Oct 22, 2018

BLANEY’S APPEALS: ONTARIO COURT OF APPEAL SUMMARIES (OCTOBER 15 – 19, 2018)

Van Aert v. Sweda Farms Ltd. (Best Choice Eggs), 2018 ONCA 831 (CanLII)

Facts:

The Appellant is in the business of producing, grading, and selling eggs. The Respondents are egg suppliers. The Appellant and Respondents conducted business together pursuant to various supply agreements, which culminated with each side claiming that the other was in breach of the agreements. The Respondents ultimately brought an action against the Appellant.The Appellant counterclaimed.

At trial, the Appellant’s previous counsel was granted an adjournment of the counterclaim on terms that included consenting to a judgment in the action in favour of the Respondents in the amount of $164,560.92, which funds were to be paid into court, as well as being permitted to move to add the Respondents as defendants to an existing Toronto action. The Appellant did not pay the funds into court, bring a motion to add the Respondents as defendants to the Toronto action, or take any further steps to advance the counterclaim.

The Appellant returned to court five years after the judgment was entered, seeking an order to: (1) permit it to proceed with the counterclaim once it paid the judgment funds into court, (2) permit it to amend its counterclaim, and (3) fix a timetable for the remaining steps in the litigation.

The motion was dismissed. The motion judge concluded that there was no rule governing a request to belatedly comply with an order. Instead, it most closely approximated a motion to set aside an order dismissing an action for delay pursuant to r. 48 of the Rules of Civil Procedure.

The motion judge placed the onus on the Appellant to establish: (1) that there is an acceptable explanation for the litigation delay; and (2) the Respondents would suffer no non-compensable prejudice if the counterclaim was permitted to proceed.

The motion judge did not accept any explanation for the delay. She also determined that there was actual prejudice, as the Appellant sought to renew the counterclaim, pursue increased damages, and set a timetable for further steps that would involve increased costs for the Respondents.

The Appellant appealed on the grounds that the motion judge applied the wrong legal test.

Issue:

(1) Did the motion judge apply the wrong legal test?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The motion judge did not err in analogizing from the situation before her to Rule 48 of the Rules of Civil Procedure. The Appellant was in default of an order and was seeking an indulgence from the court. It was appropriate that the onus be on the Appellant to provide an explanation for the delay. Further, it was open to the motion judge to conclude that the Appellant knew of previous judgments against it.

The Court also noted that the motion judge did not err in concluding that the Respondents would suffer actual prejudice from the revival of the counterclaim. That is, the Appellant attempted to bring a claim that would have been tried five years earlier, and did not file any materials on the motion to establish that there would be no prejudice from the delay. Instead, the Appellants asserted that the Respondents did not lead evidence of actual prejudice. However, there was no onus on the Respondents to do so.

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