Executive Summary: Key Legal and Evidentiary Issues

• Interpretation of Rule 24.02(1) on dismissal for long delay, including whether the mandatory three-year period for a significant advance is extended when the last day falls on Labour Day.

• Application of Rule 3.01(c) and section 24(1) of The Interpretation Act (and the argument under section 22(4)) to compute the three-year period from the last significant advance on September 2, 2021.

• Determination of whether filing a pre-trial conference brief on August 30, 2024, and emailing it with pre-trial availability on September 3, 2024, constituted a “significant advance” in the action.

• Effect of irregular email service of the pre-trial brief under Rules 16.05(1), 16.08 and 2.01, given that the defendants actually received the brief but did not formally accept service by email.

• Consideration of whether the overall delay, including the period from September 2, 2021, to early September 2024, was inordinate and inexcusable under Rule 24.01(3).

• Assessment of significant prejudice under Rule 24.01, including the presumption of prejudice and the absence of evidence of actual prejudice justifying dismissal.

Background and parties
The plaintiffs, Denis Ferland and Michelle Ferland, owned real property that was sold pursuant to a listing agreement with the defendants, real estate agent Georges Bohemier and Century 21 Carrie Realty Ltd., carrying on business as Century 21 Carrie.com. The plaintiffs brought an action seeking compensation for breaches of contractual duties, fiduciary duties and the duty of care, and for negligent misrepresentation, all relating to the sale of this property. The defendants defended the action. In this decision, Associate Judge Goldenberg of the Court of King’s Bench of Manitoba dealt with a procedural motion by the defendants to dismiss the action for delay, rather than determining the underlying liability issues.

Procedural history of the action
The plaintiffs filed their Statement of Claim on February 19, 2020. They filed an Amended Statement of Claim on June 30, 2020. The defendants filed a Statement of Defence on August 7, 2020. On September 21, 2020, the plaintiffs served the defendants with their Affidavit of Documents and Schedule “A” productions. On April 15, 2021, the defendants served the plaintiffs with their Affidavit of Documents and Schedule “A” productions. On May 4, 2021, the plaintiffs served the defendants with a Supplemental Affidavit of Documents. On May 5, 2021, defendant Georges Bohemier was examined for discovery. On June 10, 2021, plaintiff Denis Ferland was examined for discovery, and his examination for discovery was resumed and completed on September 2, 2021. The parties agreed that there were no significant advances in the action between the conclusion of discoveries on September 2, 2021, and the filing of the plaintiffs’ Pre-trial Conference Brief on August 30, 2024, and that none of the enumerated exceptions in Rule 24.02(1) applied. On August 30, 2024, the plaintiffs filed a Pre-trial Conference Brief and requested available dates for a pre-trial conference from the Trial Coordinator. September 2, 2024, was Labour Day. On September 3, 2024, the Trial Coordinator provided plaintiffs’ counsel with available pre-trial dates. That same day, plaintiffs’ counsel emailed defence counsel a filed copy of the plaintiffs’ Pre-trial Conference Brief together with a list of available dates for a pre-trial conference and requested the defendants’ availability. On September 5, 2024, the defendants filed the Notice of Motion seeking to dismiss the action for long delay, or in the alternative, for inordinate and inexcusable delay.

The long delay motion under Rule 24.02(1)
The defendants brought their motion under Rule 24.02(1) of the Court of King’s Bench Rules on the basis that “three or more years” had passed without a significant advance in the action. Rule 24.02(1) provides that if three or more years have passed without a significant advance, the court must, on motion, dismiss the action unless one of the specified exceptions is met. The plaintiffs and defendants agreed that discoveries completed on September 2, 2021, were a significant advance, and that none of the exceptions in Rule 24.02(1)(a)–(e) applied. They also did not dispute that, had the Pre-trial Conference Brief been filed and properly served within the three-year period, it would have constituted a significant advance in light of authorities such as Rempel v. Gentek and Schneider et al v. Moffat, where the filing of a pre-trial brief was held to typically be a significant step in litigation. The defendants’ primary position was that the three-year period expired on Labour Day, Monday, September 2, 2024, and that the Pre-trial Conference Brief was not served within that period. They further argued that the brief had not been properly served at all, because it was only emailed on September 3, 2024, without a formal acceptance of service by email in accordance with Rule 16.05(1)(e). They relied in part on Blaze et al v. Rooke et al at first instance, where filing but not serving a pre-trial brief was held not to constitute a significant advance, though that decision was later overturned on a different point by the Court of Appeal.

Computation of time and the impact of Labour Day
The plaintiffs answered that the deadline for a significant advance in this case was not Labour Day, but Tuesday, September 3, 2024. They relied on Rule 3.01 of the Rules and sections 22(4) and 24(1) of The Interpretation Act, C.C.S.M. c. I80. Rule 3.01(c) provides that where the time for doing an act under the Rules expires on a holiday, the act may be done on the next day that is not a holiday. Section 24(1) of The Interpretation Act similarly provides that a time limit that would otherwise expire on a holiday is extended to include the next day that is not a holiday. The plaintiffs also relied on section 22(4) of The Interpretation Act, which states that when anything is to be done within a time after, from or before a specified day, the time does not include that day. They argued that, by operation of these provisions, the deadline for a significant advance was extended to September 3, 2024, and that, by virtue of section 22(4), the three-year period started on September 3, 2021, rather than September 2, 2021. The defendants contended that Rule 3.01(c) did not apply because Rule 24.02(1) does not expressly require that an “act” be done within a set time, but instead refers to a period of three years passing without a significant advance. They argued that the plaintiffs had three years before Monday, September 2, 2024, to take any step or obtain an agreement to the delay and that the expiry of three years on a holiday did not change the fact that the period had elapsed. They also pointed to Droog v. Hamilton, an Alberta decision interpreting Alberta’s rules and Interpretation Act, to support their approach. Associate Judge Goldenberg rejected the defendants’ narrow reading. The court held that a significant advance is an “act under these rules” and that the three-year period in Rule 24.02(1) functions as a mandatory time limit to take at least one such step after the last significant advance. The decision emphasized that this deadline is “more consequential than most, if not all, other deadlines under the Rules,” because once three or more years have passed without a significant advance and no exception applies, the court has no discretion and must dismiss the action. The court relied on analogous interpretations of similar wording in other jurisdictions, including Taylor v. Richardson Foods and Hamel v. Leduc, where courts held that time limits expiring on holidays are extended to the next non-holiday day. Associate Judge Goldenberg found that Rule 3.01(c) applied and extended the deadline for a significant advance to Tuesday, September 3, 2024. The judge also stated that, for the same reasons, the three-year deadline was a time limit within The Interpretation Act, such that section 24(1) similarly operated to extend the deadline to the day after Labour Day. In light of this finding, the court concluded it was unnecessary to decide whether section 22(4) of The Interpretation Act independently altered the start date of the three-year period, although that argument was noted.

Whether a significant advance occurred by September 3, 2024
The court next considered whether there had been a significant advance by the extended deadline. The evidence showed that the plaintiffs filed their Pre-trial Conference Brief on Friday, August 30, 2024. On Tuesday, September 3, 2024, plaintiffs’ counsel emailed defence counsel stating, “Enclosed for service upon you please find a filed copy of the Plaintiffs’ Pre-Trial Conference Brief,” and providing a list of available dates in November and December 2024 for a pre-trial conference, asking which dates worked for the defendants. The defendants acknowledged that they received this email and knew the brief had been filed on that date. However, they argued that the brief was not properly served. Rule 16.05(1) sets out the forms of service on a lawyer of record, including by fax and courier, and under Rule 16.05(1)(e), email service is effective only if the lawyer being served provides an email acceptance of service and the date of acceptance. In this case, defence counsel did not send any email accepting service, the brief was not faxed, and no hard copy was personally served. The first response to the September 3, 2024 email was the filing of the delay motion on September 5, 2024. Associate Judge Goldenberg held that the analysis did not end with the conclusion that the brief was not served in exact compliance with Rule 16.05(1). The defendants acknowledged that they had received the email and the brief on September 3, 2024. The court found that this met the threshold for validating service under Rule 16.08, which permits the court to validate service made in an unauthorized or irregular manner where the document came to the notice of the person to be served. The court also referred to Rule 2.01(1), which states that a failure to comply with the Rules is an irregularity and does not render a proceeding or step a nullity, and authorizes the court to grant necessary relief to secure the just determination of the real matters in dispute. Applying a functional analysis, the court considered prior Manitoba authorities, including Rempel, Schneider and Buhr. The Pre-trial Conference Brief in this case was described as substantive, setting out the plaintiffs’ assessment of case law and legal principles as well as the expert report they intended to rely on at trial. The court noted that by filing the brief, the plaintiffs had satisfied a prerequisite for scheduling the first pre-trial conference, and that by emailing the brief and available dates, they put the parties in a position to schedule a pre-trial conference. In Buhr, a similar step—sending a pre-trial conference brief and requesting availability—was treated as a significant advance, although there it occurred outside the three-year period. On these facts, Associate Judge Goldenberg found that the defendants were in the same position as if the brief had been served by fax or courier on September 3, 2024. The court concluded that providing the brief and the pre-trial dates in this way amounted to a significant advance in the action within the extended three-year period. Accordingly, there had not been a period of three or more years without a significant advance, and the mandatory dismissal provision in Rule 24.02(1) did not apply.

Alternative request for dismissal under Rule 24.01 (inordinate and inexcusable delay)
In the alternative, the defendants sought dismissal under Rule 24.01, arguing that the delay in this action had been inordinate and inexcusable and had resulted in significant prejudice. They pointed out that 58 months elapsed from the filing of the Statement of Claim on February 19, 2020, to the filing of the delay motion on September 5, 2024. They submitted that the action did not involve a complicated matter and that the issues were straightforward, so that the delay—particularly between September 2, 2021 (completion of discovery of Mr. Ferland) and September 3, 2024 (the email enclosing the Pre-trial Conference Brief)—was unreasonable. They noted that in Buhr a 33-month delay in a personal injury action between completion of discovery and the delivery of some answers to undertakings was found to be inordinate and inexcusable, and said that in the present case discovery had been completed 36 months before the delay motion with no undertakings exchanged. They also emphasized that no communication occurred between the conclusion of discovery on September 2, 2021, and the September 3, 2024 email, and argued that taking 35 months to obtain an expert report (dated July 5, 2024) was not reasonable. The plaintiffs responded that the time was used to prepare the Pre-trial Conference Brief and obtain the expert report attached to it. They argued that the pace of the litigation was not uncommon and that the subject matter included a claim for damages for breach of contract, negligent misrepresentation, breach of fiduciary duties and breach of the duty of care, with potential expert evidence required. They pointed out that examinations for discovery had been concluded, the expert report had been obtained, and that, but for the delay motion, a pre-trial conference could have taken place in late 2024. The Court of Appeal’s guidance in Forsythe v. Johnson was cited for the applicable test under Rule 24.01, including the need to consider the subject matter of the litigation, the complexity of the issues, the length of the delay, the explanation for the delay, the current status of the litigation, and the role of each party in the overall delay.

Findings on inordinate delay, excuse and prejudice
Considering these factors, Associate Judge Goldenberg stated, “Overall, I consider the litigation to be somewhat complex, likely more complex than in Buhr.” The court noted that the case may require expert testimony, including on the standard of care of the defendants, whether a change in a development plan affected the value of the property, and whether a real estate agent who was aware of (or ought to have been aware of) a change in a development plan would have an obligation to advise clients accordingly. While acknowledging that the length of delay was “not insignificant,” the court examined the totality of the steps that had been taken: the amendment and close of pleadings, production of documents, examinations for discovery, and the preparation, filing and provision of the Pre-trial Conference Brief and pre-trial conference dates. With these in view, and noting that a pre-trial conference could have proceeded in late 2024 but for the motion, Associate Judge Goldenberg was not prepared to find that the delay was inordinate. The court accepted that the plaintiffs had not provided a specific explanation for why each step, including obtaining the expert report, took as long as it did. However, the judge was not satisfied that the delay had been in excess of what was reasonable in all of the relevant circumstances, including the complexity of the issues and the current status of the litigation in comparison to Buhr. Because inordinate and inexcusable delay was not established, the presumption of significant prejudice under Rule 24.01(2) did not arise. The defendants did not establish, and did not argue, that the delay had resulted in actual prejudice. In these circumstances, the court exercised its discretion under Rule 24.01 not to dismiss the action for delay on the basis of prejudice.

Outcome and successful party
In conclusion, Associate Judge Goldenberg found that there had not been a period of three or more years without a significant advance in the action, once Rule 3.01(c) and section 24(1) of The Interpretation Act were applied to extend the deadline to September 3, 2024, and the filing and provision of the Pre-trial Conference Brief with pre-trial dates were taken into account. The court also found that the delay in this case had not been shown to be inordinate and inexcusable within the meaning of Rule 24.01(3), and that no presumption or proof of significant prejudice justified dismissal. The defendants’ motion to dismiss the action for long delay, or alternatively for inordinate and inexcusable delay, was therefore dismissed. The successful party on this motion was the plaintiffs, Denis Ferland and Michelle Ferland. The court did not fix any specific amount for costs or damages in this decision; it stated that if the parties could not agree on the issue of costs, they could arrange to speak to the matter. Accordingly, the total monetary award, costs or damages ordered in favour of the successful party cannot be determined from this judgment.