MILEMORE HOLDINGS LTD., Plaintiffs/Respondents on Motion – v. –, 2023 NBKB 235

IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK TRIAL DIVISION JUDICIAL DISTRICT OF MONCTON Milemore Holdings Ltd v. Harold Grew, Larry C. Fullerton, Richard Carver and Douglas Stewart 2023 NBKB 235 MC/381/2007 BETWEEN: MILEMORE HOLDINGS LTD., Plaintiffs/Respondents on Motion – and – HAROLD GREW Defendant/Moving Party – and – LARRY C. FULLERTON, RICHARD CARVER and DOUGLAS STEWART Third Party/ Respondents on Motion DECISION BEFORE: Chief Justice Tracey K. DeWare AT: Moncton, New Brunswick DATE OF HEARING: December 14, 2023 DATE OF DECISION: December 21, 2023 APPEARANCES: Milemore Holdings Ltd., Unrepresented. Larry Fullerton, on his own behalf Andrew Kinley, for the Defendant Harold Grew

Richard Carver and Douglas Stewart, did not appear DeWARE, C. J. INTRODUCTION [ 1 ] The Defendant, Harold Grew, requests the dismissal of this action pursuant to Rule 26.01(

c) and Rule 26.04(1) of the New Brunswick Rules of Court . FACTS [ 2 ] The Plaintiff, Milemore Holdings Ltd., commenced an action against the Defendant alleging professional negligence in legal services provided respecting a real estate transaction which occurred in 1993. The Notice of Action with Statement of Claim Attached was filed with the court in June of 2007.

An Amended Notice of Action with Statement of Claim Attached was filed with the court on May 26, 2015. [ 3 ] The Defendant filed his Statement of Defence in June of 2007 and responded to the Amended Statement of Claim with an Amended Statement of Defence filed in June of 2015. In August of 2007 the Defendant filed Third Party Claims against the Third Parties all of whom filed defences. The parties exchanged affidavit of documents in 2009.

Commencing in 2009 the Defendant highlighted the difficulty in moving the litigation forward as Larry Fullerton, sole shareholder of Milemore Holdings and also a named third party was not responding to requests for information and contact details for Mr. Fullerton were not provided. The parties were before the court for status hearings in 2011 and Mr. Fullerton was ordered to provide his personal affidavit of documents. Discoveries took place in August of 2012. [ 4 ] The Defendant brought a motion for

summary judgement seeking dismissal of this action on the grounds that it was statute barred by virtue of the Limitations of Actions Act , SNB 2009, c L-8.5 . Justice McNally heard the motion on January 31st, 2013, and dismissed it in a written decision issued on May 9 th , 2013. Justice McNally sets out a succinct explanation of the circumstances that led to the filing of this action at paragraphs 2 to 7 of his decision in Milemore Holdings Ltd. v.

Grew et al. , 2013 NBQB 158 as follows: 2 More specifically, Grew asserts that Milemore's claim is based on alleged breaches of contract, fiduciary duty and/or negligent acts that allegedly occurred in or about July, 1993 and that such alleged breaches and/or negligence, and any damages arising from those breaches, by the exercise of reasonable diligence would have been actually known to Milemore more than six years prior to the filing of this action on June 6, 2007. Consequently Grew submits that Milemore's action is proscribed pursuant to sections 7 and .9 of the Limitations of Actions Act, R.S.N.B. 1973, c.

L-8 . In the alternative, Grew seeks an order directing Milemore to post security for costs in the amount of $14,500.00, pursuant to Rule 58. 3 In the spring of 1993, Milemore was pursuing an opportunity to purchase a trailer park owned by a company called Cymor Ltd., which was located in the City of Miramichi. Mr. Larry Fullerton was the president of Milemore and he was experiencing difficulties in securing financing for the purchase and approached the other third parties in this proceeding, Richard Carver and Douglas Stewart, to assist in securing financing.

Carver and Stewart were business brokers involved in the transaction and they eventually secured financing for the purchase but as a condition of the financing they were required to personally guarantee the loan. 4 Carver and Stewart were prepared to sign the personal guarantees but required some protection for taking on this potential liability. Consequently, Fullerton on behalf of Milemore, agreed that Carver and Stewart would assume the management and operation of the trailer park for a period of one year to ensure its viability. 5 It was also agreed that a numbered company, 054334 N.B.

Ltd. would be incorporated to act as a holding company for the shares of Cymor that were to be purchased to effect the transfer of the trailer park. The funding to finance the purchase of Cymor's shares was to include the sum of $65,000.00 from Milemore, with the remainder coming from a loan from the lending institution secured by Carver and Stewart, which was the loan they had agreed to personally guarantee. 6 At about the same time during the month of June 1993, Milemore, through Mr.

Fullerton, retained the services of solicitor Harold Grew to draft a Trust Agreement that would allow Carver and Stewart to manage and operate the trailer park but at the same time protect Milemore's beneficial interest in it.

7 In its Statement of Claim, Milemore pleads that Solicitor Grew prepared a Trust Agreement which was forwarded to and signed by Carver and Stewart. Milemore further pleads that the Trust Agreement was subsequently altered by Grew prior to Fullerton's signing of it on behalf of Milemore. It further alleges that Milemore commenced proceedings against Carver and Stewart in 2001 for alleged breaches of the Trust Agreement following differences dating back to the year 1997.

It also alleges that Milemore discovered in January 2004 that the Trust Agreement had been altered by Grew and that the alteration rendered the Trust Agreement unenforceable resulting in Milemore being unable to proceed with legal action against Carver and Stewart. [ 5 ] Justice McNally dismissed the request for

summary judgment but ordered the Plaintiff to furnish security for costs in the amount of $8500.00 which was to be held in the trust account of the Plaintiff’s solicitor at that time, Randy Bishop. The Defendant appealed Justice McNally’s decision which was upheld in a written decision issued by the Court of Appeal on May 29 th , 2014. Discoveries resumed in December of 2014 following which the parties exchanged responses to undertakings and correspondence requesting outstanding undertakings. [ 6 ] The plaintiff’s solicitor Randy Bishop withdrew from the file in October 2020. On October 28 th , 2020, Mr.

Bishop forwarded to all counsel correspondence enclosing Mr. Fullerton’s Notice of Intention to Act in Person. The Plaintiff has been unable to secure legal representation since Mr. Bishop withdrew his services. The corporate plaintiff is currently a dissolved company. Mr. Fullerton who was present at the motion indicated to the court he is looking into reviving the company for the purposes of proceeding with this litigation. [ 7 ] In support of the motion for dismissal, the Defendant has filed with the Court an affidavit of Robert B.

Jackson, Director of Insurance for the Professional Liability Reserve Fund of the Law Society of New Brunswick. In the April 2023 affidavit, Mr. Jackson explained the various communications which took place between counsel from 2007 and 2022. [ 8 ] The Defendant was compelled to seek an order for substituted service of this motion given his inability to contact Mr. Fullerton and the lack of information available as to Mr. Fullerton’s location. The order for substituted service was granted and Mr. Fullerton did contact Mr.

Kinley in early September of 2023 when he saw the notice of the hearing date for the motion in the newspaper. Mr. Fullerton was aware of the date of the hearing of the motion for a full 3 months prior to his attendance at court on December 14 th , 2023. [ 9 ] The Defendant highlights the need to secure an order for substituted service of this motion as further evidence of the difficulties with this file. The Defendant is challenged to even serve the Plaintiff, let alone solicit a response. [ 10 ] The Plaintiff filed no evidence in response to the Defendant’s motion.

Larry Fullerton did appear to oppose the motion on his own behalf and as the only shareholder and principle of the now defunct corporate plaintiff, Milemore. Prior to the hearing of the motion Mr. Fullerton attended at the clerk’s office and requested the opportunity to file a motion requesting permission of the court for him to act as the representative of the corporate plaintiff, Milemore. I advised Mr.

Fullerton at the hearing that we would proceed with the hearing of the Defendant’s motion which was properly before the court and if the motion was unsuccessful then his motion would be sent to the clerk’s office to have a date fixed. [ 11 ] The court allowed Mr. Fullerton to address the Defendant’s arguments on the motion for dismissal for delay while highlighting the fact that there was no sworn evidence before the court. However, Mr. Fullerton regrettably no longer has the benefit of legal counsel and the court attempted to facilitate his participation at the hearing of the motion in a meaningful manner. Mr.

Fullerton does remain a named third party. [ 12 ] Mr. Fullerton explained to the court the significant efforts he has made to obtain legal representation since Mr. Bishop withdrew from the file in 2020. According to Mr. Fullerton he has been in contact with Terrence Teed, KC., Tim Hopkins, KC, Bruce Grant, KC, and Steven Barnett, KC, however none of them have been able to take on his representation due to conflict of interests. Mr. Fullerton provided a copy of a letter written to Solicitor Teed in April of 2023 in support of the assertion that he has sought legal counsel. Mr.

Fullerton also explained to the court that he has faced serious health challenges over the course of the last decade including the amputation of a leg in 2013, the fitting of a prosthetic leg in 2014 and subsequent surgeries thereafter. Mr. Fullerton and his common law spouse separated in 2018 and he lost his home. Mr. Fullerton indicates that he was again hospitalized for 10 days this past fall. The Court accepts Mr.

Fullerton has faced some significant personal hardship over the course of the last decade. [ 13 ] Neither of the third parties, Richard Carver nor Douglas Stewart attended or responded to the Defendant’s motion. Solicitor

Greg Murphy who represented these two third parties during the early stages of the proceeding including the discoveries did contact Mr. Kinley via telephone and left a voice mail confirming that he would not be attending the motion. Mr. Murphy’s transcribed voice mail was received into evidence and stated as follows: “Andrew, its Greg Murphy. I’m returning your call. You know I won’t be appearing a Rick. He’s got a bad case of cancer Haven’t talked to Doug since probably the discoveries in 2014 or whatever they were. And I’m going in for cancer surgery for five days next week.

So no, we’re not truck and appearing on this. So that’s all you wanted from me. Your brief look very good. It’s all there alright. And you can get back to me if you wish at 506-857-9120. I’m not in the office very much.” ISSUES [ 14 ] The sole issue to resolve in this matter is whether or not it is appropriate to dismiss the action for delay pursuant to Rule 26.01 of the Rules of Court .

LAW AND ANALYSIS [ 15 ] Rules 26.01 and 26.04(1) provide as follows: 26.01 Where Available A defendant who is not in default under these rules or under an order of the court, may apply to have the action dismissed for delay where the plaintiff has failed (

a) to serve his Statement of Claim on all the defendants within the time limited for so doing, (

b) to note in default any defendant for failure to file and serve his Statement of Defence, within 30 days after such default, or (

c) to set the action down for trial within 6 months after the close of pleadings . 26.04 Effect on Subsequent Action

(1) The dismissal of an action for delay shall not be a defence to a subsequent action unless so provided in the order dismissing the action.

(2) Where a subsequent action in respect of the same subject matter is brought before payment of the costs of an action dismissed for delay, the court may order a stay of the subsequent action until those costs have been paid. [Emphasis mine] [ 16 ] In The Province of New Brunswick v. Clayco Construction

(2001) Ltd et al, 2022 NBQB 66 , Justice Morrison set out the principles a court must consider when determining whether the dismissal of an action pursuant to Rule 26.01 is appropriate. Justice Morrison set out the framework for this analysis at paragraphs 22 to 24 as follows: [22] The principles governing the Court’s discretion to dismiss an action for delay are well settled. In order to succeed the moving party must establish that:

a) there has been inordinate delay;

b) the inordinate delay is inexcusable; and

c) the defendant is likely to be seriously prejudiced by the delay.

(Régie régionale de la santé 6 v. Robichaud, 2009 NBCA 51 (“Robichaud”) (NBCA); Michaud v Robertson, 2003 NBQB 288; Ingalls v.Steeves, 2009 NBQB 163; 513012 N.B. Ltd. v. New Brunswick, 2013 NBQB 307; Levesque v. Réseau de Santé Vitalité¸ 2019 NBQB200; J.D. Irving Ltd. v. Swain¸ 2020 NBQB 198). [23] The onus is on the defendant to demonstrate prejudice.

In order to demonstrate serious prejudice the moving party must establishthat he or she will not be able to properly defend the plaintiff’s claim because of the unavailability of witnesses, failing memory or anyother such cause (Levesque, supra, at para. 17). [24] In cases of grossly inordinate delay, prejudice may be inferred and it then falls to the plaintiff to displace the inference(Michaud v. Robertson, supra; 513012 N.B. Ltd. v. New Brunswick, supra; J.D. Irving Ltd. v. Swain, supra).

The discretion to dismissan action for delay should be exercised with caution and only in the clearest of cases (Robichaud; Betts v. Norris, (NB CA), [1991], 120 N.B.R. (2d) 384 (NBCA)). [Emphasis mine] [17] The Plaintiff filed no response to the Defendant’s motion. Mr. Fullerton attempted to file a motion to represent the corporateplaintiff personally on the afternoon of the hearing. The corporate plaintiff at the present time is not a going concern but Mr. Fullertonhas explained his investigations into the necessary steps he must take to revive the corporation.

The court is however left with theuncontradicted evidence of the defendant as to the extent and nature of the delay in this matter. [18] The law is clear that the Court should only issue an order dismissing an action for delay in the clearest of cases. A plaintiff whohas commenced a civil action against another party has a duty to diligently prosecute that action.

The onus is not upon the Defendant tomove the matter forward, and in circumstances where a defendant has attempted to move an action forward for over a decade andreceived no collaboration form the plaintiff, dismissal is the appropriate remedy. [19] In the present matter, there has been an inordinate delay. The file has not progressed since the Court of Appeal’s decision in April2014 and the conclusion of discoveries in 2014. On September 22, 2020, counsel for the Defendant wrote counsel for the other partiesrequesting an update on the matter as the file had been dormant since the amendment of pleadings in 2015.

Plaintiff’s counsel, RandyBishop, responded to that inquiry on October 28, 2020 in correspondence advising he was no longer representing the Plaintiff,forwarding a Notice to Act in Person signed by Larry Fullerton as president of the corporate Plaintiff. [20] The file remained dormant for nearly two years until Randy Biship wrote to defense counsel and Larry Fullerton seekinginstructions on monies held in his trust account. Mr. Bishop’s letter in its entirety stated as follows: File : 04-0054 August 18, 2022 Milemore Holdings Ltd.

Law Society of New Brunswick 24 Woodstock Avenue, Unit 3 68 Avonlea Court Riverview, NB E1B 5H5 Fredericton, N.B. E3C 1M8 Attention: Larry Fullerton Attention: Phil Frenette Dear Sirs: RE: Milemore Holdings Ltd. v. Harold Grew and Larry C. Fullerton, Richard Carver and Douglas Stewart, Third Parties Court File No.: M/C/0381/07 The above noted matter has come up on my diary.

As you both know, I no longer represent the Plaintiff in the above noted matter. However, during the time William Stephenson & Associates had carriage of this matter we participated in a Motion wherein the Defendant sought security for costs from the Plaintiff. The Court decided that the sum of $ 8,500.00 would have to be furnished by the Plaintiff in order to carry on with its litigation. It was agreed between the parties at the time that the said sum if furnished would be held in the trust account of William Stephenson & Associates.

The Plaintiff did subsequently furnish these costs and they were put in the trust account of William Stephenson & Associates. After Mr. Stephenson retired, that $8,500.00 was transferred to Bishop’s Law trust account where it has remained ever since. In October 2020 this firm ceased representing the Plaintiff and Notice of Intention to Act in Person signed by the Plaintif’s president was served and filed on all concerned. Given that we no longer represent the Plaintiff or have any involvement in this litigation, it makes little sense for us to continue to hold on to the security for costs amount.

It would therefore ask that both of you provide me with written instructions as to what to do with the security for costs amount. Perhaps the best option is for that amount to be held in trust by Mr. Frenette unless the Plaintiff is now represented by counsel. Otherwise, perhaps it should be paid into court. Would you both kindly address your minds to this issue and provide me with instruction. Thank you. Yours truly, Randy G. Bishop [ 21 ] There is no evidence before the Court that Larry Fullerton took any action to reach out to the Defendant or Mr. Bishop subsequent to October 2022. The first time Mr.

Fullerton contacted the Defendant’s lawyer was following his reading of the Notice of Motion published in the paper pursuant to Justice Dysart’s Order for Substituted Service in August of 2023. There is no evidence in the file that Mr. Fullerton has attempted to file any documents with the Court prior to December 14, 2023 – the day this hearing was scheduled. While I will accept Mr.

Fullerton has reached out to at least four lawyers between the fall of 2020 and the fall of 2023, he has not taken the necessary steps to revive the corporate status of the Plaintiff, nor to communicate in any fashion with the Defendant. The sole communications between Mr. Fullerton and Defense counsel were prompted by the present motion. [ 22 ] The events which led to the filing of this action are now three decades old! The action was filed in June of 2007 , over 16 years ago.

Discoveries were concluded in 2014, nine years ago, and the Defendant’s remaining undertakings were discharged in 2018, over five years ago. The Plaintiff’s failure to set the matter down for trial within those timelines is inordinate. [ 23 ] Larry Fullerton’s offered excuse for the delay in the prosecution of this matter is his inability to secure counsel to represent the corporate Plaintiff following Randy Bishop’s withdrawal in 2020. While there is no sworn evidence before the Court, I will accept Mr. Fullerton’s statement that he has contacted at least four lawyers.

However, the only evidence proffered to the Court in support of this assertion is a letter he wrote to Terrence Teed in April 2023. There is no evidence before the Court that Mr. Fullerton even responded to Mr. Bishop’s inquiry in October 2022 concerning the funds held in trust. [ 24 ] Mr. Fullerton did explain to the Court his medical challenges. Mr. Fullerton underwent serious medical procedures in 2013-2014. Ironically, this is the period when the matter was moving forward. There is no explanation offered for the delay between 2015-2020.

Further, there is no explanation for the delay between 2020-2023 other than an inability to secure legal counsel, a problem which remained unaddressed at the hearing of this motion. [ 25 ] Given the length of the delay and the nature of the response, I do not accept that these delays are excusable. [ 26 ] In my view, there is a prejudice to this Defendant in this matter which is both actual and inferred. The actual prejudice is that the age and health of the parties is now clearly problematic. Greg Murphy’s advice to Mr.

Kinley sets out his personal health challenges as well as those of one of the other names third parties. These events occurred in 1993, and subsequent events in the early 2000’s. Prejudice can be inferred simply by the passage of time. Justice McNally’s 2013 decision is helpful in understanding the factual circumstances of this claim. The ability of a party to mount a defense for claims arising out of commercial and legal agreements dating back to 1993

would be tenuous at best. Had the Plaintiff intended to pursue this litigation, they could have done so in 2015 following their success at the Court of Appeal and once all the undertakings of the Defendant were completed in 2018. The failure to act on the file from that point forward has prejudiced the Defendant. CONCLUSION [ 27 ] The Defendant’s motion is granted. The Plaintiffs’ action is dismissed pursuant to Rule 26.01 with costs payable to the Defendant of $1,500.00. Payment of the costs owing to the Defendant can be paid out of the security for costs held by Randy Bishop. The balance of fees held by Mr.

Bishop should be paid into court, and then made available to the appropriate entity entitled to those costs. DATED at Moncton, New Brunswick this 21 st day of December 2023. _____________________________________ Tracey K. DeWare, Chief Justice of the Court of King’s Bench of New Brunswick