IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20150128

Docket: S112600

Registry: Vancouver

Between:

Leelavathi Reddy
also known as Leela Reddy

Plaintiff

And

Element Fleet
Management Inc.

Defendant

–
and –

Docket: S121941

Registry: Vancouver

Between:

Russ Reddy also
known as Purushotham Reddy

Plaintiff

And

Accurate Effective
Bailiffs Ltd.,

Element Fleet
Management Inc., Does 1-10

Defendants

Before:
The Honourable Madam Justice Fleming

Oral Reasons for Judgment

In
Chambers

Introduction

[1]            
THE COURT: The plaintiffs, Leelavathi Reddy and Russ Reddy, are
husband and wife with separate civil claims against the defendant, Element
Fleet Management Inc. (“Element”). Element applies for orders dismissing the
claims of Mr. and Mrs. Reddy pursuant to Rule 22‑7 alleging non‑compliance
with the Supreme Court Civil Rules and orders made in each proceeding. The
defendants also seek special costs for its applications.

[2]            
The applications were heard together and in the interests of efficiency
I am providing one set of reasons, although I have considered them separately in
coming to my decisions.

Background

[3]            
In each of the applications the defendants rely on the affidavit
evidence of legal assistants Erin O’Connor and Camille DesLauriers, which
provide highly detailed accounts of the procedural history in both proceedings.
I accept that evidence.

History of Mr. Reddy’s Claim

[4]            
Turning first to the application against Mr. Reddy. The procedural
history is as follows: on March 22, 2010, Mr. Reddy filed a notice of civil
claim for damages against the applicant and Accurate Effective Bailiffs Ltd. (“Accurate”)
alleging he was assaulted and injured by employees of Accurate when they came
onto his property in an attempt to locate and/or repossess a Porsche that was
subject to an action brought by his son, Sal Reddy (“Sal”), against the
applicant regarding a lease agreement.

[5]            
During the course of that proceeding Sal was found in contempt of court
on two occasions in August 2012, and a warrant for his arrest was ordered. On
September 6, 2012, the court ordered his action dismissed.

[6]            
In his notice of civil claim Mr. Reddy provides suite 113 ‑ 8623
Granville Street as his address for service, as does Mrs. Reddy in her action,
which is an UPS office.

[7]            
Accurate was never served with Mr. Reddy’s claim. The applicant filed a
response on April 5, 2012, and in May 2012 Mr. Reddy served a blank list of
documents and requested production of the defendant’s list of documents. He
made a further request on or about June 6, 2012, for document production but
since then has not communicated with the applicant at all. His address for
service has remained unchanged.

[8]            
Together the plaintiffs also own a home located in Richmond which the
applicant understands to be their residence.

[9]            
In May 2013 applicant’s counsel wrote to the plaintiff advising him that
she wished to schedule a case planning conference and inviting him to provide
his available dates. The letter was sent to Mr. Reddy by regular mail at his
address for service and his home address. No response was received. The
applicant then scheduled a case planning conference for July 17, 2013. The
applicant served Mr. Reddy with a case planning proposal. The letter
accompanying the proposal informed Mr. Reddy that Rule 5‑1(5) required
him to file a case plan proposal within 14 days. He signed for the letter and
the proposal when served by registered mail at his home in Richmond. He did not
attend the case planning conference.

[10]        
However, an order was made in his absence requiring him to provide a
list of documents by September 3, 2013, granting liberty to the defendant to
schedule an examination for discovery in the event he did not respond, which
was required to be completed by October 1, 2013, and requiring completion of
the examination for discovery of the defendant’s representative by that same
date.

[11]        
The parties were also ordered to attend a settlement conference by
November 1, 2013,

[12]        
Unentered and entered copies of the case plan order were served on Mr. Reddy
at his address for service and the Richmond address. The entered order was
returned with a note that the plaintiff no longer used the address for service.
No other address for service has ever been provided by Mr. Reddy.

[13]        
On October 26, 2013, applicant’s counsel served its list of documents on
Mr. Reddy and proposed dates for his examination for discovery. The
applicant scheduled an examination for discovery of Mr. Reddy for September 19,
2013. The appointment was sent by registered mail to his home address and
delivered by a courier who dropped it in the mail slot. The appointment was set
under cover of letter that notified the plaintiff if he did not attend the
examination for discovery his action may be dismissed pursuant to Rule 22‑7(5)(a).
The plaintiff did not attend.

[14]        
The applicant then scheduled a settlement conference for October 24,
2013. Again Mr. Reddy was advised by registered mail sent to his home. The
letter was also delivered by a courier who dropped it into the mail slot. He
did not attend.

[15]        
Counsel for the applicant subsequently became aware that required
witness fees had not been paid to Mr. Reddy for his attendance at the scheduled
discovery. Consequently the applicant sent him a second appointment for
examination for discovery on May 23, 2014, requiring him to attend on June 9,
2014, along with a cheque for the required witness fees. He was asked to notify
counsel if he was unavailable. He did not respond or attend.

History of Ms. Reddy’s Claim

[16]        
With respect to Mrs. Reddy’s claim, the procedural history is as follows.
She signed a lease agreement with the applicant on or about July 26, 2001, for
a 1991 Range Rover. Mrs. Reddy filed a notice of civil claim on April 19, 2011,
setting out very similar allegations against the applicant that were claimed by
Sal Reddy in his action. She alleged fraudulent and negligent misrepresentation
as well as breach of contract against the applicant and sought rescission of the
lease and the return of all funds paid to the applicant. At bottom she alleged
as her son Sal had done that she understood she had bought the vehicle and not
leased it.

[17]        
On May 27, 2011, the applicant filed its response to civil claim. On or
about June 23, 2011, Mrs. Reddy sent an e‑mail to applicant’s counsel
from a Yahoo address and advised he could contact her at that e‑mail
address. She also confirmed her address for service was as set out above at the
UPS office. Just as Mr. Reddy had done Mrs. Reddy then served a blank list of
documents and requested the applicant’s list on April 5, 2012.

[18]        
On June 7, 2012, she again requested production of the applicant’s list
of documents. On June 15, 2012, counsel for the applicant wrote to Mrs. Reddy
expressing concern about the blank list of documents and advised her he wished
to schedule a case planning conference. He proposed dates but received no
response. That letter was sent to the e‑mail address provided by Mrs.
Reddy and to her address for service by regular mail. Applicant’s counsel also
sent two follow-up letters. She then scheduled the case planning conference for
September 12, 2012. The applicant notified her of the date and time by e‑mail
and regular mail with an enclosed filed notice of case planning conference and
informed the plaintiff of the rule requirements regarding case plan proposals,
also providing her with a blank form 20.

[19]        
Again she was notified by e‑mail and regular mail. Mrs. Reddy did
not attend. The conference proceeded and the court granted orders requiring the
exchange of lists of documents by October 31, 2012, examination for discovery
to take place by July 31, 2013, and a settlement conference by March 15, 2013.

[20]        
Mrs. Reddy was served with both unfiled and filed copies of the case
plan order as directed by using four methods: e‑mailing the order to two
e‑mail addresses the applicant had previously used to correspond with
Mrs. Reddy and Sal Reddy and the e‑mail address I have referred to above,
as well as sending the order by regular mail to the address for service and her
residence in Richmond. A cover letter required she contact counsel.

[21]        
On October 7, 2013, the applicant’s counsel wrote to her again enclosing
the applicant’s list of documents and canvassing dates for her examination for
discovery. In the absence of a response counsel scheduled the date for November
20, 2013. The appointment was served by regular mail to her address for service
and the Richmond home. The cover letter advised Mrs. Reddy that if she did not
attend the examination for discovery, her action may be dismissed pursuant to
Rules 22‑7(5)(a) and (f). A letter and appointment again were sent
by e‑mail and regular mail to her address for service and her home
address. She did not respond to the appointment or attend.

[22]        
Again, the applicant’s counsel became aware required witness fees had
not been paid for her attendance and consequently a second appointment was also
served on her for examination for discovery on May 23, 2014, requiring her to
attend on June 9, 2014. The appointment was served on both the address for
service and the home in Richmond with the cheque for witness fees being sent to
the Richmond address. Again Mrs. Reddy did not attend or respond.

[23]        
The letter accompanying the appointment incorrectly identified the date
of discovery as June 13, 2014. The court reporter’s offices advised that Mrs.
Reddy did not attend on that day either.

Procedural History of the Current Application

[24]        
On January 7, 2014, the applicant’s counsel served the plaintiffs with
the respective notices of application and affidavit material for this
application by registered mail to their address for service and under cover of
letter enclosing a copy of the text of Rule 8‑1. To date Canada Post has
not returned the materials as undeliverable. That same day applicant’s counsel
wrote a second letter to each plaintiff by registered mail to the Richmond
address advising them of the notices of application and their delivery to the
address for service.

[25]        
In addition the second letter was sent to Mrs. Reddy at the Yahoo e‑mail
address she had provided, also on January 7, 2014. On January 16, 2015,
applicant’s counsel received an e‑mail from that same e‑mail
address attaching a letter to counsel and asking that it be provided to the
court in the event the application proceeded. A redacted version of the letter
was provided to the court which bears the heading "Settlement
privilege."

[26]        
The letter purports to be sent by Nash Reddy, who identifies himself as
the son of Mr. and Mrs. Reddy and the brother of Sal (“Nash”). He advises
counsel’s e‑mail regarding the applications came to his attention on
January 14, 2015. He confirms he has communicated its contents to his parents
and they are aware of the hearing on January 27, 2015. He also advises the
letter was prepared with legal assistance, although his parents remain self‑represented.

[27]        
Nash goes on to write that his parents are in India and will not be
returning until early April. He states that since 2012 they have been spending
most of their time there, seldom visiting Canada. He refers then to Mr. Reddy
being diagnosed with cancer in the last few years and the illness having
progressed to stage four. He cites this as the reason why his parents spend
most of their time in India with his father’s family.

[28]        
Nash then states as follows:

We note further in Leelavathi
Reddy’s action the steps you have taken since June 15, 2012, (paragraph 18 and
onward of your notice of application) including the case planning conference
and the examination for discovery are carried with the knowledge that the
plaintiff is either not receiving or not responding to your communications. It
is our position that the costs you have incurred for those steps are not
attributable to the plaintiff as the proper step to take would have been to
seek the court’s direction at that time before taking any further steps. It is
particularly unreasonable to book an examination for discovery and incur the
costs thereof while you have clear indication that the plaintiff is either not
receiving or not responding to your communications. We note the same with
respect to the Russ Reddy action.

[29]        
Nash asks that the applicant reschedule the applications to a date in
April so the plaintiffs will have the opportunity to attend. He also requests
that further communications be directed to the same e‑mail address and
advises that he too is physically out of the country.

[30]        
In response, the applicant’s counsel sought the consent of the
plaintiffs to communicate with Nash about these proceedings through the same e‑mail
address. The plaintiffs did not respond nor did Nash.

[31]        
With respect to Nash’s assertions about his father’s health the
materials include an affidavit prepared by Mr. Reddy himself in Sal’s
proceedings sworn December 2, 2011. He deposes to the circumstances underlying
his own action, alleging that two men hired by the applicant came onto his
property and threatened to harm him and pushed him in an effort to find the
Porsche. Mr. Reddy describes himself as a 71 year old senior citizen diagnosed
with stage four prostate cancer. He also deposes to the Richmond address having
been his personal residence where Sal has lived with him for over 20 years. A
recent title search confirms that Mr. and Mrs. Reddy continue to own that
property.

Legal Framework

[32]        
Before further considering the defendant’s applications pursuant to Rule
22‑7, I want to make it clear that I accept the plaintiffs have been
properly served when required to be served and provided with all the written
communication referred to in the above chronology.

[33]        
Rule 4‑1 requires each party to a proceeding who is not
represented by counsel to have an accessible address for service. If there is a
change in address for service the party must file and serve a notice of address
for service in form 9. Neither plaintiff has done so in this case. Indeed
Nash’s letter does not allege his parents have not been properly notified or
served. It is clear from his letter that the notices of application and
affidavit material have been received because he discusses their contents.

[34]        
The applicant relies on Rules 22‑7(2) and (5) and (6) of the Supreme
Court Civil Rules which read in part as follows:

Powers of court

(2) Subject to subrules (3) and
(4), if there has been a failure to comply with these Supreme Court Civil
Rules, the court may

(a) set aside a proceeding, either
wholly or in part,

(d) dismiss the proceeding or
strike out the response to civil clam and pronounce judgment, or

(e) make any other orders it
considers will further the object of these Supreme Court Civil Rules..

Consequences of certain non-compliance

(5) Without limiting any other
power of the court under these Supreme Court Civil Rules, if a person, contrary
to these Supreme Court Civil Rules and without lawful excuse,

(a) refuses or neglects to obey a
subpoena or to attend at the time and place appointed for his or her
examination for discovery,

(c) refuses or neglects to produce
or permit to be inspected any document or other property,

(d) refuses or neglects to answer
interrogatories or to make discovery of documents, or

then

(f) if the person is the plaintiff
or petitioner … the court may dismiss the proceeding

Failure to comply with direction of court

(6)If a person, without lawful excuse, refuses or neglects
to comply with a direction of the court, the court may make an order under
subrule (5) (f) or (g).

[35]        
Justice Willcock in Breberin v. Santos, 2013 BCSC 560, sets out a
very helpful summary of the jurisprudence dealing with dismissal applications
pursuant to Rule 22‑7 at paragraphs 52 and following, which reads:

[52]      Several principles identified in the jurisprudence
describe and limit the appropriate application of Rule 22‑7.

[53]      The order sought by the defendants is not readily
granted. Dismissal is a "blunt tool, to be used sparingly" in
response to procedural delay: House of Sga’nisim v. Canada (Attorney
General), 2007 BCCA 483 (CanLII) at para. 28 [House of Sga’nisim]. The
remedy is a "draconian" one, "only to be invoked in the most
egregious of cases": Homer Estate v. Eurocopter S.A., 2003 BCCA 229
(CanLII) at para. 4. It is to be avoided where it is reasonable to do so: House
of Sga’nisim at para. 30.

[54]      Where failure to comply with the Rules or failure
to comply with the terms of a court order is established, the party at fault
bears the onus of proving a lawful excuse for the non‑compliance or non‑observance: 
Balaj v. Xiaogang, 2012 BCSC 231 (CanLII) at para. 36 [Balaj]; Eisele
v. B.A. Blacktop Ltd. et al, 2004 BCSC 521 (CanLII) at para. 15.

[55]      In this context, a "lawful excuse" is
"one which, in the discretion of the judge acting judicially, is worthy of
acceptance": United Furniture Warehouse LP v. 551148 B.C. Ltd.,
2007 BCSC 1252 (CanLII) at para. 24.

[56]      Because an action may be struck when the lack of
production has been occasioned by negligence, the degree of negligence required
should be more than moderate on a scale ranging from mere negligence to gross
negligence.

[57]      Fundamental failures, such as failure to make
appropriate disclosure of documents or records, must be treated as a serious
default.

[58]      A dismissal order will not usually be granted on a
first application for relief arising from procedural delay, even intentional
delay. Injustice might result from such a course of action.

[59]      A dismissal order will not usually be granted until
the plaintiff has been warned that result will follow upon further delay or
obstruction.

[60]      Lesser sanctions ought to be considered where any
are available and appropriate.

[61]      A self‑represented litigant cannot be held to
the same standards as a professional lawyer in terms of compliance with court
procedures and rules. That said, a litigant who chooses to represent him‑
or herself cannot ignore his or her responsibilities with impunity.

[62]      A persistent pattern of
delay on the part of the plaintiff, as well as a persistent failure to comply
with the Rules of Court and court orders, may result in a dismissal order. Defaults
must be seen in context. The plaintiff’s conduct of the claim from its
inception does have a bearing on the seriousness of the default before the
court.

[36]        
The principles enunciated by Justice Willcock include what has been
referred to as a two‑step process adopted in the case of Neeld v.
Pezamerica Resources Corp., [1985] B.C.J. No. 2356 (C.A.).Unless there are
unusual circumstances, the offending party is first put on notice by the court
that an order to strike will likely follow unless there is compliance by
dismissing the application to strike in the first instance and making certain
orders for compliance. Then, if there is still a lack of compliance, the other
party is at liberty to make a second application.

[37]        
Animating this two‑step process are the overlapping principles of
proportionality, second chance and alternate remedy. Clearly dismissal of the
action must be proportionate to the circumstances.

Analysis

[38]        
As Justice Fitzpatrick in Schwarzinger v. Bramwell, 2011 BCSC 304
observed considering proportionality inevitably leads to the question of
whether a lesser remedy would cure the default and inspire confidence that
court orders and the rules would be respected and followed in future (at para.
123). In this case no orders for compliance have ever been sought or made, and
certainly orders for compliance could be granted. Contempt proceedings could be
brought, although it seems almost certain the applicants would be unable to
effect personal service upon the plaintiffs.

[39]        
The applicant argues the circumstances here are unusual and make it
clear that no purpose would be served by imposing lesser sanctions and a
warning that dismissal will follow upon further delay or obstruction. The
plaintiffs’ non‑compliance with the rules in this case are multiple and
serious. Neither filed a case plan proposal nor attending the case planning
conferences as required by Rule 5‑2(2). Both have failed to comply with Rule
7‑1(1) by serving blank lists of documents only. Both have failed to
comply with Rule 7‑2(14) by failing to attend their respective second scheduled
examinations for discovery. In addition, both plaintiffs have failed to comply
with all aspects of the case planning orders made in their respective
proceedings. I note that both plaintiffs have been put on notice by the
applicant, with respect to discovery appointments in particular, that an order
for dismissal could be made in the event they did not attend or attempt to
reschedule.

[40]        
The court must consider the offending parties’ explanation for non‑compliance.
It is for the party to establish a lawful excuse for their non‑compliance.
Justice Fitzpatrick in Schwarzinger points out that a party who comes to
court apologizing and providing reasoning for their transgression is more
likely to be given another chance. A party who continues to deny their
transgression must necessarily raise in the court’s mind the question of
whether that party is likely to simply continue their conduct into the future.

[41]        
In this case, unlike the other authorities I have been asked to consider,
the plaintiffs have provided no explanation for their failure to comply. Their
non‑compliance is not acknowledged at all nor do they provide any
assurances they will comply in the future. In his letter Nash refers to his
father’s ill health as an explanation for their absence only, which in turn
forms the basis for their request to adjourn the hearing of the dismissal
applications. He asks only they be given an opportunity to attend that hearing.
He states the letter was prepared with legal advice, which is of some
significance to me. In any event I note that in Neeld medical evidence
was tendered to explain non‑attendance at a discovery. Here we have,
apart from the assertions of Nash, no evidence other than the prior affidavit
of Mr. Reddy and no communication at all from the plaintiffs themselves.

[42]        
In my view given the ongoing nature of the plaintiff’s non‑compliance
and the absence of any effort or a proposal to remedy that non‑compliance,
orders to strike the claims sought by the applicant are reasonable, despite the
absence of a prior application for dismissal. I am concerned that refusing the
applicant’s application or adjourning it will simply send a message to these
plaintiffs and litigants generally that parties may disregard court orders and
their obligations under the Rules as they wish. The nature of the plaintiffs’
non‑compliance here is serious, repeated and entirely unacknowledged. I also
have little confidence that adjourning the application will change the course
of the plaintiffs’ conduct or that they will actually attend any further
hearing date given the history of the proceedings to date, the content of the
letter prepared by Nash and their failure to respond to the applicant’s request
for their consent to communicate with him. Accordingly, I grant both
applications to dismiss the plaintiffs’ claims pursuant to Rule 22‑7.

[43]        
And then, counsel, what were the subparagraphs?

[44]        
MS. McGOLDRICK: 2, 5 and 6.

[45]        
THE COURT: All right. The actual power of the court is found in subsection
(2).

[46]        
MS. McGOLDRICK: Oh, yes.

[47]        
THE COURT: And subparagraph (d), is it?

[48]        
MS. McGOLDRICK: I believe it is (5)(f), subparagraph (5)(f).

[49]        
THE COURT: Yes. Subsection (5), paragraph (f).

Costs

[50]        
The applicant also seeks special costs for these applications and costs
at Scale B for the rest of the proceeding. Costs awards are discretionary but
the general rule is that costs should follow the event. Special costs are
awarded in exceptional circumstances to chastise or punish a party’s litigation
conduct and encompass an element of deterrence.

[51]        
The authority to award costs is found in the inherent jurisdiction of
the court and in Rule 14‑1 of the Supreme Court Civil Rules. The
Court of Appeal’s decision in Garcia v. Crestbrook (1994), 9 B.C.L.R.
(3d) 242 (C.A.) remains the leading authority on special costs. There
reprehensible conduct was established as the single standard for awarding
special costs.

[52]        
In Westsea Construction Ltd. v. Veale, 2013 BCSC 1657 Justice
Gropper canvassed the jurisprudence on special costs since Garcia and
provided a helpful distillation of the key principles at para. 73, which are:

a)    the court must
exercise restraint in awarding special costs;

b)     the party
seeking special costs must demonstrate exceptional circumstances to justify a
special costs order;

c)     simply
because the legal concept of “reprehensibility” captures different kinds of
misconduct does not mean that all forms of misconduct are encompassed by this
term;

d)    reprehensibility
will likely be found in circumstances where there is evidence of improper
motive, abuse of the court’s process, misleading the court and persistent
breaches of the rules of professional conduct and the Rules of Court
that prejudice the applicant;

e)    special costs
can be awarded against parties and non‑parties alike; and

f)      the
successful litigant is entitled to costs in accordance with the general rule
that costs follow the event. Special costs are not awarded to a successful part
as a “bonus” or further compensation for that success.

[53]        
With respect to litigation conduct, special costs may be awarded where
the court finds the party has not conducted him or herself in accordance with
the Rules of Court and has failed to comply with orders of the court. On
these grounds the applicant argues the conduct of both plaintiffs has been
reprehensible. It is not always the case that the court will order special
costs when an order dismissing the claim is granted for non‑compliance. The
applicant here points to the special costs order made with respect to Sal when
his claim was dismissed. However, Sal had been found in contempt twice prior to
that order being made.

[54]        
In Nash’s letter he essentially chastises the applicant for incurring
considerable expense in attempting to move both actions forward in the absence
of any response from the plaintiffs. This position reflects a troubling view of
the roles of the plaintiffs’ in these proceedings. He fails to acknowledge the
applications to dismiss the actions were only necessary because of the
plaintiffs’ non‑compliance.

[55]        
The focus in determining whether special costs should be ordered here is
not the cost to the applicant throughout the course of the proceeding but the
conduct of the plaintiffs giving rise to the applications.

[56]        
Given the ongoing and serious non‑compliance of the plaintiffs
with the Rules as found above, their failure to comply with any aspect of the
respective case planning orders, and their absolute lack of response to all
written communication from the applicant until Nash’s letter (which fails to
acknowledge their non‑compliance or provide a proposal for future
compliance), I find their conduct reprehensible and worthy of the court’s
rebuke.

[57]        
The applicant therefore shall have special costs for these applications.
The balance of their costs shall be assessed at Scale B.

[58]        
The applicant seeks further orders relating to the styles of cause in
these proceedings. So then we get to your draft orders. Based on the evidence
set out in the recent land title searches, what I think is best is to amend the
style of cause in the Russ Reddy proceedings so that his name appears as Russ
Reddy also known as Purushotham Reddy. Then in Mrs. Reddy’s proceeding the
style of cause will be amended so that her name appears as Leelavathi Reddy
also known as Leela Reddy and then I will grant the order you seek with respect
to your client’s change of name and I will allow you to seek entry of these
orders without approval from either plaintiff given their non-attendance.

“Fleming
J.”