Executive Summary: Key Legal and Evidentiary Issues

• Adequacy of the plaintiff’s explanation for nearly a decade of inordinate delay in advancing the action beyond the exchange of affidavits of documents.
• Credibility of the plaintiff’s asserted ongoing intention to proceed to trial, weighed against prolonged and largely unexplained inactivity and limited evidence of instructing counsel.
• Application of the Reid v. Dow Corning factors, particularly whether failure to set the action down for trial was due to inadvertence and whether the interests of justice favoured reinstatement.
• Extent of actual prejudice to the defendants arising from the death of a key law clerk, the death of one defendant, and the faded memory of the remaining elderly defendant, and the impact on the possibility of a fair trial.
• Proper appellate deference to a discretionary decision of an associate justice and whether any palpable and overriding error or error in principle was shown.
• Appropriateness and quantum of costs awarded on appeal following the dismissal of the plaintiff’s challenge to the administrative dismissal for delay.

Background and factual context

The litigation in De Almeida v. Peric arose from a mortgage enforcement dispute involving the power of sale of residential property in Ontario. The plaintiff, Marluce Luiz De Almeida, alleged that the defendants, Marko and Mileva Peric, acting as mortgagees under a power of sale, had improvidently sold her property. The power of sale transaction occurred in 2014, and the plaintiff commenced her action in 2015, seeking to challenge the propriety of the sale and the defendants’ conduct as mortgagees. The case therefore sat at the intersection of real estate law, mortgage enforcement, and civil litigation procedure.
From an early stage, the procedural history of the case was marked by substantial delay. Although the action was started in 2015, it never progressed beyond the exchange of affidavits of documents. In 2018, there was an intention that a key law clerk, Mary Alves, would be examined for discovery. She had been centrally involved in the events surrounding the impugned power of sale, working with the respondents’ real estate lawyer, Mr. von Bogen. However, the examination did not proceed. Over the ensuing years, the plaintiff changed counsel multiple times and at one point was without legal representation. In 2019, fully one year after being ordered to appoint new counsel, she finally retained new lawyers, but no meaningful steps were taken thereafter to move the matter to discoveries or to set it down for trial.
During this period, critical factual circumstances changed. One of the defendants, Mrs. Mileva Peric, passed away. The law clerk, Ms. Alves, also died in October 2021. The remaining defendant, Mr. Marko Peric, reached approximately 90 years of age and had little independent memory of the relevant events. The defendants and their counsel maintained that the law clerk, rather than the supervising lawyer, possessed the only direct and detailed knowledge of the key dealings around the mortgage defaults and the power of sale.
By August 1, 2024, the action had languished well beyond the five-year administrative dismissal timeline prescribed by Rule 48.14(1) of the Rules of Civil Procedure, with only the pandemic-related suspension of administrative dismissals preventing an earlier termination. Ultimately, the registrar administratively dismissed the action for delay. The plaintiff then moved to set aside that administrative dismissal.

The motion before Associate Justice Robinson

On the motion to set aside the registrar’s dismissal, heard before Associate Justice Robinson, the plaintiff bore the onus of justifying reinstatement of the action. The governing framework was drawn from the well-established Reid v. Dow Corning Corp. line of authority, which directs courts to consider several factors in a contextual manner, including the length and explanation of delay, the intention to set the matter down for trial, and prejudice to the defendant.
Associate Justice Robinson began by carefully reviewing the chronology of the litigation and the gaps in the plaintiff’s evidentiary record. He emphasized that a plaintiff is expected to put her best foot forward on such a motion and provide cogent evidence explaining why the case was not advanced in a timely way. He also reaffirmed the principle that the plaintiff bears the primary responsibility for moving an action toward trial and final disposition on its merits.
The plaintiff acknowledged that the delay was inordinate but sought to attribute it to a combination of changes in counsel, periods without representation, challenges in obtaining files from former counsel, and general disruption during the COVID-19 pandemic. She also swore an affidavit asserting that it had always been her intention to pursue the action to trial and that any neglect was inadvertent.

Assessment of delay and intention to proceed

In analyzing whether the failure to set the matter down for trial was due to inadvertence and whether the plaintiff always intended to proceed, Associate Justice Robinson found the evidence wanting. He noted that the plaintiff provided no meaningful evidence on several critical points: the nature of her communications with prior counsel, what concrete steps (if any) she took while unrepresented, the specific time and impact of delays in obtaining files, and how any personal issues of current counsel actually impeded activity on the file.
The judge concluded that there were multiple significant, unexplained periods of inactivity throughout the life of the case. He found that the plaintiff’s assertion of a continuous intention to prosecute the matter, stated in a brief and self-serving paragraph of her affidavit, was inconsistent with this history of inaction. In his view, inadequately explained inaction over a prolonged period fundamentally undermined the credibility of her purported intention.
He further rejected the argument that the mere retention of three successive lawyers necessarily demonstrated a real intention to move the case forward. He drew a distinction between hiring counsel and giving them instructions to actively prosecute the case. On the record before him, there was little evidence that the plaintiff had given sustained, timely instructions to push the matter toward discoveries and trial.
On these grounds, Associate Justice Robinson held that the plaintiff had not satisfied her burden of showing that she always intended to prosecute the action in accordance with the Rules, but failed to do so only through inadvertence. He also observed that the five-year Rule 48.14 period had already long since expired when the action was dismissed and that, absent the pandemic suspension, the matter would have been administratively dismissed even earlier.

Prejudice to the defendants and fairness of a future trial

A central issue on the motion was whether the defendants had suffered prejudice, either presumed from the length of delay or actual, such that a fair trial was no longer realistic. While acknowledging strong arguments on presumptive prejudice, Associate Justice Robinson based his decision chiefly on actual prejudice.
He found that the law clerk, Ms. Mary Alves, was the key witness with first-hand knowledge of the defendants’ response to the mortgage defaults and the events surrounding the power of sale. This conclusion was supported by the fact that the plaintiff’s first lawyer had agreed to examine her for discovery and by the real estate lawyer’s own evidence that he had no independent recollection of the detailed events, relying instead on his clerk’s work. The defendants themselves, particularly Mr. Peric, also indicated that Ms. Alves was their main point of contact regarding the sale.
The judge rejected the plaintiff’s argument that this was primarily a document-driven dispute that could be tried on the paper record or on the supervising lawyer’s testimony alone. He noted that no specific documentary record had been identified that could reasonably substitute for the missing viva voce evidence from the clerk who handled the file day to day. In his view, the loss of Ms. Alves’ testimony left the defendants deprived of material evidence necessary to meaningfully respond to the allegations of an improvident sale.
The prejudice was compounded by the death of one defendant, Mrs. Peric, and the substantially faded memory of the surviving defendant, now 90 years old. When considered cumulatively—the death of the law clerk, the death of a defendant, and the fading recollection of the remaining elderly defendant—Associate Justice Robinson concluded that the defendants faced significant actual prejudice and that a fair trial was no longer possible. He also observed that the prejudice stemming from the loss of Ms. Alves’ evidence was avoidable or at least could have been mitigated, because there had been a nearly two-year window between the plaintiff’s retention of new counsel in late 2019 and the clerk’s death in 2021 during which she could have been examined.

Absence of policy wording issues

Although the underlying dispute centred on a mortgage enforcement process and an allegedly improvident sale under a power of sale, the decision does not involve insurance policy wording or detailed contractual clauses being interpreted by the court. Rather than construing specific mortgage or insurance clauses, the court focused on procedural law and the consequences of delay. The issues lay primarily in civil procedure, evidentiary prejudice, and the discretion to reinstate an administratively dismissed claim, not in the interpretation of specialty policy terms or particular contractual provisions.

The decision at first instance and its implications

Having weighed the Reid factors in a contextual manner, Associate Justice Robinson determined that the balance of interests did not favour reinstating the action. The delay was long and inadequately explained. The plaintiff failed to demonstrate that the failure to set the matter down for trial was due to inadvertence coupled with a genuine intention to move the action forward. Most importantly, the defendants had suffered concrete prejudice through the loss of crucial witness evidence and the altered circumstances of the surviving witnesses, such that a fair trial on the merits was no longer realistic.
On this basis, he refused to set aside the registrar’s August 2024 administrative dismissal. The plaintiff’s claim therefore remained dismissed for delay.

The appeal to the Divisional Court

The plaintiff appealed Associate Justice Robinson’s refusal to the Divisional Court under section 19(1)(c) of the Courts of Justice Act. The appeal came before Justice L. Brownstone, sitting as the Divisional Court. Both parties agreed that the associate justice’s ruling was a discretionary decision entitled to deference. Under the governing standard of review, an appellate court may only interfere if the motion judge made a palpable and overriding error of fact, proceeded on an incorrect legal principle, or gave no or insufficient weight to relevant considerations.
On appeal, the plaintiff advanced two main grounds. First, she argued that the motion judge erred in principle and made palpable and overriding errors in assessing her intention to proceed and in failing to treat the delay as inadvertent. She maintained that her affidavit evidence of an ongoing intention to proceed, coupled with the fact that she had retained three separate lawyers, should have been accepted as demonstrating a genuine desire to have her case heard on the merits.
Second, she argued that Associate Justice Robinson erred in finding actual prejudice arising from the death of the law clerk and from the respondents’ elderly status and limited memories. In her submission, the supervising real estate lawyer, who remained available to testify, should have been treated as the key witness, and the case should have been considered largely a document-based dispute. She contended that the motion judge misunderstood the respective roles of the lawyer and his clerk in the power of sale process and overstated the impact of the clerk’s absence on the fairness of a future trial.

Divisional Court’s analysis and reasoning

Justice Brownstone methodically addressed both lines of argument and found them unpersuasive. On the intention-to-proceed issue, he observed that the motion judge had explicitly considered the plaintiff’s affidavit statement but was not obliged to accept it at face value in the face of extensive, unexplained inactivity. The associate justice was entitled to find that a bare assertion of intention, standing alone, did not outweigh years of procedural inaction and the plaintiff’s failure to provide detailed evidence explaining what steps were taken with each lawyer and during periods without counsel. The Divisional Court found no error in the conclusion that the plaintiff had not shown that she always intended to prosecute the claim in a timely fashion but failed only through inadvertence.
Regarding prejudice, Justice Brownstone accepted that Associate Justice Robinson’s characterization of the law clerk as the key witness with first-hand knowledge of the events surrounding the power of sale was firmly rooted in the evidentiary record. The supervising lawyer’s own evidence indicated that he lacked independent knowledge of the material facts and that this knowledge “had been possessed only” by his clerk. The fact that the plaintiff’s earlier counsel had agreed to examine Ms. Alves during discoveries also supported the conclusion that she was the central witness. The Divisional Court agreed that this was not simply a documentary case and that the absence of her testimony left the defendants without critical evidence needed to answer the plaintiff’s allegations.
Justice Brownstone also accepted the associate justice’s reliance on the cumulative effect of the death of one defendant, the fading memory of the other, and the death of the law clerk. In his view, there was ample support for the finding that these developments created significant actual prejudice such that a fair trial was no longer achievable. He rejected the suggestion that the motion judge had applied the Reid factors mechanically or in a formulaic way; instead, the record showed that the factors were considered contextually, with proper regard for both access to justice and fairness to the defendants.
The Divisional Court emphasized that, while there is a general preference in civil justice for disputes to be decided on their merits, that preference is not absolute. Where lengthy, inadequately explained delay has caused actual prejudice and undermined the possibility of a fair trial, the interests of justice can require that an administratively dismissed action not be reinstated.

Outcome of the appeal and costs

In the result, Justice Brownstone held that there was no basis to interfere with Associate Justice Robinson’s findings or his discretionary refusal to set aside the registrar’s administrative dismissal. The appeal was dismissed, leaving the plaintiff’s claim permanently dismissed for delay. On costs, the court noted that the parties’ bills of costs were very similar in magnitude. The respondents sought costs on a partial indemnity basis in the amount of $7,477.12, inclusive of disbursements and HST, which was slightly less than the appellant’s own costs outline. The court considered this figure reasonable and proportionate, particularly in light of the importance of the issues to both sides. Accordingly, the court ordered the plaintiff, Ms. De Almeida, to pay the defendants/respondents, Mr. and Mrs. Peric, costs of $7,477.12. The respondents were thus the successful parties in the appeal, with the total monetary amount ordered in their favour consisting of this single costs award of $7,477.12 and no damages or other monetary relief being granted to the plaintiff.