Travaglione v. Wawanesa Mutual Insurance Company, 2011 ABQB 604

Court of Queen ’ s Bench of Alberta Citation: Travaglione v. Wawanesa Mutual Insurance Company, 2011 ABQB 604 Date: 20111003 Docket: 0803 17990 Registry: Edmonton Between: Bruno Travaglione Appellant - and - Wawanesa Mutual Insurance Company and James Burkinshaw Respondents _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.L. Shelley _______________________________________________________ Appeal from the Order by L. Smart, Master in Chambers Dated the 12 th day of April, 2011 Background

[ 1 ] Mr. Travaglione hired Mr. Burkinshaw to provide legal services in relation to Mr. Travaglione’s purchase of 37 Dorian Way, Sherwood Park, Alberta (the “Property”). The purchase was completed on April 13, 2007. [ 2 ] In June, 2007, police arrested Mr. Travaglione for parole violations. Mr. Travaglione returned to prison. Mr. Travaglione signed a power of attorney in favour of his sister Anna Mitoraj on June 27, 2007, and thereafter she occasionally provided instructions to Mr. Burkinshaw. [ 3 ] In August, 2007, there was a break-in (“first break-in”) at the Property, and some items were stolen. Mr.

Burkinshaw acknowledges that he provided some assistance with that break-in, including providing proof of loss forms to Mrs. Mitoraj. In a letter to the Law Society of Alberta, dated September 23, 2007, Mr. Travaglione alleged that he instructed Mr. Burkinshaw to hire a property management firm to handle the day to day care and control of the Property. He also alleged that he instructed Mr. Burkinshaw to have the locks changed. A property management firm was not hired and the locks were not changed prior to the first break-in. Mr. Burkinshaw did arrange to have the locks changed after the first break-in. Mr.

Burkinshaw denies that he was instructed to hire a property management firm, but states that his legal assistant lived next door and supervised the Property. [ 4 ] The letter to the Law Society contained complaints about Mr. Burkinshaw for failing to follow Mr. Travaglione’s instructions on property management, for issues relating to attempts to sell the Property, and for mishandling rental income. Mr. Burkinshaw claims that, as a result of these complaints, he did not represent Mr.

Travaglione any further, except to complete certain tasks relating to a defaulting tenant and completing the sale of the Property, which occurred in April 2008. [ 5 ] A second break-in occurred on December 23, 2007 (“second break-in”). Mr. Burkinshaw asserts that he did not deal with any issues arising from the second break-in, including any insurance issues. [ 6 ] On January 15, 2008, Mr. Travaglione wrote to Mr. Burkinshaw, proposing a settlement of his claims if Mr. Burkinshaw would make payments and assume certain liabilities relating to outstanding utility bills, property taxes, and the sale of the Property.

The settlement proposal did not mention anything about losses for either break-in. It stated that if Mr. Travaglione’s terms were met he would withdraw his complaint to the Law Society. [ 7 ] Mr. Travaglione did not submit a Proof of Loss form for the first break-in to his insurer (Wawanesa) until May 13, 2008. Wawanesa denied the claim and informed Mr. Travaglione that he had had one year from the date of the incident to file a statement of claim. Mr. Travaglione never filed a statement of claim for the first break-in. [ 8 ] On September 9, 2008, Mr. Travaglione submitted a Proof of Loss and a

Schedule of Loss in relation to the second break-in. Wawanesa denied Mr. Travaglione’s claim on November 7, 2008. Wawanesa’s reasons for denying Mr. Travaglione’s claim included: that he sought inflated values for stolen items; that the claim included items stolen in the first break-in; that some items were taken with his permission; and, alternatively, that Mr. Travaglione was in breach of the terms of his insurance policy for leaving the Property vacant and improperly supervised for 30 days prior to the second break-in. Mr. Travaglione filed a statement of claim against Wawanesa on December 19, 2008.

He amended it to include Mr. Burkinshaw on March 15, 2010. [ 9 ] In July 2010, a Master granted Wawanesa and Mr. Burkinshaw orders for security for costs against Mr. Travaglione. Madam Justice Veit set aside those orders in December 2010. [ 10 ] Mr. Burkinshaw brought an application to have the statement of claim dismissed as against him, and Wawanesa brought an application for security for costs. Mr. Travaglione was served with Mr. Burkinshaw’s affidavit in support of the application on March 9, 2011. The affidavit was missing one exhibit (Mr. Burkinshaw’s Bill of Costs), and Mr.

Travaglione alleges that the second page was unreadable. A replacement affidavit was sent to Mr. Travaglione on March 31. Mr. Travaglione attempted to file an affidavit in response, but filing was not completed until three days after the hearing. On April 12, the applications were heard and the Master dismissed the statement of claim as against Mr. Burkinshaw and ordered security for costs in favour of Wawanesa. Mr. Travaglione was not present at the application. [ 11 ] Mr. Travaglione appealed the Master’s Orders of April 12, 2011. I adjourned the appeal in relation to Wawanesa’s Order so

that Mr. Travaglione could order transcripts of the hearing. On the joint request of Mr. Burkinshaw and Mr. Travaglione I heard the application in relation to the dismissal of the action against Mr. Burkinshaw. Appellant ’s Position [ 12 ] Mr. Travaglione’s written materials and his oral submissions at the appeal hearing (which he made by telephone) contained little detail. In his Statement of Claim, Mr. Travaglione alleged that Mr. Burkinshaw was negligent in failing to protect Mr. Travaglione from the loss he suffered as a result of the second break-in and in pursuing Mr. Travaglione’s insurance claim.

He takes the position that Mr. Burkinshaw undertook to hire a property management firm to supervise and maintain the Property but, having failed to do so, created conditions for the break-in. He also argues that Mr. Burkinshaw’s alleged negligence caused him to arguably breach the terms of his home insurance policy by leaving it vacant for 30 days. [ 13 ] In support of this appeal, Mr. Travaglione asserts that his claim against Mr. Burkinshaw has merit and was filed within the limitation period. He also argues that Mr.

Burkinshaw’s affidavit filed in support of the application before the Master was missing exhibits, hampering his ability to properly respond to that application. He submits that he could not file his responding affidavit prior to the hearing on April 12, and could not make arrangements to appear at the hearing, because he is incarcerated in Ontario. Respondent ’s Position [ 14 ] Mr. Burkinshaw denies that he undertook any responsibility related to the second break-in, including any issues relating to insurance. He also denies that he had any agreement or obligation to reimburse Mr.

Travaglione for any losses he suffered. [ 15 ] Mr. Burkinshaw argues that Mr. Travaglione’s Statement of Claim was amended to include Mr. Burkinshaw after the two year limitation period set out in the Limitations Act , R.S.A. 2000, c. L-12. He asserts that the limitation period started running from the date of the second break-in, December 23, 2007, and, since the Statement of Claim was not amended until March 15, 2010, the action against him is statute barred. Legislation [ 16 ] The relevant portions of the Alberta Rules of Court , Alt. Reg. 124/2010 and the Limitations Act are attached as Appendix “A”.

Issues 1. Did the alleged defects in Mr. Burkinshaw’s affidavit render the hearing before the Master procedurally unfair? 2. Did the Master err in finding that Mr. Travaglione’s Statement of Claim was amended to include Mr. Burkinshaw outside the applicable limitation period? 3. Does Mr. Travaglione’s claim lack merit?

Analysis Issue 1 - Did the alleged defects in Mr. Burkinshaw's affidavit render the hearing before the Master procedurally unfair? [ 17 ] Rule 6.3 requires that, unless the Court or the Rules otherwise provide, a person bringing an application must serve on all other parties a notice of the application and any affidavit or evidence in support of the application at least five days before the application is scheduled to be heard. There are no additional provisions which change the five day period for applications for

summary judgment or for respondents outside of Alberta. [ 18 ] Mr. Travaglione received notice of Mr. Burkinshaw's application and the affidavit in support of it on March 9, 2011, more than one month before April 12, the date the application was scheduled to be heard. However, Mr. Travaglione alleges that the second page of the affidavit was unreadable and that it was missing exhibits. If these errors were made, they were corrected by at least March 31 when Mr.

Travaglione was served with a complete and readable affidavit, including all exhibits. [ 19 ] Since an error-free affidavit was provided more than five days before the date of the application, any defect in the initial affidavit did not affect the fairness of the application hearing. Issue 2 - Did the Master err in finding that Mr. Travaglione's Statement of Claim was amended to include Mr. Burkinshaw outside the applicable limitation period? [ 20 ] The standard of review for appeals from a Master's order was set out by Macklin, J. in Janvier v. 834474 Alberta Ltd. , 2010 ABQB 300 at para. 18 : In

summary, the standard of review on a decision from the Master on a question of law is correctness. The standard of review for facts accepted by the Master or factual inferences drawn by the Master from the evidence is reasonableness. The finding must amount to a palpable and overriding error. The imputed error must be plainly identified and must be shown to have affected the result.

On a question of mixed fact and law, if the principle of law cannot be extricated from the question, then the standard of review is again one of reasonableness only to be interfered with if a palpable and overriding error can be shown. If the principle of law can be extricated from the question, then the standard of review on the principle of law is correctness. [ 21 ] The selection of the appropriate limitation period to apply is a question of law and subject to a standard of correctness.

The question of when various events occurred is a question of fact and subject to a standard of palpable and overriding error. [ 22 ]

Section 3 of the Limitations Act creates a two year limitation period for most actions. However, s. 6 allows a defendant to be added to an existing action if the claim against the additional defendant relates to the conduct, transaction, or events that form the subject matter of the original pleading, and the defendant receives sufficient knowledge of the added claim within the limitation period applicable to the claim plus time for service of process so that he or she would not be prejudiced. Rule 3.26 grants a plaintiff one year to serve a statement of claim on a defendant.

Therefore, s. 6 requires a defendant to receive sufficient knowledge of the claim within three years. [ 23 ] Mr. Burkinshaw was served with Mr. Travaglione's Amended Statement of Claim on March 31, 2010. The loss suffered by Mr. Travaglione in the second break-in, which forms the subject matter of the claim against Mr. Burkinshaw and Wawanesa, occurred on December 23, 2007. Therefore, Mr.

Burkinshaw received notice of the claim against him a little over two years and three months after the event which could have triggered the running of the limitation period. [ 24 ] Without a transcript, I do not know if the Master dismissed the claim against Mr. Burkinshaw on the basis of a two year limitation period, without considering the implications of s.6 of the Limitations Act . In the circumstances of this action, it would be an

error of law for him to do so. If he did consider the applicability of s.6, without a transcript I do not know what conclusion he reached inrelation to its applicability, its effect, or the reasons why he concluded that the claim was statute barred. Issue 3 - Does Mr. Travaglione's claim lack merit? [25] If the basis of the Master’s decision to dismiss Mr. Travaglione’s claim against Mr. Burkinshaw was that it was statute barredand if he was wrong in reaching that conclusion, then it becomes necessary to determine whether the Master also, as an alternative,dismissed the claim on its merits and his reasons for doing so. [26] In determining and applying the test for

summary judgment, the standard is correctness. The test for

summary judgment is setout by the Supreme Court of Canada in Canada (Attorney General) v. Lameman, 2008 SCC 14 at paras. 10-11: The

summary judgment rule serves an important purpose in the civil litigation system. It prevents claims or defences that have no chanceof success from proceeding to trial. Trying unmeritorious claims imposes a heavy price in terms of time and cost on the parties to thelitigation and on the justice system. It is essential to the proper operation of the justice system and beneficial to the parties that claimsthat have no chance of success be weeded out at an early stage. Conversely, it is essential to justice that claims disclosing real issues thatmay be successful proceed to trial. For this reason, the bar on a motion for

summary judgment is high. The defendant who seeks

summary dismissal bears the evidentiaryburden of showing that there is "no genuine issue of material fact requiring trial": Guarantee Co. of North America v. Gordon CapitalCorp., (SCC), [1999] 3 S.C.R. 423, at para. 27. The defendant must prove this; it cannot rely on mere allegations or thepleadings: 1061590 Ontario Ltd. v. Ontario Jockey Club (1995), (ON CA), 21 O.R. (3d) 547 (C.A.); TucsonProperties Ltd. v. Sentry Resources Ltd. (1982), (AB KB), 22 Alta. L.R. (2d) 44 (Q.B. (Master)), at pp. 46-47. If thedefendant does prove this, the plaintiff must either refute or counter the defendant's evidence, or risk

summary dismissal: Murphy OilCo. v. Predator Corp. (2004), 365 A.R. 326, 2004 ABQB 688, at p. 331, aff'd (2006), 55 Alta. L.R. (4th) 1, 2006 ABCA 69. Each sidemust "put its best foot forward" with respect to the existence or non-existence of material issues to be tried: Transamerica LifeInsurance Co. of Canada v. Canada Life Assurance Co. (1996), (ON SC), 28 O.R. (3d) 423 (Gen. Div.), at p. 434;Goudie v. Ottawa (City) [2003] 1 S.C.R. 141, 2003 SCC 14, at para. 32.

The chambers judge may make inferences of fact based on theundisputed facts before the court, as long as the inferences are strongly supported by the facts: Guarantee Co. of North America, atpara. 30. [27] This test continues to apply to the current Rules of Court (Mraiche Investment Corp. v. Paul, 2011 ABQB 164 at para. 11). In BA Capital Inc. v. Stream Oil & Gas, 2011 ABQB 91 at para. 4, Master Mason also held that "summary judgment should not begranted if opposing affidavits clash on relevant facts." [28] The Master may have found that there was no merit to Mr. Travaglione's claim by inferring that Mr.

Burkinshaw did notacquire any obligations to maintain or supervise the Property in the time leading up to the second break-in, or any responsibility fordealing with insurance issues related to the break-in. Such inferences could be made from the affidavits filed by Mr. Burkinshaw.According to Janvier, proper inferences of fact made by a Master are subject to standard of palpable and overriding error. [29] It is also possible that the Master made a finding on a contentious or disputed issue of fact, which would amount to ajurisdictional error (Court of Queen’s Bench Act, R.S.A. 2000, c. C-31, s. 9(3)(b)).

Jurisdictional questions are questions of law and arealso reviewable on a standard of correctness. [30] There is competing evidence on the merits of the case. Mr. Burkinshaw, in an affidavit in support of his application forsummary judgment sworn March 15, 2011, stated that he did not represent Mr. Travaglione after September 2007, except to completetasks relating to a defaulting tenant and completing the sale of the Property. He also stated that he was not instructed to deal with, nor didhe deal with, any insurance issues arising from the second break-in.

Finally, he stated that there was no agreement, contractual orotherwise, for him to reimburse Mr. Travaglione for any loss suffered in the second break-in. In a previous affidavit filed in support of anorder for costs in July 2010 Mr. Burkinshaw stated essentially the same thing. [31] Mr. Travaglione, in his affidavit opposing

summary judgment, adopted statements made in paragraphs two through seventeenof his affidavit filed November 1, 2010 in support of an appeal against an order for costs. Paragraphs fifteen through seventeen disagree

with the position of Mr. Burkinshaw in his affidavits. Mr. Travaglione attaches exhibits which he believes show that Mr. Burkinshawdid provide the services in connection with the matters alleged in the Statement of Claim and that he did deal with the insurer and policein relation to the second break-in. Mr. Travaglione also claims that Mr. Burkinshaw and/or his employees supervised the Property in the30 days leading up to the second break-in. In his subsequent affidavit, Mr. Travaglione references a letter attached as an exhibit to Mr.Burkinshaw's March 15th affidavit in support of Mr.

Travaglione's position that Mr. Burkinshaw acted as his counsel until at leastJanuary 11, 2008. According to Mr. Travaglione, that same letter also shows that Mr. Burkinshaw took actions in relation to the secondbreak-in, which actions Mr. Burkinshaw denied in his affidavit. [32] The supporting documents, attached as exhibits to Mr. Burkinshaw's March 15th affidavit and Mr. Travaglione's affidavits, donot establish, either way, whether Mr. Burkinshaw agreed to supervise the Property after September 2007 or whether he agreed to dealwith any insurance issues arising from the second break-in. An email to Mrs.

Mitoraj on January 7, 2008, indicates that Mr. Burkinshawwas working to fix up the house after the second break-in, and his assistant had gone to the police station to fill in an incident report onbehalf of Mr. Travaglione. In a letter to the Law Society Mr. Burkinshaw wrote on October 30, 2007 responding to complaints made byMr. Travaglione, Mr. Burkinshaw stated that he wished to continue to act as Mr. Travaglione's counsel regardless of the complaints, thathe was not instructed to hire a property manager but that his assistant, who lived next door, provided supervision.

He also stated that hearranged to have locks changed as soon as a locksmith was available. This does not prove or disprove either Mr. Travaglione's or Mr.Burkinshaw's version of events. [33] If the Master did find that there was no merit to Mr. Travaglione’s claim, it could have been, in part, because neither Mr.Travaglione nor his affidavit were before him. Mr. Travaglione claims that he tried to file before the hearing but there was delay. As aresult, Mr.

Travaglione's affidavit in support of his appeal was not before the Master. [34] Subject to exceptions, only the evidence that was before the Master should be before this Court in an appeal of a Master'sorder. However, Mr. Burkinshaw agreed that Mr. Travaglione's affidavit could be considered in this appeal. Mr.

Travaglione agreed thatthe affidavit was all that could have been before the Master, had it been filed in time. [35] Without a transcript, it is not possible to determine whether the Master applied the correct test in dismissing the claim.Furthermore, assuming he did so, it is not possible to determine his reasons for granting the application. Conclusions [36] Rule 6.14(4)(

c) requires a party appealing a Master’s order to file a transcript of the proceedings before the Master, but grantsthe Court discretion to waive this requirement. This Rule has only been in effect since November 1, 2010, and only one case hasconsidered it (Travaglione v. Wawanesa Mutual Insurance Company, 2010 ABQB 765). That case was a decision of Veit J. in aprevious appeal by Mr. Travaglione from a Master’s order granting security for costs to Wawanesa and Mr. Burkinshaw. In that case,there was an issue as to the basis on which the Master granted the order.

The only way to determine the basis with certainty was for Mr.Travaglione to order the transcript. Nonetheless, Veit J. decided that the transcript did not need to be produced. The content of theNotices of Motion, coupled with the fact that Mr. Travaglione was not present at the hearing before the Master, indicated that it wasunlikely the Master would have proceeded on any basis other than that Mr. Travaglione resided outside Alberta.

In addition, counselbefore the Master also appeared before Veit J. and did not indicate that the Master proceeded on any other basis. [37] The Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, similarly requires a transcript to be filed in all appeals, and alsogrants the Court hearing the appeal the discretion to dismiss the requirement: “If it is necessary to do so in the interest of justice, a judgeof the appellate court may give special directions and vary the rules governing the appeal book and compendium, the exhibit book, thetranscript of evidence and the appellant’s factum”, (R. 61.09(4).

In cases decided under that Rule, courts have dispensed with the needfor a transcript in situations where it was necessary for the appellant’s case to be heard on the merits (Great Union Holdings Ltd. v.Palovich (2007), (ON SCDC), 221 O.A.C. 255 (Ont. S.C.J. (Div. Ct.)). However, the Ontario Court of Appeal refusedto dispense with the requirement where the allegations of judicial error were solely fact based (McDowell v. Barker, 2011 CarswellOnt.1130 (C.A.)). The Court held that without a transcript there was no basis upon which to review the trial judge’s finding.

The fact that theappellant could not afford to pay for a copy of the transcript did not change the Court of Appeal’s decision. [38] None of these cases provide strict guidelines on when a Court may dispense with the need for a transcript, as might be

expected with a discretionary remedy. Nonetheless, the cases suggest that the Court may exercise its discretion when it is necessary for the appeal to be heard on the merits and when the absence of a transcript will not impair the Court’s ability to properly hear the case. [ 39 ] When the matter was argued before me, I agreed to proceed without a transcript because both parties wished to proceed and asked me to exercise my discretion to dispense with a transcript. However, in reviewing the issues raised by this appeal it became clear to me that I could not decide the appeal issues without the transcript.

Accordingly, I am adjourning the application pending receipt of the transcript of the proceedings before the Master on April 12, 2011. I will render my further decision on the appeal following receipt and consideration of the transcript unless, within thirty days of the issuance of this decision, either or both of the parties request the opportunity to make further submissions. [ 40 ] As Mr. Travaglione is the appellant, it is his responsibility to arrange for a transcript to be provided to me.

He is to provide me with a transcript within sixty days of the issuance of these reasons, failing which this appeal will be deemed abandoned. Heard on the 21 st day of June, 2011. Dated at the City of Edmonton, Alberta this 3 rd day of October, 2011. D.L. Shelley J.C.Q.B.A. Appearances: Mr. B. Travaglione for the self-represented Appellant Mr. V. Cox for the Respondent Wawanesa Mutual Insurance Company Ms. P. Smith for the Respondent James Burkinshaw

Appendix “A ” Rule 6.14 of the Alberta Rules of Court , Alta. Reg. 124/2010, provides for appeals from Master’s Orders: 6.14(1) If a master makes a judgment or order, the applicant or respondent to the application may appeal the judgment or order to a judge. ...

(3) An appeal from a master’s judgment or order is an appeal on the record of proceedings before the master and, if the judge permits, may also be based on new evidence that is significant enough that it could have affected the master’s decision.

(4) The record of proceedings is (

a) the application before the master, (

b) affidavits and other evidence filed by the parties respecting the application before the master, (

c) any transcript of proceedings before the master, unless the Court dispenses with this requirement , and (

d) the master’s judgment or order and any written reasons given for the decision. ... (emphasis added) Master Smart’s order for

summary dismissal was granted under Rule 7.3, which reads in part: 7.3(1) A party may apply to the Court for

summary judgment in respect of all or part of a claim on one or more of the following grounds: ... (

b) there is no merit to a claim or part of it; ...

(2) The application must be supported by an affidavit swearing positively that one or more of the grounds described in subrule (1) have been met or by other evidence to the effect that the grounds have been met. The Limitations Act provides for the limitation periods: 3(1) Subject to

section 11, if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. The Limitations Act provides different rules when adding or substituting a defendant:

6(1) Notwithstanding the expiration of the relevant limitation period, when a claim is added to a proceeding previously commenced, either through a new pleading or an amendment to pleadings, the defendant is not entitled to immunity from liability in respect of the added claim if the requirements of subsection (2), (3) or (4) are satisfied. ...

(4) When the added claim adds or substitutes a defendant, ... (

a) the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, and (

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.

(5) Under this section, (

a) the claimant has the burden of proving (

i) that the added claim is related to the conduct, transaction or events described in the original pleading in the proceeding, and (ii) that the requirement of subsection (3)(c), if in issue, has been satisfied, and (

b) the defendant has the burden of proving that the requirement of subsection (3)(

b) or (4)(b), if in issue, was not satisfied.