TETRAD AUTO SERVICE LTD. PLAINTIFF - v. -, 2023 SKKB 104

KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 104 Date: 20 23 05 17 Docket: QBG-RG-00619-2022 Judicial Centre: Regina BETWEEN: TETRAD AUTO SERVICE LTD. PLAINTIFF - and - UNIVERSAL TIRE & SERVICES LTD. And MITCHEL NEUFELD DEFENDANT Counsel: Emily F.L.B. Bancescu for the plaintiff Universal Tire & Services Ltd. and no one appearing Mitchel Neufeld FIAT ROBERTSON J. May 17, 202 3 INTRODUCTION [ 1 ] This decision addresses the issue of proper service of a notice of application in the context of an application under Rule 12-1 of The Queen’s Bench Rules to validate irregular service.

BACKGROUND [ 2 ] On March 2, 2022, the plaintiff, Tetrad Auto Service Ltd. [Tetrad], filed a statement of claim naming Universal Tire & Services Ltd. and Mitchel Neufeld as defendants. [ 3 ] On April 25, 2022, the defendants filed a statement of defence and counterclaim.

The address for service shown at the end of the statement of defence was the defendants’ lawyer’s office in Lloydminster, Alberta. [ 4 ] On May 6, 2022, the defendants’ lawyer filed notice of withdrawal of lawyer of record stating the last known address of the now self-represented defendant Mitchel Neufeld, who is a director of the corporate defendant, as: Box 93, Kitscoty, Alberta, T0B 2P0 with telephone 780-872-6586. [ 5 ] On May 18, 2022, Tetrad filed a reply to defence with an “Affidavit of Email Service” on the defendants by email to “neufeldmw@gmail.com”. [ 6 ] On December 5, 2022, certificate of compliance with s. 42(4) of The King’s Bench Act, SS 2023, c 28 was filed stating that as of November 14, 2022, the requirements for mediation had been met. [ 7 ] On March 26, 2023, Tetrad filed a notice of application to compel attendance of the defendant, Mitchel Neufeld [Neufeld], for questioning and costs of $1,500.00 on the grounds that the defendants had neglected or refused to reply to requests to

schedule questioning. The supporting affidavit of Emily Bancescu at para. 4 stated “Neufeld confirmed his residence in Kiscoty by email dated January 12, 2023. He did not provide a physical address”. That email was not attached as an exhibit to the affidavit. The “Affidavit of Email Service” for the notice of application was by email to “neufeldmw@gmail.com”. [ 8 ] The application was heard in chambers on April 13, 2023, at which time I asked counsel to point me to

authority for service by email. Counsel could not then do so. After some discussion over whether to adjourn or reserve, I reserved mydecision, inviting counsel to file materials supporting the validity of the email service. [9] Tetrad subsequently filed a brief of law and affidavit asking the court to validate the previous service byemail. ISSUES [10] The issues are: (

a) Was there proper service of the notice of application? (

b) If not, should the court apply Rule 12-1 of The Queen’s Bench Rules to validate the previous irregular service? ANALYSIS [11] This application affords the court an opportunity to review the rules of service. In doing so, I do not intend to becritical of this application, but rather to remind practitioners of the importance of following the rules for service of applications. Was there proper service? [12] Tetrad, in its brief of law, does not expressly concede that the previous email service was improper.

But it doesso implicitly by asking the court to apply Rule 12-1 to validate the prior service by email. [13] I find that the purported service by email was improper. Rule 12-4(2) of allowing service by email applies onlywhere the party being served has filed the email as their address for service, which is not the case here. [14] As discussed below, the proper mode of service on Neufeld would be personal service. If Tetrad wanted to useanother mode of service, then it should have first applied for an order of substitutional service.

But it would then have to satisfy thecriteria under Rule 12-10, including showing that personal service had been attempted and, from that attempt, was shown to beimpractical. [15] From the materials filed, Neufeld resides in the village of Kitscoty, a community of under one thousand people.Kitscoty is located on the Yellowhead Highway, 24 kilometres west of Lloydminster. It is difficult to see why personal service would beimpractical. In any event, I infer personal service was never attempted. [16] The failure to follow the rules of service is not uncommon.

So, it may be worth reviewing some of those rules. [17] In Stephens v Canadian Imperial Bank of Commerce, 2021 SKCA 155 at para 42, Kalmakoff J.A. for the Courtof Appeal stated the purpose of the rules regarding service of documents.

While expressed in the context of service of pleadings, thepurpose of any service is to bring notice to the person served so they are aware of the matter and can respond. [42]…The purpose of the rules regarding service of documents such as statements of claim is to ensure that a party being sued has noticeof the claim being made against them, has notice of the temporal requirements for filing a defence, and has notice that default judgmentmay be granted against them if they do not respond to the claim.

Proof of service of a statement of claim is not a precondition topermitting an action to proceed; it is required if a plaintiff wishes to seek remedies against a defendant who has not responded. [18] Rules 6-3(1) and 15-32 (for family matters) require all applications to be brought with notice. The applicant hasthe onus of proving service. See Swift River Farms Ltd. v Pillar Capital Corp., 2022 SKCA 89 at paras 36-37 and Clarkson Co. Ltd. vCredit Foncier Franco Canadien (1985), (SK CA), 44 Sask R 151 (Sask CA) at para 3. [19] Generally, personal service is required.

See Rule 12-2 and Rimney v Gilchuk, 2021 SKQB 98. [20] Rules 12-2(1)(

b) and 12-4 allow for alternate modes of service “if expressly authorized” by enactment, Rule orcourt order. [21] Rule 12-4(2) allows service by courier, mail, fax or electronic transmission at the address for service filed by theparty to be served. See Levy v Levy, 2022 SKCA 126, at para 9 [Levy]. Rules 12-4(4)-(7) provide specific requirements for service bycourier, mail, fax or electronic transmission. [22] Texting is not an authorized mode of service, unless expressly authorized for substitutional service. See Bank ofMontreal v Thompson, 2022 SKQB 152 [Thompson]. [23] The test for an order for substitutional service is cogent evidence of: (

a) Reasonable steps taken to locate and serve the party through an authorized mode of service (usually personal service); (

b) The circumstances that make it impractical to effect service by that mode; and (

c) A proposed, alternative mode of service that, in the opinion of the applicant, is likely to provide the person to be served withnotice of the document. See Canadian Imperial Bank of Commerce v Star Development Corp., 2019 SKQB 149, [2019] 12 WWR 127 [Star Development] andSaskatoon Mortgage & Loan Company v Roton, (SK CA), [1942] 3 DLR 54 (Sask CA).

[24] As stated in Star Development at paras 16-17, the person being served has no duty to cooperate with service.Evidence of evading service may be relevant but is not a criteria for an order of substituted service. Which is not to say that the courtcondones lack of cooperation by parties, whether represented or self-represented. To the contrary. [25] If an enactment specifies the authorized method of service and does not allow substitutional service, then that isthe only possible mode of service.

An order for substitutional service is then not available, since the Rules are subordinate to any statute.See Royal Bank of Canada v Wright (1989), (SK CA), 74 Sask R 215 (Sask CA) and R v S.D.H. (1989), (SK CA), 49 CCC (3d) 451 (Sask CA). If not, should Rule 12-1 be applied to validate the previous irregular service? [26] There is no notice of application seeking this relief. Instead, it was requested in the brief of law in response tomy inquiry about whether there was proper service of the application to compel attendance for questioning.

In any event, I will applyRule 1-6 to cure the non-compliance with the Rules requiring notice of application. [27] Rule 12-1 allows the court, subject to the express provisions of any enactment, to validate or set aside theservice of any document. 12-1(1) Subject to the express provisions of any enactment and notwithstanding any rule respecting service, the Court has discretion tovalidate or set aside the service of any document.

(2) The primary consideration for the Court in the exercise of its discretion is that the person served or to be served: (

a) received notice of the document; or (

b) would have received notice except for the attempts of that person to evade service.

(3) If the Court is satisfied that the person to be served received notice of the document, the Court may: (

a) validate any irregular or unauthorized service of a document; and (

b) impose any terms that it considers appropriate on the validation.

(4) If the Court is not satisfied that the person to be served received notice of a document, the Court may: (

a) set aside service of the document; and (

b) order further or other service of the document.

(5) The Court may set aside the consequences of any default to respond to service of a document or may extend the time to respond toservice of a document if the Court is satisfied that: (

a) the person to be served did not have notice of the document; (

b) the person to be served did not have notice of the document until a date later than the effective date of service; or (

c) the document served was incomplete or illegible. [28] Under Rule 12-1(1), the court has authority both to validate service where notice was achieved, although servicewas improper, or to set aside service where there was no actual notice. See: Levy (McCreary J.A. for the Court) [12] Pursuant to Rule 12-1(1) of the Rules, the Chambers judge was entitled to validate service of the application for judgment if theconditions of Rule 12-1(2)(

a) or (

b) were met. Rule 12-1(2)(

a) and (

b) provide that the “primary consideration” for the court in theexercise of its discretion to determine that a person has been served is whether the person “received notice of the document” or “wouldhave received notice except for the attempts of that person to evade service”. The Chambers judge correctly interpreted Rules 12-1(1)and 12-1(2) when she deemed Ms. Levy to have been served by relying on the affidavit evidence that demonstrated Ms. Levy hadreceived notice of the application: McAdam v Grimard, 2017 SKQB 39 at paras 22 and 24, 7 CPC (8th) 123.

Having correctly interpretedthe Rules, the Chambers judge was entitled to exercise her discretion to validate service as she did. As I discuss below, nothing in therecord suggests that the Chambers judge exercised her discretion improperly by failing to correctly identify the legal criteria whichgoverned the exercise of her discretion or by misapplying those criteria, or by making a palpable and overriding error in her assessmentof the facts: Kot v Kot, 2021 SKCA 4 at para 20, 63 ETR (4th) 161. C.D.R.

Developments Inc. v ACI holdings Inc., 2017 SKQB 163, 10 CPC (8th) 118 (Danyliuk J.) [3] Recently, there has been a plethora of substitutional service applications, applications to validate service, and reliance on what Iwould call “dodgy” service. This is a trend to be discouraged. Our civil justice system is like an inverted pyramid, with the point restingon notice of proceedings. If a party has notice but ignores the process, it does so at substantial risk.

But if proper notice is not given, thenthe serving party cannot expect to simply be allowed to proceed. … [30] Finally, I make a note to all counsel, and I wish to be clear. Service is not merely a hoop through which a party is to jump. Service isnot something to which only lip service is to be paid. It is real and substantial. It lies at the heart of our system of litigation in Canada.

Effecting service needs to be taken more seriously than presently appears to be the case. Real attention needs to be paid by counsel toensure that real notice is reaching parties opposite. Counsel have a duty to the court in this regard. Counsel generally should expect thatimproper or insufficiently supported applications for substitutional service, to validate irregular service, or which rely on improperservice will routinely be dismissed.

McAdam v Grimard, 2017 SKQB 39 at paras 23-24, 7 CPC (8th) 123 (Goebel J.) [23] Likewise, the court has the discretion to set aside valid service where the defendant did not actually receive notice of the claim, solong as the application is brought within a reasonable time, the default is satisfactorily explained and a good defence on the merits isdisclosed. In Royal Bank of Canada v Kruchkowski, [1988] SJ No 491 (QL) QB), the court set aside a default judgment where service byregistered mail was contradicted by the defendant’s affidavit denying receipt.

Likewise in Schachtel v Wasmann, 2004 SKQB 120,although a document was validly served on a third party pursuant to an order for substitutional service, it was never brought to thedefendant’s attention and was therefore, set aside. [24] In other words, the court is generally prepared to validate irregular or unauthorized modes of service where it is satisfied that as aresult of such methods, notice has reached the hands or minds of the intended parties: Re Avery, (ON CA), [1952] OR192 (Ont CA).

If this has not occurred, unauthorized modes of service should not be validated and even valid modes of service may beset aside. [29] In Thompson, Hildebrandt J. declined to validate service by text message where there was no confirmation ofreceipt. [30] Rule 12-1(2) states that the primary consideration for the court in the exercise of its discretion to validate serviceis whether the person to be served either received actual notice or would have received notice but for their attempts to evade service.Neither of these criteria is established in this case.

On the contrary, the affidavit of Emily Bancescu sworn April 17, 2023 at para. 5states that since the emailed service of March 28, 2023 “No further communication has been sent to or received from the Defendants”.So, no acknowledgement of service nor proof of receipt and actual notice. [31] Even if there had been receipt, what would be the date of service? Hildebrandt J. made the same point inThompson at paras 24-25. That uncertainty would in turn raise the question of compliance with the 14-day requirement under Rule 6-9for service of notices of application.

Decision [32] I decline to grant the application to validate email service in these circumstances. [33] Tetrad has leave to re-apply with proper service of its application. J. D.N. ROBERTSON