926 Capital Corp. v. Petro River Oil Corp., 2016 ABQB 194

• Judge: Strekaf, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: March 16, 2016
• Citations: 2016 ABQB 194;[2016] A.R. TBEd. AP.012

926 Capital Corp. v. Petro River Oil Corp., [2016] A.R. TBEd. AP.012

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Currently being edited for A.R. - judgment temporarily in rough form.

Temp. Cite: [2016] A.R. TBEd. AP.012

926 Capital Corp. (plaintiff) v. Petro River Oil Corp. (defendant)

(1401 01161; 2016 ABQB 194)

Indexed As: 926 Capital Corp. v. Petro River Oil Corp.

Alberta Court of Queen's Bench

Judicial District of Calgary

Strekaf, J.

April 1, 2016.

Summary:

A landlord (926 Capital Corp.) sued a tenant (Petro River Oil Corp.) for unpaid rent under a lease. The tenant applied for summary dismissal, arguing that it was entitled to immunity from liability pursuant to s. 3 of the Limitations Act. The tenant noted that the statement of claim was filed over four years after the last payment of rent, over four years after the tenant vacated the premises and over three and a half years after the landlord served its written notice of default under the lease. The landlord had decided initially that it was not cost effective to pursue the rent claim, but subsequently decided to pursue the claim because of a change in the tenant's financial circumstances. The landlord argued that in deciding whether the bringing of an action was warranted pursuant to s. 3(1)(a)(iii) of the Limitations Act, the court should engage in a calculation of the cost of litigation relative to the expected recovery from a fiscally challenged defendant in order to determine whether the bringing of a proceeding was warranted. After the tenant applied for summary dismissal, the landlord applied to add another claim against the tenant (i.e., a claim for damages (future rent)). The applications were heard together.

A Master of the Alberta Court of Queen's Bench, in a decision reported [2015] A.R. TBEd. JL.051, held that the court would determine the amendment application first. The Master allowed the landlord's application to add the claim for damages and the tenant's application to summarily dismiss the unpaid rent claim. The Master stated that the landlord's argument was contrary to a decision by the Court of Appeal where the court stated that "... neither impecuniosity of the debtor nor poor prospects of collecting on the judgment affect whether the 'injury' in existence 'warrants' a claim' ...". In the result, the action which would proceed was the claim for damages. The landlord appealed the dismissal of the rent arrears claim and the tenant cross-appealed the amendment adding the future rent claim.

The Alberta Court of Queen's Bench dismissed the appeal and cross-appeal. As to the order in which the applications were heard, the court noted that the general rule was that where an application to amend pleadings and an application for summary judgment were heard concurrently the amendment application should be heard first. Here, the Master correctly applied the general rule.

Landlord and Tenant - Topic 4076

Rent - Actions for recovery or abatement of rent - Limitation periods - See paragraphs 21 to 58.

Limitation of Actions - Topic 2023

Actions in contract - Actions for breach of contract - When time commences to run - See paragraphs 45 to 58.

Practice - Topic 2110

Pleadings - Amendment of pleadings - Adding new cause of action or "claim" - See paragraphs 21 to 44.

Practice - Topic 2111

Pleadings - Amendment of pleadings - Prohibition against adding new action or "claim" which is statute barred (incl. exceptions) - See paragraphs 21 to 44.

Practice - Topic 2139.3

Pleadings - Amendment of pleadings - Where concurrent summary judgment application - See paragraphs 14 to 20.

Counsel:

Theodore Stathakos, for the plaintiff;

Eugene J. Bodnar, for the defendant.

This application was heard in Calgary, Alberta, on March 16, 2016, before Strekaf, J., of the Alberta Court of Queen's Bench, who issued the following reasons for judgment on April 1, 2016.