Date: 19991004
Docket: T-1703-94
OTTAWA, ONTARIO, MONDAY, THIS 4th DAY OF OCTOBER, 1999
PRESENT: THE HONOURABLE MADAME JUSTICE McGILLIS
BETWEEN:
MULTIBOND INC.
Plaintiff
(Appellant)
- and -
DURACOAT POWDER MANUFACTURING INC.
Defendant
O R D E R
The plaintiff's motion is dismissed with costs.
D. McGillis
____________________________
Judge
Date : 19991004
Docket: T-1703-94
BETWEEN:
MULTIBOND INC.
Plaintiff
(Appellant)
- and -
DURACOAT POWDER MANUFACTURING INC.
Defendant
REASONS FOR ORDER
McGILLIS J.
INTRODUCTION
[1] The plaintiff has appealed from a decision of Lafrenière P. dismissing the action for delay.
FACTS
[2] On July 15, 1994, the plaintiff instituted an action for trade-mark infringement. On
September 20, 1994, the defendant filed a Statement of Defence. No steps were taken by the
plaintiff to pursue its action.
[3] On September 10, 1998, the Court issued a Notice of Status Review, requiring the plaintiff to show cause why the action should not be dismissed for delay. The Notice of Status Review was directed to the parties and their solicitors, and stated as follows:
More than 360 days have elapsed since the filing of the statement of claim in this action and, according to the records of this Court, no requisition for a pre-trial conference has been filed.
The plaintiff is required to show cause by written submissions, to be served and filed no later than Tuesday, October 13th, 1998, why this action should not be dismissed for delay.
[4] On October 13, 1998, the plaintiff filed a Notice of Change of Solicitor, indicating that
it had retained its present solicitor of record. On the same date, counsel for the plaintiff filed
written submissions in response to the Notice of Status Review. Shortly thereafter, counsel for
the defendant filed written submissions, although the terms of the Notice of Status Review did
not require him to do so.
[5] On March 19, 1999, Giles A.S.P. issued an Order in which he stated, in part, as follows:
The defendant has alleged prejudice if the matter should be allowed to proceed. In such circumstances it is my view that a motion to strike for want of prosecution should be allowed to be filed within 30 days.
[6] In compliance with the Order of Giles A.S.P., the defendant brought a motion, under rule 167 of the Federal Court Rules, 1998 ("Rules"), to dismiss the action by reason of the plaintiff's undue delay in prosecuting it. On June 21, 1999, Lafrenière P. heard and granted the motion to dismiss the action. He provided no reasons in support of his decision.
[7] The plaintiff appealed the decision of Lafrenière P. on the basis that he erred in law and
proceeded upon a wrong principle in allowing the motion, in that he failed "...to properly apply
the threefold test for determining if an action should be dismissed for delay". In particular,
counsel for the plaintiff submitted that the defendant had failed to establish that it was likely to
suffer serious prejudice by reason of the delay. He did not challenge the decision of the
prothonotary on any other basis. Indeed, the evidence in the record on appeal established
unequivocally that the plaintiff had failed to provide any reasonable explanation to justify the
inordinate delay of four years.
ISSUE
[8] The question to be determined is whether, in exercising my discretion de novo, the action should be dismissed by reason of delay.
ANALYSIS
[9] Prior to considering the issue raised on the motion, I must comment on the procedure adopted by Giles A.S.P. on the status review in ordering the defendant to bring a motion for dismissal for want of prosecution. Since the new Rules provide, in rule 167, for dismissal on the ground of undue delay in prosecuting an action, I will use that terminology rather than "dismiss for want of prosecution".
[10] The Rules have equipped the Court with various procedural tools to enable it to assume an active role in the management and supervision of cases with a view to ensuring that litigation proceeds in a timely and efficient manner. An integral part of the case management scheme in the Rules involves the conduct of a status review in circumstances where a party has failed to comply with certain time frames in a proceeding. Rules 380 to 382 govern the procedure to be followed on a status review. For the purposes of the present motion, it is necessary to consider rules 380 and 382, which provide as follows:
| 380. (1) Subject to subsection (3), where
(a) in an action,
(i) 180 days have elapsed since the issuance of the statement of claim and pleadings are not closed, or
(ii) 360 days have elapsed since the issuance of the statement of claim and no party has filed a requisition for a pre-trial conference under Rule 258, or
(b) in an application or appeal, 180 days have elapsed since the issuance of the notice of application or appeal and no requisition for a hearing date has been filed, the Court shall fix a time and date for a status review.
(2) Unless the Court directs otherwise, a status review shall be conducted on the basis of written representations.
(3) Subsection (1) does not apply to a specially managed proceeding.
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380. (1) Sous réserve du paragraphe (3), la Cour fixe la date et l'heure d'un examen de l'état de l'instance:
a) dans le cas d'une action :
(i) si les actes de procédure ne sont pas clos et que 180 jours se sont écoulés depuis la délivrance de la déclaration,
(ii) si aucune partie n'a déposé de demande de conférence préparatoire aux termes de la règle 258 et que 360 jours se sont écoulés depuis la délivrance de la déclaration;
b) dans le cas d'une demande ou d'un appel, si aucune demande d'audience n'a été déposée et que 180 jours se sont écoulés depuis la délivrance de l'avis de demande ou de l'avis d'appel.
(2) Sauf directives contraires de la Cour, l'examen de l'état de l'instance se fait uniquement sur la base des prétentions écrites.
(3) Le paragraphe (1) ne s'applique pas aux instances à gestion spéciale. |
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| 382. (1) A status review shall be conducted by a judge or prothonotary assigned for that purpose.
(2) At a status review, the Court may
(a) require a plaintiff, applicant or appellant to show cause why the proceeding should not be dismissed for delay and, if it is not satisfied that the proceeding should continue, dismiss the proceeding;
(b) require a defendant or respondent to show cause why default judgment should not be entered and, if it is not satisfied that the proceeding should continue, grant judgment in favour of the plaintiff, applicant or appellant or order the plaintiff, applicant or appellant to proceed to prove entitlement to the judgment claimed; or
(c) if it is satisfied that the proceeding should continue, order that it continue as a specially managed proceeding and make an order under rule 385. |
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382. (1) L'examen de l'état de l'instance est présidé par un juge ou un protonotaire affecté à cette fin.
(2) À l'examen de l'état de l'instance, la Cour peut :
a) exiger que le demandeur ou l'appelant donne les raisons pour lesquelles l'instance ne doit pas être rejetée pour cause de retard et, si elle n'est pas convaincue que l'instance doit être poursuivie, rejeter celle-ci;
b) exiger que le défendeur ou l'intimé donne les raisons pour lesquelles il n'y a pas lieu d'enregistrer un jugement par défaut et, si elle n'est pas convaincue que l'instance doit être poursuivie, rendre un jugement en faveur du demandeur ou de l'appelant, ou ordonner au demandeur ou à l'appelant de démontrer qu'il a droit au jugement demandé;
c) si elle est convaincue que l'instance doit être poursuivie, ordonner qu'elle le soit à titre d'instance à gestion spéciale et rendre toute ordonnance prévue à la règle 385. |
[11] Following the enactment of the Rules, the Court issued status review notices in relation
to existing proceedings which did not comply with the time limits prescribed in rule 380. The
present case, in which the plaintiff had taken no steps in over four years, therefore became the
subject of a status review.
[12] By virtue of rule 380(2), a status review is to be conducted on the basis of written representations, unless the Court directs otherwise. The discretionary powers of the Court on a status review are clearly delineated in rule 382(2). In the case of delay occasioned by a plaintiff, rule 382(2)(a) permits the Court to require a plaintiff "...to show cause why the proceeding should not be dismissed for delay". If the Court is not satisfied on the show cause hearing that the proceeding should continue, the proceeding may be dismissed. Conversely, if the Court is satisfied that the proceeding should continue, it may order "...that it continue as a specially managed proceeding and make an order under rule 385". In other words, the Court must be satisfied on the status review that the proceeding should continue. Where the Court has required a plaintiff to show cause why the proceeding should not be dismissed for delay, the defendant has no obligation under the Rules to make written representations or to play any role whatever in the status review. Although as a matter of practice the Court permits a defendant to make written representations on a status review, the Rules do not require the defendant to do so. Following the issuance of a show cause order to a plaintiff in the context of a status review, the Rules clearly and unequivocally place the burden on the plaintiff to satisfy the Court that the
proceeding should continue despite the delay.
[13] The test to be applied by the Court in making a discretionary decision on a status review as to whether a proceeding should continue was outlined by Hugessen J. in Baroud v. Canada, [1998] F.C.J. No. 1729 (F.C.T.D.), at paragraph 4 of the decision, in the following terms:
In deciding in what manner to exercise the wide discretion granted to it by Rule 382 at the conclusion of a status review, it seems to me that the Court needs to be concerned primarily with two questions:
1) what are the reasons why the case has not moved forward faster and do they justify the delay that has occurred?; and
2) what steps is the plaintiff now proposing to move the matter forward?
The two questions are clearly inter-related in that if there is a good excuse for the case not having progressed more quickly, the Court is not likely to be very exigent in requiring an action plan from the plaintiff. On the other hand, if no good reason is advanced to justify the delay, the plaintiff should be prepared to demonstrate that he recognizes that he has a responsibility to the Court to move his action along. Mere declarations of good intent and of the desire to proceed are clearly not enough. Likewise, the fact that the defendant may have been lax and may not have fulfilled all his procedural obligations is largely irrelevant: primary responsibility for the carriage of a case normally rests with a plaintiff and at a status review the Court will look to him for explanation.
[14] I agree with Hugessen J. that, on a status review in which the Court has required a plaintiff to show cause under rule 282(2)(a), the only relevant considerations are whether the plaintiff has justified the delay and has proposed a plan for moving the case forward.
[15] Given the procedure outlined in the Rules, Giles A.S.P. clearly erred by requiring the
defendant to bring a motion under rule 167 to dismiss the action on the ground of undue delay. He further erred by failing to exercise his discretion in a manner permitted by rule 382(2)(a). In other words, Giles A.S.P. was required by the Rules to consider the representations submitted on the status review and to decide whether he was satisfied, within the meaning of rule 382(2)(a), that the proceeding should continue. It was not open to him to alter the scheme in the Rules by placing the burden on the defendant to establish, on a separate motion under rule 167, that the proceeding should be dismissed on the ground of undue delay. Although the Rules provide in rule 167 for a motion to dismiss an action on the ground of undue delay, it is expected that such motions will be only be very rarely brought by a party, given the active role now assumed by the Court in monitoring the status of all proceedings.
[16] As is obvious from a review of the procedural history of this matter, the decision of Giles A.S.P. is not the subject of the appeal before me. However, it was necessary for me to address the procedure adopted by Giles A.S.P. in order to place in its proper context the motion that was before Lafrenière P. As indicated previously, Lafrenière P. granted the defendant's motion and dismissed the action for undue delay, but provided no reasons in support of his decision.
[17] On the hearing of the motion before me, counsel for the plaintiff submitted that Lafrenière P. erred in dismissing the action. In particular, he submitted that the evidence failed to establish that the defendant was likely to suffer serious prejudice by reason of the delay, as required by the test traditionally applied by the Court on a motion to strike for want of prosecution or on a motion to dismiss for undue delay.
[18] In considering a motion to dismiss an action for want of prosecution under the previous
Federal Court Rules, the Court consistently applied the following test: whether there has been
an inordinate delay, whether that delay was inexcusable, and whether the defendant is likely to
be seriously prejudiced by the delay. [See, for example, Patex Snowmobiles Ltd. v. Bombardier
Ltd. (1991), 37 C.P.R. (3d) 467 (F.C.T.D.), aff'd (1993), 48 C.P.R. (3d) 555 (F.C.A.)]. Following the enactment of the new Rules, Gibson J. held in Ruggles v. Fording Coal Ltd., [1998] F.C.J. 1172 (T.D.) that those three criteria continued to apply to a motion to dismiss an action for undue delay under rule 167.
[19] During the course of the hearing, counsel for the defendant submitted that Lafrenière P. committed no error in dismissing the action, in that the evidence in the record established serious prejudice to the defendant by reason of the delay. Alternatively, he submitted that, given the context in which this matter arose, the motion was a disguised status review and the question of serious prejudice to the defendant was not a relevant factor to be considered. He therefore submitted that, in view of the plaintiff's complete failure to justify the delay, Lafrenière P. had committed no error in dismissing the action.
[20] The standard of review to be applied in reviewing a discretionary decision made by a
prothonotary was outlined by MacGuigan J., writing for the majority, in Canada v. Aqua-Gem
Investments Ltd., [1993] 2 F.C. 425 (C.A.), in the following terms, at pages 462 to 463:
I also agree with the Chief Justice in part as to the standard of review to be applied by a motions judge to a discretionary decision of a prothonotary. ... discretionary orders of prothonotaries ought not to be disturbed on appeal to a judge unless:
(a) they are clearly wrong, in the sense that the exercise of discretion by the prothonotary was based upon a wrong principle or upon a misapprehension of the facts, or
(b) they raise questions vital to the final issue of the case.
Where such discretionary orders are clearly wrong in that the prothonotary has fallen into error of law (a concept in which I include a discretion based upon a wrong principle or upon a misapprehension of the facts), or where they raise questions vital to the final issue of the case, a judge ought to exercise his own discretion de novo.
[21] In the present case, the discretionary order made by Lafrenière P. clearly raised a question "vital to the final issue of the case", in that it was a final order dismissing the action. In the circumstances, I am required to exercise my own discretion de novo in this matter.
[22] A review of the procedural history of this matter confirms that the plaintiff failed, on the status review, to provide a reasonable explanation to justify its inordinate delay. Giles A.S.P.
therefore should have summarily dismissed the action for delay. Furthermore, the question of
whether the defendant was likely to suffer serious prejudice by reason of the delay was irrelevant
in the context of the Rules and the jurisprudence governing the conduct of a status review. In any event, it was clearly contrary to the procedure prescribed in the Rules to require the defendant to establish, on an unnecessary motion to dismiss for undue delay, that it would likely suffer serious prejudice by reason of the delay.
[23] Given the very unusual procedural history of this matter, I have concluded that it would be manifestly unjust and unfair to require the defendant to establish the three criteria in the test normally applicable on a motion to dismiss an action for undue delay. Despite the procedure ordered by Giles A.S.P., the matter should be treated as a status review, and the considerations relevant to the exercise of discretion on a status review should apply. I have therefore concluded, in the exercise of my discretion and on the basis of the evidence in the record, that the plaintiff should not be permitted to continue with its action, given its failure to provide any reasonable explanation to justify its inordinate four year delay in this matter. I am also not satisfied that the avowed intention of the plaintiff to move the action forward should be accorded any real weight, given its failure to provide a reasonable explanation to justify the inordinate delay.
[24] Alternatively, in the event that I have erred in deciding to apply only those considerations relevant on a status review, I have nevertheless concluded, on the basis of the evidence in the record, that the defendant is likely to suffer serious prejudice by reason of the plaintiff's inordinate and unjustified delay in this matter. In the alternative, the action is therefore dismissed by reason of undue delay on the basis that the defendant has established, on a balance of probabilities, the three criteria in the traditional test.
[25] The plaintiff's motion is dismissed with costs.
D. McGillis
_______________________________
Judge
OTTAWA
October 4, 1999