Resta v Thornton, 2023 ABKB 498

Court of King’s Bench of Alberta Citation: Resta v Thornton, 2023 ABKB 498 Date: 20230830 Docket: 2110 00530 Registry: Red Deer Between: Laurie Resta and Bow River Lands Inc. Plaintiffs/Applicants - and - Scott Thornton and Thornton Promotions Inc. Defendants/Respondents _______________________________________________________ Reasons for Judgment of the Honourable Justice Eleanor J. Funk _______________________________________________________ [ 1 ] There is a history of high conflict between these parties, both inside and outside of the courtroom.

The issue before me is a narrow one, involving the appropriate recourse when the Respondents were unexpectedly unable to meet a court-ordered deadline for payment of security for costs and the Applicants refused to accept payment one day after that deadline. [ 2 ] On April 13, 2023, I granted an Order in which I directed the Respondents to pay security for costs in the amount of $15,000.

That payment was to be made to Counsel for the Applicants within 60 days of the Order. [ 3 ] If the payment were made within the 60-day limit, my Order went on to direct that the parties would seek a ½ day Special Chambers hearing before me. Failure to meet this deadline would essentially terminate the action, in favour of the Applicants, and allow the parties to make submissions on costs. [ 4 ] On June 12 th , the Respondents were unexpectedly unable to transfer the funds to the Applicants. The next day, Counsel for the Respondents phoned Counsel for the Applicants in an effort to complete the transfer.

The Applicants refused to accept the funds, taking the position that the Court-ordered deadline had passed. [ 5 ] That same day, Counsel for the Applicants wrote to me to let me know that the transfer of funds had not happened by the June 12 th deadline and sought to

schedule a hearing before me to speak to costs. [ 6 ] On June 16 th , Counsel for the Respondents wrote to me, requesting an audience before me to address the issue of the non- payment of the funds. Counsel explained they had the funds in trust, and ready to transfer to the Applicants, on June 12 th . They sent three separate emails to Counsel for the Applicants on the morning of June 12 th , asking for the necessary information to transfer the funds electronically. Those emails were not answered.

The Applicants then refused to accept transfer of the funds the next day. [ 7 ] In their letter to me, the Respondents sought relief from forfeiture or, in the alternate, a nunc pro tunc order allowing the transfer of funds forthwith and deeming that payment to have been made on June 12 th . [ 8 ] In their submissions before me, the Respondents additionally argued that a proper

interpretation of my Order would put the deadline for payment on June 13 th , not June 12 th . [ 9 ] The issues for me to decide here are: i. What was the deadline for the security for costs payment? ii. If the deadline was June 12 th , is a nunc pro tunc order available to the Respondents? Or, iii. Should the Respondents be granted relief from forfeiture? A. What was the deadline for the security for costs payment? [ 10 ] My April 13 th Order directed payment of security for costs within 60 days. For the reasons that follow, I find that payment was due on June 12, 2023. [ 11 ]

Section 22 of the

Interpretation Act deals with the computation of time. Subsection (7) reads “if an enactment provides that anything is to be done within a time after, from, of or before a specified day, the time does not include that day”: RSA 2000, c I-8 . [ 12 ] A plain reading of subsection (7) means the 60 days started to run on April 14, 2023. Starting on the 14 th and carrying through to the 30 th of April totals 17 days. When the 31 days of May are added, the tally is 48 days. Adding the first 12 days of June brings the total to 60 days. [ 13 ] A straight forward application of s 22(7) of the

Interpretation Act places the 60-day time limit on June 12 th and, prima facie , places the Respondents in breach of my April 13 th Order. [ 14 ] The real question is whether I should grant any form of equitable relief for this breach. B.

Is a nunc pro tunc order available to the Respondents? [ 15 ] While it is generally understood that orders take effect on the day they are granted, the doctrine of nunc pro tunc operates to allow courts to give an action retroactive legal effect, as though it had been performed at an earlier date. [ 16 ] In CIBC v Green , 2015 SCC 60 , the Supreme Court confirmed that courts have inherent jurisdiction to issue orders nunc pro tunc . Simply put, the court has the power to backdate its orders. This is tied to the maxim that

an act of the court shall prejudice no one: Green , at paras 85, 86 . [ 17 ] In Alberta, this power is implied by Rule 9.6 of the Rules of Court , Every judgment and every order, whether or not it has been entered, comes into effect on (

a) The date of pronouncement, or (

b) If the Court orders the judgment or order to come into effect before or after the date of pronouncement, the date so ordered. [ 18 ] Rule 9.14 further allows the Court, on application after a judgement or order is entered, to make any further or other order that is required if doing so (

a) does not require the original judgment or order to be varied and, 2) the further order is needed to provide a remedy to which a party is entitled in connection with the judgment or order.

[ 19 ] In Green , the Supreme Court emphasized that courts should not exercise this inherent jurisdiction where it would undermine the purpose of the limitation period or legislation at issue. This is because the courts’ inherent jurisdiction to grant nunc pro tunc orders is circumscribed by legislative intent.

Nunc pro tunc orders will not be available if they are precluded by either the language or the purpose of the statute: Green , at paras 92-94 . [ 20 ] To this end, the Court in Green established a two-part test, at para 90, for courts to apply when deciding to exercise its inherent jurisdiction to grant nunc pro tunc orders: 1) the party seeking relief must seek leave prior to the expiry of the limitation period, and 2) the Court should weigh a number of factors including whether:

i) the opposing party will be prejudiced by the order; ii) the order would have been granted had it been sought at the appropriate time, such that the timing of the order is merely an irregularity; iii) the irregularity was not intentional; iv) the order will effectively achieve the relief sought or cure the irregularity;

v) the delay has been caused by

an act of the court; and, vi) the order would facilitate access to justice. [ 21 ] Since Green , many courts have interpreted the first branch of this test as establishing a “red line,” meaning that courts cannot grant nunc pro tunc orders unless the party seeking relief does so before the expiration of the limitation period. [ 22 ] In Patkaciunas v Economical Mutual Insurance Company , 2021 ONSC 5945 , the Court considered this approach and concluded that Green did not establish a “red line” rule that applies to all cases and in all circumstances: Patkaciunas , at para 11 . [ 23 ] In Patkaciunas , the plaintiff was required to file its Statement of Claim by June 25, 2019.

On that date, the plaintiff’s paralegal was in line, at the courthouse, ready to file the Statement of Claim. When the paralegal approached the Clerks’ counter, the Clerk said that his computer was shutting down and he would not be able to process the Claim. The Clerk turned and walked away from the counter. The Statement of Claim was processed the next day: Patkaciunas , at paras 2-3 . [ 24 ] The Court was satisfied that the plaintiff did all that was required to file the Statement of Claim within the limitation period.

Had the Clerk not shut down his computer prematurely and walked away, the Claim would have been processed on time: Patkaciunas , at paras 2, 8-9 . [ 25 ] In declaring the Statement of Claim was issued on June 25, 2019, the Court found, as a fact, the step that the plaintiff was required to take by that day was taken, despite the court’s failure to record it: Patkaciunas , at para 9 . [ 26 ] The Court held this declaration was completely in line with the ratio in Green . There was no prejudice to the defendants other than a procedural advantage of which they were not aware at the time.

The irregularity was not intentional. The delay was not foreseeable. In relation to the first branch of the test from Green , the Court stated that the prospect of requiring the plaintiff to seek leave in advance to excuse something that had not yet happened was an absurdity: Patkaciunas , at para 12 . [ 27 ] While the facts before me do not involve a failing by the court to fully accomplish a required step, I find the reasoning in Patkaciunas applies equally here.

In both cases the parties had done what was necessary to complete the required step on time; for reasons beyond their control, they were unable to complete the step; and there was no ability to apply for equitable relief until after the deadline (or limitation period) had passed. [ 28 ] While it would have been prudent for the Respondents to leave a greater margin for error, they were not required to anticipate that their multiple emails to Counsel for the Applicants would go unanswered on the payment deadline. [ 29 ] I accept the representation that Counsel for the Applicants was busy on June 12 th and did not see the Respondents’ multiple emails that day.

He certainly became aware of those emails on June 13 th when he and Counsel for the Respondents spoke on the phone. While I am not privy to any instructions the Applicants may have given about accepting the funds one day late, I would have expected Counsel to approach my Order as including an implied term to act in good faith and to make reasonable efforts to fulfill its terms. Unfortunately, that was not done. [ 30 ] I am not persuaded that any prejudice flows to the Applicants if I grant a nunc pro tunc order. The Applicants are, without a doubt, facing a growing mound of legal costs.

They are concerned that the Respondents will not have the funds to continue with this litigation, or to pay any costs award that might flow from it. These same concerns were raised with me on April 13 th, and I addressed those concerns by ordering security for costs, with a deadline for payment, and consequences that flowed from either compliance or non- compliance with that Order. [ 31 ] I am equally satisfied that the relief sought here would have been granted had the Respondents sought a one-day extension of the payment deadline before that deadline passed.

The irregularity in not being able to complete the electronic transfer of funds on June 12 th was unforeseen and unintentional. The relief sought here would cure that irregularity. Finally, granting a nunc pro tunc order would facilitate access to justice. [ 32 ] The Applicants are understandably frustrated by the costs and delays in moving this action forward. On the evidence and submissions before me, the Respondents have largely been responsible for those delays.

To my mind, the Respondents’ past conduct and the Applicants’ natural frustration do not now justify the consequences that flow from non-compliance with an Order whose terms

the Respondents were able and ready to meet on time. Against this backdrop, it is difficult for me to find that any of the consequencesthat flow from non-compliance with my Order should be triggered here. [33] The purpose of putting a deadline on the security for costs Order was not to allow the Applicants to obtain an advantage onthis kind of technical failure, but to ensure that the Respondents acted in a timely manner, as they attempted to do.

Rather thanundermining the purpose of my previous Order, I am satisfied that granting a nunc pro tunc order in these circumstances is in keepingwith the purpose of that Order. For these reasons, I am exercising my discretion to grant a nunc pro tunc order. [34] Had I not granted this order, I would have granted the Respondents’ request for relief from forfeiture. C.

Should the Respondents be granted relief from forfeiture? [35] The courts’ discretionary power to grant relief from forfeiture is found in s 10 of the Judicature Act, “subject to appeal as inother cases, the Court has power to relieve against all penalties and forfeiture and, in granting relief, to impose any terms as to costs,expenses, damages, compensation and all other matters that the Court sees fit”: RSA, 2000, c J-2. [36] When exercising this discretion, the Court should consider the conduct of the applicant, the gravity of the breach, and thedisparity between the value of the property forfeited and the damage caused by the breach: Saskatchewan River Bungalows Ltd vMaritime Life Assurance Co, (SCC), [1994] 2 SCR 490 at para 32. [37] The party who seeks relief from forfeiture bears the burden of establishing the necessary criteria to support that relief: H&CHoldings PTE Ltd v Pengrowth Energy Corporation, 2019 ABQB 956 at paras 94-99; citing Carrington Holdings Ltd v SchonseeProperty Development Corp, 2005 ABCA 51 at para 8, leave to SCC refused. [38] As discussed, the breach here involved the Respondents not meeting the June 12th deadline for payment of security for costs.

They were ready and able to complete an electronic transfer on that date but did not receive the Applicants’ banking information in time. The Applicants refused to accept transfer of the funds the next day. Compliance with my Order would result in the action proceeding toa ½ day Special Chambers hearing. Non compliance terminates the action in favour of the Applicants and allows them to seek costs. [39] To my mind, the result of non-compliance is disproportionate in these circumstances and the Respondents should be entitledto relief from forfeiture.

Conclusion [40] The Respondents’ application for a nunc pro tunc order is granted. [41] The Applicants will forthwith provide the Respondents with the necessary information for the Respondents to complete anelectronic transfer of funds. Upon receipt of this banking information, the Respondents will forthwith transfer $15,000, pursuant to the terms of my April 13th Order. That payment is then deemed to have been made on June 12, 2023.

The parties will then continue on withthe terms of my Order as set out in paragraph 7 of that Order. [42] The parties may speak to the costs of this application at the conclusion of all matters. Heard on the 3rd day of August 2023. Dated at the City of Red Deer, Alberta this 30th day of August 2023. Eleanor J. Funk J.C.K.B.A. Appearances: Daniel K. MacDermid Bryan & Company LLP for the Plaintiffs (Applicants) Nicholas M. Ramessar

Carscallen LLP for the Defendants (Respondents)