hollins j

3.45: Form of third party claim
7.3: Summary Judgment (Application and decision)
13.5: Variation of time periods

Case Summary

Justice Hollins heard an Application by the Third Parties, Nelson & Nelson and Stephen B. Nelson (“Nelson”) (collectively, the “Third Parties”) to strike or summarily dismiss, under Rule 7.3, a number of Third-Party claims issued against them (the “Application”). The underlying matter involved a number of Actions, all arising from a fire in 2012. In the underlying Actions, the main parties were the Condominium Corporation No. 0013187 (“Condo Corp”) which managed the building, Aviva Insurance Company of Canada (“Aviva”) which insured the property, Dominion General Contractors Ltd (“Dominion”) retained as the general contractor, and Nelson the lawyer who received and distributed the insurance proceeds. Aviva and Condo Corp alleged that Nelson erroneously paid $225,000 to Dominion that ought not to have been paid.

There were six Third-Party claims at issue, all of which the Third Parties contended should be set aside or dismissed under: (1) the Limitations Act, RSA 2000, c L-12; (2) Rule 7.3(1)(b) for lack of merit; and (3) Rule 3.45 for being filed outside the time allowed. Hollins J. considered the factors set out by the Alberta Court of Appeal in the recent and seminal case of Weir-Jones Technical Services Inc. v Purolator, 2019 ABCA 49 (CanLII) and found that the Applications were not appropriate for determination by way of Summary Judgment. Justice Hollins noted that the disputes on material facts, both with respect to Nelson’s potential liability and also with respect to the chronology underlying the limitations defence, made it impossible to determine the case against the Third Parties summarily.

Turning to the issue of the late filings under Rule 3.45, Justice Hollins noted that the 6-month time period in Rule 3.45 can be extended in the discretion of the Court provided in Rule 13.5. Hollins J. explained that in the absence of an agreement, a Defendant can apply for an extension of the timelines. Justice Hollins noted, as identified by Nelson’s counsel, that Aviva and Condo Corp circumvented the above procedure by simply filing the Third Party Claims without leave, thereby putting Nelson in a position where he had to apply to set them aside. Justice Hollins emphasized that Her Ladyship did not condone the actions of experienced counsel by-passing what they know to be the expected procedure under Rule 13.5, and assured the Third Parties that the onus under Rule 3.45 was not reversed, and that Her Ladyship analyzed this portion of the Application as though it were an Application brought by Aviva and Condo Corp.

Nonetheless, Her Ladyship found that, in this case, the delay was not so long as to obviate any discussion of prejudice but neither so short as to obviate any requirement of a reasonable explanation therefor. The explanation provided, being that the discovery of the accounting leading to the Third Party Claim was delayed, coupled with the language of the Rule 13.5 (which is not as stringent as the Limitations Act) made that explanation acceptable to the Court. Accordingly, the Third Parties’ Application was dismissed.

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