Danek v Levine, 2016 ABQB 422

Court of Queen’s Bench of Alberta Citation: Danek v Levine, 2016 ABQB 422 Date: 20160802 Docket: 0901 17898 Registry: Calgary Between: Carol Joyce Danek Appellant/Plaintiff - and - Darryl Marc Levine, Darryl Marc Levine operating as Levine Law Office, Darryl Marc Levine Professional Corporation, Levine Currie Respondents/Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice C.M.

Jones _______________________________________________________ Appeal from the Order by Farrington, Master in Chambers Filed on the 22 nd Day of September, 2015 ( Docket: 0901 17898 ) [ 1 ] Danek appeals the decision of Master Farrington dated September 22, 2015 (the “Farrington Decision”) striking her action against the Defendants in accordance with the provisions of Rule 4.33 of the Alberta Rules of Court , Alta Reg 124/2010 (the “ Rules ”).

Rule 4.33 provides that if three or more years have passed without a significant advance in an action, the Court, on application, must dismiss the action as against the applicant, unless certain exceptions apply. [ 2 ] Danek was involved in an accident while on a City of Calgary (the “City”) bus in 1997, and alleges she suffered personal injury. She brought an action against the City and an unknown driver who is alleged to have cut off the bus (the “Bus Action”). The unknown driver was defended by the Administrator of the Motor Vehicle Accident Claims Fund (the “Administrator”).

[ 3 ] Danek engaged lawyer D. Marc Levine in the Bus Action. An application by the Administrator to have her action against it dismissed for want of prosecution under former Rule 244.1 was successful. It was determined by Master Hanebury that documents had not been served on the Administrator as required, and therefore no step had been taken within five years that materially advanced the action against the Administrator.

The Bus Action continued against the City, and Danek’s questioning was held August 26, 2014. [ 4 ] Danek brought a separate action against the Defendants, who are the respondents on this appeal, for $250,000 for negligence and breach of a retainer agreement by Statement of Claim issued November 26, 2010 (the “Levine Action”). The Defendants defended this claim by filing a Statement of Defence on December 10, 2010. No steps were taken by Danek in the Levine Action since she served her Statement of Claim.

The Defendants obtained an ex parte order signed September 15, 2011 deeming service of the Statement of Defence to be good and effective as of January 11, 2011. The Defendants also served a Notice of Appointment for Questioning on Danek returnable December 5, 2011, but she did not attend. Otherwise, no steps have been taken in the Levine Action. [ 5 ] The Defendants sought dismissal of the Levine Action under Rule 4.33 . Their Application was filed October 23, 2014. Master Farrington heard that Application on August 11, 2015. On September 22, 2015 he allowed the application and dismissed the Levine Action.

The Plaintiff now appeals on the basis that the Master erred in determining that the Bus Action and the Levine Action were not inextricably linked, and that therefore a step taken in the Bus Action significantly advanced the Levine Action. [ 6 ] The Plaintiff acknowledges that more than three years have passed since a step was taken in the Levine Action.

As a result, there is no dispute that Rule 4.33 would apply to the Levine Action if not for the possibility that the Bus Action is inextricably linked to the Levine Action, as the parties agree that steps have been taken in the Bus Action which would qualify as a significant advance therein. [ 7 ] There also appears to be no dispute that if the two actions are inextricably linked, a significant advance in the Bus Action will be deemed to be a significant advance in the Levine Action, thus rescuing the Levine Action from the otherwise mandatory operation of Rule 4.33 . [ 8 ] The inquiry on this appeal then focusses on the presence or absence of an inextricable link between the two actions.

The parties each refer to and discuss in detail the decision of the Court in Angevine v Blue Range Resources Corp , 2007 ABQB 443 (“ Angevine ”). [ 9 ] In Angevine , Mahoney J. said this at para 41: To determine if a related action is “inextricably linked” to the primary action, the following factors are to be considered. 1) Are the two actions inextricably linked in the sense that the result in the related action would be “legally or factually determinative” of the issues in the primary action? 2) Will the issue determined in the related action be “relevant and binding” in the primary action? 3) Does the related action materially advance the primary action? 4) Could the decision in the related action be a “barrier in law” to the Court’s adjudicating the primary action? [citation omitted] (the “ Angevine factors”) Master Farrington’s Decision [ 10 ] The parties agree that the standard to be applied on this appeal of the Farrington Decision is correctness: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 at para 30 . [ 11 ] Master Farrington found the two actions were not inextricably linked, noting: 1) The Defendants will not be bound by a determination of the Administrator’s liability in the Bus Action.

The Defendants are not parties to that action. They would be at liberty, in the Levine Action, to contest apportionment of liability determined in the Bus Action. Accordingly, Master Farrington concluded that the Bus Action serves no useful purpose in fixing liability that then could flow to the Administrator in the Levine Action. Because it is not binding, a trial within a trial would still be needed in the Levine Action. Thus, a determination of issues in the Bus Action does not significantly advance the Levine Action.

By implication, Master Farrington concludes the two actions are not inextricably linked. 2) The substance of the Levine Action is substantially different from the substance of the Bus Action. In the Bus Action, Danek must establish that the City and/or an unknown driver (and therefore the Administrator) is liable for the accident that caused her injuries.

In the Levine Action, she must establish the existence of a retainer and breach of that retainer. 3) Danek’s argument that she might be accused of abuse of process if she succeeds against the City in the Bus Action and then successfully pursues the Levine Action, potentially leading to double recovery, is untenable. Master Farrington thought that the Defendants were the appropriate parties to raise that issue and, since they had not, it could not excuse Danek from the application of Rule 4.33 .

Discussion [ 12 ] Danek asserts that the two actions are inextricably linked because she can collect 100% of her damages against the City if it is

found even 1% liable for her damages. Such a finding, she argues, means that she would have sustained no damages arising from the Defendants’ alleged negligence in failing to serve the Administrator. This, she argues, makes findings of liability in the Bus Action determinative of causation and damages in the Levine Action.

That may be correct as it relates to damages for the accident if Danek is able to collect 100% of her damages from the City, but I do not believe that is correct in regards to causation. [ 13 ] The Defendants point out (and Danek acknowledges) that a finding in the Bus Action that the Administrator is 100% liable would relieve the City of liability, but would not be binding in the Levine Action as the basis for a conclusion that she suffered damages as a result of the Defendants’ failure to serve the Administrator.

Such a finding would not be determinative of causation and damages in the Bus Action because the Defendants would not be bound by that determination. [ 14 ] Moreover, the Defendants correctly point out that the Levine Action could proceed notwithstanding a determination in the Bus Action that the City was liable.

In the Levine Action, Danek could pursue her claims for damages in addition to damages for personal injury, including her costs and expenses incurred to pursue the Bus Action which was dismissed against the Administrator as a result of the Defendants’ alleged negligence. [ 15 ] Danek cites the decision in 155569 Canada Ltd v 248524 Alberta Ltd , 2004 ABQB 17 (“ 155 ”) as an example of how two actions can be inextricably linked when it is not possible to re-litigate between two parties an issue that has been conclusively decided by the court.

In that case, the court considered an application for dismissal of an action regarding the enforceability of a General Assignment of Rents and Leases (“GARL”) under former rule 244.1. The court held that a decision in a foreclosure action was a step that materially advanced the action regarding enforceability of the GARL, even though it involved different defendants than the foreclosure action. Danek notes that even though the defendants were different in the two actions, the court in the enforceability action concluded they were inextricably linked.

She argues that the same conclusion applies here. [ 16 ] I agree with the Defendants that 155 can be distinguished on the basis that one of the defendants in the action to enforce the GARL, Clarkson Gordon, specifically adopted and incorporated the defence of one of its co-defendants in the separate foreclosure action. A finding in the foreclosure action thus bound Clarkson Gordon in the action to enforce the GARL. As a result, the foreclosure action, where the court held the GARL was enforceable, finally determined an issue that advanced the enforceability action. Such is not the case here.

The Defendants do not specifically adopt and incorporate the defences raised in the Bus Action. [ 17 ] Danek also cites Calgary (City) v Chisan , 2000 ABCA 313 (“ Chisan ”) as an example of two actions found to be inextricably linked on an application brought under former rule 244.1. There, Chisan had been convicted of bylaw infractions and was ordered to comply. The City brought a separate application for contempt on the basis that Chisan failed to comply, which was adjourned. Chisan subsequently appealed his conviction for bylaw infractions.

On his application to dismiss the City’s contempt application for want of prosecution under former rule 244.1, the Court of Appeal concluded the proceedings were inextricably linked, stating at para 4: In the circumstances of this case, no court would have entertained an action to find Chisan in contempt while he was still attempting to exercise his appeal rights of the order on which the contempt application was based, despite the fact that the contempt proceeding was not formally stayed.

The dismissal of Chisan’s ultimate appeal rights was therefore a thing in an action which materially advanced this action, as contemplated in Rule 244.1. [ 18 ] Chisan is distinguishable on the basis that in that case, an action against the defendant for contempt for failing to comply with orders to remedy by-law infractions had no basis in law for proceeding until a pending appeal of the defendant’s by-law conviction determined if there was any conceivable grounds for contempt. Resolution of the latter was clearly a condition precedent to resolution of the former.

That is not the case here, where it is not necessary to decide the Bus Action as a condition precedent to resolve the Levine Action. [ 19 ] In my view, even if it was found that Danek did not suffer any damages as a result of personal injury attributable to the City or the Administrator, she might still continue her action against the Defendants, alleging that she suffered damages in the form of costs and expenses arising in respect of an action that never proceeded to resolution because it was struck.

Thus, I conclude that a finding in the Bus Action is not determinative of liability or all damages in the Levine Action and therefore inextricable linkage does not arise in that manner. [ 20 ] Danek also argues that Master Farrington erred because he held that findings in the Bus Action would not be binding on the Defendants, thus one of the four Angevine factors to be considered for inextricable linkage was not satisfied.

She suggests that it is sufficient if any one or more of those indicia of inextricable linkage are present. [ 21 ] I am not convinced that a correct reading of Angevine (or of the decision in Malcolm v Canada (Minister of Indian Affairs & Northern Development) , 2006 ABQB 152 upon which it draws), leads to the conclusion that establishing any one of the four indicia of inextricable linkage is sufficient to establish such a link in every case. Similarly, I am not convinced that all four must be present for inextricable linkage to be found. [ 22 ] Angevine tells us to consider the four factors set out.

It does not state that any one is more important than any other. It does not tell us, for example, if the result in the related action must be legally and factually determinative of all of the issues in the primary action, or just some of them or just the more important issues. [ 23 ] It does not tell us precisely how a determination of issues in the related action must be relevant and binding in the primary action and to what particular questions.

It does not tell us how we are to measure the materiality of any advance it brings to the primary action. [ 24 ] These comments are not a criticism of the discussion in Angevine . Rather, they are a recognition of the importance of viewing the four Angevine factors together to see if they collectively and cumulatively point to a consistent conclusion that two actions are not only linked, but inextricably so. [ 25 ] The Defendants note that the first factor set out in Angevine requires that a finding in the related action (the Bus Action)

would be logically or factually determinative or relevant or binding on the primary action (the Levine Action). It does not require a finding that they are logically or factually determinative or relevant or binding on the parties to the primary action. Danek would agree, as she argued that we are to consider if findings could be binding on an action, not on any one particular party. [ 26 ] I agree that the first factor, whether a result in the Bus Action would be legally or factually determinative of issues in the Levine Action, relates to an issue in an action, not between parties, to be resolved.

I believe that is what Master Farrington meant in his reference to a finding in the Bus Action being binding “on Mr. Levine in this action”. [ 27 ] As noted above, a finding in the Bus Action is not binding or determinative of the Defendants’ liability in the Levine Action, although it may inform on the quantum of damages. Findings in either action could certainly be relevant to findings in the other action, but they are not binding (with the possible exception of a determination of Danek’s injuries).

Possible relevance does not, in my view, establish inextricable linkage. [ 28 ] Danek argues that inextricable linkage arises because the Defendants in the Levine Action are, at this stage, entitled to assert that she has suffered no damage, there having been no determination as yet in the Bus Action of any injury or loss she suffered due to the 1997 accident. [ 29 ] I agree the two actions are linked. I do not, however, believe that the fact that no damages in the Bus Action have yet been proven gives rise to inextricable linkage.

It is, after all, possible that the Levine Action could proceed before the Bus Action and that a trial within in a trial in the Levine Action would establish damage or injury arising from the 1997 accident, though such a finding would not be binding on the City or the Administrator. [ 30 ] As well, even if Danek cannot establish personal injury damages in the Bus Action, she can still assert that she incurred needless expense in connection with the Levine Action by engaging Levine to perform legal services which came to nothing because of failure to serve documents.

In that regard, the Bus Action would not determine all damages issues. [ 31 ] Danek argues that it would be an abuse of process to allow her to re-litigate in the Levine Action the issue of her damages in the Bus Action. While she is bound by any determination as to her damages arising from personal injury in the Bus Action, the Defendants in the Levine Action are not. Nor are the issues in the Bus Action identical to those in the Levine Action.

The cause of action in the Bus Action is negligence causing personal injury, while the cause of action in the Levine Action is professional negligence and breach of retainer. The facts needed to establish each are markedly different. At most, a determination of liability and damages in the Bus Action could possibly significantly narrow the scope of the damages to be determined in the Levine Action. [ 32 ] Danek argues that actions can be inextricably linked even though the issues in the two actions are not identical.

The question she posits is whether, theoretically, findings in the Bus Action could affect the Levine Action. [ 33 ] I consider that test too loose. I agree with the Defendants’ observation that what is necessary is that the related action would be legally or factually determinative, or relevant and binding on the primary action. At para 26 of the Respondents’ Brief, they note that: A determination in the Prior Actions would still not determine whether the Defendants in the within action were negligent or breached their retainer agreement with the Plaintiff.

Therefore, no “barrier in law” would arise from the Prior Actions. It would, for example, still be open to the Plaintiff to seek declaratory relief that the Defendants were negligent in handling the Prior Actions and seek costs against them. [ 34 ] I disagree in part with the Defendants’ observation at para 30 of their Brief.

There, they note: A finding of liability in the Second Bus Action does not impact the potential liability of the Defendants in the within action, and similarly does not resolve the damages the Plaintiff could receive should liability be found against the Defendants. [ 35 ] That statement is overly broad. If the City is found liable in the Bus Action, that will substantially resolve the issue of the Defendants’ damages in the Levine Action.

Even though the Levine Action could subsequently proceed, there may be little incentive for Danek to pursue it at that time if all she may seek is nominal damages and costs for an abortive attempt to sue the Administrator. [ 36 ] Accordingly, there is some reason to believe that one or more of the Angevine factors establishing inextricable linkage outlined in Angevine are present. For example, a finding that the City is liable in the Bus Action would: 1) be legally and factually determinative of the Defendants’ exposure for damages for personal injury in the Levine Action.

It would not be determinative of the Defendants’ liability, if any, for professional negligence or breach of a retainer agreement; 2) be relevant and binding in the Levine Action. While issues determined in the Bus Action would be relevant to the Levine Action, any finding in the Bus Action that the Administrator has any liability would not be binding in the Levine Action; 3) potentially materially advance the Levine Action. I use the term “potentially” because the extent of advance is dependant upon findings of injury and apportionment of liability in the Bus Action.

Perhaps more importantly, the extent of advance is to some extent dependent upon Danek’s intentions in the Levine Action once a decision in the Bus Action is rendered; and 4) potentially be a barrier in law to the Court adjudicating the Levine Action.

If the Bus Action determines that Danek has suffered no injury, that issue will be settled for the purpose of damages in the Levine Action. [ 37 ] These observations establish a link between the two actions but not, in my view, one which is so compelling that it would warrant relieving Danek from an obligation to pursue the Levine Action in a manner which protects against the application of Rule 4.33 . Although a decision in the Bus Action may provide some assistance with the determination of damages in the Levine Action, it is not determinative or necessary.

The extent to which the Bus Action is determinative of damages or of Danek’s injury depends on what is decided in the Bus Action. A conditional link is not an inextricable link.

[ 38 ] The Defendants were sued. They have the right to expect Danek to pursue that action responsibly. In this case, that may mean the pursuit of an application for a stay of the Levine Action or a standstill agreement, pending the outcome of the Bus Action. Danek pursued neither. [ 39 ] Danek’s appeal is dismissed. If the parties cannot agree on costs within thirty days of the date of this judgment, they are to make written submissions in that regard no later than forty five days from the date of this judgment. Heard on the 12 th day of May, 2016.

Dated at the City of Calgary, Alberta this 2 nd day of August, 2016. C.M. Jones J.C.Q.B.A. Appearances: Shelagh McGregor, Weir Bowen LLP for the Appellant/Plaintiff David Kitchen / Garth Paulson, Verjee & Associates for the Respondents/Defendants