This post will review the topic of Managing Notices, Limitation Deadlines and Timelines & The Test for Withdrawal of Admissions to a Notice to Admit
Did you know in the last five years, a total of 1,043 lawyers have reported claims and potential claims to the Lawyers’ Insurance Fund because of a missed limitation deadline ? (www.lawsociety.bc.ca)
Managing notice periods, limitation deadlines and timelines is a critical function of a law firm. In addition to your notice periods and limitation deadlines to commence a legal action, there are numerous timelines as set out by the BC Supreme Court Civil Rules that are equally important. If missed, either by clerical error, administrative error or by a failed system or otherwise, a missed limitation deadline may negatively impact your client’s claim, and may also result in a negligence action against counsel.
Training
How often should a firm’s systems be reviewed with the purpose of improving the process for noting, tracking and complying with notice periods, limitation deadlines and timelines? Is there a system in place to appropriately train your current and new staff ?
Risk management should be undertaken to ensure that proper protocol is being followed by counsel and their teams. New staff members are routinely being hired, while others move on. All firm members should be periodically trained and introduced to the firm’s process and systems for noting, tracking and complying with limitation deadlines. Noted below are some very useful links to risk management in addition to the Limitations and Deadlines Quick Reference List posted on the Law Society website.
Very handy information is also offered under the heading Practice Management – Risks & Tips on the Law Society website (current to June 27, 2017)
Awareness and knowledge is key.
Habib v. Schindler, 2017 BCSC 1019
This recent decision in Habib v. Schindler deals with a missed timeline in failing to respond to a Notice to Admit, which resulted in two applications:
- An application to withdraw admissions that were made in error by failing to respond to a Notice to Admit within the timelines outlined in the BC Supreme Court Civil Rules; and
- A Summary Judgment filed by the Defendant for a dismissal of the Plaintiff’s action based on the admissions made by the Plaintiff in error and as a direct result in failing to respond to a Notice to Admit within the timelines outlined in the BC Supreme Court Civil Rules.
Although the Plaintiff was successful in this application, costs of the Defendant were awarded. The issue discussed in this case was the test for withdrawal of admissions to a Notice to Admit. The relevant Rules are noted, in addition to the legal principles:
Legal Basis
[38] Rule 7-7(5) of the Rules grants the power for courts to withdraw or set aside deemed admissions:
(5) A party is not entitled to withdraw
(a) an admission made in response to a notice to admit,
(b) a deemed admission under subrule (2), or
(c) an admission made in a pleading, petition or response to petition except by consent or with leave of the court.
[39] Rule 4-7(1) of the Rules grants the power to extend the period of time to respond to a notice to admit:
(1) If a document has been served in accordance with this Part but a person can show that the document
(a) did not come to his or her notice,
(b) came to his or her notice later than when it was served, or
(c) was incomplete or illegible,
the court may set aside an order, extend time, order an adjournment or make such other order as it considers will further the object of these Supreme Court Civil Rules.
[40] The test for withdrawal of admissions originally formulated by Master Horn in Hamilton v. Ahmed, (1999) 28 C.P.C. (4th) 139 (S.C.), was confirmed by the Court of Appeal in Sidhu v. Hothi, 2014 BCCA 510 [“Sidhu”] at para. 11 as follows:
[11] Turning to the legal test for the withdrawal of admissions, the chambers judge noted the test formulated by Master Horn in Hamilton, supra:
There is no conflict between these decisions and I derive the following principles from them:
- That the test is whether there is a triable issue which, in the interests of justice, should be determined on the merits and not disposed of by an admission of fact.
- That in applying that test, all the circumstances should be taken into account including the following:
- That the admission has been made inadvertently, hastily, or without knowledge of the facts.
- That the fact admitted was not within the knowledge of the party making the admission.
- That the fact admitted is not true.
- That the fact admitted is one of mixed fact and law.
- That the withdrawal of the admission would not prejudice a party.
- That there has been no delay in applying to withdraw the admission. [At para. 11.]
The judge noted, correctly in my view, that “the test” is as stated at item 1 and that items 3-8 are factors to be considered in determining where the interests of justice lie when an application to withdraw an admission is before the Court. (Para. 33.) This principle has been enunciated many times by this court: see Norlympia Seafoods Ltd. v. Dale (1982) 41 B.C.L.R. 145 (C.A.) 145 and the cases cited at 148-9.
[41] At para. 25 the Court of Appeal further stated:
[25] Turning, then, to what I regard as the real issue in this case — whether the chambers judge erred in concluding that most of the Hamilton factors weighed in favour of the defendants — I would suggest it would be preferable to frame items 3-8 of the Hamilton test not as conditions that must be met, but as factors that should be considered in determining what result is in the interests of justice. Thus I would reframe items 3-8 as follows:
(a) whether the admission was made inadvertently, hastily, or without knowledge of the facts;
(b) whether the “fact” admitted was or was not within the knowledge of the party making the admission;
(c) where the admission is one of fact, whether it is or may be untrue;
(d) whether and to what extent the withdrawal of the admission would prejudice a party; and
(e) whether there has been delay in the application to withdraw the admission and any reason offered for such delay.
I have omitted item 6 of the original list (that the fact admitted be one of mixed fact and law), since in most cases, including Hamilton itself, this has been held to be irrelevant provided a triable issue is raised (see also Nesbitt (B.C.S.C.) at para. 56.).
(“Sidhu Factors”)
Without going into details of this case, I will share the court’s discussion and decision, which was in favour of the Plaintiff, although the Defendant was awarded its costs.
Discussion
[65] The power to set aside deemed admissions under R. 7-7(5) is discretionary. That authority must be exercised in accordance with the test in Sidhu for withdrawal of admissions which can be stated as follows: (1) whether there is a triable issue (2) which, in the interests of justice, as determined by considering all the circumstances, including the Sidhu Factors, should be determined on the merits and not disposed of by an admission of fact.
[66] On the first question, whether there is a triable issue, the Affidavits were filed by the plaintiff and David prior to the notice to admit being served on the plaintiff. These documents, in effect, deny the facts contained in the notice to admit. In particular, they suggest that the plaintiff paid $67,993.50 for a 1/4 interest in the Property and had spoken to Shane about it on September 1, 2016.
[67] The plaintiff also points to the Bank Draft to substantiate his claim. He states that the agreement was that each of David, Shane and Paul were to receive $22,091.25 ($66,273.75 in total) for the 1/12 share of the Property they were each to transfer to him and that the Bank Draft is evidence of that.
[68] I note, however, that the amount of the Bank Draft is for $67,993.50 and not $66,273.75 as anticipated under the alleged agreement. Neither the plaintiff nor David explained this discrepancy.
[69] The plaintiff’s failure to produce any objective documentary evidence to substantiate his claim – other than the Bank Draft – is concerning.
[70] While there are clearly some evidentiary issues here, on this application, I am not being asked to rule on the merits of his claim. The question is only whether there is a triable issue with respect to the truth of the Deemed Admissions. I conclude that there is at least a triable issue here.
[71] Turning to the Sidhu Factors, I am prepared to accept that the Deemed Admissions were made inadvertently by the notice to admit not being brought to the plaintiff counsel’s attention. Once she was made aware of the notice to admit, a response was filed promptly.
[72] The Deemed Admissions all concern the plaintiff’s alleged dealings with the defendants. They were, therefore, within his knowledge.
[73] There is a limited evidentiary record on the truth of the admitted facts. That being said, as noted, the plaintiff adduced enough evidence to make the truth of the Deemed Admissions at least a triable issue. Their truth or falseness is by no means obvious or clear to me at this juncture.
[74] The defendants claim that they will suffer prejudice if the Deemed Admissions are set aside. However, any such prejudice, in my view, would be relatively limited and could be remedied by a favourable costs award.
[75] Finally, when the plaintiff’s counsel was made aware of notice to admit, this application to set aside the Deemed Admissions was filed promptly.
[76] In addition to the Sidhu Factors, it is relevant that the plaintiff has had ample opportunity to produce basic records and/or documents that would raise a triable issue. Numerous directions were also made to that effect. To date, he has failed to do so and any evidence he has provided is vague, unhelpful and contradictory without explanation. The absence of such evidence weighs heavily against the application he seeks.
[77] The plaintiff offered the reasons cited above for not producing the relevant evidence. However, he offered no explanation for why he did not contact the bank and his lawyer four years ago when he commenced this action; or more to the point, at any time after November 2005 when he asserted his interest in the Property.
[78] This is a borderline case. In the end, I am prepared to exercise my discretion in favour of setting aside the Deemed Admissions but only on the basis that the Affidavits deny the truth of the facts in the notice to admit. As vague and unhelpful as they may be, it would not be appropriate at this stage to assess their credibility. That will be for the summary trial judge to determine.
[79] Where, as here, a failure to respond to the notice to admit was through oversight and as a result of counsel’s error, the litigant ought not to be penalized: Piso v. Thompson, 2010 BCSC 1746; Litt v. Grewal, 2011 BCSC 1071; Arsenovski v. Bodin, 2012 BCSC 35 at paras. 19-27.
[80] In sum, on balance and somewhat reluctantly, I am satisfied that the interests of justice require that the Deemed Admissions should be set aside and I make that order. However, my order is conditional on the plaintiff filing a response to the notice to admit within 14 days of today’s date.
[81] To remedy any prejudice experienced by the defendants as a result of my decision, the defendants are entitled to one set of costs of this application thrown away in any event of the cause payable forthwith.
Quick Reference:
The Law Society of British Columbia
Limitations and Deadlines Quick Reference List (Up until June 2014)
Missed Limitations & Deadlines, BEAT THE CLOCK, Timely Lessons from1600 Lawyers
*All Law Society links current to June 27, 2017
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