Western Canada Business Litigation Blog

Dismissal for Chronic Delay – New Six Question Framework

Posted in Civil Procedure, Fraud
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On April 19, 2017, in Humphreys v Trebilcock, 2017 ABCA 116 (“Humphreys“),  the Alberta Court of Appeal set out six “essential” questions that an adjudicator must ask in order to apply Rule 4.31, the “chronic delay” rule. Under the Alberta Rules of Court (the “Rules”), a party may apply to dismiss an action for undue delay pursuant to Rule 4.31 at any time in an action or Rule 4.33, the “drop dead” rule, if three years have passed without a significant advance in the litigation. While the Court has no discretion under Rule 4.33, Rule 4.31 provides the Court with broad discretion, but little direction.

Humphreys provides direction as to when and how to apply the Court’s discretion under Rule 4.31. The six “essential” questions are as follows:

  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 r. 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 r. 4.31(1), is there a compelling reason not to dismiss the nonmoving party’s action?

In dismissing the action in Humphreys, the Court considered both litigation and nonlitigation prejudice, including: the exacerbated stress associated with alleged fraud; the business and reputational toll on alleged wrongdoers when claims are not prosecuted in a reasonable time; the balance of the plaintiffs’ interest in securing a judicial determination with the defendants’ interest in carrying on business without fear that unsubstantiated claims in an extant lawsuit will cause others to refrain from doing business with them; and, degraded memories.

Rule 4.31 (at issue in Humphreys) provides an alternative for defendants where the requirements of Rule 4.33’s mandatory dismissal are not met, but the suit is languishing.