2023 MBKB 167, 2023 MBKB 167

Date: 20231123 File No.: FD 14-01-08453 (Winnipeg Centre) Cited as: Wozney v. Struth Indexed as: 2023 MBKB 167 COURT OF KING’S BENCH OF MANITOBA (FAMILY DIVISION) B E T W E E N: CHRISTINE HEATHER WOZNEY, ) ) ) L.R. Fishman for the petitioner petitioner, ) ) -and- ) ) HARLEY ROBERT STRUTH, respondent. ) ) ) ) ) Brittney Fehr for the respondent ) Judgment Delivered: ) November 23, 2023 THOMSON J.

Introduction [ 1 ] The respondent seeks an order pursuant to Rule 24.02(1), dismissing “all claims in this proceeding relating to division of property, unjust enrichment, constructive trust, non-dissipation and spousal support for reason of long delay” (document no. 11, p. 1), and that this order contain a provision that this dismissal be a defence to a subsequent action under Rule 24.06(1).

Background [ 2 ] To understand the peculiar issues that arise in this particular case, and the somewhat nuanced positions of the parties regarding the relief requested under Rule 24.02(1), some detailed examination of the background to the proceeding is warranted. [ 3 ] The petition was filed on August 11, 2014, and an answer followed on August 27, 2014. The petition, as later amended, seeks various relief as set out in paragraph 1 above, as well as parenting time and child support. The litigation in the first few years was intense and conflictual.

At least one expert was engaged to prepare an assessment report concerning the parties’ children, and parenting issues attracted the attention of the parties as their litigation priority. [ 4 ] In the normal course at the time, the parties appeared before me at several case conferences beginning in September 2014. At a

case conference continuation on April 25, 2017, trial dates were set for May 2018. It was anticipated that the assessment report notedabove would then be available. As the parties announced they were unable to agree, a separate trial to determine their date of separationwas set for January 18, 2018. (They settled that issue before that trial.) Counsel were also pointedly directed to promptly proceed withThe Family Property Act, C.C.S.M. c. F25 (the “FPA”) accounting before the master (now associate judge), and told again at a laterappearance on October 16, 2017. They never did.

This desultory attention paid by counsel to the court’s directions, and to theappropriate pace of the litigation, became a feature of the proceeding. (The respondent had different counsel at that time.) [5] At the following case conference continuation on March 7, 2018, I was told that counsel had yet to exchange affidavits ofdocuments or to conduct examinations for discovery, much less to have initiated the FPA accounting (which would obviously beessential to adjudication of the spousal support claim pled). Consequently, I severed issues for the pending trial which was to commencein May 2018.

Specifically, the pending trial dates (as shortened) were to be limited to the parenting and child support disputes, with thebalance of the issues being adjourned pending compliance by counsel with the court’s directions.

A further case conference wasconvened for trial-readiness purposes to proceed on May 2, 2018. [6] On the eve of that trial on parenting and child support matters (late Friday morning, before the Monday commencement),counsel jointly sent a letter dated May 11, 2018, to the Trial Coordinator (TCO) advising that, “this matter has been settled... [a]n Orderwill follow in due course”, and the trial was then cancelled. [7] I became aware of the trial cancellation, and of the existence of that letter about five years later, on February 16, 2023, when therespondent’s current counsel submitted a Form 70DD to my attention, asking to bring a motion to dismiss for delay; there was never anappearance set before me, nor any communication from counsel between May 2, 2018 (the date of the trial-readiness case conference),and that date. [8] Material to this motion, the only court appearance concerning the remaining issues in the litigation as severed, after that May 11,2018 letter and prior to the Form 70DD filing this February, was before the master on June 4, 2018. [9] That is, the Court Registry discloses no other appearances or activity whatsoever between June 4, 2018 and February 16, 2023 -a span of four years and eight months. [10] I became aware of the June 4, 2018 appearance only upon the bringing of the subject motion.

What was also then disclosed to mewas the existence of a written settlement agreement between the parties addressing parenting time and child support, made shortly beforethe May 11, 2018 letter, and upon which both parties claim reliance in addressing the merits of the motion before me. The Law [11] As discussed in Duncan v.

Magnusson, 2023 MBKB 33:[1] [4] There are two pathways to possible dismissal under Rule 24: Rule 24.01 deals with overall delay in the subject litigation as a wholeand focusses on gaps, while Rule 24.02 is a “drop-dead” rule requiring dismissal of an action if there has been three or more years ofinactivity in the litigation (no “significant advance in an action”), subject to the discrete exceptions specified therein. It is Rule 24.02which has relevance in this case. [5] While there are a number of authorities which I have considered (see: D.L. et al. v. C.P. et al., 2019 MBQB 42 ; Fehr et al.v.

Manitoba Public Insurance Corporation et al, 2019 MBQB 64 ; The Workers Compensation Board v. Ali, 2020 MBCA 122; Krasulja v. Manaigre, 2021 MBQB 131 ; Buhr v. Buhr, 2021 MBCA 63 ; Papasotiriou-Lanteigne v.Tsitsos, 2022 MBQB 41 [overturned on other grounds]; WRE Development Ltd. v. Lafarge Canada Inc., 2022 MBCA 11; Shreddfast Inc. v. Business Development Bank of Canada, 2023 MBCA 9 ), I lean heavily upon MacPhailJ.’s judgment in Ruchotzke v.

Ruchotzke, 2022 MBQB 153 , which is attuned to the unique features of Family Divisionproceedings. [6] In elaborating upon the law, I can do no better than to reproduce a portion of her decision here: [18] Rule 24 provides for dismissal of an action for delay.[5] [19] While Rule 70 governing family proceedings[6] does not contain a provision for dismissal of an action for delay, the Rulesgenerally apply to family proceedings “except where [Rule 70] provides otherwise, expressly or by implication” (Rule 70.02). [20] Rule 24.01 applies to dismissal for delay that results in significant prejudice to a party and Rule 24.02(1) to dismissal for longdelay.

Rule 24.06 addresses the impact of a dismissal for delay on a future action. Those Rules provide: RULE 24

DISMISSAL OF ACTION FOR DELAY MOTION FOR DISMISSAL FOR DELAY Dismissal for delay 24.01(1) The court may, on motion, dismiss all or part of an action if it finds that there has been delay in the action and that delay hasresulted in significant prejudice to a party. Presumption of significant prejudice 24.01(2) If the court finds that delay in an action is inordinate and inexcusable, that delay is presumed, in the absence of evidence to thecontrary, to have resulted in significant prejudice to the moving party.

What constitutes inordinate and inexcusable delay 24.01(3) For the purposes of this rule, a delay is inordinate and inexcusable if it is in excess of what is reasonable having regard to thenature of the issues in the action and the particular circumstances of the case. Dismissal for long delay 24.02(1) If three or more years have passed without a significant advance in an action, the court must, on motion, dismiss the actionunless (

a) all parties have expressly agreed to the delay; (

b) the action has been stayed or adjourned pursuant to an order; (

c) an order has been made extending the time for a significant advance in the action to occur; (

d) the delay is provided for as the result of a case conference, case management conference or pre-trial conference; or (

e) a motion or other proceeding has been taken since the delay and the moving party has participated in the motion or other proceedingfor a purpose and to the extent that warrants the action continuing. EFFECT ON SUBSEQUENT ACTION Not a defence 24.06(1) The dismissal of an action for delay is not a defence to a subsequent action unless the order dismissing the action providesotherwise.

Failure to pay costs 24.06(2) Where a plaintiff's action has been dismissed for delay with costs, and another action involving the same subject matter issubsequently brought between the same parties or their representatives or successors in interest before payment of the costs of thedismissed action, the court may order a stay of the subsequent action until the costs of the dismissed action have been paid. [21] Rule 1.03 defines “action” as “a civil proceeding, other than an application, that is commenced in the court by … (

e) a petition.”Neither party addressed whether the term “action” did or did not include the Answer and Petition for Divorce filed by the respondent,presumably because such a pleading is in essence akin to a Statement of Defence and Counterclaim in that it responds to the claims in aPetition for Divorce, and asserts claims by a respondent. Rule 24.07 provides that “Rules 24.01 to 24.06 apply, with necessary changes,to counterclaims, crossclaims and third party claims” (emphasis added). (See also Esler v. Busch, 2022 MBQB 76 .) [5] Rule 38.12 applies to dismissal of an application for delay.

[6] Defined in Rule 70.01 as “a family proceeding within the meaning of

section 41 of The Court of Queen’s Bench Act”. [emphasis in original] Analysis and Decision [ 12 ] When this matter was argued before me, the petitioner seemed to ultimately concede that there has been three-plus years of delay without any significant advance having been taken in the proceedings (which concession appeared obligatory, given the factual background I have recited above). [ 13 ] Nonetheless, I here observe that the petitioner did make an initial tepid argument that, as the record before me reveals some text communications between the individual parties themselves in 2021/22, I ought to consider whether this evidence amounts either to a step taken in the proceeding, or to an agreement to pause the case.

In my view, neither submission has any merit, nor is of any moment to disposition of this motion. Given the timing and the substance of the communications, and having regard to the applicable authorities, they clearly do not constitute or amount to a “significant advance” in the proceeding. (See: Fehr et al v. Manitoba Public Insurance Corporation et al , 2019 MBQB 64 , at paras. 16-20 ; WRE Development Ltd. v.

Lafarge Canada Inc. , 2022 MBCA 11 , at paras. 10 and 17-19 .) And, as discussed further below, there is simply no evidence of an express agreement to delay the case. [ 14 ] Accordingly, Rule 24.02(1) applies presumptively, and dismissal for delay must follow, unless one of the specified exceptions under Rule 24.02(1) applies. This is where the petitioner’s case against dismissal really rests. She asserts that four of the five delineated exceptions save her. They do not. [ 15 ] First, the petitioner says Rule 24.02(1)(

a) has application. The written settlement agreement the parties entered into in May 2018 resolving the contest between them about parenting time and child support contains a provision (which counsel incorporated into the consent final order respecting parenting time and child support) which the petitioner says indefinitely paused the litigation between them.

It reads: 3.89 All other issues between the parties set out in the pleadings or as they may be amended, including but without limiting the generality of the forgoing, spousal support, property issues, and costs, remain unsettled and shall be dealt with by the parties or litigated as they may be advised. [ 16 ] The respondent says that term in their agreement actually has the opposite meaning – making it clear that the remaining issues between them remain live and are to continue to be litigated. That is the

interpretation which makes more sense to me, on a plain reading of the language of the provision. Moreover, events which followed immediately after the agreement was executed included the parties actually continuing to advance the case (albeit not for very long), with the court appearance before the master already noted in paragraph 8, above. To the extent the parties directly communicated with each other by text subsequently about an appraisal of the former family home, there is nothing in those exchanges sufficient to imply agreement to delay, as the petitioner says. In any event, Rule 24.02(1)(

a) requires express agreement. ( See: WRE Development Ltd. , at para. 31 .) There is none here. [ 17 ] The petitioner’s second plea is that her case is saved by the exceptions to dismissal in Rule 24.02(1)(

b) and (c), which argument seems to hinge on the terms of the final order I signed October 4, 2023, years after the written settlement agreement and adjournment of the trial in May 2018. Again, this submission is without merit. It relies upon a creative argument that requires a superficial conflation of the terms of the settlement agreement with those of the final order (which are separated by a span of five-plus years of inactivity), and the ignoring of the order severing the issues before the court. [ 18 ] Finally, the petitioner submits that Rule 24.02(1)(

e) assists her case against dismissal, by suggesting that the respondent has “since the delay... participated in the motion or other proceeding for a purpose and to the extent that warrants the action continuing” (document no. 136, para. 3.7). I reject the argument. The respondent’s conduct since February 2023 has been laser-focused upon dismissal of the moribund case of the petitioner, which remains before the court.

To the extent he has sought relief himself, and engaged the petitioner, it has been regarding the discrete matter of seeking to enforce the settlement agreement regarding parenting time and child support, and/or to vary the final order respecting those issues only.

The petition outstanding since 2014 and the remaining relief therein is what he has consistently and singularly sought to have dismissed. [ 19 ] The remaining issue, then, is whether the order I now pronounce dismissing the petitioner’s case for long delay pursuant to Rule 24.02(1) ought also to include a provision under Rule 24.06(1), specifying that this order of dismissal be a defence to a subsequent action. [ 20 ] Both counsel made submissions making reference to my decision in Duncan on this point.

In the case at bar, it is the respondent who is the moving party on the dismissal motion who conceded in his answer that there be an equal division of family property, which was amongst the relief sought in the petition filed. It was the converse in Duncan ; there the petitioner was the moving party, and he had claimed an equal division of family property in his pleading, which was agreed to in the answer filed.

I found there had been long delay under Rule 24.02(1) and determined that I must dismiss the various claims of the respondent in her answer, and barred her refiling under Rule 26.02(1), with one exception.

I concluded that a discretion was reserved to me, despite the mandatory language in Rule 24.02(1), pursuant to Rule 26.02(1), and I excepted the subsequent filing of a claim by her to an equal division of family property, citing their years long understanding (reflected in the pleadings they filed) that there was no contest on that issue (and the petitioner’s intimation that he would, upon this dismissal, withdraw his own claim, leaving the respondent adrift and empty-handed when it came to the equalization payment to her).

[21] I now have the benefit of the Court of Appeal’s decision in Papasotiriou-Lanteigne v. Tsitsos, 2023 MBCA 66 ,released after both the Ruchotzke v. Ruchotzke, 2022 MBQB 153 and Duncan judgments, and which clarifies the correctinterpretation of Rule 24.06(1) addressing the effect of the dismissal of an action for delay. It also gives direction regarding the properexercise of the judicial discretion available under Rule 26.02(1). [22] The Court of Appeal’s judgment in Papasotiriou-Lanteigne, respecting foundational principles, provides: [52] Rule 24.06(1) has a long history and a clear rationale.

The objective of the provision is to address the effect of a dismissal of anaction for delay and potentially bring closure to a claim where there has been no final determination on the merits where it is in theinterests of justice to do so. As I have said previously, the rule does not undermine timely and proportionate civil justice provided thoseprinciples are properly considered in the exercise of discretion pursuant to the rule. ….. [65] The innovation of r 24.02(1) is that, if its conditions are met, an action “must” be dismissed for delay; there is no judicialdiscretion to conclude otherwise.

The drop-dead rule creates a mechanism to provide justice for both parties while, at the same time,ensuring the overall integrity of the civil justice system as a whole (see Buhr at paras 33-35)… [23] In terms of the proper exercise of discretion, the court also states in Papasotiriou-Lanteigne: [45] . . . while I accept the comments in Ruchotzke and Duncan that there may be a good reason to decline to exercise the discretion tomake a dismissal for delay a defence to a subsequent action pursuant to r 24.06(1), I would say that, regardless of whether the case arisesin the General Division or the Family Division of the Court of King’s Bench, the discretion should be declined only for a reason ofsubstance, not a speculative or fanciful reason (see River Ridge 2 Facility Inc v Manshield Construction LP et al, 2023 MBKB 61 atparas 50-51). ….. [48] As was said in Glenwood Label & Box Mfg Ltd v Brunswick Label Systems Inc et al, 2019 MBCA 12, “unreasonable departurefrom the expected standard of proportionate, timely and cost-effective civil litigation” will not be tolerated lightly (at para 5).

The judgewas correct to the extent that, absent a reason of substance, the failure to exercise the discretion under r 24.06(1) to make the dismissal ofa plaintiff’s action for delay a defence to a subsequent action would undermine the purpose of rr 24.01 and 24.02 in weeding out inactivecases and addressing complacency in advancing civil actions. The architecture of rr 24.01 and 24.02 on the merits of dismissal build in anumber of safeguards to ensure that essential justice is done in deciding whether the action should be dismissed for delay.

Therefore, thediscretion under r 24.06(1) must be exercised mindful of and consistent with the determination under either rr 24.01(1) or 24.02(1). [24] In the case before me now, the order for the FPA accounting pronounced by consent of the parties does not oblige one or theother party to have carriage of the reference. It cannot be said that, there being no issue between them regarding an equal division asstated in their pleadings, the petitioner any more than the respondent delayed that aspect of the proceeding, and the quantification of anequalization amount, due from the respondent to the petitioner.

This is clearly distinct from the petitioner’s other claims, including tospousal support and to a constructive trust, which were hers and hers alone to pursue. She did nothing to advance them for many years,and those discrete claims were always contested by the respondent in his pleading. [25] Mindful of the constraints upon the exercise of my discretion under Rule 24.06(1), there shall be a provision in my orderdismissing the petitioner’s case for long delay which specifies that this dismissal is a defence to a subsequent action, except for thematter of a claim to an equal division of family property.

I carve out that discrete claim because the circumstances of this particular caseprovide a “reason of substance” to do so, and to ensure that “essential justice” is done. (See: Papasotiriou at paras. 45 and 61) Costs [26] Costs may be spoken to. J. APPENDIX “A” RULE 24.02 OF MANITOBA KING’S BENCH ENGLISH AND FRENCH

RULE 24 DISMISSAL OF ACTION FOR DELAY MOTION FOR DISMISSAL FOR DELAY RÈGLE 24 REJET DE L'ACTION POUR CAUSE DE RETARD MOTION POUR REJET DE L'ACTION Dismissal for delay 24.01(1) The court may, on motion, dismiss all or part of an action if it finds that there has bee n delay in the action and that delay has resulted in significant prejudice to a party. Rejet pour cause de retard 24.01(1) Le tribunal peut, sur motion, rejeter une action, en tout ou en partie, s'il estime qu'elle a fait l'objet d'un retard ayant causé un préjudice important à une

partie Presumption of significant prejudice 24.01(2) If the court finds that delay in an action is inordinate and inexcusable, that delay is presumed, in the absence of evidence to the contrary, to have resulted in significant prejudice to the moving party. Présomption de préjudice important 24.01(2) Lorsque le tribunal estime que le retard dont une action fait l'objet est inhabituel et inacceptable, ce retard est présumé, en l'absence d e preuve contraire, avoir causé un préjudice importan t à la

partie ayant présenté la motion. What constitutes inordinate and inexcusable delay 24.01(3) For the purposes of this rule, a delay is inordinate and inexcusable if it is in excess of what is reasonable having regard to the nature of the issues in the action and the particular circumstances of the case Retard inhabituel et inacceptable 24.01(3) Pour l'application de la présente règle, tout retard est inhabituel et inacceptable lorsqu'i l excède ce qui est raisonnable compte tenu des circonstances et de la nature des questions du litige.

Dismissal for long delay 24.02(1) If three or more years have passed without a significant advance in an action, the court must, on motion, dismiss the action unless (

a) all parties have expressly agreed to the delay; (

b) the action has been stayed or adjourned pursuant to an order; (

c) an order has been made extending the time for a significant advance in the action to occur; (

d) the delay is provided for as the result of a case conference, case management conference or pre-trial conference; or (

e) a motion or other proceeding has been taken since the delay and the moving party has participated in the motion or other proceeding for a purpose and to the extent that warrants the action continuing. Rejet pour cause de long retard 24.02(1) Lorsqu'au moins trois ans s'écoulent sans que des progrès importants n'aient lieu dans l e cadre d'une action, le tribunal la rejette sur motion, sauf dans l'un des cas suivants :

a) toutes les parties ont expressément accepté le retard;

b) il a été sursis à l'action ou l'action a été ajournée en conformité avec une ordonnance;

c) une ordonnance prolongeant le délai pouvant s'écouler avant que des progrès importants n'aient li

d) le retard découle d'une conférence de cause ou de gestion de cause ou d'une conférence préparatoire au procès;

e) une motion a été présentée ou une autre instance a été entreprise depuis le retard et la

partie ayant présenté la motion ou entrepris l'instance y a participé à des fins ou dans une mesure justifiant la poursuite de l'action eu dans le cadre de l'action a été rendue EFFECT OF DISMISSAL ON CROSSCLAIM OR THIRD PARTY CLAIM EFFET DU REJET SUR LA DEMANDE ENTRE DÉFENDEURS OU SUR LA MISE EN CAUSE Not a defence 24.06(1) The dismissal of an action for delay is not a defence to a subsequent action unless the order dismissing the action provides otherwise. Défense non acceptée 24.06(1) Le rejet d'une action pour cause de retard ne peut être opposé en défense à une action subséquente, sauf disposition contraire de l'ordonnance de rejet.

Failure to pay costs 24.06(2) Where a plaintiff's action has been dismissed for delay with costs, and another action involving the same subject matter is subsequently brought between the same parties or their representatives or successors in interest before payment of the costs of the dismissed action, the court may order a stay of the subsequent action until the costs of the dismissed action have been paid.

Défaut de paiement des dépens 24.06(2) Si l'action d'un demandeur a été rejetée avec dépens pour cause de retard et qu'une autre action relative au même objet est intentée subséquemment entre les mêmes parties, leurs représentants de la succession, ou leurs ayants droits avant le paiement des dépens de l'action rejetée, le tribunal peut ordonner le sursis de l'action subséquente jusqu'au paiement.