Executive Summary: Key Legal and Evidentiary Issues

• Whether an administratively dismissed action could be treated as a nullity because it had previously been automatically stayed under Rule 11.01 of the Ontario Rules of Civil Procedure.
• The extent to which the plaintiffs provided a satisfactory explanation for nearly ten years of delay, including the impact (or lack thereof) of COVID-19 and former counsel’s regulatory issues on the progress of the litigation.
• The application of the Reid v Dow Corning factors to determine if the administrative dismissal of the 1736106 Ontario Inc. action should be set aside in the interests of justice.
• Evidentiary prejudice arising from the long passage of time, including concern about fading witness memories regarding conversations and events surrounding the 2011 fill-removal contract.
• The plaintiffs’ failure to obtain a straightforward order to continue under Rule 11.02 after transferring Parcel 1 to a non-party, and whether this supported dismissal for delay under Rule 11.03.
• The proper use of the court’s procedural discretion to treat the dismissal of the stayed Niagara Radio action as a nullity, yet still dismiss that action for delay within the framework of the plaintiffs’ own motion.

Factual background and the construction contract dispute

The dispute arises from a highway construction project on Highway 406 in Ontario, where the road was widened to four divided lanes between Fonthill and Welland. Some of the fill required for that project was taken from lands owned by the plaintiffs, Niagara Radio Group Inc. (“Niagara Radio”) and 1736106 Ontario Inc. (“1736106”), under a 2011 contract with the defendant, Rankin Construction Inc. The parties referred to the relevant locations as Parcel 1 and Parcel 2. Parcel 1 was owned by Niagara Radio and Parcel 2 by 1736106. The plaintiffs alleged in their statement of claim that, while Rankin did remove fill from their lands as contemplated by the contract, it did so in breach of the contractual terms. No insurance policy or policy wording was at issue; the case was grounded in contract and construction law, not coverage or policy interpretation. The contract itself and its specific clauses were not analyzed in detail in this motion, because the matter came before the court on procedural issues long before any trial on the merits of the alleged contractual breach.

Corporate structure, land transfers and the stay of proceedings

A central factual feature was the role of Andrew Ferri, who was a directing mind of both Niagara Radio and 1736106, and also of 448332 Ontario Ltd. In 2019, Niagara Radio transferred its interest in Parcel 1 to 448332. This transfer had significant procedural consequences. Under Rule 11.01 of the Ontario Rules of Civil Procedure, where a party’s interest in a proceeding is transferred to another person, the proceeding is automatically stayed as against that party until an order to continue is obtained. The court found that the Niagara Radio action was accordingly stayed in November 2019 when Parcel 1 was transferred to 448332. However, the 1736106 action was not affected by that transfer because 1736106 retained ownership of Parcel 2 and thus maintained its interest in the litigation. Years later, Justice Gambacorta, on an August 4, 2023 motion brought by Mr. Ferri, dismissed his attempt to represent the plaintiffs and to add 448332 as a new plaintiff. In that endorsement, she reminded the parties that the action was stayed pursuant to Rule 11.01 and that an order to continue was required. Despite this, no such order to continue was ever obtained by Niagara Radio, 448332, or Mr. Ferri.

Procedural history and administrative dismissal for delay

The plaintiffs commenced the action in 2016. Over the following years, counsel engaged intermittently with the defence on case-management steps. A timetable was agreed that, if complied with, would have had the action set down for trial by December 31, 2022. However, progress stagnated. In March 2022, defence counsel specifically advised plaintiffs’ counsel that the transfer of Parcel 1 to 448332 had triggered an automatic stay and that an order to continue was required. No such order was sought. Plaintiffs’ then-counsel, Mr. Hutton, was removed from the record in July 2022. Mr. Ferri, acting on behalf of the companies, further delayed matters with his unsuccessful 2023 motion to represent the plaintiffs and add 448332. In August 2023, new counsel, Mr. Luigi De Lisio, was retained for the plaintiffs. Nonetheless, no meaningful steps were taken until the Registrar issued an “Order Dismissing Action for Delay” on March 3, 2025, administratively dismissing both plaintiffs’ actions. Once that order issued, Mr. De Lisio acted promptly to bring a motion seeking to set aside the dismissal. On the hearing of that motion, plaintiffs’ counsel advanced an alternative argument that the dismissal order was a nullity for the Niagara Radio action, because that claim had been automatically stayed under Rule 11.01 well before the dismissal.

The court’s treatment of the stayed action and the “nullity” argument

Justice Latimer agreed that a stayed action cannot properly be the subject of an administrative dismissal order. Relying on authorities including 625041 Ontario Inc. v Ford Motor Company of Canada, he accepted that the dismissal order, to the extent it purported to dismiss the Niagara Radio action, should be treated as a nullity. On that basis, he proceeded on the footing that the Niagara Radio action technically remained stayed, unaffected by the registrar’s order. However, this finding did not benefit the plaintiffs in a practical sense. The judge turned to Rule 11.03, which provides that, where a plaintiff’s interest has been transferred and no order to continue is obtained within a reasonable time, the defendant may move to have the action dismissed for delay. In the unique circumstances of this motion, the court held it was appropriate and just to consider dismissal under Rule 11.03 within the plaintiffs’ own motion, even though the defendant had not brought a separate, formal Rule 11.03 motion. Justice Latimer found that the plaintiffs had long been aware of the need for an order to continue, that obtaining such an order would have been a simple administrative process requiring minimal effort, and that their failure to do so was unreasonable and, on the evidence, deliberate. To require a separate motion by the defendant would, in his view, elevate form over substance when all relevant facts and arguments were already before the court.

Application of the Reid factors and analysis of delay

For the 1736106 action, which had been lawfully administratively dismissed, the court applied the Reid v Dow Corning factors to decide whether the dismissal should be set aside in the interests of justice. The four core questions were: whether there was a satisfactory explanation for the delay, whether the delay was caused by inadvertence, whether the plaintiff moved promptly to set aside the dismissal order, and whether the defendant suffered prejudice. Justice Latimer found that the plaintiffs failed to convincingly link the COVID-19 pandemic to any specific delay in this proceeding, noting that the parties had, in fact, exchanged information and communicated during the pandemic period and that an earlier extension of the five-year dismissal deadline had already been granted. Similarly, he declined to find that former counsel’s regulatory difficulties had concretely affected the pace of the litigation, as there was no evidence that counsel’s performance delayed the case. The court held that much of the delay was attributable to the plaintiffs themselves, particularly to Mr. Ferri’s conduct after 2019: he transferred the interest in Parcel 1 without advising the court or the defendant for years, did not pursue the straightforward step of obtaining an order to continue, and delayed in bringing his 2023 motion to represent the plaintiffs and add 448332. While the plaintiffs did move promptly to set aside the dismissal once notified in 2025, the judge concluded that this recent diligence did not outweigh the preceding years of inaction. The court also found prejudice to the defendant. Rankin Construction had been forced to defend a lawsuit that had lingered for a decade, and the long passage of time created evidentiary prejudice, particularly because the case involved recollections of conversations and events around a 2011 construction contract. Although documents were important, witness memories would inevitably fade, undermining the fact-finding process.

Outcome of the motions and dismissal of both actions

Against this backdrop, the court refused to reinstate the 1736106 action by setting aside the administrative dismissal. Justice Latimer held that the plaintiffs had not met their onus under the Reid framework: they had not given a satisfactory explanation for the considerable delay, had not shown that the delay was inadvertent, and had caused prejudice to the defendant and the court process. The motion to set aside the dismissal in relation to 1736106 Ontario Inc. was therefore dismissed. Turning to the stayed Niagara Radio action, the judge accepted that the registrar’s dismissal order was a nullity because the action had been stayed under Rule 11.01 at the time of the purported dismissal. Nonetheless, he concluded that the same prolonged and unjustified delay warranted dismissal under Rule 11.03. Applying the court’s general powers to secure the just, most expeditious and least expensive determination of the proceeding, he found it appropriate to dispense with the formal requirement of a separate Rule 11.03 motion. In the end, the Niagara Radio action was dismissed for delay within the framework of the plaintiffs’ own motion. Thus, both strands of the litigation—the 1736106 action and the Niagara Radio action—were brought to an end.

Costs and final disposition in favour of the defendant

In disposing of the matter, Justice Latimer emphasized the Supreme Court of Canada’s “culture shift” toward timely and affordable justice and contrasted that with a claim that remained close to the starting line ten years after it was filed, while the highway at the heart of the dispute had already aged and deteriorated in ordinary use. The court held that responsibility for the excessive delay fell squarely on the plaintiffs. As the successful party on the motion and overall outcome, Rankin Construction Inc. was entitled to its costs. After reviewing the parties’ costs materials and considering proportionality and fairness, the court ordered the plaintiffs to pay Rankin Construction Inc. costs fixed in the amount of $7,500, payable forthwith. No damages were awarded on the underlying contractual claim because both actions were dismissed at the procedural stage, so the only monetary award was this $7,500 costs order in favour of Rankin Construction Inc., which stands as the sole financial consequence flowing from the decision.