master hanebury

4.33: Dismissal for long delay

Case Summary

The Plaintiff, Servus Credit Union Ltd. sued various Defendants to enforce two commercial mortgages granted by the Defendant BRB Building Corp. The Statement of Claim was filed on August 6, 2010 and Statements of Defence were filed for some, but not all, of the Defendants. In 2010, counsel for the few Defendants who did not file Statements of Defence wrote to the Plaintiff’s counsel asking that they “not to take any further steps without prior notice to our offices”. The Court granted an Order confirming the sale of the mortgaged property on April 20, 2012. In March 2015, the same Defendants retained new counsel, who also wrote to the Plaintiff’s counsel asking that no steps be taken without prior reasonable written notice. Subsequently, all the Defendants brought an Application to dismiss the Action for long delay. The issue before the Court was whether an open-ended request by a Defendant that a Plaintiff take no further steps in an Action constituted an express agreement to delay the application of  Rule 4.33 was amended a few days prior to the Application being heard; however, all parties agreed that the Application would be considered under the un-amended Rule.

Master Hanebury stated that it was clear that the Court must look back from the date of the Rule 4.33 Application and if less than 3 years had elapsed since the date of the last significant advance in the Action Rule 4.33 did not apply. In making its determination, the Court was required to take a functional approach in examining the real issues in dispute, and to take a “macro view” of what occurred during the three year period. The focus must be on the substance of what was done and its effect; the Court must analyse whether what was done moved the Action towards a resolution.

Master Hanebury considered whether the Mediation and discussions between the parties that occurred in a related Action was something that significantly advanced the Plaintiff’s Action. Master Hanebury held that the Mediation did not resolve anything or advance the Action. Master Hanebury also considered what constituted an “express agreement” to delay under Rule 4.33, and noted that a standstill agreement could not be implied by conduct: evidence was needed to establish the basic elements of an agreement. In this case, Master Hanebury held that the evidence did not clearly demonstrate that there was an express agreement to hold the Action in abeyance. Further, there was no discussion about stopping or suspending the procedural steps or requirements of the Action. As a result, the discussion between the parties’ counsel did not meet the requirements for an express agreement.

With respect to the correspondence which requested that no steps be taken, the Court noted that Rule 4.33 was designed to bring an end to Actions that had become inactive and should be deemed abandoned. The Rule requires an express agreement with respect to a timeline or a temporal boundary. An open-ended request that no steps be taken was insufficient. Master Hanebury held that the original letter of 2010 was not a standstill agreement, as it had no temporal boundary. Regarding the second letter sent in 2015, the Court held that this was also an open-ended request and therefore, not a standstill agreement. Further, Master Hanebury noted that when a Defendant makes an open-ended request for time near the end of the drop dead period, fairness requires that he or she cannot bring an Application under Rule 4.33 for a reasonable period of time. The Application of the Defendants to dismiss the claim for long delay was granted.

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