avr. 28. 2016

When a Court can tell your Action to Drop Dead: Summary Dismissal in Alberta

Ro-Dar Contracting Ltd. v Verbeek Sand & Gravel Inc., 2016 ABCA 123 (CanLII)

Keywords: summary dismissal; Rule 4.33; long delay; Alberta; significant advance

Summary:

This case is representative of the delays in the justice system. The Court of Appeal summarized it as follows:

This is a very simple lawsuit. It is a suit over a series of invoices. The plaintiffs were to crush gravel for $4.80 per tonne. There are no difficult issues of law. There is no question about the quality of the “crushing”. The main issue is how to calculate how many tonnes the plaintiff is entitled to be paid for, and how much gravel was crushed. The outcome of the action turns on simple questions of fact, which should not have taken eight years to resolve. (para. 31)

The respondents filed an application to dismiss the action for long delay under Rule 4.33. A Master dismissed that application, but on appeal the chambers judge allowed the application and dismissed the action. The Court of Appeal allowed the appeal and restored the action.

The central issue on appeal was whether “3 or more years passed without a significant advance in the action” requiring dismissal of the action under R. 4.33. The Court of Appeal found that the chambers judge took too strict a view of what constituted “a significant advance”. The fact the appellants provided information that helped both parties measure the claims was a significant advance in the action.

Importance:

Most jurisdictions provide for dismissal of a claim for delay. In recent years, to the dismay of some professional liability insurers, the law has developed make it easier to have an action dismissed. In Ontario we’ve seen the rise of Rule 48 administrative dismissals, in B.C. there has been a significant number of Rule 22-7(7) decisions, and in Alberta new Rules of Court came in force in 2010 introducing a 3-year drop dead rule (replacing the old 5-year rule).

In the present decision, the Alberta Court of Appeal taps the brakes on the trend towards greater access to dismissals. Faced with a “very simple lawsuit” over invoices that has been ongoing for eight years and a chambers judge’s assessment that there had been no significant advance in the action, the Court of Appeal restores the action.

The Court clarifies what constitutes a “significant advance”:

…A significant advance does not have to be so definitive that it would support an application for summary judgment. It is quite true that the casual and dilatory pace of this litigation continued even after the disclosure of this information. The drop dead rule does not, however, require continuous and unbroken advancement of the action, only that there be a substantial advance at one point during the 3 year period. The dilatory pace of this litigation is not to be commended, but an application to strike for persistent delay is more properly brought under R. 4.31, which requires proof of prejudice, than under the drop dead R. 4.33. (para. 28)

The Court confirmed that Alberta’s drop dead rule requires a functional approach that doesn’t overemphasize formalistic steps that might have been taken. In other words, don’t focus exclusively on the outcome of particular steps but rather look at the whole picture of what transpired during the period at issue. That being said, the Court took a hard look at a particular step in this case, namely the transfer of documents on a particular date.

To conclude its decision, the Court ordered the matter should be set down for trial without further delay. Parties should expect where a court refuses an application to dismiss an action for delay, it will make a procedural order to move the matter along. The Court stated it is “seldom appropriate” to refuse an application to dismiss without making a procedural order. This could include “the imposition of a schedule or deadlines, provisions to remedy any prejudice, and often a requirement that the plaintiff post security for costs” (para. 18).