Executive Summary: Key Legal and Evidentiary Issues

• Timeliness of service of originating process under Rule 14.08(2) and whether relief should be granted under Rules 3.01 and 2.01.

• Prejudice to the defendant from delayed service and adequacy of the plaintiff’s notice regarding the claim.

• The defendant’s burden to provide evidence of prejudice when opposing an extension of time.

• Role of pre-litigation communications in supporting lack of prejudice.

• Reasonableness of the plaintiff’s conduct upon discovering the service delay.

• Judicial discretion to validate late service where procedural fairness is not compromised.

Facts and procedural background

Trans Power Utility Contractors Inc. (TP) brought a motion to extend and validate the late service of its Statement of Claim on Promark-Telecon Inc. (Promark). TP had been hired to relocate underground hydro infrastructure for a Metrolinx project and contracted Promark to provide underground utility locate reports. On August 11, 2021, during excavation, TP’s operator struck an active water main that was not marked on Promark’s report, causing significant flooding.

TP promptly notified Promark in October and November 2021 of its intention to hold it responsible, providing supporting documents such as repair invoices and an investigation report. Despite this, TP did not formally commence its action until August 11, 2023 (Notice of Action) and filed the Statement of Claim on September 8, 2023. Due to counsel’s oversight, service was delayed until September 26, 2024—over seven months after the prescribed time had expired.

In the meantime, Metrolinx sued TP and Alectra Utilities for $5 million in damages (the “Metrolinx Action”), and Alectra issued a third party claim against Promark. TP was preparing its own third party claim as well.

Court’s analysis and legal framework

The Court applied Rule 14.08(2), which requires service of the Statement of Claim within six months of the Notice of Action, and considered whether to exercise its discretion under Rules 3.01 and 2.01 to extend time and validate service. The key issue was whether the delay prejudiced Promark.

The Court emphasized that procedural rules are not intended to thwart claims where the merits can be adjudicated without prejudice. It relied on principles from Chiarelli v. Wiens, Howe v. Solart LLL Corp., and Tarsitano v. Drutz, which guide courts to evaluate notice, delay, abandonment, personal involvement, and prejudice contextually.

Findings on prejudice and notice

Promark failed to provide any concrete evidence of prejudice. Although it argued that the late service interfered with its insurance strategy (given overlapping claims totaling $5.25 million and its $4 million coverage limit), the Court found this insufficient. It held that Promark’s coverage would have been insufficient regardless of the timing, and its insurer had already been involved early on, investigating and communicating with TP and Metrolinx.

The Court found that Promark had clear notice of TP’s claim since 2021 and had been actively involved in assessing the incident. It rejected Promark’s claim that the delay affected its litigation strategy or that trial fairness was compromised.

The court’s decision

The motion to extend and validate service was granted. The Court found TP’s delay was due to counsel’s inadvertence, not strategic or intentional. Once discovered, TP acted promptly to rectify the issue. Given Promark’s early notice, its lack of demonstrable prejudice, and TP’s reasonable conduct, the Court held that extending the time for service was just and fair.

The time for service was extended to September 27, 2024, and service was validated as of that date, nunc pro tunc. The parties were encouraged to agree on costs, failing which they could make written submissions.