The Plaintiff appealed a Decision by a Chambers Judge dismissing its Action for prejudicial delay under Rule 4.31. The case arose from a 2006 contract in which Clara Industrial Services Limited (Clara) painted a bridge in Edmonton using paint manufactured by Termarust Technologies Inc. (Termarust). Both Clara and Termarust provided the Plaintiff with a five-year warranty. By 2008, defects in the paint began to appear, prompting the Plaintiff in late 2011 to request repairs under the warranty. Clara denied liability, asserting that it had applied the paint according to specifications, and refused to make repairs.

The Plaintiff filed its Statement of Claim in 2013, and served it on Clara in 2014, advising at the time that no immediate defence was necessary. Other than amending its Claim in August 2014 to add another Defendant, the Plaintiff did not take further formal steps until June 2018, when it requested a Statement of Defence. During this period, the Plaintiff obtained two expert reports on the paint failure, in 2015 and 2018, and shared them with Clara. Despite some correspondence and a 2015 meeting, Clara maintained its denial of liability and, in July 2018, applied to strike the Action for delay under Rule 4.31 and for being out of time under the limitation period.

Rule 4.31 allows for the dismissal of claims where delay has caused significant prejudice, with prejudice presumed if the delay is “inordinate and inexcusable”. The Chambers Judge found that the Plaintiff failed to take meaningful procedural steps to advance the litigation. Between the filing of the Claim in 2013 and obtaining the expert reports, the Plaintiff made little progress. While obtaining the expert reports was deemed reasonable, this did not excuse the absence of document exchange or questioning. The prolonged inaction caused significant prejudice to Clara, including the death of two potential witnesses, fading memories, and the deterioration of key evidence such as the solidified paint. Furthermore, the absence of document exchange and questioning left Clara at a disadvantage due to “unknown unknowns”. The Chambers Judge concluded that the delay was inordinate, inexcusable, and caused significant prejudice to Clara, warranting dismissal of the Claim.

The Plaintiff appealed the Decision, arguing that it had no obligation to expedite service or advance the litigation more quickly. It contended that only the delay from 2016 to 2018 was relevant and that any prejudice suffered by Clara was unrelated to its Actions. The Plaintiff also claimed that much of the necessary evidence was documented in expert reports. The Court rejected these arguments, noting that earlier procedural steps could have enabled Clara to secure critical evidence, including testimony from witnesses who died during the delay.

The Court upheld the Chambers Judge’s Decision, finding no errors in the assessment of delay or prejudice. The Appeal was dismissed.