Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff’s motion to set aside the Registrar’s dismissal order was assessed under the four Reid factors, focusing on delay and explanation.

• Significant periods of litigation delay were not adequately explained, particularly over 4.5 years of inactivity.

• The plaintiff did not demonstrate that the failure to meet deadlines was due to inadvertence or that there was always intent to prosecute the action.

• Although no actual prejudice to the Re/Max Defendants was established, the court emphasized the importance of finality and the impact of inordinate delay.

• The balancing of factors favored upholding the dismissal order due to lack of satisfactory explanation for delay and the principle of finality.

• Costs of $2,500 were awarded to the Re/Max Defendants following the dismissal of the plaintiff’s motion.

Facts of the case

This action arose from a failed agreement of purchase and sale (“APS”) dated March 28, 2017, in which the defendant, Dave Sukhram, agreed to purchase a property from Paolina Ferrari for $1,000,000. At the time, Frank Ferrari, Ms. Ferrari’s son, acted under a power of attorney. Mr. Sukhram provided a deposit of $20,000 payable to Re/Max Platinum Limited, Brokerage. The plaintiff alleged that Mr. Sukhram breached the APS by failing to close on the closing date, and the property was subsequently sold for $850,000. The Re/Max Defendants (Re/Max Ultimate Realty Inc. and Daniela De Medeiros) represented Mr. Sukhram in the transaction. The plaintiff sought damages of $192,241.69, release of the $20,000 deposit, plus costs and interest. Against the Re/Max Defendants, the plaintiff pleaded “gross negligence” and “misleading representations.”

Procedural history and litigation delay

The statement of claim was issued on June 15, 2018. Ms. Ferrari had passed away before the action commenced, and Frank Ferrari was the estate trustee. The Re/Max Defendants served a Statement of Defence and Crossclaim on August 14, 2018, and an affidavit of documents on August 21, 2018. Neither Mr. Sukhram nor Re/Max Platinum delivered a Statement of Defence. On May 9, 2019, the plaintiff obtained an order for substituted service with respect to Mr. Sukhram, which was served on July 3, 2019. Frank Ferrari was later removed as estate trustee, and Lina Delellis was appointed and took carriage of the action. The style of cause was amended accordingly. On August 7, 2020, the Re/Max Defendants received a Notice of Change of Lawyer appointing Harrison Pensa LLP for the plaintiff, and on August 26, 2021, another Notice of Change of Lawyer re-appointed Mr. Di Monte. Mr. Sukhram was noted in default on February 22, 2024, and on March 6, 2024, Ms. Delellis assigned the claim to Mr. Ferrari. The Registrar issued a dismissal order for delay on October 10, 2024. On December 3, 2024, the plaintiff served a motion record on the Re/Max Defendants seeking to amend the style of cause and for default judgment against Mr. Sukhram. On January 24, 2025, the plaintiff amended the motion to seek an order setting aside the Registrar’s dismissal order.

Application of the Reid factors

Justice Mathai applied the four Reid factors as follows:

1. Explanation for delay: The court found a partial explanation for delay related to difficulties serving Mr. Sukhram from June 2018 to July 2019. However, no adequate explanation was provided for the delay from July 2019 to February 2024, a period of over 4.5 years. The plaintiff did not explain why the action was not prosecuted more diligently against the Re/Max Defendants or Re/Max Platinum, nor why no steps were taken after changes in estate trustees and counsel.

2. Intent to prosecute: The evidence did not establish that the plaintiff always intended to prosecute the action within the applicable time limits but failed to do so through inadvertence. The only step taken before the dismissal order was noting Mr. Sukhram in default. The five-year period under Rule 48.14(1) had already expired more than a year before the dismissal.

3. Promptness in seeking to set aside dismissal: While there was no affidavit evidence from the plaintiff’s solicitor, the court accepted that the plaintiff did not know about the dismissal order until January 2025 and moved immediately to set it aside.

4. Prejudice to the defendants: The court found no actual prejudice to the Re/Max Defendants following the dismissal of the action, as Ms. De Medeiros was available to provide evidence and affidavits of documents had been exchanged. However, the court found that the principle of finality and the defendants’ reliance on the dismissal order outweighed the interest in having the action heard on its merits, especially given the inordinate delay.

Discussion of policy terms and relevant clauses

The court’s analysis focused on Rule 48.14(1) of the Rules of Civil Procedure, RRO 1990, Reg 194, and the four Reid factors as set out in Piedrahita v. Costin, 2023 ONCA 404. The court emphasized that the primary burden of advancing an action rests with the plaintiff and that inordinate delay without adequate explanation cannot be tolerated in the Ontario civil justice system.

Ruling and outcome

Justice Mathai dismissed the plaintiff’s motion to set aside the Registrar’s dismissal order. The court found no satisfactory explanation for most of the litigation delay and no evidence that the five-year deadline was missed due to inadvertence. The principle of finality outweighed the interest in having the action decided on its merits. The plaintiff was ordered to pay costs to the Re/Max Defendants in the amount of $2,500 inclusive of H.S.T. and disbursements. The successful party was the Re/Max Defendants, with the total amount ordered in their favor being $2,500 for costs. No damages or other monetary awards were granted to the plaintiff.