Executive Summary: Key Legal and Evidentiary Issues

• Danark sought dismissal of the action for delay under Rule 24.01 and the court’s inherent jurisdiction.

• The plaintiff’s delay was examined in light of the COVID-19 pandemic, business disruptions, and changes in legal counsel.

• The court assessed whether the delay was intentional, contumelious, or inexcusable, and whether it prejudiced the defendant.

• The presumption of inherent prejudice due to delay was addressed and rebutted by the plaintiff.

• The court considered whether the delay undermined public confidence in the administration of justice.

• The defendant’s motion to dismiss was ultimately dismissed, and the matter was found trial-ready.

Background and facts of the case

Cy Rheault Construction, the plaintiff, registered a claim for lien on January 13, 2017, in the amount of $338,326.98 against property of the defendant, Danark Enterprises Limited. The plaintiff commenced this action on February 27, 2017, to perfect its lien. The Bank of Nova Scotia was originally named as a defendant but was discontinued from the action on March 7, 2017. Danark delivered a statement of defence and counterclaim on March 27, 2017. The plaintiff brought a motion to remove Mr. Doucet as counsel for the defendant due to an alleged conflict of interest, but this motion was ultimately abandoned. In the spring of 2018, Danark sought permission to have Mr. Doucet cross-examine Roger Rheault while the motion to remove him was outstanding; this request was denied on May 22, 2018. The plaintiff delivered a reply and defence to counterclaim on August 28, 2018. Affidavits of documents were exchanged in December 2018, and examinations for discovery took place in August 2019. The defendant provided answers to certain undertakings in December 2019, and the plaintiff did so in June 2020. Some undertakings remained outstanding on both sides.

Procedural history and delay

The defendant delivered the motion to dismiss on November 1, 2024. The plaintiff was cross-examined on his responding affidavit on January 27, 2025. The defendant argued that the plaintiff failed to advance its claim in a timely fashion since examinations for discovery were completed, resulting in prejudice to the defendant. The plaintiff argued that there were reasonable explanations for the delay, including the severe impact of the COVID-19 pandemic on its business in 2020, the loss of a major client in 2021, and complications in retaining new counsel after its original lawyers left their firm. The plaintiff was sued by its prior lawyers for non-payment of fees in 2021. The plaintiff’s new counsel, Contant, did not receive the file from previous counsel until November 28, 2023. The plaintiff followed up with Contant in late 2023 and early 2024, but Contant advised he could not defend the motion for personal reasons. The plaintiff hired its current counsel in October 2024, who responded to the motion. The motion was adjourned on November 29, 2024, to permit cross-examination of Rheault, which took place on January 27, 2025. The motion was argued on July 11, 2025.

Legal principles and analysis

The court reviewed Rule 24.01 of the Rules of Civil Procedure, which allows for dismissal if a plaintiff fails to set an action down for trial within six months after the close of pleadings, provided the delay is intentional and contumelious, or inexcusable and gives rise to a substantial risk that a fair trial might not be possible. The court also considered its inherent jurisdiction to dismiss for lengthy and unexplained delay that undermines public confidence in the administration of justice. The court found that the threshold for intentional and contumelious delay was not met and that the delay was not inexcusable, given the impact of the COVID-19 pandemic, the plaintiff’s business challenges, and issues with legal representation. The court accepted the plaintiff’s evidence regarding these difficulties. The presumption of inherent prejudice was rebutted, as discoveries were completed early and most undertakings were complete. The defendant did not provide convincing evidence of actual prejudice. The court found the delay did not undermine public confidence in the administration of justice.

Outcome and next steps

The court concluded that the trial record had been passed and the matter was ready to be scheduled for trial. The court ordered the parties to contact the trial coordinator to schedule a judicial pre-trial, where the possibility of proceeding by way of affidavit could be considered. The timetable requested by the defendant was deemed unnecessary. The defendant’s motion was dismissed. If the parties could not agree on costs, written submissions were invited within specified timeframes. The successful party on this motion was the plaintiff, Cy Rheault Construction. The amount in dispute was noted to have been greatly reduced, but no specific figure was provided in the evidence on this motion.