Gammage v Costco Wholesale Canada Ltd., 2021 ABQB 514

Court of Queen’s Bench of Alberta Citation: Gammage v Costco Wholesale Canada Ltd., 2021 ABQB 514 Date: 20210707 Docket: 0810 01112 Registry: Red Deer Between: Robert Keith Gammage and Jo-Ann Gammage and Her Majesty the Queen In Right of Alberta Plaintiffs (Respondents) - and - Costco Wholesale Canada Ltd. and Costco Wholesale Corporation Defendants (Applicants) - and - Entrance Technology Inc. and ABC Corporation and John Doe Third Party _______________________________________________________ Decision of the

Honourable Mr. Justice S.N. Mandziuk _______________________________________________________ Introduction [1] This personal injury action was commenced in 2008. The Plaintiffs claim damages in relation to a November 8, 2006incident at a facility operated by the Defendants in Red Deer, Alberta. [2] The Defendants apply to set aside a procedural order granted by Slawinsky J on November 20, 2017 (Slawinsky J Order)and to have the action dismissed for delay under Rule 4.31 of the Alberta Rules of Court, Alta Reg 124/2010. [3] In this Decision I will refer to the Defendants as Costco and the Third Parties as ETI.

ETI did not actively participate in thisapplication.

Preliminary Evidentiary Issue [4] The Plaintiffs raised a preliminary evidentiary issue arising from the requirement that the evidence in a dispositiveapplication such as this one be based on personal knowledge. [5] Rule 13.18(3) states: If an affidavit is used in support of an application that may dispose of all or part of a claim, the affidavit must be sworn on the basis ofthe personal knowledge of the person swearing the affidavit. [6] The purpose of the Rule is to avoid reliance on hearsay affidavits when the very existence of a legal action is at stake. [7] Costco’s evidence comes from three affidavits, all sworn by Georgina McMinn, Costco’s lawyer’s legal assistant.

ThePlaintiffs have filed the affidavit of Kristin Frederiksen, their lawyer’s office administrator. Ms. Frederiksen was cross-examined on herAffidavit; Ms. McMinn has not been cross-examined.

These Affidavits outline the timeline of events in the action and are largely (andnearly exclusively) based on information and belief and matters that were relayed to the affiants or gleaned from documents (many ofwhich are attached as exhibits). [8] In this sense, the Affidavits are not based on personal knowledge and therefore fit the definition of hearsay evidence: an outof court statement restated and submitted for the truth of its contents. [9] Our Court of Appeal has held that “some flexibility is required in interpreting Rule 13.18(3)” (Saito v Lester Estate, 2021ABCA 179 at para 12) and stated in Goodswimmer v Canada (Attorney General), 2017 ABCA 365 at para 33, leave to appeal ref’d[2018] SCCA No 1: The case law has long recognized that some flexibility is required in interpreting the rule on the use of hearsay affidavits.

Too strict aninterpretation would preclude

summary judgment applications by large organizations. In some cases involving historical claims, due tothe passage of time there may be no one with any personal knowledge; for example, there is no longer anyone around with personalknowledge of the negotiation and signing of Treaty 8, or the original survey of the Reserve.

Thus, litigants are allowed to rely onaffidavits in support of final relief where the personal information in the affidavit is obtained from reviewing relevant and reliabledocuments: JH Ashdown Hardware Co v Singer (1951), (AB CA), 3 WWR (NS) 145 at pp 148-9 (Alta SC, App Div),affirmed on other grounds (SCC), [1953] 1 SCR 252; Attila Dogan Construction and Installation Co v AMEC AmericasLtd, 2015 ABQB 120 at paras. 87-8, 605 AR 303, aff’d 2015 ABCA 406, 609 AR 313. A key consideration is whether the underlyingsource of the information is reliable, and would be admissible at trial.

The proximity of the affiant to the original events and thedocuments themselves is an important consideration in the weight that will be given to such affidavits. [10] It is true that an application under Rule 4.31 is not in the result different from a

summary dismissal application: both lead tothe dismissal of the action. The latter, because it has no merits; the former, because of delay in advancement. One arrives at the samedestination in both cases. [11] The main difference is that this is a procedural application. The Plaintiffs agreed that the evidence required is largelyprocedural in nature. The merits of the claim are not being examined. That distinction allays the concerns about hearsay evidence. [12] Further, lawyers represent their clients.

The client’s knowledge of the status of an action generally comes from their counsel.The exchanges of procedural information, steps taken in an action and so forth would normally be outside of the direct knowledge of theclient. [13] This separation of the client from the operative elements of the legal action is exacerbated when the client is a corporate entityrepresented by employees, directors, officers, shareholders, or others. This is precisely the situation with Costco and ETI. [14] Costco cited Master Robertson’s decision in Scott v Cargill Limited, 2019 ABQB 308.

In that case – a Rule 4.31 application -the corporate Defendant relied on an Affidavit sworn by a corporate representative who had no personal knowledge of matters deposedto, many of which were descriptions of steps that had been taken in the action: “[m]uch of his evidence simply describes (and attaches)the correspondence between counsel” (Scott at para 17).

[ 15 ] Master Robertson went on to say (at paras 21-23): . . .much time and expense has been expended by Cargill simply trying to put before the Court the correspondence between counsel – both officers of the court who, in my view, are entitled simply to tell the Court what they wrote to each other – so that arguments could be made about who was responsible for delay, in order to address the question of whether the inordinate delay is “inexcusable”.

Notwithstanding the fact that officers of the court can tell the court what they wrote to each other and when, in a case such as this actually putting the record of their correspondence before the Court is important to have a clear record. But there would have been a simpler and probably better way to do this.

A legal assistant, preferably one who worked for the senior lawyer representing Cargill (the applicant), could have assembled, in chronological order, all of the correspondence between counsel that occurred between the commencement of the action and the filing of this application (other than privileged settlement communications). If the legal assistant has worked as that senior lawyer’s legal assistant for an extended period, she would have personal knowledge of what had happened and, importantly, what had not happened. [ 16 ] The issue here is the same.

The facts that must be put before the Court, so that the application can be determined, squarely relate to the progress of the litigation and its place on the litigation spectrum. [ 17 ] Requiring a level of personal knowledge that would not be in the mind of a corporate client, who provides a corporate representative under Rule 5.4, is simply unrealistic where the evidence is a recitation of documented events and exhibited documents and not a consideration of merits. [ 18 ] This evidentiary objection by the Plaintiffs is not a bar to this application.

Timeline of Events [ 19 ] Costco provided a timeline in its materials and the Plaintiffs submitted a revised timeline. [ 20 ] During submissions, counsel for Costco did not take issue with the Plaintiffs’ revised timeline. I draw my understanding of the action’s progress on a year-by-year basis from the revised timeline and the filed Affidavits referred to above. 2008 [ 21 ] The Statement of Claim was filed on November 3. 2009 [ 22 ] The Statement of Claim was served on October 6. The Statement of Defence was filed by Costco on October 20.

The Third- Party Notice against ETI was filed on November 6. 2010 [ 23 ] The Plaintiffs filed their Affidavit of Records on January 12. The next day Costco filed its Affidavit of Records. [ 24 ] On October 13, ETI filed its Statement of Defence to Third Party Claim. It was served either that same day or on March 10, 2011. Nothing turns on this discrepancy in the correspondence concerning dates. 2011 [ 25 ] ETI served its Affidavit of Records on March 28. [ 26 ] Questioning was scheduled on September 21, to be held January 5 & 6, 2012.

By way of letter dated December 7, 2011, then counsel for Costco advised that, further to earlier emails of November 15 and 24, he was no longer available on January 5 & 6. [ 27 ] On December 9, Costco proposed March 2012 dates, but by the time that ETI responded Costco was no longer available. 2012 [ 28 ] Between January and May, correspondence was exchanged between the parties about Questioning dates. [ 29 ] The Plaintiffs served a Notice of Appointment on August 10 to question Costco’s representative.

That Questioning took place on August 27 and the two individual Plaintiffs were also questioned on August 27 and 28. [ 30 ] In September, after Questioning, Costco told the Plaintiffs that it was going to apply for

summary dismissal of the claim. 2013

[ 31 ] On February 7, Costco filed the application for

Summary Dismissal. [ 32 ] The Plaintiffs cross-examined Costco’s representative on his Affidavit on May 1.

There were 10 undertakings taken under advisement. [ 33 ] On November 4, Costco and ETI were advised that the Plaintiffs had retained new counsel. [ 34 ] On December 9, Plaintiffs’ counsel sent a demand for answers to undertakings: seven months after the cross-examination. 2014 [ 35 ] Costco’s counsel sent a letter on January 16 saying that the records needed to answer the undertakings were destroyed two to three years previously. [ 36 ] Plaintiffs’ counsel advised on March 10 that they wanted to set the matter down for trial. [ 37 ] On March 12, Costco’s counsel said that they wanted to proceed with the previously filed

Summary Dismissal application. [ 38 ] On July 30, more than four months after Costco’s correspondence, the Plaintiffs advised of available dates and that was the Plaintiffs last action in 2014 (nothing further happened in 2014). 2015 [ 39 ] Costco changed counsel on February 9. [ 40 ] ETI’s corporate representative was examined by Costco on September 9.

Continued Questioning of the Plaintiff Keith Gammage occurred on September 15. [ 41 ] There was no other activity in 2015. 2016 [ 42 ] On January 22, Costco sent a litigation plan to the Plaintiffs’ counsel. [ 43 ] At some point during the first part of 2016 the Plaintiffs retained an expert, Mr. Panish. [ 44 ] On March 4, Costco filed an application to compel the Plaintiffs to answer their undertakings and to have a litigation plan created.

Plaintiffs’ counsel proposed dates for six weeks after the proposed litigation plan was sent by Costco. [ 45 ] Further answers to undertakings were given by the Plaintiffs on March 18. [ 46 ] On May 10, the parties agreed to a litigation plan which was memorialized in a Consent Order that same date (Litigation Plan). The Litigation Plan required the following:

a) Plaintiffs were to complete their answers to undertakings by April 30, 2016;

b) Primary onus expert reports were to be provided by the Plaintiffs by August 30, 2016;

c) Expert reports or rebuttals were to be provided by Costco and ETI by February 28, 2017;

d) All rebuttal or surrebuttal reports were to be completed and provided by May 30, 2017;

e) By June 30, 2017 the parties were to agree to an early trial date. [ 47 ] The dates could be amended by the Court or by agreement of the parties. [ 48 ] A number of things went wrong with the Litigation Plan in 2016 and afterwards. Most of the problems arose from expert reports. [ 49 ] The Plaintiffs requested more time to serve primary onus reports four months after the Litigation Plan had been agreed to. The reports were due by August 30. The request for more time was made on August 29.

Costco rejected this request. [ 50 ] The Plaintiffs retained an Occupational Therapist on October 11, who evaluated the Plaintiff Keith Gammage on November 18. [ 51 ] On October 26, Costco inquired about the Plaintiff Keith Gammage’s availability for a December 7 appointment with Costco’s orthopedic expert and it appears that the appointment proceeded on that date. 2017 [ 52 ] The Plaintiffs’ Occupational Therapist completed the functional capacity evaluation of the Plaintiff Keith Gammage on February 7.

[ 53 ] On February 23, an orthopedic independent medical examination report was served on the Plaintiffs.

At the same time, a Rule 5.44 demand was made for any undisclosed medical records or reports in the Plaintiffs’ possession. [ 54 ] On February 28, Costco served an economist’s report and on April 11, the Plaintiffs served their Occupational Therapist Report. [ 55 ] Costco objected to the Occupational Therapist Report as being late and this lateness having caused prejudice to Costco. [ 56 ] It does not appear that the Plaintiffs took any other steps in the action in 2017 until Costco made an application, heard November 20, which led to the Slawinsky J Order. [ 57 ] The Slawinsky J Order directs this matter to proceed to an 18-day trial.

Additionally, Slawinsky J directed that the Plaintiffs file and serve their application to vary certain litigation plan dates by January 5, 2018, with supporting evidence. There was a specific direction that the parties comply with Rule 8.7. Costs were awarded against the Plaintiffs. 2018 [ 58 ] The Plaintiffs met the deadline for filing an application to vary the Litigation Plan specified in the Slawinsky J Order on January 5.

The application was set for January 23. [ 59 ] On January 23, before Master Robertson, the Plaintiffs were given until March 30 to serve expert reports, and rebuttals were due by October 30. [ 60 ] The Plaintiffs filed the Michael Panish expert report on March 28. There is some debate as to whether Master Robertson’s filing and service deadline was in fact met. The Plaintiffs say that it was served on the filing date, thus meeting the deadline.

Costco says that it was served on June 8, well past the deadline. [ 61 ] On April 26, the parties agreed to have the matter mediated, but this was cancelled at the request of ETI’s insurer. [ 62 ] Finally, on November 27 the Plaintiffs renewed the request for mediation dates. The Plaintiffs say that they received no response. [ 63 ] Between April 26, when the parties agreed to

schedule mediation, and the Plaintiffs’ November 27 request (a period of six months) there is no evidence that the Plaintiffs took any steps. 2019 [ 64 ] On April 4, the Plaintiffs corresponded with Costco to set mediation dates. There was no response, according to the Plaintiffs. [ 65 ] This appears to be the only thing that happened in 2019. 2020 [ 66 ] On January 21, the Plaintiffs were advised that an 18-day trial was available from September 27 to October 21, 2021. The trial fees would be $4,100. The Plaintiffs advised Costco and asked to set the trial down on those dates. [ 67 ] Costco responded with an application for

summary dismissal under Rule 4.31 . That application did not proceed at the time due to the Covid-19 Pandemic and the Court’s response thereto. [ 68 ] In September, the application was rescheduled for December 9, but then Costco removed it from the Master’s list on October 20. 2021 [ 69 ] On February 9, a revised application was filed. It included the relief with respect to the Slawinsky J Order. [ 70 ] The application was heard before me on May 12. The Law Fundamentals [ 71 ] Rule 1.2, the foundational rule, sets the tone for litigation in Alberta.

The Rule states that the purpose of the rules “ . . . is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way” (Rule 1.2(1)), and this purpose is particularized in subsection (2): In particular, these rules are intended to be used (

a) to identify the real issues in dispute,

(

b) to facilitate the quickest means of resolving a claim at the least expense, (

c) to encourage the parties to resolve the claim themselves, by agreement, with or without assistance, as early in the process as practicable, (

d) to oblige the parties to communicate honestly, openly and in a timely way, and (

e) to provide an effective, efficient and credible system of remedies and sanctions to enforce these rules and orders and judgments. [ 72 ] Parties to litigation are required, “jointly and individually” (Rule 1.2(3)) to: (

a) identify or make an application to identify the real issues in dispute and facilitate the quickest means of resolving the claim at the least expense, (

b) periodically evaluate dispute resolution process alternatives to a full trial, with or without assistance from the Court, (

c) refrain from filing applications or taking proceedings that do not further the purpose and intention of these rules … [ 73 ] “Timely litigation is a key objective” of Rule 1.2 ( Huerto v Canniff , 2014 ABQB 534 at para 13 , aff’d 2015 ABCA 316 ).

Rule 1.2 is a lens through which all of the rules must be read and applied, including the operation of Rule 4.31 ( Huerto at para 19). [ 74 ] Moen J described it thus in Envision Edmonton Opportunities Society v Edmonton (City) , 2011 ABQB 29 at para 47 : Under the Foundational Rule of the New Rules, Rule 1.2, however, timeliness and cost-effectiveness is put front and centre alongside the need for a fair and just result. In my opinion, the Legislature in enacting Rule 1.2 is signalling the need to consider timeliness and cost- effectiveness in conjunction with the need for fairness and justice.

I would go even further, and say that Rule 1.2 recognizes that a result, to be fair and just, must also be timely and cost-effective. This makes perfect sense in light of the seemingly inexorable trend toward longer and more expensive trials which put access to the courts out of reach of more and more people.

The ordinary citizen in this day and age is hard-pressed to afford a long trial. [ 75 ] All of this aligns with the “cultural shift” discussed in Hryniak v Mauldin , 2014 SCC 7 and Slatter JA’s comments in Windsor v Canadian Pacific Railway Ltd , 2014 ABCA 108 at para 15 where he noted: ... the need for a change in culture. In other words, the myth of trial should no longer govern civil procedure. It should be recognized that interlocutory proceedings are primarily to “prepare an action for resolution”, and only rarely do they actually involve “preparing an action for trial”.

Interlocutory decisions that can resolve a dispute in whole or in part should be made when the record permits a fair and just adjudication... [ 76 ] Finally, Crighton J (as she then was) confirmed (referring to Envision ) that Rule 1.2 is a principle that applies to a Rule 4.31 inordinate delay application ( Steparyk v Alberta , 2014 ABQB 367 at paras 34-37 ). [ 77 ] This is the context in which Rule 4.31 and the Slawinsky J Order operate. Rule 4.31 [ 78 ] Rule 4.31 states:

(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, that delay is presumed to have resulted in significant prejudice to the party that brought the application. [ 79 ] It is important to note that this application is not a “drop dead” application based on steps (Rule 4.33).

This application is strictly under Rule 4.31, which tends towards an emphasis on the qualitative over the quantitative. [ 80 ] In essence, the Court can dismiss all or part of a claim if two conditions are met: delay in the prosecution of the action and significant prejudice to the opposing party. Specific time limits or deadlines are not found in this rule. [ 81 ] Rule 4.31 is permissive, not mandatory.

The Court has a discretion not to dismiss even if there is significant prejudice and inordinate and inexcusable delay. [ 82 ] However, once delay is found to be inordinate and inexcusable, a presumption of significant prejudice arises (Rule 4.31(2)). [ 83 ] The leading case interpreting Rule 4.31 is Humphreys v Trebilcock , 2017 ABCA 116 , which, after referring to litigation delay as a “corrosive force in a free and democratic state committed to the rule of law” (at para 90) sets out a six-part test guiding the application of Rule 4.31 (at paras 150-156): In order to apply r. 4.31 an adjudicator must answer six distinct questions.

First, has the nonmoving 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 nonmoving 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 nonmoving 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 r. 4.31(2), has the nonmoving party rebutted the presumption of significant prejudice? 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 the nonmoving party’s action? This question must be posed because of the verb “may” in r. 4.31(1). (Footnotes Omitted) [ 84 ] The Court of Appeal has since made it clear that this is not a formulaic prescription: . . .

As this Court has repeatedly stressed, Humphreys does not set out a universal mandatory code: see Arbeau v Schulz , 2019 ABCA 204 at para 23 ; Transamerica Life Canada v Oakwood Associates Advisory Group Ltd, 2019 ABCA 276 at paras 15 – 20 ; Thoreson v Alberta (Infrastructure) , 2020 ABCA 146 at para 28 ; Alderson at para 22 . The “core source of the legal principles” lies in the Rules themselves: Transamerica at para 15. The guidance and direction provided by this Court must be assessed in the context of an action’s unique characteristics.

It follows that the application of the Rules to the specific facts will “always engage an element of judicial discretion”: Transamerica at para 15.

Whether delay is inordinate “is to be determined in light of all of the circumstances of a particular case”: Transamerica at para 18. ( LDS v SCA , 2021 ABCA 59 at para 18 ) [ 85 ] Parties to litigation are jointly responsible for managing it in accordance with the principles of timeliness, cost-effectiveness and efficiency (Rules 4.1 and 4.2; Pillar Resource Services Inc v PrimeWest Energy Inc , 2017 ABCA 19 at para 136 ). [ 86 ] Rules 4.1 and 4.2 work in concert with the foundational rule (Rule 1.2) and the clear conclusion is that Rule 4.31 is linked to all of them ( 330626 Alberta Ltd v Ho & Laviolette Engineering Ltd , 2018 ABQB 398 at paras 68-69 ). [ 87 ] The Plaintiffs refer to the gloss that was put on the Humphreys case in Transamerica Life Canada v Oakwood Associates Advisory Group Ltd , 2019 ABCA 276 at para 21 (characterized as the “leading case” on this topic by Master Schlosser in Song v Alberta , 2019 ABQB 789 at para 10 ), noting that R 4.31 applications do not invite a purely rote analysis and can be approached in different ways, with the purpose of the analysis top of mind: The objective of the exercise must be remembered.

It is to determine whether the delay is inordinate, inexcusable, or otherwise, has caused significant prejudice to the defendant. Any particular class of proceedings will include some that proceed quickly, some that proceed slowly, and a great many in the middle. In determining the reasonable expectation of progress for the purpose of striking out an action for delay, regard must be had to all categories. Delay is not fatal just because the litigation has not progressed to the point that the “fastest” or even the “average” proceeding of that type would have reached.

In order to be struck, the action must generally fall within the slowest examples of that type of proceeding, and it must be so slow that the delay justifies striking out the claim. Further, even very short delays can be grounds for striking the action if significant prejudice has resulted. “Significant prejudice” remains the ultimate consideration. [ 88 ] The six-step analysis in Humphreys is referred to in para 16 of Transamerica as an “example” of an approach to the issue that might not work effectively in every case. The Court noted (at para 23): In

summary, Humphreys v Trebilcock is one of dozens of decisions of this Court on delay; it did not purport to displace all of the other jurisprudence on the issue. The basic test for dismissal for delay is found in the text of the Rules of Court , as interpreted in all of the many decisions on the topic... Analysis Costco’s Position [ 89 ] Costco argues that there has been inordinate and inexcusable delay and the presumption of significant prejudice has not been rebutted by the Plaintiffs. The Slawinsky J Order should be set aside and the Plaintiffs’ claims dismissed.

The Plaintiffs’ Position [ 90 ] The Plaintiffs argue that the action should not be struck. The Slawinsky J Order should stand and a procedural order should be granted to set the matter for trial with new dates. There has been delay, but Costco has played a

part in that delay. The matter is ready to go to trial. Application of Rule 4.31

[91] Transamerica confirms that the Humphreys rubric is not the only way to approach the application of Rule 4.31. In thisdecision, I will follow the steps in Humphreys in my analysis, bearing in mind the text of the Rule itself. Has there been inordinate delay? [92] It is not possible, by any measure, to find that there has not been delay. [93] The action was commenced nearly 13 years ago in relation to an alleged tortious incident that occurred nearly 15 years ago.This is the epitome of delay, without question. [94] Is the delay inordinate?

Have the Plaintiffs “failed to advance the action to the point on the litigation spectrum that a litigantacting reasonably would have attained within the time frame under review?” and second, “is the shortfall or differential of such amagnitude to qualify as inordinate?” (Humphreys at paras 151-152). [95] Citing a dictionary definition, the Court in Humphreys considered “inordinate” to mean “exceeding in amount, quantity,force, intensity or scope the ordinary, reasonable or prescribed limits: extraordinary’.

In this context inordinate means thatthe differential between the norm and the actual progress of an action is so large as to be unreasonable or unjustifiable” (Humphreys atpara 120). [96] Costco cites Hudson v Garreck, 2012 ABCA 111 and Barlot v Eisner, 2017 ABQB 636, both personal injury actions, asexamples of the Court finding that delays of 11 years from the date of the accident (Hudson) and 10 years from the date the actioncommenced and 12 since the tortious conduct (Barlot) constituted inordinate delay. [97] Costco points to the relative simplicity of this action, with a small number of Plaintiffs (three including the subrogated claimof the Alberta Government) and a “conventional subject matter” (Costco Brief, para 35). [98] Each case is, of course, unique and must be assessed on its own merits, and here, I consider the following:

a) Pleadings closed in October 2010, when ETI filed its Statement of Defence to Third Party Claim. That was just about four yearsafter the incident and two years after the Statement of Claim was filed. The next step is discovery, through document disclosure and oralquestioning.

b) Virtually nothing happened in 2011.

c) Questioning did not take place until the end of August 2012, nearly two years after pleadings closed, four years after the actioncommenced and six years after the incident.

d) The parties then spent time dealing with Costco’s

summary dismissal application, which was initially discussed in September 2012but after examinations on affidavit, with undertakings and answers to undertakings, it appears the application never took place.

e) This period of time was punctuated with the Plaintiffs changing counsel and then following up on unanswered undertakings sevenmonths after the cross-examination occurred.

f) Nothing happened between July 30, 2014, and September 2015, when there was follow up questioning of the Plaintiff KeithGammage and an examination of ETI’s representative. Nothing else happened in 2015.

g) Other time periods when the matter went “silent” include a long gap in 2017 between about April and the Slawinsky J Order inNovember and between April and November 2018. It appears there was a single piece of correspondence in 2019.

h) The Slawinsky J Order was granted in November 2017, more than three years ago. The matter has still not gone to trial. [99] As stated in Humphreys, at para 168, “[a]ny delay that was not trivial or minor is inordinate”. Here, the periods of inactivitywere substantial and material. [100] This action was not conducted efficiently. It is not where it should be in the litigation process. [101] I have no difficulty in finding the delay in this case to be inordinate. It is not at the stage that it should be at.

Explanation and Justification for the Inordinate Delay [102] Having found that the delay is inordinate, I will turn to the question of the Plaintiffs’ explanation for the delay, and whether thedelay is justified. [103] In Fraser v Jeffries, 2019 ABQB 145, aff’d 2019 ABCA 368, I stated (at para 45): Inordinate delay may be excusable: John Barlot Architect Ltd v Atrium Square Investments Ltd, 2017 ABQB 749 at para 32. The partyresponding to a Rule 4.31 application has the burden of establishing the excuse: 330626 Alberta Ltd v Ho & Laviolette EngineeringLtd, 2018 ABQB 398 at para 88.

Any explanation offered in support of the delay being excusable must be based in evidence and must be“reasonably capable of belief and sufficient to excuse or justify the delay”: Housser v Savin Canada Inc, , 77 OR (3d)251 at para 14 (SCJ). [104] In Fode v Paragon Gaming EC Company, 2020 ABQB 266, Master Schlosser, Q.C. noted the following about excusabledelay, at paras 20-21:

If we examine the decided cases, excusable delay falls into several categories; the most common being: defence, or third-party delay,defence acquiescence, or health issues. Less common are: the pace of an inextricably linked action that would determine some or all ofthe issues in the lawsuit, complexity, or representation issues. Instances of institutional delay, natural disaster, family matters, litigationfinancing, changing action control, clerical errors, incarceration and settlement negotiations have sometimes also been found to constituteacceptable excuses for delay.

All of these instances seem to have a common theme. For the most part, an acceptable excuse for delay is caused by events outside of thecontrol of the plaintiff. But that is not the end of the story. We are also obliged to examine the plaintiff's response to an unexpected, orunanticipated delaying event. In the case of a loss of counsel, for example, we have to examine the efforts to find a replacement.

In thecase of defence delay, we are also obliged to examine whether the plaintiff's response was appropriate, or whether they should perhapshave taken steps to compel the defendant to do the thing that provided the obstacle. The Transamerica Life Canada v OakwoodAssociates Advisory Group Ltd 2019 ABCA 276 , [2019 CarswellAlta 1388 (Alta CA)] case affirms that a defendant is notwithout obligations to move a matter forward, especially in view of the foundational rules. Typically, defence delay disables thedefendant from relying on the delay as against the plaintiff.

It appears, from the decided cases, that absence of fault and excusability areclosely linked. All instances of excusable delay have to be considered in context, on a case-by-case basis. [105] The Plaintiffs argue that Costco and ETI also bear a share of responsibility for delay. Their role militates against the granting ofa remedy that would deprive the Plaintiffs of their opportunity to continue with their action to trial and obtain redress. [106] The Plaintiffs indicate that one of the reasons for the delay was personal issues experienced by their counsel.

These personalissues included the retirement of the senior partner and originating lawyer on the file, Plaintiffs’ (new) counsel entering into solopractice, the loss of two of Plaintiffs’ (new) counsel’s assistants in succession, and Plaintiffs’ counsel’s illness and resulting substantialtime away from the office. (Affidavit of Kristin Fredriksen, sworn January 4, 2018) [107] Illness or other personal difficulties encountered by counsel can underlie a reasonable excuse for delay (Ivkovic v TingleMerrett LLP, 2018 ABQB 308 at para 26, cited in Fraser). [108] With respect to the litigation plan, once it was varied by Master Robertson in 2018 a mediation was scheduled for April 25,2018, and then cancelled due to ETI changing counsel. [109] As well, the Plaintiffs had difficulty obtaining an expert report.

In her Affidavit of January 4, 2018, Ms. Fredriksen referred to“difficulties in securing the appropriate experts and consultants in the timelines agreed to”. She noted that Plaintiffs’ counsel engagedMr. Panish as an expert in early 2016 however: [d]ue to Mr. Panish’s extremely busy

schedule and issues surrounding the start up of [counsel’s] solo practice among other delays relatedto [counsel’s] personal life, Mr.

Panish did not provide the initial draft of his report in this matter until November 19, 2017 and thereforeit could not have been reviewed by the Plaintiffs or Plaintiffs’ counsel or delivered to the Defendants and Third Parties until after thatdate. (Affidavit of Kristin Fredriksen, sworn January 4, 2018) [110] The Defendants are also responsible to move litigation along, even if the primary obligation falls on the Plaintiffs: “[i]t iscorrect to say that the plaintiff has the primary obligation in moving the litigation forward. The Rules of Court give the plaintiff manytools to ensure that happens.

It does not follow, however, that a defendant has no obligation with respect to the pace of litigation...”(Transamerica at para 27). It is clear from Transamerica that the obligation to move matters forward falls on all parties. [111] Defence delay is relevant, and here:

a) ETI changed counsel on the eve of mediation in 2018, and a six-month period elapsed during which new counsel familiarizedthemselves with the file;

b) Costco changed counsel in February 2015 and then did not examine ETI’s representative until September;

c) Costco’s application to compel answers to undertakings was not filed until March 4, 2016, six months after the continuedQuestioning of the Plaintiff Keith Gammage, which had commenced three-and-a-half years earlier in August 2012; and,

d) The parties agreed to have the matter mediated on April 26, 2018. ETI cancelled the dates. The Plaintiffs asked for new dates inNovember 2018 and again in April 2019. The Plaintiffs say they received no response until May 2019, and that Costco advised they didnot want to mediate the matter and said that they would bring the Rule 4.31 application. [112] Of course, none of the parties can be faulted for the delay in this application that was occasioned by the COVID-19 Pandemic,then set for December 2020.

In October 2020, Costco took this application off the list to amend it and have it heard by a Justice ratherthan a Master. The revised application was not filed until February 9, 2021. [113] The Plaintiffs’ failure to follow the Litigation Plan is not subtle; the Litigation Plan was clear and designed to move the matteralong within the Rules. This is a crucial issue.

With clear direction to take steps in the action, and deadlines with which to complete thesesteps, the Plaintiffs did not do so. [114] The Plaintiffs wanted trial dates, they were given the dates of September 27 to October 21, 2021, and then decided not pay thefee of $4100 given the current delay application and its outcome. [115] Having said that, through a series of Master Orders, many, if not most, civil hearings, including trials, were adjourned sine die,from the beginning of the COVID-19 Pandemic in mid-March 2020, up to the present. [116] It is the Plaintiffs who must explain and justify the delay, and in my view, they have done so.

[ 117 ] As noted above, explainable and justifiable delay most often presents as delay that is “caused by events outside of the control of the plaintiff.” ( Fode at para 21 ) However, a plaintiff’s response to those delaying events is also relevant. [ 118 ] Here, the Plaintiffs have explained and justified the delay. Some of the delay was due to the change in Plaintiffs’ counsel (as a result of a retirement), and then (new) counsel’s difficulties setting up a new practice. As well, there is evidence that Plaintiffs’ counsel suffered health problems which took him away from the office.

It is difficult to say that the Plaintiffs ought to have responded to these delays in a different way. [ 119 ] As well, some of the delay appears to be due to difficulties in getting expert reports. This has been accepted as an excuse for delay in other cases, for example, Sangha v Alberta (Motor Vehicle Accident Claims Act, Administrator) , 2018 ABQB 385 . [ 120 ] In addition, and importantly, Costco and ETI have been dilatory in this matter as well.

In my view, they did not move this matter along in the spirit of the foundational rule, and therefore, the Plaintiffs can point to those inactions to explain and justify the delay in addition to their own problems. [ 121 ] This finding does not entirely exonerate the Plaintiffs. I simply find, on a balance of probabilities, that this part of the test has been met.

Impairment of Defendants’ Interest & Prejudice [ 122 ] The Plaintiffs have offered an explanation and justification for the inordinate and inexcusable delay, I now must consider whether the delay has “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?” This question is wrapped up in the determination of significant prejudice. [ 123 ] Has Costco established that it has suffered significant prejudice? [ 124 ] Significant prejudice was characterized in Transamerica as “the most important factor in the analysis” (at para 42). [ 125 ] The prejudice cited by Costco in its brief arises from faded memories of witnesses.

Their evidence is not specific. Witnesses are not specifically named. [ 126 ] This type of prejudice was addressed in Humphreys at para 130 : There is no doubt that the passage of time may impair a moving party's ability to defend its interests at the trial of an action. “Delay may compromise the fairness of a trial”. The unavailability of crucial witnesses - death, impairment or disappearance - may diminish the strength of the moving party's case. The passage of time may also have impaired a prospective witness’ ability to access stored data.

A potential witness’ mental health may have declined and place the person in a position where he or she no longer can retrieve material in a memory bank. Or a party may have lost exhibits.

This may be attributable to disastrous fires or floods or mistakes made by movers or document managers. [ 127 ] Faded witness memory can be a factor in determining prejudice ( University of Alberta v Chang , 2011 ABQB 595 , rev’d 2012 ABCA 324 ). [ 128 ] Further, in Costigan v Ruzicka , 1984 ABCA 234 at para 30 , our Court of Appeal stated that “[e]very trial judge is aware that stale claims with stale testimony produce bad trials and poor decisions”. In Humphreys at para 182 , the Court of Appeal noted “...the ability of persons to recall events accurately diminishes with the passage of time.

This is true even for persons with above-average recall skills ...”. [ 129 ] Courts have held that “[m]emories are important not only to present a witness’ recollection of the facts, but to allow proper challenge to the witness’ evidence” ( Middleton Energy Management Ltd v TransCanada Pipelines Limited , 2017 ABQB 669 at paras 31 , 38). [ 130 ] There is no evidence that Costco or the third party would be calling any non-expert witnesses. If they were, this would be a concern. There is no evidence that witnesses have disappeared or died.

Furthermore, it appears from the record that this matter is ready to go to trial. Expert reports are done and all indications point to an expert driven trial on issues of tort liability and damages. [ 131 ] I cannot find that the inordinate and inexcusable delay has “impaired a sufficiently important interest of the moving party so as to justify overriding the nonmoving party’s interest in having its action adjudged by the court.” ( Humphreys at para 154 ) [ 132 ] I am not persuaded that there is significant prejudice here.

The striking of the action for delay would be too drastic a measure and in light of the current state of the litigation, the best course would be to have this matter proceed to trial at the earliest opportunity. Compelling Reason not to dismiss the Plaintiffs’ action? [ 133 ] The application fails on the basis of the significant prejudice factor. I do not need to answer the question of whether there is a compelling reason not to dismiss the Plaintiffs’ action. Conclusion [ 134 ] Both sides are responsible for the delay in this matter.

Both have a responsibility to move it towards trial ( T ransamerica at para 27) . Neither has advanced it as diligently as they could.

[ 135 ] The application is dismissed. Costs are awarded to the Plaintiffs in any event of the cause. [ 136 ] The parties are directed to set this matter down for trial at the earliest opportunity, subject to court availability, and are directed to book a pre-trial conference under Rule 4.10 forthwith. [ 137 ] If the parties are unable to agree on a procedural order, if such an order is necessary, they may

schedule a meeting with me on a mutually available date. Heard on the 12 th day of May, 2021. Dated at the City of Red Deer, Alberta this 7 th day of July, 2021. S.N. Mandziuk J.C.Q.B.A. Appearances: Hugh Graham Slocombe for the Plaintiffs Darcy Christian McAllister for the Defendants No One for the Third Party