Brendan Connor William Forrest

The defendants, Economical Mutual Insurance Company and Firstbrook, Cassie & Anderson Limited, brought motions for leave to amend their statements of defence under Rule 26.01.

The plaintiff opposed several proposed amendments, arguing they improperly pleaded res judicata, issue estoppel, withdrew admissions, and pleaded evidence rather than facts.

The Master granted leave to both defendants to amend their pleadings, finding no non-compensable prejudice to the plaintiff and concluding that the proposed amendments were legally tenable and properly pleaded the necessary elements of the defences.

On a preliminary motion common to four security for costs motions, the responding plaintiffs asserted impecuniosity.

The court held that impecuniosity requires full and frank financial disclosure, and that a corporate plaintiff bears the added burden of proving it cannot raise funds from shareholders or associates.

The evidence tendered by both the corporate plaintiff and the estate trustee plaintiff was vague, incomplete, and insufficiently documented, with major gaps concerning assets, liabilities, bank accounts, tax filings, shareholder loans, and the estate's financial position.

The court found neither plaintiff had established legal impecuniosity and directed the matter to proceed to further scheduling, with costs to be addressed if necessary.

The defendants brought motions for security for costs against the plaintiffs.

The plaintiffs sought leave to file a supplementary affidavit regarding their alleged impecuniosity, which was served six months after the deadline set by a court-ordered timetable.

The court denied leave, finding that plaintiffs' counsel failed to provide a reasonable, good faith explanation for the delay and had ignored the court's explicit direction to research the evidentiary requirements for impecuniosity before drafting the initial materials.

In a coverage dispute involving an insured, its insurance broker, and the insurer, the broker sought leave to amend its statement of defence to add a crossclaim against the insurer for a declaration that the insurer was required to defend and indemnify the insured.

The insured opposed the amendment, arguing that no independent cause of action existed between the broker and the insurer and that a prior settlement agreement eliminated any lis between them.

The court held that a crossclaim does not require an independent cause of action and may be advanced where parties share a legal relationship regarding a real issue in the litigation.

Because the question of insurance coverage directly affected the broker’s potential liability and remained unresolved despite the settlement agreement, there remained a sufficient lis between the broker and insurer.

Leave to amend was granted as the proposed pleading was legally tenable and caused no prejudice that could not be compensated by costs.