Last Week’s Court Rulings from the Alberta Court of King’s Bench, Court of Appeal and SCC.
Edited by Steven Graham
Jelonek v Monterrosa-Renaud, 2022 ABKB 738
Serving Statement of Claim | Estoppel | Extension for Service
Condominium Plan No. 7822583 v Asiedu, 2022 ABKB 745
Condominium Property Act | Condo Fees | Redemption Order | Master Insurance Policy
Diotte v 2 Cuz’N Trucking Ltd., 2022 ABKB 741
Rule 4.33 | Delay | Firsthand Knowledge | Hearsay
This appeal considered whether the Application Judge erred in granting an extension to the Plaintiff’s deadline to serve his Statement of Claim, and when it is appropriate for such an extension to be granted.
In this case, the Plaintiff was involved in two motor vehicle collisions. The Statement of Claim in the within action was filed in September 2020, and provided to the insurance adjuster handling both collision claims. The adjuster requested and counsel agreed that no Statement of Defence was required. The Plaintiff’s file changed hands between counsel in May 2021, and in December 2021 a settlement offer was delivered which led to a settlement of one of the collision claims but not this one. The settlement required a Pierrenger Agreement, which was approved by a consent order signed by all parties, including the insurance adjuster handling the claims.
One of the terms of the consent order specified that an Amended Statement of Claim in this action would be filed and served on the non-settling Defendants within 14 days of filing. Despite the insurance adjuster signing the consent order as agent for the Appellant, he took the position subsequently that the Statement of Claim had expired because it was not served on his insured in time.
The matter came before Application Judge Farrington at first instance, who concluded it was appropriate to grant an extension of the time to serve pursuant to Rule 3.27. Application Judge Farrington considered that there were settlement discussions both before and after the expiry for the time for service, and that there was no prejudice to the Defendant by the failure to serve.
On appeal, Justice Feasby noted that it is a well-established practice for insurance adjusters to receive filed Statements of Claim and commence negotiations with counsel. Justice Feasby reasoned that when an insurer seeks an indulgence of counsel not to take any steps without reasonable notice to the insurer, and the same is granted, this gives rise to a promissory estoppel argument if the insurer attempts to then rely on the Plaintiff’s failure to serve:
 I respectfully suggest that the correct characterization of the concept is promissory estoppel. There is a distinction between estoppels based on representations of facts or law by words or conduct (estoppel by representation) and representations as to future actions (promissory estoppel). The Supreme Court of Canada explained in Maracle v. Travellers Indemnity Co. of Canada, 1991 CanLII 58 (SCC),  2 SCR 50 at 57 that promissory estoppel demands: “[t]he party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position.”
 The salient fact that Mr. McDougall [the adjuster] must be shown to have known is that at the time of requesting the indulgence in respect of filing the Statement of Defence is that the Defendant had not been served. The fact that the Defendant had not been served at the time that Mr. McDougall requested the indulgence in respect of filing a Statement of Defence is evident from the correspondence between Mr. McDougall and Mr. Johanson. In the same email chain where the indulgence in respect of filing the Statement of Defence was requested, Mr. Johanson twice asked for the Defendant’s contact information so that service of the Statement of Claim could be effected. Though Mr. McDougall may have expected or assumed that service would be effected prior to the expiry of the time limit, there can be no question that at the time of making the request for the indulgence he knew that service had not been effected.
It is noteworthy that Justice Feasby found an implicit commitment on an insurer not to strictly enforce the deadlines for service when an indulgence of counsel, in this case requesting that a Statement of Defence need not be filed, is sought:
 The promise in the present case was the request by Mr. McDougall on behalf of SGI and the Defendant that a Statement of Defence not be required. Mr. McDougall did not say anything about not requiring service of the Statement of Claim, but words and actions take meaning from the context in which they are used or occur. The reasons of Major and Hetherington JJA in Cyre-Willis v Couture show that there is a collective understanding or convention among lawyers and insurers in Alberta that when an indulgence with respect to provision of a Statement of Defence is requested there is an implicit reciprocal commitment not to strictly enforce the Rules of Court requirement for service of the Statement of Claim. Given that Mr. McDougall is an insurance adjuster, he may be presumed to be familiar with litigation practice and it is fair and reasonable to impute to him knowledge of both the legal rights SGI and the Defendant would have in the absence of proper service of the Statement of Claim and the practical and legal effect of making a request for an indulgence in respect of filing a Statement of Defence. Counsel for the Plaintiff reasonably relied on Mr. McDougall’s promise such that it is inequitable to permit SGI and the Defendant to resile from the representation made on their behalf by Mr. McDougall. [emphasis added]
Justice Feasby emphasized there have been similar decisions in other contexts where Courts have found inequity in allowing one party to obtain a relaxation of certain timelines in the Rules of Court, only for the other party to then attempt to strictly enforce other timelines against the party granting the indulgence:
 […] For example, in Reyes v Dyck, 2019 ABQB 667 at para 20 Master Shulz observed “[i]f the Insurer wants to take advantage of the professional courtesies offered by Counsel, then the Insurer must be equally circumspect in its behaviour. It is not appropriate to allow the Insurer to insist on all the formalities while also asking that the formalities not be enforced against it.” See also, Brousseau v Janz, 2014 ABQB 136 at para 27.
Justice Feasby further commented on Rule 3.27(1)(a)(iii) which sets out that the time for service can be extended if anyone on behalf of a Defendant causes the Plaintiff to reasonably believe and rely on the belief that a particular time limit will not be enforced, equating it to a “sort of codification and modification of promissory estoppel in the limited context of extension for the filing of a Statement of Claim” (para 30).
The Court also emphasized particular circumstances, including that the insurer did not raise the issue of service until more than eight months passed after the expiry of the one year period, and also engaging with the Plaintiff in settlement during this time:
 My conclusion is reinforced by SGI’s concession that the Defendant has not suffered any prejudice and by the fact that SGI raised the issue of lack of service more than eight months after the expiry of the one-year period and after engaging with the Plaintiff on various issues including potential settlement. SGI also executed the Yamauchi Consent Order which provided for service of an Amended Statement of Claim on the Defendant. The execution of the Yamauchi Consent Order may also operate as an admission that service was in order or as an estoppel to that effect.
Ultimately, the Court dismissed the appeal and awarded the Respondent double costs under Schedule C.
The Appellant owned a unit in a condominium complex which was destroyed in the Fort McMurray wildfires of 2016. After the unit’s destruction (along with several others in the complex), the Appellant stopped paying his condominium fees while the unit was uninhabitable, believing that the units were being rebuilt by the Condo Board pursuant to their master insurance policy. The Appellant further believed the Condo Board’s insurance policy provided coverage indemnifying him from condo fees if he could not occupy his property due to fire. The Condo Board initially did not object, but eventually required the Appellant to continue making payments. When the Appellant refused, the Condo Board applied and obtained a summary judgment and redemption order in respect of the Appellant and his unit.
On appeal, the Court first considered whether the Condo Board’s insurance policy insured the owner’s monthly condo fees.
The Appellant cited section 7 of the policy, which provided:
7. EXTENSIONS OF COVERAGE
The following extensions of coverage shall not increase the amounts of insurance applying under this form and are subject to all conditions of this form:
(d) Common Expense: The Insurer agrees to indemnify the “Condominium Corporation” for the loss of such obligatory contribution toward common expense as may be assessed from time to time by the “Condominium Corporation” against all “unit” owners. The Insurer shall be liable under this extension for not more than the pro-rata share of such expense during the time the “unit(s)” remain unoccupied and untenantable following a loss caused by an insured peril.
The Condo Board argued that no loss was suffered that would trigger this clause, because the Condo Corporation has the absolute obligation to assess fees to unit holder pursuant to the Condominium Property Act, as well as the bylaws. These authorities permit the Condo Corporation to secure payment of such fees through a caveat on title, through which they could seek a judgment, thereby preventing any loss from being incurred.
The Court ultimately agreed with the Condo Board’s argument:
 I do agree that the Appellant will never receive any benefit from the Condominium Corporation insurance because given the Act and the Bylaws, no loss will ever be suffered by the Condominium Corporation because it has not only the obligation, but the right to assess fees to unit holders in accordance with the unit factors. The Condo Corporation can proceed to secure payment through a caveat against title to the individual condominium units, and it can obtain judgment in priority to most other charges against the property, such as in this case, the Scotia Bank mortgage that the Appellant had taken out. Accordingly, the Condominium Corporation could never suffer a loss as it could as in this case seek to sell the property, in priority to all over caveats and interests.
The Court rejected the Appellant’s argument that the insurance policy was worthless vis-à-vis the condo unit owners, and also emphasized that the Condo Corporation is not the Appellant’s insurer:
 While the Appellant’s situation is unique based on the Fort McMurray wildfires, these principles extend to all condominium fees plus special assessments fines, penalties, and interest charges. All condominium owners in Alberta can have their property taken away from them by the Condominium Corporation because of their non-payment of monthly condominium fees, special assessments fines and interest charges irrespective of the existence of the Condominium Corporation’s Master Insurance Policy and irrespective of questionable or unfair Condominium Corporation governance issues.
 Condominium Corporations in Alberta simply do not have the ability to help out condominium property owners and relieve hardship from condominium fees and special assessments even if they wanted to because Condominium Corporations can only assess on the basis of unit factors, not on the basis of what is fair and equitable. Ultimately, Condominium Corporations pursuant to the Act and the Condominium Bylaws are largely insulated from complaints such as the ones brought forward by condo unit owners such as the Appellant in this matter.
The Court concluded that coverage for the Appellant under the Condo Corporation’s master insurance policy was not available, and there was no other reason to overturn the summary judgment and redemption order granted by the Applications Judge. The appeal was dismissed.
The Defendant sought to strike the claim pursuant to Rule 4.33 for delay. At issue was whether the affidavit filed in support of the application was based on hearsay and thereby inadmissible.
Application Judge Schlosser first emphasized that Rule 13.18(3) requires personal knowledge in any affidavit sworn in support of a final application. However, hearsay can still form part of an affidavit if it satisfies any of the admissible hearsay exceptions:
 I adopt, as an up-to-date statement of the law, the comments by Graesser J, in County of Vulcan v Genesis Reciprocal Insurance Exchange, 2020 ABQB 93. There, in the summary judgment context, he says:
 … Presumptively inadmissible hearsay may be admissible under Khelawon [R v Khelawon, 2006 SCC 57], and it may be admissible for narrative purposes. However, my read of Weir-Jones is that neither party may rely on hearsay evidence on the substantive issues to be determined on a summary judgment application, unless the hearsay can be brought within the exceptions described in Khelawon or other recognized exceptions to the hearsay rule. …
The Applications Judge scrutinized the affidavit, which was sworn by a legal assistant of the Defendant’s counsel. He found no issue with the legal assistant swearing to the details set out in the Court’s procedure card (ie. when certain pleadings were filed).
The Applications Judge had no issue with the legal assistant swearing to the service of the Affidavits of Records, though noting it is something that the client or a party should properly swear to:
 Affidavits of records, unlike pleadings, are served but not filed. I do not take issue with receiving the evidence set out above either. It is true that this is something that the client or a party could swear to and properly should swear to, but this would likely have to be on information and belief as well; as it is doubtful that the client or party could have personal or firsthand knowledge of this. Like the legal assistant, they would likely have to be informed by counsel, a legal assistant, or at the very least a review of the file. But even then, it would be second hand.
The critical aspect of the affidavit was when the legal assistant sworn to her belief that no steps were taken between the date the Defendant served their Affidavit of Records and the date of swearing the subject affidavit. The Applications Judge noted that whether something is a significant advance is a question of mixed fact and law. Any statement that there have been no steps, stays, participation or suspension of the time periods agreed to are things that should be sworn by the client:
 Rule 4.33 requires that the action not have advanced significantly in the three years following the last significant advance. (Rahmani v 959630 Alberta Ltd, 2021 ABCA 110, para 16). Whether something is a significant advance is a mixed question of fact and law. The client should swear to the events in the lawsuit prior to the motion that are not reflected on the court file. Some of this may necessarily be on information and belief as well, given that client may not be privy to every event that has taken place on the file. The important thing is that the Court has to be able to assess the event, to see whether or not it is significant; such that it may restart the three-year clock.
 Applicants in a r 4.33 application will often swear that there has been no stay (r 4.33(2)(a)), no ‘participation’ (r 4.33(2)(b)), and no suspension (r 4.33(5)). While the Court can take notice of an Order directing a stay, or of a litigation plan, this evidence should otherwise be provided by the client.
The Applications Judge concluded that the Defendant had failed to establish a prima facie case with firsthand knowledge or hearsay evidence that would be admissible at trial. The legal assistant swearing that there had been no significant advance was not admissible hearsay, and as such could not satisfy the Court that ground of Rule 4.33 had been satisfied. Accordingly, the application was dismissed.