In a proceeding arising from a motor vehicle action, the Alberta Court of Appeal upheld the striking of the statement of claim of an applicant alleging that he was insolvent, given that he had not made an assignment into bankruptcy.
More than 20 years ago, the applicant in Diggs v Weir, 2026 ABCA 279, had a car accident while uninsured. In a 2010 judgment in the motor vehicle action, he executed a consent judgment for $99,205 in the plaintiffs’ favour.
The administrator of Alberta’s Motor Vehicle Accident Claims Act, 2000, paid the plaintiffs. Under s. 5 of the legislation, the judgment was assigned to the administrator.
Since then, in enforcement proceedings, the administrator has been attempting to recover from the applicant. As the judgment remained unsatisfied, s. 102 of Alberta’s Traffic Safety Act, 2000, disqualified the applicant from driving.
Statement of claim
In a statement of claim filed on Sept. 24, 2025, the applicant requested just over $3 million in damages from the respondents, including the administrator. The applicant alleged that:
- He was not properly served with the statement of claim before the entry of the 2010 judgment
- The 2010 judgment included impermissible heads of damage
- Enforcement actions against him under the 2010 judgment violated the stay order
- His license suspension was unconstitutional since he was insolvent under the Bankruptcy and Insolvency Act, 1985 (BIA), which was paramount to the Traffic Safety Act
- The enforcement proceedings breached his right to life, liberty, and security of the person under the Canadian Charter of Rights and Freedoms
- Due to the improper actions against him, he lost his employment, accumulated debt, and experienced mental stress, anxiety, depression, and related health complications
The respondents applied to review the applicant’s statement of claim under the process in Civil Practice Note 7, governing apparent vexatious application or proceeding (AVAP) applications.
The chambers judge struck the claim after considering the applicant’s arguments regarding his driver’s licence suspension and the application of the BIA.
The judge characterized the applicant’s statement of claim as a collateral attack on the 2010 judgment to evade compliance and as an abuse of process under r 3.68(2)(d) of the Alberta Rules of Court, Alta Reg 124/2010.
The judge noted that the applicant had not made an assignment into bankruptcy and could apply to reinstate his driving privileges under the Traffic Safety Act.
Application to extend time
The applicant applied to extend the time to appeal against the chambers judge’s order. He argued that the judge erred by misapplying the collateral attack doctrine and by ignoring his “uncontroverted” bad faith allegations.
The applicant added that the judge failed to analyze the applicant’s Charter claims, fairly assess the applicant’s evidence, uniformly apply the timelines and page restrictions in Civil Practice Note 7, and apply an appropriately strict threshold.
The respondents countered that the applicant’s appeal lacked reasonable prospects of success.
Alberta Court of Appeal denies requests
The Alberta Court of Appeal denied the application to extend time to appeal and his request to reinstate his licence upon seeing no error in the chambers judge’s analysis and conclusions, and no stand-alone, independent cause of action.
Based on the record, the appeal court determined that the chambers judge properly applied timelines and page restrictions, fairly assessed the applicant’s evidence, and thoroughly analyzed his key arguments.
Collateral attack
Agreeing with the chambers judge, the appeal court ruled that the allegations in the statement of claim collaterally attacked the 2010 judgment and the enforcement proceedings taken under it.
In the circumstances, the appeal court held that letting the appeal proceed would benefit nobody, would unduly prejudice the respondents by making them spend the time and incur the expense of responding to an appeal doomed to fail, and would not serve the interests of justice.
Reinstatement denied for driver’s licence
Regarding the request to lift the licence suspension, the appeal court decided that the applicant did not properly raise the issue before it. The appeal court noted that the Traffic Safety Act covered this relief.
More insolvency and restructuring cases
Here are some other recent appellate court decisions involving insolvency and restructuring.
On June 17, the Ontario Court of Appeal granted leave to appeal on the question of whether the Bank of Montreal could use a credit bid to purchase an asset that did not attach to its security – specifically, a potential cause of action against itself – at an auction sale.
On May 25, the Alberta Court of Appeal did not permit an administrator working on contract for a construction business to relitigate an issue previously decided in a judgment that found him liable for misappropriation of funds while acting in a fiduciary capacity.
In a case that arose from a project to develop a limestone quarry, the Manitoba Court of Appeal issued a Mar. 6 decision upholding a finding that a judgment debt fell within the ambit of s. 178(1)(e) of the BIA.
Enjoy this story? Read insolvency and restructuring law news on the main page!