Dismissal for Delay - Setting Aside. Lumaj v. St. Michael’s Hospital
In Lumaj v. St. Michael’s Hospital (Div Ct, 2021) the Divisional Court stated the test for setting aside a Registrar's dismissal of an action for delay:
 The appellants Diella Lumaj and Lula Lumaj appeal from the order of Master McGraw dated March 3, 2021 refusing to set aside the Registrar’s order of dismissal of their civil action for delay, made pursuant to rule 48.14(1) (reported at 2021 ONSC 1603).. Ali v Fruci
 The Registrar’s dismissal order was made on May 1, 2013. The underlying action, based on a claim of medical negligence, was commenced in 2009 following the death of Gjyste Lumaj.
The Decision of the Master
 The factual background to this matter is set out carefully in the Master’s reasons. He then correctly described the proper legal test to be applied in a motion to set aside a Registrar’s dismissal pursuant to rule 37.14. That test was set out in Reid v. Dow Corning Corporation,  O.J. No. 2365 at para. 41 (rev’d on other grounds,  O.J. No. 3414 (Div. Ct.)), and it has been applied by the Court of Appeal in numerous cases (see, for example, Prescott v. Barbon, 2018 ONCA 504 and Marché d’Alimentation Denis Thériault Ltée v. Giant Tiger Stores Limited, 2007 ONCA 695 at para. 12).
 In such a motion, the court must consider four factors:
(i) Have the plaintiffs provided a satisfactory explanation for the litigation delay?The court hearing such motion must consider the overall context and determine the order that is just in the circumstances (Prescott at para. 15).
(ii) Have the plaintiffs led satisfactory evidence to explain that they always intended to prosecute this action within the time limit set out in the rules or a court order but failed to do so through inadvertence?
(iii) Have the plaintiffs demonstrated that they moved forthwith to set aside the dismissal order as soon as the order came to their attention, and
(iv) Have the plaintiffs convinced the court that the defendants have not demonstrated any significant prejudice in presenting their case at trial as a result of the plaintiffs’ delay or as a result of steps taken following the dismissal of the action? (Prescott at para. 14)
 With respect to the factor of prejudice to the defendants, the Master focused on the importance of finality in the litigation process. That is a relevant consideration in determining prejudice to the defendant, as the Court of Appeal stated in Giant Tiger, at para. 38:
When an action has been disposed of in favour of a party, that party's entitlement to rely on the finality principle grows stronger as the years pass. Even when the order dismissing the action was made for delay or default and not on the merits, and even when the party relying on the order could still defend itself despite the delay, it seems to me that at some point the interest in finality must trump the opposite party's plea for an indulgence. This is especially true where, as in the present case, the opposite party appears to have another remedy available.
In Ali v Fruci (Ont CA, 2014) the Court of Appeal sets out the test for setting aside a dismissal against a plaintiff for delay in listing their action for trial, where the delay was not intentional:
(b) The test. Chrisjohn v. Riley
 This is not a case where the plaintiff intentionally delayed the action or showed a disdain for the court’s processes. Thus, to have Ali’s action dismissed for delay, the respondents had to meet a three-part test. On their motion they had to show:
• the delay was inordinate or unreasonable;See Langenecker v. Sauvé, 2011 ONCA 803 (CanLII), 2011 ONCA 803 at para. 7.
• the delay was inexcusable;
• the delay gave rise to a substantial risk that a fair trial of the issues in the litigation would not be possible
 The motion judge’s order dismissing this action for delay is a discretionary order. It is therefore entitled to the usual deference from an appellate court. We are not justified in interfering with the order unless the motion judge exercised her discretion unreasonably or acted on a wrong principle.
In Chrisjohn v. Riley (Ont CA, 2015) the Court of Appeal discussed the principles applicable to setting aside a trial court clerk's dismissal for delay:
 The decision of a master or judge refusing to set aside an administrative dismissal is entitled to deference and may be set aside only if made on an erroneous legal principle or infected by a palpable and overriding error of fact: 1196158 Ontario Inc. v. 6274013 Canada Ltd., 2012 ONCA 544 (CanLII), 112 O.R. (3d) 67, at para. 16. The appellants assert that there were such errors in this case.. H.B. Fuller Company v. Rogers (Rogers Law Office)
 In Finlay v. Van Paassen, 2010 ONCA 204 (CanLII), 101 O.R. (3d) 390, Laskin J.A. noted, at para. 33, that on 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, at para. 28, Sharpe J.A. observed: “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.” Sharpe J.A. went on to recognize that the situation may be different where the lawyer’s conduct is not inadvertent but deliberate.
 As this court noted in Hamilton (City) v. Svedas Koyanagi Architects Inc., 2010 ONCA 887 (CanLII), 104 O.R. (3d) 689, at para. 33, on a motion to set aside a dismissal for delay, the question of prejudice is invariably a key, if not the key consideration. The relevant prejudice is to the defendant’s ability to defend the action that would arise from steps taken following dismissal or which would result from the restoration of the action: MDM Plastics Ltd. v. Vincor International Inc., 2015 ONCA 28 (CanLII), 124 O.R. (3d) 420, at para. 25; see also 806480 Ontario Ltd. v. RNG Equipment Inc., 2014 ONCA 488 (CanLII),  O.J. No. 2979, at para. 4.
 The onus was not on the respondent to demonstrate “significant and actual” prejudice, as asserted by the appellants (although there was evidence of such prejudice on the record), but on the appellants to rebut the inference of prejudice, that is, prejudice to the respondent’s ability to defend the action. The motion judge correctly concluded that the onus was not met in the present case, and that actual prejudice relevant to the ability to defend the action on damages and liability had been established.
In H.B. Fuller Company v. Rogers (Rogers Law Office) (Ont CA, 2015) the court considers a motion to set aside dismissal of a case for delay:
 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.
 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.
 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),  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).
 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.
 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.
 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.
 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.] 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).
 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.