The Defendant appealed a Decision of an Applications Judge who had found that certain invoice amounts sought by the Plaintiff were not barred by the Limitations Act, RSA 2000 c L-12 and could be set off against the Defendant’s counterclaim. Justice Romaine dismissed the Appeal and upheld the Applications Judge’s Decision.

Rule 6.14 allows for the Appeal of an Applications Judge’s Decision. The Appeal before Romaine J. was de novo, and the standard of review was correctness on all issues.

Under the agreements between the Parties, the Plaintiff had 180 days after each year-end to adjust certain invoices and provide them to the Defendant for payment. The invoices at issue were provided well after the 180-day period. Justice Romaine noted that the Applications Judge referred to Bellatrix Exploration Ltd. v Penn West Petroleum Ltd., 2013 ABCA 10 for the proposition that the 180-day provision is rarely complied with in the oil and gas industry. Rather, the question is whether the delay in accounting was unreasonable in the circumstances. Like the Applications Judge, Romaine J. found that the Plaintiff’s accounting delay was reasonable and in line with the Parties’ business relationship and industry practice.

With respect to the Defendant’s counterclaim, Justice Romaine agreed with the Applications Judge’s analysis. When a Defendant is sued, it can raise any defences without fear of “being met by a period of limitation”. In other words, no defence is subject to a time-bar. The Plaintiff, as Defendant-by-Counterclaim, was allowed to set-off time-barred claims against the Defendant’s Counterclaim.