Ontario Court of Appeal Upholds Dismissals for Delay

by Bennett Jones LLP

On June 4, 2013, the Ontario Court of Appeal released two decisions about dismissals for delay. In Faris v. Eftimovski, the Court upheld a status hearing dismissal. In Nissar v. The Toronto Transit Commission, the Court upheld a refusal to restore the action to the trial list. I think the decisions confirm the Court of Appeal’s continuing desire to see actions prosecuted more vigorously and its support for lower courts that hold plaintiffs accountable for delay.

Faris arose from a real estate deal gone bad. In 2007, the former property owner sued his real estate agent and lawyers. By the date of the status hearing over four years later, pleadings were not yet finalized, no document productions had been exchanged, and no examinations for discovery had taken place. Meanwhile, the real estate agent and lawyer had both died. The status hearing judge held that there were many periods of unexplained delay and that the deaths of the agent and lawyer prejudiced the defendants. She dismissed the plaintiff’s action.

In Nissar, the plaintiff commenced her action in 2001 alleging injury suffered on a TTC bus. Discoveries occurred in 2002, but the plaintiff’s lawyer never requested a transcript of the bus driver’s examination with the result that no record of his examination existed. The action was set down for trial in 2004 but struck off the trial list in 2005. Seven years later, the plaintiff moved to restore the matter to the trial list. The motions judge dismissed the motion because the plaintiff had not explained her seven-year delay in moving to restore the matter to the trial list and the delay had prejudiced the defendants since the bus driver could hardly be expected to remember 13-year-old events.

On appeal, Faris and Nissar both argued that the lower court had applied the wrong test by placing the onus on them to explain the delay and lack of prejudice rather than on the defendants. They argued that the Court of Appeal should apply the test used on motions to dismiss for delay under Rule 24.01.

Justice Tulloch rejected the appellants’ approach. He held that Rule 24.01 (motions for dismissal by a defendant) and Rule 48 (status hearings and administrative dismissals) “each offer distinct means that may lead to the same end; the dismissal of the plaintiff’s action for delay.” But Rule 48 motions, such as status hearings and motions to restore a matter to the trial list, require plaintiffs to convince the court why actions should be allowed to proceed. In contrast, Rule 24.01 motions require defendants to convince the court why actions should be dismissed. That conclusion results from:

  1. the plain wording of Rule 48 which puts the onus on plaintiffs and
  2. the fact that Rule 48 motions occur much later in a proceeding than Rule 24.01 motions, indicating that plaintiffs must bear the consequences of their failure to advance the action.

Accordingly, Justice Tulloch held that that test for status hearings and motions to restore an action to the trial list – both Rule 48 motions – are the same. The plaintiff must show that:

  1. there is a reasonable explanation for the litigation delay and
  2. no non-compensable prejudice will result to the defendant if the action continues.

In the result, Justice Tulloch agreed with the lower courts that Faris and Nissar had not met that test. He dismissed the appeals effectively ending their claims.

Some take-aways from these decisions:

  1. There is a new test on motions to restore a matter to the trial list. Do not rely on the old test developed by Master Graham in Ruggiero v. FN Corporation.
  2. These decisions are the latest in a series of decisions in which the Court of Appeal has taken a hard line against plaintiffs who have failed to diligently prosecute actions. Continuing appellate support of lower courts that dismiss actions for delay may increase the frequency with which Masters and Judges dismiss borderline cases. When acting for plaintiffs, make sure you keep actions moving forward.
  3. The onus on Rule 24.01 motions makes them hard to win except in cases of egregious delay. When acting for defendants, forget Rule 24.01. Focus on getting contested status hearings or having actions struck off of the trial list. That will put the plaintiff under the gun to explain the delay and why there is no prejudice.
  4. The deferential standard of review of Rule 48 dismissals increases the importance of the lower court hearing because an appeal is so hard to win. The Court of Appeal will only overturn an administrative dismissal if the lower court made a palpable and overriding error of fact or based its decision on an erroneous legal principle.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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