



COURT OF APPEAL FOR ONTARIO

CITATION: Iroquois Falls Power Corp. v. Jacobs Canada Inc.,
    2018 ONCA 412

DATE: 20180501

DOCKET: C64438

MacFarland, LaForme and Epstein JJ.A.

BETWEEN

Iroquois Falls Power Corp.

Plaintiff (Appellant)

and

Jacobs Canada Inc. and McDermott Incorporated and
    Chubb Insurance Company of Canada and American Home Assurance Company

Defendants (Respondents)

AND BETWEEN

Jacobs Canada Inc. and McDermott Incorporated

Plaintiffs by Counterclaim

and

Iroquois Falls Power Corp. and Computershare Trust
    Company of Canada, in its capacity as Trustee of Northland Power Income Fund
    and Iroquois Falls Power Management Inc.

Defendants by Counterclaim

Paul A. Ivanoff and Evan Thomas, for the appellant, Iroquois
    Falls Power Corp.

Brennan Maynard, for the respondents, Chubb Insurance
    Company of Canada and American Home Assurance Company

Robert Rueter, for the respondents, Jacobs Canada Inc.
    and McDermott Incorporated

Heard: April 11, 2018

On appeal from the orders of Justice Mario D. Faieta of
    the Superior Court of Justice, dated September 20, 2017, reported at 2017 ONSC
    5515 and October 17, 2017, reported at 2017 ONSC 6187.

REASONS FOR DECISION

[1]

Iroquois Falls Power Corp. (IFPC) appeals from the orders of the
    Superior Court of Justice dismissing its action for delay and awarding costs to
    the respondents.

BACKGROUND

[2]

The action was commenced in 2005. IFPC alleged
    that the engineering work related to two natural gas turbines at a power
    generating station was negligently performed. This action was dismissed in
    March 2007 when the respondents obtained summary judgment. This court allowed
    IFPCs appeal in part. IFPC then brought a motion to amend its statement of
    claim, which was dismissed in September 2008. This court overturned the
    decision in 2009. No further steps have been taken since then to bring the
    action to trial.

[3]

As of January 1, 2017, Rule 48.14(1) now
    requires the registrar to dismiss all actions in Ontario that were five or more
    years old and had not been set down for trial. There is no authority for the
    registrar to order costs.

[4]

The respondents brought a motion on January 4,
    2017 under Rule 24.01(1) to dismiss IFPCs action for delay and for their costs
    of the action. IFPC did not dispute that the action should be dismissed for
    delay. Rather, in response, on August 2, 2017, it brought its own motion  as
    it says - to require the court give effect to Rule 48.14(1) and dismiss the
    action, but without costs.

[5]

In particular, IFPC took the position that its action
    should have been dismissed by the registrar on January 1, 2017 pursuant to Rule
    48.14(1) with no costs.
IFPC, therefore, asked the motion judge for an
    order,
nunc pro tunc
, that this action be administratively dismissed
    effective January 1, 2017.

[6]

The motion judge granted the respondents motion
    under Rule 24.01(1) and under the courts inherent jurisdiction and ordered
    that the action of IFPC be dismissed for delay. Further, he found that the
    registrar had acted appropriately in not dismissing the action under Rule
    48.14(1). He held that the Rule does not apply to case managed actions, such as
    this one. And, he declined IFPCs request to grant an order under the Rule,
nunc
    pro tunc
dismissing the action effective January 1, 2017.

[7]

Finally, the motion judge declined to award
    substantial indemnity costs to the respondents and found that the circumstances
    warranted having costs assessed.

DISCUSSION

[8]

At the hearing of this appeal we advised the
    parties that we were dismissing it with reasons to follow. These are the
    reasons.

[9]

Before this court, IFPC submits the motion judge
    made several errors. We disagree with each of IFPCs submissions and dismiss
    the appeal for the following reasons.

[10]

IFPC submits that in dismissing the action for
    delay under Rule 24, the motion judge failed to recognize that the new regime
    that has been ushered in by the legislature under Rule 48.14 takes precedence
    over Rule 24. In fact, IFPC counsel on appeal goes so far as to argue that Rule
    48.14 ousts the jurisdiction of the court from dealing with any action that is
    subject to dismissal by the registrar under Rule 48.14, except to enforce
    compliance with the Rule. That is to say, pursuant to Rule 48.14, after five
    years, and subject to the exceptions identified in the rule, the courts
    jurisdiction is ended awaiting the registrars mandated dismissal.

[11]

We cannot accept this rather incongruous
    submission for several reasons.

[12]

First, as this court has previously found, there
    is no hierarchy as between Rule 24.01 and Rule 48.14. Each of the Rules simply
    provide a different means that may lead to the dismissal of the plaintiff's
    action for delay: see
Faris v. Eftimovski
, 2013
    ONCA 360, at paras. 34.

[13]

Second, there is nothing in the language of Rule
    48.14 to even suggest an intention that the jurisdiction of the registrar to
    issue an administrative order under Rule 48.14 takes precedence over the
    jurisdiction of the court. To the contrary, Rule 24.01 specifically notes the
    courts jurisdiction to dismiss an action for delay under Rule 24 where the
    circumstances described in paragraphs 1 and 2 of subrule 48.14(1) apply.
    Moreover, Rule 48.14(1) expressly recognizes the paramount authority of the
    court, which supersedes that of the registrar  the opening words provide:
    Unless the court orders otherwise.

[14]

Third, non-compliance with a rule is an
    irregularity and a court may grant all necessary amendments or other relief,
    on such terms as are just and where necessary in the interest of justice, may
    set aside the proceeding or a step, document or order in the proceeding in
    whole or in part: Rule 2.01(1). Thus, rather than Rule 48.14 ousting the
    jurisdiction of the court in favour of the registrar, the courts paramount
    jurisdiction is manifestly recognized.

[15]

Simply put, Rule 48.14 does not take precedence
    over Rule 24.01, nor does it oust the jurisdiction of the court from dealing
    with any action that is subject to dismissal by the registrar under Rule 48.14.
    Given that the registrar had not dismissed IFPCs action under Rule 48.14, it
    was entirely open to the respondents to proceed with their motion under Rule
    24.01 and for the motion judge to exercise jurisdiction in accordance with that
    rule.

[16]

Also, we reject IFPCs assertion that the motion
    judge failed to appreciate the costs implications of Rule 48.14 in these
    circumstances. Given there was no Rule 48.14(1) registrars order, IFPCs
    argument that such an order does not include costs, simply has no significance.
    The motion judge ultimately considered his jurisdiction and authority under
    Rule 24.01. IFPCs observation that the registrar could not have ordered costs
    under Rule 48.14 is not relevant.

[17]

Finally, we reject IFPCs submission that the
    motion judge erroneously concluded that IFPC was not entitled to an order that
    its action be dismissed under Rule 48.14
nunc pro tunc
. As we explained, in the final analysis, because the respondents
    properly proceeded under Rule 24.01, Rule 48.14 had no application to this
    case. More importantly, IFPC ignores the fact that while the Rules allow a
    plaintiff to discontinue its own action, they do not permit a plaintiff to
    bring a motion to dismiss it:
Dubuc v. 1663066 Ontario Inc.
,
2009 ONCA 914, at paras. 12-13.

COSTS

[18]

On the issue of costs, IFPC seeks leave to
    appeal the motion judges order insofar as he awarded costs of the action, the
    summary judgment motion, and the motion before him. IFPC submits that in doing
    so he took the wrong approach. Furthermore, IFPC argues that the motion judges
    reasons fail to adequately explain his decision. We disagree.

[19]

The motion judge considered detailed submissions
    from all parties. These included IFPCs claim for relief and supporting
    submissions and its entitlement to costs. All parties relied on s. 131 of the
Courts
    of Justice Act,
the court's inherent jurisdiction, and
    Rule 57. Furthermore, Rule 24.05.1(1) expressly provides for the right of any
    party to make a motion respecting the costs of the action, where an action is
    dismissed for delay. There is nothing in the record to suggest the motion judge
    ignored any of this in reaching his decision, and IFPC has not satisfied us
    that he did.

[20]

IFPC accepts that the court has complete
    discretion to fashion a costs award that is in the interests of justice. In
    this regard, there are numerous cases where costs of an action are awarded to
    the defendant after dismissal of the action for delay, including costs of
    motions within the action not otherwise adjudicated: see for example,
North
    Toronto Chinese Alliance Church v. Gartner Lee Limited
, 2012
    ONCA 251, at para. 14. Here, the motion judge provided reasons for his costs
    decision that adequately explain his award and are satisfactory for purposes of
    appellate review.

[21]

In the end, IFPCs arguments do not present
    strong grounds upon which [this court] could find that the judge erred in
    exercising his discretion:
OrthoArm Incorporated v. GAC
    International LLC,
2017 ONCA 418, at para. 44. We
    therefore refuse leave to appeal costs.

DISPOSITION

[22]

The appeal is dismissed. Costs are awarded to the
    respondents,
Jacobs Canada Inc. and McDermott Incorporated in the amount
    of $24,000 and to the respondents, Chubb Insurance Company of Canada and
    American Home Assurance Company in the amount of $14,000. Costs are inclusive
    of disbursements and HST.

J. MacFarland J.A.

H.S. LaForme J.A.

Gloria Epstein J.A.


