New Rules of Court Interpreted: Rule 3.37, Applications for Default Judgment

Case commented on: Toerper v. Hoard, 2011 ABQB 85 

Toerper v. Hoard involved a claim for breach of contract and breach of trust or fiduciary duty by Elizabeth Toerper against several defendants. The defendant 1215396 Alberta Ltd. was noted in default on March 24, 2010, and the statement of defence of Graham Hoard and 919035 Alberta Ltd. was struck on June 11, 2010. An order directed that the action be set down for summary trial for an assessment of damages.

Justice J. Strekaf cited Rule 3.37 of the new Alberta Rules of Court, Alta. Reg. 124/2010, which provides that a plaintiff “may, without notice to any other party, on proof of the plaintiff’s claim, apply to the Court for judgment in respect of a claim for which default judgment has not been entered if (a) one or more defendants are noted in default, or (b) the defendant’s statement of defence is struck out.” Under Rule 3.37 (3)(c) and (e), the Court may “direct a determination of damages”, as well as “dismiss the claim or a part of it.” According to Justice Strekaf, Rule 3.37 suggests that “The purpose of an assessment of damages is to determine the quantum of damages, rather than the liability for damages, provided that the facts deemed to have been admitted establish the cause of action.” (at para. 3). This interpretation is consistent with the case law under the predecessor provision to Rule 3.37 in the old Rules of Court (Rule 142(1)), including Robinson v. Fiesta Hotel Group Resorts, 2008 ABQB 311, which stood for the proposition that “the effect of a noting in default is that the defendant has admitted the facts alleged in the statement of claim by the failure to deny them”, however “where the Court is not satisfied that the Plaintiff has a cause of action, the Court has a duty to direct a hearing to determine the matter” (Robinson at paras. 11 and 12, cited in Toerper at para. 4. For Nicholas Rafferty’s ABlawg comment on Robinson see here).

Applying this interpretation to the application for the assessment of damages in Toerper, Justice Strekaf found that the plaintiff had established a claim for breach of contract against Hoard and 919035 Alberta Ltd. based upon the deemed admissions in the amended statement of claim, and damages were awarded on this basis. The causes of action against 1215396 Alberta Ltd. had not been established, and were dismissed.

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