MT Investments Inc v Raydan Transport Ltd, 2018 ABQB 1017

Court of Queen’s Bench of Alberta Citation: MT Investments Inc v Raydan Transport Ltd, 2018 ABQB 1017 Date: 20181214 Docket: 1101 10570 Registry: Edmonton Between: MT Investments Inc. Plaintiff/Respondent - and - Raydan Transport Ltd. and William R. English Defendants/Applicants - and - Worley Parsons Komex Third Party Defendant _______________________________________________________ Reasons for Decision of W.S. Schlosser , Master in Chambers _______________________________________________________

[1] This is an application to dismiss for delay. [2] The action concerns the contaminated land sold to the Plaintiff by Raydan, as vendor, and Mr. English, as the “warrantingparty”. The Agreement for Sale provided for a holdback of $500,000 pending the vendor’s delivery of a Phase II EnvironmentalAssessment. In 2007, the Defendants provided this report, prepared by Worley Parsons Komex. It indicated that the lands had beenremediated. On the basis of the report, the Plaintiff released the holdback. In September 2010, the Plaintiff had another environmentalevaluation done.

That opinion disclosed that the lands had not been adequately remediated. MT then started this action. List of Authorities By the Parties: 1. Alberta Rules of Court, Alta. Reg. 124-2010 2. Huerto v. Canniff, 2014 ABQB 5345 ABCA316 3. Sangha v Alberta (Motor Vehicle Accident Claims Act, Administrator), 2018 ABQB 385 4. Humphreys v. Trebilcock, 2017 ABCA 116 , 2017 ABCA116 5. Megatrend Holdings Inc. v. Glenbow-Alberta Institute, 2007 ABQB 346 6. 4075447 Canada Inc v. Pacrim Developments Inc, 2018 ABQB 358 7. Lambur Scott Architects Ltd. v. Coronation Insurance Co. [1996], A.W.L.D. 822 8. 330626 Alberta Ltd. v.

Ho & Laviolette Engineering Ltd., 2018 ABQB 398 9. Jacobs v. McElhanney Land Surveys Ltd., 2018 ABQB 867 10. English v. Alberta (Service Alberta), 2018 ABCA 141 11. Empson v. Wenzel Downhole Tools Ltd., 2013 ABCA 418 By the Court: 1. Duraguard Fence Ltd. v Badry, 2018 ABQB 882 [3] The law is not in dispute. The starting point is the six-part test in Humphreys v. Trebilcock. My approach to theseapplications is as follows (from Duraguard Fence): [2] The leading case is Humphreys v Trebilcock, 2017 ABCA 116 .

The Court sets out six questions for a rule 4.31 analysis(at paragraphs 150-156), as follows: [150] In order to apply r. 4.31 an adjudicator must answer six distinct questions. [151] First, has the non-moving party failed to advance the action to the point on the litigation spectrum that a litigant acting reasonablywould have attained within the time frame under review? [152] Second, is the shortfall or differential of such a magnitude to qualify as inordinate? [153] Third, if the delay is inordinate has the non-moving party provided an explanation for the delay?

If so, does it justify inordinatedelay? [154] Fourth, if the delay is inordinate and inexcusable, has this delay impaired a sufficiently important interest of the moving party so asto justify overriding the non-moving party’s interest in having its action adjudged by the court?

Has the moving party demonstratedsignificant prejudice? [155] Fifth, if the moving party relies on the presumption of significant prejudice created by r. 4.31(2), has the non-moving partyrebutted the presumption of significant prejudice? [156] Sixth, if the moving party has met the criteria for granting relief under r. 4.31(1), is there a compelling reason not to dismiss thenon-moving party’s action?

This question must be posed because of the verb “may” in r. 4.31(1). [3] The first question has a number of components the Court should weigh into its consideration: the complexity of the lawsuit, thenumber of parties, the steps taken and the relevant time limits under the rules for those steps, whether there have been long gaps in theprogress of the action, the Defendants’ involvement in the delay (it is not enough for the Defendants to say ‘You could have made me...’) and whether the case is more of a ‘documents case’, or a ‘memories case’. [4] There may be some other factors as well.

In McCarthy v Schindeler, 2017 ABQB 511 at para 9, for example, I noted: [9] In calculating the delay, the Jordan decision is instructive. The Court should look at a delay occasioned by the Plaintiff, the

institutional delay, and the delay occasioned by the Defendants. Unlike Jordan, a Plaintiff should not be held accountable for periodsattributed to institutional delay, such as the time between scheduling Special Chambers application and its actual hearing, or the timebetween an application and a reserved decision. I note, however, that a pending application, even an application for

summary judgment,will not necessarily act as a stay but it often has the practical effect of stopping or slowing activity in a lawsuit. So that part of the delayought to be assessed on a case-by-case basis. This was applied in part and later upheld (unreported) in Kehew Construction Ltd v Kehewin Cree Nation, 2017 ABQB 561 ,2017 ABQB 561 (at first instance). [5] The Court also needs to bear in mind that the time limits under the rules for certain activities may have changed over the courseof the lawsuit. Examples here are the times for the Affidavit of Records, which have changed twice.

The approach to resolution has alsochanged over the course of this lawsuit. Since 2014, there has been an increased emphasis on

summary resolution as opposed to trial. Thecurrent emphasis is different from what it was in 2009. This impacts the steps that might have been taken and, ultimately, where thelawsuit should have been on the litigation spectrum when the application to dismiss was taken out. In other words, it is not just aquestion of viewing a 2009 lawsuit with 2018 glasses (422252 Alberta Ltd. v Messenger, 2018 ABQB 576 at para 5). [6] What I am trying to say is that the analysis is nuanced within the Humphrey’s questions and is highly discretionary.

It is not thebright-line analysis found in rule 4.33, although that too seems to be changing somewhat as the functional approach is applied to eventsin a lawsuit. [7] My process in dealing with these applications is to begin by applying a coarse filter. In the most general terms, the evidentiary‘best before date’ is probably about ten years, which, in turn, may be affected by factors such as whether the evidence is recorded andhow much of the case depends on memories.

Typically, (if there is a typical case) a lawsuit that is vulnerable to be struck for delay is onethat is about ten years (plus), the questioning is not complete and the matter is not set for trial. But there are always exceptions and theanalysis has to be performed on a case-by-case basis. In this case, the lawsuit is eight years, nine months old (for the purposes of thisapplication). Nine and a half years was a long delay in McCarthy v Schindeler (which was primarily a memories case).

Eight years wasenough in 330626 Alberta Ltd. v Ho & Laviolette Engineering Ltd., 2018 ABQB 398 , but in that case, questioning was notcomplete and the matter was a long way from trial. This case is now set for trial, though with some procedural caveats. [4] The Respondent/Plaintiff argues that it has been less than six years between the time the Statement of Claim was issued andthe time that the dismissal application was taken out.

A Rule 4.31 application is not quite like Rule 4.33 application where you look backfrom the date of the motion (in part to avoid the race to the courthouse) Trout Lake Store v CIBC (#1) 2003 ABCA 259. A Rule 4.31application is about overall delay, not gaps in the action. [5] In applications such as these, the court looks back from the date of the hearing. A Rule 4.31 application does not act as a defacto stay (though an agreement can be reached between the parties).

This is one of the reasons that institutional delay, such as the datebetween the motion and the hearing of the motion, might not automatically be held against the respondent. Chronology [6] The events in the action are as follows: • July 29, 2011 – Statement of Claim issued. • August 5, 2011 – Statement of Claim served. • October 13, 2011 – Statement of Defence. • November 25, 2011 – Plaintiff’s Affidavit of Records. • Defendants’ Affidavits of Records, sworn October 28, 2011, served December 21, 2011. • December 22, 2011 – Plaintiff requests questioning dates. • The Defendant replied to say that Mr.

English was out of the country and that they wished to postpone the questioning until hisreturn the following spring. • February 2, 2012 – Third Party Claim. • March 7, 2012 – Plaintiff requests questioning dates, Defendant requests postponement until the Third Party defence and ThirdParty Affidavit of Records is received. • June 6-7, 2012 – Questioning (Defendant). • Fall, 2012 – Questioning (Third Party). • 2013 – 2015 – Responses to undertakings. Plaintiff sought out expert witness. • September 18, 2015 – Plaintiff asks for further details on undertakings.

When there was no response the Plaintiff served anAppointment for Questioning. • Defendant requested, and the Plaintiff agreed, that answers would be provided in writing. The answers were provided October 20,2015 and December 13, 2015.

• July 15, 2016 – Third Party brings an application to strike the Third Party claim. • July, 2016 – Plaintiff expert report served. • August 17, 2016 – Defendants advise that Mr. English had suffered a stroke. • December 8, 2016 – Litigation representative appointed for Mr.

English. • Third Party application to dismiss – reset for March 17, 2017, adjourned to March 24, 2017, adjourned again to April 11, 2017. • March 23, 2017 – Defendants apply to transfer the hearing of this application from Calgary to Edmonton. • March 31, 2017 – Defendants sought to revive the corporate defendant. • April 7, 2017 –Application to revive was dismissed.

Affirmed by the Court of Appeal April 12, 2018. • April 4, 2017 – Defendants launch an application to dismiss for delay. • April 24, 2017 – Defendants request that all applications be adjourned sine die while they wait for the decision from the Court of Appeal about revival of the corporate defendant. • A standstill agreement was put into place such that time would not count in the interim. • April 12, 2018 – Court of Appeal Decision. • June 7, 2018 – Motion to dismiss for delay rescheduled. • December 5, 2018 – Application to dismiss for delay heard.

Analysis [ 7 ] Applying the approach set out above, this lawsuit, first of all, is not caught by the coarse filter; being a little over seven years old. It is a Four Party suit, including the Third Party, with, primarily, a single central issue, as noted above. Inordinate, Inexcusable Delay: (The Blame Game) [ 8 ] As the chronology above shows, much of the delay occurred at the request of the Defendants. There is institutional delay for part of it and also a standstill agreement for part of it.

The individual Defendant’s incapacity may well have invoked the automatic Rule 4.34 stay. [ 9 ] I acknowledge there was a hiatus between 2013 and 2015. No doubt at least part of this can be attributed to the Plaintiff. However, this is more than balanced out by the delay occasioned by the Defendants: there was delay in filing a Statement of Defence, delay in providing a sworn Affidavit of Records, an indulgence granted for scheduling the questioning when the individual Defendant was out of the country, a pause when the parties waited for the Third Party defence and Affidavit of Records.

The Defendants’ undertaking answers from the 2012 questioning were not provided until 2013. There was the failure to revive the corporate Defendant in a timely way, which proved fatal to a successful revival and there was a standstill linked to this attempt. There was, arguably, a Rule 4.34 stay or something akin to it when Mr. English lost capacity.

There were also two periods of institutional delay: first, while the parties waited for the Court of Appeal decision and, second, while waiting to obtain a special chambers date. (I note that the wait times now are significantly shorter). [ 10 ] When the Court is asked to assess whether the delay is inordinate, it could come up with an analogue (e.g. see Ho at para 81). The analogue, of course, has to have an air of reality; acknowledging not only the time limits under the Rules, but that counsel typically have more than one file to attend to.

However, it is not necessary to complete that exercise here. [ 11 ] In my view, the delay verges on being inordinate given that this is a four-party lawsuit and a fairly straightforward issue that will essentially be a battle of the experts. However, much of the delay was at the request, or at the instance of the Defendants. Some of the delay is institutional and ought not to be held against the Plaintiffs. In my view, the delay in this lawsuit is excusable when all of the circumstances are considered. [ 12 ] This is not quite like those cases where many years have passed and the matter is a long way from trial.

I acknowledge that a determination of the propriety of the Third Party proceedings remains to be decided. Then, there is the production of the Defendants’ expert evidence and, potentially, some questioning of the experts before a Form 37. [ 13 ] Given that there is not both inordinate and inexcusable delay, the rebuttable presumption of prejudice (rebuttal on the balance of probabilities, see Humphreys at paras 144-149 ) does not arise. Is there actual prejudice suffered by the Defendants that arose during the Plaintiff’s delay? The answer to this question appears to be “no”.

The Defendants argue (from the Plaintiff’s brief): 32. The Dismissal Application states the Defendants have been prejudiced because Raydan was struck, Mr. English is no longer medically competent, Worley Parsons is taking steps to have the Defendants’ Third Party Claim dismissed, and MT had commenced the Action in Calgary. 33. On November 14, 2018, Mr. English’s litigation representative swore a further affidavit, stating that Mr. English’s medical

condition has deteriorated, impacting his short and long-term memory, and that Mr. English would be the sole lay witness at trial. It cannot be said that any of this prejudice arose at the hands of the Plaintiff. Prejudice [ 14 ] I acknowledge that this is not entirely a ‘documents case’ in that the instructions given to Worley Parsons are important. Mr. English would have been able to provide this evidence although the Plaintiff advises that the manager of the corporate Defendant was highly involved in this project and might well be able to assist. [ 15 ] Mr.

English’s unfortunate loss of capacity affects both sides. The incapacity of the individual Defendant probably also has evidentiary repercussions for the Plaintiff. It may be that the Court will require corroboration of evidence against him, beyond those admissions gained earlier at the questioning. I have in mind an analogy with s.11 of Evidence Act that would apply in an action against an estate of a deceased person who is no longer available as a witness. However, the result would have been the same even if Mr.

English had lost capacity after a Form 37 had been filed and the parties were waiting for trial. [ 16 ] The Plaintiff indicates that they would be willing to consent to a Rule 8.14 order allowing Mr. English’s entire questioning transcript to be put in at the trial and used in place of the witness to ameliorate my prejudice arising from the loss of capacity. However, this type of order is up to a Judge.

It is not open for Master to order this (as the rule says ‘judge’) and the Defendants point out that the questioning transcript, though helpful, does not touch on all of the issues. [ 17 ] On balance, I cannot say that the Defendants have suffered significant prejudice at the hands of the Plaintiff’s delay. Disposition [ 18 ] The Defendants’ application is dismissed with costs. A procedural order would be appropriate to bring this matter to a conclusion, concerning the timing of the Third Party application to dismiss, and the expert evidence prior to entry of a Form 37.

Third Party counsel did not attend this application and takes no position on it. I will leave it to the parties to propose the timing of procedural steps to bring this lawsuit to a conclusion. Heard on the 5 th day of December, 2018. Dated at the City of Edmonton, Alberta this 14 th day of December, 2018. W.S. Schlosser M.C.Q.B.A. Appearances: Rob Rakochey, Norton Rose Fulbright Canada LLP

for the Plaintiff/Respondent Tara L. Hamelin, Bishop McKenzie LLP for the Defendants/Applicants Phillip R. Stuffco, Stuffco Law Litigation Representative for W. R. English, Observing J.B. Marshall, Q.C., Gowling WLG (Canada) LLP for the Third Party, did not attend