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Dismissal for Delay

. American Environnemental Container v. Kennedy

In American Environnemental Container v. Kennedy (Div Court, 2022) the Divisional Court considered the R48.14 law of dismissal for delay:
[27] I will not recreate the wheel in explaining the applicable test. It was comprehensively stated by the Ontario Court of Appeal in Kara v. Arnold, 2014 ONCA 871 at paras. 8-13:
[8] The decision of a judge presiding at a status hearing under rule 48.14 is discretionary and is entitled to considerable deference. The test is two-fold and conjunctive: the plaintiff has the onus of demonstrating both that there was an acceptable explanation for the delay and that, if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice: [citations omitted]. . . .

[9] Dismissals for delay involve a careful balance between two competing values. On the one hand, the Rules of Civil Procedure need to be enforced in a way that ensures timely and efficient justice, in the interests of plaintiffs, defendants, and society in general. On the other hand, society in general, and the parties, have an interest in the resolution of disputes on their merits and in the availability of flexibility to avoid potentially draconian results, by providing the opportunity for parties to offer a reasonable explanation for delay when it takes them beyond established timelines.

[10] The courts do not take a rigid or “purely formalistic and mechanical” approach to the application of timelines in the Rules “that would penalize the parties for technical non-compliance and frustrate the fundamental goal of resolving disputes on their merits”: 1196158 Ontario Inc. v. 6274013 Canada Ltd., at para. 19. That said, rule 48.14 was designed to have some teeth, in my view. As Sharpe J.A. noted, in Marché d’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd., 2007 ONCA 695, 87 O.R. (3d) 660, at para. 23:
Rule 48.14 is one of many rules of civil procedure designed to promote the timely resolution of disputes, to discourage delay in civil litigation and to give the courts a significant role in reducing delays. Before the promulgation of rule 48.14, parties had total control over when cases were placed on the trial list. Rule 48.14 “establishes a procedure which gives the court a degree of control over the speed at which litigation proceeds to a conclusion. . . . In essence the rule provides for a very limited form of case management.” Garry D. Watson & Craig Perkins, Holmested and Watson: Ontario Civil Procedure, vol. 4 supplement (Toronto: Carswell, 1984) [at] 48§15. The case management regime, for which rule 48.14 was a precursor, was introduced in part to reduce “unnecessary cost and delay in civil litigation”: rule 77.02.
[11] Later, in 1196158 Ontario Inc. v. 6274013 Canada Ltd., at paras. 39, 41 and 42, Sharpe J.A. reinforced the importance of the rule for purpose of promoting timely justice. He said:
[The] cases quite properly reflect and reinforce the strong public interest in promoting the timely resolution of disputes. “The notion that justice delayed is justice denied reaches back to the mists of time . . . . For centuries, those working with our legal system have recognized that unnecessary delay strikes against its core values and have done everything within their power to combat it”: [citations omitted]. Excusing significant delay “risks undermining public confidence in the administration of justice”: Marché, at para. 32. The timelines the rules impose are relatively generous and there is a heavy price to be paid when they are not respected.

....

The civil justice regime should deliver timely justice to both plaintiffs and defendants. … Unless the basic ground rules of litigation – including time requirements – are enforced in a principled way, counsel cannot provide reliable advice and clients cannot plan their affairs in an orderly manner.

If flexibility is permitted to descend into toleration of laxness, fairness itself will be frustrated. … [E]ven if there is no actual prejudice, allowing stale claims to proceed will often be unfair to the litigants. Disputes are more likely to be resolved fairly if they are resolved in a timely fashion and, accordingly, the enforcement of timelines helps achieve the ultimate goal of fair resolution of disputes.
....

[13] In my view, little is to be gained by debating whether there is a bright line between the “contextual approach” and the approach enunciated in later authorities such as Faris and 1196158 Ontario Inc. v. 6274013 Canada Ltd. It seems to be evident that, in considering the reasonableness of any explanation for the delay in question, a status hearing judge will almost invariably engage in a weighing of all relevant factors in order to reach a just result.
See also: Faris at para. 42; 1196158 Ontario Inc. at para. 32; H.B. Fuller at paras. 20-28.

....

[37] The leading cases on dismissal for delay recognize that the issues at play on a status hearing (or other delay related motions) involve a court assessing a balance between two competing policy considerations: on one hand, that civil actions should be decided on their merits, and on the other, that civil actions should be resolved in a timely and efficient manner. The case law is also clear that in assessing this tension, a court should not merely engage in a formalistic analysis of the branches of the test for dismissal for delay, but must step back and consider the overall justice of the case. In my view, the associate judge erred in principle in failing to do so in this case.

[38] The decision of the Court of Appeal in HB Fuller is instructive on this issue (at para. 22-27):
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: [citations omitted]. 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: [citations omitted].

....

[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: [citations omitted].

[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).
See also Micaleff v. Dodig, 2009 CanLII 72091 (ONSCDC) at paras. 29-25.
. M.J.H. v. Kenora-Rainy River Districts Child & Family Services

In M.J.H. v. Kenora-Rainy River Districts Child & Family Services (Ont CA, 2022) the Court of Appeal considered (and denied) a motion for intervenor status to argue that the normal test for Registrar's dismissal for delay under R48.14 should be varied in a case of historical sexual and physical abuse:
[3] In the appeal, the appellants ask this court to set aside the status hearing order of Fregeau J., in which he dismissed their action under r. 48.14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 because they had not provided an acceptable explanation for their delay in prosecuting the action.

OTLA’s Argument

[4] The principles governing interventions are well known and were most recently summarized by Coroza J.A. in Foxgate Developments Inc. v. Jane Doe, 2021 ONCA 745. I will not repeat them.

[5] OTLA proposes to make a two-step argument if given leave to intervene. The first step is to argue that there is an “absurdity” in the Rules of Civil Procedure that works to the prejudice of those like the appellants whose claims are dismissed after a status hearing. An action can be dismissed for delay in three ways: on a defendant’s motion, under r. 24.01(2); by the registrar, under r. 48.14(1); or by a judge at a status hearing, under r. 48.14(5).

[6] OTLA argues that the absurdity arises because certain plaintiffs whose actions are dismissed may start another similar action but not others, such as these appellants. The distinction arbitrarily depends on the manner in which the action was dismissed. OTLA submits that plaintiffs whose actions are dismissed by a judge on a defendant’s motion or by the registrar may bring another similar action, as a result of rr. 24.05 and r. 48.14(9). But plaintiffs whose actions are dismissed at a status hearing do not have similar recourse. This outcome is especially absurd for plaintiffs whose claims for historical sexual and physical abuse are not subject to a limitation defence under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, such as the appellants in this case.

[7] Assuming the first step of the argument prevails, OTLA proposes, as the second step argument, that this court should purge the absurdity by reformulating the test for dismissal by a status hearing judge. While the two-part test prescribed by this court in Faris v. Eftimovski, 2013 ONCA 360, 363 D.L.R. (4th) 111, at para. 32 would apply in most cases, it would not apply in cases advancing a claim for historical sexual and physical abuse for which there is no limitation defence. OTLA proposes that an action should only be dismissed at a status hearing if the plaintiff’s delay is contumelious or if the action is frivolous and vexatious.

[8] This proposed new test was expressed in oral argument but not in OTLA’s motion factum. The new test represents an advance on the policy argument in its factum:
In light of the amendments to the Ontario rules governing limitation periods for cases based on sexual assault, it appears irreconcilable that no time constraints apply to the commencing of an action but will apply to the procedural progress of the action.

When removing limitation periods for cases based on sexual assault, it was acknowledged that many survivors find the strength to come forward, but then recoil before they gather enough strength to come forward again to pursue their case. Recognition of this fact, and the desire to not force a survivor to explain their behaviour, was a large consideration when removing timelines for cases based on sexual assault.
[9] OTLA does not seek to file new evidence to support the policy argument just quoted but instead seeks to rely on the factual findings in abuse cases such as K.M. v H.M., 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6.
. 828343 Ontario Inc. v. Demshe Forge Inc.

In 828343 Ontario Inc. v. Demshe Forge Inc. (Div Ct, 2021) the Divisional Court considered an interesting case where through apparent inadvertence by counsel a default judgment was obtained (without the defendant being served of with an earlier assignment court date). It wasn't until some nine years after the initial service of the claim that the defendant become aware of it. The defendant's moved successfully to set aside the default judgment. On appeal the appellant/plaintiff sought re-instatement of the default judgment, and on cross-appeal the defendants sought (unusually to my mind) dismissal for delay.

In this quote the court considers the test for dismissal for delay at paras 69-101 (it was dismissed for delay).

. Canadian National Railway Company v. Kitchener (City)

In Canadian National Railway Company v. Kitchener (City) (Ont CA, 2015), a 25-year old case, the Court of Appeal quoted with approval and commented as follows on the test for dismissal of a proceeding for plaintiff delay:
[12] The motion judge concluded that there was a strong presumption of prejudice, given that 25 years had elapsed since the action was started. He applied the test set out in Armstrong v. McCall, 2006 CanLII 17248 (ON CA), [2006] O.J. No. 2055 (C.A.), at para. 11:
Where there is a presumption of prejudice, the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebuts the presumption. The presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and the issues in the lawsuit do not depend on the recollection of witnesses or that all necessary witnesses are available with detailed recollection of the events. If the presumption is rebutted then the action may still be dismissed if the defendant leads convincing evidence of actual prejudice.
.....

[16] A presumption of prejudice flows from lengthy delay. Memories fade, witnesses become unavailable and documents may be lost. As observed in Clairmonte v. Canadian Imperial Bank of Commerce, 1970 CanLII 470 (ON CA), [1970] 3 O.R. 97 (C.A.), at p. 116, “[w]hile the presumption will speak as a barely audible caution immediately after a limitation period has expired, it may command with increasing imperativeness on the passage of a substantial time, depending on the cause of action.” Use of the presumption is particularly appropriate when dealing with a 25 year old action relating to events in the period from 1924 to 1958. There is an inherent difficulty in proving that there is relevant evidence from long ago which no longer exists. Given the lengthy delay in this case, the motion judge did not err in finding that there was a presumption of prejudice. Further, he did not err in concluding that CNR had failed to rebut this presumption. He did not require CNR to meet the impossible standard of establishing that the evidence of every conceivable person who might have had any relevant observation had been preserved. Instead, he identified key individuals, such as the retired foreman for the Public Utilities Commission and a former employee of Hogg Fuel, who likely had some relevant information but whose evidence was no longer available. It was open to the motion judge to conclude on the record before him that CNR had not rebutted the presumption of prejudice flowing from the very long delay. Although, as noted by the appellant, some of the witnesses became unavailable during the period of excused delay, that is, before 2003, the record also shows that a number became unavailable during the period of unexcused delay, that is, after 2003.
. Sickinger v. Krek

In Sickinger v. Krek (Ont CA, 2016) the Court of Appeal canvassed the principles applicable to dismissing a Claim for delay in bringing it to trial:
[29] The principles that apply on a motion to dismiss an action for delay were set out by this court in Langenecker v. Sauvé, 2011 ONCA 803 (CanLII), 286 O.A.C. 268. As noted in paras. 6-7 of that decision, an action may be dismissed for delay where the delay is (1) inordinate; (2) inexcusable; and (3) such that it gives rise to a substantial risk that a fair trial of the issues in the litigation will not be possible because of the delay.

[30] The jurisprudence provides guidelines for evaluating the three requirements:
• Inordinate: A court will measure the length of time from the commencement of the proceeding to the motion to dismiss to determine if the delay is inordinate: Langenecker, at para. 8; Ali v. Fruci, 2014 ONCA 596 (CanLII), 122 O.R. (3d) 517, at para. 11. When considering the delay, the court should remember that some cases will move slower than others because of the issues raised, the parties involved, and/or the nature of the action: Langenecker, at para. 8.

• Inexcusable: A court should consider the reasons offered for the delay and whether those reasons provide an adequate explanation, with regard to the credibility of the explanations, the explanations for individual parts of the delay, the overall delay, and the effect of the explanations considered as a whole: Langenecker, at paras. 9-10.

• Prejudice: The third factor considers the prejudice caused by the delay to a defendant’s ability to put forward its case for adjudication on the merits: Langenecker, at para. 11. An inordinate delay will give rise to a presumption of prejudice and, unless rebutted, that presumption may result in the action being dismissed: Armstrong v. McCall (2006), 2006 CanLII 17248 (ON CA), 213 O.A.C. 229 (C.A.), at para. 11. A defendant may also suffer, and demonstrate, case-specific prejudice: Langenecker, at para. 12.
[31] An order dismissing an action for delay is discretionary and entitled to deference from an appellate court: Ali, at para. 10. It should not be overturned unless the motion judge exercised his discretion unreasonably, acted on an incorrect principle, or made a palpable and overriding error on a factual matter: Ali, at para. 10; Canadian National Railway Company v. Kitchener (City), 2015 ONCA 131 (CanLII), 33 M.P.L.R. (5th) 173, at para. 14.
Here the claim at issue was a third party claim. While acknowledging the derivative nature of a third party claim the court held that it too could be dismissed for delay in the appropriate circumstances [see para 40-47].

. Home Town Financial (Timmins) Corporation v. Levesque

In Home Town Financial (Timmins) Corporation v. Levesque (Ont CA, 2020) the Court of Appeal sets out the test for dismissal of an action for delay:
[5] The motion judge correctly set out the test for dismissing an action for delay under Rule 48.14(7). A plaintiff must show: (1) an acceptable explanation for the delay; and (2) the defendant would not suffer any non-compensable prejudice if the action is allowed to proceed: Faris v. Eftimovski, 2013 ONCA 360, 42 C.P.C. (7th) 258, at para. 32; Kara v. Arnold, 2014 ONCA 871, 328 O.A.C. 382, at para. 8.
. Samuels v. Mai

In Samuels v. Mai (Ont CA, 2020) the Court of Appeal reversed a dismissal of an action for delay, when a related counterclaim would have persisted:
[27] In considering the motion to vary the timetable, the motion judge made reference to the test in Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5th) 80 (Ont. S.C.), rev’d on other grounds (2002), 48 C.P.C. (5th) 93. (Ont. Div. Ct.), which was referred to by this court in Prescott v. Barbon, 2018 ONCA 504, 141 O.R. (3d) 616. The motion judge laid out the four Reid factors, namely: (1) the explanation for the litigation delay; (2) inadvertence in missing the deadline; (3) efforts to move promptly to set aside the dismissal; and (4) absence of prejudice to the defendant.

[28] The motion judge also cited to Jadid v. Toronto Transit Commission, 2016 ONSC 1176, aff’d 2016 ONCA 936, dealing with the application of the Reid factors in a situation where a party comes to the court seeking a “second lifeline”.

[29] Finally, the motion judge properly noted two points. First, it is not necessary to satisfy each part of the Reid test. A contextual approach requires the weighing of all relevant factors to determine what is just in the circumstances: Marché D’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695, 87 O.R. (3d) 660, at para. 20. Second, she was required to balance two principles, namely: (a) that actions should be determined on their merits if possible; and (b) that the timely and efficient resolution of disputes requires that rules be respected and enforced: 1196158 Ontario Inc. v. 6274013 Canada Limited, 2012 ONCA 544, 112 O.R. (3d) 67, at para. 18.

[30] Considering the Reid factors, and applying them with heightened scrutiny due to the appellant’s complete disregard of the timelines established by the Master, the motion judge found that the plaintiff:

1. had not provided a satisfactory explanation for the delay;

2. did not demonstrate that he failed to prosecute the action due to inadvertence;

3. did not move promptly to bring a motion to vary the timetable; and

4. had not proven that the defendants would not suffer prejudice.

....

[37] In Cardon Developments Ltd. et al. v. Butterfield, 1999 BCCA 642, 131 B.C.A.C. 197, at para. 5, Southin J.A. set aside an order dismissing a claim for delay because a counterclaim that arose out of the same events remained. Since the claim and counterclaim were “inextricably wound up one with the other” and the defendants were planning on proceeding on the counterclaim, the interests of justice would not be properly served if the claim was not also permitted to proceed.

[38] As in Cardon, it was not in the interests of justice to dismiss the appellant’s claim while permitting the respondents to litigate the very same issues in their counterclaim.


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