Condominium Plan No, 2017 ABQB 583

Court of Queen’s Bench of Alberta Citation: Condominium Plan No 7920829 v Academy Contractors Inc, 2017 ABQB 583 Date: 20170928 Docket: 1003 18358 Registry: Edmonton Between: The Owners of Condominium Plan No. 7920829 Plaintiff - and - Academy Contractors Inc. operating as Abalon Construction, 355872 Alberta Ltd., Ptarmigan Engineering Ltd. and Richard Imai Defendants _______________________________________________________ Reasons for Decision of W.S.

Schlosser , Master, Court of Queen's Bench of Alberta _______________________________________________________ [ 1 ] This is Abalon’s application for a late third party notice. List of Authorities 1. Alberta Rules of Court , Alta Reg 124/2010, rules 3.43 and 3.45 ; 2. Condominium Plan 9812082 v Battistella Developments Inc , 2014 ABQB 644 ; 3. Limitations Act , RSA 2000, c L-12, sections 3(1), 3(1.1) , 6(3) and 6(4) ;

4. De Shazo v. Nations Energy Co., 2005 ABCA 241; 5. Whitecourt Power Limited Partnership v. Elliott Turbomachinery Canada Inc., 2015 ABCA 252; 6. 575714 Alberta Ltd. v. 341888 Alberta Ltd., 2008 ABQB 186; 7. Turta v CPR (1951) (AB KB), 2 WWR (NS) 628 (Alta SCTD); 8. Tort-Feasors Act, RSA 2000, c T-5, sections 3(1)(

c) and 3(2); and 9. Contributory Negligence Act, RSA 2000, c C-7,

section 2. Facts [2] Academy o/a Abalon was hired to do foundation repairs at the plaintiff’s condominium complex in 2002. Abalon retainedPtarmigan and Imai but things allegedly went wrong. [3] The Statement of Claim was not issued until 2010. Abalon’s defence was filed January 18, 2013. Ptarmigan’s defence wasfiled November 2013. The time for a third party notice under rule 3.45(c)(

i) is six months from the defence. Rule 3.43(2) allows 20 daysfrom the defence for a Notice of Contribution. [4] The plaintiff’s claim against Abalon is primarily in contract. The plaintiff’s claim against Ptarmigan and Imai is in tort. [5] The issue arose between these two defendants when Abalon wanted to question Ptarmigan. Ptarmigan refused on the basisthat the defendants were not formally adverse in interest. Abalon, accordingly, sought to take out a Third Party Notice.

Analysis [6] The case that used to be cited in law school (and perhaps still is) to determine when parties are adverse in interest for thepurpose of Questioning is our old friend Turta v CPR (1951) (AB KB), 2 WWR (NS) 628 (Alta SCTD) per Egbert J.In that case, Turta sued the CPR for a declaration that he was the owner of a petroleum interest. The CPR filed a Third Party Noticeagainst Montreal Trust. In its defence to the Third Party Notice, Montreal Trust affirmed the claim of the plaintiff.

Egbert J. found thatMontreal Trust and CPR were “persons adverse in interest” for the purposes of (then) rule 240(1), saying: There can, however, in my opinion, be no doubt that Montreal Trust Company and Canadian Pacific Railway are “persons adverse ininterest.” Canadian Pacific Railway has joined Montreal Trust Company as a third party, and Montreal Trust Company has filed astatement of defence whereby it has adopted as its defence the very allegations set forth in the statement of claim of the plaintiff, and hasthereby put in issue between itself and the Canadian Pacific Railway the exact questions already in issue between the plaintiff and thedefendant.

Since the claims of the plaintiff and the Canadian Pacific Railway are diametrically opposed, it must follow that the claims ofthe Montreal Trust Company and the Canadian Pacific Railway are likewise opposed. It is, in my view, clear that these two parties arepersons adverse in interest within the meaning of the rule, and that Canadian Pacific Railway has a right to examine for discovery anofficer of the trust company. [7] The starting point, for determining whether parties are adverse in interest, are the pleadings. The absence of formal cross-claims between the defendants was what triggered this application.

In essence, Abalon wants to make Ptarmigan formally adverse ininterest (Rule 5.17(1)(a)). [8] The Tort-Feasors Act, RSA 2000, c T-5, sections 3(1)(

c) and 3(2) provide: Damage suffered as result of tort 3(1) When damage is suffered by any person as a result of a tort, whether a crime or not, (

c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is or would, if sued, havebeen liable in respect of the same damage, whether as a joint tort-feasor or otherwise, but no person is entitled to recover contributionunder this

section from any person entitled to be indemnified by the person first mentioned in respect of the liability regarding which thecontribution is sought.

(2) In any proceedings for contribution under this section, the amount of the contribution recoverable from any person shall be anamount that the court finds to be just and equitable having regard to the extent of that person’s responsibility for the damage. [9]

Section 2 of the Contributory Negligence Act, RSA 2000, c C-7 provides: Determination of degree of fault 2(1) When damage or loss has been caused by the fault of 2 or more persons, the court shall determine the degree in which eachperson was at fault.

(2) When 2 or more persons are found at fault, they are jointly and severally liable to the person suffering the damage or loss, but asbetween themselves, in the absence of a contract express or implied, they are liable to make contribution to and indemnify each other inthe degree in which they are respectively found to have been at fault.

[10] Fault under the Contributory Negligence Act encompasses both a breach of contract and negligence. If either of the defendantsis even one percent at fault for the plaintiff’s loss, they can end up being jointly and severally liable for the entire judgment. TheContributory Negligence Act and the Tort-Feasors Act provide the means for apportionment between at fault parties. A notice ofcontribution is the formal way of alerting a co-defendant to this eventuality.

A third party notice satisfies the same function except that itcan also be used to bring new parties into the lawsuit. [11] In my view, the effect of the Contributory Negligence Act and the Tort-Feasors Act is to make co-defendants in thesecircumstances statutorily adverse in interest even though there are no formal pleadings between them. Both this and a broad reading ofEgbert J.’s reasons above make co-defendants in these circumstances adverse in interest for the purposes of rule 5.17(1)(

a) and they areopen to be questioned by their co-defendants. [12] The formal test for a late third party notice is set out in Condominium Plan 9812082 v Battistella Developments Inc, 2014ABQB 644. In that case, Madam Justice Erb said: The test to be applied in applications of this nature is disclosed in the case law with the starting point found in Kreway v RenfrewPlymouth Ltd. (1972), (AB KB), [1973] 1 W.W.R. 447 (Alta. Master) (approved on appeal, (1972), [1973] 1 W.W.R.462 (Alta.

T.D.)) and cited in this Court on many occasions: An extension will not be granted where there has been inordinate delay, nocredible or reasonable excuse for the delay and there is prejudice. In short, the Court must assess: (

i) length of the delay; (ii) explanationfor the delay; (iii) relative prejudice to the parties. An additional factor which may be considered is whether the proposed third partyclaim has “an air of reality” (Condominium Corp. No. 9813678 v. Statesman Corp. 2008 ABQB 495 (Alta. Q.B.) at para. 46. This Courthas been provided with no helpful insight into the quality of the claim Battistella advances against Graham Edmunds beyond theallegations in the pleadings.

The same allegations have been made against all of the third party defendants without particulars. (para 15) [13] The length of the delay is roughly 2 ½ years. It is explained by the fact that the formal issue did not emerge until theQuestioning. The only actual prejudice that Ptarmigan can point to is the expiry of the six month limitation for a third party notice.Rather than being conclusive, this is essentially circular where the Court has the discretionary power to extend the time. [14] There is no doubt that Abalon should have acted with greater dispatch with respect to these pleadings.

However, in view of theforegoing, the pleading is really only a formality. Absent the nice question of concurrent liability and whether it is the ContributoryNegligence Act or the Tort-Feasors Act that applies, the cross-claim would likely be caught by section 3(1.1) of the Limitations Act butsaved by

section 6. However, I will leave it open to the respondents to raise the Limitations Act in their defence to Third Party Notice.Until that issue is decided, there is no prejudice that is not compensable in costs. Both parties may well have a strong limitations defenceto the main action. Disposition [15] The application is allowed. Heard on the 15th day of August, 2017. Dated at the City of Edmonton, Alberta this 28th day of September, 2017. W.S. Schlosser M.C.Q.B.A. Appearances: Randolph Langley Henning Byrne LLP for the Plaintiff, The Owners of Condominium Plan No. 7920829 (did not appear) Peter D. Gibson Field LLP

for the Defendant, Academy Contractors Inc. operating as Abalon Construction Sigurd Delblanc Bryan & Company LLP for the Defendants, Ptarmigan Engineering Ltd. and Richard Imai