EPCOR WATER SERVICES INC v LEDCOR INDUSTRIES INC

EPCOR Water Services Inc. (“EPCOR”) alleged that construction activities by Ledcor entities caused cement-based material to block municipal sewer mains, leading to backups. EPCOR claimed $718,588.75 in damages for remediation and restoration, naming several Ledcor companies (collectively, the “Ledcor Group”) and another contractor as Defendants.

Some of the Defendants were noted in default, prompting EPCOR to seek Default Judgment through a without notice Desk Application pursuant to Rule 3.37(1)(a). However, Applications Judge Wanke highlighted that Rule 3.37 does not guarantee Judgment upon default. Rather, the Court retains discretion to require notice and a hearing before granting Judgment. Here, the Court declined to grant Default Judgment and adjourned the Application, directing that any renewed Application be brought on notice to the Defendants.

The Court identified three main problems with the Application. First, EPCOR’s pleadings did not set out a viable cause of action against each individual Ledcor Group entity but instead relied on a general allegation of collective responsibility. Second, there were deficiencies in how service was effected and documented, including lack of evidence confirming service to proper corporate addresses and unclear communications with defence counsel. Lastly, the Court took the position that the use of a without notice Application was inappropriate in this instance, given that the Defendants were sophisticated, some had counsel, and no prejudice would result from giving notice.

In the result, the Court declined to grant Default Judgment and required that any further Application proceed on notice.