Nova Oculus Canada v Sather et al, 2023 ABKB 245

Court of King’s Bench of Alberta Citation: Nova Oculus Canada v Sather et al, 2023 ABKB 245 Date: 20230425 Docket: 2301 02211 Registry: Calgary Between: Nova Oculus Canada Manufacturing ULC Plaintiff - and - Justin Sather, Macumira Medical Devices Inc., Walter O’Rourke, and Karmastar Consulting Inc. Defendants _______________________________________________________ Reasons for Decision of J.T. Prowse , Applications Judge _______________________________________________________ [ 1 ] The defendant Macumira was noted in default on March 15, 2023. It applies to set aside that noting in default.

For the reasons which follow I allow that application. [ 2 ] Here is the chronology of events: • January 17, 2023 – plaintiff’s counsel wrote a demand letter to Macumira. • January 23, 2003 – Mr. McDonald sent the following response: We have been retained by Macumira to respond to your letter dated January 17, 2023. We are currently reviewing the matter, and expect to be in a position to respond by the end of the week. I ask that you not take any adverse steps against Macumira without reasonable written notice to me. Thank you.

• February 10, 2023 – Mr. McDonald sent a short letter “without prejudice” to plaintiff’s counsel, summarizing why it considers the plaintiff’s claim to be without merit. As an aside, despite its label, it is dubious that this letter would be ruled to be “without prejudice” as it offered no compromise. • February 17, 2023 – the plaintiff sent Mr. McDonald a courtesy copy of its statement of claim. • February 21, 2023 – the plaintiff served the statement of claim on Macumira by registered mail. • February 23, 2023 – Mr.

McDonald sent the following letter to plaintiff’s counsel: We represent Macumira and [another defendant] Justin Sather, and are in receipt of your February 17 th letter enclosing the Statement of Claim. We anticipate receiving instructions shortly to accept service and defend the claim on behalf of our clients. In the meantime, we ask that you not take any adverse steps against Macumira or Mr. Sather without reasonable advance written notice to me. Thank you. [ 3 ] Instead of extending the courtesy of advising Mr.

McDonald that the plaintiff would not agree to an extension and would be noting Macumira in default failing a defence within 20 days of service, plaintiff’s counsel simply proceeded to note Macumira in default. [ 4 ] Plaintiff’s counsel indicated that they assumed, not hearing back from Mr. McDonald, that Macumira had decided not to defend.

That is a very unreasonable assumption given that just a few weeks earlier Macumira’s counsel had send a reply to the plaintiff’s demand letter, in which Macumira’s counsel observed that the plaintiff’s position ‘has no merit’. [ 5 ] The goal of the Rules of Court is to provide a means by which claims can be fairly and justly resolved in or by a court process in a timely and cost-effective way [see rule 1.2(1)]. [ 6 ] The plaintiff’s decision not to extend a courtesy to Mr.

McDonald was done, in my view, to gain the tactical advantage of getting to cross-examine the defendant’s deponent on the merits of the defendant’s case without the preliminary exchange of affidavits of records and without the defendant having the reciprocal right to cross-examine a representative of the plaintiff. [ 7 ] While the ‘merits of the case’ is one of the usual criteria on a setting aside application, in my view the Court ought to decline to allow cross-examination on the merits to take place when that request for cross-examination arises from a plaintiff ignoring a request for an extension, rather than by simply responding that no extension will be given (which latter response would have allowed a defendant to file a defence and the parties to get on with the production of documents and examinations under

Part 5). [ 8 ] The goal of having this claim resolved in a timely and cost-effective way can be achieved by denying the plaintiff’s request to cross-examine Macumira’s deponent, and by setting aside the noting if default of Macumira. [ 9 ] A consideration of the ‘merits of the case’ is not a mandatory ingredient of a setting aside application [see Al-Ghamdi v Alberta , 2017 ABQB 169 at para 115] and the overarching principle of fairness will be achieved here by setting aside the noting in default. [ 10 ] If the parties cannot agree on costs, they may seek a ruling from me in that regard.

Heard on the 28 th day of March, 2023. Dated at the City of Calgary, Alberta this 25 th day of April, 2023. J.T. Prowse A.J.C.K.B.A. Appearances: Kelly Hannan Lawson Lundell LLP for the Plaintiff Trevor R. McDonald

Burnet, Duckworth & Palmer LLP for the Defendant Macumira Medical Devices Inc.