Fun with amendments

Ontario: the limitations implications of withdrawing a claim

Curtis v. The Bank of Nova Scotia is a recent authority for the principle that removing a claim from a pleading causes the limitation period to continue running.  A plaintiff can’t reintroduce the claim if the limitation period has expired:

[22]       Mr. Curtis’ present Further Fresh As Amended Statement of Claim contains a series of paragraphs concerning what Mr. Curtis calls “bad faith breach of contract.” Having reviewed these paragraphs, I have concluded that they are primarily a reintroduction of the wrongful and constructive dismissal claim Mr. Curtis voluntarily removed from his pleading in January, 2016 almost four years ago. As such, its reintroduction at this point represent a violation of the two year limitation period under the Limitations Act, namely the introduction of a cause of action long after the expiration of the limitation period. Whether Mr. Curtis originally pleaded this cause of action is immaterial. He removed it in January, 2016, four years ago, and cannot now reintroduce it.

Ontario: the timing of amendments to plead discoverability

Marvelous Mario’s Inc. et al. v. St. Paul Fire And Marine Insurance Co.  provides authority for the principle that an amendment to plead discoverability is available at any time:

[52]           The plaintiffs’ pleading is silent as to discoverability. Recognizing the gap in their pleading, the plaintiffs have moved for an order allowing them to amend their pleading to plead discoverability. St. Paul takes no position on the motion. Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194allows for an amendment to be made at any time, even after the conclusion of trial: Hardy v. Herr, 1965 CanLII 225 (ON CA), [1965] 2 O.R. 801 (Ont. C.A.), at para. 2. Discoverability was an issue thoroughly canvassed at trial. I see no prejudice to St. Paul in granting the amendment. Accordingly, the plaintiffs’ motion to amend their statement of claim to plead discoverability is granted.

All of that said, it’s worth noting that the facts setting up a discovery argument are properly pleaded in reply.

Ontario: remember the amendment principles

Master Muir provides a helpful summary of amendment principles in Concord Adex Inc. v. 20/20 Management Limited:

[20]           The law in relation to motions seeking leave to amend a pleading is well settled and was not seriously in dispute on this motion. The applicable principles are summarized in my decision in Greenwald v. Ridgevale Inc., 2016 ONSC 3031 (CanLII), 2016 ONSC 3031 (Master). At paragraph 21 of Greenwald I set out those factors as follows:

• the amendments must not result in prejudice;

• the amendments must be legally tenable;

• the amendments must comply with the rules of pleading;

• a motion to add a party must meet all of the requirements of a motion under Rule 26.01;

• the addition of the party should relate to the same transaction or occurrence;

• the addition of the party should not unduly delay or complicate the hearing;

• the addition of a party will not be permitted if it is shown to be an abuse of process.

It is useful to keep these in mind when considering whether a motion to add a party of the presumptive expiry of the limitation period.

There is also a reminder that standard of discovery applicable when determining whether to add a proposed defendant after the presumptive expiry of the limitation period is reasonable discovery, not possible discovery:

[47]           With respect to all of these arguments it is important to emphasize that it is reasonable discoverability and not the mere possibility of discovery that triggers a limitation period. See Crombie Property Holdings Ltd. v. McColl-Frontenac Inc., 2017 ONCA 16 (CanLII) at paragraph 35; leave to appeal refused, 2017 SCCA No. 85. The proposed defendants appear to be holding the plaintiffs to a standard of perfection. That is simply not the test.

Ontario: Stopping time when adding a new claim to a proceeding

 

A limitations practice tip—when amending a pleading to add a new claim, it’s the filing of the motion record that stops time running, not service of the motion record.  Master Albert recently made this point in Becerra v. Ronchin:

 

41)  The limitations clock does not stop running until a proceeding is launched. In the case of a motion to amend a pleading, the proceeding is launched either when the motion record is served (arguably) or more correctly when the motion record is filed with the court.  This is akin to the issuance of an action or application stopping the limitations clock where a plaintiff is launching a fresh proceeding. Service of an intention to issue a proceeding prior to issuance does not initiate the proceeding. Similarly, service of a notice of motion together with a without prejudice letter and without a motion record does not constitute the launching of a proceeding to amend a pleading in an existing action.

Ontario: Is it really a new cause of action?

You can’t amend a claim to assert a new cause of action if the cause of action is statute-barred.  The question is, when’s an amendment a new cause of action?

In Beauchamp v. Gervais, Justice Dunphy sets out the following test:

[23]           The preceding authorities establish that in order to qualify as something other than a new cause of action the proposed amendments must, in substance, be: (i) an alternative claim for relief, or a statement of different legal conclusions based on no new facts or not going beyond the factual matrix from which the original claim arose; (ii) better particulars of the claims already made; (iii) a correction of errors in the original pleading; or (iv) the assertion of a new head of damage arising from the same facts. If the amendments cannot be characterized in one of these ways, the amendments should not be permitted, in order to not deny a defendant the right to rely upon a limitations statute.

This paragraph follows a lengthy summary of the relevant jurisprudence that’s worth reading if you’re considering the issue.

Ontario: amending a pleaded date of discovery (you can do it)

Here’s a novel limitations issue.  A plaintiff intends to plead that he discovered his claim within the limitation period, but inadvertently pleads that he discovered it on an earlier date so that the claim is statute-barred.  Is the plaintiff entitled to amend the Statement of Claim to plead the correct date, assuming there’s no noncompensable prejudice to the defendant, or is he in effect amending to add a statute-barred claim?

Master Pope held in Islam v. Tadin that it’s just a regular amendment, and the defendant who doesn’t consent to it wrongly seeks advantage from another lawyer’s slip (i.e., a jerk).

The plaintiff’s Statement of Claim in Islam pleaded that he discovered his claim against the defendants in June 2011.  This meant that the limitation period expired in June 2013 and before he issued the Statement of Claim.

The defendants’ pleaded a limitations defence.  Immediately after service of the Statement of Defence, the plaintiff advised defence counsel that the date of discovery pleaded in the Statement of Claim was a factual error.  The plaintiff served a proposed amended Statement of Claim, but the defendants refused their consent to the amendment.

The defendants’ position was that the plaintiff wasn’t entitled to amend his pleading to bring the claim within the limitation period.  Just as the expiry of a limitation period gives rise to a presumption of prejudice, an amendment that makes a statute-barred claim timely gives rise to the same presumption of prejudice.  The expiry of the presumptive limitation period in section 5(2) of the Limitations Act gave rise to a further presumption of prejudice.

If there was any logic to these arguments, it’s hard to tell from the decision.  One senses that Master Pope wasn’t impressed with them, noting with what I imagine was some irritation that “a great deal of material was filed and time spent on the defendants’ submissions”.  In any event, Master Pope rejected them.

The plaintiff was not seeking to add claim beyond the limitation period, or even a claim at all.   The issue of the expired limitation period arose when the plaintiff served the Statement of Claim, not because of the proposed amendments.  The amendment did not engage section 5(2) at all.  The presumptive limitation period wasn’t at issue, but when the plaintiff pleaded he had subjectively discovered the claim.

Master Pope also took note of the circumstances of the motion. Plaintiff’s counsel immediately sought consent for the amendment.  The plaintiff filed an uncontested affidavit stating that the date of discovery pleaded in the Statement of Claim was unintentional and incorrect.  In her view, the motion “was unnecessary given the mandatory wording of rule 26.01 and the fact that there was no case law to support the defendants’ position.  She awarded substantial indemnity costs against the defendant.

Alberta: The new limitation period for contribution claims explained

Whitecourt Power Limited Partnership v. Elliott Turbomachinery Canada Inc.  is the first Court of Appeal decision to consider the recent amendments to the Limitations Act establishing a limitation period specific to claims for contribution under the Tort-feasors Act.  These are the paragraphs discussing the amendments:

[33]           By amendment assented to on December 17, 2014 the Limitations Act now provides for limitation periods specific to claims for contribution under theTort-feasors Act.

[34]           Section 3 of the Limitations Act provides:

(1.1)  If a claimant who is liable as a tort‑feasor in respect of injury does not seek a remedial order to recover contribution under section 3(1)(c) of theTort‑feasors Act against a defendant, whether as a joint tort-feasor or otherwise, within

(a)  2 years after

(i)  the later of

(A)   the date on which the claimant was served with a pleading by which a claim for the injury is brought against the claimant, and

(B)   the date on which the claimant first knew, or in the circumstances ought to have known, that the defendant was liable in respect of the injury or would have been liable in respect of the injury if the defendant had been sued within the limitation period provided by subsection (1) by the person who suffered the injury,

if the claimant has been served with a pleading described in paragraph (A), …

whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim for contribution.

(1.2)  For greater certainty, no claim for contribution against a defendant in respect of damage referred to in section 3(1)(c) of the Tort‑feasors Act is barred by the expiry of a limitation period within which the person who suffered that damage could seek a remedial order.

[35]           The applicable Hansard (Bill 8 Justice Statutes Amendment Act, 2014, December 8, 2014) states:

Bill 8 proposes amendments to … clarify … when the discovery limitations period begins for a claim for contribution under the Tort-feasors Act. So when a plaintiff brings an action, they don’t have to list all the possible defendants who may have been responsible for the injury. However, the current law allows a defendant to bring a claim against another person that they believe is also responsible for the same injury to the plaintiff. This proposed change clarifies how the limitation period runs when a defendant brings a claim against another person responsible for the same injury to the plaintiff, and these wording changes are intended to further clarify this change. These clarifications were brought forward to us by the Law Society of Alberta, and the drafters of this amendment worked closely with the Law Society to ensure that every lawyer was satisfied with the new wording of this section.

[36]           In short, subsection 1.1 creates a specific limitation period for tort-feasors’ claims against each other, when previously the common law informed that issue. Subsection 1.2 clarifies that expiry of the limitation period as between the plaintiff and the third party no longer prevents the defendant from claiming contribution from another tort-feasor under the Tort-feasors Act. It gives the defendant two years from the later of the date served and discoverability to seek indemnity from other tort-feasors. Those subsections overcome the difficulties addressed by this court in Howalta and in Arcelormittal Tubular Products Roman SA v Fluor Canada Ltd, 2013 ABCA 279 (CanLII), 556 AR 188, and state the law as it was interpreted in Dean per Slatter J (as he then was). The amendments are deemed to have come into force on March 1, 1999.

[37]           The amendment makes clear who as between plaintiff and the defendant “ought to have known” that the third party was jointly liable for the claimant’s injury in order to satisfy the discoverability requirements of the Limitations Act. For statutory contribution under the Tort-feasors Act, the answer must now be the defendant. This also accords with Dean, in which the court said that discoverability was when the defendant ought to have known that the third party had a duty to contribute because of their joint liability. If so, the plaintiff’s knowledge of the third party’s joint liability is irrelevant.

[38]           The mechanics of litigation associated with third party claims (r 3.44) or statutory claims for contribution (r 3.43) appear to dictate that the statement of claim must be extant before a claim for contribution can be filed. In other words, service of the statement of claim is always the earliest date the limitations period can begin (absent a right of contribution independent of the claimant’s suit, which does not apply on these facts).

[…]

[41]           We note that subsection 3(1.1)(a)(i) contemplates discoverability later than service of the statement of claim. “Under the presumption against tautology, ‘[e]very word in a statute is presumed to make sense and to have a specific role to play in advancing the legislative purpose’ …. To the extent that it is possible to do so, courts should avoid adopting interpretations that render any portion of a statute meaningless or redundant”: Placer Dome Canada Ltd v Ontario (Minister of Finance), [2006] 1 SCR 715 at para 45, 2006 SCC 20 (CanLII). Applying this presumption, there must be circumstances when the discoverability limitation period post-dates service of the statement of claim.