2024 QCCS 121, 2024 QCCS 121

Portah c. 9417508 Canada inc. 2024 QCCS 121 SUPERIOR COURT (Civil Division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL No.: 500-17-109055-197 DATE: January 22, 2024 _____________________________________________________________________ PRESIDING: THE HONOURABLE GARY D.D. MORRISON, J.S.C. _____________________________________________________________________ ELLIOT PORATH Plaintiff v. 9417508 CANADA INC. LINDA FRAZER LFRASERNOTAIRE INC.

LARRY SOUSSAN MARK BLUMENTHAL Y DELTA INTERACTIVE CORP Defendants - and - OFFICIER DE LA PUBLICITÉ DES DROITS DE LA CIRCONSCRIPTION FONCIÈRE DE MONTRÉAL Impleaded Party _____________________________________________________________________ JUDGMENT _____________________________________________________________________ [ 1 ] The Court must decide whether or not to relieve Plaintiff of his default to inscribe the case for trial. [ 2 ] On November 9, 2023, Plaintiff Elliot Porath filed a Notice for Special Case Management, seeking a number of file management orders, including the foreclosure of Defendant Mark Blumenthal to present a defence [1] . [ 3 ] Upon receipt, counsel for Defendant Y Delta Interactive Corp (“ Y Delta ”) informed Plaintiff’s counsel that his client is in default for failing to have filed an inscription for trial and judgement on the merits within the delay stipulated by Justice Bélanger, being Tuesday November 7, 2023, which was two (2) days prior his notice. [ 4 ] Upon being informed of his default to inscribe, Plaintiff’s counsel immediately filed and notified a Modified Notice whereby he also seeks to be relieved from his default to file an inscription and, as well, to have the delay extended to March 8, 2024. [ 5 ] The following Monday, Y Delta filed and notified a De Bene Esse Notice of Case Management seeking the dismissal of Plaintiff’s conclusion to be relieved of his default, with certain subsidiary conclusions which target Plaintiff. [ 6 ] For the purpose of context, the present file has seen more than its share of delays, notices for case management, amendments to the Originating Application, a case management conference before Justice Edwards on January 22, 2021, and what appears to be a less than cooperative defendant in Mark Blumenthal, not that all the other defendants are necessarily fully cooperative on all issues. [ 7 ] For example, Defendant Blumenthal has still not provided all the pre-undertakings to his examination on discovery, and this not even after Justice Brossard ordered him to be examined on October 4, 2022 and to provide all the pre-undertakings.

Instead, he filed an application to have Plaintiff’s counsel disqualified. He then failed to appear at Court to present same. That incited Justice Moore to

schedule it anew on a peremptory basis. [ 8 ] Defendant Blumenthal then attempted to appeal that decision, but his application was dismissed by the Court of Appeal. Thereafter, the application to disqualify Plaintiff’s counsel was dismissed by Justice Marie-Eve Bélanger of this Court. [ 9 ] According to Plaintiff, all the defendants, save Y Delta, are simply refusing to comply with Justice Bélanger’s May 31, 2023 order to file a new Protocol by the end of June 2023. It was never done as defendants, save Y Delta, would not sign. Nor are they agreeing to fix dates for the examinations of their clients

[ 10 ] Their refusal, described by Plaintiff as a “dead man strategy”, is based on the fact that Plaintiff had not provided his undertakings, U-I to U-28, since his discovery in April 2022. It was not until October 12, 2023, approximately one and one-half years later, that Plaintiff finally provided five (5) of his pre-undertakings [2] , claiming that he could not find the other documents or that there were no other documents than those already included in his Exhibits P-1 to P-78.

A number of objections were also raised by Plaintiff, but these have not been brought before the Court. [ 11 ] Without intending to endorse such delays by Plaintiff in providing undertakings, it should be noted that he nonetheless did provide his response to the undertakings prior to the default to file an inscription.

Insofar as the quality of the replies are concerned, the Court is not seized of a debate on the subject and, therefore, declines to draw any conclusions. [ 12 ] As mentioned, Defendant Y Delta was an exception in that it did sign a new Protocol with Plaintiff whereby the delay to inscribe was to be extended to March 8, 2024. None of the others did. [ 13 ] Being incomplete, that Protocol was never filed and approved by the Court.

Plaintiff’s counsel states, however, that he had put the March 8, 2024 date in his agenda and simply forgot about the November date. [ 14 ] Plaintiff pleads an impossibility to act within the time limit for filing a new Protocol and obtaining the Court’s approval of an extension of the delay to file an inscription. This argument is meant to counter the presumption of discontinuance stipulated at

Article 177 C.C.P. The

article reads as follows: 177. A plaintiff who fails to file a request for setting down within the strict time limit is presumed to have discontinued the application, unless another party files such a request within 30 days after the expiry of the time limit. The court may relieve the plaintiff from this sanction if it is satisfied that it was impossible in fact for the latter to act within the time limit. In such an instance, the court modifies the case protocol and sets a new time limit, which cannot be extended except for compelling reasons. 177. Faute de demander l’inscription dans le délai de rigueur, le demandeur est présumé s’être désisté de sa demande à moins qu’une autre

partie n’ait demandé l’inscription dans les 30 jours de l’expiration du délai. Le tribunal peut lever la sanction contre le demandeur s’il est convaincu qu’il était en fait dans l’impossibilité d’agir dans le délai imparti. Dans ce cas, le tribunal modifie le protocole de l’instance et fixe un nouveau délai qui ne pourra être prolongé que si un motif impérieux l’exige. [ 15 ] Defendant Y Delta, whose Notice is obviously supported by the other defendants, argues that an impossibility to act is to be analyzed from the perspective not of the lawyer but of the individual party, in this case Plaintiff Porath.

In support thereof, she cites the decision of the Court of Appeal in Heaslip v. McDonald [3] in which the Court states that principle, adding as well an impossibility to act can result from the errors and negligence, even gross negligence, of counsel as long as the party itself has acted with diligence, although even then, relief is not automatic. [ 16 ] In this regard, the Court is to weigh the elements, while respecting the principles set out in

Article 9 C.C.P., which deals with the Court’s mission. [ 17 ] That mission includes ensuring proper case management in keeping with the principles and objectives of procedure. [ 18 ] The guiding principles are described at Articles 17 to 24 C.C.P., which includes proportionality, the duty of cooperation, the right of parties to be heard and the duty of the courts to ensure proper case management and the orderly conduct of proceedings, which requires parties to respect the rules of procedure and prescribed time limits. [ 19 ] The objectives of the rules of the Code of Civil Procedure , as stated in

Article 25, is in part to bring out the substantive law and to ensure that it is carried out. [ 20 ] Accordingly, courts have a certain discretion when assessing a party’s argument of impossibility to act and its right to be relieved of its default, but it is not without limits. [ 21 ] The Court of Appeal in Heaslip states that the courts are to analyze the situation in a two-step approach [4] . Firstly, the courts are to determine whether the party has demonstrated its impossibility to act.

And only then, if impossibility has been determined, are the courts to decide whether or not to relieve the party of the presumption of discontinuance. [ 22 ] In exercising its discretion, a court can consider the prejudice that a party will suffer if the court does not relieve him of his default, the serious character of his recourse, the time lapse between the default and conduct of the party and its attorneys [5] . [ 23 ] Each case is to be decided on its own merits, or lack thereof. [ 24 ] How is the individual party to demonstrate that it has acted in a diligent manner up to the date that the inscription was supposed to have been filed, such that it can then dissociate itself from its lawyers’ negligence? [ 25 ] The Court of Appeal confirms that it is the party’s burden to demonstrate its own good conduct, which is the reason for which an affidavit is generally required from the party and not only its lawyer [6] .

[ 26 ] In the present case, Y Delta correctly pleads that Plaintiff Elliot Porath has not submitted a signed affidavit. [ 27 ] Nor has his lawyer, who opted to proceed by way of a case management notice as opposed to an application pursuant to

Article 177 C.C.P., second paragraph. [ 28 ] In Heaslip , the Court of Appeal states that the failure to provide a party’s subpoena to support its argument results in the court not knowing anything as to the issue at hand or as to the party’s relationship with its counsel, such that the failure to do so is decisive [7] (“[ cette ] lacune était décisive ”), and would alone be sufficient to dismiss a demand to be relieved. [ 29 ] In Villanueva v.

Pilotte [8] , in which were assembled the same judges of the Court of Appeal as in Heaslip , the Court comments that the lack of an affidavit by the party itself results in the court not knowing what the party would have done and that “ on peut présumer qu’elle ne s’intéresse pas à l’action, ce qui dénote un manque de diligence incompatible avec l’impossibilité d’agir ” [9] . [ 30 ] In other words, the individual party’s own lack of interest may prevent it from pleading an impossibility to act. [ 31 ] However, in that case, the Court also comments that the absence of an affidavit was not considered determinative by the judge in first instance [10] , and the Court of Appeal nonetheless did not intervene in that regard.

It further observes that the impossibility to act is relative [11] , which explains why it need be analyzed on a case-by-case basis. [ 32 ] In the present matter, the Court is of the view that even in the absence of affidavits, the file demonstrates an impossibility to act. [ 33 ] Firstly, although much time was taken for Plaintiff to provide his undertakings, he did so approximately three weeks prior to the deadline fixed by Justice Bélanger for the inscription of the case. [ 34 ] In the Court’s view, that is not indicative of a party who is not interested in advancing its file. [ 35 ] The defendants argue that Plaintiff should have done so much earlier.

Perhaps so, but once they did receive them, the Court understands that they did not start to cooperate with fixing the examinations that still needed to be completed or with signing another Protocol (save Y Delta, as mentioned), that could have provided for a debate as to the undertakings.

The Court mentions this not so as to lay blame on the defendants as opposed to Plaintiff, but rather because, as mentioned above, the duty of cooperation is an element to be considered by the Court. [ 36 ] Moreover, in this regard, Defendant Blumenthal attempted to remove Plaintiff’s lawyer from the file, a futile attempt which lasted nine (9) months, from September 4, 2022 to March 31, 2023.

Plaintiff and his counsel successfully contested that attempt, which is clearly not indicative of a party who is not interested in seeing his case progress. [ 37 ] The fact is that Plaintiff’s lawyer missed the filing deadline some three weeks after Plaintiff provided what he describes as being his undertakings.

It is not clear what in fact an individual party, suing for alleged dishonest manoeuvres and misrepresentations regarding a real estate transaction, would be expected to do in a three-week period to ensure that his lawyer filed an inscription within the delay fixed by the Court. [ 38 ] The alternative to such filing of course would be to sign a new Protocol and seek the Court’s approval extending the delay so that, amongst other things, the additional examinations of defendants could be concluded prior to the filing of an inscription, although as mentioned there was little cooperation in that regard. [ 39 ] What more could such an individual reasonably be expected to do in such circumstances? [ 40 ] It would be unreasonable, in the Court’s view, to expect more from an individual litigant in such circumstances.

The Court is not to seek perfection before relieving a party from its default. [ 41 ] Nor is the Court to deduct at this stage that Plaintiff has not been sufficiently diligent over time. Judges of this Court have accepted the filing of protocols extending filing delays in this file, so the Court is not now going to conclude that Plaintiff has been negligent or disinterested in the advancement of his proceedings by reason of his having sought extensions. [ 42 ] The Plaintiff’s lawyer made a mistake and in the specific context of this file, it constitutes an impossibility to act for Plaintiff within the meaning of

Article 177 C.C.P., second paragraph, and

Article 173 C.C.P., third paragraph. [ 43 ] That being the case, the Court is also of the view that Plaintiff should be relieved of his default so that he can advance his file. [ 44 ] The Court considers that the claim appears, after a

summary review, serious on its face.

Moreover, if his case were to be considered discontinued and accordingly dismissed as per Y Delta’s application, Plaintiff would suffer a serious prejudice in that he would lose the opportunity to be declared owner of the immoveable property in question, along with damages for stress and inconvenience, or subsidiarily, to claim damage awards in excess of $300,000. [ 45 ] Although in certain cases, courts have taken the position that monetary losses could always be claimed from the lawyer and the latter’s professional liability insurers, thereby reducing or eliminating any prejudice, that would not necessarily negate a prejudice relating to, as in this case, the loss of a party’s ability to be declared owner of a property. [ 46 ] Moreover, the Court also, as mentioned above, takes into consideration the fact that Plaintiff’s lawyer filed a case management notice just two days past the deadline he says he forgot about.

The original notice represents an attempt to

schedule the pre-trial examinations of the defendants, to order them to provide their pre-undertakings and to have Defendant Blumenthal declared foreclosed from filing a defence, and this not as part of an attempt to convince the Court to relieve him of a default and to extend delays. He only added those conclusions two days later when reminded by Y Delta that he had missed the deadline. [ 47 ] In the Court’s view, all the foregoing combined circumstances are sufficient for the purposes of Articles 177 C.C.P., second

paragraph, and 173 C.C.P., third paragraph, and it will accordingly relieve Plaintiff of his default to file an inscription. [ 48 ] That said, the parties still must file a new protocol reflecting the various steps that need be accomplished prior to filing an inscription, including the conclusions of Plaintiff’s Notice for Case Management dated November 9, 2023 that relate to matters other than what is decided by the present judgement. Also, what will also need be decided are the subsidiary conclusions of Y Delta’s

Avis de gestion d’instance de bene esse dated November 13, 2023. [ 49 ] Considering the current situation, the Court considers that it would be appropriate to refer the matter for a one-hour case management conference, while extending the delays on a pro forma basis pending the convening of a case management conference. FOR THESE REASONS, THE COURT: [ 50 ] RELIEVES Plaintiff of his default to file an inscription on the merits within the delays fixed by the Court; [ 51 ] FIXES , on a pro forma basis, the time limit to ready the case for trial to March 8, 2024; [ 52 ] REFERS the present file to a one-hour case management conference, to be convened pursuant to

Article 153 C.C.P. at the earliest possible time; [ 53 ] THE WHOLE without costs, given the default. _________________________________ Gary D.D. Morrison, J.S.C. Mtre. Sébastien Dubois Greenspoon Winikoff s.e.n.c.r.l. Attorney for Plaintiff Mtre. Karim Renno Renno Vathilakis inc. Attorney for Defendants 9417508 Canada Inc. and Larry Soussan Mtre. Pascale Caron Donati Maisonneuve s.e.n.c.r.l. Attorney for Defendants Linda Frazer and LFraserNotaire Inc. Mr. Mark Blumenthal Defendant (self represented) Mtre. Nathalie Boulanger Langlois avocats, S.E.N.C.R.L. Attorney for Defendant Y Delta Interactive Corp Date of Hearing: November 16, 2023