The Behaviour of Defendants May Significantly Influence Whether the Alberta Court of Appeal Dismisses an Action for Delay

By Cassandra Paterson, Student at the Faculty of Law, University of Alberta

In three recent decisions, the Alberta Court of Appeal (the “ABCA”) paid close attention to the defendants’ behaviour when deciding whether to dismiss a claim or action for delay under Rules 4.31 and 4.33 of the Alberta Rules of Court. Rules 4.31 and 4.33 are relevant when a delay has occurred in an action without the parties’ agreement.

Rule 4.31(1)(a) permits the Court to dismiss all or any part of a claim on application if the Court determines that a delay has occurred in an action resulting in significant prejudice to a party. Rule 4.31(1)(b) provides that the Court may make a procedural order or any other order provided for by the Rules of Court if a delay occurs in an action. According to Rule 4.31(2), a delay is presumed to have caused significant prejudice to the party bringing the application for delay if there has been an inordinate and inexcusable delay. Rule 4.31(3) requires the Court to consider whether the party that brought the application to dismiss all or any part of a claim contributed to the delay.

Rule 4.33 is often called the “Drop Dead Rule” since it is more of a bright-line rule than Rule 4.31. Rule 4.33(2) permits the Court to dismiss an action if three or more years have passed without a significant advance in an action, subject to narrow exceptions. Rules 4.31 and 4.33 uphold the principle that it is the plaintiff’s duty to progress the action toward trial. However, Rule 4.31(3) requires the Court to consider whether the defendant contributed to the delay to such an extent that the claim should not be dismissed. Considerations of access to justice arise from the ABCA’s interpretation of Rules 4.31 and 4.33 since it involves balancing the resolution of a claim on its merits with preserving the efficiency of the court system.

Nova Pole International Inc. v Permasteel Construction Ltd., 2020 ABCA 45

A dispute arose between Nova Pole International Inc. (“Nova”) and Permasteel Construction Ltd. (“Permasteel”) regarding a contract to build a facility for the manufacture of steel poles. Nova commenced two actions against Permasteel for breach of contract. However, Nova took over a decade to bring the actions to trial.

The ABCA overturned the Chambers Judge’s decision that found prejudice could be presumed according to Rule 4.31(2). In assessing the defendant’s role in the delay, the ABCA found that Permasteel agreed to continue questioning Nova Pole’s witness only after Nova delivered its expert report.1 The ABCA found that Nova’s delay in obtaining an expert on damages and finalizing the report was the major contributing factor to the delay of the actions. However, the court held that “all parties bear some responsibility in failing to move these actions forward.”2 Further, the ABCA cited Transamerica Life Canada v Oakwood Associates Advisory Group Ltd (“Transamerica”), in which the court stated, “It is correct to say that the plaintiff has the primary obligation in moving the litigation forward. The Rules of Court give the plaintiff many tools to ensure that happens. It does not follow, however, that a defendant has no obligation with respect to the pace of litigation.”3

The matter was not ready for trial in 2016 when the expert report was provided partially because Permasteel would not complete its questioning until it received an expert report, although the Rules of Court did not require this.4 Consequently, the ABCA concluded that both parties were responsible for the delay and that Nova’s delay was excusable.

Considering the ABCA’s decision, it is wise for defendants to ensure they behave well throughout the litigation process to have a chance at dismissing an action for delay. After all, the ABCA admitted that the plaintiff, Nova, was a “major” contributor to the delay but still refused to dismiss the claim for delay, given Permasteel’s behaviour.

LDS v SCA, 2021 ABCA 59

LDS brought an action in which she alleged SCA, who was previously in an intimate relationship with her, hacked her email account and forwarded her nude photographs to her new partner and posted them on pornographic websites. The defendant, SCA, applied to have the action dismissed for delay under Rules 4.31 and 4.33.

An Anton Pillar Order was granted without notice which authorized the seizure of SCA’s electronic devices by an Independent Supervising Solicitor (ISS) and the review of those devices by an IT professional.5 The ISS had significant difficulty examining SCA’s electronic devices due to the volume of data and the multiplicity of electronic devices and online accounts.6 The difficulty in searching the devices was exacerbated by SCA’s conduct, which included misleading the ISS.7

The case management judge held that the action could not be dismissed for delay because it could not be properly litigated without a detailed forensic analysis of SCA’s electronic devices. Further, the case management judge held that the steps taken to retrieve and analyze the data constituted significant advances in the action.8 The ABCA upheld the case management judge’s findings. The ABCA determined that Rule 4.33 did not mandate dismissal of the action and upheld the “flexible and contextual analysis” of the case management judge in deciding what constitutes a significant advance in the action.9

The ABCA also upheld the case management judge’s finding that there was no inordinate delay according to Rule 4.31(2) and that SCA did not suffer significant prejudice under Rule 4.31(1).10 Notably, the ABCA upheld the case management judge’s finding that “In light of these circumstances, it would not be just and equitable to find that the delay complained of by the Defendant is inordinate.”11 Further, the ABCA referenced Transamerica, which explained that whether a delay is inordinate “is to be determined in light of all the circumstances of a particular case.”12 The ABCA dismissed the appeal since dismissing the action for delay could not be supported according to Rule 4.31 or 4.33.

The Alberta Court of Appeal’s Interpretation of Rules 4.31 and 4.33 Impacts Access to Justice

The ABCA’s close attention to the defendant’s conduct when applying Rule 4.31 and a flexible interpretation of what qualifies as a significant advance in the action under Rule 4.33 may lead to more appeals due to uncertainty about when claims can be dismissed for delay. This uncertainty may lead to increased strain on judicial resources, which Rules 4.31 and 4.33 were intended to avoid.13 For example, the interpretation of what constitutes a significant advance in an action under Rule 4.33 (the “Drop Dead Rule”) by Alberta courts has led to more Drop Dead applications taking significantly longer to achieve final resolution and significantly more Drop Dead applications being appealed. This outcome contradicts the goals of Rules 4.31 and 4.33 to avoid delay in resolution and provide greater predictability.14

The ABCA’s interpretation of Rules 4.31 and 4.33 raises the question of how much weight should be given to a defendant’s behaviour in dismissing an action for delay. On the one hand, it is fundamentally the plaintiff’s duty to progress the action toward trial since they are the party who started the action. Placing significant emphasis on the defendant’s conduct and failing to dismiss for delay when the defendant played only a minor role in the delay may defeat the purpose of Rule 4.31. After all, Rule 4.31 was created to increase the efficiency of the legal system and avoid subjecting defendants to unnecessary legal fees. Wait times to access the courts risk increasing for parties who are motivated to resolve their matters efficiently if defendants cannot dismiss an action for delay. This increase in wait times may arise if cases involving plaintiffs who have hardly made an effort to progress their claim take judicial resources away from parties who are dedicated to efficiently resolving their claims. Wait times inherently raise access to justice concerns by inhibiting parties from having a timely resolution of their matters.

At the same time, plaintiffs’ access to justice would be impeded if their claims were dismissed when the defendant played a significant role in the delay. Permitting claims to be dismissed due to any delay by the plaintiff would prevent those who have suffered loss from reaching a fair decision on the merits. It is already stressful for a plaintiff to start a lawsuit, given the expense of hiring a lawyer and the fact that many people do not understand the legal system.

Evidently, a difficult decision must be made in each delay application regarding whether it is worth sacrificing the decision of a case on its merits to ensure an efficient and accessible court system. There is likely no clear answer for when courts should certainly dismiss claims for delay under Rule 4.31 and what constitutes a “significant advance in the action” under Rule 4.33. However, courts may reduce the amount of litigation and appeals arising from delay claims by applying the Rules more strictly unless there are equitable concerns in situations similar to LDS v SCA.

  1. Nova Pole international Inc. v Permasteel Construction Ltd., 2020 ABCA 45 at para 9. ↩︎
  2. Ibid at para 39. ↩︎
  3. Ibid at para 26 citing Transamerica Life Canada v Oakwood Associates Advisory Group Ltd, 2019 ABCA 276. ↩︎
  4. Ibid at para 39. ↩︎
  5. LDS v SCA, 2020 ABQB 586 at para 3. ↩︎
  6. Ibid at para 19. ↩︎
  7. Ibid. ↩︎
  8. Ibid at para 13. ↩︎
  9. Ibid at para 12. ↩︎
  10. Ibid at para 20. ↩︎
  11. Ibid at para 19. ↩︎
  12. Ibid at para 18 citing Transamerica Life Canada v Oakwood Associates Advisory Group Ltd, 2019 ABCA 276. ↩︎
  13. Melissa Morrow & McKay White, “Drop Dead or a Slow Death? An Analysis of Rule 4.33 of the Alberta Rules of Court” (2020) 57:4 Alta L Rev 957 at 958. ↩︎
  14. Ibid. ↩︎

The views expressed in these blogs do not necessarily reflect the views of the Faculty of Law at the University of Manitoba and should not be construed as legal advice or endorsement.

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