Executive Summary: Key Legal and Evidentiary Issues

• Scope of the defendants’ liability is unclear where EPCOR pleads that one or more Ledcor entities or ABC Corporation caused the cement-based blockage but does not particularize each entity’s specific role.
• Adequacy of pleadings is questioned because the statement that the “Ledcor Group” is collectively responsible is treated as an unsupported legal conclusion rather than a fact-based cause of action.
• Sufficiency of proof on a default judgment desk application is in issue, as the Court insists that even with noted default, there must be a viable, factually grounded cause of action before judgment is granted.
• Validity of service becomes critical, with deficiencies identified in affidavits of service on several Ledcor entities, including lack of corporate searches and issues arising from counsel’s conditional acceptance of service.
• Procedural propriety of proceeding without notice under r 3.37 is scrutinized given that the respondents are sophisticated commercial parties, some represented by counsel, and there is no demonstrated prejudice from giving notice.
• Judicial emphasis on foundational objectives of the Rules leads the Court to adjourn the application, underscoring that “shortcuts to judgment” in default situations risk wasted time and expense rather than efficient, credible remedies.

Facts of the case

Epcor Water Services Inc (EPCOR) operates sewer mains in downtown Edmonton. In July 2022, two of its downtown sewer mains were allegedly filled with cement-based material, causing sewer backups and requiring remedial work. EPCOR attributes this damage to construction activities at a site located at 10125–108 Street NW in Edmonton. The site was associated with several Ledcor entities: Ledcor Industries Inc (LII), Ledcor Construction Limited (LCL), Ledcor Developments Ltd (LDL) and Ledcor Construction Group Ltd (LCG), collectively defined in the Statement of Claim as the “Ledcor Group”. EPCOR pleads that the Ledcor Group was the owner and construction manager of the site and was responsible for all activities related to that construction project. EPCOR further alleges that the Ledcor Group engaged ABC Corporation (ABC) to perform work at the site, although the precise details of ABC’s engagement are not known to EPCOR. EPCOR’s theory is that one or more of the Ledcor entities, ABC, or those acting on their behalf, carried out cement-based work that resulted in the cement flowing into and blocking EPCOR’s sewer mains. As a result of this obstruction, EPCOR claims to have incurred significant costs in restoring the sewer mains.

Claims advanced and legal basis

In its Statement of Claim, EPCOR pleads that the defendants or those acting on their behalf caused two EPCOR sewer mains to be filled with cement-based material, resulting in sewer backups and damage. The pleading asserts that the damage to the mains was caused by the defendants’ “breaches of duties and obligations, acts, omissions, and negligence” and, in the alternative, by trespass and nuisance. EPCOR further pleads that the defendants are vicariously liable for the acts and omissions of those who acted on their behalf. The claim therefore engages tort principles of negligence, nuisance and trespass, as well as vicarious liability in a construction context. The claim is framed broadly: all four Ledcor entities are grouped together as the “Ledcor Group” and are collectively said to be the owner and construction manager and responsible for all activities at the site. EPCOR does not distinctly attribute specific conduct to each corporate defendant but instead relies on a collective characterization of responsibility for the work that allegedly led to the sewer damage. No insurance policy or contractual policy wording is discussed in this decision; the reasons focus on tort liability, procedural issues, and proof rather than on policy interpretation or specific contractual clauses.

Evidence and quantum of damages claimed

To support its desk application, EPCOR relied on the affidavit of Mr. Bulat, an EPCOR Manager. His affidavit mirrors the collective approach of the pleadings by speaking in general terms about the “Ledcor Group” rather than separating out the role of each corporate defendant. The affidavit asserts that the Ledcor Group was responsible for construction on the site where the incident occurred. It also details EPCOR’s alleged losses. EPCOR claims a total of $718,588.75 in damages and further seeks $97,589.27 in interest and costs. The damages figures are broken down between internal and external expenditures: EPCOR asserts that it incurred $230,370.83 in internal costs and $488,217.92 in contractor costs to restore the two sewer mains. The affidavit includes an explanation of how internal costs were tracked and provides a detailed ledger, along with invoices for contractor expenses. While this material addresses the quantum of loss and links it to EPCOR’s remedial efforts, it does not provide detailed evidentiary support connecting particular defendants or particular acts or omissions to the cement-based blockage itself.

Procedural posture and default judgment application

The application came before the Court as a desk application by EPCOR under rule 3.37(1)(a) of the Alberta Rules of Court. That rule permits a plaintiff, without notice to any other party, to apply for judgment where one or more defendants have been noted in default, provided default judgment has not already been entered. EPCOR sought to take advantage of this mechanism and applied, without notice, for judgment against the Ledcor respondents for the damages, interest and costs it claimed. The Court emphasized that, even where a defendant has been noted in default, it retains discretion under the Rules to direct that a hearing be held on notice before judgment is granted. The judge referenced rule 3.37(3)(b) and (f), as well as the decision in TLA Food Services Ltd v 1144707 Alberta Ltd, to underscore that the Court must still be satisfied that the claim discloses a viable cause of action and that procedural fairness is maintained. The Court also relied on the longstanding authority of Spiller v Brown, which affirms that a defaulting defendant does not entitle the plaintiff to automatic judgment; the Court must be satisfied that the pleadings support the relief sought and that any legal conclusions are supported by factual allegations.

Pleading and evidentiary deficiencies identified by the Court

The judge scrutinized the way EPCOR framed the responsibility of the defendants. The Statement of Claim defined all four Ledcor entities collectively as the “Ledcor Group” and alleged that this group was the owner and construction manager of the site and was responsible for all related activities. It also claimed that one or more of the Ledcor entities or ABC was responsible for the cement-based work that caused the blockage and that the resulting damage was due to the defendants’ negligence or, alternatively, trespass and nuisance, with vicarious liability pleaded over those acting on their behalf. The Court found that the Claim’s statement that the “Ledcor Group” is collectively responsible for the work that caused the damage is an unsupported legal conclusion rather than a clearly pleaded factual basis for each defendant’s liability. The affidavit of Mr. Bulat did not cure this defect, as it also spoke generically about the Ledcor Group without differentiating the conduct or legal responsibility of the individual entities. In light of Spiller v Brown, the Court held that it must be satisfied, even in a default context, that the pleadings disclose a viable cause of action. Here, the Court was not satisfied that EPCOR’s broad and collective pleading, unsupported by more specific factual material, met that standard.

Issues with service and default

The Court also examined the adequacy of service on the defendant corporations. For LII, LDL and LCG, EPCOR’s affidavits of service stated that these entities were served by registered mail directed to their registered corporate offices, and proof of delivery with signatures dated June 24, 2025 was attached. The Alberta Rules of Court, via r 11.4, permit service of commencement documents in accordance with other enactments, and s 256 of the Business Corporations Act allows for service on a corporation by registered mail to its registered office. However, the judge noted a key omission: the affidavits did not include corporate searches evidencing that the address to which the materials were mailed was, in fact, the registered office of each corporation. This omission rendered those affidavits of service deficient. With respect to LCL, the affidavit of service stated that its counsel accepted service by email on April 7, 2025. The correspondence attached showed that EPCOR’s counsel assured LCL’s counsel that no defence would be required at that time and that reasonable notice would be provided if a defence later became necessary. There was no evidence before the Court that EPCOR ever gave such subsequent notice or demanded a defence before moving for default judgment. In these circumstances, the Court regarded the affidavit of service in relation to LCL as deficient as well, given the assurances made and the lack of evidence that those assurances were revisited before seeking default judgment.

Considerations on notice, prejudice and professional obligations

Although r 3.37 allows applications for default judgment to proceed without notice, the Court stressed that this rule cannot be applied in isolation from broader procedural and ethical principles. Counsel must exercise judgment in deciding whether it is appropriate to proceed ex parte, having regard to their professional obligations and the foundational objectives of the Rules of Court. The Court referred to the commentary under the Law Society of Alberta’s Code of Conduct, which advises that where no prejudice would result, counsel should consider giving notice even if a rule permits an ex parte procedure. The Court explained that “prejudice” means real injury or damage, not simply the prospect that a respondent might wish to contest the application. The foundational rules also emphasize that the Court’s role is to provide effective, efficient and credible remedies. In the judge’s view, “shortcuts to judgment” that rely on defective service or inadequate pleadings are none of those things; they typically result instead in further applications to set aside questionable judgments and a corresponding waste of time and expense. Here, the respondents were sophisticated commercial entities, and one of them was in fact represented by counsel. In the absence of any demonstrated prejudice from giving notice, the Court concluded that EPCOR should have provided notice rather than attempting to proceed without notice on a desk application.

Outcome and effect on the parties

Having identified both pleading and service deficiencies and having weighed the broader procedural considerations, the Court declined to grant default judgment to EPCOR. Instead, EPCOR’s application for judgment was adjourned to no fixed date. The judge directed that if the application is set back down in the future, it must be brought on notice to the respondents. EPCOR was instructed, pursuant to r 9.2(1), to prepare the form of order for the judge’s review. As a result of this decision, no defendant was found liable, and no damages, interest or costs were awarded. EPCOR remains free to pursue its claim, but it must address the identified deficiencies, provide notice, and properly prove its case if it wishes to obtain judgment. Accordingly, there is no clearly successful party on the merits at this stage, and the total monetary award—whether for damages, interest or costs—in favour of any party cannot be determined because no money judgment or cost order has been made in this decision.