In today’s increasingly litigious world,
it is imperative for both those in the legal field and non-legal field who may
be involved in litigation to have a solid understanding of the service requirements
for a Statement of Claim. This includes both serving a claim on an opposing
party and being served as a Defendant. In some cases, consideration must be
given where service may be deemed sufficient, even in situations where a
document is not formally served according to the Alberta Rules of Court,
Alta Reg 124/2010 (the “Rules”).
What the Rules say
Rules 3.26-3.28 specifically outline the
formal service requirements of a commencement document, setting out very strict
requirements for proper service. While service of all types of documents is
governed by the Rules (see Part 11, Division 2: Service of Commencement
Documents in Alberta for further information), a commencement document has
specific and unique requirements. Failure to ensure a Statement of Claim is
served within the required time period can be fatal to a claim, no matter how strong
it may be. Generally, a claim must be served within one year as stated in the
Rule below:
3.26(1) A
statement of claim must be served on the defendant within one year after the
date that the statement of claim is filed unless the Court, on application
filed before the one-year time limit expires, grants an extension of time for
service.
How can an extension be granted?
There are certain circumstances in which
the Court will permit an extension of time for service to be granted up to a
maximum of three months. This time limit is designed to prevent unnecessary
litigation delays, balancing “a Plaintiff’s needs with the prevention of undue
delay” (Oberg v Foothills Provincial General Hospital, (1999), 232 AR 263).
Rule 3.27(1) outlines the circumstances governing an extension:
(a) if a defendant, anyone purporting
to be a defendant, or a lawyer or other person purporting to negotiate on
behalf of a defendant, has caused the plaintiff or the plaintiff’s lawyer to
reasonably believe and to rely on the belief that
(i) the defendant has been served,
(ii) liability is not or will not be
contested, or
(iii) a time limit or any time period
relating to the action will not be relied on or will be waived;
(b) if an order for substitutional
service, an order dispensing with service or an order validating service is set
aside;
(c) special or extraordinary
circumstances exist resulting solely from the defendant’s conduct or from the
conduct of a person who is not a party to the action.
What happens if the claim is not
served in time?
Rule 3.28 states that if a Statement of
Claim is not served within the time period outlined in 3.26 (one year with a
potential additional 3 months), the Plaintiff is unable to take any further proceedings
against the Defendant. This means the claim will no longer be active.
There are a number of decided cases that
uphold the “strict and mandatory limit on service of a Statement of Claim” (Foster
v Robb, 2011 ABQB 776). In Foster, the Court dismissed the
Plaintiff’s case for failing to serve in accordance with the Rules. The Court
referenced several other cases that upheld the principles developed in the old
Rule 11, which have been incorporated into Rules 3.26-3.28. These are the
principles referred to in Foster:
·
Failure to serve a Statement of
Claim on time leaves the Court with little or no options (Martinez v
Hogeweide, 1998 ABCA 34);
·
After a Statement of Claim
expires, service is impossible (Hansraj v Ao, 2004 ABCA 223, para 63);
and
·
Exceptions to the service
requirements in the Rules are rare. In these exceptional circumstances, the
onus is on the Plaintiff to show that service should be considered valid (Hiep
v Cain, 2004 ABQB 876, paras 25 and 66).
The Court of Appeal in Martinez
also rejected the idea that Rule 11 was optional or discretionary, and
suggested the Court cannot cure a Plaintiff’s failure to serve through an
Order.
If you are a Plaintiff:
If you have filed a Statement of Claim
against someone, you will want to confirm it is served properly according to
the Rules (Rules Part 11, Division 2). This will ensure the claim remains valid
and active, at least as far as service is concerned; if the Defendant contests
service and the claim has not been served in accordance with the Rules, Courts can
deem service to be invalid. In a recent Alberta Court of Appeal case, Al-Ghamdi
v College and Association of Registered Nurses of Alberta, 2020 ABCA 81,
the Court ruled that no further proceedings could be taken against Defendants
“who were not served in time pursuant to [Rule] 3.28”, which highlights the
importance of ensuring service is performed properly. A Plaintiff can prove
service through an Affidavit of Service or an Order validating service to
safeguard their claim.
Despite the strict requirements of the
Rules, the Court has discretion to grant an order deeming service sufficient. There
are circumstances in which Courts have considered service to be valid even
where a document has not been served in accordance with the Rules. In Clarke
v Treadwell, 1997 ABCA 206, the Court of Appeal held that even knowledge of
a claim was enough to consider service to be sufficient where the Defendants “had
actual and substantial, though perhaps imperfect knowledge of the contents of
the Statement of Claim” issued within the limitation period (para 3). In Cloutier Estate v Caterpillar of Canada Ltd.,
[1997] A.J. No. 1009, the Court of Queen’s Bench referred to Clarke,
noting:
The Defendants
were aware of the lawsuit during the currency of the Statement of Claim. The Plaintiff
was dealing with the Defendants Insurer and the Defendants expected the Insurer
to defend the lawsuit, as it was obliged to do.
This shows that in some cases, with
sufficient awareness of the existence of a claim and its contents, formal
service is not necessarily required for a Court to find that service is valid,
and cannot be used as grounds to have a claim dismissed.
If you are a Defendant
The Rules outline strict service
requirements as a method of ensuring a Defendant has sufficient notice of a
claim against them to properly defend the lawsuit. If a Defendant is unable to
defend themselves, a Plaintiff could obtain default judgment after noting the
Defendant in default, obtaining an Order which may be unfair. The Court of
Queen’s Bench discussed this issue in Ritter
v Donell, 2005 ABQB 197, recognizing that defects in service are cured if
the Defendant has notice, can respond, and is not prejudiced. If these factors
are met, the Defendant cannot obtain an order determining service to be
insufficient.
While it may appear that this test is
seemingly simple, the Courts have differentiated between no service and
defective service. They have recognized that there is a distinction between the
two, and cautioned that a Defendant’s mere knowledge about the possible
existence of a lawsuit is not enough to consider service to be sufficient (Ranger
v Ferreira, 1999 ABQB 625, para 20). In Ranger, the Court of Queen’s
Bench also cited Bolingbroke v Bolingbroke, 2001 ABQB 40 at para 12, noting
“a Court can deem defective service of a document to be good and sufficient”. This
should not be confused with complete lack of service.
Pursuant to Rule 11.31(1), a Defendant
may apply to set aside service of a commencement document, but only before
filing a Statement of Defence. This is imperative to keep in mind if making an
application to set aside service.
Conclusion
It is important to consider all the above
factors involving service of a commencement document within the required time
period. Today’s litigation world is increasingly complicated and service is one
of the most vital factors in safeguarding that a claim will be able to proceed.
Retaining effective legal representation to ensure a claim is properly served
and defended as required by the Rules and shaped by significant caselaw is
always recommended.
With a strong reputation in commercial
litigation, McLennan Ross LLP is well-positioned to provide you with
exceptional advice and representation. If you have any questions or concerns
with respect to a Statement of Claim or any other litigation matter, please do
not hesitate to contact Michaela Kocon, Peter Major, Q.C., or any member of our
Commercial Litigation Team.
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