COURT FILE NO.: CV-14-518629
DATE: 2024 10 28
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: H. KEITH JURIANSZ, Estate Trustee with a Will of the Estate of EVGENIYA CHERNUKHINA, deceased, Plaintiff
- and -
SOFIA GUREVICH, SABRINA GUREVICH, BORIS GUREVICH, and ANATOLY GUREVICH, also known as ANDREW GUREVICH, also known as ANDY GUREVICH, Defendants
BEFORE: Associate Justice Todd Robinson
COUNSEL: A. Bouchelev, for the defendants (moving parties)
V. Luchko, for the plaintiff
HEARD: June 7, 2024 (by videoconference)
REASONS FOR DECISION (Motion to Dismiss for Delay)
[1] The defendants move for an order dismissing this action for delay and, in any event, discharging the certificates of pending litigation (CPLs) obtained by the now-deceased plaintiff, Evgeniya Chernukhina, near the outset of this litigation. Since this action was commenced in December 2014, it has only progressed to examinations for discovery. Examination of Ms. Chernukhina was started in 2017, but was stopped by plaintiff’s counsel and has still not been completed. The plaintiff passed away on March 7, 2023. This motion was ultimately brought in August 2023. Steps were thereafter taken to appoint an estate trustee for Ms. Chernukhina’s estate and an order to continue was obtained. The plaintiff estate opposes the motion and asks that this action be permitted to proceed.
[2] This action arises from a dispute over whether the defendants improperly converted the monetary and real estate assets of Evgeniya Chernukhina. At the time this action was commenced, she was a retired 79 year old individual. The statement of claim alleges that Ms. Chernukhina immigrated to Canada at the urging of Sofia Gurevich, who is alleged to have induced Ms. Chernukhina to transfer funds totalling $539,640 USD from her accounts in Moscow be held in trust. The defendants are collectively alleged to have misused those funds for their own purposes, including purchasing a property for Ms. Chernukhina in the names of Sofia and Sabrina Gurevich, in which Ms. Chernukhina resided alone, and then wrongfully evicting her from the property and keeping it for themselves. These allegations are denied by the defendants. The core disputes all involve verbal discussions and alleged agreements between Ms. Chernukhina and the defendants, as well as alleged verbal representations made to Ms. Chernukhina.
[3] The action is now approaching its tenth anniversary. There have been significant and extended periods of delay for which, in response to this motion, little or no explanation has been provided. During the period of inadequately explained delay, Ms. Chernukhina appears to have lost capacity and ultimately passed away. Although plaintiff’s counsel expressed an intention to preserve Ms. Chernukhina’s evidence, that was not done prior to her passing.
[4] In my view, the inordinate delay in this particular case has been inadequately explained and has given rise to a substantial risk that a fair trial is no longer possible. In any event, this action is now well beyond the five-year set down deadline in subrule 48.14(1) of the Rules of Civil Procedure, RRO 1990, Reg 194 (the “Rules”). The only reason it has not been dismissed for delay by the registrar is the prior suspension of automatic dismissals during the COVID-19 pandemic (which has now been lifted). The plaintiff estate has not convinced me that it would be unjust to dismiss the action and discharge the CPLs. I am accordingly granting the motion.
Analysis
Legal framework for dismissal for delay
[5] The defendants move to dismiss this action for delay under subrules 24.01(1)(c) and 24.01(2) of the Rules.
[6] Subrule 24.01(1)(c) permits a defendant who is not in default under the Rules or an order of the court to move to dismiss an action for delay where the plaintiff has failed to set the action down for trial within six months after the close of pleadings.
[7] Dismissing an action for delay is a discretionary order. A dismissal order under subrule 24.01(1) is warranted where (i) the default is intentional or contumelious; or (ii) the delay is inordinate, inexcusable, and prejudicial to the defendant, in that it gives rise to a substantial risk that a fair trial of the issues will not be possible: Ticchiarelli v. Ticchiarelli, 2017 ONCA 1 at paras. 12 and 14; Langenecker v. Sauvé, 2011 ONCA 803 at para. 5. The defendants seek relief under only the second branch of the test.
[8] The defendants also seek relief under subrule 24.01(2). It provides that the court shall dismiss an action for delay where either of the circumstances described in paragraphs 1 and 2 of subrule 48.14(1) applies to the action, unless the plaintiff demonstrates that dismissal of the action would be unjust. Since this action has not been set down for trial, paragraph 1 of subrule 48.14(1) applies. It requires that an action be set down for trial or terminated by any means by the fifth anniversary of its commencement. No case law has been cited by either side discussing the applicable test under subrule 24.01(2).
Are the moving defendants in default under the Rules or an order of the court?
[9] There is no dispute that the action was not set down for trial within six months of the close of pleadings. It has not been set down at all. Nevertheless, the plaintiff estate’s position is that the defendants are in default under both a court order and the Rules, and are thereby precluded from bringing this motion. Three defaults are alleged, namely (i) the defendants are in default of an order of now-retired Master Short made on April 20, 2016; (ii) the defendants have failed to produce sworn affidavits of documents; and (iii) the non-affiant defendants failed to produce themselves for examination in advance of this motion under subrule 39.03(1) of the Rules. I am not convinced that there has been any default by the defendants that would preclude them from bringing this motion.
[10] With respect to the alleged breach of the court order, on November 23, 2015, Master Short granted a preservation order and directed the defendants to produce flow charts with respect certain funds, with supporting documentation. When the parties appeared again before Master Short in April 2016, he directed the defendants to provide an updated flow chart and produce a further affidavit of documents disclosing various specific additional documents, including income tax returns, bank records, property purchase records, and documents related to an alleged Russian investor. The plaintiff estate argues that these documents were not produced.
[11] Other than a bald assertion of non-compliance made in the estate trustee’s supplementary affidavit, there is no evidence before me of any breach of Master Short’s order by the defendants. The estate trustee acknowledges that the defendants did serve a fresh affidavit of documents, but did not include a copy of it in any of his affidavits. During cross-examination of Sabrina Gurevich on her affidavits, both defendants’ counsel and Ms. Gurevich denied that the defendants are in breach of the order. That is consistent with Ms. Gurevich’s reply affidavit. Further questions posed to Ms. Gurevich about documents during her cross-examination were premised on the defendants not having produced the documents, but that was neither established nor agreed.
[12] At the return of this motion before me on April 22, 2024, I heard submissions on the plaintiff’s request for a further adjournment, which I granted. In my reasons for adjournment, I ordered that Ms. Gurevich re-attend cross-examination to answer certain refused questions, none of which related to the production ordered by Master Short. My view was then, as it is now, that refusals of the questions put to Ms. Gurevich on the documents in Master Short’s order were proper, since they lacked any established foundation. I thereby give no weight to those refusals in assessing whether the defendants were in default of Master Short’s order.
[13] The estate trustee has sworn the only responding affidavits on this motion. He states that he is the lawyer for the plaintiff and has personal knowledge of the matters in his affidavit. However, he was not the lawyer appearing before Master Short, he does not discuss his involvement in the motions, and there is no correspondence before me to or from him at the time (including not being copied on those emails that are in the record). His evidence appears to be based entirely on hearsay from other lawyers.
[14] Significantly, the list of alleged deficiencies in what was produced by the defendants was not given until the estate trustee’s supplementary affidavit, which was sworn and served after the deadlines ordered by Brown A.J. for affidavits and after the defendants had already cross-examined on the estate trustee’s responding affidavit. By the time of that cross-examination, the defendants had served all of their affidavits in compliance with Brown A.J.’s timetable for this motion. The estate trustee’s first affidavit (the only one that had been served by that time) does not identify any specific deficiencies in what the defendants had actually produced. Instead, it focuses on a dispute with defendants’ counsel over a newly produced document allegedly prepared by the wire transfer department of the Toronto-Dominion Bank. Ms. Gurevich’s reply affidavit was accordingly sworn at a time when no specific deficiencies in the defendants’ productions pursuant to Master Short’s order had been identified.
[15] The estate trustee’s supplementary affidavit on this motion was served the day before Sabrina Gurevich was cross-examined and well outside the timetable fixed by Brown A.J., which required the plaintiff estate to serve its responding affidavits by January 31, 2024. The defendants complied with the timetable to serve their materials and complete cross-examinations. The plaintiff estate did not. In my view, it was procedurally unfair to effectively sandbag the defendants with fresh evidence on particulars of alleged non-compliance with Master Short’s order outside the court-ordered timetable and immediately prior to a cross-examination.
[16] In any event, the estate trustee’s alleged deficiencies are uncorroborated and his personal knowledge has not, in my view, been established. The bald assertion that the defendants are in continuing breach of Master Short’s order has not been made out on the evidence or in argument before me.
[17] I am reinforced in that view by the lack of any contemporaneous correspondence identifying non-compliance with Master Short’s order. There is also no evidence explaining why nothing appears to have been done since April 2016 to raise the alleged breach with the defendants. The defendants served a fresh affidavit of documents as ordered. It is not unreasonable to expect that the unsatisfied plaintiff would raise her concerns about non-compliance and afford the defendants an opportunity to provide their position or, if they agreed that they had not fully complied with the order, to do so.
[18] With respect to the defendants’ affidavits of documents being unsworn, there is no admissible evidence before me on whether they were or were not sworn. The affidavits of documents are not in the record before me. The only evidence is found in a second supplementary affidavit of the estate trustee. It baldly asserts that no sworn copies of the defendants’ affidavits of documents were ever served. In my view, though, that affidavit is not properly considered in deciding this motion.
[19] In addition to being served outside the deadlines ordered by Brown A.J., the second supplementary affidavit was served after the plaintiff estate had already cross-examined Ms. Gurevich on her affidavit. It was accordingly prepared and served in breach of subrule 39.02(2) of the Rules. That subrule prohibits a party who has cross-examined on an affidavit to subsequently deliver an affidavit for use at the hearing without consent or leave of the court. Neither was obtained. The affidavit squarely addresses issues raised by the plaintiff estate during Ms. Gurevich’s cross-examination. Admitting it, particularly in support of barring the defendants’ motion, would be procedurally unfair.
[20] With respect to the alleged failure of the defendants to produce themselves for examination under subrule 39.03(1) of the Rules, I have already addressed it. In my reasons for adjournment, I denied leave to conduct examinations of the other defendants. I was satisfied that any right to examine them had not been exercised diligently as required by subrule 39.03(3).
[21] I do not find the defendants’ failure to produce the non-affiant defendants to be unreasonable or a default under the Rules. As discussed in my reasons for adjournment, when the examinations were requested, defendants’ counsel sought information on the purpose of the examinations to seek instructions. That was a reasonable request. No response was provided. Absent confirmation of the purpose for the examination, defendants’ counsel did not produce his clients. In my view, the plaintiff estate’s request for examination of the defendants for an undisclosed purpose in advance of this motion was unreasonable. The defendants were entitled to know the purpose of examination to assess relevance and proportionality in order to provide a position.
[22] The examinations were also not raised before Brown A.J. when the timetable for this motion was fixed. No cogent explanation was provided for waiting nearly three months to alert defendants’ counsel of the intention to cross-examine. Moreover, in my view, examining the non-affiant defendants would not have be proportionate in all the circumstances. The estate trustee was the plaintiff’s lawyer of record at all material times. I am unconvinced that examining the non-affiant defendants would be sufficiently probative of any issues on which the plaintiff estate was capable of tendering direct evidence.
[23] In all the circumstances, I do not fault the defendants for not voluntarily producing themselves for examination on undisclosed issues. There was no default under the Rules.
[24] I accordingly find that the plaintiff estate has failed to establish any breach of Master Short’s order or any default by the defendants under the Rules that would bar this motion from being brought and heard.
Has there be inordinate delay?
[25] Inordinance of delay is measured simply by reference to the length of time from the commencement of the proceeding to the motion to dismiss: Ticchiarelli, supra at para. 15; Langenecker, supra at para. 8. However, as acknowledged in Langenecker, most litigation does not move at a quick pace. Inordinance of delay must be assessed in the particular circumstances of each case.
[26] In my view, there has been inordinate delay. The action was nearly 9 years old when this motion was initially brought. Discoveries are still not yet complete. The action is still not ready to be set down for trial. This is not an action that has consistently moved forward since its commencement. Although there is no appreciable delay until Ms. Chernukhina’s capacity was called into question in March 2017, from that point there have been long periods of delay and inactivity with no material progress in advancing the litigation to trial. I have no hesitation finding that delay in this action has been inordinate.
Is the delay inexcusable?
[27] Determining whether a delay is inexcusable requires determining the reasons for the delay and whether those reasons afford an adequate explanation for the delay. In considering the reasons provided, explanations that are “reasonable and cogent” or “sensible and persuasive” will excuse the delay, at least to the extent that an order dismissing the action would be inappropriate: Ticchiarelli, supra at para. 16; Langenecker, supra at paras. 9-10.
[28] Although the moving defendants have the ultimate burden on this motion, the plaintiffs have an evidentiary burden to provide a reasonable explanation for the delay and rebut any presumption of prejudice arising from the delay. Although the defendants’ conduct may be relevant, the plaintiffs are ultimately responsible for moving the action forward: Farmer v. 145 King Street West, 2017 ONSC 6003 at para. 31.
[29] The defendants do not allege inexcusable delay before March 2017, when Ms. Chernukhina’s examination was terminated by plaintiff’s counsel on the basis of capacity concerns. In my view, though, the explanation for delay proffered by the plaintiff estate from March 2017 to this motion being brought in August 2023, and even since that time, is neither “reasonable and cogent” nor “sensible and persuasive”.
[30] The sole evidence tendered in response to this motion is from plaintiff’s counsel, who is now the estate trustee. Several other lawyers and clerks were involved along the way. Dr. Rachel Witten, the plaintiff’s niece, agreed to become litigation guardian in January 2020. She was presumably responsible for instructing plaintiff’s counsel on advancing the litigation from that time. None of the other lawyers, clerks, or Dr. Witten have provided any evidence on this motion to explain the delay.
[31] From the evidence before me, some limited steps occurred during 2017, including case conferences before Master McGraw (as then titled). Other than a production motion heard in July 2018, no other steps appear to have been taken in 2018.
[32] In July 2019, plaintiff’s counsel wrote to defendants’ counsel to propose that Ms. Chernukhina’s evidence be preserved by completing a rule 36 examination before trial in lieu of continued examination for discovery, subject to agreeing to reasonable accommodations to address Ms. Chernukhina’s medical circumstances and health. In response, defendants’ counsel asked for clarification on how undertakings would be addressed and whether there remained capacity concerns. Plaintiff’s counsel agreed to permit requests for undertakings and proposed a capacity assessment. Defendants’ counsel sought clarification on the capacity assessment and proposed that discoveries be completed first with a rule 36 examination proceeding immediately thereafter. He also proposed a motion for directions. There is no cogent evidence of any response to the questions and proposals from defendants’ counsel or addressing when steps were initially taken to advance a capacity assessment.
[33] In January 2020, an affidavit of Ms. Chernukhina’s niece, Dr. Rachel Witten, was prepared. It attached a capacity assessment conducted in December 2019, which found Ms. Chernukhina to be incapable of managing her property or instructing her lawyers. In her affidavit, Dr. Witten attests to a power of attorney for property and her willingness to act as litigation guardian.
[34] The absence of evidence from Dr. Witten on this motion is stark. Based on the record before me, she agreed to act as litigation guardian and continued in that capacity until her aunt’s passing in March 2023. During that period, very little occurred. Dr. Witten’s affidavit in support of being appointed litigation guardian was submitted to the court in January 2020 and a lawyer spoke to several potential witnesses in August 2021. There is otherwise no cogent evidence of any steps being taken to advance the litigation during the period leading to Ms. Chernukhina’s passing. There is also nothing before me supporting that Dr. Witten had any intention of advancing this action or what, if anything, she did during that period or understood that plaintiff’s counsel was doing.
[35] Silence from the plaintiff continued until August 2023, when defendants’ counsel provided notice of the defendants’ intention to bring this motion. In response, approximately one week later, a law clerk with plaintiff’s counsel sought to schedule mandatory mediation and indicated that the action would then be set down for trial. Plaintiff’s counsel then proceeded to try to have a mandatory mediator assigned.
[36] It was only after this motion was brought in late August 2023 that plaintiff’s counsel advised defendant’s counsel that “Ms. Chernukhina recently passed away.” The uncontested evidence before me is that plaintiff’s counsel was unaware of her death until August 15, 2023, when advised by Dr. Witten after contacting her for instructions on the file. However, there is no evidence on what communications, if any, occurred between Dr. Witten and plaintiff’s counsel prior to that point and why plaintiff’s counsel was unaware of his client’s passing for five months.
[37] From October 2023 to April 2024, shortly before the first return of this motion before me, steps were being taken. Proof of death was obtained and plaintiff’s counsel proceeded to file for a certificate of appointment of estate trustee with a will and obtain an order to continue. Those steps, however, appear to have been in direct response to this motion.
[38] I acknowledge that the COVID-19 pandemic suspension of court operations took place during the period of delay. I accept that period is excusable delay, since the suspension was beyond the control of all parties. However, civil court operations ceased for only a relatively short period (during which I note the court accepted the filing of Dr. Witten’s affidavit).
[39] The plaintiff estate focuses on Ms. Chernukhina’s health as the primary explanation for delay. I agree with the defendants that her illness is not, in and of itself, a sufficient explanation for taking essentially no substantive steps to advance the litigation to trial since March 2017. Despite capacity concerns at that time, no formal capacity assessment was conducted until December 2019, well over 2.5 years after Ms. Chernukhina’s examination was stopped.
[40] By April 2017, Ms. Chernukhina had been diagnosed with stage III lymphoma and was receiving chemotherapy. A doctor’s letter in April 2017 indicated that there were “fairly minor side effects” from the chemotherapy, which were described as “fatigue but little else”.
[41] In August 2017, five months after the plaintiff’s examination was stopped by her lawyer, Ms. Chernukhina’s family physician prepared a letter outlining Ms. Chernukhina’s medical conditions and his opinion on her capacity. Ms. Chernukhina’s medical conditions were noted to include glaucoma, a heart condition, hypertension, and dyslipidemia, but were described as “currently stable.” In addressing the impacts of chemotherapy and depression from the lymphoma diagnosis and eviction, the physician stated that Ms. Chernukhina’s physical ability to participate in litigation was limited, but his belief was that “she does have the mental capacity to continue with the lawsuit.”
[42] No cogent explanation has been provided for why Ms. Chernukhina could not be produced for examination, with accommodation for her medical conditions, given her family physician’s view in August 2017 that she had sufficient mental capacity.
[43] There is no cogent evidence of any further medical updates until May 2019, when plaintiff’s counsel provided a letter from a hematologist confirming that Ms. Chernukhina’s “aggressive lymphoma” was incurable, with a “guarded” prognosis. The letter noted a typical survival of six to twelve months. The doctor stated that the nature of her illness “could potentially affect her ability to attend a full-day discovery in May 2019.” The lawyer’s covering letter states, in part, as follows:
We are currently seeking further information related to our client’s health conditions and her ability to attend at her examinations for discovery. We expect that certain accommodations will be required if our client is to attend at an examination, and we will provide you with more information as it becomes available. In the circumstances, we are not in a position to schedule our client's examination at this time.
[44] In July 2019, plaintiff’s counsel wrote to defendants’ counsel to propose that Ms. Chernukhina’s evidence be preserved by completing a rule 36 examination before trial in lieu of continued examination for discovery, subject to agreeing to reasonable accommodations to address Ms. Chernukhina’s medical circumstances and health. In response, defendants’ counsel asked for clarification on how undertakings would be addressed and whether there remained capacity concerns. Plaintiff’s counsel agreed to permit requests for undertakings at the examination and agreed to a capacity assessment. Defendants’ counsel sought clarification on the capacity assessment and proposed that the discovery be completed first with a rule 36 examination proceeding immediately thereafter. He also proposed a motion for directions. There is no evidence of any response to the questions and proposals of defendants’ counsel nor when steps were taken to advance a capacity assessment, which as already noted did not occur until December 2019.
[45] Based on the record before me, it appears that Ms. Chernukhina lost capacity during the period of delay. Moreover, Ms. Chernukhina was given a terminal diagnosis with six to twelve months to live in May 2019. When plaintiff’s counsel proposed proceeding with an examination, he did not raise or maintain the prior capacity concerns expressed in March 2017. When asked by defendants’ counsel if there were continued capacity concerns, plaintiff’s counsel then proposed a capacity assessment. Nevertheless, despite a terminal diagnosis, a capacity assessment was not immediately arranged or undertaken. There is no evidence of any urgency by Ms. Chernukhina, Dr. Witten as her litigation guardian, or her counsel to take steps to preserve her evidence.
[46] The fact of witness interviews having taken place does not assist in explaining the delay. They occurred in two discrete periods in August 2021 and August 2023 and the substance of those interviews constitutes double hearsay. The estate trustee did not conduct the interviews himself. Rather, he attests to what his associate has told him about them. The potential witnesses’ proposed evidence is also circumstantial and does not directly address dealings between the parties.
[47] I reject the plaintiff estate’s submissions that I should consider the defendants’ complacency during the delay. The defendants sought to proceed with their examination in 2017 by bringing a motion to compel re-attendance. That motion was adjourned to case conferences before Master McGraw and ultimately sidelined because of Ms. Chernukhina’s health conditions. In my view, the ball was in the plaintiff’s court from that point. There was little that the defendants could meaningfully do until the plaintiff was willingly produced for examination. The fact that the plaintiff appears to have lost capacity during the period of her treatment and lack of attention to this litigation is not the fault of the defendants. Even the litigation guardian, Dr. Witten, does not appear to have meaningfully sought to advance the claim.
[48] I am frankly unclear on what the plaintiff estate expects the defendants should have done differently in all the circumstances. I find that the plaintiff estate has not cogently or persuasively explained the delay in this action.
Is there a substantial risk that a fair trial is not possible?
[49] In addition to finding inordinate and inexcusable delay, the delay must also be prejudicial to the defendants by giving rise to a substantial risk that a fair trial of the issues will not be possible. Specifically, the delay must prejudice the defendants’ ability to put their case forward for adjudication on the merits. In the face of inordinate delay, a rebuttable presumption arises that the defendants are prejudiced. The presumption of prejudice derives largely from a recognition that memories fade and fail over time, witnesses can become unavailable, and documents can be lost. The longer the delay, the stronger the inference of prejudice to the defence case flowing from that delay: Ticchiarelli, supra at para. 28; Langenecker, supra at para. 11.
[50] In my view, there is a strong presumption of prejudice in this case that has been exacerbated by the actual prejudice of Ms. Chernukhina losing capacity and now having passed away. Plaintiff’s counsel sought to characterize Ms. Chernukhina’s passing as being prejudice solely to the plaintiff, and that it benefits the defendants. I agree that it is prejudicial to the plaintiff’s case, but it is also prejudicial to the defendants’ case.
[51] Based on the pleading and materials before me, this case will largely turn on direct oral dealings and representations between the parties. Although the plaintiff estate submits that this is largely a document case, I disagree. A core allegation in the statement of claim is that there was an oral trust agreement with Sofia Gurevich pursuant to which Ms. Chernukhina’s funds in Russia were transferred to Canada and, further, that her money was used by Sofia Gurevich and Sabrina Gurevich to purchase the property in Toronto on Ms. Chernukhina’s behalf, where she lived until she was wrongfully evicted. These all appear to have been oral arrangements (denied by the defendants).
[52] Ms. Chernukhina’s examination for discovery was interrupted by plaintiff’s counsel and has never been completed, despite her family physician opining in August 2017 that she had capacity at that time. The defendants are unable to examine on or test the plaintiff’s case. Ms. Chernukhina’s evidence has not been preserved. The record does not support a finding that any non-party witnesses have probative evidence that could fairly stand in lieu of Ms. Chernukhina’s own direct evidence. I am unconvinced that Ms. Chernukhina’s evidence is not required for a fair determination of the disputed issues. On the record before me, her direct evidence is central to the case.
[53] I reject the plaintiff estate’s argument that this case turns on whether or not funds were received by the defendants from a Russian investor or were taken from Ms. Chernukhina. That is part of the case, but not the entirety of it. Even if the plaintiff estate proves that Ms. Chernukhina’s funds were used, that does not lead inevitably to judgment. The circumstances under which those funds were used, including Ms. Chernukhina’s knowledge and/or approval of it, will reasonably need to be explored at trial.
[54] It is, in my view, significant that no capacity assessment was conducted between March 2017 and December 2019, despite the plaintiff’s counsel having capacity concerns, with no explanation for failing to do so. As of May 2019, Ms. Chernukhina was given a terminal prognosis of six to twelve months. A capacity assessment was still not undertaken until seven months later. There is no evidence on what happened after the proposal to preserve Ms. Chernukhina’s evidence in July 2019 and the assessment taking place. In my view, Ms. Chernukhina’s evidence has been lost through no fault of the defendants.
[55] The defendants have also tendered evidence of personal prejudice from the delay and ongoing presence of the CPLs. I need not address that issue. During the inordinate and inexcusable delay in this action, a key party witness lost capacity and, several years later, died. Her central evidence on oral dealings was not preserved. The record does not support any meaningful efforts to try to preserve that evidence at any point after her initial lymphoma diagnosis. In my view, given the issues in dispute, there cannot be a fair trial without her evidence on dealings and agreements with the defendants.
[56] For the foregoing reasons, I find that the defendants have met their onus of establishing inordinate and inexcusable delay that has given rise to a substantial risk that a fair trial is no longer possible. This action will be dismissed for delay.
Is it unjust to dismiss the action for delay?
[57] Relief under subrule 24.01(2) of the Rules has two elements. I must find that (i) one of the circumstances described in subrule 48.14(1) applies to the action; and (ii) the plaintiffs have failed to demonstrate that dismissing this action would be unjust. Dismissal under subrule 24.01(2) is mandatory if both elements are satisfied. As noted earlier in these reasons, neither side provided me with any case law on the applicable test under subrule 24.01(2).
[58] There is no question that the plaintiff estate has failed to comply with subrule 48.14(1). The action has not been set down for trial. My reasoning above for dismissing this action for delay under subrule 24.01(1) equally supports relief under subrule 24.01(2), regardless of the test to be applied. In my view, the circumstances of this case are such that it is not unjust to dismiss the action.
Should the certificates of pending litigation be discharged?
[59] Since I am granting the motion and dismissing this action for delay, it follows that the CPLs should be discharged. I accordingly need not address the defendants’ alternative arguments for discharging the CPLs if the action continues.
[60] Nevertheless, even if I am wrong in dismissing the action, I would still have discharged the CPLs. Pursuant to s. 103(6)(a)(iii) of the Courts of Justice Act, RSO 1990, c C.43, the court may make an order discharging a certificate of pending litigation where the plaintiff does not prosecute the proceeding with reasonable diligence. Whether or not to discharge a CPL is a discretionary decision.
[61] In my view, as outlined above, the plaintiff, her litigation guardian, and now the plaintiff estate has not pursued the claim with anything near reasonable diligence. The inexcusable delay in this case is, in my view, even more pronounced than in the cases of Stayside Corporation Inc. v. Cyndric Group Inc., 2023 ONSC 2363 and Henein v. Alala, 2021 ONSC 5871. In both of those cases, the court discharged CPLs for want of prosecution in shorter periods of delay than what is present in this case.
[62] I agree with the defendants that demonstrating prejudice is not required for relief under s. 103(6)(a)(iii) of the Courts of Justice Act. I concur with Corthorn J.’s view in Stayside, supra at para. 37, that failure to prosecute the action diligently is sufficient, as a singular ground, to support making an order that a CPL be discharged. The failure to meaningfully advance this case is, in my view, sufficient in and of itself to discharge the CPLs.
Costs
[63] The defendants have been entirely successful and are entitled to their costs. The defendants seek their partial indemnity costs of the motion in the amount of $34,574.30, including HST and disbursements. The plaintiff estate submits that the amount of costs sought is excessive and that the plaintiff estate’s partial indemnity costs claim of $11,927.71 is more reasonable.
[64] This was a significant motion for the defendants. The costs claim includes multiple motion records, facta, cross-examinations, and two attendances. Neither the hours nor rates claimed are particularly unreasonable given the detail in the motion materials and the number of steps required for this motion, although the aggregate of 116.4 hours is somewhat high. I am also mindful of Brown A.J.’s censure of the defendants for proceeding in person at the first return of this motion over the objection of opposing counsel and my own view that there were sufficient improper refusals on cross-examination of Ms. Gurevich to warrant an adjournment of the second return for further cross-examination. These factors militate against the total costs claimed by the defendants.
[65] Considering the factors in subrule 57.01(1) of the Rules in the particular circumstances of this case, I find that the fair and reasonable amount of costs payable by the plaintiff estate to the defendants in respect of this motion is $28,500, inclusive of HST and disbursements, payable within thirty (30) days.
[66] The defendants did not submit a bill of costs or seek any costs of the action. Costs of the action shall accordingly be agreed or assessed.
Disposition
[67] For the foregoing reasons, I order as follows:
(a) This action is hereby dismissed for delay.
(b) The certificates of pending litigation issued pursuant to the order of Master McAfee (as then titled) dated January 27, 2015 and registered against the properties known municipally as 133 Torresdale Avenue, Unit 505, North York, Ontario and 58 Carnes Crescent, Keswick, Ontario, are hereby discharged.
(c) The plaintiff estate shall pay to the defendants their costs of the motion fixed in the amount of $28,500, including HST and disbursements, payable forthwith.
(d) This order is effective without further formality.
[68] A draft order was not submitted by the defendants or included in the motion materials. If a formal order is required, then the parties may submit a draft order, with approval as to form and content, to my Assistant Trial Coordinator. If they cannot agree on a form of order, then each may submit a draft order in the form they propose and I will settle the form of order.
ASSOCIATE JUSTICE TODD ROBINSON
DATE: October 28, 2024