Case citation: Derrick Concrete Cutting & Construction Ltd. v Nexxt Concrete Cutting & Construction Ltd. et al., 2024 ABKB 190
 

In Derrick Concrete Cutting & Construction Ltd. v Nexxt Concrete Cutting & Construction Ltd. et al., 2024 ABKB 190, the Defendants appealed the decision of Applications Judge B.W. Summers, dismissing the Defendants’ applications under Rule 4.33(2). The appeal was heard by Justice T. Neilson, who overturned Judge Summers’ decision and dismissed the Plaintiff’s action. 

The Plaintiff brought a claim against the Defendants, Travis Lega and Nexxt Concrete Cutting & Construction and their affiliates. The Plaintiff alleged Mr. Lega obtained employment with Nexxt Concrete, shared their business secrets, and stole clients, causing $3,000,000 in losses.

Action History

The Plaintiff filed an Amended Statement of Claim on October 2, 2017, all Defendants filed their Statements of Defence by October 31, 2017. Affidavits of Records and Notices to Admit facts were exchanged between February and June 2018. In August 2018 the Defendants filed a Summary Dismissal Application. The Summary Dismissal Application was adjourned and a Consent Order was entered setting out deadlines for the exchange of affidavits, cross-examinations, and briefs. Mr. Lega was cross-examined on his affidavit in February 2019. He provided partial responses to undertakings in May 2019; however, some undertakings were not produced. In June 2019 the Plaintiff obtained an Order compelling Mr. Lega to produce the undertaking responses, including the Bell Mobility records. Mr. Lega failed to produce the records and advised the Bell Mobility records could not be located. Despite advising the records could not be located, they were produced in December 2021.

In May 2019, the Plaintiff filed a Summary Judgment Application; but similar to the Defendants, the Plaintiff abandoned it. In December 2021 and February 2022, the Plaintiff’s lawyer contacted the Defendants’ counsel to try and set up the next litigation steps, but no replies were given. Finally, in 2022 the Defendants filed applications for dismissal pursuant to Rule 4.33.

Decision of Applications Judge B.W. Summers

Judge Summers was presented the case of Jacobs v McElhanney, 2019 ABCA 220, an Alberta Court of Appeal decision which held an abandoned summary judgement application is not a step that significantly advances an action. Despite the affidavits and production flowing from a summary judgment application, if the application is not heard and a decision is not made, there is no significant advance in the action. Judge Summers was concerned Jacobs had been overruled by Weir-Jones and creatively distinguished the Jacobs decision. Judge Summers held the filing of the applications and the steps taken in relation to those applications were sufficient and dismissed the Rule 4.33 applications. 
 

Appeal Decision by Justice J. Neilson

Justice Neilson granted the Defendants’ appeal and dismissed the Plaintiff’s action. Justice Neilson’s decision succinctly reviewed the considerations to determine whether a step significantly advances an action, as outlined in Patil v Cenovus Energy, 2020 ABCA 385. Those factors remind us the operative test is whether a step moves the action forward in an essential way. The test is about the substance of the step, not the form.

In Jacobs, the Court of Appeal was clear that an abandoned summary judgment application is not a step unless the matter is heard in court and a decision is given. Justice Neilson noted the same principles will apply to a summary dismissal application. Accordingly, the steps taken by the Defendants for their Summary Dismissal Applications and the Plaintiff’s Summary Judgment Application did not advance the Action. Orders and steps related to the Applications did not create important or notable progress toward the resolution of the Action.

Justice Neilson noted that the Plaintiff had many options to advance the Action after the Defendants abandoned their Summary Dismissal Applications; such as completing Questioning of the Defendants. Despite some production delays and failure from the Defendants to respond to the Plaintiff’s lawyer in early 2022, the Plaintiff’s failure to advance the Action was not a result of the Defendants’ actions.

Takeaways

Rule 4.33 is a very strong tool for a defendant and it is important during the litigation to analyze whether a step in significantly advances the action. This case reminds us the substance of the step is important, not the form. In the three years prior to the Rule 4.33 Application, there were answers to undertakings provided by the Defendants, a Court Order for production undertakings, and the Plaintiff filed a Summary Judgment Application of their own. Despite all these steps, the Action was dismissed as all steps were related to the Applications and none of the steps advanced the Action closer to resolution. It is important for defence counsel and insurance adjusters to be mindful of what advances have actually occurred on a file. Do not assume that any production, filed document, unheard application, or procedural step will advance an action to restart the three-year clock under Rule 4.33.