



COURT OF APPEAL FOR ONTARIO

CITATION: Chrisjohn v.
    Riley, 2015 ONCA 713

DATE: 20151026

DOCKET: C60237

Gillese, van Rensburg and Miller JJ.A.

BETWEEN

Deborah
    L. Chrisjohn, Kennard Chrisjohn, Rosaleen P. Weiler,

Pamela Chrisjohn, and
    Michelle Chrisjohn

Plaintiffs (Appellants)

and

Shawn
    C. Riley, Deceased, and/or the Estate of Shawn C. Riley,

Economical
    Mutual Insurance Company, Belair Insurance

Company, Iroquois
    Ironworks Ltd., and
Langdon Insurance Company

Defendants (
Respondent
)

Douglas M. Bryce, for the appellants

Lauren N. Bloom and Amir Fazel, for the respondent

Heard: October 5, 2015

On appeal from the order of Justice Antonio Skarica of
    the Superior Court of Justice, dated February 15, 2015.



van Rensburg J.A.:

A.

overview

[1]

The appellants appeal an order refusing to set aside an administrative
    dismissal of their personal injury action. Through no apparent fault of the
    appellants, and as a result of the delay, negligence and deliberate actions of
    their lawyers, no motion to set aside the dismissal was brought until more than
    five years after the dismissal, eight and a half years after the action had
    been commenced, and ten and a half years after the accident in which the
    appellant Deborah Chrisjohn was seriously injured. In the interim, the
    respondent (who had never been formally added as a defendant to the action) had
    been informed that the appellants would no longer pursue the personal injury
    action and instead would be suing their first lawyer. The respondent heard
    nothing from the appellants or their counsel for almost three years, when it
    received notice of a motion to set aside the dismissal.

[2]

In these circumstances, was the motion judge wrong to refuse to set
    aside the dismissal?

B.

facts

[3]

The appellant Deborah Chrisjohn was seriously injured in a motor vehicle
    collision in August 2002. The other driver, who died in the impact, and is
    alleged to have been impaired at the time of the accident, was uninsured. In August
    2004, an action was commenced by Ms. Chrisjohns first lawyer, R.N., seeking
    damages for her injuries and damages under the
Family Law Act,
R.S.O.
    1990, c. F.3, for the other appellants, who are her husband and daughters (the
    personal injury action). R.N. named two insurance companies among the
    defendants to the personal injury action. Pursuant to two orders made in 2005
    and 2006 in unopposed motions, the action against these insurers was dismissed
    and the appellants were granted leave to amend the claim to add as defendants
    the owner of the vehicle Ms. Chrisjohn was driving at the time of the
    collision, and the insurer of that vehicle, the respondent, Langdon Insurance
    Company (Langdon), with the requirement that the amendment be made within 20
    days.

[4]

R.N. did not take the steps required to amend the pleading, as a result
    of which Langdon was never added to the action as a defendant. In fact, R.N.
    took no steps to advance the action. A status notice was issued in May 2007, and
    the action was dismissed by registrars order on August 21, 2007.

[5]

A month before the dismissal, Langdons counsel examined Ms. Chrisjohn for
    discovery (although the examination was cut short by R.N. and not completed).
    Some 53 undertakings were given, and eight questions refused. The undertakings
    included to provide a sworn affidavit of documents by the end of the day and to
    deliver an amended statement of claim naming Langdon as defendant within 30
    days. None of the undertakings have ever been answered.

[6]

In November 2007, the parties attended a settlement conference without
    prejudice to the respondents position on the dismissal. The claim was not
    resolved.

[7]

Between September 2007 and February 2009, in response to letters from
    Langdons counsel, R.N. indicated repeatedly that he would take steps to
    regularize the proceedings, that is, to move to set aside the administrative
    dismissal and to add Langdon as a defendant. Motion dates were proposed and
    abandoned; no motion materials were ever served by R.N. There was no contact
    between R.N. and Langdon after April 2009.

[8]

Ms. Chrisjohn was aware of the administrative dismissal when it
    occurred, however she was assured by R.N. throughout his retainer that the personal
    injury action was continuing. R.N. told her that he had health and marital
    problems and when she threatened to change lawyers out of concern that her
    action was not progressing, he reacted angrily and bullied her.

[9]

In July 2009, the appellants terminated their relationship with R.N. and
    they so advised Langdon. In October 2009, the appellants retained A.M. as their
    new lawyer. Instead of moving immediately to set aside the administrative
    dismissal, A.M. focussed on R.N., alleging that he had been negligent in his
    handling of the personal injury action and demanding that R.N. report himself
    to his professional liability insurer, LawPro.

[10]

Langdon
    did not hear from the appellants or their counsel from July 2009 until April
    2010, when A.M. called Langdons counsel to advise that Ms. Chrisjohn was now
    pursuing a claim against her former lawyer, as the limitation period for
    pursuing a claim against Langdon had long since expired.

[11]

In
    August 2010, A.M. commenced an action in the appellants names against R.N. (the
    solicitors negligence action). R.N., who is representing himself, brought an
    unsuccessful motion for summary dismissal of the solicitors negligence action,
    asserting, among other things, that the action was premature and that A.M.
    ought to have moved immediately to set aside the administrative dismissal. A.M.
    filed an affidavit in that motion that was ultimately relied upon in support of
    the motion to set aside the dismissal of the personal injury action. In the
    affidavit, he explained the difficulties he encountered in the action against
    R.N. He asserted that the delay in the personal injury action was solely
    attributable to R.N.s refusal or failure to co-operate with LawPro.

[12]

Although
    A.M. did not explain in his own affidavit why he had delayed in bringing the
    motion to set aside the dismissal, Ms. Chrisjohn, in her affidavit, stated that
    A.M. told her that it was necessary to sue R.N. before the dismissal could be
    set aside.

[13]

R.N.
    refused to report the claim to LawPro. A.M. made a complaint to the Law Society
    of Upper Canada, whereupon an adjuster was appointed for R.N.  LawPro
    ultimately closed its file and R.N. has been acting in his own defence
    throughout the solicitors negligence action, which continues.

[14]

In
    2014, in proceedings by the Law Society to have R.N. psychiatrically assessed,
    it came to light that in April 2010, R.N. had taken leave of his law practice
    on medical grounds. The Law Society found that there are reasonable grounds to
    conclude that R.N. has been and is incapacitated.

[15]

In
    February 2013, A.M. filed a notice of change of lawyer indicating that his firm
    was solicitor of record for the appellants in the personal injury action, and also
    served notice of a motion to set aside the dismissal of that action, originally
    returnable in March 2013. In April 2014, new counsel for the appellants filed a
    notice of change of lawyer in the personal injury action, and argued the motion
    to set aside the administrative dismissal and to amend the pleading to add the
    respondent as a defendant. The motion was heard in 2015 and dismissed.

C.

Decision of the motion judge

[16]

The
    motion judge concluded that the appellants had failed to satisfy a number of
    the criteria set out in
Reid v. Dow Corning Corp.
, [2001] O.J. No.
    2365 (S.C.J.), revd on other grounds, using the contextual approach mandated
    by various decisions of this court, including
Scaini v. Prochnicki et al.
(2007), 85 O.R. (3d) 179 and
Marché DAlimentation Denis Theriault Ltée. et
    al. v. Giant Tiger Stores Ltd.
(2007), 87 O.R. (3d) 660.

[17]

First,
    the motion judge observed that the delay by R.N. was not properly explained.
    Before the administrative dismissal little progress had been made in the action
    and there was no evidence that R.N. intended to set down the action for trial within
    the time limit set out in the status notice. The motion judge noted that R.N
    was at one point depressed and had marital problems, but what influence these
    problems had on R.N.s conduct and decisions from 2002 to 2007 is unclear. R.N.
    did nothing in the next two years to set aside the administrative dismissal.

[18]

After
    A.M. became involved, no steps were taken to set aside the administrative
    dismissal for another three and a half years. The motion judge observed that it
    was reasonable to conclude that A.M. had made a strategic decision to abandon
    proceedings against the respondent and to pursue R.N. instead.

[19]

With
    a delay of five and a half years from the date the appellants became aware of
    the dismissal, it was clear that the motion to set aside the dismissal had not
    been brought promptly. The delay gave rise to a presumption of prejudice which
    was not rebutted by the appellants. There was also evidence of actual prejudice
    as numerous records relevant to Ms. Chrisjohns pre-and post-accident medical
    condition and liability (including on the issue of the other drivers sobriety)
    were not available, and the investigating police officer had suffered a stroke.
    Finally, the motion judge emphasized the compelling consideration of
    finality: based on the administrative dismissal and A.M.s communication to the
    respondents counsel, the respondent had assumed for almost three years that
    the case against it was over. He noted that the interest in finality in these
    circumstances must trump the plea for an indulgence.

D.

Issues

[20]

The
    decision of a master or judge refusing to set aside an administrative dismissal
    is entitled to deference and may be set aside only if made on an erroneous
    legal principle or infected by a palpable and overriding error of fact:
1196158
    Ontario Inc. v. 6274013 Canada Ltd.
, 2012 ONCA 544, 112 O.R. (3d) 67, at
    para. 16. The appellants assert that there were such errors in this case.

[21]

First,
    the appellants contend that the motion judge erred in his consideration of the
    explanation for the litigation delay by ignoring, or failing to give proper
    weight to, the uncontroverted evidence that the appellants always intended to
    proceed with the personal injury action.

[22]

Second,
    the appellants assert that the motion judge refused to consider as relevant the
    very real prospect that, if the action were not restored, they may be without
    any real remedy in respect of the very serious personal injuries sustained by
    Ms. Chrisjohn after a head-on collision with an impaired driver. LawPro has refused
    to defend R.N. in the solicitors negligence action, and (although not in
    evidence, but adverted to in oral argument), A.M. is actively defending a
    second solicitors negligence action brought by the appellants, arguing that
    R.N. and not A.M. was responsible for the dismissal of the personal injury
    action and the failure to have the dismissal set aside.

[23]

Third,
    the appellants argue that the motion judge erred in his assessment of prejudice,
    when the evidence compiled by their counsel suggested that there was no actual
    and significant prejudice and the action was capable of being fairly tried on
    the merits.

[24]

The
    respondent contends that there was no error in the motion judges reasoning or
    decision. It was reasonable for the motion judge to conclude on the evidence
    before him that the appellants had failed to satisfy any of the
Reid
factors
    and that the motion should be dismissed.

E.

Analysis

[25]

It
    is an understatement to say that the appellants were not well served by their former
    legal counsel in this case. Their first lawyer, R.N., took on Ms. Chrisjohns personal
    injury claim and did little to advance it. When the personal injury action was
    dismissed, he did not move promptly to set aside the dismissal. While there is
    evidence that R.N. suffered from personal problems as early as 2007, as the
    motion judge observed on the evidence before him, what influence these
    problems had on R.N.s conduct and decisions from 2002 to 2007 is unclear.  And
    as Langdon points out, during this time, R.N. managed to settle Ms. Chrisjohns
    long-term disability claim.

[26]

After
    Ms. Chrisjohn changed counsel, A.M. commenced and pursued the solicitors
    negligence action on her behalf against R.N., and did not take any steps in the
    personal injury action. Indeed, he did not deliver a notice of change of lawyer
    in that action until 2013, shortly before his retainer ended. He informed
    Langdon that the personal injury action was not being pursued. This was, as the
    motion judge concluded, a deliberate and strategic decision, and not
    inadvertent, even if, in retrospect, A.M. should have moved to set aside the
    administrative dismissal at the same time he pursued the solicitors negligence
    action.

[27]

Ms.
    Chrisjohns intention throughout was to recover damages for the personal
    injuries she suffered as a result of the 2002 collision. Unfortunately, however,
    the personal injury action had been dismissed in 2007, and from at least 2010,
    the respondent considered the dismissal to be final and that the action against
    it had ended.

[28]

In
    my view, the motion judge did not make any of the errors asserted by the
    appellants. His decision not to set aside the administrative dismissal was
    based on a careful consideration of the relevant circumstances. As he was
    required to do, he weighed all the factors and made the order that was just in
    the circumstances:
Habib v. Mucaj
, 2012 ONCA 880, at para. 6.

[29]

First,
    the motion judge was well aware of the fact that it was the conduct and inaction
    of her counsel, and not of Ms. Chrisjohn herself, that led to the
    administrative dismissal and the failure to move to set aside the dismissal
    promptly. He had before him the evidence in Ms. Chrisjohns two affidavits that
    made it clear that, while she knew of the administrative dismissal in August
    2007 when it occurred, she relied on her counsels assurances that the action
    would nevertheless continue. She stated that it was always her intention to
    pursue her claim for compensation.

[30]

The
    motion judge considered this evidence. After noting that, in August 2007, both
    Ms. Chrisjohn and her lawyer were aware of the administrative dismissal, he
    stated that R.N. assured Ms. Chrisjohn that everything was all right and even
    conducted mediation shortly thereafter. He also noted that, in order to get
    around the dismissal, A.M. pursued R.N.

[31]

In
Finlay v. Van Paassen
, 2010 ONCA 204, 101 O.R. (3d) 390, Laskin J.A.
    noted, at para. 33, that on a motion to set aside a dismissal order, the court
    should be concerned primarily with the rights of the litigants, not with the
    conduct of their counsel. In
Marché
, at para. 28, Sharpe J.A. observed:
    The law will not ordinarily allow an innocent client to suffer the irrevocable
    loss of the right to proceed by reason of the inadvertence of his or her
    solicitor. Sharpe J.A. went on to recognize that the situation may be
    different where the lawyers conduct is not inadvertent but deliberate.

[32]

The
    fact that Ms. Chrisjohn always intended to pursue her claim is a factor that
    weighs in favour of setting aside the administrative dismissal. It is not
    however sufficient. The rights of the appellants as plaintiffs and the
    respondent as defendant to an action that has been dismissed must be considered
    to determine ultimately whether it would be fair and just to set aside the
    dismissal and to allow the action to proceed.

[33]

Similarly,
    the absence of a guaranteed alternative recovery against her former counsel
    cannot be determinative. While the appellants point to the fact that R.N. is defending
    himself, suggesting that insurance will not be available to satisfy their claim
    should they succeed in the solicitors negligence action against him, and that
    the solicitors negligence action against A.M. is being defended, whether Ms.
    Chrisjohn will succeed or fail in either or both of the solicitors negligence
    actions, or in recovering damages in either action, is far from certain. The
    motion judge specifically stated that he did not take into account whether the
    plaintiffs had another remedy against either R.N. or A.M. for negligence. In
    this regard, he followed this courts advice in
Finlay v. Van Paassen
,
    where Laskin J.A. cautioned against weighing as a factor in such motions the
    plaintiffs ability to sue her former counsel, at para. 32:

A judge who refuses to set aside a dismissal order will
    naturally be concerned that the effect of the refusal will be to deprive an
    innocent party of its day in court. To protect the claim of the innocent party,
    the judge will often raise the possibility of a negligence action against the
    partys own lawyer. Although perhaps understandable, I do not find this
    helpful. Speculation about whether a party has a lawsuit against its own
    lawyer, or the potential success of that lawsuit, should not inform the courts
    analysis of whether the registrars dismissal order ought to be set aside.

[34]

The
    motion judge, accordingly, did not err in refusing to consider the appellants
    chances in their solicitors negligence actions. He did not fail to appreciate
    the very serious consequences to the appellants if the personal injury action
    were not restored. Rather, his decision turned on the important question of
    prejudice  whether the respondent, after such a significant delay and after
    being informed that the action was at an end, would fairly be able to defend
    the appellants claims if the action were restored.

[35]

I
    therefore turn to a consideration of the appellants final argument, that the
    motion judge erred in his assessment of prejudice in this case.

[36]

As
    this court noted in
Hamilton (City) v. Svedas Koyanagi Architects Inc.
,
    2010 ONCA 887, 104 O.R. (3d) 689, at para. 33, on a motion to set aside a
    dismissal for delay, the question of prejudice is invariably a key, if not
the
key consideration. The relevant prejudice is to the defendants ability to
    defend the action that would arise from steps taken following dismissal or
    which would result from the restoration of the action:
MDM Plastics Ltd. v.
    Vincor International Inc.
, 2015 ONCA 28, 124 O.R. (3d) 420, at para. 25;
    see also
806480 Ontario Ltd. v. RNG Equipment Inc.
, 2014 ONCA 488, [2014] O.J. No. 2979
, at
    para. 4.

[37]

I
    would not interfere with the motion judges assessment of prejudice in this
    case. He recognized that the appellants had the onus of rebutting the
    presumption of prejudice as a result of the passage of time; however, he relied
    not only on the presumption, but also on the extensive evidence put forward by
    the respondent of actual prejudice to its ability to defend the action.

[38]

There
    is no question that the appellants present counsel went to considerable
    lengths to attempt to address the question of prejudice. They made inquiries of
    various sources and confirmed that certain medical and other records had been
    preserved. They did not however produce such records, and as such, the
    respondent was unable to assess whether records said to have been available
    were complete. The motion judge noted that, as a result of the passage of time,
    there were important gaps in the available medical evidence. These include OHIP
    records for the first five months after the accident as well as pre-accident OHIP
    records for Ms. Chrisjohn, the original CT scans and x-rays taken after the
    collision, and records of certain treating professionals and prescription drug
    records for the first three years after the accident. No pre-accident medical
    records were produced or confirmed to be available. Many of the undertakings
    given in her discovery would have required Ms. Chrisjohn to obtain and produce
    medical records. None of the undertakings were answered. The respondents
    ability to assess and evaluate Ms. Chrisjohns claim for damages has been
    impaired.

[39]

As
    the motion judge noted, significant evidence respecting liability is also no
    longer available, in a case where liability would be a live issue. In her
    examination for discovery, Ms. Chrisjohn agreed that her vehicle had crossed
    over the centre line before impact, and there is little evidence indicating whether
    the other driver was impaired by alcohol. The investigating police officer
    suffered a stroke and has retired. Undertakings to produce 911 and Fire
    Department records, as well as to identify names and contact information for
    witnesses were not fulfilled. There was no evidence before the motion judge
    that any such evidence had been obtained or preserved.

[40]

The
    onus was not on the respondent to demonstrate significant and actual
    prejudice, as asserted by the appellants (although there was evidence of such
    prejudice on the record), but on the appellants to rebut the inference of
    prejudice, that is, prejudice to the respondents ability to defend the action.
    The motion judge correctly concluded that the onus was not met in the present
    case, and that actual prejudice relevant to the ability to defend the action on
    damages and liability had been established.

[41]

This
    is not a case where a defendant complained of prejudice that it might have
    taken steps to avoid. Langdons counsel acted responsibly, even proactively 
    defending the action although Langdon had not been formally added as a
    defendant, communicating with R.N. and co-operating in scheduling the proposed
    motions respecting the dismissal, and even engaging in mediation on a without
    prejudice basis  until being informed that the appellants would not pursue
    their personal injury action. As the motion judge observed, based on the
    dismissal and A.M.s communication, the respondent assumed legitimately that
    the case against it was over.

[42]

I
    see no error in the motion judges decision not to set aside the administrative
    dismissal. Further, I agree with the motion judge that in the circumstances of
    this case, the principle of finality was important.

F.

DISPOSITION

[43]

For
    these reasons, I would dismiss the appeal and award costs to the respondent in
    the sum of $12,500, inclusive of disbursements and HST.

K. van Rensburg J.A.

I agree E.E. Gillese

I agree B.W. Miller
    J.A.


