Alberta Court Decision Addresses Drop Dead Rule, Chronic Delays in Civil Litigation
June 15, 2016
The Court of Appeal of Alberta (Court) recently addressed the issue of chronic delay in civil litigation, when it released a split decision in Ursa Ventures Ltd. v. Edmonton (City) (Ursa) on the interpretation of rule 4.33 in the Alberta Rules of Court. Rule 4.33 directs the dismissal of civil proceedings where a significant advance in an action has not occurred for three or more years. Often referred to as the “drop dead” or “dismissal for long delay” rule, it states that “[i]f 3 or more years pass without a significant advance in an action,” and a party applies to have the action dismissed, the court must dismiss the action. The Court’s ruling in Ursa offers new insight into what constitutes a “significant advance.”
On November 1, 2010, Ursa Ventures Ltd. (Ursa Ventures) filed a claim against the City of Edmonton for breach of a commercial contract. The City of Edmonton filed a defence shortly thereafter, but neither party took any other steps in the litigation until October 31, 2013, when Ursa Ventures served its affidavit of records on the City of Edmonton. A few months later, the City of Edmonton applied under rule 4.33 to dismiss the action.
WHAT IS A “SIGNIFICANT ADVANCE”?
Writing for the majority, Justice P.A. Rowbotham ruled that the chambers judge did not err in holding that Ursa Ventures’s affidavit of records was a “significant advance” in the action. Justice Rowbotham held that rule 4.33 requires courts to apply a functional, context-driven analysis. The court must ask whether the step in question actually helped resolve the action by narrowing the issues or moving the action towards summary judgment or trial. No step, regardless of whether it is a mandatory step under the Rules of Court, will be deemed in all cases to significantly advance an action. For example, service of an affidavit of records is a mandatory step, but service of a blank affidavit of records may not significantly advance an action.
In concurring reasons, Justice P.W.L. Martin noted that Ursa Ventures’s affidavit of records did not adequately describe the documents and was obviously missing key documents. Justice Martin lamented that “such an infantile step should be allowed to reset the clock for another three years of inactivity[.]” Nevertheless, Justice Martin agreed with Justice Rowbotham that the chambers judge was not unreasonable in finding that the affidavit of records significantly advanced the action.
Justice T.W. Wakeling, in a lengthy dissenting opinion, argued that rule 4.33 requires the court to determine whether the plaintiff advanced the action at an acceptable pace relative to a notional “reasonably diligent litigant” in similar circumstances. Justice Wakeling held that Ursa Ventures’s claim should have been dismissed because a reasonably diligent plaintiff in a similar case would have set the action down for trial by the end of the three-year period, and a plaintiff moving with “acceptable dilatoriness” would have at least completed questioning.
All three Justices voiced concern over the potential for litigants to preserve their actions indefinitely without making any real progress by doing as little as taking one step in every three-year period. While the functional approach adopted by Justices Rowbotham and Martin may not fully address this concern, Justice Wakeling’s proposal, involving reference to the hypothetical “reasonably diligent litigant,” may lead to further litigation on rule 4.33 applications and uncertain outcomes, given its subjective standard.
A change to the Rules of Court may be required to develop a workable solution to the problem of chronic delay to help Alberta courts and litigants achieve the goal articulated by the Supreme Court of Canada in Hryniak v. Mauldin of “affordable, timely and just adjudication of claims.” (For more information on Hryniak v. Mauldin, please see our January 2016 Blakes Bulletin: A Roadmap for Summary Judgment in Alberta).
IMPLICATIONS FOR ALBERTA LITIGANTS
Parties to civil proceedings in Alberta should be aware that a civil claim is liable to be dismissed if three years pass without a step that moves the claim toward trial. They should also be aware that as a result of the Court’s comments in the Ursa decision, Justices and Masters may take a more critical approach to determining what constitutes a significant advance in an action.
The authors acknowledge the contribution of Joshua Smith (Summer Law Student).
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