Canada: Procedure; Alberta Rules of Court; "Drop Dead" Rule

Last Updated: November 13 2017
Article by Field LLP

Ursa Ventures Ltd. v. Edmonton (City), 2016 ABCA 135

Areas of Law: Procedure; Alberta Rules of Court; "Drop Dead" Rule

~A mandatory step under the Rules does not always significantly advance an action for the purposes of R. 4.33~

BACKGROUND

The Respondent, Ursa Ventures Ltd., sued the Appellant City of Edmonton for damages relating to a contract to provide electrical components. The Statement of Claim and Statement of Defence were both filed in November of 2010. The Respondent was granted several extensions of time for filing its affidavit of records. A final deadline of December 12, 2011 passed without the affidavit. The parties corresponded in late December 2011, and in February 2012 counsel for the Respondent confirmed that he would still be conducting the file. Then a year and a half went by without any correspondence or steps being taken. On October 31, 2013, within three years from the filing of the Statement of Defence, the Respondent served the affidavit. On February 12, 2014, the Appellant stated that it intended to apply under R. 4.33 to have the action dismissed for long delay. The Appellant continued to press the Respondent for documents. On October 28, 2014, the Appellant informed the Respondent that one of its representatives would be attending at Respondent's counsel's office to inspect records. Respondent's counsel advised that he would be away, and inspection could not take place. The parties did not undertake any subsequent inspection of records, nor did the Appellant file its affidavit of records. The chambers judge noted that neither party had delivered its affidavit of records in accordance with the time limits in the Rules. He indicated that there had been a "sea change" in the law regarding delay in civil litigation, and he noted that there was no doubt the Respondent's affidavit of records had been served within three years of filing the Statement of Claim. The judge framed the question as being whether, using a purposive approach, the filing of the affidavit significantly advanced the action. He found that it did and dismissed the application to have the action dismissed.

APPELLATE DECISION

The appeal was dismissed. The majority considered that two issues were raised on appeal: whether a mandatory step under the Rules, such as providing an affidavit of records, always significantly advances the action; and whether the chambers judge erred in finding that the Respondent's affidavit of records significantly advanced the action. The majority noted that R. 4.33 operates like a limitation period. A dormant action can be saved by something that significantly advances it in the 35th month, regardless of how much delay there has been up to that point. The majority noted that under the old Rules, the test was whether three years had elapsed since "the last thing done to significantly advance" the action, whereas under the new Rules, it is whether three years have passed "without a significant advance" in the action. By removing the reference to things, the Legislature shifted the focus of R. 4.33 to function and substance, rather than whether an act fit into a specific category. A mandated step will advance the action, and in many instances will significantly advance it, but not every mandated step will meet the functional test. The chambers judge was correct when he concluded that a mandatory step under the Rules does not always significantly advance an action, for the purposes of R. 4.33. The first ground of the appeal was dismissed. On the second ground, the majority found that even if all the documents listed in the affidavit were already in the Appellant's possession, the chambers judge's conclusion that it significantly advanced the action was reasonable because the affidavit alerted the Appellant to the existence and nature of the Respondent's records. When one party includes some of the other party's documents in its affidavit, it essentially admits their authenticity. The chambers judge weighed several factors in reaching his conclusion with respect to the affidavit, and is entitled to appellate deference.

Mr. Justice Wakeling dissented. He considered the pertinent question when considering R. 4.33 to be how much progress a reasonably diligent plaintiff would make in the applicable time frame. He took the position that a reasonably diligent plaintiff with a straightforward commercial action like the Respondent's would have likely set a trial date within the three-year period and most certainly would have filed a form 37 request for a trial date. He would have allowed the appeal and dismissed the Respondent's claim.

Click here to access the judgement.

Originally published by OnPoint Legal Research | Take Five

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