Court File and Parties

COURT FILE NO.: CV-18-00598032-00CP DATE: 20231101 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: WILLIAM TATARYN and DAYA NAND RAJAN, Plaintiffs – AND – DIAMOND & DIAMOND LAWYERS LLP, Defendant

BEFORE: Justice E.M. Morgan

COUNSEL: Peter Waldman and Matthew Armstrong, for the Plaintiffs Milton Davis, Ronald Davis, and Teodora Obradovic, for the Defendant

HEARD: October 31, 2023

Motion to Dismiss for Delay

[1] The Defendant submits that the Plaintiffs have delayed this proceeding beyond the time permitted by section 29.1 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”).

[2] The case has travelled a long and winding road, but every turn has led back to the pleadings door. The following is a chronology to date:

• May 17, 2018: this class proceeding is begun by Notice of Application. Until June 7, 2023, William Tataryn is the only representative plaintiff.
• March 20, 2019: Tataryn amends his Notice of Application.
• June 6, 2019: Tataryn amends his Notice of Application a second time.
• May 8, 2020: At a Case Conference, the Court orders, on consent, that the Application be converted to an Action, and that Tataryn, now the Plaintiff, deliver a Statement of Claim.
• June 22, 2020: Plaintiff delivers a Statement of Claim mirroring the Notice of Application, but adding new claims.
• July 10, 2020: At a Case Conference, the parties agree on a timetable for the then Defendants’ motion to strike the Statement of Claim to be heard on October 23, 2020. Plaintiff's counsel undertakes to confirm the agreed dates for the motion.
• July 31, 2020: the then Defendants deliver their materials for the motion to strike the Statement of Claim.
• August 4, 2020: Defendant’s counsel writes Plaintiff’s counsel asking him to comply with his undertaking to confirm dates. Plaintiff’s counsel does so two days later.
• September 1, 2020: Plaintiff’s counsel delivers responding materials (four days late).
• October 10, 2020: The motion to strike the Statement of Claim scheduled for October 23, 2020 is postponed on all parties' consent. The Court proposes to use the now former motion date, October 23, 2020, for a case conference.
• October 23, 2020: The third Case Conference is held, scheduling the motion for April 1, 2021.
• December 10, 2020: The fourth Case Conference is held at the Defendants’ request, after Plaintiff’s counsel refuses to deliver motion materials until March 2021. The Court orders them delivered by February 15, 2021.
• April 1, 2021: The motion to strike is argued.
• April 13, 2021: The Court orders that the Statement of Claim be struck, with leave to amend on terms set out in the Court’s endorsement, and that the action be stayed against eleven of twelve named defendants, except Diamond & Diamond LLP.
• May 13, 2021: Plaintiff delivers a Fresh as Amended Statement of Claim.
• May 17, 2021: The Court awards the defendants $200,000 for costs of the motion.
• May 25, 2021: Plaintiff’s counsel advises that he is withdrawing the Fresh as Amended Statement of Claim after Defendant’s counsel complains of deficiencies.
• June 7, 2021: Plaintiff delivers a new Fresh as Amended Statement of Claim.
• July 21, 2021: After objections to the latest Fresh as Amended Statement of Claim, Plaintiff’s counsel agrees to deliver a revised pleading.
• October 4, 2021: Plaintiff’s counsel delivers a draft Fresh as Amended Statement of Claim.
• December 15, 2021: Plaintiff’s counsel issues the new Fresh as Amended Statement of Claim. This is the fourth Statement of Claim and the seventh originating process (including the three Notices of Application).
• January 4-5, 2022: Defendant’s counsel expresses further objections to the new pleading. Both parties request another Case Conference. The Court schedules one for February 15, 2022, soon after rescheduled to April 4, 2022.
• April 1, 2022: Plaintiff’s counsel delivers an Amended Fresh as Amended Statement of Claim (the fifth Statement of Claim, and eighth originating process).
• April 4, 2022: The fifth Case Conference is held. The Defendant proposes a motion ordering the Plaintiff to comply with the April 13, 2021 order. Plaintiff asks to bring a certification motion at the same time as the compliance motion. The Court orders that the Defendant’s compliance motion be heard on June 29, 2022, and the certification motion on February 13–15, 2023.
• April 29, 2022: Plaintiff’s counsel delivers to Defendant’s counsel a draft proposed Amended Amended Fresh as Amended Statement of Claim (the sixth Statement of Claim, and ninth originating process).
• May 20, 2022: The Court confirms that it will hear Plaintiff’s cross-motion to deliver the Amended Amended Fresh as Amended Statement of Claim and to add Daya Nand Rajan as co-plaintiff.
• June 15, 2022: Plaintiff’s counsel delivers a Revised Amended Amended Fresh as Amended Statement of Claim (the seventh Statement of Claim, and tenth originating process) that differs from the proposed pleading filed on their pending cross-motion two weeks away.
• June 29, 2022: The Court hears the motion and cross-motion, and reserves judgment.
• January 10, 2023: Plaintiff’s counsel emails the Court office asking about the status of the decision on the June 29 motion and cross-motion.
• January 11, 2023: The Court renders its decision allowing the defence motion in part and dismisses Plaintiff’s motion.
• January 20, 2023: Defence counsel puts Plaintiffs’ counsel on notice of the Plaintiffs’ failure to comply with section 29.1 of the Class Proceedings Act.
• January 26, 2023: Plaintiffs’ counsel files a motion in the Divisional Court for leave to appeal the decision on the defence motion.
• February 13, 2023: At a sixth Case Conference, Plaintiffs’ counsel asks for a certification motion timetable to avoid falling foul of s. 29.1. The Court defers the matter until after the Divisional Court proceeding is completed.
• May 1, 2023: The Divisional Court dismisses the Plaintiffs’ motion for leave to appeal.
• June 8, 2023: Plaintiffs’ counsel delivers a Fresh as Amended Statement of Claim (the eighth Statement of Claim, and eleventh originating process), along with a Notice of Motion and Motion Record for Certification. The Court also schedules a further case conference at Defendant’s request.
• September 12, 2023: The Court issues an endorsement setting the certification hearing date for May 6-8, 2024.

[3] Defendant’s counsel observes that the chronology provides a catalogue of the Plaintiffs’ repeated efforts to join parties as defendants who the Court determines are improper parties and to plead causes of action that the Court determines are not viable under the circumstances. The result of these efforts has been eleven originating pleadings, a transition from an application to an action, and two orders striking the pleadings in whole or part.

[4] To satisfy the requirements of section 29.1(1) of the CPA, the Plaintiffs must, within one year of commencing the action (or, in this case, within one year of the coming into force of section 29.1 – i.e. by October 1, 2021),

(a) file a final and complete motion record in the motion for certification; (b) agree in writing to a timetable for service of the Plaintiffs’ certification motion record or for completion of one or more other steps required to advance the proceeding, and have filed the timetable with the court; (c) ensure that the Court had established a timetable for service of the Plaintiffs’ certification motion record or for completion of one or more other steps required to advance the proceeding.

[5] The Plaintiffs in May 2023 – i.e. well after the October 1, 2021 deadline – delivered a motion record for certification. Last month I issued an endorsement scheduling the certification to be heard in May 2024.

[6] None of the delay to date can be said to be the fault of the Defendant. While Plaintiffs’ counsel argues that it is the series of motions brought by the Defendant that has consumed so much time, I cannot fault the Defendant for having brought a series of motions alleging, correctly, that the Plaintiff’s pleading was defective.

[7] I pause here to note Plaintiffs’ counsel’s argument it was really the Plaintiffs, and not the Defendant, that was successful on the pleadings motions, and so it was the Plaintiffs that improved the claim and moved it forward. They argue that the Defendant sought in those motions to dismiss the action, but I ended up siding with the Plaintiffs in granting leave to amend the pleading instead of outright dismissing it.

[8] With respect, that is hardly a badge of initiative or success. I held that in those motions that the Statement of Claim was so faulty in putting forward untenable causes of action and in suing improper defendants that it could not proceed without substantial revisions. While I agree with Plaintiffs’ counsel that the Plaintiffs had to, and did, respond to those motions, I do not agree that the response was a proactive step by the Plaintiff to “improve” their claim. Responding to the Defendant’s challenges to their faulty pleading, or timetabling those pleadings motions in the lead-up to the hearings, were not the kind of steps referred to in section 29.1.

[9] The Defendant was right in bringing the pleadings motions since the Plaintiffs had not pleaded properly; the fact that I allowed the Plaintiff to resurrect the claim to make it at least legally coherent enough for the Defendant to be able to properly defend itself is not exactly a step forward taken by the Plaintiffs. I’ll admit that I admire the clever way that Plaintiffs’ counsel now tries to spin the series of motions, but the rulings on the Defendant’s pleadings motions do not lend themselves to being recharacterized as an affirmative step or initiative taken by the Plaintiffs.

[10] As Defendant’s counsel said in argument, issuing pleadings, or correcting them so that they contain a recognizable cause of action against a proper Defendant, is a step in commencing an action. But section 29.1 assumes that the action has already been commenced. It then requires a step on the way to certification, not just a foundational step such as the Plaintiff issuing its pleading and struggling to salvage it.

[11] Even deducting a number of months for the Court’s scheduling needs and the time it takes to issue reserve judgments for the series of pleadings motions, the passage of time is rather extreme. The case commenced in May 2018 and the motion record for certification was served in May 2023. That means that the first section 29.1 step was taken by the Plaintiffs 5 years since commencement of the case, 3 years since the enactment of section 29.1, and 2 years since the deadline has come and gone under that section for making some progress toward certification.

[12] In Lubus v. Wayland Group Corp., 2022 ONSC 4999, leave granted Jan. 20, 2023 (Div Ct), I indicated, at para. 25, that the issuance of an amended pleading does not represent a step toward certification as outlined in section 29.1. By the same logic, a motion to strike a pleading does not represent such a step either. And by further application of that logic, a change in the form of pleading from a Notice of Application to a Statement of Claim such as occurred here on May 8, 2020, is also not a step toward certification. The steps outlined in s.29.1 all assume that the Plaintiffs’ pleading is finalized; there can be no certification motion contemplated before there is a Statement of Claim.

[13] Plaintiffs’ counsel points out that in Lubus I expressed a willingness to apply section 29.1 flexibly due to the particular circumstances of that case. It was my expressed view, at para. 42, that the section is to be interpreted strictly as that was its purpose, but that it did not impose an absolute “zero tolerance” regime. The plaintiff in Lubus had made considerable efforts to move the matter ahead but was prevented from doing so by the steps taken by the defendants in that case and by the court’s own schedule.

[14] Otherwise, numerous cases from this court have stated that the deadline contained within section 29.1 is to be enforced regardless of the circumstances. These cases include Justice Belobaba’s statement in Bourque v. Insight Productions, 2022 ONSC 174, at para. 19, that the section should be “interpreted and applied as written”. Some of the cases have gone so far to state that if none of the requirements in s. 29.1 were satisfied, “the court retains no residual discretion to order anything but dismissal: St. Louis v. Canadian National Railway Company, 2022 ONSC 2556, at para. 17: see also LeBlanc v. Attorney General of Canada, 2022 ONSC 3257, at para. 15.

[15] Whether or not there is any room for interpretation of what constitutes the steps toward certification enumerated in s. 29.1 (a) through (d), the language of the section is mandatory. The action is to be dismissed if it is clear that none of the identified steps were taken in time: D’Haene v BMW Canada Inc, 2022 ONSC 5973, at para 70. There is nothing in the section that is ambiguous in that respect: Adkin v Janssen-Ortho Inc, 2022 ONSC 6670, at para. 5.

[16] I see nothing in the present record that would compel me to deviate here from the literal language of s. 29.1. In fact, in waiting a substantial amount of time before bringing the present motion, the Defendant itself has applied the deadline flexibly. The Plaintiffs have had more than ample time to get its house in order. Instead, they persisted in revising the claim in ways that have subjected it to successful challenges.

[17] Plaintiffs’ counsel argues that the Defendant has, in effect, waived its rights under s. 29.1 requirement. Defendant’s counsel responds by pointing out that there is nothing in section 29.1 that suggests that one can waive compliance with it.

[18] Waiver of a statutory right is recognized at law; in fact, waiver can sometimes even be implied through the waiving party’s conduct: Canada (Human Rights Commission) v. Taylor, [1990] 3 SCR 892, 972. It is noteworthy, however, that this is only possible if the waiver or the implicitly waiving conduct is done by the party for whom the right was designed to protect: R. v. Turpin, [1989] 1 SCR 1296, at 1315-1316. Section 29.1 is designed for the benefit of defendants insofar as it requires a plaintiff to take affirmative steps, so it is the Defendant that must express its desire to waive the deadline.

[19] The strictness of the section 29.1 policy of dismissal suggests that it cannot be waived by accident, as it were. Plaintiffs’ counsel here seems to be arguing that, unbeknownst to Defendant’s counsel, the series of motions, including the motion to convert the application to an action to which the Plaintiffs ultimately consented, had the effect of waiving the Defendant’s right to seek dismissal for delay. I see no principled basis for interpreting waiver in that way. Section 29.1 places an onus on plaintiffs and thereby confers rights on defendants, and those rights are not notionally waived by the rights-holding party bringing a number of successful motions – i.e. motions that were also an exercise of its rights.

[20] Furthermore, the Supreme Court of Canada has said expressly that, “Waiver may not be permitted of statutory provisions in which there is a substantial public interest”: Ibid., at 1316. I have little hesitation in saying that section 29.1 falls into that category.

[21] Defendant’s counsel has drawn to my attention the words with which the Attorney General of Ontario introduced the section in bill form in the legislature. The Attorney General specifically stated that, “It is unnecessarily expensive and time consuming for parties to defend class actions …if they can't be resolved in a reasonable amount of time. The cost of these lengthy lawsuits takes a toll on our economy”: Legislative Assembly of Ontario, Hansard. 42nd Leg. 1st Sess. (24 June 2020) (per Hon. Doug Downey). The introduction of the Bill, in other words, came with an explicit acknowledgment of the public interest in section 29.1; the benefit of the section is conferred on defendants, but it is also conferred on the public at large.

[22] Plaintiffs’ counsel further submit that if the deadline is determined to have passed, the Plaintiffs should get what Justice Perell has called a ‘Phoenix” order: D’Haene, at para. 78. That is where the action is dismissed but leave is granted to start a new action. They submit that at this still early stage of the action, a “Phoenix” ruling is appropriate.

[23] Defendant’s counsel responds by pointing out that in the context of section 29.1, that kind of order would be directly contrary to the policy goal of the section. I agree. In my view, section 29.1 would not address the problem it set out to address if a plaintiff can bring an action, delay it until it gets dismissed under s. 29.1, and then just start a new action as if nothing had happened.

[24] The Court of Appeal has indicated that under the Rules of Civil Procedure, there are some circumstances where resurrecting the identical case after a dismissal for delay could even be an abuse of process: Mintz v. Wallwin, 2009 ONCA 199. Whether that would apply under section 29.1 of the CPA is not at issue here; the Defendant is not seeking a ruling on abuse of process. But I do take the Court of Appeal’s general point that there is “no right to a plaintiff to commence a second action identical to one that has been dismissed for delay”: Ibid., at para. 2.

[25] Having said all of that, it is to be kept in mind that the present case is, of course, a proposed class action. Since we have not reached the certification stage here, any ruling in this case formally binds only the named Plaintiffs. I make no comment as to whether some other putative class member will be in a position to start a similar case in the future. At the moment, that is a hypothetical question that can be addressed by a court if and when it actually arises with a new plaintiff taking up the present Plaintiffs’ mantel.

Disposition

[26] Section 29.1(1) of the CPA requires that the action be, and is hereby, dismissed.

[27] The parties may make written submissions on costs. I would ask Defendant’s counsel to send by email their brief submissions to my assistant within two weeks of today’s date, and for Plaintiffs’ counsel to send to my assistant by email their equally brief submissions within two weeks thereafter.

Date: November 1, 2023 Morgan J.