4.36: Discontinuance of claim

Case Summary

This Action involved the sale and subsequent resale of a Calgary property known as “The Barron Building”. The property was sold by the Plaintiff in 2007 with certain conditions, and because of unfulfilled obligations of the purchaser, the Plaintiff registered an Unpaid Vendor’s Lien against the title of the property. In 2008, the Defendant acquired the property and filed an Action to have the Unpaid Vendor’s Lien removed from the title. The Plaintiff and Defendant purported to settle that Action by way of a settlement agreement. The Plaintiff, in turn, brought this Action to enforce specific performance of the settlement agreement.

Just prior to the Trial of the Action of this matter, the Plaintiff applied for an Order, pursuant to Rule 4.36, to authorize it to discontinue the Action, without costs to the Defendant. The Application was heard and the Court adjourned the Trial sine die pending the decision of the Application and requested written briefs from the parties.

In deciding the Application, the Court found that there was no material difference between the new Rules and the “old” Rules governing the obligation of a party to obtain leave of the Court to discontinue an Action or Claim. Furthermore, the Court relied on De Shazo v Nations Energy Co, 2006 ABCA 400 (CA), for the following principle:

[A]fter the proceedings have reached a certain stage, the Plaintiff, who has brought his adversary into Court, shall not be able to escape by a side door and avoid the contest. He is then, to be no longer dominus litis, and it is for the judge to say whether the action shall be discontinued or not and upon what terms.

The Court recognized that there was no resistance by the Defendant to the Discontinuance of the Action. Rather, there was only resistance to the Discontinuance of the Action on a without costs basis. In deciding whether or not Costs should be awarded, the Court stated that if the evidence established that the Defendant had “engineered” the situation so as to render the continuation of the Action to a successful Judgment an exercise in futility, it would have granted leave to Discontinue the Action on a without costs basis. In the circumstances, the Court found that the continuation of the Action to Judgment had not been proven to be demonstrably futile, and therefore, Leave to Discontinue the Action with Costs to the Defendant was granted.

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