Bell Davidson Insurance Brokers Ltd. v. Beaton, 2013 ABQB 219

Court of Queen ’ s Bench of Alberta Citation: Bell Davidson Insurance Brokers Ltd. v. Beaton, 2013 ABQB 219 Date: 20130411 Docket: 1201 10827 Registry: Calgary Between: Bell Davidson Insurance Brokers Ltd. Plaintiff - and - Donald Beaton Defendant _______________________________________________________ Reasons for Judgment of J.T. Prowse, Master in Chambers _______________________________________________________ [ 1 ] The plaintiff Bell Davidson Insurance Brokers Ltd. sued to collect unpaid premiums in May of 2012.

The only defendants named were two corporations. [ 2 ] Bell Davidson then filed an application to add Donald Beaton as a third defendant to the action, but abandoned that application. [ 3 ] Bell Davidson subsequently commenced a second action to recover the unpaid premiums, this time naming Mr. Beaton as the sole defendant.

[ 4 ] Mr. Beaton applies to strike out the second action against him as an abuse of process. His counsel cites in support the 2011 Ontario Court of Appeal decision in Maynes v. Allen-Vanguard Technologies Inc. , 2011 ONCA 125 , 274 O.A.C. 125, 2011 CarswellOnt 792, which states, at paragraphs 38 and 39: In the present case, the plaintiffs’ assertions in Claim Six are intricately linked to Claims One through Five, which are already being pursued in the Ongoing Actions. The plaintiffs should have sought leave of the court to name the Added Defendants in the Ongoing Actions and to amend their pleadings to plead any relief they had not already claimed, either pursuant to rule 26.02 (

c) or rule 26.01. As mentioned, rule 26.01 obliges the court to amend a pleading “on such terms as are just unless prejudice would result that could not be compensated for by costs or an adjournment”. Instead, the plaintiffs commenced the New Action for the purpose of naming the Added Defendants as parties to the related litigation and sought declaratory relief against them in Claim Six. By doing so, the plaintiffs effectively circumvented the express procedural requirement in rule 26.02 (

c) that leave of the court be obtained to add a non-consenting party to the proceeding after pleadings have closed. This was an abuse of process. [ 5 ] A contrary view has been indicated by the British Columbia Court of Appeal in Strata Plan No. VIS3578 v.

Canan Investment Group Ltd. , 2010 BCCA 329 , 323 D.L.R. (4 th ) 482, 90 C.L.R. (3d) 4, 2010 CarswellBC 1645, at paragraphs 28 and 29 : The doctrine of abuse of process recognizes a judge’s inherent power to control the court process and prevent its use in a manner that is vexatious, oppressive, or unjust, and brings the administration of justice into disrepute. It is used in a variety of contexts, one of which is to prevent relitigation of the same issues between the same parties: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63 , [2003] 3 S.C.R. 77 at paras. 35 - 38 .

That principle has been discussed in the context of “leaky condo” cases in several decisions in this province. In each, the plaintiff owners sought to join potential defendants to an existing action under R. 15, but also commenced a parallel action against the same parties to protect their rights if the joinder application was unsuccessful ...[cases cited] ... Those cases affirm that it is an abuse of process for a plaintiff to have two actions extant against a defendant that claim the same relief.

They also establish, however, that if a plaintiff is unsuccessful in applying to join parties to an existing action, the doctrine of abuse of process does not preclude it from commencing a separate action against those parties that claims the same relief. [ 6 ] While decisions from other provinces may provide guidance in matters of civil practice, one must keep in mind that outcomes may differ due to the different rules of court in force in each province. [ 7 ] I will now review and discuss a number of decisions from Alberta.

My review, for the reasons which follow, leads me to the conclusion that the second action, which names Mr. Beaton as its sole defendant, is not an abuse of process and should not be struck. [ 8 ] When considering these Alberta decisions, chronologically, the following should be kept in mind: (

I) Mr. Beaton was not named as a defendant in two actions at the same time. (ii) even if a particular step in an action is an abuse of process, striking out is only one of many possible remedies. Depending on the circumstances, a stay order and/or an award of costs may be the appropriate remedy. [ 9 ] In Roberts v. Alberta Bound Canoe Ltd. , 1984 CarswellAlta 656, [1984] A.W.L.D. 894 (Master) the plaintiff had sued Alberta Bound and then obtained an ex parte order to add a new defendant named Grimes. Grimes moved to set aside the order, raising inadequacies in the evidence provided in support of the ex parte order. The court upheld the ex parte order and made the following observation:

There is no suggestion of any prejudice to Grimes. The limitation period has not run. The plaintiff could have started a second actionagainst Grimes and applied ... to have both actions heard together on the ground there was only one transaction. The plaintiff could havediscontinued the action against Alberta, paid Alberta its pound of flesh in costs and then started a new action against Alberta and Grimesfor exactly what he now claims in the amended statement of claim.

The court’s indication that the plaintiff could have commenced a new action arising out the same transaction against a new defendant(exactly what happened in the case before me) indicates that such a procedural step is not an abuse of the process of the court. [10] In Edmonton Northlands v. Edmonton Oilers Hockey Corp., (AB KB), 1993 CarswellAlta 224, 15 Alta.L.R.(3d) 179, 147 A.R. 113, 23 C.P.C. (3d) 49 (Q.B.) the plaintiff Edmonton Northlands commenced an action and obtained an ex parteinjunction preventing the defendant, the Edmonton Oilers, from moving to Minnesota.

It turned out later that Northlands commencedthese proceedings in breach of a standstill agreement. The Oilers filed a motion to set aside the injunction and stay the action.Northlands, out of an abundance of caution, commenced a second action identical to the first action. The court stated as follows (para’s26 - 28): The courts of Alberta generally recognize a rule against multiple prosecution. It is trite law that commencing a second action while one iscurrently pending is an abuse of process: German v. Major, 1985 ABCA 176 , 1985, 62 A.R.14, 39 Alta.L.R. (2d) 270, 20 D.L.R. (4th) 703, 33 C.C.L.T. 257 (C.A.).

Since the same relief can be obtained in the first action, Northlands is not entitled to bring a second action while the first is still pending:Great Pacific Contracting Ltd. v. Hahn Properties, (BC SC), 1981, 29 B.C.L.R. 145, 21 C.P.C. 280 (S.C.). In my view, the second action must be set aside. I note that the subject of this comment was a second identical action against the same defendant named in the first action. This is not thecase before me. [11] In Polansky Electronics Ltd. v.

AGT Ltd., (AB KB), 1997 CarswellAlta 384, 73 C.P.R. (3d) 257, 205 A.R.43 (Q.B.) the plaintiff was the holder of various patents and sued the defendant for breach of patent. At one point the plaintiff brought anapplication to add a related company as a co-plaintiff, but withdrew that application.

In the course of discussing, amongst other things,whether the court should dismiss the abandoned application so that it could not be restarted in the future, the court made the followingobservation: With respect to the position on dismissal, the effect of a dismissal from the defendants’ point of view, would be to prevent the additionalplaintiff from ever joining the action should it choose to do so at a later date.

However, there appears to be no question as to a limitationperiod, and as in my view this is not an abusive process, not being part of a systematic or repetitive course of conduct, I can see no basisfor preventing the additional plaintiff from adding itself to the litigation or commencing separate litigation on its own. The fact that itthought about commencing litigation and chose not to do so does not prevent it from doing so in the future. In our case, Bell Davidson abandoned an application to add a defendant in the first action, and then commenced a second action againstthat party.

In Polansky the plaintiff abandoned an application to add a co-plaintiff. The court’s comment, quoted above, indicates that thecourt did not consider it would be an abuse of process if the co-plaintiff later decided to commence its own action regarding the samesubject matter. [12] In Balm v. 3512061 Canada Ltd., 2003 ABCA 98, 2003 CarswellAlta 458, 327 A.R. 149, 14 Alta.L.R. (4th) 221 (C.A.) theplaintiff applied to amend its statement of claim, including adding new defendants.

While discussing what evidentiary hurdle theplaintiff should reach before being granted permission to amend, the court made the following observation at para 28:

One must recall that the original statement of claim here needed no evidence at all, and that any plaintiff can always issue a newstatement of claim if the limitation period has not expired. Lack of a factual basis is ordinarily not a ground to strike out a pleading, solong as it alleges facts which (if true) would have given a cause of action (or defence). And a plaintiff with two statements of claim couldlikely then have the two suits either consolidated or tried together.

This comment contemplates and approbates the concept of a plaintiff commencing two actions regarding the same subject matter andthen seeking to have them consolidated or tried together. There is no suggestion that such a tactic would be an abuse of process. [13] Urban Landmarks Master Builder Inc. v. Lloyd’s Underwriters, 2012 ABQB 224, 2012 CarswellAlta 666, 11 C.L.R. (4th) 236(Q.B.) deals with two actions, described as the First Action and the Second Action. [14] The plaintiff Urban was building an apartment complex.

It hired United to provide security services at the jobsite and obtained afire insurance policy, through its broker Jardine, from Lloyd’s. The complex was destroyed by fire and Urban commenced the FirstAction against United, Jardine and Lloyd’s. The allegations against United were limited to a claim that United’s conduct had resulted ina loss of insurance coverage, as the insurance policy mandated the use of a full time watchman/patrol service.

The narrowness of thisallegation was the subject of a comment during a case management meeting. [15] Urban reacted to the comment by commencing a Second Action which alleged that United’s negligence had caused orcontributed to the fire, and also asserted that United made misrepresentations as to the nature and extent of the services it was to provideunder the contract. [16] United found out about the Second Action and applied for it to be struck out as an abuse of process.

Relying on Cahoon v.Franks, (SCC), [1967] S.C.R. 455 (S.C.C.), United argued that there is only one cause of action for a single wrongful ornegligent act and damages resulting from the negligent act must be claimed and assessed in one proceeding. [17] United’s counsel noted that, in Donaldson v Farrell, 2011 ABQB 11, the court had ruled that “commencing a second actionwhile one is currently pending is an abuse of process”. [18] The court in Urban Landmarks ruled that the Second Action was not an abuse of process, and stated, at para’s 50 - 52: The choice of issuing a new Statement of Claim and amending or seeking to amend the existing Statement of Claim is to some extent ajudgment call and a matter of strategy for counsel.

I do not see that issuing a new Statement of Claim, alleging new causes of actionagainst one party only, rather than include these new issues in an action where records have been produced, many days of discovery hadtaken place, and a number of court applications had been made, as being so outside the range of reasonable strategic choices available tocounsel as to make it an abuse of process. In my view, that would be taking Cahoon v Franks to an extreme that is not made out in that case itself or in subsequent cases. Abuse of process can be addressed in manyways, and not just by striking a pleading.

In any event, I do not find that the commencement of the Second Action by way of separate Statement of Claim was an abuse of process. Had Urban proceeded by way of amendment, there would have been no apparent basis for objection. If the amendment requiredanything to be redone, that would have been an issue for costs. Again, it is clear from this decision that commencing a second action dealing with the same subject matter is not necessarily an abuse ofprocess, even where the new action is against the same defendants, let alone a new defendant such as Mr.

Beaton. [19] In FastTrack Technologies Inc. v. 104 Street Law Office Management Ltd., 2012 ABQB 639, 2012 CarswellAlta 2319 (Q.B.) a

[ 19 ] In FastTrack Technologies Inc. v. 104 Street Law Office Management Ltd. , 2012 ABQB 639 , 2012 CarswellAlta 2319 (Q.B.) a plaintiff applied to amend an existing statement of claim, its application was rejected, and the plaintiff then commenced a new action. The new action was struck out. [ 20 ] The events leading to the litigation began with the owner of a building (the “Vendor”) selling it twice, once to FastTrack and once to Castledown. Castledown sued the Vendor for specific performance and sued FastTrack for removal of the caveat which FastTrack had filed to protect its purchase contract.

Significantly, FastTrack counterclaimed for damages and costs, but not for specific performance. [ 21 ] At trial, Castledown’s claim for specific performance was allowed and FastTrack’s caveat was ordered removed from title. FastTrack appealed the trial decision, but was unable to obtain a stay of the trial decision. Castledown then resold the property to a related entity, 104 Street, who, in 2008, fixtured the property and began occupying it. FastTrack was aware of the conveyance to 104 Street, at the latest, in November of 2008. In April, 2009 FastTrack won its appeal.

The Court of Appeal set aside the award of specific performance in favour of Castledown and remitted the matter back to the trial court for continuation. [ 22 ] FastTrack then applied, in 2010, to amend its counterclaim so as to claim, for the first time, specific performance. In April, 2011 FastTrack filed a new statement of claim seeking specific performance. FastTrack’s request to amend the existing counterclaim was dismissed, and that dismissal was upheld in the Court of Appeal: see Castledown Law Office Management Ltd. v.

FastTrack Technologies Inc. , 2012 ABCA 219 , 2012 CarswellAlta 1203. [ 23 ] 104 Street then applied successfully to strike out the new action which FastTrack had commenced in April of 2011: see FastTrack Technologies Inc. v. 104 Street Law Office Management Inc. , 2012 ABQB 639 , 2012 CarswellAlta 2319.

The grounds for dismissing the new action are set out in paragraphs 37 to 43 of the decision as follows: In my view, there is no logical reason why the principle in Mikisew against doing indirectly through a reply what has already been disallowed as amendments to a statement of claim would not apply equally to the causes of action in this Statement Claim where a decision has previously been made in the Prior Action to disallow amendments to the counterclaim therein involving the same individuals, entities, facts and causes of action.

Clearly, unreasonable delay causing serious prejudice can amount to an abuse of process. That serious prejudice, resulting from delay and intervening events, was the reason the requested amendments were denied in the Prior Action. Those concerns and conclusions are equally operative within these new pleadings. I find that to allow the Statement of Claim filed in this action to proceed would be inconsistent with the decision of the Court of Appeal in the Prior Action and would violate the principles of judicial economy, consistency, finality and the integrity of the administration of justice.

It would be a misuse of the judicial system and manifestly unfair to the parties to the earlier decision, bringing the administration of justice into disrepute. The Court has the power and the duty to prevent such an abuse of process. The Statement of Claim describes the transfer of the Property from Castledowns to 104 Street taking place on June 25, 2008. FastTrack knew, no later than November 2008, that the transfer to 104 Street had taken place. Under s. 3(1)(

a) of the Limitations Act , RSA 2000, c L-12, a claimant has two years from the date the claimant knew of the injury within which to seek redress in a civil judicial proceeding. FastTrack argues that its cause of action arose after that on one of two possible dates on which rulings of the higher courts in the Prior Action determined that FastTrack was the party entitled to purchase the Property in 2006 and no further appeal of that determination would be heard. This argument cannot succeed.

Our Court of Appeal held in Laasch v Turenne , 2012 ABCA 32 , 522 AR 168 at para 24 that discoverability in Alberta law generally refers to facts, not law; error, ignorance of the law or uncertainty of law does not postpone a limitation period. Pending related proceedings do not extend limitation periods. The Court of Appeal in the Prior Action also rejected a similar argument. By April 2011 the limitation period had expired. The defendants are entitled to immunity from a claim raising this cause of action on these facts. Therefore, this action is improper.

As well, s. 10 of the Limitations Act provides that a court may grant a defendant immunity from liability under the equitable doctrines of laches, notwithstanding that the defendant would not be entitled to immunity under the Act. The Court of Appeal made it clear in relation to the proposed amendments in the Prior Action that it would have found that laches barred the amendments in any event.

That reasoning compels the same result here. [ 24 ] In my view the situation in FastTrack is distinguishable: in FastTrack the new action was against the same defendants, here the Bell Davidson claim is against a new defendant; in FastTrack there was a limitation issue which has not been asserted here; and in FastTrack there was already a judicial determination that the claim for specific performance asserted in the new action was not appropriate. [ 25 ] As stated earlier in these reasons, my conclusion is that the new action brought by Bell Davidson against Mr.

Beaton is not an abuse of process and should not be struck. [ 26 ] The reasoning inherent in the Ontario Court of Appeal’s decision in Maynes v. Allen-Vanguard , supra, seems to be that, if the rules of court allow a plaintiff to apply to add a defendant to an existing action, then it is mandatory to make such an application as opposed to commencing a new action. This rationale, in my view, is not in accord with the Alberta decisions cited above, and is not the practice in Alberta. [ 27 ] The application of Mr. Beaton is dismissed and the new action is allowed to proceed.

If counsel cannot agree as to costs they are to approach me for a ruling in that regard within 30 days. Heard on the 17 th day of December, 2012. Dated at the City of Calgary, Alberta this 11 th day of April, 2013. J.T. Prowse M.C.C.Q.B.A. Appearances: Brendan Miller Walsh LLP for the Applicant / Defendant Adrianna Worman Schuett Law

for the Respondent / Plaintiff