) ) MIKAL-CALLADAN CONSTRUCTION LTD. v. UNIMAC GROUP LTD., 2017 ONSC 189

CITATION : Mikal-Calladan Construction Inc. v. Kim, 2017 ONSC 189 DIVISIONAL COURT FILE NO.: 275/16 DATE: 20170109 ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT BETWEEN: ) ) MIKAL-CALLADAN CONSTRUCTION LTD. and UNIMAC GROUP LTD. Plaintiffs (Appellants) – and – LAWRENCE KIM, VIVIAN RHEE, RICHARD YOON, JOHN YOON, and STEVE YU Defendants (Respondents) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Justin P. Baichoo , for the Plaintiffs (Appellants) Bruce G. McEachern , for the respondents, Vivian Rhee, Lawrence Kim, and Steven Yu Peter J. Mitchell , for the respondent, Richard Yoon Matthew R.

Harris for the respondent, John Yoon ) ) HEARD at Toronto: January 9, 2017 swinton J. ( Orally ) [ 1 ] The appellants appeal the order of Master Mills dated May 30, 2016 in which she dismissed their motion to set aside the order of the Registrar dismissing their action for delay. [ 2 ] This action began in October 2011, arising out of a dispute concerning a construction contract with a corporation, Rose of Sharon (Ontario) Retirement Community. That corporation is the subject of an ongoing receivership order.

The respondents are former directors of the corporation and were sued for alleged breach of the trust provisions in the Construction Lien Act . Pleadings closed around February or March 2012. [ 3 ] A status hearing was held on May 22, 2014, at which Master Abrams refused to dismiss the action. Instead, she set a timetable for the exchange of affidavits of documents, discoveries, and mediation.

She ordered the Registrar to dismiss the action for delay if the action was not set down for trial by October 31, 2015. [ 4 ] Only one respondent John Yoon provided an affidavit of documents in accordance with the timetable. There had been no discoveries or mediation held or scheduled when the Registrar dismissed the action on November 6, 2015 because the action had not been set down for trial. [ 5 ] The decision of the Master was discretionary and is entitled to deference.

An appellate court should not interfere with such an exercise of discretion unless there has been an error in the legal principles applied or a palpable and overriding error of fact (see 1196158 Ontario Inc. v. 6274013 Canada Limited , 2012 ONCA 544 at para. 16 ) [ 6 ] The Master set out the correct test to be applied in deciding whether to set aside a dismissal for delay, relying on Reid v. Dow Corning Corp. (2001), 11 C.P.C. (5 th ) 80 .

She considered the four factors set out in that test, as well as the overall justice of allowing the action to continue. [ 7 ] The appellants take issue with the weight she accorded to the factors in the Reid test. In particular, they argue that she should have given greater weight to the fact that there was no prejudice to the respondents. [ 8 ] They also argue that she erred in failing to consider the ongoing impact of the receivership order and in failing to accept that counsel inadvertently missed the deadline because of a mistake

interpretation of the amended Rule 48.14. [ 9 ] The fact that there was no actual prejudice to the respondents does not take priority over the other factors (see Jadid v.

Toronto Transit Commission , 2016 ONCA 936 at para. 12 ; 1196158 Ontario Inc. above at paras. 32-34 ). [ 10 ] The Master was not satisfied with the appellants’ explanation for the delay and for their failure to comply with Master Abram’s order. She reasonably concluded that the appellants had not provided a satisfactory explanation for the delay. Even though several of the respondents failed to provide their affidavits of documents in accordance with the timetable, the appellants took no steps to communicate with respondents’ counsel and made no efforts to try to move the litigation along.

As plaintiffs, they bore the primary responsibility to move the litigation along. [ 11 ] Moreover, the evidence does not show that the ongoing receivership order had an impact on the conduct of this litigation. Junior counsel’s affidavit filed on behalf of the appellants states that the receivership continues, but does not explain why or how that justifies the appellants’ inability to move the action forward.

The Master reasonably concluded that there was no satisfactory explanation for the delay in either meeting the court-established timetable or seeking an amendment to it. [ 12 ] With respect to the impact of the changes to Rule 48.14, there was no evidence before the Master that the appellants’ counsel erroneously relied on a mistaken

interpretation of the Rule. The Master had no evidence to find that there was inadvertence in missing the set-down date. [ 13 ] In sum, the Master made no error in legal principle nor any palpable and overriding error of fact. She reasonably concluded, on the record before her, that the values of timeliness and efficiency were important considerations. Her decision is consistent with the approach of the Court of Appeal in cases such as Jadid and 1196158 Ontario , cited above. [ 14 ] Accordingly, the appeal on the merits is dismissed. [ 15 ] On costs, the respondents represented by Mr.

McEachern (Kim, Rhee and Yu) agree that the costs order below should be reduced to $2,650, the amount sought by them before the Master. With respect to the other respondents, the costs of $3,000 each are disproportional to the amount awarded to Mr. McEachern’s clients, especially given their limited role on the motion. The Master gave no explanation for this award of costs. Leave to appeal the costs order is granted, and the costs ordered to Richard Yoon and John Yoon are reduced to $1,500 each.

COSTS [ 16 ] I have endorsed the Appeal Book, Compendium and Exhibit Book as follows: “For oral reasons delivered today, order to go:

(1) The appeal on costs is granted. On consent of respondents Kim, Rhee and Yu, costs below are fixed at $2,650. Costs to Richard Yoon and John Yoon are fixed at $1,500 each.

(2) The appeal is otherwise dismissed.

(3) Costs to the respondents fixed as follows, to reflect the larger role played by Mr. McEachern in this appeal, (

i) to Kim, Rhee and Yu, the amount of $5,200.00; (ii) to Richard Yoon, $1,500.00; (iii) to John Yoon, $2,000.00 all in.” ___________________________ SWINTON J. Date of Reasons for Judgment: January 9, 2017 Date of Release: January 12, 2017 CITATION : Mikal-Calladan Construction Inc. v. Kim, 2017 ONSC 189 DIVISIONAL COURT FILE NO.: 275/16 DATE: 20170109

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT BETWEEN: MIKAL-CALLADAN CONSTRUCTION LTD. and UNIMAC GROUP LTD. Plaintiffs (Appellants) – and – LAWRENCE KIM, VIVIAN RHEE, RICHARD YOON, JOHN YOON, and STEVE YU Defendants (Respondents) ORAL REASONS FOR JUDGMENT SWINTON J . Date of Reasons for Judgment: January 9, 2017 Date of Release: January 12, 2017