



COURT OF APPEAL FOR ONTARIO

CITATION: Samuels v. Mai, 2020 ONCA 408

DATE: 20200624

DOCKET: C67621

Strathy C.J.O., Lauwers and van
    Rensburg JJ.A.

BETWEEN

Donovan
    Samuels

Plaintiff/Appellant

and

Jen Ling
    Mai
,
Hao Cheung Mark
,
Mark Holdings Inc.
and CPM Realty Corporation

Defendants/
Respondents

David Silver, for the appellant

Pulat Yunusov, for the respondents

Heard: in writing

On appeal from the order of Justice Shaun
    OBrien of the Superior Court of Justice, dated September 23, 2019.

REASONS FOR DECISION

[1]

The appellant appeals an order dismissing his
    action. The order was made on the appellants motion to vary a litigation
    timetable and for summary judgment against the respondents. On that motion, the
    respondents sought an order dismissing the motion to vary the timeline and
    dismissing the appellants action for delay.

[2]

For the reasons that follow, we allow the appeal
    and remit the matter to the Superior Court.

Procedural History

[3]

The action is based on an Agreement of Purchase
    and Sale dated September 6, 2011, for a 12-unit apartment building in Toronto
    for the sum of $1.28 million. The agreement called for a $50,000 deposit and
    was conditional on the buyer, the appellant, obtaining financing. The appellant
    was allegedly unable to do so and purported to terminate the agreement.

[4]

On December 6, 2011, the appellant commenced this
    action for recovery of his $50,000 deposit under the Simplified Procedure: see r.
    76 of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194. He claimed
    an additional $50,000 for loss of opportunity to invest the deposit.

[5]

On January 11, 2012, the respondents delivered a
    statement of defence and counterclaim, claiming damages of $100,000 for breach
    of contract. Nine months later, on October 26, 2012, the appellant delivered a
    reply and defence to counterclaim.

[6]

At that point, the action stalled. There is
    little evidence of why that happened, although there is a suggestion that the
    appellants then counsel had a serious illness.

[7]

Whatever the reason, there is no evidence of any
    step having been taken by any party to move the action forward for over four
    years. There were some inconclusive communications between the lawyers
    concerning settlement and other issues, but nothing of significance occurred.

[8]

In March 2016, the appellant retained new
    counsel, but there was no progress in the action for almost a year. In January
    2017, the respondents retained new counsel.

[9]

The appellants counsel requested a status
    hearing to prevent an administrative dismissal. At that hearing, on February
    27, 2017, the Master directed the Registrar not to dismiss the action for delay
    and set a litigation timetable, which called for discoveries and motions to be
    completed and the action to be set down for trial by June 1, 2018. That order
    was not opposed by the respondents.

[10]

In spite of being handed a lifeline by the Master, the appellant
    took no steps to move the action forward.

[11]

On January 26, 2018, the respondents served a motion to dismiss the
    action for delay or, in the alternative, for summary judgment dismissing the appellants
    claim and granting the respondents judgment on their counterclaim.

[12]

Between January and August 2018, the parties delivered affidavits of
    documents and exchanged communications concerning settlement, but once again,
    the appellant did little to move the action forward.

[13]

On March 19, 2018, counsel for the appellant stated an intention to
    bring a cross-motion for summary judgment on the same timeline as the
    respondents motion for dismissal for delay or summary judgment.

[14]

On March 20, 2018, a motion schedule was set in Civil Practice
    Court, leading to a return date for the respondents motion on September 11, 2018.

[15]

On August 10, 2018, having filed no materials on their scheduled
    motion to dismiss the action for delay or for summary judgment, the
    respondents counsel proposed to withdraw their motion to focus on the next
    stage of this action.

[16]

On September 6, 2018, counsel for the respondents advised the court
    in an email that the motion would be proceeding on September 11, 2018, but
    only on costs and the respondents would be seeking a deadline to set this
    action down for trial.

[17]

On September 10, 2018, counsel for the respondents advised the
    appellants counsel, [m]y offer on costs [of the withdrawn motion] will remain
    open until the hearing tomorrow but regardless of your acceptance I will seek a
    new deadline to set this matter down for trial.

[18]

On September 11, 2018, the motion did not go ahead because the matter
    had not been listed. On this day, counsel agreed that the appellants motion
    for summary judgment would be scheduled and a timetable would be set at Civil
    Practice Court. The costs of the respondents withdrawn motion would be
    reserved to the motion judge.

[19]

In the five months thereafter, there were inconclusive settlement
    discussions, but nothing substantive occurred.

[20]

On February 27, 2019, the appellants counsel appeared in Civil
    Practice Court to schedule a motion to vary the timetable set by the Master and
    for summary judgment. The motion, which resulted in the order at issue, was
    scheduled for July 24, 2019.

[21]

Both parties delivered materials on the July 24, 2019 motion. The
    respondents materials addressed both the merits of the claim and counterclaim
    and responded to the appellants request for variance of the timetable. The
    appellant and one of his affiants were cross-examined.

[22]

On September 23, 2019, the motion judge dismissed the appellants
    action for delay and provided written reasons for decision. She did not address
    the respondents counterclaim.

[23]

On October 21, 2019, after the dismissal of the action, the
    respondents served a notice of election to proceed with their counterclaim.

The Motion Judges Reasons

[24]

The motion judge noted the appellants failure to take any steps to
    move the action forward for several years after the exchange of pleadings. Even
    after the retainer of new counsel in March 2016, the appellant took no action
    until bringing a motion to avoid dismissal for delay in January 2017. As a
    result of that motion, the Master set a timetable order. Yet again, the
    appellant took no steps to advance the action, which prompted the respondents
    motion, served in January 2018, to dismiss the action for delay or
    alternatively for summary judgment.

[25]

While the respondents ultimately did not proceed with their motion,
    which was scheduled for September 11, 2018, the appellant took no steps to
    schedule his own motion until February 2019. In the meantime, the parties had
    one phone call and the [appellant] sent one letter in an attempt to settle the
    matter.

[26]

The motion judge found that the eight years delay since the
    commencement of the action was inordinate. The appellant had failed to
    provide a satisfactory explanation for the delay, either before or after the
    Masters timetable order. While courts are prepared to make some allowance for
    delay due to settlement discussions, this was not a satisfactory explanation in
    the circumstances.

[27]

In considering the motion to vary the timetable, the motion judge
    made reference to the test in
Reid v. Dow Corning Corp.
(2001), 11
    C.P.C. (5th) 80 (Ont. S.C.), revd on other grounds (2002), 48 C.P.C. (5th) 93.
    (Ont. Div. Ct.), which was referred to by this court in
Prescott v. Barbon
,
    2018 ONCA 504, 141 O.R. (3d) 616. The motion judge laid out the four
Reid
factors, namely: (1) the explanation for the litigation delay; (2) inadvertence
    in missing the deadline; (3) efforts to move promptly to set aside the
    dismissal; and (4) absence of prejudice to the defendant.

[28]

The motion judge also cited to
Jadid v. Toronto Transit
    Commission
, 2016 ONSC 1176, affd 2016 ONCA 936, dealing with the
    application of the
Reid
factors in a situation where a party comes to
    the court seeking a second lifeline.

[29]

Finally, the motion judge properly noted two points. First, it is
    not necessary to satisfy each part of the
Reid
test. A contextual
    approach requires the weighing of all relevant factors to determine what is
    just in the circumstances:
Marché DAlimentation Denis Thériault Ltée v.
    Giant Tiger Stores Limited
, 2007 ONCA 695, 87 O.R. (3d) 660, at para. 20.
    Second, she was required to balance two principles, namely: (a) that actions
    should be determined on their merits if possible; and (b) that the timely and
    efficient resolution of disputes requires that rules be respected and enforced:
1196158 Ontario Inc. v. 6274013 Canada Limited
, 2012 ONCA 544, 112
    O.R. (3d) 67, at para. 18.

[30]

Considering the
Reid
factors, and applying them with
    heightened scrutiny due to the appellants complete disregard of the timelines
    established by the Master, the motion judge found that the plaintiff:

1.

had not provided a satisfactory explanation for the
    delay;

2.

did not demonstrate that he failed to prosecute
    the action due to inadvertence;

3.

did not move promptly to bring a motion to vary
    the timetable; and

4.

had not proven that the defendants would not
    suffer prejudice.

[31]

The motion judge added that if she were wrong in dismissing the
    action for delay, she would not have decided the summary judgment motion because
    the parties had disclosed the terms of settlement offers in their motion
    materials. She would have referred the matter to another judge.

Submissions on
    Appeal

(1)

Appellant

[32]

The appellant submits that the motion judge erred in dismissing the
    action because she failed to consider whether the order was just under the
    circumstances. She ought to have considered the overall context and history of
    the litigation and should not have dismissed an action that was ripe for
    summary determination on the merits. The order was punitive rather than
    efficient, citing to
Cariocas Import & Export Inc. v. Canadian
    Pacific Railway Limited
, 2015 ONCA 592, 128 O.R. (3d) 143, at para. 54.

(2)

Respondents

[33]

The respondents submit that the appellant was responsible for
    unreasonable delay and failed to proceed with his motion in a timely way,
    particularly after the respondents withdrew their motion on September 11, 2018,
    in the expectation that the plaintiff would move promptly with his. The
    respondents also submit that the nature of their counterclaim is different from
    the claim advanced by the plaintiff. Specifically, the plaintiff sought return
    of the deposit and damages for loss of investment opportunity; whereas, the
    respondents sought damages for failure to close the real estate transaction. The
    respondents submit that this court should not consider the notice of election
    to proceed with the counterclaim, as it amounts to fresh evidence and would
    require a re-weighing of the
Reid
factors.

Discussion

[34]

The motion judges decision is entitled to deference in the absence
    of an error in legal principle or a palpable and overriding error of fact.

[35]

While the motion judge identified the need for a contextual
    analysis, she failed to consider a critical contextual factor: the dismissal of
    the appellants claim left the respondents counterclaim alive. In fact, the
    respondents have evidenced an intention to proceed with their counterclaim.

[36]

We do not accept the respondents submission that the counterclaim
    is somehow different from the claim. It is a mirror image of the claim. If the
    appellants claim had been successful, he would have established that he was
    entitled to refuse to complete the transaction and the respondents
    counterclaim would have failed. Success on the counterclaim, on the other hand,
    would necessarily mean the failure of the claim.

[37]

In
Cardon Developments Ltd. et al. v. Butterfield
, 1999
    BCCA 642, 131 B.C.A.C. 197, at para. 5, Southin J.A. set aside an order
    dismissing a claim for delay because a counterclaim that arose out of the same
    events remained. Since the claim and counterclaim were inextricably wound up
    one with the other and the defendants were planning on proceeding on the
    counterclaim, the interests of justice would not be properly served if the
    claim was not also permitted to proceed.

[38]

As in
Cardon
, it was not in the interests of justice to dismiss
    the appellants claim while permitting the respondents to litigate the very
    same issues in their counterclaim. The order did not promote the timely and
    efficient resolution of the proceeding. While the claim and counterclaim were
    well past their best before dates, neither party had displayed any diligence
    in moving the proceedings forward and there was no evidence of prejudice. When
    the litigation was finally ready for determination, the motion judge erred in failing
    to consider the fact that dismissing the claim would leave the counterclaim
    outstanding, exposing the appellant to liability in relation to the very same
    issue he was litigating.

[39]

We do not think it was necessary for the motion judge to recuse
    herself from hearing the summary judgment motion, had she permitted the
    variation of the timetable. The parties waived privilege over the settlement
    discussions by referring to them in their materials. It does not appear that
    she was asked to recuse herself. Having received the evidence and heard the
    submissions, it would not have been efficient to refer the matter to another
    judge to decide the summary judgment motion.

[40]

We cannot leave this matter without observing that this proceeding could
    have been resolved by a one-day trial. Liability turned on the credibility of
    the appellant and on one or two documents. Proof of the respondents damages,
    if any, should have been uncomplicated. Sometimes a trial is the just, most
    expeditious, and least expensive determination of a civil proceeding on its
    merits, as required by r. 1.04(1).

Disposition

[41]

For these reasons, the appeal is allowed, the dismissal of the
    action and the costs award are set aside, and the matter is remitted to the
    Superior Court for determination. There were no submissions as to costs. In the
    particular circumstances of this case, the costs of this appeal are fixed at $5,000,
    inclusive of disbursements and all applicable taxes, in the cause.

G.R.
    Strathy C.J.O.

P.
    Lauwers J.A.

K.
    van Rensburg J.A.


