Stabilized Water of Canada Inc v Better Business Bureau of Southern Alberta, 2017 ABQB 736

Court of Queen’s Bench of Alberta Citation: Stabilized Water of Canada Inc v Better Business Bureau of Southern Alberta, 2017 ABQB 736 Date: 20171204 Docket: 0201 18472 Registry: Calgary Between: Stabilized Water of Canada Inc. and Envirosoft Water Inc. Plaintiffs/Appellants - and - Better Business Bureau of Southern Alberta Defendant/Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Bryan E.

Mahoney _______________________________________________________ Introduction [ 1 ] This is an appeal of a Masters decision found at 2016 ABQB 543 . [ 2 ] The Appellants/Plaintiffs are Stabilized Water of Canada Inc. and Envirosoft Water Inc. (Stabilized/Envirosoft) a water softener retailer. The Respondent/Defendant is the Better Business Bureau of Southern Alberta (the BBB), an organization that promotes better business practices among businesses and consumers.

[ 3 ] Stabilized/Envirosoft in a Statement of Claim, filed in October 31, 2002, allege damages from a defamation claim relating to a number of publications in the BBB's consumer directories and a later publication in the BBB's spring directory in 2000. [ 4 ] On February 29, 2016 the BBB applied to dismiss the defamation action for delay under Rule 4.31(long delay) and Rule 4.33 (the three year "drop dead" rule). The Master, in written reasons cited above, on September 29, 2016 dismissed the action. [ 5 ] Before the Master, BBB alleged that Stabilized/Envirosoft's efforts to prosecute the claim were dilatory.

BBB argued that Stabilized/Envirosoft carried out a pattern of attempting to do just enough to try and save the action from impending long delay applications over the last 14 years. [ 6 ] Stabilized/Envirosoft responded that, notwithstanding 14 years passed since the commencement of the action, the recent delays in moving this matter forward were attributable to BBB.

Stabilized/Envirosoft argued that it is inappropriate for BBB to lay in the weeds, ignore its obligations as a party in the action, abandon responsibility for preserving relevant and material evidence and rely on its own delinquencies to create the prejudice now relied on to seek dismissal for delay. Decision of the Master [ 7 ] For the reasons found in his decision the Master dismissed the action for delay pursuant to Rule 4.31 but declined to dismiss it for delay pursuant to Rule 4.33. (see 2016 ABQB 543 ) [ 8 ] The Master at paragraph 10 of his reasons set out the time line of events.

The Master applying the first and second part of the test in Rule 4.31, found that the delay to be inordinate and inexcusable. He then went on to consider the third part of the test, whether there was significant prejudice to the defendant. [ 9 ] In addition to his finding that the delay was inordinate and inexcusable, the Master found that on the evidence before him there was no doubt about the existence of prejudice to BBB.

He wrote that even if the evidence had raised a legitimate doubt about the existence of prejudice, in the end, considering all the evidence, he was satisfied that BBB has suffered significant prejudice due to Stabilized/Envirosoft's delay in advancing the action. As a result he dismissed the action pursuant to Rule 4.31. Standard of Review [ 10 ] The standard of review on appeal from a Master to a Queen's Bench Justice, on all issues, is correctness. A Justice is not bound by any findings of fact or inferences made by the Master even if no new evidence is introduced on appeal.

Bahcheli v Yorkton Securities Inc. , 2012 ABCA 166 . Appellant Stabilized/Envirosoft's Argument on Appeal [ 11 ] Stabilized/Envirosoft refers to Humphreys v Trebilcock , 2017 ABCA 116 . This is the most recent decision to clarify the standard by which a defendant can seek to strike a claim due to delay under Rule 4.31. Humphreys held that in order to apply Rule 4.31 an adjudicator must answer six distinct questions. First, has the non-moving party failed to advance the action to the point on the litigation spectrum that a litigant acting reasonably would have attained within the time frame under review?

Second, is the shortfall or differential of such a magnitude to qualify as inordinate? Third, if the delay is inordinate has the non-moving party provided an explanation for the delay? If so, does it justify inordinate delay? Fourth, if the delay is inordinate and inexcusable, has this delay impaired a sufficiently important interest of the moving party so as to justify overriding the non-moving party's interest in having its action adjudged by the court? Has the moving party demonstrated significant prejudice?

Fifth, if the moving party relies on the presumption of significant prejudice created by Rule 4.31(2), has the non-moving party rebutted the presumption of significant prejudice? Sixth, if the moving party has met the criteria for granting relief under Rule 4.31(1), is there a compelling reason not to dismiss the non- moving party's action? This question must be posed because of the verb "may" in Rule 4.31(1). [ 12 ] Stabilized/Envirosoft argues that the analysis comes down to the application of the fifth part of the Humphreys test.

It then argues that the fourth part of the test, significant prejudice, has not been suffered by BBB. Therefore, under the sixth part of the test, there is a compelling reason not to dismiss the action. Documents [ 13 ] Stabilized/Envirosoft argues, from a documentary standpoint, there is not much in the way of harm that occurs by the delay. It points to the testimony of the officer of the BBB who said under questioning that she was not aware of any records that had gone missing in the course of producing documents.

She said she believed the BBB has done all that was required of it to produce its records and she had no knowledge of any inadequacy of financial records, nor is she aware of any issues concerning the financial documents that were

produced, or technical information that was requested of the plaintiffs. With all the BBB documents produced, Stabilized/Envirosoft submits any delay does not prejudice BBB because the relevant documents are available. Witnesses [ 14 ] Stabilized/Envirosoft dealt with the issue of prejudice where witnesses who, but for delay, would be available to testify, are no longer available because of death, or poor health or just cannot be located, Stabilized/Envirosoft argues that the BBB has an obligation to secure their witnesses, to interview them and to keep in touch with them.

It also argues that the only BBB witnesses that have anything relevant to say in defence of the claim, are those witnesses who were around at the time the publications were being made. Stabilized/Envirosoft argues that according to the affidavit of the officer for the BBB, that was before the Master, the President, the Vice-president at the relevant time, and, another President who was also involved, had some knowledge of the defamation allegation.

Ambush [ 15 ] Stabilized/Envirosoft distinguishes this case from the Humphreys case on the basis that there is some element of ambush that was practiced here by BBB to sabotage or delay matters to unfairly make it look like Stabilized/Envirosoft was "dragging its feet." [ 16 ] Stabilized/Envirosoft cited some case authorities that stand for the proposition that it is improper for the defendant to create delay and then rely on that delay for the purposes of bringing a

summary dismissal application for delay. A defendant cannot give the plaintiff a sense of confidence that things are moving along then at the opportune time change the process with a dismissal application. Ruling [ 17 ] I agree with the submission, as did the Master at paragraph 27, that the BBB is not basing its prejudice argument on missing documents. BBB argues that the witnesses that vetted the documents and publications containing the alleged defamatory material are no longer available. It refers the court to the supplemental affidavit of its officer, Ms.

McKee, which contains significant detail about all the efforts that she has made to find the witnesses that would have done the vetting at the time. Stabilized/Envirosoft did not cross-exam her on that supplemental affidavit. Though some witnesses are available, the ones with knowledge of the vetting of publications are dead or cannot be located. [ 18 ] The time line set out in the Master's Reasons shows that Stabilized/Envirosoft waited over four years to approach questioning of the BBB.

It was nearly five years, with the "drop-dead" date looming, before Stabilized/Envirosoft questioned the BBB officer in April of 2009; nine years since the alleged defamation. [ 19 ] BBB requested financial and technical product information of Stabilized/Envirosoft. On this point the Master said at para 14: In my view these are two areas of document production which were clearly very relevant from the outset. If the plaintiffs were serious about their claims, they would have realized the obligation on them to include these relevant and material documents in their affidavit of records.

Other than some perfunctory financial information regarding one of the plaintiffs, those records have not been produced to date, almost 14 years later, yet the plaintiffs acknowledge that the technical specification data does exist and that financial records for Envirosoft are also available. [ 20 ] Master Prowse's finding that all the institutional knowledge in the BBB about this matter is virtually gone is correct.

Stabilized/Envirosoft has not put any convincing evidence forward to challenge the conclusion that the BBB has been significantly prejudiced by this inordinate delay. [ 21 ] Regarding Stabilized/Envirosoft submission of ambush or some improper conduct, I find that there was no evidence of any communication or records of correspondence that would support this assertion. Stabilized/Envirosoft had the primary responsibility for moving the action. BBB, however, must respond in a timely way to the actions of Stabilized/Envirosoft and cannot rely on its own delay if they have failed to so respond.

The cases clearly hold that there has to be some egregious conduct, some malicious or calculated manoeuver to prove ambush. [ 22 ] The longer the delay, the stronger the presumption and the more difficult it is to rebut. Cooke v. Calgary Civic Employees Benefit Society , 2003 AJ No. 1725 at para 29 . [ 23 ] The appeal is dismissed. The ruling of the Master is upheld. Costs are set at $1,500 for a half day argument with written briefs plus reasonable disbursements and GST. Heard on the 18 th day of October, 2017. Dated at the City of Calgary, Alberta this 4 th day of December, 2017.

Bryan E. Mahoney J.C.Q.B.A. Appearances: Peter J. Major, QC for the Plaintiffs/Appellants Ryan M.L. Phillips for the Defendant/Respondent