July 23, 2015
The Ontario Court of Appeal recently allowed a plaintiff’s appeal of a motion judge’s order declining to set aside the Registrar’s order administratively dismissing an action against the respondents, Computer Packages Inc. (“CPI”) and Rogers Law Office (“Rogers”).
In this action, the appellants sued the respondents for negligently permitting three patents owned by the appellants to lapse and failing to take steps to reinstate these patents. The action was issued in October 2011.
The appellants focused their attention on settling the action against Rogers and did not request a defence from CPI until July 2013, only days after Rogers passed away. An Order to Continue was not obtained following Roger’s death. In November 2013 the Court issued a Status Notice which was not received by Appellants counsel, nor was the subsequent Registrar’s Order dismissing the action.
The appellants moved to reinstate the action approximately three months after learning of the Registrar’s Dismissal Order. The motion’s judge refused to reinstate the action because there was an insufficient explanation for the litigation delay and the appellants failed to demonstrate that the respondents would not suffer prejudice if the action was reinstated.
In addition to the four (4) part test applied on motions to set aside a Registrar’s dismissal order, the Court of Appeal also considered the two (2) part test applicable on a status hearing. The Court found that both tests do not provide an “exhaustive list of considerations”. Rather, the Court must apply a contextual approach and consider “all of the circumstances of the case” to “arrive at a just result.” This decision is significant because it confirms the two-part conjunctive status hearing test established by the Court of Appeal in Faris v. Eftimovski is subject to the contextual approach requiring the Court to consider all relevant factors to make the fair order.
In allowing the plaintiff’s appeal, the Court unanimously held that the litigation delay was adequately explained. In assessing delay, while a plaintiff has the obligation to move an action forward, the Court found that one cannot ignore a defendant’s passivity. In this case, the appellants’ decision to focus their efforts to settle the action against Rogers and effectively hold the action against CPI in abeyance was consistent with achieving the least expensive determination of a civil proceeding in accordance with Rule 1.04. A settlement with Rogers could have eliminated or reduced the damages claimed against CPI.
The Court of Appeal also held that the motions judge erred in his assessment of prejudice in several respects. Firstly, the lower court judge did not link the question of prejudice to whether a fair trial was possible. Secondly, the court did not address uncontested evidence from the appellants’ lawyer that the respondents would suffer no prejudice if the action was reinstated. While the court was entitled to reject this evidence as bald and self-serving, it was not entitled to ignore this material evidence. Thirdly, the Court found that a plaintiff does not automatically fail to rebut a presumption of prejudice by not adducing affirmative evidence. Rather, the court must consider all relevant circumstances, including the defendant’s conduct, which in this case, did not support the existence of any material actual prejudice occasioned by approximately two years of litigation delay.
This decision is significant because it reinforces the Court’s predisposition to resolve litigation on the merits rather than dismiss claims on procedural grounds for delays occasioned in part by the acts and omissions of the appellants’ solicitors.
H.B. Fuller Company v. Rogers (Rogers Law Office), 2015 ONCA 173