Toronto-Dominion Bank v Palisade Security Group Inc, 2023 ABKB 307

Court of King’s Bench of Alberta Citation: Toronto-Dominion Bank v Palisade Security Group Inc, 2023 ABKB 307 Date: 20230524 Docket: 1803 21009 Registry: Edmonton Between: The Toronto-Dominion Bank Plaintiff - and - Palisade Security Group Inc and Rebecca K Richmond Defendants _______________________________________________________ Endorsement of Judge W.S. Schlosser _______________________________________________________ [ 1 ] This Special Chambers application had to be adjourned at the last moment because of the unexpected unavailability of counsel.

The parties agreed that this application be dealt with on the basis of written submissions. In addition to the materials already filed, supplemental argument was provided April 27 and April 28. [ 2 ] This is a delay application, with some ancillary relief as a fall-back position. I am grateful for the helpful submissions made by counsel that has enabled me to deal with this without oral argument.

Rule 4.33 [ 3 ] First of all, I am satisfied that we cannot treat this claim against a principal debtor and a guarantor as two separate lawsuits requiring advances against each party individually, rather than considering advances in the lawsuit generally. I am satisfied that this

position - to the extent that it is represented by Danek v Calgary (City of), 2006 ABQB 807 - is no longer good law. This is affirmed, most recently by Justice Marion in 1499925 Alberta Ltd v NB Developments Ltd, 2023 ABKB 114 .

That decision confirms that a significant advance in an action is sufficient for the purposes of r 4.33 and that it is unnecessary to have completed a significant advance as against each defendant. [ 4 ] That being said, I am also satisfied that the judgment obtained against the principal debtor on November 8, 2019, not only constitutes a significant advance in the action but also a significant advance against the applicant.

At the very least, it crystallizes the amount, fixes liability on the guarantee, and it has the added benefit of putting the interest rate down to the Judgment Interest Act rate. [ 5 ] If we look forward from the last uncontroversial advance, as we are instructed to do by the Court of Appeal in Rahmani v 959630 Alberta Ltd, 2021 ABCA 110 , at para 16 , the judgment against the principal debtor is a significant advance for the purposes of r 4.33 within the three-year time specified by the Rules .

In the circumstances, we need not consider other events with respect to the r 4.33 application. [ 6 ] The r 4.33 application is dismissed. Rule 4.31 [ 7 ] Rule 4.31 is discretionary and requires demonstrating significant prejudice. There are two ways this can be accomplished: first, by proving inordinate an inexcusable delay; in which case the applicant enjoys a rebuttable presumption of significant prejudice. Alternately, an applicant can simply prove significant prejudice arising from the delay. [ 8 ] I'm not satisfied the delay in this action - in all the circumstances - is inordinate and inexcusable.

Accordingly, the applicant does not enjoy the benefit of the presumption specified by the rule. [ 9 ] The applicant raises an instance of significant prejudice which is said to be the death of Ms. Kristen Carpenter on June 18, 2021. Ms. Carpenter was in a close personal relationship with the applicant, Ms. Richmond, and I accept that she might have been able to provide some insight into Ms.

Richmond 's mental health and, importantly, her capacity at the relevant time. [ 10 ] The lawsuit concerns a Security Agreement that was roughly seven years old when the plaintiff obtained judgment against the principal debtor on November 8, 2019. Ms. Richmond’s main defence - as I understand it - is that she lacked capacity to give the security that she is now being sued for. [ 11 ] I note that this defence is set out and explained in her affidavit in response to the

summary judgment application. The boilerplate defence filed earlier really only amounts to a civil plea of ‘not guilty’. [ 12 ] The difficulty with Ms. Richmond 's position is that there is a Guarantees Acknowledgment Act certificate, completed when the guarantee was given. There is also a Certificate of Independent Legal Advice for the Collateral Mortgage Security. The lawyers who gave these certificates are both available. [ 13 ] There are other witnesses that could shed light on Ms.

Richmond’s capacity, including her two siblings, (a brother and a sister), her medical doctors and her estranged spouse. [ 14 ] In my view, the lawsuit is now significantly narrowed to the issue of capacity, and I do not see that the loss of this witness will significantly impair Ms. Richmond 's ability to advance this defence. [ 15 ] I am satisfied that there isn’t a significant prejudice of the kind, or to the degree that it should warrant exercising my discretion to strike out this lawsuit under r 4.31 for delay. Accordingly, the r 4.31 application is dismissed. [ 16 ] Ms.

Richmond asks, as a fallback position, that she be permitted to answer written interrogatories rather than attending to be questioned orally based on her fragile mental state. It is my view that this is one of those circumstances where it would be particularly important to see the witness in person and that the circumstances favour oral examination in person. Dated at the City of Edmonton, Alberta this 24 th day of May, 2023. W.S. Schlosser A.J.C.K.B.A. Appearances:

Susy Trace Miller Thomson LLP for the Plaintiff Mark D. Miller Weir Bowen LLP for the Defendant, Rebecca K. Richmond