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Civil Litigation - Amending Pleadings - General
MORE CASES
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. 1734934 Ontario Inc. v. Tortoise Restaurant Group Inc.
In 1734934 Ontario Inc. v. Tortoise Restaurant Group Inc. (Ont CA, 2022) the Court of Appeal heard an appeal of a Superior Court motion judge, which in turn had set aside a master's procedural order to add a party and amend a Claim. The progress of the case through the court was characterized as "nothing short of disgraceful", and - apparently due to this - the appealed rulings were denied on 'abuse of process' grounds. Reliance on 'abuse of process' seems to have been used by the two appeal courts courts due to (the otherwise generosity of) R26.01 ["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."].
. Rebello v. Ontario
In Rebello v. Ontario (Div Court, 2022) the Divisional Court considers the sometime necessary interaction between adding a party [R5.04] and amending pleadings [R26.01]:[14] The Associate Justice referred to Rule 26.01 of the Rules of Civil Procedure and the legal principles applicable to a motion for leave to amend. The Associate Justice correctly noted that “amendments should be presumptively approved unless they would result in prejudice that cannot be compensated by costs or an adjournment; they are shown to be scandalous, frivolous, vexatious or an abuse of the court's process; or they disclose no reasonable cause of action.” The Associate Justice further noted that the amendments must be tenable at law. The Associate Justice did not err in his application of the principles applicable to a motion for leave to amend.
[15] However, the Associate Justice did not make reference to or apply Rule 5.04(2), which specifically deals with amendments to add parties, and states as follows:At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. [16] In Plante v. Industrial Alliance Life Insurance Co., 2003 CanLII 64295 (ONSC), Master MacLeod (as he then was) set out the test for adding a party under rule 5.04(2) as follows:a) The proposed amendment must meet all of the tests under Rule 26.01.
b) Joinder should be appropriate under Rule 5.02(2) or required under Rule 5.03. The addition of the parties should arise out of the same transaction or occurrence (Rule 5.02(2)(a)), should have a question of law or fact in common (Rule 5.02(2)(b)), or the addition of the party should promote the convenient administration of justice (Rule 5.02(2)(e)). Adding a party will be particularly appropriate if it is unclear which of the original defendant or the proposed defendant may be liable (Rules 5.02(2)(c) or (d)), or if it is necessary that the proposed defendant be bound by the outcome of the proceeding or his or her participation is otherwise necessary to allow the court to adjudicate effectively (Rule 5.03(1)).
c) Joinder should not be inappropriate under Rule 5.03(6) or 5.05. The addition of a party should not unduly delay or complicate a hearing or cause undue prejudice to the other party. In a case-managed proceeding, it may also be appropriate to withhold consent if it will cause significant disruption to the court-ordered schedule.
d) Addition of a party will not be permitted if it is shown to be an abuse of process. Abuse of process will exist where the addition of a party is for an improper purpose such as solely to obtain discovery from them, to put unfair pressure on the other side to settle, to harass the other party or for purely tactical reasons.
[Internal citations omitted.] See also, Steel Tree Structures Ltd. v. Gemco Solar Inc., 2016 ONSC 955. . The Calbot Group Ltd. v. NSR Toronto Holdings Ltd.
In The Calbot Group Ltd. v. NSR Toronto Holdings Ltd. (Ont CA, 2022) the Court of Appeal considers factors involved in granting leave to amend pleadings:[11] The statement of claim had already been amended prior to the hearing before the motion judge. The motion judge refused leave to further amend as there had been opportunities to do so, and there was no showing that amendments could make the claims against the respondents legally viable. This was a discretionary decision of the motion judge that is entitled to appellate deference: The Catalyst Capital Group Inc. v. VimpelCom Ltd., 2019 ONCA 354, 145 O.R. (3d) 759, at para. 75, leave to appeal refused, [2019] S.C.C.A. No. 284. We see no error in the motion judge’s exercise of discretion that would justify interference with it. . Wakeling v. Desjardins General Insurance
In Wakeling v. Desjardins General Insurance (Ont CA, 2021) the Court of Appeal noted that the decision to amend pleadings is discretionary on the motion judge:[18] A motion judge’s decision not to grant leave to amend a pleading is discretionary, and an appellate court should not interfere with it unless the motion judge erred in principle or acted unreasonably: Mortazavi v. University of Toronto, 2013 ONCA 655, leave to appeal refused, 2014 S.C.C.A. No. 190, at para. 3. . Gillani v. Jamali
In Gillani v. Jamali (Div Ct, 2021) the Divisional Court set out principles applicable to amendment of pleadings:[2] The motions judge correctly stated the principles that apply to amendment of pleadings. A party is permitted to amend her pleadings at any time so long as the pleading is proper and prejudice will not arise that cannot be redressed by costs and/or an adjournment, and the proposed amendment to the pleading is not an abuse of process. This is trite law (see 1588444 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42 at para. 25). . Spar Roofing & Metal Supplies Limited v. Glynn
In Spar Roofing & Metal Supplies Limited v. Glynn (Ont CA, 2016) 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.
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[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. . 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company
In 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company (Ont CA, 2017) the Court of Appeal set out the principles to be considered in a motion to amend pleadings:1. Motion to Amend
(a) Legal Principles
[24] Motions for leave to amend a pleading are governed by r. 26.01, which 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. [25] The law regarding leave to amend motions is well developed and the general principles may be summarized as follows:- The rule requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court’s process; or the pleading discloses no reasonable cause of action: Iroquois Falls Power Corp. v. Jacob Canada Inc., 2009 ONCA 517 (CanLII), 75 C.C.L.I. (4th) 1, at paras. 15-16, leave to appeal to SCC refused, 2010 CarswellOnt 425, and Andersen Consulting v. Canada (Attorney General) (2001), 2001 CanLII 8587 (ON CA), 150 O.A.C. 177 (C.A.), at para. 37.
- The amendment may be permitted at any stage of the action: Whiten v. Pilot Insurance Co. (1996), 1996 CanLII 8109 (ON SC), 27 O.R. (3d) 479 (Gen. Div.), rev’d on other grounds (1999), 1999 CanLII 3051 (ON CA), 42 O.R. (3d) 641 (C.A.), aff’d 2002 SCC 18 (CanLII), [2002] 1 S.C.R. 595.
- There must be a causal connection between the non-compensable prejudice and the amendment. In other words, the prejudice must flow from the amendments and not from some other source: Iroquois, at paras. 20-21, and Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 CanLII 8620 (ON CA), 56 O.R. (3d) 768 (C.A.), at para. 65.
- The non-compensable prejudice may be actual prejudice, i.e. evidence that the responding party has lost an opportunity in the litigation that cannot be compensated as a consequence of the amendment. Where such prejudice is alleged, specific details must be provided: King’s Gate Developments Inc. v. Drake (1994), 1994 CanLII 416 (ON CA), 17 O.R. (3d) 841 (C.A.), at paras. 5-7, and Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1995), 1995 CanLII 7105 (ON SC), 25 O.R. (3d) 106 (Gen. Div.), at para. 9.
- Non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial: Hanlan v. Sernesky (1996), 1996 CanLII 1762 (ON CA), 95 O.A.C. 297 (C.A.), at para. 2, and Andersen Consulting, at paras. 36-37.
- At some point the delay in seeking an amendment will be so lengthy and the justification so inadequate, that prejudice to the responding party will be presumed: Family Delicatessen Ltd. v. London (City), 2006 CanLII 5135 (ON CA), 2006 CanLII 5135 (Ont. C.A.), at para. 6.
- The onus to prove actual prejudice lies with the responding party: Haikola v. Arasenau (1996), 1996 CanLII 36 (ON CA), 27 O.R. (3d) 576 (C.A.), at paras. 3-4, and Plante v. Industrial Alliance Life Insurance Co. (2003), 2003 CanLII 64295 (ON SC), 66 O.R. (3d) 74 (Master), at para. 21.
- The onus to rebut presumed prejudice lies with the moving party: Family Delicatessen, at para. 6.
. McHale v. Lewis
In McHale v. Lewis (Ont CA, 2018) the Court of Appeal sets out the test for leave to amend pleadings:[6] The motion judge summarized the principles governing the decision whether to grant leave to amend a pleading from Aristocrat Restaurants Ltd. (c.o.b. Tony’s East) v. Ontario, [2003] O.J. No. 5331 (S.C.):(a) the approach that amendments should be presumptively approved unless they would occasion prejudice that cannot be compensated by costs or an adjournment, they are shown to be scandalous, frivolous, vexatious, or an abuse of the court’s process, or they disclose no reasonable cause of action, is relevant to the issue of whether, on a motion to strike a pleading, a court should exercise its discretion to grant leave to amend;
(b) leave to amend should properly be given where a pleading can be put right or improved by amendment and no injustice is done thereby;
(c) depending on the circumstances of the case, striking out a pleading without granting leave to amend often does little to advance the ends of justice;
(d) in disposing of a motion to strike when a recognized cause of action has been improperly pleaded, but can be put right without non-compensable prejudice to the defendants, the preferred route is to afford the plaintiff the opportunity, upon appropriate terms, to plead the cause properly within the action before the court; and
(e) the foregoing approach makes practical sense and is in keeping with the objectives set out in rule 1.04, namely that the rules shall be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. . Rabb Construction Ltd. v. MacEwen Petroleum Inc.
In Rabb Construction Ltd. v. MacEwen Petroleum Inc. (Ont CA, 2018) the Court of Appeal considers the issue of amending pleadings:[8] First, the motion judge erred in misinterpreting the plain meaning of the proposed amendments and the amended statement of claim, which should have been read generously in favour of the amendments: Farmers Oil and Gas Inc. v. Ontario (Natural Resources), 2016 ONSC 6359 (Div.Ct.), leave to appeal to ONCA refused, February 24, 2017 (M47111), at para. 31. ... . Burns v. RBC Life Insurance Company
In Burns v. RBC Life Insurance Company (Ont CA, 2020) the Court of Appeal considered the general test for amending pleadings:[22] The motion judge denied Mr. Burns leave to amend but gave no reasons for doing so. As this court has stated, leave to amend should be denied only in the clearest of cases, especially where the deficiencies in the pleading can be cured by an appropriate amendment and the other party would not suffer any prejudice if leave to amend was granted: Tran v. University of Western Ontario, 2015 ONCA 295, at para. 26; South Holly Holdings Limited v. The Toronto-Dominion Bank, 2007 ONCA 456, at para. 6. . Tutt v. Ishakis
In Tutt v. Ishakis (Div Ct, 2020) the Divisional Court extensively considered the law around amending pleadings:[18] The Master considered 1588444 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42 where the court set out the legal principles applicable to amending a pleading pursuant to Rule 26.01 as follows:[25] The law regarding leave to amend motions is well developed and the general principles may be summarized as follows:* The rule requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court's process; or the pleading discloses no reasonable cause of action: Iroquois Falls Power Corp. v. Jacob Canada Inc., 2009 ONCA 517, 75 C.C.L.I. (4th) 1, at paras.15-16, leave to appeal to SCC refused, 2010 CarswellOnt 425, and Andersen Consulting v. Canada (Attorney General) (2001), 2001 CanLII 8587 (ONCA)150 O.A.C. 177 (C.A.), at para. 37.
* The amendment may be permitted at any stage of the action: Whiten v. Pilot Insurance Co. (1996), 1996 CanLII 8109 (ON SC) 27 O.R. (3d) 479 (Gen. Div.), rev'd on other grounds (1999), 1999 CanLII 3051 (ON CA, 42 O.R. (3d) 641 (C.A.), aff'd 2002 SCC 18, [2002] 1 S.C.R. 595.
* There must be a causal connection between the non-compensable prejudice and the amendment. In other words, the prejudice must flow from the amendments and not from some other source: Iroquois, at paras. 20-21, and Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 2001 CanLII 8620 (ON CA), 56 O.R. (3d) 768 (C.A.), at para. 65.
* The non-compensable prejudice may be actual prejudice, i.e. evidence that the responding party has lost an opportunity in the litigation that cannot be compensated as a consequence of the amendment. Where such prejudice is alleged, specific details must be provided: King's Gate Developments Inc. v. Drake (1994), 1994 CanLII 416 (ONCA), 17 O.R. (3d) 841 (C.A.), at paras. 5-7 and Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1995), 1995 CanLII 7105 (ONSC), 25 O.R. (3d) 106 (Gen. Div.), at para. 9.
* Non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial: Hanlan v. Sernesky (1996), 1996 CanLII 1762 (ONCA), 95 O.A.C. 297 (C.A.), at para. 2, and Andersen Consulting, at paras. 36-37.
* At some point the delay in seeking an amendment will be so lengthy and the justification so inadequate, that prejudice to the responding party will be presumed: Family Delicatessen Ltd. v. London (City), 2006 CanLII 5135 (ONCA), at para. 6.
* The onus to prove actual prejudice lies with the responding party: Haikola v. Arasenau (1996), 1996 CanLII 36 (ONCA), 27 O.R. (3d) 576 (C.A.), at paras. 3-4 and Plante v. Industrial Alliance Life Insurance Co. (2003), 2003 CanLII 64295 (ONSC), 66 O.R. (3d) 74 (Master), at para. 21.
* The onus to rebut presumed prejudice lies with the moving party: Family Delicatessen, at para. 6.
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