The Action, commenced in 2000, concerned tax consequences flowing from the alleged negligence of two law firms involved in a corporate transaction. Before a Master, the Action was dismissed for inordinate delay pursuant to Rule 4.31. On Appeal, Justice Lema was asked to consider the law firms’ recent participation in the Action as implicit acquiescence to prior delay.

Justice Lema reviewed judicial interpretation of acquiescence as an exception to Rule 4.31. As a starting point, it was noted that Rule 4.31 does not expressly provide for an acquiescence exception, in contrast to the express acquiescence exception set out in companion Rule 4.33(2)(b). However, Justice Lema observed that the Court had previously exercised its discretion in applying Rule 4.31 (and predecessor Rule 244) to nonetheless recognize acquiescence as sufficient to defend dismissal. Under the current analytical approach to Rule 4.31, set out in Humphreys v Trebilcock, 2017 ABCA 116 (CanLII), Justice Lema attributed consideration of acquiescence as relevant to step six, i.e. whether there is a compelling reason not to dismiss an Action.

Several judicial holdings regarding acquiescence to delay were usefully summarized by Justice Lema, including “acquiescence or waiver can be express or implicit”; “acquiescence or waiver requires more than silence or inactivity”; “context always matters” in ascertaining dismissal-barring participation; “waiver of a delay does not waive future delay”; and “the party considering further participation and wishing to preserve dismissal rights can do so by participating on a without-prejudice basis or by first applying for delay-based dismissal.”

On the facts before the Court, the law firms’ participation had been recent and substantial, including the negotiation of the terms of a Form 37. Justice Lema was prepared to consider inordinate delay subsequent to the law firms’ participation in the Action, finding no second-stage delay. The Appeal was allowed and the Action permitted to proceed.