Procedure

Ontario: the timing of amendments, and some words on laches

The Superior Court in Barker v. Barker is perhaps the most extreme example of an eleventh-hour motion to amend to plead discoverability.  The plaintiffs moved in the third week of trial to amend their Statement of Claim to plead reliance on ss. 5 and 16 of the Limitations Act in response to the defendants’ limitations defence (the decision is silent on why the plaintiffs chose to amend their Statement of Claim rather than file a Reply).  Justice Morgan didn’t find that the delay was fatal to the motion:

[8]               Whether or not the motion to amend would have been better brought before trial began rather than in its third week, what is clear is that the limitations issues, including as the Court of Appeal says, the application of section 16(1)(h.2) and the doctrine of discoverability, come as no surprise to the Defendants. They knew these issues were raised by the Plaintiffs in the 2017 motion before Perell J. Plaintiffs’ counsel has reproduced in their motion record copies of the factums from the 2017 motion, where these issues were argued for many paragraphs by both sides. As indicated above, the Defendants all knew that the 2018 judgment of the Court of Appeal had specifically reserved these issues for a later date, mentioning the trial itself as the likely time for canvassing section 16(1)(h.2) and discoverability.

[9]               Although mid-trial pleadings amendments are not encouraged as a matter of case management, Rule 26.02(c) provides that a pleading may be amended at any time, without limitation, with leave of the court. Moreover, the amendment rule is written in mandatory language. Rule 26.01 provides that, “On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.” Accordingly, a party seeking to prevent a pleading from being amended “must establish a link between the non-compensable prejudice and the amendment. It must show that the prejudice arises from the amendment”: Iroquois Falls Power Corp. v Jacobs Canada Inc., 2009 ONCA 517 (CanLII), at para 20.

The decision is also noteworthy for its consideration of the role of discoverability in a laches analysis.  It is impossible to assess the impact of delay in suing without knowing when the plaintiff first ought to have known of the claim:

[25]           Embedded in this argument is the idea that different questions would be asked in an equitable laches case than in a statutory limitation case. More specifically, it assumes that discoverability, which is an integral part of a limitation period analysis both at common law and under statute, is not at issue in a laches analysis. That sounds somewhat plausible at first blush – after all, the equitable doctrine of laches is, like all doctrines of equity, related to but different in nuance from limitation periods as its nearest relative at law. Limitation periods are hard numerical rules while laches is a principle that requires a weighing of the competing equities: Manitoba Metis Federation Inc. v Canada (Attorney General), 2013 SCC 14 (CanLII), [2013] 1 SCR 623, at paras 145-6. That difference, however, is not always as substantive as it may appear.

[26]           Almost a century ago, English legal scholar John Brunyate stated, “since delay by a plaintiff who has been ignorant of his right of action will not amount to laches, we should expect that…time will not run until the plaintiff is aware of his right of action.” Limitation of Actions in Equity (London: Stevens & Sons, 1932), c. 2, cited approvingly in M(K) v M(H), 1992 CanLII 31 (SCC), [1992] 3 SCR 6. We need not delve into legal history to see that that logic makes sense. It would be impossible to evaluate the equities of a delay in bringing an action without knowing when the Plaintiff first realized he or she had been wronged.

[27]           In fact, the weighing of equities in a laches analysis specifically involves asking whether the claimant has acquiesced in the delay, which in turn involves evidence of the claimant’s state of mind and level of knowledge of the facts on which the cause of action is premised: Manitoba Metis Federation, at para 147. One can’t acquiesce in something one hasn’t discovered. It is little surprise, therefore, that the Supreme Court of Canada has indicated that the equitable doctrine of laches essentially mirrors the common law doctrine of discoverability: “It is not enough that the plaintiff knows of the facts that support a claim in equity; she must also know that the facts give rise to that claim”: M(K), supra, citing Re Howlett, [1949] Ch. 767.

[28]           The Supreme Court in M(K) has specifically confirmed with respect to discoverability and laches that “both doctrines share the common requirement of knowledge on the part of the plaintiff.” The indicia of that knowledge – what did the Plaintiff know with respect to the alleged wrongs and his legal rights and when did he know it – will be the subject of discovery under both rules. It defies logic and the nature of the two very similar legal principles to say that a Defendant knew full well he had to discover on the issue of laches, but that he is greatly disadvantaged to now learn that he also had to discover on the issue of discoverability. The information sought and the questions asked will be virtually the same.

This analysis came in the context of a rather astonishing (and unsuccessful) argument by the Crown.  It denied having notice that discoverability was in issue despite having asked questions about discoverability on examination for discovery.  The Crown explained this contradiction by throwing a junior under the bus: apparently, the junior went rogue and asked the discoverability questions without instructions:

[19]           Turning to the discoverability doctrine, Defendants’ counsel contend that they have not had an opportunity to examine the Plaintiffs for discovery on the discoverability issue. They submit that at this late date, with the trial already underway, the motion to amend must either be dismissed outright or granted together with an adjournment of the trial so that further discovery can be conducted. Otherwise, they say, they are made to essentially defend a trial by ambush.

[20]           Counsel for the Plaintiffs responds with some incredulity. Plaintiffs’ motion record contains over a thousand pages of discovery transcripts in which the discoverability issue was explored with various Plaintiffs by Defendants’ counsel. Plaintiffs’ counsel point out that Defendants’ counsel canvassed everything from the dates that the Plaintiffs first contacted their present counsel, to previous complaints and law suits brought by any number of Plaintiffs, to the Plaintiffs’ awareness of and access to duty counsel while at Oak Ridge in the 1970s, to the letter writing campaigns engaged in by several of the Plaintiffs over the decades seeking to put a stop to the kind of acts in issue in this litigation. In addition, in the affidavits sworn by each of the Plaintiffs for the 2017 motion, and which by agreement of the parties now form part of the trial record, the Plaintiffs each provide information on the dawn of this case and how and when they personally became involved or realized that they could engage in a legal action.

[21]           Counsel for the government of Ontario at discoveries asked a number of the Plaintiffs for undertakings with respect to these issues, and followed up on those requests by sending Plaintiffs’ counsel an undertakings chart listing and describing each of the outstanding answers. The chart divided the outstanding undertakings into three categories, listing each of the undertakings as going to either “Liability”, “Damages”, or “Discoverability”. The label of this third category was not a Freudian slip; a perusal of the undertakings falling under this heading reveals precisely the kind of questions one would ask in order to unearth the opposing side’s discoverability position. Various Plaintiffs responded by indicating when in the past they learned about, and with whom and when in the past they had spoken about, the prospect of a law suit relating to their Oak Ridge experiences.

[22]           It is not surprising that Defendants’ counsel asked these questions. Discoverability, as Perell J. and the Court of Appeal pointed out, has long been an issue to be addressed in the case.

[23]           Defendants’ counsel responds by conceding that all of those questions were indeed asked, but says that they were for the most part meant to address the issue of laches as it pertains to the equitable claim of breach of fiduciary duties. It is the Defendants’ position that discoverability under the Act or at common law is a response to a defense which places an onus on the Plaintiff, and so it did not have to be canvassed at discoveries (or addressed at trial) if the Plaintiff did not specifically plead it.

[24]           At the same time, it is the Defendants’ position that with respect to the claim of breach of fiduciary duties the doctrine of discoverability does not apply either at common law or under the pre-Act limitations statutes in force in Ontario, but that the equitable doctrine of laches applies. Defendants’ counsel concedes that the onus is on the Defendant to establish the unfair delay on which the laches principle is premised. Accordingly, counsel for the Defendants explains that in their view, discoverability does not have to be explored in pre-trial examinations if the Plaintiff has not bothered to plead it, but laches has to be explored because it is clearly relevant and the Plaintiff need not plead it.

[29]           Interestingly, counsel for the Defendants conceded in argument that examinations on the issue of discoverability were in fact conducted with respect to 7 of the 28 Plaintiffs. Defendants’ counsel’s explanation for this is that, apparently, a very diligent young lawyer for the government of Ontario conducted the discoveries on those individual Plaintiffs, and was foresightful enough to pose questions exploring the discoverability issue. As for the rest of the individual Plaintiffs, other lawyers on the Defendants’ counsel team conducted those discoveries and the discoverability questions were not asked. Accordingly, the Defendants are not seeking to eliminate the doctrine of discoverability from the analysis of the limitation period with respect to 7 of the 28 Plaintiffs, but are seeking to eliminate it with respect to the remaining 21 Plaintiffs.

[30]            With respect, this position is not tenable. In the first place, counsel for Ontario asked for undertakings regarding discoverability from 13 of the Plaintiffs. If only 7 Plaintiffs were questioned about discoverability, how is it that undertakings were extracted from 6 more of them? Perhaps others on the Defendants’ counsel team were more foresightful and diligent than they have been given credit for.

[31]           But that is only part of the point. If the Defendants’ position is to be taken seriously, the young lawyer who supposedly on his or her own asked about facts going to the discoverability issue would have been fishing for information that, in the Defendants’ view, he or she had no right to ask about. Not surprisingly, Plaintiffs’ counsel did not object to this line of questioning and provided answers that now satisfy the Defendants such that they are not discounting the discoverability doctrine with respect to those 7 deponents. What was wrongful from the Defendants’ point of view when it was done has suddenly become rightful now that it helps explain some of the discoverability questions which the Defendants did in fact explore with the Plaintiffs.

[32]           Furthermore, if one lawyer on the Defendants’ team knew about the discoverability doctrine, they all knew about the discoverability doctrine. In order to put an opponent on notice in litigation, one conveys the notice to opposing counsel – any number of them or any one of them will do. If one member of a law firm of record has notice, or one member of the Ministry of the Attorney General is aware of an issue in the action, they all are presumed to have notice and be aware of the issue. The young lawyer who asked discoverability questions is not being presented as a rogue acting beyond his retainer; quite the opposite. He is being presented as a perhaps more thorough or diligent version of all the other Defendants’ lawyers.

Ontario: the Court of Appeal on adding a new claim

In Klassen v. Beausoleil, the Court of Appeal provides a helpful summary of the analysis for determining whether proposed amendments assert a fundamentally new claim:

(1)         The test to be applied

[24]      I begin with the text of r. 26.01 of the Rules. It provides:

On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. [Emphasis added.]

[25]      The rule is framed in mandatory terms: the court must allow the amendment, unless the responding party would suffer non-compensable prejudice, the proposed pleading is scandalous, frivolous or vexatious, or the proposed pleading fails to disclose a reasonable cause of action: 158844 Ontario Ltd v. State Farm Fire and Casualty Co., 2017 ONCA 42 (CanLII), 135 O.R. (3d) 681, at para. 25; Iroquois Falls Power Corp. v. Jacobs Canada Inc., 2009 ONCA 517 (CanLII), 264 O.A.C. 220, at paras. 15-16.

[26]      The expiry of a limitation period is one form of non-compensable prejudice. A party cannot circumvent the operation of a limitation period by amending their pleadings to add additional claims after the expiry of the relevant limitation period: Frohlick v. Pinkerton Canada Ltd, 2008 ONCA 3 (CanLII), 88 O.R. (3d) 401, at para. 24; 1100997 Ontario Ltd. v. North Elgin Centre Inc., 2016 ONCA 848 (CanLII), 409 D.L.R. (4th) 382, at paras. 21-23; United Food and Commercial Workers Canada, Local 175 Region 6 v. Quality Meat Packers Holdings Limited, 2018 ONCA 671 (CanLII), at paras. 64; Davis v. East Side Mario’s Barrie, 2018 ONCA 410 (CanLII), at paras. 31-32. In this regard, the “addition of new statute-barred claims by way of an amendment is conceptually no different than issuing a new and separate Statement of Claim that advances a statute-barred claim” (emphasis added): Quality Meat Packers, at para. 64; citing Frohlick, at para. 24.

[27]      An amendment will be statute-barred if it seeks to assert a “new cause of action” after the expiry of the applicable limitation period: North Elgin, at paras. 19-23, 33; Quality Meat Packers, at para. 65. In this regard, the case law discloses a “factually oriented” approach to the concept of a “cause of action” – namely, “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”: North Elgin, at para. 19; Quality Meat Packers, at para. 65.

[28]      An amendment does not assert a new cause of action – and therefore is not impermissibly statute-barred – if the “original pleading … contains all the facts necessary to support the amendments … [such that] the amendments simply claim additional forms of relief, or clarify the relief sought, based on the same facts as originally pleaded”: Dee Ferraro, at paras. 4, 13-14; North Elgin Centre Inc., at paras. 20-21; East Side Mario’s Barrie, at paras. 31-32; Quality Meat Packers, at para. 65. Put somewhat differently, an amendment will be refused when it seeks to advance, after the expiry of a limitation period, a “fundamentally different claim” based on facts not originally pleaded: North Elgin, at para. 23.

[29]      The relevant principle is summarized in Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 3rd ed. (Toronto: LexisNexis, 2017), at p. 186:

A new cause of action is not asserted if the amendment pleads an alternative claim for relief out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon [which] the original right of action is based.[2]

[30]      In the course of this exercise, it is important to bear in mind the general principle that, on this type of pleadings motion, it is necessary to read the original Statement of Claim generously and with some allowance for drafting deficiencies: Farmers Oil and Gas Inc. v. Ontario (Ministry of Natural Resources), 2016 ONSC 6359 (CanLII), 134 O.R. (3d) 390 (Div. Ct.), at para. 23.

[31]      Finally, the court may refuse an amendment where it would cause non-compensable prejudice. The prejudice must flow from the amendment and not some other source: Iroquois Falls, at para. 20. At some point the delay in seeking an amendment will be so lengthy, and the justification so inadequate, that prejudice to the responding party is presumed. In this event, the onus to rebut the presumed prejudice lies with the moving party: State Farm, at para. 25.

[32]      Alternatively, the responding party may resist the amendment by proving actual prejudice – i.e. by leading evidence that the responding party has lost an opportunity in the litigation that cannot be compensated by an adjournment or an award of costs as a consequence of the amendment. It is incumbent on the responding party to provide specific details of the alleged prejudice: State Farm, at para. 25.

[33]      Irrespective of the form of prejudice alleged, there must be a causal connection between the non-compensable prejudice and the amendment. The prejudice must flow from the amendment and not from some other source: State Farm, at para. 25.

[34]      Bearing in mind these principles, the framework to determine the issues raised by this appeal is as follows:

  •     Are the proposed amendments to assert a claim to a 33% ownership interest the assertion of a “new cause of action”? If the proposed amendments are the assertion of a new cause of action, are the amendments statute-barred?

  •     Irrespective of the above, is this a case where non-compensable prejudice will arise as a consequence of the amendments?

Ontario: the denial of summary judgment on a limitations defence isn’t necessarily determinative of the defence

 

The Divisional Court’s decision in Barrs v. Trapeze Capital Corp. is a reminder that when the court denies a summary judgment motion on a limitations defence, the order isn’t determinative of the limitations defence absent explicit language to that effect:

[36]           And in Skunk, at para. 60, the Court of Appeal stated that in the absence of an express indication by the motion judge that his or her determination is to be binding on the parties at trial, it should be presumed that in expressing a conclusion on a point of law when dismissing a summary judgment motion she is simply explaining why she concluded that there is a genuine issue requiring a trial, and did not intend her determination to be binding on the parties.

[37]           Our reading of the reasons of the motions judge leaves us uncertain about whether he intended to make final and binding findings of fact and conclusions on the legal consequences of those facts. The parties evidently see things the same way, having pursued an appeal route applicable to interlocutory rather than final orders.

[38]           Given the absence of an express determination of this issue, we are of the view that the motion judge did not intend his conclusions to be binding on the parties.

A party that wants the limitations defence determined should ask the court to do so explicitly.

Ontario: the limitation of new causes of action

In David v. Easte Side Mario’s Barrie, the Court of Appeal quotes from The Law of Civil Procedure in Ontario for the principle that an alternative claim for relief arising out of the same facts is not a new cause of action for limitations purposes:

[32]      And, quoting from Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 3d ed. (Toronto: LexisNexis Canada, 2017), at p. 186:

A new cause of action is not asserted if the amendment pleads an alternative claim for relief out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon [which] the original right of action is based.

See also 1100997 Ontario Limited, at para. 20.

Ultimately, the Court applied the “fundamentally different claim” test to conclude that the plaintiff wasn’t entitled to the amendment.

As I discussed when the Court of Appeal last addressed this issue, the “fundamentally different claim” test makes a lot of sense.

My complaint, which I recognise verges on pedantry, is that a cause of action analysis, and the casual use of the word “claim”, is problematic in the limitations context.  The Limitations Act has nothing to do with causes of action, and, as I often note, does not appear in the Act.  This is because the Act uses the language of “claim”, which reflects an intentional break with cause of action accrual as determinative of the commencement of time.  Claims are not causes of action, and causes of action have very little do with the operation of the current limitations scheme.  It’s unhelpful when the Court fails to account for this.

Ontario: The Court of Appeal on adding new claims to a proceeding

The Court of Appeal in 1100997 Ontario Limited v. North Elgin Centre Inc. sets out the test for amending a pleading to add a new claim outside a limitation period (making our last post rather unnecessary).  The court will refuse an amendment when it seeks to advance after the expiry of the limitation period a “fundamentally different claim” based on facts not originally pleaded:

[19]      A cause of action is “a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”: Letang v. Cooper, [1965] 1 Q.B. 232 (C.A.), at pp. 242-43, as adopted by this court in July v. Neal (1986), 1986 CanLII 149 (ON CA), 57 O.R. (2d) 129 (C.A.), at para. 23.

[20]      In Morden & Perell, The Law of Civil Procedure in Ontario, 2nd ed. (Markham: LexisNexis Canada Inc., 2014), at p. 142, the authors state:

A new cause of action is not asserted if the amendment pleads an alternative claim for relief out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon which the original right of action is based. [Footnotes omitted.]

[21]      In Dee Ferraro Ltd. v. Pellizzari, this court noted the distinction between pleading a new cause of action and pleading a new or alternative remedy based on the same facts originally pleaded. The appellants had commenced an action against their lawyer claiming damages for breaches of contract, trust and fiduciary duty and for fraud and negligence. The appellants then sought to amend their pleading. This court, in overturning the motion judge’s dismissal of the motion to amend, concluded that the proposed amendments, such as claims for a mandatory order and a constructive trust over shares, could be made because they flowed directly from facts previously pleaded.

[22]      By contrast, a proposed amendment will not be permitted where it advances a “fundamentally different claim” after the expiry of a limitation period: Frohlick v. Pinkerton Canada Ltd. In that case, the court did not permit the plaintiff in a wrongful dismissal action to amend the statement of claim to assert a claim for damages for constructive dismissal on the basis that the limitation period had expired. This court dismissed the appeal. The amendment regarding constructive dismissal related to events that occurred prior to the events described in the original statement of claim that were unrelated to that claim. The defendant was unaware of the new allegations prior to the plaintiff seeking the amendments, and the events were not put in issue or encompassed within the original claim.

[23]      Based on the foregoing, an amendment will be refused when it seeks to advance, after the expiry of a limitation period, a “fundamentally different claim” based on facts not originally pleaded.

I think this is a sound conclusion. Allowing amendments so long as they don’t advance a fundamentally different claim based on the facts originally pleaded makes sense, though it doesn’t seem like much of a departure from the “same factual matrix” test.  Indeed, later in the decision Justice van Rensburg refers to the factual matric concept:

[38]      I therefore conclude that the proposed amendments contained in the statement of claim ought not to have been refused on the basis that they raised new claims based on new causes of action.

Perhaps this new formulation’s chief virtue is that it doesn’t necessarily require a cause of action analysis.  Comparing claims is materially different than comparing causes of action.  “Claim” is a defined term in the Limitations Act, whereas the words “cause of action” don’t appear at all in the Limitations Act, and particular causes of action and their accrual are immaterial to a limitations analysis.  Mischief results when the court forgets this.

Other aspects of the decision are noteworthy.  Justice van Rensburg concludes that when a notice of application commences a proceeding, the court should consider both the notice of application and the supporting affidavit material to determine whether a proposed amendment sets forth a new claim.

Justice van Rensburg follows the 1989 Court of Appeal decision in Energy Probe v. Canada (Attorney  General) for the principle that affidavit materials on an application form part of the pleadings.  The interesting question that arises from this principle is its interaction with the affirmative nature of a limitations defence.  In an action, the defendant must plead the Limitations Act in the statement of defence.  The plaintiff may then plead the facts supporting a discovery argument in reply.  See the Court of Appeal decision in Collins.

Does this mean that the respondent to an application should “plead” the limitations defence in  a responding affidavit? Should the applicant then plead the facts supporting a discovery argument in a reply affidavit?  Increasingly, I’m of the mind that it’s impossible to square limitations law and application procedure (with certain exceptions, especially contested applications to pass accounts), but this is an issue (and likely an article) for another day.

Lastly, Justice van Rensburg  also reminds us that an order refusing leave to amend a pleading to add a new claim outside a limitation period is a final order:

[17]      In Energy Probe v. Canada (Attorney General) (1989), 1989 CanLII 258 (ON CA), 68 O.R. (2d) 449 (C.A.), leave to appeal refused 37 O.A.C. 160 (S.C.C.), in determining whether a cause of action was disclosed, this court stated that “affidavit materials on an application are to be considered as the pleadings” (at para. 10). Further, where oppression proceedings commenced by notice of application were converted into an action in Przysuski v. City Optical Holdings Inc., 2014 ONSC 3686 (CanLII), Perell J. refused to strike paragraphs of the statement of claim as raising unanticipated claims as an abuse of process because “[t]he Notice of Application should be read with its supporting affidavits and with the evidentiary record for the Application” (at para. 11).

Ontario: the limitation of adding new claims to a proceeding

 

Justice Nordheimer’s decision in Farmers Oil and Gas Inc. v. Ontario (Natural Resources) has a useful overview of the jurisprudence of amending a pleading to add a new cause of action after the expiry of the limitation period.  It will be a good starting point if you encounter the issue:

[14]           As I have said, the central issue between the parties is whether the proposed amendments give greater clarity or particularity to the existing claim, or whether they advance new claims.  On that point, the appellant relies heavily on the decision in 1309489 Ontario Inc. v. BMO Bank of Montreal (2011), 2011 ONSC 5505 (CanLII), 107 O.R. (3d) 384 (S.C.J.)where Lauwers J. addressed this same issue.  In that decision, Lauwers J. referred to the two different approaches to determining whether a claim is a new cause of action.  On the one hand, one can see a cause of action as a factual matrix.  On the other hand, one can see a cause of action simply as the legal basis upon which the claim for relief is based.  Lauwers J. concluded that the trend of the case law was to favour the broader factually oriented approach to the meaning of a cause of action.  Under that broader approach, if the defendant has notice of the factual matrix underlying the claim being advanced, then amendments that arise out of, or do not depart from, that factual matrix do not constitute “new” causes of action that would not be allowed by way of amendment.  On that point, Lauwers J. said, at para. 27:

A plaintiff is not required to name or specify the technical cause of action as an essential part of pleading; in saying this, I do not resile from the requirement noted in Morden and Perell, supra, that ordinarily the facts as originally pleaded, or as better particularized in the proposed new pleading, must be able to sustain the technical cause of action.  [emphasis added]

[15]           A very short time later, Lauwers J. had to deal with this same issue a second time.  In Sweda Farms Ltd. (c.o.b. Best Choice Eggs) v. Ontario Egg Producers, [2011] O.J. No. 4886 (S.C.J.) the plaintiff sought to amend the statement of claim to advance a conspiracy claim, along with other amendments.  The defendant objected on the basis that any such claim was barred by the expiration of the limitations period.  In allowing the amendments to be made, Lauwers J. again addressed the meaning of a cause of action and said, at para. 25:

I find that the broader, factually-oriented approach to the meaning of “cause of action” in interpreting and applying rule 26.01 is the correct approach.  It is consistent with the trend of the cases and is also consistent with a purposive approach to the interpretation of limitations legislation.  This means that the defendant’s basic entitlement is to have notice of the factual matrix out of which the claim for relief arises.  In my view the existing set of pleadings raises the factual matrix of concern to the plaintiffs and within which the defendants’ possible liability is to be located.  The proposed Fresh Statement of Claim simply reframes those allegations of fact.

[16]           The approach taken by Lauwers J. was tacitly approved by the Court of Appeal in Rausch v. Pickering (City),[2013] O.J. No. 5584 (C.A.) where Epstein J.A. said, at para. 95:

As Lauwers J. (as he then was) emphasized in BMO Bank of Montreal, at para. 27, as long as the existing pleading “raises the factual matrix of concern to the plaintiff and within which [the defendant’s] possible liability is to be located[,] it successfully asserts a cause of action within the meaning of rule 21.01(1)(b).”  Thus, even if the plaintiff does not explicitly set out the technical cause of action on which it relies, if the facts as pleaded implicitly advance such a claim, the court ought not to strike the pleadings: BMO Bank of Montreal, at paras. 26-27.

[17]           I say that the approach was tacitly approved only because the issue that was before the Court of Appeal in Rauschhad less to do with the expired limitation period and more to do with whether the proposed amendment disclosed a cause of action.

[18]           The respondent, on the other hand, relies on a different line of cases beginning with Fuda v. Jim McIntosh Petroleum Engineering Ltd., [2013] O.J. No. 5208 (S.C.J.); aff’d. [2014] O.J. No. 2255 (C.A.) where Wilton-Siegel J. granted summary judgment dismissing certain claims, that had been added to the statement of claim by amendment, on the basis that the limitations period had expired.  In addressing the issue whether the subsequent claims could be seen to have been part of the original claim, Wilton-Siegel J. said, at para. 310:

Given the principles set out above, I conclude that each of these causes of action were asserted for the first time in the 2013 Amendment dated February 8, 2013, other than the original cause of action based on the 2003 Reserve Report Representation, which was asserted in the Statement of Claim.  The fact that both the cause of action asserted in the Statement of Claim and the four additional causes of action asserted in the 2013 Amendment lie in negligent misrepresentation is not sufficient to conclude that these remaining causes of action are contained in the Statement of Claim.

[19]           It is of some importance to this conclusion to be aware of how the Court of Appeal approached this conclusion.  In dismissing the appeal, the court said, at para. 9:

The misrepresentation claims that were asserted after the expiry of the limitation period advanced new causes of action that were unconnected to the factual matrix pleaded in the original statement of claim.  [emphasis added]

[20]           The respondent relies on two other authorities.  One is Winnipeg (City) v. Entegra Credit Union Ltd., [2013] M.J. No. 10 (C.A.).  In that case, the motion judge had permitted the plaintiff to amend its statement of claim.  The motion judge found that the proposed amendments did not constitute new causes of action.  The Court of Appeal reversed that finding.  The Court of Appeal found that the motion judge had misunderstood the nature of the claim being advanced by the proposed amendments, that is, a separate and distinct claim for breach of contract that was “independent” of the existing claim.

[21]           The other authority is American Axle & Manufacturing, Inc. v. Durable Release Coaters Ltd., [2010] O.J. No. 2515 (S.C.J.) where the issue was whether certain claims at trial were barred by the expiration of a limitations period.  The claims had been added to the statement of claim by way of amendment with the limitation period issue being expressly reserved for determination at trial.  The trial judge, Newbould J. , found that those claims were barred by the limitation period, and were not saved by any suggestion that they were not “new” causes of action, but rather were encompassed within the same factual situation previously pleaded.  In so concluding, Newbould J. said, at para. 50:

In my view the amendments do not plead alternative claims for relief arising out of the same facts previously pleaded.  The new facts pleaded are relied upon to support new causes of action and new heads of damages arising from those new causes of action.  While it is the same contract as previously pleaded that is claimed in the amendments to have been breached, the contractual provisions and breaches relied on in the amendment are different from the previous pleading and the breaches and resulting damages are different from those previously pleaded.  They constitute new causes of action.

[22]             As may be obvious from the above, the distinction between the authorities relied upon by the appellant, and those relied upon by the respondent, turns on whether the proposed amendments do, or do not, arise out of the same facts, or the factual matrix, that was pleaded in the original statement of claim.  If they do, then the amendments should be permitted.  If they do not, and the limitations period has expired, then the amendments should be refused.

[23]           In determining this issue in this case, I must begin by reading the original statement of claim generously and with due allowance for drafting deficiencies – see Operation Dismantle Inc. v. Canada, 1985 CanLII 74 (SCC), [1985] 1 S.C.R. 441.  In my view, it is clear from a generous reading of the statement of claim that the appellant’s original claim arises out of an alleged course of conduct between it and the Ministry that began in 1991, and continued through to 1995, when the new policy was adopted, and the alleged unfair dealing by the Ministry with the appellant came to light.  It is clear that the appellant was, at all relevant times, interested in obtaining the near shore rights.  The appellant claims that it did not take steps to acquire those rights only because the Ministry told it that it did not need to because, up until 1995, the Ministry was not in a position to grant those rights.  What the appellant alleges, however, is that the Ministry did not tell it that companies could file applications for those rights and, specifically, that one company had filed for the very rights that the appellant was seeking.

[24]           When one then looks at the proposed amendments, they allege facts that are clearly part and parcel of these dealings.  They arise out of the same factual matrix.  In that respect, they fall into the Sweda and related line of cases and are thus distinguishable from the Fuda line of cases.  They provide precisely the type of particulars regarding what was said, and between whom, that ought to have been part of the original statement of claim.  What they do not do, however, is allege some new and distinct claim unrelated to that original claim.