DIRECT HORIZONTAL DRILLING INC v NORTH AMERICAN PIPELINE INC, 2018 ABQB 1006
1.2: Purpose and intention of these rules
4.33: Dismissal for long delay
The Defendant applied to dismiss the Action under Rule 4.33 on the basis that three years had elapsed without a significant advance in the Action. The parties agreed that no steps had been taken in the Action which significantly advanced it for a period of three or more years. The Plaintiff contended, however, that the filing of an Affidavit in support of a Summary Judgment Application in a separate Action (the “Other Action”) constituted a significant step as the Other Action was inextricably linked to the matter before the Court. The parties first appeared before Master Shulz, who granted the Application. The Plaintiff appealed that Order to Justice Yungwirth.
The present Action and the Other Action were based on unpaid subcontract work arising from two different projects and two separate contracts. The Defendant raised identical claims for set-off in both Actions, however, only filed a Counterclaim in the present Action.
Justice Yungwirth held that there were two issues to be determined: 1) whether the two Actions were “inextricably linked”; and 2) if so, whether the filing of the Affidavit in the Other Action significantly advanced the present Action.
Justice Yungwirth considered the factors set out in Angevine v Blue Range Resource Corporation, 2007 ABQB 443 (CanLII) to determine whether the Actions were inextricably linked, which are whether: 1) the result in one Action is “legally or factually determinative” of the issues in the other Action; 2) the issues determined in one Action will be “relevant and binding” in the other; 3) one Action significantly advances the other; and 4) the Decision in one Action could be a “barrier in law” to the Court adjudicating the other. Justice Yungwirth noted that establishing one factor is not necessarily sufficient to prove an inextricable link, however, proof of all four factors is not necessary.
Justice Yungwirth found that both Actions involved the same parties, similar contracts, and identical set off claims, and that the determination of liability in one Action would “play a large role in the global resolution” of the other. Justice Yungwirth found that the determination of the central issues in either Action would have the effect of moving both Actions forward. As a result, Justice Yungwirth held that the Actions were inextricably linked.
Having found the Other Action to be inextricably linked with the present Action, Justice Yungwirth examined the Affidavit filed in the Other Action to determine whether it constituted a significant advance in the present Action. Justice Yungwirth confirmed that the analysis under Rule 4.33 is a functional one, which is to be conducted in light of the principles emphasized in Rule 1.2, which seeks to provide a fair and just resolution of claims in a timely and cost effective manner. The functional approach focusses on the substance and effect of the step taken, not its form. The genuineness and timing of the step taken are also relevant to considering whether the step significantly advanced the Action.
Yungwirth J. found that the Affidavit did not disclose materially new information beyond that which was already in the pleadings, and as such, it did not allow the Defendant the opportunity to assess the strength of its own position in light of the new information. Further, the claims and issues which linked the Actions were not mentioned in the Affidavit. Justice Yungwirth noted that when questioned on the Affidavit, Plaintiff’s counsel objected to any questions relating to the Counterclaim, or any issues which may pertain to the Other Action, citing them as irrelevant. Justice Yungwirth accordingly held that the Affidavit filed in the Other Action was not a genuine step taken to significantly advance the present Action, and therefore had no such effect of significantly advancing the present Action.
The Appeal was dismissed.View CanLII Details