Franchuk v. Schick, 2013 ABQB 532

Court of Queen ’ s Bench of Alberta Citation: Franchuk v. Schick, 2013 ABQB 532 Date: 20130916 Docket: 0603 07660 Registry: Edmonton Between: Mike Franchuk Plaintiff - and - Mary Schick Defendant _ ________________________________________ ______________ Reasons for Judgment of S. L. Schulz , Master in Chambers _________________________________________ ______________ [ 1 ] This is an application to dismiss an action for long delay pursuant to Rule 4.33 and the bridging provision in Rule 15.4, commonly referred to as the “drop dead rule”.

Alternatively, this is an application to deal with delay pursuant to Rule 4.31. [ 2 ] Counsel appearing for the Plaintiff on this application is not Counsel who had conduct of this matter but rather appears as agent for Counsel of Record. Facts [ 3 ] The Plaintiff Franchuk was a Director and the Defendant Schick was an employee of Lakeland REA Ltd. The Statement of

Claim alleges that the Defendant Schick sent a letter to her immediate work supervisor, Ben Kwasnycia, complaining of sexual harassment at work by the Plaintiff. The Plaintiff alleges the letter contained libellous statements and claims damages.

The Defendant Schick denies publication, alternatively raises the defence of truth of the contents of the letter. [ 4 ] The action proceeded as follows: June 29, 2006—Statement of Claim July 6, 2006—Statement of Defence September 11, 2006—Plaintiff’s Affidavit of Records September 28, 2006—Defendant’s Affidavit of Records January 5, 2007—Examinations for Discovery April 5, 2007—Notice to Admit Facts May 7, 2007—Reply to Notice to Admit Facts ------Alleged commencement of “Drop Dead” period----- November 13, 2008—Letter from Counsel for the Plaintiff proposing Judicial Dispute Resolution (“JDR”) or a Pre-Trial Conference February 16, 2009—Follow-up letter from Counsel for the Plaintiff re: JDR, Pre-Trial Conference and proposing trial dates March 26, 2009—Summary Judgment Application Heard and dismissed April 8, 2009—Follow-up letter from Counsel for the Plaintiff re: JDR and Pre-Trial Conference April 8, 2009—Response Letter from Counsel for the Defendant refusing JDR invitation but advising Counsel was in the process of estimating the number of witnesses required and the amount of trial time required June 25, 2009—Filing of Affidavit of Ben Kwasnycia (“Kwasnycia Affidavit”) August 30, 2009—Death of Ben Kwasnycia May 18, 2011—Letter from Counsel for the Plaintiff with a request to execute Form 37 Unknown Date—Return of executed Form 37 by Counsel for the Defendant May 3, 2012—Letter from Counsel for the Plaintiff advising that the executed Form 37 had been misplaced and requesting execution of a replacement Form 37 August 27, 2012—Follow-up letter from Counsel for the Plaintiff re: the replacement Form 37 September 4, 2012—Letter from Counsel for the Defendant to Counsel for the Plaintiff advising he will be “…relying upon [the affidavit of Ben Kwasnycia] as if it was testimony given at trial.” (“September 4, 2012 Letter”) April 10, 2013—Follow-up letter from Counsel for the Plaintiff re: replacement Form 37 April 22, 2013—Filing of Application by Defendant for dismissal of action Positions of the Parties [ 5 ] The Defendant takes the position that nothing has occurred to significantly advance the action since the May 7, 2007 filing of the Reply to Notice to Admit Facts and therefore the action should be dismissed.

Alternatively, there has been inordinate and inexcusable delay resulting in significant prejudice to the Defendant which warrants the dismissal of the action. [ 6 ] The Plaintiff takes the position that the filing of the Kwasnycia Affidavit on June 25, 2009 significantly advanced the action. Alternatively, the Plaintiff takes the position that after May 8, 2007, the Defendant participated in the proceedings to the extent that the action should continue. In the further alternative, the Plaintiff takes the position that the Defendant has not suffered significant prejudice that warrants the dismissal of the action.

Issues 1. Did the filing of the Kwasnycia Affidavit on July 16, 2009 significantly advance the action within the 5 year period set out by Rule 15.4 (1) (

b) such that the application must be dismissed? 2. If the application to dismiss the action is unsuccessful under Rule 15.4, should the action be dismissed pursuant to Rule 4.31 for delay causing significant prejudice to any party?

Issue 1: Did the filing of the Kwasnycia affidavit on July 16, 2009 significantly advance the action such that the application must be dismissed? [ 7 ] Rule 4.33 was amended July 25, 2013 however this amendment does not come into effect until November 1, 2013. This application is properly brought under the bridging provision set out in Rule 15.4 (1) (b). The 5 year period applies. 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 passed without a significant advance in the action, or (b) 5 years has passed without a significant advance in 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 provided a substantive response within 2 months after receiving a written proposal by the respondent that the action not be advanced until more than 3 years after the last significant advance in 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) The following periods of time must not be considered in computing periods of time under subrule (1): (

a) a period of time, not exceeding one year, between service of a statement of claim on an applicant and service of the applicant’s statement of defence; (

b) a period of time, not exceeding one year, between provision of a written proposal referred to in subrule (2)(

c) and provision of a substantive response referred to in that subrule.

(5) Rule 13.5 does not apply to this rule. [ 8 ] Counsel for the Defendant takes the position that the 5 year “drop dead” period commenced to run on May 8, 2007 and since that date, there have been three possible activities that could be considered significant advances within the meaning of Rule 15.4: 1.

Summary Judgment Application; 2. Correspondence between the parties since May 8, 2007; and 3. Filing of the Affidavit by Ben Kwasnycia, a non-party to the action. [ 9 ] Both Counsel agree that the failed

Summary Judgment Application did not significantly advance the action within the meaning of Rule 15.4 and no evidence was filed to allow me to consider otherwise. [ 10 ] A number of letters were exchanged between counsel between May 7, 2007 and the date of this application. For the most part, this correspondence was directed at setting the matter for trial and filing a completed Form 37. The caselaw is clear that discussing a subject without it actually occurring does not constitute an advance of the action ( Lanset Capital Corp. v Waterloo Geological Consulting Ltd . (2009), 380 A.R. (CA) at paragraph 9).

Accordingly, I find that the correspondence between Counsel does not represent a significant advance within the meaning of Rule 15.4. [ 11 ] This leaves the Kwasnycia Affidavit to be considered. [ 12 ] Mr. Justice M. D. Gates set out some clear principles in Huynh v Rosman , 2013 ABQB 218 , which still apply despite the fact they were set out in reference to former versions of the “drop dead” rule:

[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. [ 13 ] Mr. Kwasnycia was a witness in this action, not a party. His Counsel (not Counsel for either party) drafted the Kwasnycia Affidavit and provided it to Counsel for the Defendant who filed it in this action on June 25, 2009.

The Kwasnycia Affidavit provided details on the defences of qualified privilege and whether the Defendant acted maliciously. Mr. Kwasnycia was not examined on that affidavit before he died on August 30, 2009. [ 14 ] According to Counsel for the Plaintiff, the Kwasnycia Affidavit was, at the time, instructive to the Plaintiff as it allowed him to gain a better knowledge of the Defendant’s case and test the strength or weakness of his own case. [ 15 ] While the death of the witness is unfortunate, the Kwasnycia Affidavit crystalized his evidence.

The Defendant herself is still in a position to testify as to the events. The September 4, 2012 letter from Counsel for the Defendant states that the Defendant intends to rely on the Kwasnycia Affidavit at the trial of this action. There is no evidence that the Plaintiff objects to this process, although the ultimate decision on admissibility and weight to be attributed to the Kwasnycia Affidavit is a decision for the trial Justice. [ 16 ] The Kwasnycia Affidavit advances the action in a way similar to the provision of information to the opposing party.

The September 4, 2012 Letter is an acknowledgement by the Defendant that the filing of the Kwasnycia Affidavit is a significant advance that moved the litigation closer to trial. This advance starts the 5 year clock running again. I find that the filing of the Kwasnycia Affidavit significantly advanced this action and the 5 year “drop dead” period has not yet expired.

Issue 2: If the application to dismiss the action is unsuccessful under Rule 15.4, should the action be dismissed pursuant to Rule 4.31 for delay causing significant prejudice to any party? [ 17 ] Rule 4.31 was amended July 25, 2013 without a bridging provision, and now reads as follows: Application to deal with delay 4.31

(1) If delay occurs in an action, on application the Court may (

a) dismiss all or any part of a claim if the Court determines 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.

(2) Where, in determining an application under this rule, the Court finds that the delay in an action is inordinate and inexcusable, that delay is presumed to have resulted in significant prejudice to the party that brought the application. [ 18 ] For Rule 4.31 to make sense, it must be intended to allow the Court to consider activities that do not reach the status of “significant advances” under Rules 4.33 or 15.4, and to address delay where that delay is less than the timeframes set out in Rules 4.33 and 15.4. [ 19 ] Under the current version of Rule 4.31, the Defendant must prove delay and that the delay has caused significant prejudice.

The Court will presume that there has been significant prejudice if the Defendant can show that the delay was inordinate and inexcusable. The onus will then shift to the Plaintiff to rebut the presumption. [ 20 ] The old three part test of inordinate, inexcusable delay and serious prejudice still applies but the emphasis is now on prejudice. (See Raven v Airdrie (City), 2012 ABQB 74 ; Mintage Financial Corporation v Altenhofen , 2013 ABQB 486 ). [ 21 ] The Defendant points to the passage of time and lack of progress toward trial to prove inordinate and inexcusable delay.

[22] Inordinate delay is delay that is in excess of what is reasonable having regard to the nature of the issues in the action and thecircumstances of the case (Kuziw v Kucheran Estate, 2000 ABCA 226 at paragraph 31; Deis v Koch Oil Ltd. (2001) 2001 ABQB 997, 304 AR 371 (QB) at paragraph 11). Undoubtedly the untimely death of the witness caused both parties to take time tocontemplate how to proceed. In part, this explains the passage of time since that event.

The evidence does show that the Plaintiff didmake some effort to set the matter for trial, with those efforts being unsuccessful for a number of reasons, including the lack of responseto correspondence by Counsel for the Defendant. [23] Delay subsequent to the new Rules of Court coming into effect on November 1, 2010 must also be considered in light of thefoundational rules and the duty on all parties to identify the real issues in dispute and facilitate the quickest means of resolving the claim(Rule 1.2 (3) (a)).

The Defendant asserts that the matter was ready to proceed to trial in 2007 but she did not take steps to push the matterto trial and in fact there is evidence that the Defendant did not respond to correspondence requesting that the matter be set for trial. Thereis no explanation as to why the Defendant did not take steps to move the matter to resolution. In these circumstances, we have delay onboth sides.

As the saying goes, “the pot is calling the kettle black”. [24] Yes, there was delay, but not so much as to be inordinate or inexcusable in the circumstances. [25] The presumption of significant prejudice has not been made out, but this does not preclude the Defendant from provingsignificant prejudice in some other manner. Does the death of Mr. Kwasnycia result in significant prejudice such that the action shouldbe dismissed? Undoubtedly there is some prejudice but the introduction of the evidence through the Kwasnycia Affidavit, coupled withthe evidence of the Defendant will put the defences before the court.

It is the Plaintiff who suffers prejudice because of the inability tocross-examine Mr. Kwasnycia on his affidavit. Accordingly, I do not find that the Defendant has made out significant prejudice. [26] I agree with the comments of Master Schlosser when referring to the previous enactment of Rule 4.31 in Mintage FinancialCorporation v Altenhofen (supra): Dismissal for delay is the capital punishment of a civil action. It is not to be taken lightly. [27] The application to dismiss for delay pursuant to Rule 4.31(1) (

a) is hereby dismissed. Procedural Order [28] The Court has the ability under Rule 4.31 (1) (

b) and Rule 15.4 (3) to make a procedural order to address delay that falls shortof the delay required to dismiss the action. In the circumstances, I find that it is appropriate to make such an order. I direct that on orbefore October 15, 2013, the Plaintiff must either file a completed Form 37 or bring an application pursuant to Rule 8.5 (1) to set a trialdate. Should the Plaintiff fail to take either action, the Defendant is at liberty to apply to the Court for whatever remedy she deemsappropriate, including an application to a Justice for a declaration of contempt.

Costs [29] Although the Defendant has been unsuccessful in this application, it appears that the application was necessary to obtain theprocedural order pursuant to Rule 4.31 (1) (b). I therefore award costs of the contested special chambers application to the Defendantunder the appropriate column of

Schedule C to be paid forthwith. If counsel cannot reach agreement on costs, they are free to contactme. Order 1. The application of the Defendant to dismiss this action is dismissed. 2. On or before October 15, 2013, the Plaintiff is directed to either file a completed Form 37 or bring an application pursuant toRule 8.5 (1) to set a trial date. 3. The Defendant is entitled to costs of the contested special chambers application under the appropriate column of

Schedule Cto be paid forthwith Heard on the 26th day of August, 2013. Dated at the City of Edmonton, Alberta this 16th day of September, 2013.

S. L. Schulz M.C.C.Q.B.A. Appearances: Kate Hurlburt Emery Jamieson LLP for the Plaintiff Byron Nelson McGuigan Nelson LLP for the Defendant