NIXON v TIMMS, 2012 ABQB 315


3.26: Time for service of statement of claim
3.27: Extension of time for service
3.28: Effect of not serving statement of claim in time
9.15: Setting aside, varying and discharging judgments and orders
11.5: Service on individuals

Case Summary

A process server swore an Affidavit of Service stating that he personally served the Statement of Claim on the Defendant. The Plaintiff subsequently obtained Default Judgment. Upon discovering that an enforcement agency was attempting to enforce the Default Judgment, the Defendant retained a lawyer and claimed that he was never served and had no knowledge of the Claim. The Defendant applied for a Declaration that the Statement of Claim had expired, or in the alternative, for an Order setting aside a Default Judgment pursuant to Rule 9.15(3).

After reviewing the viva voce evidence of the Defendant, the process server, and a tenant of a property which was the subject matter of the dispute, Acton J. determined that the Defendant was never served with the Statement of Claim. Rather, the Claim was served on a tenant of the subject property.

The Defendant argued that the Statement of Claim had expired, and relied on Rule 11 of the former Rules, which were in force when the Statement of Claim was filed. Rule 11 provided that a Statement of Claim was in force for a period of 12 months after it was issued. The Defendant argued that the Statement of Claim was not served within this 12 month period and, as such, had expired. For all intents and purposes, the Action was “dead” and any steps taken after the expiry of the Statement of Claim were void or ineffective.

The Rules require a commencing document to be served personally (Rules 3.26(a) and 11.5(a)). However, the Plaintiff was operating on the understanding that he had effected personal service on the Defendant. In this context, Acton J. held that the issue was whether a Statement of Claim can become a nullity unbeknownst to a Plaintiff who acts in good faith and proceeds in accordance with the Rules, until a Declaration is made that service is not in order.

Under the former Rules, an expired Statement of Claim was not a nullity and could be revived in a number of circumstances. Former Rule 11 was replaced by Rule 3.27, which provides that the Court may extend the time for service in extraordinary circumstances that exist by virtue of the conduct of a person who is not a party to the Action. Rule 3.27 specifically contemplates the kind of unusual consequence of a false Affidavit upon which an entire case would stand or fall. Rule 3.28 sets out the effect of a failure to serve a Statement of Claim within the one year time limit, and provides that if a Claim is not served in time, no further proceeding may be taken against the Defendant who was not served in time. In such circumstances, it was more appropriate to describe the Action as suspended rather than struck or dead.

Acton J. held that given the extraordinary circumstances, and pursuant to Rule 3.27, it was reasonable to extend the time for service of the Statement of Claim to the date of her Decision. Acton J. held that such an extension would not prejudice either Party, because the Defendant was able to defend on the merits of the Claim even if the time for service was extended.

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