



COURT OF APPEAL FOR ONTARIO

CITATION: 1116227 Ontario Ltd. v. Telus Communication
    Company, 2022 ONCA 287

DATE: 20220411

DOCKET: C69669

MacPherson, Paciocco and George JJ.A.

BETWEEN

1116227 Ontario Ltd. and 2115776 Ontario Inc.

Plaintiffs (Appellants)

and

Telus Communication Company, Telus Communications
    Inc., Mark Bridgman and Joe Goodbaum

Defendants (Respondents)

Mohsen Seddigh, for the appellants

Rachel Laurion, for the respondents

Heard: April 4, 2022

On appeal from the judgment of Justice Cory A. Gilmore of
    the Superior Court of Justice, dated June 15, 2021.

REASONS FOR DECISION

[1]

In April 2015, the appellants 1116227 Ontario Ltd. and 2115776 Ontario
    Inc. commenced a joint action against the respondents, Telus Communication
    Company, Telus Communications Inc., and two individual parties.
[1]
In that action, the appellants claimed recission and damages relating to what they
    contend were franchise agreements. Almost six years later, the appellants
    action had not been set down for trial. The adjusted fifth anniversary date of
    the commencement of the action of October 21, 2020 was approaching.
[2]
Facing the prospect of the dismissal of their action by the registrar for delay
    pursuant to r. 48.14(1) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194
, the
    appellants brought a r. 48.14(5) motion requesting that their action not be
    dismissed, and seeking an order for a litigation timetable.

[2]

In those circumstances, a status hearing was convened pursuant to r. 48.14(6).
    After hearing from the parties, the motion judge found that the appellants
    failed to meet their onus of demonstrating why the action should not be
    dismissed for delay. She held that they had not satisfied either of the two cumulative
    components of the relevant test affirmed in
Faris v. Eftimovski
, 2013
    ONCA 360, 363 D.L.R. (4th) 111, at para. 42, by: (1) providing an acceptable
    explanation for the delay in the litigation (the explained-delay component)
    and (2) showing that the respondents would not suffer non-compensable prejudice
    (the prejudice component). Accordingly, the action was dismissed.

[3]

The appellants appeal the motion judges decision to dismiss, claiming
    that she erred in her findings relating to both components of the
Faris
test.
    Since a plaintiff must satisfy both of those components to prevent an action
    caught by r. 48.14(1) from being dismissed, this appeal cannot succeed
    unless the appellants demonstrate reversible error relating to both the
    explained-delay component and the prejudice component.

[4]

The appellants submit that the motion judges analysis of the two
    components of the test is intertwined, and that error in her prejudice analysis
    taints her findings relating to the explained-delay component. We do not agree.
    For the reasons that follow, we are not satisfied that the motion judge
    committed reversible error relating to the explained-delay component. Therefore,
    the appeal must be dismissed, and there is no need for us to address the appellants
    able submissions relating to the prejudice component.

[5]

In challenging the motion judges finding that they failed to provide an
    acceptable explanation for the delay, the appellants do not contend that the
    motion judge committed any legal errors. Instead, they argue that she committed
    palpable and overriding errors of fact.

[6]

We see no palpable or overriding errors in the motion judges key
    finding that the appellants action had become mostly dormant during a long
    period of delay after the Statement of Defence was filed on July 17, 2017, until
    the inception of efforts by the appellants in October 2020 to achieve an agreed
    upon litigation timetable. We are not persuaded that the motion judge committed
    palpable error by relying on incomplete dockets to assess the steps the
    appellants had taken. The undocketed correspondence identified by the
    appellants does not contradict her finding that during this period the
    appellants had not taken substantive steps in pursuing the action. Nor did the
    motion judge commit palpable and overriding error by apparently misreading one
    date on the docket as April 2020, when it was in fact December 1, 2020. The
    motion judge had ample other evidence before her to find the delay she
    identified.

[7]

Nor did she commit palpable and overriding error in determining that the
    appellants explanation for that delay was not acceptable.

[8]

The appellants attempted to explain that delay primarily by identifying unspecified
    challenges it experienced in gathering relevant documentary evidence. However,
    the action was underway for close to six years by the time the motion was heard,
    yet the appellants had still not proposed a discovery plan or provided a draft
    Affidavit of Documents. They also failed to establish that all of the documents
    had been gathered by the time of the motion. As well, they had missed a prior
    undertaking to provide documents. Moreover, the affidavit evidence offered by
    the appellants to advance this explanation lacked detail.

[9]

The additional reason for delay identified  the need to reinstate the
    corporations so that the action could be pursued  does not begin to account
    for the period of delay that occurred, and the appellants were correct not to
    press this explanation in oral argument.

[10]

The motion judges finding that the appellants failed to provide an
    acceptable explanation for the delay is entitled to deference, and we would not
    interfere with it.

[11]

The appeal is dismissed. Costs are payable to the respondents in the
    amount of $2,100 inclusive of disbursements and applicable taxes. As requested
    by the respondents, this amount reflects the agreed upon costs on the appeal of
    $8,000, as set off by the outstanding $5,900 costs order in favour of the
    appellants arising from the respondents failed motion for security for costs
    in this appeal.

J.C. MacPherson J.A.

David M. Paciocco J.A.

J. George J.A.





[1]

The action was discontinued on consent as against the
    individual parties.



[2]
Some of that delay was attributable to the pandemic, requiring an adjustment in
    quantifying the anniversary date of the commencement of the action.


