Court File and Parties
COURT FILE NO: 09-248-00 DATE: 2021/05/06 SUPERIOR COURT OF JUSTICE-ONTARIO
RE: SONYA ROBERTS IN HER CAPACITY AS CREDITOR IN THE MATTER OF THE BANKRUPTCY OF CALIN LAWRYNOWICZ Plaintiff
AND
ROBERT HORNE HALLIDAY Defendant
BEFORE: Justice A. Doyle
COUNSEL: Adam Patel, Counsel for the Plaintiff Sean Butt, Counsel for the Defendant
HEARD: April 30, 2021 via Zoom in Belleville, Ontario
ENDORSEMENT
Overview
[1] There are two motions before the Court:
The Plaintiff’s motion set down in 2017 requesting a status hearing and that a timetable be set for the completion of this matter; and
The Defendant’s motion set down in 2019 requesting that the action be dismissed for delay.
[2] This matter involves an alleged debt owed by a client, the Defendant Mr. Halliday to his lawyer, Mr. Lawrynowicz who had advanced him funds to assist him in settling of an action. In his defence, Mr. Halliday does raise, among other defences that the Mr. Lawrynowicz was in a conflict and should have ensured the Defendant had his own lawyer when he borrowed money from his lawyer. The Defendant acknowledges that monies were advanced on his behalf but requires an accounting.
[3] Since the commencement of this action in 2009, there have been numerous intervening events that have delayed the resolution of this matter including eight changes of counsel on the file, Mr. Lawrynowicz made an assignment in bankruptcy and then was disbarred and in 2016, the current Plaintiff, Sonya Roberts, a creditor of the estate of the bankrupt of Mr. Lawrynowicz took carriage of the file as the Plaintiff. The trial record has been filed.
[4] For reasons set out below, I decline to exercise my discretion to dismiss this claim and I allow the action to proceed. I order that a Pre-trial be scheduled within 30 days from the release of this decision. All discoveries are to take place before the Pre-trial hearing. Failing a settlement, this matter will proceed to trial at a time to be scheduled by the Trial Coordinator.
Background
[5] The Statement of Claim was issued in September 2009.
[6] Mr. Lawrynowicz was a lawyer and in the business of lending private funds. The Defendant Mr. Halliday was one of the Plaintiff’s clients who resided on Wolfe Island in Kingston, Ontario.
[7] In 2008, Mr. Halliday was in litigation with Mr. Andrew Miracle and he was represented by Mr. Lawrynowicz. On the eve of trial, the litigation was settled whereby Mr. Halliday was required to pay a bank charge against a property, litigation settlement and writs that were registered against the property. To assist the Defendant to pay his obligations, Mr. Lawrynowicz paid the following amounts:
On June 4, 2008: $553,784.06 to pay the Bank of Montreal charge;
On June 6, 2008: $118,214.84 to pay the settlement amount owing to Mr. Miracle; and
On August 19, 2008: $3,455.00 to pay the writs that were registered against the property.
[8] A mortgage was arranged through HSBC and the proceeds of $440,0000 were paid to Mr. Lawrynowicz with the consent of the Defendant. Mr. Lawrynowicz was a covenantor/guarantor on the mortgage. The Defendant did not make payments on the mortgage and Mr. Lawrynowicz paid $19,737.18 to bring the mortgage in good standing.
[9] The Plaintiff indicates that the balance of $270,000 remains outstanding plus interest at the rate of 8% per annum.
[10] The Defendant states that he has no intention of avoiding any obligation but needs to know what is owing and on what basis (para. 30 of Statement of Defence dated November 19, 2009).
[11] On August 20, 2009 Justice Scott allowed an ex-parte injunction preventing the Defendant from disposing of his property.
[12] Mr. Lawrynowicz’s summary judgement motion brought in December 2009 was dismissed by Justice McKinnon and his endorsement indicates, among other things:
The motion was premature;
By December 2009 the Plaintiff would deliver an itemized statement of account;
The Plaintiff would deliver an affidavit of documents; and
Cross-examinations would take place.
[13] There were settlement discussions in 2010 as evidenced by the correspondence (which should not have been included in the record as they were without prejudice discussions).
[14] On April 30, 2010, the Defendant’s email to Mr. Lawrynowicz included a doctor’s note indicating he would not be available to discuss settlement for another month as he was stressed due to the litigation.
[15] The Plaintiff’s affidavit of documents included the cheques regarding the loan, the HBSC cheque, 2008 mortgage discharge, TD bank charge registration copy of the HBSC mortgage, summary of advances and receipts attached.
[16] In the February 28, 2012 status hearing before Justice Minnema, a timetable was set:
The Defendant would file his affidavit of documents by April 30, 2012; and
The matter would be set down for trial by September 30, 2012.
[17] At the status hearing before Justice Byers on April 24, 2012, the Defendant’s counsel was removed from the record.
[18] Pedlar J.’s order of September 25, 2012 varied the order of Justice Minnema so that the Defendant had until December 31, 2012 to provide his affidavit of documents
[19] Justice MacLeod-Beliveau’s order of April 16, 2013 made further changes to the timetable but there was no further mention regarding the filing of an affidavit of documents.
[20] The Defendant and Plaintiff have had four lawyers each on this matter.
[21] A Notice of Sale dated June 28, 2012 from TD Bank to Mr. Lawrynowicz contained a notice that property that was the security for Mr. Lawrynowicz’s claim was being sold.
[22] On December 13, 2012, Mr. Lawrynowicz made an assignment in bankruptcy and on August 6, 2013, the Trustee in Bankruptcy (“Trustee”) advised the creditors and the parties that they would not be pursuing Mr. Lawrynowicz’s claim. The Trustee also told the creditors that they consider obtaining their own counsel.
[23] On April 16, 2013, Mr. Lawrynowicz requested a revised schedule. In October 2013, the Defendant’s counsel was removed from the record.
[24] On November 4, 2013, the Defendant brought a motion to stay the action due to the bankruptcy and on that date, there was a removal of counsel for the Plaintiff.
[25] The Plaintiff Sonya Roberts is a creditor of the estate of Mr. Lawrynowicz.
[26] She was cross-examined and she indicated that in 2013, she had serious health issues which required her to be laid up on her back and then undergo extensive physiotherapy. She was going through an acrimonious divorce and was a single mother of a toddler, living with her mother, and waiting for renovations to her house. She was a self-employed lawyer working part time and ultimately returned to work full time in late 2014.
[27] She had to gather information regarding this litigation as much of it was missing and found the bankruptcy issues complex and wondered whether this claim was worth pursuing.
[28] She gathered documents from counsel and Ms. Roberts indicates that she needed time to familiarize herself with the bankruptcy process and litigation procedure as although a lawyer, she did not practice litigation. She also financial difficulties caused by Mr. Lawrynowicz’s bankruptcy
[29] She indicates that she did not take action until she received a copy of the letter from CIBC dated November 2016 by which she was advised that the CIBC as a secured creditor was not intending to proceed with the claim.
[30] In December 2016, Ms. Roberts, as a creditor, moved under s. 38 of the Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3 (“BIA”) which reads:
38 (1) Where a creditor requests the trustee to take any proceeding that in his opinion would be for the benefit of the estate of a bankrupt and the trustee refuses or neglects to take the proceeding, the creditor may obtain from the court an order authorizing him to take the proceeding in his own name and at his own expense and risk, on notice being given the other creditors of the contemplated proceeding, and on such other terms and conditions as the court may direct.
(4) Where, before an order is made under subsection (1), the trustee, with the permission of the inspectors, signifies to the court his readiness to institute the proceeding for the benefit of the creditors, the order shall fix the time within which he shall do so, and in that case the benefit derived from the proceeding, if instituted within the time so fixed, belongs to the estate.
[31] She obtained a s. 38 BIA order on January 3, 2017.
[32] Ms. Roberts moved for a status hearing in December 2016 and this prevented the action from being administratively dismissed on the January 1, 2017 deadline. The original date for the motion was April 11, 2017. The Defendant asked for an adjournment of the status hearing and it was adjourned to May 2017.
[33] In the March 30, 2017 motion, the Defendant moved for an order removing the Plaintiff’s lawyer from the record. This was ultimately dealt with on consent.
[34] Various correspondence of 2017 and 2018 disclose the attempts to reschedule the motion for a status hearing and eventually the date of August 2018 was agreed. It did not proceed on that date.
[35] In August 2018, Ms. Roberts filed the trial record and a pre-trial was requested in February 2019 and one was set for April 2019. A pre-trial has not yet been heard.
[36] There is correspondence where the Defendant indicates that he is considering a counterclaim due to the Plaintiff’s injunction against his property. In August 2017, the Defendant indicated that he wanted to move the matter from Belleville to Kingston.
[37] The Defendant had a fire in his house but does not particularize what relevant documents may have been lost as he is not sure he even had them in the first place.
Legal Framework
[38] Rule 48.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, sets out the statutory framework for the Registrar’s dismissal of action for delay. However, the party may avoid this dismissal by resorting to r. 48.14(4) if, at least 30 days before the expiry of dismissal date, a party files a timetable, identifies next steps and completion date no later than 2 years from the expiry date and provides a draft order. If the parties do not consent, a motion may be brought.
[39] Subrule (7) sets out what is to occur at 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. O. Reg. 170/14, s. 10.
[40] In Daniels v. Grizzell, 2016 ONSC 7351, Marrocco C.J. reiterated the purpose of this rule at para. 9 and 13:
[9] Rule 24.05.1(1) does not apply to actions dismissed for delay pursuant to Rule 48.14. The phrase “dismissal for delay” in Rule 24.05.1(1) does not include a dismissal under Rule 48.14(1) because Rule 48.14 (9) does not incorporate Rule 24.05.1 into administrative dismissals; it only applies, per its plain wording, to Rules 24.03 to 24.05.
[13] As can be appreciated from the above, Rule 48.14 exists in the interests of keeping court information current. It should be interpreted in a way which appreciates this purpose. It should not be interpreted in a way which makes it a trap for the unwary.
[41] Motion for dismissal for delay is set out in r. 24.01:
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. R.R.O. 1990, Reg. 194, r. 24.01; R.R.O. 1990, Reg. 194, r. 24.01 (2); O. Reg. 770/92, s. 7; O. Reg. 533/95, s. 4 (1).
(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. O. Reg. 259/14, s. 6.
Position of the Plaintiff
[42] The Plaintiff submits that:
Some of delays were caused by the Defendant;
That there is no prejudice to the Defendant as all documents and witnesses are available;
The Defendant is not entitled to bring this motion because he is in default of the Rules of Civil Procedure as he has not filed a sworn affidavit of documents; and
That Ms. Roberts, who was originally a non-party, should not be blamed for any delay on her part to bring herself up to speed to take over this action on behalf of all the creditors.
[43] At the time of the automatic stay caused by the bankruptcy, the Defendant did not request a lifting of the stay and dismissal of the action. The Defendant’s conduct does not demonstrate a willingness to see the case proceed expeditiously.
[44] The creditors ought not to be prejudiced due to the various delays and they are owed monies in the amount of $270,000 plus interest. The Defendant did not dispute that monies were advanced but the parties do not agree on the outstanding balance. In his cross-examination, the Defendant did not dispute that there was a settlement with Mr. Miracle and that funds were advanced to him from Mr. Lawrynowicz.
[45] Mr. Lawrynowicz’s affidavit of documents dated March 2012 sets out the accounting of what the Defendant is owed. Document 24 of the affidavit contains the summary of the advances. The advances are also confirmed in Mr. Lawrynowicz’s affidavit dated March 22, 2017 at paras. 35 and 37 and his affidavit of January 30, 2020.
[46] The Plaintiff is ready to proceed, discoveries are not necessary and this matter can be dealt with in a two-day trial.
Position of the Defendant
[47] The Defendant argues that the Plaintiff has been largely responsible for the delays, there is prejudice to the Defendant and the Plaintiff has not served the itemized statement of account ordered by Justice McKinnon in 2009.
[48] It has been 11.5 years since the action commenced, 13 years since the funds were allegedly advanced and 16 years since the events underlying the action occurred when the Defendant retained the Plaintiff in 2004.
[49] The Defendant submits the following:
The matter should not have been set down for trial until after the status hearing had taken place;
The matter was not trial ready;
The Defendant had no choice but to bring a motion to dismiss for delay and was planning to vigorously contest the status hearing;
This is a complicated matter as the Rules of Professional Conduct dictated that the Plaintiff:
should have referred the client to independent legal representation and
Client should have had independent legal advice since he was lending money to a client and was guaranteeing a mortgage
In addition, funds regarding the loan should not have been paid through the lawyer’s trust account as this is contrary to the Law Society of Ontario’s By-Laws;
The legal files have only just recently surfaced dealing with Mr. Miracle and the Bank of Montreal mortgage and the HSBC mortgage;
[50] The delay here is inordinate and inexcusable. The Defendant had a delay of one-month when he was ill in April 2010. This was a “one off” situation. The change of Defendant’s counsel did not cause delay.
[51] For example, upon being retained, new counsel hired on May 30, 2012 dealt with the injunction to determine if it could be removed and examination of the Plaintiff was set for September 20, 2012.
[52] There was a major period of delay due to the bankruptcy and proceedings were stayed. More specifically, the Trustee advised the creditors on August 6, 2013 that he would not continue the action and advised the creditors that they should seek counsel. Roberts acknowledged receiving this letter.
[53] Ms. Roberts knew the position of the CBIC two months after the Trustee said he would not be proceeding. She had health issues but in late 2014 she was working full time.
[54] For 2 years, Ms. Roberts was in communication with both counsel and was receiving various documents. Only on the eve of the looming administrative dismissal, Ms. Roberts brought a s. 38 BIA motion.
Analysis
Plaintiff’s motion
Legal Principles
[55] Pursuant to r. 48.114(7) the Plaintiff must show cause why the action should not be dismissed.
[56] The Plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation and that if the action is allowed to proceed, the defendant would suffer no non-compensable prejudice. See: Faris v. Eftimosvski, 2013 ONCA 360. In addition, at para. 52, the Court reiterated the policy rationale of Rule 48, that is, “to prevent abuse of its processes and dilatory behaviour on the part of plaintiffs. Status hearings serve an important function in ensuring that disputes are resolved efficiently.
[57] Even if the Plaintiff can provide a satisfactory explanation for the delay, the action will be dismissed if there would be prejudice to the Defendant. See 1196158 Ontario Inc. v. 6274013 Canada Limited 2012 ONCA 544. However, actual prejudice does not have to be demonstrated by the Defendant. At para. 32, the Ontario Court of Appeal stated:
Actual prejudice or the lack thereof is an important factor to consider in cases of dismissal for delay: Hamilton, at para. 33. However, it is certainly not the law that an action cannot be dismissed for delay at a rule 48.14 status hearing without proof of actual prejudice. The status hearing judge applied the test as stated by this court in [page77 ]Khan v. Sun Life Assurance Co. of Canada, [2011] O.J. No. 4590, 2011 ONCA 650, at para. 1: "the appellant [plaintiff] bore the burden of demonstrating that there was an acceptable explanation for the involved litigation delay and that, if the action was allowed to proceed, the respondent [defendant] would suffer no non-compensable prejudice". The test is conjunctive, not disjunctive. Even if the plaintiff 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.
[58] The Plaintiff can overcome the presumption of prejudice by leading evidence that all relevant documents have been preserved, the key witnesses are available or that certain aspects of the claim are not in issue. See Lippa v. Advanced Software Concepts Inc. 2019 ONSC 1873 and Wellwood v. Ontario Provincial Police 2010 ONCA 386.
Discussion
[59] I note that the original date for this motion was April 2017, 4 years ago and that there were many attempts to reschedule the motion. When the August 2018 status hearing was adjourned, the Plaintiff filed a Trial Record. The Defendant brought his motion to dismiss for delay in 2019.
[60] In Habib v. Mucaj, 2012 ONCA 880, at para. 5, the Court stated that “a deliberate decision not to advance the litigation will usually be fatal.”
[61] This is not a case where the Plaintiff deliberately ignored the claim. There is evidence that the claim did not proceed with speedy dispatch, but I find that there was no deliberate decision to ignore the claim or abandon the claim.
[62] As stated in Slota v. Kenora-Rainy River Districts Child and Family Services, 2019 ONSC 126, the Plaintiff is responsible to move the action along but the Defendant’s conduct is also a factor in considering whether an action should be dismissed for delay or allowed to proceed. See also: Carioca’s Import & Export Inc. v. Canadian Pacific Rail Limited, 2015 ONCA 592.
[63] For the reasons set out below, in view of the entire contextual environment, the nature of the claim and the overall conduct of the parties, I find that the Defendant would suffer no non-compensable prejudice if the action were allowed to proceed.
Defendant’s Motion
[64] The factors to consider in a motion for dismissing an action for delay are set out in Ticchiarelli v. Ticchiarelli, 2017 ONCA 1. At para. 12, the Court of Appeal for Ontario stated that an action will be dismissed if the delay is inordinate, inexcusable and prejudicial to the Defendant and that it gives rise to a substantial risk that a fair trial of the issues will not be possible. Reference was also made to Langenecker v. Sauvé, 2011 ONCA 803, 286 O.A.C. 268, at paras. 4-7.
[65] The Court may derive its jurisdiction to dismiss an action for delay from either r. 24.01 of the Rules of Civil Procedure, or through its inherent jurisdiction to prevent an abuse of its own process.
[66] As a preliminary matter, the Plaintiff alleges that since the Defendant is not in compliance of the Rules of Civil Procedure he is not permitted to bring this motion. The Plaintiff indicates that the Defendant has failed to produce a sworn affidavit of documents. The sworn one, if it exists has not been located and this is not surprising given the number of changes of counsel from both sides. I note that an unsworn affidavit of documents was filed which had been attached to a letter dated December 2012.
[67] I am not prepared to give effect to this objection, as on the balance of probabilities I find that a sworn affidavit of documents would have been filed.
[68] The only correspondence available includes an unsworn affidavit of documents. However, the timetable set out in status hearing order of Justice McLeod-Beliveau dated April 16, 2013 does not reference the requirement by the Defendant to file an affidavit of documents.
[69] The Court infers that if a sworn affidavit of documents had not been delivered, then this would have been addressed in the timelines in this Order (as in the previous two Orders dealing with the timetable). Hence, I am prepared to find that the Defendant is in default of the Rules.
Inordinate delay
[70] As stated at para. 8 of Langenecker "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".
[71] There are 8 years from the institution of the claim to the 2017 status hearing. In my view, viewed objectively, this is an inordinate amount of time to proceed with a fairly straightforward debt claim of liquidated damages. In addition, there is a delay from date of the status hearing set for August 2018 to 2020. As stated, the Defendant brought their motion in that time period.
Inexcusable Delay
[72] The next factor to consider is whether there has been inexcusable delay. This requires the Court to examine the reasons for the delay and whether they present an adequate explanation that are according to para. 16 of Ticchiarelli “reasonable and cogent” or “sensible and persuasive.”
[73] The Court will consider the explanations provided for the various delays and the overall delay. These explanations will be considered as a whole. 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.
[74] I start from the premise that the Plaintiff is responsible for moving the action along, see Wallace v. Crate’s Marine Sales Ltd., 2014 ONCA 671.
[75] From 2009 to 2012, there were exchanges of pleadings, affidavits of documents and documents. Settlement discussions also took place. A status hearing took place with timelines to be followed. There were also changes of counsel. The delay up to this point is shared between the parties. I note that there were orders requiring the Defendant to file his affidavit of documents and he was finally given until December 31, 2012 by the Order of Justice Pedlar of September 2012.
[76] The most troublesome delay occurred after Mr. Lawrynowicz made an assignment in bankruptcy. From 2013 to 2016, there was little progress.
[77] As a result of the bankruptcy, this action was stayed and 8 months after the assignment of the bankruptcy, the Trustee advised the creditors that he would not be continuing the action.
[78] From August 2013 to December 2016 which is over 3 years, there is no progress on the file.
[79] Ms. Roberts was aware of the Trustee’s position. She was provided copies of correspondence between counsel and was aware of the proceedings.
[80] What is her duty as a creditor?
[81] There is no question that she moved quickly in 2016 after receiving a copy of the letter addressed to the lawyers regarding the CIBC position and that the administrative dismissal was approaching.
[82] Is a 3-year delay inexcusable? As stated in Kara v. Arnold, 2014 ONCA 871, the longer the delay the more cogent is explanation that is required.
[83] I find the reasons for her delay in not pursuing this claim are excusable and cogent.
[84] Although a lawyer, she does not practice in litigation. She also had significant health and personal issues. She also needed to gather the information and learn about the bankruptcy process and determine if the claim was worth pursuing. Most significantly, she was financially impacted by Mr. Lawrynowicz’s bankruptcy and taking this matter on would require a financial commitment on her part. Finally, this is not only her litigation, this is benefiting other creditors, and to take this on is no light matter.
[85] There is no evidence of why the Trustee would not take this on for the creditors, despite that he has a duty and responsibility to maximize the returns for the creditor.
[86] There is nothing in the BIA that requires a creditor to take on this responsibility.
[87] Three years is long delay but in my view is excusable.
[88] She did bring a motion for status review which was returnable in April 2017 which is being heard now.
[89] Regarding the period from 2016 to 2019, there were issues of conflict allegations requiring the removal of the lawyers representing the Plaintiff, and the scheduling issues to set up examinations and these motions.
[90] From the adjournment of the April 2017 status hearing motion there are numerous communications between counsel regarding the rescheduling of the status hearing.
[91] From 2017 and 2018 efforts were made to reschedule the status hearing motion. When the final agreed date of August 2018 did not proceed, counsel for the Plaintiff set the mater down for trial.
[92] Eventually the status hearing was scheduled for August 2018 but when it appeared that it would be adjourned again, then the Plaintiff served the trial record, which was certainly a questionable step as the status hearing had not yet taken place.
[93] I note that the cross-examinations of the parties only took place in March 2021.
[94] In conclusion, I find that the delay in moving this matter along rests with the Plaintiff and the main delay of 3 years after the bankruptcy was excusable in light of the Trustee’s unwillingness to bring this matter forward and the delay in one of the creditors willing to take this matter on.
Prejudice to fair trial rights
[95] I do not find that there is a substantial risk that the Plaintiff’s delay in the conduct of the action will result in an unfair trial. See Tanguay v. Brouse, 2010 ONCA 73.
[96] In this case, the Defendant’s position is that he requires an accounting. The documentation that the Plaintiff intends to rely on for the alleged debt have been provided, mostly in form of cancelled cheques and the files underlying the issues before the court were located on the eve of this motion.
[97] The Defendant has also raised issues of professional misconduct against Mr. Lawrynowicz and certainly with the production of the lawyer’s files, this defence can be fully explored.
[98] Here the test is whether the delay has been prejudicial to the Defendant in that it creates a substantial risk that a fair trial of the issues will not be possible. As stated in the Ontario Court of Appeal in Langenecker, at para. 11: “Memories fade and fail, witnesses can become unavailable, and documents can be lost. The longer the delay, the stronger the inference of prejudice to the defence case flowing from that delay.”
[29] The evidentiary burden is on the Plaintiff to demonstrate that the Defendant has not been prejudiced such as the availability of key witnesses being available or documents having been preserved. I note that I can infer prejudice arising from the inordinate delay but it is also open to the Defendant to lead evidence of actual prejudice. The Defendant indicates that his home burned down but does not specify what documents, if any, were destroyed that could have been evidence in this trial.
[38] In these circumstances, the Plaintiff has rebutted the presumption of prejudice. There have been no deaths or loss of key witnesses, no loss of important documents or key evidence lost or destroyed. I find that there is no prejudice that creates a substantial risk that a fair trial of the issues will not be possible is also reasonable.
[99] I find that the Plaintiff has rebutted the inference of prejudice from the delay and hence I decline to exercise my discretion to dismiss this action. Ali v. Fruci, 2014 ONCA 596, 122 O.R. (3d) 517, at para. 10. This is not a case where due to the delays in this case that the Court can emphatically say that “enough is enough” as in the Ticharelli case.
[100] I note Ms. Roberts has taken this on. Section 38 provides the following:
(2) On an order under subsection (1) being made, the trustee shall assign and transfer to the creditor all his right, title and interest in the chose in action or subject-matter of the proceeding, including any document in support thereof.
(3) Any benefit derived from a proceeding taken pursuant to subsection (1), to the extent of his claim and the costs, belongs exclusively to the creditor instituting the proceeding, and the surplus, if any, belongs to the estate.
[101] There is a possible benefit to the creditors of the estate and the interests of justice dictate that this action should be heard on its merits. In one of his emails to the Plaintiff, the Defendant admits the debt and would like to settle the amount.
Conclusion
[102] In conclusion, the delay is inordinate but excusable. Based on the above findings, this delay will not give rise to a substantial risk that a fair trial would not be possible. As stated above, a substantial risk does not require proof of actual prejudice. Prejudice will be presumed after passage of a limitation period and it will be presumed that memories of witnesses fade over time.
[103] Here, the plaintiff has overcome the presumption of prejudice by evidence that relevant documents have been preserved, key witnesses are available, certain elements of the claim may not be in issue (as the Defendant does not deny that monies were advanced).
[104] I note that the defendant has not adduced actual evidence that a fair trial will not be possible due to the delay.
[105] Accordingly, the Defendant’s motion to dismiss for delay is dismissed.
[106] The action will be permitted to continue and a pre-trial date must be scheduled within 30 days from the release of this decision. Discoveries must take place before the pre-trial. The matter will be set down for trial if it does not resolve at the pre-trial.
[107] If the parties are unable to agree on the issue of costs, then the Plaintiff can provide a two page costs submission along with any offers to settle and bill of costs by May 21, 2021 and the Defendant can file his two page costs submission along with any offers to settle and bill of costs by June 1, 2021 and the Plaintiff may submit a one page reply by June 7, 2021.
Justice A. Doyle
Date: May 6, 2021
COURT FILE NO: 09-248-00 DATE: 2021/05/06
ONTARIO SUPERIOR COURT OF JUSTICE
RE: SONYA ROBERTS IN HER CAPACITY AS CREDITOR IN THE MATTER OF THE BANKRUPTCY OF CALIN LAWRYNOWICZ Plaintiff
AND
ROBERT HORNE HALLIDAY Defendant
BEFORE: Justice A. Doyle
COUNSEL: Adam Patel, Counsel for the Plaintiff Sean Butt, Counsel, for the Defendant
Endorsement Judge A. Doyle
Released: May 6, 2021