In Charik Custom Homes Ltd. v Sara Development
Inc., Master Robertson of the Alberta Court of Queen's
Bench added another layer of interpretation to the
"drop-dead" rule. Specifically, the question posed to the
Court was whether a request made for time to defend a claim, and
agreed to by the plaintiff, can defeat an application to dismiss
for long delay under the "drop-dead" rule. The
"drop-dead" rule is found at 4.33(1):
4.33(1) If 3 or more years has passed without a significant
advance in an action, the Court, on application, must dismiss the
action as against the applicant, unless
the parties to the application
expressly agreed to the delay,
the action has been stayed or
adjourned by order, an order has extended the time for advancing
the action, or the delay is provided for in a litigation plan,
the applicant did not provide a
substantive response within 2 months after receiving a written
proposal by the respondent that the action not be advanced until
more than 3 years after the last significant advance in the action,
an application has been filed or
proceedings have been taken since the delay and the applicant has
participated in them for a purpose and to the extent that, in the
opinion of the Court, warrants the action continuing.
At the time of the application, the plaintiff's statement of
claim had been filed for more than three years without another
advance in the action. Shortly after service of the statement of
claim, the defendant's counsel advised the plaintiff's
counsel that he was acting on their behalf, and requested the usual
courtesy of not proceeding with default proceedings without
reasonable prior notice. The plaintiff's counsel agreed to this
request, however the claim then sat dormant for over three years.
Due to the delay, the defendants applied for dismissal of the claim
against them under Rule 4.33 of the Alberta Rules of
The plaintiff's counsel argued that the agreement between
counsel, namely not to proceed with default proceedings, amounted
to a "standstill" agreement, which would fulfill the
requirement under Rule 4.33(1)(a) that the parties expressly agreed
to the delay. This would serve to prohibit the dismissal of the
action for a delay longer than three years.
Master Robertson concluded that "when a Defendant or
Defendant's counsel asks for reasonable prior notice before the
Plaintiff takes default proceedings, and the Plaintiff agrees, then
there is no agreement that would bring into play rule
4.33(1)(a)"(para 29). To reach this conclusion, Master
Robertson analyzed previous case law, and determined that although
there were some conflicting decisions, the status of the law was
that the granting of the usual courtesy request for extra time,
without an undertaking to defend the claim, did not amount to a
standstill agreement. If there is no standstill agreement, there is
no avoidance of the "drop-dead" rule under Rule
There is however a difference when the defendant's counsel
has undertaken to defend. Master Robertson followed the Court of
Appeal decision Bugg v Beau Canada Exploration Ltd., 2006
ABCA 201, which emphasized that there is a difference between the
usual request for time, and an actual undertaking to defend,
communicated to opposing counsel; "Where the Defendant or
Defendant's counsel has undertaken to defend, either Rule
4.33(1)(a) is brought into play, or the Defendant cannot bring the
application to strike, having failed to do what he or she undertook
to do, or both" (para 34).
Therefore, if counsel has made an undertaking to defend, they
will be correspondingly unsuccessful in applying for the action to
be dismissed pursuant to Rule 4.33 if they never fulfilled their
obligation of defending the claim. Furthermore, it is important to
note that a notice of the intention to defend is not the same as an
undertaking to defend.
As more than three years had passed without the application of
any of the exclusionary rules within Rule 4.33, Master Robertson
allowed the defendant's application to dismiss the
plaintiff's action pursuant to the "drop-dead"
How Does it Apply?
Moving forward, do not rely upon the agreement between counsel
to not proceed with default proceedings to stop the clock on the
"drop-dead" rule. It is not sufficient to dismiss an
application to strike. If you are a plaintiff granting the courtesy
not to take default proceedings, consider requesting an undertaking
to defend that will preclude the defendant from later seeking a
dismissal of the action under Rule 4.33(1).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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