4.31: Application to deal with delay
4.33: Dismissal for long delay
4.34: Stay of proceedings on transfer or transmission of interest

Case Summary

The Parties were divorced. The Applicant had commenced an Action against her husband for divorce and division of matrimonial property. The Respondent defended and counterclaimed for the same relief. A few months later, the Respondent passed away.

The Applicant sought the dismissal of the Counterclaim for long delay under Rules 4.33 and 4.31. The Respondent, now represented by the personal administrator of his estate, opposed the Application. Justice Feth dismissed the Applicant’s long delay Application finding that the Counterclaim was significantly advanced by the Respondent, and the Applicant had not established significant prejudice.

The Court noted that under Rule 4.33, the Court must dismiss an action if three or more years have passed without a significant advance in the Action. The COVID-19 pandemic suspended the operations of the time periods under the Rules from March 17, 2020 to June 1, 2020. Therefore, the time period during which the Counterclaim had to be significantly advanced was extended by 75 days. Under Rule 4.33, no inquiry is required into whether the Respondent was prejudiced. The method for calculating the time period under Rule 4.33 is to count back from the date that the Application was filed, not heard, to the last step that significantly advanced the Action.

Based on the filing date of the Application, Justice Feth found that the time period of 3 years and 75 days started on March 27, 2019. The Court explained that a genuine and timely advance significantly moves a lawsuit forward “in an essential way considering its nature, value, importance and quality”. The Court focuses on the “substance and effect” of a step, not its form. The Courts have historically called this the “functional approach”, and under this analysis a step providing meaningful progress is a significant advance.

Justice Feth found that four steps had significantly advanced the Action from March 27, 2019. First, on March 27, 2019, the Respondent obtained a Grant of Probate. Further, Rule 4.34(1) automatically stays an Action upon the death of a Party and an Order is necessary to allow it to continue. Justice Feth held that on this basis alone, the 4.33 Application failed. Second, material information was exchanged about the value of the matrimonial property after March 27, 2019. Third, a Judgment obtained in foreclosure proceedings crystalized the Parties’ debts related to the matrimonial home. Fourth, the disclosure of a consumer proposal to the estate significantly advanced the Action between September 2020 and 2021. Therefore, Feth J. dismissed the Application under Rule 4.33.

The Court noted that under Rule 4.31, the Court may dismiss an Action if it determines that the delay significantly prejudiced a Party. The burden of proving prejudice rests with the Applicant. Alternatively, if the Court determines that the delay is “inordinate and inexcusable”, the delay is presumed to have resulted in significant prejudice to the Party that brought the Application.

The Applicant adduced no evidence of prejudice. Rather, she asked the Court to find that there was inordinate and inexcusable delay which presumed prejudice.

Justice Feth stated that a Court may analyze a delay application under Rule 4.31 in many different ways without reference to a specific formula. However, one approach is the six-part inquiry from the Alberta Court of Appeal decision in Humphreys v Trebilcock, 2017 ABCA 116. Under this inquiry the Court asks: (a) whether the Respondent failed to advance the Action to the point on the litigation spectrum that a litigant acting reasonably would have reached within the time frame under review; (b) whether the shortfall or differential is of such magnitude that it qualifies as inordinate; (c) if the delay is inordinate, whether the Respondent explained the delay, and whether the excuse justifies the inordinate delay; (d) if the delay is inordinate and inexcusable, whether the delay impaired a sufficiently important interest of the Defendant so as to justify overriding the Plaintiff’s interest in having its Action determined by the Court; (e) if the Respondent relied on the presumption of significant prejudiced created by Rule 4.31(2), whether the Plaintiff has rebutted the presumption of significant prejudice; and (f) whether there is a compelling reason not to dismiss the Respondent’s claim.

Ultimately, Justice Feth relied on a simpler formulation of the Humphreys test to hold that delay is found to be inordinate in light of all the circumstances of a case. Essentially, until a “credible excuse is made out, the natural inference would be that (inordinate delay) is inexcusable”. Further, whether significant prejudice has been established remains the Court’s ultimate consideration.

In analyzing the delay under Rule 4.31, Feth J. found that the pace of litigation was slowed by changes in circumstances, but that the overall delay was not “much in excess of what was reasonable having regard to the nature of the issues in the action and the circumstances of the case”. For example, the passing of the Respondent, the Grant of Probate and the consumer proposal impacted the pace of the litigation in the circumstances. However, the Respondent did not fail to advance the Counterclaim to the point on the litigation spectrum that a reasonable litigant would have in the circumstances, and there was no prejudice to the Applicant. Accordingly, Feth J. dismissed the Application under Rule 4.31.

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