) ) MDM PLASTICS LIMITED Plaintiff (Appellant) – v. –, 2013 ONSC 710

CITATION : MDM Plastics Limited v. Vincor International Inc., 2013 ONSC 710 DIVISIONAL COURT FILE NO.: 343/12 COURT FILE NO.: CV-09-00373357-0000 DATE: 20130201 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT BETWEEN: ) ) MDM PLASTICS LIMITED Plaintiff (Appellant) – and – VINCOR INTERNATIONAL INC.

Defendant (Respondent) )) )) )) )) )) Mauro Carabetta , for the Plaintiff (Appellant) Shawn Irving , for the Defendant (Respondent) ) ) ) HEARD: January 10, 2013 LEDERER J. : Introduction [ 1 ] Three years after the Statement of Claim was issued, the Registrar dismissed this action for delay. [1] The plaintiff brought a motion to set aside the dismissal, which was heard by Master Glustein and refused. [2] The plaintiff has appealed the decision of the Master. [ 2 ] There is a strong public interest promoting the timely resolution of disputes.” [3] This principle is included in an overarching direction found in the Rules of Civil Procedure.

We are instructed that the Rules “… shall be liberally construed to secure the just , most expeditious and least expensive determination of every civil proceeding on its merits ” [Emphasis added]. [4] Not only is resolution to be timely, it is to be “just” and “on the merits”. [ 3 ] The Master undertook a careful analysis. He fully accounted for the need for expedition, but erred in law in failing to consider the preference that proceedings be determined on the merits and not on the basis of the procedural failings of one side or the other.

Background The first dismissal by the Registrar [ 4 ] The Statement of Claim was issued on February 27, 2009. Less than three weeks later, on March 18, 2009, a Notice of Intent to Defend the action was served. On April 7, 2009, the defendant wrote asking to inspect certain documents referred to in the Statement of Claim and demanding particulars. In the absence of a response, on May 21, 2009, an e-mail was delivered by the defendant repeating these requests and advising that it would be seeking security for costs.

By letter, dated June 24, 2009, the plaintiff delivered certain documents, but failed to respond to the demand for particulars or the request for security for costs. [ 5 ] On September 17, 2009, counsel for the defendant wrote another letter re-iterating the demand for particulars and the request

for security for costs. The plaintiff did not respond and, on October 21, 2009, the defendant sent an e-mail to the same effect. On the same day (October 21, 2009), counsel for the plaintiff responded advising that an earlier meeting with his client had been “derailed”, but that they planned to meet on the following day and would respond to the demands of the defendant “thereafter”.

Two months later, on December 21, 2009, counsel for the plaintiff sent an e-mail advising that $10,000 was being held as security. [ 6 ] On January 21, 2010, counsel for the defendant wrote indicating that he still had not received a response to the demand for particulars and that he was instructed to bring a motion for security for costs unless the plaintiff was prepared to post $50,000 “in court”. On March 4, 2010, eleven months after the defendant delivered its demand for particulars, the plaintiff responded.

On April 9, 2010, approximately one month later, the defendant delivered its Statement of Defence. [ 7 ] In the meantime, on March 31, 2010, counsel for the defendant asked again if the plaintiff would agree to post $50,000 as security for costs. On the same day, counsel for the plaintiff responded indicating that they would “…seek instructions and advise”. On April 20, 2010 and again on May 25, 2010, counsel for the defendant wrote with respect to security for costs.

On May 26, 2010, counsel for the plaintiff repeated that he would “… seek instructions and advise” on security for costs. [ 8 ] Between May 26, 2010 and June 7, 2011, there was no contact between the parties. This is so despite the fact that, on December 2, 2010, counsel for the defendant wrote to counsel for the plaintiff outlining the failure of the plaintiff to respond to numerous requests that it post security for costs in a satisfactory amount. The letter observed: Given your lack of correspondence since May, I assume that your client has lost interest in this action.

Accordingly we have decided not to move for an order for security for costs at this time. [ 9 ] On March 21, 2011, a Status Notice: Action Not on Trial List was issued by the Superior Court of Justice. It advised that, in the absence of appropriate steps being taken, the action would be dismissed in ninety days. On June 7, 2011, two weeks prior to the expiry of the 90-day period, counsel for the plaintiff, in an e-mail to counsel for the defendant, advised that their client wished to “resume” the prosecution of the action and that the matter had been stalled pending instructions dealing with security for costs.

The e- mail noted that instructions had been received to post $25,000 as security for costs “now” with a further $25,000 to be delivered following discoveries and prior to mediation. In the ensuing weeks, there was an e-mail exchange in which counsel for the plaintiff indicated a desire to discuss settlement or move forward with the action. By e-mail, dated July 13, 2011, counsel for the defendant indicated he wanted to review where they were on the security for cost issue and would respond by the following week. On that day, the Registrar dismissed the action.

The second dismissal by the registrar [ 10 ] On July 26, 2011, through a series of e-mails, counsel for the defendant indicated that he had obtained instructions to consent to a motion to set aside the order dismissing the action and to accept the offer that had been made with respect to security for costs. Counsel for the plaintiff raised the prospect of settlement and, on July 29, 2011, a discussion did take place. On August 4, 2011, counsel for the plaintiff advised that he was “… awaiting instructions further to our discussion of last Friday.

I will get back to you soon.” On August 18, 2011, a consent order setting aside the order dismissing the action was issued by Master Sproat. The order included a direction that “… the Registrar forthwith issue a fresh status notice”. [ 11 ] On September 12, 2011, counsel for the defendant received the fresh status notice referred to by the Master (the “second status notice”). For whatever reason, counsel for the plaintiff never received this document.

Having indicated on August 4, 2011 that he would “… get back to you soon”, it was not until December 8, 2011 that an e-mail was sent by counsel for the plaintiff to counsel for the defendant providing an offer to settle the action. [ 12 ] During the intervening months, those who represented the plaintiff made no effort to contact the court or determine whether the direction of Master Sproat to “forthwith issue a fresh status notice” had been complied with.

At the same time, neither party had brought a motion to obtain an order with respect to security for costs and directing that the money reflecting the security be paid to the accountant for the Superior Court of Ontario. No such payment has been made. [ 13 ] On December 10, 2011, counsel for the defendant responded to the offer to settle. His e-mail indicated that, based on previous discussions with his client, he believed that the proposal “will not fly” and went on to say that he would be in with contact counsel for the plaintiff “early next week”.

The 90-day notice period referred to in the second status notice ran its course and, on December 21, 2011, without any further response to the settlement offer having been delivered by counsel for the defendant, the Registrar, for the second time, dismissed the action. [ 14 ] Counsel for the defendant refused to consent to an order setting aside the second dismissal of the action and, accordingly, the plaintiff brought the motion. Master Glustein delivered the decision refusing the order, which is the subject of this appeal.

The Standard of Review [ 15 ] The decision of the Master involves questions of fact and questions of mixed fact and law. It was a discretionary decision and is entitled to deference from this court: It is now settled law in Ontario that an appeal from a master’s decision is not a rehearing. Rather, on questions of fact and mixed fact and law, deference applies and the role of the reviewing court is limited. An appellate court cannot substitute its

interpretation of the facts or re-weigh the evidence simply because it takes a different view of the evidence from that of the master. [5] [ 16 ] To set aside a finding of fact made by the Master, which may, in turn, lead to his decision being overturned, there must be a “palpable and overriding error…”. [6] The decision may be set aside where the Master has erred in law. For an error in law, the standard of review is correctness. Findings of Fact of the Master

[17] Counsel for the defendant has pointed to a number of factual findings made by Master Glustein which, he submits, I am boundto accept.

As counsel sees it, there is nothing to suggest that any of these determinations are the result of palpable and overriding error. [18] The Master found that: • the plaintiff “… took no procedural or substantive step in the action [after] it issued the statement of claim on February 27,2009”;[7] • the evidence on the motion did not demonstrate that the plaintiff “…intended to proceed with the action.”;[8] • the plaintiff provided no explanation for the delay;[9] • the evidence demonstrated that the plaintiff was responsible for the delay;[10] • the defendant acted promptly in responding to the statement of claim, demanding particulars, the inspection of documents, securityfor costs and providing a statement of defence;[11] • contrary to the affidavit filed on behalf of the plaintiff, there were no ongoing settlement discussions;[12] and, • there was no evidence filed on behalf of the plaintiff to rebut the presumption of prejudice.[13] [19] I accept these findings.

There is no basis on which I could properly or would set any one of them aside. Reid v. Down Corning Corp.[14] [20] The case of Reid v. Dow Corning Corp. outlines factors pertinent to a decision as to whether a dismissal by the Registrarshould be set aside.

It refers to: 1. explanation for the delay in proceeding with the litigation; 2. inadvertence in missing the deadline of ninety days to set the action down for trial as set out in the Status Notice; 3. promptness in bringing the motion to set aside the dismissal order once made; and, 4. prejudice to the defendant if the dismissal order is set aside and the action is allowed to proceed. [21] Master Glustein considered and applied each of these factors.

He found that, “for the purposes of these reasons”, the motionwas brought with sufficient promptness (see: factor 3, above).[15] He determined that, while the plaintiff met the test for inadvertencebecause it did not receive the second status notice, this was a weak factor in its favour (see: factor 2, above).[16] The plaintiff was awareof the order of Master Sproat and the requirement that the second status notice was to be delivered “forthwith” and, yet, made no effort todetermine if it had been issued and why it had not been received.

The Master considered the entire history of the proceeding from thedelivery of the Statement of Claim to the issuance of the second order dismissing the action.[17] Consistent with his factual findings thatthe plaintiff had taken no procedural steps since the delivery of the statement of claim and had not demonstrated any intention to proceedwith the action, the Master determined that there was no explanation for the delay (see: factor 1, above)[18]. Master Glustein did notevaluate the nature or extent of any prejudice that may be present in this case.

Rather, he relied on the presumption of prejudice thatarises with the passage of time and, in the absence of any evidence to rebut it, determined that “...the key presumption of prejudice isstrong in this case” (see: factor 4, above).[19] [22] From this foundation, the Master found that the “Reid factors” were met and, on this basis, dismissed the motion.[20] In spiteof coming to this conclusion, the Master continued with his analysis. In itself, the failure to satisfy the “Reid factors” is not enough todemonstrate that a dismissal by the Registrar should be upheld. In Scaini v.

Prochnicki,[21] the Court of Appeal held that, while the Reidcriteria are likely to be of central importance in most cases, “...a contextual approach to this question is to be preferred to a rigid testrequiring an appellant to satisfy each one of a fixed set of criteria... What is important is that the analysis be contextual to permit thecourt to make the order that is just.” [22] Master Glustein considered that there was a contextual factor that should be accounted for. Theplaintiff had already failed once to set the action down for trial. This was the second status notice that had been issued.

The Masterconsidered that, given he was dealing with a “second kick at the can”, he was required “...to carefully examine in some detail theadditional delay along with the cause of the initial delay”.[23] He found that there was no evidence to explain the delay in the failure ofcounsel for the plaintiff to “get back to” counsel for the defendant between August 4, 2011 to December 8, 2011.[24] As the Master sawit, the absence of such evidence exacerbated the failure to meet the “Reid factors” and confirmed his determination that the dismissal bythe Registrar should not be set aside.

The Error in Law [23] The decision of the Master turns exclusively on a consideration of the delay, both the failure of the plaintiff to justify it and itsimpact on the proceeding (prejudice): … The paucity of evidence explaining the litigation delay and the lack of evidence rebutting the presumption of prejudice lead to the justresult that the action be dismissed. There is a strong public interest in promoting the timely resolution of disputes (MarchéD’Alimentation Denis Theriault Ltée et al. v. Giant Tiger Stores Ltd. 2007 ONCA 695 , (2007), 87 O.R. (3d) 660 (C.A.) at para.25).

A plaintiff cannot allow an action to sit dormant for almost three years without an adequate explanation and then file no evidence torebut the key presumption of prejudice arising from the passage of the limitation period... [25] [24] In deciding the matter in this way, the Master failed to account for a competing value, the preference that matters bedetermined on their merits.[26] This was referred to in Farmers Oil & Gas Inc. v. Ontario (Ministry of Natural Resources)[27] in its

opening words: Expeditious justice is an ideal that our civil justice system strives to attain. This is reflected in rule 1.04(1) which provides that the Rulesof Civil Procedure are to be ‘liberally construed to secure the just, most expeditious and least expensive determination of every civilproceeding on its merits.’ Rule 1.04 also explicitly recognizes the strong public interest in having legal disputes resolved on their merits.Indeed, that is central to the just determination of a dispute.

On the other hand, the objective of an expeditious determination alsomentioned in rule 1.04(1) reflects the compelling interest, shared by litigants as well as the public at large, in the efficient, timely andaffordable resolution of legal disputes.[28] [25] To my mind, this required a consideration and balancing of both of these values, not the application of one in the absence ofthe other. This is referred to in Marché D’Alimentation Denis Theriault Ltée et al. v.

Giant Tiger Stores Ltd.,[29] the case on which theMaster relied: …The Rules of Civil Procedure must be interpreted in a manner that recognizes that expeditious justice is only one value to be weighedagainst others and that delay may be excused where necessary to ensure complete justice. As rule 1.04(1) states, the rules are to be‘liberally construed to secure the just, most expeditious and least expensive determination or [sic] every civil proceeding on its merits.’(emphasis added). 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 theplaintiff an indulgence is generally favoured.[30] [26] The need to consider both elements is repeated in 1196158 Ontario Inc. v. 6274013 Canada Ltd.[31]: …On the other hand, procedural rules are the servants of justice not its master. We must allow some latitude for unexpected and unusualcontingencies that make it difficult or impossible for a party to comply.

We should strive to avoid a purely formalistic and mechanicalapplication of time lines that would penalize parties for technical non-compliance and frustrate the fundamental goal of resolvingdisputes on their merits. As Laskin J.A. stated in Finlay v.

Paassen, 2010 ONCA 204 , 2010 ONCA 204, 101 O.R. (3d) 390, atpara. 14: ‘the Rules and procedural orders are construed in a way that advances the interests of justice, and ordinarily permits the partiesto get to the real merits of their dispute.’[32] [27] In the same case, the need to balance these concerns is confirmed: The challenge posed in cases involving dismissal for delay is to find the right balance between, on the one hand, the need to ensure thatthe rules are enforced to ensure timely and efficient justice and, on the other, the need to ensure sufficient flexibility to allow parties ableto provide a reasonable explanation for failing to comply with the rules to have their disputes decided on the merits. [33] [28] The Master did not account for or consider the effect of the preference that matters be determined on the merits.

It appears thatthis consideration was not raised in the submissions that were made to him.[34] Nonetheless, this preference has to be considered incoming to a proper determination of this case. Analysis Delay [29] In examining the delay, the Master, as he was entitled to do, looked at the entire life of the proceeding, from the issuance ofthe statement of claim to the making of the second dismissal order. Consistent with the first of the “Reid factors”, he found that therewas no justification provided by the plaintiff to explain the delay. In adhering to the directive in Scaini v.

Prochnicki[35] that an overallcontextual approach or understanding should drive these decisions, the Master referred only to the absence of any evidence explainingthe additional delay that occurred between the order setting aside the first dismissal order (August 18, 2011) and the Registrar’s secondorder dismissing the action (December 21, 2011).

When he found no evidence, he determined that this further delay exacerbated hisinitial conclusion that the “Reid factors” had not been satisfied and that the order of the Registrar dismissing the action should be left tostand. [30] Accepting the failure of the plaintiff to produce any evidence to justify the delay, is there anything present that may,nonetheless, affect an understanding of the context such that it could lead to a decision that the order of the Registrar should be set asideand the action left to be dealt with on its merits?

The Master referred to the response provided by counsel for the defendant to thesettlement offer that had been delivered, by e-mail, on December 8, 2011. He noted that counsel, in his response, dated December 10,2011, advised of his view that the offer “will not fly”.[36] This is not all that the responding e-mail said.

It was in the immediatelysucceeding words that counsel for the defendant indicated: “I will contact you again early next week after I have had a chance to speakwith our client.”[37] Counsel for the defendant did not contact counsel for the defendant the next week or any time prior to December21, 2011, the day on which the second order dismissing the action was made. The presence of the statement and the failure to makecontact “next week” played no role in the Master’s determination of the motion he heard. This is a factor that impacts the context inwhich his decision was made.

It affects a consideration of whether the matter should be left to be determined on its merits. [31] Counsel for defendant had the second status notice; counsel for the plaintiff did not. Counsel for the defendant made noinquiries of counsel for the plaintiff as to his intentions, given that the ninety days referred to in the second status notice were windingdown. Counsel did not advise that, contrary to his e-mail of December 10, 2011, no further communication would be forthcomingconcerning the settlement offer that had been made.

Counsel for the defendant did nothing until the order had been made by theRegistrar. This does not explain the delay or indicate that there were ongoing settlement discussions, but it does suggest that the action orinaction of counsel for the defendant contributed to the failure of those representing the plaintiff to act in the face of the second statusnotice. It is difficult to conceive that, had they known that what was coming was not a further response to their offer of settlement, but anorder dismissing the action, counsel for the plaintiff would not have moved to avoid that result.

I do not wish to be taken as saying thatcounsel for the defendant set out to mislead counsel for the plaintiff or that they “lay in the weeds” waiting for the second order

dismissing the action to be made. I say only that while, as the Master noted, it is the plaintiff who “...bears the primary responsibility under the Rules for the progress of the action” [Emphasis added], [38] the defendant is not free of all obligation to take part. In Farmers Oil & Gas Inc. v. Ontario (Ministry of Natural Resources [39] , the following observation is made in respect of the conduct of a status hearing conducted in response to the issuance of a status notice: The focus of the inquiry on a status hearing under rule 48.14 should be on the conduct of the plaintiff.

However, the conduct of the defendant may be relevant where it contributes to the delay being reviewed. [40] [ 32 ] In Armstrong v. McCall [41] , two doctors brought a motion to dismiss the malpractice claim against them on the ground of delay. The motion succeeded. Although the motions judge did not find the delay of the plaintiff to have been intentional, she concluded that the plaintiff had failed to rebut the presumption that, as a result of the delay, there was a substantial risk that the doctors would not have a fair trial. [42] There was an appeal. The decision of the motions judge was set aside.

Among other things, the Court of Appeal determined that the motions judge failed to properly account for “...the delay that was attributable to the defendants”. [43] In the case I am asked to decide, the Master determined that the defendant had responded promptly throughout the time period in question suggesting that no part of the delay should ascribed to its conduct. [44] To my mind, it is not the contribution of the defendant to the delay that is the concern but the impact of its conduct on the progress of the action. [ 33 ] It has been said that “...the initiating litigant generally suffers the consequences of a dilatory regard for the pace of the litigation” [45] .

This does not mean that it is never the responding party that will have to deal with the results of any delay. In this case, the defendant failed to provide the further response it said would be forthcoming and stood by in the knowledge that an order dismissing the action was expected. The failure of those representing the defendant to act, either consciously, accidentally or through inadvertence, contributed to the circumstances that led to the second dismissal order. The defendant should not be permitted, as a result of this failure, to avoid the need to defend the action on its merits.

Prejudice [ 34 ] There was no evidence of actual prejudice. There was no evidence that suggested documents had been lost, witnesses had died, had disappeared or that their memory had become impaired. The Master relied on the presumption of prejudice occasioned by the delay. [46] He undertook no analysis of the nature of the case or the concern for prejudice when balanced against the length of the delay.

Instead, he relied on the failure of the plaintiff to provide any evidence to set aside whatever prejudice could be presumed to be present and, on that basis, found that the fourth “Reid factor” was not satisfied. [47] There is a problem with this approach. Prejudice can begin to occur immediately after the events that led to the action took place. From that moment, memories may begin to fade. This prejudice can be part of an action that is timely; one that is without any inappropriate delay. The extent of any prejudice can be affected by the nature of the evidence.

If it is a case that is heavily reliant on documents, it is clear that evidence will not change. If it is a case that depends upon the recollection of individuals at a moment when they are distracted by fear for the immediate safety of themselves or others, it may be that the passage of time will quickly erode the accuracy of what they remember. To fail to account for this, even in the absence of any evidence rebutting the presumption of prejudice, ignores the requirement to consider the overall context.

Instead, it adheres to a strict and narrow requirement that there must be evidence provided by the plaintiff rebutting the prejudice. [ 35 ] Did the Master consider these broader contextual matters? The defendant consented to the order of August 18, 2011 setting aside the first dismissal of the action by the Registrar. Whatever prejudice was present was not sufficient to dismiss the action. It was to proceed on its merits. The second dismissal order was made on December 21, 2011. Master Glustein dealt with this as a matter of additional delay.

He found there was no evidence explaining any steps the plaintiff had taken to prevent a second dismissal order. [48] In other words, there was nothing justifying the additional delay. I pause to observe that the reason for this seems clear. Counsel for the plaintiff was unaware that the second status notice had been issued. This being so, only one of the steps the Master suggested the plaintiff could have taken would apply.

The Master observed that there was no evidence that the plaintiff “...took any steps to determine whether the Second Status Notice had been issued...”. [49] Be that as it may, there was no discussion of what had changed in the intervening four months to say that the case could no longer fairly be dealt with on its merits. There was no consideration of any additional prejudice to the defendant, presumed or otherwise. The Master relied on the entire period of delay and, in the absence of any evidence rebutting the presumption of prejudice, found that the plaintiff had failed to satisfy the “Reid factors”.

He took the absence of evidence demonstrating steps taken to avoid the second dismissal order as exacerbating that finding. [50] There is nothing to suggest that the Master stepped outside an application of the “Reid factors” and considered this in the broader context, particularly its impact on the preference that proceedings be dealt with on the merits. [ 36 ] Are there broader contextual issues to be accounted for? Armstrong v. McCall [51] dealt with what was the third motion to dismiss an action for delay. On the first, the judge set a

schedule leading to the setting down of the action for trial. [52] The

schedule was not met. There was a second motion before another judge. A new

schedule was set. A motion was brought seeking leave to appeal the second order at which a third

schedule was imposed. The third motion to dismiss was heard and the action dismissed. It was appealed. The Court of Appeal identified as an issue, whether the judge who dismissed the action “...placed too much emphasis on the period from the commencement of the action until the date of the motion before her.” [53] The Court indicated that this raised a question.

What happened in the time between the motion for leave to appeal, the second motion to dismiss for delay and the third such motion “...that tipped the scales in favour of the defendants?” [54] In that case, the time between the two motions was seventeen months; in this one it is only four.

The court went on to ask: “If the delay was taken by [the judge who dealt with the motion for leave to appeal] to be excusable on February 20, 2004, what was it that worsened the defendants' position thereafter?” [55] The Court of Appeal found that “... there is nothing in the record that shows the subsequent delay worsened the situation so far as the defendants were concerned.” [56] Similarly, in the case before me, there is nothing in the record to show that the position of the defendant was any more prejudiced on December 21, 2012 when the second order dismissing the action was made than it was on August 18, 2011 when the first order was set aside. [ 37 ] Counsel for the defendant pointed out that the motion in Armstrong v.

McCall [57] was made pursuant to Rule 24.01 (1) of the Rules of Civil Procedure not, as here, Rule 48.14(16). It is not clear to me why, with respect to the issues raised, one should be treated differently than the other. It is true that, under Rule 48.14(16), an order has already been made by the Registrar, but that is a purely administrative act. In that case, the decision under appeal and, in this one, the decision being made by me, are the first to be made after hearing from the parties affected. A reading of the decision in Armstrong v. McCall [58] makes clear that a principal concern of the Court

of Appeal was whether the defendants could still obtain a fair trial. [59] [ 38 ] In this case, the Master erred. He based his decision on an evaluation of the “Reid factors” and failed to account for the preference that proceedings should be dealt with on the merits. He did not balance delay against the broader context that demonstrated that the presumption of prejudice was such that the defendant would not be denied a fair trial if the action was left to proceed. [ 39 ] This conclusion is underscored by a consideration of the nature of the action and the length of the delay.

This is an action concerning the supply of plastic containers, by the plaintiff, to the defendant. The plaintiff claims the defendant breached certain obligations in a supply agreement it is alleged to have entered into in 2007. The defendant denies these allegations, including that it entered into a contractual relationship with the plaintiff. The Statement of Claim was issued on February 27, 2009. The first order by the Registrar dismissing the claim was made on July 16, 2011, which was approximately two years and five months later.

The second dismissal order was issued six months later or about two years and eleven months after the action had been commenced. At the outset of the action, the defendant demanded particulars and the production of documents referred to in the Statement of Claim. This suggests that this is an action between two businesses. Documents, drawings, invoices and specifications for the containers are at the foundation of the lawsuit. It is not a personal action involving individuals which depends only on their recollection of past events.

Moreover, while three years is a significant length of time, many actions take longer without any suggestion that the parties have been prejudiced to the point that the matter cannot reliably be dealt with on the merits or that a fair trial is no longer possible. These facts and understandings are all part of the overall context. They were not accounted for by the Master. Balancing the delay against the context, including these factors, is something the Master did not do. It leads to the conclusion that the desire that matters be dealt with on their merits can still be and should be met.

The Involvement of the Lawyers [ 40 ] There is one further element of the case that I wish to refer to, the role of the lawyers acting for the plaintiff. In Farmer’s Oil & Gas Inc. v. Ontario (Ministry of Natural Resources) [60] , the judge concluded that there was no binding authority that a party could not rely on the actions of its counsel to explain delay. [61] Presumably, it depends on the circumstances.

An offsetting factor where the delay is the fault of counsel is the demonstration that the plaintiff intended that the action proceed. [62] In this case, counsel for the defendant submitted that the plaintiff shared the blame for the delay. In his reasons, Master Glustein referred to a meeting that did not take place because the plaintiff “got derailed”. It was not rescheduled for “a few weeks” [63] .

The Master also made reference to the absence of any evidence that instructions were given to make a settlement offer in the four months following the e-mail of August 4, 2011 where counsel advised he was waiting for these instructions [64] .

He also noted the indication by counsel for the plaintiff, in e- mails dated, June 7, 2011 and July 12, 2011, that his client had determined to “resume” prosecution of the action and “ ‘now’ wishes to proceed”. [65] The Master expressed some doubt about whether the assertion that the first and second of these delays could be attributed to the client. [66] Whether or not the lawyers contributed to the delay, it was not for the client to follow up and see if the order of Master Sproat requiring that a second status notice be issued forthwith had been complied with. This was the responsibility of the lawyers.

As I have already noted, given that they did not receive the second status notice, this is what led to the second order dismissing the action. This is not something that can be laid at the feet of the plaintiff. If the lawyers had followed up on the order that a second status notice be issued as the Master said they should have, it is reasonable to presume there would not have been a second order and the matter would have been left to proceed. Conclusion [ 41 ] The Master prepared a careful and, insofar as the history is concerned, a comprehensive set of reasons.

Despite this, he failed to consider the delay and the prejudice in the overall context and to balance the concerns they raised against the preference that proceedings before the courts be dealt with on the merits. For the reasons reviewed, the appeal is granted. The second order of the Registrar dismissing the action for delay is set aside. Costs [ 42 ] This decision should not be taken as validating or justifying the actions of the plaintiff or its counsel. The case should not have proceeded as it did. The delay should not have occurred. As the Master found, no explanation for the delay was provided.

The rationale behind these reasons steps outside the specific concerns of these parties. It is based on the broader idea that, where the circumstances allow, it is preferable that matters be decided on their merits and not as a result of the procedural failings of any of the participants. [ 43 ] The fact remains the delay took place. It was not explained. If the plaintiff had been more assiduous in its conduct of the action, this motion would not have been necessary. It was the second dismissal order.

I do not believe the defendant or its counsel can be blamed for failing to consent to a second order overturning a second order dismissing the action for delay. While I have found that the actions of the defendant contributed to the issuance of the second dismissal order, the delay was the fault of the plaintiff. In this situation, costs will not follow the event. The defendant is to have the costs thrown away as a result of the motions brought on in response to the delay.

The parties have agreed that, in the event I determined that such an award was to be paid, the amount involved would be $13,000, inclusive of fees, disbursements and HST. [ 44 ] Costs are awarded to the defendant in the amount of $13,000. LEDERER J. Released: 20130201

CITATION : MDM Plastics Limited v. Vincor International Inc., 2013 ONSC 710 DIVISIONAL COURT FILE NO.: 343/12 COURT FILE NO.: CV-09-00373357-0000 DATE: 20130201 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT BETWEEN: MDM PLASTICS LIMITED Plaintiff (Appellant) – and – VINCOR INTERNATIONAL INC. Defendant (Respondent) JUDGMENT LEDERER J. Released: 20130201