Ross v Rancho Realty (Edmonton) Ltd, 2022 ABKB 820

Court of King’s Bench of Alberta Citation: Ross v Rancho Realty (Edmonton) Ltd, 2022 ABKB 820 Date: 20221207 Docket: 1412 00137; 1612 00275 Registry: Wetaskiwin Between: Docket: 1412 00137 Jane Ross and Her Majesty the Queen In Right of Alberta Plaintiffs - and - Rancho Realty (Edmonton) Ltd and Condominium Corporation No 0621607 Defendants And Between: Docket: 1612 00275 Norman Martz and Lorraine Martz as the Personal Representative of Neil Joseph Martz Plaintiffs - and - Blair MacCormac and Sharon MacCormac Defendants

_______________________________________________________ Reasons for Decision of the Honourable Justice James T. Neilson _______________________________________________________ [ 1 ] This is an appeal by the Plaintiffs in these two actions from the Order of Applications Judge B.W. Summers dated November 17, 2021: Ross v Rancho Realty (Edmonton) Ltd , 2021 ABQB 921 . The Order dismisses the actions for delay under Rule 4.33 of the Rules of Court . The Defendants also applied for dismissal for delay under Rule 4.31.

However, the Applications Judge did not make a ruling with respect to Rule 4.31, given that the actions were ordered to be dismissed under Rule 4.33. [ 2 ] Rule 4.33(2) provides as follows: If 3 or more years have passed without a significant advance in the action, the Court, on application, must dismiss the action as against the applicant, unless (

a) the action has been stayed or adjourned by order, an order has been made under subrule (9) or the delay is provided for in a litigation plan under this part, or (

b) an application has been filed or proceedings have been taken since the delay and the applicant has participated in them for a purpose and to the extent that, in the opinion of the Court, warrants the action continuing. Procedural History [ 3 ] The applications in these two actions were considered together given that counsel for the Plaintiffs and counsel for the Defendants were the same in each action, and each action had proceeded along a similar timeline leading up to the applications filed by the Defendants to dismiss. [ 4 ] The Ross action involves a trip and fall accident on June 2, 2012.

Liability and damages are in issue in the action. [ 5 ] The Martz action involves a motorcycle-vehicle accident on August 14, 2014. Neil Martz died in the impact. Liability and damages under the Survival of Actions Act and the Fatal Accidents Act are in issue. [ 6 ] The Statement of Claim in the Ross action was filed on June 2, 2014.

The Statement of Defence was filed on August 10, 2015. [ 7 ] The Statement of Claim in the Martz action was filed on August 12, 2016, and the Statement of Defence was filed on March 10, 2017. [ 8 ] The questioning of the Plaintiffs in the Ross action was conducted in September 2017, and the questioning of the Plaintiffs in the Martz action occurred in June 2017. [ 9 ] Delays in responding to undertakings in both actions resulted in an application by the Defendants to compel the undertaking responses which resulted in Consent Orders of Justice Gill dated April 3, 2018, in both actions. [ 10 ] Responses to undertakings in the Ross action were provided on May 28, 2018 and most of the undertaking responses in the Martz action on May 29, 2018. [ 11 ] The parties agree that the provision of answers to undertakings on May 28 and May 29, 2018 in these actions constituted a significant advance in the actions.

Therefore, the issue before the Court and on this appeal is whether there have been significant advances in the actions since those dates, within the time prescribed by Rule 4.33. Steps Taken since May 28 & May 29, 2018

a) The Ross Action [ 12 ] Defence counsel wrote to Plaintiffs’ counsel on June 7, August 9, September 20 and November 8, 2018. Defence counsel was seeking updated or current medical expert reports and noted that the Plaintiff had not made any settlement proposal and had not responded to the Defendants’ settlement offer. No response was received to this correspondence. [ 13 ] On June 3, 2021, counsel for the Plaintiffs obtained dates from the trial coordinator for a Judicial Dispute Resolution and forwarded these to Defence counsel.

Also, Plaintiffs’ counsel proposed a consent order for a revised Litigation Plan and a request to set up examinations of the Defendants. No response was received to this correspondence.

b) The Martz Action [ 14 ] On February 20, 2019, Norman Martz, the personal representative of the estate of Neil Martz, passed away. In December 2019, Plaintiffs’ counsel requested that the parties seek a date for a JDR. Agreement on a date was not reached and no date was secured. [ 15 ] On March 9, 2021, counsel for the Plaintiffs forwarded a draft consent order with a Litigation Plan to move the action forward.

Defence counsel indicated that he was seeking instructions, but he would not agree to the proposed timelines. [ 16 ] On March 11, 2021, counsel for the Plaintiffs retained an expert in Financial Forensics and Business Evaluation to assist on the file. [ 17 ] On March 25, 2021, counsel for the Defendants proposed that mediation be conducted in May 2021.

Counsel for the Plaintiffs declined as they required further information from the Defendants before an expert report could be completed. [ 18 ] On June 3, 2021, counsel for the Plaintiffs again proposed a consent order for a revised Litigation Plan and a request to set up examinations of the Defendants. No response was received from counsel for the Defendant. Applications to Approve a Litigation Plan [ 19 ] The Plaintiffs in each action filed applications to approve a Litigation Plan pursuant to Rule 4.4. These applications were filed on July 20, 2021.

On August 10, 2021, Justice Feth heard the applications and approved each Litigation Plan as set out in

Schedule A to the Orders which were entered on August 31, 2021. [ 20 ] At the return of the applications approving Litigation Plans, counsel for the Defendants advised Justice Feth that applications to dismiss the actions were going to be made imminently and the Defendants made no submissions with respect to the proposed Litigation Plans. [ 21 ] The Defendants filed their applications to dismiss these actions on August 13, 2021.

The applications to dismiss were heard by the Applications Judge on October 1, 2021, who then issued the Reasons for Decision filed on November 17, 2021, dismissing both actions pursuant to Rule 4.33. Standard of Review [ 22 ] An appeal from the decision of the Applications Judge is a hearing de novo , and the standard of review by the Appeal Court is correctness: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 at para 30 . The Issues on Appeal [ 23 ] In these reasons, I will consider two issues: 1.

The timing of the applications of the Plaintiffs seeking Orders approving the Litigation Plans, and the timing of the Defendants’ applications to dismiss; 2. Whether there has been a significant advance in each action. I. Timing of the Applications [ 24 ] The wording of Rule 4.33 is mandatory. If three or more years have passed without a significant advance in the action, the Court, on application, must dismiss the action as against the applicant: St Jean Estate v Edmonton (City) , 2014 ABCA 47 . The exceptions in Rule 4.33(2)(

a) and (

b) are not applicable in these cases. [ 25 ] Rule 4.33 has been characterized as functioning like a limitations period: Rahmani v 959630 Alberta Ltd. , 2021 ABCA 110 at para 14 . [ 26 ] However, the time period prescribed in Rule 4.33(2) has been extended by Ministerial Order No. 27/2020, which was issued by the Minister of Justice and Solicitor General during the early stages of the COVID-19 pandemic. [ 27 ] As stated by the Alberta Court of Appeal in O’Chiese First Nation v DLA Piper (Canada) LLP , 2022 ABCA 197 , at para 4 : MO 27/2020 states in its

preamble that on March 17, 2020, the Lieutenant Governor in Council under s 52.1(1) of the Public Health Act , RSA 2000, c P-37 [ PHA ], declared “a state of public health emergency in Alberta due to pandemic COVID-19 and the significant likelihood of pandemic influenza”. Although since repealed, s 52.1(3) of the PHA empowered the Minister responsible for an enactment to make an order to suspend or modify the application or operation of, all or part of an enactment.

In MO 27/2020, the Minister of Justice responsible for the listed enactments under Appendix A, which included the Court of Queen’s Bench Act , RSA 2000, c C-31 , the Judicature Act , RSA 2000, c J-2 and thereunder the Rules, ordered that: 1. Limitation periods are suspended in the enactments under Appendix A from March 17, 2020 to June 1, 2020.

2. Any period of time within which any step must be taken in any proceedings or intended proceeding is suspended subject to the discretion of the court, tribunal, or other decision-maker from March 17, 2020 to June 1, 2020. 3. For clarity, the limitation period or period or time resumes running on June 1, 2020 and the temporary suspension period shall not be counted. [ 28 ] In the O’Chiese decision, the Court of Appeal ruled that the suspension of limitation periods in the listed enactments under MO 27/2020 was mandatory. In that case, it applied specifically to the one year time limit under Rule 10.10(2) within which an appointment for review of a lawyer’s account(

s) could be filed. The Ministerial Order had the effect of adding 75 days to the time limit set out in the Rule. [ 29 ] I find that paragraph 1 of the Ministerial Order applies to Rule 4.33(2) and the applications in this case.

The extension of the three year period by 75 days is mandatory. [ 30 ] The Applications Judge in these cases refrained from ruling as to whether paragraph 1 of the Ministerial Order relating to limitation periods applied to these cases, but in any event, ruled that there were no exceptional circumstances that would permit the Court to exercise its discretion with respect to subparagraph 2 of the Ministerial Order. [ 31 ] In this case, I find that the applications by the Plaintiffs seeking Court approval of litigation plans were filed, and heard by Justice Feth, within the three year period plus 75 day suspension period directed by the Ministerial Order. [ 32 ] Counsel for the Defendants had refrained from filing the applications to dismiss until the three year plus 75 day period had lapsed, not knowing whether the Ministerial Order would require a 75 day suspension in the circumstances of these cases.

However, given that the 75 day suspension period as it applies to Rule 4.33 is mandatory, if the Defendants had applied within the 75 day period the applications under Rule 4.33(2) would have been premature. 2.

Significant Advance in the Action [ 33 ] The Plaintiffs made application to the Court for approval of litigation plans in the actions pursuant to Rule 4.4(2) that provides as follows: A party to an action categorized as a standard case may serve on the other party a proposed litigation plan or a proposal for the completion or timing of any stage or step in the action, and if no agreement is reached, any party may apply to the court for a procedural or other order respecting the plan or proposal. [ 34 ] On March 9, 2021, in the Martz action counsel for the Plaintiffs forwarded a draft consent order with a Litigation Plan.

Counsel for the Defendants indicated that he was seeking instructions, but he would not agree to the proposed timelines. On June 3, 2021, counsel for the Plaintiffs in both actions proposed consent orders with Litigation Plan. However, there was no agreement forthcoming from Defence counsel. [ 35 ] Therefore, counsel for the Plaintiffs made applications to the Court to approve the Litigation Plans pursuant to Rule 4.4(2).

As I have held, the applications and the orders granted by Justice Feth occurred within three years and seventy-five days since May 28 and May 29, 2018 when substantial undertakings arising out of questioning were answered by the Plaintiffs. [ 36 ] The Litigation Plans that were approved by the Court by Orders pronounced on August 10, 2021 are as follows: a. The Ross Action: Prepared on: June 29, 2021 A. Purpose of Plan 1.

This Litigation Plan relates to the conduct of Court of Queen’s Bench of Alberta Action 1412000137 as between the Plaintiffs, Jane Ross and Her Majesty the Queen in Right of Alberta, and the Defendants, Rancho Realty (Edmonton) Ltd. and Condominium Corporation No. 0621607. B. Close of Pleadings 2. For ease of reference, the pleadings were filed on: a. Statement of Claim – June 2, 2014; b. Statement of Defence – August 10, 2015 3. The parties agree that subject to any amendments that may be permitted pursuant to the Rules of Court, the Pleadings are closed as between the Plaintiffs and the Defendants. C.

Disclosure of Information under

Part 5

4. For ease of reference, Affidavits of Records and Questioning have been attended to as follows: a. Questioning of the Plaintiffs - November 23, 2015; b. Response to Undertakings provided by Plaintiffs - January 20,2017 c. Continuation of Questioning for Discovery - September 28,2017 d. Response to Undertakings provided by Plaintiffs - May 28,2018 D. Application for a Trial Date 5. The parties agree that a JDR shall be scheduled on or before December 1, 2021, with the Court in Wetaskiwin. 6. Questioning of the Defendants shall be completed not later than December 31, 2021. 7.

The Plaintiffs shall provide copies of any expert reports that are intended to be used at the trial of this action, not later than February 1, 2021. 8. The Defendants shall provide to the Plaintiffs in the manner and form set out in

Part 5, Division 2 of the Alberta Rules of Court , copies of any rebuttal expert reports that they intend on using at the trial of this Action not later than 6 months of receiving copies of the Plaintiffs’ expert reports. 9. The parties shall file a Form 37 by not later than 2 months after completing the steps set out in 5 & 6 of

Section D of this Litigation Plan. The cost of filing shall be paid by the Plaintiff. E. Varying the Litigation Plan and Other Provisions 10. This Litigation Plan may be varied by agreement between the parties. 11. The parties may apply to the Court for further advice and direction with respect to the conduct of this Action, and/or to impose deadlines for additional steps in the litigation, including with respect to liability. 12. The parties may apply to the Court to vary this Litigation Plan. 13.

If any party fails to comply with this Litigation Plan, the other party may apply to the Court to enforce compliance with this Litigation Plan or seek such other remedy or direction as may be warranted in the circumstances. b. The Martz Action: Prepared on: March 10, 2021 A. Purpose of Plan 1. This Litigation Plan relates to the conduct of Court of Queen’s Bench of Alberta Action 1612000275 as between the Plaintiffs, Norman Martz and Lorraine Martz as the Personal Representative of the Estate of Neil Joseph Martz, and the Defendants, Blair MacCormac and Sharon MacCormac. B. Close of Pleadings 2.

For ease of reference, the pleadings were filed on: a. Statement of Claim - August 12, 2016; b. Statement of Defence - March 10, 2017 3. The parties agree that, subject to any amendments that may be permitted pursuant to the Rules of Court, the Pleadings are closed as between the Plaintiffs and the Defendants. C. Disclosure of Information under

Part 5 4. For ease of reference, Affidavits of Records and Questioning have been attended to as follows: a. Questioning of the Plaintiffs – June 16, 2017; b. Response to Undertakings provided by Plaintiffs – May 29, 2018

5. The parties agree that the Plaintiffs shall conduct Questioning of the Defendants on or before September 30, 2021. 6. The parties agree that any Questioning on Undertakings shall occur not later than November 1, 2021, subject to the reasonable availability of the parties and their counsel. 7. The Plaintiffs shall provide copies of any expert reports that are intended to be used at the trial of this action, not later than January 3, 2021. 8. The Defendants shall provide to the Plaintiffs in the matter and form set out in

Part 5, Division 2 of the Alberta Rules of Court , copies of any rebuttal expert reports that they intend on using at the trial of the Action not later than 6 months of receiving copies of the Plaintiffs’ expert reports. D. Application for a Trial Date 9. The parties agree to waive the Dispute Resolution process as required by

Part 4, Division 3, Subdivision 1 of the Rules of Court 10. The parties shall file a Form 37 by not later than 2 months after completing the steps set out in

Section C of this Litigation Plan. The cost of filing shall be paid by the Plaintiff. E. Varying the Litigation Plan and Other Provisions 11. This Litigation Plan may be varied by agreement between the parties. 12. The parties may apply to the Court for further advice and direction with respect to the conduct of this Action, and/or to impose deadlines for additional steps in the litigation, including with respect to liability. 13. The parties may apply to the Court to vary this Litigation Plan. 14.

If any party fails to comply with this Litigation Plan, the other party may apply to the Court to enforce compliance with this Litigation Plan or seek such other remedy or direction as may be warranted in the circumstances.

Legal Principles of Rule 4.33 [ 37 ] The Alberta Court of Appeal in Patil v Cenovus Energy Inc. , 2020 ABCA 385 reviewed the legal principles of Rule 4.33 at para 7 of its reasons, as follows: Several legal principles can be discerned from decisions of this Court interpreting r 4.33: • The rule must be applied within the context of the foundational rule (r 1.2) to resolve claims fairly and justly in a timely and cost-effective way. • Plaintiffs bear the responsibility of prosecuting their claims in a timely way: XS Technologies Inc v Veritas DGC Land Ltd , 2016 ABCA 165 at para 7 . • Defendants are obliged (pursuant to r 1.2) to not obstruct, stall or delay an action that the plaintiff is advancing: Janstar Homes Ltd v Elbow Valley West Ltd , 2016 ABCA 417 at para 26 . • A functional, as opposed to a formalistic, approach is appropriate to determine if a step constitutes a significant advance: Ursa Ventures Ltd v Edmonton (City) , 2016 ABCA 135 at para 19 . • The functional approach to r 4.33 is context-sensitive: “[C]ases that have considered a particular advance in an action will be useful precedents, but they are not determinative”: Ursa Ventures at paras 19, 23. • A significant advance is one that moves the action forward in an essential way, having regard to the nature, quality, genuineness and timing of the advancing action: Ursa Ventures at para 19; Ro-Dar Contracting Ltd v Verbeek Sand & Gravel Inc. , 2016 ABCA 123 at para 21 . • Rule 4.33 functions like a limitations period.

It only requires one significant advance within the three-year period, not “continuous significant advancement”. Rule 4.33 is not designed to determine what a “reasonably diligent litigant” would do over the course of the three-year period: Ursa Ventures at para 11. • Whether an agreement between counsel constitutes a significant advance is context-dependent.

Rule 4.33 was not designed to encourage an “ambush” by one side after the parties had agreed to take a particular step: Turek v Oliver , 2014 ABCA 327 at para 6 . • Courts assessing whether an action is a significant advance under r 4.33 should focus on substance, not form. As an example, agreement to participate in a judicial dispute resolution process may not constitute a significant advance if it was merely an agreement to

schedule a JDR, which was not carried out: Weaver v Cherniawsky , 2016 ABCA 152 at paras 20-21 . [ 38 ] Of note, the Court must take a “functional, as opposed to a formalistic, approach... to determine if a step constitutes a significant advance”. Rule 4.33 “functions like a limitation.”. It only requires one significant advance within the three year period, not “continuous significant advancement”. Importantly, Rule 4.33 is “not designed to regulate the efficient prosecution of actions, but rather to prune out actions that have truly died”.

[ 39 ] With respect to the Ross action, the Applications Judge stated at para 22 of his reasons: I have no doubt that the intent of Counsel for the Plaintiffs to advance the action in a meaningful way was genuine. He knew that he was facing a deadline and tried to meet it. But he was gambling on the position that a procedural order approving a Litigation Plan was a significant advance in the action.

He was also gambling that the seventy five day suspension under the ministerial order would be available. [ 40 ] The Applications Judge goes on to state at para 28: In my view, the procedural order in this action has not significantly advanced the action, considering its nature, value, importance, and quality. Reviewing the history of the litigation, it is apparent that a procedural order was not required to get the litigation moving. A litigation history shows that it was counsel for the Defendants who repeatedly tried to move the action along and it was counsel for the Plaintiffs who was not responding.

If the Defendants were dragging their heels and were the authors of the delay, it is possible that a procedural order approving a litigation plan might have more value and importance and consequently be a significant advance. But that is not the case here. [ 41 ] With respect to the Martz action, the Applications Judge stated at para 40 and 41 as follows: As I stated with respect to the Ross action, the Plaintiffs application for a procedural order was certainly genuine. Counsel for the Plaintiffs knew that he was facing a deadline and he thought this procedural order would be significant advance of the action.

Again, Counsel for the Plaintiffs gambled that the granting of a procedural order setting a litigation plan would be a significant advance of the Martz action. But has this procedural order approving a litigation plan significantly advanced the Martz action, considering the nature, value, importance, and quality of that step? In my view it has not. A procedural order setting the litigation plan did not move this action ahead in a significant way. Like the Ross action, it has been the Defendants that have been striving to move this action forward.

Counsel for the Defendants advised counsel for the Plaintiffs to proceed with preparation of the Plaintiffs expert report. The Defendants sent them an offer that was not responded to. The Defendants suggested a mediator for mediation and that was not pursued by the Plaintiffs. [ 42 ] With respect, I disagree with the conclusion by the Applications Judge that the Litigation Plans approved by the Court did not significantly advance the actions. A litigation plan comes within the purview of Rule 4.4 dealing with a standard case obligations.

The Rules of Court have delineated litigation plans as important procedural tools for the prosecution of civil litigation in this Province. By seeking and obtaining Court approval of the litigation plans in these actions, the Plaintiffs have surely advanced their actions. [ 43 ] Counsel for the Plaintiffs had proposed the Litigation Plans to counsel for the Defendants on March 10, and again on June 3, 2021 in the Martz action, and June 3, 2021 in the Ross action.

There was no agreement on the proposed plans. [ 44 ] As I have previously ruled, the filing of the applications to approve the litigation plans, and the hearing before Justice Feth approving those plans, were all within the applicable time period, namely three years and seventy-five days. [ 45 ] With respect to the substance of the plans, they are detailed and designed to bring these cases to the point where they may be tried or, presumably, to provide an opportunity for settlement negotiations between the parties.

I find that the orders approving the litigation plans did, in fact, significantly advance the actions. [ 46 ] The Alberta Court of Appeal in Patil v Cenovus Energy Inc , supra , at para 16, recognized a case conference order as constituting a significant advance in that action: The context of this lawsuit is that it was moving along until it stalled because of roadblocks primarily, document production and conduct money. Mr. Patil took steps to try to address the roadblocks by obtaining a case management order.

In the specific context of this case, each of the steps identified by the Master, the abandonment of claims, subsequent production and objections; and the case conference order, separately and cumulatively , constitute significant advances in the action. This is not a case where the action has “truly died” and needs to be “pruned”. [emphasis added] [ 47 ] As the Alberta Court of Appeal stated in Ursa Ventures Ltd v Edmonton (City) , 2016 ABCA 135 as cited in Patil v Cenovus Energy , s upra , Rule 4.33 only requires one significant advance within a three year period, not “continuous significant advancement”.

Rule 4.33 is not designed to determine what a “reasonably diligent litigant” would do over the course of the three year period.

Importantly, Rule 4.33 is “not designed to regulate the efficient prosecution of actions, but rather to prune out actions that have truly died”. [ 48 ] These actions have not “truly died” and counsel for the Plaintiffs has secured Court approval of litigation plans to progress those actions toward trial or, possibly, settlement between the parties. [ 49 ] I disagree with the characterization by the Applications Judge that the Plaintiffs had “gambled” that the litigation plans would constitute significant advances in the action, and had “gambled” that the applications would be dealt with within three years and seventy- five days under the Ministerial Order.

The applications to approve the Litigation Plans were brought by the Plaintiff’s pursuant to Rule 4.4(2) as they were entitled to do, given that no agreement had been reached with the Defendants. The applications were brought within time. The Plaintiffs were not “gambling” in taking these steps. [ 50 ] The Defendants had also made application to strike the claims pursuant to Rule 4.31. The Applications Judge did not consider or make any ruling with respect to the application of Rule 4.31.

Counsel for the Defendants did raise this issue in the alternative with brief submissions before me, however, I am satisfied that the facts of these cases do not merit a finding of inordinate or inexcusable delay, or that delay has been severely prejudicial to the Defendants.

III. Conclusion [ 51 ] In conclusion, I find that the Applications Judge erred in concluding that the Litigation Plans, approved by court order within time, did not substantially advance the actions. Accordingly, the appeals are allowed. Given the lapse of time since the Litigation Plans were approved by court order, the parties are asked to revisit the timelines to be incorporated in updated litigation plans.

If the parties cannot agree by consent, then further applications can be made for Court approval. [ 52 ] The Plaintiffs are awarded costs relating to the applications before the Applications Judge, and for the within appeals. If the parties cannot agree on costs, then Counsel may make written submissions to me outlining the positions of their respective parties, within thirty days of the filing of these Reasons for Decision. Heard on the 30 th day of June, 2022. Dated at the City of Wetaskiwin, Alberta this 7 th day of December, 2022. James T. Neilson J.C.K.B.A.

Appearances: Martin West Farnham West Stolee Kambeitz LLP for the Plaintiffs Martin D. Romanow Martin D. Romanow Professional Corporation for the Defendants