1.2: Purpose and intention of these rules
4.28: Confidentiality of formal offer to settle
4.29: Costs consequences of formal offer to settle
4.31: Application to deal with delay
4.33: Dismissal for long delay
5.31: Use of transcript and answers to written questions

Case Summary

The Plaintiffs appealed a Decision of Master Robertson to dismiss the two underlying Actions for delay pursuant to Rule 4.31. The underlying Actions had been ongoing for 12 years. The Plaintiffs argued that one of the Defendants had destroyed certain electronic records belonging to the Plaintiffs such that the delay that resulted was not inordinate. The Defendants argued that the delay was not due to the alleged destruction of documents, that the delay was inordinate and inexcusable, that they had been prejudiced by the delay, and that the Actions should be dismissed under Rule 4.31 or 4.33.

One of the Defendants had been questioned about the destruction of electronic records in one of the underlying Actions, but the Plaintiffs argued that according to Rule 5.31, the Defendants could not rely on the transcript of the pre-Trial Questioning of one of the Defendants in the other underlying Action. Justice Eamon agreed and did not consider the contents of the transcript of the Questioning.

Justice Eamon noted that Rules 4.31 and 4.33 must be interpreted and applied in the light of Rule 1.2. He explained that if a delay was found to be “inordinate and inexcusable” then it would create a presumption of “significant prejudice” under Rule 4.31(2). “Significant prejudice” is a precondition for dismissal under Rule 4.31. Justice Eamon found that there was inordinate and inexcusable delay that caused significant prejudice under Rule 4.31. In analyzing the application of Rule 4.33, Justice Eamon stated that the period of delay must be determined from the date the Applications were filed, and not when they were heard, citing the relevant case law.

Regarding Costs, Master Robertson had found that the Defendants’ Formal Offers were genuine offers pursuant to Rule 4.29 and confirmed that Rule 4.28, with a few exceptions, allows parties to serve Formal Offers any time after a Statement of Claim has been filed. Master Robertson had awarded double Schedule C Costs from the date of the service of the Defendants’ first set of Formal Offers, and 80% of solicitor-client Costs to one group of Defendants and 100% of solicitor-client Costs of another group of Defendants from the date of service of the second set of Formal Offers.

On Appeal, the Plaintiffs submitted that the offers were not genuine Formal Offers, that the Master should not have awarded double Schedule C Costs, and that they were not guilty of misconduct that would justify awarding solicitor-client Costs to the Defendants. Justice Eamon agreed with Master Robertson and found that the Formal Offers were genuine offers and that the Plaintiffs did not discharge their burden to prove special circumstances under Rule 4.29. He also found that the Plaintiffs committed serious ligation misconduct so as to justify an award of solicitor-client Costs, however, Justice Eamon found that Master Robertson overstated the impact of misconduct of one group of Defendants and had understated it for the other. Justice Eamon varied the Costs award to give each Defendant group 80% of their solicitor-clients Costs for some time after the second set of Formal Offers, and awarded double Schedule C Costs after the date of service of the first set of Formal Offers, except for one Defendant for whom double Costs were awarded after the second set of Formal Offers.

The Appeal of the Master’s Decision was dismissed.

View CanLII Details