Since the release of the Alberta Court of Appeal's decision in Humphreys v Trebilcock ("Humphreys") 2017 ABCA 116 , Alberta courts have approached delay in the civil litigation process with renewed vigor. In the short period of time since it was issued, Humphreys has been cited in 35 decisions in Alberta alone. An analysis of those decisions reveals a stark trend - plaintiffs who fail to advance their actions do so at their own peril. Alberta courts have not been shy in utilizing the procedural tools at their disposal to vanquish lingering lawsuits. In particular, through the Humphreys decision and the cases that follow it, Alberta Courts have breathed new life into Rule 4.31 (dealing with "inordinate delay") and Rule 4.33 (the "drop-dead" Rule).
The court’s condemnation of litigation delay is consistent with a broader policy position recently adopted by Canadian courts, including the Supreme Court of Canada. Delay in the prosecution of court actions has been rising steadily. The 2016 R v Jordan decision of the Supreme Court of Canada is referred to in Humphreys and, though it deals with criminal rather than civil prosecutions, echoes similar themes. Three recent decisions from the Court of Appeal for Ontario have had a similar effect on the interpretation of the civil procedure rules against delay in that province.
Overall, the trend towards the dismissal of stagnant claims is a much welcomed development for litigants, practitioners and our overburdened courts. By cracking down on chronic delay, the courts are promoting, rather than hindering, much needed access to justice for civil litigants.
Humphreys
Humphreys is perhaps the most comprehensive consideration to date of whether delay in the prosecution of a plaintiff’s case warrants dismissal of an action. The court reversed the lower court’s decision and dismissed the action, finding that the delay was inordinate, unjustified and that the chambers justice had committed no less than four reversible errors.
The claim in Humphreys, commenced in December 2006, concerned a transfer and sale of assets by the defendants, which the plaintiffs claimed were fraudulent and in breach of the defendants’ fiduciary duties as directors of the corporate sellers. The plaintiffs alleged that the defendants had engaged in oppressive conduct intended to cause harm and that the “egregious and high handed” behaviour was deserving of sanction and punitive costs.
The plaintiffs claimed against multiple defendants and by the time each defendant moved for the action to be dismissed in June 2016, the questioning process — a preliminary step in civil litigation — was not yet complete. At that point it had been almost 10 years since the action was first filed.
The defendants gave evidence that the delay not only resulted in litigation prejudice — depletion of memories of the events at issue and even the death of several key witnesses — but also created non-litigation prejudice which impacted their ability to conduct business and carry on their daily lives free from the stress and limitations that come from being involved in a lawsuit.
The lower court was not persuaded by the defendants’ evidence and did not consider the plaintiffs’ delay to be inordinate or inexcusable. The defendants appealed.
The Six "Essential Questions"
The Court of Appeal in Humphreys allowed the appeal and set out guiding principles for parties involved in civil litigation to pursue claims expeditiously. Failure to adhere to these guidelines may result in significant penalties and ultimately an action being dismissed.
Rule 4.31 of the Alberta Rules of Court (Rules) authorizes a court to dismiss a lawsuit if a party has prosecuted it at such a slow pace that delay has occurred and the delay has resulted in significant prejudice to the other party. If the party seeking relief proves inexcusable delay, this is considered proof of significant prejudice.
In Humphreys, the Court of Appeal articulated the following six "essential" questions in assessing a Rule 4.31 application:
1. Has the nonmoving party failed to advance the action to the point on the litigation spectrum that a litigant acting reasonably would have attained within the time frame under review?
2. Is the shortfall or differential of such a magnitude to qualify as inordinate?
3. If the delay is inordinate has the nonmoving party provided an explanation for the delay? If so, does it justify inordinate delay?
4. If the delay is inordinate and inexcusable, has this delay impaired a sufficiently important interest of the moving party so as to justify overriding the nonmoving party’s interest in having its action adjudged by the court? Has the moving party demonstrated significant prejudice?
5. If the moving party relies on the presumption of significant prejudice created by Rule 4.31(2), has the nonmoving party rebutted the presumption of significant prejudice?
6. If the moving party has met the criteria for granting relief under Rule 4.31(1), is there a compelling reason not to dismiss the nonmoving party’s action?
The Court of Appeal found that “significant prejudice” in the context of delay will result if the time lapse causes serious impairment to a party’s ability to produce evidence. This is litigation prejudice and is a non-controversial principle. Significant prejudice can also arise where the lawsuit threatens important or legitimate non-litigation interests of a party.
Non-litigation prejudice has been recognized and applied in other jurisdictions, but the Humphreys decision is the first instance of its adoption in Alberta. The decision is therefore a serious warning to litigants to consider not only the legal ramifications of the timing and execution of their actions, but also the commercial and personal consequences of delay to the opposing party.
Crackdown on Delay
The Humphreys decision, and the cases that follow it, stand as a warning to litigants in Alberta that there are real consequences to parties who employ stall tactics, are deleterious in their approach or who simply fail to pursue their legal claims with speed and efficiency. While the facts in Humphreys involved delays of many years, hopefully litigants will take heed of this decision and the court will be more willing to impose sufficient remedies for delay, particularly given the significant backlog of cases in Alberta.