Successful application for a dismissal for want of prosecution of an action commenced in April 2006

Insurance law – Property insurance – Landlord and tenant – Intentional torts – Exclusions – Vandalism – Actions – Delay – Dismissal of action for want of prosecution

Momi v. Wawanesa Mutual Insurance Co., [2016] B.C.J. No. 2288, 2016 BCSC 2025, British Columbia Supreme Court, November 3, 2016, G.C. Weatherill J.

The insureds owned a rental property that was damaged in a fire on April 5, 2005. The fire loss was investigated by an independent insurance adjuster and a fire investigator. The independent adjuster interviewed the tenants of the property and learned they had been evicted from the property on March 28, 2005. As a result, the property was vacant at the time of the fire. The fire investigator was of the opinion the fire had been deliberately set and he identified six separate and distinct points of origin both inside and outside the property and the use of an accelerant at the points of origin.

The insurer denied coverage on the basis of an exclusion for vandalism or malicious acts committed while the property was vacant.

On April 6, 2006, the insureds commenced an action against the insurer. The action proceeded and the parties attempted to use the appraisal process to resolve differences between them regarding the actual cash value of the property. The appraisal process failed and the last correspondence from the plaintiff’s initial counsel was dated September 8, 2008.

More than six years later, on October 9, 2014, the defendants received a letter from new counsel for the insureds. Counsel for the insurer advised the insureds he had instructions to commence an application to dismiss the action for want of prosecution.

The factors the court must consider on an application to dismiss an action for want of prosecution include: the length of the delay and whether it is inordinate; any reasons for the delay either offered in evidence or inferred from the evidence, including whether the delay was intentional and tactical or whether it was the product of dilatoriness, negligence, impecuniosity, illness or some other relevant cause, the ultimate consideration being whether the delay is excusable in the circumstances; whether the delay has caused serious prejudice to the defendant in presenting a defence and, if there is such prejudice, whether it creates a substantial risk that a fair trial is not possible at the earliest date by which the action could be ready for trial after its reactivation by the plaintiff; and whether, on balance, justice requires dismissal of the action.

The delay in this case was clearly inordinate. The only reason suggested in the materials for the delay was that the insureds’ former counsel forgot about the action. The insureds did not provide fulsome evidence to explain why they did not take further steps to advance the action and retain new counsel. On the whole of the evidence, the Court found the delay was inexcusable.

When delay is both inordinate and inexcusable, prejudice to the defendants is assumed and it is up to the plaintiffs to rebut the presumption. No evidence was provided by the insureds to rebut the presumption of prejudice. Moreover, the defendants put forward positive evidence of prejudice. The fire investigator retained by the insurer died approximately four and a half years after the action was commenced, the insurer could not find the tenants who advised the independent adjuster that they were evicted prior to the fire, and the independent adjuster was in poor health and unable to testify at trial.

Regarding the interests of justice, the Court found that it was no longer possible for there to be a fair trial and the action was dismissed for want of prosecution.

This case was digested by Aaron D. Atkinson and edited by David W. Pilley of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact them directly at aatkinson@harpergrey.com or dpilley@harpergrey.com or review their biographies at http://www.harpergrey.com.

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