By Ian Carruthers and Noel Harper
DISCLAIMER: This blog is intended to inform the reader about how the law was applied in a particular case. It should not be taken as advice regarding the outcome of any other case, even one that may have similar facts. The Court’s decision will depend on the facts of each case. Please call 1-844-210-9511 or visit carrutherslaw.ca if you would like to know more about your specific case.
We have reached the end of our series on Rule 4.31, the Prejudicial Delay rule. In this week’s example, an Alberta town became involved in a wide-reaching suit relating to the failure of retaining walls in a residential property development. This case marks a bit of a homecoming for Carruthers Law, as the town at the center of this action is Cochrane, where we are based.
The town’s claim against the company responsible for the faulty retaining walls as well as numerous other defendants – Cochrane (Town) v. Austech Holdings Inc., 2022 ABCA 377 – ended by being dismissed for delay by the case management judge. Therefore, the answer to this week’s question is a).
For the final time, here is Rule 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 the 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.
The third prong of the rule referring to the applying party’s potential responsibility for the delay was added in 2022, just in time for the case to be heard. Rule 4.31 also notably refers to a delay “in an action” meaning that the entirety of the action must be reviewed when an application is made.
“Delay is always a matter of degree,” reads the decision, and as such, a “reasonable” point for a litigant to have reached within the process is up for discussion and cannot be precisely defined. Determining the extent of a delay is affected by “an examination of the record, the submissions of counsel, and the experience of the judiciary.”
Following the eight years of activity between when the initial claims were filed and the dismissal applications were presented to the court, only a limited amount of questioning had been completed – not a “reasonable” amount according to the case management judge – and the defendants could not present a single expert report to use at trial. There were several reasons why the actions were not ready for trial at the time of the dismissal applications and a significant lack of activity on many essential steps needed to move the litigation along.
Because settlements had been previously reached with some defendants during this period, the total number had been substantially reduced, and some of the third-party claims had also been resolved. However, despite conceding that this was proof of the appellants working to progress the litigation forward, the court found that these steps “did not reduce the number of issues to be considered at trial, nor did they assist in the development of the necessary evidential framework for those issues to be addressed at trial in a manner which was fair to every party.”
Another issue, which has come up in several of our Rule 4.31 examples, is the notion that the respondent’s memories would have faded during the period of delay. Because each respondent played their own small role in the development, they were each necessary to paint a complete picture of the events at hand. Also, key documents and records were no longer available to help refresh the memories of their witnesses, and the case at hand was not primarily a documents case.
To determine what took place during the design and construction of the retaining walls, and if the professionals involved met the necessary standards of care and skill in their work, the court would require viva voce testimony rather than relying on written affidavits. One defendant company involved in the project had since declared bankruptcy, which would impact the allocation of liability and damages. Given all these potential instances of significant prejudice, the appeal was dismissed and the order to dismiss the action was upheld by the court.
PRACTICE TIP
A notable distinction between 4.33 “drop dead” applications and 4.31 “significant prejudice” applications is the time frame that is considered. 4.33 applications deal in three-year segments. An action, no matter how lengthy it has become, will not be struck under Rule 4.33 as long as there is no period of three years or more without considerable progress. In contrast, rule 4.31 refers to delay “in an action” which, as mentioned, requires a review of the entire litigation.
Thus, plaintiffs must keep their eye on the destination: trial. Sometimes, litigation can be very active – parties pursue settlement opportunities, defendants are removed, and individual steps in complex cases take longer than usual. However, plaintiffs must be focused on advancing the action steadily toward trial by reducing the number of issues to be considered and developing the necessary evidential framework for those issues to be fairly addressed. Otherwise, they can find themselves several years and tens of thousands of dollars in legal fees into an action just to have it collapse under a 4.31 application.
Your claim was struck for delay. Is it malpractice?
The longer a claim takes to resolve, the greater the chance it will fall to a 4.31 application. A failure to advance an action is often the result of the client’s conduct, but if an application arises because counsel kept the case active without meaningfully advancing the action toward trial, the lawyer may be at fault.
Are you being retained in the middle of a court action that could be subject to a 4.31 application? Carruthers Law can help determine whether your client’s former lawyer was negligent. Contact us for a complimentary consultation to discuss your situation.