IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20120113

Docket: S021987

Registry:
Vancouver

Between:

Danica
Arsenovski

Plaintiff

And

Gregory
Bodin, John Gould and
Insurance Corporation of British Columbia

Defendants

Before:
The Honourable Mr. Justice Blair

Reasons for Judgment

[1]            
The parties to this litigation, which has a history originating in a
motor vehicle incident in Burnaby, British Columbia, some 12 years ago on
January 31, 2000, bring three chambers motions as follows:

1)    The defendants
seek an order pursuant to Rule 8-1(4) of the Supreme Court Civil Rules
(the “Civil Rules”) extending the time for them to respond to the
plaintiff’s August 26, 2011 notice to admit, or that the notice to admit be set
aside, or alternatively that any deemed admissions arising from the notice to
admit be replaced with the admissions made in the defendants’ reply drafted to
respond to the notice to admit;

2)    Plaintiff ‘s
counsel seeks an order for leave to cross-examine defence counsel, Michael
Thomas, on his affidavits explaining the circumstances leading to his failure
to file a reply to the plaintiff’s notice to admit within the 14 days permitted
by Rule 7-7(2) of the Civil Rules; and

3)    The defendants
seek an order dismissing the plaintiff’s action for want of prosecution
pursuant to Rule 22-7(7) of the Civil Rules.

[2]            
I will address the applications in the following order:

·      
the plaintiff’s request for leave to cross-examine Mr. Thomas;

·      
the defendants’ request for an extension of the time to respond
to the notice to admit, or alternate relief as set out above; and finally

·       the
defence application to dismiss the action for want of prosecution.

[3]            
This action commenced on April 9, 2002, and given the delay incurred to
date, it is tempting to address these applications in a succinct and summary fashion
with the object of getting this litigation resolved. However attractive that
approach might be, these applications must be dealt with by a principled
consideration of the circumstances behind each application in order to arrive
at an appropriate decision.

Background

[4]            
The plaintiff, Danica Arsenovski, and her husband, Gone Arsenovski,
arrived in Canada in 1999 from Yugoslavia. On January 30, 2000, the couple were
crossing Nelson Avenue in Burnaby, B.C., when Mr. Arsenovski was struck by a
motor vehicle. He subsequently reached a settlement with the Insurance
Corporation of British Columbia (“ICBC”) for the damages resulting from his
injuries. Ms. Arsenovski, although not struck by the motor vehicle, claimed
relief for the injuries suffered when she slipped on the road during the
incident.

[5]            
Ms. Arsenovski, whose first language is Serbo-Croation, sought no-fault
medical and disability payments for her injuries from ICBC. In pursuing her
claim she provided a statement through a translator about the incident and her
injuries to an ICBC adjuster. ICBC concluded, after further investigation, that
Ms. Arsenovski provided a false statement to ICBC and initiated steps which led
to her being charged with fraud. Ms. Arsenovski says the translator
misinterpreted her statement. On July 16, 2001, the Crown stayed the fraud
charge on hearing the statement had come not directly from Ms. Arsenovski, but from
an interpreter.

[6]            
On April 9, 2002, Ms. Arsenovski commenced this action for negligent and
malicious prosecution against ICBC and two of its employees, Gregory Bodin and
John Gould. On October 31, 2006, Ms. Arsenovski’s original counsel withdrew
upon reviewing documents from ICBC relating to the action which were critical of
him personally, and from which he concluded he might be required to testify in
the trial of the action. In light of the potential conflict he withdrew as
counsel.

[7]            
Ms. Arsenovski retained her present counsel, Mr. Harding, on January 12,
2007, and the parties agreed to adjourn the trial set for January 22, 2007. The
next step in the action came 49 months later on February 11, 2011, when plaintiff’s
counsel filed a notice of intention to proceed, although he took no further
steps until after the defence, on August 19, 2011, filed its application to
dismiss Ms. Arsenovski’s action for want of prosecution. That latter
application appears to have directed plaintiff’s counsel’s energies toward the
pursuit of the plaintiff’s claims.

Cross-Examination of Defence Counsel ’s Affidavit

[8]            
The steps subsequent to August 19, 2011 form the basis for the plaintiff’s
application to cross-examine defence counsel, Mr. Thomas. Plaintiff’s counsel
on Sunday, August 28, 2011, pursuant to Rule 7-7(1) of the Civil Rules,
faxed to Mr. Thomas a notice to admit dated August 26, 2011. However, Mr.
Thomas did not file a reply to the notice to admit by September 12, 2011, that being
the deadline set by Rule 7-7(2).

[9]            
On September 20, 2011, plaintiff’s counsel informed defence counsel that
if the defence sought leave to extend the time to file a reply that he would
seek to cross-examine Mr. Thomas if he filed an affidavit describing the
circumstances surrounding the defendants’ omission to respond to the notice to admit
within 14 days. The plaintiff’s intention in warning Mr. Thomas about the
consequences of his filing an affidavit with respect to the notice to admit is
not clear and was in any event ignored by Mr. Thomas, who swore his first
affidavit on September 23, 2011. Considering Mr. Thomas had conduct of the defendants’
case, it would seem that he was in the most advantageous position to explain
the circumstances surrounding the defendants’ omission to file a reply in a
timely fashion.

[10]        
In his affidavit, Mr. Thomas acknowledged that his office received the notice
to admit dated August 26, 2011 and faxed to his office by plaintiff’s counsel
on Sunday, August 28, 2011 at 9 a.m. Mr. Thomas deposed that his assistant who
usually dealt with faxes such as that which contained the plaintiff’s notice to
admit was on vacation and the fax was inadvertently forwarded to his absent
assistant, rather than to another employee who was attending to his assistant’s
responsibilities whilst she was on vacation. Mr. Thomas deposed that he was not
aware of the faxed notice to admit until September 20, 2011 when he reviewed
his correspondence and telephone messages.

[11]        
Mr. Thomas accepted responsibility for failing to reply to the notice to
admit within the time limits, but prepared a reply which he forwarded to
plaintiff’s counsel on September 23, 2011 and attached as an exhibit to his
September 23, 2011 affidavit.

[12]        
Mr. Thomas prepared a second affidavit sworn October 17, 2011, which
provided further details about what occurred after his firm received the fax
containing the notice to admit and why it was not brought to his attention
until September 20, 2011. Employees of his firm also provided affidavits
casting further light on the error which occurred with respect to the handling
of the notice to admit. I should add that to his credit, at no point did Mr.
Thomas resile from his initial position that he was responsible for not having
filed the reply within the required time limits.

[13]        
Plaintiff’s counsel submits that cross-examination is required because
the affidavits provided by defence counsel failed to explain all the
circumstances regarding the failure to reply in a timely fashion to the notice
to admit, including whether the corporate defendant knew of the notice to admit.
Plaintiff’s counsel contends that without examining defence counsel he could
not properly address the defendants’ application to extend the time to file a
reply. Plaintiff’s counsel described defence counsel’s initial affidavit as a
“Mickey Mouse” affidavit. That description is unnecessarily disparaging and
lacks civility and good manners which is how discourse between counsel is
typically conducted.

[14]        
I have reviewed the affidavits filed by defence counsel and his co-workers
with respect to what occurred when the fax with the notice to admit arrived at their
law firm. The explanation as to the delay in filing a reply is as comprehensive
as might be anticipated in the circumstances. The affidavit from defence
counsel includes a statement that the defendants were unaware that the notice
to admit had been filed, a matter raised by the plaintiff’s counsel in his
submissions.

[15]        
Brown v. Garrison, [1967] B.C.J. No. 59 (B.C.C.A.) addressed the
question of whether the trial judge had erred in refusing an application to
cross-examine a deponent on his affidavit. Bull J.A. at para. 5 wrote:

Clearly, and it has been long so
held, the judge has a discretion which he must exercise on proper principles as
to whether or not cross-examination should be directed on the application of a
party. There is no question that in the normal course where the affidavit on
which the cross-examination is sought includes facts that are in issue, the
deponent will so be ordered to attend if application therefor is sought. But
the circumstances may be such that the judge may properly exercise his
discretion to refuse such an application, and in this case I am of the opinion
such circumstances existed.

[16]        
I find that the matters raised by the plaintiff in seeking to cross-examine
the defence counsel go to the conduct of the defence counsel in failing to
reply, not to any real issue between the parties with respect to the
plaintiff’s claim for malicious prosecution.

[17]        
I find the circumstances to be such that I will exercise my discretion
and deny the plaintiff’s application for an order permitting cross-examination
of defence counsel upon the latter’s three affidavits.

[18]        
I should add that in his submissions, plaintiff’s counsel indicated he
also wanted to cross-examine the other members of defence counsel’s law firm on
their affidavits, but I have been unable to find an application seeking this
relief. In any event, if such an application were before me I would reject it
for the same reasons I have rejected the plaintiff’s application to cross-examine
defence counsel.

The Deemed Admissions Found in the Notice to Admit

[19]        
The defendants seek an order pursuant to Rule 8-1(4) of the Civil
Rules that the time for the defendants to respond to the notice to admit be
extended, or that the notice to admit be set aside, or alternatively that any
admissions arising from the notice to admit be replaced with the admissions set
out in their reply found in defence counsel’s September 23, 2011 affidavit.

[20]        
Rule 7-7 was created to deal with non-contentious matters that should be
admitted. Silence by a party receiving a notice results in a deemed admission
of the assertion or document contained in the notice and that a party is not
entitled to withdraw a deemed admission without leave of the court.

[21]        
The Court of Appeal in Munster & Sons Developments Ltd. v. Shaw,
2005 BCCA 564 addressed the principles to be addressed in an application to
withdraw a deemed admission as described under Rule 31(5) of the Supreme
Court Rules, now replaced by Rule 7-7 (5) of the Civil Rules. At
para 10, the Court stated:

10 Rule 31(5) provides that admissions of fact,
whether deemed or actually made, cannot be withdrawn except by consent or with
leave of the court. The principles to be drawn from the authorities that govern
an application to withdraw an admission of fact are perhaps best set out in
Hamilton v. Ahmed (1999), 28 C.P.C. (4th) 139 (B.C.S.C.) [paragraph] 11:

1. That the test is whether there is a triable issue which,
in the interests of justice, should be determined on the merits and not
disposed of by an admission of fact.

2. That in applying that test, all the circumstances should
be taken into account including the following:

3. That the admission has been made inadvertently, hastily,
or without knowledge of the facts.

4. That the fact admitted was not within the knowledge of
the party making the admission.

5. That the fact admitted is not true.

6. That the fact admitted is one of mixed fact and law.

7. That the withdrawal of the admission would not prejudice
a party.

8. That there has been no delay in applying to withdraw the
admission.

[22]        
If the defendants’ reply is not permitted to be filed, then the triable
issues between the parties addressed in the notice to admit will be disposed of
by the far-reaching deemed admissions, not by a trial on the merits of the
case.

[23]        
From the circumstances surrounding the defence omission to make a timely
reply, I conclude that the admissions were made inadvertently and neither
wilfully nor negligently. Further, that after becoming aware on September 20,
2011 of the notice to admit, defence counsel drafted a reply which was
delivered to the plaintiff on September 23, 2011. The defendants also advised
at that time that they would seek to have the deemed admission withdrawn,
followed with little delay by the filing on October 12, 2011 of the defendants’
application.

[24]        
In the defendants’ reply responding to the admissions contained in the notice
to admit, the defendants say that some of the facts admitted were not within
their knowledge and that some of the facts deemed admitted are not true.

[25]        
Although the withdrawal of the admissions would result in the plaintiff
having to prove the facts set out in the notice to admit, I do not perceive
that to be prejudicial to the plaintiff’s position. I presume that having
advanced the admissions the plaintiff would be in a position to prove those
admissions.

[26]        
This is not a case such as Piso v. Thompson, 2010 BCSC 1746 in
which Master Caldwell found at para. 8 that plaintiff’s counsel, upon receiving
a notice to admit, put it in his file and forgot about it until served with a
notice of a summary trial application by the defendants seeking judgment on the
basis of the deemed admissions. In the instant case, defence counsel became
aware of the notice to admit on September 20, 2011 and responded forthwith by
drafting a reply and forwarding it to plaintiff’s counsel on September 23,
2011. Defence counsel also took action to determine how the system of
transferring information within his office led to the delay in his becoming
aware of the notice to admit.

[27]        
Having considered the principles upon which to approach an application
to withdraw or set aside a notice to admit and the circumstances found in the
instant case, I conclude that justice would be ill-served were the deemed
admissions allowed to stand without a reply. The defendants will have seven
days from the filing of this judgment to serve plaintiff’s counsel with their reply.

Application to Dismiss Plaintiff’s Claim

[28]        
The defence filed an application on August 19, 2011 seeking an order
pursuant to Rule 22-7(7) that the plaintiff’s claim against the defendants be
dismissed for want of prosecution. The plaintiff commenced her action on April
9, 2002 against the defendants alleging negligent and malicious prosecution on
their part as they investigated her claim for Part 7 benefits, and for having
caused her to be charged with fraud in connection with an allegedly fraudulent
statement she provided to ICBC.

[29]        
In January 2007, the plaintiff’s present counsel advised the defendants
that he had assumed conduct of the plaintiff’s case and filed a notice of change
of solicitor. The parties agreed to adjourn the trial then set for January 22,
2007. Plaintiff’s counsel took no further steps in pursuing the action for four
years until on February 11, 2011, her counsel filed a notice of intention to proceed,
although he took no further steps until August 28, 2011, when he forwarded the notice
to admit to the defendants’ counsel. Defence counsel, on May 11, 2011, advised
plaintiff’s counsel that he had received instructions to bring an application
to dismiss the action for want of prosecution followed by the filing of the
application on August 19, 2011.

[30]        
In Tundra Helicopters Ltd. v. Allison Gas Turbine, a Division of
General Motors Corp., 2002 BCCA 145, Esson J.A. confirmed that the correct
“bare bones” statement of the present law in B.C. with respect to dismissing
actions for want of prosecution arose from the decision in Irving v. Irving,
[1982] B.C.J. No. 970, 38 B.C.L.R. 318 (B.C.C.A.), and he expressed the
statement at para. 15:

1. There has been inordinate delay;

2. The inordinate delay is inexcusable; and

3. The delay has caused, or is likely to cause, serious
prejudice to the applicant.

If those tests are met, the court must go on to consider
whether or not the balance of justice demands that the action should be
dismissed.

[31]        
The tests are all cumulative and the applicant must establish that the
answer to all four tests should be answered in the affirmative.

[32]        
Mr. Justice Esson at para. 16 cited the decision Busse v. Robinson
Morelli Chertkow (1999), 63 B.C.L.R. (3d) 174 (C.A.) as having clarified
the Irving test by holding that:

… once there has been a finding
of inordinate delay which is inexcusable, the onus shifts to the plaintiff to
establish on a balance of probabilities that the defendant has not suffered
prejudice or that other circumstances would make it unjust to terminate the
action.

[33]        
In considering the circumstances in this case in the context of the
tests to be applied on an application to dismiss the plaintiff’s action, it is
clear that there has been an inordinate delay in pursuing the action. I would
agree with the defendants’ submission that the causes of action arose on July
16, 2001 when the Crown stayed the criminal charge against the plaintiff and that
the two-year limitation period for the torts upon which the plaintiff bases her
claims would have expired on July 15, 2003. The plaintiff brought her action on
April 9, 2002 and the trial date was scheduled for January 22, 2007.

[34]        
Some of the delay surrounding the period October 2006 and the
adjournment of the January 2007 trial date is attributable and understandable
given the reasons for the withdrawal from the action by the plaintiff’s
original counsel. However, January 2007 saw plaintiff’s present counsel assume
conduct of the action and there then ensued a gap of some four years during
which plaintiff’s counsel appears to have done nothing on the file until February
11, 2011 when he filed a notice of intention to proceed. However, in spite of
having notified the defendants that the plaintiff intended to proceed, counsel
took no further steps until August 28, 2011, when he forwarded the notice to
admit to the defendants, some nine days after the defendants filed their
application to dismiss the action for want of prosecution.

[35]        
Plaintiff’s counsel deposed in his affidavit sworn August 26, 2011 that
after assuming the conduct of the action, it took him several months to arrange
for the transfer of the plaintiff’s file from the plaintiff’s former counsel. He
further deposed that:

5. Due to the pressures of my workload and the seemingly
constant occurrence of pressing and urgent matters, this file slipped through
the cracks. This is entirely my fault and was not the result of any conduct or
instruction by the Plaintiff.

6. The Plaintiff has never
instructed me to delay this matter intentionally, nor have I intentionally
delayed this matter. Rather, the Plaintiff has instructed me to press forward
with the matter to clear her name and seek redress for the wrongs done to her.

[36]        
I conclude that the delay encountered in this action is inordinate and
that to some extent the delay is inexcusable at least insofar as the delay is
attributable to plaintiff’s counsel. However, whether responsibility for
counsel’s delay should be borne by the plaintiff is a factor to be considered
in the fourth part of the test, that being whether the balance of justice
requires that the action be dismissed.

[37]        
The third part of the test is whether the delay caused serious prejudice
or is likely to have caused serious prejudice to the defendants. It is
inevitable that the accuracy of the memories of all the witnesses who might
testify at the trial of this action are bound to have diminished given the
delay in having this trial proceed. Such a delay appears consistently to thwart
to some extent an individual’s recollection.

[38]        
However, the evidence filed in connection with these various
applications indicates that many of the witnesses provided written statements contemporaneously
or soon after the events which led eventually to the plaintiff’s claim. I
anticipate these will assist the witnesses to recall if necessary the events
surrounding this incident of so many years ago.

[39]        
The defence submits that specific prejudice to the defendants arises as
a result of John Gould’s deteriorating medical condition. Since the January 31,
2000 incident, Mr. Gould, a peace officer with ICBC, who was largely
responsible for ICBC’s investigation of the plaintiff, suffered a head injury
from a motor cycle accident in July 2006, and has also been treated for cancer.
Both the injury and the medication used to treat the cancer appear to have
diminished Mr. Gould’s recollection of at least some parts of his investigation.
He describes his memory in July 2011 as being mildly, but noticeably impaired.

[40]        
I accept that while Mr. Gould’s recollection of his involvement in the
circumstances of this claim has diminished as a result of time, the head injury
and his lymphatic cancer, I do not understand from his affidavits that he is
completely unable to recall the events surrounding his investigation of the
plaintiff which led him to recommend that she be charged with criminal fraud.
The defence asserts that the plaintiff’s failure to take any steps in this
action for over four years has seriously compromised Mr. Gould’s ability to
give evidence contradicting the plaintiff’s allegations.

[41]        
However, there are written records of Mr. Gould’s involvement in the
investigation of the plaintiff’s claim which I presume will assist his
recollection of the events germane to this action. Further, the plaintiff’s
former counsel conducted an examination for discovery of Mr. Gould at New
Westminster on April 26, 2004, and the 102-page transcript is available for Mr.
Gould to review in preparing for trial.

[42]        
While I accept that the defendants have suffered some prejudice as a
result of the delay in pursuing the plaintiff’s action, I am unable to conclude
given the extensive documentation accumulated by ICBC as well as by Mr. Gould
during his investigation that the defendants have suffered serious prejudice as
a result of the plaintiff’s delay.

[43]        
Even if I were to conclude that the defendants had suffered serious
prejudice as a result of the plaintiff’s delay, such a finding would not
necessarily result in the dismissal of the plaintiff’s action. In Irving Seaton
J.A. wrote at para. 22:

[22] The demonstration of
inordinate delay, inexcusable delay and serious prejudice does not lead necessarily
to dismissal. Those three factors are only the primary considerations; all of
the circumstances must be considered. It is still for the courts to decide
“whether or not on balance justice demands that the action should be
dismissed”. Salmon L.J. in Allen v. Sir Alfred McAlpine & Sons Ltd.
[1968] 2 Q.B. 229. All of the statements of law are subject to the overriding
principle that essential justice must be done. (See Freedman J.A., as he then
was, in Ross and Ross v. Crown Fuel Co. Ltd. et al (1962) 41 W.W.R. 65
at 88).

[44]        
In the instant case, I conclude that there was inordinate delay, that
there was inexcusable delay on the part of plaintiff’s counsel, and some
prejudice, but not serious prejudice, suffered by the defendants, and that such
prejudice as exists is reduced by the records so carefully maintained by ICBC
and its employees.

[45]        
Given all the circumstances, including the need to ensure that justice
is attained and exercising the discretion afforded me, I conclude that the
plaintiff ought to have the opportunity to advance her claim in a trial. I
dismiss the defendants’ application that the plaintiff’s action be dismissed
for want of prosecution.

Costs

[46]        
Counsel have the opportunity to address the question of costs. The
plaintiff will have 21 days from the filing of this judgment to deliver written
submissions to the Court and defence counsel with respect to costs on the three
applications. The defence will have 14 days thereafter to respond to the
plaintiff’s submission with the plaintiff having seven days thereafter to reply
to the defendants’ submissions.

“R.M. Blair J.”

BLAIR J.