Chevalier v. Sunshine Village Corporation, 2011 ABQB 295

Court of Queen ’ s Bench of Alberta Citation: Chevalier v. Sunshine Village Corporation, 2011 ABQB 295 Date: 20110429 Docket: 1101 01193 Registry: Calgary Between: Chris Chevalier, Ben Chevalier, Rowan Harper, and Christopher Conway Plaintiffs - and - Sunshine Village Corporation and Thomas Taylor Scurfield Defendants _______________________________________________________ Memorandum of Decision of K.R. Laycock, Master in Chambers _______________________________________________________ [ 1 ] The defendants apply for an order extending the deadline for filing the defendants’ affidavit of records.

According to rule 5.5 (3) the defendant is required to serve an affidavit of records within one month after the date the defendant was served with plaintiff’s affidavit of records. The defendants affidavit of records would be due on April 21, 2011 because the plaintiffs served their affidavits of record on March 21, 2011. [ 2 ] Rule 5.12 (1)(

a) prescribes a penalty for party failing to file and serve an affidavit of records in time. The rule states:

In addition to any other order or sanction that may be imposed, the Court may impose a penalty of 2 times the amount set out in item 3(1) of the tariff in Division 2 of

Schedule C, or any larger or smaller amount the Court may determine, on a party who, without sufficient cause, (

a) does not serve an affidavit of records in accordance with rule 5.5 or within any modified period agreed on by the parties or set by the Court, [ 3 ] The defendants have not filed an affidavit in support of their application. They are relying on the pleadings and the record before the court. [ 4 ] The defendant Sunshine Village Corporation filed a previous application for an order striking the pleadings because of misjoinder, or in the alternative, for an order that the action be stayed and for an order directing each plaintiff to commence a separate action pursuant to Rules 1.4(2), 3.68(1) and 3.68(2)(b), (c) (

d) or (

e) and 3.71. [ 5 ] The individual defendant asks that the action against him be struck pursuant to Rules 1.4(2), 3.68(1) and 3.68(2)(b), (c), (

d) or (e). The Rules [ 6 ] The Rules that the defendant relies upon are as follows: 1.4(1) To implement and advance the purpose and intention of these rules described in rule 1.2 the Court may, subject to any specific provision of these rules, make any order with respect to practice or procedure, or both, in an action, application or proceeding before the Court. 1.4(2) Without limiting subrule (1), and in addition to any specific authority in the Court has under these rules, the Court may, unless specifically limited by these rules, do one or more of the following: (

h) adjourn or stay all or any part of an action, application or proceeding, extend the time for doing anything in the proceeding, or stay the effect of a judgment or order; 4.7(2) On application, the Court may adjust or set dates by which a stage or step in the action is expected to be completed. 13.5(2) The Court may, unless a rule otherwise provides, stay, extend or shorten the time period that is (

a) specified in these rules, (

b) specified in an order or judgment, or (

c) agreed on by the parties. 13.5(3) The order to extend or shorten the time period may be made whether or not the period has expired.

The Defendants Argument [7] The defendants argue that until the first application has been dealt with, they should not be required to file an affidavit ofrecords. They argue that their prior applications may result in the action being struck against the individual defendant who would thennot have to file an affidavit of records.

The defendants say that if they must file their affidavit, it would be an abuse of process, a violationof their privacy rights and that it would be unreasonable for the defendants to have to file their affidavit and to produce documents whenthe action against them may be struck or stayed. [8] The plaintiffs argue that parties to an action are required to act in accordance with the Foundational Rules, particularlyRule12 (1) and (2), which includes the requirement to facilitate the quickest and most effective means of resolving a claim. Also in Part5, dealing with disclosure of information, Rule 5.1(1)(

c) states that the purpose of

Part 5 is to encourage early disclosure of facts andrecords. Finally, rule 5.12(1) allows the court to punish a party who, “without sufficient cause” fails to file and serve an affidavit ofrecords in time. Within the context of filing an affidavit of records, “without sufficient cause”, means a reasonable excuse, based onevidence provided in an affidavit which proves that the failure to file the affidavit in time is beyond the control of the party who isobliged to file the affidavit. [9] The plaintiff relies upon Wagner v. Petryga Estate 2001 ABQB 690 , 292 A.R. 320 (Q.B), Johnson v.

Bryant 2003ABCA 169, and Vista Group Inc. v. Petro-Canada 2009 ABQB 296 for the proposition that the purpose of the rule is to encourageefficiency in this civil litigation process. Since the defendants have filed no evidence, the defendants argue that no sufficient cause hasbeen shown. [10] The defendants respond that these cases deal with the former rule 190, but in any event there is good reason to defer the filingof the defendants affidavit of records.

I note that both the existing and former rule, dealing with penalties for failing to file and serve anaffidavit of records in time, imposes upon the party in default a requirement to show sufficient cause in order to avoid a penalty. Thecases under the former rule state that the purpose of the rule was to ensure that litigation proceeds in an expeditious manner. [11] The new Foundational Rules emphasize that the purpose of the rules is to have claims fairly and justly resolved in a timelyand cost-effective way.

To achieve this the rules are intended to identify the real issues in dispute, facilitate a quick resolution at the leastexpense, and provide an effective, efficient and credible system of remedies and sanctions to enforce the rules. As earlier noted thepurpose of

Part 5 is to, among other things, encourage early disclosure. Rule 5.5(1) and (3) achieve this goal by fixing the time in whichthe defendants must file their affidavit. [12] The individual defendant emphasizes that if he is successful in striking out the claim, there would be no issues in disputebetween the parties and to require him to file an affidavit of records would increase the cost of litigation.

He argues that there is evidencefrom the pleadings and motions on the file and no further evidence is necessary to show that he has sufficient cause to extend his April21, 2011 deadline for filing his affidavit of records. Pending the release of this decision I extended time for filing the Defendantsaffidavit of records. [13] To require the individual defendant to file an affidavit of records would be a wasted, expensive process if the statement ofclaim is struck in relation to him.

At this stage of the proceeding it is not helpful to inquire at length into the grounds that the defendantis using in his motion to strike the statement of claim. It is sufficient that it does not appear to be frivolous or filed merely for the purposeof delay. I am satisfied that the efficiencies of time and expense would dictate that in this circumstance, there is sufficient cause to extendthe time for the individual defendant to file his affidavit of records.

Accordingly, the individual defendant will not be required to file hisaffidavit of records until 30 days after the hearing of his motion to strike the plaintiffs claim. [14] Arguably the circumstances are different for the corporate defendant. Its motion will not result in the plaintiffs action beingstruck or dismissed. The best result would be to have the action severed on the basis that each plaintiff has a distinctive breach ofcontract action which should not be tried together.

At least one of these plaintiffs will be allowed to continue his claim in this proceeding.Three of the four plaintiffs may be required to commence separate and individual actions, but this claim will, in some form, continueagainst the corporate defendant. [15] The corporate defendant further argues that this matter has been the subject of much comment in the press and on the internetand that any revelation of their records at this time may result in such records becoming a matter of public debate, to their prejudice.

[ 16 ] Counsel for the plaintiffs argues that all of the defendant’s records would be subject to an implied undertaking of confidentiality and would not find their way into a public forum. Binnie J., in referring to an implied undertaking, in Juman v. Doucette 2008 S.C.R. 8 stated at para.

For good reason, therefore, the law imposes on the parties to civil litigation an undertaking to the court not to use the documents or answers for any purpose other than securing justice in this civil proceedings in which the answers are compelled (whether or not such documents or answers were in their origin confidential or incriminatory in nature). [ 17 ] Because of the severe penalties imposed against parties to litigation or their counsel for disclosing information improperly, it is doubtful the documents disclosed by the corporate defendant in its affidavit of records will ever become the subject of public disclosure and debate. [ 18 ] Therefore, based on the Foundational Rules and the purpose of disclosure of information rules in

Part 5, early disclosure of records is required. There is no sufficient cause to defer the corporate defendants requirement to file its affidavit of records. It shall be filed within 15 days of the release of this decision. [ 19 ] Costs may be spoken to. Heard on the 15 th day of April, 2011. Dated at the City of Calgary, Alberta this 29th day of April, 2011. K.R. Laycock M.C.C.Q.B.A. Appearances: L. Frank Molnar Field LLP for the Defendants Andrew R. Robertson MacLeod Dixon

for the Plaintiffs