HUMPHREYS v TREBILCOCK, 2017 ABCA 116
Costigan, Watson AND Wakeling JjA
4.1: Responsibilities of parties to manage litigation
4.2: What the responsibility includes
4.31: Application to deal with delay
The Defendants appealed an Application pursuant to Rule 4.31 in which the Defendants sought to dismiss the Plaintiff’s Action for long delay. The Action was commenced in 2006, and the Court of Appeal noted that it probably would not be tried until 2020. The Court of Appeal thoroughly reviewed Rule 4.31, including its history and its interpretation.
The Court opined that litigation delay is a long-standing and corrosive problem for justice and the rule of law. Litigation delay has the potential to, and often does inflict substantial harm on the parties. The panel noted that Courts have mechanisms to address delay, but often choose not to use them. The new Rules implemented in 2010 were meant “to facilitate the quickest means of resolving the claim at the least expense”. The Court noted that foundational Rules 1.2(1) and 1.2(2)(d), 4.1, and 4.2 inform the Court’s analysis under Rule 4.31. A Court considering a Rule 4.31 Application should balance the moving party’s interest in an expeditious resolution with the non-moving party’s interest in having a just determination of the dispute.
In interpreting how to apply Rule 4.31, the Court noted that neither “delay” nor “significant prejudice” is a defined term in the Rules. The Court noted that a thorough analysis of the meaning of these terms had not been undertaken since as far back as 1969, when the first iteration of Rule 4.31 was enacted. The Court stated that delay is a “relative concept”, and it is:
[T]he product of a comparison between the point on the litigation spectrum that the nonmoving party has advanced an action as of a certain time and that point a reasonable litigant acting in a reasonably diligent manner and taking into account the nature of the action and stipulated timelines in the rules of court would have reached in the same time frame. …
The litigant is thus compared against the “reasonable litigant” advancing the same Claim under comparable conditions. Where the differential between the norm and the actual progress of an action is so large as to be unreasonable or unjustifiable, the delay becomes inordinate. Minor or trivial delay does not justify depriving a plaintiff of the right to a judicial determination of its dispute. What constitutes inordinate delay may be informed by the nature of the allegations. Where the allegations are serious, in particular where a plaintiff makes allegations of fraud, it may be under a heightened obligation to prosecute the action with expediency. The Court noted that any delay in the prosecution of a fraud allegation runs the risk of being characterized as inordinate.
The Court noted that prejudice in the context of the Rule means “injury or damage suffered by the moving party as a result of the non-moving party’s dilatory prosecution of its action”. It is not necessary that the injury or damage be to the defendant’s ability to present a full answer and defence to the allegations – any injury is prejudicial. “Prejudice” includes both litigation and non-litigation prejudice, and can be suffered just as much by individuals as by corporations. The Rule requires that the prejudice be “significant”. Significant, for the purpose of Rule 4.31, means that which is more than minor or trivial. It must be important enough to ground the serious consequences of a successful Rule 4.31 Application.
The Court noted that Rule 4.31(2) creates a rebuttable presumption: proof of inordinate and inexcusable delay is proof of significant prejudice. That is, that once the Court is satisfied of the basic fact that inordinate and inexcusable delay is a feature of the Action, the presumed fact that significant prejudice has occurred must be found unless the non-moving party proves on the balance of probabilities that no significant prejudice has been suffered.
Finally, the panel stated that a Court must consider six “essential Rule 4.31 queries”:
First, has the nonmoving party failed to advance the action to the point on the litigation spectrum that a litigant acting reasonably would have attained within the time frame under review?
Second, is the shortfall or differential of such a magnitude to qualify as inordinate?
Third, if the delay is inordinate has the nonmoving party provided an explanation for the delay? If so, does it justify inordinate delay?
Fourth, if the delay is inordinate and inexcusable, has this delay impaired a sufficiently important interest of the moving party so as to justify overriding the nonmoving party’s interest in having its action adjudged by the court? Has the moving party demonstrated significant prejudice?
Fifth, if the moving party relies on the presumption of significant prejudice created by r. 4.31(2), has the nonmoving party rebutted the presumption of significant prejudice?
Sixth, if the moving party has met the criteria for granting relief under r. 4.31(1), is there a compelling reason not to dismiss the nonmoving party’s action? …
In the present case, the Court of Appeal held that the Chambers Judge had failed to explain the finding that inordinate and inexcusable delay was not a feature of the Plaintiff’s Action. The Court of Appeal also found that the Chambers Judge did not consider the required factors for a Rule 4.31 Application, and did not analyse whether there had been inordinate delay; rather, it began with the question of whether delay had caused the Defendants prejudice in the litigation. Further, the Chambers Judge had failed to address the Defendants’ complaints about non-litigation prejudice. The Court of Appeal held that the record demanded the dismissal of the Plaintiff’s Action.
The Plaintiff had attempted to explain their delay as resulting from of a number of changes in counsel, after their first lawyer was appointed to the bench in October of 2012. However, the Court of Appeal opined that this was not an adequate excuse: the Plaintiff was responsible for the conduct of their counsel. The Court found that there was no valid excuse for the Plaintff’s delay.
The Court also observed that the Defendants had suffered significant litigation and non-litigation prejudice. The Statement of Claim sought damages of $3.5 million and alleged fraud. The Court found this had had significant deleterious effects on the Defendants in the business community. The Court held that the interest of the Plaintiffs in getting a judicial determination of their claims no longer outweighed the interests of the Defendants in carrying on business without the allegations of fraud lingering over their heads. Further, the witnesses who had not yet been questioned would be questioned on events which had occurred between 2003 and 2006.
In the result, the Court granted the Appeal and dismissed the Plaintiff’s Action.
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