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Note: 590988 Alberta Ltd. (Contractor) filed a builder's lien on property owned by 728699 Alberta Ltd. (Applicant).

Subsequently, Contractor commenced a lawsuit to collect on Applicant's debt under the builder's lien. After the lawsuit was filed, the lien was discharged and replaced with an LC. Applicant then annually renewed this LC. However, the only action that either party undertook regarding this lawsuit for over five years was Applicant renewing the LC.

Subsequently, Applicant moved to dismiss the case pursuant to a "drop dead" court rule. A "drop dead" rule states that a court must dismiss an action if "nothing has actually been done by either party to materially advance the action during the [previous] five year period." The Queen's Bench of Alberta, Edmonton District Court, Veit, J., granted Applicant's motion and dismissed the lawsuit.

Contractor argued that renewal of the LC materially advanced the action. The court ruled that conduct materially advances an action if it "in fact move[s] the lawsuit close to trial in a meaningful way." Since the LC in this case was only necessary for the prevailing party to collect a judgment and not for the court to actually render the judgment itself, the court stated that renewal of the LC did not materially advance the action under the "drop dead" rule.

[JEB/az]

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