Executive Summary: Key Legal and Evidentiary Issues

• The appellant’s claim was dismissed for inordinate and inexcusable delay under Rule 4.31 of the Alberta Rules of Court.

• The courts found that the delay was primarily attributable to the appellant, who failed to use procedural tools to advance the litigation.

• Arguments that professional courtesy justified the delay and that the case could be resolved on documentary evidence alone were rejected.

• The chambers judge determined that oral and expert testimony would be necessary, and the delay would cause significant prejudice to the respondent.

• The Court of Appeal upheld the dismissal, finding no error in the chambers judge’s exercise of discretion.

• An earlier application to extend the time to file a notice of appeal was granted due to a bona fide intention to appeal and the absence of prejudice to the respondent.

Background and facts of the case

1199096 Alberta Inc. (1199) filed a statement of claim in 2009 against Imperial Oil Limited (Imperial) and another party, alleging they contaminated and failed to remediate certain lands. The claim sought $11 million in damages. Imperial is an energy producer with oil and gas operations on the lands in question. In 1996, Imperial sold the lands to Probe Exploration Inc. but retained certain well sites. MEC Operating Company (MEC), not a party to this appeal, acquired the lands in 2003. In 2005, 1199 purchased approximately 185 acres from MEC. Before the purchase, 1199 engaged Planning Protocol Inc. to investigate the environmental status of the lands. Imperial advised that there were outstanding contamination issues, and further environmental assessments were conducted. The reports recommended that remediation certificates be completed by the oil/gas lease operators.

Despite these findings, 1199 completed the purchase. Imperial continued to advise 1199 and Planning Protocol of ongoing testing for remediation and reclamation purposes. 1199 later attempted to sell the lands between October 2005 and April 2008, receiving eight offers, all of which fell through. 1199 alleged this was due to environmental concerns for which Imperial and MEC were responsible. Eventually, 1199’s lenders foreclosed on the lands, and they were later purchased by a subsidiary of Imperial, Devon Estates Limited.

Procedural history and policy terms

On February 27, 2009, 1199 filed its statement of claim against Imperial and MEC, alleging negligence in failing to discharge statutory remediation obligations. Imperial filed a statement of defence on April 14, 2009, and served its affidavit of records on August 31, 2009. By 2020, the action had not proceeded to trial. On November 9, 2020, Imperial filed an application under Rule 4.31 to dismiss 1199’s action for inordinate delay. The applications judge granted the application and dismissed 1199’s claim against Imperial. 1199 appealed to the Court of King’s Bench, but the appeal was dismissed.

The chambers judge, using the framework from Humphreys v Trebilcock and Transamerica Life Canada v Oakwood Associates Advisory Group Ltd, examined the chronology of the case and found “conclusively” that the delay was inordinate, noting repeated failures by 1199 to advance the action. Examples included a 30-month delay in requesting questioning, cancellation of questioning without seeking alternative dates for 11 months, an eight-month delay in responding to undertakings, and a 14-month delay in following up on questioning a former Imperial employee.

The chambers judge found the delay was inexcusable and that Imperial “consistently and promptly complied with its specific duties as a defendant, and it consistently responded to 1199’s correspondence promptly and constructively, to progress the action.” The judge rejected 1199’s arguments that Imperial acquiesced in the delay caused by MEC or that professional courtesy justified not taking formal steps to advance the litigation, stating that plaintiffs have a duty to use the tools in the Rules of Court to advance the action.

The judge also found that 1199 had not rebutted the presumption of prejudice arising from the inordinate delay. The claim was framed only in negligence, not strict liability under Rylands v Fletcher, and the issues would require oral testimony and expert opinion evidence, not just documentary evidence. The passage of time would impede Imperial’s ability to adduce oral testimony and expert opinion evidence, resulting in significant, actual prejudice if forced to go to trial. No compelling reason was found not to dismiss the action, and the appeal was dismissed.

Appeal and extension of time application

After the chambers judge’s decision was filed on March 5, 2024, 1199 attempted to file a notice of appeal on March 6, 2024, one day late. Under Rule 14.8(2)(a)(iii), the deadline was March 5, 2024. 1199 applied for an extension of time to file the notice of appeal. Justice Bernette Ho granted the extension, finding that there was a bona fide intention to appeal, the delay was due to confusion in counsel’s office regarding the filing deadline, and there was no prejudice to Imperial. The court found that the appeal raised at least an arguable issue, as the applicant submitted that the statement of claim pleaded both an intentional tort and negligence, and one ground of appeal was that the court below erred by analyzing only the negligence aspect.

Outcome

The Court of Appeal dismissed both the appeal and the application to adduce fresh evidence. The court held that the chambers judge had correctly characterized the claim as negligence, that oral and expert evidence would be necessary, and that the delay was inordinate and inexcusable, causing significant prejudice to Imperial. The successful party was Imperial Oil Limited. No amount was awarded to 1199, as the claim was dismissed in its entirety.