Condominium Corporation No, 2015 ABQB 801

Court of Queen ’ s Bench of Alberta Citation: Condominium Corporation No 0425636 v Amyotte's Plumbing Ltd, 2015 ABQB 801 Date: 20151215 Docket: 1403 04102 Registry: Edmonton Between: Owners Condominium Corporation No. 0425636, The Estates of Clareview Plaintiff - and - Amyotte's Plumbing Ltd. and Ipex Inc. Defendants/Applicants _______________________________________________________ Reasons for Judgment of S. L. Schulz , Master in Chambers _______________________________________________________

[ 1 ] This matter came before me in morning chambers and was adjourned for written briefs. The Defendants apply for an order allowing them to file and serve a Third Party Claim against a proposed Third Party, Save-On Mechanical Services Ltd., notwithstanding that a period of more than 6 months has passed since the filing of the Statements of Defence. [ 2 ] For the reasons that follow, I extend the time for the filing and service of the Third Party Claim.

Background Facts [ 3 ] The condominium complex was constructed in 2005, at which time the Defendant Amyotte’s Plumbing Ltd. (“Amyotte”) installed the plumbing system using materials from the Defendant Ipex Inc. (“Ipex”). [ 4 ] On March 11, 2012, the proposed Third Party Save-On Mechanical Ltd. (“Save-On”) repaired a glycol leak at the condominium. [ 5 ] On March 23, 2012, there was a water/glycol leak. [ 6 ] The Statement of Claim was filed on March 14, 2014 alleging, among other things, negligent design, manufacture, and installation of the PVC fittings by Amyotte and Ipex. [ 7 ] Ipex filed its Statement of Defence on September 14, 2014.

The deadline for filing the Third Party Claim without a court ordered extension was March 18, 2015. [ 8 ] Amyotte filed its Statement of Defence on November 6, 2014.

The deadline for issuing a Third Party Claim without a court ordered extension was May 16, 2015. [ 9 ] The application to allow the Third Party Notice was filed on August 7, 2015. [ 10 ] The proposed Third Party claim seeks, among other relief, contribution from Save-On for any alleged loss or damages described in the Statement of Claim for which those Defendants might be liable and in particular, the alleged failure of Save-On to properly repair the March 11, 2012 leak. [ 11 ] Questioning had not yet taken place as of the date of the application. Issues I.

What is the test to allow a party to file and serve a Third Party Claim outside the six month limitation period and what is the result of the application of this test to these facts? II. Can the Respondent request Relief Independent of the Application filed by the Applicants? Relevant Rules of Court [ 12 ] The relevant Rules of Court are: 3.44 A defendant or third party defendant may file a third party claim against another person who (

a) is or might be liable to the party filing the third party claim for all or part of the claim against that party, (

b) is or might be liable to the party filing the third party claim or an independent claim arising out of (

i) a transaction or occurrence or series of transactions or occurrences involved in the action between the plaintiff and the defendant, or (ii) a related transaction or occurrence or series of related transactions or occurrences, or (

c) should be bound by a decision about an issue between the plaintiff and the defendant. 3.45 A third party claim must ... (

c) be filed and served on the plaintiff and the third party defendant, whether or not the third party defendant is already a party to the action, (

i) within 6 months after the date on which the defendant filed a statement of defence... 13.5(2) The Court may, unless a rule otherwise provides, stay, extend or shorten a time period that is (

a) specified in these rules,

(

b) specified in an order or judgment, or (

c) agreed on by the parties.

(3) The order to extend or shorten a time period may be made whether or not the period has expired. I. What is the test to allow a party to file and serve a Third Party Claim outside the six month limitation period andwhat is the result of the application of this test to these facts? [13] The test for the extension of time to file a Third Party Claim has been considered in a number of cases.

See: WhitecourtPower Limited Partnership v Interpro Technical Services Ltd, 2014 ABQB 135 at para 14 (“Whitecourt”); Flight v Dillon, 2001ABQB 211 , [2001] A.J. 329 (QB) (“Dillon”); Dean V Kociniak, 2001 ABQB 412 , [2001] A.J. 643 (QB) (“Dean”);Builders Holdings Ltd v Gasland Properties Ltd, [2001] A.J. 1707 (QB); Alliance Pipeline Limited Partnership v C.E. Franklin Ltd,2007 ABQB 582 at para 10 (“Alliance”); Hein v Barrett, 2008 ABQB 548 (“Hein”). [14] It is not disputed that there are three factors to consider in determining whether to extend the time for the filing of a ThirdParty Claim: i.

Was the delay inordinate? ii. Was the delay adequately excused in the circumstances? iii. Did the delay prejudice the proposed Third Party Defendant? [15] The benefits to the Third Party procedure place this test in context. These benefits include: 1. to avoid a multiplicity of actions; 2. to avoid contrary or inconsistent findings; 3. to allow the third party to defend the plaintiff’s claim against the defendant; 4. to save costs; and 5. to determine the issues between the defendant and the third party as soon as possible.

See Edmonton & Rural Auxiliary Hospital & Nursing Home District 24 v Ellis-Don (1981), 33 AR 60 (QB), reversed on other groundsat 1981 ABCA 283. [16] It is important to note that on an application of this type, the Court looks to both the pleadings and the evidence adduced onthe application. This is not like an application to strike where only the pleading is considered and evidence is not allowed. i.

Was the delay inordinate? [17] The delay to be considered is that period between the time that the Third Party Claim should have been filed (i.e. six monthsafter the filing of the Statement of Defence) and the Application to extend time to file a Third Party Claim (Alliance, para 12). [18] Delays in the range of 16 or more months have been found not to be inordinate and the Court has even described a delay of 2years as “not commendable..., but...not gross”. (See the discussion of the case law by Master Mason in Whitecourt at para 16.) However,it is clear that whether a delay is inordinate is fact dependant and influenced by the answers to the rest of the test. [19] Here, the delays are approximately 3 months plus one day for Amyotte and four months less two days for Ipex.

On the face ofit, these delays appear to be relatively short, keeping in mind the obligation placed on litigants by virtue of the Foundational Rules tolitigate in a timely and cost effective manner. ii. Was the delay adequately excused in the circumstances? [20] Where the delay is short, the primary focus of the application is on the excuse offered and the prejudice suffered. In Hein, Master Hanebury put it this way: [14] In Flight v. Dylan [sic] 2001 ABQB 211, the court commented on the approach to be taken in an application to extend the time tofile a third party notice.

It said at paragraph 29: [29] I therefore respectfully disagree... that every case of delay beyond the six-month time frame contemplated by Rule 66(4) [now Rule3.45] requires the defendant to advance a reasonable excuse before any consideration of prejudice comes into play. I would agree withthe approach taken in Grandwood Flooring, supra, namely that a short delay would result in a different weighing exercise, focusingprimarily on the existence of any prejudice. As one moves further away from the six-month deadline, the weighing exercise will focusmore on whether the delay is excusable.

In the case of a significant delay, as in Lister, supra, the failure to advance a reasonable excusefor the delay will, without more, be fatal to an application to extend time. At paragraph 12 the court said that “these cases suggest to me that the further one is situated along the path of delay, the stronger theneed for evidence of a credible reason for delay and the weaker the need for opposing parties to show prejudice.”

[ 21 ] Here, the delays are relatively short, so the focus is on the excuse offered and the prejudice suffered, with the weight being more on the existence of prejudice (See

Part iii of the test). [ 22 ] The explanation for the delay is that time was required to review historical records and information relating to the manufacture of the fittings, the installation of the HVAC at the Plaintiff’s premises, and the ongoing repair, service and maintenance of the HVAC at the Plaintiff’s premises. [ 23 ] In the written brief submitted by Counsel for the Defendants, Counsel advised that all of these records were in the possession of the Plaintiff and had to be provided by the Plaintiff to the Defendants for review.

This assertion was not objected to by Plaintiff Counsel and I accept it to be true. [ 24 ] This is a reasonable excuse. Given the short nature of the delay, more emphasis/weight is to be put on the element of prejudice. iii. Did the delay prejudice the proposed Third Party Defendant? [ 25 ] Prejudice to the proposed Third Party is relevant during the delay period. The relevant period of time is from approximately September to August, 2015. [ 26 ] The Court considers the pace of the litigation when looking at prejudice.

Where the pace is “leisurely”, it has been found to weigh in favour of extending the time: Whitecourt at para 15 ; Hein at para 17 . Here, Plaintiff Counsel granted the courtesy of extending the time for the filing of the Statements of Defence for approximately 6 months and Questioning has not yet taken place. There has apparently been some exchange of records. It does not appear that this has been fast paced litigation, nor would I describe it as being leisurely. In this situation, the pace of the litigation does not weigh in favour of either extending or not extending the time.

On the evidence, it is a neutral consideration. [ 27 ] Save-On claims prejudice because of its inability to locate employees (possible witnesses) that were involved at the relevant time. The specific employee identified by Save-On is Will St. Amour, who left Save-On’s employ in January of 2013. Save-On states that it is unable to contact Mr. Amour but it does not indicate whether or not this inability occurred during the September to August 2015 period. The Defendants take the position that this inability pre-existed the relevant time and therefore the short delay does not create any prejudice.

In absence of something more specific as to when the Plaintiff became unable to locate the witness, the inability to locate this witness does not assist Save-On’s position. [ 28 ] Possible limitations defences are also considered in the context of prejudice.

Master Schlosser put it this way: [13] If it is plain and obvious, or beyond doubt that the limitation has expired, there is no point in allowing the Third Party Notice to be filed as it would just be struck out...If there is reasonable doubt that the limitation has expired, and all of the other elements of the test are satisfied, the Third Party claim can proceed while preserving the Third Party’s rights to raise a limitations defence. [14] Limitations are one of the factors to be considered in determining the relative prejudice to the parties.

The ability to start a new claim is apparently a reason for not allowing a Third Party action. Conversely, the loss of a right to start a new action apparently can weigh in favour of a late Third Party Notice. Citations omitted; Pagnucco , at para 13-14 [ 29 ] A limitation defence may have some applicability here. If the Defendants have a claim against Save-On, it is possible that a limitation period will bar the bringing of a separate action.

This is a factor which weighs in favour of allowing the Third Party Notice to be filed. [ 30 ] Save-On raises other defences that must be considered by the Court to assess whether there is “an air of reality” to the proposed Third Party Claim: Dean at para 11 ; Relied on in Alliance at para 12 ; Pagnucco at para 12; Kwik-Kopy Printing Canada Corporation v Skoreiko , 2002 ABQB 835 at para 34-37 . [ 31 ] Save-On argues that there was no contractual relationship between the Defendants and Save-On.

A Third Party Claim enforces the duties which the Third Party owes to the Defendant issuing the Third Party Claim, not the duties owed by the Third Party to the Plaintiff: Wallace v Litwiniuk , 2001 ABCA 118 (“ Wallace ”) at para 8 . In the absence of a contract, there are no duties owed to the Defendants by Save-On and a Third Party Claim based solely on that allegation must fail. This factor weighs against the filing of a Third Party Notice containing this allegation. [ 32 ] Save-On also takes the position that the damage alleged makes it a non-concurrent tort-feasor.

Only joint and concurrent tort- feasors fall within the provisions of the Tort-feasors Act . Different damage to the same Plaintiff is insufficient to maintain a Third Party Claim ( Wallace at para 16 ).

However, the Applicants rely on the Affidavits of Denis Amyotte and Maryse Boucher for the proposition that Save-On was retained by the Plaintiff “to supply repair, maintenance and mechanical services...for heating, ventilation, and air conditioning systems...at all material times to this action...” (See para 6 of the Affidavit of Maryse Boucher, sworn July 16, 20115 and para 6 of the Affidavit of Denis Amyotte sworn on August 6 th ). It does not limit the activities of Save-On to a specific location or time.

The clear implication of this evidence is that the activities of Save-On were the cause of the damages alleged in the Statement of Claim, or were an intervening event, or were a contributing factor to those damages. The evidence is weak but it is there. [ 33 ] The proposed Third Party Claim appears to support an arguable claim, although not worded as clearly as it perhaps should be worded. I am satisfied that that it is still early in the litigation and the parties have not had the opportunity to adequately assess the evidence through Questioning or through formal document production.

As the facts unfold, the issues and the evidence supporting or

defeating these claims will be clarified and may prompt some or all of the parties to amend their pleadings or bring other applications. Save-On has presented strong arguments that raise questions as to the ultimate success of the Third Party Notice, but it has not done so sufficiently to defeat the application. Save-On is still at liberty to bring a

Summary Dismissal application where all the evidence can be fully examined, an application to Strike the Third Party Claim where no evidence is permitted and will deal with whether the wording of the Third Party Claim is sufficient, or any other application that it feels it is appropriate based on the facts as they unfold. II. Can the Respondent request Relief Independent of the Application filed by the Applicants? [ 34 ] One other issue was raised by the Applicants.

The Applicants complain that they have not had the opportunity to cross- examine on the Simpson Affidavit which was unfiled at the time of the morning chambers application but was filed later on that same day. However the Applicants did not ask for an adjournment of their application in order to cross-examine. Instead, the Applicants take the position that the arguments supported by the Simpson Affidavit are in the nature of a

summary judgment application for which they have not been given notice in accordance with the Rules of Court . The Applicants take the position that it is not appropriate for Save-On to ask for relief independent of the filed application to allow the late filing of a Third Party Claim and argue that it is against the principles of natural justice for those arguments to be heard without adequate and proper notice in accordance with the Rules of Court . [ 35 ] I disagree with the proposition advanced by the Applicants.

In an application of this nature, it is appropriate for the Respondent to address the issue of prejudice by adducing evidence as to whether the Third Party Claim is doomed to fail. This is the “air of reality” that is addressed in the case law. It is appropriate to oppose the application on the basis of prejudice. Prejudice has been interpreted by the case law to include evidence to establish facts that make the pursuit of the proposed Third Party Claim fruitless.

Conclusion [ 36 ] The time limits in Rule 3.45 are not limitation periods, and can therefore be extended by Court order pursuant to Rule 13.52. [ 37 ] The Applicants have met the low threshold present in these circumstances to be successful. The short delays here are not inordinate and have been adequately excused in the circumstances. Any prejudice that might be suffered by Save-On can be met through monetary compensation. [ 38 ] This is an appropriate situation to extend the time period and I hereby do so.

The filing of the Third Party Claim is allowed provided it is filed and served within 20 days of the date the Applicants receive these written reasons. The Third Party Defendants have 30 days from service of the Third Party Claim within which to file and serve a Statement of Defence to Third Party Notice or a Demand of Notice. [ 39 ] If the parties cannot agree on costs, they can make an appointment to speak to same. Dated at the City of Edmonton, Alberta this 15 th day of December, 2015. S. L. Schulz M.C.C.Q.B.A. Appearances: D. Chronopoulos Chatwin LLP for the Applicant, Amyotte’s Plumbing Ltd. A.

Kos Brownlee LLP for the Applicant, Ipex Inc.

B. Carr Carr Defir for the Respondent, Save-On Mechanical Services Ltd.