The Court of King’s Bench of Alberta has ruled against a dismissal application by Hi Line Farm Equipment Ltd., Amraa Industrial Supplies Ltd., and two individuals — collectively the defendants — in a six-year-old lawsuit concerning unpaid commissions and alleged defamation.
The ruling, delivered by Justice A. Loparco, dismisses the defendants’ request for dismissal under Alberta’s “Drop-Dead Rule,” which mandates case dismissal if there has been no significant advance for more than three years.
The ruling centered on whether the defendants’ claim that significant delays had occurred, warranting dismissal, could be substantiated. According to the memorandum of decision, the defendants argued that no meaningful steps were taken by the plaintiffs between Jan. 15, 2019, and March 31, 2022, exceeding the allowable delay period.
The plaintiffs, D.O. and two Alberta numbered companies, initiated the case in March 2016, alleging that Hi Line and its associates had failed to pay commissions owed for farm equipment sales. The suit also claims defamation, asserting that D.O.’s reputation suffered due to statements allegedly made by a company employee.
Three-year rule
The defendants invoked Rule 4.33, which stipulates that a case can be dismissed if no significant advance occurs within a three-year period. They pointed to various procedural delays as evidence that the plaintiffs were not actively pursuing the case. However, the plaintiffs countered that steps taken in 2019 and 2022 did, in fact, advance the litigation. Specifically, the plaintiffs cited their March 1, 2019, responses to undertakings and a March 5 letter that included updated answers and clarifications, asserting that these moved the case closer to resolution.
In her analysis, Justice Loparco agreed that these actions were sufficient to constitute significant advancements. She noted, “The general rule is that the provision of an answer to an undertaking is usually a thing that materially advances an action.” The court reviewed the plaintiffs’ submissions, including extensive financial records, as part of this advancement. Justice Loparco acknowledged the defendants’ argument that the responses were “merely perfunctory,” but disagreed, stating that “it was essential that (D.O.) sharpen his pencil so that the damages could be ascertained in a more precise manner.”
Inordinate delay
The defendants also applied for dismissal under Rule 4.31, which allows dismissal if delay results in “significant prejudice” to the opposing party. They argued that fading memories and possible loss of financial records held by a former accountant prejudiced their ability to mount a defense. While acknowledging that the plaintiffs’ delay was “inordinate” during a gap from March 2019 to March 2022, Justice Loparco concluded that it was excusable due to the complexity of the case and the plaintiff’s financial inability to retain counsel at certain times.
Despite the inordinate delay, the court found no significant prejudice had resulted.
“The mere ‘fear’ of fading memories, without more, does not lead to an inexorable conclusion that memories have indeed faded and significant prejudice arises,” Justice Loparco stated, noting that much of the evidence relied upon was documented.
Moving forward, Justice Loparco has imposed a Procedural Order with strict deadlines for the parties to adhere to. Questioning is required to be completed by the end of 2024, with any responses to undertakings finalized by March 2025. If additional questioning on undertakings is necessary, it must occur by May 2025. The parties are also ordered to attempt alternative dispute resolution by August 2025, and to agree on a process for setting the matter down for trial by September 2025.
For more information, see Oleksyn v Hi Line Farm Equipment Ltd, 2024 ABKB 584 (CanLII).
