Canada: The Danger Of Delays: Alberta Court Strikes Lingering Lawsuit

The Court of Queen's Bench of Alberta (Court) in Altex International Heat Exchanger Ltd. v Foster Wheeler Limited (Foster Wheeler Limited) recently reaffirmed that it will carefully scrutinize lingering actions. In Foster Wheeler Limited, the Court dismissed an almost 18-year-old action for delay.

Blakes successfully represented Foster Wheeler Limited (Foster Wheeler) in this matter.

BACKGROUND

The plaintiff brought a claim against Foster Wheeler in 2000. In 2006, a pre-trial conference was held and the Court set procedural deadlines. The plaintiff did not meet the deadlines and the action went dormant for four years. In 2010, the plaintiff applied to have the matter set for trial, but a date was not set as a number of pre-trial steps remained outstanding. Foster Wheeler applied to dismiss the action for delay in 2012. The Court denied the action, but issued a stern warning to the plaintiff to expedite the action. In 2013, Foster Wheeler sought answers to outstanding undertakings given by the plaintiff in 2010. It took the plaintiff until 2016 to provide answers to the undertakings and a supplemental affidavit of records mere days before the three-year "drop dead" date. In October 2017, Foster Wheeler applied to have the action dismissed for delay pursuant to Rules 4.31 and 4.33 of the Alberta Rules of Court.

DECISION

The Court granted Foster Wheeler's application and dismissed the plaintiff's action for delay pursuant to Rules 4.31 and 4.33. Pursuant to Rule 4.31, the Court found the delay to be inordinate and inexcusable and stated that Foster Wheeler had experienced significant prejudice. The Court also found that the plaintiff had not significantly advanced the action in three years and therefore triggered rule 4.33, the "drop dead" rule. The Court provided a helpful summary of the law of dismissal for delay and reinforced the Alberta judiciary's intolerance for actions that needlessly linger in the courts.

Rule 4.31

The Court reiterated that plaintiffs have the responsibility to move actions towards trial. Inordinate delay is established when there is a shortfall between the action's current point and the point at which it should reasonably be. The burden is on the plaintiff to justify any inordinate delay. In this case, the Court found that after 17 years, this action should have advanced well past trial. The Court rejected the plaintiff's assertion of difficulty locating witnesses and noted that it failed to provide any credible excuse for allowing the action to fall into a second period of dormancy. The Court also rejected the plaintiff's assertion that Foster Wheeler declined to seek a procedural order setting deadlines, and thereby "accepted" the delay. The Court reiterated that defendants are not required to advance the plaintiff's action.

When it has been established that the delay is inordinate and inexcusable, there is a presumption of prejudice sufficient to warrant dismissal. The Court found that the plaintiff provided no evidence to rebut this presumption. The Court also found that Foster Wheeler suffered actual prejudice because of the death of one of its key witnesses and the faded memories of other witnesses. The Court stated that the longer the delay, the more likely memories will have faded and prejudice will be established.

Rule 4.33

Pursuant to Rule 4.33, an action can be dismissed if three or more years have passed without a significant advance in the action. The Court clarified that it will analyze the substance of a step taken to determine whether it advances the action. It noted that providing undertaking responses is not always a significant advance in an action. The Court found that the plaintiff's undertaking responses were not a significant advance in that they did not provide additional information to aid in the resolution of the action. Additionally, the fact that the responses were provided just before the drop-dead period indicated that their provision was deliberately dragged out.

The Court also rejected the plaintiff's argument that filing a supplemental affidavit of records was a significant advance in the action, since most of the documents in it had already been provided. More egregiously, the Court found that the plaintiff had access to the new records in 2010, almost six years before production.

Simply commencing a step without completing it does not significantly advance an action. In this case, the plaintiff's request to Foster Wheeler to schedule a trial date alone did not constitute a significant advancement until the trial date was secured. For these reasons, the Court found the plaintiff had not significantly advanced the action since 2013, and the action should be dismissed.

In its decision, the Court was critical of the plaintiff having ignored the Court's warning to take immediate steps to advance the action, of its non-compliance with deadlines and its inability to satisfy its undertakings.

CONCLUSION

The Foster Wheeler decision provides a concise summary of the law on delay. It also clarifies to counsel as to what steps will advance an action and what facts constitute significant prejudice. The decision reflects direction given by the Alberta Court of Appeal and the Supreme Court of Canada that timely and efficient use of the justice system is imperative. For more information, please see our April 2017 Blakes Bulletin: Alberta Court of Appeal Cracks Down on Chronic Delay, Throws Case Out of Court.

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© 2018 Blake, Cassels & Graydon LLP.

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