Huynh v. Rosman, 2013 ABQB 218

Court of Queen ’ s Bench of Alberta Citation: Huynh v. Rosman, 2013 ABQB 218 Date: 20130416 Docket: 0501 07318 Registry: Calgary Between: Chi Chau Huynh and Thi Phu Nguyen Appellants - and - Michael Rosman and the Administrator of the Motor Vehicle Accident Claims Act Respondents _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice M. David Gates _______________________________________________________ Appeal from the Oral Judgment by J.L. Mason, Master in Chambers Dated the 2 nd day of August, 2012 Filed on the 2 nd day of August, 2012

Overview [ 1 ] This is an appeal of a decision of Master Mason brought by the Plaintiffs, Chi Chau Huynh and Thi Phu Nguyen. On August 2, 2012, the Master granted an application by the Defendant, the Administrator of the Motor Vehicle Accident Claims Act ( “ the Defendant Administrator ” ), to dismiss the action for long delay. The Plaintiffs now appeal that decision. [ 2 ] For the reasons that follow, the appeal is dismissed.

Background [ 3 ] The Plaintiffs ’ Statement of Claim alleges that the Plaintiffs suffered damages as the result a motor vehicle accident that occurred on March 12, 2004, and that the Defendant, Michael Rosman ( “ the Defendant ” ), was responsible for the accident and the resultant damages. [ 4 ] On May 13, 2004, the Defendant ’ s insurer advised the Plaintiffs ’ counsel that the Defendant did not have a valid insurance policy at the time of the motor vehicle accident.

Plaintiffs ’ counsel then advised the Administrator on May 17, 2004, that the Defendant did not have a valid insurance policy. [ 5 ] On May 16, 2005, the Statement of Claim was filed. An Order was issued on February 6, 2006, allowing the Plaintiffs to substitutionally serve the Defendant by publication. The Statement of Claim was then served on February 24, 2006. [ 6 ] On April 12, 2006, the Defendant was noted in Default and the Administrator was notified by letter dated April 18, 2006.

On the same date, Plaintiffs ’ counsel wrote to the Administrator confirming his representation of the Plaintiffs and providing copies of requested documents, specifically the Statement of Claim, Affidavit of Service by Publication, praecipe to Note in Default, and a copy of correspondance from ING Insurance dated May 13, 2004.

The Administrator responded by way of letter dated May 3, 2006, in which he requested, amongst other things: [A]ll medical information including IME ’ s and medical receipts; Alberta Health Care Statements from the Plaintiff as far back as possible before the accident to the present; any documentation relating to

Section B Benefits or any other insurance or government benefits received by your client as a result of this accident; details of any special damage claim with supporting documentation including, where relevant, pay stubs and wage receipts for the year prior to the accident, and income tax returns for the three years prior to the present. [ 7 ] Plaintiffs ’ counsel never responded to this correspondance, not to a letter sent on December 21, 2009, advising that Ed Chan had assumed conduct of the file on behalf of the Administrator and that any correspondance should be sent to him. [ 8 ] Plaintiffs ’ counsel began to request and receive medical information specifically a Statement of Benefits Paid for Huynh on July 13, 2006,

Section B breakdowns for Huynh and Nguyen on November 24, 2006, and an updated Statement of Benefits Paid for Nguyen on December 6, 2006. [ 9 ] On December 7, 2006, Plaintiffs ’ counsel wrote to Dr. Nguyen and requested medical records for Nguyen. These treatment notes were received from Monterey Medical Centre on December 27, 2006. On January 2, 2007, Plaintiffs ’ counsel wrote to Dr. MacLellan to request Nguyen ’ s clinical chart. Nguyen ’ s chiropractic treatment notes from Dr. MacLellan were received on February 26, 2007. On July 16, 2007, Plaintiffs ’ counsel wrote to Dr.

MacLellan to request Huynh ’ s clinical chart. On February 26, 2007, Plaintiffs ’ counsel received Nyguen ’ s chiropractic treatment notes from Dr. MacLellan. [ 10 ] On July 16, 2007, Plaintiffs ’ counsel wrote to Huynh ’ s employer requesting employment information. A second request was

made on August 29, 2007 and a third request was made on September 19, 2007. No employment information was received. [ 11 ] On August 18, 2008, Plaintiffs ’ counsel requested the translator on the file contact the Plaintiffs.

A second request for the translator to contact the Plaintiffs was made on August 26, 2008. [ 12 ] On October 12, 2011, the Administrator filed an application to dismiss the action for long delay. [ 13 ] On August 2, 2012, Master Mason granted the Administrator ’ s application and dismissed the Plaintiffs ’ Statement of Claim on the basis that five or more years had expired from the time that the last thing was done in the action that significantly advanced the action.

Standard of Review [ 14 ] The Alberta Court of Appeal in Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 , dealt at length with the appropriate standard of review on an appeal to the Court of Queen's Bench from a Master's decision.

Côté JA concluded that the standard of review on all issues is correctness (at para 30). [ 15 ] According to Rule 6.14(3) of the Alberta Rules of Court , Alta Reg 124/2010 , an appeal from a Master ’ s judgment is an appeal on the record before the Master as well as any “ new evidence that is significant enough that it could have affected the master's decision ” if permitted by a judge. New evidence should be permitted as long as it is “ relevant and material ” , a phrase which should be interpreted broadly: Bahcheli v Yorkton Securities Inc at para 16.

As stated by Côté JA , “ sometimes justice lies on the side of letting a party later patch up oversights and ambiguities in his or her first affidavit ” ( at para 24). [ 16 ] Accordingly, the only issue on this appeal is whether Master Mason was correct in granting the Administrator ’ s application to dismiss the action for long delay. Law [ 17 ] The Alberta Rules of Court provide in part as follows: 4.33(1) If 2 or more years has passed after the last thing done that significantly advanced an action, the Court, on application, must dismiss the action as against the applicant, unless (

a) the parties to the application expressly agreed to the delay, (

b) the action has been stayed or adjourned by order, an order has extended the time for doing the next thing in the action, or the delay is provided for in a litigation plan, (

c) the applicant did not respond to a written proposal by the respondent that the next thing in the action not occur until more than 2 years after the last thing done that significantly advanced the action, or (

d) an application has been filed or proceedings have been taken since the delay and the applicant has participated in them for a purpose and to the extent that, in the opinion of the Court, warrants the action continuing. 15.4(1) Unless subrule (2) applies, the Court, on application, must dismiss the action as against the applicant if (

a) after the coming into force of this rule, 3 years has elapsed since the last thing done to significantly advance the action, or

(b) 5 years has elapsed since the last thing done to significantly advance the action, whichever comes first. [ 18 ] Rule 4.33(1) directs the Court to dismiss an action for long delay if two or more years elapse since the last thing done that “ significantly advanced ” the action. The two year period is a reduction from the five year period in the former Rules of Court. Rule 15.4(1) is a “ bridging ” provision which preserves the former 5 year rule until 3 years have elapsed from the coming into force of the new rule. [ 19 ] The Plaintiffs and the Administrator agree that Rule 15.4(1)(

b) governs this application and that the 5 year rule applies in this instance. [ 20 ] Rule 4.33 and Rule 15.4 are the successors to former Rule 244.1(1). The test under the new rules use similar language as the old rules and there is no real difference in the term “ significantly advanced ” under the new rules and “ materially advanced ” used in the old rules: Bahcheli v Yorkton Securities Inc, 2010 ABQB 824 at para 27 , affirmed 2012 ABCA 166 . Therefore, the jurisprudence under the old rules continues to be applicable to the

interpretation of Rule 15.4. [ 21 ] Rule 244.1 was aimed at “ certainty and expeditious litigation ” : Trout Lake Store Inc v Canadian Imperial Bank of Commerce , 2003 ABCA 259 at para 32 . The purpose of the rule was to prevent actions from languishing unnecessarily and to prevent parties from facing constant threat, stress, and uncertainty from a pending lawsuit for an indeterminate amount of time.

It was based on the principle that parties should not have to put up with languishing actions where there is no progress being made towards a resolution: Angevine v Blue Range Resource Corp , 2007 ABQB 443 at para 17 . [ 22 ] In Alberta v Morasch , 2000 ABCA 24 , the Court of Appeal discussed the principles under Rule 244.1. The general rules derived from Alberta v Morasch , as well as subsequent cases, are: 1. A procedural step required by the Rules of Court will be presumed to be a "thing which materially advances the trial" provided that this step has been completed. 2.

A party does not have to rely on this presumption, "things" can be broader than steps. 3. The delivery of documents may or may not be things which, in and of itself, materially advances an action. The Court of Appeal has suggested many ways to determine this: reviewing the value of the document to the litigation, determining whether producing the document moves the action closer to trial, is necessary to advance the action, or allows a party to reconsider its position and provide a basis for early settlement discussions. 4.

The participation or acquiescence and knowledge of the opposite party is a valid consideration in determinating whether a thing has advanced the action to trial: Top Grade Solutions Inc v Flying Pizza 73 Inc , 2009 ABQB 492 at para 20 . [ 23 ] A thing done must materially advance the action, not merely assist in negotiations: Bourne v Alberta , 2008 ABCA 165 at para 8 .

Settlement negotiations, by themselves, do not materially advance an action, but might advance the action if the negotiations result in a narrowing of issues, an agreement on certain facts, or an agreement as to some aspect of the action (such as quantum or liability): 525812 Alberta Ltd v Purewal , 2004 ABQB 938 at para 16 . Therefore, determining whether something moved the lawsuit closer to trial and genuinely furthered the litigation in a meaningful way requires a functional analysis: Phillips v Sowan , 2007 ABCA 101 at para 5 .

Issue [ 24 ] The issue in this appeal is whether anything was done that significantly advanced the action in the five years preceding the Administrator ’ s Rule 15.4 application. Since the Administrator ’ s application was filed on October 12, 2011, it must be determined if anything which significantly advanced the action was done after October 12, 2006. Position of the Parties

[ 25 ] The Administrator submits that the last thing done to significantly advance the action was the noting of the Defendant Rosman in default on April 12, 2006. [ 26 ] The Plaintiffs submit that after the noting in default, the Plaintiffs were in the process of gathering medical evidence to prove their damages claim. The Plaintiffs submit that the receipt of medical information on February 26, 2007 and July 23, 2007 significantly advanced the action because the information could be used to make a more accurate estimate of damages and be used in settlement negotiations.

Analysis [ 27 ] As stated above, a procedural step required under the Rules of Court , once completed, significantly advances an action. Other procedural steps, even if not required by the Rules of Court , may also significantly advance an action. Finally, an action may be significantly advanced by other things, even if they are not procedural steps.

A functional analysis must be used to determine if the thing done moved the lawsuit closer to trial. [ 28 ] According to the evidence, between October 12, 2006 and October 12, 2011, no procedural step required, or even contemplated, by the Rules of Court , was taken by the Plaintiffs. The only thing done during this time by the Plaintiffs was to request medical and employment information. Plaintiffs ’ counsel, in fact, received some medical information but this information was never provided to the Defendant or the Defendant Administrator.

The last contact between the parties was the May 3, 2006 letter from the Administrator to Plaintiffs ’ counsel in which the Administrator requested a variety of material. This contact occurred before the five years relevant to this appeal.

Plaintiffs ’ counsel never responded to this correspondence, nor to the correspondence sent to him on December 21, 2009. [ 29 ] Based on the evidence and the things done by the Plaintiffs, the primary issue is whether requesting and obtaining information, without providing it to the other party, can be held to have significantly advanced the action under Rule 15.4. [ 30 ] This case is analogous to Howard v Calgary (City) Police Service , 2001 ABQB 904 . In Howard , the plaintiffs ’ counsel obtained medical evidence in a personal injury case.

Counsel argued that this “ materially advanced the action ” because it was essential to the assessment of damages and was a necessary precursor to trial.

Booker J. rejected this argument and held that the plaintiff had not materially advanced the action (at para 30): It is difficult to conclude that any progress achieved by the Plaintiffs in corresponding with these medical caregivers materially advanced the action when there is no evidence to suggest that the Defendants had any awareness of or input into the activity and no evidence that the Defendants were required to respond to the activity or prompted to respond in a way which, presumably, would have driven the parties closer to having the matter heard.

Nor was a specific, particular step avoided by the Plaintiffs' obtaining this evidence. [ 31 ] Other Alberta authorities also stand for the proposition that the informal gathering of information by a plaintiff does not materially advance an action. In Webber v Canada , 2005 ABQB 718 , the defendant proposed settlement discussions and requested medical information from the plaintiff. The plaintiff attended a psychologist in response to the request. A psychologist ’ s report was obtained, but never forwarded to the defendant. The Court held that obtaining the report did not materially advance the action.

In Schulze v Whitby Business Development Corp , 2009 ABQB 163 , the plaintiff gathered medical information but never forwarded the information to the defendant until after the relevant five year period. Again, the Court held gathering medical information had not materially advanced the action. In Top Grade Solutions Inc v Flying Pizza 73 Inc , 2009 ABQB 492 , the plaintiff ’ s created and provided edited audio tapes to the defendant.

The Court held this did not materially advance the action because the tapes were provided after the five year period. [ 32 ] The Plaintiffs rely on Phillips v Sowan , 2006 ABQB 579 , aff ’ d 2007 ABCA 101 , and Blair v Onespot (unreported, action number 0601-02856). In Phillips , the defendant was noted in default and the plaintiff was gathering information to prove its damage claim. The gathering of information included obtaining medical reports and an economic report.

The information had been requested by the Administrator of the Motor Vehicle Accident Claims Fund and there was correspondence in this regard between the two parties within the five year period. The Court of Queen ’ s Bench and the Court of Appeal confirmed that gathering this information in such circumstances materially advanced the action and declined to dismiss the plaintiff ’ s action for long delay.

[ 33 ] In Blair, the Administrator of the Motor Vehicle Accident Claims Fund sent a letter to the plaintiff ’ s counsel requesting lost documentation. Plaintiff ’ s counsel replied that the request for medical records was premature because the plaintiff was still receiving treatment and recovering from his injuries. After this exchange of letters, the plaintiff ’ s counsel collected treatment notes, clinical records, and medical reports, but never disclosed the information to the Administrator.

Justice Park held that the gathering of the medical information was a thing that materially advanced the action and that the Administrator ’ s awareness was not relevant to the issue. [ 34 ] In Juke v John Doe , 2009 ABQB 557 at paras 8 to 20 , Master Prowse discusses a number of cases on the issue of whether the informal gathering or providing of information materially advances an action under the old Rule 244.1, including the cases discussed above, save Blair .

Master Prowse noted that the case law was divided and stated that “ the dividing line in the case law appears to be a functional analysis as to whether the information provided informally was sufficiently important and extensive to have materially advanced the action. One factor in that consideration is whether the opposing party requested or was aware that the information was being compiled for its consideration ” . (at para 22) [ 35 ] I agree with Master Prowse ’ s approach to the proper application of this rule, as well as his conclusion in Juke .

In determining if a thing significantly advanced an action, the court must undertake a functional analysis and determine if the thing moved the litigation closer to trial in a meaningful way.

In a case where the thing done is the collection of information, the determination if the litigation was moved closer to trial will depend on a number of factors, including the importance of the information, the extent of the information, the quality of the information, whether the opposing party was aware the information was being gathered, and if the information was ever provided to the opposing party. [ 36 ] The importance, extent, and quality of the medical information are relevant considerations because the gathering of information, and its eventual disclosure to the other side, may significantly advance an action if it leads to a settlement, a narrowing of issues, or an agreement on certain facts or issue.

A review must be made of the “ value of the document in the litigation and whether it moves the action closer to trial, whether it is necessary to advance the action or whether it allows a party to reconsider its position and provide a basis for early settlement discussions ” : Top Grade Solutions Inc. at para 29 . [ 37 ] I would simply add that most of the cases which have considered the content and extent of the information gathered are cases where the information was actually shared with the opposing party. [ 38 ] The other party ’ s knowledge and/or receipt of the information is, in my view, a very important consideration because the advancement of an action to trial necessarily requires the involvement of both parties.

Litigation is an interactive process between opposing parties, each of whom are required to both initiate steps and respond to actions taken by the opposing party. Moreover, litigation is about the exchange of information and positions between and among parties on various factual and legal issues relevant to the action. One party cannot rely solely on its own efforts to allege that they advanced the action when the defendant has no knowledge such work was being done. It is not until the information is actually shared with the other side that the litigation has some prospect of actually moving forward.

As stated by Master Hanebury in Schulze v Whitby Business Development Corp at para 30 : From a functional perspective, the material advancement of an action involves both parties to the action.

While only one may be doing the behind the scenes collection of information that is the ‘ thing ’ that advances the action, the other party must at least have some knowledge during the five year period that this is occurring for the action to be materially advanced. [ 39 ] In this case, the information gathered by the Plaintiffs amounted to only one set of treatment notes from a medical centre and one chiropractic treatment chart relative to Nguyen, one chiropractic treatment chart for Huynh, a

Section B breakdown for both Plaintiffs, and an updated Statement of Benefits Paid for both Plaintiffs . The information gathered was minimal and not a complete picture of any of the alleged damages. The quality of the information, even if it had been disclosed, would likely not have significantly advanced the action. [ 40 ] I agree with Master Mason that Blair can be distinguished on the basis that plaintiffs ’ counsel in that instance had, in fact, informed the Administrator within five years of the application that his client was continuing to receive treatment and still recovering.

In that case, the plaintiff collected treatment notes, clinical records, and medical reports which, taken as a whole, may well have been of such a quality as to have moved the action closer to trial and thus significantly advanced the action. In this instance, as previously noted, there was no communication whatsoever from the Plaintiffs during the five year period.

[ 41 ] Phillips is also distinguishable, in my view, because the information collected in that case had been requested by the Administrator. Further, there was correspondence between the two parties during the five year period. [ 42 ] In this case, the medical information collected by the Plaintiffs was never provided to the Administrator notwithstanding the explicit request for same set forth in his letter of May 3, 2006.

As such, the Defendant Administrator was left in the dark for five years and had no knowledge of the information gathered or, indeed, that the Plaintiff was taking any action to advance the litigation in any way. The lack of disclosure prevented the Administrator from having input or making any decision relevant to the litigation.

The lack of disclosure meant that the litigation had no prospect of moving forward. [ 43 ] In this case, just as in Howard , Webber , Schulze , and Top Grade Solutions Inc. , the Defendant ’ s lack of awareness regarding any activities on the part of the Plaintiffs, as well as the lack of any disclosure, meant that the Plaintiffs ’ mere gathering of information did not significantly advance the action. [ 44 ] Accordingly, I am not satisfied that the collection of medical information by the Plaintiffs was a step that significantly advanced the action.

Conclusion [ 45 ] More than five years had passed since the last thing done that significantly advanced this action and the Administrator ’ s application to dismiss for long delay. The Master was correct in granting the Administrator ’ s application. Accordingly, the Plaintiffs ’ appeal is dismissed. [ 46 ] The Defendant Administrator is entitled to his costs on this application. Heard on the 13 th day of February, 2013. Dated at the City of Calgary, Alberta this 10 th day of April, 2013. M.David Gates J.C.Q.B.A. Appearances: Z. Verjee Q.C. For the Appellants L.H. Whittaker for the Respondents