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Monday Morning Case Bites for April 27, 2020

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Amanda Kostek & Steven Graham

HOOPP Realty Inc v Emery Jamieson LLP, 2020 ABCA 159
Limitation Period

Fode v Paragon Gaming EC Company, 2020 ABQB 266
Inordinate Delay | Application to Strike | Presumption of prejudice rebutted

HOOPP Realty Inc v Emery Jamieson LLP, 2020 ABCA 159

In HOOPP Realty Inc v Emery Jamieson LLP, 2020 ABCA 159 the Alberta Court of Appeal confirmed that the knowledge required for a Limitation Period to apply is the knowledge of an injury, and not the legal cause of action: 

[55]           The Limitations Act is focused on knowledge of an injury, not the cause of action: Sun Gro Horticulture Canada Ltd v Metal Building Sales Inc., 2006 ABCA 243 at para 11.

[56]           This Court has adopted the guidance from Novak v Bond, 1999 CanLII 685 (SCC), [1999] 1 SCR 808, 8 WWR 499 as to when an injury would warrant bringing a proceeding. This provision speaks not to the legal strength of a plaintiff’s case for recovery, but to the circumstances of the plaintiff: Nipshank v Trimble, 2014 ABQB 120 at para 9.  As set out in N(J) v Kozens, 2004 ABCA 394: 

[14]      In Novak v. Bond, supra, Major, J. noted that the critical time is one “at which a reasonable person would consider that someone in the plaintiff’s position, acting reasonably in light of his or her own circumstances and interests, could – not necessarily should – bring an action. This approach is neither purely subjective nor purely objective. The question becomes: ‘in light of his or her own circumstances and interests, at what point could the plaintiff reasonably have brought an action?’” (at para. 81)  McLachlin, J. (as she then was), speaking for the majority in the same case, also espoused a variant of a “restrictive subjective/objective approach” that takes into account the plaintiff’s “important and substantial interests.” (at para. 38), adding that

“purely tactical considerations have no place in this analysis.” (at para. 81) Time begins to run, she explained, when, “in light of the plaintiff’s particular situation, the bringing of a suit is reasonably possible, not when it would be ideal from the plaintiff’s perspective to do so.” (at para. 84) 

[15]      McLachlin, J. in Novak provided the following as examples of when a plaintiff may not reasonably be able to bring an action when viewed objectively but with regard to the plaintiff’s own situation: 

(a)        the costs and strains of litigation would be overwhelming to him or her,
(b)        the possible damages recoverable would be minimal or speculative at best, or
(c)        other personal circumstances combined to make it unfeasible to initiate an action. 

The focus on limitations is whether facts are known, and not the consequences of those facts: 

[57]           HOOPP’s arguments focus on the legal consequences of the facts known by the Dentons defendants, not the facts. Discovery relates to the facts, not the applicable law or any assurances of success: Weir-Jones at para 56. Similarly, discoverability does not require perfect knowledge or certainty that the claim will succeed: Weir-Jones at para 58. 

[58]           HOOPP sued the Emery Jamieson defendants in contract as well as tort and breach of fiduciary duty. The failure to serve the notice to arbitrate is a non-performance of an obligation and constitutes the “injury” under the legislation. As it relates to the claim against the Emery Jamieson defendants, all other losses flowed from that injury. Additionally, there was much more than merely a suspicion that an injury occurred by November 4, 2009 at the latest. There was no doubt that the arbitration notice had not been served by then. 

Finally, the Court directed that tactical decisions play no role in determining whether an action is warranted: 

[59]           Finally, HOOPP has not put forward any personal circumstances which are serious, significant and compelling that made it unfeasible to initiate an action earlier. Waiting until the Clark Builders action was actually struck focuses on the strength of the claim against the Emery Jamieson defendants.  These are tactical concerns that have no place in the “warrants bringing a proceeding” analysis.   

Fode v Paragon Gaming EC Company, 2020 ABQB 266

The Court considered an application to strike the claim for inordinate delay in relation to a bar fight that occurred in 2007.   The Court concluded that 8 years to complete litigation steps up to answering undertakings was inordinate: 

[16]           To put it another way, the case against Ms. Sanderson could have been determined summarily in 2014, if Ms. Fode had been an early adopter. It would have been ideally suited for a Rule 7.2(a) application for judgment. So the question becomes, in the face of the Applicant’s admissions in March of 2014, is the roughly five-year delay from an admission of liability to an application for judgment, a three year delay in answering undertakings after Questioning, or just over eight years to complete disclosure, inordinate? In my view, it is. 

The Court said the following concerning uncomplicated law suits: 

[17]           Is this inordinate delay excusable?  Let us pause for a moment to put things into perspective. Assume, for the sake of argument, that we take steps in a relatively uncomplicated lawsuit, like this one, using the maximum times permitted by the rules: one year to serve, twenty days to defend, five months for Affidavits of Records. That would take about a year and a half. Then we need Questioning, perhaps further production and, where necessary, expert reports or IME’s. Assume six months for the latter steps; which I acknowledge is ambitious given that some of these things may depend on third parties who are beyond our control. 

[18]           There are two points to this exercise. The first is to show that for a relatively uncomplicated lawsuit, having it summarily determined, or set for trial could be accomplished within two years from the Statement of Claim, or four years from the event; if we figure the limitation into the equation. The second point is that any delay in excess of this is due to counsel, or the parties themselves. This is where the excuses come in. 

The Court  categorized the types of excuses for delay, and made the following comments: 

[20]           If we examine the decided cases, excusable delay falls into several categories; the most common being: defence, or third-party delay, defence acquiescence, or health issues. Less common are: the pace of an inextricably linked action that would determine some or all of the issues in the lawsuit, complexity, or representation issues. Instances of institutional delay, natural disaster, family matters, litigation financing, changing action control, clerical errors, incarceration and settlement negotiations have sometimes also been found to constitute acceptable excuses for delay. 

[21]           All of these instances seem to have a common theme. For the most part, an acceptable excuse for delay is caused by events outside of the control of the plaintiff. But that is not the end of the story. We are also obliged to examine the plaintiff’s response to an unexpected, or unanticipated delaying event. In the case of a loss of counsel, for example, we have to examine the efforts to find a replacement. In the case of defence delay, we are also obliged to examine whether the plaintiff’s response was appropriate, or whether they should perhaps have taken steps to compel the defendant to do the thing that provided the obstacle. The Transamerica case affirms that a defendant is not without obligations to move a matter forward, especially in view of the foundational rules. Typically, defence delay disables the defendant from relying on the delay as against the plaintiff. It appears, from the decided cases, that absence of fault and excusability are closely linked. All instances of excusable delay have to be considered in context, on a case-by-case basis. 

Notwithstanding the Court’s finding that the delay was inordinate, and without excuse, it concluded that there was no prejudice, because liability had been admitted: 

[24]           The role of prejudice in this type of application is pivotal. Apart from the public policy considerations engaged by delay; which are described in Humphreys (and elsewhere), prejudice is what this rule is all about. 

[25]           There is no proof of actual prejudice. Serious prejudice, however, is presumed by the operation of Rule 4.31(2). 

[26]           The Applicant speculates that there is actual prejudice arising from the settlement with the Paragon Defendants and the potential unavailability of Paragon employees as witnesses, but it is difficult to see what these employees might now have added to a fair and just determination of the outcome of this action.   

[27]           This is not a case of having untoward, unproven allegations hanging over your head and a delay in being able to clear your name. The Applicant admitted liability six years ago. 

[28]           What difference have these many days made? All they really amount to is a postponement of the Applicant’s obligation to pay damages. Any prejudice there might have been can fully be addressed with a determination of costs and interest. 

As a result, the action was permitted to continue: 

[29]           I am satisfied that there is no actual prejudice arising from the delay and that the presumption built into Rule 4.31 is rebutted on the facts of this case.