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Monday Morning Case Bites for February 11, 2019

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

Edited by Amanda Kostek & Christie Dewar

Delver v Gladue, 2019 ABCA 54 (CanLII)
Dismissal for Long Delay l Unsuccessful Settlement Discussions and Unsuccessful Trial Scheduling

Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49
Summary Judgment l Court of Appeal’s new test

Condominium Corporation 0812755 v IBI Group Inc, 2019 ABQB 75
Summary Dismissal l Limitation Period

Delver v Gladue, 2019 ABCA 54 (CanLII)

This was an application for dismissal due to long delay under Rule 4.33. The application was successful at the Master level, and overturned on appeal. The Court of Appeal allowed the appeal, and dismissed the action. The plaintiff argued that two steps significantly advanced the action, including an attempt to have the defendants consent to trial of an issue on consent, and a without prejudice offer enclosing a settlement offer of $250,000:

[8] The chambers judge considered the steps that, according to the plaintiff, significantly advanced the action: (i) her counsel attempted to have the defendants consent to a trial of an issue on whether Lariviere was driving the vehicle with the owner’s consent; and (ii) her counsel provided a without prejudice letter indicating a willingness to recommend to her client a full and final settlement in the amount of $250,000. The chambers judge described these proposals at para 9:

[9] The settlement offer was dated July 12, 2013, and rejected by the insurer on August 21, 2013. The discussions respecting trial of an issue occurred between counsel for the Plaintiff and counsel for insurer in the period from October 2013 and September 2014. For some reason, the Fund did not weigh in until January of 2015 when it rejected both the settlement offer and opined that there could not be a trial on the issue of consent absent an agreement on quantum or severance of the issue of quantum from the liability issue.

The chambers judge found that these steps were “reasonable efforts” to resolve the litigation despite being unsuccessful:

[9] The chambers judge held that these two steps constituted “reasonable efforts” to resolve the litigation “in a timely and cost-effective way”, as directed by Rules 1.2(1), 4.1 and 4.2(b): (paras 11 and 12). He concluded, at paras 12 – 13:

[12] While neither was successful, either could have been and either would have advanced the litigation. Plaintiff’s counsel acted sensibly in making both proposals and neither were colourable attempts to extend an expiring period for action.

[13] In my view, therefore, as the settlement discussions and the issue resolution proposal occurred in the three years preceding this application, the action should not have been dismissed.

The Defendants argued that the test is not whether steps were taken that could have advanced the action if successful, but whether there was actually a significant advance:

[10] The defendants submit that, while the chambers judge correctly identified the functional test to be applied on a Rule 4.33 application, he erred in law by failing to apply that test. The test is not whether the plaintiff took steps that, although unsuccessful, could have advanced the action if they had been successful. Rule 4.33 requires that there has actually been “a significant advance in (the) action” within the past 3 years. If there has not been a significant advance, the action must be dismissed. The defendants acknowledge that there were genuine efforts to determine the length of trial and identify the best forum within which to proceed, but note that nothing was ever scheduled, no agreement was reached, and a completed Form 37 was never circulated.

The Court rejected the plaintiff’s submission that the defendants were overstating the importance of the outcome, because the plaintiff did not provide any new information, and the settlement proposal did not narrow the issues or clarify the parties’ positions:

[11] The plaintiff submits that the chambers judge did not err in applying the test. She says the defendants are overstating the importance of the outcome of a purported advancement, “because steps that serve to narrow the issues, complete the discovery of documents and information, or clarify the positions of the parties might well significantly advance the action. ‘Outcomes’ should not be overemphasized”: Ro-Dar at para 20.

[13] In our view, this case is distinguishable from Ro-Dar. There is no evidence that the plaintiff here provided any important new information within the relevant three year period, or that the proposals made by her narrowed the issues or clarified the parties’ positions. While the outcome of any step is not determinative, the test is whether there was a significant advance in the action, not whether unaccepted proposals or attempted procedures could have resulted in a significant advance in other circumstances. The language in paragraph 12 of the chambers judge’s reasons suggests that he was focusing on whether the steps taken by the Plaintiff could have resulted in a significant advance, rather than whether anything was done that actually did significantly advance the action.

The Court noted that unsuccessful settlement offers can significantly advance the action, but this is when new information is provided that narrows the issues or move things towards conclusion.

[14] While settlement offers that are not accepted have been found, in some cases, to significantly advance an action, in those situations new information was provided that narrowed the issues for trial: Ro-Dar; John Barlot Architect Ltd v Atrium Square Investments Ltd, 2017 ABQB 749 (CanLII) at para 21. A without prejudice proposal by the plaintiff’s counsel to recommend a settlement figure to her client does not have that effect. It is comparable to the circumstances in Sutherland v Brown, 2018 ABCA 123 (CanLII) at para 16, where the settlement offer was not found to have moved “things toward conclusion”.

Finally, the Court also concluded that an unsuccessful proposal to schedule trial did not advance the action.

[15] We reach a similar conclusion with respect to the unsuccessful proposal to schedule a trial of an issue to determine whether the vehicle was driven with consent. This court has found that unsuccessful steps taken to schedule a JDR did not significantly advance an action: Weaver v Cherniawsky, 2016 ABCA 152 (CanLII). Likewise, the unsuccessful proposal to schedule a trial of an issue did not advance this action. Moreover, as the defendants point out, it was clear from the outset that the liability of the vehicle’s owner was a central issue, and the correspondence among the parties served only to confirm this, not to clarify positions or otherwise advance the action.

Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49

This was an unsuccessful appeal of a successful summary dismissal application on the basis of a missed limitation period. The case is significant because it resolves the two different tests laid out by the Court of Appeal. The Court concluded that there is no reason to stick to the old, strict rules for summary Judgement, and the test is not that it is obvious the claim must fail or a “high likelihood” that it may fail:

[47] The proper approach to summary dispositions, based on the Hryniak v Mauldin test, should follow the core principles relating to summary dispositions, the standard of proof, the record, and fairness. The test must be predictable, consistent, and fair to both parties. The procedure and the outcome must be just, appropriate, and reasonable. The key considerations are:

a) Having regard to the state of the record and the issues, is it possible to fairly resolve the dispute on a summary basis, or do uncertainties in the facts, the record or the law reveal a genuine issue requiring a trial?

b) Has the moving party met the burden on it to show that there is either “no merit” or “no defence” and that there is no genuine issue requiring a trial? At a threshold level the facts of the case must be proven on a balance of probabilities or the application will fail, but mere establishment of the facts to that standard is not a proxy for summary adjudication.

c) If the moving party has met its burden, the resisting party must put its best foot forward and demonstrate from the record that there is a genuine issue requiring a trial. This can occur by challenging the moving party’s case, by identifying a positive defence, by showing that a fair and just summary disposition is not realistic, or by otherwise demonstrating that there is a genuine issue requiring a trial. If there is a genuine issue requiring a trial, summary disposition is not available.

d) In any event, the presiding judge must be left with sufficient confidence in the state of the record such that he or she is prepared to exercise the judicial discretion to summarily resolve the dispute. To repeat, the analysis does not have to proceed sequentially, or in any particular order. The presiding judge may determine, during any stage of the analysis, that summary adjudication is inappropriate or potentially unfair because the record is unsuitable, the issues are not amenable to summary disposition, a summary disposition may not lead to a ‘just result”, or there is a genuine issue requiring a trial.

[48] There is no policy reason to cling to the old, strict rules for summary judgment. This can only serve to undermine the shift in culture called for by Hryniak v Mauldin. Summary judgment should be used when it is the proportionate, more expeditious and less expensive procedure. It frequently will be. Its usefulness should not be undermined by attaching conclusory and exaggerated criteria like “obvious” or “high likelihood” to it.

Condominium Corporation 0812755 v IBI Group Inc, 2019 ABQB 75

This was an unsuccessful application for summary dismissal brought on the basis that a claim for a building deficiency was not filed until after the limitation period expired. The chronology of events was as follows:

  • Spring of 2008: building was completed;
  • 2009: water ingress into the underground parking lot discovered, and an engineer was retained to determine the cause and origin;
  • 2010: the Plaintiff was advised by the Developer and New Home Warranty that the problem was repaired;
  • January 19, 2011: a new leak surfaced;
  • 2011: a lawsuit against the Developer and New Home Warranty was initiated (a different action than the within action);
  • April 17, 2012: a further engineering report was obtained identifying the cause of the defect; and
  • 2012: a Statement of Claim was issued.

The Plaintiff argued that it was entitled to rely on the Developer and New Home Warranty’s assertions that the problem had been fixed, and therefore the claim did not warrant bringing a proceeding.

The Court noted that the Plaintiff could have sued sooner, but it was relying on the Developer and New Home Warranty, which were trying to fix the problem:

[40] But the facts are clear that it was relying on the parties with whom there were contracts – the Developer and the new home warranty provider. Those parties were trying to fix the problem, and had even gone so far as to report that they had. In those circumstances, it is difficult to understand why the condominium corporation would have concluded that it should sue parties with whom it had no contractual connection – when the parties with whom it had contracts seemed to be accepting responsibility for the repair and doing something about it.

[41] The condominium corporation was not sleeping on its rights; it was not relying on mediation and arbitration as in Owners: Condominium Plan No. 0625385 v Oxford Grande Ltd, 2017 ABQB 316 (CanLII). The facts are similar to those in Condominium Corp No 0610078 v Pointe of View Condominiums (Prestwick) Inc, 2016 ABQB 609 (CanLII), 2016 CarswellAlta 2164, with some important differences. In Pointe of View, the condominium corporation wrote to the Developer and advised that a claim had been made against the warranty provider and that a claim would be made against the Developer and others involved, and asked for identification of the subcontractors and consultants involved. There was no response to that letter.

The Court confirmed that until it was clear that the Developer’s efforts and New Home Warranty’s efforts to repair the problem were not working, filing a Statement of Claim was not warranted:

[52] One known factor here was that the Developer and the warranty provider were dealing with the claim. Until it became apparent that their efforts were not working and that they were apparently not going to do more, there was no point in suing anyone.

[54] It had information to the effect that the injections might not be effective, and it might fairly be said that it knew that it was unlikely that the injections were going to be effective. But that is not the answer to the problem here either. As long as the Developer and the warranty provider were continuing to work to correct the problem, it is not clear that they were going to stop doing anything more if the injections were not effective.

The Court noted that a party is not required to sue everyone who might have been responsible:

[55] I do not accept that the Limitations Act effectively requires a party to sue everyone who might have been involved when there are responsible parties with whom they contracted who appear to be trying to resolve the problem. That is one reason why the Act contains the provision contains the requirement “that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding”. An analogy might be drawn to a debt claim on a demand promissory note. The creditor calls on the note, the debtor defaults in making full payment, but makes sporadic payments in an attempt to pay the debt. Should the creditor be required to sue within two years following the demand? What would be the point of requiring that a claim be filed when the debtor is making payments?

[56] The comments by the Law Reform Commission and previous cases have suggested that one factor might be cost. If the plaintiff knows of the injury and knows that the defendant caused it, and concludes that the cost of dealing with it is small and suing is not worth it, but later finds out that the remedy is far more expensive than it reasonably believed at the outset, that is a factor that might delay the running of the limitation period. Here, if the Developer and new home warranty provider had actually solved the problem, the costs to the plaintiff would have been effectively zero.

Master Robertson ultimately concluded that as long as the Plaintiff thought the Developer was handling it, there was no need to bring a claim:

[58] In my view, when there is no reason for a party to sue anyone, because the party reasonably believes that someone who has apparent liability has actually assumed responsibility for addressing it, and is doing so, the injury does not warrant bringing a proceeding. Requiring a party to sue in this circumstance would encourage needless litigation.