Tyler Hazelwood Plaintiff - v. -, 2022 ABKB 821

Court of King’s Bench of Alberta Citation: Hazelwood v Schlotter, 2022 ABKB 821 Date: 20221207 Docket: 1601 13111 Registry: Calgary Between: Tyler Hazelwood Plaintiff - and - Jason P. Schlotter Corporation and Jason P. Schlotter Defendants _______________________________________________________ Reasons for Decision of the Honourable Justice J.D. Rooke _______________________________________________________ [ 1 ] On May 16, 2022, Counsel for the Plaintiff, Tyler Hazelwood [Mr.

Hazelwood], referred, for Civil Practice Note No. 7 [CPN7] review, an April 21, 2022 Application by the Defendants in this matter to file a Third Party Claim against Mr. Hazelwood’s lawyer and the McLennan Ross LLP law firm [Candidate Third Parties]. The proposed Third Party Claim is outside the Rules based requirement period of within six months after the Statement of Defence, and therefore requires permission of the Court. The proposed Third Party Claim generally alleges that the Candidate Third Parties had engaged in the same deficient conduct that was the alleged basis for the Defendants’ liability.

A more detailed review of the alleged Defendants’ and Candidate Third Parties’ conduct is reported in Hazelwood v Schlotter , 2022 ABKB 739 [ Hazelwood #1 ].

[ 2 ] After review of the submitted materials, on May 27, 2022, I outlined, in a letter, concerns by the Court that a conflict of interest may have emerged for Mr. Hazelwood’s Counsel and his law firm, the Candidate Third Parties. All Parties were instructed to provide written submissions, and, in Hazelwood #1 , I concluded that, at that point, no conflict of interest existed that required the Court’s intervention. The proposed Third Party Claim was returned to a CPN7 review: Hazelwood #1 at para 83 . [ 3 ] I now conclude that the Court should reject the proposed Third Party Claim as a candidate for CPN7 review.

I come to that conclusion on two bases. [ 4 ] First, CPN7 is a method to conduct a process based on a Rule 3.68 (of the Alberta Rules of Court , Alta Reg 124/2010 ) process: Unrau v National Dental Examining Board , 2018 ABQB 874 [ Unrau #1 ]; Ubah v Canadian Natural Resources Limited , 2019 ABQB 347 . During a striking out process, such as Rule 3.68, alleged facts are presumed to be true, R v Imperial Tobacco Canada Ltd , 2011 SCC 42 , with minor exceptions that do not apply in this situation.

However, evidence, such as affidavits, is excluded during a Rule 3.68 procedure, where that evidence relates to the merit of a proceeding: Rule 3.68(3). [ 5 ] Here, the document referred for CPN7 review is an application to file the proposed Third Party Claim, not the proposed Third Party Claim itself. The proposed Third Party Claim itself both rejects the basis of the alleged liability for the Defendants, but also claims that the Candidate Third Parties engaged in the same wrongdoing alleged by Mr. Hazelwood.

Furthermore, the Application itself is supported by a May 11, 2022 Affidavit, that is, by Rule 3.68(3) inadmissible, but that is potentially relevant to the issue of whether the proposed Third Party Claim should be permitted a late filing. In short, while CPN7 is a review of the merit of a single filing, here, the question is broader: both the merit of the proposed Third Party Claim, and a late Third Party Claim.

That is outside the narrow scope of review by CPN7 that targets “clearer cases of abuse”: Unrau #1 at paras 22 and 24 . [ 6 ] Second, the Defendants in their referral reference Rana v Baker , 2021 ABQB 352 , aff’d 2022 ABCA 180 for the rule that “... a party cannot claim against legal counsel for an adverse party as such a claim was inconsistent with the adversarial structure of the Canadian Court apparatus, and an abuse of process.” While I agree with that principle of law, here, the Defendants with their proposed Third Party Claim are not arguing that the proposed Third Parties are liable to the Defendants, but to the Plaintiff, Mr.

Hazelwood. That is a different question of law. [ 7 ] In light of CPN7’s very narrow scope, and the nature of the referred procedure, I reject the CPN7 referral of the Application to file a late Third Party Claim. To be explicit, my drawing that conclusion is not a finding of fact and/or law concerning the potential merit (or lack of merit) of the Application to file a late Third Party Notice.

Those pleadings may be subject to other forms of challenge under the Alberta Rules of Court , so this CPN7 paragraph 6 referral rejection does not affect other potential future litigation steps, including a Rule 3.68 application conducted by a formal application. [ 8 ] In the result, the Parties should all contact the Clerk of the Court to reschedule the April 21, 2022 Application. [ 9 ] No costs will result from this Decision. Dated at the City of Calgary, Albert a this 7 th day of December, 2022. J.D. Rooke J.C.K.B.A.

Appearances: Michael D Aasen for the CPN7 Referrer / Plaintiff Dana Schindelka for the Respondents / Defendants