Locridge Homes Ltd. v Dupperon, 2011 ABQB 458

Court of Queen ’ s Bench of Alberta Citation: Locridge Homes Ltd. v Dupperon, 2011 ABQB 458 Date: 20110712 Docket: 0903 19669 Registry: Edmonton Between: Locridge Homes Ltd. Plaintiff Defendant by Counterclaim - and - Mark Ray Dupperon and Kimberly Kristin Dupperon Defendants Plaintiffs by Counterclaim Corrected judgment: A corrigendum was issued on July 22, 2011; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee _______________________________________________________

[ 1 ] This is an application by Mark and Kimberly Dupperon for the following relief:– 1. An Order for

Summary Judgment pursuant to Rule 7.3 of the Alberta Rules of Court ; 2. An Order striking the Plaintiff’s Amended Statement of Claim for failure to file and serve and Affidavit of Records as required by the Alberta Rules of Court , Rule 2.68(4)(b); 3. An Order for security for payment of costs pursuant to Rule 4.22 of the Alberta Rules of Court ; 4.

An Order discharging all liens and any certificates of Lis Pendens of the Plaintiff as against the Defendants’ real property legally described as Lot 34, Block 54, Plan 062 6249, and which liens and any certificates of Lis Pendens are described as: 072 641 634 Caveat/Vendor’s Lien - Locridge Homes Ltd. 082 418 351 Builder’s Lien - Locridge Homes Ltd. 092 086 052 Certificate of Lis Pendens (affects instrument 082 418 351); 5. An order directing that monies held in trust by Mr.

Christopher Sarsons, Barrister and Solicitor be paid to the Defendants, the conditions of the payment to the Plaintiff no having been satisfied; and an Order directing that the obligations of Mr. Christopher Sarsons, Barrister and Solicitor regarding the monies held in trust in relation to the within action be forever discharged; 6.

An Order pursuant to Rules 4.2, 4.9, 4.10 and 4.11 of the Alberta Rules of Court that the parties to this action and relation action 1003 16058 attend a conference with the Court. [ 2 ] The Dupperon’s submit that the Statement of Claim in this matter should be struck as a result of the failure of the Plaintiff Locridge Homes Ltd. to file an Affidavit of Records pursuant to Rule 3.68 of the New Alberta Rules of Court . The Plaintiff in this action has not taken any steps to advance its claim since the filing of its Amended Statement of Claim on December 18, 2009. Counsel for Locridge Homes Ltd.

Greg Heinrichs, Q.C. of Davis LLP ceased to act in this matter in August 2010. [ 3 ] The Defendants depose that they were required to retain third party builders to correct and complete the work started by the Plaintiff on the property, which led them to incur expenses of $195,863.36. [ 4 ] The Plaintiff is involved in several other actions including:– (

i) Border City Building Centre Ltd. v. Locridge Homes Ltd., Court of Queen’s Bench Action Number 0814 00301; (ii) Power-Pro Electric Inc. v. Locridge Homes Ltd., Court of Queen’s Bench Action Number 0914 00187; (iii) Lockridge Homes Ltd. and Valli Cleall v. Leeann Wist et al, Court of Queen’s Bench Action Number 0903 10979; (iv) Totem Building Supplies Ltd. v. Locridge Homes Ltd., Provincial Court of Alberta Action Number P0890103699;

(

v) Totem Building Supplies Ltd. v. Locridge Homes Ltd., Court of Queen’s Bench Action Number 0701 12035; (vi) Lloydminster Stucco & Heating Co. v. Mark Ray Dupperon et al, Court of Queen’s Bench Action Number 0914 00033. [ 5 ] The Plaintiff has several secured interests registered against it, including:– (

i) Serial numbered goods; (ii) An assignment of sale proceeds; (iii) Writ of Enforcement for $157,764.95; (iv) Writ of Enforcement for $644.84; (

v) Several security agreements; and (vi) A WCB charge in the amount of $2,859.46 registered against the Plaintiff’s serial numbered goods as well as all present and after-acquired property. [ 6 ] The Plaintiff has been struck from the Corporate Registry, and the Plaintiff corporation is the subject of litigation amongst its own shareholders. [ 7 ] The Plaintiff in Action 1003 16058 Border City Building Centre Ltd. v. Dupperon has sought to prosecute the within action on behalf of the Plaintiff, and also subsequently filed its own pleadings against the Defendants.

The Defendants and the Plaintiff in Action 1003 16058 Border City Building Centre Ltd. v. Dupperon are unable to fully resolve the issues between them until the procedural and other issues are resolved in the current Action. Conclusion Rule 4.33 - The New Drop Dead Rule [ 8 ] Under the New Alberta Rules of Court the previous five year time year under the so called “drop dead Rule” under former Rule 244.1 is reduced to two years, so that it is in line with the general limitation period which only allows two years to bring an action.

The two year time period cannot generally be extended by the Court, and the Court must dismiss the action as stated in Rule 4.33 which reads as follows: – Dismissal for long delay

4.33(1) If 2 or more years has passed after the last thing done that significantly advanced an action, the Court, on application, must dismiss the action as against the applicant, unless (

a) the parties to the application expressly agreed to the delay, (

b) the action has been stayed or adjourned by order, an order has extended the time for doing the next thing in the action, or the delay is provided for in a litigation plan, (

c) the applicant did not respond to a written proposal by the respondent that the next thing in the action not occur until more than 2 years after the last thing done that significantly advanced the action, or (

d) an application has been filed or proceedings have been taken since the delay and the applicant has participated in them for a purpose and to the extent that, in the opinion of the Court, warrants the action continuing.

(2) If the Court refuses an application to dismiss an action for delay, the Court may still make whatever procedural order it considers appropriate. [ 9 ] In this particular case there was a step to advance the Plaintiff’s claim when the Plaintiff filed its Amended Statement of Claim on December 18, 2009 within the two year time period. However Rule 4.33 further requires that the action was “significantly advanced” within each two year time period, so that although a step has occurred within the two year time period, it cannot be said that the action was “significantly advanced” within that two year time period.

Consequences of the Failure to File Affidavit of Records [ 10 ] In this case as well the Plaintiff has failed to file an Affidavit of Records pursuant to Rule 3.68 of the New Alberta Rules of Court which reads as follows:– Court options to deal with significant deficiencies 3.68(1) If the circumstances warrant and a condition under subrule (2) applies, the Court may order one or more of the following: (

a) that all or any part of a claim or defence be struck out; (

b) that a commencement document or pleading be amended or set aside; (

c) that judgment or an order be entered; (

d) that an action, an application or a proceeding be stayed.

(2) The conditions for the order are one or more of the following: (

a) the Court has no jurisdiction; (

b) a commencement document or pleading discloses no reasonable claim or defence to a claim; (

c) a commencement document or pleading is frivolous, irrelevant or improper; (

d) a commencement document or pleading constitutes an abuse of process; (

e) an irregularity in a commencement document or pleading is so prejudicial to the claim that it is sufficient to defeat the claim.

(3) No evidence may be submitted on an application made on the basis of the condition set out in subrule (2)(b).

(4) The Court may (

a) strike out all or part of an affidavit that contains frivolous, irrelevant or improper information; (

b) strike out all or any pleadings if a party without sufficient cause does not (

i) serve an affidavit of records in accordance with rule 5.5 [When an affidavit of records must be served], (ii) comply with rule 5.10 [Subsequent disclosure of records], or (iii) comply with an order under rule 5.11 [Order for a record to be produced]. [ 11 ] Specifically then Rule 3.68(4) allows the Court to strike a Statement of Claim as an appropriate remedy for the failure of the Plaintiff to file an Affidavit of Records. [ 12 ] Furthermore the Court has its inherent jurisdiction to strike the Statement of Claim in order to fully resolve the issues between the parties.

In this case the Plaintiff’s disinterest in this litigation has caused a number of problems for Mark and Kimberly Dupperon, who were then sued by Border City Building Centre Ltd. (“Border City”) on the basis of an Assignment of Proceeds that Locridge Homes Ltd. had executed in favour of Border City.

Locridge Homes Ltd. did not notify anyone however of this Assignment, as a result of which Locridge Homes Ltd. was paid by the Dupperons, and Locridge Homes Ltd.’s action was utilized as the basis for the filing of a Caveat by Border City, and a subsequent action filed by Border City against the Dupperons. [ 13 ] By striking the Statement of Claim, the Dupperons and Border City are in a position to resolve the matters as between them, so long as the Locridge Homes Ltd.’s action, all corresponding registrations, and the funds currently held in trust with respect to this transaction can be dealt with. [ 14 ] Accordingly I conclude that the Statement of Claim in this matter will be struck, and that prior counsel for Locridge Homes Ltd. with respect to the purchase/sale transaction only, who is now holding the funds in trust pursuant to certain builder’s liens is hereby discharged from any further obligations to hold those funds.

He is directed to pay those funds over to Parlee McLaws LLP for them to hold in trust pending the resolution of the matter between Mark and Kimberly Dupperon and Border City. [ 15 ] My Order will include the following provisions:– 1. The Plaintiff’s amended Statement of Claim is struck and the Plaintiff’s interest in the subject Lands shall cease. Upon delivery of a certified copy of this Order, the Registrar of the Land Titles Office shall forthwith discharge the following encumbrances against the Lands: (

a) Caveat/Vendor’s Lien No. 072 641 634; (

b) Builder’s Lien No. 082 418 351; and (

c) Certificate of Lis Pendens No. 092 086 052. 2. The Registrar of the Land Titles Office shall register this Order discharging the above noted encumbrances against the Lands notwithstanding the requirements of Section 191(1) of the Land Titles Act .

3. Mr. Christopher Sarsons, prior counsel for the Plaintiff Locridge Homes Ltd., in respect of the purchase/sale transaction only, shall pay the $36,623.55 he currently holds in trust over to Parlee McLaws LLP to hold in trust pending the resolution of the matters between the Defendants, Mark Ray Dupperon and Kimberly Kristen Dupperon, and Border City Building Centre Ltd., as reflected in Queen’s Bench Court No. 1003 16058. 4. Mr. Christopher Sarsons, Barrister and Solicitor, is discharged from all further obligations with respect to the funds he held in trust arising from the purchase/sale transaction. 5.

Service of this Order on the Plaintiff may be sent by ordinary mail to the address provided in the Notice of Ceasing to Act. Heard on the 30 th day of June, 2011. Dated at the City of Edmonton, Alberta this 12 th day of July, 2011. Donald Lee J.C.Q.B.A. Appearances: Erin M. Lafuente Parlee McLaws LLP for the Defendants Dimitrios Jim Chronopoulos Stillman LLP for Border City Building Centre Ltd. Christopher J. Sarsons Robertson Moskal Sarsons Prior Counsel for the Plaintiff With Respect to the Purchase/Sale Transaction Only

_______________________________________________________ Corrigendum of the Reasons for Judgment of The Honourable Mr. Justice Donald Lee _______________________________________________________ Corrections have been made to the Reasons for Judgment, paragraph 15 has been added, and the Appearances have been corrected, as follows: [2] The Dupperon’s submit that the Statement of Claim in this matter should be struck as a result of the failure of the Plaintiff Locridge Homes Ltd. to file an Affidavit of Records pursuant to Rule 3.68 of the New Alberta Rules of Court .

The Plaintiff in this action has not taken any steps to advance its claim since the filing of its Amended Statement of Claim on December 18, 2009. Counsel for Locridge Homes Ltd. Greg Heinrichs, Q.C. of Davis LLP ceased to act in this matter in August 2010. [14] Accordingly I conclude that the Statement of Claim in this matter will be struck, and that prior counsel for Locridge Homes Ltd. with respect to the purchase/sale transaction only, who is now holding the funds in trust pursuant to certain builder’s liens is hereby discharged from any further obligations to hold those funds.

He is directed to pay those funds over to Parlee McLaws LLP for them to hold in trust pending the resolution of the matter between Mark and Kimberly Dupperon and Border City. [15] My Order will include the following provisions:– 1. The Plaintiff’s amended Statement of Claim is struck and the Plaintiff’s interest in the subject Lands shall cease. Upon delivery of a certified copy of this Order, the Registrar of the Land Titles Office shall forthwith discharge the following encumbrances against the Lands: (

a) Caveat/Vendor’s Lien No. 072 641 634; (

b) Builder’s Lien No. 082 418 351; and (

c) Certificate of Lis Pendens No. 092 086 052. 2. The Registrar of the Land Titles Office shall register this Order discharging the above noted encumbrances against the Lands notwithstanding the requirements of Section 191(1) of the Land Titles Act . 3. Mr.

Christopher Sarsons, prior counsel for the Plaintiff Locridge Homes Ltd., in respect of the purchase/sale transaction only, shall pay the $36,623.55 he currently holds in trust over to Parlee McLaws LLP to hold in trust pending the resolution of the matters between the Defendants, Mark Ray Dupperon and Kimberly Kristen Dupperon, and Border City Building Centre Ltd., as reflected in Queen’s Bench Court No. 1003 16058. 4. Mr. Christopher Sarsons, Barrister and Solicitor, is discharged from all further obligations with respect to the funds he held in trust arising from the purchase/sale transaction.

5. Service of this Order on the Plaintiff may be sent by ordinary mail to the address provided in the Notice of Ceasing to Act. Appearances: Erin M. Lafuente Parlee McLaws LLP for the Defendants Dimitrios Jim Chronopoulos Stillman LLP for Border City Building Centre Ltd. Christopher J. Sarsons Robertson Moskal Sarsons Prior Counsel for the Plaintiff With Respect to the Purchase/Sale Transaction Only