The Defendants applied to dismiss the Action for long delay pursuant to Rules 4.31 and 4.33. The Plaintiffs’ Statement of Claim was filed in May of 2013. The Defendants had never filed a Statement of Defence, but had responded to and been involved in various Applications in the Action and in related Actions, including a related foreclosure Action and insolvency proceedings respecting one of the Defendants.

Regarding dismissal for delay pursuant to Rule 4.33, Master Prowse found that the Defendants had continued to participate in the Action at the same time that they had filed and prepared for their dismissal Application. As such, the Master held that the Action should not be dismissed on account of Rule 4.33(2)(b), which states that the Court must dismiss an Action if there has been over 3 years of delay unless “an application has been filed or proceedings have been taken since the delay and the applicant has participated in them for a purpose and to the extent that, in the opinion of the Court, warrants the action continuing”.

Regarding the Defendants’ Application to dismiss the Action for prejudicial delay pursuant to Rule 4.31, Master Prowse found that “relevant events [had] continued to occur subsequent to the initial flurry of activity from mid-2013 to early 2014”, including one of the Defendants being put into receivership in 2015 and into bankruptcy in 2017, and another of the Defendants being struck from the corporate registry for a period of time. As a result, the relevant facts in the Action did not all occur prior to the filing of the Statement of Claim in 2013 and then go stale: they continued as the Action continued. Master Prowse noted that pursuant to Rule 13.8(1), events occurring after the Statement of Claim was filed may be relevant to include in pleadings.

Master Prowse also noted that pursuant to Rule 1.2(3)(a), the parties are to manage the litigation quickly and economically. Further, Rule 4.1 states that the parties are responsible for managing their dispute, and Rule 4.2 requires them to respond “in a substantive way and within a reasonable time to any proposal for the conduct of an action”. Given that the Defendants had waited 6 years to file a Statement of Defence, when Rule 3.31(3)(a) says they should do so within 20 days, Master Prowse found that the Defendants had not met their obligation to move the matter forward, and also held that they had not established significant prejudice as a result of delays in the Action. The Rule 4.31 Application was accordingly also dismissed.

Finally, Master Prowse addressed a dispute between the parties respecting the Defendant mortgage administrator trustee’s fees, which was not currently part of the Action. Master Prowse noted and that pursuant to Rule 1.2, the Rules should be used to identify issues in dispute and facilitate the quickest means of resolving them; and pursuant to Rule 1.4, the Court may make Orders and directions to implement the purpose of the Rules. As such, Master Prowse directed the parties to “consider and come forward with proposals as to how to adjudicate the fees issue in the quickest way at the least expense” pursuant to Rule 1.4.