Court File and Parties

COURT FILE NO.: 16-CV-559905 MOTION HEARD: May 6, 2024 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: PharmX Rexall Drug Stores Ltd., et al. Plaintiffs -AND- Inez Antonio, et al. Defendants

BEFORE: Associate Justice Abrams

COUNSEL: K. Chaytor, lawyer for the plaintiffs E. Gasparyan, for the defendant, Inez Antonio N. Sandic, for the defendants, Gore Mutual Insurance Company and Nialund Properties Limited

Reasons for Decision

The Motion

[1] The plaintiffs bring a motion for a status hearing pursuant to R. 48.14(5) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. They ask that the time to set this 2016 action down for trial be extended and that the remaining steps in the litigation be timetabled. They say that “there is an acceptable explanation for [their] delay [to date] and…that allowing the action to proceed would not cause the defendant[s] to suffer non-compensable prejudice” (Kara v. Arnold, 2014 ONCA 871, at para. 8).

[2] In the context of this motion, the plaintiffs acknowledge that the test to be applied by the court is conjunctive but add the following consideration. “The first part of the test should be contextualized. The court should weigh all relevant factors to determine the order that is just” (Windebank v. Toronto East General Hospital, 2022 ONSC 6913, at para. 12; Henderson v. Kenora-Rainy River Districts Child & Family Services, 2022 ONCA 387, at para. 10). They point out that an acceptable explanation need not be perfect or, even, good; an adequate or passable explanation may suffice” (Windebank v. Toronto East General Hospital, 2022 ONSC 6913, supra, at para. 13). I agree. On the second part of the test, they say, fairly, that the prejudice to be considered by the court is in respect of the defendants’ ability to defend the action as a result of the delay (Carioca’s Import & Export Inc. v. Canadian Pacific Railway Inc., 2015 ONCA 952, at para. 57) and that, while there is a presumption of prejudice that they acknowledge, it need not be actively rebutted by them. Instead, the court must consider all of the circumstances in evaluating the strength of the presumption (Windebank v. Toronto East General Hospital, 2022 ONSC 6913, supra, at paras. 34 and 37). And while it is true that the plaintiffs bear primary responsibility for advancing their claims, “a defendant’s passivity may be a relevant factor in the contextual analysis” (Beshay v. Labib, 2024 ONCA 186, at para. 23). With this too, I agree.

The History of the Litigation

[3] Pursuant to an October 1, 1992 lease agreement (extended a number of times and as late as January 4, 2012), the plaintiffs were tenants and/or occupiers of a portion of a building (the “building”) in Niagara Falls, Ontario owned by, among others, Nialund Properties Limited. Nialund Properties Limited was insured by Gore Mutual Insurance Company (collectively the “Nialund defendants”). There was a fire in an adjacent building (then owned by the defendants, Inez Antonio and her daughter, Janice Antonio) that spread to the plaintiffs’ premises, on or about September 6, 2014. The fire caused substantial damage and destruction to the building, including the portion occupied by the plaintiffs. The plaintiffs reference resulting structural damage, damage to the HVAC system and loss of inventory.

[4] The plaintiffs say that there was a cost-sharing arrangement settled on by the parties with some repairs to be conducted by the Nialund defendants, and others by them. They say, further, that they were to be reimbursed for the costs incurred by them, which costs exceeded $1.2 million. By early May of 2015, the work was completed but the plaintiffs were not, they submit, reimbursed in full (or as they expected to be reimbursed). At issue, largely, is the question of betterment, as relates to the plaintiffs’ premises.

[5] Discussions among the plaintiffs and the Nialund defendants ensued but did not lead to a resolution of their dispute. This action was then commenced by way of a notice of action in early September, 2016, with a statement of claim issued the following month. Both were served on the defendants in February and March of 2017.

[6] The plaintiffs posit that the delay herein was occasioned by (1) only some, not all, of the defendants having delivered a defence herein—with there having been a general waiver of defence while extensive efforts to amicably resolve all issues were undertaken (which efforts continued during 2017-2019 and August 2021-May 2022), (2) the claims against some of the defendants having been discontinued, and, (3) the plaintiffs having changed lawyers four times.

[7] The plaintiffs say that, in addition to the reasons for delay set out above, the court should note that this motion was scheduled on September 2, 2021— within the 5-year period by which the action was to be set down for trial or be administratively dismissed—to be heard on June 6, 2022. The motion was adjourned to August 2023, on consent, to permit time for some of the defendants to retain counsel. The motion was adjourned, further, to May 6, 2024. At the time that this motion was brought, none of Gore Mutual Insurance Company, Nialund Properties Limited and Inez Antonio had delivered even notices of intent to defend.

[8] In support of their motion, the plaintiffs point out that all parties were served with the notice of action and statement of claim by the Spring of 2017 such that they knew as at then, or should have known, that documents should be retained and witnesses interviewed. Further, all parties were put on notice that the plaintiffs were seeking an extension of the set down deadline since as early as September of 2021 (and until this motion came on for a hearing, no one objected to the extension of time sought). Then too, this is not a case in which court Orders have been breached or there have been multiple extensions of time. This motion represents the plaintiffs’ first request for an extension of time.

Position of the Nialund Defendants

[9] The Nialund defendants are of the view that this action ought to be dismissed for delay—a change, the plaintiffs say, from their original position as at the time the motion was brought (see: Exhibit “F” to the Second Supplementary Affidavit of Dylan Dilks—with only Allianz Global Risques Mondiaux E.-U. having indicated opposition and with the claims as against Allianz having been discontinued since). They say, through their counsel (and not directly), that they do not owe any monies to the plaintiffs and point out that examinations for discovery and mediation have yet to be held herein. They do not explain their seeming change in position since their lack of opposition to the motion was first stated.

[10] I note that the Nialund defendants’ statement of defence was not delivered until September 29, 2023— after this motion was brought and years after the litigation was commenced. By virtue of the timing of the delivery of their statement of defence and seeming lack of opposition to the pace at which the plaintiffs were proceeding, I agree (as the plaintiffs submit) that the Nialund defendants appear to be complicit in the delay. Their “passivity” is a relevant consideration.

[11] The Nialund defendants’ complaints herein derive from the plaintiffs having failed to adduce evidence, on this motion, to support their theory of liability as against them and having discontinued their claims as against their own insurer, Chubb. On the issue of prejudice, the Nialund defendants’ lawyer references in his affidavit fading memories (something that I accept happens with the passage of time) and “Chubb’s investigative documents and evidence [being] no longer available”. As to the latter point, how does counsel know this? Is it a fact or is it speculation? Have the Nialund defendants had any discussions with Chubb or, indeed, with any of the parties against whom claims have been discontinued? There is no evidence from the Nialund defendants, directly, on this issue. The suggestion seems to run counter to the evidence of the plaintiffs that they have preserved all relevant documents. Then too, and in any event, the plaintiffs’ Director of Construction Services, a person with direct knowledge of the work done, continues to be employed by the plaintiffs and is available to testify at trial. Indeed, he swore an affidavit on this motion.

Position of Inez Antonio/The Cross-Motion

[12] As for the motion to dismiss brought by Inez Antonio, the plaintiffs submit that it is duplicative. Inez Antonio could have opposed their motion in the same way as the Nialund defendants did. Even if it is not duplicative, though, the plaintiffs suggest that the evidence adduced in support of the motion ought to be discounted. Inez Antonio has not sworn an affidavit in support her cross-motion or in opposition to the plaintiffs’ motion—only Janice Antonio, her daughter, against whom the plaintiffs’ claims have been discontinued has; and much of Janice Antonio’s evidence is hearsay evidence.

[13] Considering the evidence adduced on behalf of Inez Antonio and taking it at its highest, and admittedly making allowances in doing so, I accept that Inez Antonio is of advanced age and is said to be suffering from a number of health issues. However, and this is key, according to Janice Antonio (and as set out in the physician’s letter filed in support of Inez Antonio’s cross-motion), Inez Antonio is communicative and is “of competent mind and able to make her own decisions”. She does not have and does not, therefore, appear to need a litigation guardian. This evidence attenuates the suggestion of prejudice. Then too, and importantly, even as at the time that this litigation was commenced, Inez Antonio was of advanced age. There is no evidence before the court as to any decline in Inez Antonio’s health status in the years following the presumptive set down deadline.

[14] Then too, and in any event, the plaintiffs posit that, with the issues in the litigation being what they are (and with the focus of the inquiry being largely documents based, i.e. an inquiry as to the nature and cost of repairs and the question of betterment), it does not follow that viva voce testimony on the part of Inez Antonio will be required (even if communication with Inez Antonio is strained because she is hard of hearing). Further, an accommodation can be made for her, if it needs to be.

[15] I note, parenthetically, that Janice Antonio deposes as to what the former lawyer for her and her mother told them as to the status of the action and what they would/wouldn’t need to do, and as to the fact that they, themselves, did not participate in any settlement discussions. I also note that she says that correspondence was sent to her and her mother, by the plaintiffs, at incorrect/former addresses for them and that she did not appreciate the implications of the plaintiffs’ motion when she (and her mother) did not appear to oppose it before now. To this, the plaintiffs fairly say, and I agree, that they are not responsible for what may have been shared with the Antonios by their former lawyer (this is an issue as between the lawyer and them) and if, as Janice Antonio suggests, there was a change of address about which the plaintiffs ought to have been aware, it was for the Antonios or their agent to update them as to how they might be reached given that there was no doubt but that they knew that claims had been made against them.

[16] And to say that Inez Antonio will suffer “uncommendable” or even “fatal prejudice” attendant on this action being permitted to continue (if it is permitted to continue), as Janice Antonio deposes on this motion, is a bald statement without foundation.

Conclusion

[17] In all, and considering the plaintiffs’ adequate, if imperfect, explanation for their delay (see: para. 6, supra), the fact that this motion was brought in a timely way and there has been no earlier timetabling Order made, the nature of the claims (and the preservation of documents by the plaintiffs), the early notice given as to the plaintiffs’ claims, the lacunae in the responding defendants’ evidence, the original position advanced by the Nialund defendants in respect of this motion, the passivity of the defendants—even as relates to the delivery of defences, the fact that the responding defendants’ assertions of non-compensable prejudice are absolute in nature and are not supported by the evidence adduced by them, and the court’s preference for deciding claims on their merits, inter alia, I am permitting this action to continue, with the parties to settle (among themselves) on a reasonable timetable for next steps and submit it to me for approval—this by August 30, 2024. The plaintiffs’ motion is granted and Inez Antonio’s cross-motion is dismissed.

[18] If the parties are not able to agree on a litigation timetable and/or on the issue of costs, I am to be notified—also by August 30th—in which case I will have counsel attend before me (virtually) to make submissions.

July 30, 2024 Original Signed By Associate Justice Abrams