The principles for extending the limitation period for filing Third Party Notices.
Condominium Corporation No 0425636 v Amyotte’s Plumbing, 2015 ABQB 801, per Master Schulz
I. FACTS AND ISSUES
When the condominium complex (Condo) was constructed in 2005, Amyotte’s Plumbing installed the plumbing system using materials from Ipex. In March 2012, the proposed Third Party, Save-On Mechanical Ltd., repaired a glycol leak at the condominium. Twelve days later there was a water/glycol leak.
The condominium corporation filed a Statement of Claim alleging, inter alia, negligent design, manufacture and installation of the PVC fittings by Amyotte and Ipex. Ipex filed its Statement of Defence on September 14, 2014. Amyotte filed its Statement of Defence on November 6, 2014.
Rule 3.45(c)(i) regarding filing Third Party Claims states that the claim must be filed within 6 months of the Statement of Defence being filed. Therefore, without a court ordered extension, Ipex needed to file its Third Party Claim by March 18, 2015 (March 14 being a Saturday). Amyotte needed to file its Third Party Claim by May 6, 2015.
Both Defendants Ipex and Amyotte filed an application on August 7, 2015 for an extension to file their Third Party Claim against Save-On.
II. HELD: For the Defendants; the Court granted an extension of 20 days from the written decision to file and serve the Claim.
1. The test to allow a party to file and serve a Third Party Claim outside the 6 month limitation period consists of 3 factors: (1) Was the delay inordinate? (2) Was the delay adequately excused in the circumstances? (3) Did the delay prejudice the proposed Third Party Defendant?
(a) Where the delay is short, as was the case here, the primary focus of the application is on the last two factors.
(b) The test must be examined in the context of the benefits of the Third Party procedure which are: (1) avoiding multiplicity of actions; (2) avoiding contrary or inconsistent findings; (3) allowing the third party to defend the plaintiff’s claim against the defendant; (4) to save costs; and (5) to determine the issues between the defendant and the third party as soon as possible.
(c) On application to extend the time for a third party claim, a court will look at both the pleadings and the evidence adduced on application.
2. Applying the three-part test, the Court determined that the applicants had met the low threshold present in these circumstances. Given the short length of the delay, the focus of the test was on the excuse offered and prejudice suffered with the weight being more on the existence of prejudice.
3. Factor 1: The delay of approximately 3 months plus a day for Amyotte and 4 months less 2 days for Ipex, is relatively short and not inordinate.
(a) The delay to be considered is the period between the time the Claim should have been filed and the Application to extend the time. Here, September to August, 2015.
(b) Whether a delay is inordinate is fact dependent and influenced by the answers to the rest of the test. Delays of 16 or more months have been found not to be inordinate; a delay of 2 years has been described as “not commendable…but…not gross.”
4. Factor 2: The delay was adequately excused in the circumstances.
(a) The “excuse offered” was that time was required to review the historical records and information relating to the manufacture of the fitting, installation of the HVAC at the Plaintiff’s premises and the ongoing repair, service and maintenance of the HVAC. These records were in the Plaintiff’s possession and had to be provided to the Defendants by the plaintiff for review.
(b) The Court found this to be a reasonable excuse.
5. Factor 3: Any prejudice that might be suffered by Save-On can be met through monetary compensation.
(a) Given the short nature of the delay, emphasis would be placed on this element.
(b) The Court will look at the pace of the litigation when assessing prejudice; where the pace is “leisurely” this will weigh in favour of granting the time.
(i) Here, the litigation did not appear to be either fast paced or leisurely. Thus, this was a neutral consideration.
(c) Save-On claimed prejudice because of its inability to locate employees (possible witnesses) that were involved at the relevant time. However, it did not indicate whether or not this inability occurred during the September to August 2015 period. Therefore, this did not assist Save-On’s position.
(d) Possible limitations defences are also considered under this factor.
(i) The ability to start a new claim is reason for not allowing a Third Party action; whereas, the loss of a right to start a new action can weigh in favour of a late Third Party Notice.
(ii) Here, if the Defendants have a claim against Save-On, it is possible that a limitation period will bar the bringing of a separate action. This militates in favour of allowing the Third Party notice to be filed.
(e) The Court must also consider the Plaintiff’s other defences to determine if there is “an air of reality” to the proposed Third Party Claim.
(f) The Court found that overall, despite not being worded as clearly as perhaps it should be, the proposed Claim appeared to support an arguable claim. The Court also noted it was early enough in the litigation.
6. While Save-On presented strong arguments that raised questions as to the ultimate success of the Third party notice, it was not sufficient to defeat the Defendant’s application.
(a) Save-On still had the ability to bring a Summary Dismissal application, an application to Strike or any other application it felt was appropriate.