



COURT OF APPEAL FOR ONTARIO

CITATION: Wallace v. Crate's Marine Sales Ltd., 2014 ONCA 671

DATE: 20140930

DOCKET: C58159

Juriansz, LaForme and Lauwers JJ.A.

BETWEEN

Kim Robert Wallace and Karen Lynn Wallace

Plaintiffs (Appellants)

and

Crates Marine Sales Ltd. and Carver Boat Corporation

Defendants (Respondents)

William E. Pepall and Jasmine T. Akbarali, for the
    appellants

Morris Manning, Q.C., for the respondents

Heard:  September 18, 2014

On appeal from the order of Justice Drew S. Gunsolus of
    the Superior Court of Justice, dated December 10, 2013, with reasons reported
    at 2013 ONSC 7384.

Lauwers J.A.:

[1]

This is a relatively simple case. The appellants claim that the yacht
    they purchased in 2000 for more than $1 million from the respondent, Crates
    Marine Sales Ltd., was so defective that there was a fundamental breach of the
    purchase contract. They returned the yacht to Crates in 2003 where it has
    languished ever since. They seek rescission of the purchase contract and return
    of the purchase money, or damages in the alternative.

[2]

The action was started in 2003. The motion judge estimated that if the
    action was now permitted to proceed, it would not be ready for trial until 2015
    at the earliest.

[3]

The motion judge dismissed the action for want of prosecution based on
    both his discretion under Rule 24 of the
Rules of Civil Procedure
R.R.O.
    1990, Reg. 194, and as an exercise of the courts inherent jurisdiction.

[4]

For the reasons set out below, we dismiss the appeal.

(1)

The Test for Dismissing an Action for Delay

[5]

The appellants concede that the motion judge properly instructed himself
    at paras. 17-27 of his reasons on the test for dismissing an action under Rule
    24. The motion judge cited
Woodheath Developments Ltd. v. Goldman
(2001), 56 O.R. (3d) 658 (S.C.);
Scaini v. Prochnicki
, 2007 ONCA 63, 85
    O.R. (3d) 179 and
Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger
    Stores Ltd
., 2007 ONCA 695, 87 O.R. (3d) 660. However, the appellants
    challenge the motion judges application of the law to the facts.

[6]

The motion judge did not find that the delay was intentional or contumelious.
    He instructed himself that, under Rule 24, he had to be satisfied that the
    delay gave rise to a substantial risk that a fair trial of the issues would
    not be possible at the earliest date a trial could be held in this matter
    (para. 81). The motion judge also noted the expiry of the applicable limitation
    period and the presumption of prejudice that arises in circumstances of
    inordinate delay.

(2)

Background and Decision in the Court Below

[7]

Until the close of pleadings in 2004, the action proceeded at an
    ordinary pace. It then took about one and one-half years to arrange for
    discoveries. The motion judge noted that he had not received a satisfactory
    explanation for this delay (para. 75).

[8]

The discoveries began in December 2005, but were shortly adjourned to
    permit the appellants to amend their statement of claim. The appellants were to
    narrow their allegations to a claim that either the portside Volvo engine or
    the electronics related to the engine were defective. Counsel never took steps
    to amend the statement of claim. No other steps were taken by either side to
    advance the litigation for a number of years, apart from a desultory exchange
    of correspondence. In August 2011 counsel for the appellants served a notice of
    examination for discovery; the respondents did not attend, advising that they
    would be bringing a motion for summary judgment, which led to the motion that
    is the subject of this appeal.

[9]

The motion judge stated:

In fact, the court received no satisfactory explanation from
    the plaintiffs as to the cause for a delay of in excess of ten years. The
    plaintiff's explanation is basically that he and his counsel were tied up in
    other, unrelated litigation for over two years of that time. Counsel for the
    plaintiff explained that they were busy with other cases and the realities of
    their litigation practice. The defendant sent ongoing correspondence trying to
    "needle" the matter forward on their own terms, but neither side
    availed themselves of motions, which is surprising, as neither counsel could be
    considered "wilting flowers" on the civil litigation stage. (Para.
    76)

[10]

At
    para. 80, the motion judge found:

I find that the delay in this matter of in excess of ten years
    is inordinate and inexcusable as it has never really moved beyond the pleadings
    stage. This delay includes an unexplained ten year litigation delay after the
    issuance of the Statement of Claim, and an eight year delay following the
    expiry of a critical limitation period. It was over thirteen years ago when the
    original contract was entered into.

[11]

The
    motion judge concluded:

The inordinate delay described above, has created a presumption
    that the defendant has been prejudiced by this delay. The onus was on the
    plaintiff to displace the prejudice and persuade the court with convincing
    evidence that no prejudice will be suffered as a result of its delay, and that
    there is not a substantial risk that a fair trial will not be possible. The
    plaintiff has failed to discharge that onus. Beyond that, the defendant has
    demonstrated actual prejudice in any event. (Para. 89)

(3)

Analysis

[12]

The
    confluence between discretion and dismissal for delay is traced out in this
    courts decision in
Langenecker v. Sauvé
, 2011 ONCA 803,
[2011] O.J. No. 5777. Doherty J.A.
    observed:

An order dismissing an action for delay is obviously a severe
    remedy. The plaintiff is denied an adjudication on the merits of his or her
    claim. Equally obviously, however, an order dismissing an action for delay is
    sometimes the only order that can adequately protect the integrity of the civil
    justice process and prevent an adjudication on the merits that is unfair to a
    defendant. (Para. 3)

[13]

In
    this case, the motion judges finding that the delay was inordinate and inexcusable
    is unassailable.

[14]

The
    appellants argue that they have successfully rebutted the presumption of
    prejudice. They argue that the evidence is in decent enough form to permit a
    fair trial, and that any memory lapses can be repaired by recourse to the
    documentary record.

[15]

Counsel
    for the appellants takes direct aim at three factors cited, at para. 90, by the
    trial judge as examples of prejudice: mitigation of damages relating to re-sale
    and depreciation of the yacht; passage of the limitation period in relation to
    the manufacturers warranty on the portside engine; and the bankruptcy of the
    co-defendant Carver Boat Corporation. The appellants submit that these factors
    are not examples of prejudice, but are instead litigation risks that they, not
    the respondents, must absorb. There is some merit in this argument.

[16]

However,
    the motion judge did not rely on the listed examples of prejudice alone. He also
    noted that, while documentary evidence may well be available, this is not
    litigation driven solely by documentation (para. 86). He added: Both parties
    have their own views as to what occurred and what should have occurred, in
    relation to the use and repair of the vessel and they are now relying upon
    memories of events that occurred over a decade ago.

[17]

Based
    on these findings, the motion judge concluded that the appellants attempted
    rebuttal of the presumption of prejudice failed in the face of the respondents
    evidence as to the potential significance of testimony dependent upon the
    witnesses ability to recall statements and observations. These findings cannot
    be characterized as unreasonable.

[18]

The
    appellants argue that at least some of the delay falls at the feet of the
    respondents. It is fair to say that neither side is free of fault in the
    conduct of this action, but, as LaForme J. observed in
DeMarco v. Mascitelli
,
    [2001] O.J. No. 3582, 14 C.P.C. (5th) 384 (S.C.), at para. 22, the plaintiff is
    responsible for moving the action along. In this case the appellants manifestly
    failed to fulfill this responsibility.

[19]

The
    appellants also challenge the motion judges statement that his decision
    dismissing the action for delay was an exercise of the courts inherent
    jurisdiction. They argue that Rule 24 effectively exhausts the courts
    jurisdiction to deal with dismissal for delay.

[20]

Regarding
    this exercise of inherent jurisdiction, the motion judge stated:

A lengthy, unexplained delay in a case of this nature could
    well be defined as an abuse of the court's process. There is, indeed, a strong
    public interest in promoting the timely resolution of disputes in our civil
    justice system, which is already overburdened. Litigants and the public
    regularly complain about inordinate delays in obtaining civil motions and trial
    dates. The delay in this matter, of over a decade, strains the empathy of the
    court to excuse a delay of this "magnitude and gravity" and further
    undermines public confidence in the administration of our civil justice system.
    (Para. 95)

I agree. This is a simple case in which there was no
    reason to delay the trial to permit the situation to unfold, as there often is
    in personal injury cases, for example.

[21]

The
    motion judges invocation of inherent jurisdiction is consistent with this
    courts decision in
Marché D'Alimentation Denis Thériault
. Sharpe J.A.
    noted at para. 24:

Dismissal for delay is not, of course, an invention of case
    management. Rule 24.01 allows a party to move to dismiss an action for delay
    where the plaintiff has failed to prosecute the action in a timely fashion in
    accordance with the rules. Moreover, courts may dismiss actions for delay even
    when the relevant rules do not mandate it. A court has inherent jurisdiction to
    control its own process, which "includes the discretionary power to
    dismiss an action for delay."
Housser v. Savin Canada Inc.
(2005),
    77 O.R. (3d) 251 at para. 9 (S.C.J.). As the Manitoba Court of Appeal wrote,
    "The power of a superior court to strike a matter for want of prosecution
    does not hinge on the niceties of the wording of the rules, but rather flows
    from the inherent power of the court to prevent an abuse of its own
    process."
Kuhr v. Pearlman
(1991), 76 Man. R. (2d) 67 at para. 16.
    In at least two cases, this court has characterized lengthy, unexplained delays
    as "an abuse of the court's process." In
Susin v. Baker &
    Baker
, [2004] O.J. No. 723 at para. 7 (C.A), the court wrote that
    "even if the action could not be dismissed under r. 24.01(1), given all of
    the circumstances, it could properly be dismissed as an abuse of the court's
    process." See also
Convay v. Marsulex Inc.
, [2002] O.J. No. 4655
    (C.A.).

[22]

There
    comes a time, in short, when enough is enough, and the civil justice system
    will no longer tolerate inordinate and inexplicable delay. A court may then
    eject the action as an exercise of its inherent jurisdiction, whether or not
    the relevant rules expressly mandate it. This is such an action. The motion
    judge properly exercised his jurisdiction to dismiss the claim and the
    counterclaim.

[23]

The
    appeal is dismissed with costs fixed in the amount of $9,000, all inclusive.

Released:  September 30, 2014 PL                      P.
    Lauwers J.A.

I
    agree R.G. Juriansz J.A.

I
    agree H.S. LaForme J.A.


