The Plaintiff purported to serve the Defendant, Cold Lake First Nations, with the Statement of Claim by Registered Mail to the post office box address displayed on the Defendant’s website and letterhead. The Defendant failed to defend and was Noted in Default, though the Noting in Default was never served on the Defendant. The Plaintiff subsequently applied for Summary Judgment, and the Application was delivered to the Defendant on December 15, 2014. Counsel for the Defendant sought consent to set aside the Noting in Default so that it could defend, claiming this was the first it had learned of the Claim, but the Plaintiff refused to consent. The Defendant’s Application to set aside the Noting in Default was dismissed. The Defendant appealed the Order dismissing its Application to open up the Noting in Default.

Macklin J. noted that the test for setting aside a Noting in Default is provided by Rule 9.15(3), and requires the Applicant to show: an adequate explanation as to why a Statement of Defence was not delivered; whether there was any delay in applying to set aside the Default and, if so, whether there was a satisfactory explanation accounting for that delay; and whether the material discloses a meritorious defence, that is, a triable issue of fact or law.

The Defendant argued that it had not been served in accordance with the Rules of Court, and had no actual knowledge of the claim. Macklin J. observed that Rule 11.4 does not apply to the service of commencement documents on a First Nations because there is no enactment that describes the particular method for service on First Nations. Instead, Rule 11.14(1) applied. Rule 11.14(1)(b) allows service on a statutory entity by Registered Mail sent to the entity’s principal place of business or activity in Alberta. The post office box which the Plaintiff addressed the Statement of Claim to, was not the principal place of business for the Defendant, notwithstanding that this address appeared on the Defendant’s letterhead. Rather, the Band office was the Defendant’s principal place of business. Further, Justice Macklin pointed out that the Plaintiff did not attempt to apply for an Order for Substitutional Service under Rule 11.28, or apply to dispense with service under Rule 11.29, although Justice Macklin indicated the Plaintiff likely would not have met the preconditions necessary for either such Orders. The failure to properly serve the Statement of Claim was a sufficient and adequate explanation as to why a Statement of Defence was not filed.

The Defendant did not delay in applying to set aside the Noting in Default given that it scheduled the Application to set it aside less than three months after learning of the Claim, and less than one month after receiving a refusal to consent to set aside the Noting in Default. The fact that the Plaintiff had not diligently pursued Default Judgment spoke to the lack of prejudice involved in setting aside the Noting in Default. Under the third arm of the test, the Defendant had to show both that it may succeed should it prove the facts it alleged, and that it genuinely wished to defend the Action. The Defendant, using case law, argued the merits of its defences; Justice Macklin held that, while the authorities the Defendant relied upon were distinguishable, they were sufficient to create a meritorious defence for the purposes of Rule 9.14.

Justice Macklin held that had the Defendant’s only defence related to quantum, Rule 7.3(1)(c) would allow the Defendant to contest just the amount claimed without reopening the Noting in Default. However, because the Defendant raised meritorious defences on the other substantive issues in the Action, it was necessary to reopen the Noting in Default. The Appeal was allowed, although the Plaintiff was awarded thrown-away Costs, including travel costs for the initial Application and the Appeal.