CITATION: Gill v.

Khindria, 2016 ONSC 5057

COURT FILE NO.: CV-07-1073-00
DATE: 2016 08 09

2016 ONSC 5057 (CanLII)

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Manjeet Gill and 1251226 Ontario Inc., c.o.b. “Paramount Furniture Mfg.”

Plaintiffs

AND:

Monika Khindria, Dinesh Khindria and Dinkar Khindria

Defendants

BEFORE: Trimble, J.

COUNSEL: Plaintiffs: John J. Adair and Valerie A. Matthews (Adair Barristers LLP)

Defendants: Pathik Baxi (Simmons da Silva LLP)

HEARD: June 22, 2016

ENDORSEMENT

NATURE OF THE ACTION

[1] This Simplified Rules action involves a dispute between a creditor and debtors that
began with a loan the Plaintiff made to one of the Defendants of $86,764.43 in
September, 2004. That loan was to be secured by a mortgage on the debtor’s property.
The debtor Defendant allegedly delayed giving the mortgage and did not repay the loan.
The debtor Defendant is said to have transferred the property to which the mortgage was
to attach, to a family member. The owners of the property gave mortgages to others that
stood in priority to the Plaintiffs’. While the Defendants allegedly delayed registering the
mortgage in favour of the Plaintiff, the Plaintiff and one of the Defendants borrowed
between $100,000 and $125,000 USD for an investment. One of the Defendants signed a
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promissory note in favour of the Plaintiff in December 25, 2006. The Plaintiff says that
was never repaid. The Plaintiffs claim approximately $145,000 from the Defendants.

NATURE OF THE MOTION

2016 ONSC 5057 (CanLII)

[2] There are two motions before the court.

[3] In the first, the Plaintiffs move for an order to restore the action to the trial list. In
the second, the Defendants seek an order dismissing the plaintiffs’ action for delay as
they have failed to restore the action to the trial list within 30 days of the action being
struck from the list.

[4] Bielby J. struck the action from the list on May 16, 2012, to be returned on
consent or by court order.

FACTS

[5] I have stated the basic facts of the action above. The facts relevant to the litigation
are as follows:

September 2005 Loan advanced

September 19, 2006 Loan and interest came due

April 3, 2007 Statement of Claim issued

June 1, 2007 Statement of Defence served and filed

June 6, 2007 Reply served and filed

March 4, 2008 Amended Statement of Claim issued, to include claims

for the $100,000 loan.

April 2, 2008 Amended Statement of Defence delivered

September 9, 2009 Plaintiffs serve and file Trial Record

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May 15, 2012 Counsel for the Defendants receives letter from lawyer
for the Plaintiffs advising counsel must withdraw and
requesting adjournment of trial

May 16, 2012 Action was set to proceed to trial. Bielby J. ordered that

2016 ONSC 5057 (CanLII)

the trial be adjourned and struck from the trial list, to be
returned on consent or court order

June 2014 Plaintiffs retain new counsel

June 20, 2014 Defendants bring motion to dismiss this action for delay
and discharge two CPLs against Defendants’ two
properties. The motion was settled with a consent order
withdrawing the Defendants’ motion on consent and
without costs. Only one of the CPLs was discharged.

November 9, 2014 Mr. Adair sends email to Mr. Baxi suggesting mediation.
Mr. Baxi does not respond.

December 17, 2014 Mr. Adair requests response to November 9 email. Mr.
Baxi responds – agrees to mediation if Defendants pay
the entire fee.

January 23, 2015 Mr. Adair suggests scheduling a trial and pre-trial
instead of mediation. Mr. Baxi does not respond.

July 1, 2015 Mr. Adair sends email noting he never received a

response to January email. Mr. Baxi responds, advising
he would be scheduling this motion to dismiss the action
for delay.

August 27, 2015 Plaintiffs file motion to restore action to the trial list

September 15, 2015 Defendants file motion to dismiss action for delay

ISSUES

1. Should leave be granted to return the action to the trial list?

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2. Should the action be dismissed for delay?

POSITIONS OF THE PARTIES

Issue 1: Should leave be granted to return the action to the trial list?

2016 ONSC 5057 (CanLII)

Plaintiffs’ Position

[6] The Plaintiffs seek leave pursuant to Rule 48.11 to restore this action to the trial
list. The test for restoring an action to the trial list is conjunctive: there must be an
explanation for the delay and the defendants must not have suffered prejudice that cannot
be compensated in costs.

[7] The delay in this case is explained and the Defendants have not suffered
irremediable prejudice. Current counsel for the Plaintiffs was retained in June 2014 in
response to the Defendants’ motion to dismiss the action for delay at that time. The
motion was withdrawn on consent. Since that time, the Plaintiffs have attempted to
mediate a settlement between the parties, but the Defendants either failed to respond or
refused to mediate on reasonable terms.

[8] The “delay” if any, is measured from the consent order withdrawing the
Defendants’ motion to dismiss for delay, that motion and its resolution having vitiated
any delay before that time.

[9] Since there is no inexcusable delay, there is no presumption of prejudice.

Furthermore, the Defendants have not led sufficient evidence to show actual prejudice.
The Defendants have not provided any evidence in respect of difficulties experienced in
efforts to locate witnesses. Speculation that witnesses will be hard to find or that their
memories will be faded should not be relied on by the court.
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Defendants’ Position

[10] The Defendants submit advanced the same arguments in respect of the Plaintiffs’
motion to restore the action to the trial list as in their motion to dismiss the action for

2016 ONSC 5057 (CanLII)

delay under Rule 24.01.

[11] The Defendant says that the Plaintiff has an onus to proceed with the action
expeditiously and to demonstrate a commitment to have the action tried.

[12] The Court can dismiss an action where it is satisfied the Plaintiff’s delay is either:

a) Intentional and contumelious;

b) Inordinate and inexcusable such that the delay will give rise to a
substantial risk that a fair trial will not be possible, or will likely
prejudice the defendant.

[13] The Defendants submit that the Plaintiffs’ delay is inordinate and inexcusable and
gives rise to a substantial risk that a fair trial will not be possible and will prejudice the
Defendants. The action was struck from the trial list in 2012 and nothing was done to
move it forward for several years. The events giving rise to the action happened more
than 10 years ago.

[14] The defendants have been prejudiced for several reasons:

• There is a presumption of prejudice because there has been an inordinate delay;

• Where a limitation period has elapsed, there is a presumption of prejudice. The

limitation period in this case expired on September 17, 2008, more than seven
years ago;

• Only one of the two CPLs initially granted against the Defendants’ properties has
been discharged, preventing the Defendants from dealing with their property;
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• The Plaintiffs have led no evidence to rebut the presumption of prejudice;

• Prejudgment interest has been allowed to excessively and unnecessarily accrue;

• The passage of time has negatively affected the memory of witnesses that will be

2016 ONSC 5057 (CanLII)

called at trial;

• There will be actual prejudice to the Defendants as the events giving rise to the
action took place over 10 years ago and several key witnesses will not be
available at trial as a result of the delay.

[15] The action should not be restored to the trial list the same reasons that the action
should be dismissed for delay.

Issue 2: Should the action be dismissed for delay?

Defendants’ Position

[16] See the Defendants’ position, above.

Plaintiffs’ Position

[17] The Plaintiffs submit that any delay in this matter is not inordinate or inexcusable,
and that it has not caused prejudice to the defendant. Moreover, the delay is explained.
The action was stalled for several months while the Plaintiffs sought he Defendants’
agreement to mediate and the Defendants either failed to respond or refused to mediate
on reasonable terms. The Defendants cannot take advantage of their own failure to
respond to communications and intransigence with respect to mediation.

[18] The delay since June 2014 is hardly inordinate and is excusable. Counsel for the
Plaintiffs attempted to arrange for mediation with counsel for the Defendants, but was
unsuccessful. Counsel for the Defendants was either slow to reply or did not reply to
communications from counsel for the Plaintiffs.
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[19] Since there is no inordinate or inexcusable delay, there is no presumption of

prejudice. Furthermore, the Defendants have not led sufficient evidence to show actual
prejudice. The Defendants have not provided any evidence in respect of difficulties
experienced in efforts to locate witnesses. Speculation that witnesses will be hard to find

2016 ONSC 5057 (CanLII)

or that their memories will be faded should not be relied on by the court.

DISPOSITION:

[20] The action is restored to the trial list. The Defendants’ motion is dismissed.

ANALYSIS:

Restoring the Action to the List:

[21] Rule 48.11 permits a Judge to restore an action to the Trial List, if it has been
struck off by another Judge.
[22] The most recent pronouncement of the law on Rule 48.11 is that of the Court of
Appeal in Carioca’s Import & Export Inc. v. Canadian Pacific Railway Limited, 2015
ONCA 592 (CanLII). In that case, van Rensburg, J.A. made it clear that in all but the
clearest of cases, an action should not be dismissed for delay. In reaching her decision,
van Rensburg, J., considered the earlier seminal decision of Nissar v. Toronto Transit
Commission, 2013 ONCA 361 (CanLII);115 O.R. (3d) 713 and 1196158 Ontario Inc. v.
6274013 Canada Ltd., 2012 ONCA 544 (CanLII); 112 O.R.(3d) 67. She said:

“43. Where, as here, the refusal to restore an action to the trial list will result in its
dismissal, the Nissar test, informed by the case law respecting rule 48.14 dismissals,
will apply. This is because the inevitable result of the failure to restore the action to
the trial list would be dismissal, as occurred here. As discussed in several decisions
of this court concerning dismissal for delay, a motion judge must strike a balance
between the need for efficiency and the need for flexibility, such that cases can be
tried on the merits where there is a reasonable explanation for non-compliance with
the rules: see 1196158 Ontario Inc., at para. 20, Fuller,[2015 ONCA 173] at para.
25, Faris v. Eftimovski, 2013 ONCA 360 (CanLII), 306 O.A.C. 264, at para. 24, and
Kara v. Arnold, 2014 ONCA 871 (CanLII), 328 O.A.C. 382, at para. 9.

(i) Delay
 8

44. Nissar was an appeal from a refusal to restore an action to the trial list, where
there had been many years of completely unexplained delay and no resistance by the
defendant to moving the case along. The primary issue in Nissar was whether a Rule
48 or a Rule 24 test should be applied in a contested motion to restore. At para. 29,
this court stated that the legal test for determining whether an action should be
dismissed under rule 48.14 should be "adapt[ed]" to determine when an action

2016 ONSC 5057 (CanLII)

should be restored the trial list. The plaintiff is required to provide an "acceptable
explanation" for the delay and to satisfy the court that there would be no prejudice to
the defendant if the action were to proceed: Nissar, at paras. 29-31. The court
dismissed the appeal.

45 As to the nature of the explanation for delay, in the judgment followed in

Nissar, 1196158 Ontario Inc., Sharpe J.A. referred variously to the requirement for
the plaintiff to show an "acceptable", "satisfactory", or "reasonable" explanation for
the delay. Therefore I take these adjectives to be interchangeable in this context. The
motion judge in this case referred to the appellant's requirement to show a
"reasonable explanation" for the delay, not an "acceptable explanation" as worded in
Nissar. No error is alleged by either party with regard to the articulation of the test.

46. A motion to restore an action to the trial list is not a "blame game", where
counsel should be required or encouraged to take a defensive stance and justify
their conduct of the litigation on a month-by-month basis. Rather, in assessing
whether a plaintiff's explanation for delay is reasonable, a motion judge should
consider the overall conduct of the litigation, in the context of local practices,
which can vary quite widely between jurisdictions. Practices for scheduling pre-
trial conferences and trials differ throughout the province, because they must meet
the needs of particular regions and courthouses. These practices can affect the
expectations of the parties, their counsel and the courts as to timing.

48. …. a proper delay analysis does not consider the conduct of an action in a
vacuum.” [emphasis mine]

When does the period of delay start?

[23] The Plaintiff says that the period of delay in this matter begins with the consent
order in June, 2014 withdrawing the Defendants’’ motion to dismiss the action for delay.
The Defendants say that the delay is measured from the action’s outset.

[24] The delay period begins to run from June 20, 2014 and ends with the bringing of
the Defendants’’ motion to dismiss. In Christie v. Lee, [199] O. J. No. 495 (C.A.) the
Court of Appeal addressed the effect that an amendment of a Statement of Claim,
amended on consent of the Defended, had on the calculation of delay. The Court held at
 9

paragraph 6 that the period of delay began to run not from the initial issuing of the
Statement of Claim, but from the date it was amended. While there may have been
inexcusable delay up to that time it was “excused” by the Defendant when he consented
to the amendment of the Statement of Claim.

2016 ONSC 5057 (CanLII)

[25] Reading Christie more broadly, but still within its spirit, if a Plaintiff takes a step
in an action in which there has been the type of delay that R. 24 (or 48.11) applies, and
the Defendant consents to (or does not object to that step in circumstances where the
Defendant ought to have objected to and announced his intention to move for dismissal
for delay), that consent (or lack of objection) vitiates delay to that point. For example,
where an inordinate or inexcusable delay exists, if the Plaintiff serves an updated
Affidavit of Documents or serves more recent medicals, and the Defence does not object,
if the Plaintiff serves a Notice of Examination and the Defendant attends, or if the
Defendant serves a Notice of Examination, in light of those steps it is unfair and
unreasonable for the Defence to rely on the delay.

[26] In this case, the Defendants brought a motion to Dismiss for Delay. The motion
was settled and the Defendants withdrew it without any agreement that the withdrawal
would be without prejudice to the Defendants’ right to bring another motion for delay,
measuring that delay from the outset of the action. When such an agreement was not
reached, the Defendants could have, but did not declare, unilaterally, that their
withdrawal of the motion to Dismiss for Delay would be without prejudice to their
bringing another such motion.

Issue 1: Restoring the Action

[27] Under the Carioca’s test, the onus is on the Plaintiff to give a reasonable
explanation for the delay and to show that there is no non-compensable prejudice to the
Defendants.
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[28] Explanation: In this case, the delay is not inordinate or unacceptable. The
explanation for any delay (if it is of the nature to engage a Carioca’s analysis) is
reasonable. The delay is measured from June, 2014 to September 15, 2015. The facts
indicate that from June 20, 2014 onward, Plaintiffs’ counsel took steps to attempt to

2016 ONSC 5057 (CanLII)

resolve the action. Counsel of perfection might have done more, especially in the face of
the Defendants’ silence to most requests to resolve the matter. The standard set out in
Carioca’s is low, and certainly not that of the Counsel of perfection.
[29] Prejudice: The onus is on the Plaintiff to prove prejudice. It is presumed where
the limitation has expired, as it has done in this case. The Plaintiff says that since the
Defendants said in October 2011 and May, 2012, that they were ready to go to trial, one
can infer that their files are still trial ready. Any prejudice should be addressed by costs.
I accept this as discharging the Plaintiffs’ onus on prejudice. The evidentiary onus now
shifts to the Defendant to show actual prejudice. Presumed prejudice is not sufficient.\

[30] In Carioca’s, the Court looked at prejudice under R. 48. The Court of Appeal
rejected bald or bare assertions that people’s memories fade with age. Van Rensburg, J.A.
commented that if a witness is important to the defence and it does not take the steps that
a reasonable defendant would take to capture the memory of witnesses as early as
possible by taking a statement, for example, then the prejudice does not arise from the
delay, but from the Defendant’s failure to prepare its case. The failure to take statements
or to contact witnesses early (as opposed to on the eve of the motion to dismiss)
undermines the position of the Defendants.

[31] I take a stronger view that the Court of Appeal. A Defendant’s failure to interview
witnesses in a timely way, to take statements, and to locate the witnesses again well
before the trial date, is a problem created by the Defendant’s approach to the litigation, in
whole or in part. A Defendant may have valid reasons to delay doing any of this, but the
decision to delay interviewing material witnesses, taking statements, and making sure
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they are located for the purpose of trial, is one that has attendant risks that are the
Defendant’s to bear.

[32] In this case, the Defendants’ case on prejudice is without merit. The evidence of

2016 ONSC 5057 (CanLII)

the Defendant Dinesh Khindria on prejudice is twofold. First he says that memories fade
after 10 years. Second, he says that he spoke to 4 witnesses and reports that the
individuals reported to him that their memories have faded. This is hearsay evidence. It
is not admissible.

Issue 2: Dismissal for Delay

[33] There is much overlap in the law and analysis between restoring the action to the
Trial List, and dismissal for delay.
[34] Under Rule 24.1, the onus is on the Defendant to show that the delay was
intentional and contumelious, or that the delay for which the Plaintiff is responsible is
inexcusable and that it gives rise to a substantial risk that a fair trial of the issues will not
be possible, the action should be dismissed (Clairmonte v CIBC, [1970] 3 O.R. 97 (C.A.),
adopted in Wallace v. Crate’s Marine Sales Ltd., 2014 ONCA 671).

[35] Delay: The relevant period of the delay in this action, as indicated above, is from
June, 2014 to September, 2015. The Defendants have not met their burden to show that
the delay was either intentional, or contumelious, or both. In any event, the duration of
the delay is only 14 months, not a delay of significance in these circumstances.

[36] Prejudice: The onus is on the Defendant to prove actual prejudice. The
presumption of prejudice arises after the expiry of the limitation period. The time lapse
between the limitation’s expiry and the motion to restore the action affects the strength of
the presumption. Generally, however, the presumption of prejudice must be sustained by
evidence of prejudice (see Loblaw Co.s v. Lido Ind. Prod.s Ltd. (1993) 19 CPC (3d) 183
(Ont. Gen. Div).
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[37] I have held, above, that the Plaintiffs’ have rebutted the presumption of prejudice.
The evidentiary onus shifts to the Defendant to prove prejudice arising from the
Plaintiffs’’ delay. I have held that they have failed to do so.

2016 ONSC 5057 (CanLII)

DISPOSITION:

[38] The Plaintiffs’ motion is allowed. The Action is restored to the Trial List. The
Defendants’ motion is dismissed.

COSTS:

[39] The parties may address in writing who shall pay whom costs, and in what
amount. Costs submissions are not to exceed 4 double spaced pages, excluding bills of
costs or cases. The Plaintiffs’ submissions are to be served and filed by 4 p.m., August
26, 2016, and the Defendants’ by 4 p.m. Friday September 9, 2016.

Trimble, J.

Date: August 9, 2016

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CITATION: Gill v. Khindria, 2016 ONSC 5057

COURT FILE NO.: CV-07-1073-00
DATE: 2016 08 09

ONTARIO

2016 ONSC 5057 (CanLII)

SUPERIOR COURT OF JUSTICE

RE: Manjeet Gill and 1251226 Ontario Inc., c.o.b.

“Paramount Furniture Mfg.”

AND:

Monika Khindria, Dinesh Khindria and

Dinkar Khindria

BEFORE: TRIMBLE, J.

ENDORSEMENT

TRIMBLE J.

Released: August 9, 2016