Scheerschmidt v Chrapko-Deib, 2019 ABQB 928

Court of Queen’s Bench of Alberta Citation: Scheerschmidt v Chrapko-Deib, 2019 ABQB 928 Date: 20191205 Docket: 1403 07827 Registry: Edmonton Between: June Scheerschmidt and Louis Flamant Plaintiffs - and - Edith Louis Chrapko-Deib also known as Edith Louise Deib Defendant _______________________________________________________ Reasons for Decision of B.W. Summers , Master, Court of Queen's Bench of Alberta _______________________________________________________ [ 1 ] In this case the defendant brings an application for dismissal on the basis of delay.

The application is primarily made under rule 4.31, but the defendant also relies upon rule 4.33. [ 2 ] The plaintiffs filed a cross application for advice and directions. [ 3 ] The action concerns the ownership of a house. The defendant is the registered owner, but the plaintiffs allege that the defendant holds title to the house in trust for them. [ 4 ] The plaintiffs commenced action by way of statement of claim on May 29, 2014. They filed a certificate of lis pendens against title to the house on April 13, 2015. The defendant filed a statement of defence and counterclaim on May 27, 2015.

A statement of defence to counterclaim was filed on June 10, 2015. Affidavits of records were exchanged. [ 5 ] The plaintiff June Scheerschmidt and the defendant were both questioned for discovery on July 7, 2016. The plaintiff Louis Flamant has not been questioned for discovery. [ 6 ] The next step that occurred was that the defendant filed an application on May 1, 2019, returnable May 13, 2019, seeking to have the plaintiffs’ statement of claim dismissed and the certificate of lis pendens filed against the title to the house removed and an order requiring the plaintiff June Scheerschmidt to vacate the house.

The application stated that it was made under rule 4.33. [ 7 ] On July 2, 2019 the plaintiffs filed an application for advice and directions “to aid in proceeding with this claim”. The affidavit sworn by June Scheerschmidt in support of that application states that she had attempted to have Louis Flamant questioned for discovery, but Louis Flamant is a resident in the Hardisty Care Center and his son, who has power of attorney, would not permit his

father to leave that premises. [ 8 ] Both applications came before Master Schulz in morning chambers on July 4, 2019. The Master ordered that the applications be set for Masters’ special chambers. [ 9 ] On October 8, 2019 the defendant filed a further application. In essence it was the same application as had been filed on May 1, 2019, but stated that the application was being made under rules 4.31 and 4.33. [ 10 ] Further affidavits were sworn and filed on behalf of each of the parties.

June Scheerschmidt swore a second affidavit which states, among other things, the following: 3) I visited the plaintiff Louis Flamant on October 23, 2019 along with my solicitor Kevin D. Mah at the Hardisty Care Center... 5) Louis Flamant indicated to both me and our solicitor that they (sic) wish to continue this action. ... 9) I restate that I have attempted to have Louis Flamant participate at questioning for discovery.

On October 23, 2019, the head nurse named Ruwana at the Hardisty Care Center told me and my solicitor that Louis Flamant is not to leave the premises due to instructions by his son Clark Flamant.... 12) Louis continues to indicate that he is willing to be questioned and if needed, questioned where he is located at the Hardisty Care Center. [ 11 ] The defendant swore an affidavit shortly before this hearing which states, in part, the following: 3. I was recently made aware that the respondent/plaintiff June Scheerschmidt had vacated the property. 5.

The respondent/plaintiff June Scheerschmidt left the premises in a state of neglect tantamount to ruin… 6. While attending at the premises, I found unpaid utility bills which were the responsibility of the respondent/plaintiff June Scheerschmidt… 7. The respondent/plaintiff June Scheerschmidt’s failure to pay the utility bills and utter neglect of the premises has caused me undue financial hardship. [ 12 ] At the hearing of this matter, counsel for the plaintiffs advised that he has had direct discussions with Louis Flamant and questioning of Louis Flamant could now occur at the Hardisty Care Center.

Rule 4.31 Application [ 13 ] Counsel for the defendant submits that the plaintiffs’ application for advice and directions is not a significant advance of the action under rule 4.33, but in any event the test for dismissal under rule 4.31 has been met. He states that there has been inordinate delay for which there is no reasonable excuse and that there has been significant prejudice to the defendant.

More specifically, he asserts that the six-part test set out by our Court of Appeal in Humphreys v Trebilcock , 2017 ABCA 116 has been met. [ 14 ] In response, counsel for the plaintiffs refers to the decision of our Court of Appeal earlier this year in Transamerica Life Canada v Oakwood Associates Advisory Group Ltd , 2019 ABCA 276 and in particular that part of the decision regarding the obligation of a defendant to avoid delay. In that case, the court stated the following with respect to questioning: [32] This record discloses several examples of defence delay.

One is that the appellants waited for more than six years before they initiated questioning of the respondent’s representatives. Questioning of the opposing party is virtually universal in civil litigation. The appellants did nothing to initiate this step, which was entirely for their benefit and under their control, but then complained that when they finally got around to it some of the witnesses could not be located.… [ 15 ] In this case, the defendant took no steps to initiate the questioning of Louis Flamant.

All that was required of counsel for the defendant was to send an appointment for questioning and conduct money to counsel for the plaintiffs. The defendant’s current counsel who recently came on to the file could not advise as to why his predecessor did not do that. One certainly is left wondering why the defendant would not seek to question Louis Flamant and get on with the action since the plaintiff June Scheerschmidt was living in the house rent free and the defendant was paying the mortgage and upkeep. [ 16 ] There has been inordinate delay.

Questioning of Louis Flamant should certainly have been completed within the last three years. [ 17 ] The plaintiffs’ excuse that Louis Flamant has been in a nursing home and his son would not cooperate in producing Louis Flamant for questioning is a very weak excuse. Were it standing alone, I would find that the plaintiffs’ delay is inexcusable. However, the defendant is not blameless. In my view, it would be unfair in this case to grant to the defendant the presumption that the inordinate delay brought about significant prejudice—since the defendant is also responsible for the delay that occurred.

Consequently, the defendant is required to prove on a balance of probabilities that she suffered significant prejudice. [ 18 ] Significant prejudice is the ultimate consideration: Transamerica , paragraph 21. [ 19 ] Prejudice may be “litigation prejudice” or “nonlitigation prejudice”.

[ 20 ] The defendant makes no claim of litigation prejudice. The significant prejudice claimed by the defendant is nonlitigation prejudice in the form of significant economic losses. Specifically, the defendant states that the plaintiff June Scheerschmidt has been living in the house without paying any rent since 2005 and that this created significant and serious economic hardship for the defendant as she has been forced to make mortgage payments and pay for repairs for a property she has not resided in since 1997.

The economic difficulties suffered by the defendant during this period of delay have resulted in the property being foreclosed upon. A six-month redemption order was granted on June 9, 2019.

Counsel for the defendant asserts that the plaintiffs’ interest in securing judicial determination of their claim is no longer more important than the defendant’s interest in carrying on her affairs without suffering significant and crippling economic losses, including but not limited to the foreclosure of the defendant’s property. [ 21 ] In Humphrey v Trebilcock the court stated (at paragraph 138): “This court has not, as far as we can tell, dismissed an action on account of delay because of nonlitigation prejudice.” [ 22 ] In Mintage Financial Corporation v Altenhofen , 2013 ABQB 486 , Master Schlosser stated (at paragraph 43) that he found “Economic prejudice as a significant prejudice is an intriguing proposition.” In that case, the defendant seeking dismissal for inordinate delay under rule 4.31 argued that the plaintiff’s claim of 21% interest over 12 years amounted to significant prejudice.

Master Schlosser said that if the defendant’s liability for interest were under a contract, the court would not have the power to stop or reduce the contractual interest, and consequently there would be a direct correlation between the prejudice and the delay. [ 23 ] In Minshull v LED S ign Supply Inc , 2019 ABQB 424 Master Prowse ruled that a defendant by counterclaim’s complaint that the plaintiff by counterclaim’s action showed up on the defendant by counterclaim ’s credit report and that whenever the defendant by counterclaim applied for financing, its bank raised the issue of the plaintiff by counterclaim’s claim, the bank raised serious reservations, was insufficient evidence of significant prejudice, since there was no evidence of financing being applied for and refused. [ 24 ] In the decision of Kametani v Holman , 2018 ABQB 18 Madam Justice Bast stated that she was not satisfied that the defendant’s bare statement that she has had difficulty securing employment was sufficient to establish a significant nonlitigation prejudice. [ 25 ] In Alberta (Minister of Justice and Attorney General) v McNair , 2018 ABQB 314 the defendant was arrested after a large number of marijuana plants were found in his home.

The respondent Minister asked for a restraining order against the defendant’s home a few months later, alleging that it was used to carry out an illegal act and should be forfeited pursuant to the Victims Restitution and Compensation Payment Act. The defendant’s property was restrained for five years without a property disposal hearing having been undertaken. The defendant provided affidavit evidence attesting to financial hardship during the years that the action had been stalled.

The court found that the defendant being subject to the terms of the restraint order for over four years and seven months created and continued to create significant financial hardship for him. [ 26 ] In this case, the defendant’s application seeks to have the plaintiffs’ certificate of lis pendens removed from the title to the house. Counsel for the defendant indicated his client may seek to get a new mortgage to pay out the mortgage which is in the foreclosure. He states that the certificate of lis pendens will prevent his client from getting a new mortgage.

In fact counsel for the defendant stated at the hearing that if the action were not dismissed due to delay, he still would ask the court for an order to have the certificate of lis pendens removed.

Counsel for the plaintiffs offered to postpone the certificate to a new mortgage, but would not agree to its discharge as his clients are concerned that the defendant would register something against the title to the house that would defeat the plaintiffs’ claim. [ 27 ] There is no doubt that the defendant has suffered significant economic loss during the time that this case has been in litigation as she continued to make mortgage payments and pay upkeep for the property (to a point).

The defendant also states that the plaintiff June Scheerschmidt utterly neglected the property, to the extent that it is now in a ruinous state. As I stated earlier, I am left wondering why the defendant continued to make the mortgage payments while the plaintiff June Scheerschmidt was in possession, but did nothing to hasten the lawsuit. Nonetheless, I am satisfied that the defendant has proven that she has suffered significant nonlitigation prejudice in the form of economic loss during the period of inordinate delay.

Furthermore, with the property about to be listed for sale following the Redemption Order, economic loss will continue. Consequently, the defendant’s application for dismissal under rule 4.31 is granted on the basis that the defendant has suffered and continues to suffer nonlitigation prejudice which is significant.

Rule 4.33 Application [ 28 ] Despite my ruling that the defendant’s application under rule 4.31 succeeds, I will consider the alternative application under rule 4.33. [ 29 ] With respect to the defendant’s application under rule 4.33, both counsel for the defendant and counsel for the plaintiffs directed their arguments solely to the issue as to whether the plaintiffs’ application for advice and directions constitutes a significant advance. [ 30 ] In my view, the plaintiffs’ application for advice and directions does not constitute a significant advance of the action as is required to avoid striking for long delay under rule 4.33.

I see the plaintiffs’ application for advice and direction to be of the same nature or quality as the pretrial conference considered in St. Jean Estate v. Edmonton (City) , 2014 ABQB 47 and the notice of written questioning considered in XS Technologies Inc v Veritas DGC Land Ltd , 2016 ABCA 165 . In both cases, the court employed a functional analysis as to whether the step in question brought about a significant advance in the action and determined that it did not. They were incomplete steps. Adopting a phrase from the decision in the St.

Jean case, the plaintiffs’ application for advice and directions in this case, just a few days before the three year period was about to expire, was a “hollow exercise”.

In fact, the application for advice and directions became moot when June Scheerschmidt filed her affidavit (on October 28, 2019) stating that Louis Flamant could be questioned at the Hardisty Care Center. [ 31 ] In coming to the conclusion that the plaintiffs’ application for advice and directions did not significantly advance the action, I have conducted a functional analysis and determined that it did not move the action to resolution in a meaningful way.

Effect of the plaintiffs’ and defendant’s applications having been first returnable before the expiry of three years [ 32 ] In determining whether three years or more has passed without a significant advance in this action, should the time after the date when that the plaintiffs’ and defendant’s applications were first heard and adjourned by Master Schulz (July 4, 2019) be included? The answer is “no”: Kehew Construction Ltd v. Kehewin Cree Nation , 2017 ABQB 763 .

In fact the time after the defendant first filed her application for dismissal (May 1, 2019) should also not be included, at least with respect to the application under rule 4.33: Ma v Kwan , 2019 ABQB 89 affirming 2018 ABQB 852 . [ 33 ] Consequently, three years had not elapsed from of the last step taken (July 7, 2016) when the defendant filed its application under rule 4.33 (May 1, 2019). Conclusion [ 34 ] The defendant’s application under rules 4.31 is granted. The action is dismissed and the certificate of lis pendens shall be discharged from title.

Since the plaintiff June Scheerschmidt has already vacated the property, an order for possession is not necessary. [ 35 ] The defendant is awarded costs on the appropriate column. Heard on the 26 th day of November, 2019. Dated at the City of Edmonton, Alberta this 5 th day of December, 2019. B. W. Summers M.C.Q.B.A. Appearances: Kevin Mah Simons and Stephens for the Plaintiffs James Weary Weary Law for the Defendant