Court Declines to Reinstate Stale Action Against Elderly Couple
July 11, 2016
The Plaintiff, Canada Trust Company (“Canada Trust”) was the trustee of a self-directed RRSP investment on behalf of Joseph Sasso (“Sasso”). Sasso advanced $180,000 from his RRSP to various Defendants which was secured by mortgages against four properties in Windsor. All Defendants, aside from Boulos and Henriette Dahers (collectively the “Dahers”) are bankrupt and default judgment was ordered against them in October 2007.
The Dahers executed a mortgage in favour of Sasso on September 27, 2004. The Dahers did not have independent legal advice and they are an elderly Lebanese couple with limited faculty for the English language.
The mortgages at issue fell into arrears in June 2006. Canada Trust brought an action on June 15, 2007 for payment and possession on the mortgages in default. The Dahers defended the action relying, in part, on the defence of non-est factum.
Canada Trust took no steps for approximately two years to advance the litigation against the Dahers. Rather, the Plaintiff’s litigation counsel who also acted for all of the parties on the mortgages at issue, was put on notice that he could not act as he would be in an irreconcilable conflict of interest and a witness given his role as the transactional lawyer for all parties on the mortgages. Nevertheless, the Plaintiff chose not to appoint successor counsel until June 2009.
Shortly thereafter, in November 2009, the Dahers issued third party proceedings against the Plaintiff’s litigation counsel for negligence, contribution and indemnity. On April 23, 2010, the Court ordered a timetable which required the action be set down for trial by January 31, 2011. Nevertheless, the Plaintiff took no steps to advance the litigation until discoveries took place in March 2011.
The Plaintiff’s litigation counsel brought a motion for summary judgment in July 2011 and subsequently brought a further motion to amend his defence to plead the limitation period. Master Pope granted the motion to amend the defence before the summary judgement motion could be adjudicated. The Dahers appealed. While the appeal was pending, the main action and third party claim were administratively dismissed by Registrar Order dated May 3, 2013. In November 2013, the Dahers entered into minutes of settlement with the Plaintiff’s litigation counsel to abandon the appeal and dismiss the third party claim relying upon the administrative dismissal of the main action, which by operation of law resulted in the dismissal of the third party claim.
Plaintiff’s counsel did not seek consent to restore the main action until February 2014, which request was promptly rejected. The Plaintiff’s motion to reinstate the action was not served until April 2015, approximately two years after the action was dismissed by the Registrar.
By applying the mandated contextual approach and Reid factors, Justice Thomas dismissed the Plaintiff’s motion to restore the action for the following reasons:
(a) There were significant unexplained periods of litigation delay following the commencement of the action;
(b) The Plaintiff did not move promptly or forthwith to reinstate the action as required by the Rules;
(c) There was significant presumed and actual prejudice to the Dahers as approximately 12 years had passed since the impugned mortgage was given. The Dahers pleaded non-est factum. As such, credibility and viva voce evidence would be central to the fair adjudication of their defence at trial.
(d) The Dahers filed uncontested evidence, including an affidavit from their treating physician that they were not fit to stand trial as a result of serious medical conditions. Boulos Daher also filed uncontroverted evidence that his health had deteriorated over the past two years following the dismissal of the action and he had suffered memory loss, which would jeopardize the ability to have a fair trial.
As prejudice is invariably the key Reid factor, Justice Thomas placed significant weight on the uncontested medical evidence filed that the Dahers would suffer actual prejudice if the action was restored. As a result, the Court determined the just order in these circumstances was to dismiss the motion.