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Civil Procedure - Dismissal for Delay - Setting Aside

H.B. Fuller Company v. Rogers (Rogers Law Office) (Ont CA, 2015)

This is yet another of many cases considering the criteria that the courts should apply when faced with a motion to set aside dismissal of a case for delay:
[20] When hearing a motion to set aside a registrar’s order dismissing an action for delay, a judge must consider and weigh the following four well-known factors: the length of the litigation delay and whether the plaintiff has provided an adequate explanation for it; whether the failure to meet the mandated time limits was due to inadvertence; whether the motion to set aside the dismissal order was brought promptly; and whether the delay has prejudiced the defendant: Habib v. Mucaj, 2012 ONCA 880 (CanLII), 31 C.P.C. (7th) 1, at para. 5; Hamilton (City) v. Svedas Koyanagi Architects Inc., 2010 ONCA 887 (CanLII), 328 D.L.R. (4th) 540, at para. 22.

[21] Requiring a party moving to set aside the order dismissing its action for delay to satisfy each of the four factors is too rigid an approach. That approach, derived from Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80 (Ont. S.C.), at para. 41, rev’d on other grounds (2002), 48 C.P.C. (5th) 93 (Ont. Div. Ct.), was overruled in Scaini v. Prochnicki, 2007 ONCA 63 (CanLII), 85 O.R. (3d) 179. See Marché D’Alimentation Denis Theriault Ltee v. Giant Tiger Stores Limited, 2007 ONCA 695 (CanLII), 286 D.L.R. (4th) 487, at para. 20. Instead, the judge must adopt an overall contextual approach and, as well, take factors unique to the case into consideration. The factors are not an end in themselves. Rule 37.14(2) requires that a judge arrive at a just result in the particular circumstances of the case: Scaini, at paras. 23-24.

[22] Some of the later authorities from this court have applied a two-part test that is conjunctive, requiring a plaintiff both to provide an acceptable explanation for the delay and to show that the defendant would suffer no non-compensable prejudice if the action were allowed to proceed: see e.g. Kara v. Arnold, 2014 ONCA 871 (CanLII), [2014] O.J. No. 5818, at para. 8. This test emerged in the context of the similar consideration of whether an action should be dismissed for delay following a status hearing under the old rule 48.14(13).

[23] As Blair J.A. stated on behalf of the court in Kara, at para.13:
[L]ittle is to be gained by debating whether there is a bright line between the “contextual approach” [enunciated in Scaini] and the approach enunciated in later authorities such as Faris and 1196158 Ontario Inc. v. 6274013 Canada Ltd.
Neither the four-factor approach nor the two-part test provides an exhaustive list of considerations. Regardless of which is followed, all of the circumstances of the case must be considered in order to arrive at a just result: see e.g. Hamilton (City), at paras. 22-23; Marché, at para. 20; Finlay, at paras. 27-30; Kara, at paras. 13-15. Furthermore, it is not only the plaintiff’s conduct that must be considered. While the plaintiff bears primary responsibility for the conduct of the action, the defendant’s conduct in the litigation is a relevant circumstance: see Aguas v. Rivard Estate, 2011 ONCA 494 (CanLII), 107 O.R. (3d) 142, at paras. 18-19, 21.

[24] In his reasons, the motion judge adverted to both the four-factor contextual approach and Faris v. Eftimonski, 2013 ONCA 360 (CanLII), 363 D.L.R. (4th) 111, which employs the two-part test. The parties to this appeal agree that the issue is whether he applied the relevant factors correctly.

[25] The factors that guide the court’s choice between ending the plaintiff’s action before trial and forcing the opposite party to defend the case despite the delay require a judge to resolve the tension between two underlying policies. The first is that civil actions should be decided on their merits. The second is that civil actions should be resolved in a timely and efficient manner in order to maintain public confidence in the administration of justice: Kara, at para. 9; Hamilton (City), at paras. 20-21; Marché, at para. 25.

[26] When reviewing a registrar’s dismissal for delay under the former rule 48.14, the weight of authority from this court has leaned towards the first policy consideration. As Laskin J.A. stated in Hamilton (City), at para. 20, quoting with approval the motion judge’s comment, “[T]he court’s bias is in favour of deciding matters on their merits rather than terminating rights on procedural grounds.” While failure to enforce the rules may undermine public confidence in the capacity of the justice system to process disputes fairly and efficiently, as Sharpe J.A. observed in 119, at para. 19, nonetheless:
[P]rocedural rules are the servants of justice not its master … We should strive to avoid a purely formalistic and mechanical application of time lines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits. [T]he Rules and procedural orders are construed in a way that advances the interests of justice, and ordinarily permits the parties to get to the real merits of their dispute. [119, at para. 19. Citations omitted.]
[27] The court’s preference for deciding matters on their merits is all the more pronounced where delay results from an error committed by counsel. As the court stated in Habib, at para. 7, “[O]n a motion to set aside a dismissal order, the court should be concerned primarily with the rights of the litigants, not with the conduct of their counsel.” In Marché, Sharpe J.A. stated, at para. 28, “The law will not ordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or her solicitor” (citations omitted).

[28] In determining whether to reinstate an action that has been dismissed for delay, keeping in mind the above observations, the court must consider the rights of all the litigants. This necessarily requires consideration not only of the plaintiff’s right to have its action decided on its merits, but also consideration of whether the defendant has suffered non-compensable prejudice as a result of the delay, whether or not a fair trial is still possible, and even if it is, whether it is just that the principle of finality and the defendant’s reliance on the security of its position should nonetheless prevail. See e.g. 119, and Wellwood v. Ontario Provincial Police, 2010 ONCA 386 (CanLII), 319 D.L.R. (4th) 412.

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