The Defendants applied to dismiss the Action under Rule 4.33, claiming more than three years had elapsed since the last significant advance in the litigation. Alternatively, they sought dismissal under Rule 4.31 for inordinate and inexcusable delay. The dispute arose due to a fire that destroyed a building and its contents, including premises rented by the Plaintiffs for warehousing. The Plaintiffs initiated the Action in March 2017, seeking damages.

At a Case Management Conference on February 18, 2020, the Plaintiffs were directed to provide an Affidavit of Records (the AOR) by March 16, 2020. However, the AOR was not served until February 9, 2023, and listed “nil” under producible records, stating that “all relevant and material records were destroyed in the fire.” At issue was whether serving of the AOR constituted a significant advance in the litigation.

Justice Akgungor explained that in a Rule 4.33 Application, the delay period is measured from the last uncontroversial significant advance to the filing of the dismissal Application. Akgungor J. determined that the delay period began after the Case Management Conference and extended to the filing of the dismissal Application on November 13, 2023. The Court must then assess if there was a three-year gap without a significant advance during this period. Akgungor J. clarified that a significant advance is one that meaningfully progresses the Action towards resolution, considering its nature, importance, and timing.

The Defendants argued that because the AOR was blank, it could not constitute an advance. The Defendants cited Ursa Ventures v Edmonton (City), 2016 ABCA 135, to support their assertion that a mandatory step under the Rules no longer automatically advances an Action. In response, the Plaintiffs contended that the AOR confirmed the destruction of records, thereby clarifying the lack of evidence and advancing the Action. The Plaintiffs also noted that Rule 5.6 requires disclosure of all relevant and material records, and the AOR, provided an admission under oath that no records exist, exposing them to Costs, denial of interest, and other sanctions under Rule 5.3 for swearing an AOR that does not disclose all required records.

Akgungor J. held that the filing of the AOR constituted a significant advance. The key consideration was whether its content meaningfully advanced the Action, rather than whether it contained records. Akgungor J. found that the AOR was not blank but rather a sworn document verifying that the Plaintiffs had no records, completing their discovery, clarifying the litigation’s focus, and enabling the Parties to assess their positions for settlement or adjudication.

The Court assessed the Application for dismissal under Rule 4.31, highlighting that significant prejudice is a prerequisite for dismissal under this Rule. Akgungor J. explained that an Action may be dismissed for delay causing significant prejudice under Rule 4.31(1)(a), or if the delay is inordinate and inexcusable, significant prejudice is presumed under Rule 4.31(2). Justice Akgungor found there was delay, noting that five years had passed since the pleadings closed and the Action was far from ready for Trial. The Plaintiffs had failed to advance the Action to the extent that a reasonable litigant would have. When assessing whether the delay was inordinate or inexcusable, Akgungor J. noted that Rule 1.2(3)(a) obliges both parties to move the Action along, and Rule 4.31(3) requires consideration of whether the Applicant contributed to the delay. Noting the pace of the Action as a whole, and the Defendants’ contribution to the delay, Akgungor J. determined it was not inordinate or inexcusable.

Justice Akgungor continued the analysis to address whether the Defendants demonstrated significant prejudice, as it was not presumed under Rule 4.31(2). The Defendants argued that significant prejudice arose because the retention period for business records had expired, and witness memories were likely to have faded. However, Akgungor J. found that the Defendants failed to specify how this would cause prejudice. The Plaintiffs ultimately had no records, and there was no evidence that witnesses were no longer available. In the absence of actual significant prejudice, the Court found no basis to dismiss the Action for delay pursuant to Rule 4.31.

As a result, Justice Akgungor dismissed the Defendants’ Applications under Rules 4.31 and 4.33, and ordered the parties to attend a Rule 4.10 Case Conference.