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 are continuing to demonstrate how Rule 4.31 can apply in Alberta’s courtrooms. This week’s example is a recent case involving a major Canadian bank alleging fraud against three defendants. Here is the breakdown of this case:
The fraud action against two initial defendants commenced in 2011, in which the plaintiff bank claimed that they obtained mortgages by providing false information and documentation in their applications. These two defendants filed a third-party claim against several people, including the individual alleged to have involved them in the mortgage fraud scheme.
Following this, the bank amended their claims to add the third individual as a defendant, and made several allegations surrounding how the three defendants worked together to commit mortgage fraud and divided up the resulting proceeds. The third-party defendant filed a statement of defence, and all defendants were questioned in 2012.
Eight years later, on October 13, 2020, the initial defendants applied to dismiss the action under Rule 4.31, with the third-party defendant doing the same on March 2, 2021. Both applications were heard together, and the Applications Judge declined to dismiss the action, finding that the bank rebutted the presumption of substantial prejudice to the defendants.
All necessary pre-trial steps were completed before the delay application was brought forward. According to the initial decision of the Applications Judge, she found that the case at hand was primarily a “documents case” rather than a “memories case,” stating that any memory-based evidence was “not complex or subtle” and that transcripts from questionings could be used to refresh memories.
Furthermore, the Applications Judge noted that the defendants did not provide any evidence to support an instance of prejudice under Rule 4.31, and found no evidence that other witnesses would be required for trial or that any documents would have gone missing or been destroyed.
The 2021 affidavit filed by the third-party defendant argued that due to the nature of his work, which often required background checks on him revealing that he is a defendant in a fraud case, he had lost many opportunities over the years. “Both in my personal life and professional life,” he wrote, “I have been denied financing and lenders have been unwilling to extend credit to me as a result of this action.” The Applications Judge did not consider this relevant to the question of substantial prejudice.
Come back on Friday for the solution and a brief explanation of the case in question.