



COURT OF APPEAL FOR ONTARIO

CITATION: Prescott v. Barbon, 2018 ONCA 504

DATE: 20180601

DOCKET: C63510

Watt, Pepall and Miller JJ.A.

BETWEEN

Andrea Prescott, Amanda Burt and Barbara Ramsey

Plaintiffs

(Appellants)

and

Ramon Barbon and Eduardo Ramon-Sagastume

Defendants

(Respondents)

and

Economical Insurance Company

Intervenor

(Respondents)

William G. Scott, for the appellants

Derrick Fulton, for the respondent Eduardo
    Ramon-Sagastume

Derek V. Abreu and Trevor J. Buckley, for the respondent
    Ramon Barbon

Donna Polgar, for the intervenor Economical Insurance
    Company

Heard: October 23, 2017

On appeal from the order of Justice Freya Kristjanson of
    the Superior Court of Justice, dated February 13, 2017, with reasons reported
    at 2017 ONSC 1048.

Pepall J.A.:

[1]

On December 28, 2008, the appellants, Andrea Prescott and Barbara
    Ramsey, were passengers in a motor vehicle owned and operated by the appellant,
    Amanda Burt.  A motor vehicle owned and operated by the respondent, Ramon
    Barbon, stopped behind Burts vehicle.  A third motor vehicle operated by the
    respondent, Eduardo Ramon-Sagastume, struck Barbons vehicle from behind,
    causing it to drive into the rear of Burts vehicle.  Wawanesa Mutual Insurance
    Company (Wawanesa) insured both of the respondent vehicles.  The appellants
    sued for injuries sustained in the accident.  The action was commenced on
    December 29, 2010.

[2]

Ramon-Sagastume pleaded guilty to impaired driving.  He had been
    consuming alcohol and had been driving his fathers vehicle.  Wawanesa denied
    coverage to Ramon-Sagastume because he was operating the vehicle without the
    consent of his father, the owner.

[3]

On July 11, 2011, the registrar sent a notice to the appellants lawyer
    advising that the action would be dismissed as abandoned and giving the
    appellants 45 days to act.  The registrar dismissed the action as abandoned on
    August 25, 2011, pursuant to r. 48.15(1) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194, which was then in force.  Unaware of the dismissal order
    but prior to the expiry of the 45 days, the appellants lawyer tried to note
    the respondents in default but was precluded from doing so due to the dismissal. 
    The lawyer failed to inform his clients of the dismissal and only reported the
    matter to LawPRO over two years later in December 2013.  In that time period,
    he unsuccessfully made some efforts to negotiate a setting aside of the
    dismissal order.

[4]

Ultimately, the appellants served a notice of motion to set aside the
    dismissal in February 2014.  As such, the total time between the date of the
    dismissal order (August 25, 2011) and the bringing of the motion to set aside the
    dismissal order (February 20, 2014) was two years and six months.

[5]

Economical Insurance Company (Economical) insures the vehicle the
    appellants were at the time of the accident.  If the dismissal is set aside,
    the appellants intend to bring a motion to add Economical to the action in
    order to access the uninsured motorist provisions of its policy.  Economical was
    granted intervenor status because it was the uninsured motorist carrier for the
    appellants and an ultimate target for recovery.

[6]

Master Hawkins heard the motion in June and September 2015 and
    overturned the registrars administrative dismissal on December 11, 2015.

[7]

The respondents appealed the Masters decision.  The Superior Court
    judge (the SCJ) allowed the appeal and overturned the Masters decision, thus
    reinstating the administrative dismissal.  She ordered the appellants to pay
    costs of $8,370 to each of the respondents and did not disturb the Masters
    costs order of $3,000 to be paid by the appellants to each of them.

[8]

The appellants appeal from that decision and the respondents seek leave
    to appeal the SCJs costs award.  For the following reasons, I would dismiss
    both the appeal and the request for leave to appeal costs.

[9]

The SCJ anchored her decision overturning the Masters order on three
    components of the Masters reasons:

-

he
    erred in failing to consider the entire statutory scheme relating to
    administrative dismissals in his contextual analysis;

-

he
    erred in finding the respondents partially responsible for the administrative
    dismissal; and

-

he
    erred in his approach to the factors set out in
Reid v. Dow Corning Corp.
(2001), 11 C.P.C. (5th) 80 (Ont. S.C.), with emphasis on his failure to
    consider the principle of finality in his prejudice analysis.

The Role of Masters

[10]

The
    Masters play a very important role in civil litigation proceedings and regularly
    address a wide variety of procedural matters.  As a result, they have developed
    deep expertise in the law and practice relating to procedure.  While
    traditionally Masters presided in Toronto and Ottawa, the use of Masters has
    now been expanded to other regions in Ontario as well.  This expansion
    recognizes their valuable role in the litigation firmament.  As far back as
Evans
    v. Bartlam
, [1937] A.C. 473, Lord Wright of the House of Lords stated, at
    page 484:

The Masters admirably exercise their discretion in routine matters
    of pleading, discovery, interrogatories, venue, mode of trial, and other
    interlocutory directions.

[11]

The
    decision of a Master granting or refusing to set aside an administrative
    dismissal is discretionary.  It is entitled to deference and may be set aside
    only if made on an erroneous legal principle or infected by palpable and
    overriding error of fact:
1196158 Ontario Inc. v. 6274013 Canada Ltd.
,
    2012 ONCA 544, 112 O.R. (3d) 67; and
Chrisjohn v. Riley Estate
, 2015
    ONCA 713, 341 O.A.C. 70.

It is not for an appellate court judge to
    reweigh the evidence and substitute another discretionary decision for that of
    the Master.  Applying
Zeitoun v. Economical Insurance Group
(2009), 96
    O.R. (3d) 639, Cronk J.A. stated in
Wellwood v. Ontario Provincial Police
,
    2010 ONCA 386, 102 O.R. (3d) 555, at para. 28, that it is settled law that an
    appeal from a Masters 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 reweigh the evidence
    simply because it takes a different view of the evidence from that of the
    master.  On questions of law, the correctness standard applies: see
Housen
    v. Nikolaisen
, [2002] 2 S.C.R. 235;
H.L. v. Canada (Attorney General)
,
    [2005] 1 S.C.R. 401.

[12]

Unfortunately
    in this case, for the following reasons, I have concluded that interference
    with the Masters decision was justified.

Applicable Legal Test

[13]

Under
    r. 37.14(2), the court has discretion to set aside or vary a dismissal order on
    such terms as are just.  Specifically, r. 37.14(1) and (2) provide:

37.14(1) A party or other person who,

(a)     is affected by an order obtained on motion without
    notice;

(b)     fails to appear on a motion through accident,
    mistake or insufficient notice; or

(c)     is affected by an order of a registrar,

may move to set aside or vary the order, by a notice of
    motion that is served forthwith after the order comes to the persons attention
    and names the first available hearing date that is at least three days after
    service of the notice of motion.

(2) On a motion under subrule (1), the court may set aside or
    vary the order on such terms as are just.

[14]

The
    legal test for setting aside a registrars order dismissing an action for delay
    was originally described by Master Dash in
Reid
and adopted by this
    court in
Scaini v. Prochnicki
, 2007 ONCA 63, 85 O.R. (3d) 179:

(i)    Have the plaintiffs provided a satisfactory explanation
    for the litigation delay?

(ii)   Have the plaintiffs led satisfactory evidence to explain
    that they always intended to prosecute this action within the time limit set
    out in the rules or a court order but failed to do so through inadvertence?

(iii)  Have the plaintiffs demonstrated that they moved
    forthwith to set aside the dismissal order as soon as the order came to their
    attention, and

(iv)  Have the plaintiffs convinced the court that the defendants
    have not demonstrated any significant prejudice in presenting their case at
    trial as a result of the plaintiffs delay or as a result of steps taken
    following the dismissal of the action?

[15]

This
    is not a rigid, one-size fits all test.  Rather, a contextual approach is
    required:
Scaini
, at paras. 23-25.  Prior to
Scaini
, a plaintiff
    had to satisfy each of the four elements. Thereafter, courts were to consider
    and weigh all relevant factors to determine the order that is just.  See also
Marché
dAlimentation Denis Thé
riault Lté
e. v. Giant Tiger Stores
    Ltd.
, 2007 ONCA 695, 87 O.R. (3d) 660.  In
Hamilton (City) v. Svedas
    Koyanagi Architects Inc.
, 2010 ONCA 887, 104 O.R. (3d) 689, at para. 23, Laskin
    J. A. observed that the overriding objective is to achieve a result that
    balances the interests of the parties and takes account of the publics
    interest in the timely resolution of disputes. The four
Reid
factors
    provide a structured approach to achieving this result.

[16]

This
    appeal involves an order dismissing an action as abandoned but the same
    principles apply.

I.        Masters Consideration
    of the Statutory Scheme

[17]

Turning
    to the three bases identified by the SCJ for reversing the Master, first, she
    determined that the Master erred in his contextual analysis by failing to
    consider the entire statutory scheme relating to administrative dismissals.

[18]

Prior
    to 2015, r. 48.14(0.1) and (1) provided:

(0.1)  In this rule,

defence means,

(a)  a statement of defence,

(b)  a notice of intent to defend, and

(c)  a notice of motion in
    response to an   action, other than a motion challenging the courts
    jurisdiction.

48.14(1)   Unless the court orders otherwise, if an action in
    which a defence has been filed has not been placed on a trial list or
    terminated by any means within two years after the first defence is filed, the
    registrar shall serve on the parties a status notice in Form 48C.1 that the
    action will be dismissed for delay unless, within 90 days after service of the
    notice, the action is set down for trial or terminated, or documents are filed
    in accordance with subrule 10.

[19]

Also,
    prior to 2015, r. 48.15(1) provided:

(1) The registrar shall make an order dismissing an action as
    abandoned if the following conditions are satisfied, unless the court orders
    otherwise:

1.

More than 180
    days have passed since the date the originating process was issued.

2.

None of the
    following has been filed:

(i)    A
    statement of defence.

(ii)    A
    notice of intent to defend.

(iii)   A notice
    of motion in response to an action, other than a motion challenging the courts
    jurisdiction.

3.

The action has
    not been disposed of by final order or judgment.

4.

The action has
    not been set down for trial.

5.

The registrar has given 45 days notice in Form 48E that the action will
    be dismissed as abandoned.

[20]

As
    such, prior to January 1, 2015, unless a court ordered otherwise, a defended
    action could be dismissed for a delay of approximately 2 years and 90 days
    after the first defence was filed, and an undefended action could be dismissed
    180 days after the originating process was issued combined with 45 days notice
    from the registrar.

[21]

As
    of January 1, 2015, r. 48.15 was repealed, and a registrar no longer had
    jurisdiction to dismiss an action as abandoned.  In addition, as of January 1,
    2015, r. 48.14(1) was amended in part to provide:

(1) Unless the court orders otherwise, the registrar shall
    dismiss an action for delay in either of the following circumstances, subject
    to subrules (4) to (8):

1.  The action has not been set
    down for trial or terminated by any means by the later of the fifth anniversary
    of the commencement of the action and January 1, 2017.
[1]


[22]

Accordingly,
    under the amended rule, the appellants would have had five years from the
    commencement of their action on December 29, 2010 to set their action down for
    trial or otherwise conclude the action.

[23]

As
    mentioned, r. 37.14 provides that a party affected by an order of the registrar
    may move to set aside the order by a notice of motion that is served forthwith
    and names the first available hearing date that is at least three days after
    service.  It states that the court may set aside the order on such terms as are
    just.

[24]

The
    SCJ reasoned that the Master, in his contextual analysis, failed to consider
    the entire statutory scheme including transitional provisions and treated the
    repeal of r. 48.15 as a get out of jail free card.

[25]

I
    would not characterize the Masters reasons in this manner.  The Master was
    fully aware that r. 48.15 was in force when the action was dismissed and that the
    new r. 48.14 was not.  He also was aware that the appellants should have moved
    forthwith after the order came to their attention to set it aside.  Indeed, he
    recited that provision found in r. 37.14 in full in his reasons.  It was also
    conceded by the appellants that the motion was not brought promptly.

[26]

In
    his reasons, the Master described the history of the proceedings.  He then
    moved to the legal test, noting Goudge J.A.s observations in
Scaini
, at paras. 23-24,

that r.
    37.14(2) invites the court to make the order that is just and that the court
    should consider and weigh all relevant factors to determine the order that is
    just in the circumstances of the particular case.  The Master noted that a contextual
    approach was mandated by this court in
Scaini
and, quoting from this
    court in
H.B. Fuller Company v. Rogers (Rogers Law Office)
, 2015 ONCA
    173, 330 O.A.C. 378, identified the tension between deciding actions on their
    merits and resolving actions in a timely and efficient manner to maintain
    public confidence in the administration of justice.

[27]

The
    Master then described the changes to rr. 48.14 and 48.15 and the statutory
    scheme.  At para. 19, he noted that: What now constitutes an acceptable level
    of diligence in the prosecution of an action is a much easier test to meet than
    was the case in the past.  He stated that the repeal of r. 48.15 may  be
    considered as part of the context in which this motion to set aside a
    registrars order dismissing an action as abandoned was argued.

[28]

This
    was in error.  Rule 48.15 was in force when the registrar dismissed the action
    as abandoned, but by the time the motion was argued, it had been repealed.  As
    such, it could not form part of the applicable context, and it was an error for
    the Master to make this statement.  He went on to say: [O]wing to the
    amendments to rule 48.14, I do not find this delay to be inordinate.  For the
    same reason, this too was in error.

II.       Primary
    Responsibility for Actions Progress Lies with Plaintiffs

[29]

The Master then considered the four criteria contained in
Reid
. 
    Dealing with the first criterion, he did not find the lawyers explanation for
    the delays to be satisfactory.  However, he also observed that the respondents
    had to accept part of the blame for the dismissal. The SCJ took issue with this
    finding.  She stated that the party who commences the proceeding bears the
    primary responsibility for its progress, and the Master erred in law in
    concluding that the respondents were at fault for not filing a defence.  She
    said that the rule governing administrative dismissals places no obligation on
    defendants to file a defence to prevent a registrars dismissal, and as such,
    the Masters approach in treating the respondents as blameworthy created a
    categorization that does not exist under the
Rules of Civil Procedure
.

[30]

I
    agree with the SCJs conclusion.  There is no burden on the defendant to
    explain the delay or to move the action to trial:
Wellwood
, at paras.
    37-41, 84;
Jadid v. Toronto Transit Commission
, 2016 ONCA 936, at para.
    23.  The primary responsibility for the progress of an action lies with the
    plaintiff:
MDM Plastics Limited v. Vincor International Inc.
, 2015 ONCA
    28, at para. 33.  As Cronk J.A. stated in
Wellwood
at para. 48, the
    initiating litigant generally suffers the consequences of a dilatory regard for
    the pace of the litigation.  Although there may be occasions where the
    defendants conduct may be relevant, (see for example
Labelle v. Canada
    (Border Services Agency)
, 2016 ONCA 187;
Aguas v. Rivard Estate
,
    2011 ONCA 494 and
Armstrong v. McCall
(2006), 213 O.A.C. 229, at para.
    26), assigning fault that arises from a failure to file a notice of intent to
    defend or a statement of defence within the context of r. 48 was misplaced.

[31]

There
    was also a more fundamental problem embedded in the Masters consideration of
    the first and second criteria of the
Reid
test.

There was no
    evidence filed from either of the appellants: no sworn affidavit, no
    correspondence, no testimony under oath. There was simply a bald statement from
    the lawyer that it had always been the intention of the appellants to proceed
    with the action. This was inadequate particularly given that, as noted by the
    SCJ, there was no reference to any conversations with the respondents, no
    evidence of any contact with any of the respondents between January 3, 2012 and
    February, 2014, and only minimal contact before that time.  There was no
    evidence that any of the respondents had asked about the status of their action
    in over two years.  The Masters finding that the respondents intended to
    prosecute their claim was unreasonable in light of the full factual context.

III.      Prejudice

[32]

The
    SCJ focused particularly on the Masters failure to consider the finality
    principle in his analysis of prejudice.  In that regard, she relied on
H.B.
    Fuller Co.
and
Marché
.

[33]

Prejudice
    is a key consideration on a motion to set aside a dismissal order:
Finlay
    v. Van Paassen
, 2010 ONCA 204, at para. 28.

[34]

In
    addressing this issue, it is important to consider the different aspects of
    prejudice.  In
Reid
, the focus is on whether a defendant would suffer
    any significant prejudice in presenting their case at trial (para. 41).  The
    emphasis described in that decision is on the impact of delay on a defendants
    ability to mount a defence to the plaintiffs claim.

[35]

However,
    in
Marché
, Sharpe J.A. identified an additional dimension to the
    fourth
Reid
factor: security of legal position and finality:

[A]s the Master correctly observed, the jurisprudence from this
    court identifies as relevant to the fourth
Reid
factor the security of
    legal position gained by a litigant through a court order granted because of
    delay or default: see
Halton Community Credit Union Ltd. v. ICL Computers
    Canada Ltd.
,
supra
.



Even when the order dismissing the action was made for delay or
    default and not on the merits, and even when the party relying on the order
    could still defend itself despite the delay, it seems to me that at some point
    the interest in finality must trump the opposite partys plea for an
    indulgence.



I agree with the Master that, when viewed in the light of a
    delay of this magnitude, the security of the legal position obtained by the
    appellant becomes an important factor to consider.  Five years after the action
    against it had been dismissed, the appellant was entitled to rest on the
    assurance that the judicial system had disposed of the respondents claim once
    and for all.

[36]

As
    such, in considering the fourth
Reid
factor, the Master was required
    to address:

(i)

did
    the appellants satisfy their onus to establish no significant actual prejudice
    to the respondents ability to defend the action as a result of the appellants
    delay; and

(ii)

whether
    in light of the delay, the principle of finality and the respondents reliance
    on the security of its position should nevertheless prevail.  See
H.B.
    Fuller
at para. 28.

[37]

There
    is no need to resort to presumptions or inferences of prejudice.  The question
    as described by Sharpe J.A. in
Marché
is simply whether the interest
    in finality must trump the opposite partys pleas for an indulgence.

[38]

The
    SCJ acknowledged in her reasons that the Master addressed the issue of
    prejudice but maintained that the Master erred in failing to consider the
    finality principle.  I agree with this assessment.

[39]

The
    Master did address whether either of the respondents had suffered any
    significant prejudice in presenting his case at trial as a result of the
    appellants delay or as a result of steps taken following the dismissal of the
    action and properly placed the onus on the appellants to establish that the
    respondents had not suffered prejudice.  However, he did not consider the
    finality principle.

[40]

Coupling
    this failure with the Masters consideration of the incorrect context, the
    blame allocated to the respondents, and the absence of any evidence from the
    appellants, the SCJ was correct in setting aside his decision and considering
    the merits of the motion anew.  Her conclusion is effectively captured in
    paragraph 51 of her reasons:

More than eight years ago, the plaintiffs were involved in a
    minor car accident; all three vehicles drove away from the accident.  The
    lawyer issued a Statement of Claim, then took virtually no steps to prosecute
    the action.  He did not request a defence.  He ignored correspondence from
    defence counsel and adjusters.  Counsel became aware the case would be
    dismissed in August, 2011 and initially sought to note the defendants in
    default, although he was aware by September, 2011 that the case had been
    dismissed and he could not note the defendants in default.  After the case was
    administratively dismissed in August, 2011, he did not inform his clients for
    more than 2.5 years, until February, 2014.  There is no evidence the plaintiffs
    contacted their lawyer in this two year period to inquire about the status of
    the case.  The notice of motion to set aside the dismissal was served in
    February, 2014; the motion record was served in June, 2014.  The motion was
    argued in June and December, 2015.

[41]

She
    found no satisfactory explanation for the delay and noted the complete lack of
    action by the lawyer and the absence of evidence from the appellants.

The evidence does not establish inadvertence.  The motion was
    not brought promptly.  The lawyers tickler system was completely inadequate,
    and was a missed deadline waiting to happen.

There is evidence of reliance by Barbon and Ramon on the
    finality of the order and the intervenor stands to be added for the first time
    seven years after the accident.  In addition, this is not a case which would
    depend on documents, but one which would depend on witnesses.  Seven years
    after the accident, the case is at the pleadings stage.

[42]

After
    considering the relevant factors, the SCJ was entitled to conclude as she did.

Disposition

[43]

For these reasons, I would dismiss the appeal.  The appellants are to
    pay each of the respondents $7,500 in costs of the appeal, inclusive of taxes and
    disbursements.  I see no reason to interfere with the costs order made by the SCJ
    and would decline leave.

Released:

DW                                                  S.E.
    Pepall J.A.

JUN -1 2018                                    I agree
    David Watt J.A.

I
    agree B.W. Miller J.A.





[1]
Rule 48.14(1) has since been slightly amended again. It currently provides:

1. The action has not been
    set down for trial or terminated by any means by the fifth anniversary of the
    commencement of the action.

2. The action was struck
    off a trial list and has not been restored to a trial list or otherwise
    terminated by any means by the second anniversary of being struck off.


