Claimant's lawyers sued for unpaid fees or cited personal reasons for failing to act
In a claim to perfect a lien, the Ontario Superior Court dismissed the defendant’s motion to dismiss upon deeming the plaintiff’s delay excusable because of its problems with counsel suing it or failing to pursue its matter for personal reasons.
In Cy Rheault Construction v. Danark Enterprises, 2025 ONSC 4935, the plaintiff registered a claim seeking a lien for $338,326.98 against the defendant’s property on Jan. 13, 2017.
On Feb. 27, 2017, the plaintiff commenced this action to perfect its lien. On Mar. 27, 2017, the defendant provided its statement of defence and counterclaim.
The plaintiff moved to remove the defendant’s counsel due to an alleged conflict of interest, but later abandoned this motion.
In spring 2018, the defendant unsuccessfully requested permission for its counsel to cross-examine the plaintiff’s principal.
In December 2020, the plaintiff was trying to hire new counsel. The plaintiff asked its new counsel to get its file from its former firm and pursue a court date or mediation in this action.
In 2021, the plaintiff’s previous lawyers sued it for failing to pay fees. On Nov. 28, 2023, the plaintiff’s new counsel finally received the plaintiff’s file from former counsel.
In fall 2023 and winter 2024, the plaintiff followed up unsuccessfully with its new counsel so that it could proceed with its action.
On Nov. 1, 2024, the defendant delivered a motion to dismiss the action for delay under the court’s rules and inherent jurisdiction. The defendant alternatively sought an order setting a timetable.
When the defendant served the motion to dismiss, the plaintiff’s new counsel informed the plaintiff that he could not defend the motion due to personal reasons. The plaintiff retained its current counsel, who responded to the motion to dismiss.
The Ontario Superior Court of Justice dismissed the defendant’s motion to dismiss, ordered the parties to contact the trial coordinator to schedule a judicial pretrial, and considered the timetable the defendant alternatively requested unnecessary.
The court found the delay excusable due to the COVID-19 pandemic’s impacts and the plaintiff’s issues with its counsel.
The court deemed both parties responsible for delays in this part of the litigation. The court attributed some delay to a solicitor’s lien on the file and the defendant’s request to cross-examine the plaintiff’s principal.
The court pointed out that the matter had proceeded normally from the time the action began in February 2017 until June 2020.
The court noted that the parties exchanged pleadings and affidavits, completed discoveries, argued a motion, and mostly finished the undertakings. Given that the trial record had been passed, the court called the matter trial-ready.
The court acknowledged that the action had been pending for more than eight years, but dubbed this delay far from exceptional in the circumstances.
The court noted that the COVID-19 pandemic – and the resulting court and business closures, restricted hearings, and suspended limitation periods – significantly affected this proceeding.
The court ruled that the plaintiff gave a reasonable excuse for delaying its pursuit of its action. The court accepted the plaintiff’s evidence that the pandemic severely impacted its business from 2020–21 and made it lose a major client.
The court added that the plaintiff made efforts to retain new counsel and move its matter along despite its difficulties with its lawyers.
Even if it had considered the delay inexcusable, the court said it would have seen no substantial risk that a fair trial might be impossible.
The court found that the plaintiff rebutted the presumption of inherent prejudice, while the defendant failed to provide convincing evidence of any prejudice.
Lastly, the court held that the delay did not undermine public confidence in the administration of justice. The court deemed the plaintiff entitled to a determination of its action on its merits.
