MINSHULL v LED SIGN SUPPLY INC, 2019 ABQB 424
3.36: Judgment in default of defence and noting in default
3.58: Status of counterclaim
3.60: Application of rules to counterclaims
4.31: Application to deal with delay
4.33: Dismissal for long delay
5.12: Penalty for not serving affidavit of records
5.5: When affidavit of records must be served
The Defendants by Counterclaim applied to dismiss the Counterclaim for delay pursuant to Rules 4.33 and 4.31. They also applied for penalty Costs for failure to file an Affidavit of Records as required.
With respect to the Rule 4.33 Application, the question was whether three or more years had passed without a significant advance of the Counterclaim. The last activity regarding the Counterclaim was service of an Affidavit of Records (the “AoR”) by the Plaintiffs by Counterclaim and the filing (but not service) of a Statement of Defence to the Counterclaim by another party nearly three years prior to the AoR.
The Court ruled that the AoR was a significant advance. Master Prowse explained that an Affidavit of Records can be a significant advance where it lists the relevant documents in a litigant’s possession and also confirms that no other documents are within that litigant’s possession, and that the emphasis is on substance over form. Even if there are technical problems with the document itself, it will generally advance the Action if the relevant information about the extent of a litigant’s documents is disclosed.
The Court also considered whether the filing of the Statement of Defence nearly three years prior was a significant advance. If not, the AoR would have been served out of time. The issue with the Statement of Defence was that it was filed but not served. However, Master Prowse confirmed that the filing of a Statement of Defence, even without service, still prevents a Noting in Default from being filed under Rule 3.36. Therefore, the filing of a Statement of Defence was a significant advance.
In regard to the Rule 4.31 Application, the Court considered whether there had been delay causing significant prejudice, real or presumed. Applying the factors set out in Humphreys v Trebilcock, 2017 ABCA 116 (CanLII), the Court concluded that the delay had been inordinate and inexcusable; however, it was also apparent that no significant prejudice had been suffered. Therefore, the Rule 4.31 Application was also dismissed.
Notwithstanding the dismissal of the delay Applications, the Court still considered the lateness of the AoR. The Court confirmed that Rule 3.58 provides that a Counterclaim is an independent Action and that Rule 3.60 states that a Rule applying to a Statement of Claim applies equally to a pleading in respect of a Counterclaim. Therefore, Rule 5.5(2) required that the AoR in this case be served within three months of service of a Statement of Defence.
The Plaintiff by Counterclaim took nearly three years to serve an Affidavit of Records. Therefore, Master Prowse granted penalty Costs under Rule 5.12 in the amount of $1,000.View CanLII Details