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It goes without saying that complex litigation matters can be a time-consuming process.  Depending on its complexity, it can take years for a matter to reach final resolution through the courts.  In some situations, however, delays may be the fault of a party to the litigation.  We have previously written about the legal consequences of such delays, but when will a plaintiff’s delays likely result in a claim being dismissed?

The Rules of Civil Procedure

A defendant can seek dismissal of an action against it pursuant to Rule 24.01 of the Rules of Civil Procedure.  That Rule provides that a defendant not in default may move to have an action dismissed for delay where a plaintiff has failed to meet certain milestones in moving the lawsuit along.  Of particular note is Rule 24.01(c), which permits a defendant to bring such a motion where a plaintiff has failed “to set the action down for trial within six months after the close of pleadings.”  

What is the Test for Determining Whether or Not to Dismiss an Action for Delay?

Case law has held that an action should not be dismissed for delay under Rule 24.01 “unless the delay is (a) inordinate; (b) inexcusable; and (c) prejudicial to the defendants such that it gives rise to a substantial risk that a fair trial of the issues will not be possible” (see NWG Investments Inc. v. Fronteer Gold Inc. et al. and Ticchiarelli v. Ticchiarelli).  Dismissal under the Rule may also be possible where the delay is “caused by the intentional conduct of the plaintiff or its counsel that demonstrates a disdain or disrespect for the court process” (see Langenecker v. Sauve).

What is an “Inordinate” and “Inexcusable” Delay?

In determining whether a delay has been “inordinate,” a court must consider “the length of time between the commencement of the proceeding and the motion to dismiss” (see Deutsche Postbank AG v. Kosmayer).  For example, an “inordinate delay” existed in a case involving the passage of over eight years between the commencement of an action and the bringing of the motion to dismiss (see Deutsche Postbank AG). 

Where the action in question involves allegations of fraud, the plaintiff “may be under an obligation to advance the action … at a faster pace than that expected of a reasonable litigant pursuing a claim that does not allege fraud or a comparable wrong” (see Deutsche Postbank AG, citing Alberta case law).

Once it is established that a delay has been “inordinate,” “the burden shifts to the plaintiff to establish a reasonable excuse for the delay” (see NWG Investments Inc.).

It is important to note that moving a lawsuit along rests with the defendant and the plaintiff (see Farmer v. 145 King Street West).  The plaintiff must show that its delays were not intentional.  If the delays are not explained, there is a presumption they were intentional (see Farmer).  

A delay will be excused if the reasons for it are “reasonable and cogent” or “sensible and persuasive,” and, in considering the reasons for a delay, a court will consider “the credibility of explanations, the explanations offered for individual parts of the delay and the overall delay and the effect of the explanations considered as a whole” (see Farmer).

When Will a Delay Be Deemed to Be Prejudicial to a Defendant?

In addition to establishing that a delay is “inordinate and inexcusable,” a defendant seeking to dismiss an action must show that the delay is “prejudicial” in the sense it “gives rise to a substantial risk that a fair trial of the issues will not be possible” (see NWG Investments Inc.). 

There is a presumption that unexplained delays result in prejudice.  A plaintiff can rebut that presumption “by showing that documents have been preserved,” that the issues in the case “do not require the recollection of witnesses,” or that “necessary witnesses are available with detailed recollection of events” (see Deutsche Postbank AG).

However, it should be noted that even if a plaintiff rebuts this presumption, an “action may still be dismissed if the defendants lead to evidence of actual prejudice” (see Berg v. Robbins).

It should also be noted that simply because documents concerning the substance of the dispute remain available “does not equate to a finding by the court that a fair trial can still take place after many years” (see Deutsche Postbank AG).

What Policy Reasons Underlie the Dismissal of an Action for Delay?

The policy reasons underlying a motion to dismiss have been set out in various cases.  Courts have essentially said there is a “strong public interest in promoting the timely resolution of disputes” (see Marche D’Alimentation Denis Theriault Ltd. v. Giant Tiger Stores Ltd.).  Courts have also cited the Commercial List Practice Direction in relation to cases on the Commercial List, as that Practice Direction states that the very purpose of the Commercial List is to “expedite the hearing and determination of matters involving issues of commercial law” (see Deutsche Postbank AG).  Some courts have characterized an inordinate delay as an “abuse of the court’s process” (see Marche D’Alimentation Denis Theriault Ltd.).

It should be noted that an order dismissing an action for delay is “a severe remedy” and “an order of last resort” (see NWG Investments Inc.).  However, courts have issued such orders on the basis that they are sometimes necessary to “adequately protect the integrity of the civil justice process and prevent an adjudication on the merits that is unfair to a defendant” (see NWG Investments Inc., citing Langenecker v. Sauvé).

Parties named as defendants in litigation that have progressed very slowly over a lengthy period of time would be wise to seek legal advice to determine whether bringing a Rule 24.01 motion would be advisable.

Toronto Litigation Lawyers Representing Clients in Complex Corporate Commercial Disputes

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