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When is an Expired Claim Not an Expired Claim?

03-Dec-13

By Jennifer Biernaskie

On November 28, 2013, Master S.L. Schulz of the Alberta Court of Queen’s Bench dismissed a Defendant’s application to declare a Statement of Claim “expired” because it was served more than one year after it was filed, contrary to Rule 3.26.

The action related to a motor vehicle accident which occurred on February 5, 2010. Shortly after the accident, the injured Plaintiff began negotiating a settlement with the Defendant’s insurance adjuster. When no settlement was reached, the Plaintiff retained counsel and a Statement of Claim was filed within the appropriate limitation period.

After the claim was filed, Plaintiff counsel and the adjuster continued with negotiations. Liability was never raised by the adjuster, and none of the offers made by the adjuster included any discount for contributory negligence or other liability risks. At one point, because the Plaintiff had not provided medical documents requested by the adjuster, the adjuster threatened that the records must be provided or he would be filing a Statement of Defence.

As no settlement was reached, the Plaintiff’s claim was served on the Defendant. Service occurred two and a half months after the one year deadline and the Defendant accordingly applied for a declaration that the Statement of Claim was expired. The Plaintiff cross-applied for a retroactive extension of the time for service pursuant to 3.27, which allows an extension of up to three months.

There were three grounds considered in determining whether the extension should be allowed. The first was whether the adjuster had caused Plaintiff counsel to believe that liability would not be contested. Master Schulz confirmed earlier case law which states that entering into negotiations and/or requesting medical information does not provide a reasonable basis upon which to conclude liability will not be an issue.

The second ground considered was whether the adjuster had caused the Plaintiff to rely upon the belief that the time limit for service would be waived. Master Schulz found the issue of service had not been discussed and, in fact, Plaintiff counsel had not turned his mind to service at all. Accordingly, he could not have relied upon something said by the adjuster in relation to the issue. As noted by Master Schulz: "... waiver cannot be foisted on someone. It must be a conscious act.”

Lastly, it was considered whether any special or extraordinary circumstances resulting from the conduct of the adjuster permit the Court to extend the time for service. Emphasis was placed on the adjuster’s threat to file a Statement of Defence, which Master Schulz felt would “create the impression that the adjuster was satisfied with service as it stood”. Although this communication was held to fall short of a standstill agreement, it was described as “sloppy” and formed the “special circumstances” necessary for Master Schulz to allow an extension for the time for service under Rule 3.27(10)(c). Ultimately, it was concluded it would be “unfair in these circumstances to end an otherwise valid claim because of a technical defect.”

McGown v. Lang, 2013 ABQB 699

Click here to view the decision.

 

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