Pearson v Parkland (County), 2014 ABQB 690

Court of Queen ’ s Bench of Alberta Citation: Pearson v Parkland (County), 2014 ABQB 690 Date: 20141223 Docket: 0803 16214 Registry: Edmonton Between: Yolanda Pearson Plaintiff/Respondent - and - Parkland County Defendant/Applicant _______________________________________________________ Reasons for Judgment of the Honourable Mr.

Justice Donald Lee _______________________________________________________ Introduction [ 1 ] The Plaintiff (Respondent) Yolanda Pearson in action 0803 16214 brought a wrongful dismissal action against her former employer, the Applicant defendant Parkland County ("County") on November 18, 2008. [ 2 ] On November 4, 2013, the County brought a drop dead application against Ms. Pearson as more than 3 years passed since the last thing was done to significantly advance her action, and an application for failing to provide the County with an Affidavit of Records.

Facts [3] The chronology of events on Ms. Pearson’s file is not in dispute and is as follows: • November 18, 2008 – Plaintiff’s lawyer Mr. Hall filed a Statement of Claim on behalf of Yolanda Pearson. • December 12, 2008 – The County’s lawyer Mr. Lavergne filed a Statement of Defence on behalf of Parkland County. • March 12, 2009 – Mr. Lavergne filed an Affidavit of Records on behalf of Parkland County. • January 24, 2011 – Mr. Lavergne sent a letter to Mr. Hall asking for a settlement meeting and seeking documentation relating toMs.

Pearson’s mitigation efforts, namely: 1) income tax returns 2) T4s 3) Canada Revenue Agency assessments and 4) details of jobsearch efforts. • April 4, 2011 – Mr. Hall sent a letter to Mr. Lavergne enclosing: 1) job search log 2) emails for job searches 3) income taxreturns and 4) T4 for 2009. • July 5, 2011- Mr. Lavergne sent a letter to Mr. Hall with a settlement offer, which was rejected by the Plaintiff. • August, 2013 – Ms. Van Campenhout took over conduct of the file from Mr. Hall. • August 29, 2013 – Ms. Van Campenhout met with the Plaintiff. • September 13, 2013 – Ms.

Van Campenhout filed a notice of change of representative. • Ms. Van Campenhout’s husband fell seriously ill and was hospitalized from October 20-October 31, 2013 and Ms. VanCampenhout was unable to monitor her files. • Ms. Van Campenhout was served with an application to strike the claim for want of prosecution on November 4, 2013.

The Applicable Rule of Court [4] The applicable Alberta Rules of Court Rules 4.33 and 15.9 provide in part as follows: 4.33(1) If 3 or more years has passed after the last thing done that significantly advanced an action, the Court, on application, mustdismiss 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 thedelay 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 3years 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 apurpose and to the extent that, in the opinion of the Court, warrants the action continuing. ... 15.9(1) Subject to subrule (2), where these rules impose a time limit for doing anything for which no time limit was provided for underthe former rules, and on the coming into force of these rules the thing has not yet been done, the time limit under these rules applies tothe doing of that thing and is calculated from the date on which these rules come into force.

(2) Rule applies only to matters that are set down for trial after the coming into force of these rules. The Applicant County’s Argument [5] It is the position of the County that the last thing of significance done to advance Ms. Pearson's action was when the Countyserved its Affidavit of Records on her lawyer (Mr. Hall) on March 13, 2009. [6] Ms. Pearson failed to serve an Affidavit of Records on the County as is required by Rule 5.5. [7] Regarding long delay, Rule 4.33 applies.

If it does not apply, then (former) Rule 15.4 applies. [8] It has long been recognized in wrongful dismissal actions that mitigation is required, the onus is on a plaintiff to makereasonable efforts to mitigate and all monies earned in mitigation are deducted from anything the former employer owes the employeefor damages: Red Deer College v Michaels, (SCC), [1976] 2 SCR 324.

[ 9 ] There is nothing novel about the mitigation requirements of Ms. Pearson in their actions against the County. Ms. Pearson had ongoing obligations to provide the County with her mitigation information, and providing it did not significantly advance the action. [ 10 ] Under Rule 4.33(1), if “3 or more years has passed without a significant advance in an action, the Court, on application, must dismiss the action as against the applicant", unless the exceptions cited exist. None of the exceptions exist in the circumstances at hand. [ 11 ] There were no genuine efforts by Ms.

Pearson to take steps to significantly advance her actions during the applicable 3 year drop dead window. As plaintiff, Ms. Pearson has carriage of her action. It is her responsibility to move her action forward and make sure that something is significantly done to advance them during the 3 year time period. [ 12 ] The mitigation information the County requested was information which was relevant to negotiations, but no negotiations occurred, and negotiations do not significantly advance an action. The January 24, 2011 letters from County counsel to Ms.

Pearson's lawyer clearly indicated that County counsel would like to arrange a meeting to discuss possible resolution and the mitigation information was relevant to settlement discussions. It had no other purpose. [ 13 ] Ms. Pearson's actions are exacerbated by the fact that she did not provide the County with an Affidavit of Records. Under

Part 5 of the Rules of Court, an Affidavit of Records is an important part of the disclosure process. It must be sworn by Ms. Pearson. It must disclose relevant and material records. It also must indicate the producible records are available for the opposing party to review. Respondent’s Argument [ 14 ] Justice Topolniski recently released her decision in Nash v Snow , 2014 ABQB 355 . In Nash , Topolniski J introduced “the macro view” of Rule 4.33. Under this approach, the issue on drop-dead applications remains whether the action was advanced or moved forward.

Therefore, the analysis under the drop-dead rule must now be based on the real quality of the act done, not just that a process was undertaken. [ 15 ] Nash also upholds the policy – earlier promoted e.g., by Slatter J (as he then was) in 525812 Alberta Ltd v Purewal , 2004 ABQB 938 – that priority should be given to encouraging settlement. [ 16 ] While in Nash , an eleventh hour settlement offer was held not to have advanced litigation, it is submitted that the exchange of documentation in April of 2011 elicited a settlement offer which in combination with mitigation documents, fall squarely within the macro test in Nash in that it advanced the litigation. [ 17 ] Huynh v Rosman , 2013 ABQB 218 is distinguishable from the case at hand because the Defendant Parkland County requested the information, it was provided promptly, the nature of the information narrowed the issue of quantum and requests to have a settlement meeting and a serious settlement offer ensued.

In Huynh , the lack of disclosure prevented the Administrator from having input or making any decision relevant to the litigation, which meant that the litigation had no prospect of moving forward. [ 18 ] Similarly reported cases where 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, are not applicable here because the Defendant Parkland was made aware that mitigation information for purposes of settlement had been gathered. [ 19 ] Finally, an action may be significantly advanced by other things, such as the informal provision of information that serve to narrow the issues and correspondence seeking to settle the matter, even if they are not procedural steps.

In the end, a functional analysis must be used to determine if the thing done moved the lawsuit closer to trial. [ 20 ] In Malcolm v Canada (Indian and Northern Affairs) 2006 ABQB 152 , an exchange of correspondence was held as a material advancement of the action to trial as it engaged the party adverse in interest. [ 21 ] While the case law is divided on this point, particularly as the case law requires an express agreement for any standstill during negotiations that might delay taking a step, there is good authority that an exchange of correspondence and information that is responded to by the party adverse in interest in a way that significantly advances the action, will be seen as a step.

In this case, a large package of relevant and material information and an agreement by both parties to meet to discuss settlement is strong evidence of a significant step. Further, the fact that a decent offer was exchanged after the provision of the information, which included evidence of mitigation efforts and financial records, is further telling of the parties’ reciprocal intention to settle the matter.

It can be argued that the exchange narrowed the issues on the question of quantum and liability. [ 22 ] The Respondent also submits that the Applicant’s argument that the Action should be struck for failure to produce an Affidavit of Records ought to be ignored. The usual procedure is that the party seeking the records has recourse to compel such records by means of a Court application. The County made no such efforts and did not even request that the Affidavit of Records be served.

It too did nothing in this regard. [ 23 ] Finally while the Respondent was unable to locate any case law regarding a lawyer’s inability to act due to emergency medical situations, she nevertheless seeks the Court’s understanding in this application. Although Mr. Lavergne did not have the benefit of knowing Ms. Van Campenhout’s situation, an extension of time for the equivalent number of days that Mr. Van Campenhout was unavailable is warranted. Analysis [ 24 ] The current Rule 4.33 is the successor to former Rules 15.4 and 244.1(1). The test under the new rules, which uses the term

“significantly advanced” is similar to the old rules, which used the term “materially advanced”: Bahcheli v Yorkton Securities Inc, 2010ABQB 824 , 2010 ABQB 824 at para 27, affirmed 2012 ABCA 166 , 2012 ABCA 166. Therefore arguably thejurisprudence under the old rules continue to be applicable to the

interpretation of current Rule 4.33. [25] In Alberta v Morasch, 2000 ABCA 24 , 2000 ABCA 24, the Court of Appeal discussed former Rule 244.1 and thefollowing general principles of

interpretation: 1. A procedural step required by the Rules of Court will be presumed to be a "thing which materially advances the trial" providedthat 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 Appealhas suggested many ways to determine this: reviewing the value of the document to the litigation, determining whether producing thedocument moves the action closer to trial, is necessary to advance the action, or allows a party to reconsider its position and provide abasis for early settlement discussions. 4. The participation or acquiescence and knowledge of the opposite party is a valid consideration in determining whether a thing hasadvanced the action to trial. [26] While I agree that the mitigation information provided by Ms.

Pearson was something that she had an obligation to provide tothe County and would not in and of as itself have significantly advanced the action, I note most importantly that soon after the mitigationinformation was provided, the Defendant County sent her an offer of settlement. These events occurred between January and July 2011.On January 24, 2011 Mr. Lavergne sent a letter to Mr. Hall asking for a settlement meeting and seeking documentation relating to Ms. Pearson’s mitigation efforts. On April 4th, 2011 Mr. Hall sent a letter to Mr.

Lavergne enclosing a job search log, emails with respect to job searches, income tax returns, and 2009 T4s. On July 5th, 2011 Mr. Lavergne sent Mr. Hall a settlement offer, which I gather was adecent offer, not just a nuisance value offer, although I have never been provided with the actual offer. [27] While a thing done must materially advance the action, not merely assist in negotiations as stated in Bourne v Alberta, 2008ABCA 165 at paragraph 8, in this case relevant and material information was provided to Mr.

Lavergne, which ultimately elicited asettlement offer and further requests to discuss. [28] Therefore even though settlement discussions do not in and of itself materially advance an action, if the negotiations result in anarrowing of issues, an agreement on certain facts, or an agreement as to some aspect of the action, such as in this case a settlementoffer, they may materially advice an action. [29] An often quoted passage from Slatter, J. (as he then was), in 525812 Alberta Ltd. v Purewell, 2004 ABQB 938 at paragraph16 discusses how settlement negotiations rarely materially advance an action except in certain limited circumstances: 16 It is difficult to envision how settlement discussions can materially advance an action.

If the settlement discussions are successful,the action will be settled, and the matter is at an end. If the settlement discussions are unsuccessful, they accomplish nothing, and do notmaterially advance the action. Since the policy of the Court favours settlement, it would be unfortunate if merely entering into settlementdiscussions with the other party would in effect extend the time under the drop dead rule. This would discourage, rather than encouragesettlement discussions.

There is the possibility that the action might not be settled in whole, but that the settlement discussions mightproduce a narrowing of the issues, an agreement on certain facts, or an agreement on parts of the action (such as quantum or liability). Inthe latter case settlement negotiations might amount to things that materially advance the action, but there is nothing like that in this case.

Underlining Added [30] Although not argued or specifically cited by either counsel, in Montreal Trust Co. of Canada v Telcorp Ltd. 2013 ABQB398, my colleague Park, J. dealt with this same application in the context of an ultimately failed settlement process.

He concluded thatalthough settlement negotiations are not things that materially advance an action, and notwithstanding settlement negotiations failed asthey did in the matter presented before me, negotiations that cause a narrowing of the issues constituted things that materially advancedthe action, as discussed at paragraphs 64 to 66: 64 Consequently I hold the meeting of March 22, 2007 and the subsequent emails up to and including April 17, 2007 were thingswhich genuinely furthered the litigation in a meaningful way. 65 The next step completed in this litigation was the without prejudice unilateral settlement offer of Computershare through itsCounsel's letter of February 27, 2012 to AMJ's Counsel.

Although I note it was sent on a "without prejudice" basis, it can be observedthis new offer was predicated on many of the agreements in principle reached by the parties in the March 22, 2007 meeting.

Theproposed interest calculation was not so predicated but no initial agreement in principle on the interest calculation was ever reached atthe March 22, 2007 meeting. 66 I might add in reaching my final opinion I took into consideration the Alberta Court of Appeal's instructions to interpret Rule15.4(1) in a way most favourable to preserving the right to litigate. [31] Finally in Phillips v Sowan, 2007 ABCA 165, as in the present matter, information was exchanged on an informal basis [afterthe defendant was noted in default], and such was held by our Court of Appeal to have materially advanced the action as the defendantwas aware that the plaintiff was obtaining the information.

The Chambers Judge Thomas, J. whose decision was later upheld by ourCourt of Appeal commented (as was also mentioned in paragraph 66 of Montreal Trust) that the Court should preserve a claimants rightto litigate and see an action though to resolution. Thomas J. provided at paragraphs 11 to 16 of his decision, reported at 2006 ABQB 579

the following background: 11 To provide a general context for the analysis in this case I note the statement in Filipchuk v. Ladouceur (2001), 2001 ABCA 26, 277 A.R. 192 where the Alberta Court of Appeal stated at para. 5 that when interpreting Rule 244.1 "given the effect of therule upon the right to litigate, the

interpretation most favourable to the preservation of that right should be adopted". (emphasisadded). 12 The Defendant Sowan had been noted in default and that is a very important factor in this decision. When a defendant is noted indefault in Alberta that party is taken to have admitted the facts alleged in the statement of claim by his failure to deny those facts. All adefendant can do is contest the amount of damages to which the plaintiff is entitled. That is the only issue left alive in the action. SeeSulef v. Parkin and Breno, (1966), (AB CA), 57 W.W.R. 236 (Alta.

S.C.A.D.) at 239 per Smith C.J.A. andYaremchuk v. Haight, 2001 ABCA 7, 277 AR 160, 89 Alta. L.R. (3d) 311. 13 In this case, counsel for the Administrator in a letter dated March 8, 2001 said: ". . . we cannot defend this action until you provideour office with a copy of the filed Affidavit of attempted service upon which the substitutional service order was based".

She thenrequested a list of medical information and finished the correspondence by inviting the Plaintiffs' counsel to forward a "reasonablesettlement proposal". 14 On March 16, 2001 Plaintiffs' counsel responded with some of the information requested including the affidavit of attemptedservice. This letter also advised that a consultant had been retained to provide an assessment of the economic loss suffered by thePlaintiff.

That retainer had occurred on January 19, 2001. 15 Notwithstanding the receipt of the Affidavit of attempted service the lawyer for the Administrator did not apply to open up thedefault judgment and no statement of defence has ever been filed. Accordingly, it was reasonable for the Plaintiffs' counsel to conclude(as stated in para. 15 of the Champion Affidavit) that liability was no longer an issue and that the action had resolved into an assessmentonly. Plaintiffs' counsel proceeded on that assumption and it appears that the lawyer for the Administrator did as well.

That no steps weretaken to reverse the noting in default is a key consideration because in terms of the steps remaining to be taken in this action it was thenup to the Plaintiff from that point on to assemble the necessary information required to support the damage claim.

In a rather stop and gofashion that is what the Plaintiffs' lawyer proceeded to do. 16 In keeping with the direction of the Court of Appeal in Filipchuk, supra, it is my view that where an assessment is the only liveissue remaining in an action, the application of Rule 244.1(1) should seek to preserve a claimants right to litigate and see an actionthrough to completion by resolution of the damage claim. [32] Furthermore I conclude that a “functional analysis” is required to determine whether an action has been significantly advancedas discussed in Nash at paragraph 29 and 30: 29 The absence of the words the "last thing" or "step" in Rule 4.33 necessarily modifies the focus of the purposive and contextualassessment.

The issue is "advancing" or moving the action forward and what was done in the context of the real issues in dispute.Accordingly, the court must take a macro view of what transpired in the three-year window. That may require some dissection of whathappened, and some examination of the dissected parts. As Graesser J. noted in Le v 1055168 Alberta Ltd, the focus is on function, notwhether

an act fits into a defined category of activities. 30 Put another way, the court must view the whole picture of what transpired in the three-year period, framed by the real issues indispute, and viewed through a lens trained on a qualitative assessment.

This necessarily involves assessing various factors including, butnot limited to, the nature, value and quality, genuineness, timing, and in certain circumstances, the outcome of what occurred. [33] As described in Nash at paragraphs 33 to 35, I conclude that priority should be given to encouraging settlement: 33 The Rules employ the term "resolution" but do not define it. In the context of litigation, the word often conjures images of"settlement" ("The reconciliation of conflicting views or parties in regard to a matter; the settlement of a dispute or conflict": OxfordEnglish Dictionary, online: <www.oed.com>).

Similarly, it can bring to mind a "disposition" ("A formal decision, determination, orexpression of opinion by a deliberative assembly, committee, court...": Oxford English Dictionary, online). Both concepts exist on alitigation continuum ranging from abandonment of an action, to complete or partial settlement, to final disposition by ruling of thetribunal. Final dispositions do not flow only from trials; they can take multiple forms ranging from striking of an unmeritorious action,dismissal of a dormant action,

summary judgment or dismissal,

summary trial, and a full trial. While a full trial may be "a rarity" asSlatter J.A. observed in Windsor v Canadian Pacific Railway Ltd, for some it is nevertheless inevitable. 34 The Rules speak to dispute resolution with or without the court's assistance (Rule 15 (d)). They place responsibility on the parties tomanage their dispute, by engaging in good faith participation in alternate dispute resolution (Rule 4.16), and they mandate some form ofdispute resolution (or Order waiving it) before a case can be set for trial (Rule 8.4(3)).

None of these notions existed until November 1,2010 when the new Alberta Rules of Court came into force.

Their obvious purpose is to promote affordable, timely, and proportionatedispute resolution and to place squarely on litigants' shoulders the responsibility for working towards resolution of their lawsuit withoutthe need for a trial. 35 The change in tenor of the new Rules supports the notion that litigation is no longer about reaching the ultimate goal of trial.Rather, the goal - as stated in Hryniak and Windsor - is to resolve the case by proportionate means when it is just and fair to do so. [34] Although the Parkland County settlement offer was never accepted in the present matter, I conclude that the relevant materialinformation that was provided to Mr.

Lavergne by Mr. Hall was sufficiently and directly connected [in time and otherwise] with thesettlement offer that was made by the Defendant Parkland. Therefore the gathering of that information for settlement purposes as a result of Mr. Lavergne’s January 24, 2011 letter to Mr. Hall means that the April 4th, 2011 letter from Mr. Hall to Mr. Lavergne in response constituted a thing that materially advanced Ms. Pearson’s action. Counsel for Ms. Pearson’s letter of April 4th, 2011 not merely assisted

in the negotiations, but clearly resulted in a narrowing of issues that led to another thing that materially advanced the action, namely a bona fide non-nuisance value settlement offer from the Defendant July 5 th , 2011. Like my colleagues Park, J. in the Montreal Trust case, and Thomas, J. in Phillips v Sowan , upheld by the Court of Appeal, I interpret the drop dead rule in a manner which seeks to preserve a claimant’s right to litigate, and see an action through to resolution. [ 35 ] Furthermore as in Snow , a functional analysis leads me to conclude that the Defendant’s settlement offer was as a result of thing(

s) that material advanced the action and obviously promoted settlement. [ 36 ] Accordingly the application to strike the claim for want of prosecution on November 4 th , 2013 must be dismissed based on the April 4 th and July 5 th , 2011 things that materially advanced Ms. Pearson’s action within the three year period, and which reset the clock. Plaintiff’s Failure to Produce an Affidavit of Records [ 37 ] The Applicant also argues that Ms. Pearson’s action should be struck for her failure to produce an Affidavit of Records, as required by Rule 5.5.

The Applicant argues that disclosure in an Affidavit of Records is important to narrow and define the issues between the parties, to get an early disclosure of the facts and records, and to facilitate an evaluation of the positions of the parties. The County argues that it was deprived of all of this when Ms. Pearson did not provide it within an Affidavit or Records. [ 38 ] Under Rule 5.5(2), Ms. Pearson was required to provide the County with an Affidavit of Record within three months after the County’s Statement of Defence was served in December 2008.

I agree that if the Plaintiff had wanted additional time to serve her Affidavit of Records, she could have applied to the Court for an extension; under Rule 5.1(2) a Defendant is entitled to double

Schedule C costs when the other party fails to produce an Affidavit of Records; and one of the additional sanctions that may be imposed is the striking out of the claim. [ 39 ] In this particular case however I also note that the Defendant could also have applied to compel the production of records that he was seeking, and not only did the County make no such application, it had not even during the course of these proceedings between November 2008 and November 2013 ever even requested that an Affidavit of Records be provided. [ 40 ] I conclude that whatever turns on the Affidavit of Records not being filed in this matter on behalf of Ms.

Pearson, it is not something that should not result in Ms. Pearson’s claim being struck. While an Affidavit of Records can be an important document, it appears that the County did not feel that the Affidavit of Records from Ms. Pearson was particularly important, as the facts appear to bear out. The Defendant never sought the production of the Affidavit of Records, and in fact never even mentioned a requirement to produce the Affidavit of Records as I understand it until the present application. Furthermore, Mr.

Lavergne’s letter of January 24, 2011 seeking certain documentation may have been all he felt he needed because when his request was responded to on April 4 th , 2011, he sent a settlement offer on July 5 th , 2011. Conclusion [ 41 ] In the end result, the Applicant’s application to have Ms. Pearson’s claim dismissed for want of prosecution pursuant to Rule 4.33 is dismissed for the reasons provided. [ 42 ] Finally although it is not essential to my decision, there is also the Plaintiff’s submission that some accommodation be made in this case because of Ms.

Van Campenhout’s inability to act due to an emergency medical situation. There is no authority as conceded by the Plaintiff that suggests that an extension in time for the equivalent number of days that Ms. Van Campenhout was not able to act due to her husband’s emergency medical situation should be granted. Otherwise an intended and unacceptable consequence of this extension would mean that the three year period in which a thing must be done to materially advance an action could be delayed indefinitely depending on the amount of time that a party’s lawyer is unable to act due to a medical condition.

I conclude that this argument is without merit. Heard on the 25 th day of September, 2014. Dated at the City of Edmonton, Alberta this 23 rd day of December, 2014.

Donald Lee J.C.Q.B.A. Appearances: Anna Loparco, Dentons Canada LLP for the Plaintiff (Applicant) F. Albert X. Lavergne, Reynolds Mirth Richards & Farmer LLP for the Defendant (Respondent)