Paquin v Whirlpool Canada LP, 2016 ABQB 147

Court of Queen ’ s Bench of Alberta Citation: Paquin v Whirlpool Canada LP, 2016 ABQB 147 Date: 20160314 Docket: 0901 04219 Registry: Calgary Between: Andrea Paquin Plaintiff - and - Whirlpool Canada LP, Whirlpool Canada Co., Whirlpool Corporation, Antonio Merloni Spa, Asko Appliances, Inc., successor to AM Appliance Group Inc., The Brick Warehouse LP, The Brick GP Ltd., John Doe Corporation and John Doe 1 through 5 Defendants - and - Whirlpool Canada LP, Whirlpool Canada Co., Whirlpool Corporation, Antonio Merloni Spa, Asko Appliances, Inc., successor to AM Appliance Group Inc., John Doe Corporation and John Doe 1 through 5 Third Party Defendants

_______________________________________________________ Memorandum of Decision of J. Farrington, Master in Chambers _______________________________________________________ The Application [1] This is an application to dismiss an action for delay pursuant to Rule 4.33. The facts are not in dispute however the partiesdisagree about how the law should be applied to those facts. The Action [2] The action relates to a fire which occurred in a condominium complex on March 26, 2007.

The fire is alleged to haveoriginated from a clothes dryer, and the various defendants are connected to the supply or manufacture of the dryer. The action wascommenced on March 19, 2009, and the Statement of Claim was amended on February 17, 2010.

The last Statement of Defence wasfiled on July 14, 2010. [3] There was a related action in which the condominium corporation claimed compensation for damage to common propertyfrom the fire, but no specific argument is made to the effect that developments in that action may have constituted advancements in thisaction. [4] Various third-party claims and notices to co-defendants were filed in this action and the last third party claim was served onor about March 19, 2012. The Facts [5] On August 2, 2012, Mr.

Irwin, who was counsel for some of the defendants, wrote to counsel for the plaintiff, and to counselfor the condominium corporation, offering to settle this action and the condominium corporation action collectively for the sum of$50,000. No apportionment was suggested as between the two actions. At the same time, Mr. Irwin forwarded an expert report regardingthe cause of the fire. [6] In approximately 2013 the condominium corporation action was settled. [7] On July 25, 2014 plaintiff’s counsel forwarded an offer to Mr. Irwin. In September 2014 Mr. Irwin requested an extension oftime for responding to the offer.

In addition, shortly thereafter, Mr. Irwin posed questions by e-mail seeking factual clarificationsregarding why certain appliances were replaced, and he requested evidence regarding repair costs. Those inquiries were answered. [8] On January 14, 2015 Mr. Irwin forwarded an offer to counsel for the plaintiffs. The offer was a global offer to settle theplaintiff’s claim for $30,650, and it commented in some detail on specific elements of the plaintiff’s claim. This was a recurring theme inthe offers. They debated specific heads of damages before arriving at a global number.

Progress on the specific heads of damages can betracked. [9] On June 19, 2015 plaintiff’s counsel made a further offer, again commenting on specific elements of the plaintiff’s claim,and arriving at a global figure of $46,561.31. [10] The defendants’ response to that offer was this application to dismiss which was filed on July 9, 2015. [11] The defendants say that the last thing that significantly advanced the action was the filing and service of the last third partyclaim on March 19, 2012 and that no significant advancements occurred in the three years ending on or about March 19, 2015.Alternatively, they argue that if the forwarding of the expert report on August 2, 2012 was an advancement, that the three year windowcan be extended to August 2, 2015 based on Chan v.

Calgary Remand Centre [2012] A.J 512 (Master). The Applicable Law [12] Settlement offers form a large part of the argument in this case so their admissibility must be considered. In Montreal TrustCompany of Canada v Talcorp Limited, 2013 ABQB 398 Park, J. confirmed at paragraph 62 that without prejudice settlementdiscussions can be reviewed for the purpose of considering advancement in an action: In reaching my conclusion I am aware the settlement meeting was held on a “without prejudice” basis.

However the communicationsmade in that meeting are admissible for the purpose of considering whether the communications were things which materially advancedthe action within the 5 year period. Both Clarke, J in JK Campbell, supra, and Greckol, J in Webber v Canada (Attorney General), 2005ABQB 718 , 385 A.R. 209 (Alta. Q.B.) found that “without prejudice” communications were admissible for the purposes ofdetermining whether they were a thing which materially advanced the action.

[13] The law with respect to delay applications now focuses upon advancements toward resolution rather than steps or things. Abrief review of some of the leading cases is helpful. [14] In Nash v Snow, 2014 ABQB 355 Topolniski, J held at paragraphs 29 to 30: 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. Put another way, the court must view the whole picture of what transpired in the three-year period, framed by the real issues in dispute,and viewed through a lens trained on a qualitative assessment.

This necessarily involves assessing various factors including, but notlimited to, the nature, value and quality, genuineness, timing, and in certain circumstances, the outcome of what occurred. [15] She held further at paragraphs 32 to 35: Slatter J.A. commented in Windsor v Canadian Pacific Railway Ltd at para 15 that “the myth of trial should no longer govern civilprocedure”. The culture shift called for in Hryniak and echoed in Windsor supports the Plaintiff’s contention that the end goal of“significant advancements” under Rule 4.33 is not necessarily trial, but rather resolution. I agree.

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”: Oxford EnglishDictionary, online: <www.oed.com>). Similarly, it can bring to mind a “disposition” (“A formal decision, determination, or expressionof opinion by a deliberative assembly, committee, court...”: Oxford English Dictionary, online).

Both concepts exist on a litigationcontinuum ranging from abandonment of an action, to complete or partial settlement, to final disposition by ruling of the tribunal. Finaldispositions do not flow only from trials; they can take multiple forms ranging from striking of an unmeritorious action, dismissal of adormant action,

summary judgment or dismissal,

summary trial, and a full trial. While a full trial may be “a rarity” as Slatter J.A.observed in Windsor v Canadian Pacific Railway Ltd, for some it is nevertheless inevitable. 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. The change in tenor of the new Rules supports the notion that litigation is no longer about reaching the ultimate goal of trial. Rather, thegoal - as stated in Hryniak and Windsor - is to resolve the case by proportionate means when it is just and fair to do so. [16] In Huynh v.

Rosman, 2013 ABQB 218 Gates J held at paragraph 27: As stated above, a procedural step required under the Rules of Court, once completed, significantly advances an action. Other proceduralsteps, even if not required by the Rules of Court, may also significantly advance an action. Finally, an action may be significantlyadvanced by other things, even if they are not procedural steps.

A functional analysis must be used to determine if the thing done movedthe lawsuit closer to trial. [17] In Pearson v Parkland (County), 2014 ABQB 690 Lee J held at paragraph 27 and 28: While a thing done must materially advance the action, not merely assist in negotiations as stated in Bourne v Alberta, 2008 ABCA 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.

Therefore even though settlement discussions do not in and of itself materially advance an action, if the negotiations result in a narrowingof issues, an agreement on certain facts, or an agreement as to some aspect of the action, such as in this case a settlement offer, they maymaterially [advance] an action [18] Of course, Hryniak v. Mauldin, 2014 SCC 7 , [2014] 1 SCR 87, while primarily a case about

summary judgment,emphasized the need for a cultural shift in the carriage of litigation. Among other things, it reminded that most cases do not go to trial,and that ultimately the goal of litigation should be resolution and not necessarily “trial”. It is from the perspective of this goal ofresolution, and the “macro” view urged by Topolniski, J in Nash, that the facts of this application must be considered. Toward that end,she clearly incorporated both Hryniak and Windsor v. Canadian Pacific Railway

(2014) ABCA 108 into her reasons in Nash. [19] Chronologically, the cases that I have cited were decided in the following order: Huynh, Montreal Trust, Hryniak, Windsor,Nash and Pearson. Not surprisingly, the latter cases reflect the litigation culture shift mandated by Hryniak and the fact that resolutionin any form is the end goal. [20] A brief review of the purpose of Rule 4.33 is also helpful. Slatter, JA described the purpose of the rule in Turek v.

Oliver,2014 ABCA 327 at paragraph 5: [5] The drop dead rule, R. 4.33, is designed to bring an end to actions that have become inactive and should be deemed to havebeen abandoned. It was not unreasonable for the chambers judge to conclude that this action does not fall within that category. Analysis

[ 21 ] Based upon the foregoing authorities, I find that the at the very least, the exchanges of settlement offers, and in particular those of July 25, 2014 by the plaintiff, and January 14, 2015 by the defendants, along with the exchanges of information in support of those offers constituted a sufficient advancement in the action for the purpose of responding to the Rule 4.33 application. While the settlement offers were global offers, they analysed individual aspects of the claim.

They clearly show the parties becoming closer on particular issues as the settlement discussion process unfolded and even agreement on some issues, bearing in mind that none of those agreements were in themselves binding. While there were no formal admissions on specific items, the differences on many items became insignificant. The parties also made progress in identifying the true issues in dispute, whether formally or otherwise. [ 22 ] From an overall resolution perspective, the parties’ discussions led them to a point where they were approximately $16,000 apart.

They started in 2012 when the defendants were not prepared to even allocate a specific amount to the plaintiff’s claim, and they progressed to a point where the parties had not only allocated specific amounts to the claim, but they may have well have been able to resolve the matter had this application not intervened. [ 23 ] I also find that the exchange of information that occurred within the settlement discussions and the answering of questions posed by the defendant’s counsel as part of those exchanges advanced the matter toward resolution.

The defendants argued on this application that the answers merely confirmed what was in the Statement of Claim, but the questions asked were directly related to the damages claimed, and were in fact similar to the type of information that would have been obtained in a traditional questioning session. Indeed, if the informal posing of questions was not designed to be a productive exercise, it is curious as to why the defendants were even asking the questions that they posed. [ 24 ] Hryniak urges proportionality in terms of the method of resolution of claims.

It was certainly understandable that plaintiff’s counsel engaged in good faith in the further exchange of information and offers when the parties appeared to be getting closer to resolution. [ 25 ] The fact that the discussions, offers and exchanges assisted in making significant progress is confirmed in the January 14, 2015 offer from Mr.

Irwin which said: We have now had an opportunity to complete an analysis of your client’s claim for damages resulting from the alleged fire at her condominium unit…which occurred on March 26, 2007… as well as statements made in the letter accompanying her Formal Offer to Settle and subsequent factual clarifications . Our assessment is set out below. In an effort to resolve this matter , we have also provided a settlement offer for your consideration. (Emphasis added) [ 26 ] Those statements are a clear indication that progress has been made toward resolution.

First, they confirm that the defendant’s analysis of the plaintiff’s claim for damages is complete. That is significant. Second, they confirm that information obtained in the process which led to the offers was used in the analysis. That is also significant for the purposes of this application. [ 27 ] Furthermore, Rule 1.2(2) provides:

(2) In particular, these rules are intended to be used (

a) to identify the real issues in dispute, (

b) to facilitate the quickest means of resolving a claim at the least expense, (

c) to encourage the parties to resolve the claim themselves, by agreement, with or without assistance, as early in the process as practicable, (

d) to oblige the parties to communicate honestly, openly and in a timely way, and (

e) to provide an effective, efficient and credible system of remedies and sanctions to enforce these rules and orders and judgments. [ 28 ] Sometimes the parties’ interests can be better served by constructive dialogue than by taking adversarial steps. Toward that end, plaintiff’s counsel was doing exactly what Rule 1.2(2) directed him to do. On the facts of this case, it was reasonable for him to engage in the dialogue that was undertaken. That is not without limits, however, as Rule 4.33 clearly requires that demonstrable progress be made.

With hindsight, a standstill agreement or notice would have likely been prudent, but I am reluctant to second guess what appears to have been a reasonable assessment by plaintiff’s counsel that matters were progressing toward possible resolution and that further exchanges were warranted. There was demonstrable progress. [ 29 ] Rule 4.33 is meant to be used to dismiss languishing actions. This is not, and was not, a languishing action.

Result [ 30 ] The application to dismiss the action under Rule 4.33 is dismissed. If the parties cannot agree on costs, they may make arrangements with the Masters’ office to

schedule a time to speak to costs at the end of one of my morning lists. Heard on the 8th day of March, 2016. Dated at the City of Calgary, Alberta this 14 th day of March, 2016. J. Farrington M.C.C.Q.B.A. Appearances: Norton Rose Fulbright Canada LLP Kelly G. Moffet-Burima for the Plaintiff Miles Davison LLP Jason J. Irwin for the Defendants Whirlpool Canada LP, Whirlpool Canada Co., Whirlpool Corporation, Asko Appliances, Inc., successor to AM Appliance Group, Inc. MacPherson Leslie & Tyerman LLP Julie V. Sheperd for the Defendants The Brick Warehouse LP and The Brick GP Ltd.