BALL v 1979927 ALBERTA LTD, 2022 ABKB 814


1.4: Procedural orders
1.5: Rule contravention, non-compliance and irregularities
3.26: Time for service of statement of claim
3.27: Extension of time for service
3.28: Effect of not serving statement of claim in time
11.25: Real and substantial connection
11.26: Methods of service outside Alberta
11.27: Validating service
11.33: Definitions
11.34: Service in Contracting State
13.5: Variation of time periods

Case Summary

This was an Application by the Plaintiffs for an Order validating service or extending time for service of a Statement of Claim on two individual Defendants, resident in the United States and United Kingdom, respectively. The Statement of Claim was filed May 16, 2019. In August 2019, the Plaintiffs submitted a desk Application seeking an Order authorizing service ex juris on the two Defendants; however, no Order resulted. Subsequently, counsel for several of the other Defendants indicated in a letter to counsel for the Plaintiffs that it anticipated that it would be retained by the two un-served Defendants in the event the Applicants decided to proceed against and serve them. Since service was never effected, the un-served Defendants did not retain counsel and no steps were taken by that counsel on the Defendants’ behalf.

In the Application, the Applicants argued that service should be validated or time for service extended in light of the Applicants’ reasonable belief that the individual Respondents were aware of the Statement of Claim. In support, the Applicants cited communications with the Defendants’ prospective counsel and the fact that a corporation in respect of which the two Defendants were believed to be directors was served with the same Statement of Claim. The Applicants relied on Rules 1.5, 11.27, 3.27 and 1.4.

Regarding the Applicants’ belief that the Defendants were aware of the Statement of Claim, the Court noted that awareness of a Statement of Claim is not tantamount to service since, in the absence of service, the Defendants’ legal rights were not engaged. Similarly, the Court found that the Applicants’ interactions with prospective counsel were insufficient to give rise to a reasonable belief as to service since the prospective counsel indicated only that it anticipated being retained in the event that service was effected, which it was not.

Regarding Rule 1.5, the Court held that, notwithstanding the general curative power provided by Rule 1.5, the Rule is subject to limitations. In particular, the Court held that, since Rule 1.5 restricts the Court’s power to extend time periods that are otherwise prohibited from being extended, and Rule 3.26 restricts the Court’s power to vary or extend timelines for service pursuant to Rule 13.5, Rule 1.5 could not be relied upon to extend time for service of the Statement of Claim. Relying on previous case authority, the Court also held that Rule 1.5 could not be relied upon to cure non-compliant service on Parties located outside of Canada.

Regarding Rule 11.27, the Court held that the Applicants could not rely on Rule 11.27 to validate service since Rule 11.27 includes a specific exception for documents required to be served in accordance with Division 8, including Rules 11.33, 11.34. As the Statement of Claim was required to be served pursuant to that Division, Rule 11.27 did not apply. Further, since Rules 11.25 and 11.26 make service outside of Canada contingent on an Order permitting service ex juris, the Court held that the absence of such an Order precluded validation.

Regarding Rule 3.27, the Court held that time for service could not be extended because the Applicants’ failure to serve arose a result of their own counsel’s oversight and not any conduct on the part of the Respondents or a third party.

Regarding Rule 1.4, the Court held that time to serve could not be extended since Rule 3.26(3) limited the Court’s power to do so and Rule 1.4 applies only in the absence of specific limitations provided by the Rules.

In the result, the Court held, pursuant to Rule 3.28, that no further proceedings could be taken against the two Respondents. 

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Related to 1.4

Related to 1.5

Related to 3.26

Related to 3.27

Related to 3.28

Related to 11.25

Related to 11.26

Related to 11.27

Related to 13.5

Related to 11.33

Related to 11.34