January 25, 2016
In Kupets v. Bonavista Pools Limited, Swinton J. sitting as a single judge of the Divisional Court allowed the appeal of Master Abram’s Order dismissing this mature action at a status hearing.
By way of background, on May 8, 2009, the Appellants instituted a claim against the Respondent, Bonavista Pools Limited, for alleged damages to the Appellants’ residential property during an acid wash cleaning of their swimming pool. Settlement negotiations between the parties took place from 2007 through 2010, during which time the Respondent’s insurance adjuster inspected the property and had ample opportunity to preserve its evidence for trial.
The action was administratively dismissed on two occasions because the Respondent had not defended the action while settlement negotiations were ongoing. On both occasions, the action was restored without opposition. Subsequently, a status notice was issued by the Court on May 5, 2014 and the Respondent, for the first time, expressed concerns regarding litigation delay and requested a dismissal of the action. By this time, the action was mature in that productions had been exchanged, discoveries were complete, and the action was ready to be set down for trial after mediation.
On a status hearing, the Plaintiff is required to adequately explain the litigation delay since the action was defended and demonstrate that the Defendant would suffer no significant non-compensable actual prejudice caused by the litigation delay.
At the Divisional Court, Justice Swinton allowed the appeal for the following reasons:
(a) the Master failed to consider all of the evidence which demonstrated that the litigation delay was adequately explained from the date the defence was served until the status notice was issued by the Court. Rather, the Master focussed on the Plaintiff’s “paucity and (poor) quality of evidence” ignoring material evidence filed by the parties which explained the litigation delay;
(b) the Master erroneously calculated the period of litigation delay at issue. The lower Court required an explanation of the delay commencing in 2007, even though the claim was not issued until May 2009 and the action was not defended until March 2012. The appellate jurisprudence is clear that the correct period of assessment for litigation delay starts from the time the action is defended until the status notice is generated;
(c) the Master required “cogent”, “compelling” and “convincing” evidence to explain the litigation delay when the settled case law simply requires an “adequate” or “passable” explanation; and
(d) the Master ignored undisputed evidence that the Respondent had sustained no prejudice from the litigation delay. As outlined by the Court of Appeal in Carioca’s, the Court must not mechanically apply a presumption of prejudice based merely on the passage of time. The Master ignored the Respondent’s conduct which undercut any assertion of actual prejudice. Rather, the Master erroneously relied upon the mere passage of time and bald assertions that defence witnesses “may” not be available without any evidentiary foundation.
In the result, the Divisional Court properly applied the mandated contextual approach and made the just order reinstating the action.
 Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592.