PETER SYVENKY v. TERRENCE SYVENKY, 2003 ABQB 288

Syvenky v. Woo, 2003 ABQB 288 Date: 2003 0328 Action No. 0103 13659 IN THE COURT OF QUEEN'S BENCH OF ALBERTA JUDICIAL DISTRICT OF EDMONTON BETWEEN: PETER SYVENKY AND TERRENCE SYVENKY Plaintiffs - and - NAM DEOG WOO Defendant _______________________________________________________ MEMORANDUM OF DECISION of W. BREITKREUZ , Master in Chambers [Note: An Erratum has been filed on April 15, 2003; the correction has been made to the text and the Erratum is appended to this Judgment.] _______________________________________________________ APPEARANCES: Robert Wachowich Weir Bowen for the plaintiffs Connor Glynn Bryan & Company

for the defendant [ 1 ] The issue in this application is the

interpretation of Rule 11(9) in the context of settlement negotiations between an unrepresented plaintiff and the adjuster for a defendant. FACTS [ 2 ] On June 20, 1999, the plaintiffs in this action, Peter and Terrence Syvenky, were rear-ended by a vehicle owned and driven by the defendant, Nam Deog Woo. State Farm Mutual Automobile Insurance Company (“State Farm”) is the insurer of the defendant. [ 3 ] On June 20, 2001, the statement of claim in this action was issued.

As of March 15, 2002, settlement negotiations had been ongoing between the plaintiffs since soon after the accident, but no settlement had been reached. The plaintiff, Peter Syvenky, was negotiating on his own behalf and on behalf of his son, Terrence Syvenky. [ 4 ] On February 20, 2002, the adjuster for State Farm, Mr. Filips, called Peter Syvenky to cancel an appointment with him which had been scheduled for February 21. Mr. Filips suggested that Mr. Syvenky should call to reset the meeting after more healing took place. Mr. Syvenky informed Mr.

Filips that he would have a better feeling as to the progress of recovery from his operation on his rotator cuff injury in November 2002. Mr. Filips invited Mr. Syvenky to call him at the time when he would have more fully recovered and left it to Mr. Syvenky to get back to him. [ 5 ] On March 15, 2002, Mr. Filips wrote the following letter to Mr. Syvenky: Further to our telephone conversation of February 20, 2002, we wish to confirm that despite several attempts to discuss settlement with you over the last two and three-quarter years or so, we are unable to come to a satisfactory resolution of your claim.

Up to this point, we have not raised any liability issues against you. However, we wish to advise you that Nam Woo and State Farm Mutual Automobile Insurance Company intend now to rely on all defences and other remedies provided by the law hereon in. Specifically, we deny liability for the above-noted car accident. Further, we intend to rely on all remedies in the Alberta rules of Court. As such, we ask that you govern yourself accordingly. [ 6 ] Until March 15, 2002, Peter Syvenky believed that liability was not or would not be contested. Until receipt of the letter, he had no knowledge of the rules of court.

He did not know that the rules contain a time limitation for serving a statement of claim. [ 7 ] After retaining counsel more than a year after the issuance of the statement of claim, and on their advice, the plaintiffs attempted to serve the defendant with the statement of claim between July 26 and 31, 2002.

The defendant, on July 31, 2002, told the process server by telephone that the statement of claim should be given to his insurance company and that he would not accept any documents that the process server had for him. [ 8 ] On August 20, 2002, Peter Syvenky swore his affidavit in support of an order renewing the statement of claim.

On August 22, 2002, unknown to the plaintiffs, the defendant Woo swore his affidavit for a motion to “strike out” the statement of claim for non- service, which is the same affidavit relied upon by the defendant in their present motion. [ 9 ] On August 26, 2002, I granted the plaintiffs, ex parte , both an order renewing the statement of claim for three months, and

an order for substitutional service by posting to the door of the defendant’s residence, on the understanding that the matter would likely come back before me. [ 10 ] On September 5, 2002, the defendant was served with the statement of claim. On or about the same day, the plaintiffs personally received the motion, and affidavit of Mr.

Woo, to “strike out” the statement of claim for non-service, originally returnable September 17, 2002. [ 11 ] Counsel for the defendant agreed to withdraw the September 17, 2002 application and proceed with the present motion instead, requesting an order setting aside my ex parte order of August 26, 1996. RULE 11 [ 12 ] The relevant subsections of Rule 11 provide: 11

(1) A statement of claim is in force for a period of 12 months commencing on the day that the statement of claim is issued and it expires at the end of the day of the first anniversary of the day that it was issued.

(2) The Court may, on application, grant an order renewing a statement of claim for a further period not exceeding 3 months.

(3) An application under subrule (2) may be brought at any time during the period of time referred to in subrule (1) but not after the termination of that period.

(9) Notwithstanding subrule (3), if the Court finds as a fact (

a) that, before a statement of claim expired, (

i) a defendant, (ii) anyone purporting to be a defendant, or (iii) any lawyer or other person purporting to negotiate on behalf of a defendant caused the plaintiff or the plaintiff’s lawyer to reasonably believe, and to rely on that belief, that (iv) the defendant has been served, (

v) liability was not or would not be contested, or (vi) the time limits provided for in subrule (3) or anyother time limits that relate to the action would not be relied on or would be waived, and

(

b) that the statement of claim had expired, the Court may by order renew that statement of claim for a period of time not exceeding 3 months from the day that the order was made. [ 13 ] Prior to 1991, Rule 11(1) provided that a statement of claim may be renewed once at any time before or after its expiration ( A.R. 390/68 ). In 1991, Rule 11 was repealed, and the current subsections (1)-(8) were substituted (A.R. 308/91). The current subsections (9) and (10) were added in 1997 (A.R. 269/97) . ISSUES [ 14 ] The following issues are raised in this application: 1.

Did State Farm cause Peter Syvenky to believe that liability would not be contested prior to March 15, 2002? 2. If so, does Rule 11(9) permit renewal in the context of an express withdrawal of a non-contestation of liability three months before the expiration date of the statement of claim? 3. Was there a standstill agreement between State Farm and Syvenky prior to March 15, 2002? 4. If so, was the letter of March 15, 2002 sufficiently clear to end the standstill agreement? ANALYSIS 1.

Did State Farm cause Peter Syvenky to believe that liability would not be contested prior to March 15, 2002? [ 15 ] The plaintiffs submit that State Farm did cause Peter Syvenky to believe that liability would not be contested prior to March 15, 2002. They point to the fact that settlement discussions began within a month of the accident and continued for almost three years, without any mention of liability. Most importantly, they point to the fact that the March 15, 2002 letter states: “Up to this point, we have not raised any liability issues against you.” [ 16 ] The defendants referred me to Virji v.

Kramer , 2001 ABQB 205 , in which Master Quinn held that indicating a willingness to negotiate is not tantamount to causing a reasonable belief that liability was not or would not be contested, at para. 14: The plaintiff’s lawyer may have thought it was unlikely liability would be contested, because this was a rear end collision accident.

There is however no evidence [the insurance adjuster] said liability would not be contested. [She] indicated a willingness to negotiate, but that is not tantamount to causing [the plaintiff’s lawyer] to reasonably believe that liability was not or would not be contested. [ 17 ] The plaintiffs argue that, if Virji v. Kramer does stand for the proposition that negotiation without any discussion of liability can never lead to a reasonable belief that liability would not be contested, it is wrong in law. They point to Gunther v.

Hohnstein , 2001 ABCA 297 , in which the Court of Appeal held, at para. 5, that an affidavit which described continued settlement discussions, without any discussion of liability, “...disclosed enough evidence upon which a court could reasonably find as a fact that Rule 11(9)(

v) and (vi) was [sic] complied with, allowing grounds for renewal.”

[ 18 ] They also submit that the standards of what constitutes a reasonable belief are lower for an unrepresented plaintiff than they are for a lawyer, citing Meyer v. Vasiu , 2002 ABQB 182 , at para. 13 . [ 19 ] In the context of this case, where: (

a) the accident in question was a rear end collision; (

b) the settlement negotiations commenced immediately following the accident and continued for almost three years; (

c) the settlement negotiations for the Plaintiffs were conducted by Peter Syvenky, a non-lawyer, unexperienced in litigation; and (

d) the representative for State Farm stated, in the March 15, 2002 letter, that liability issues had not be raised to that point in time I am satisfied that State Farm did cause Peter Syvenky to believe that liability would not be contested. [ 20 ] However, while Peter Syvenky’s evidence is contradictory as to his actual belief following the March 15, 2002 letter, it cannot be said that he reasonably believed that liability would not be contested at that point in time. Even if he considered it a “form letter,” it was the type of “form letter” that should have put him on notice.

It is necessary to consider how Rule 11(9) should be interpreted in these circumstances. That is issue #2 in the list of issues previously itemized. 2.

If so, does Rule 11(9) permit renewal in the context of an express withdrawal of a non-contestation of liability three months before the expiration date of the statement of claim? [ 21 ] The plaintiffs submit that as soon as they bring themselves within Rule 11(9), in that liability was not contested for some time even though this non-contestation of liability was eventually withdrawn, the court is authorized to renew the statement of claim after the one year expiration date. They put forward the following possible

interpretations of Rule 11(9) in these circumstances, from the least to the most restrictive: (

a) regardless of when liability is first contested the court can at any time after the year renew the statement of claim, just as the court could have done under the old Rule 11 before the amendments in 1991; (

b) the year for service begins at the date of contesting liability, and the statement of claim can be renewed at any time during that year; or (

c) the court can only renew the statement of claim if the admission is withdrawn close to the end of the anniversary of the statement of claim. [ 22 ] They argue that Rule 11, which is a limitation provision, should be construed strictly against the party seeking to use it to dismiss a claim: ( Campbell Estate v. Fang (1994), 1994 ABCA 247 (CanLII) , 116 D.L.R. (4 th ) 443 (C.A.), at para. 10 ). They also argue that Rule 11(9), added in 1997, was clearly intended to alleviate the harshness of the previous, shorter version of Rule 11. As such, they submit that a liberal

interpretation of Rule 11(9) in favor of renewal is appropriate, since that is what it was designed to permit, citing s. 10 of the

Interpretation Act , R.S.A. 2000, c. I-8 :

10. An enactment shall be construed as being remedial, and shall be given the fair, large and liberal construction and

interpretation that best ensures the attainment of its objects. [ 23 ] They point to the Court of Appeal’s ruling in Gunther , cited earlier, as an example of this kind of liberal

interpretation. They also point to Gregory v. Sparling , 1999 ABQB 1025 , in which Binder J. expressly rejected the narrow, strict

interpretation of Rule 11(9) proposed by the defendants in that case. [ 24 ] The plaintiffs also submit that the Court of Appeal’s reasoning in Lassen v.

City of Calgary (1985), 1985 ABCA 88 (CanLII) , 19 D.L.R. (4 th ) 137 applies here, namely that: ...it seems inequitable if not unconscionable that [the defendant] should on that technicality alone avoid payment of compensation for injuries which it has been found to have caused by its negligence and for which it would, but for the appellant’s ignorance, have been liable to pay, thus benefiting from the appellant’s mistake without have been adversely affected by it. [ 25 ] They submit that there is no prejudice to the defendant in this case and that Rule 11(9) should be interpreted to prevent the defendant from obtaining a windfall as a result of the plaintiff’s ignorance.

Further, they point to the potential prejudice suffered by a plaintiff against whom liability is suddenly contested, nearly three years after the accident. [ 26 ] The defendant’s position is that the statement of claim should have been either served or renewed in the time left after liability was contested. [ 27 ] I cannot accept the

interpretation put forward by the plaintiffs. I read Rule 11 to apply only to situations where liability was not contested throughout the year after the statement of claim was issued. In my view, it could also apply to situations where a non- contestation of liability is withdrawn very close to a statement of claim’s expiration date. If the drafters of the rule had intended for the

section to operate in the same way as the old Rule 11 in these circumstances, or in the same way as a standstill agreement, it could have so provided. [ 28 ] Applying that

interpretation to this case, it is clear that the plaintiffs had ample time to serve the statement of claim once the non-contestation of liability was withdrawn. The March 15, 2002 letter clearly specified that the defendant intended to rely on all remedies in the rules of court. This is as clear as State Farm could have been, without breaching its duty to its insured. As stated in Gingara v. Przybylski (1997), 1997 CanLII 14906 (AB KB) , 57 Alta.

L.R. (3d) 170 (Q.B.), a case also involving State Farm in the limitations context, at para. 29: State Farm's first duty is to its insured and any conduct by State Farm to compromise the legal position of their insured would be a breach of that duty.

The adversarial position of the plaintiff and the insured as reflected in the Insurance Act provisions precludes the existence of a duty owed by State Farm to the plaintiff to advise her of the potential loss of her action by expiration of the time prescribed by the Limitation of Actions Act . [ 29 ] The letter should have put Peter Syvenky on alert, to the extent that he either consults a lawyer or apprises himself of the applicable rules of court. This case demonstrates the risks that a self-represented person assumes if he does not apprise himself of the procedural rules governing his action. 3.

Was there a standstill agreement between State Farm and Syvenky prior to March 15, 2002? [ 30 ] Whether there is a standstill agreement is a question of fact. I cannot find that there was such an agreement in this case. A standstill agreement is one in which the parties agree to literally “stop the clock,” so that the intervening time will be added on the end of usual time limits ( Martinez v. Hogeweide , 1998 ABCA 34 , at para. 5 ). Since Mr. Syvenky had no idea that there was a time limit for serving the statement of claim, he could not have agreed to anything respecting that time limit.

4. If so, was the letter of March 15, 2002 sufficiently clear to end the standstill agreement? [ 31 ] This issue does not arise, since I have found that there was no agreement. CONCLUSION [ 32 ] While State Farm, on behalf of the defendant, did cause Peter Syvenky to believe that liability would not be contested, it withdrew that non-contestation of liability in the March 15, 2002 letter, leaving the plaintiffs approximately three months in which to renew or serve their statement of claim. There was sufficient time for the plaintiffs to consult a lawyer or apprise themselves of the applicable rules.

As there was no standstill agreement between the parties, I am satisfied that the plaintiffs’ statement of claim expired and should not have been renewed. [ 33 ] As such, I set aside my ex parte order of August 26, 2002 granting a renewal of the expired statement of claim in this action and permitting substitutional service upon the defendant in this action. [ 34 ] It appears to me in the overall circumstances the defendant and his insurer are in the fortunate circumstances where they can take advantage of a layperson’s ignorance of our limitation rules to avoid payment in circumstances where I think the defendant would have been liable but for the failure to serve on time.

That appears to me a reasonable conclusion in spite of the March 15, 2002 letter. The comments of our Court of Appeal in Lassen v. City of Calgary , cited earlier, are appropriate in this context. Unfortunately the new rule prevents me from following that decision, but the comments made in it certainly support the exercise of my discretion in favour of absolving the unsuccessful plaintiffs from paying any costs. HEARD on the 18 th day of November, 2002. DATED at Edmonton, Alberta this 28th of March, 2003. __________________________ W. BREITKREUZ M.C. C.Q.B.A. _____________________________________________

ERRATA OF THE MEMORANDUM OF DECISION OF W. BREITKREUZ, Master in Chambers _______________________________________________ In paragraph number [33] of the above judgment, the date “August 26, 1996” has been changed to read “August 26, 2002”. Please replace this page in your copy of the judgment.