MACK v DATZOFF, 2023 ABKB 343
9.15: Setting aside, varying and discharging judgments and orders
11.5: Service on individuals
This was an Application to set aside a Default Judgment involving Ms. Mack and Mr. Datzoff, former adult interdependent partners. After their relationship ended, Ms. Mack began a civil Action for unjust enrichment and division of property. Mr. Datzoff failed to respond to the Statement of Claim, which led Ms. Mack to note him in default. Later, Mr. Datzoff applied to set aside the Default Notice and for an Order permitting him to file a Statement of Defence. His Application relied on the argument that he was not correctly served, as per Rule 11.5.
Ms. Mack served her Statement of Claim via recorded mail. This mail was signed for by Mr. Datzoff's new partner, Jennifer Jones, who confirmed that she had hand-delivered it to Mr. Datzoff. The same day, Mr. Datzoff acknowledged service of the Statement of Claim via a text message to Ms. Mack.
Mr. Datzoff’s counsel, acting on a limited scope retainer, sent a letter to Ms. Mack’s counsel. The letter suggested the Statement of Claim was to preserve a limitation period, assumed negotiations would move the matter forward, and requested that Ms. Mack's counsel not note Mr. Datzoff in default without reasonable advance notice. This firm then ended its retainer.
Mr. Datzoff was noted in default for failing to file a Statement of Defence or Demand for Notice. Subsequently, Mr. Datzoff hired a new counsel in response to a child support Application and claimed to have learned about the Default Notice then. Negotiations ensued with no progress, leading Ms. Mack's counsel to proceed with litigation. Mr. Datzoff’s second lawyer then withdrew. Mr. Datzoff hired a third counsel and filed the current Application, asserting that he assumed his second counsel had addressed the Default Notice.
In the evaluation of Mr. Datzoff's situation, the Court initially deliberated the efficacy of the service as per Rule 11.5. Although Ms. Mack's attempt at service via recorded mail failed to meet the standards set in Rule 11.5(2)(b), the Court held that personal service was achieved under Rule 11.5(1)(a), as Mr. Datzoff did receive the Statement of Claim directly from Ms. Jones.
The Court then evaluated if the Default Notice should be set aside pursuant to Rule 9.15, allowing Mr. Datzoff to file a Statement of Defence. The Court noted that Mr. Datzoff's casual approach to his obligations contributed to his delay in filing a defence. However, in consideration of the principles of fairness, inadvertence of his counsel, and the existence of a plausible defence as suggested by the test set out in Poloma Investments Ltd. v Yuen, 2016 ABCA 93 and Palin v Duxbury, 2010 ABQB 833, the Court decided to exercise its discretion under Rule 9.15 to set aside the Default Notice.
The Court concluded that Mr. Datzoff was personally served and ordered Mr. Datzoff to file a Statement of Defence within 7 days of the Decision. Ms. Mack was awarded $1,500 in throw away Costs and the Court directed that the Parties enter a Litigation Plan, including setting the Trial within 30 days.View CanLII Details