March 30, 2021
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In Sweet Productions Inc. et al. v. Licensing IP International S.À.R.L. et al., 2021 FC 216, the Federal Court allowed the Defendants’ appeal from the Prothonotary’s decision ordering that the action be subject to case management as opposed to being dismissed for undue delay.
In doing so, the Court confirmed that, where undue delay is established on a balance of probabilities, the plaintiff bears the burden of demonstrating that a remedy other than dismissal of the action is appropriate.
The Decision Below
The Defendants were accused of copyright infringement relating to numerous cinematographic works. Pursuant to Rules 167 and 369 of the Federal Courts Rules, the Defendants launched a motion to strike the action for undue delay or, in the alternative, to have case management ordered. In support of its motion, the Defendants sought leave to file a reply affidavit, which the Prothonotary refused, concluding that, because the affidavit contained evidence of further delays after the motion to strike was filed, it had diminished usefulness for establishing the relevant delay.
The Prothonotary found that the Plaintiffs caused an undue delay to the proceedings. Although the delay was found to have prejudiced the Defendants, the action was ordered into case management. The Defendants appealed.
The Federal Court’s Decision
Admissibility of the Reply Affidavit
The Court held that the Prothonotary should have granted leave for the Defendants to file the reply affidavit. The Defendants submitted, and the Court accepted, that the purpose of the reply affidavit was not to provide additional evidence with respect to delay. Rather, the evidence in the reply affidavit was relevant to the Plaintiffs’ conduct after the motion to dismiss for delay as well as the appropriate remedy and was therefore relevant to the motion to strike.
Was Rule 167 Satisfied?
Rule 167 of the Federal Court Rules empowers the Court to dismiss a proceeding or impose other sanctions when there has been undue delay by a plaintiff, applicant or appellant in the proceeding. The Plaintiffs did not challenge the Prothonotary’s finding that there had been an undue delay.
In determining the appropriate remedy, the Court held that the Prothonotary failed to apply the guiding principle that “judicial delay is objectionable in all contexts.” As the Court explained, this principle, as dictated by the Supreme Court of Canada in R. v. Jordan, 2016 SCC 27 and Hryniak v. Mauldin, 2014 SCC 7, marks a “culture shift”, which the parties to the within litigation were required to follow. The Court concluded that it was an error in law not to apply the principles in Hyrniak to the events that had occurred up until the date of the decision (including those described in the reply affidavit).
Further, the Court noted that, in light of the culture shift and the language of Rule 167, where undue delay is established on a balance of probabilities, there is a presumption that the matter should to be dismissed:
"Where a party has established on the balance of probabilities that there has been undue delay in prosecuting a proceeding, the proceeding will be dismissed unless the Court is convinced that imposing another sanction is more appropriate. The burden of satisfying the Court that it ought to order another sanction rests on the party facing the dismissal of its action.”
The Court concluded that the Plaintiffs had failed to demonstrate on a balance of probabilities that any sanction would ensure that their prosecution of the action would proceed at a reasonable pace.
Finally, the Court was satisfied that, in deciding to impose case management in favour of dismissing the action, the Prothonotary improperly considered certain evidence and ignored other relevant evidence, including: the reply affidavit evidence; the Plaintiffs’ failure to provide assurances that the action would proceed expeditiously; and the fact that the Plaintiffs opposed case management. When all relevant evidence was considered, the Court found that case-management was an inappropriate remedy.
The Court concluded that, pursuant to Rule 167, there was an undue delay by the Plaintiffs in prosecuting the within action, and ordered that the action be dismissed, with costs, for undue delay.
Authors: Aaron Barrett and Sam Galway