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Civil Procedure - Pleadings - Leave to Amend

Spar Roofing & Metal Supplies Limited v. Glynn (Ont CA, 2016)

In this case the Court of Appeal set out principles applicable to granting leave to amend pleadings:
[35] Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that “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.” The words “at any stage” include the appeal: see e.g. Conway v. Law Society of Upper Canada, 2016 ONCA 72 (CanLII).

[36] The rule is designed to carry out the underlying principles reflected in the Courts of Justice Act, R.S.O. 1990, c. C.43, of encouraging public access to the courts (s. 71) and affirming the role of the Superior Court as a court of equity (s. 96) where actions are decided on their merits. Another purpose is to bring all parties to disputes relating to one subject matter before the court at the same time so that disputes might be determined without the delay, inconvenience and expense of separate actions. The object of the rule requiring the court to grant leave to amend is not that the party’s case should be so framed as to succeed but that it be framed so that it can be adjudicated by the court, whether for or against the party.

[37] As far back as 1883, Lord Brett M.R. laid down this rule regarding the amendment of pleadings in Clarapede v. Commercial Union Assn. (1883), 32 W.R. 262; it was restated by Lord Esher M.R. in Steward v. North Metropolitan Tramways Co. (1886), 16 Q.B.D. 556, 55 L.J.Q.B. 157 (C.A.), as follows:
The rule of conduct of the Court in such a case is that, however negligent or careless may have been the first omission, and however late the proposed amendment, the amendment should be allowed, if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs: but, if the amendment will put them into such a position that they must be injured, it ought not to be made.
This rule was adopted in Ontario in Williams v. Leonard (1895), 16 P.R. 544, at p. 549 (Ont. H.C.), aff’d (1896), 17 P.R. 73 (Ont. C.A.), aff’d (1896), 26 S.C.R. 406. This court has recently affirmed the principle that amendments should be allowed absent non-compensable prejudice and noted additional factors to guide the application of r. 26.01: see Marks v. Ottawa, 2011 ONCA 248 (CanLII), 280 O.A.C. 251, at para. 19; 1317424 Ontario Inc. v. Chrysler Canada Inc., 2015 ONCA 104 (CanLII), 330 O.A.C. 195, at para. 7.

......

[42] On the issue of whether leave to amend should be granted, the respondent renews his argument that the appellants’ proposed amendment is unenforceable because they cannot bring themselves within the exception to the Statute of Frauds. The respondent further submits that the appellants have misapprehended the equitable doctrine of part performance of an agreement in relation to land that would otherwise be unenforceable because it is not in writing. He submits that the appellants must plead acts done in reliance of such magnitude that it would be inequitable and unconscionable to deny them relief. He points out that the law requires that the acts put forward as part performance refer to the alleged contract dealing with the land, and refers to Steinberg v. King, 2011 ONSC 3042 (CanLII), and Cowderoy v. Sorkos Estate, 2012 ONSC 1921 (CanLII), 23 R.P.R. (5th) 36, in support of this argument.

[43] The respondent’s submission is in effect a submission that the court should consider the merits of the factual and legal basis for the proposed amendment at the pleading stage and not at a later stage of the proceedings. That is not the law under r. 26.01. As stated in Todd Archibald, Gordon Killeen & James C. Morton, Ontario Superior Court Practice, 2016 Edition (Markham, ON: LexisNexis Canada, 2015), at p. 1151:
The amended pleading must be legally tenable. It is not necessary to tender evidence to support the claims nor is it necessary for the court to consider whether the amending party is able to prove its amended claim. The court must assume that the facts pleaded in the proposed amendment (unless patently ridiculous or incapable of proof) are true, and the only question is whether they disclose a cause of action. Amendments are to be granted unless the claim is clearly impossible of success.
Put another way, an amendment is to be granted unless it would have been struck out under r. 21.01(1)(b) if it had been pleaded originally: 1317424 Ontario Inc., at para. 7. A motion to strike out a pleading on the ground it discloses no reasonable cause of action or defence must not, however, be conflated with a motion for summary judgment under r. 20.04: see Andersen Consulting v. Canada (Attorney General) (2001), 2001 CanLII 8587 (ON CA), 150 O.A.C. 177 (C.A.), at paras. 34-37; Griffiths v. Canaccord Capital Corp. (2005), 2005 CanLII 42485 (ON SCDC), 204 O.A.C. 224 (Div. Ct.), at para. 10.

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