Waud v Dawson-Dixon, 2023 ABKB 158

Court of King’s Bench of Alberta Citation: Waud v Dawson-Dixon, 2023 ABKB 158 Date: 20230316 Docket: 2101 06419 Registry: Calgary Between: Ernest P. Waud III and Chase Steer Applicants/Plaintiffs - and - Marilyn J. Dawson-Dixon Respondent/Defendant _______________________________________________________ Reasons for Decision of the Honourable Justice Colin C.J. Feasby _______________________________________________________ Introduction [ 1 ] The Applicants/Plaintiffs, Ernest P.

Waud III and Chase Steer (the “Applicants”) seek a stay of this action (the “Duplicate Action”) pending the completion of an outstanding appeal in a California proceeding concerning the same facts and same parties (the “California Action”) or enforcement proceedings in Alberta predicated on the California Action (the “Enforcement Action”). The Applicants submit that a stay is appropriate because there is a multiplicity of proceedings, continuance of the Duplicate Action would be unjust, and judicial economy favours staying the Duplicate Action.

[ 2 ] The Respondent/Defendant, Marilyn J. Dawson-Dixon (the “Respondent”), submits the appropriate path forward would be for the Applicants to discontinue the Duplicate Action or for the Court to deny the stay which would permit the Respondent to bring a

summary dismissal application. The Applicants advanced their case in California and obtained judgment and they should not be allowed to maintain a duplicative Alberta proceeding as an insurance policy.

Background [ 3 ] On February 3, 2021, the Applicants filed a complaint in the Superior Court of the State of California for the County of Riverside (the “California Court”) seeking relief against the Respondent. [ 4 ] Since the horses in dispute in the California Action had been transported by the Respondent back to Alberta, the Applicants commenced an action in Alberta seeking a preservation order (the “Preservation Order Action”) on February 11, 2021. The Preservation Order Action was discontinued on July 2, 2021. [ 5 ] The Duplicate Action was commenced on May 19, 2021.

The Applicants’ explanation for starting the Duplicate Action was that they were having difficulty serving the Respondent with the commencement documents for the California Action and that her participation in the California Action was uncertain. [ 6 ] After the commencement of the Duplicate Action, the Respondent filed an appearance in the California Action. The Respondent then brought a motion to strike certain causes of action pleaded in the California Action and a motion to dismiss or stay the California Action on the grounds of forum non conveniens .

Both motions were dismissed. [ 7 ] The California Action proceeded quickly to a jury trial that commenced on June 27, 2022. The Respondent participated in the trial; she attended in person and four witnesses testified on her behalf. The jury rendered a verdict on July 15, 2022. The jury found in favour of Waud, determining the ownership of several horses and finding that the Respondent had committed fraud and breached her fiduciary duties and contractual obligations to Waud. The Respondent was ordered to pay Waud, not Steer, US $900,000 in damages.

The Respondent’s cross-claims against the Applicants were dismissed. [ 8 ] On November 8, 2022, the California Court issued a formal judgment in the California Action setting out the terms of the jury’s verdict (the “California Judgment”). [ 9 ] On December 6, 2022, Waud commenced the Enforcement Action in this Court seeking recognition and enforcement of the California Judgment. [ 10 ] An appeal of the California Judgment was commenced by the Respondent on January 11, 2023.

The Applicants submit and the Respondent did not dispute that the California Judgment is final and fully enforceable against the Respondent despite the pending appeal. [ 11 ] On January 25, 2023, the California Court issued an Amended Judgment (the “Amended California Judgment”) that, in addition to the previous relief granted in favour of Waud, dismissed the claims of Steer against the Respondent.

The Court concluded that “while there was evidence supporting a finding that Dixon breached her fiduciary duty to Steer, there was insufficient evidence that Steer suffered harm in light of the jury’s decision not to award monetary damages to Steer.” [ 12 ] On February 15, 2023, the Respondent filed a Statement of Defence in the Duplicate Action.

The Statement of Defence pleads that the Duplicate Action should be dismissed on the grounds of res judicata and abuse of process and that it is a collateral attack on the Amended California Judgment. [ 13 ] As of the time of the oral hearing of this application, Waud had not been able to effect service of the Statement of Claim in the Enforcement Action on the Respondent. Mr.

Solomon, the Respondent’s counsel in the Duplicate Action, advised the Court that he has not been retained to represent the Respondent in the Enforcement Action. [ 14 ] At this time, it is not known if the Respondent will resist the Enforcement Action or, if she does, on what grounds she might resist the Enforcement Action. The Applicants fear that the Respondent will resist the Enforcement Action by raising jurisdictional issues. As a result, the Applicants wish to stay the Duplicate Action rather than discontinue it.

A stay would allow the Applicants to have a fall back if this Court refuses to enforce the Amended California Judgment in the Enforcement Action. If the Applicants discontinue the Duplicate Action and then fail in the Enforcement Action, the Limitations Act , RSA 2000 c L-12 would bar a new claim. Stays and Multiple Proceedings [ 15 ] Duplicative litigation is wasteful, an abuse of process, and contrary to the public interest.

The Judicature Act , RSA 2000, c J- 2 s 8 accordingly gives the Court the power to stay actions to avoid “a multiplicity of legal proceedings.” [ 16 ] A Binnie J, put it colourfully in Danyluk v Ainsworth Technologies Inc , 2001 SCC 44 at para 18 “[a] litigant ... is only entitled to one bite at the cherry.” He went on to explain that “[d]uplicative litigation, potential inconsistent results, undue costs, and inconclusive proceedings are to be avoided.” [ 17 ] The Applicants seek a stay pursuant to Judicature Act s 8 and Rules of Court Rule 3.72.

Rule 3.72 provides: 3.72(1) The Court may order one or more of the following:

(

a) that 2 or more claims or actions be consolidated; (

b) that 2 or more claims or actions be tried at the same time or one after the other; (

c) that one or more claims or actions be stayed until another claim or action is determined ; (

d) that a claim be asserted as a counterclaim in another action [emphasis added]. [ 18 ] The framework for considering whether it is appropriate to grant a stay to prevent a multiplicity of proceedings was set out by the Court of Appeal in Alberta v Alberta Union of Provincial Employees , 1984 ABCA 130 at paras 9-17 . See also, UCANU Manufacturing Corp v Calgary (City) , 2015 ABCA 22 at para 7 . The questions that must be considered are:

(1) Are the issues in the action sought to be stayed substantially the same as the issues in another action?

(2) Would the continuance of the action work an injustice because it would be oppressive or vexatious to one of the parties or an abuse of the Court’s process?

(3) Would the stay cause an injustice to one of the parties? [ 19 ] The questions that a court must consider are typically premised on the assumption that it is the defendant, not the plaintiff, that has brought the stay application. Most of the time, such applications will be brought by a defendant. However, neither the Judicature Act nor Rule 3.72 restricts the Court’s ability to grant relief to a plaintiff in circumstances where there is a multiplicity of proceedings.

While it will be a rare case where a plaintiff can make out a case for a stay of its own action, the Judicature Act and Rule 3.72 do not foreclose that possibility. [ 20 ] The parties agree that the California Action and the Duplicate Action involve the same parties, arise out of the same facts, and seek the same relief.

The first part of the test for a stay is met. [ 21 ] The Applicants say that the continuance of the action will work an injustice and be an abuse of process because the parties will be required to take a step – complete Affidavits of Records – that is costly and unnecessary. [ 22 ] The Applicants further submit that a stay would permit them to maintain the Duplicate Action in abeyance as insurance against the possibility that the Respondent will raise jurisdictional issues in defending the Enforcement Action. [ 23 ] Counsel for the Applicants conceded in oral argument that completion of an Affidavit of Records would not be a difficult task in the present case because the parties have already completed the discovery process and a trial in the California Action. [ 24 ] The Respondent submits that a stay would be unjust because it would prevent the Respondent from bringing an application to dismiss the Duplicate Action.

The Respondent’s position is that the Duplicate Action should be dismissed and that she will be entitled to costs. She wants to maintain the ability to pursue dismissal and costs so that she can crystallize her entitlement to costs in the Duplicate Action before the Enforcement Action is completed so that a set-off can be claimed. [ 25 ] The Applicants submit that injustice could also stem from refusing the stay because if the Respondent is successful in having the Duplicate Action dismissed, she may then assert that the California Court did not have jurisdiction in her defence of the Enforcement Action.

If that happens and the Respondent’s defence to the Enforcement Action is successful, then the Applicants say that they will not be able to recommence an action in Alberta due to the expiry of the limitation period. [ 26 ] Based on the record before me, the concern regarding potential jurisdictional arguments by the Respondent in the Enforcement Action appears to be unfounded.

The Respondent cannot plead and rely on the existence of the Amended California Judgment to seek a dismissal of the Duplicate Action by asserting abuse of process, res judicata , and collateral attack – such a pleading depends on an implicit assumption that the Amended California Judgment was legitimately obtained – and, at the same time, assert that the Amended California Judgment was improperly obtained as a defence to the Enforcement Action. [ 27 ] The Applicants have not established that the continuance of the Duplicate Action would be unjust because it is vexatious or oppressive to the Applicants.

If the Applicants do not wish to incur the cost and inconvenience of taking steps in the Duplicate Action, they may discontinue the Duplicate Action. [ 28 ] The Duplicate Action is an abuse of process, but the appropriate remedy for that problem is not a stay to permit it to remain in a state of suspended animation to assuage the fears of the Applicants. Instead, the Duplicate Action should be allowed to continue so that the Respondent may bring her

summary dismissal application. Granting a stay would be unjust to the Respondent as it would prevent her from moving forward with a

summary dismissal application. Conclusion [ 29 ] A stay is a discretionary remedy. Typically, a stay is sought by a defendant, not a plaintiff. The plaintiff says that the present case is exceptional and that a stay is warranted because the continuance of the Duplicate Action would be unjust and on the grounds of judicial economy. Judicial economy, however, would be served just as well or perhaps even better by the discontinuance or dismissal of the Duplicate Action. The Applicants’ application for a stay of the Duplicate Action is dismissed. [ 30 ] The Respondent is awarded the costs of the application.

If the parties are unable to agree on the quantum of costs, they may make submissions of 2 pages or less supported by a draft bill of costs.

Heard on the 14 th day of March, 2023. Dated at the City of Calgary, Alberta this 16 th day of March, 2023. Colin C.J. Feasby J.C.K.B.A. Appearances: Jakub Maslowski and Joseph Wenig, Stikeman Elliott LLP for the Applicants/Plaintiffs Glenn Solomon, KC, JSS Barristers for the Respondent/Defendant