This was an Appeal of an Order upholding the dismissal of claims brought by 1199096 Alberta Inc. (“1199”) against Imperial Oil Limited (“Imperial”), for inordinate and inexcusable delay, pursuant to Rule 4.31. MEC Operating Company (“MEC”) sold land to 1199 that was previously owned by Imperial. Before the purchase, Imperial advised 1199 of potential contamination and that environmental assessments recommended remediation. After acquiring the land, 1199 was unable to sell due to environmental issues and ultimately lost it to foreclosure. As a result, 1199 commenced an Action against Imperial and MEC in 2009, alleging negligence in failing to fulfill statutory remediation obligations.

The matter did not progress to Trial for over 11 years, prompting Imperial to bring an Application under Rule 4.31 to dismiss the claim for inordinate delay in 2020. Applying the framework established in Humphreys v Trebilcock, 2017 ABCA 116, and Transamerica Life Canada v Oakwood Associates Advisory Group, 2019 ABCA 276, the Chambers Judge identified repeated delays caused by 1199. These included a 30-month wait to request questioning of Imperial’s litigation representatives, an 11-month delay in rescheduling a cancelled questioning, and further delays of 8 and 14 months in responding to undertakings and following up on questioning a former employee.

The Chambers Judge found that Imperial acted promptly, complied with its obligations, and actively responded to 1199’s requests, rejecting 1199’s arguments that the delay was excusable or acquiesced to. The Chambers Judge noted that since the Action was framed in negligence, oral testimony, including expert opinion evidence on the standard of care at the time the land was purchased, would be required. Considering the passage of time, the Chambers Judge highlighted that witnesses might be unavailable or have fading memories, causing significant actual prejudice to Imperial. Finding no compelling reason to continue the case, the Chambers Judge granted Imperial’s Application to dismiss the Action.

On Appeal, 1199 argued that the Chambers Judge mischaracterized the claim as negligence, leading to the conclusion that oral and expert evidence would be necessary, and that Imperial would suffer prejudice from the delay. Additionally, 1199 contended that the Chambers Judge overlooked relevant factors including the delays caused by MEC, the efficiency of the proceeding against both defendants together, and counsel’s inaction as a professional courtesy.

The Court confirmed that Applications under Rule 4.31 are discretionary, and absent an error in principle or a clearly unreasonable exercise of discretion, an appellate court will defer to the Trial Judge. Similarly, the Court highlighted that whether there is significant prejudice is a question of fact and is reviewed for palpable and overriding error.

The Court upheld the Chambers Judge’s finding that proceeding to Trial would cause significant prejudice to Imperial, as oral testimony was necessary to address allegations and evaluate documents, and that the passage of time would result in fading witness memories and the difficulty of obtaining expert opinion evidence. Additionally, the Court found that the Chambers Judge properly considered all relevant factors in evaluating the delay, and rejected 1199’s professional courtesy argument, noting that the Rules provide tools to advance litigation even if a defendant is uncooperative. Accordingly, the Court found no error in principle was identified, and since dismissal for inordinate delay is discretionary, the Chambers Judge’s decision warranted deference. Further, the Court held that 1199’s Application to admit fresh evidence was unnecessary, as oral testimony remained essential.

In the result, the Court dismissed the Appeal and the Application.