The Defendant appealed an Order of a Master granting the Plaintiff an extension of time to serve the Statement of Claim relating to a motor vehicle accident. The filed Statement of Claim had been forwarded to the insurance adjuster, but at no point did the insurance adjuster advise the Plaintiff that: (i) service on the Defendant was not necessary; (ii) the Statement of Claim had been served on the Defendant; or (iii) liability was not or would not be contested. However, there were ongoing negotiations throughout and, shortly before the expiry of the one year period for service, the insurance adjuster advised Plaintiff’s counsel that he would file a Statement of Defence if no medical documents were received soon.

The Plaintiff made no attempt to serve the Statement of Claim on the Defendant and there was no evidence suggesting the Defendant’s whereabouts was unknown during the required time period for service. The Defendant was eventually served with the Statement of Claim 68 days after it had expired, at which point the Plaintiff applied to extend the time for service.

The Master granted an extension of time to serve the Statement of Claim pursuant to Rule 3.27(1)(c) and stated that, in exercising discretion under this Rule, the Court should:

(a)    Aim to eliminate procrastination and delay in litigation;

(b)   Consider whether there is any prejudice to any of the parties as a result of the limitation issue;

(c)    Determine if the special or extraordinary circumstances result solely from the Defendant’s conduct or from the conduct of a person who is not a party to the action; and

(d)   Strike an appropriate balance of the interests of the parties in order to achieve the most justice with the least injustice.

Applying these factors, the Master held that there was no procrastination or delay and no prejudice to the Defendant. The Master held that the ongoing negotiations and comments made by the insurance adjuster regarding the filing of a Statement of Defence constituted special circumstances within the meaning of Rule 3.27(1)(c).

Upon reviewing the Master’s Decision, Yungwirth J. stated that:

-          Rules 3.26 to 3.28 were similar to former Rule 11;

-          The principles under the former Rules have been incorporated into the requirements of Rules 3.26 to 3.28;

-          Rules 3.26 to 3.28 impose a strict and mandatory limit on the service of a Statement of Claim;

-          Only the rare exceptions listed in Rule 3.27 alter the limit on service; and

-          The Court’s discretion to grant an extension pursuant to Rule 3.27 arises only after a Plaintiff brings itself within the exceptions laid out in Rule 3.27.

Yungwirth J. went on to comment more thoroughly about Rule 3.27(1)(c), stating that while it is intended to be more of a general exception, the reference to exceptional circumstances suggests that it will rarely be used. Analysis under Rule 3.27(1)(c) is a two-step process:

1. The Plaintiff must bring itself within the requirement that special or extraordinary circumstances exist resulting solely from the Defendant’s conduct or from the conduct of a person who is not a party to the action. As part of this step, the Plaintiff must demonstrate that the special or extraordinary circumstances are connected in some way to the lack of service.

2. Once the Plaintiff establishes the type of special or extraordinary circumstances contemplated by Rule 3.27(1)(c), the Court then considers if is it appropriate to exercise its discretion to extend time for service. As part of this step, the Court will consider policy considerations of the limitations legislation and prejudice.

Yungwirth J. allowed the Appeal and held that the Plaintiff had not brought himself within the requirements of Rule 3.27(1)(c). There was no evidence that the Plaintiff’s lawyer relied on anything done by the Defendant or by any third party when he failed to serve the Statement of Claim within the required time period. Moreover, there was no evidence that the Plaintiff decided not to serve the Statement of Claim because he relied on the comments made by the insurance adjuster regarding his intention to file a Statement of Defence. The evidence was that the limitation for service was not noted on the file’s diary system and Plaintiff’s counsel simply neglected to serve the Statement of Claim. Extensions under Rule 3.27 should not be permitted in circumstances where the failure to serve is caused by Plaintiff’s counsel’s inadvertence, even if there is no demonstrated prejudice to the Defendant.