Duperron v. Landry, 2011 ABQB 114

Court of Queen ’ s Bench of Alberta Citation: Duperron v. Landry, 2011 ABQB 114 Date: 20110224 Docket: 0703 00153 Registry: Edmonton Between: Miranda Duperron Plaintiff - and - Christine Landry, Kevin Dent and Monika Dent Defendants _______________________________________________________ Memorandum of Decision of W. Breitkreuz, Master in Chambers _______________________________________________________ [ 1 ] This is an application to set aside an ex parte order granted by me on August 20, 2008. That order renewed the statement of claim, which had expired more than seven months earlier without being served.

The order further amended the statement of claim to name a new defendant, Monika Dent, in the place of a “Jane Doe”. [ 2 ] Counsel for the plaintiff, opposing this application, is not the original lawyer on the file, and is not the lawyer who obtained the ex parte order. I am going to refer to the original lawyer on the file as Mr. Smith, but that is not his real name. [ 3 ] The accident which forms the basis of this action occurred January 7, 2005 in Edmonton. The plaintiff alleges that she was a

passenger in a motor vehicle driven by the defendant Christine Landry, and owned by one or both of the defendants Kevin Dent and Monika Dent. The plaintiff further alleges a red-light violation by Christine Landry. [ 4 ] The road was icy, which is not surprising in early January in Edmonton. Christine Landry told Monika Dent “that it was icy and that she couldn’t stop and she consequently ran a light and hit a vehicle that was going on the straight through fair”.

Further, she had told Monika Dent about “two fellows in another vehicle that took off”. [ 5 ] On January 4, 2007, three days before the expiry of the limitation period, the statement of claim was issued in this action naming Kevin Dent, Tina Landry, and Jane Doe as defendants. [ 6 ] The statement of claim required amendment to add a dollar figure for general damages.

This amendment was made pursuant to Rule 130, without need of a court order, on January 10, 2007. [ 7 ] On January 4, 2008, the period for service of the statement of claim under Rule 11 expired. [ 8 ] On August 20, 2008, I granted an ex parte order which did three things: (

a) Renewed the statement of claim for three months; (

b) Amended the name of the first-named defendant, Tina Landry, by expanding “Tina” to “Christine”, and (

c) Added Monika Dent as a new named defendant, in substitution of a “Jane Doe” (the “ex parte order”) [ 9 ] This application is on the basis that the statement of claim had already expired, and no reason existed to renew the statement of claim outside the year for service in the Rules of Court. [ 10 ] The focus of the evidence put forth by and on behalf of the plaintiff, both in support of the ex parte order and in opposition to this motion, is that the renewal should have been granted because of Rule 11(9)(a), and in particular because the plaintiff and her lawyer had formed a belief that liability would not be contested. [ 11 ] In his affidavit, Mr.

Smith deposes to a belief that liability would not be contested in this action. However, he does not depose that this belief arose from anything that was said to him by or on behalf of the defendants or TD Insurance. In cross-examination, he confirmed: (

a) Mr. Smith had reached the conclusion that this is not a file in which liability would be contested prior to communicating with any adjuster on behalf of the defendant on this file [Smith examination, page 6, lines 18-22]. (

b) No adjuster on behalf of the defendant told Smith “that liability would not be in dispute because we never discussed it” [Smith examination, page 8, line 26, page 9, line 4]. (

c) Mr. Smith was informed by the plaintiff of the circumstances of the accident when he was retained approximately less than a month after the accident [Smith examination, page 5, line 16-26] (

d) The circumstances of the accident related to Mr. Smith by the plaintiff amounted to a set of facts in which he would not expect liability to be contested [Smith examination, page 6, lines 2-17].

(

e) The plaintiff did not communicate directly with the defendants or their insurer, instead retaining Mr. Smith “quite promptly” after the accident [Smith examination, page 20, line 17-page 21, line 25]. (

f) In Miranda Dupperon’s affidavit in support of the ex parte order, she stated that as she was a passenger in a vehicle that ran a red light, she did not believe there would be any doubt as to the liability of the defendants. This is something she had told Mr. Smith “from the very beginning” of when he was first retained [Smith examination, page 20, line 17- page 21, line 13]. [ 12 ] Smith also does not, in his affidavit, depose that he did not serve the defendants within the time for service because of any belief relating to liability. In cross-examination he confirmed a lack of detrimental reliance: (

a) Mr. Smith first turned his mind to the issue of service “when I realized we weren’t getting anywhere in our settlement discussions, so that would have been in the beginning of August or sometime in late July, 2008" [Smith examination, page 14, lines 20- 26]. (

b) At no specific point in time did Mr. Smith decide against serving the statement of claim within a year after its issuance [Smith examination, page 14, lines 20-26]. (

c) The office at which Mr. Smith worked at the relevant times did not have a centralized system in place to keep track of limitation periods for service. Nor was there any other system in place whereby limitation periods to serve would be noted (e.g. on the file or in a diary) [Smith examination, page 15, lines 7-21]. (

d) Before the limitation period for service expired, Mr. Smith was not aware of its expiry. He was first aware of its expiry after it had expired in or about August of 2008 [Smith examination, page 15, Line 22 - page 16, line 2]. (

e) In or about July or August of 2008, Mr. Smith picked up the file; noted that “we weren’t getting anywhere” with respect to settlement; and decided to move the file along. The next step in that regard was service. “Once I picked up the file to do the service, I realized uh-oh, the time to serve it has passed” [Smith examination, page 16, lines 9-18.] [ 13 ] Other evidence relevant to the Rule 11(9) renewal application includes the following communications between counsel for the plaintiff and the adjusters for the insurer of the defendants: (

a) Between January of 2007 and February of 2008, Michelle Gelein of TD Insurance was the adjuster assigned to the plaintiff’s claim against Kevin and Monika Dent. (

b) Between January 2007 and February 2008, Michelle Gelein did not discuss the issue of liability with the plaintiff or her legal counsel, and did not advise the plaintiff or her legal counsel that liability would not be contested. (

c) The affidavit of Miranda Dupperon did not include a letter dated April 26, 2007 to her lawyer from TD Insurance. That letter is at Exhibit “B” to the affidavit of Michelle Gelein, which contained the following statement: Please be advised that any negotiations between our respective offices do not represent, nor are you entitled to rely upon it as representing any waiver or suspensions of the filing or service deadlines under the rules of court for the Limitation Act. In my opinion this letter is the determinative factor in this application.

(

d) As indicated in item sub (

c) above, the above letter was not included in the affidavit of Miranda Dupperon sworn in support of the ex parte order. Mr. Smith could not locate it in his file at the time of examination. He indicated his file had “been sort of torn apart because of this so not everything is in chronological order” so he was “working on the assumption that we received it, but I just don’t have a copy of it in my file.” Mr. Smith indicated that “I’m assuming I got it. I mean, it says it was faxed, so usually faxed things arrive.” When asked again if he had any reason to believe he didn’t receive it, he reiterated “I’m assuming I got it” [Smith examination, page 36, line 24 - page 38, line 1] (

e) From March, 2008 onward, Bonnie Abrams of TD Insurance was the adjuster assigned to the plaintiff’s claim. (

f) On March 10, 2008, Bonnie Abrams wrote the letter which appears as Exhibit “D” of the Dupperon affidavit, and at Exhibit “A” of the Abrams affidavit. This requested documentation from Mr. Smith, and was sent after the limitation period for service had expired. This letter was written on the same day as Ms. Abrams’ initial review of the file. On that review, she observed a lack of substantiating documentation with respect to the plaintiff’s claim. That was why she wrote that letter. When she wrote the letter she had not turned her mind to the issue of service of the statement of claim. (

g) Ms. Abrams first turned her mind to the issue of service of the statement of claim after service had occurred in late August 2008. At no time prior to service being effected did she discuss the issue of service with plaintiff’s counsel or correspond with him with respect to service issues. (

h) It appears clear that it was not Ms. Abrams’ intention to waive any defences or time limits by writing and sending the letter of March 10, 2008, nor did she ever subsequently have that intention [Abrams affidavit]. The cases are clear that waiver cannot be foisted on someone. It must be a conscious act. (

i) A letter dated June 4, 2008 from Mr. Smith to Bonnie Abrams of Meloche Monnex (TD Insurance) referenced some confusion as to who may have been the third party adjuster and who was the

Section B adjuster. Copies of charts, reports and other treatment records were enclosed [Smith examination]. (

j) A letter also dated June 4, 2008 from Mr. Smith to Michelle Gelein of Meloche Monnex (TD Insurance) requested a copy of the plaintiff’s complete

Section B file [Smith examination]. (

k) An email from Bonnie Abrams of TD Insurance to Mr. Smith dated August 13, 2008 explained who was handling the bodily injury aspect of the file and who had been handling the

Section B aspect of the file. She indicated that she will fax a copy of the collision report and had not yet had the chance to go through the documents enclosed with Mr. Smith’s June 4, 2008 letter [Smith examination]. (

l) A letter from Mr. Smith to Ms. Abrams of TD Insurance dated August 19, 2008 enclosed further documentation and requested reimbursement for that [Smith’s examination]. (

m) Other than an argument as to whether or not this was a capped claim, there were no numbers exchanged between the parties, and no settlement offers made, until the plaintiff’s offer dated August 20, 2008, the same day as the ex parte order was granted [Smith examination]. (

n) In the letter to Bonnie Abrams dated September 3, 2008, there was no mention that the plaintiff had renewed, amended, or effected service. Mr. Smith did not notify the insurer or Ms. Abrams that the plaintiff had done so [Smith examination]. (

o) A letter from Mr. Smith to Ms. Abrams of TD Insurance dated September 3, 2008 enclosed further documentation [Smith examination].

(

p) A letter from Mr. Smith to Ms. Abrams of TD Insurance dated October 20, 2008 enclosed a report and invoice [Smith examination]. (

q) A letter from Mr.

Smith to Malcolm Jones of Weir Bowen LLP dated November 5, 2008 requested discovery dated [Smith examination]. [ 14 ] The relevant Rule (the old Rules apply to this application) paraphrased, provides as follows: The Court can find as a fact, before the statement of claim has expired, that is during the twelve month life of the statement of claim, that some agent purporting to negotiate on behalf of the defendant caused the plaintiff or the plaintiff’s lawyer to reasonably believe, and to rely on that belief that liability will not be contested or that the defendant will not invoke the time limit for service provisions.

In that case, the Court may renew the statement of claim for a three month period from the date the order was made. In other words a dormant statement of claim can have life breathed into it well beyond the original twelve month period plus the additional three month period provided for in Rule 11(3). [ 15 ] I believe the very recent decision of the Court of Appeal in Maasen v. Horvath, 2010 ABCA 271 has a significant bearing on the case at bar. Defence counsel has summarized a number of principles that were set out in that case that are relevant to a renewal under Rule 11(9), as follows: (

a) There must be an objective basis for a reasonable belief that liability was not, or would not be, in issue. (

b) There must be an objective basis to find that there was reliance on any implicit representation that liability would not be contested. (

c) Silence on liability in circumstances where one might ordinarily expect liability to be admitted is not an implicit representation that liability would not be contested. Presumably if silence on liability in the circumstances of Maasen v. Horvath (a rear-ender) had been sufficient for renewal, the outcome would have been different. (

d) A failure to diarize service dates does not constitute detrimental reliance on a belief that liability would not be contested. (

e) Requests for medical documentation do not found a reasonable or objective basis for a belief that liability for the personal injury claim is not in issue. (

f) A lawyer’s practices with respect to when information would be shared with insurers are not relevant if there is no evidence that the insurer knew of those practices. (

g) A letter by the defendant’s insurer, asking for a settlement position, sent after the expiry of the statement of claim, does not assist the plaintiff in an application to renew, and does not amount to a waiver of any service deadlines. (

h) The behavior of the plaintiff’s lawyer may be examined, and if it is inconsistent with a belief that service is not necessary, it can undercut the assertion that there was such a belief. [ 16 ] The defendants advance the following specific reasons against granting of the renewal of the statement of claim under Rule 11(9):

(

a) Any belief by the plaintiff and her lawyer that liability would not be in issue did not originate with the defendants or their insurer. Instead the belief was based upon the circumstances of the accident as understood by the plaintiff, who was intoxicated at the time of the accident. (

b) The belief of the plaintiff and her lawyer regarding liability was not communicated to the defendants or their insurer, nor was confirmation sought of the defendants’ position. (

c) The insurer expressly stated that any negotiation was not a waiver of any rights of the defendants under the Rules of Court or Limitations Act . This was not mentioned in the affidavit in support of the ex parte order to renew. The only explanation offered for how this was omitted from the affidavit was that the lawyer for the plaintiff had misplaced the letter. (

d) There was no reliance upon such belief when the statement of claim was allowed to expire unserved. The plaintiff’s lawyer had no limitations diary, and the failure to serve was not based on any conscious decision; (

e) There was no intention to waive any rights of the defendants by any communications after the expiry. In any event, the plaintiff’s lawyer could not have relied on any communications after the fact as the statement of claim already expired. (

f) Promptly upon realizing that service was not effected, the lawyer for the plaintiff took steps to renew, which is not consistent with any belief that Rule 11(9) would provide relief; (

g) The first time numbers were put forward was by plaintiff’s counsel in a letter with the same date as the ex parte order. [ 17 ] For all of these reasons I have concluded that my order of August 20, 2008 renewing the statement of claim cannot be justified, and must be set aside. [ 18 ] There was a further issue argued regarding my August 20, 2008 order, namely the substitution of the defendant Monika Dent in the place of Jane Doe.

If that part of the order can be maintained, the statement of claim as against Monika Dent would survive because she was served within twelve months after the granting of the order. [ 19 ] However all of the facts surrounding her addition as a defendant are so close to the facts in McLaughlin v. Broddy , 2006 ABQB 914 , decided by Chief Justice Wachowich, that I cannot distinguish the two cases, and must come to the same conclusion that Chief Justice Wachowich reached. [ 20 ] Section 6(4)(

b) of the Limitations Act, RSA 2000 L-12 provides: When the added claim adds or substitutes a defendant, or changes the capacity in which a defendant is sued, (a) .... (

b) the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on the merits. [ 21 ] At paragraph 27 of the McLaughlan decision, Chief Justice Wachowich noted the following:

(

i) the knowledge referred to in s.6(4)(

b) pertains to the added claim, not the claim generally; (ii) in the circumstances before him, as well as before me, the added claim is the substitution of the added defendant for the named defendant in the style of cause; (iii) the added defendant did not receive sufficient knowledge of the added claim from the insurer; and (iv) the added defendant did not receive sufficient knowledge of the added claim through the named defendant herself, which in the case before me of course is the fictitious Jane Doe.

But in the case before me the evidence is that the added defendant did not receive any knowledge from the other named defendants. [ 22 ] I have therefore concluded that that part of the order I granted on August 20, 2008 substituting Monika Dent for Jane Doe cannot be maintained. [ 23 ] The application of the defendants is granted together with costs on the appropriate column. Heard on the 22 nd day of November, 2010. Dated at the City of Edmonton, Alberta this 24 th day of February, 2011. W. Breitkreuz M.C.C.Q.B.A. Appearances: Scott Schlosser, Q.C. Schlosser Cook for the Plaintiff/respondent Philip Kirman

Weir Bowen LLP for the Defendants/applicant