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.
This week’s analysis of how Rule 4.33 applies to a case, our last installment in this month’s series on the subject, was left at a stalemate when we introduced it to you on Monday. In responding to the defendant’s application to dismiss the action for delay, the plaintiff pointed to two filings that they believed constituted significant advancements of the action – which were submitted two years and 364 days apart. Before going any further, be sure to read this introduction here if you haven’t already.
In the case of Déjà Vu Holdings Ltd. v. Securex Master Limited Partnership, 2018 ABQB 597, in order for the delay application to be dismissed and the action to continue, both filings had to fulfill this definition – a statement of defence to the defendant’s counterclaim and a supplemental affidavit of records. The court found that neither filing did so and dismissed the action, meaning that the answer to this week’s question is d).
For the final time, here is a reminder of Rule 4.33:
(2) If 3 or more years have passed without a significant advance in an action, the Court, on application, must dismiss the action as against the applicant, unless
(a) the action has been stayed or adjourned by order, an order has been made under subrule (9) or the delay is provided for in a litigation plan under this Part, or
(b) an application has been filed or proceedings have been taken since the delay and the applicant has participated in them for a purpose and to the extent that, in the opinion of the Court, warrants the action continuing.
The courts “apply a functional approach” when it comes to applying the ‘drop dead’ rule and determining if something is in fact a significant advancement. According to the decision, said approach asks “whether the advance in an action moves the lawsuit forward in an essential way considering its nature, value, importance and quality. The genuineness and the timing of the advance of the action are also relevant.”
Applying this approach focuses on the substance of a given step and how it affects the litigation, rather than the step itself. It is crucial to consider the “real quality of what was done in the context of the real issues in dispute over a given period; it is not just that a process was undertaken.”
Neither the statement of defence to counterclaim nor the supplemental affidavit of records were significant enough to continue the action. For the former, such a pleading is usually seen as a significant advancement, but this is not always the case. Recall that the court described the plaintiff’s statement as a “general, boilerplate denial.”
The same is true of the latter; often “the production of new information or documents can significantly advance an action,” but “the nature of the documents, and their importance to the litigation, must be examined.” Here, the affidavit was considered by the court as merely “a housekeeping step” for the plaintiff, due to a lack of new information that wasn’t already in the possession of the defendant.
Recall as well that the supplemental affidavit of records did include Déjà Vu Holdings’ general ledger, which purported to show deposits sent to them from Securex – the crux of the action in the first place. However, the action began in 2007, almost a decade before this affidavit was filed, and such a crucial document “ought to have been included in the original affidavit of records.” Therefore, the information in the balance sheets did not significantly advance the action, which was dismissed pursuant to Rule 4.33.
PRACTICE TIP
A plaintiff takes a significant risk by only advancing a claim in three-year increments. It is best to dispense with the three-year minus one day ‘safety net,’ as the plaintiff has done in this case, and complete each stage of a litigation as soon as reasonably possible. Not only does this eliminate the risk of a 4.33 application, but it upholds the plaintiff’s “responsibility of prosecuting their claims in a timely way” (XS Technologies Inc. v. Veritas DGC Land Ltd., 2016 ABCA 165 at para 7).
It is also the lawyer’s responsibility to perform all necessary functions in a timely manner, per Code of Conduct Rule 3.1-1(e). Merely avoiding the three-year ‘drop dead’ period by way of the safety net does not satisfy this responsibility.
Your lawyer made a mistake. Is it legal malpractice?
A failure to advance a civil litigation is often the result of the client’s conduct, but if a claim is dismissed because the client’s lawyer did not ensure that significant steps were taken within the three-year ‘drop dead’ period, the lawyer may be at fault.
Are you facing a dismissal for delay application? Carruthers Law can assist in opposing it, or determining whether you have a professional negligence claim against the lawyer handling your file. Contact us for a complimentary consultation to discuss your situation.