In Elbaz v. Government of P.E.I., 2023 PESC 52 (CanLII), in the context of a motion by the defendants to dismiss an action for delay, the Court considered (among many other factors) the fact that the plaintiffs had, after their counsel had died after 15 years on the case, suggested to defendants that the case be moved to arbitration rather than remaining before the court. Considering this and other factors, the Court declined to dismiss the case for delay, finding that the delay was inordinate, but that it was not intentional or contumelious. Further, both sides were responsible for the delay. The explanations for the delays were “reasonable and cogent” or “sensible and persuasive”.
The dispute – This case is the latest development in a decades-long saga relating to the reorganization of the fish processing industry in Prince Edward Island. The plaintiffs were in the business of fish processing. In the 1990s, they declined to consolidate their operations in a new company as part of a government-backed process. Since then, the plaintiffs encountered a number of issues relating to their fishing license and government loans. In 2002, the plaintiffs filed an application for judicial review of a decision relating to their fishing license, and in 2005, they sued the provincial government and other related parties for damages.
That claim made its way through the PEI courts for the next two decades, with various motions and rulings made, and an extensive discovery process over years. In November 2019, plaintiffs’ counsel passed away. The plaintiffs took a long time to find new counsel. In 2023, the government brought a motion to dismiss the action for delay.
The Court analysed, among other things, whether the plaintiffs’ delay in finding new counsel warranted granting the motion to dismiss. The Court considered that a number of factors could excuse the delay: (i) the fact that it was difficult to find new counsel in 15-year-old litigation against the government with an extensive history; (ii) the fact that the search for new counsel overlapped with the Covid-19 pandemic; and (iii) the fact that the plaintiffs had proposed moving the case to arbitration shortly after the death of its counsel.
This last factor is the only relevant aspect relating to arbitration in the decision. The plaintiffs wrote the following letter to opposite counsel in February 2020 – only a few months after the death of their counsel:
“This case has been going on for a very long time. I have a very busy and demanding business to run. I would very much like for this dispute with the Province to come to an end sooner than later. I expect your clients likely feels the same way. Regardless who wins at a trial there is always the possibility of an appeal further prolonging the judicial process. I am therefore writing to you to ask that you discuss with your client the possibility of an agreement for a private arbitration in order to expedite a final conclusion to this longstanding dispute. If there is no interest on your client’s part in a more expedient process such as arbitration would avail, then so be it. However, I thought I should ask.”
The defendants rejected the proposal. There was no agreement to proceed by arbitration, and the matter remained before the court.
On the whole, considering all the factors before it (and without particularly developing on the impact of the letter proposing arbitration), the Court found that the delay was inordinate, but that it was not intentional or contumelious. The explanations for the delays were “reasonable and cogent” or “sensile and persuasive”. Further the delays were the responsibility of both sides.
Contributor’s Notes:
This case only tangentially relates to arbitration and is very fact-specific. In most motions to dismiss a court case based on delay, the mere fact that one of the parties unsuccessfully requested moving the case to arbitration in a letter to opposing counsel is unlikely to be determinative. However, in this case, the proposal to arbitrate, along with many others factors (death of the plaintiffs’ counsel after 15 years on the case, the COVID pandemic, etc.) seem to have helped the Court conclude that the plaintiffs were not completely disengaged so as to be intentionally delaying the proceedings. Onne can imagine other circumstances in which a court (or arbitrator) might accept that one party’s proposal to move all or part of a dispute to arbitration would be relevant to the determination of costs for example. Given the current court backlogs, there is certainly a public policy rationale for such an approach.