Court File and Parties

COURT FILE NO.: CV-12-461542-00A1 DATE: 20240603 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Inderpreet Singh Chhabra, Plaintiff AND: Edwin Bunsee and The Personal Insurance Company, Defendants AND: Corazon Bunsee, Third Party

BEFORE: J.T. Akbarali J.

COUNSEL: Cary Schneider, for the plaintiff Andrew Franklin, for the defendant The Personal Insurance Company

HEARD: May 31, 2024

Endorsement

Overview

[1] On May 29, 2017, Perell J. made an order dismissing this action for delay. On this motion, the plaintiff seeks to set aside the dismissal order under r. 37.14(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the basis that he failed to appear on the motion to dismiss through accident, mistake, or insufficient notice.

Brief Background

[2] The plaintiff was involved in a motor vehicle accident on August 27, 2010, when his vehicle was sideswiped by a vehicle driven by the defendant Edwin Bunsee. Mr. Bunsee’s insurance coverage was denied because he was driving the vehicle without consent, had a suspended driver’s license, was intoxicated, and was an excluded driver.

[3] The plaintiff commenced a claim against Mr. Bunsee and the defendant The Personal Insurance Company (“Personal”). The claim against Personal is based on the uninsured provisions of the Insurance Act. Personal commenced a third party claim against the owner of the vehicle Mr. Bunsee was driving, Corazon Bunsee, who defended on the basis that she had not given her consent to Mr. Bunsee to be in possession of the car. Mr. Bunsee has been noted in default.

[4] At the outset, the plaintiff retained Sergio Grillone to represent him. The action proceeded to discoveries in May 2014, which were not completed. The plaintiff’s examination for discovery was recommenced on August 11, 2015. The plaintiff discontinued the discovery over the objection of the defendant, but it is not clear from the record whether the plaintiff had reason to do so, as I have only been given the last page of the transcript. In any event, the defendant advised, on the record, that it would move to compel answers to questions.

[5] The evidence suggests the defendant wrote plaintiff’s counsel numerous times seeking answers to undertakings and refusals but did not receive much in the way of a substantive response.

[6] There were apparently some efforts between counsel to resolve the file between January and August 2016. Vic Purewal, a lawyer at Mr. Grillone’s firm who had day to day carriage of the action, advised the defendant that he was unable to get instructions from the plaintiff and that the firm would take steps to remove itself from the record.

[7] There is no evidence that the plaintiff was actually not responsive to Mr. Purewal, only that Mr. Purewal indicated that he was not responsive to the defendant. The plaintiff’s evidence is that he was never told by anyone from his counsel’s office that they were considering a motion to get off the record.

[8] On May 29, 2017, the defendant moved to dismiss the plaintiff’s action for delay and sought its costs in the amount of $18,305.47. Mr. Grillone advised the defendant that he took no position on the motion, and neither Mr. Grillone nor anyone from his firm attended the motion. The plaintiff was unaware that a motion was being brought.

[9] Justice Perell granted the motion, which was unopposed, and dismissed the plaintiff’s action with costs in the amount of $18,305.47.

[10] The very next day, the defendant settled the third party claim for a dismissal without costs. The order dismissing the third party claim was dated June 6, 2017.

[11] Over a year later, the plaintiff received a letter from the defendant directly, demanding payment of the costs order. This was the first he learned of the dismissal order. He contacted Mr. Grillone, who told him that he (Mr. Grillone) was actively working on the plaintiff’s case and would take care of the issue.

[12] About two months later, the plaintiff emailed the defendant directly, with a copy to Mr. Grillone and Mr. Purewal. He wrote that he was surprised by the defendant’s letter because he had received no communication informing him of the May 29, 2017 motion date. He said, “[w]hen I contacted my lawyer, he too advised me that he was not aware of the court date or any judgement against me”. While the plaintiff may have been accurately relaying what he had been told by Mr. Grillone, it was not true that Mr. Grillone was unaware of the court date. The plaintiff asked the defendant to communicate directly with Mr. Grillone and copy the plaintiff on the correspondence, and sought that the case be reopened.

[13] It appears the next step occurred on March 12, 2019, when the plaintiff received a Notice of Examination in Aid of Execution from the defendant. He again contacted Mr. Grillone, who told him that he (Mr. Grillone) would take care of it.

[14] On Friday September 6, 2019, the plaintiff received an email from the defendant indicating that Mr. Grillone was no longer the plaintiff’s lawyer. The plaintiff was shocked. The following Monday he contacted the Law Society of Ontario and was informed that Mr. Grillone was no longer practicing law in Ontario. On September 24, 2019, the plaintiff received a letter from the Law Society advising that Mr. Grillone was subject to an undertaking not to practice law, and that the plaintiff might wish to consult another lawyer about possible remedies available to him.

[15] I am advised that the plaintiff’s story at the hands of Mr. Grillone is not unique, that many of Mr. Grillone’s clients have had their actions dismissed for delay, that Mr. Grillone’s insurance coverage appears to be exhausted, and that Mr. Grillone appears to be in bankruptcy proceedings.

[16] The plaintiff began acting for himself. He prepared a notice of motion dated September 23, 2019 to set aside the judgment of Perell J., returnable on November 13, 2019. On consent, the matter was adjourned to February 5, 2020 to allow the plaintiff time to retain counsel.

[17] The plaintiff was unable to find counsel who were available on February 5, 2020, so another consent adjournment was granted to May 29, 2020. However, by that time, the covid pandemic had arrived, and the plaintiff’s motion was adjourned sine die as the court did not then have available dates to adjourn to.

[18] On November 30, 2020, notwithstanding that the motion to set aside the judgment was pending, the defendant obtained a writ of seizure and sale against the plaintiff for $18,305.47. The defendant wrote to the plaintiff on December 4, 2020 telling him to contact them before January 15, 2021 to arrange payment. The plaintiff wrote to the court seeking a new date for his motion, but received no response.

[19] In January 2021, the plaintiff received a referral to Michael Housley from the Law Society Referral Service. He paid Mr. Housley a $2,000 retainer. On January 15, 2021, Mr. Housley wrote to the defendant to advise he would be bringing a motion to set aside the default judgment, and that they should refrain from taking any collection proceedings against the plaintiff.

[20] The plaintiff met Mr. Housley one to two months later, in March 2021, and followed up with him by email four times thereafter up to July 8, 2021. On July 13, 2021, the two spoke and Mr. Housley advised he would be preparing an affidavit for the plaintiff’s review. The plaintiff continued to follow up with Mr. Housley, with three emails over four months. On September 24, 2021, Mr. Housley emailed to advise he was busy with other things but had been communicating with the defendant about the motion.

[21] On October 5, 2021, the plaintiff attended Mr. Housley’s office to sign the affidavit, but it needed revisions, so could not be signed that day. The plaintiff followed up with Mr. Housley on November 12, 2021 and January 22, 2022 about the status of the affidavit. The plaintiff deposes that he was growing frustrated about the lack of communication he was receiving from Mr. Housley.

[22] On January 24, 2022, Mr. Housley told the plaintiff that he had suffered a heart attack and been off work for three months, but that he would ask a friend to take over the case. However, no one took over the case.

[23] The plaintiff continued to follow up with Mr. Housley with emails on February 4, 2022, May 3, 2022 and June 9, 2022. He had a meeting with Mr. Housley in March 2022 and spoke to him on the phone in September 2022, at which time he was told that Mr. Housley would have an update for him in a couple of weeks. On September 26, 2022 the plaintiff attended Mr. Housley’s office, but he was not there. He wrote an email to Mr. Housley requesting an update. On September 27, 2022, Mr. Housley wrote him an email setting out the “barebones of the affidavit” that would be needed.

[24] By this time, about a year and nine months had passed since Mr. Housley’s retainer, and the motion materials had not yet been prepared, nor the date scheduled.

[25] On October 7, 2022, the plaintiff met with his current counsel, Cary Schneider, whose conduct is not at issue in this motion. Mr. Schneider moved as quickly as possible to gather relevant documentation and bring the motion to set aside the default judgment. Much of the delay between Mr. Schneider’s retainer and the hearing of this motion is due to the court’s unavailability due to a serious and significant lack of resources on the civil team in Toronto.

Issue

[26] The question to be resolved on this motion is whether the dismissal order ought to be set aside.

Analysis

[27] The parties are in substantial agreement as to the legal principles to be applied to a motion such as this.

[28] Rule 37.14(1) provides that a person who failed to appear on a motion through accident, mistake or insufficient notice may move to set aside or vary the order, “by a notice of motion that is served forthwith after the order comes to the person’s attention and names the first available hearing date…” Rule 37.14(2) provides that, on such a motion, the court may set aside or vary the order on such terms as are just.

[29] Where the order in question is a dismissal order, a motion to set it aside brings two important principles into conflict: first, that civil actions should be decided on their merits, and second, that civil actions should be resolved in a timely and efficient manner in order to maintain public confidence in the administration of justice: Zhang v. Kusnir, 2023 ONSC 6907, at para. 37.

[30] The court’s bias is in favour of deciding matters on their merits rather than terminating rights on procedural grounds, and is all the more pronounced where delay results from an error committed by counsel: Zhang, at para. 37.

[31] The relevant considerations that guide the exercise of the court’s discretion when considering a motion under r. 37.14(1) were set out by Strathy J. (as he then was) in Ontario (Attorney General) v. 15 Johnswood Crescent, at para. 34:

a. The moving party must establish a failure to appear on the original motion through accident, mistake, or insufficient notice. b. The party must move forthwith after the order comes to his or her attention. There is some flexibility in the interpretation of “forthwith” depending on the circumstances. c. The length of the delay, and the reasons for it. The longer an order has been in effect, particularly where parties have acquired rights or changed their positions as a result of the order, the less likely it will be that the court will set it aside. d. The presence or absence of prejudice. This factor may require an examination of the relative prejudice to the parties. e. The underlying merits of the moving party’s case. Lengthy delay in bringing the motion may be more readily forgiven if the moving party has a strong case on the merits.

Proof of Accident or Mistake

[32] In this case, the defendant accepts that the plaintiff did not attend the motion through mistake of his counsel.

The party must move forthwith.

[33] The defendant disputes that the plaintiff moved forthwith after learning of the order.

[34] As Strathy J. held in Johnswood, at para. 41, the requirement that a party move forthwith reflects the finality of court orders, which is a policy that goes to the integrity of the justice system. Confidence in the system is eroded if orders can be challenged long after they have been made. Moreover, failure to challenge an order forthwith suggests the party is prepared to let it stand, and has accepted its legitimacy.

[35] When considering the “forthwith” requirement, the court must consider the purpose of the rule, that is, to prevent unfairness or a miscarriage of justice, the purpose of the requirement for prompt action, the length of the delay, the reasons and circumstances of the delay, and all the surrounding circumstances of the case.

[36] In this case, the plaintiff did not move forthwith to set aside the order, so it is necessary to consider the length of the delay and the reasons for it.

The Length of Delay and the Reasons for it

[37] On August 10, 2018, over a year after the order was granted, the defendant wrote to the plaintiff directly advising that the motion to dismiss the action took place on May 29, 2017, an order dismissing the action was granted, and the plaintiff had been ordered to pay the defendant’s costs of $18,305.47.

[38] The length of delay in this case is difficult to calculate because some of it was completely out of the plaintiff’s control, and the plaintiff himself had brought a motion to set aside the order that did not proceed. The adjournment of his original motion due to the pandemic, and the delay in waiting for the hearing date for the motion that came before me is entirely related to the operational challenges faced by the court, and has nothing to do with the plaintiff’s actions.

[39] The evidence indicates that, on learning of the order in August 2018, the plaintiff immediately contacted Mr. Grillone. The defendant argues that, having learned there was a problem, the plaintiff unreasonably turned to the source of the problem, when it should have been obvious he could not rely on Mr. Grillone. While, in hindsight, it is clear that Mr. Grillone was the source of the problem, at the time the plaintiff received the letter, he was advised by Mr. Grillone that Mr. Grillone had no notice of the motion date, and that Mr. Grillone would take care of the problem. At that stage, the plaintiff had no reason to disbelieve him.

[40] When he wrote to the defendant directly in October 2018, advising that he sought to reopen his case, and asking the defendant to copy him on correspondence it had with Mr. Grillone, he would have expected that both Mr. Grillone and the defendant would keep him up to date with next steps. However, the next time he heard from the defendants was in March 2019 when he received the Notice of Examination in Aid of Execution.

[41] At that time, the plaintiff again turned to Mr. Grillone, who again reassured the plaintiff that he (Mr. Grillone) was taking care of it.

[42] It was not until September 2019 that the plaintiff learned that Mr. Grillone had been suspended, and came to understand that Mr. Grillone had not, in fact, been protecting his interests.

[43] One can fault the plaintiff for not being more proactive in the time period between March and September 2019. Having received the Notice of Examination, arguably the plaintiff should have been alerted that he needed to pay more attention to ensure Mr. Grillone was doing what he said he was doing.

[44] As soon as the plaintiff learned that Mr. Grillone was no longer acting for him, he acted forthwith to bring his own motion. While that motion was adjourned on consent so the plaintiff could retain counsel, the defendant obtained the writ of seizure and sale. Shortly thereafter, the plaintiff retained Mr. Housley.

[45] Mr. Housley did not move expeditiously to bring (or reschedule) the motion to set aside Perell J.’s order. His reported health issues may explain some, but not all, of that delay.

[46] During the time that Mr. Housley was acting for him, the plaintiff followed up with Mr. Housley at regular intervals, but could have been more aggressive in doing so.

[47] On the record before me, a delay of one year and nine months is largely attributable to Mr. Housley not meeting his obligations to the plaintiff, for which the plaintiff bears some responsibility due to his failure to follow up with Mr. Housley more actively.

[48] The blameworthy delay in question is the product of the plaintiff’s lawyers failing to act with the urgency required, and failing to protect the plaintiff’s interests as they were duty-bound to do. The plaintiff bears some responsibility for the delay because he did not actively ensure that his interests were being protected, but the lion’s share of the blame lies with his two prior law firms.

Prejudice

[49] The plaintiff argues that there is no prejudice in this case. Liability is not in question, as the driver of the car that hit him has been noted in default. The defendant is an insurer, and does not have witnesses whose memories of key events will have faded. The case will largely be about damages, and if there are deficits in the evidence due to the passage of time, those will harm the plaintiff, who bears the obligation of proving his damages.

[50] The defendant argues that the delay is so long, a presumption of prejudice arises. It also argues that it has suffered actual prejudice in that:

a. It settled the third party claim for a dismissal without costs and would have to attempt to revive it were the plaintiff’s action to be restored. b. It will incur financial prejudice if the action is restored. c. It has lost significant parts of its file, including documentary productions, and it is unclear whether old medical records can be recreated.

[51] With respect to the settlement of the third party claim, the defendant notes that it has lost its ability to pursue the owner of the vehicle for contribution and indemnity. However, it acknowledges that the prejudice may be able to be remedied through a motion to revive the third party claim.

[52] The defendant alleges financial prejudice if it has to move to resurrect the third party claim. It also alleges financial prejudice due to the expenses of continuing the examination for discoveries and reviewing and assessing the plaintiff’s financial and medical documents spanning the last fourteen years.

[53] To the extent the defendant relies on financial prejudice from continuing to defend the action, those are the costs that would have been incurred to defend against the action on its merits. To the extent those costs are elevated, by having to review medical records over a longer period of time, or having to incur costs to revive the third party claim, those are compensable through an award of costs which can be considered at the appropriate time.

[54] The defendant argues that it is prejudiced because it has lost its files, and no longer has documentation, some of which may be lost (i.e., a decoded OHIP summary is only available going back seven years, so it will not be possible now to obtain one for the pre-accident period). It does not have the property damage file showing damage to the plaintiff’s car.

[55] The defendant criticizes the plaintiff for not having obtained medical records and put them in the motion record. It says we cannot know what records are recoverable.

[56] I have difficulty with this argument for the following reasons:

a. The defendant served its record on the plaintiff on May 24, 2024. Until that time, the plaintiff had no knowledge that the defendant had lost parts of its file. Had the plaintiff been aware earlier, he could have made attempts to determine what he could recreate through original sources (e.g., his family doctor’s records). The plaintiff was thus taken by surprise without sufficient time to assemble evidence to respond to this argument. b. Liability is not in question in this case. The bases on which Mr. Bunsee’s insurer denied coverage, and the fact that Mr. Bunsee has been noted in default means the only live issue is damages. c. It is the plaintiff who must prove his damages. If there is any prejudice from a lack of documentation, it is most likely to be the plaintiff who suffers it. d. The records of the plaintiff’s family doctor should be able to assist in closing most of the gaps of information, including identifying which treating specialists the plaintiff has seen. e. There may be other sources of information that the parties could seek to access, including the plaintiff’s accident benefit file, which was settled.

[57] There is a substantial time delay between the issuance of the order and this motion, however, as I have noted, some of it relates to delays caused by the court, and the first year and three months was caused by the defendant not taking steps to enforce the judgment earlier. In any event, given that liability is not an issue in this case, and my conclusions above, I find that any inference of prejudice has been rebutted. As the Court of Appeal held in Carioca’s Import & Export Inc. v. Canadian Pacific Railway Ltd., 2015 ONCA 592, at para. 49, “the mere passage of time cannot be an insurmountable hurdle in determining prejudice, otherwise timelines would become inflexible and explanations futile.” I also find that the plaintiff has proven that there is no actual, non-compensable prejudice to the defendant.

[58] On the other hand, the plaintiff is prejudiced if he is unable to assert his claim. The defendant’s argument that it has withdrawn the writ of seizure and sale, and thereby eliminated the prejudice to the plaintiff deals only with the costs award, and not the plaintiff’s losses.

[59] Moreover, while it is possible that the plaintiff has a claim against his prior counsel, the claim against Mr. Grillone appears to be futile if he is bankrupt and his insurance has been exhausted. Moreover, it is unclear how much of the plaintiff’s losses can be laid at Mr. Housley’s feet. In any event, as the Court of Appeal held in Finlay v. Van Passen, 2010 ONCA 204, at para. 32, “speculation about whether a party has a lawsuit against its own lawyer, or the potential success of that lawsuit, should not inform the court’s analysis of whether the registrar’s dismissal order ought to be set aside”. I see no reason why this guidance would not apply equally in a motion to set aside a dismissal order.

Merits

[60] The last question is whether the plaintiff has a meritorious case. The defendant argues that by failing to put forth his financial documents, such as his tax returns, or his medical records, the plaintiff has failed to discharge his burden to demonstrate that his case is meritorious.

[61] The evidence before me indicates that the liability case is meritorious. The defendant driver has been noted in default, and insurance coverage was refused for him in part because he was intoxicated and was driving with a suspended licence.

[62] The plaintiff gives evidence about his losses. He was working as an accountant at Bell, but deposes that he had to leave his job to take a job working at his father’s gas station because it allows him to stand and sit as he needs, to better manage his pain.

[63] The record indicates his accident benefit insurer settled with him, and the funds from that settlement have been spent on therapies.

[64] The plaintiff’s evidence is that he is under the care of a spinal pain specialist and gets regular injections to his back. He deposes that he continues to take pain medication and muscle relaxants, and gets ongoing physical therapy.

[65] While not the most complete damages record from a documentary perspective, the essentials are in the evidence to establish that the plaintiff has suffered some loss as a result of the accident. When coupled with the strong case on liability, I conclude that the plaintiff has a meritorious case.

Conclusion

[66] In Van Passen, at para. 33, the court noted that the law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of inadvertence of his or her solicitor. I have already noted that court favours resolution of claims on their merits.

[67] In this case, the plaintiff has been the victim of two separate lawyers, neither of whom protected his interests as they should have. Much of the delay in bringing this motion was not the fault of the plaintiff. The defendant, the plaintiff’s insurer, is not prejudiced by the continuation of this action. The plaintiff’s case on the merits is very strong, and there is enough evidence in the record to persuade me that the plaintiff has a meritorious case for at least some level of damages.

[68] In my view, although the delay is lengthy, this is an appropriate case in which to set the dismissal order aside.

[69] It is also an appropriate case in which a timetable ought to be ordered. The parties did not make submissions on what timetable would be appropriate in the circumstances. I direct the parties to schedule a case conference as soon as practicable under r. 50.13 for purposes of obtaining an order for an aggressive timetable to move this case towards a conclusion.

Costs

[70] The only remaining matter is costs. At my request, the parties uploaded their bills of costs to CaseLines before the hearing of the motion. They each agreed that once I wrote my reasons on the merits, I would proceed to determine costs in writing based upon the materials filed. That is the process I have followed.

[71] The three main purposes of modern costs rules are to indemnify successful litigants for the costs of litigation, to encourage settlement, and to discourage and sanction inappropriate behaviour by litigants: see Fong v. Chan (1999), 46 O.R. (3d) 330, at para. 22.

[72] Subject to the provisions of an act or the rules of this court, costs are in the discretion of the court, pursuant to s. 131 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The court exercises its discretion considering the factors enumerated in r. 57.01 of the Rules of Civil Procedure, including the principle of indemnity, the reasonable expectations of the unsuccessful party, and the complexity and importance of the issues. Overall, costs must be fair and reasonable: see Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (Ont. C.A.), at para. 38. A costs award should reflect what the court views as a fair and reasonable contribution by the unsuccessful party to the successful party rather than any exact measure of the actual costs to the successful litigant: see Zesta Engineering Ltd. v. Cloutier (2002), 21 C.C.E.L. (3d) 161 (Ont. C.A.), at para. 4.

[73] The plaintiff is the successful party on this motion and is presumptively entitled to his costs.

[74] The plaintiff’s bill of costs seeks partial indemnity costs of $10,998.50, all inclusive. The defendant’s bill of costs supports partial indemnity costs of $9,891.18 all inclusive.

[75] In my view, counsel’s hourly rate and time investment in this case are reasonable. Much was at stake, for both parties, as this motion determined whether the plaintiff’s action would be resurrected.

[76] The plaintiff’s costs are very similar to the defendant’s costs, and as such, within the reasonable expectations of the defendant.

[77] I thus find that the costs sought by the plaintiff are fair and reasonable. The defendant shall pay the plaintiff his costs of $10,998.50 all inclusive within thirty days.

Summary of Orders

[78] In conclusion, I make the following orders:

a. The plaintiff’s motion is granted. The order of Perell J. dated May 29, 2017 is set aside; b. The defendant shall pay the plaintiff’s costs fixed at $10,998.50 within thirty days; c. The parties shall schedule a case conference under r. 50.13 as soon as possible for purposes of obtaining an order for an aggressive timetable to move this case forward.

J.T. Akbarali J. Date: June 3, 2024