Diem Thi Le Plaintiff - v. -, 2013 ABQB 431

Court of Queen ’ s Bench of Alberta Citation: Le v 1055168 Alberta Ltd., 2013 ABQB 431 Date: 20130730 Docket: 0703 01793 Registry: Edmonton Between: Diem Thi Le Plaintiff - and - 1055168 Alberta Ltd. and Salim B. Hassam and Sarjan Luthra o/a Luthra Law Office Defendants _ ________________________________________ ______________ Memorandum of Decision of the Honourable Mr. Justice Robert A. Graesser _________________________________________ ______________ Introduction [ 1 ] The Defendants 1055168 Alberta Ltd, Salim B.

Hassam and Sarjan Luthra operating as Luthra Law Office apply for dismissal of this action on the basis of long delay. [ 2 ] The Plaintiff Diem Thi Le opposes the application, and argues that compliance with a number of undertakings given on

questioning significantly advanced the action in March, 2010 so the threshold of three years from November, 2010 has not been exceeded. Background [ 3 ] In November, 2006, Ms. Le consulted with Mr. Luthra regarding the purchase of shares in 1055168 from Mr. Hassam. She alleges that she gave Mr. Luthra $110,000 in trust, representing the purchase price. A dispute arose as to whether the conditions in the purchase agreement had been satisfied. Ultimately, Ms. Le demanded the return of the monies from Mr. Luthra. Mr.

Luthra was holding $96,677.56 in trust after the transaction fell apart, and eventually transferred the remaining funds to counsel for the plaintiff to be held pending agreement or order of the court. [ 4 ] The lawsuit was commenced on February 7, 2007. Ms. Le seeks various remedies from the defendants, including a declaration that the purchase agreement is null and void, return of the funds held by Mr. Luthra and damages against 1055168 and Mr. Hassam. [ 5 ] The statement of claim was served, and the defendants filed statements of defence in the spring of 2007.

Affidavits of records were filed, and examinations for discovery (I will use the term applicable at the time they took place) were held in April, 2008. A number of undertakings were requested of Ms. Le which remained outstanding until March, 2010. On March 3, a consent order requiring Ms. Le to comply with undertakings was entered, and the undertakings were substantially complied within the time specified in the order, namely 45 days from the date of the order. [ 6 ] The issue on this application is whether complying with the undertakings pursuant to the order of March 3, 2010 “significantly advanced the action”.

Analysis [ 7 ] Rule 15.4 of the Rules of Court is the relevant rule. It is the bridging provision between old Rule 244.1 which specified a 5 year “drop dead” provision, and the new Rule 4.33 which currently species a 2 year “drop dead” provision. [ 8 ] Rule 15.4 provides: Dismissal for long delay: bridging provision 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.

(2) The Court must not dismiss the action if (

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 the 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 3 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.

(3) If the Court refuses an application to dismiss an action for delay, the Court may still make whatever procedural order it considers appropriate.

(4) Rule 13.5 d oes not apply to this rule. [ 9 ] Rule 15.4 uses the same wording “significantly advances the action” as does Rule 4.33. This departed from old Rule 244.1 which used “materially advances the action”. As has been held in Bahcheli v. Yorkton , 2010 CarswellAlta 2498 (and with which I agree) , there is no difference between “significantly advances” and “materially advances” such that the cases under old Rule 244.1 continue to aid in the

interpretation of new Rule 15.4 and new Rule 4.33 (when it eventually comes into force). [ 10 ] It is clear that if complying with the undertakings in March 2010 did not significantly advance the action, more than 5 years has elapsed since the last thing that did: attending on examinations for discovery in April, 2008. This application was filed on April 25, 2013, clearly more than 5 years from the discoveries. Argument [ 11 ] The argument of on behalf of Ms. Le is simple: complying with undertakings is something which significantly advanced the

action. She cites Wagner v. Petryga , 2009 ABQB 385 , a case decided under old Rule 244.1. In that case, Kenny J. noted that some 6 undertakings had been complied with, and at para. 36 stated: [36] As indicated by counsel for the Plaintiff, not only was the information relevant to the Defendant hence the request for the undertakings but it was important enough for counsel for the Defendant to advise that he anticipated having to examine on the undertaking responses. [ 12 ] She relied on the Court of Appeal’s decision in Kuziw v.

Kucheran Estate , 2000 ABCA 226 which stated at para. 35: [35] Supplying undertakings given at a discovery, or in this case, at a cross-examination on an affidavit, may constitute a thing which materially advances the action towards a hearing or trial. However, the fact that one undertaking answer was supplied in the circumstances of this case is not, without more, proof that the undertaking answer was a thing that materially advanced the action towards a hearing. Something more is required and is absent here. [ 13 ] She also referenced Ravvin Holdings v. Ghitter , 2008 ABCA 208 at para. 30 : In

summary, therefore, a response to an undertaking is generally a thing that advances an action, unless it is perfunctory or designed to thwart, rather than advance, resolution of the litigation. Whether a particular response materially advances the action is a question of mixed fact and law for the chambers judge. Where a party gives a number of undertakings it does not have to respond to them all before the undertakings can be considered individually, or collectively, as a thing that materially advances the action.

Where the opposing party objects to the speed with which undertakings are being responded to it can always apply to the court to speed up the process. [ 14 ] She held that “a response to an undertaking is presumed to advance the action, unless it is designed to frustrate the litigation” (at para. 22). [ 15 ] She concluded at para. 23 that she needed to review the particular undertakings to determine whether they materially advanced the action. [ 16 ] The Master had previously ruled that the answers were of “marginal relevance” and had not materially advanced the action. [ 17 ] The Defendants rely on Smith v.

Rhodes , 1996 CarswellAlta 534 , a decision of Master Alberstat. In that case, he held that complying with an undertaking in one’s own lawsuit “is not a material advancement of an action” (at para. 11). [ 18 ] The Defendants further argue that in any event, the responses to the particular undertakings given did not significantly advance the action. Analysis [ 19 ] A number of cases have held that responding to undertakings constitutes a “step” in an action, including Wagner and Ravvin Holdings cited above, and Brar v.

Pawa , 2010 ABQB 779 . [ 20 ] Master Laycock considered almost identical arguments to the ones in the case at bar in Raven v. Airdrie (City of) , 2012 ABQB 74 . Citing the exceptions noted in Ravvin Holdings , the Master held at para. 7: [7] The court concluded that the provision of undertakings was a thing that materially advance the action but there are always exceptions to the general rule. The court identified 2 circumstances as exceptions. Firstly, provision of undertakings that are merely perfunctory and nothing hinges on the response would not have significantly advanced the action.

Nor would a response to an undertaking be considered a thing that materially advances in action where the party has deliberately dragged out the process. See also Matco Investments Ltd. v. Dhow Prop erties Ltd. , 2010 ABQB 104 at para 24 and 25 . [ 21 ] He then went on to consider whether the undertakings responded to by Mr. Raven were merely perfunctory, and concluded that they were not. [ 22 ] In my view, the approach taken by Master Laycock was the correct approach.

The analysis of whether the action has been significantly advanced does not end with a determination that a step has been taken; the quality of the step or thing must be analyzed. Importantly, the Master focused on the pleadings to see what may be relevant to the lawsuit. [ 23 ] With respect to undertaking responses and their relationship to significant advances in the action, it is clear that Smith v. Alberta is not good law.

That is obvious from the cases after it in Queen’s Bench and the Court of Appeal. [ 24 ] I frequently find myself coming back to the foundational rules in the new Rules of Court for guidance in

interpretation. The new Rules are intended to be somewhat less formalistic than was the case previously, and encourage a focus on efficiency, proportionality and economy. It probably goes without saying that delay in litigation is the anathema of all of these objectives.

Hence a shorter “drop dead” provision and maintaining the focus on whether the action has been moved along, rather than whether something has occurred in the action which fits into a defined category of activities. [ 25 ] Previous attempts to deal with the speed and cost of litigation included amendments to the discovery rules, changing the requirement or test for production of records and questioning to “relevant and material” instead of the old “relevant”.

That focused record production and questioning on the issues as defined in the pleadings. [ 26 ] The new Rules have a focus on party self-determination, having regard to the requirements that the parties develop case plans under Part Four, Division One of the new Rules (Managing Litigation – Responsibility of the Parties). With the abolition of pre-trial conferences, civil cases may come to trial without ever having been in court before. [ 27 ] Essentially, so long as the parties are in agreement, they can define their own scope of production and questioning and can

manage their litigation in the manner they determine. Once they disagree, the remedy is to come to court for directions. [ 28 ] Ravvin Holdings makes it clear that compliance with undertakings generally advances the action. It creates exceptions to that, namely “perfunctory” undertakings and compliance which is part of a process where the complier has dragged things out to delay the lawsuit. In my view, it would be a rare situation where compliance with an undertaking should be characterized as perfunctory. [ 29 ] It is not the complier who asks for the undertaking, it is opposing counsel.

Opposing counsel is required to ask relevant and material questions. If questioning counsel asks for an undertaking, it is presumably because counsel thinks the answer is important. Asking for “perfunctory” undertakings is a dubious practice. While counsel for the party being questioned can always object, it is sometimes easier to simply give the undertaking rather than argue and invite an application to compel answers.

That is especially so when there are arguments both ways. [ 30 ] When the parties come to court, however, the court should presume that counsel have only been asking questions that they consider important, and there should be a presumption that where undertakings have been sought, they have been sought because the answer or information is important to the questioner. [ 31 ] It rarely lies in the questioner’s mouth to later complain that compliance with the undertakings the questioner asked for did not significantly advance the action. [ 32 ] In this area, I observe that there can be no absolutes.

Complying with a twenty doubtfully-relevant undertakings may not significantly advance the action; but should the questioning party have a meritorious complaint based on the fact that the twenty undertakings she sought were all “perfunctory”? I think not. [ 33 ] One undertaking response may be critical to the action so the number of undertakings given is not determinative of the result of a dismissal application.

I can easily see a situation where undertakings might be routinely sought and given which can be characterized as perfunctory (producing a certificate of incorporation or other information which might have been easily obtained by questioning counsel). However, in my view, the court should be slow to characterize an undertaking requested by examining party as “perfunctory” at some later date at the request of the same examining party. [ 34 ] There is an expression “be careful what you ask for; you might get it”. That can be applied to undertaking requests.

Counsel are well familiar with cases where the parties have been loaded up with undertakings. That has the inevitable result of delaying the action, often requiring applications and re-attendance for questioning on the undertaking responses.

Just as actions can be delayed by the plaintiff taking a very long time to answer undertakings, so can actions be delayed by the defendant loading the plaintiff up with doubtful helpful undertakings. [ 35 ] On an application such as this, the onus should be on the applicant to demonstrate why compliance with an undertaking sought by the applicant should not be considered to have significantly advanced the action.

I am unsure as to whether a submission that “I asked for and received an undertaking to produce information that is routine, hasty and superficial, lacking interest, care or enthusiasm, or which might be characterized as indifferent or apathetic (taken from various

definitions of perfunctory) is likely to meet with much success. [ 36 ] I am supported in my view as to onus by Rule 1.2(3) relating to the sharing of responsibilities for the efficient management of the lawsuit to “facilitate the quickest means of resolving the claim at the least expense”.

I do not suggest that a defendant must harass a plaintiff for undertaking responses, but if the defendant intends to use Rule 4.33 or Rule 15.4 and argue that compliance with undertakings did not move the lawsuit along, it is surely incumbent on the defendant to take some steps to secure compliance rather than sit back and hope the plaintiff falls asleep. [ 37 ] As noted in Ravvin Holdings , plaintiffs should not be strategic in doling out undertaking responses to stretch out the action, and if there are only a few arguably “perfunctory” undertakings or “clean up” undertakings (eg. “if your memory changes let me know” and the plaintiff responds later “my memory has not changed”), responses are certainly not guaranteed to satisfy the requirement that the action have been significantly advanced. [ 38 ] In this case, experienced counsel asked the plaintiff for 11 undertakings.

From a review of the pleadings, the lawsuit would appear to turn on the nature of the retainer between Mr. Luthra and Ms. Le and her instruction to him, as well as whether the lease approval condition in the purchase agreement was met. Experienced counsel asked for a number of undertakings which are not clearly irrelevant or immaterial to these issues.

The undertaking responses were not clearly perfunctory. [ 39 ] As a result, the applicants have not satisfied me that the action was not materially advanced when the undertakings were complied with in March 2010. [ 40 ] That means that the last thing which materially advanced the action was more than three years ago, but within the time permitted by Rule 14.4.

Subject to any further amendments to the transitional rule and new Rule 4.33, the plaintiff must do something to significantly advance the action before November 1, 2013. [ 41 ] This decision in no way countenances more than five years of virtual inactivity in the action by the plaintiff. The plaintiff is perilously close to losing her cause of action by doing almost nothing. One thing in five years, with no excuse, is lamentable, but without remedy for the defendants in this case. [ 42 ] The defendants argued in the alternative rule 4.31 as there has clearly been delay in the action.

That rule provides: Application to deal with delay 4.31 If delay occurs in an action, on application the Court may

(

a) dismiss all or any part of a claim if the Court is satisfied that the delay has resulted in significant prejudice to a party, or (

b) make a procedural order or any other order provided for by these rules. [ 43 ] The rule itself provides that for the action to be dismissed for delay (presumably short of the delay dealt with in Rule 4.33), the party must have suffered significant prejudice. Before old Rule 344 was enacted, dismissal for delay required that the delay be inordinate and inexcusable. [ 44 ] It is doubtful that those cases will be revived for the purposes of Rule 4.31, but that is for another day.

Since the defendants here do not allege any particular prejudice, I do not have any basis to dismiss the action under this rule. [ 45 ] As for making a procedural order, had the defendants requested anything in particular, I would certainly have considered it. Having regard to the fact that the plaintiff has slightly more than three months to significantly advance the action, I leave it to the plaintiff to determine how that might be accomplished.

Being successful in resisting dismissal for delay has not significantly advanced the action. [ 46 ] Although the plaintiff has been successful in resisting this application, having regard to the history of delay in this matter, I do not award her any costs. Heard on the 28 th day of June, 2013. Dated at the City of Edmonton, Alberta, this 30 th day of July, 2013. Robert A. Graesser J.C.Q.B.A. Appearances: Anita K. Turna Moustarah & Company for the Plaintiff Anna Loparco Dentons Canada LLP for the Defendants Sarjan Luthra o/a Luthra Law Office