Precision Label Ltd v Milburn, 2016 ABQB 481

Court of Queen’s Bench of Alberta Citation: Precision Label Ltd v Milburn, 2016 ABQB 481 Date: 20160829 Docket: 1101 13430 Registry: Calgary Between: Precision Label Ltd. Plaintiff - and - Scott Milburn Defendant Corrected judgment: A corrigendum was issued on August 31, 2016; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of J.T.

Prowse , Master in Chambers _______________________________________________________ [ 1 ] The defendant Scott Milburn (“Milburn”) seeks an Order dismissing this action brought against him by the plaintiff Precision Label Ltd. (“Precision”). [ 2 ] Milburn asserts that more than three years passed without a significant advance in the action and so it should be dismissed pursuant to Rule 4.33(2), which states: If 3 or more years have passed without a significant advance in an action, the Court, on application, must dismiss the action as against the applicant … [ 3 ] Milburn asserts that the last advance action took place on September 28, 2012 when questioning occurred. [ 4 ] Precision points to answers to undertakings which were provided to Milburn within 3 years (on September 25, 2015) as

constituting a significant advance in the action. [ 5 ] Milburn responds that the answers given were perfunctory and of marginal relevance, and therefore did not constitute a significant advance [ 6 ] For the reasons which follow it is my conclusion that the answers to undertakings did constitute a significant advance in the action, and I decline to dismiss the action pursuant to Rule 4.33. The course of the litigation [ 7 ] Precision commenced the action on September 29, 2011.

It asserts that Milburn, a former employee, breached obligations owing to Precision under an employment agreement and breached other obligations including fiduciary duties and duties of confidentiality. [ 8 ] Milburn filed a statement of defence and counterclaim on November 4, 2011.

The counterclaim alleges interference with economic interests by wrongful means, mental and physical suffering, loss of income due to the actions of the Precision and general damages. [ 9 ] Affidavits of records were exchanged on March 2, 2012 and questioning took place over two days on September 27 and 28, 2012. [ 10 ] On Friday September 25th, 2015, Precision provided answers to undertakings given by Precision’s witness at the questioning held on September 27th, 2012. [ 11 ] Milburn argues that the answers to undertakings are not complete, not responsive, and perfunctory. [ 12 ] On December 22, 2015 Milburn filed this application for dismissal under Rule 4.33.

The application was set down for hearing and was heard on July 20, 2016. Precision’s motives in providing the answers when they did [ 13 ] Milburn suggests in his written argument that Precision delayed answering the undertakings until the last possible moment in order to drag out the lawsuit. I am unable to infer that motivation. [ 14 ] It is equally possible that Precision simply neglected to provide answers earlier and, when realizing that a three year ‘drop dead’ delay was imminent, it organized itself to answer the undertakings and proceed with the litigation.

Some answers to undertakings are said to be irrelevant [ 15 ] Milburn says that, with respect to some of the answers provided, “nothing hinges on the answer in any event”. In other words, the question was irrelevant. This is not a satisfactory reason to discount an answer to undertaking. [ 16 ] This topic was discussed in Le v. 1055168 Alberta Ltd. , 2013 ABQB 431 , 2013 CarswellAlta 1571, at para’s 28 to 31 as follows: Ravvin Holdings Ltd. 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. 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. 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.

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 (emphasis added) Documents not provided along with answers [ 17 ] Where the undertaking simply asked a question, which was answered, I do not think the answer does not advance the action because documentation (which was not requested in the undertaking) was not provided along with the answer.

Can Precision rely on its own tardy answers to undertakings to significantly advance the action? [ 18 ] In my view, Precision can base its argument (that the action has been significantly advanced) on its own tardy answers to undertakings. [ 19 ] Milburn asserts to the contrary in his written argument, relying on Steparyk v Alberta , 2014 ABQB 367 , 2014 CarswellAlta

956 as authority, which in turn cites Alberta v Morasch , 2000 ABCA 24 (Alta. C.A.) , (2000), 183 D.L.R. (4th) 742 (Alta.

C.A.) and Smith v Alberta , (1996), 49 C.P.C. (3d) 94 (Master) . [ 20 ] These cases do lend some support for Milburn’s position, but, as argued by Precision’s counsel, that approach has been overtaken by more recent cases. [ 21 ] In Steparyk , supra , the relevant time period had not yet been changed from 5 year to 3 years and so the question was whether 5 or more years had passed without a significant advance in the action. [ 22 ] During that 5 year time period, the plaintiff applied for advanced costs, and the deponent in support of that application had been cross-examined, had given undertakings on his cross-examination, and had provided answers to at least some of those undertakings.

However, the answers were given in two tranches, with the final answer not given until more than 2 years after the first answers were given. [ 23 ] The court concluded that, even if the application for advanced costs had gone ahead, that application would not have significantly advanced the action, and even more so where that application was never brought forward for hearing. [ 24 ] As a result, the Court’s comment in Steparyk on the 2 year delay in answering undertakings was an obiter comment, which was as follows: Further, the final answers were provided two years after counsel who was retained on the application agreed to provide them.

Our Court of Appeal in Morasch v Alberta , 2000 ABCA 24 (Alta. C.A.) at para 11 , (2000), 183 D.L.R. (4th) 742 (Alta. C.A.) concludes this delayed response to obligation is not necessarily a basis to reset the delay clock: Acts which satisfy prior commitments, such as delivering documents one has previously promised to supply, are often not things which, in and of themselves, materially advance an action. The spirit of R. 244.1 would be circumvented if one party delayed completion of an agreement or undertaking and thereby restarted the five-year clock at a later date.

See Smith v Alberta (1996), 49 C.P.C. (3d) 94 (Master) in which complying with an undertaking in one's own lawsuit did not materially advance an action. [ 25 ] In Le , supra , Justice Graesser stated as follows with respect to the Smith v Alberta decision: 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. [ 26 ] Justice Graesser’s decision is consistent with the decision in Hickaway v Riddell Kurezaba , 2015 ABCA 69 , where the Court of Appeal upheld a refusal to dismiss an action under Rule 4.33, where the plaintiff “woke up” shortly before the three year period expired and resolved to proceed with the action by taking a series of steps including providing answers to undertakings. [ 27 ] Undertakings provided in an arguably tardy fashion can significantly advance an action provided that they are not being provided under a ‘year-by-year’ scenario where the plaintiff is deliberately stretching out the three year drop dead period. [ 28 ] As I indicated earlier, there is nothing in the record to support the conclusion that Precision was providing answers “year-by- year” in order to extend the usual three year period. [ 29 ] And so, we are left back at the initial enquiry, which is simply this – did the answers to undertakings provided by Precision significantly advance the action?

The answers to undertakings [ 30 ] I have categorized the answers provided as responsive, partially responsive or unresponsive. [ 31 ] Using those categories, here is my view as to the answers provided, referring to the undertaking numbers: - responsive: #2, #5, #10, #11, #13, #16, #18, #22, #23, #26, #27, #28, #29, and #30. - partially responsive: #1, #3, #6, #9, #14, #15, and #20. - unresponsive: #4, #7, #8, #12, #17, #19, and #25. [ 32 ] The issue is not that some of the answers were unresponsive, but rather whether the responsive answers significantly advanced the action: See Ravvin Holdings Ltd. v Ghitter , 2008 ABCA 208 at para. 33 . [ 33 ] The information provided by the responsive answers, amongst other things: - confirmed when Ms.

Carew left Precision’s employment and that Mr. Milburn became responsible for carrying out her functions (#2) - confirmed that the head hunter provided the employment agreement to Precision and when it was signed (#5) - confirmed that Mr. Milburn was given greater holidays than enjoyed by most salaried employees (# 10) - confirmed the name of the customer that Mr. Milburn was said (by Mr. Larkham) to have approached (#11)

- provided information on whether she had called Mr. Milburn on January 28, 2011, to correct work he had done(#13) - provided the date that the audit was done (#16) - provided names of customers said to have left Precision attributable to Mr. Milburn (#18) - confirmed that Shred-it had not attended the employment premises between the time that Mr. Milburn allegedly shredded that documents and when Mr. Bumstead searched the bins (#22) - confirmed how many pages made up the customer list (#23) - confirmed that Ms. Bumstead had asked Mr. Milburn to give Rita a copy of the key to the filing cabinet prior to Mr.

Milburn’s departure (#26) - confirmed when Mr. Milburn was replaced (#27) - confirmed how much business with Boss Lubricants moved away from Precision both during and after Mr. Milburn’s employment (#28) - provided the amount of business Precision had with XL Beef during the last two years of Mr. Milburn’s employment and what it was in the year after he left (#29) - described what the customer list looked like (#30). [ 34 ] In my view, while none of these answers to undertakings were of critical importance, they were responsive to the undertakings requested. Together they significantly advanced the action.

Consequently I decline to dismiss the action pursuant to Rule 4.33. [ 35 ] If the parties cannot agree as to the costs of this action, they may seek a ruling from me in that regard. Heard on the 20 th day of July, 2016. Dated at the City of Calgary, Alberta this 29 th day of August, 2016. J.T. Prowse M.C.C.Q.B.A. Appearances: Julie V. Shepherd MacPherson Leslie & Tyerman LLP for the Plaintiff Stewart LaPrairie Sawers McFarlane for the Defendant

_______________________________________________________ Corrigendum of the Reasons for Judgment of J.T. Prowse, Master in Chambers _______________________________________________________ The Citation line has been changed to reflect full name of the Plaintiff Precision Label Ltd