



COURT OF APPEAL FOR ONTARIO

CITATION: S.I.A.S.I. Trading Limited v. Teplitsky, 2018 ONCA
    788

DATE: 20180927

DOCKET: C65135

Hourigan, Nordheimer and Harvison Young JJ.A.

BETWEEN

S.I.A.S.I. Trading Limited,

Paul Jankel and Saul Kenton

Plaintiffs
    (Appellants)

and

Martin Teplitsky and Messrs. Teplitsky
    Colson

Defendants
    (Respondents)

David M. Goodman for the appellants

David Robins for the respondents

Heard: September 26, 2018

On appeal from the
    order of Justice Elizabeth C. Sheard of the Superior Court of Justice, dated
    February 15, 2018 with reasons reported at 2018 ONSC 1107.

REASONS FOR DECISION

INTRODUCTION

[1]

There were two motions before
    the motion judge: the appellants motion to restore their action to the trial
    list and the respondents motion to dismiss the action for delay. The motion
    judge dismissed the motion to restore the action and granted the motion to
    dismiss for delay.

[2]

The appellants submit that the
    motion judge made numerous legal and factual errors in her analysis. In
    particular, they assert that she erred in identifying and applying the correct
    legal tests, erred in her prejudice analysis, and made various factual errors
    regarding the delay in this action. For the reasons that follow, we dismiss the
    appeal.

BACKGROUND

[3]

Martin Teplitsky and his law
    firm, Teplitsky Colson, were retained to commence an action on behalf of
    S.I.A.S.I. Trading Limited (SIASI) against Labatt Brewing Company and John
    Labatt Limited (the Labatt Action). The individual appellants, along with
    Jonathan Barnett, are the principals of SIASI, which at the relevant time was a
    startup company.

[4]

The gravamen of the Labatt
    Action was that the defendants breached a contract with SIASI for the supply of
    overstocked beer to Eastern Europe. The action was commenced on May 30, 1994.
    Following examinations for discovery, a dispute arose among the principals of
    SIASI regarding the funding of the litigation. On May 24, 1996, Mr. Teplitsky
    was instructed by Mr. Barnett to hold off on any action in the litigation,
    pending further instructions. Mr. Teplitsky thereafter took the position that
    he would not act without unanimous instructions. He agreed not to go off the
    record as a courtesy to his clients in order to forestall a motion by the
    defendants to dismiss the action.

[5]

Mr. Teplitsky gave evidence at
    his discovery that he advised Mr. Barnett about a court notice to attend in the
    Labatt Action dated June 8, 2001 and was told by Mr. Barnett that they were
    not investing any more money in the proceeding. Mr. Teplitsky did not provide a
    copy of the notice to the individual appellants. He took no further steps in
    the Labatt Action and it was eventually dismissed as abandoned on July 9, 2001.

[6]

This action was commenced by the
    appellants on July 28, 2005 (the Teplitsky Action). The appellants assert
    that they did not learn that the Labatt Action had been dismissed until August
    2003. They acknowledge that there was a temporary dispute with Mr. Barnett
    about funding in 1996, but say that it was resolved in 1997. Their position is
    that they were unable to pursue the Labatt Action until August 2003 due to
    financial and/or health reasons.

[7]

The Teplitsky Action proceeded
    at a slow pace, with examinations for discovery not being completed until March
    2010. In August 2010, the action was struck from the trial list for failure to
    conduct a pretrial. There followed a motion for security for costs, which
    resulted in an order dated April 5, 2012 requiring the appellants to post
    $25,000. In his reasons on that motion, Justice ONeill suggested that the case
    should proceed to mediation and that damages were a critical issue.

[8]

On March 7, 2014, the
    appellants proposed that the parties attend mediation, but the respondents
    refused that suggestion because an expert report on damages had not been
    served. A report prepared by forensic accountant Tom Aslin (the Aslin Report)
    was delivered to the respondents on March 9, 2016. It was prepared for
    mediation purposes only and did not purport to be an Expert Witness Report.


[9]

On July 14, 2016, Mr.
    Teplitsky passed away. On August 3, 2016, counsel for the respondents wrote
    counsel for the appellants advising that he would be opposing any motion to restore
    the action to the trial list because the action was stayed on Mr. Teplitskys
    death and his estate had been prejudiced by the delay in the prosecution of the
    action.

DECISION OF THE MOTION JUDGE

[10]

The motion judge first
    considered the motion to restore the Teplitsky Action to the trial list. She
    applied the two-part test in

Nissar v. Toronto Transit
    Commission
, 2013 ONCA 361, 115
    O.R. (3d) 713, which requires the moving party to establish: (i) that there is
    an acceptable explanation for the delay in the litigation; and (ii) that, if
    the action was permitted to proceed, the defendants would suffer no
    non-compensable prejudice. The motion judge found that the individual
    appellants conducted their litigation in a dilatory manner, that they failed to
    explain the slow place of the litigation, and that the respondents would suffer
    non-compensable prejudice if the action proceeded. Consequently, she concluded
    that the individual appellants had failed to meet the two-part
Nissar
test.

[11]

The motion judge then dealt
    with the motion to have the Teplitsky Action dismissed for delay. She granted
    the motion, finding that the delays in the litigation were inordinate and
    inexcusable. The motion judge also found that the respondents trial rights
    were impaired by reason of the loss of Mr. Teplitsky as a witness and the
    passage of time, which made the delivery of a proper damages report more
    difficult.

ANALYSIS

[12]

The appellants raise ten
    grounds of appeal. At their essence, they amount to assertions that the motion
    judge erred in identifying and applying the correct legal tests under rr. 48.11
    and 24.01 of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, erred in her prejudice
    analysis, and made various factual errors regarding the delay in the Teplitsky
    Action. We see no merit in these arguments.

[13]

We start by noting that
    decisions regarding the restoration of an action to the trial list under r.
    48.11 and the dismissal of an action for delay pursuant to r. 24.01 are
    discretionary and are entitled to considerable deference on appeal. They will
    not be interfered with unless the motion judge exercised her discretion
    unreasonably or acted on a wrong principle:
Ticchiarelli v.
    Ticchiarelli
, 2017 ONCA 1, at
    para. 14.

[14]

The motion judges r. 48.11
    analysis is free of error. She applied the two-part
Nissar
test, which, contrary to assertion of the
    appellants, is the proper test in the circumstances of this case, given that
    there was an outstanding motion for dismissal of the action.

[15]

The motion judge concluded
    that there was no acceptable explanation for the delay proffered by the
    appellants. This was a finding open to her and was well grounded in the
    evidence. There were lengthy periods of inaction during the course of the proceeding
    when the appellants took no steps to advance the litigation. The motion judge
    gave due consideration to the surrounding circumstances of the case, including
    the actions of the respondents.

[16]

We are also not satisfied that
    the motion judge erred in her analysis of non-compensable prejudice. Contrary
    to the position of the appellants, there is a live issue as to liability. That
    issue would have been decided largely on the evidence of Mr. Teplitsky
    regarding his instructions, his understanding of his reporting obligations, and
    his explanation for his actions or inaction. That evidence is no longer
    available. Mr. Teplitskys evidence on discovery is not a substitute for his
viva
    voce
evidence in these circumstances.  Had the case moved forward at an acceptable
    pace, it would have gone to trial long before Mr. Teplitskys death. Moreover,
    as conceded by Mr. Aslin in the Aslin Report, it is a very difficult task to
    calculate damages for a startup company for an alleged breach of contract that
    occurred over 24 years ago.

[17]

With respect to the motion
    judges r. 24.01 analysis, it is also free of error. At para. 66, she correctly
    relied on the test articulated in
Ticchiarelli

that
    an order dismissing an action for delay will be justified where the delay is
    inordinate, inexcusable, and prejudicial to the defendants in that it gives
    rise to a substantial risk that a fair trial of the issues will not be
    possible:
Ticchiarelli
, at para. 12.

[18]

The motion judge found, as she
    was entitled to do on the evidence, that the delay was inexcusable and the
    appellants had failed to provide an adequate explanation for their delay. In
    that regard, she noted the lack of evidence tendered by the appellants in
    support of their argument that their impecuniosity was the reason for much of
    the delay.

[19]

We also see no error in the
    motion judges conclusion that the prejudice to the respondents is such that
    there is a substantial risk that a fair trial is not possible. In making this
    finding, she correctly relied on, among other things, the prejudice caused by
    Mr. Teplitskys death and the difficulty in producing an experts report on
    damages so long after the events in issue.

DISPOSITION

[20]

The appeal is dismissed. The respondents
    are entitled to their costs of the appeal, which we fix at the agreed upon sum
    of $10,000, all-inclusive.

C.W. Hourigan J.A.

I.V.B. Nordheimer J.A.

Harvison Young J.A.


