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Federal Court - Pleadings

. McCain Foods Limited v. J.R. Simplot Company

In McCain Foods Limited v. J.R. Simplot Company (Fed CA, 2021) the Federal Court of Appeal considered whether to grant leave to make a third party claim (under the federal rules):
[25] Rules 193 and 194 of the Rules contemplate third party claims. The question of whether leave should be granted to commence a third party claim is based on the same factors as are relevant to whether a pleadings amendment should be allowed to introduce a new cause of action: Alberta v. Canada, 2018 FCA 83, 425 D.L.R. (4th) 366 at para. 20. As with the pleadings amendments in this case, the viability of the third party claim turns on whether it has a reasonable prospect of success.

[26] A third party claim must stand on its own as an independent proceeding, separate from the main action and not merely incidental to it: R. v. Thomas Fuller Construction Co. (1958) Ltd., 1979 CanLII 187 (SCC), [1980] 1 S.C.R. 695, 106 D.L.R. (3d) 193 at 709 (Thomas Fuller); 744185 Ontario Inc. v. Canada, 2020 FCA 1, 441 D.L.R. (4th) 564 at para. 32 (Air Muskoka). That said, regard may be had to the main action if it assists in determining what is in issue in the related third party claim: Canada (Attorney General) v. Gottfriedson, 2014 FCA 55, 456 N.R. 391 at para. 34 (Gottfriedson).
. McCain Foods Limited v. J.R. Simplot Company

In McCain Foods Limited v. J.R. Simplot Company (Fed CA, 2021) the Federal Court of Appeal considered the test for allowing an amendment to pleadings (under the federal rules):
[20] The general rule is that an amendment should be allowed at any stage of an action for the purpose of determining the real questions in controversy between the parties, provided, notably, that the allowance would not result in an injustice to the other party not capable of being compensated by an award of costs and that it would serve the interests of justice: Canderel Ltd. v. Canada, 1993 CanLII 2990 (FCA), [1994] 1 F.C. 3, 157 N.R. 380 (C.A.); Enercorp at para. 19. However, the Prothonotary noted that the proposed amendment must have a reasonable prospect of success: Teva Canada Limited v. Gilead Sciences Inc., 2016 FCA 176, 140 C.P.R. (4th) 309 at paras. 29-32 (Teva). Another way to put this is that a proposed amendment will be refused if it is plain and obvious, assuming the facts pleaded to be true, that the pleading discloses no reasonable cause of action: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45 at para. 17 (Imperial Tobacco).

[21] In deciding whether an amendment has a reasonable prospect of success, its chances of success must be examined in the context of the law and the litigation process, and a realistic view must be taken: Teva at para. 30; Imperial Tobacco at para. 25.

[22] In determining whether an amendment to a defence should be allowed, it is often helpful for the Court to ask itself whether the amendment, if it were already part of the proposed pleadings, would be a plea capable of being struck out: VISX Inc. v. Nidek Co., 1996 CanLII 11534 (FCA), [1996] F.C.J. No. 1721, 72 C.P.R. (3d) 19 (F.C.A.) at para. 16. If yes, the amendment should not be allowed.

[23] Rule 174 of the Rules requires that material facts be pleaded. However, there is no bright line between material facts and bald allegations: Mancuso v. Canada (National Health and Welfare), 2015 FCA 227, 476 N.R. 219 at para. 18 (Mancuso). Looking at the pleadings as a whole, the motions judge must ensure that they define the issues with sufficient precision to make the pre-trial and trial proceedings both manageable and fair: Mancuso at para. 18. In Enercorp, this Court recently developed the idea that proceedings should be manageable and fair:
[36] In deciding whether pleadings are “manageable and fair”, the Court should consider the whole of the circumstances, including the relative knowledge and means of knowledge of the parties. Rules as to sufficiency of pleadings must not be allowed to become instruments of oppression in the hands of those who have knowledge of material facts at the expense of those who seek to rely on those facts without, however, having the means of knowing those facts so as to be able to plead them with specificity.

[37] The statement at paragraph 19 of Mancuso that “The pleading must tell the defendant who, when, where, how and what gave rise to its liability” must be understood in light of the “manageable and fair” requirement. Where, as here, a party seeks to rely upon a transaction to which it is a stranger, it must be able to describe the transaction with sufficient particularity to allow the other party to identify the transaction in issue. If that criterion is met, the question of whether the pleadings are sufficient is to be assessed in light of all the circumstances including the respective means of knowledge of the parties.


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