221198 Alberta Ltd, 818674 Alberta Ltd, Dobrescu Holdings Ltd, Zia Haque v. Dorothy Lee Carlson-Haque, 2017 ABQB 460

Court of Queen’s Bench of Alberta Citation: 221198 Alberta Ltd v Dobrescu, 2017 ABQB 460 Date: 20170724 Docket: 0103 10092; 0203 07517 Registry: Edmonton Action Number: 0103 10092 Between: 221198 Alberta Ltd, 818674 Alberta Ltd, Dobrescu Holdings Ltd, Zia Haque and Dorothy Lee Carlson-Haque Respondents/Plaintiffs - and - George Dobrescu v Betty Anne Dobrescu Appellants/Defendants Action Number: 0203 07517 Between: 818674 Alberta Ltd Respondent/Plaintiff - and - 399537 Alberta Ltd Appellant/Defendant

_______________________________________________________ Reasons for Decision of the Honourable Madam Justice D.L. Shelley In Relation to an Appeal of the Order of Master Smart Pronounced December 8 th , 2015 ___________________________________________________ Nature of the Appeal [1] The Appellants are the Defendants in the two actions in this Appeal. They appeal the Order of Master Smart made on December 8th, 2015, which dismissed their applications, brought pursuant to Rules 4.31 and 4.33 of the Alberta Rules of Court , for dismissal of the two actions referenced above.

Background [2] The actions arise out of a share purchase agreement executed in 1999. The first action was commenced in 2001, the second in 2002. [3] The actions are related, having the same corporate entities or individuals involved. The same correspondence and transcripts of questioning have been used in both actions. In October of 2009, this Court ordered that the two actions be heard together. Position of the Parties Position of the Appellants [4] The Appellants submit that there have been numerous periods of inactivity and delay on the part of the Respondents/Plaintiffs during the actions.

They submit that the latest period in which there has been no significant advance of the actions commenced on November 17 th , 2009. They submit that, since that date, the Plaintiffs have provided two answers to undertakings and a purported expert report (which they submit is not an actual expert opinion).

They argue that neither of these significantly advanced the actions and were attempts to restart the three year period under Rule 4.33. [5] The Appellants submit that it was not until three years had elapsed without a significant advance in the actions that the Respondents commenced activities aimed at obtaining a trial date. [6] The Appellants acknowledge that they initially indicated their availability for trial but, having then reviewed the undertaking answers and expert report, determined it was appropriate to move for dismissal of the actions. [7] The Appellants submit that the Master erred in concluding that the two answers to undertakings and the expert report were steps that significantly advanced the actions.

He further erred when, having determined that there had been inordinate delay and no excuse for large portions of delay, he concluded that there had been no prejudice to the Appellants. Position of the Respondents [8] The Respondents submit that, using the functional and contextual approach mandated by the Alberta Court of Appeal, the actions were not dead, and there were numerous steps taken between November 1 st , 2010 and November 1 st , 2013, which significantly advanced them.

In addition, since November 1 st , 2013, the Appellants participated in numerous events which support the continuation of the actions. [9] The Respondents provide a detailed listing of numerous pieces of correspondence, including Form 37 containing a list of the Respondents’ intended witnesses at trial. Furthermore, the parties eventually agreed to obtain and did obtain trial dates, which amount to further evidence that the actions were not abandoned and the parties had taken steps toward resolution of the actions by trial.

Other related actions taken to advance the actions to trial included providing responses to outstanding undertakings and provision of an expert report. [10] Therefore, the Respondents submit, the Master did not err in concluding that: there had been significant advances in the

actions during the relevant period; there was no inordinate delay or that there was an excuse in relation to delay; and, there had been no prejudice to the Appellants in relation to any delay. Applicable Law [11] The relevant portions of the Rules upon which the Appellants rely, Rules 4.31 and 4.33, are set out in the attached Appendix “A.” [12] The parties rely upon a number of cases, which are listed in Appendix “B” to these Reasons. Analysis [13] It is well established that the standard of review from an appeal of a Master’s decision is that of correctness: Bacheli v Yorkton Securities Inc , 2012 ABCA 166 at para 30 , 524 AR 382. [14] The following is a

summary of what I consider to be the most relevant principles established by the Alberta Court of Appeal in relation to the type of application that was before the Master, and which is now under appeal before me: - Rule 4.31 is prejudice based, which relies on a finding of significant prejudice to a party rather than any specific delay in an action. - Dismissal is mandatory under Rule 4.33, where there has not been a significant advance in the action for three years.

The only exception for mandatory dismissal arises where the defendant opposing the application participated in steps after the expiry of the three years to such an extent that it would be unjust to grant the application for dismissal. - In determining whether there has been a significant advance in an action, a functional approach is required. Actions taken that serve to narrow the issues, complete document and information discovery, or clarify the positions of the parties might significantly advance an action in a particular case.

Formalistic steps and outcomes should not be overemphasized, although they are relevant considerations. - Whether or not a step significantly advances an action means determining whether the step moves a lawsuit forward in a meaningful way. In making this determination, the court should consider its nature, value, importance, quality, genuineness and timing.

This is not an exhaustive list and the court should view the “whole picture of what transpired in the three year period.” - Since each piece of litigation is unique, an analysis in connection with the application of Rule 4.33 must be conducted within the context of that particular lawsuit. - Taking a mandatory step under the Rules is not always, nor is necessarily, a significant advance in a particular action. - To be a significant advance, a step does not have to support an application for

summary judgment. Under Rule 4.33, there need only be one substantial advance during the three year period. Where the argument rests on persistent delay, reliance on Rule 4.31 is more appropriate. [15] In this case, the Appellants argue that the Respondents’ provision of answers to undertakings and the purported expert report did not significantly advance the actions because they consider the contents of the documents to have provided little of value to them.

However, unlike the document considered in Weaver v Cherniawski , 2015 ABQB 157 , 71 CPC (7th) 84, aff’d 2016 ABCA 152 , in this case the Appellants never indicated to the Respondents that they did not wish to receive answers to the undertakings.

And, also unlike Weaver v Cherniawski , in this case, rather than indicating that they felt it unnecessary to respond to the Respondents’ expert report, they indicated that they were considering obtaining their own expert report. [16] Similarly, unlike Morasch v Alberta , 2000 ABCA 24 , 250 AR 269, in this case the parties went far beyond talking about trial dates; trial dates were secured. [17] Given this, it can hardly be said that this action had died.

While the information contained in the answers to undertakings may not have provided much in the way of new evidence, it did confirm the Respondents’ position in relation to trial issues (for example, by confirming the loss of profit claim and its calculation). That, together with the securing of trial dates, did move the parties closer to resolution. [18] With respect to the alleged prejudice if the actions are not dismissed for delay, I agree with the Master that the nature of the prejudice alleged in this case does not assist the Appellants.

They argue that one of the potential witnesses has indicated she may no longer wish to provide evidence at trial. However, she is a compellable witness and her reluctance to testify does not prevent the Appellants from serving her with a notice to attend at trial. [19] Furthermore, a review of the materials, and in particular, the exchange of correspondence between the parties’ counsel, indicates that, at least in relation to delays over the last few years, it is the Appellants who were the principal cause of delay.

The Respondents’ counsel had been attempting for some time to obtain a completed Form 37 from the Appellants’ counsel and eventually had to indicate that he would make an application to set the matter for trial. After indicating that the Form would be forthcoming and that he was considering hiring an expert to rebut the Respondents’ expert report, and having agreed to trial dates, I note that the Appellants’ former counsel was himself “surprised” to receive his clients’ instructions not to sign the Form 37, following the prescheduling of the trial dates.

This is just one of the examples in the evidence that shows that it was the Appellants who often delayed in responding to the Respondents’ request for dates or other information required to set the trial dates by agreement. Throughout this time period, and before it, the evidence shows that the Respondents provided ongoing information and documentation in connection with getting the matter to

trial. And, at least until his services were terminated, the Appellants’ counsel’s correspondence indicated that he was intending to do the same. Conclusion [20] For the above reasons, I reach the same conclusion as the Master and, therefore, I dismiss the appeal. [21] These actions should be set down for trial without further delay. If not set down for trial earlier, the Respondents are to bring an application before the Court of Queen’s Bench to obtain the necessary directions no later than September 15 th , 2017. [22] The Respondents are entitled to costs of the appeal.

If the parties are unable to agree on the quantum of costs, they are to notify my assistant within 30 days of the issuance of these Reasons for Decision to arrange a time at which the issue can be addressed. Heard on the 1 st day of September, 2016. Dated at the City of Edmonton, Alberta this 24 th day of July, 2017. D.L. Shelley J.C.Q.B.A. Appearances: Mr. Nicholas A. Clarke Snyder & Associates LLP for the Appellants Mr. Kenneth F. Bailey, Q.C. Parlee McLaws LLP for the Respondent Appendix A 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, thatdelay is presumed to have resulted in significant prejudice to the party that brought the application. Dismissal for long delay 4.33

(1) In this rule, a) “applicant” means a party to an action who makes an application to dismiss the action for delay as set out in this rule; b) “respondent” means a party who has filed a commencement document; c) “suspension period” means, in subrules (5) to (9), a period that ends on (

i) a specific date, or (ii) the happening of a specific event.

(2) If 3 or more years have passed without a significant advance in an action, the Court, on application, must dismiss the action asagainst the applicant, unless

a) the action has been stayed or adjourned by order, an order has been made under subrule (9) or the delay is provided for in alitigation plan under this Part, or

b) 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.

(3) If the Court refuses an application to dismiss an action for delay, the Court may make whatever procedural order it considersappropriate.

(4) The period of time referred to in subrule (2) does not include the following, whichever ends earlier:

a) the period of time between the service of a statement of claim on an applicant and the service of the applicant’s statement ofdefence;

b) the period of one year after the date of service of a statement of claim on an applicant Appendix B Appellants’ Cases 1. Ursa Ventures Ltd v Edmonton (City), 2016 ABCA 135 2. Weaver v Cherniawski, 2016 ABCA 152 3. Ro-Dar Contracting Ltd v Verbeek Sand & Gravel Inc, 2016 ABCA 123 4. XS Technologies Inc v Veritas DGC Land Ltd, 2016 ABCA 165 5. Weaver v Cherniawksy, 2015 ABQB 157 6. Davenport Homes Ltd v Cassin, 2015 ABQB 138 7. Nash v Snow, 2014 ABQB 355 8. Huerto v Cannif, 2014 ABQB 534 9. Carter v Sears Canada Inc, 2011 ABQB 732 10. Pearson v Parkland (County), 2014 ABQB 690 11.

Bacheli v Yorkton Securities Inc, 2010 ABQB 824 12. Trout Lake Store v CIBC, 2003 ABCA 259 13. Morasch v Alberta, 2000 ABCA 24 14. St. Jean Estate v Edmonton (City), 2014 ABQB 47 15. R. Mohan, (SCC), [1994] 2 SCR 9

16. R v DD 2000 SCC 43 , [2000] 2 SCR 275 17. Graham Construction and Engineering

(1985) Ltd v LaCaille Developments Inc, 2006 ABQB 898 18. Ravvin Holdings v Ghitter, 2008 ABCA 208 19. JDC Contracting, 2015 ABQB 98 20. Kahlon v Cheecham, 2015 ABQB 203 21. Willard v Compton Petroleum Corp, 2015 ABQB 8 22. Volk v 3313232 Alta Ltd, 1998 ABCA 54 23. Trang v Canada (Attorney General), 2014 ABQB 110 24. Raven v Airdrie (City), 2012 ABQB 74 25. Kuziw v Kucheran Estate, 2000 ABCA 226 Respondents’ Cases 1. Turek v Oliver, 2014 ABCA 327 2. Trout Lake Store Inc v CIBC, 2003 ABCA 259 3. Nash v Snow, 2014 ABQB 355 4. Le v 1055168 Alberta Ltd, 2013 ABQB 431 5. Ravvin Holdings Ltd v Ginter, 2008 ABCA 208 6.

JDC Contracting Ltd v Moose Mountain Equipment, 2015 ABQB 98 7. Bentley v Stringer, 1999 ABQB 432 8. Leder v Karoles, 2009 ABQB 334 9. Kelly v Atkinson, 2005 ABQB 668 10. FMX Construction Ltd v Caterpillar Financial Services Ltd (2000), (AB KB), 262 AR 393 11. Wiens v Dewald, 2012 ABQB 172 12. Krieter v Alberta, 2014 ABQB 349 13. Volk v 331323 Alberta Ltd, 1998 ABCA 54 14. Deis v Koch Oil Ltd, 2001 ABQB 997