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Monday Morning Case Bites for November 29, 2021

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

Edited by Steven Graham

Jacobsen v Wawanesa Mutual Insurance Company, 2021 ABQB 938
Prejudice | Inordinate Delay | Rule 4.31

The Master in Chambers initially dismissed the Defendant’s application to dismiss the claim for delay pursuant to Rule 4.31. The matter arose out of a property loss claim occurring in March 2008. The Plaintiff retained a contractor to repair damage to its property, and the Defendant Wawanesa, the Plaintiff’s insurer, paid the invoice of the contractor. The Plaintiff alleged deficiencies in the repair work and sought further compensation from Wawanesa, which was denied, resulting in this action.  

On appeal by Wawanesa, the Justice first had to consider whether the appeal was time-barred. Rule 6.14(2) of the Rules of Court requires a Notice of Appeal to be filed and served within 10 days after the Order is both entered and served. The Court set out the specific chronology of events after the Master’s decision was pronounced: 

[8]               The chronology of events leading to service of the Order is as follows: 

  1. The application to dismiss the action was heard and dismissed on October 20, 2020. The Master directed the Defendant to prepare the form of Order.
  2. The form of Order was sent to the Master for endorsement and filing on October 28, 2020.
  3. The Order was returned to counsel for the Defendant on October 30, 2020, signed but not filed.
  4. The Order was not returned to the Court for filing until November 25, 2020. On that same day, counsel for the Defendant informed counsel for the Plaintiffs of their intention to appeal.
  5. When the Court returned the Order, the file stamp incorrectly stated the filing date as October 23, 2020.
  6. A Notice to appeal was sent to the Court on December 8, 2020 but was rejected.
  7. After communication with the Court and an Endorsement by ACJ Rooke, the Notice of Appeal was ultimately filed on December 18, 2020, and served with the Original Order on December 21, 2020.

The Justice noted that during the time the order was signed, there were significant Court delays as a result of the COVID-19 pandemic, and further noted that the Order was not properly filed by the Court when it was signed, and a month later an incorrect filing date was applied to the Order. The Court determined that the appeal had been properly filed and served within the 10 days after the Order was entered and served, and as such was not time-barred. 

The Justice then considered whether the master erred in dismissing the Defendant’s delay application. After reviewing the chronology, the Justice noted that nearly 12.5 years had elapsed since the original incident occurred, and over 10 years had passed since the Statement of Claim was filed. The Justice indicated that no compelling explanation for the delay had been provided by the Plaintiffs, and as such inordinate delay was established: 

[19]           More than 10 years passed prior to this application being brought and there is no compelling explanation provided by the Plaintiffs. The Plaintiffs admit that there has been delay in this action, although that fact is obvious. Little has been done by these Plaintiffs in a matter that is not complex or complicated. There have not been a multitude of Defendants, interim applications, or issues. The Plaintiffs may not be sophisticated litigants themselves, but they have retained counsel on more than one occasion and were represented until 2017. Retention of new counsel is not deemed a valid excuse for the delay. Based on these factors I find that the delay has been inordinate. 

The Justice rejected the Plaintiffs’ argument that Wawanesa’s not questioning them contributed to the delay, indicating that Wawanesa had attended the questioning conducted by other Defendants, and there was an agreement that all parties adverse in interest could use the transcripts. As such, the questioning was considered completed, subject to undertakings, which the Court noted the Plaintiff had not fully answered even after more than 4 years:  

[21]           In this case I do not see the delays by the Defendants to be sufficient to dismiss the responsibility of the Plaintiffs. Although Wawanesa itself has not questioned the Plaintiffs, it attended the questioning that was conducted by the other Defendants, and entered an agreement that all parties adverse in interest could use the transcripts. So, in fact, the questioning of Mr. Jacobson was effectively concluded subject to further questioning on undertakings. The Plaintiff has failed to provide all answers to undertakings from questioning that occurred more than 4-5 years prior. This cannot be seen as the Defendant’s responsibility. Nor can this be seen as the Defendant adding to the delay or extinguishing the fact that the delay is inordinate and inexcusable. 

[22]           I find the Defendant has not enabled or encouraged the delay, but even if I had, it would not justify the Plaintiffs’ failure to advance their claim in a timely manner. 

On the matter of prejudice, Wawanesa argued that there was significant prejudice, relying on the possibility of pre-existing conditions caused by uninsured perils. The Court noted the Plaintiff had not yet retained an expert and there was a lack of documentation regarding pre-existing perils. Given the passage of time, the Court noted it would be difficult for any expert to assess damages occurring more than 10 years ago.  

Additionally, Rule 4.31(2) contains a presumption of significant prejudice when inordinate and inexcusable delay is made out, and will be found unless the Plaintiff can disprove it on a balance of probabilities. While the Master concluded that this was a case involving coverage and the presumption of significant prejudice had been rebutted, the Justice disagreed, noting there was no evidence to support the conclusion that this case was simply one of coverage:  

[27]           When specifically asked, the Plaintiffs could not point to any evidence that would show that this case is simply an issue of coverage. As stated, the Defendant is advancing as part of their defence pre-existing conditions. This point would have to be proven or disproven through memories of the Plaintiff, which at 5 years already showed to be lacking. The Plaintiffs offer some photographs which allegedly minimize the memory issue, but these were not dated nor was their context clear. No expert reports from the Plaintiff exist which may be difficult to obtain now, some 14 years after the incident occurred. The Plaintiffs have not rebutted the presumption that significant prejudice does not exist, and I find that Master Farrington erred in finding that they did. 

[28]           As the Defendant has met the criteria for granting relief under Rule 4.31(2), I must determine if there is any compelling reason not to dismiss the Plaintiffs’ action. The Plaintiffs argue that the second Plaintiff, Ms. Gehring was only added in 2018 and it would be patently unreasonable to dismiss the claim as she has only been a plaintiff for approximately 3 years. It was on the Plaintiff’s application that Ms. Gehring was added. When requesting to be added as a Plaintiff, the new Plaintiff is accepting the same responsibilities of the original Plaintiff and it became her obligation along with Mr. Jacobsen’s obligation to move this matter forward. She accepted the role at the place it was in and had a responsibility to move it forward which she did not. The delay continued with no reasonable excuse. There continues to be inordinate delay with no reasonable explanation by either party. This is not a compelling reason not to dismiss. 

Ultimately, the Justice held that the Master erred in placing the burden of proving prejudice on the Defendant when he found that there was both inordinate and inexcusable delay:  

[29]           […] Under Rule 4.31(2), once inordinate and inexcusable delay is found, the Defendants benefit from a presumption of prejudice and the burden falls on the Plaintiffs to disprove it. No evidence was given by the Plaintiffs to rebut the presumption. As such, I allow the appeal. The Plaintiffs’ action against the Defendant Wawanesa is dismissed for inordinate delay. 

The appeal was granted, and the action was dismissed for delay.