LISETTE ROLAND, JACQUES ROLAND v. DANIEL ROLAND, 2018 ONSC 2754

CITATION : Roland v. Florence, 201 8 ONSC 2754 COURT FILE NO.: 01- CV-219317CM MOTION HEARD: 201 80327 REASONS RELEASED: 201 80430 SUPERIOR COURT OF JUSTICE – ONTARIO BETWEEN: LISETTE ROLAND, JACQUES ROLAND and DANIEL ROLAND , minor by his Litigation Guardian, Lisette Roland Plaintiffs - and- DITA MARIE FLORENCE and GE CAPITAL AUTOLEASE CANADA INC. Defendants BEFORE: MASTER M.P. McGRAW COUNSEL: W. G. Scott Email : wscott@brownandpartners.ca -Agent for the Plaintiff Daniel Roland S. Kim Email: sarah.kim@tdinsurance.com -Counsel for the Defendants W. Dunlop -Counsel for the Defendant GE Autolease Canada Inc.

REASONS RELEASED : April 30 , 2018 Reasons for Endorsement I. Introduction [ 1 ] This is a motion by the Plaintiff Daniel Roland (“Daniel”) to set aside the Notice of Discontinuance filed November 1, 2001 (the “Discontinuance”) in this action (the “2001 Action”) and to extend the time to serve a Statement of Claim. This motion is brought as part of Daniel’s mitigation obligations in his lawyer negligence action commenced in 2012 (the “2012 Action”) arising from the settlement of his claim in the 2001 Action by his parents, the Plaintiffs Lisette Roland (“Lisette”) and Jacques Roland (“Jacques”).

This motion is brought by counsel retained by LawPRO to defend Daniel’s former lawyers in the 2012 Action as Agent for Daniel.

[ 2 ] This motion is largely a strategic effort by LawPRO to resurrect the 2001 Action, settled and discontinued almost 17 years ago, in order to mitigate its potential liability in the 2012 Action. However, underlying this motion are a series of missteps, delays and related complexities, including LawPRO claims in both actions, which have affected Daniel’s interests as a party under disability. II.

History of These Proceedings The 2001 Action, the Settlement, the Discontinuance and the 2012 Action [ 3 ] The 2001 Action was commenced by Notice of Commencement of Proceedings and Notice of Action dated October 24, 2001 and arises from Lisette’s involvement in a motor vehicle accident on October 25, 1999 with the Defendant Dita Marie Florence (together with the Defendant GE Capital Autolease Canada Inc,, the “Florence Defendants”). Jacques and Daniel claimed damages pursuant to the Family Law Act (Ontario)(“FLA”).

Daniel was 6 years old at the time of the accident, turned 18 on October 8, 2011 and is currently 24 years old. [ 4 ] Lisette and Jacques were represented by Tina Nanov and J. David Lindsay of Gluckstein & Associations LLP who are Defendants in the 2012 Action (collectively, the “Gluckstein Defendants”). [ 5 ] Although the Notice of Commencement of Proceedings and Notice of Action describe Daniel as “minor by his Litigation Guardian, Lisette Roland”, no Affidavit of Litigation Guardian was filed with the Court. The Notice of Commencement and Notice of Action were not served on the Defendants.

No Statement of Claim was issued given that on October 26, 2001, the Plaintiffs entered into a settlement agreement (the “Settlement”) with the Florence Defendants’ insurer, Meloche Monnex (now known as TD Insurance) (“TD”). The Settlement was negotiated and documented by Ms. Nanov and Rose Martyn, an analyst at TD. [ 6 ] The terms of the Settlement included payment of $50,000 in damages plus disbursements of $499.95. TD sent a cheque in the amount of $50,499.95 to Gluckstein in trust on October 26, 2001.

Gluckstein set up an internal account and $2,500 was allocated to Daniel’s FLA claim. [ 7 ] Gluckstein sent the Discontinuance to Ms. Martyn at TD on October 29, 2001 and filed it with the Court on November 1, 2001. The style of cause on the Discontinuance does not include the reference to Daniel as a minor by his Litigation Guardian, Lisette.

On November 9, 2001, Lisette and Jacques executed a final release prepared by TD in favour of the Florence Defendants which was sent to TD on November 12, 2001. [ 8 ] Rules 7.08(1) and (3), and 7.09(1) in force at the time of the Settlement and the filing of the Discontinuance, state: “7.08

(1) No settlement of a claim made by or against a person under disability, whether or not a proceeding has been commenced in respect of the claim, is binding on the person without the approval of a judge. … 7.08

(3) Where an agreement for the settlement of a claim made by or against a person under disability is reached before a proceeding is commenced in respect of the claim, approval of a judge shall be obtained on an application.” 7.09

(1) Any money payable to a person under disability under an order or a settlement shall be paid into court, unless a judge orders otherwise.”

[ 9 ] Rule 23.01(2) provides that leave of a Judge is required to discontinue an action by a party under disability. [ 10 ] Judicial approval was not obtained for the Settlement or the Discontinuance and the $2,500 allocated to Daniel was not paid into court. [ 11 ] There were no further communications regarding the 2001 Action for almost 11 years until Daniel commenced the 2012 Action. [ 12 ] On June 19, 2012, Daniel’s counsel, Raphael Barristers (“Raphael”) commenced the 2012 Action against the Gluckstein Defendants and the Florence Defendants.

The Statement of Claim in the 2012 Action did not name a Litigation Guardian for Daniel. Daniel claims $1,000,000 for breach of contract and professional negligence from the Gluckstein Defendants and, as against the Gluckstein Defendants and the Florence Defendants, a declaration that he is entitled to damages under the FLA of $1,000,000. [ 13 ] Daniel alleges that he became distraught as a result of Lisette’s injuries and developed a number of symptoms and behaviours associated with Obsessive Compulsive Disorder including aggression and self-mutilation.

He has also been diagnosed with Tourette’s Syndrome and Asperger’s Syndrome which has affected his ability to function and will continue to require extensive medical attention. [ 14 ] Brown & Partners LLP (“Brown”) was retained by LawPro to represent the Gluckstein Defendants. On January 18, 2013, the Gluckstein Defendants delivered a Statement of Defence and on January 19, 2013 commenced a Third Party Claim against Lisette. On August 2, 2013, in-house counsel for Intact Insurance served a Statement of Defence on behalf of Lisette to the 2012 Action and the Third Party Claim.

The Discontinuance Motion, Dismissal Order and Appointment of Litigation Guardian [ 15 ] On or about June 5, 2015, Brown, as Agent for Daniel, commenced a motion to set aside the Discontinuance (the “Discontinuance Motion”). Raphael consented to Brown acting as Daniel’s Agent. [ 16 ] On September 9, 2015, the Registrar issued an Order dismissing the 2012 Action for delay (the “Dismissal Order”). [ 17 ] The Discontinuance Motion was originally returnable on December 18, 2015.

It was adjourned to May 12, 2016 due to a separate application commenced by Daniel for a declaration that he was incapable of managing property and for the appointment of a Guardian of Property (the “Application”). As a result, Brown advised Raphael that if Daniel was incapable of managing property, then he was also a person under disability for the purposes of the Discontinuance Motion and Brown could not bring the Discontinuance Motion until Daniel’s counsel brought a motion to appoint a Litigation Guardian (the “Litigation Guardian Motion”).

Brown, on behalf of LawPro, also requested that Raphael bring a motion to set aside the Dismissal Order (the “Dismissal Motion”). [ 18 ] On March 1, 2016, Raphael agreed that Daniel would not move to set aside the Dismissal Order as against the Gluckstein Defendants. Raphael also took the position that Daniel had continuously been under disability since Lisette’s accident and therefore, the limitations period with respect to his claims had never started to run and it was not necessary to proceed with the Discontinuance Motion.

Raphael further advised that Daniel intended to move to set aside the Dismissal Order as against the Florence Defendants and requested their consent. On this basis, Brown withdrew the Discontinuance Motion. . [ 19 ] In or about early March 2016, as a result of the Dismissal Order, Raphael reported itself to LawPRO which appointed Moodie Mair Walker LLP (“Moodie”) as Agent for Daniel on the Dismissal Motion.

On March 24, 2016, Moodie commenced the Dismissal Motion which was later amended to add the Litigation Guardian Motion. [ 20 ] By Order of Justice Wilton-Siegel dated October 24, 2016, Daniel was found to be incapable of managing his property and Jacques was appointed as Daniel’s Guardian of Property.

[ 21 ] The Dismissal Motion and the Litigation Guardian Motion first came before me on June 15, 2017 and were initially opposed by the Gluckstein Defendants and the Florence Defendants. After discussions with counsel, the Gluckstein Defendants consented to setting aside the Dismissal Order and the appointment of Jacques as Litigation Guardian.

I adjourned these motions to a telephone case conference on June 19, 2017 in order to provide the Florence Defendants with additional time to obtain further instructions. [ 22 ] As set out in my Endorsement dated June 19, 2018 (the “June 19 Endorsement”), on consent of the Gluckstein Defendants and the Florence Defendants I granted an Order setting aside the Dismissal Order and appointing Jacques as Litigation Guardian.

Paragraphs 3-4 of the June 19 Endorsement stated the following with respect to this motion: “[3] Counsel advise that the next step in these proceedings which requires scheduling is the outstanding motion to set aside the Notice of Discontinuance in the action commenced in 2001 (the “2001 Action”). Counsel anticipate that after cross-examinations take place, they will be in a position to

schedule this motion, likely to be returnable in September 2017 or later. [4] Once counsel have a better idea of the timing of the motion with respect to the Notice of Discontinuance in the 2001 Action, counsel may contact me through the Masters’ Administration Office to arrange a telephone case conference to

schedule this motion for September 2017 or later, which shall proceed before me for 2 hours. As I am seized of this matter, counsel may contact me any time in the interim to arrange a telephone case conference should any issues arise.” [ 23 ] This motion was scheduled on a subsequent telephone case conference then adjourned to today. III.

The Law and Analysis Leave and Conflict of Interest [ 24 ] The Defendants raise two preliminary issues: i.) that Daniel requires leave to bring this motion given that the Discontinuance Motion was withdrawn; and ii.) that Brown, as counsel for the Gluckstein Defendants, is in a conflict of interest by acting as Agent for Daniel on this motion. [ 25 ] Rule 37.09(1) provides that a moving party may withdraw a motion by delivering a notice of abandonment, however, there is no guidance in the Rules as to if or how an abandoned motion may be revived or whether leave is required to withdraw a notice of abandonment.

The courts have held that leave is required, and in the absence of limitations period issues, the court should consider whether there has been mistake, inadvertence or misapprehension or some other grounds, and that leave should not be granted unless there are special circumstances of a compelling nature ( Gastops Ltd. v. Forsyth, [1998] O.J.

No. 4570 (Gen Div.) at paras. 13 and 28 ). [ 26 ] Daniel submits that leave is not required because the June 19 Endorsement contemplated this motion and that the Florence Defendants consented to the Dismissal Order thereby agreeing that there was no prejudice to them in defending the 2001 Action and the 2012 Action.

I reject these arguments given that the case management and scheduling of this motion together with the consent to set aside the Dismissal Order were all without prejudice to any positions which the parties might take on the return of this motion. [ 27 ] The issue of leave is largely moot in light of my conclusions below.

However, given the compelling and complex circumstances of these proceedings namely the procedural missteps, Daniel’s disability and with no substantive legal submissions on leave by the Florence Defendants, I conclude that it is appropriate to grant Daniel leave to bring this motion. [ 28 ] The Florence Defendants also assert that Brown is in a conflict of interest acting as Daniel’s Agent or this is otherwise an abuse of process. The Florence Defendants have not brought a motion to disqualify Brown from acting in this capacity and confirm that they do not intend to do so.

Further, the Florence Defendants have not previously raised this issue before me or otherwise taken issue with it. Accordingly, in the absence of a motion to disqualify Brown and the Florence Defendants’ acquiescence to Brown acting as Agent, I reject these submissions and refuse to consider this as a factor on this motion. Should the Discontinuance Be Set Aside?

[ 29 ] Of the cases referred to me by counsel, the one which bears closest resemblance to the present case is Morten (Litigation Guardian of) v. Fanzutti, [1994] O.J. No. 1129 (Gen Div.) . In that case, counsel for the child plaintiff’s father settled the child’s claim with the insurance company and a Notice of Discontinuance was filed after the child turned 18. The Court refused to set aside the Notice of Discontinuance on the basis that court approval was not required because it was filed after the child had attained the age of majority ( Morten at para. 7).

The court further held that any claim brought by the plaintiff was beyond the limitations period, the defendant would suffer prejudice if the discontinuance were set aside and the child had not demonstrated special circumstances including inadvertence, mistake or misapprehension of a procedural matter ( Morten at paras. 9-10). [ 30 ] In Daniele v.

Johnson (1999), 5 O.R. (3d) 498 at paras. 20-21 , the Divisional Court confirmed a Master’s refusal to set aside a Notice of Discontinuance on the basis that there was no inadvertence, mistake or misapprehension of the client’s instructions and no exceptional circumstances. [ 31 ] The courts have also refused to set aside Notices of Discontinuance where the moving party failed to act within a reasonable time to set aside the discontinuance ( Abdalla v. Rohani, [2003] O.J.

No. 333 (S.C.J.) at paras. 3-4 ). [ 32 ] Rule 14.03(3) provides that a Statement of Claim shall be filed within 30 days after the issuance of a Notice of Action except with consent of the defendant or leave of the Court. Rule 3.02(1) provides that the Court may extend or abridge any time prescribed by the Rules. [ 33 ] In McNeil v. Sun Life Assurance Co. of Canada, [2009] O.J.

No. 4272 (S.C.J.) , the court dismissed the plaintiff’s motion for leave to file a Statement of Claim 18 months after the deadline on the basis that the plaintiff had failed to demonstrate that the defendant would not suffer prejudice, stating: “It has been deprived of any opportunity to effectively investigate her medical condition and ability to qualify for LTD for a period of almost one and one-half years. In my view, there is a form of prejudice beyond remedy”( McNeil at para. 6). [ 34 ] More recently, the Court of Appeal in Sultan v. Hurst, [2018] O.J.

No. 223 (C.A.) upheld a motion Judge’s dismissal of a motion to validate late service of a Statement of Claim.

The Court of Appeal held that the motions Judge was entitled to accept the defendant’s evidence that its ability to conduct defence medicals, timely surveillance, complete a full investigation and obtain timely OHIP records (which are only obtainable for 7 years preceding the date of request) were compromised and would result in prejudice ( Sultan at para. 4). [ 35 ] In my view, there are 3 overarching principles to consider on this motion: the balance between efficiency and deciding disputes on their merits; non-compensable prejudice; and finality.

The consideration and balancing of these principles and related interests is more pronounced in the unique and complex circumstances of these proceedings. [ 36 ] This motion requires the kind of careful balancing between efficiency and deciding disputes on their merits discussed by the Court of Appeal in the context of motions to set aside dismissals for delay: “ ....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.” ( Kara v. Arnold, 2014 ONCA 871 at para. 9 ). [ 37 ] The Court of Appeal has stated the preference that matters be resolved on their merits. At para. 34 of D’Alimentation Denis Theriault Ltee v.

Giant Tiger Stores Ltd., 2007 ONCA 695 Sharpe J.A. stated: “Expeditious justice must be balanced with the public interest in having disputes determined on their merits. Where, despite the delay, the defendant would not be unfairly prejudiced should the matter proceed for resolution on the merits, according the plaintiff an indulgence is generally favoured.”

[38] In H.B. Fuller Company et al. v. Rogers (Rogers Law Office), 2015 ONCA 173 at paragraph 27, the Court of Appeal furtherexpanded on the preference for deciding matters on their merits in the context of cases where the delay has resulted from an error bycounsel: “The court's preference for deciding matters on their merits is all the more pronounced where delay results from an error committed bycounsel.

As the court stated in Habib, at para. 7, "[O]n a motion to set aside a dismissal order, the court should be concerned primarilywith the rights of the litigants, not with the conduct of their counsel." In Marché, Sharpe J.A. stated, at para. 28, "The law will notordinarily allow an innocent client to suffer the irrevocable loss of the right to proceed by reason of the inadvertence of his or hersolicitor" (citations omitted).” [39] A consideration of actual prejudice is integral to this balancing of competing interests.

The party seeking an indulgence mustdemonstrate that the other parties would not suffer any actual prejudice if this action is permitted to proceed including prejudice which ispresumed given the loss of institutional knowledge and the fading of memories over time (1196158 Ontario Inc. v. 6274013 CanadaLtd., 2012 ONCA 544, at paras. 31, 41-43).

The unavailability or death of key witnesses, the loss of documents such as OHIP records andthe loss of opportunities to conduct a proper investigation may also constitute actual prejudice (Sultan at para. 4; 1186158 Ontario Inc. atpara. 31). [40] The finality principle is also a primary consideration on this motion, particularly given that the 2001 Action was settled anddiscontinued over 16 years ago and after advancing settlement funds, the Florence Defendants heard nothing more about the 2001Action for almost 11 years.

The Court of Appeal summarized the principle of finality in Giant Tiger: “37 Finality, like the avoidance of unnecessary delay, is a central principle in the administration of justice. ". The law rightly seeks afinality to litigation" and finality is "a compelling consideration": Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44 ,[2001] 2 S.C.R. 460 at paras. 18 and 19. 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 asthe years pass.

Even when the order dismissing the action was made for delay or default and not on the merits, and even when the partyrelying on the order could still defend itself despite the delay, it seems to me that at some point the interest in finality must trump theopposite party's plea for an indulgence. This is especially true where, as in the present case, the opposite party appears to have anotherremedy available. 39 The delay in this case was inordinate.

From the appellant's perspective, the respondents did absolutely nothing to move this fileforward for more than five years, and before that, the respondents had proceeded in what could only be described as a desultory fashionfor two and one-half years after commencing the action. 40 I agree with the Master that, when viewed in the light of a delay of this magnitude, the security of the legal position obtained by theappellant becomes an important factor to consider.

Five years after the action against it had been dismissed, the appellant was entitled torest on the assurance that the judicial system had disposed of the respondents' claim once and for all.” [41] I have also considered and applied Rule 1.04(1) which provides that the Rules of Civil Procedure shall be liberally construedto secure the just, most expeditious and least expensive determination of every civil proceeding on its merits and Rule 1.04(1.1) whichrequires the court to make orders and give directions that are proportionate to the importance and complexity of the issues, and to theamount involved, in the proceeding. [42] Daniel submits that the Settlement is not binding and the Discontinuance not effective given the absence of judicialapproval under Rule 7.08(3) and Rule 23.01(2).

Daniel’s primary submission is that the Florence Defendants should not be entitled torely on the Settlement and the Discontinuance or complain of any prejudice because TD either knew that approval was required or didnot care and took the risk that it was not binding.

Daniel also asserts that the Florence Defendants’ consent to set aside the DismissalOrder in the 2012 Action also amounts to an admission that they would suffer no prejudice by having to defend the 2012 Action andtherefore, by extension, the 2001 Action. [43] The Florence Defendants submit, among other things, that they would suffer actual prejudice if the Discontinuance is setaside particularly given the passage of time; that no steps were taken within a reasonable period of time to set aside the Discontinuance;principle of finality permits them to rely on the Settlement and the Discontinuance; and that in any event, the Settlement is binding.

Withrespect to the validity of the Settlement, the Florence Defendants rely on Wu Estate v. Zurich Insurance Co., [1999] O.J. No. 1939,where the Court of Appeal held that a settlement between a 28-year old plaintiff under disability and an insurance company was bindingwhere the plaintiff passed away before approval was obtained.

The Florence Defendants also cite Azzeh (Litigation Guardian of) v.Legendre, 2017 ONCA 385, where it was held that notwithstanding the fact that the Litigation Guardian did not file the requiredaffidavit, the plaintiff was represented and the relevant notice period under the Municipal Act (Ontario) started to run. [44] In my view, these cases relied on by the Florence Defendants are distinguishable from the present case. However, it is notnecessary or appropriate in the circumstances for this court to make any conclusions with respect to whether the Settlement and the

Discontinuance are binding and effective due to the failure to obtain judicial approval. Not only are these issues in dispute in the 2012 Action, any such conclusions are not dispositive of this motion or the court’s consideration of prejudice as they apply to the Discontinuance and the 2001 Action. Further, there is insufficient evidence before me to conclude that TD knew or should have known that judicial approval was required or that TD had any obligation to seek it.

However, more importantly, these factors are not relevant to my consideration of actual prejudice. [ 45 ] In this regard, Daniel bears the onus of demonstrating that the Florence Defendants would not incur any actual prejudice if the Notice of Discontinuance is set aside. In my view, he has provided no evidence to discharge this onus. [ 46 ] As a result of the passage of time and the circumstances related to these proceedings, I conclude that the Florence Defendants would suffer actual prejudice if the Notice of Discontinuance is set aside.

The accident occurred over 18 years ago and was settled 2 days after the commencement of the 2001 Action, over 16 years ago. During these 18 plus years, and even by the commencement of the 2012 Action almost 11 years later, the Florence Defendants have lost any opportunity to properly investigate the claims against them in order to make full, fair and proper answer and defence. [ 47 ] In addition to the general presumption that the memories of key witnesses have faded over this significant time period, some are no longer available including the late Dr.

Herbert Joseph Kaye, a neuropsychologist who assessed Lisette on December 17-19, 2000. As a result of the prompt Settlement and Discontinuance, there were no examinations for discovery, defence medicals, surveillance or further investigations nor was any witness testimony preserved. [ 48 ] Further, relevant documentation which is integral to the Florence Defendants’ proper defence of this action is no longer available.

Not only was there no documentary production given the quick Settlement and Discontinuance, relevant records have been purged or were not preserved, including OHIP records which are only available for 7 years prior to the date of request.

The loss of OHIP records is particularly prejudicial given that records with respect to Lisette’s and Daniel’s treatments and conditions are necessary for the Florence Defendants to properly defend this action. [ 49 ] While I am of the view that the actual prejudice is sufficient on its own to favour dismissal of Daniel’s motion, this conclusion is strengthened when balanced with the fact that Daniel is not without remedies given that the 2012 Action continues.

Further, while the law favours trying matters on their merits, this presumes that there is no actual prejudice, which I have concluded would be the result in the present circumstances. I am also mindful and empathetic that the circumstances giving rise to this motion, including the failure to obtain judicial approval for the Settlement and the Discontinuance for a party under disability and the related delays can be attributed to errors and/or inadvertence of Daniel’s counsel.

However, in my view, this is not enough of a mitigating factor to overcome the significant prejudice and unfairness which the Florence Defendants would suffer if the Discontinuance is set aside. [ 50 ] I also conclude that the finality principle strongly favours the Florence Defendants in these circumstances. For 11 years, the Florence Defendants relied on the fact that this action had been finally disposed of by the Settlement and Discontinuance followed later by a shorter period when there was no outstanding Discontinuance Motion.

Given this significant passage of time, the Florence Defendants’ entitlement to rely on the Settlement and Discontinuance has grown stronger, moreso given that Daniel still has remedies in the 2012 Action. [ 51 ] I further conclude that the application of Rule 1.04 also favours the dismissal of Daniel’s motion.

In particular, what is just, expedient and proportionate is for Daniel to pursue his remedies in the 2012 Action. [ 52 ] Having considered, balanced and weighed all of the relevant factors and circumstances, I conclude that the most just result in the circumstances is to dismiss Daniel’s motion to set aside the Discontinuance. IV. Disposition [ 53 ] Order to go dismissing Daniel’s motion to set aside the Discontinuance. [ 54 ] If the parties cannot agree on the costs of this motion, they may file written costs submissions not to exceed 3 pages (excluding costs outlines) on or before June 29, 2018.

Released: April 30, 2018 __________________________ Master M.P. McGraw