MA v KWAN, 2019 ABQB 89
4.31: Application to deal with delay
4.33: Dismissal for long delay
The Plaintiff, Ma, commenced the Action seeking relief from oppression pertaining to the operation of a business jointly owned by the parties. The Defendant, Kwan, applied to have the Action dismissed for long delay pursuant to Rule 4.33, filing an initial Application on June 14, 2017, and a subsequent 4.33 Application on October 5, 2018. Both Applications were heard together. Master Prowse held that the first 4.33 Application must fail because only 2 years and 9 months had elapsed between the date the first Application was filed and the last step which advanced the Action, which Master Prowse held to be the sale of the business at issue. Master Prowse held that the second 4.33 Application must fail because the time which had elapsed after the filing of the first 4.33 Application is considered to be institutional delay and cannot be counted against the Respondent to a 4.33 Application. Kwan appealed both rulings.
Justice Poelman confirmed that all issues on Appeal from a Master to a Justice are reviewed on a standard of correctness. Poelman J. also confirmed that the analysis on a 4.33 Application is based on the functional approach which examines substance over form. The functional approach is concerned with the substantive effect on the litigation of the step taken considering the step’s nature, value, importance, and quality. Justice Poelman also noted that regard must be had to the pleadings to consider what issues are relevant to the lawsuit to determine whether a particular step has advanced the matter toward resolving some or all of those issues.
Justice Poelman found that the sale of the business resolved issues in the Action pertaining to the day-to-day operation of the business, and narrowed the possible remedies to be the award of monetary damages. Justice Poelman therefore held that the first 4.33 Application must fail as less than 3 years had passed between the sale of the business and the filing of the Application. The Appeal on this ground was dismissed.
Justice Poelman noted that the “filing of a dismissal for long delay application crystalizes the rights of the parties as the date of filing” and that the material date for the running of time is the date the Application was filed, not heard. Kwan argued that the reasoning and approach from Rule 4.31 cases should apply, which use the date the Application was heard, not filed, as the relevant date, noting that the Respondent had obtained a Consent Order after the first Application was filed, demonstrating they continued to attempt to push the Action forward. Justice Poelman found that the mere obtaining of the Consent Order did not demonstrate an “unequivocal intention to prosecute the oppression application”, noting that the steps which the Order directed were not actually taken. Further, Justice Poelman held that the test and principles from Rule 4.31 cases were inapplicable to a 4.33 Application, as the consideration in a 4.31 Application is overall delay in the prosecution of an Action, as opposed to a single continuous period of inaction. Poelman J. thus held that the time which elapsed after filing of the first Application could not be counted against the Respondent to the Application. The Appeal on this ground was therefore dismissed.View CanLII Details