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Monday Morning Case Bites for July 20, 2020

Last Week’s Court Rulings from the Alberta Court of Queen’s Bench, Court of Appeal and SCC.

Edited by Amanda Kostek & Steven Graham

Domenic Construction Ltd v Primewest Capital Corp, 2020 ABCA 265
Amendments to Pleadings | Limitation Period

This was an Alberta Court of Appeal decision affirming the law on late amendments to a Statement of Claim. The Court of Appeal confirmed that generally, amendments are easily obtained:

[20] In general terms, amendments to pleadings are easily obtained: Balm v 3512061 Canada Ltd., 2003 ABCA 98 at para. 43, 14 Alta LR (4th) 221, 327 AR 149. There are a number of recognized circumstances that may bar amendments:

(a) unless permitted by statute, the amendment seeks to add a new party or a new cause of action after the expiry of a limitation period;

(b) the amendment requested is impermissible, sometimes described as “hopeless” (an amendment that, if it had been in the original pleadings, would have been struck);

(c) the amendment would cause serious prejudice to the opposing party, not compensable in costs; or

(d) there is an element of bad faith associated with the failure to plead the amendment in the first instance.

See Eon Energy Ltd v Ferrybank Resources Ltd., 2018 ABCA 243 at para. 18 citing with approval Dow Chemical Canada Inc v Nova Chemicals Corp., 2010 ABQB 524 at paras 20-21, 35 Alta LR (5th) 51, 495 AR 338.

Amendments after the Limitations period has expired are governed by Section 6 of the Limitations Act:

[25]           On this record, it is not possible to tell if the balance of the proposed amendments are or are not timely. The general limitation periods in s. 3 of the Limitations Act are a) two years from when the plaintiff could reasonably have discovered an injury attributable to the defendant that warranted a proceeding, and b) the ultimate limitation period of 10 years after the claim arose.[1] Where amendments are proposed after the expiration of the limitation period, s. 6 of the Limitations Act governs: 

6(1) Notwithstanding the expiration of the relevant limitation period, when a claim is added to a proceeding previously commenced, either through a new pleading or an amendment to pleadings, the defendant is not entitled to immunity from liability in respect of the added claim if the requirements of subsection (2), (3) or (4) are satisfied. . . . 

(4) When the added claim adds or substitutes a defendant, or changes the capacity in which a defendant is sued, 

(a)  the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, and 

(b)  the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on the merits. 

If the amendments raise claims outside the limitation period, they must meet the test in s. 6. When the time for the service of process is added, the effective time limits under s. 6 are three years and 11 years. 

Under Section 6, the preferred procedure is to deal with the limitations issue at the amendment application, and not at Trial: 

[26]           When amendments are proposed after the possible expiry of the limitation period, the preferred procedure is to resolve the limitations issue at the time of the application to amend. Section 6 of the Limitations Act does not contemplate routinely allowing the amendments, and leaving the limitations issues for trial. The decision in Hryniak v Mauldin, 2014 SCC 7 at para. 28, [2014] 1 SCR 87 called for a “shift in culture” in the approach to summary determination of issues. Where a fair and just determination on the expiry of the limitation period can be made on the application to amend, the court should do so. Nevertheless, there are cases where the complexity of the facts or the state of the record preclude a final decision. In those cases, the amendments can be allowed, and the limitations issue sent to trial. 

However, the record in this case was insufficient, and on that basis, the limitations issue would be dealt with at Trial: 

[28]           In summary, a fair and just determination of the limitations issue with respect to the allegation of assignment cannot be made on this record. Those amendments should accordingly be allowed, but the defendants are entitled to raise the limitations defence at trial.