COURT FILE NO.: 14-4139-SR
DATE: 2021/02/03
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Lexfund Inc.
Plaintiff
– and –
Lena Karyouti aka Lena Emily Kuaryouti, Chris Nicolis aka Christian Nicolis and Arvai Personal Injuries Lawyers aka Karl Arvai Professional Corporation
Defendants
Amber E. Bonnell - Counsel for the Plaintiff
Karl Arvai - Counsel for the Defendant
HEARD: February 1, 2021
The Honourable Justice James W. Sloan
REASONS FOR DECISION
Corrected decision: The correction were made on February 10, 2021.
Two typographical errors were made on page 1. A typographical error was also
made on the backsheet. The DATE at the top of page 1 was inserted as 2020/02/03 and this has now been changed to read 2021/02/03. The HEARD date in the title of proceedings on page 1 was inserted as February 1, 2020 and this has now been changed to read February 1, 2021. The DATE at the top of the backsheet page
read 2020/02/03 and has now been changed to read 20201/02/03.
[1] In this motion before the court, the Plaintiff seeks to:
(a) set aside the administrative dismissal of its action dated November 13, 2019;
(b) extend the time to set the action down for trial; and
(c) for default judgment against Karyouti.
[2] While the facts of the case are simple and for the most part are agreed upon, they are also quite convoluted.
[3] This action arises out of what I will describe as a litigation loan from Lexfund to Karyouti in 2008, which has not been repaid.
[4] The following is a chronology of events:
(a) 2006 – Karyouti and/or h(is)er lawyer submitted an application to the Plaintiff for a loan to assist her in prosecuting her lawsuit arising from a motor vehicle accident,
(b) June 15, 2008 – $10,000 was advanced, plus a $500 underwriting fee,
(c) July 28, 2008 – $10,000 was advanced, plus a $500 underwriting fee, the interest rate on both loans was 24% compounded monthly,
(d) March 20, 2013 – the Karyouti’s lawyer advised that the matter had settled and that the balance owing to the Plaintiff would be paid to the Plaintiff. It is the Defendants’ submission that they said once Karyouti’s legal account was finalized the balance left over would be paid to the plaintiff,
(e) July 5, 2014 – the Plaintiff was advised that there was no money for them after satisfaction of Karyouti’s legal account,
(f) August 11, 2014 – the Plaintiff sent its final demand for payment,
(g) September 9, 2014 – the Plaintiff issued its Statement of Claim,
(h) October 9, 2014 - the Arvai defendants filed their Statement of Defence,
(i) October 9, 2014 – the Arvai Defendants offered to settle for $21,872.30, plus costs pursuant to the Small Claims Court Rules,
(j) 2014 – 2015 – the Plaintiff claims that Karyouti was evading service,
(k) 2014 - the Plaintiff attempted service on Karyouti on September 12, October 14 and October 28, 2014,
(l) July 2019 – the Plaintiff brought a motion to validate service of its Statement of Claim on Karyouti,
(m) August 7, 2019 - the Arvai Defendants revoked their October 9, 2014 Offer to Settle and served a new offer to settle for $15,000 plus Small Claims Court costs,
(n) August 15, 2019 – the Court (Sloan J.) extended the time for service of the Statement of Claim to November 1, 2019, and ordered the Plaintiff to file an affidavit about what searches it had done to ascertain if Karyouti had a social media presence by which she could be served with the Statement of Claim,
(o) September 26, 2019 – the Plaintiff obtained an order validating its service of the Statement of Claim on Karyouti (Braid J.),
(p) October 8, 2019 – the Plaintiff signed a requisition requesting the local registrar to note Karyouti in default (this was the first possible date for such a request),
(q) October 17, 2019 – Pierre Gregoire, (the president of Lexfund) who resides in Malta, signed an affidavit in support of the motion for default judgment. He emailed a copy of the affidavit and sent the original copy by registered mail to the Gowlings’ Ottawa office, expecting it to be delivered in approximately two weeks,
(r) November 1, 2019 - the Arvai defendants revoked their August 7, 2019 Offer to Settle,
(s) November 12, 2019 – Pierre Gregoire’s original affidavit arrived in Ottawa and was immediately couriered overnight to Gowlings’ Waterloo office, arriving on November 13, 2019,
(t) November 13, 2019 – the Plaintiff attended court and attempted to file a motion seeking to extend the time to set the action down because they required a default judgment against Karyouti or they would be precluded from doing so later,
(u) November 13, 2019 – the Plaintiff was informed that the action had been administratively dismissed earlier that day,
(v) November 14, 2019 – the administrative dismissal order was issued and entered,
(w) November 15, 2019 – Mr. Arvai refused to consent to the setting aside of the registrar’s dismissal order.
Settlement of Karyouti’s MVA
[5] Karyouti’s motor vehicle lawsuit was settled for an all-inclusive amount of $50,000.
[6] Her legal fees, which the material indicates were to be between 15 and 25% were $21,985, which is 43.97% of the all-inclusive settlement figure.
[7] In addition, she paid GST of $549.63, HST of $1,429.03 and two sets of disbursements being $2,516.56, plus $1,647.48, which brought the grand total of her fees and disbursements to $28,127.70.
[8] Assuming those numbers to be correct, that left the maximum amount of money left over of $21,872.30
[9] However, the Arvai Defendants plead that Karyouti executed an assignment of her MVA settlement funds to pay expenses she incurred with the Arvai Defendants who were also prosecuting a medical malpractice action on her behalf.
[10] If the subject assignment is valid and if it comes in priority to the loan documentation, there would be nothing left for the Plaintiff. This is an issue that would need to be resolved.
Lexfund’s Claim for Interest
[11] As stated earlier, the loan from Lexfund charged interest at 24% per annum compounded monthly.
[12] The court believes the formula for calculating such interest is:
A = [P(1+ r/n)nt] where,
A - is the amount owing
P - is the principal advanced
r - is a rate of interest per annum
n - is the number of times the interest is compounded per year and
t - is the number of years
[13] To make my point and for simplicity sake, since both advances were close in time, I have added both advances together, which including the underwriting fees equals $21,000.
[14] At the time of settlement, the loan had been outstanding for approximately five years and now has been outstanding for going on 12 twelve years.
[15] By my calculations, after five years, the mathematical amount owing under the loan would have been approximately $68,901.65. ($21,000 x 3.28103078837)
[16] After twelve years, the mathematical amount owing would be approximately $363,616.87.
[17] Both these figures of course are vastly in excess of the loan and the all-inclusive MVA settlement.
[18] Although there is no evidence to suggest that the Plaintiff dragged its feet so its claim for damages would dramatically increase, the fact that its claim for damages has dramatically increased solely because of its tardiness is an undeniable fact.
Prosecution of Action
[19] This Simplified Procedure action is governed to a great extent by r. 76.
[20] The Statement of Claim was not served within six months after September 9, 2014. (r. 14.08)
[21] Service was attempted on September 12, October 14 and October 28, 2014. Although there are no affidavits of attempted service in the Motion Record, the fact that the Plaintiff knew on or about October 28, 2014 that there was difficulty in serving Karyouti is undeniable.
[22] The Plaintiff failed to bring its motion for substituted service within six months (r. 16.04). Instead it waited until August 1, 2019, which was the first return date of the motion.
[23] The order for substituted service was made more than five years after the claim was issued.
[24] The Arvai defendants filed their Statement of Defence on October 9, 2014.
[25] Other than three attempts at service in the Fall of 2014 and their very tardy motion for substitution of service, the Plaintiff took no steps whatsoever to move this action forward. No affidavit of documents has been served, nor have any discoveries been arranged.
The Plaintiff’s Position
[26] Based on my endorsement dated August 15, 2019, which extended the time for service of the Statement of Claim to November 1, 2019, there was an implicit extension of time to serve the Statement of Claim to November 1, 2019.
[27] Pursuant to Justice Braid’s order of September 26, 2019, service of the Statement of Claim on Karyouti was validated and was effective September 17, 2019.
[28] From that date forward, the Plaintiff acted reasonably and with due haste by noting Karyouti in default, preparing an affidavit for Pierre Gregoire to sign in Malta, receiving the executed affidavit on November 13, 2019 and attending at court the same day it arrived, in an attempt to obtain default judgment.
[29] The local registrar did not see fit to bring the unusual circumstances surrounding the timing of the Plaintiff’s application and the administrative dismissal order to the attention of a Superior Court Judge prior to the dismissal order being issued and entered on November 14, 2019.
[30] The Plaintiff took immediate action to bring this motion, by preparing the material and serving same on December 12, 2019 and initially setting it down for January 2020.
[31] Because the Defendants needed time to respond and because of COVID-19 the matter could not be heard until February 1, 2021.
[32] The rules envisage that a Plaintiff in circumstances such as these, may apply to have the order set aside under r. 37.14, which the Plaintiff has complied with.
[33] The plaintiff relies in part on the cases of Scaini v. Prochnicki 2007 ONCA 63, Geerligs v. Beck Taxi Limited, 2019 ONSC 2683 and Marche d’Alimentation Denis Theriault Ltee. v. Giant Tiger Stores, 2007 ONCA 695.
[34] The Scaini and Geerligs cases deal with the four elements of the Reid test (Reid v. Corning) and introduce some further criteria stating that “a contextual approach… is to be preferred to a rigid test requiring an appellant to satisfy each one of a fixed set of criteria.
[35] The criteria to be considered include:
(a) the length of litigation delay,
(b) explanation for the litigation delay,
(c) inadvertence in missing the deadline,
(d) promptness in moving to set aside the order,
(e) prejudice to the Plaintiff,
(f) prejudice to the Defendant
(g) factors unique to the case,
(h) the defendant’s conduct and contribution to any delay,
(i) balancing, having a hearing on the merits versus resolution in a timely manner.
[36] Although the Plaintiff admits there has been some delay, particularly between late 2014 and July 2019, it always intended to proceed with the action, was in contact numerous times with the Defendants’ solicitors, discussed settlement with the Defendants’ solicitors, obtained an order to extend time for service, obtained an order validating service on September 29, 2019 and then moved with great speed to file a motion to extend the time and to bring a motion for default judgment against Karyouti.
[37] Unfortunately for the Plaintiff, the necessary affidavit had to be signed in Malta and due to circumstances beyond the Plaintiff’s control, it took almost a month rather than two weeks to have the affidavit delivered to Canada.
[38] If the matter does not proceed to a determination there is prejudice to the Plaintiff, who in good faith loaned $21,000 in 2008 and has not received any payments on the loan whatsoever.
[39] It submits their motion to set aside the dismissal was brought promptly and that there is no prejudice to the Defendants if the matter is allowed to be adjudicated on, since this trial in essence will be one run on documentation.
[40] In addition. now that service has been validated and Karyouti has been noted in default, she is deemed to admit the facts in the Statement of Claim.
[41] The Plaintiff further submits that its claim is for a liquidated demand in money and therefore they are entitled to a default judgment.
[42] In reply, the Plaintiff submitted that because the court extended the time to serve the Statement of Claim, it also extended the time to set the matter down for trial, therefore the Plaintiff was within the five year window.
[43] They brought this motion promptly within 30 days of the dismissal order.
[44] The issue of whether or not the plaintiff complied with the Consumer Protection Act has not been pleaded in their Statement of Defence.
[45] The lack of an alternative request for interest pursuant to the rate set out in the Courts of Justice Act was inadvertence on behalf of the Plaintiff’s lawyer.
The Defendants’ Position
[46] On the issue of case law, the Defendants submit that the Plaintiff is attempting to rely on old Court of Appeal decisions from 2007 and that even the 2019 Geerlings case relies on the 2007 Scaini Court of Appeal decision, which does not mention the more recent Court of Appeal cases in this area, which were decided in 2011, 2012 and 2013.
[47] Mr. Arvai is unaware of any Simplified Procedure cases in this area of law which calls for cases to be set down within 180 days rather than two years.
[48] The Defendants rely on the cases of 1196158 Ontario Inc. v. 6274013 Canada Limited et al, 2012 ONCA 544, Faris v. Eftimovski, 2013 ONCA 360, Deverett Professional Corporation v. Canpages Inc., 2013 ONSC 6954 (Divisional Court), Machacek v. Ontario Cycling Association, 2011 ONCA 410 and Louis v. Poitras, 2020 ONCA 815 & 2021 ONCA 49.
[49] The 1196158 case deals with a status hearing, however it should be noted the case at bar is beyond the status hearing. The 1196158 case had not proceeded beyond the close of pleadings in five years and was dismissed on a r. 48.14 status hearing. The Plaintiff failed to adhere to a timetable agreed upon at the first status hearing and the action was dismissed.
[50] In that 2012 case the action had not been moved beyond the pleading stage after three years and four months. Although there was no alleged or demonstrated actual prejudice to the Defendants, the judge at the status hearing dismissed the action.
[51] At paragraph 14 the Court of Appeal stated:
[14] …There must be finality to claims. The plaintiff has been given generous chances to proceed with the action. At some point, the court has to say the plaintiff has had enough opportunities to move this action along. The defendants have had to deal with these claims for over five years and should not be forced to have this claim remain a contingent claim against them.
[52] At paragraph 19 the court stated:
[19] Timelines prescribed by the Rules of Civil Procedure or imposed by judicial orders should be complied with. Failure to enforce rules and orders undermines public confidence in the capacity of the justice system to process disputes fairly and efficiently. On the other hand, procedural rules of the servants of Justice not its master. We must allow some latitude for unexpected and unusual contingencies that make it difficult or impossible for a party to comply.
[53] The court went on to state that the focus of the inquiry under r. 48.14 is the conduct of the Plaintiff who bears primary responsibility for its progress and that an action can be dismissed even if there is no proof of actual prejudice to the Defendant, stating at paragraph 34:
[34]… the court is entitled to exercise the powers conferred by the rules to dismiss actions absent an adequate explanation for the delay…
[54] At paragraph 44 the court stated:
[44] Another harm that flows from delay, properly relied on by the status hearing judge, is that it leaves the litigant with the claim hanging over its head in a kind of perpetual limbo. Fairness requires allowing parties to plan their lives on the assumption that, barring exceptional or unusual circumstances, litigation timeliness will be enforced. “Litigants are entitled to have their disputes resolved quickly so they can get on with their lives” and “[d]elay multiplies costs and breeds frustration and unfairness”: March, at para 25; see, also, Hamilton, at para. 21. In my view, it is entirely proper for the status hearing judge to weigh in the balance the fact that the defendants would inevitably suffer some harm if after more than five years and no significant movement by the plaintiff, they were forced to continue to face this contention claim.”
[55] In the 2013 Faris case which deals with a dismissal following a status hearing, the Court of Appeal stated at para.31 that;
“if the presiding judge or case management master is not satisfied that the action should proceed, the judge or case management master may dismiss the action for delay” (para 31 r. 48.13(13)).
[56] The court went on to state at para. 33:
[33] “”Since the purpose of Rule 48 is to enable the court to control the pace of litigation and ensure that disputes are resolved in a time effective manner, imposing the onus on the plaintiff to show cause why the action should not be dismissed for delay is fair. This court has held that the responsibility to move the action along lies chiefly with the plaintiff. Accordingly, the plaintiff also bears the consequences of conducting its action in a dilatory manner.”
[57] At paragraphs 41 and 42 Court of Appeal went on to state:
[41] The onus placed on the plaintiff under rule 48.14(13), therefore, is mandated not only by the plain wording of that rule but also by the greater severity of the plaintiff’s delinquency in pursuing its claim. In other words, at this juncture, the emphasis on the objectives expressed in rule 1.04(1) to ”secure the just, most expeditious and least expensive determination of every civil proceeding on its merits” must necessarily shift towards ensuring that disputes be resolved expeditiously and in a time efficient manner.
[42] Therefore, I conclude that the status hearing judge in the case at bar was correct to place the onus on the appellant and to apply a test similar in principle to one recently confirmed by this court in 1196158 Ontario Inc. At para. 32 of 1196158, the court held that the plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation and that, if the action was allowed to proceed, the defendant would suffer no non-compensable prejudice.
[58] The 2013 Deverett, Divisional Court decision also dealt with a status hearing. In that case the claim was issued on December 22, 2009, the Statement of Defence was served February 12, 2010 and then there was then no communication between the parties prior to the status notice from the court on January 13, 2012. The appellant relied on several decisions where a balancing approach favoured cases being determined on their merits. The Divisional Court took the position that the cases referred to by the Plaintiff had been overtaken by the Court of Appeal decisions in 1196158 and Faris.
[59] The Divisional Court relied on the Court of Appeals statements made in paras. 41 and 42 of the Faris decision and paragraph 32 of the 1196158 decision. The Divisional Court went on to quote from the Court of Appeal decision in Scaini v. Sun Life Assurance, 2013 ONSC 4463, where the court stated at paragraph 8:
[8] … The thrust of the recent case law from the Court of Appeal is that the judge or master presiding at the status hearing is not to aim at fixing a tardy action but at dismissing it, unless there is cogent evidence in the record establishing a reason not to do so.
[60] In the Machacek Court of Appeal decision, the Plaintiff was seriously injured in the June 15, 2002 accident, the Statement of Claim was issued on February 20, 2003 and the action was dismissed for delay in setting the action down for trial by the local registrar, on August 15, 2007, pursuant to r. 48.14. Prior to the dismissal, pleadings had been exchanged, some discovery sessions were held, various documents were produced, and a defence medical had been completed.
[61] The order dismissing the action came to the attention of the Appellant’s lawyer in early 2008. On April 2, 2008 the Appellant’s lawyer asked the Respondents for their consent to set aside the dismissal which was refused. Between February and October 2008, the plaintiff met with his lawyer’s six times urging him to deal with the dismissal of the action.
[62] The matter was ultimately reported to LawPro, who served a Motion Record in March 2010.
[63] The Court of Appeal viewed the delay between September 2006 and March 2010 as inexcusable and attributed it to the failure of counsel for the Appellant to move the action along and take appropriate steps to set aside the registrar’s order.
[64] Although there was no actual prejudice found by the Motions Judge, the court held that the delay in that case and the conduct of counsel tipped to the balance towards dismissal.
[65] The court quoted from other cases at para. 9, to the effect that the court:
… should opt for a resolution that discourages this type of conduct which undermines important value of having disputes resolved in a timely fashion…
and further stated:
… moreover excusing a delay of this magnitude and gravity risks undermining public confidence in the administration of justice. Lawyers who fail to serve their clients threaten public confidence in the administration of justice …
[66] The Louis case dealt with the striking of a jury notice, however paragraph 43 of the 2020 decision by Justice Brown is instructive with respect to delays in the judicial system. He acknowledged that the broad discretion exercised by judges is influenced by two key factors, one external to the court system (Covid-19) and one internal to it.
[67] At paragraph 43 he stated:
[43] “The internal factors stem from the Supreme Court of Canada’s description of our court system as one marked by a mindset of “complacency” and the willingness “to tolerate excessive delays”: R v. Jordan, 2016 SCC 27, [2016] 1 S.C.R. 631, at paras. 4 and 29. In Jordan and Hryniak v.Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court called for a “culture shift” (Hryniak, at para. 2) and a “change of direction” (Jordan, at para. 5). While the long duration of the pandemic has many actors in the civil justice system desiring to “return back to normal”, one must not forget that the “good old ways” caused unacceptable delays and are the very ways that the Supreme Court in Hryniak and Jordan has charged the court system to discard.
[68] The full Court of Appeal in Louis, stated the following at paragraphs 23 and 25:
[23] This case neatly captures the competing approaches to the crisis faced by the civil justice system. The motion judge approached this case practically, cognizant of his responsibility to the parties and the system to move cases forward and offer timely service. By contrast, the Divisional Court took the wrong approach to the new reality of the civil justice system. Implicit in its reasoning is that delay is to be expected and tolerated; it is the ordinary course. That is precisely the type of complacency that led to the civil justice system’s systemic delay and was subject to criticism by the Supreme Court of Canada in Hryniak.
[25] There is no debate that in considering a request to strike a jury notice, the court may look beyond the parties’ interests and consider the broader interests of the administration of justice. While the Divisional Court purported to consider the administration of justice, it ignored the realities of the current situation. In its analysis, the importance of the administration of justice was almost totally discounted.
[69] In the case at bar, the last attempted service was October 2014 and the date of the dismissal order was more than five years later, on November 13, 2019.
[70] The Plaintiff in its Notice of Motion at Tab 10 of the Motion Record dated November 13, 2019, was asking for default judgment and an extension of time to set the matter down for trial. It was brought on an ex parte basis notwithstanding that a default judgment finding against Karyouti in the amount being claimed by the Plaintiff would severely prejudice the other Defendants.
[71] In addition, in the Motion Record before this court at Tab 10, the original court was not referred to rules 19.04 or 48.
[72] With respect to the issue of default judgment, there are numerous issues that need to be addressed, including whether or not Aravi’s solicitor’s lien has priority to the Plaintiff’s claim, in which case nothing would be owing to the Plaintiff.
[73] In addition, the Defendants submit that the Plaintiff may not have complied with the Consumer Protection legislation.
[74] All of the Defendants are prejudiced by the passage of time which is entirely the fault of the Plaintiff because of the very high rate of interest being claimed by the plaintiff.
[75] Under r. 76.09, the Plaintiff is obligated to set the action down for trial within 180 days after the first Statement of Defence has been filed. It has now been over 2,000 days, a factor of greater than 11.
Findings/Ruling
[76] In deciding this motion, perhaps a good place to start is with some 2011 comments attributed to former Justice Quinn in the case of Blais v. TTC.
This ruling stemmed from a personal injury action where the plaintiff sued the Toronto Transit Commission for damages resulting from a slip and fall in 1998. By 2010 the parties had not completed examinations for discovery. Some records created around the time of the incident had been destroyed through the defendant’s normal purging practices. The plaintiff brought a motion to compel the defendant’s representative to answer questions refused on his examination for discovery and to have the defendant comply with undertakings. The plaintiff also sought an order striking out the statement of defence.
Justice Quinn stated, “Some actions proceed more slowly than others.” He continued, “Here, the lawyers for the plaintiff have prosecuted this action with the enthusiasm of invitees at a tax audit. A straightforward slip-and-fall injury in 1997, where the statement of claim was issued in 1998, finds the parties, by 2010, still trapped in examinations for discovery. How can this happen? How can this possibly happen? How? It will be seen that, among other things, the plaintiff elected trial by letter.”
“The full background of this motion is a story too long to tell. (Typically, it consists of a flurry of correspondence, some feeble attempts at progress and lengthy periods of hibernation, followed by repetitions of that cycle.) Nevertheless, I have set out the history in detail.”
[77] On the face of this action, it appears relatively simple. The Plaintiff claims damages pursuant to a contractual loan. There are some modest legal hurdles, perhaps the largest of which is whether or not a solicitor’s lien over Karyouti’s MVA settlement funds has priority as against the Plaintiff.
[78] Another modest practical/legal hurdle became apparent very early on, because the Plaintiff was unable to effect personal service on Karyouti.
[79] The Statement of Claim was issued on September 9, 2014, approximately two months after the Plaintiff was advised it would be receiving no money from the MVA settlement.
[80] By October 28, 2014, the Plaintiff had attempted unsuccessfully on three occasions to effect personal service on Karyouti.
[81] The file then, for some unexplained reason, went dormant until July 2019 when the Plaintiff brought a motion in an attempt to validate service of the Statement of Claim on Karyouti.
[82] At this point in time the Plaintiff would have known that they were and had been effectively in noncompliance with numerous Rules of Civil Procedure including rules:
1.04 - to process files in the most expeditious and least expensive manner,
14.08 - to serve the statement of claim within 6 months of it being issued,
16.04(1) - to apply to the court for an order for substituted service,
48.14(1) - not setting the action down for trial within 5 years of its commencement,
76.03 (1) – to serve an affidavit of documents within 10 days after the close of pleadings,
76.08 – to meet with the other side within 60 days after the filing of the 1st statement of defence,
76.09(1) – to set the action down for trial within 180 days after the 1st statement of defence is filed.
[83] No explanation whatsoever, much less a palatable explanation has been put forward with respect to why the plaintiff allowed this file to languish between October 28, 2014 (the 3rd failed attempted service) and July 2019 when the Plaintiff brought a motion to validate service.
[84] It is beyond belief that the only person in the employ of the Plaintiff who could attest to the facts set out in Mr. Gregoire’s affidavit of October 17, 2019, resided in Malta.
[85] In any event, the Plaintiff knew or should have known, that the five year anniversary date had already passed. The plaintiff’s lawyers would have known that the registrar is obligated to dismiss an action for delay once the registrar becomes aware that an action has not been set down for trial by the fifth anniversary date.
[86] In spite of these facts, no Canadian employee of the Plaintiff signed the appropriate affidavit and when Mr. Gregoire did sign the affidavit, for some essentially unexplained reason he mailed it, in a world where timely documents are routinely couriered on an overnight basis. Although it may not have been possible to courier the affidavit from Malta overnight, it is far more likely than not that it could have been sent to Waterloo, Ontario in two to three days or less.
[87] Although the court takes a dim view under the circumstances of this case, that the Arvai Defendants were not served with any Notices of Motion seeking default judgment against Karyouti, given the possible extreme prejudice which could result, that fact does not significantly enter into this decision.
[88] From a point by point analysis:
(a) the delay is very lengthy (over 5 years),
(b) there has not been an adequate explanation for the delay,
(c) this is simply not inadvertence in missing a deadline,
(d) although there is prejudice to the Plaintiff, its stake in this matter is $21,000 plus the use it could have put the money to,
(e) the prejudice to all the Defendants is breathtaking given that the mathematical claim for the initial $21,000 loan, approximately 12 years ago, is now approximately $363,616.87.
(f) while Karyouti may have contributed to the delay initially, by being difficult to serve personally, that delay was effectively over by the end of October 2014, and
(g) the Arvai defendants did not contribute to the delay in any way.
[89] I find that the cases referred to by the Defendants with respect to dismissal at a status hearing are analogous to the issues before me.
[90] The facts of this case, from the perspective of the Plaintiff, are not such that the court should use its discretion to set aside the registrar’s dismissal order.
[91] The Defendants have now had this claim hanging over their head for in excess of five years. The Plaintiff appears to have simply taken an extremely cavalier attitude towards the previously mentioned Rules of Civil Procedure.
[92] Such conduct should and must be discouraged for the reasons previously set out in the cases referred to. The excessive delays which exist in this case must become a thing of the past.
[93] Therefore, I dismiss the Plaintiff’s motion with costs.
[94] If the parties are unable to agree on costs, Mr. Arvai shall forward his brief submissions on costs to me by February 11, 2021. Ms. Bonnell shall forward her brief response to me by February 17, 2021. Mr. Avari shall then forward his reply, if any, to me by February 20, 2021. Cost submissions may be sent to my attention by email, care of Kitchener.SCJJA@ontario.ca. Cost submissions, excluding bills of costs shall be limited to 5 pages using spacing of 1.5 and 12 pitch font.
Justice James W. Sloan
Released: February 3, 2021
COURT FILE NO.: 14-4139-SR
DATE: 2021/02/03
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Lexfund Inc.
Plaintiff
- and –
Lena Karyouti aka Lena Emily Kuaryouti, Chris Nicolis aka Christian Nicolis and Arvai Personal Injuries Lawyers aka Karl Arvai Professional Corporation
REASONS FOR DECISON
J.W. Sloan J.
Released: February 3, 2021