Murray v. Intelligarde et al., 2021 ONSC 3749

COURT FILE NO.: CV-15-536146

DATE: 20210525

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Fraser Murray

Plaintiff/Responding Party

– and –

Intelligarde International Inc. and Ross McLeod

Defendants/Moving Parties

Michael Tersigni for the Plaintiff/Responding Party

Reginald M. McLean for the Defendants/Moving Parties

HEARD: January 26, 2021

VELLA J.

endorsement – motion to dismiss for delay

1This is a motion brought by the defendants for an order dismissing the action for delay, pursuant to r. 24.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

2The plaintiff also brought a motion, before the defendants’ motion was served, seeking to impose a timetable for next steps in this action. However, at Civil Practice Court, it was ordered that the defendants’ motion proceed first, on the understanding that should it fail, the parties would agree to the timetable proposed by the plaintiff in his motion.

3For the following reasons, I am dismissing this motion to dismiss the action for delay.

Background

4The plaintiff, Fraser Murray, started this action by statement of claim issued September 10, 2015. It relates to alleged outstanding invoices for services Murray rendered to Intelligarde International Inc. between 2011 and 2014. Murray claims the sum of $157,939.45 as damages, plus interest and costs.

5Intelligarde delivered a statement of defence on October 9, 2015. Intelligarde has had lawyers since the outset of the action.

6Murray was self-represented until 2018. Up until that time, the record shows that there were some efforts by Murray to resolve this matter with Intelligarde, without the need for lawyers.

7Murray’s settlement communications were with the defendant, Ross McLeod. McLeod was the president of Intelligarde until it was sold to another company in November 2018, and he had a professional relationship with Murray.

8McLeod told Murray that Intelligarde had discovered fraudulent activity by a former employee and that Murray was implicated in this activity. This was the reason for the non-payment of the invoices. McLeod told Murray that Intelligarde was conducting a forensic audit into the suspected fraudulent activity.

9When Murray received no further response from McLeod, he retained present counsel to represent him, having reached the conclusion that this matter was not going to be settled without the assistance of a lawyer.

10Since Murray retained Keel Cottrelle LLP, there have been several unsuccessful attempts by his lawyer, Mr. Tersigni, to advance this action (the affidavit of Murray sets out a chronology of the steps taken). These steps occurred between June 2018 (date of engagement of Keel Cottrelle) and June 2020.

11Amongst the steps taken by Murray’s lawyer was the delivery of an affidavit of documents. Intelligarde reciprocated, albeit with an unsworn affidavit of documents. Before that, Murray’s lawyer had attempted to finalize a discovery plan and timetable but he received no buy in from Intelligarde’s lawyer.

12It is conceded that Murray’s lawyer has made several attempts to advance this action and Intelligarde is relying on the time period from September 2015 to June 2018 – a period of approximately 33 months – as the period of delay for the purposes of this motion.

13On June 23, 2020, Murray’s lawyer served a motion record on Intelligarde seeking the following relief:

a) an order that the proposed timetable be implemented to govern the remaining steps of this action;

b) leave to amend the statement of a claim in the form of the fresh as amended statement of claim; and

c) leave to continue this action under the simplified procedure rules pursuant to r. 76.

14On July 3, 2020, Intelligarde’s lawyer advised that they oppose the imposition of a timetable. He further advised that Intelligarde intended to bring a motion to dismiss the action for delay.

Analysis

15The Court of Appeal, in Langenecker v. Sauvé, 2011 ONCA 803, at para. 7, set out the test to be applied in the determination of a motion for dismissal of an action for delay under r. 24.01(c) as follows:

a) the delay must be inordinate;

b) the delay must be inexcusable; and

c) the delay must give rise to a substantial risk that a fair trial of the issues in the litigation will not be possible.

16The Court of Appeal also cautioned that an action should not be dismissed for delay unless the default is intentional and contumelious or the plaintiff or their lawyers are responsible for the inexcusable delay that gives rise to a substantial risk that a fair trial will not be possible: Langenecker, at para. 5, citing Allen v. Sir Alfred McAlpine & Sons, Ltd., [1968] 1 All E.R. 543 at p. 556.

17The balance is between the plaintiff’s right to proceed to trial and the defendants’ right to a fair trial.

18In examining whether the delay is inordinate, the courts have generally held that the longer the delay, the more likely it is to give rise to a rebuttable presumption of prejudice. Inordinate is a relative term and will be informed by the complexity of the action and any special circumstances that might prolong a matter. To be considered inordinate, the length of the delay must give rise to prejudice: Langenecker, at paras. 8, 11. However, courts have often rejected periods of delay under five years as being inordinate. This is, in part, because under r. 48.14 five years is the period for administrative dismissal if any action has not yet been set down for trial.

19In addition, the courts have tended to show leniency in situations where the plaintiff is a self-represented litigant: see Courtney v. Sprunt, 2019 ONSC 3722 (Master McGraw).

20I find that the delay of approximately 33 months, during the period that Murray was self-represented, is not inordinate in these circumstances. This is because Murray was initially told that Intelligarde was conducting a forensic audit, and after he did hire a lawyer, the lawyer did much to attempt to advance the action in a prompt manner: see Courtney.

21Courts have accepted attempts to settle an action by the plaintiff as being a reasonable excuse for delay: see Lazaris v. Computer Logistics Inc., 2013 ONSC 4757 (Master Muir); H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173; and Algoma District School Board v. Algoma Insurance Brokers Ltd., 2018 ONSC 7414.

22I also find that Murray had a reasonable excuse for the delay given he was making good faith attempts to settle the matter, and was waiting for Intelligarde to complete its forensic audit, after which event he had good reason to believe settlement might be feasible.

23A further relevant consideration apt to this case is the fact that Intelligarde’s lawyers did not attempt in any way to advance the action or warn Murray, as a self-represented litigant, that if he did not proceed with the action, it would be subject to a motion to dismiss for delay. In my view, especially when dealing with a self-represented plaintiff, it is incumbent on lawyers to give fair warning of an intention to bring a motion to dismiss for delay so that the plaintiff might understand the consequences of its inaction before it reaches a crisis point.

24This practice avoids the tendency to bring unnecessary motions or what Myers J., in Sheikh v. Kathuria, 2021 ONSC 3273, at para. 4, called the “motion culture” especially prevalent in Toronto. This suggested practice of providing fair warning is consistent with the values reflected in r. 1.04, which promote the fair, expeditious, proportionate, and least expensive determination of disputes on their merits.

25Going to the third part of the test, the prejudice that has been alleged by Intelligarde is that relevant documents have either been lost or destroyed due to the lapse of time. Furthermore, the employees and management who had knowledge of the alleged fraudulent scheme are no longer with Intelligarde. Therefore, Intelligarde claims that it has been prejudiced in its ability to mount a defence at trial.

26In Ali v. Fruci, 2014 ONCA 596, the Court of Appeal overturned a motion judge’s order dismissing an action for delay of approximately five and a half years notwithstanding that there was some prejudice to the defendant and an inadequate explanation for some of the delay. At para. 17, the Court of Appeal found that:

The presumption of prejudice increases with the length of the delay. In this case, although the length of the delay was inordinate (and much of it was not adequately accounted for), this delay was not so inordinate that the respondents could rely on presumed prejudice alone to show that their right to a fair trial was substantially at risk. To deprive Ali of her day in court, of a trial on the merits, the respondents had to show that they would actually be prejudiced by the delay.

27In Fenton v. Nubury Properties Limited, 2011 ONSC 1005 (Master Muir), the court declined to dismiss an action after a ten-year delay because there was inadequate evidence regarding the defendant’s efforts to locate retired witnesses.

28In Im v. BMO Investorline Inc., 2019 ONSC 1663 (Master Muir), the plaintiff rebutted the presumption of prejudice created by inordinate and inexcusable delay because the defendants had early notice of his claim, an opportunity to investigate and preserve evidence, and the defendants were sophisticated parties represented by counsel from the beginning.

29To be successful on this ground, Intelligarde was required to adduce evidence of what documents were destroyed or lost, how and when, and to outline what steps were taken to preserve the key documents once it had notice of the action. In addition, Intelligarde had to adduce evidence of attempts to locate and contact witnesses it claimed were not available for trial: Joseph Carbery v. St. Michael’s Hospital, 2018 ONSC 1617 (Master McGraw).

30In this case, McLeod thought his company had been the victim of fraudulent activity by its employee that implicated Murray, and this is the reason for the nonpayment of Murray’s invoices. At that time, McLeod, as president, ought to have undertaken an investigation promptly to determine if, indeed, Murray was implicated; particularly once McLeod received notice of the lawsuit. Notably, McLeod told Murray that his company was conducting a forensic audit into the matter. However, it turns out that Intelligarde never undertook a forensic audit and no explanation has been provided in the record as to when and why Intelligarde decided not to conduct a forensic audit.

31Intelligarde had early notice of these issues. The lawsuit from Murray ought to have incentivized Intelligarde to investigate and preserve its evidence. It had the benefit of legal counsel from the outset of the claim and a pre-existing suspicion of fraudulent activity potentially implicating Murray.

32Furthermore, there is no evidence in the record on behalf of Intelligarde indicating what documents and witnesses are no longer available or what steps were taken in order to locate the witnesses and preserve documentary evidence. Tellingly, when Intelligarde eventually delivered an unsworn affidavit of documents in this proceeding, it failed to list any documents under Schedule C.

33If Intelligarde failed to take steps to preserve evidence once faced with a lawsuit in 2015, allowed documents to be destroyed or lost, and failed to take statements from witnesses, it cannot now take advantage of its own neglect and visit that on the shoulders of Murray: see Schmidt v. City of Hamilton, 2010 ONSC 542, at para. 35.

34All that the court has on the issue of prejudice is a bald statement by McLeod to the effect that documents, and witnesses, have been “lost or destroyed due to age”. Based on the record, Intelligarde has, at minimum, McLeod as a key fact witness with direct knowledge of this matter. In fact, Intelligarde’s lawyer advised Murray’s lawyer that he would produce McLeod at the examination for discovery and that his answers would bind Intelligarde.

35In my view, the delay was not so inordinate as to engage the presumption of prejudice. Further, Murray has provided a satisfactory explanation for the 33-month period of delay incurred: Langenecker, at para. 8; Ali, at para. 11.

36Further, and in any event, Intelligarde has failed to show any actual prejudice.

Decision

37For all these reasons, the motion to dismiss the action for delay is dismissed.

38The parties are to include the agreed upon timetable incorporated into a draft order for my consideration. If the parties require a case conference to discuss timetable related issues, they may come before me.

39I am also prepared to order this matter to continue by way of the simplified procedure, r. 76, provided the matter is on consent of the parties.

40If the parties cannot agree on costs, after exchanging costs outlines, then the plaintiff shall have ten business days from the release of these reasons to deliver his costs outline and written submissions not to exceed two pages in length. The defendants shall have ten days thereafter to deliver their costs outline and written submissions also limited to two pages in length.