1499925 Alberta Ltd. Plaintiff/Respondent - v. -, 2023 ABKB 114

Court of King’s Bench of Alberta Citation: 1499925 Alberta Ltd. v NB Developments Ltd., 2023 ABKB 114 Date: 20230227 Docket: 1301 11823 Registry: Calgary Between: 1499925 Alberta Ltd. Plaintiff/Respondent - and - NB Developments Ltd., Mukhtar S. Olak, Munmohan (Moe) Sihota, Rajvinder Uppal, Kuldip Cheema, Harbance Singh Dhaliwal and Mel Dhaliwal Defendants/Appellants _______________________________________________________ Reasons for Decision of the Honourable Justic e M.A. Marion _______________________________________________________ I.

Introduction [ 1 ] The appellant, Mel Dhaliwal (also known as Gurmel Singh Dhaliwal) ( Appellant ) appeals ( Appeal ) the August 4, 2021 order ( Order ) of Applications Judge JR Farrington ( Judge) by which he (1) refused to dismiss or stay the action ( Action ), or to stay enforcement of the judgment, as against the Appellant; and (2) granted the application of the Plaintiff, 1499925 Alberta Ltd ( 149 ), to set judgment amounts owing to 149 by NB Developments Ltd ( NB ) and the Appellant pursuant to a mortgage and a guarantee, respectively. [ 2 ] The Appellant asserts that the “equities of the situation call for a delay remedy which includes either a dismissal of the Plaintiff’s case against [the Appellant], or a stay of proceedings until the whole of the case has been concluded as was obviously in the parties [sic] contemplation throughout.” I disagree.

For the reasons set out below, the Appeal is dismissed in respect of the application to dismiss or stay the Action, or stay the enforcement of the judgment against the Appellant. The Appeal is adjourned with respect to the determination of the amount of the judgment so that the other defendants other than NB and the Appellant ( Other Defendants ) may advise the Court if they have any issue with the calculation of the NB judgment. II. Background [ 3 ] The mortgage and guarantees that are the subject of this action were signed almost 13 years ago, in December 2009.

The Action is 9 years old and has travelled an unusual path. Some context is required.

[ 4 ] NB was in the business of owning and developing lands for the Northern Bear Golf Course and related residential lands in Sherwood Park, Alberta ( Project ). An initial group of investors participated as shareholders of NB. The Appellant was and is one of those shareholders, directly or indirectly holding a 21% interest in NB. The Appellant was also a director of NB. A. The Mortgage, Guarantees and Default [ 5 ] By late October 2009, the Project was not doing well and further funds were required.

The Directors of NB proposed a loan to refinance the Project which was in jeopardy due to cost overruns. 149 was incorporated to provide the loan, and some of the NB shareholders or their relatives became shareholders of 149. An independent investor who was not one of the NB shareholders or directors, Jack Cruise ( Cruise ), also invested in 149 through a corporation he controlled. [ 6 ] 149 agreed to advance $2,690,000 to NB. The repayment of the funds was secured by a second mortgage ( Mortgage ) executed by NB in favour of 149.

The Appellant and allegedly five others (who were also shareholders of NB) (defined above as the Other Defendants) executed documents entitled “Guarantee” which purported to guarantee a certain percentage of the “due payment of the principal, interest and all other moneys secured” by the Mortgage. The Appellant’s percentage under his Guarantee ( Guarantee ) was 21%, based on his 21% ownership share of NB at the time. The Appellant also owned 33% of 149’s shares (including through a corporation he controlled, Julyo Holdings Ltd ( Julyo )), and was a director and officer of 149. [ 7 ] NB defaulted on the 149 loan.

According to a November 2014 affidavit, Cruise was a minority shareholder of 149 and wanted 149 to commence foreclose proceedings. However, this was resisted by other 149 shareholders. On November 9, 2012, the Appellant agreed to support foreclosure and 149 was authorized to commence foreclosure proceedings.

As admitted by the Appellant in his Statement of Defence, he voted in favour of Cruise’s resolution to commence foreclosure proceedings because he had a substantial investment in 149, but also because the Mortgage was in arrears and the controlling shareholders of NB were not taking steps to correct the default. He was under a duty to act in 149’s best interests and, if he did not do so, he would likely be sued by Cruise “for which I would not have a good defence”. The Appellant was of the view that NB had assets available to satisfy the debt to 149. B.

The Action [ 8 ] After making a demand that did not bear fruit, in October 2013, 149 filed a Statement of Claim against NB, the Appellant, and the Other Defendants.

The Statement of Claim sought judgment in the sum of $3,336,129.63 as of October 4, 2013, together with interest at the Mortgage interest rate (12% per annum, “calculated annually, not in advance as well after as before maturity until paid”). 149 also moved forward with steps to realize on the property encumbered by the Mortgage. [ 9 ] In November 2013, NB and the Other Defendants defended the claim on a number of grounds, including alleging that the Mortgage was illegal and their guarantees were induced by misrepresentation or void for mistake.

They also filed a counterclaim against 149 and the Appellant ( Counterclaim ). The Counterclaim alleged that the Appellant breached contracts, made misrepresentations or collateral warranties, and breached fiduciary obligations, all relating to his involvement in or management of the Project and his real- estate development skills (or alleged lack thereof).

Effectively, the Other Defendants alleged that they relied on the Appellant, that he did not adequately develop the Project, and that he improperly took personal profits or advanced his personal interests. [ 10 ] On December 9, 2013, the Appellant filed his Statement of Defence, which he filed on his own behalf and not through legal counsel. In it he admits that he “provided a guarantee on the mortgage advanced to 149” and that he “provided the guarantee as NB was in desperate need of refinancing so as to complete the project”. He also admitted NB’s liability under the Mortgage.

Under the “Remedy Sought” heading, he pleaded: Remedy Sought 29. The solution to the default by NB Developments must be a comprehensive solution as a judgment against me on my guarantee alone would be prejudicial to me unless judgements were not also granted against all of the other guarantors and [NB] itself. 30. This loan from [149] is a just debt of [NB] made in good faith and the controlling directors of [NB] are not prepared to discharge the debt. 31.

As a minority shareholder of [NB], I should not be held responsible for the failure of the controlling shareholders to act responsibly and take the necessary steps to control their cost and repay their debts. [Emphasis added] [ 11 ] The Appellant has not filed any counterclaim or third-party claims in the Action. [ 12 ] Both 149 and the Appellant defended the Counterclaim.

In his Statement of Defence to Counterclaim, the Appellant admitted that the loan from 149 to NB was secured by “personal guarantees provided by the [Other Defendants]” and that the Appellant “also provided a personal guarantee to [149] to secure the Loan”.

He further pleaded that, even if the allegations in the Counterclaim were true, any alleged breach by the Appellant would “not absolve [NB] and the guarantors from their liability under the term of the Loan, the [Mortgage] or the guarantees”. [ 13 ] The Appellant has never amended or sought to amend his Statement of Defence or his Statement of Defence to Counterclaim. [ 14 ] Effectively, the Appellant did not deny his personal liability to 149; rather, he used his defence to support 149’s claim against NB and the Other Defendants.

This was because, as he testified, if the guarantees were collected in full against the guarantors, “the end result would be to distribute back to me, more than the amount of my guarantee”. Having decided to effectively admit his own liability, his litigation strategy was to align with 149 in the prosecution of the claim against NB and the Other Defendants. He later swore an affidavit on October 27, 2014 that confirmed the guarantees in October 2014, and confirmed them again in his September 9, 2020 affidavit.

C. 149’s

Summary Judgment Application and the Alleged Agreement [ 15 ] By August 2014, the properties subject to the Mortgage had been sold, and the net proceeds of $1,757,848.64 were paid into Court. [ 16 ] In November 2014, 149 applied for

summary judgment against all the defendants. [ 17 ] The Appellant relies in this Appeal on a document signed by Cruise and the Appellant on December 27, 2014 ( Alleged Agreement ), on or about the date of a 149 board meeting.

The Alleged Agreement provided, among other things, that Cruise would support a resolution to replace the Appellant’s Guarantee with a guarantee of Julyo. [ 18 ] Even though the Alleged Agreement was executed long after the Appellant filed his Statement of Defence and his Defence to the Counterclaim, and after he swore an affidavit in October 2014 confirming personal guarantees, the Appellant nonetheless asserts he relied on the Alleged Agreement, and the undertaking of Cruise, in the Appellant’s decision to support 149’s collection on the guarantees. [ 19 ] 149’s

summary judgment application eventually proceeded by way of a special application before Master Prowse (as he then was) on August 5, 2015. The Appellant did not attend or oppose the application. Master Prowse granted

summary judgment against all the defendants. His August 14, 2015 order ( Prowse Order ) provided that the “amount of the judgment will be determined by agreement between the parties or on future application”. He also dismissed the Counterclaim against 149, but not as against the Appellant. His reasons are found at 1499925 Alberta Ltd v NB Developments Ltd , 2015 ABQB 516 . [ 20 ] Following the Prowse Order, Cruise’s direction of 149’s action to collect on the guarantees was temporarily halted.

On August 31, 2015, the 149 board, supported by the Appellant, voted to replace a vacant board seat with one of the Other Defendants (Raj Uppal) who was opposed to 149’s collection on the guarantees. Uppal was appointed President and immediately took steps to stop 149’s collection efforts. In response, in December 2015, Cruise obtained an order pursuant to

section 240 of the Alberta Business Corporations Act , RSA 2000 c-B-9 , which granted Cruise leave to conduct a derivative action in the name of 149 in this Action, to collect on the guarantees ( Derivative Action Order ). D. Appeal of the Prowse Order and the Millar Order [ 21 ] The Appellant did not appeal the Prowse Order. However, in September 2015, NB and the Other Defendants did, and that same month they obtained a stay of the Prowse Order pending the appeal. [ 22 ] On May 3, 2016, Justice Millar granted the Other Defendants’ appeal off the bench. He dismissed NB’s appeal. The Appellant did not participate.

It took the parties some time to settle the terms of his order, and it was entered on October 17, 2016 ( Millar Order ). The Millar Order set aside the

summary judgment granted against the Other Defendants, but not against NB. It also provided, among other things, that all other terms of the Prowse Order remained in effect. Therefore, the parties before me agreed that the

summary judgment order against the Appellant remained. [ 23 ] Nobody appealed the Millar Order. At that point in time, therefore, there were three different components remaining in the Action: (1) 149 had an order granting

summary judgment against the Appellant and NB, with the amount of the judgment to be determined; (2) 149 had its claim against the Other Defendants; and

(3) NB and the Other Defendants had their Counterclaim against the Appellant. [ 24 ] In September 2016, proceeds from the sale of properties, in the amount of $1,595,710.11, were released and applied to the outstanding amount under the Mortgage, leaving a deficiency of $2,276,709.85. E. Post Millar Order and the Applications before the Judge [ 25 ] Following the 2016 Millar Order, 149’s focus was on prosecuting its claim against the Other Defendants. In 2017 the Other Defendants unsuccessfully applied for

summary dismissal of the claim against them. In 2018-2019, 149 unsuccessfully attempted to have the claims against the Other Defendants set down for a

summary trial. Following that, records disclosure and oral questioning occurred. The Appellant does not seem to have been involved in those steps in any material way. [ 26 ] From August 2015 to June 2020, no steps were taken by any party to determine the amount of 149’s judgment against the Appellant or NB.

In June 2020, 149 filed an Application for Judgment Calculation, supported by an Affidavit of Default sworn by Cruise. [ 27 ] In response, the Appellant filed his August 14, 2020 application ( Application ) seeking to (1) dismiss the Action against him on the basis of long delay pursuant to rule 4.31 of the Alberta Rules of Court , Alta Reg 124/2010 ( Rules ); (2) amending the style of cause to replace the Appellant with Julyo; (3) setting aside the Prowse Order and allowing the Appellant to file a Statement of Defence; and (4) staying the Action against the Appellant pending judgment against the Other Defendants.

The Appellant swore an affidavit in support of his cross-application. In July 2021, the Appellant amended his Application in July 2021 to also specifically rely on rule 4.33. [ 28 ] Both Cruise and the Appellant were questioned on their affidavits and those transcripts were before the Judge. [ 29 ] The Judge heard the Application on August 4, 2021. The Other Defendants were aware of the Application but did not participate.

The Judge dismissed the Appellant’s Application, and then set the judgment amount against NB in the amount of $2,430,006.55 and against the Appellant in the amount of $510,301.38 (21% of the judgment against NB). [ 30 ] On September 15, 2021, the Appellant filed his Notice of Appeal. He did not seek a stay of the Order pending this Appeal.

III. Standard of Review and Record [ 31 ] An appeal from a master is a hearing de novo : Kadco Construction Inc v Sterling Bridge Mortgage Corp , 2021 ABCA 52 at para 11 .

The standard of review is correctness: Bahcheli v Yorkton Securities Inc , 2012 ABCA 166 at para 30 . [ 32 ] Rule 6.14(3) provides that an appeal from a master’s judgment or order is “an appeal on the record of proceedings before the master and may also be based on additional evidence that is, in the opinion of the judge hearing the appeal, relevant and material.” Neither party sought to rely on additional evidence on this Appeal, but the parties acknowledged I could refer to the court file that existed at the time of the Order. IV.

Grounds of Appeal and Positions of the Parties [ 33 ] On Appeal, the Appellant abandoned his arguments that he should be replaced with Julyo or that the Prowse Order should be set aside. He maintained his position that the Action should be dismissed against him pursuant to rules 4.33 and 4.31, or that the Action or enforcement of the judgment should be stayed.

In oral argument, he abandoned his position that the Judge miscalculated the judgment amount. [ 34 ] 149’s position is that the delay rules are not available to the Appellant because there is already a judgment against him, that even if the delay rules apply the Action should not be dismissed against the Appellant, and that judgment quantification and enforcement against the Appellant should not be stayed. V. Issues [ 35 ] The issues on this Appeal are: (

a) Should the Action be dismissed as against the Appellant pursuant to rule 4.33? (

b) Should the Action be dismissed as against the Appellant pursuant to rule 4.31(1)(a)? (

c) Should there be a stay of the Action, or of the enforcement of any judgment, against the Appellant? (

d) If the judgment amount against NB and the Appellant is to be set, what is the appropriate judgment amount against NB and the Appellant? VI. Analysis A.

Should the Action be dismissed as against the Appellant pursuant to rule 4.33? [ 36 ] 149 opposes the rule 4.33 aspect of the Application and Appeal on several grounds: (1) the Appellant’s Application did not seek to dismiss the claim based on rule 4.33; (2) the Appellant cannot rely on rule 4.33 because the Prowse Order constituted a judgment against him which was not appealed, and the delay rules do not apply in those circumstances; and (3) the reference to “significant advance in an action” means the action as a whole, not just as against the Appellant, and the steps taken against the Other Defendants in the Action significantly advanced the Action. 1.

Did the Appellant fail to plead rule 4.33? [ 37 ] The Application did not initially rely on rule 4.33, but was later amended to include it. 149 clearly had notice of the Appellant’s intention to rely on rule 4.33, it was argued before the Judge, and it has been argued by both sides before me. I am satisfied that the Appellant has sufficiently sought relief under rule 4.33 in his Application and on this Appeal. 2.

Can the Appellant Rely on rule 4.33 Given the Prowse Order? [ 38 ] 149 argues that rules 4.33 and 4.31 are only to be used in addressing interlocutory delay and that, once judgment has been granted, those rules do not apply.

The Judge agreed with this argument. 149 relies on Alberta Treasury Branches v Canadian Egg Processing Inc , 2014 ABQB 548 at paras 13-15 [ Canadian Egg ] ; 7621126 Alberta Ltd v Sims , 2007 ABQB 550 at paras 23-24 , and Manufacturers Life Insurance Co v Mehra , [1982] AJ No 331 at paras 17-18 and 24 [ Mehra ] . [ 39 ] In Canadian Egg , Master Schulz dealt with whether rule 4.33 prevented the court from renewing a judgment in favour of a judgment creditor pursuant to rule 9.21. In that case, a default judgment for $58,744 plus costs had been entered, and a writ of enforcement had been issued.

In 2014, shortly before the expiry of the 10-year limitation period set out in

section 11 of the Limitations Act , RSA 2000, c L-12 , the judgment creditor applied under rule 9.21 to renew the judgment. In response, the judgment debtor applied to dismiss the action pursuant to rule 4.33. Master Schulz dismissed the application on the basis that rule 4.33 does not apply to rule 9.21 applications. He held that rule 4.33 deals with the pre-trial, pre-judgment period, and rule 9.21 applies post-judgment.

He also noted the policy consideration that favours an obligation on judgment debtors to satisfy a judgment, not an obligation on a judgment creditor to take steps to collect on them (citing Canadian Imperial Bank of Commerce v Lau , 2009 ABQB 362 at para 5 ). Further, Master Schulz

found that to allow rule 4.33 to operate post-judgment would be inconsistent with the 10-year limitation period under

section 11 of theLimitations Act. Canadian Egg was confirmed in Servus Credit Union Ltd v BRB Building Corp, 2016 ABQB 428 at para 19. [40] 7621126 and Mehra dealt with the ability of a party to discontinue, or the court to dismiss, a foreclosure action when amortgage is brought into good standing after an order nisi/order for sale is granted. In both cases, Masters of the Alberta Court ofQueen’s Bench decided that discontinuance of dismissal could not occur because the order nisi/order for sale was a judgment into whichthe claim had merged: 7621126 at paras 20-24; Mehra at paras 17-18 .

In Mehra, Master Funduk said at paras 17-18: Whatever might be the case before judgment, after judgment it is not possible to dismiss an action. Once a judgment has been given infavour of the mortgagee the cause of action has "merged" into the judgment. There cannot be a judgment in favour of a mortgagee andalso a judgment dismissing the action. The two are mutually exclusive. A dismissal of an action is itself a judgment. It is not possible to have a judgment which "dismisses" a previous judgment in the sameaction between the same parties.

In my view, McDougall cannot apply to a case where the mortgagor remedies the breaches after anorder nisi has been obtained. [41] The essence of 149’s argument is that 149’s claim against the Appellant merged with the Prowse Order, which was notappealed, and, therefore, the Appellant has no recourse under the delay rules. I disagree. While I agree with the results in Canadian Egg,7621126 and Mehra, they are distinguishable and do not apply to the facts of this case. [42] In my view, any limits on whether or when rule 4.33 is available must be governed by the wording of the rule.

Rule 4.33(1)and (2) provides: Dismissal for long delay 4.33(1) In this rule, (a) “applicant” means a party to an action who makes an application to dismiss the action for delay as set out in this rule; (b) “respondent” means a party who has filed a commencement document; (c) “suspension period” means, in subrules (5) to (9), a period that ends on: (

i) a specific date, or (ii) the happening of a specific event.

(2) If 3 or more years have passed without a significant advance in an action, the Court, on application, must dismiss the action as againstthe 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 alitigation 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 apurpose and to the extent that, in the opinion of the Court, warrants the action continuing. [43] An “applicant” under rule 4.33(1)(

a) is a “party to an action”. A “party” is also defined in

Schedule 1 of the Rules as “a partyto an action”. “Action” is not defined under the Rules. However, in Royal Canadian Legion Norwood (Alberta) Branch 178 vEdmonton (City), 1994 ABCA 37 at para 22, the Court of Appeal adopted the definition of action from Halsbury's Laws of England, 4thEdition Vol. 37, para. 17, page 24: 'Action' means any civil proceedings commenced by writ or in any other manner prescribed by rules of court.

It has a wide significationas including any method prescribed by those rules of invoking the court's jurisdiction for the adjudication or determination of a lisor legal right or claim or any justiciable issue, question or contest arising between two or more persons or affecting the status ofone of them. In its natural meaning 'action' refers to any proceeding in the nature of a litigation between a plaintiff and a defendant.

Itincludes any civil proceedings in which there is a plaintiff who sues, and a defendant who is sued, in respect of some cause of action, ascontrasted with proceedings, such as statutory proceedings which are embraced in the word 'matter'. [Emphasis added] [44] This passage connotes that an action is a reference to the process by which disputes are brought and resolved before the court.The question is whether or when an action ceases to be an “action” for the purpose of rule 4.33.

In my view, this occurs when the claimin the action has been finally determined against a defendant in a judgment such that there is no substantive lis or justiciable issuebetween the parties on the merits. At that point, the claim or original debt obligation is transformed or merged into, or has been distilledinto, a judgment: Mehra; Lightbody v Goldberg, at para 13.

At that point, it has been said there is “no longer anaction”: Karaha Bodas Company, LLC v Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 2010 ABQB 172 at para 14,aff’d 2011 ABCA 291 at para 3. [45] I agree with Canadian Egg that, when a debt claim has been prosecuted to final monetary judgment, the claim merges into thefinal judgment and it is no longer possible to “dismiss the action” under the delay rules.

At that point, the parties to the claim havebecome a “judgment creditor” (a “person who has a judgment or order requiring a person who is the subject of the judgment or order orpart of it to pay money”) and a “judgment debtor” (a “person who is the subject of a judgment or order or part of it requiring the personto pay money”): Rules,

Schedule 1

definitions. Subject only to

section 11 of the Limitations Act and the requirements of rule 9.21, thereis no obligation on a judgment creditor to take steps to materially advance collection or enforcement, and a judgment can existperpetually if renewed: Canadian Imperial Bank of Commerce v Lau, 2009 ABQB 326 at para 5; Canadian Egg at para 23; Martin vKubes, 2021 ABQB 479 at para 32.

[46] In this case, the Prowse Order is referenced as an “order”. It provides that the “Plaintiff is granted

summary judgment againstall Defendants” (which was later set aside as against the Other Defendants only) and that “the amount of the judgment will be determinedby agreement between the parties or on future application”. In my view, the reference to “judgment” in respect of the Prowse Order mustinterpreted in this context. In common parlance, the use of the word “judgment” can often be used as a generic term including all judicialdecisions: Muzak Corp v Composers, Authors, and Publishers Association of Canada, (SCC), [1953] 2 SCR 182 at195.

However, not every “judgment”, order, or decision of the court gives rise to a merger of the defendant’s obligation, or the plaintiff’sclaim, with the judgment and the effective end of an action or claims within an action.

Where there is a remaining substantive step ordetermination to be made by the court or the parties to resolve a debt claim, there is not a merger of the claim into the judgment: therecontinues to be an action and parties to the action as contemplated by rule 4.33. [47] In my view, following the Prowse Order and the Millar Order, there continued to be a lis between the parties in respect of149’s claim — namely, determining the amount of 149’s judgment against NB and the Appellant.

While the issues were considerablysimplified, determining the amount was not merely a mathematical calculation — issues remained to be decided, including the interestrate and whether and when pre-judgment interest versus post-judgment interest would apply and accrue (Judgment Interest Act, RSA2000 c J-1) and how and when to account for the proceeds of sale of the mortgaged properties.

That there continued to be a lis is obviousbased on the arguments before the Judge and before me, the terms of the Prowse Order, and his reasons at para 35-36. [48] Accordingly, I find the Prowse Order was not the final judgment against the Appellant.

It was not “finally decisive of a case orsuit”, not a “final decision of the whole controversy”, or a “final decision obtained in an action by which a previous existing liability ofthe defendant to the plaintiff is ascertained or established”: Lieberman v Business Development Bank of Canada, 2006 BCCA 363 atparas 4-5; R v Duhamel, 1981 ABCA 295 at para 14; Interclaim Holdings Limited v Down, 2004 ABQB 571 at para 13; Wensel vWensel, at paras 6-7, aff’d 1976 AltaSAD 179; Century Services Inc v LeRoy, 2015 BCCA 120 at para 42. [49] This does not mean that the Prowse Order is not final and binding on the question of liability — it is — a decision on aquestion may be final and conclusive for the purpose of the proceedings in which it is adjudicated: Reynolds v Toronto TransportationCommission, (ONCA), [1937] OR 377; R v Duhamel, 1981 ABCA 295 para 14; Poffenroth Agri Ltd v Brown, 2020SKCA 68 at para 18.

Further, the Prowse Order was not appealed and the court is functus in respect of the decision on the Appellant’sliability, but not in respect of the quantification of the judgment: Canadian Broadcasting Corp v Manitoba, 2021 SCC 33 at para 32;Dow Chemical Canada ULC v NOVA Chemicals Corporation, 2021 ABCA 153 at para 37; Saskatchewan Power Corporation vAlberta (Utilities Commission), 2015 ABCA 281 at para 8; 369413 Alberta Ltd v Pocklington, 1999 ABQB 936, overturned on othergrounds in 2005 ABCA 376.

All of this means that 149’s debt action against the Appellant was not yet completed and rule 4.33continued to potentially be available. [50] Allowing a defendant to apply under rule 4.33 where there has been a judgment on liability, but where damages or judgmentquantification have not yet been resolved, does not offend policy considerations. In Yaremchuk v Haight, 2001 ABCA 7, the Court ofAppeal held that a party that had been noted in default could file an application under former Rule 244.1(1), which was the equivalent ofrule 4.33 under the previous rules: Alberta Rules of Court, Alta Reg 390/1968.

The Court said, at para 6: “A defendant who has beennoted in default is entitled to expect the plaintiff to pursue his claim for damages in a diligent manner in the same way a defendant whohas filed a statement of defence has this entitlement.” See also Anstar Enterprises Ltd v Transamerica Life Canada, 2009 ABCA 196 atpara 18; Anglin v Resler, 2022 ABKB 737 at para 39; Agriculture Financial Services Corporation v Zaborski, 2013 ABCA 277 at para18. [51] In my view, the same rationale applies where a court has found a party to be liable, but the quantification of their liability isnot yet resolved.

In these circumstances, parties should not, for an indeterminate period of time be forced to face the “constant threat,stress and uncertainty” of a pending but unquantified judgment: Canadian Egg at para 13; Angevine v Blue Range ResourceCorporation, 2007 ABQB 433 at para 17.

At that stage, the policy of removing stalled actions from the “litigation highway” or givingthem a boost to get them moving again continues to exist: Recycling Worx Solutions Inc v Hunter, 2023 ABKB 51 at para 50, citingJacobs v McElhanney Land Surveys Ltd, 2019 ABCA 220 at para 60; Morrison v Galvanic Applied Sciences Inc, 2019 ABCA 20 atpara 9; and Transamerica Life Canada v Oakwood Associates Advisory Group Ltd, 2019 ABCA 276.

The expeditious resolution of “allaspects of a dispute” is in the interests of the litigants, the civil justice system as a whole and the greater community: Oslanski vOslanski, 2021 ABCA 68 para 58. [52] Further, a party applying to dismiss for delay under rule 4.33 in these circumstances does not create a conflict with

section 11of the Limitations Act or the enforcement scheme in rule 9.21, as it would have in Canadian Egg.

Section 11 of the Limitations Actprovides a 10-year limitation period if a claimant “does not seek a remedial order in respect of a claim based on a judgment or order forthe payment of money”. Rule 9.21 only allows the court to grant a “judgment creditor a new judgment or order on a former judgment orany part of it that has not been paid”. A “judgment creditor” under the Rules is a person who has a “judgment or order requiring a personwho is the subject of the judgment or order or part of it to pay money”.

Under the Civil Enforcement Act, RSA 2000 c C-15, writs ofenforcement are issued to a “judgment creditor”, which is a “person who has a money judgment.” At the time of the Appellant’sApplication to dismiss, 149 did not yet have a money judgment, or a judgment against the Appellant for the payment of money. It onlyhad a judgment that the Appellant was liable under the Guarantee. 149 could not have obtained a writ of enforcement, could not havecommenced enforcement proceedings, could not have renewed the Prowse Order under rule 9.21, and would not be subject to the 10-yearlimitation period.

The concerns raised in Canadian Egg would not arise. [53] Based on the foregoing, I find that the Appellant was an “applicant” under rule 4.33 and was entitled to bring a rule 4.33application. With respect, the Judge erred in his conclusion otherwise and I must now consider the Appellant’s rule 4.33 application. B. Should the Action be Dismissed as Against the Appellant pursuant toRule 4.33? [54] Rule 4.33(2) provides that, if 3 or more years have passed without a significant advance in an action, the Court, onapplication, must dismiss the action as against the applicant, unless certain exceptions exist.

This “drop dead rule”, requires a functional

approach to determine whether that step significantly advances the action: Flock v Flock , 2017 ABCA 67 at paras 17-1 and 17-2 . The relevant period of delay must be determined by looking back from the date the application was filed: Flock at para 17-8 . [ 55 ] During the relevant 3-year period, other than 149’s application to set the judgment immediately before the Appellant’s Application, no steps were taken by any party to have the court quantify 149’s judgment against NB or the Appellant.

However, the Appellant acknowledges that there was a significant advance in the Action as against the Other Defendants during this period. The only issue under the Appellant’s rule 4.33 application and Appeal is whether there must be a significant advance in the Action against each defendant (i.e., against the Appellant specifically), or whether a significant advance in the Action as a whole (i.e., against the Other Defendants) is sufficient to avoid dismissal for delay.

If the former, the Appellant’s rule 4.33 application and Appeal must succeed and, if the latter, it must fail. [ 56 ] In Apex Land Corp v Heikkila , 2011 ABCA 87 [ Heikkila ], at para 32 , the Court of Appeal held that a proper

interpretation of former rule 244.1 (rule 4.33’s predecessor), the “thing” need only materially advance the action as a whole. One of the reasons for the Court’s

interpretation was the focus in the Rules on materially advancing the “action”, not materially advancing the “action against the party bringing the application to dismiss”. [ 57 ] The Heikkila

interpretation of rule 244.1, under the former Rules , has been consistently applied to rule 4.33 by both Applications Judges and Justices of this Court: Neitz v Jordan , 2015 ABQB 732 at paras 39-40 ; Humphreys v Hanne , 2015 ABQB 143 at para 7 ; Field, Field & Field Architecture-Engineering Ltd v Tempo Construction

(2000) Ltd , 2015 ABQB 471 at para 23 ; 994552 NWT Ltd v Bowers , 2017 ABQB 741 at para 5 aff’d 2019 ABQB 195 at para 12 ; Drain v Drain , 2018 ABQB 468 at para 20 . I have reviewed those cases and agree that the interpretive rationale underlying Heikkila continues to apply to rule 4.33’s reference to significant advance in the action. The Appellant has not articulated any compelling reason that the

interpretation under rule 4.33 should be different. Therefore, 149 can point to any significant advance of the Action in the relevant three-year period to resist the rule 4.33 application. As noted earlier, the Appellant conceded that there was a significant advance in the Action if the steps taken in relation to the Other Defendants is considered. [ 58 ] Even if the Appellant had not conceded that there was a significant advance in the Action as a whole, I would have nonetheless concluded there was one. I need go no further than the September 2019 questioning.

The transcript from the September 2019 questioning was filed in June 2021. It was, therefore, before the Judge and forms part of the record before me. I have reviewed the transcript. It establishes that the May 2019 Affidavit of Records included over one hundred records, and 149’s corporate representative was questioned on some of those records. Other questioning related to the circumstances and nature of the loan, the Mortgage, the guarantees, attempts to enforce it, and the balance outstanding at that time.

Answers to undertakings were provided, including to obtain further records from 149 and its corporate representative. Both the conduct of questioning and the answering of undertakings may significantly advance an action: Lanset Capital Corp v Waterloo Geological Consulting , 2006 ABCA 77 at para 9 ; Donnelly v Brick Warehouse Corporation , 2013 ABQB 621 at paras 16 and 19 ; Precision Label Ltd v Milburn , 2016 ABQB 481 at para 27 ; Preston v Bent Developments Co Limited , 2018 ABQB 89 at paras 25-28 .

Functionally, and in substance, I find that the service of the May 2019 Affidavit of Records and September 2019 questioning were both significant advances of the Action. [ 59 ] Based on the foregoing, the Judge reached the correct conclusion that the Appellant’s rule 4.33 application should be dismissed. The Appeal of that decision is dismissed. C. Should the Action be Dismissed as against the Appellant pursuant to rule 4.31(1)(a)? 1.

Can the Appellant Rely on Rule 4.31 Given the Prowse Order? [ 60 ] As he did for rule 4.33, the Judge found that rule 4.31 could not be engaged in this case. 149 also argues that rule 4.31 is not engaged, again relying on Canadian Egg . [ 61 ] Rule 4.31 provides: Application to deal with delay 4.31(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.

(3) In determining whether to dismiss all or any part of a claim under this rule, or whether the delay is inordinate or inexcusable, the Court must consider whether the party that brought the application participated in or contributed to the delay. [ 62 ] Unlike rule 4.33, rule 4.31 doesn’t set out who can bring an application. Under rule 4.31(1)(a), the court may dismiss all or any part of a claim if the Court determines the delay has resulted in significant prejudice to a “party”.

For the reasons I set out earlier under rule 4.33, 149’s claim against the Appellant had not yet merged into a judgment, the Appellant was a party, and it was open to him to bring the rule 4.31 application. As the Judge did not assess rule 4.31, I do not have the benefit of his reasoning. [ 63 ] The Court of Appeal has held that there is no universal mandatory code or formulaic analysis for rule 4.31: Transamerica at para 15; LDS v SCA , 2021 ABCA 59 at para 18 [ LDS ]; Cochrane (Town) v Austech Holdings Inc , 2022 ABCA 377 at para 23

[ Cochrane CA ]. Having said that, it can be an error if a court does not address issues of delay, inordinate delay, and inexcusable delay, before turning to the question of prejudice: Arbeau v Schulz , 2019 ABCA 204 at para 31 [ Arbeau ]. [ 64 ] In this case, I conclude that the most appropriate way to structure an analysis of the Appellant’s rule 4.31 application is to address these issues: (

a) Has the Appellant established delay in the Action? (

b) Is any delay in the Action inordinate and inexcusable, such that the Appellant can rely on the presumption of significant prejudice in rule 4.31(2)? (

c) Has delay in the Action resulted in significant prejudice to the Appellant? (

d) Should the Court exercise its discretion to dismiss the Action under rule 4.31? 2. Has the Appellant Established Delay in the Action? [ 65 ] Given this Court’s consistent

interpretation of “action” under rule 4.33 to mean the “action as a whole”, it is consistent with the presumption of consistent expression that the same

interpretation applies to rule 4.31: Canada (Minister of Citizenship and Immigration) v Vavilov , 2019 SCC 65 at para 44 .

Thus, rule 4.31 mandates consideration of the action “as a whole”: 4075447 Canada Inc v WM Fares & Associates Inc , 2020 ABCA 150 at para 14 ; Arbeau at para 27 . [ 66 ] In Recycling Worx at paras 55-56, I summarized the principles in assessing delay in an action: One way of assessing whether there is delay is to consider whether the plaintiff 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, having regard to the nature of the action and stipulated timelines in the Rules : Humphreys at paras 20, 150-156 ; Arbeau at para 33 .

However, this is not a scientific calculation, and the theoretical comparison of what point a reasonable litigant would have reached in any particular case is incapable of precise definition: Transamerica at para 20; Cochrane CA at para 25 . Delay is usually incremental, and it is very difficult to fix the specific point at which the passage of time becomes “delay”: Royal Bank of Canada v Levy , 2020 ABCA 338 at para 23 [Levy].

Ultimately, determining whether there has been a delay must be based on an “examination of the record, the submissions of counsel, and the experience of the judiciary”: Transamerica at para 22, cited affirmatively in Cochrane CA at para 25 .

It requires a review of the entire action, not just segments of it, commencing with the filing of the claim and ending with the date of the rule 4.31 application: Cochrane CA at para 25 ; Arbeau at para 27 ; 4075447 Canada Inc v WM Fares & Associates Inc , 2020 ABCA 150 at para 14 . [ 67 ] The Action was commenced in 2013 and, at the time of the Application in August 2020, was almost 7 years old. It is a relatively simple debt action against NB and a guarantee action against a number of defendants.

The Counterclaim by the Other Defendants against the Appellant complicates the Action and expands it to address issues relating to, among other things, the management of the Project, the reason for its failure, breach of contract, fiduciary duty and the Appellant’s skill and expertise. It is not clear to me whether steps have been taken to advance the Counterclaim and, in argument, the Appellant’s counsel did not seem to be aware of its status.

It appears on the record before me that the Counterclaim was dismissed as against NB but remains extant against the Appellant. [ 68 ] In all the circumstances, I do not hesitate in finding that there is delay in this case. 3. Is any delay in the Action inordinate and inexcusable, such that the Appellant can rely on the presumption of significant prejudice in rule 4.31(2)? [ 69 ] The analytical framework and onus of proof are different for the questions of inordinate delay and excusable delay: Recycling Worx at para 59. I address them separately below. a.

Has the Appellant Established Inordinate Delay? [ 70 ] The onus is on the Appellant to establish that the delay in the Action is inordinate: Kuziw at para 31; OmniArch Capital Corporation v Bishop , 2020 ABQB 102 at para 28 , aff’d 2020 ABCA 472 ; Willard v Compton Petroleum Corporation , 2015 ABQB 766 at para 56 . [ 71 ] From Recycling Worx , at paras 61-63: There is no fixed test for determining whether delay is inordinate: Levy at para 14 .

It has been described as simply meaning delay that is much in excess of what was reasonable having regard to the nature of the issues in the action and the circumstances of the case: Levy at para 14 ; Transamerica at para 18; Kuziw at para 31. It has also been said that if the difference between the actual progress of the action and the “norm” is so large as to be unreasonable or unjustifiable, then the delay is inordinate: Morrison at paras 11-12 ; Humphreys at paras 115-120 .

In my view, these are all different ways of asking the underlying question—is the length of the delay reasonable in the circumstances of the case? As with determining whether delay exists, it can also be difficult to fix the specific point at which delay becomes “inordinate”: Levy at para 23 . Whether delay is inordinate is to be determined in light of all the circumstances of the case: Kuziw at para 30; Arbeau at para 36 ; Transamerica at para 18; LDS at para 18 . There is no presumptive time that must pass before delay is considered inordinate: Levy at para 14 .

The relevant circumstances should include the overall delay as well as gaps between steps: Levy at para 14 . Defence delay is also relevant: Transamerica at para 28; Fraser v Jeffries , 2019 ABCA 368 at para 19 ... Alston v Haywood Securities ,

2020 ABQB 107 at para 44 . [...] [ 72 ] The broad progress of the Action in its first 7 years was described earlier in these reasons. In his affidavit and argument, the Appellant does not appear to complain about the time from October 2013 to the August 2015 Prowse Order. The Appellant focuses on 149’s delay in taking any steps to proceed against him in the approximately 5-year period from the Prowse Order to his Application.

He does not address the whole of the Action or provide much evidence about what else was going on in the Action during this period. [ 73 ] Based on the procedure card attached to his affidavit, the record before me, and the parties’ arguments, some steps taken in the Action can be discerned from August 2015 to August 2020: (

a) in September 2015, the Other Defendants appealed the Prowse Order and Justice Millar stayed it pending appeal. This was heard before Justice Millar in May 2016. He allowed the appeal in part and set aside the Prowse Order as against the Other Defendants. The terms of the Millar Order were not settled until October 2016. The delay in settling the Millar Order terms has not been explained; (

b) in May 2017, the Other Defendants unsuccessfully applied to summarily dismiss 149’s claim against them, which was heard in a Master’s special application in November 2017. The delay between October 2016 and May 2017 has not been explained; (

c) in December 2018, 149 filed an application to have the matter set down for

summary trial, which was heard in February 2019 but was not granted. The delay between the November 2017 dismissal of the Other Defendants’

summary dismissal application and the December 2018

summary trial application has not been explained; (

d) in May 2019, 149 prepared and provided its Affidavit of Records to the Other Defendants; (

e) in September 2019, the Other Defendants completed the questioning of 149’s corporate representative; (

f) in March 2020, 149 provided undertaking responses resulting from questioning to the Other Defendants’ counsel; (g) 149 engaged in settlement discussions with the Other Defendants, discovered funds had been withdrawn from 149’s bank account; and (

h) in June 2020, 149 filed its application to set the judgment amount against the Appellant, supported by an April 2020 Cruise affidavit. [ 74 ] The Appellant does not appear to have been participating in the Action since 2015. He has not provided evidence about why some of the unexplained gaps in the steps above occurred. He questioned Cruise on his April 2020 affidavit, but did not explore delay gaps in any detail. Without any further context about what exactly was going on during those periods, I cannot assess whether those gaps were reasonable.

Neither party has provided any information to the Court as to the status of the Other Defendants’ Counterclaim against the Appellant. [ 75 ] In all the circumstances, the Appellant has not discharged his onus to establish inordinate delay. I am aware from the Court file that, in January 2022, the Other Defendants filed an application to have the Action against them dismissed under rule 4.31, the results of which is not yet known. I have not considered the evidence filed in support of that application in my consideration of this Application.

The Other Defendants were not before me, and it is unclear whether they had notice of the Appeal. I do not make, or intend to make, any findings in respect of the Other Defendants’ rule 4.31 application. [ 76 ] Ultimately, it is not enough for the Appellant to point only at 149’s delay in taking steps to set the judgment amount against the Appellant — the Court looks at the entire action in determining inordinate delay.

However, in the event I am wrong, and it is sufficient to only rely on the delay in proceeding to quantify and enforce the judgment against the Appellant, I would still not find the Appellant has established inordinate delay. The Appellant did nothing to advance the setting of the judgment amount. In my view, once a final and binding decision on liability has been established against a defendant, as it has here, policy reasons dictate that the defendant owes a positive obligation to jointly advance the action to settle the amount of that liability.

While an obligation continues to exist on plaintiffs to finalize a judgment once liability is admitted or established, in my view, a defendant cannot assert inordinate delay against the plaintiff in support of an application to dismiss if the liable defendant simply sits back and does nothing. [ 77 ] In all of the circumstances, the Appellant has not discharged his onus to establish inordinate delay. b. Is the Delay Excusable? [ 78 ] Given my finding that the Appellant has not discharged the onus to establish inordinate delay, it is not necessary to assess whether the delay was excusable.

However, in case I am wrong about whether the delay was inordinate, I will assume that there was inordinate delay and assess whether it is excusable. [ 79 ] In Recycling Worx , at para 88, I discussed circumstances where a defendant may not be able to rely on delay in a rule 4.31 application, or where the defendant’s conduct or failure to take steps may contribute to an excuse for the delay: There are numerous situations where a defendant may not be able to rely on delay in an application to dismiss for delay under rule 4.31 or, put another way, where the defendant’s conduct or failure to take steps may contribute to an excuse for the delay.

Each case depends on a review of all the circumstances, so there is no exhaustive list of relevant defendant conduct. However, the numerous decisions under rule 4.31 provide helpful guidance of the types of defendant conduct that will be scrutinized by courts and may provide an excuse for delay. Examples include: (

a) generally, where the defendant is responsible for or contributed to the delay, or part of it: Transamerica at para 27; Nova Pole at paras 25-39; 4075447 Canada at para 20;

(

b) where the defendant fails to adhere to its own positive procedural obligations: Transamerica at para 30; Alderson at para 22; Song at para 41. In my view, positive procedural obligations include those in the Rules and in court orders or procedural directions; (

c) where the defendant, while not having positive procedural obligations, fails to exercise its rights that are in its control and for its benefit: Transamerica at para 32; (

d) where there is a procedural dispute that causes or could contribute to the delay, and the defendant does not take steps to resolve the dispute: Transamerica at para 34; (

e) where the defendant proposes or causes delay by taking a position that other processes should or must be dealt with first, or refuses to proceed with the action unless certain steps are taken: Transamerica at para 36; Heikkila v Apex Land Corp , 2011 ABCA 87 at para 44 ; Nova Pole at paras 33, 39-40; Tiger Calcium Services Inc v Sazwan , 2019 ABQB 665 at paras 32 , 41-42...; and (

f) where the defendant acquiesces in the delay. However, assessing acquiescence must be done with care, given that the primary obligation to move the action along lies with the plaintiff, and the defendant is entitled to let “sleeping dogs lie” in some circumstances. Silence alone does not amount to acquiescence: Cochrane CA at para 35 ; Flock v Flock Estate , 2017 ABCA 67 at para 22 , leave to appeal to SCC refused, 37552 (19 October 2017); Altex International Heat Exchanger Ltd v Foster Wheeler Limited , 2018 ABQB 620 at para 67 .

Participation in a step in the litigation, or the failure to expressly indicate that a defendant is proceeding “without prejudice” is not necessarily acquiescence: Levy at para 23 . A party has no duty to expressly advise that they do not agree to delay: Cochrane QB at para 152; Flock at para 24 . However, on the other hand, a defendant’s failure to press the litigation may strengthen a finding that the delay is excusable: Fraser CA at paras 12, 19 .

Further, where the defendant participates in a culture of complacency, they can be jointly responsible for the delay, which can then be excusable: Song at para 43. [ 80 ] In my view, this case presents another instance where a defendant cannot simply sit back and do nothing and then complain about plaintiff delay.

If a defendant is found liable under a final and binding decision of the court and then sits back and does nothing to advance the determination of the quantum of liability, they risk being held jointly responsible for any delay and may be unable to complain about it. [ 81 ] Further, in this case, the Prowse Order specifically contemplated that the “parties” were to agree to the judgment amount, failing which it would be resolved by court application. This connotes a joint obligation on the part of the plaintiff and defendant to resolve the judgment amount.

The Appellant did not take any actions to advance the resolution of the judgment amount with 149, nor did he apply to have it resolved per the Prowse Order’s direction, which he could have if he was concerned about the delay in setting the judgment amount. Also, the Derivative Action Order provided that “any party is at leave to bring an application upon proper notice to vary this order”.

If the Appellant was concerned about the pace at which 149 was pursuing the Other Defendants, as a shareholder of 149 he could have taken steps to cause 149 to get moving, or could have filed an application to vary the Derivative Action Order. Also, as a remaining party to the Action, including the Defendant by Counterclaim, the Appellant could have taken steps in the Action to move it forward, or sought an order under

Part 4, Division 2 of the Rules . [ 82 ] In all of the circumstances, if necessary, I would find that any delay in the Action until August 2020 was excusable because the Appellant was jointly responsible for it. Again, the Other Defendants are not before me, and my decision is based only on the record before me and is not binding in respect of the Other Defendants’ separate 2022 rule 4.31 application. 4. Has delay in the Action Resulted in Significant Prejudice to the Appellant? [ 83 ] Based on my findings, the Appellant cannot rely on the presumption of significant prejudice under rule 4.31(2).

Accordingly, the principles summarized in Recycling Worx , at paras 100-105, are apt here: In Humphreys , the Court of Appeal discussed what is meant by “significant” prejudice, at para 128: “Significant”, in the context of a procedural court rule focusing on delay, means prejudice that is more than minor or trivial. It must be important enough to justify the attachment of a serious consequence adverse to the interests of the nonmoving party. Webster’s Third New International Dictionary offers this potential meaning: “deserving to be considered: important, weighty, notable”.

The Oxford English Dictionary states that significant may mean “[i]mportant, notable”. [footnotes omitted] In Transamerica , the Court of Appeal stated that “whether or not to dismiss for delay turns on prejudice, indeed substantial prejudice”: para 50. I do not interpret the Court’s use of the word “substantial”, which arguably could have a different meaning than “significant”, to be expanding or narrowing the meaning of significant for the purposes of rule 4.31. The degree of prejudice is generally more important than the raw passage of time: Levy at para 17 .

Prejudice can be in the form of traditional litigation prejudice, or non-litigation prejudice: Humphreys at paras 125, 130-138 . Litigation prejudice is that which may impair the moving party’s ability to defend its interests in the trial of an action: Humphreys at paras 130-131 . Litigation prejudice typically involves things like the unavailability of witnesses or the loss or deterioration of other evidence due to the passage of time: Tiger Calcium at para 47. Non-litigation prejudice involves the threatening of an important and legitimate interest of the moving party: Humphreys at paras 133- 138 .

It can include legitimate professional, business or other interests, reputational damage, inability to earn a livelihood and meet financial duties, delayed retirement, or potentially the stress and inconvenience of litigation and delayed resolution: Humphreys at paras 133-138 ; Ouellette, et al v Law Society of Alberta , 2021 ABCA 99 at para 91 ; Tiger Calcium at para 47; 4075447 Canada at para 8; Jacobs at para 98 .

One way of analyzing whether there has been significant prejudice is to ask whether the delay has impaired a sufficiently important interest of the defendant so as to justify overriding the plaintiff’s interest in having its action adjudged by the Court: Humphreys at para 154 ; Transamerica at para 16. The concepts of delay and significant prejudice are causally linked, such that the significant prejudice must be the result of or attributed

to the delay: OmniArch Capital Corporation v Bishop , 2020 ABCA 472 at para 31 ; Fraser CA at para 22 ; Arbeau at para 31 ; Transamerica at para 21; Cochrane QB at para 39; Tiger Calcium at para 48; Alston at para 47 ; McNair at para 51. [ 84 ] The Appellant’s assertion of prejudice is not based on the usual types of litigation prejudice or non-litigation prejudice. I agree with 149’s counsel that the Appellant’s evidence of prejudice is “very thin”.

The Appellant does not assert that delay somehow has prejudiced his ability to advance his position in calculating his judgment, his ability to defend himself in the Counterclaim, or to advance any other claims he has made or intends to make. The Appellant does not assert any non-litigation prejudice being exacerbated by the delay in setting the judgment amount or collection on the judgment.

He ignores the fact that the delay has benefitted him by deferring his payment under a judgment. [ 85 ] Rather, the Appellant effectively asserts that he has been prejudiced because he supported the collection against the Other Defendants, that he may be the only judgment debtor, and that he was denied the opportunity to raise the same defences to the guarantees as the Other Defendants before Master Prowse or on appeal of the Prowse Order. [ 86 ] In my view, the alleged harm flowing from the Appellant’s decision to support 149’s collection on the guarantees is not prejudice as contemplated by rule 4.31.

The Appellant has provided no authority to suggest it is. In my view, it is simply the consequences of the Appellant’s litigation strategy, including his admissions in his Statement of Defence (which he filed after the Other Defendants’ Statement of Defence challenging the validity of the guarantees), his support of the Prowse Order (including his affidavit evidence), and his failure to appeal the Prowse Order, all of which he says in turn was based on his expectations arising from his dealings with Cruise.

I will deal with these assertions against Cruise further when I deal with the Appellant’s application for a stay. But for the purposes of the rule 4.31 application, the consequences of the Appellant’s litigation strategy do not flow from and are not attributable to any delay in the Action. [ 87 ] The Judge said in his reasons: Another difficulty is there was a conscious strategic decision of Mr. Dhaliwal, by all accounts, to support the application which was going to lead to a finding of enforceability of everyone’s guarantors -- of everyone as guarantors. In the end, it only ended up resulting in Mr.

Dhaliwal’s guarantee being -- remaining to be the only one declared to be enforceable so far. But that was a conscious strategy that he took. He didn’t appeal Master Prowse’s decision. He didn’t appeal Justice Millar’s decision. And I think it’s important that, with respect to the alleged deal, if I can call it that, that a corporation would be substituted for the enforcing person, being that that was the sense the deal would be reached, I think it’s of concern that that information was withheld in the first part of the applications, by all accounts, with no indication that any of that was relayed to the Court.

And the Court was permitted to draw conclusions and make decisions based upon the fact that Mr. Dhaliwal was the guarantor. [ 88 ] I agree. The Appellant may not like the consequences of his strategy, may now in hindsight wish he used a different strategy, and may feel he has been wronged by Cruise, but none of that means that he has been significantly prejudiced by any delay in the Action. Litigants must live with the consequences that flow from their strategic litigation choices: Quan v Cusson , 2009 SCC 62 at para 51 ; Beals v Saldanha , 2003 SCC 72 at para 175 ; 1562860 Ontario Ltd (Shoeless Joe’

s) v Insurance Portfolio Inc , 2011 ONCA 180 at para 8 ; Gravelle (CodePro Manufacturing) v Denis Grigoras Law Office , 2018 ONCA 396 at para 6 ; Barbe v Evans , 2021 ABQB 796 at para 21 ; Panghali v Panghali , 2014 BCSC 647 at para 9 ; 742190 Ontario Inc (Van Del Manor Nursing Homes) v Canada (Customs and Revenue Agency) , 2010 FCA 162 at para 30 ; BNP Paribas Bank (Canada) v Donald S Bartlett Investments Limited et al , 2011 ONSC 6902 at para 55 . [ 89 ] Further, and in any event, as I have held, if there was any prejudice caused to the Appellant by the delay, he is jointly responsible for it. [ 90 ] The Appellant has not asserted any other prejudice.

It is conceivable that, in some cases, a delay by a plaintiff in determining a judgment amount after liability has been confirmed could prejudice a defendant because the defendant would not know the amount it was required to pay to satisfy its obligations, stop the accrual of interest, or to be free to deal with their assets. But here, there is no evidence that the Appellant is eager to satisfy his obligations or is being prejudiced in that way.

Rather he wants to delay discharging his binding obligations. [ 91 ] In all of the circumstances, I find the Appellant has not discharged his onus to establish that any delay in the Action caused him significant prejudice. [ 92 ] In the event I am wrong in my conclusions, and in fact the delay was inordinate and inexcusable, such that the presumption of prejudice was in fact invoked, for the same reasons above, and given that the delay has benefitted the Appellant by delaying his payment to discharge his liability, I would have found that the presumption of significant prejudice is rebutted. 5.

Conclusion re Rule 4.31 [ 93 ] Based on the foregoing, the Judge reached the correct conclusion to dismiss the Appellant’s rule 4.31 application. This aspect of the Appeal is dismissed. 6. Should the Court Exercise its Discretion to Dismiss the Action under Rule 4.31? [ 94 ] As I have found that the Appellant has not established that delay resulted in significant prejudice, I do not need to consider whether there is a compelling reason not to dismiss the Action. D. If the Action is Not Dismissed as against the Appellant, Should the Quantification or Enforcement of the Judgment Against the Appellant be Stayed?

[ 95 ] In the Application, the Appellant sought an order “staying this matter as against Mel Dhaliwal pending judgment against the other Defendants”. The Appellant relies on rules 4.31(1)(

b) and 1.4(2)(h), as well as the Judicature Act , RSA 2000 c J-2 . Rule 1.4(2)(

h) provides the Court jurisdiction to “adjourn or stay all or any part of an action, application or proceeding...or to stay the effect of a judgment or order”. [ 96 ] Sections 17(1) and (4) of the Judicature Act provide: Stay of proceedings 17(1) In a proceeding (

a) for the recovery of a debt or liquidated demand, [...] the Court in its discretion may at any stage of the proceeding grant a stay of proceedings on any terms that the Court may prescribe, and in like manner the Court in its discretion may with or without imposing terms, after final judgment in any proceeding whatsoever, grant a stay of execution of an order for sale or of other similar process, including a stay of an order for possession of land, and may by an order granting the stay extend the time for payment of a judgment debt or the time for doing any act or making any payment prescribed by a previous order of the Court. [...]

(4) Nothing in this

section limits the authority of the Court, at or after the time that a judgment is granted, to stay the enforcement of the judgment or to remove or extend any stay already granted in respect of the judgment. [ 97 ] Although not articulated clearly, the Appellant seems to be arguing that the Action should be stayed against him altogether (including determining the amount of the judgment against him) pending the outcome of the rest of the Action or, alternatively, that if the judgment amount against him is set and final judgment entered, there should be a stay of execution of the judgment pending the outcome of 149’s claims against the Other Defendants.

As the considerations for these arguments overlap but may be different, they are addressed separately below. 1. Should the Action be Stayed against the Appellant Pending the Determination of the Rest of the Action? [ 98 ] The court has jurisdiction to stay proceedings in favour of allowing other proceedings to run their course.

The Court of Appeal has confirmed that a stay in these circumstances is subject to a wide discretion “specifically focussed on the issue at hand”: Hamm at para 11. [ 99 ] Often, the concern is the multiplicity of proceedings with the inherent duplication of resources and the potential for inconsistent findings in the overlapping proceedings.

In those circumstances, an applicant may have to show that the questions in the actions are substantially similar, that a continuance of the action sought to be stayed would be oppressive or vexatious to the applicant or otherwise abuse the powers of the court, and that the stay would not cause an injustice to the respondent: Alberta v Alberta Union Provincial Employees , 1984 ABCA 130 at paras 9-17 ; Spark Power Corp v Peacock Linder Halt & Mack LLP , 2022 ABKB 853 at para 36 ; UCANU Manufacturing Corp v Calgary (City) , 2015 ABCA 22 at para 7 ; Yaworski v Gowling Lafleur Henderson LLP , 2013 ABCA 21 at para 23 ; Ainsworth Lumber Co v Canada (Attorney General) , 2001 BCCA 105 at para 14 .

The degree of overlap between the competing proceedings, the balance of prejudice to the parties, the potential of inconsistent results, and the need to conserve judicial and private resources are relevant factors: Hamm at para 11. [ 100 ] Some of these same considerations may also be applied to support a stay of certain processes within an action: rule 7.1(1)(c); Schwartz (Estate of) v Kwinter , 2007 ABCA 16 at para 11 . [ 101 ] The Appellant argues that, if the Action is not stayed against him pending determination of 149’s claims against the Other Defendants, it could lead to inconsistent results because the Other Defendants may be allowed to advance defences the Appellant could not advance.

This is not a reason to stay the Action against the Appellant. If the Appellant is held liable to 149 and some of the Other Defendants are not, it will have been the consequence of the Appellant’s litigation strategy to admit his liability on the personal Guarantee, to support or not to oppose the

summary judgment on the guarantees, and to not appeal the Prowse Order. The Appellant’s liability has been finally determined and is binding, and the Court is functus on that issue. The result of 149’s claim against the Other Defendants will not affect or reverse the Appellant’s liability on his Guarantee. [ 102 ] I agree with the Judge’s comments: “if [the Appellant’s] responsibility depends on what happens with the other guarantors, then I may have been persuaded to grant a stay pending resolution of that.

But I just don’t think it does”. [ 103 ] I have also considered whether the calculation of the judgment against the Appellant could be affected by 149’s claims against the Other Defendants, which could be a factor supporting a stay. I am not satisfied that the determination of whether the Other Defendants are liable on their guarantees could have an impact on the calculation of the judgment against NB and, therefore, the calculation of the judgment against the Appellant as guarantor.

Further, in oral argument, the Appellant abandoned his position that the Judge miscalculated the NB’s or Appellant’s judgment amount, so there is no arguable issue raised on the calculation of the judgment. [ 104 ] On the flipside, it is possible that the Judge’s setting of the judgment against NB will affect the judgment against the Other Defendants if they are liable. However, the Appellant does not seek a stay of the Action as against NB.

Further, I understand the Other Defendants were aware of the Application before the Judge, and although 149’s Application did not specifically seek to set the NB judgment amount, it is obvious that, in order to set the judgment against the Appellant on his Guarantee, the indebtedness of NB to 149

would also have to be determined. Setting the NB judgment amount earlier would, if anything, benefit the Appellant and the OtherDefendants as it stops the accrual of contractual interest earlier. 149 did not and does not seek to delay the setting of the NB judgment tomaximize contractual interest under the Mortgage.

In any event, if there was a concern about the calculation of the NB judgment amount,it could be remedied by adjourning the process to calculate the interest until the Other Defendants could be heard, rather than staying itscalculation until the Action against the Other Defendants is finished. [105] The Appellant does not point to the potential of saving of resources by staying the Action against him, or any other relevantfactors that would warrant staying the Action against the Appellant.

Nor has the Appellant addressed the potential impact of hisproposed stay on the Counterclaim. [106] I am not persuaded that the situation warrants the exercise of my discretion to stay the Action against the Appellant pending theresolution of 149’s claims against the Other Defendants. [107] In the event the “tripartite test” applies to this characterization of the Appellant’s stay application, I would find that there is noarguable issue to be determined in the remaining claims in the Action that will affect the judgment amount.

For the reasons set out in thenext section, I would also find that the Applicant would not suffer irreparable harm if the stay is not granted and that the balance ofconvenience does not favour the imposition of a stay. 2. Should Enforcement or Execution of a Judgment Against the Appellant be Stayed PendingDetermination of the Action? [108] The Appellant also argues that, if the amount of judgment is set against him, there should be a stay of execution pending thedetermination of 149’s claims against the Other Defendants.

The court has jurisdiction pursuant to rule 1.4(2)(h), Judicature Act section17(1)(a), Civil Enforcement Act section 5(1)(d), and its inherent jurisdiction, to grant a stay of execution of a judgment. [109] The test for a stay of execution is the same whether it is pending trial in the action or pending other related proceedings: AttilaDogan Construction and Installation Co Inc v AMEC Americas Limited, 2015 ABCA 406 at para 33 [Attila CA]; HML ContractingLtd v Pinder, 2022 ABCA 185 at paras 18-19.

Recently, in HML Contracting, the Court of Appeal described the test as follows, at paras18-19: The test for a stay of execution of a judgment pending resolution of a second action is the well-known tripartite test. The applicant mustshow (1) that there is an arguable issue, (2) that it will suffer irreparable harm if the stay is not granted, and (3) that the balance ofconvenience between the parties favors the granting of a stay: Attila CA at para 33; see also Desautels Creative Printing Papers Inc vPrintcrafters Inc (1999), (MB CA), 138 Man R (2d) 309, [2000] 4 WWR 575 (CA).

Even if the tripartite test is not met, the court has a residual discretion to grant a stay “when the interests of justice so require”: Attila CAat para 33. [110] The factors I assessed above when I considered the stay of the Action against the Appellant are also relevant in considering astay of execution of the judgment, and I have considered them here as well. I also assess the tripartite test specifically below. a.

Is there an Arguable Issue? [111] Unlike an application for a stay pending appeal (where the determination of whether there is an arguable issue focuses on themerit of the appeal challenging the underlying order), the Appellant does not (and cannot) challenge the Prowse Order as it was grantedyears ago and was never appealed.

There is no arguable issue that he can raise respecting his liability to 149. [112] The Appellant’s argument is founded on the Alleged Agreement and Cruise’s subsequent communications to him, which hesays induced him to support 149’s claims on the guarantees and not to oppose or appeal the Prowse Order. He describes it as an “estoppellike argument”, without providing any particulars or authorities.

The Appellant’s arguments are misguided. [113] The first problem with the Appellant’s position is that the Alleged Agreement was executed long after the Appellant hadalready admitted and acknowledged his liability on his Guarantee when he filed his Statement of Defence and his Defence to theCounterclaim, and swore his October 2014 affidavit. [114] In any event, on its face and based on the affidavit and cross-examination evidence, the Alleged Agreement was, at best, anarrangement between Cruise and the Appellant in their personal capacities, not one between 149 and the Appellant.

Further, Cruise’scommitment in the Alleged Agreement was to support a resolution by 149 whereby “149 will release [the Appellant] from his personalguaranty provided that [Julyo] replace the personal guaranty with a limited guaranty as per terms and conditions proposed in the attacheddraft agreement”. The terms of the draft agreement are unclear and were not attached. Cruise’s commitment was also arguablyconditional on a number of things, including (

a) a resolution by 149; (

b) Dave Dhaliwal becoming available to attend a director’smeeting; (

c) papering of an agreement with 149; (

d) review and approval by 149’s counsel that Cruise would not be in breach of hisduties to 149; and (

e) the Appellant not voting in favour of an existing NB proposal or “any other NB proposal that is prejudicial to 149”and Cruise. The evidence discloses that no resolution of 149 was ever presented, no agreement between Julyo and 149 was everprepared, and no advice from or approval of 149’s counsel was ever obtained.

Cruise also testified that the Alleged Agreement wasinvalid, including because the Appellant voted in favour of a proposal against 149 and Cruise’s interest in August 2015 when hesupported the appointment of Raj Uppal (one of the Other Defendants) to the 149 board to fill a vacant board position caused by theAppellant’s earlier resignation. In all these circumstances, the Appellant has not established an arguable issue that the AllegedAgreement, even assuming it was binding on Cruise, was binding on 149 so as to support a stay of execution.

The Appellant has notmade any claim against 149 or Cruise in respect of the Alleged Agreement or suggested that he intends to make any such claim in theAction or otherwise. [115] In cross-examination, the Appellant also testified that Cruise, based on discussions with him, led the Appellant to believe that he

did not need to appeal the Prowse Order because his Guarantee was going to be replaced with a guarantee from Julyo. He was notspecific as to when these statements were made. If they were made by Cruise on behalf of 149, then they may have provided somesupport for the Appellant’s “estoppel-like” argument. However, as noted above, on August 31, 2015, Mr. Uppal was appointed to the149 board. Mr. Uppal was then immediately appointed 149’s President, he directed 149’s counsel to stop all proceedings to collect onthe guarantees, and Cruise was effectively relieved of his authority to act on behalf of 149.

Cruise did not gain control of 149’s claims onthe guarantees until December 2015 when he applied for and obtained the Derivative Action Order. Based on the foregoing, during thetime the Appellant’s appeal period to appeal the Prowse Order was running, Cruise could not speak on behalf of 149.

The Appellant hasnot shown an arguable issue that Cruise’s statements to the Appellant about the appeal of the Prowse Order were made on behalf of 149.Again, here, the Appellant has not filed a claim against 149 or Cruise for Cruise’s statements to the Appellant about the appeal of theProwse Order. [116] I have also considered whether the Appellant has raised an arguable issue about the calculation of the amount of the judgmentagainst him. As noted above, the Appellant abandoned any argument that the Judge’s calculation of the judgment amount was in error,and he has not raised any arguable issue.

Even if he had not abandoned his argument, he did not suggest any other amount. [117] Although I need not go any further, in case I am wrong and there is an arguable issue, I will briefly address irreparable harm andbalance of convenience. b. Is there any Irreparable Harm? [118] The Appellant did not seek a stay of the Order pending this Appeal.

He suggests that he will suffer and has been sufferingirreparable harm “as the only guarantor whom execution is being levied against...and the actions of 149 including the [sic] have deprivedhim of any formal contribution or third party remedy with respect ot [sic] the other guarantors”. In oral argument, he baldly stated that heis too late to seek contribution and indemnity. [119] In my view, the alleged harm the Appellant raises is the consequence of his litigation strategy.

It is untenable for a party topoint to the consequences of its strategic litigation decisions and then attempt to characterize those consequences as irreparable harm. [120] In any event, the Appellant has not discharged his onus to establish that any harm he may suffer if the judgment is executedupon would be irreparable. It is unclear what “formal contribution or third party remedy” he refers to in his argument that he once heldand has been or will be deprived of.

The Appellant provided no evidence or authority to support these claims or argument. [121] What is clear, however, is that the Appellant, even though he remains a party in the Action, has not asserted, does not nowassert, and does not say he intends to assert in the future, any existing or future claim that might be set-off against the judgment amountowing to 149. Nor has the Appellant indicated that he intends to seek contribution from the Other Defendants if he satisfies the judgmentagainst him, based on joint and several liability or otherwise.

He also does not reveal any theory upon which such a contribution claim (ifit exists or he at some point advances one) would be thwarted, or his position would be irreparably harmed, if 149 is permitted to collectagainst him before the Other Defendants’ liability t

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