866546 ALBERTA LTD v SKENE, 2018 ABQB 825


4.31: Application to deal with delay
4.33: Dismissal for long delay

Case Summary

The Applicants, Masuch, Albert and Neale (“Masuch”), applied to dismiss a Counterclaim that had been in existence for sixteen years. The basis of the Counterclaim was that Masuch had breached its duty of care as solicitors to the Respondents, David Skene and Sandy Skene (the “Skenes”), in connection with transactions for lands subject to a mortgage.

The main issue before the Court was the calculation of the period of delay. The Court ruled that the last significant advance in the Action, as required by Rule 4.33, occurred on May 16, 2011. There was then no significant advance for the next 254 days until January 19, 2012. At that time, a standstill agreement was entered into which lasted until November 13, 2015.

The Court stated that there are three ways to calculate the delay period under Rule 4.33 when a standstill agreement has been entered into and has ended: the Court can calculate from the initial starting point of the delay before the standstill agreement; the Court can count the initial period of delay plus the period following the end of the standstill agreement; or the Court could ignore the period of delay before the standstill agreement and count only from the end of the standstill agreement. Master Prowse stated that the parties to a standstill agreement could agree on which option the Court should use, but in this case, it was appropriate to count the initial period of delay before the standstill agreement was entered into and also count the period of delay after the standstill agreement ended. Therefore, the question for the Court was to determine whether there had been a “significant advance” in the Action by March 2, 2017 which would have amounted to three years including both timeframes.

Master Prowse ruled that there had been no significant advance in this timeframe. The Skenes had contended that their efforts to subdivide the property at the root of the Counterclaim had significantly advanced the Action. Master Prowse disagreed and referred to jurisprudence stating that commencing a step that is not completed in the Rule of Court does not significantly advance an Action.

Master Prowse dismissed the Action pursuant to Rule 4.33 but also stated that he would make the same ruling pursuant to Rule 4.31 which gives the Court discretion to dismiss an Action where “inordinate” and “inexcusable” delay has occurred. Master Prowse ruled that there had in fact been inordinate and inexcusable delay in this case. The Counterclaim had been in existence for sixteen years and the only potential excuse for this delay might have been the Respondents’ attempts to subdivide property which could have resolved the matter. However, Master Prowse ruled that “the reasonableness of this approach dissolved by the end of 2015 at the latest.”

Having ruled that inordinate and inexcusable delay had occurred, Master Prowse confirmed that it is presumed that Masuch had suffered significant prejudice allowing the Court to dismiss the Action. The Skenes had submitted no evidence sufficient to rebut this presumption. The Action was dismissed.

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