McDonald, Pentelechuk and Feehan JJA

3.74: Adding, removing or substituting parties after close of pleadings

Case Summary

The Appellants, Antonietta Terrigno (“Ms. Terrigno”) and her son Mike Terrigno (“Mr. Terrigno”), appealed the Chambers Judge’s dismissal of their Application to substitute Mr. Terrigno as the Plaintiff to an existing Action pursuant to Rule 3.74 of the Rules.

In the underlying Action, Ms. Terrigno had obtained a Judgment against the Respondent, Tibor Peter Uhrik (“Mr. Uhrik”), in the Provincial Court of Alberta for $29,305.00. Prior to that Judgment being granted, Mr. Uhrik conveyed his interest in his condominium to the Respondent, Lieselotte Litzius (“Ms. Litzius”). Subsequently, Ms. Terrigno commenced the underlying Action in the Court of Queen’s Bench of Alberta suing Mr. Uhrik and Ms. Litzius under the Fraudulent Preferences Act, RSA 2000, c F-24 and the Statute of 13 Elizabeth for having conveyed his interest in the condominium property to Ms. Litzius and thereby attempting to defeat Ms. Terrigno’s claim as a creditor.

Ms. Terrigno submitted that she wished to have her son substituted as Plaintiff in the underlying Action because it had become difficult for her to prosecute the Action herself; English was her second language and she lived a good part of the year in Arizona. The Respondents opposed the Application, arguing that the assignments were not effective because they were not absolute or, alternatively, they were done in furtherance of champerty and maintenance, which is generally not prohibited.

The Chambers Judge discussed the difference in wording between rules 3.74(1)(a) and 3.74(1)(b) and noted that rule 3.74(1)(b) applies only to Applications to substitute parties other than a Plaintiff, whereas Rule 3.74(1)(a) relates to adding or substituting a Plaintiff. The Chambers Judge indicated, notwithstanding the low bar for substitution, that the behavior of Mr. Terrigno during the proceedings warranted dismissing the underlying Application. This behaviour was exemplified by an instance during cross-examination via Skype when Mr. Terrigno’s talking in the background resulted in a rescheduling of the examination. Additionally, Mr. Terrigno’s email correspondence during the proceedings was described by the Chambers Judge as “[engaging] in improper and abusive communication of a type that would likely see a lawyer reported to the Law Society”.

The Court of Appeal noted that, notwithstanding the low bar for substitution, the wording of Rule 3.74(2)(a) is permissive and accordingly, the Chambers Judge is awarded discretion as to whether or not to grant the Application. On appeal, that discretion is afforded a high degree of deference where the exercise of that discretion is not based upon an erroneous principle: Canada (Attorney General) v Fontaine, 2017 SCC 47 at para 36. As such, the Court found that appellate intervention was not warranted, and dismissed the Appeal.

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