



COURT OF APPEAL FOR ONTARIO

CITATION: Home Town Financial (Timmins)
    Corporation v. Levesque, 2020 ONCA 349

DATE: 20200603

DOCKET: C67100

Gillese, Brown and Jamal JJ.A.

BETWEEN

Home Town Financial (Timmins)
    Corporation and Lorne Feldman

Plaintiffs (Appellants)

and

Sheryl Levesque
,
Beverley Kenny
, Todd Schofield, Gwen Schofield, 2165527
    Ontario Inc. o/a The Mortgage Centre-Schofield Financial Group, Ward Morris,
    Dominion Lending Centres Inc. and Neighbourhood Mortgage Centres Ltd. o/a Neighbourhood
    Dominion Lending Centres

Defendants (
Respondents
)

Jesse Harper and Nora Kharouba, for the
    appellants

Derek Zulianello, for the respondent,
    Sheryl Levesque

Jordan R.D. Lester, for the respondent,
    Beverley Kenny

Heard: May 28, 2020 by videoconference

On appeal from the order of Justice
    Robin Y. Tremblay of the Superior Court of Justice, dated May 13, 2019, with
    reasons reported at 2019 ONSC 2835.

REASONS FOR DECISION

[1]

The appellants seek to set aside the order of
    the motion judge dated May 13, 2019, made following a motion for a status
    hearing, dismissing the appellants action for delay as against the respondents
Sheryl Levesque and Beverley Kenny under r.
    48.14(7) of the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194.
The defendants to the
    action, other than Levesque and Kenny, consented to the appellants motion and
    timetable and the action is continuing as against them.

[2]

In the action, the appellants seek damages and other relief against
    several individual and corporate defendants, including the appellants former
    employees, Levesque and Kenny. The appellants allege that their mortgage
    brokerage business was injured when Levesque and Kenny were solicited to join
    competitors and then misused the appellants confidential information in their
    new employment.

[3]

At the conclusion of the oral hearing of the
    appeal, we dismissed the appeal with reasons to follow. These are our reasons.

[4]

The action was commenced by notice of action on November 26, 2013, and a
    statement of claim was filed on December 27, 2013. Kenny filed her statement of
    defence on June 5, 2014. The appellants did not serve Levesque with the
    statement of claim, as required under the r. 14.08(2), within six months after the
    notice of action was issued. When the appellants filed a motion in writing in
    2014 for an order validating service on Levesque, the court ordered that
    Levesque be served with the notice of motion through her counsel. The
    appellants did not pursue this. When the appellants brought back the same
    motion in writing in 2015, the court directed that the motion should be argued
    orally and that a special time should be set for the matter to proceed. Again,
    the appellants did not pursue this. As a result, the motion was not heard. Service
    of the statement of claim upon Levesque had still not been validated by the
    time of the motion for a status hearing. Levesque nevertheless filed a
    statement of defence on February 13, 2019.

[5]

The motion judge correctly set out the test for dismissing an
    action for delay under Rule 48.14(7). A plaintiff must show: (1) an acceptable
    explanation for the delay; and (2) the defendant would not suffer any
    non-compensable prejudice if the action is allowed to proceed:
Faris v. Eftimovski
, 2013 ONCA 360, 42 C.P.C. (7th) 258,
    at para. 32;
Kara v. Arnold
, 2014 ONCA 871,
    328 O.A.C. 382, at para. 8.

[6]

Before the motion judge, the appellants purported to explain the
    delay in the action on the basis that they were taking a wait and see
    approach to the action. They claimed that they did not take active steps to
    move the action forward because aspects of it are factually related to another
    action commenced in North Bay in October 2010 that has several parties in
    common. The appellants argued that because there were significant delays in the
    North Bay action, they decided to let sleeping dogs lie in the present action
    until the North Bay action proceeded.

[7]

The motion judge stated that the following factors supported a
    finding that the appellants had not established an acceptable explanation for
    the delay:

·

The action was totally dormant between July 24, 2014, and
    September 6, 2018, a period of more than four years.

·

The appellants did nothing to advance the action after serving
    their statement of claim. At the time the appellants moved for a status hearing
    before the motion judge, they had neither served and filed a reply nor
    delivered an affidavit of documents. The examinations for discovery had also
    not occurred.

·

The appellants failure to move their action forward was not
    inadvertent. It was a calculated and deliberate litigation strategy.

[8]

Next, the motion judge rejected the appellants contention that they were
    justified in taking a wait and see approach in this case. He noted that the North
    Bay action was itself marred by delays and that Levesque and Kenny were
    neither parties to that action nor even aware of it. As the motion judge explained:

To wait for the outcome of another action that is proceeding
    with dispatch through the court system is one thing. To do so when the other
    action itself is marred by delays is another, particularly in a situation such
    as this one, where Ms. Levesque and Ms. Kenny were totally unaware of the
    existence of the related North Bay action.

[9]

The motion judge held that the appellants had not established that there
    was an acceptable explanation for the delay. He stated that, [i]n the
    circumstances of this case, the wait and see approach adopted by the
    plaintiffs does not, in my view, justify their total inactivity over a
    four-year-period in pursuing their action as against Ms. Levesque and Ms.
    Kenny.

[10]

The
    motion judge added that it was unnecessary to decide whether the appellants had
    demonstrated that Levesque and Kenny would not suffer any non-compensable
    prejudice if the action were allowed to proceed, because the appellants had
    failed on the first element of the
Faris
test.

[11]

The
    appellants submit that the motion judge erred by not addressing the issue of
    prejudice under the second element of the
Faris

test and by failing to find that the appellants had provided
    an acceptable explanation for the delay.

[12]

We
    do not accept the appellants submissions in the context of this case.

[13]

Even
    if we were to accept, as urged by the appellants, that Levesque and Kenny would
    not suffer any non-compensable prejudice if the action were allowed to proceed as
    against them, it was fully open to the motion judge on the record before him to
    determine that the appellants had failed to provide an acceptable explanation
    for the delay. He was therefore justified in dismissing the action for delay as
    against Levesque and Kenny.

[14]

It is well established that [t]he
    decision of a judge presiding at a status hearing under rule 48.14 is
    discretionary and is entitled to considerable deference:
Kara
, at para. 8. We see no basis to intervene with the
    motion judges exercise of discretion in this case.

[15]

The appeal is dismissed. Costs are payable to the respondents Levesque
    and Kenny in the amount of $12,000 each, inclusive of disbursements and taxes.


E.E. Gillese J.A.


David Brown J.A.

M.
    Jamal J.A.


