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Monday Morning Case Bites for May 27, 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

Morrison v. Galvanic Applied Sciences Inc., 2019 ABCA 207
Dismissal for Long and Inordinate Delay | Self Represented Litigant

This was a successful application to dismiss a claim for inordinate and long delay. The action was an Originating Application to determine the fair market value of shares, which was filed on October 17, 2013 without a supporting Affidavit. Almost three years later, the supporting Affidavit was filed, which contained largely publicly available information.

The Court of Appeal confirmed the following test for determining if a claim should be dismissed for inordinate delay:

[11]           To determine whether inordinate delay is present an adjudicator compares “the point on the litigation spectrum that the nonmoving party has advanced an action as of a certain time and that point a reasonable litigant acting in a reasonably diligent manner and taking into account the nature of the action and stipulated timelines in the rules of court would have reached in the same time frame”.

[12]           If the inquiry discloses a discrepancy between the two points, the court must determine whether the “differential between the norm and the actual progress of an action is so large as to be unreasonable or unjustifiable”. Delay of this magnitude is “inordinate”.

[13]           A characterization of delay as “inordinate” triggers the next query. Has the nonmoving party accounted for the delay and does the explanation justify the pedestrian pace at which the action has been prosecuted?

[14]           If the adjudicator concludes that the delay is both inordinate and inexcusable, the rebuttable presumption recorded in r. 4.31(2) comes into play: “Where … 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.”

[15]           It is the burden of the nonmoving party to demonstrate on a balance of probabilities that the delay has not caused the moving party significant prejudice.

The applicant tried to explain the delay on the basis that “he is not a lawyer and did not know what information should be in his affidavit”.  The Court of Appeal concluded that as a general rule a self represented litigant cannot rely on his or her own lack of legal acumen as an excuse:

[21]           In the case of the typical self-represented litigant, as a general rule, explanations that do nothing more than seek forgiveness for dilatory prosecution of an action because a party has no or limited legal training and failed to advance an action in accordance with court rules are unacceptable.

In the interest of fairness, the Court could not apply a different standard to self-represented litigants than lawyers, and all parties, whether or not they are lawyers, and required to comply with the Rules of Court:

[26]           When considering whether to grant indulgences to a self-represented litigant, the court must always ensure that the procedures are fair for both parties. There can be no suggestion that a court would have tolerated the pace of this litigation if it was being managed by a lawyer, but will not apply the same standard to a self-represented litigant. Clear noncompliance with mandatory provisions of the Alberta Rules of Court by a self-represented party cannot simply be overlooked, especially in the face of prejudice to the other side.

[27]           While we understand the challenges facing self-represented parties, the bottom line is that all litigants are expected to comply with the Alberta Rules of Court.

The Court accepted that both litigation and non-litigation prejudice are important considerations.  With the passage of time memories fade, documents go missing, and witnesses die.  Further at some point a party is entitled to have closure:

[30]           Litigation prejudice is always a concern with the passage of a substantial period of time – now more than five years here. Memories degrade. Papers are lost. Witnesses die. This is not a straight-forward documents case; Mr. Morrison alleges in his affidavit that Galvanic’s chief executive officer’s decision to sell her shares for $1.70 “was a shocking betrayal of … [her] fiduciary duty to Galvanic shareholders” and placed her “in a severe conflict-of-interest”.

[31]           There is also nonlitigation prejudice to consider. As Lord Denning observed in Biss v. Lambeth Southwark and Lewisham Area Health Authority, “[t]here comes a time when … [a business] is entitled to have some peace of mind and to regard the incident as closed”. Taking into account the appellants’ allegations of misconduct, that time has arrived in this case.

The Court concluded that not only did the application take too long, but the Affidavit did not significantly advance the action.  As a result, the claim was dismissed as a result of both inordinate delay, and the 3 year ‘drop dead’ rule.