4.31: Application to deal with delay
4.33: Dismissal for long delay

Case Summary

The Plaintiff commenced an Action on the basis of breach of contract arising from the Defendants’ failure to pay amounts owing under a residential construction agreement. The agreement contained a “dispute resolution clause” but the application of that clause was under dispute. The Plaintiff applied to stay the Action pending the outcome of Arbitration, and the Defendants cross-applied to dismiss the Plaintiff’s Action for delay pursuant to Rule 4.31. Master Robertson reviewed the Arbitration Act, RSA 2000 c A-43, and leading authorities and concluded that the Action should not be stayed pending Arbitration, and dismissed the Plaintiff’s Application to Stay the Action.

Master Robertson considered the Cross-Application for delay, and noted that the Action was almost 10 years old, and that much of the delay was the result of the inactivity of the Plaintiff. Master Robertson noted that the Action was so old that during part of its life span, the old Rules applied, which allowed for a delay of 5 years as opposed to 3 years under the current Rules. However, Master Robertson observed that there was no period of time in the Action where there was a continuous delay of time as long as 3 or 5 years. Therefore, Master Robertson concluded that Rule 4.33 did not apply.

Master Robertson considered the Defendants’ Cross-Application for delay pursuant to Rule 4.31, which provides that an Action may be dismissed for delay if the delay has resulted in significant prejudice to a party. Master Robertson noted that where the delay is inordinate and inexcusable, prejudice is presumed to have resulted, and the Plaintiff must then rebut that presumption. Master Robertson observed that, at some point during the course of the Action, the Defendants had sold the property, and there was therefore no access to the property. Further, Master Robertson observed that if experts were to assess the property 10 years after the Claim arose, it would be very difficult for them to determine the status of any renovations at the time of the Claim. Master Robertson found that there was prejudice to both Parties in that regard. Master Robertson held that the Plaintiff was unable to rebut the presumption that the delay had resulted in prejudice, and the Plaintiffs had not provided a sufficiently good reason for the delay. Master Robertson granted the Defendants’ Application and dismissed the Plaintiff’s Claim under Rule 4.31.

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