Executive Summary: Key Legal and Evidentiary Issues

• Inordinate and inexcusable delay in prosecuting the action triggered a presumption of significant prejudice under Rule 24.01 of the Manitoba King's Bench Rules.

• The plaintiff did not contest the finding of inordinate and inexcusable delay but argued the presumption of significant prejudice was rebutted by evidence before the court.

• Loss of key witness availability arose because former employees of the defendant were no longer employed by the company, though the plaintiff argued they remained compellable witnesses.

• Real evidence in the form of documents once in the possession of both parties no longer existed for reasons unconnected to the litigation.

• A substantial risk that a fair trial would not be possible on the disputed issues was established by the combination of extended delays and unavailable evidence.

• The functional approach to assessing litigation prejudice required examination of the complete timeline from contract execution in 2012-2013 through trial preparation in 2024.

Background and facts of the case

BTW Inc initiated legal action against Cargill Limited in 2018, seeking damages for breach of contract. The dispute originated from canola seed and fertilizer contracts that the parties had entered into in 2012 and 2013. Much of the factual disagreement centered on alleged oral conversations between the parties regarding the terms and conditions of these contracts, conversations that involved former employees of Cargill Limited. Additionally, certain documents that had been in the possession of both parties no longer existed for reasons unconnected to the litigation.

Procedural timeline and delays

The action progressed slowly through the litigation process. Examinations for discovery were conducted in 2021. Further delays ensued, with partial answers to undertakings only being provided by the parties in 2024. In the fall of 2024, a pre-trial conference took place, at which time Cargill Limited filed a motion to dismiss the action for delay under the Manitoba King's Bench Rules.

Legal framework and the motion for delay

The motion to dismiss was brought under Rule 24.01(1) and Rule 24.02(1) of the Manitoba King's Bench Rules. Under Rule 24.01(2), when inordinate and inexcusable delay is established, there arises a presumption of significant prejudice to the defendant. The burden then shifts to the plaintiff to rebut this presumption on a balance of probabilities.

The plaintiff's position and arguments on appeal

On the motion, BTW Inc did not contest that there had been inordinate and inexcusable delay under rule 24.01. Instead, the company argued that the presumption was rebutted by the evidence before the court. On appeal to the Manitoba Court of Appeal, BTW Inc submitted that the defendant did not suffer any significant prejudice due to the delay. The plaintiff contended that the determination of prejudice begins with the filing of a statement of claim, such that prior events are not considered. Furthermore, BTW Inc argued that the fact key witnesses are no longer employed by the defendant is of no moment because they are compellable.

The court's analysis of litigation prejudice

The Court of Appeal found that the motion judge had taken the requisite functional approach to determine whether the plaintiff had rebutted the presumption of significant prejudice on the balance of probabilities. The court examined the complete factual record before the motion judge, which revealed a long delay in bringing the action, delay in prosecuting it, and the prospect of the trial of the issues in dispute being conducted without key witnesses and important real evidence. The court characterized this constellation of circumstances as a classic example of litigation prejudice to the defendant such that there is a substantial risk that a fair trial will not be possible on the issues in dispute.

The outcome and successful party

The Manitoba Court of Appeal dismissed BTW Inc's appeal and upheld the motion judge's decision to dismiss the action for breach of contract pursuant to Rule 24.01(1). Cargill Limited emerged as the successful party. The appeal was dismissed with costs to be paid to Cargill Limited; however, the precise monetary amount of costs awarded was not specified in the judgment.