2012 ONSC 4540, 2012 ONSC 4540

CITATION: Horgan v. The Law Society of Upper Canada, 2012ONSC 4540 COURT FILE NO.: CV-95-CQ061456-0000 MOTION HEARD: 20120131 and 20120227 SUPERIOR COURT OF JUSTICE - ONTARIO RE: Brian P. Horgan, Plaintiff AND: The Law Society of Upper Canada, Defendant BEFORE: Master McAfee COUNSEL: M. Adilman, Counsel for the Moving Party, the Defendant, The Law Society of Upper Canada B. P. Horgan, In Person, Responding Party, the Plaintiff HEARD: January 31, 2012 and February 27, 2012 REASONS FOR DECISION [1] This is a motion brought by the defendant for an order pursuant to Rule 24.01(1)(

c) of the Rules of Civil Proceduredismissing the action for delay. [2] For the reasons that follow, the motion is granted. [3] This action arises as a result of the defendant’s investigation of the plaintiff in 1986 and 1987, the defendant’s subsequentissuance of a complaint against the plaintiff on October 8, 1987 and the defendant’s withdrawal of the complaint on February 28, 1989. [4] It is alleged at paragraphs 13 and 15 of the amended statement of claim dated October 9, 1996 that the defendant committedabuse of process and malicious prosecution against the plaintiff in the “investigation, initiation and maintenance” of the complaint datedOctober 8, 1987.

It is alleged at paragraph 4 of the amended statement of claim that the improper conduct by the defendant as against theplaintiff commenced in January 1986, 26 years ago. [5] The defendant relies on Rule 24.01(

c) of the Rules of Civil Procedure which provides: “24.01(1) A defendant who is not in default under these rules or an order of the court may move to have an action dismissed for delaywhere the plaintiff has failed, … (

c) to set the action down for trial within six months after the close of pleadings.” [6] The plaintiff raised a preliminary issue concerning the close of pleadings in this action. It is the plaintiff’s position that theaction was set the action down for trial within 6 months after the close of pleadings. [7] On May 10, 2004 and March 7, 2005, a Master granted leave to the plaintiff to amend the amended statement of claim. Theplaintiff did not proceed to amend the amended statement of claim in accordance with the leave granted by the Master.

On May 23,2011, over 6 years later, the plaintiff wrote to defendant’s counsel advising that he would not be proceeding to amend the amendedstatement of claim. It is the plaintiff’s position that pleadings did not close until he wrote the letter advising he was not going to proceedwith the amendments to the amended statement of claim. The plaintiff argues that he set the action down for trial on November 22, 2011which was within 6 months of his letter dated May 23, 2011.

I disagree with the plaintiff’s position. [8] Rule 25.05 defines the close of pleadings as when the plaintiff has delivered a reply to every defence in the action or the timefor delivery of a reply has expired. Rule 25.04(3) provides that a reply shall be delivered within 10 days after service of the statement ofdefence. Rule 25.05 does not reference amended pleadings. An amendment does not re-open pleadings within the meaning of Rule 25(see 876761 Ontario Inc. v. Maplewood Ravines Ltd., (ON SC) at paras 21 and 22). [9] Pleadings closed in or about October 1996.

The action was not set down for trial until November 22, 2011, 15 years after theclose of pleadings. [10] The test on motion for an order dismissing an action for delay is set out in Armstrong v. McCall (ON CA),2006 CarswellOnt 3134 (CA) at para 11 citing Woodheath Developments Ltd. v.

Goldman (2003), (ON SCDC), 66O.R. (3d) 731 (Ont.Div.Ct.) at p. 732: “The principle to be applied on a motion to dismiss for delay is that an action should not be dismissed unless: (1) the default isintentional and contumelious; or (2) the plaintiff or his or her lawyers are responsible for the inexcusable delay that gives rise to asubstantial risk that a fair trial might not now be possible. It is presumed that memories fade over time, and an inordinate delay after thecause of action arose or after the passage of limitation period gives rise to a presumption of prejudice.

Where there is a presumption ofprejudice, the defendant need not lead actual evidence of prejudice and the action will be dismissed for delay unless the plaintiff rebutsthe presumption. The presumption of prejudice may be rebutted by evidence that all documentary evidence has been preserved and theissues 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 actualprejudice.” [11] The defendant relies on part (2) of the above test. Accordingly, in order to succeed on the motion, the defendant must firstshow that the plaintiff or the plaintiff’s previous lawyer of record is responsible for inexcusable delay. [12] The statement of claim was issued on February 27, 1995. The plaintiff claimed for $3,094,100.00 in damages.

The plaintiffalleged inter alia negligence, malicious prosecution and abuse of process. [13] On or about September 6, 1995, a notice of intent to defend was delivered. [14] On or about October 8, 1996, following two unsuccessful motions of the defendant to dismiss or stay the action and to strikethe statement of claim, a statement of defence was delivered. [15] On or about October 9, 1996, the statement of claim was amended.

The amendments included an increase of the amountclaimed to $6,169,100.00. [16] The defendant delivered an amended statement of defence on or about October 17, 1996. [17] For four and half years after pleadings closed, nothing occurred in this action until the action was subject to a Call Over CourtNotice dated April 25, 2001 requiring an attendance in court on June 7, 2001. [18] On or about July 5, 2001, Charles Mark became the lawyer of record for the plaintiff. [19] On July 9, 2001, at a Transitional Trial Court, this action was assigned into case management.

A case conference was held onAugust 28, 2001 and certain steps including the service of affidavits of documents were timetabled. [20] On or about October 9, 2001, the defendant served an amended amended statement of defence. [21] On or about October 31, 2001, the parties served affidavits of documents. [22] On or about November 16, 2001, the plaintiff served a reply to the amended amended statement of defence. [23] On May 28 and 29, 2002, the examination for discovery of the defendant’s representative was held and completed. [24] On May 30 and 31, 2002, the examination for discovery of the plaintiff was held but not completed. [25] Thereafter a long contested motion for leave to amend the amended statement of claim took place.

The parties attended incourt on a number of occasions between January 15, 2003 and September 11, 2003. The decision was released on May 10, 2004. Themotion was largely unsuccessful but some amendments were permitted. A costs endorsement was released on March 7, 2005 at whichtime the Master further clarified his decision regarding the amendments. [26] From the release of the decision on March 7, 2005 until in or about May 2011 no substantive steps were taken by the plaintiffeither to amend the amended statement of claim or move the action forward. [27] In the summer of 2009 Mr.

Mark moved to be removed from the record. This step did not involve the defendant nor did itmove the action forward. The removal motion was heard on August 17, 2009. The plaintiff opposed the motion. For reasons released onAugust 20, 2009, Mr.

Mark was removed from the record. [28] Six months later, on February 22, 2010, the plaintiff served a notice of intention to act in person. [29] On May 28, 2010, the plaintiff wrote to defendant’s counsel advising that he wanted to set the action down for trial and thatmediation must be arranged. [30] On June 2, 2010, defendant’s counsel replied advising that mediation was premature and asking if the plaintiff intended tocomply with the Master’s decision of March 7, 2005. [31] Following the response from defendant’s counsel of June 2, 2010, the plaintiff made no further contact with defendant’scounsel for approximately 11 months.

On May 6, 2011, the plaintiff wrote to defendant’s counsel advising that he wished to proceedwith mediation and if the matter was not resolved at mediation, he would set the action down for trial. [32] Thereafter, there was an exchange of correspondence and on May 23, 2011, the plaintiff wrote advising that he would not bepursuing the amendments ordered by Master Kelly on March 7, 2005. [33] “A delay is inexcusable if the explanation given is not “reasonable and cogent” or “sensible and persuasive.” It is not enoughto merely offer an explanation.

The explanation must be capable of belief and sufficient to excuse or justify the delay (see BNP ParibasBank (Canada) v. Donald S. Bartlett Investments Limited, 2011 ONSC 6902 at para 46). [34] The plaintiff’s affidavit filed in response to the motion indicates that in 2008, when Mr. Mark presented the plaintiff withaccounts, the plaintiff obtained an order for their assessment at which time he also sought the return of his files. The assessmentproceeding continued until February 2010 at which time the plaintiff was able to recover some boxes relating to this action.

The affidavitstates that when the plaintiff received the boxes, he “…was suffering poor health, was unemployed and receiving disability benefits as[his] only source of income.” According to the affidavit, as the plaintiff’s health improved, he took steps to move this action forward inthe spring of 2011. The plaintiff deposes that he never tried to cause delay in this proceeding (see paragraphs 3-6 of the plaintiff’saffidavit).

[35] The explanation offered by the plaintiff is not sufficient to justify the delay. The explanation offered only addresses oneperiod of time being 2008 to the spring of 2011.

Even if the evidence referred to on the motion is sufficient to excuse the 3 year period ofdelay commencing in 2008, and I am not satisfied that it is, there is no excuse or explanation offered for the period of delay of October1996 when an amended statement of defence was delivered to the call over court notification in April of 2001 nor is there any excuse orexplanation offered for the period of delay of March 7, 2005 when the decision of the Master was released to 2008 when the plaintiffbegan to have issues with his lawyer’s accounts.

I am satisfied that there has been inexcusable delay in this action. [36] The second branch of this part of the test focuses on prejudice to the defendant. Given the passage of time of approximately 26years since the events first giving rise to this action and given the expiry of the applicable limitation period, there is a presumption ofprejudice in this case.

The onus for rebutting the presumption of prejudice rests with the plaintiff. [37] As referenced above, “the presumption of prejudice may be rebutted by evidence that all documentary evidence has beenpreserved and that the issues in the law suit do not depend on the recollection of witnesses or that all necessary witnesses are availablewith detailed recollection of the events.” (see Armstrong v. McCall supra and Bentley v.

Stone (ON SC) at para 45)The plaintiff has not rebutted the presumption of prejudice. [38] Transcripts are available from the examinations for discovery that have taken place and from the Law Society proceedings.The documents referred to at

schedule A of the affidavits of documents are available. There are some documents that were in thedefendant’s possession that cannot be located but those missing documents do not appear to be missing as a result of the delay in thisaction. [39] The issues in the law suit do depend on the recollection of witnesses and not all necessary witnesses are available withdetailed recollection of the events. [40] From 1982 to 1988 Peter Guest worked as a senior investigator with the defendant. The plaintiff refers to Mr.

Guest’sinvolvement on the plaintiff’s examination for discovery (see pages 43-45 and 231-233 of the transcript). Mr. Guest is now 80 years old.Mr. Guest has no memory of any investigation of the plaintiff. He does not recall anything he may have done in connection with theplaintiff. [41] The amended statement of claim makes particular allegations against former employees of the defendant. [42] At paragraphs 5 and 6 of the amended statement of claim it is alleged that Vicki Otsu misrepresented herself in conducting arandom spot audit. Ms. Otsu worked as an examiner with the defendant from 1984 to 1989. Ms.

Otsu has advised that she has noindependent memory of anything to do with the plaintiff or her role in the investigation of the plaintiff in 1986 and 1987. [43] At paragraph 14(

a) of the amended statement of claim it is alleged that Shaun Devlin threatened a complaint against theplaintiff. Mr. Devlin had carriage of the complaint that was issued by the defendant. Mr. Devlin left the employ of the defendant in1990. He did not have a role as counsel in the cost proceeding that followed the withdrawal of the complaint but he did testify as awitness in the cost proceeding in 1997, some 15 years ago. Prior to re-reading the costs decision dated 1998 in 2011, Mr. Devlin did nothave a current, independent or clear memory of the most of the details concerning the complaint or its withdrawal.

Having re-read the1998 decision, Mr.

Devlin still has no memory whatsoever of the events regarding Peter Guest’s contact with the plaintiff concerningDoris Bourne as described in the 1998 decision at paragraphs 21 to 30. [44] The plaintiff himself acknowledged 10 years ago during his 2002 examination for discovery that he had a poor recollection ofcertain events leading to the claim (see pages 23, 149 and 272 of the transcript from the plaintiff’s examination for discovery). [45] As the plaintiff has not satisfied his onus to rebut the presumption of prejudice, it is not necessary for me to determinewhether there is actual prejudice.

However, if I am wrong and the plaintiff has rebutted the presumption of prejudice and for the sake ofcompleteness, I will address the issue of actual prejudice. [46] The onus is on the defendant to prove actual prejudice. I am satisfied that the defendant has proven actual prejudice. [47] Former employees of the defendant have no or limited recall of matters relating to the plaintiff and the complaint (see aboveregarding witnesses Mr. Guest, Ms. Otsu and S. Devlin). [48] A former employee of the defendant cannot be located.

William Henderson, who was a senior auditor with the defendant leftthe employment of the defendant in 1989. He would be 73 years old at this time. On the plaintiff’s examination for discovery, theplaintiff testified that Mr. Henderson, together with Mr. Devlin and Ms. Otsu, engaged in an investigation of the plaintiff that was a“frolic of their own” unauthorized by the Law Society regulations (see pages 183, 284 of the transcript from the plaintiff’s examinationfor discovery). The defendant has been unable to contact Mr.

Henderson. [49] There is a substantial risk that a fair trial might not now be possible in all of the circumstances. [50] The motion is granted and the action is dismissed for delay. [51] If any party seeks costs of the motion and costs cannot be agreed upon, the parties may make arrangements to attend beforeme to speak to the issue of costs.

Master McAfee Date: August 7, 2012