TLA Food Services Ltd. v., 2011 ABQB 550

Court of Queen ’ s Bench of Alberta Citation: TLA Food Services Ltd. v. 1144707 Alberta Ltd., 2011 ABQB 550 Date: 20110909 Docket: 1003 19872 Registry: Edmonton Between: TLA Food Services Ltd. Applicant - and - 1144707 Alberta Ltd., John S. Kenney, John S. Kenney Professional Corp., operating as Kenney Law Office, Jeanne MacMillan, Chauvet Holdings Inc. operating as Exit Realty Results Respondents _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.L.

Shelley _______________________________________________________ Introduction [ 1 ] TLA Food Services Ltd. (TLA) entered into a contract (the Contract) with 1144707 Alberta Ltd. (1144707) to purchase a hotel. Unknown to the Plaintiff and to its principal, Tilemachos Tziachris, the hotel and hotel parking lot were located on two parcels. The hotel building is located on both, and the hotel parking lot is situated entirely on one of them. The land description in the Contract did not include the parcel on which the parking lot and part of the building are located.

TLA sued 1144707, who did not defend and was noted in default.

[ 2 ] TLA applied ex parte in morning Chambers for an Order: 1. rectifying the Contract to include the certificate of title which was not specified in the Contract; and 2. directing the Registrar of Land Titles to register title to that parcel to TLA. Facts [ 3 ] Mr. Tziachris, as the President of TLA, filed an affidavit in connection this application, swearing to the facts which are set out in the balance of this section. [ 4 ] In August 2009, Mr. Tziachris and his realtor, Jeanne MacMillan, met with Jatinder Saroya, a shareholder in 1144707, to discuss the sale of the Blue Ridge Hotel (the Hotel). Mr.

Saroya advised him that the sale included the parking lot (the Parking Lot). Mr. Tziachris then asked Ms. MacMillan to prepare a commercial real estate contract under which he made an offer for the Hotel. TLA was later substituted as buyer.

The offer was accepted at a purchase price of $295,000.00. [ 5 ] The Contract, as amended on September 14, 2009, provided the municipal address of the property as “306 - 3 Street, Blue Ridge Alta.” and the legal description as “Plan 84NY, BLOCK 1, LOT 3A”. [ 6 ] On October 6, 2009, 1144707 transferred title to the parcel legally described in the Contract (Property 1) to TLA. [ 7 ] Sometime after October 6, 2009, TLA was advised by Woodland County that the Hotel was on the same tax account as the immediately adjacent property.

Title searches revealed that 1144707 had held title to two parcels: Property 1 and the following: ALL THAT PORTION OF THE SOUTH EAST QUARTER OF

SECTION 26 TOWNSHIP 59 RANGE 10 WEST OF THE 5 TH MERIDIAN DESCRIBED AS FOLLOWS: COMMENCING AT A POINT ON THE EAST BOUNDARY OF THE SAID QUARTER

SECTION 100 FEET SOUTH OF THE NORTH EAST CORNER OF PARCEL (

B) AS SHOWN ON FILED PLAN 5324CL; THENCE SOUTHERLY ALONG THE SAID EAST BOUNDARY 125 FEET; THENCE WESTERLY AT RIGHT ANGLES TO THE SAID EAST BOUNDARY 125 FEET MORE OR LESS, TO THE EAST LIMIT OF THE LANE AS SHOWN ON PLAN 1139ET; THENCE NORTHERLY ALONG THE EAST LIMIT OF THE SAID LANE TO A POINT 100 FEET SOUTHERLY FROM THE NORTH WEST CORNER OF SAID PARCEL (B); THENCE SOUTH EASTERLY IN A STRAIGHT LINE TO THE POINT OF COMMENCEMENT, CONTAINING 0.202 HECTARES MORE OR LESS EXCEPTING THEREOUT ALL MINES AND MINERALS; (“Property 2") [ 8 ] Although TLA had received title to Property 1, title to Property 2 remained in the name of 1144707. [ 9 ] After obtaining a real property report, Mr.

Tziachris learned that: 1. The Hotel straddles both Property 1 and Property 2,

2. The Parking Lot used by Hotel patrons is situated on Property 2 and that he was lead to believe, and did in fact believe, that theParking Lot was purchased by TLA under the Contract. [10] Mr. Tziachris was informed by his lawyer and believes that: 1. A caveat (Agreement Charging Land), in favour of Fisgard Capital Corporation, was discharged from Property 1, as part of theSeller’s Obligations, shortly after closing; and 2.

On November 5, 2009 a writ, having a face value of $257,345.00, was registered against Property 2, in favour of Fisgard CapitalCorporation. [11] TLA commenced an action against 1144707 (and several other defendants not involved in this application) on November 22,2009. The allegations against 1144707 in the Statement of Claim include that: 1.

TLA was mistakenly induced to purchase only a portion of the Hotel as a result of the negligence or misrepresentations of theDefendants’ agents, or alternatively, the negligence and misrepresentations, of the Defendants; 2. 1144707 failed in its duty to disclose to TLA that the Hotel straddled two properties under two separate certificates of title; 3. 1144707 made false representations to TLA or its agents, that it knew, or ought to have known, were false; or alternatively1144707 recklessly made false representations to TLA without knowing whether they were true or false.

These false representationsinduced TLA to complete the purchase of the Hotel believing it was acquiring all of the property on which the Hotel was situated; and 4. 1144707 breached the warranties in the Contract. [12] The Claim sought the following remedies in its Prayer for Relief: 1. An Order rectifying the Contract to include Property 2, on which part of the Hotel and the Parking Lot are situated; 2. An Order for specific performance in respect of Property 2; 3. Special damages representing the TLA’s costs; 4. Punitive damages; 5. Interest on any award of damages, and 6.

Solicitor and client costs. [13] 1144707 was served with the Statement of Claim and the Amended Statement of Claim by registered letters to its registeredoffice. 1144707 did not respond and was noted in default on January 20, 2011. Submissions [14] TLA relies on Rules 3.37 and 3.38 of the Alberta Rules of Court, Alta Reg 124/2010, and supported its application withseveral cases: Lafranchise (Next Friend of) v. Lafranchise, 2005 ABQB 828; Dykes v. Goczan (1996), (AB KB),188 AR 352, 38 Alta. L.R. (3d) 425 (QB); and Syncrude Canada Ltd. v.

Tibo Steel Products Ltd., 2001 ABQB 478. [15] TLA argues that the facts set out in the Statement of Claim are deemed to be admitted once a Defendant has been noted indefault. As long as the Court is satisfied that there is a valid cause of action and that the affidavit filed in support of the applicationsupports the relief requested, judgment should issue.

The Relevant Rules [ 16 ] Rules 3.36 , 3.37 , and 3.38 of the Alberta Rules of Court provide: 3.36(1) Subject to subrule (2), if a defendant does not file a statement of defence or demand for notice, or if the defendant’s statement of defence is struck out, the plaintiff may, on filing an affidavit of service of the statement of claim, (

a) enter judgment against the defendant under rule 3.38 or 3.39, or (

b) require the court clerk to enter in the court file of the action, in Form 14, a note to the effect that the defendant has not filed a statement of defence and consequently is noted in default. ... 3.37(1) The plaintiff may, without notice to any other party, on proof of the plaintiff’s claim, apply to the Court for judgment in respect of a claim for which default judgment has not been entered if (

a) one or more defendants are noted in default, or (

b) the defendant’s statement of defence is struck out.

(2) In the circumstances described in subrule (1) the plaintiff is entitled to a costs award.

(3) The Court may do one or more of the following: (

a) pronounce judgment; (

b) make any necessary order; (

c) direct a determination of damages; (

d) adjourn the application and order additional evidence to be provided; (

e) dismiss the claim or a part of it; (

f) direct that the claim proceed to trial and that notice be served on every other defendant; (

g) make a costs award in favour of the plaintiff. 3.38 Subject to rule 3.41 [When no defence is filed in a foreclosure action] , if a statement of claim includes a claim for the recovery of property and one or more defendants do not file a statement of defence or demand for notice, the plaintiff may enter judgment against that defendant or those defendants for the recovery of that property, and the plaintiff is entitled to a costs award. [ 17 ] Rule. 3.38 is expressly subject to Rule 3.41 which provides: 3.41(1) If a defendant in a foreclosure action does not file a statement of defence or demand for notice, the plaintiff must note the defendant in default before filing an application for (

a) personal judgment, or (

b) a remedy referred to in rule 6.5(2).

(2) A defendant may be noted in default even if the defendant has filed and served a notice of address for service.

Effect of noting in default [18] Strekaf J., in Toerper v. Hoard, 2011 ABQB 85, discussed the effect of a defendant’s failure to file a defence under R. 3.37,citing Robinson v. Fiesta Hotel Group Resorts, 2008 ABQB 311, 450 AR 167 and McElroy v. Cowper-Smith, (SCC),[1967] S.C.R. 425. These cases, and others cited therein, provide that under the old rules (Alta Reg 390/1968), in Alberta noting indefault means that the facts alleged in the Statement of Claim are admitted by the defendant. (Robinson at para. 11; McElroy at p. 425(per Hall J.) and 428 (per Spence J.).

Strekaf J. applied these principles to the new Rule. I agree that these principles continue to apply. [19] A refinement to this rule is set out in Spiller v. Brown, 1973 ALTASCAD 76 , [1973] 6 WWR 663 (ABCA), wherethe Court held that, even when an assessment has been directed, it is still open to the Court to require that it be satisfied that the plaintiffhas a cause of action, and if necessary direct a hearing to determine the matter (at para. 9). [20] In Lafranchise the plaintiff, after noting the defendant in default, applied ex parte under R. 152 for judgment on proof byaffidavit of the plaintiff’s damages.

Lee J. granted judgment for the quantum proved in the affidavit. [21] In Dykes, the defendant was noted in default in a personal injury action, and in a subsequent hearing for an assessment ofdamages, he applied to adduce evidence that would contradict the facts alleged in the statement of claim. Binder J., relying on thedecision in McElroy and Spiller v. Brown, held that there was a cause of action established by the claim and that the defendant could notlead evidence that contradicted the facts deemed to be admitted by the noting in default. [22] Syncrude Canada Ltd. v.

Tibo Steel Products Ltd., 2001 ABQB 478, another decision of Lee J., addressed the sufficiency ofthe affidavit evidence to establish the quantum of damages and whether as assessment was required.

Lee J. concluded that thedefendants had chosen not to defend the action, that the plaintiff’s allegations were deemed to be admitted, and that the affidavit materialsufficiently established the quantum of damages. [23] Lee J. in Syncrude also concluded that R. 152 did not require that notice be given to the defendants of the application, and thatthe rule gave the judge the discretion to give final judgment if satisfied by the affidavit, to direct an accounting, or to set the matter downfor assessment on notice.

That rule provided: 152 If a sole defendant has, or all the defendants have, been noted in default, the plaintiff may (

a) apply ex parte to the court for judgment, and the judge hearing the application may (

i) upon proof of the plaintiff’s claim by affidavit or otherwise, give final judgment or direct an accounting, or (ii) set the matter over for a hearing on notice, and notice shall be given to a defendant in the same manner as hereinafter providedon assessment, or (

b) set the matter down for assessment, giving at least 10 days notice of the date set for assessment. [24] A

summary of these principles follows: 1. When a defendant is noted in default, it is deemed to have admitted the allegations in the Statement of Claim; 2. Before granting default judgment the Court must still inquire as to whether a cause of action is made out in the Statement ofClaim, and may direct a hearing on the matter; 3. A defendant who has been noted in default cannot adduce evidence to contradict the facts alleged in the Statement of Claim in thecourse of a hearing for the assessment of damages; 4. Quantum of damages may be assessed based on affidavit evidence;

5. R. 152 of the previous rules gives the Chambers judge discretion as to whether to grant default judgment ex parte based on affidavit evidence or to require that notice be given and an assessment set down for hearing. Analysis The admitted facts and causes of action [ 25 ] Based on these principles, 1144707 is deemed to have admitted the facts alleged in the Statement of Claim. Those facts relevant to the liability of 1144707 are: 1. 1144707 was an Alberta corporation; 2. Mr.

Tziachris, TLA’s principal, attended at the Hotel and was told by Jatinder Saroya that the Parking Lot formed part of the lands being sold as the Hotel; 3. Mr. Tziachris made an offer to buy the Hotel from 1144707 and that offer was accepted by Manjit Saroya, on behalf of 114707; 4. The contract was amended to change the purchaser from Mr. Tziachris to TLA, to put in the correct name of 1144707, to change the municipal address to 306 3 rd Street Blue Ridge, Alberta, and to change the legal description from Plan 5324CL; B, Lot B to Plan 84NY, Block 1, Lot 3A; 5.

The Contract included certain warranties and representations, including: (

b) the Buildings and other improvements on the Land are not placed partly or wholly on any easement or utility right-of-way and are entirely on the Land and do not encroach upon neighboring lands, except where an encroachment agreement is in place; 6. On closing on October 6, 2009, Property 1 was transferred to TLA, but Property 2 was not; 7. A caveat in favour of Fisgard was discharged from title to Property 1 on closing of the sale; 8.

On November 5, 2009 Fisgard registered a writ against title to Property 2 for $257,345.00. 9. 1144707, or its agent, made false representations to TLA that it knew or should have known were false, or alternatively recklessly made false representations without knowing whether they were false; and 10. TLA relied on these representations and purchased the Hotel believing that it was acquiring all of the hotel property, including the Parking Lot. [ 26 ] The claims against 1144707 can be summarized as: 1.

TLA was mistakenly induced to purchase only a portion of the Hotel as a result of 1144707's negligence and/or misrepresentations; 2. 1144707 had a duty to disclose to TLA that the Hotel straddled two properties under two separate certificates of title, and it breached that duty; 3. 1144707 made false representations to TLA or TLA’s agents, that it knew, or ought to have known, were false; 4. Alternatively, 1144707 recklessly made false representations to TLA without knowing whether they were true or false.

These false representations induced TLA to complete the purchase of the Hotel believing it was acquiring all of the property on which the Hotel was situated; and 5. 1144707 breached the warranties in the Contract. [ 27 ] Does the Claim raise a cause of action? The Claim alleges negligent misrepresentation, false representation, breach of contract, and breach of an alleged duty on the seller to disclose that the Hotel straddled two properties.

[28] The tort of negligent misrepresentation requires (Queen v.

Cognos Inc., (SCC), [1993] 1 S.C.R. 87): 1. there must be a duty of care based on a "special relationship" between the representor and the representee; 2. the representation in question must be untrue, inaccurate, or misleading; 3. the representor must have acted negligently in making the misrepresentation; 4. the representee must have relied, in a reasonable manner, on the negligent misrepresentation; and 5. the reliance must have been detrimental to the representee in the sense that damages resulted. [29] The Claim alleges that an agent of 1144707, either negligently or intentionally, made a false representation that the ParkingLot was included in the sale when it was not.

TLA reasonably relied on that representation in deciding to make an offer on the Hotel andhas suffered damages as a result. A cause of action is made out for negligent misrepresentation. The same alleged facts also establish analternative cause of action for deceit, that is intentional misrepresentation. [30] The allegation that 1144707 owed a duty to TLA to disclose that the Hotel and Parking Lot straddled two properties isquestionable.

The Plaintiff has provided no jurisprudence or argument to support the position that there is such a duty. [31] The Contract warranted that the “Buildings and other improvements on the Land ... are entirely on the Land...”. Based on thedeemed facts, that warranty was breached, as the Hotel is not solely on the Land. [32] Generally the remedy for a tort or for breach of a contract warranty is damages. TLA has not provided a sufficient evidentiarybasis in Mr. Tziachris’ affidavit to assess damages and, in fact, TLA is not seeking default judgment for a monetary amount.

It is seekingrectification of the Contract and an order requiring the Registrar of Land Titles to transfer Property 2 to it. This raises the question ofwhether rectification can be granted on these facts and, if so, whether such a remedy is available by way of default judgment. Rectification [33] TLA seeks rectification of the Contract. Rectification is an equitable remedy that permits the courts to vary the terms of a written document. G.H.L.

Fridman in The Law of Contract (4th ed.) (Scarborough: Carswell , 1999) notes (at p. 867): The essence of rectification is to bring the document which was expressed or intended to be in pursuance of a prior agreement intoharmony with that prior agreement. It deals with the situation where, contracting parties having reduced into writing the agreementreached by their negotiations, some mistake was made in the wording of the final, written contract, altering the effect, in whole or inpart, of the contract.

What the court does is to alter the document, in accordance with the evidence, and then enforce the document aschanged. (Emphasis added, citations omitted) [34] Fridman (at pa. 870) notes that a party claiming rectification must show that: 1. there was a mistake in putting down the parties’ intentions in writing, and 2. there was an earlier agreement that shows there was such a mistake. [35] Generally, the courts have held that the mistake must have been mutual and that evidence of the mistake must be clear andunambiguous before rectification can be granted: Hart v.

Boutilier (1916), (SCC), 56 DLR 620 (SCC) at 622; Halwa

et al. v. Olson et al. (AB KB), [1948] 1 WWR 1049 (ABSC); Jacques v. Alexander (Local Government District)(1996), (MB KB), 116 Man R (2d) 164, (QB) at para. 9; Fridman at pp. 871-872. [36] However, rectification may be available for a unilateral mistake in extraordinary circumstances. Fridman (at p. 873) notesthat such exceptions include where a document was drafted by one party only (deed poll) and where denying the mistake would be“tantamount to fraud” (at p. 874). The test for rectification of a contract where there has been a unilateral mistake was set out by BinnieJ. in Performance Industries Ltd. v.

Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, [2002] 1 S.C.R. 678 at para. 31: Rectification is an equitable remedy whose purpose is to prevent a written document from being used as an engine of fraud ormisconduct "equivalent to fraud". The traditional rule was to permit rectification only for mutual mistake, but rectification is nowavailable for unilateral mistake (as here), provided certain demanding preconditions are met. Insofar as they are relevant to thisappeal, these preconditions can be summarized as follows.

Rectification is predicated on the existence of a prior oral contract whoseterms are definite and ascertainable. The plaintiff must establish that the terms agreed to orally were not written down properly. Theerror may be fraudulent, or it may be innocent. What is essential is that at the time of execution of the written document thedefendant knew or ought to have known of the error and the plaintiff did not. Moreover, the attempt of the defendant to rely onthe erroneous written document must amount to "fraud or the equivalent of fraud". The court's task in a rectification case iscorrective, not speculative.

It is to restore the parties to their original bargain, not to rectify a belatedly recognized error of judgment byone party or the other: Hart v. Boutilier (1916), (SCC), 56 D.L.R. 620 (S.C.C.), at p. 630; Ship M. F. Whalen v.Pointe Anne Quarries Ltd. (1921), (SCC), 63 S.C.R. 109, at pp. 126-27; Downtown King West Development Corp. v.Massey Ferguson Industries Ltd., (1996), (ON CA), 133 D.L.R. (4th) 550 (Ont. C.A.), at p. 558; G. H. L. Fridman,The Law of Contract in Canada (4th ed. 1999), at p. 867; S. M. Waddams, The Law of Contracts (4th ed. 1999), at para. 336.

In Hart,supra, at p. 630, Duff J. (as he then was) stressed that "[t]he power of rectification must be used with great caution". Apart fromeverything else, a relaxed approach to rectification as a substitute for due diligence at the time a document is signed would undermine theconfidence of the commercial world in written contracts. [Emphasis added] [37] In

summary: (1) there must be a prior oral agreement with ascertainable terms; (2) the terms agreed to were not properlywritten down; (3) the defendant knew or ought to have known of the error and the plaintiff did not; and (4) the defendant’s reliance onthe erroneous written document amounts to "fraud or the equivalent of fraud". [38] Do the facts deemed to be admitted satisfy these pre-conditions? [39] I conclude that: 1. the terms of the agreement were not properly written down, 2. 1144707 knew, or ought to have known, that the legal description in the Contract was not correct and that TLA did not know thatthe legal description was incorrect, and 3. to permit 1144707 to rely on the Contract is the equivalent of fraud. [40] However, in my view, the Statement of Claim does not allege sufficient facts to establish that there was a prior oral agreement,only that a representation by Jatinder Saroya was made that the sale of the Hotel included the Parking Lot.

There is no evidence thatanyone other than Jatinder Saroya discussed the sale with Mr. Tziachris on behalf of 1144707, and no evidence that Jatinder Saroyareceived or accepted an oral offer for the Hotel. [41] The Claim provides that, after the discussion with Jatinder Saroya, the written commercial real estate purchase contract (i.e.,the Contract) was prepared, under which Mr. Tziachris offered to buy the hotel and Manjit Saroya accepted the offer.

It was only onacceptance of the written contract by Manjit, not Jatinder, that the Contract was entered into. [42] Even if one inferred from the admitted facts and Mr. Tziachris’ affidavit that there was an oral agreement between JatinderSaroya and Tziachris, TLA only became a party to the agreement when the written Contract was amended, and therefore any oral

agreement was not with TLA. [ 43 ] Even if Mr. Tziachris was acting as agent for TLA, and thus it could be said that there was an oral agreement with TLA, the affidavit and the Statement of Claim do not provide evidence of the ascertainable terms of such oral agreement. The affidavit and facts alleged in the Statement of Claim only specify that the Parking Lot was included in the sale, but not such important terms as the sale price. Mr.

Tziachris did not indicate in his affidavit whether Property 2 only includes the Parking Lot and the remainder of the Hotel, leaving the possibility that title to Property 2 might include more. It is not clear from the Claim or the affidavit that Property 2 is limited to only the land on which the Hotel and the Parking Lot are situated.

Therefore, there is additional uncertainty as to whether the oral agreement extended to the lands described in the title to Property 2. [ 44 ] I conclude that rectification of the Contract is not available because there is no evidence of a prior oral agreement between TLA and 114707, and that even if such an oral agreement could be inferred, there is insufficient evidence of definite and ascertainable terms.

Can a plaintiff rely on Rule 3.38 to “recover ” property? [ 45 ] However, if I am wrong, and the Contract can be rectified, I will consider whether default judgment can be entered under Rule 3.38 to permit TLA to obtain title to Property 2. [ 46 ] Rule 3.38 provides that, when no defence or demand for notice is filed to a claim for recovery of property, the Plaintiff may enter judgment for the recovery of that property. The immediate predecessor of this Rule is R. 149. Neither Rule has been subject to judicial commentary or discussion.

Stevenson and Cote, in both the 2009 and 2010 Alberta Civil Procedure Handbook , (Edmonton, Juriliber, 2009 and 2010), have no commentary regarding either version of the Rule. [ 47 ] Rule 3.38 adds a parenthetical comment “[ When no defence is filed in a foreclosure action ]”, which initially seems to suggest that the Rule is applicable only to foreclosure actions. However, that parenthetical comment follows the phrase “Subject to rule 3.41".

Rule 3.41 is entitled “When no defence is filed in a foreclosure action”, and provides that “If a defendant in a foreclosure action does not file a statement of defence or demand for notice, the plaintiff must note the defendant in default before filing an application...” This suggests that the parenthetical reference is to alert the reader to the nature of the “subject to”, rather than to indicate that the Rule applies only to foreclosure actions. On the plain language of the Rule itself, there is no indication that it is so limited. [ 48 ] Rule 3.38 provides for “recovery of property”.

R. 149 provided for the “recovery of goods or land”. In the successor Rule 3.38 “property” includes both “land and personal property”: Rules of Court , Appendix:

Definitions. The plain meaning of “recovery” is to take back something that the Plaintiff previously possessed – to get back or regain something. See Oxford English Dictionary (www.oed.com, July 19, 2011): 4a. The regaining or restoration to one's control or possession of a thing lost, stolen, or otherwise taken away, retrieval; the possibility of recovering such a thing. [ 49 ] “Recovery” also has a legal meaning, set out in the Oxford English Dictionary (www.oed.com, July 19, 2011) as: 2 a.

The fact or process of gaining or regaining possession of or a right to property, compensation, etc., by a legal process or judgment. [ 50 ] In my view, this definition is not applicable here. “Recovery” in the latter definition is a general term describing remedies broadly. In that sense, a plaintiff in every action is always seeking recovery for what he asserts he has lost; that recovery may be assessed as damages, specific performance, or some other order. In this context, I find that “recovery of property” references the restoration or regaining of property or title.

[ 51 ] Moreover, the context of the Rules dealing with default judgment and noting in default further support this

interpretation. Rules 3.37, 3.38 and 3.39 provide for two kinds of default judgment – a judgment on application to the Court after a defendant has been noted in default under Rule 3.36 . Such a judgment requires an assessment under Rule 3.37. The second form of judgment does not require that a defendant first be noted in default (except in the case of foreclosure (Rule 3.41)) and does not require an application to the Court.

These judgments are those for a debt or liquidated demand (Rule 3.39), or “recovery of property” (R. 3.38), and are entered by the plaintiff. [ 52 ] In the case of debt or liquidated demand, the jurisprudence has established that such default judgment is only when an exact or easily calculable amount is sued for. Logically, under the similar Rule 3.38, default judgment for the recovery of property should only be available when the property is easily ascertainable, without the need for a Court application.

This would be the case in a foreclosure action, where the plaintiff has a mortgage identifying its interest, or in a bailment action, where the plaintiff has an agreement describing the personal property sued for. Alternative Remedies [ 53 ] In Fenske v. Schneider, 2007 ABQB 164 , Veit J. held that, where a plaintiff has sought alternative remedies, the defendant should be given notice of a motion by the plaintiff to seek one of those remedies.

Veit J. noted “a default of defence is an admission of the facts pleaded, not of the conclusions of law or the assessment of damages” (at para. 11) and “that the appropriate remedy flowing from that breach is not a fact which [the defendant] can be taken to have admitted” (at para. 15). In Fenske the plaintiff sought either damages or specific performance in the Statement of Claim, and then sought specific performance in the application for default judgment.

Veit J. refused the application, noting (at paras. 15-16): ... not only does the Statement of Claim itself advances two possible remedies, the remedy of specific performance is a discretionary, equitable remedy which will only be granted after a review of all pertinent circumstances. Mr. Fenske may well have a strong claim for specific performance: Fossum, Holden, United Gulf Developments Ltd., Spicer . That is not the point. The issue is that Ms.

Schneider may well have a position concerning the request for specific performance as opposed to a request for damages; she is entitled to advance that position for the court's consideration. [ 54 ] Similarly here, TLA’s Claim sought damages, rectification of the Contract, and specific performance. In my view, as in Fenske , notice must be given to the Defendants of TLA’s choice of remedy so that they can advance a position in regards to the appropriate equitable remedy. I conclude that this is a further ground for denying TLA’s application.

Order to Registrar to transfer title [ 55 ] In my view, had the Contract been rectified to include Property 2, the appropriate subsequent order would have been one for specific performance, requiring 1144707 to transfer title to TLA, since that was the remedy sought in the Statement of Claim, and not an order requiring the Registrar of Land Titles to transfer title. Conclusion [ 56 ] I dismiss TLA’s application. Heard on the 21 st day of June, 2011. Dated at the City of Edmonton, Alberta this 9 th day of September, 2011.

D.L. Shelley J.C.Q.B.A. Appearances: W.K. Horwitz for the Applicant