No Avoidance In Delay: A Cautionary Tale For Plaintiffs With Dormant Files

Defendants may take some comfort from the Ontario Court of Appeal's recent decision in Ticchiarelli v. Ticchiarelli,1 which has clarified the law in respect of dismissing an action for delay. Specifically, the Court of Appeal confirmed that even if a defendant takes procedural steps and engages in settlement negotiations, this will not necessarily excuse the plaintiff's delay or save the action from being dismissed.

The action in Ticchiarelli involved a dispute over the ownership of shares of a corporation with equity interest in a property development in Windsor, Ontario. The plaintiff alleged that the defendants misused a power of attorney, depriving the plaintiff of repayment of a shareholder loan.

The proceeding was commenced in 2004 and had several periods of inactivity. First, after the plaintiff filed its Affidavit of Documents, the action was dormant for over five years. Then, in 2010, the plaintiff proposed settlement and cross-examined the defendants. The action then fell dormant again between 2010 and 2014, at which time the plaintiff made an offer to settle. By 2015, settlement negotiations failed and the parties agreed to mediation. However, counsel for one of the defendants cancelled the mediation two days before it was scheduled to begin. Shortly thereafter, all but one of the defendants moved to dismiss the action for delay.

Over the course of the proceeding, several key witnesses died.

The Court of Appeal upheld the motion judge's decision to dismiss the action on the grounds that there was inordinate and inexcusable delay that prejudiced the defendants. The Court of Appeal confirmed that the motion judge had the grounds to dismiss the action both under Rule 24.01 of the Rules of Civil Procedure and also on the basis of the Court's inherent jurisdiction.

The test for dismissal for delay

The Court of Appeal confirmed that an order dismissing an action for delay is justified when the delay is inordinate, inexcusable, and prejudicial to the defendant in that it gives rise to a substantial risk that a fair trial of the issues will not be possible.2

Whether or not the delay is inordinate is measured by reference to the length of time from the commencement of the proceeding to the motion to dismiss.3

Whether the delay is inexcusable requires an examination of the reasons for it and whether they present an explanation that is "reasonable and cogent" or "sensible and persuasive".4

Inordinate delay will generate a presumption of...