Executive Summary: Key Legal and Evidentiary Issues

• Motion to set aside registrar’s dismissal denied due to plaintiff’s failure to meet evidentiary burden under the Reid factors

• Plaintiff could not provide a satisfactory explanation for extensive litigation delays spanning nearly a decade

• Inadequate evidence of plaintiff’s continued intention to prosecute the action or of efforts taken to move the matter forward

• Defendants suffered actual, non-compensable prejudice, including death of a key witness and one defendant, rendering a fair trial impossible

• Plaintiff failed to rebut presumption of prejudice or demonstrate that delays were inadvertent and not strategic or negligent

• Costs awarded to defendants on a partial indemnity basis due to success in opposing the motion

Background of the dispute

This case stems from a contested power of sale initiated by the defendants, Marko and Mileva Peric, as mortgagees over the plaintiff Marluce Luiz De Almeida’s property in October 2014. The plaintiff alleged that the sale was improper and improvident, claiming $300,000 in damages along with a request for a full accounting related to the mortgage and proceeds of the sale. The defendants maintained that the plaintiff had defaulted on the mortgage and failed to redeem the property before the sale was completed.

Procedural history and litigation delay

The lawsuit began in March 2015. However, progress stagnated significantly over the following decade. Only basic procedural steps such as pleadings and an exchange of affidavits of documents were completed. Scheduled examinations for discovery in 2018 were canceled due to the plaintiff’s change of counsel. No discoveries occurred, and the case languished for years. Eventually, the registrar administratively dismissed the action on August 1, 2024, for delay.

In response, the plaintiff brought a motion under Rule 37.14(1)(c) of Ontario’s Rules of Civil Procedure to set aside the dismissal. The motion was opposed by the defendants, who cited unjustified delay and prejudice arising from the loss of crucial witnesses.

Court’s analysis and findings

The motion was evaluated using the Reid factors, which include:

• whether there was a satisfactory explanation for the delay,

• whether there was a consistent intention to prosecute the case,

• whether the motion to set aside the dismissal was brought promptly, and

• whether the defendants suffered prejudice as a result of the delay.

Since the motion was brought promptly, only the first three factors were analyzed in detail. The court found that the plaintiff failed to provide a credible or detailed explanation for the long periods of inactivity, which included gaps of several years with no action taken. Her affidavit cited dissatisfaction with previous counsel and personal/family issues but lacked supporting evidence. The current lawyer’s explanation of delays caused by difficulty obtaining files and the COVID-19 pandemic was similarly insufficient and unsupported by affidavits or detailed timelines.

The plaintiff’s assertion that she always intended to take the matter to trial was dismissed as self-serving and inconsistent with the prolonged inactivity. Her delays were not shown to be inadvertent or reasonably excusable.

Prejudice to the defendants

The court found actual and significant prejudice had resulted from the delay. Mileva Peric, one of the defendants, and Mary Alves, the clerk with direct knowledge of the mortgage default and sale process, had both passed away during the litigation’s dormant years. Mr. Peric, now 90 years old, and his lawyer, Mr. von Bogen, confirmed they had no personal knowledge of the events. The court held that without Ms. Alves’ evidence, a fair trial was no longer possible. Her absence was particularly critical since she had been identified for examination back in 2018, and no efforts were made to secure her testimony in the years leading up to her death in 2021.

The court emphasized that the plaintiff's inaction was the direct cause of this prejudice and noted that such prejudice was avoidable if the case had been advanced diligently.

Costs and disposition

The motion to set aside the registrar’s dismissal was dismissed. The court awarded the defendants $11,098.74 in costs on a partial indemnity basis, payable by the plaintiff within 30 days.

Ultimately, the court found that the interests of justice did not support reviving a claim that had been effectively dormant for nearly a decade and where critical evidence was irretrievably lost due to delay.