Court File and Parties

COURT FILE NO.: CV-16-547027

Motion Heard: November 15, 2021

Date of Decision: November 17, 2021

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Queen Britain Holdings Inc., Plaintiff

-AND-

Ohayon, Defendant

BEFORE: Associate Justice Jay Josefo

COUNSEL: J. McReynolds, for the plaintiff (moving party)

E. Burlew, for the defendant Ohayon (responding party)

J. Juda, for defendants City Commercial Realty Group Ltd., & Trevor Berryman (responding parties)

Endorsement

The Motion

[1] On March 19, 2021, the plaintiff brought a motion pursuant to Rule 48.14, seeking an extension of time to set the action down for trial. In the Notice of Motion, the new set-down deadline requested was December 1, 2021. Yet, given delays in having the motion heard (it was apparently adjourned once before it was heard on November 15, 2021), Mr. McReynolds for the plaintiff submitted at the hearing that the set-down deadline should be March 1, 2022.

[2] Mr. McReynolds also sought a timetable for when the plaintiff and the defendant Ohayon must answer their undertakings. These undertakings arose from the examination for discovery of Ohayon on September 21, 2016, and from the examination for discovery of the representative of the plaintiff, Alexey Smykov (“Smykov”), which was completed on the second day of such discoveries, being January 25, 2017. The defendant Berryman was also examined for discovery on September 21, 2016. Yet his undertakings were purportedly long ago answered, on September 23, 2016.

[3] Both sets of defendants oppose the plaintiff’s motion. They wish the action to be dismissed.

Relevant Facts

[4] The facts above and herein reviewed are from the March 18, 2021 Affidavit of Smykov, from the pleadings, and the motion materials. These facts are generally not in dispute.

[5] Since early 2014, the plaintiff corporation has owned a property on Davenport Road in Toronto. The defendant Ohayon was a residential tenant in the property, with a tenancy agreement dated April 24, 2012. With permission of the plaintiff, in Spring 2014 Ohayon sought to sublet his premises. To that end, Ohayon engaged in negotiations with defendants City Commercial Realty Group Inc (“City”) and the individual agent Trevor Berryman (Berryman”). City and Berryman were real estate agents for a numbered company, 8700621 Canada Inc., and its principal, a gentleman named Ron Hitti (“Hitti”), who sought to be the sub-tenant of Ohayon.

[6] A sub-tenancy agreement was ultimately entered into and, not too long after, matters turned sour. It was alleged that Hitti failed to pay rent and damaged the premises. In 2014 and 2015 the plaintiff was compelled to take eviction and other legal proceedings. Through his numbered company, Hitti was evicted on August 12, 2015.

[7] On February 19, 2016, the plaintiff commenced this within action for damages “caused by the improper sub-tenancy to a notorious delinquent tenant”, as Smykov deposed in his affidavit (paragraph eight). The amount claimed is $174,000.00, which was then above the Simplified Rules ceiling. Unsurprisingly, there were not only defences but cross-claims. Pleadings closed in or about May 2016. The action initially moved along well, considering that discoveries were concluded by January 25, 2017, with the next step, mandatory mediation, to follow later that same month. This was within eighteen months of when Hitti was evicted, so the facts of 2014-2015, which gave rise to the action, were or ought then to have been fresh for all parties.

[8] Yet the parties never made it to the mandatory mediation first scheduled for January 30, 2017. Ohayon had a medical condition which led to that first date being cancelled. Subsequently, at the proposed new mediation date of June 5, 2017, Ohayon was to be away for business reasons, so that next date was also cancelled on consent of all. Subsequently, Ohayon’s counsel asserted that there could be no useful mediation unless the plaintiff first answered his outstanding undertakings.

[9] To the date of this hearing, even with it being delayed until this Fall, the plaintiff still has not answered his undertakings. Nor, for that matter has Ohayon. The plaintiff has a combined (from his two examination days) 26 undertakings. Reviewing the chart listing these, to which evidence the plaintiff did not take issue, in my view at least some of these would be relevant for quantifying and valuing the claim at mediation, as well as ultimately for the plaintiff to be able to prove its claim for damages. For example, one undertaking which would seem to me to be fundamental to the case is, “to advise what damage was caused by Hitti [or his numbered company] to the property”. Another one which would likely be quite important for evidentiary reasons was to “provide pictures of the damage”. Thus, in my view, Ohayon’s position, even if it represented a change from initially agreeing to mediate without the undertakings being answered, was not unreasonable in the circumstances. If the position was also tactical, which counsel for Ohayon denies, then the plaintiff had, inter alia, an easy remedy: just answer its undertakings.

[10] Thus, the case stalled when the plaintiff did not answer undertakings, and Ohayon would not agree to mediate absent those answers. Nor would Ohayon agree to answer his undertakings until the plaintiff provided its answers. Was Ohayon right to withhold his answers pending receiving those from the plaintiff? If the plaintiff had objected to that, it had its remedies. Yet none were ever sought. Moreover, the plaintiff could have called Ohayon’s bluff, so to state, by again, simply meeting its commitment to answer its undertakings. Once that was done, if Ohayon continued to refuse to answer his undertakings, the plaintiff, with then “clean hands”, could have brought the appropriate motion or sought a case conference, and so moved the case forward. Again, however, such steps were not taken.

[11] From April 16, 2018, the last of several follow up requests by the City defendants urging the plaintiff to answer its undertakings so the case could proceed to mediation, nothing was heard until February 16, 2021. On that date Mr. McReynolds wrote counsel. Yet he did so not to deliver answers to the undertakings, but rather to advise of the intention of the plaintiff to bring this motion to extend time. As of February 16, 2021, the case was five days short of the fifth anniversary. As noted above, the motion was brought a month later—after the passage of the fifth anniversary.

[12] Other relevant facts include that Smykov’s father-in-law, the President of the plaintiff, died in late 2016. Thus, as he deposes at paragraph 20 of his affidavit, Smykov was for “much of 2017 and early 2018” enmeshed in estate matters. Smykov does not discuss, in his affidavit, however, the impact of his father-in-law’s death on his ability to answer his undertakings, and if or how the death of his father-in-law prejudices the plaintiff’s own case, let alone the impact of this untimely passing on the defendants. Smykov also does not address why he could not have, at any time since at least early 2018, if not sooner, answered his undertakings.

[13] Additionally, counsel for plaintiff had an accident which necessitated surgery. From late June 2017, it is not disputed that Mr. McReynolds was greatly restricted in his activities for “the next several months”, as Smykov stated in his affidavit. In my view, the phase represented by “the next several months” likely ended in mid-October 2017. By then, more than four years prior to the date of hearing of this motion, counsel was not asserted to be unable to function more or less normally. Indeed, in his email of October 12, 2017, Mr. McReynolds then assured counsel opposite that he “continue(s) to work on my client’s undertakings and anticipate their completion shortly”.

[14] There is also no dispute that the Covid pandemic had an impact. Yet the lockdowns only commenced on or about March 15, 2020. Moreover, by later 2020, society had learned to function, adapting various “work-arounds”, including remote court hearings via Zoom. Thus, after a short period, work in many sectors resumed. In this case, moreover, referring again to the list of undertakings, most of these, if not all, are not dependent, nor does Smykov depose otherwise, on the availability of an inaccessible outside party to provide access to otherwise unobtainable information.

[15] Allocating six months due to Covid, the unexplained delay in this matter totals three and a half years from November 2017. If from until early 2018 is allocated, due to the Smykov’s struggle with estate matters, the delay is still about three years. Again, a good portion of that time is prior to the Covid-related initial shut-down beginning mid-March 2020. As I noted above, moreover, the full shutdown and period of complete inactivity did not last too long in many sectors (other than travel and hospitality).

[16] Considering again the notion of “clean hands”, given I used that expression above, even as at the date of argument of this motion, plaintiff still has not answered his undertakings. Yet these have been outstanding from, using the second and final day of discovery of the plaintiff, January 25, 2017. I now consider the law as juxtaposed with these facts.

Overview of the Law

[17] It is not disputed that this motion was addressed as a Status Hearing pursuant to Rule 48.14(6). As is stated in Faris v. Eftimovski, 2013 ONCA 360 at paragraph 46, “the party who commences the proceeding bears primary responsibility for its progress”. Thus, notwithstanding the allegedly, as plaintiff asserted, tactical stance of Ohayon in not answering his undertakings until the plaintiff addressed its undertakings, the plaintiff still had its onus to move the case forward. It also had the opportunity to do so, as I describe above. Yet, on the facts as I have found them, the plaintiff failed to do so.

[18] Does the plaintiff have a reasonable or satisfactory explanation for its delay, and for failing to take any steps to move the case forward? As was discussed by Justice McLeod in Erland v. Her Majesty the Queen in Right of Ontario, 2019 ONSC 462, paragraphs 9 and 31, that is the first of two questions which must be answered favourably for the plaintiff so it can continue this action. In that decision, which was upheld by the Court of Appeal (2019 ONCA 689), at paragraph 10 Justice McLeod stated as follows regarding the type of explanation necessary:

[10] I need not go into the long and complex history of the rule and its predecessors. The current Rule 48.14 was enacted in 2014. It replaced the previous regime of “status notice” and dismissal at the end of two years with an automatic dismissal after five years. It is fair to say this change was enacted to reduce the burden on the court and on courts administration and does not reflect a policy that civil cases should now be allowed to languish. It is evident that the explanation a plaintiff will have to give to explain delay after five years may have to be more robust than might have been the case with an action aged only two years. The test however remains the same. It begins with the reasons for delay. [emphasis added].

[19] In DK Manufacturing Group Ltd. v. MDF Mechanical Limited (“DK”), 2019 ONSC 6853, my colleague Master Robinson (now titled Associate Justice Robinson) seemed faced with facts leading up to a motion which appear very similar to the circumstances as in this matter before me. He wrote in that regard in part as follows:

[23] Based on the evidence filed, it appears that the only reason the plaintiffs sought to move this action forward was because the Rule 48.14 deadline was pending. Ms. Outerbridge’s affidavit tendered in support of the plaintiffs expressly states, “My office was aware that the within action was approaching its fifth anniversary and sought to address it without the need for a motion.” I am not satisfied that, in the absence of the Rule 48.14 deadline, there would otherwise have been any intention to move this action forward.

[24] I agree with TIF that this case is similar to the case in Walderman v. CMC Markets Canada Inc., 2017 ONSC 6802. In that status hearing case, Justice Petersen found that the early years of delay had been explained, but dismissed the action for delay after holding, at. para. 27, that there were in excess of 3 years of unexplained delay, which were marked only by some settlement discussions with one defendant (not all defendants) and multiple adjournments of a summary judgment motion. The facts of this case are similar, in that an acceptable explanation for delay exists for 2 years (as conceded by TIF), but the explanation for the past 3 years (having found that steps in the Related Action are irrelevant) consists solely of an apparent settlement with Alarm Factory, for which no particulars are provided, and dismissal of the action as against it.

[20] In this within matter, it also appears that Mr. McReynolds only wrote to counsel opposite on February 16, 2021 because he knew that time was quickly running out. He then had nothing substantive to offer—no answers to undertakings, for example. All he sought to do was to schedule this motion, just as did counsel in the DK case. In DK, moreover, there were at least some ongoing activity, minimal as it seemingly was. In this matter, there was simply nothing happening since counsel for the City defendants last wrote on April 16, 2018 to urge that undertakings be answered so the case could move forward, until 34 months later, when counsel for plaintiff alerted counsel opposite to his intention to bring this within motion.

[21] The Smykov affidavit is quite vague for any explanation for delay. At paragraph 20-22, he deposes as follows:

20. Unfortunately, Queen Britain was experiencing some difficulty in the performance of its undertakings. My father-in-law had passed away in late 2016 and I spent much of 2017 and early 2018 dealing with estate matters. At the end of June 2017, Queen Britain's counsel had an accident in which he severed a tendon in his left leg, which required surgery in July and greatly restricted his ability to conduct his practice for the next several months.

21. Ohayon's unilateral imposition of conditions to the scheduling of mediation, combined with our misadventure, derailed the timely scheduling of mediation and the setting down of this matter to trial.

22. While I have been attempting to perform the undertakings during 2020, the public health emergency has greatly contributed to our difficulty in accessing business and financial records necessary for the performance of those undertakings.

[22] Yet, that in part is contradicted by Mr. McReynolds email of October 12, 2017, wherein he then assured counsel opposite that he “continue(s) to work on my client’s undertakings and anticipate their completion shortly”. As to Smykov attempting to pass the blame to Ohayon, the Court of Appeal has in Faris, above, made clear that this will not succeed. The onus in the main rests with the plaintiff. Moreover, in this case, these are undertakings of the plaintiff. He had and still has an outstanding obligation to answer these. Yet even subsequent to his swearing this affidavit on March 18, 2021, the plaintiff’s representative still has not met his obligation in that regard. Moreover, defaulting to the Covid pandemic as an ongoing excuse, without explaining how or why this has and still makes it difficult to access plaintiff’s own records, is again, too vague. This “explanation” raises more questions than answers.

[23] Respectfully, I disagree with counsel for the plaintiff that, if the explanation by Smykov was found to be vague, defendants should have cross-examined Smykov to flesh out his explanation. In my view, the onus is squarely on the plaintiff to put forward a reasonable explanation for the delay. In considering if this has been done, as was stated by the Court at paragraph 11 in Unlimited Motors Inc. v. Automobili Lamborghini Spa, 2019 ONSC 1423, I consider the totality of all the circumstances involved in this case and what is in the interests of justice.

[24] When I consider all the facts of this within matter, I find the explanation for the delay to be so thin as to be unreasonable and unsatisfactory in all of the circumstances. Ultimately, I do not find it to be a satisfactory (if indeed, any) explanation for the delay in this case. While it is always preferable that cases be decided on the merits of them rather than by “technical knock-out”, as the case-law makes clear, Rule 48 does oblige the plaintiff to move its case forward or suffer the serious consequences. The period of not months, but several years, that this matter simply slumbered, with absolutely no forward activity, is significant. In this matter, there is just no good reason, nor satisfactory explanation, for the lengthy, indeed, still ongoing, delay on the part of the plaintiff. The case has simply been in limbo for far too long, without any reasonable or satisfactory explanation for that state of affairs.

[25] Pursuant to the Erland decision referenced above, if I find the delay to be unsatisfactorily explained, that is sufficient to end the inquiry, and the matter can be dismissed. Yet, for completeness, I turn to the question of prejudice. That is the second question which must be answered favourably for the plaintiff: the plaintiff must lead some evidence to show an absence of non-compensable prejudice, or that it is nevertheless better, in the interest of justice, that the case be allowed to proceed.

[26] Yet, there is no such evidence before me. Prejudice, moreover, is presumed with long delays. Again, there has not even been an attempt to rebut that presumption. In that regard, I refer again to the DK decision of my colleague, who well stated as follows (paragraphs 28-30):

Prejudice is inherent in long delays. Memories fade and fail, witnesses become unavailable, and documents and other potential exhibits are lost. The longer the delay, the stronger the inference of prejudice to the defence case flowing from that delay.

[27] The events which underpin this within action date from 2014 and 2015, over six years ago. I consider that the plaintiff has so far been unable to answer what I find are typical and relatively straight-forward undertakings, as he indeed volunteered to do when he was discovered years ago. In my view, that failure means that there might well be some difficulty in his obtaining that information, some of which, again, is likely necessary for the case.

[28] Accordingly, it is reasonable to presume that, given the aging of this matter, there is likely some prejudice for the defendants if the case is allowed to continue. In my view, again referring to DK, the prejudice in that regard would be difficult, if not impossible, to overcome. In other words, the prejudicial impact is likely more than insignificant in this case. Given no satisfactory explanation for the delay, and at least some legitimate grounds to conclude that there is prejudice, I am unable to grant the relief sought by the plaintiff.

[29] For all these reasons, pursuant to Rule 48.14 (7), the action is dismissed for delay. I thank all counsel for their helpful oral and written submissions.

Costs

[30] We did not address costs of the motion. If the parties cannot agree on costs, given the usual approach of “costs follow the event”, then a brief tele-case-conference may be arranged through ATC Mr. Magnante. Mr. Magnante may be emailed at marco.magnante@ontario.ca. Counsel may, in addition to cost outlines, submit up to three pages, using normal font and spacing.

ASSOCIATE JUSTICE J. JOSEFO

DATE: November 17, 2021