Master Robertson

1.2: Purpose and intention of these rules
1.7: Interpreting these rules
3.9: Service of originating application and evidence
4.31: Application to deal with delay
4.33: Dismissal for long delay

Case Summary

The Defendant, Galvanic Applied Sciences Inc (“Galvanic”) applied to strike the Plaintiffs’ Claim for delay under Rules 4.31 and 4.33. The Plaintiffs, dissenting shareholders in an amalgamation transaction, commenced the Action by way of an Originating Application filed October 17, 2013. The Action was commenced to determine the fair-market value of the Plaintiffs’ shares. The affidavit in support of the Originating Application was not filed until October 19, 2016.

Master Robertson reviewed the factors to be considered when applying Rule 4.31, and noted that the purpose of the Rule is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way. Rule 1.2(2) expressly states that the Rules are intended to “facilitate the quickest means of resolving a claim at the least expense” and “to oblige the parties to communicate honestly, openly and in a timely way”. Master Robertson referred to recent leading authority on striking claims for delay and stated that the Court must approach the determination of such applications by answering six questions: 1) has the respondent attained the same point on the litigation spectrum during the time of review as a reasonable litigant; 2) does the time differential qualify as inordinate; 3) if the delay is inordinate, is there an explanation and does it justify the delay; 4) if the delay is inordinate and inexcusable has the applicant demonstrated significant prejudice; 5) is the presumption of prejudice under Rule 4.31(2) rebutted by the respondent; and 6) if the criteria under Rule 4.31(1) are met, is there a compelling reason not to dismiss the action?

Master Robertson stated that in an Originating Application the applicant’s case is normally set out in their supporting Affidavit. This is not just convention: Rule 3.9 specifically requires the supporting Affidavit to be served ten or more days before the date scheduled for the hearing of the application. In this case, Master Robertson concluded that the delay in providing supporting evidence for an Originating Application was inordinate and inexcusable. Master Robertson found that the Respondents violated Rule 3.9, that some participants had passed away, and that all of the evidence was at least three years old. Master Robertson held that Galvanic would suffer prejudice if the Action continued, and found no compelling reason not to dismiss the Plaintiffs’ Action. The Application was granted.

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