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Dismissing for Delay – Rule 24.01 and Dismissal of Proceedings on the Basis of Inordinate Delay

In a March, 2020 ruling the Ontario Superior Court of Justice has ordered a plaintiff’s action to be dismissed because of an unreasonably long delay in the proceedings, which resulted in a substantial risk that a fair trial of the action was no longer possible.

The Court’s decision in Levant v. Gilbert Studios Limited, 2020 ONSC 1528 (“Levant”) is an important reminder for litigants and their counsel to avoid unnecessary delays in proceedings, especially in cases where valuable evidence and/or witnesses may be lost due to the passage of time. In such cases the Court can exercise its discretion to order the proceeding dismissed entirely on account of delay.

This is especially relevant in estate proceedings, where – with the passage of time – important witnesses could die or lose capacity, or other important evidence could be lost, which could create a risk that a fair trial is no longer possible.

Facts

In Levant, the Plaintiff, Darren Levant, alleged that he worked at a photography studio that was owned by his grandfather, Albert Gilbert, for many years for minimal pay. Darren claimed that his grandfather, Albert, had promised Darren that: in exchange for Darren’s work at the company, Darren would eventually be given the business outright.

When Albert refused to acknowledge the gift of the business to his grandson, Darren brought an action against the business, his grandfather and his grandmother (Gail Gilbert) claiming that his grandparents held the business property in trust for him and for a declaration that he was entitled to a 100% beneficial interest in the corporation (the “Action”). Darren commenced the Action in March 2016.

Gail died in January of 2018, and Albert died in January of 2019. In September of 2019, Darren obtained an order that the Action could be continued against the executrix of both of his grandparents’ Estates.

The Defendants (the executrix and the business) then moved for a dismissal of Darren’s Action under Rule 24.01(1) of the Rules of Civil Procedure, on the basis that there had been a lengthy and prejudicial delay in the proceedings.

Rule 24.01(1) reads, in part, as follows:

24.01(1) A defendant who is not in default under these rules or an order of the court may move to have an action dismissed for delay where the plaintiff has failed, . . .

to set the action down for trial within six months after the close of pleadings;

In this case, the pleadings had technically been closed for over 3 years, since May 5, 2016, and Darren had not set the Action down for trial. The Defendants were therefore within their rights under 24.01(1) to move for a dismissal order, and it was within the Court’s discretion to order the dismissal.

Ruling

The Court in Levant cited the Ontario Court of Appeal’s decision in Langenecker v Sauve, 2011 ONCA 803 as an authority which sets out the test for a motion to dismiss under Rule 24.01.

The test from Langenecker sets out two (2) instances in which the Court should dismiss a claim on the grounds of delay:

  1. There has been a delay caused by the intentional conduct of the plaintiff or their counsel that demonstrates a “disdain or disrespect” for the court process; or
  2. There has been an inordinate delay, which is inexcusable and gives rise to a substantial risk that a fair trial of the issues will not be possible because of the delay.

In Levant the Defendants argued that there should be a dismissal of Darren’s Action under the second test noted in Langenecker, arguing that: (a) there had been an inordinate delay in moving the Action forward by Darren; which (b) was inexcusable; and (c) as a result of Darren’s delay, there was a risk that a fair trial of the Action could no longer take place.

There was a delay of over two years following Darren’s examination for discovery, during which time no substantive steps were taken in the Action. The Court ruled that the delay of over three years since the close of pleadings, and the delay of over two years since anything substantive was done within the proceeding, qualified as an “inordinate” delay. Darren admitted that there was no legitimate excuse or reason for such a delay.

This left the Court to consider whether the delay in this case resulted in a “substantial risk” that a fair trial would no longer be possible. Of crucial importance on this issue was the fact that Darren’s grandfather, Albert, had passed away in the midst of the delay. Darren’s claim was, essentially, that Albert had promised him the family business in consideration of the years of work Darren had put into the business. It goes without saying that Albert would be a key witness in the trial of the Action, and Albert’s evidence regarding any conversations he had with Darren or others about the business would be crucial evidence in determining Darren’s claims.

Darren admitted that, had he acted promptly in having the matter set down for trial, the Action could have been tried well before Albert’s death in January 2019. The Court concluded that for the Defendants, Albert’s death meant that they could no longer properly respond at trial to evidence raised by Darren or other witnesses regarding any promises Albert allegedly made in regards to the business. Without Albert at the trial, the Defendants’ ability to defend the Action could be severely hampered.

The Court concluded that [1] there was an inordinate delay, [2] for which Darren had no excuse, [3] which created a substantial risk that there could no longer be a fair trial of the Action, and therefore ordered the Action dismissed in accordance with Rule 24.01(1).

Takeaway

The Court’s ruling in Levant is an important reminder to litigants and their counsel that unnecessary delays in proceedings should be avoided at all costs whenever possible. If a proceeding is delayed for a lengthy period of time, and there is no legitimate reason for said delay, then the proceeding may be dismissed entirely on the basis of delay in accordance with Rule 24.01(1). This is especially true where important evidence or witnesses have been lost as a result of the delay, thereby jeopardizing the ability to hold a fair trial.

This is a particularly important point in estate proceedings, where key witnesses may be close to death or close to losing their capacity. If there is a delay in such proceedings, and if an important witness passes away or their evidence is lost during such delay, a court may very well order that the proceeding be dismissed because of the delay and because of the fact that a fair trial may no longer be possible. This speaks not only to the importance of avoiding unnecessary delays in proceedings, but it also highlights the importance of noting and preserving any evidence/witnesses that could potentially be lost during the course of a proceeding before trial.

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