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Civil Litigation Dicta - Dismissal for Delay - General (2). NWG Investments Inc. v. Fronteer Gold Inc.
In NWG Investments Inc. v. Fronteer Gold Inc. (Ont CA, 2024) the Ontario Court of Appeal considered the law of dismissing an action for delay [under RCP 24.01]:[2] The motion judge correctly identified the governing legal test on a motion to dismiss for delay under r. 24.01 of the Rules of Civil Procedure: an action should not be dismissed unless the delay is (i) inordinate, (ii) inexcusable, and (iii) prejudicial to the defendants such 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 para. 12. . Beshay v. Labib
In Beshay v. Labib (Ont CA, 2024) the Court of Appeal extensively considered (and ultimately dismissed) an appeal against of RCP 48.14(7)(a) ['Dismissal of Action for Delay - Status Hearing']:[7] Rule 48.14(1) directs the registrar to dismiss actions that have not been set down for trial within five years. However, in March 2020, the Superior Court of Justice suspended operations on account of the COVID-19 pandemic, which resulted in all filing deadlines being extended for six months. As a consequence, the r. 48.14(1) deadline in this case was extended from December 2021 to June 2022.
[8] In April 2022, the appellant’s counsel wrote to the respondents’ former counsel, seeking their consent to extend the time for setting the action down for trial, and proposing a litigation timetable. When the respondents’ former counsel did not respond, the appellant brought a motion for a status hearing under r. 48.14(5). This motion was originally returnable in June 2022, but it was adjourned several times. In September 2022, while his motion was still pending, the appellant served his affidavit of documents.
[9] The appellant’s motion was eventually heard in April 2023, and on May 15, 2023, the motion judge made an order under r. 48.14(7)(a) dismissing the action for delay.
B. Analysis
[10] The appellant appeals from the dismissal order, alleging that the motion judge failed to properly apply the established legal test for dismissing actions for delay.
[11] This legal test is well-settled: see 1196158 Ontario Inc. v. 6274013 Canada Limited, 2012 ONCA 544, 112 O.R. (3d) 67. The plaintiff must establish that there is “an acceptable explanation” for the delay, and must also demonstrate that the defendant will not suffer any non-compensable prejudice if the action is allowed to proceed. As Sharpe J.A. explained in 1196158 Ontario Inc., at paras. 32-33:The test is conjunctive, not disjunctive. Even if the plaintiff can provide a satisfactory explanation for the delay, the action will be dismissed if there would be prejudice to the defendant. And if the plaintiff is not able to provide a satisfactory explanation for the delay, it is still open to the judge to dismiss the action, even if there is no proof of actual prejudice to the defendant.
As I have noted, the goal of the civil justice system is [to] ensure "the just, most expeditious and least expensive determination of every civil proceeding on its merits". Consideration of actual prejudice focuses on the just determination of the dispute on its merits. The absence of actual prejudice does not automatically or inevitably trump the values of timeliness and efficiency. At some point, a party who has failed to respect the rules designed to ensure timely and efficient justice loses the right to have its dispute decided on the merits. If that were not the case, the rules and the timelines they impose would cease to have any meaning and any hope of ensuring timely and efficient justice would be seriously jeopardized. [12] It should be noted that the Rules previously required dilatory plaintiffs to bring a motion under r. 48 if an action had not been set down for trial within two years, but this deadline has now been extended to five years. This affects the balance between the competing policy goals of having civil actions decided on their merits and of “ensur[ing] timely and efficient justice”.
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[23] As stated in 1196158 Ontario Inc., at paras. 28-29, a “party who commences the proceeding bears primary responsibility for its progress”. However, a defendant’s passivity in the face of inaction by the plaintiff may be a relevant factor in the contextual analysis.
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[27] In my view, the motion judge’s finding that the respondents would be prejudiced by the delay if the action continued is entitled to significant appellate deference. Even if I were to accept that the respondents ought to have done more to preserve the missing banking records, I see no basis to interfere with the motion judge’s finding that key defence witnesses’ memories have faded over time. As Sharpe J.A. noted in 1196158 Ontario Inc., at para. 43:The more time that passes, the more difficult it is to defend the case. Memories fade and even if documents are not lost, their significance becomes shrouded. [28] In any event, it was the appellant’s burden to satisfy both branches of the applicable legal test. Even if the motion judge had not found that the respondents would suffer prejudice from the delay, she would still have been obliged to dismiss the action on the basis of her finding that the appellant had not provided any credible explanation for the delay, let alone an acceptable explanation.
[29] Finally, I do not agree that the motion judge failed to take a proper “contextual approach” to the test under r. 48.14.
[30] The main thrust of the appellant’s argument is that in April 2022, when he sought the respondents’ consent to extend the five-year r. 48.14 deadline, he proposed a litigation timetable in which the action would have been set down for trial in May 2023. The appellant argues in his factum:It is an appealable error for the learned Motions Judge to determine that requiring the Defendant to endure an extension of the set down date by 17 months was a less desirable result than depriving the Plaintiff of his day in Court for a hearing on the merits.
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A proper contextual approach would have recognized that, while delay should not be countenanced, an Action such as this which has not been inordinately delayed beyond its fifth anniversary should not be dismissed, but rather should have an expedited timeline imposed. [31] The question of whether the balance of competing policy interests favoured granting the appellant an indulgence, despite his failure to comply with the time limits in the Rules, was a discretionary judgment call for the motion judge to make. Contrary to the appellant’s argument, there is no presumption that actions that have not been set down for trial by the five-year mark should be allowed to continue if there will not be “inordinate” further delay, even when the plaintiff has not provided an acceptable explanation for the delay. Rather, as this court noted in Burgess v. University Health Network, 2022 ONCA 105, at para. 11:Rule 48.14 requires that courts balance the objective of resolving disputes on their merits with the objective of resolving disputes in a timely and efficient manner in order to maintain public confidence in the administration of justice. The role of the judge presiding over a status hearing is to ensure that justice is served for all of the litigants: 1196158 Ontario Inc., at para. 41. [32] I am not persuaded that the motion judge erred in finding that the balance in this case tipped in favour of dismissing the action, bearing in mind that this was a discretionary decision that is entitled to deference.
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