Brokerage’s 11-year lawsuit against tech vendor allowed to continue

Ballam Insurance Services, a Nova Scotia brokerage that sued its tech vendor 11 years ago over server issues, is allowed to proceed with its case despite examples of ‘inordinate’ and ‘inexcusable’ delays, the Supreme Court of Nova Scotia ruled Monday.

That’s because the defendants in the 2011 lawsuit, Fundy Computer Services Ltd. and Atlantic Datasystems Inc. (collectively referred to as Fundy), couldn’t show the lengthy delays — particularly the ‘inordinate and inexcusable’ delay since 2017 — prejudiced its case, the court found.

“Fundy…asserts that the delay has resulted in likely prejudice because ‘there can be no doubt that the memories of those involved have faded,’” Nova Scotia Supreme Court Justice Gail L. Gatchalian wrote in the court’s decision.

“However, Fundy did not present any evidence to support this assertion. Fundy did not identify key witnesses whose memories have allegedly faded, the importance of their evidence to Fundy’s case, or when the memory loss occurred so as to result in serious prejudice to Fundy should the matter proceed.”

The dispute arose over information technology services that Fundy provided to Ballam in 2010 and 2011. Fundy did not take issue with the time elapsed from 2011 to 2014. Discoveries of the parties’ witnesses took place in June 2014.

But Fundy argued Ballam has done very little since then to advance the matter. “Fundy says that the last meaningful step taken by Ballam was on February 17, 2016, when Ballam provided a partial response to discovery undertakings, fulfilling approximately half of them,” the court found.

Ballam argued it had taken steps to advance its lawsuit. But it had encountered delays related to the resignation of a key counsel on the file, as well as limited access to the court because of the COVID-19 pandemic. The court found these delays were ‘inexcusable.’

“Ballam has not satisfied me that the delay from 2017 to the present, almost six full calendar years, is entirely excusable,” Justice Gatchalian wrote. “While I accept that [legal associate Michael] Blades’s departure and the onset of the pandemic caused some disruption to Ballam’s trial preparation, the delay caused by these two events is minimal compared to the overall delay since 2017.

“Ballam began to deal directly with the second expert in early 2017. Ballam has not satisfactorily explained why it still does not have an expert report. Neither has Ballam satisfactorily explained why approximately half of its discovery undertakings remain outstanding to this day. I do not accept that Mr. Blades’ departure and/or the onset of the pandemic explains this lengthy delay.”

Nevertheless, the court rejected Fundy’s argument that the delays had prejudiced its case.

In an affidavit filed for the case, Fundy’s information technology manager, Edward Cooze, said he believed Ballam had not made available to Fundy the original physical server, the virtualization software, the Microsoft server software, the Windows Server Audit logs, the software application used by Ballam at the relevant time and known as The Agency Manager (TAM) software, and any TAM logging system that might exist.

He told the court it was ‘essential’ for Ballam to have access to these items and information to determine the exact nature or extent of the alleged server issues.

But just because they had not been supplied, that didn’t mean they were unavailable, the judge ruled. And the judge questioned the date of the delay.

“[Cooze’s] evidence…does not establish when the information and items became unavailable, that is, before the end of 2016, or sometime later,” Justice Gatchalian wrote. “There must be a causal connection between the delay and the prejudice before Ballam’s claim can be legitimately dismissed.

“The evidence of Mr. Cooze does not establish that, as a result of the delay from 2017 on that I have found to be inexcusable, there is a substantial risk of an unfair trial or that it is likely to cause serious prejudice to Fundy.”

And so, Ballam’s case is allowed to continue, although the court set strict timelines for carrying out the next steps.

One step involves adding J.F.B. Holdings Limited as a party to the case, since Ballam informed Fundy in August 2017 that the shares of Ballam had been sold to JFB and that all rights and claims of Ballam had been assigned to JFB.

Feature photo courtesy of iStock.com/deepblue4you