2021 NUCJ 52, 2021 NUCJ 52

Nunavunmi Maligaliuqtiit NUNAVUT COURT OF JUSTICE Cour de justice du Nunavut Citation: LRT Construction Ltd . v. Igloolik Housing Association and Nunavut Housing Association and Government of Nunavut and Terry Adams , 2021 NUCJ 52 Date: 20210323 Docket: 07-12-134-CVC Registry: Iqaluit Plaintiff: LRT Construction Ltd . -and- Respondents: Igloolik Housing Association and Nunavut Housing Association and Government of Nunavut and Terry Adams __________________________________________________________________ Before: Madam Justice Cooper Plaintiff: A. Regal Defendant (IHA, Adams): J. Scott Defendant (NHC): D.

Stout Location Heard: Iqaluit, Nunavut Date Heard: March 23, 2021 Matters: Motion pursuant to Rule 327(1) (

a) seeking the dismissal of action or proceeding for want of prosecution REASONS FOR DECISION (NOTE: This document may have been edited for publication) I. INTRODUCTION [ 1 ] This matter relates to the procurement of construction contracts by the Igloolik Housing Authority.

[ 2 ] This is an application brought by the defendants, the Nunavut Housing Corporation (NHC), the Igloolik Housing Association (IHA), and Terry Adams (Adams) for a dismissal of the action because of delay on the part of the plaintiff LRT Construction Limited (LRT) in advancing the action to trial. II.

FACTS: [ 3 ] The events which gave rise to this action occurred in 2009 and 2010. [ 4 ] On February 29, 2012, LRT filed a statement of claim against the IHA, Adams, the NHC, and the Government of Nunavut (GN) alleging that contracts in relation to two retrofit projects on public housing units did not go through the required tendering process. [ 5 ] The action as against the GN was discontinued in December of 2013. [ 6 ] The progress of the matter is set out below. A.

Date: Action/Filing: February 29, 2012 Statement of Claim is filed March 16, 2012 NHC files an Appearance April 13, 2012 GN files Statement of Defence April 23, 2012 IHA & Adams are noted in default for failing to file a defence September 17, 2012 LRT files a Statement as to Documents November 16, 2012 NHC files a Statement as to Documents July 10, 2013 IHA & Adams file a motion to set aside noting in default December 4, 2013 Action is dismissed as against the GN January 13, 2014 Noting in default against IHA & Adams set aside February 19, 2014 IHA & Adams file Statements as to Documents January 29 – Feb. 16, 2015 Notice of Appointments for Examination filed setting June, 2015 examinations date May 28, 2015 NHC files supplementary Statement as to Documents

June 15, 2015 Examination for discoveries take place June 26, 2015 IHA & Adams file amended Statement of Defence August 19, 2016 Letter to Court from NHC – stating intent to bring

summary judgement application advising that IHA and Adams intended to bring the same application, and seeking a hearing date on Dec. 1 or 2 or during the week of Dec. 5, 2016 August 31, 2016 January 17, 2017 date is set for the

summary judgement application December 21, 2016 LRT letter to NCJ chambers – letter not on court file January 7, 2017

Summary judgement application set for April 11, 2017 January 17, 2017 Hearing date cancelled for the

summary judgement application March 16, 2017

Summary judgement application set for April 11, 2017, adjourned sine die March 20, 2017 LRT files Supplementary Statement as to Documents May 25, 2017 NHC files motion to dismiss the statement of claim August 3, 2017 LRT files application to direct reattendance for examination.

LRT files motion to amend Statement of Claim August 9, 2017 Special Hearing date February 13, 2018 Decision on motion by NHC to dismiss (partially granted) LRT motion to amend Statement of Claim and to direct reattendance for examination both withdrawn May 1, 2020 Motion filed by IHA & Adams to dismiss for want of prosecution (no return date) February 5, 2021 Motion filed by IHA & Adams to dismiss for want of prosecution February 8, 2021 Motion filed by NHC to dismiss for want of prosecution III. THE LAW :

A. The applicable Rules of Court are: (

i) DELAY IN PROSECUTION OF ACTION Application for dismissal or directions 327.

(1) A party may at any time apply to the Court for a determination that there has been delay on the part of another party in an action or proceeding and, where the Court so determines, the Court: (

a) may, with or without terms, dismiss the action or proceeding for want of prosecution or give directions for the speedy determination of the action or proceeding; or (

b) shall dismiss so much of the action or proceeding as relates to the applicant, where for five or more years no step has been taken that materially advances the action or proceeding.

(2) On an application under this rule, an affidavit containing statements as to the belief of the deponent with the source and grounds of the belief may be admitted.

(3) Where the Court does not dismiss the action or proceeding for want of prosecution, the Court; (

a) shall establish terms or give directions that, in the opinion of the Court, are sufficient to substantially remedy any non-trivial prejudice caused, or prevent any non-trivial prejudice that may be caused, to any adverse party by reason of the delay; and (

b) may establish terms or give directions that, in the opinion of the Court, will prevent further delay in the action or proceeding.

(4) Where, in determining an application under this rule, the Court finds that the delay in action or proceeding is inordinate and inexcusable, that delay shall be prima facie evidence of serious prejudice to the party bringing the application.

(5) Rule 713 does not apply to the time periods referred to in subrule (1)(b).

(6) Where there is a cross action, counterclaim or plea of set-off, this rule shall be applied with such terms as the Court considers necessary to prevent serious injustice. (ii) Examples of prejudice 328. For purposes of an application under rule 327, prejudice to an opposite party caused by delay is not restricted to procedural or evidentiary difficulty and includes;

(

a) substantive prejudice; (

b) fading memory of witnesses (

c) unavailability of records; (

d) increased difficulty in enforcing an ultimate judgment; (

e) increased difficulty in securing and enforcing contribution or indemnity from others; and (

f) interest expenses or income lost. (iii) Terms and directions 329. The Court may grant an order under this Part subject to such terms or directions as it considers appropriate and in particular, may make an order; (

a) awarding solicitor-client costs; (

b) restricting or forbidding discovery or other interlocutory proceedings by the party delaying; (

c) requiring the compulsory admission of facts relating to the prejudice caused by the delay; (

d) modifying the types or effect of evidence that may or may not be used at trial to prove some or all facts; (

e) amending pleadings; (

f) enlarging or abridging substantive or procedural time periods that would otherwise apply; (

g) denying costs for tardy steps; (

h) directing that costs are payable personally by a solicitor; (

i) requiring security for costs; and (

j) giving directions respecting case management under

Part 19. (iv) Agreement 330.

(1) Two or more parties to an action or proceeding may by express agreement exclude or vary, in whole or in part, the application of any portion of this

Part in relation to themselves.

(2) The parties to an agreement referred to in subrule; (1) must give written notice of the agreement to all the to Application to deal with delay. [ 7 ] The Defendants concede their applications must be considered under rule 327(1) (a), and accordingly, the granting of a dismissal is discretionary. [ 8 ] The test to be applied is a three-part test: 1. is the delay inordinate and or inexcusable; 2. is there an excuse for the delay; and 3. is there prejudice to the defendants. [ 9 ] Pursuant to Rule 327(4), an inordinate and inexcusable delay is prima facie evidence of serious prejudice to the applicant. [ 10 ] In the case of Humphreys v.

Trebilcock , [2017] ABCA 116 (leave to appeal denied [2017] S.C.C.A No. 228), the Court set out the analytical steps to be undertaken: • 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 the 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 has the nonmoving party rebutted the presumption of significant prejudice? • Sixth, if the moving party has met the criteria for granting relief, is there a compelling reason not to dismiss the nonmoving party’s action? [This question must be posed because of the verb “ may”] [ 11 ] The analysis set out in Humphreys v. Trebilcock , [2017] ABCA 116 is somewhat more flexible than suggested ( Transamerica Life Canada v. Oakwood Associates Advisory Group Ltd. , [2019] A.J.

No. 908 ABCA; Song v. Her Majesty the Queen in right of Alberta, 2021 ABCA 361 ). In Transamerica , the Court, in discussing the six-step analysis set out in Humphreys , stated in paragraph 16: “This approach might be helpful in many cases, but it is not the only way to analyze delay.”

[ 12 ] The Court in Transamerica Life Canada v. Oakwood Associates Advisory Group Ltd. , [2019] A.J. No. 908 ABCA went on to state in paragraph 27: “It is correct to say that the plaintiff has the primary obligation in moving litigation forward. The Rules of Court give the plaintiff many tools to ensure that happens. It does not follow, however, that a defendant has no obligation with respect to the pace of the litigation.” IV.

IS THE DELAY INORDINATE? [ 13 ] Inordinate delay is described as a “differential between the norm and the actual progress of an action that is so large as to be unreasonable or unjustifiable.” ( Humphreys v. Trebilcock , [2017] ABCA 116 at paragraph 120; Northwest Territories (Minister of Public Works and Services) v. 831594 N.W.T. Ltd . (c.o.b. Ferguson Simek Clark ), [2017] N.W.T.J. No. 65 ). [ 14 ] A consideration of whether the delay is inordinate must have regard to the nature of the claim and complexity of the proceedings.

The complexity of this matter appears to be greater than a simple debt or breach of contract matter but not as complex as litigation that engages constitutional issues. It involves questions regarding the proper application of procurement policy. It does not appear that expert reports or witnesses are involved. [ 15 ] This action was commenced in February of 2012 and was eight years old when the defendants expressed an intent to apply to have the matter dismissed for want of prosecution. A notice of motion seeking such relief was filed by IHA and Adams, without a return date.

Nine months later both defendants filed motions to dismiss for want of prosecution and the motion was eventually set for a hearing. [ 16 ] This length of time for a matter of this nature to be before the Court is beyond the norm and is longer than the complexity of the case warrants. I find the delay is inordinate. V. IS THE DELAY EXCUSABLE? [ 17 ] Although an action might be found to have progressed slowly and there might be a finding that the delay is inordinate, it would be unfair for the defendants to be able to rely upon delay for which they are responsible.

The Court must undertake a consideration of the reasons for the delay to determine whether the delay is excusable. [ 18 ] In this matter there are several time periods which must be considered. A. February 29, 2012, TO July 13, 2014: [ 19 ] This period of just over two years is the time from the filing of the Statement of Claim to the court setting aside the default judgement against the defendants, IHA, and Adams. [ 20 ] IHA and Adams were noted in default on April 23, 2012. They filed a motion to set aside the noting in default on July 10, 2013, more than a year later.

The defendants contend that the failure of the plaintiff to consent to setting aside the noting in default was unreasonable and therefore, the delay should be attributed to the plaintiff. [ 21 ] Adams was served with the Statement of Claim on March 6, 2012. [1] He provided the Statement of Claim to his supervisor (Sarpinak) on the same day. IHA was also served on March 6, 2012. [ 22 ] IHA and Adams were noted in default on April 23, 2012.

In January of 2013 counsel for the NHC communicated with counsel for the plaintiff regarding the possibility of setting aside the noting in default (it appears counsel for NHC was in contact with the IHA). IHA and Adams filed a motion to set aside the noting in default on July 10, 2013, more than a year after being served with the Statement of Claim and more than six months after discussion on the issue arose.

[ 23 ] The defendants contend that the failure of the plaintiff to consent to setting aside the noting in default was unreasonable and therefore, the delay should be attributed to the plaintiff. [ 24 ] At the very least, the time period from February 29, 2012 to January 2013, cannot be attributed to the plaintiff. Prior to the IHA and Adams filing a motion to set aside the noting in default, steps had been taken in the action and the matter was progressing.

The filing of the motion brought a halt to any further progress. [ 25 ] It is not clear why the plaintiff did not take further steps against IHA and Adams after they were noted in default, such as applying for a default judgment under Rule 169. As it is likely that a hearing would have been required to assess the damages, the plaintiff may have thought it preferable to do everything at the trial. Having said that, it is unlikely that such steps would have changed the course of the litigation, except perhaps to prompt IHA and Adams to move earlier to set aside the default.

There is no evidence on this point. [ 26 ] I am not prepared to find that the plaintiff’s failure to consent to setting aside the noting in default was unreasonable. While it is true the IHA and Adams were successful in having the default set aside, it does not follow that the position of the plaintiff in opposing the application was unreasonable. There are no reasons available which permit scrutiny of the decision to determine that the plaintiff’s position was unreasonable.

This was not a matter where the application to set aside the default was brought very shortly after defendants were noted in default, nor is it a case of an unsophisticated defendant, without ready access to legal resources. [ 27 ] I find that the delay from February 29, 2012 to January 13, 2014, is delay that is not attributable to the plaintiff. This is a total of 23 months. B. February 19, 2014, to June 2015: [ 28 ] IHA and Adams filed their Statement as to Documents on February 19, 2014.

Dates for examinations for discovery were agreed upon in November or December of 2014. [2] [ 29 ] The lapse of nine to ten months for the setting of dates for examinations for discovery must be considered. There is no explanation for this delay. While it is expected there might be some delay when arranging examinations for multiple parties located in different jurisdictions, at some point the plaintiff must use the tools provided in the Rules of Court to progress the matter. C. August 29, 2016, to February 13, 2018: [ 30 ] During this period the defendants were advancing

summary judgement motions. [ 31 ] On August 4, 2016, the NHC, the IHA, and Adams advised LRT of their intention to bring an application for

summary judgement. [3] This Court was advised of this on August 19, 2016, when counsel for the NHC wrote to the Court seeking a date in December for a 1-to-1.5-day hearing for a

summary judgement application. The correspondence indicated that the IHA and Adams intended to bring a similar application. The hearing was set, with the agreement of counsel for January 17, 2017. It does not appear that a motion was filed at that time. [ 32 ] Around this same time, in August of 2016, the plaintiff canvassed the possibility of simply setting the matter for trial, without any further interlocutory motions. Clearly this was not agreeable to the defendants, who understandably wanted their

summary judgement motions heard. [ 33 ] On December 21, 2016, the January 17, 2017

summary judgement hearing date was cancelled at the request of the defendants. Counsel for the NHC had new documentation brought to his attention and intended to file a revised Statement as to Documents. A new hearing date of April 11, 2017 was set.

[ 34 ] On March 14, 2017, the April 11, 2017 hearing date was cancelled at the request of counsel for the IHA and Adams. The reasons for the cancellation were a change in management at the NHC, some health issues with the new management, and personal issues of counsel [4] (). The hearing was reset to August 9, 2017, at which time the hearing proceeded. [ 35 ] Concurrent with these events were attempts by the plaintiff to amend the Statement of Claim. A total of three draft amended statements of claim were provided to the defendants, each varying very significantly from the original.

Unable to obtain the consent of the defendants to file the amended Statement of Claim, the plaintiff filed an application for leave to amend. The plaintiff’s motion was returnable on the same day as the defendants’ motions for

summary judgement however, the plaintiff withdrew that application when it became apparent that the defendants would be seeking an adjournment to respond to the application. [ 36 ] A decision on the

summary judgement motions was issued on February 13, 2018. The defendants were partially successful. [ 37 ] There was nothing that could be done to advance the action while the

summary judgement motions were pending. The delay in having those motions heard lies with the defendants, each of whom are responsible for one of the two adjournments. I appreciate that the plaintiff was also attempting to essentially change the course of the litigation through significant amendments to the Statement of Claim, however those attempts did not delay the action any further and were ultimately abandoned when it became apparent they would result in further delay. [ 38 ] I find that the defendants are responsible for the delay from August 4, 2016 to February 13, 2018, a total of approximately 19 months.

D. Total Excusable Delay: [ 39 ] The total delay attributable to the defendants is 42 months. However, the defendants are not on the same footing as regards the initial delay of 23 months, the time from the filing of the Statement of Claim to the setting aside of the default against IHA and Adams.

NHC defended in a timely manner and the action was proceeding. [ 40 ] The total delay attributable to NHC is 19 months. [ 41 ] The total delay attributable to IHA/Adams is 42 months. [ 42 ] Once the excusable delay is deducted, the delay as involving NHC is 77 months, or 6.4 years, while the delay as involving IHA/Adams is 54 months or 4.5 years. [ 43 ] There are also other steps in the litigation which must be considered. [ 44 ] By April 25, 2018, the plaintiff wanted to set the matter for trial and waive all further applications.

It appears that the parties were not able to agree on a certificate of readiness. [ 45 ] By this time it was apparent. and essentially conceded, that the plaintiff would have difficulties proving damages as claimed in the original Statement of Claim. The plaintiff’s interest was in obtaining declaratory relief and seeking punitive damages. [ 46 ] During 2018 and 2019 it appears the matter went in to case management however, I have little information about what progress was made through that process.

VI. CONCLUSION ON THE NATURE OF THE DELAY: [ 47 ] The delay in this matter is inordinate. Much of the delay is excusable and I am unable to find that either defendant can rely upon the presumption of prejudice set out in Rule 327(4). VII. PREJUDICE: [ 48 ] The Court must consider any prejudice to the defendants as a consequence of the delay.

The prejudice must be by reason of the delay; prejudice which exists independent of the delay should not be considered. [ 49 ] Both litigation and non-litigation prejudice is to be considered pursuant to Rule 328. [ 50 ] Rule 328 sets out some types of prejudice which should be considered. The list is not exhaustive. [ 51 ] The defendants in this matter submit that the delay has caused prejudice in that the witnesses they intend to call no longer work for the respective defendants, have died, or have retired.

They submit that the relationships between the prospective witnesses and the defendants have broken down so obtaining the cooperation of witnesses and preparing them for trial will be difficult. [ 52 ] The IHA and Adams also submit that they have lost records relating to the litigation as the IHA computer system was hacked in 2017 resulting in lost data and documentation that was not recovered. [ 53 ] There is no doubt that the passage of time affects the memory of witnesses, to the point where they may have no reliable evidence to provide at the time of trial.

Such loss of memory is protected against somewhat by the preservation of witness evidence through can- says and transcripts of examinations for discovery that took place at an earlier stage of the litigation. [ 54 ] At examinations for discovery the NHC presented an employee of the NHC who is now retired but still in the territory. [ 55 ] The IHA presented a witness who, at the time of discovery, was an employee of the IHA but was not employed by IHA at the time of the events which are the subject matter of the litigation.

The preferred and better witness would have been the manager who was employed at the time of the events, but that person died prior to the litigation. This prejudice cannot be attributed to the delay. Adams was also examined. A review of the transcript indicates that he had a poor recollection on some things even at that stage of the proceedings.

On other things his memory was clearer and is preserved in the transcripts. [ 56 ] While I accept that witness preparation will be difficult should the matter proceed, much of this difficulty pre-dated any lengthy delay in the matter, as evidenced by responses given by witnesses at examinations. As such, the prejudice in this regard cannot be wholly attributed to the delay in the progress of the litigation.

Nonetheless, delay exacerbates such memory loss. [ 57 ] The defendants, particularly the IHA and Adams, submit that there has been a loss of records due to a computer hacking in 2017 and the destruction of records after a period of 7 years, in accordance with their policy. They also submit that records that are available will be difficult to access as they are archived. [ 58 ] I acknowledge that the loss of relevant records is a type of prejudice recognized both in Rule 328 and in the jurisprudence. I also acknowledge that parties to litigation have a positive obligation to maintain and preserve relevant records.

Indeed, the seven-year period of record preservation in the policy of the IHA is likely due to the limitation period for commencing most litigation set out in the Limitations of Actions Act . [5] Once litigation is commenced, the parties are required to file Statements as to Documents within 30 days of the close of pleadings pursuant to Rule 219. The documents must be produced at the request of other parties or at examinations for discovery. Documents that are not disclosed cannot be relied upon at trial.

Considering these provisions which ensure the disclosure and production of documents early in the litigation process, it is difficult to see how the loss of documents, in and of itself, can constitute prejudice. Presumably the documents are available in some form, even if in the possession of the other parties. In my view, the prejudice is more frequently linked to the inability of witnesses, due to the passage of time, to provide the necessary background and explanations to properly understand the documents.

VIII. CONCLUSION: [ 59 ] This matter has been before the Court for an inordinate period of time. However, not all the delay is attributable to the plaintiff. Substantial periods of delay are attributable to the defendants. [ 60 ] There is prejudice to the defendants flowing from the delay, largely due to the prejudice which results from the fading of memories due to the passage of time.

I do not find that this is serious prejudice. [ 61 ] The prejudice relied upon was, to a large extent, existent early in the litigation and is not attributable to the delay, although it is acknowledged that it is exacerbated somewhat by the delay. [ 62 ] This is not to say that the pace of this litigation is acceptable. The record discloses a less than motived plaintiff who has failed to use the tools provided in the Rules of Court to advance the litigation. [ 63 ] In my view, this is a borderline case.

I am not dismissing the action however the matter will go into case management and will be strictly monitored to ensure it advances. IX.

DIRECTONS : [ 64 ] Pursuant to Rule 329, the litigation will proceed with the following direction: • The matter will be case managed; • There shall be no further interlocutory motions without leave of the Court ; • There shall be no further interlocutory motions without leave of the Court; • A Certificate of Readiness shall be filed within 15 days; • If the parties cannot agree upon any terms of the Certificate of Readiness, those points of disagreement shall be set out in the Certificate; • Counsel shall provide their available dates for trial to the trial coordinator within 20 days; • Parties are permitted to rely upon the examination for discovery evidence of their own witnesses with leave of the Court.

Such an application must be supported by an affidavit setting out why the witness should not be required to attend at trial. Dated at the City of Iqaluit this 11th day of April 2022, ___________________ Justice S. Cooper Nunavut Court of Justice [2] Turbid affidavit, paragraph 12. The affidavit refers to 2015 however this would appear to be an error and should be 2014 given that examinations for discovery proceeded in June, 2015).