May 17, 2024
Got a Limitations Defense to an Originating Application? Seek Leave!
The Alberta Court of King’s Bench recently considered a situation wherein a Respondent sought to raise a limitations defense in a matter initiated by an Originating Application.
The Limitations Act, RSA 2000, c L-12 (Limitations Act) requires that a party plead limitations issues. This is problematic where an Action is commenced via Originating Application as the Respondent does not have the opportunity to file pleadings in response (like a Statement of Defense where an action is commenced via Statement of Claim).
The Court addressed this issue in Prevatt v Prevatt, 2024 ABKB 31 (Prevatt).In that case, in her written argument in response to the Applicant's Originating Application, the Respondent raised the issue of limitations for the first time and contended that the relief sought by the Applicant was barred by the Limitations Act. The Applicant argued that the Respondent could not rely on the Limitations Act as a defence since she did not expressly plead it and only raised it in her written argument long after the parties had already spent two years litigating the issues.
Pleading Limitations Is A Requirement
The Court observed that pleading the Limitations Act is a requirement under both the Limitations Act and the Alberta Rules of Court, Alta Reg 124/210 (the Rules). According to section 3(1) of the Limitations Act, a party can only avail themselves of a limitations defence if they expressly plead the Limitations Act. A similar requirement is found in the Rules, specifically Rule 13.6(3), which mandates that a party relying on a limitations defence must specifically plead it. The reason for this obligation, as stated in the Rule, is to prevent surprises.
The Applicant relied on the decision of Master Hanebury in Geophysical Service Incorporated v Devon ARL Corporation, 2015 ABQB 137, which supports the argument that the statutory requirement also applies to Actions commenced by way of Originating Application.
Justice Reed further noted that, since the Applicant in Prevatt initiated the Application through an Originating Application, the Respondent, in the absence of a Consent Order or Court Order to the contrary, had no right under the Rules to file a response pleading.
However, Justice Reed's analysis emphasized the importance of the Respondent notifying the Applicant in writing if they intend to rely upon a limitations defence in a matter commenced by Originating Application, and where the Respondent doesn’t necessarily have an opportunity to file a response pleading, as they would if the Action had been started by Statement of Claim.
A Respondent Should Seek Relief To File A Defense To An Originating Application
Prevatt is an interesting decision because as noted, generally, a limitation defense is pleaded in a Statement of Defense, but if an Action is started via an Originating Application, the Respondent does not have the opportunity to file a response. Further, there has been limited judicial consideration of Rule 3.12 and this case discusses how a Respondent should plead a limitations defense in such circumstances.
To that effect, Justice Reed noted that the Respondent must, at the very least, seek relief under Rule 3.12[1] to allow them to file a defense to the Originating Application. Failing to do so would undermine the purpose of section 3(1) of the Limitations Act and result in significant procedural unfairness towards the Applicant.
The Court ultimately held that it was the Respondent's responsibility to inform the Applicant of their intention to rely on a limitations defense under the Limitations Act. Additionally, the Respondent could have sought leave from the Court to treat the Originating Application as a Statement of Claim (pursuant to Rule 3.12), but neglected to do so. Justice Reed emphasized that pleading the Limitations Act when relying on it is crucial to prevent surprise and prejudice to the claiming party.
The Court dismissed the Respondent’s attempt to rely upon the Limitations Act, noting that the Respondent failed to comply with both the Rules and the Limitations Act.
A summary of this case, as well as other recent Court decisions that consider the Alberta Rules of Court, appears in the current JSS Barristers Rules Newsletter. Further, the JSS Barristers Rules Database features current and past rules summaries, which can be searched and filtered based on specific criteria, including by specific rule, Justices/Applications Judges, and keywords.
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[1] Rule 3.12 states: At any time in an action started by originating application the Court may, on application, direct that all or any rules applying to an action started by statement of claim apply to the action started by originating application.
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