Executive Summary: Key Legal and Evidentiary Issues

• A fire at the plaintiffs' Toronto premises on September 27, 2013 gave rise to a $4,000,000 damages claim against the insurer and the insurance brokers.
• Central to the motions was whether the action should be dismissed under r. 60.12 for the plaintiffs' failure to comply with the interlocutory order of McCarthy J. dated July 30, 2024.
• Dismissal for delay under r. 24.01 was also sought, requiring the court to assess whether the over-11-year delay was inordinate, inexcusable, and prejudicial to the defendants.
• Evidentiary gaps were critical: the plaintiffs failed to produce preserved documents, completed expert reports, or evidence that key witnesses remained available with detailed recollections.
• An adverse inference was drawn against the plaintiff Wei Ping Liu for failing to answer a question taken under advisement at cross-examination regarding compliance with undertakings.
• The plaintiffs' cross-motion to restore the action to the trial list was dismissed because they could not demonstrate a reasonable explanation for the delay or that the defendants would suffer no non-compensable prejudice.

Facts of the case

On September 27, 2013, a fire occurred at the premises of the plaintiffs, Wei Ping Liu and 2037812 Ontario Inc. o/a Wei Fung Fruit Co., located in Toronto. The plaintiffs commenced an action for damages in the amount of $4,000,000, alleging that the defendant Intact Insurance Company had insured the property, and that the defendants Anthony Tsang Insurance Brokers Inc. and its agent George Leung had sold them the insurance policy. The Statement of Claim was issued on September 26, 2014.

Procedural history and timetable orders

The litigation was marked by protracted inactivity on the plaintiffs' part. In October 2017, Intact brought a motion for a timetable, resulting in an order by Master Brott setting deadlines for, among other things, examinations for discovery by January 31, 2018, answers to undertakings by March 28, 2018, mediation by July 31, 2018, and setting the action down for trial by August 31, 2018. Examinations for discovery for all parties took place in January 2018. A pre-trial conference followed in October 2020, at which Edwards J. ordered another timetable culminating in a trial scheduled for November 21, 2021. In November 2021, however, plaintiffs' counsel advised the defendants that the matter would not proceed to trial in November 2021 and consented to its removal from the trial list, without providing any explanation to the court. In 2021, Intact had also brought three motions arising from the plaintiffs' failure to appoint an appraiser pursuant to section 128 of the Insurance Act, R.S.O. 1990, c. 1.8; one settled, and the remaining motions resulted in orders requiring the plaintiffs to appoint an appraiser and an umpire, as well as costs orders against the plaintiffs. On July 30, 2024, following a case conference initiated by the defendants, McCarthy J. issued an interlocutory order requiring the plaintiffs to, among other steps, comply with all outstanding costs orders by August 16, 2024, and obtain leave to restore the action to the trial list by September 16, 2024. The plaintiffs paid two of the three outstanding costs orders in August 2024 but took no further steps to comply with the remainder of the timetable.

Contractual and statutory provisions at issue

The case engaged the appraisal mechanism under section 128 of the Insurance Act, R.S.O. 1990, c. 1.8, which requires the appointment of an appraiser and, subsequently, an umpire in the context of disputed insurance claims. The plaintiffs' repeated failure to comply with this statutory procedure was a significant factor in the litigation's delay and generated multiple court orders against them.

Reasoning and analysis

The court considered three interrelated issues: dismissal for non-compliance with the interlocutory order under r. 60.12, dismissal for delay under r. 24.01, and the plaintiffs' cross-motion to restore the action to the trial list. On the r. 60.12 motion, the court noted that the onus rested on the plaintiffs to establish an acceptable explanation for their failure to comply and that the defendants would not suffer non-compensable prejudice if the action proceeded. The plaintiffs' affidavit, sworn by Wei Ping Liu, consisted of 12 short paragraphs over two pages with no exhibits attached. The court found this entirely insufficient. There was no evidence that key documents had been preserved, no expert reports, no undertaking answers, and no evidence that witnesses remained available with detailed recollection of events — the fire having occurred over 12 years before the motion hearing. At cross-examination, Mr. Liu was unable to recall basic details of the proceedings, and he failed to answer a question taken under advisement regarding compliance with undertakings, from which the court drew an adverse inference. On the delay analysis under r. 24.01, the court assessed the period from September 26, 2014 to March 6, 2026 — over 11 years — and found that only approximately 27 months were adequately explained, leaving roughly 110 to 111 months, or over nine years, with no adequate explanation. The court found the delay inordinate and inexcusable. While the court declined to find the delay insolently abusive under the first branch of the delay test, it was satisfied under the second branch that the delay was inordinate, inexcusable, and prejudicial, giving rise to a substantial risk that a fair trial was no longer possible. The court also relied on the principle that inordinate delay of 11 years could, on its own, constitute prejudice, citing Gutcher v. Welland Retirement Suites Ltd., 2026 ONCA 273. On the plaintiffs' cross-motion to restore the action to the trial list, the court applied the test from Carioca's Import & Export Inc. v. Canadian Pacific Railway Limited, 2015 ONCA 592, and found the plaintiffs had not demonstrated on a balance of probabilities that there was a reasonable explanation for the delay or that the defendants would not suffer non-compensable prejudice.

Ruling and overall outcome

The court, per Associate Justice Mak, dismissed the action both for failure to comply with the interlocutory order under r. 60.12 and for delay under r. 24.01. The plaintiffs' cross-motion to restore the action to the trial list and reset the timetable was also dismissed. The successful parties were the defendants Anthony Tsang Insurance Brokers Inc. and George Leung, with Intact Insurance Company also effectively succeeding in having the action against it extinguished. As to costs, no amount was fixed at the hearing; the parties were directed to make written submissions to the Trial Coordinator if they could not agree on costs, with the defendants to file within 20 days and the plaintiffs within 10 days thereafter. Accordingly, no specific monetary award has been determined at this stage.