedural rules are the servants of justice not its master … We should strive to avoid a purely formalistic and mechanical application of timelines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. The Rules and procedural orders are construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute. [Citations omitted, my emphasis]
[54] Five years earlier, in Marche D’Alimentation Denis Theriault Ltee v. Giant Tiger Stores Ltd., 2007 ONCA 695, at para. 34, Sharpe J.A. discussed the balance between prejudice to the defendant and the goal of having disputes resolved on their merits:
The Rules of Civil Procedure must be interpreted in a manner that recognizes that expeditious justice is only one value to be weighed against others and that delay may be excused where necessary to ensure complete justice. As rule 1.04(1) states, the rules are to be "liberally construed to secure the just, most expeditious and least expensive determination or every civil proceeding on its 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. (my emphasis added).
[55] Where the analysis involves a solicitor’s error or oversight, the Court of Appeal provided the following guidance in H.B. Fuller Company et al. v. Rogers (Rogers Law Office), 2015 ONCA 173 at para. 27:
The court's preference for deciding matters on their merits is all the more pronounced where delay results from 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" (citations omitted).
[56] In Papp Justice de Sa also considered the second factor of the test – whether the delay is inexcusable. I agree with his view that the Court should consider the issue in context, having regard to all the relevant circumstances. Factors which should be considered include:
• The actions of the plaintiff;
• The actions of the defendant;
• Other circumstances that were beyond the plaintiff’s control including court availability;
• The nature of the proceeding itself and any complexity.
[57] The assessment should not entail a scrutinizing of the relevant time periods with a view to penalizing the plaintiff for specific periods of delay. Rather, it is a contextual assessment which looks at the delay, as a whole.
V. Preliminary Issues and Jurisdiction
[58] In its Notice of Motion, the moving Defendant relies upon Rule 24 in support of the relief sought. There is no reference to any inherent jurisdiction of the Court as possible grounds.
[59] While the Court has inherent jurisdiction to control its own process, a Master does not have the jurisdiction to dismiss an action for delay outside of the parameters of Rule 24.01. (see Lazaris v. Computer Logistics Inc., 2013 ONSC 4757 at para 26. And Elia v. Alizadeh, 2015 ONSC 1529 at para 115. )
[60] Rule 48.14 does not apply, as the action has not been dismissed by the Registrar. Moreover, the parties agreed to proceed under the Defendant’s motion and not the Plaintiff’s motion for a Status Hearing.
[61] The Defendant is therefore confined to proceeding under Rule 24.01.
VI. The Delay was Not Intentional
[62] Based upon my evaluation of the submissions of both counsel I am not convinced that Defendant has sufficient grounds to seek dismissal on the basis of intentional and contumelious delay.
[63] First, it does not appear that the Plaintiff has breached any Court Order or timetable in this action. Nor has the plaintiff taken any action or step that demonstrates a disdain or disrespect for the Court process.
[64] Secondly, the Plaintiff’s principal, Mr. Gordon Pritchard, gave sworn evidence by way of affidavit, sworn January 31, 2020. Therein, he confirmed that it was always his intention and remains his intention to proceed with the action and bring it to resolution by settlement or judgment. Furthermore, he always believed that the action was proceeding in the normal course.
[65] Mr. Pritchard was not cross-examined on his affidavit and his evidence is therefore uncontroverted.
[66] In my view the facts of this case fail to meet the high threshold required under this branch of the test.
VII. The Length of the Delay
[67] A court will measure the length of time from the commencement of the proceeding to the motion to dismiss to determine if the delay is inordinate.
[68] From the commencement of the action on August 30, 2013, to the date the Defendant’s Motion Record was served on December 5, 2019, 6 years, 3 months, and 5 days passed.
[69] Typically, Courts have found that delays of between 8 and 11 years have amounted to lengthy delays: Cardillo v. Willowdale Contracting et.al, 2020 ONSC 2193 at para 39.
[70] The Plaintiff submits that the delay in this action is not inordinate or at least falls at the bottom end of the scale when considering cases in which actions have been dismissed for delay pursuant to Rule 24.01.
[71] Furthermore, the Plaintiff served a Notice of Motion seeking a status hearing prior to the five-year anniversary of the action on August 28, 2018 in accordance with the provisions of Rule 48.14(5). The Defendant’s motion was brought as the Plaintiff was in the process of arranging for a special appointment for the status hearing.
[72] Taking a contextual approach, the period of inactivity in this action from March 2016 to August 2018 is insufficient to give rise to a presumption that there is a substantial risk to a fair trial.
VIII. Plaintiff Explanation for the Delay
[73] Since the action commenced on August 30, 2013, the following steps have been taken by the parties:
A Certificate of Action was issued – September 10, 2013
A Statement of Defence was served – December 13, 2013
A Reply was served – December 20, 2013
The parties discussed settlement and a formal offer to settle was made – January 2014
The Construction Lien Certificate of Action was discharged – February 23, 2016
The parties participated in a mediation – February 4, 2019
[74] Counsel for the plaintiff, on this motion, asserts that between 2015 and 2018, Msi sought to move this action to the discovery stage. His intent was to obtain all necessary and relevant documents from his client and to appreciate and understand the technical issues in dispute. Counsel however observes that unfortunately, “through oversight and inadvertence, Msi failed to prioritize this matter in favour of pressing issues that frequently arose in his busy litigation practice during this specific time period. As a sole practitioner, Msi lacked the resources to delegate tasks or file handling to junior counsel.”
[75] As outlined above from July 2018 to September 2019, Msi dealt with a series of cascading personal and professional crises that resulted in delay in the action and the Plaintiff’s motion for a Status Hearing.
[76] I accept the submission of counsel that “at all times, the delay was inadvertent and solely arose from Msi’s strained practice as a sole practitioner.”
IX. Is There Substantial Risk of Actual Prejudice?
[77] Counsel for the plaintiff observes:
“There will be no prejudice to the Defendant if this matter is permitted to proceed for the following reasons:
The Plaintiff’s action was commenced within 30 days of the breakdown of the parties’ business and contractual relationship.
The action is a contractual dispute that is centred on the quality of the Plaintiff’s work product with a specific focus on a narrow period of time between April and June 2013.
The action does not require significant viva voce evidence.
Records documenting services rendered by the Plaintiff have been preserved. Primary and secondary witnesses remain available to give evidence.
Cam Jones is a key witness for the Plaintiff. He performed maintenance services at the Property since 2010. He also conducted the repairs pursuant to the 2013 contract. Mr. Jones authored contemporaneous records in the form of Service Work Order forms up to and including June 2013, which records have been preserved. He remains employed by the Plaintiff and is available to give evidence.
The president of the Plaintiff, Gordon Pritchard, attended at the Property at the time of the repairs in 2013 and therefore has personal knowledge. He is available to give evidence in this proceeding and maintains a good recollection of the events in dispute in this action.
The Defendant’s property manager, Leslie Berall, also had personal involvement in the dispute and has provided affidavit evidence in support of the Defendant’s motion and continues to be employed as the property manager.
[78] As well the Defendant hired Roberto Stillisano of Toromont Industries to conduct further repairs after the Plaintiff completed their contract. Mr. Stillisano continues to be employed with Toromont Industries.
[79] Another potential witness, Maria Perone, former account manager with the Plaintiff, is currently employed as the Sales Account Manager at Ambient Mechanical Ltd. of Concord, Ontario.
[80] With respect to the availability of written materials I am inclined to accept the Plaintiff’s submissions that:
• Documents arising from the Plaintiff’s overall work on the Property, including the proposal, work orders, and correspondence have all been preserved.
• Supplementary repairs performed by a third party, Carrier, on the air conditioning unit after the Plaintiff’s repairs are also documented and form part of the Plaintiff’s file.
• The Plaintiff has prepared a draft Affidavit of Documents that itemizes all of the relevant documents in its possession.
• The action is ready to proceed to discoveries, which can be completed this year. Thereafter, the action can be set down for trial as the parties have already attended mediation.
[81] Turning to the Defendant’s Allegations of Prejudice, it appears that the Defendant’s file with respect to the issues in dispute was stored in the office of the property manager, Mr. Berall. The plaintiff notes that with one exception, the Defendant never provided its file to its lawyers.
[82] On June 21, 2019, the Defendant’s offices were flooded and its file relating to this matter was destroyed. This was virtually 6 years after the plaintiff’s claim for lien was registered on title, on July 29, 2013.
[83] However, on June 5, 2015, the Defendant provided its lawyers with five emails detailing various issues and scope of work required to address deficiencies associated with the Plaintiff’s work. The emails have been produced.
[84] The Defendant’s property manager, Leslie Berall, was cross-examined with resect to this motion on July 22, 2020 based upon that examination and responses to undertakings given, it would appear that:
• The Defendant’s lawyers never asked their client for a list of all documents relevant to the issues in dispute in this matter.
• The Defendant’s lawyers did not request their client’s file for the purpose of preparing a legal opinion on the merits of the action.
• The Defendant’s lawyers never asked their client for their file records to prepare an Affidavit of Documents in the action.
• The Defendant’s lawyers did not request their client’s file for the purpose of preparing for the February 4, 2019 mediation.
• The Defendant’s lawyers did not request their client’s file for the purpose of preparing for the Plaintiff’s status hearing motion in 2018.
• The Defendant’s lawyers did not ask their client to prepare a list of witnesses.
• The Defendant’s lawyers did not take any steps to track down third party witnesses including Toromont.
[85] The Defendant asserts that its board of directors came to the belief that the Plaintiff had abandoned the action once the Plaintiff’s construction lien was discharged on February 23, 2016. However, prior to December 2019, it took no steps in the action to obtain an Order of Dismissal, on the basis of this reported belief.
[86] The question as to whether Mr. Berall was asked to preserve his memory by preparing a statement, apparently, was refused on grounds of privilege. Thus, there is no evidence that there was no such statement prepared.
[87] Having considered the nature of the claim and the quantum involved, I am inclined to accept the Plaintiff’s submission (based upon John Laskin, J.A. of the Court’s observation on behalf of the Court, in Chiarelli v. Weins, 2000 3904 (ON CA) at para 15,.that:
“The defence cannot create prejudice by its failure to do something that it reasonably could have or ought to have done.”
[88] The loss of the Defendant’s records was not caused by the delay in the action but rather by the following:
• The Defendant’s and its lawyer’s decision that the documents would be retained by the Defendant, without a duplicate or backup, and not given to the lawyer;
• The method by which the Defendant chose to retain the documents; and,
• The documents were destroyed by an accidental flood which could have occurred at any time.
• The Defendant chose not to take reasonable steps to preserve its file and evidence. Furthermore, the loss of records occurred approximately 10 months after the Plaintiff brought their motion for a Status Hearing and signalled its intent to proceed with the action.
[89] Conversely, the Plaintiff has maintained its records and identified potential witnesses.
[90] Speculation that a case may depend in part on oral evidence coupled with the assumption that witnesses’ memories generally fade over time, are not sufficient to establish prejudice.
[91] As well, I adopt the guidance of Justice van Rensburg J.A.: who, on behalf of the Court, observed in Carioca's Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592 (at para. 76) that:
“I do not accept that speculation that a case may depend in part on oral evidence, coupled with the assumption that witnesses’ memories generally fade over time will, without more, prevent a plaintiff from satisfying the prejudice prong of the test. Counsel routinely address the reality of the passage of time in the litigation process by collecting and producing documents, undertaking oral examinations for discovery and taking witness statements. There are other methods under the rules to preserve evidence that may disappear or be lost before trial.”
[92] Lastly, I am guided on an additional issue by the Court of Appeal, in Finlay v. Paassen, 2010 ONCA 204 at para 32.There Justice Laskin held that the fact that the Plaintiff may have a claim against its counsel is irrelevant, in resolving a case such as this.
X. …I’d have no luck at all.
[93] “Gloom, despair, and agony on me,” sang the corn-pone troubadours of “Hee Haw, (1969 -1992) a long-running TV variety show. Buck Owens & Roy Clark composed a verse that conveys, in much fewer words than these Reasons, the possible result the plaintiff faced if the moving defendant was successful on this motion:
Gloom, despair, and agony on me.
Deep, dark depression, excessive misery,
If it weren't for bad luck, I'd have no luck at all.
Gloom, despair, and agony on me.
[94] In disputes such as this luck ought not tip the scales of justice. I have carefully weighed the submissions of both counsel and the unique circumstances surrounding the conduct of this litigation.
[95] Notwithstanding the quality of the advocacy and the extensive materials filed by the defendant’s counsel, I am satisfied that the correct interpretation of the law of this province, in this case, is that the Plaintiff ought to be permitted to have this matter determined on the merits of the positions of both parties and not upon the grounds sought by the moving party.
XI. Disposition
[96] The facts of this case do not meet the high threshold where the draconian remedy of a dismissal is justified.
[97] The underlying dispute is centred on the action or inaction of the Plaintiff. The Plaintiff’s file has been preserved and key witnesses are available. Both may be scrutinized by the Defendant and its experts. In my opinion, having considered the unique circumstances of this case, there is no substantial risk of an unfair trial.
[98] The facts of this case are distinguishable from the cases where the Courts have intervened to dismiss the proceedings on the basis of their unreasonable and inexcusable delay and prejudice to the defendants.
[99] The action should be permitted to proceed.
[100] The Plaintiff’s request that the Defendant’s motion be dismissed is therefore granted.
[101] However, both parties have contributed to this matter being delayed, so that as a result of the present COVID19 epidemic the matter may, of necessity, be languishing even longer.
[102] Less than a week ago, Chief Justice Geoffrey B. Morawetz of the Ontario Superior Court of Justice issued this “Notice to Profession and Public Regarding Court Proceedings”:
In view of the strengthened stay-at-home order and the critical situation with the pandemic, over the next several weeks until May 7, to reduce the number of court staff, counsel or parties required to leave their homes to participate in court proceedings, the Court will defer as many matters as possible. This includes virtual hearings.
The Court will focus on hearing
• the most serious child protection matters
• urgent family matters
• critical criminal matters, and
• urgent commercial or economic matters where there are employment or economic impacts.
Subject to the discretion of the trial judge, matters that are in-progress can continue. The positions of the parties and staff should be strongly considered and alternate arrangements should be made for those who do not wish to attend in-person.
The Court is seeking the cooperation of counsel to defer as much as possible.
[103] It seems to me that both parties will need to be creative in finding ways to move this matter forward.
[104] Taking into account the overall, unfortunate circumstances of this case, I am not requiring either party to pay costs at this time.
[105] Instead I am awarding the costs of this motion to the successful party in the cause of the main action.
[106] If the parties can mutually agree, within 30 days, upon an appropriate costs amount to the ultimate winner of the action, that will be the amount at stake. If not, I am fixing costs eventually payable at a nominal $1500 plus appropriate tax.
[107] I would be remiss if I did not acknowledge the quality of the advocacy and the patience of counsel for both sides. Finally, with respect to both parties, I wish them luck.
Master D. E. Short
DATE: April 30, 2021
DS/ R.385