Corrections made April 5, 2012: Citation corrected and File Number added
BRAMPTON COURT FILE NO.: CV-10-164-00
SUDBURY COURT FILE NO.: 1675-11
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Hugomark Services Inc.
Plaintiff
– and –
Her Majesty the Queen in Right of Ontario and Carillion Canada Inc.
Defendants
Counsel: Mr. L. Roslyn as agent for Jonathan Speigel, for the Plaintiff Mr. Greg Sheahan, for the Defendant Carillion Canada Inc.
HEARD: December 20, 2011 and January 11, 2012
REASONS FOR JUDGMENT
1The plaintiff brings this motion seeking numerous heads of relief, the most contentious of which is leave to amend its statement of claim.
2The defendant brings a cross motion seeking an order to strike out the plaintiff’s defence to the counterclaim.
3Initially, this motion was returnable in Brampton. However, the action has now been transferred to Sudbury.
4Regardless of the outcome of this motion, the parties have agreed to the following relief:
a) That leave be granted to bring this motion;
b) That the parties shall exchange affidavits of documents and produce and exchange copies of documents referenced in the affidavits electronically;
c) That discoveries be held and that two days be permitted for each party; and
d) That the action as against Her Majesty the Queen in Right of Ontario be dismissed on a without cost basis.
Issues
5What must be determined in this motion is whether the plaintiff may amend the statement of claim and also whether the plaintiff may set this action down for trial in order to comply with s. 37(1) of the Construction Lien Act, R.S.O. 1990, c. C.30, without prejudice of its rights for production and discovery and to bring motions that it could otherwise have brought, regardless of the provisions of rule 48.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. I have already ruled on the latter issue.
Background
6This action relates to a construction project on Highway 101 near Chapleau Ontario.
7The defendant Carillion was the prime contractor on the project pursuant to a written contract executed by Carillion and the Province.
8The plaintiff was either a subcontractor of Carillion or else a partner in a joint venture.
9According to the claim for Lien, the work commenced on September 1, 2008, and continued until November 10, 2009. On November 27, 2009, the plaintiff filed a claim for Lien in the amount of $2,765,848.64.
10A statement of claim was issued on January 14, 2010, by Cook and Company, solicitors for the plaintiff.
11The defendant Carillion filed a statement of defence and counterclaim on February 10, 2011.
12By order of Master C. Albert, a financial guarantee bond in the amount of $2,850,848.64 was posted by the defendant Carillion and the Lien was hereby vacated.
13A settlement meeting of all parties, except the plaintiff, was held on June 17, 2011.
14In the interim, the plaintiff had retained alternate solicitors and had personal discussions with counsel for the defendant Carillion.
15On June 28, 2011, the plaintiff filed a notice of change of solicitors appointing Jonathan Speigel of Speigel Nichols Fox LP, as lawyer of record.
16By letter dated August 3, 2011, Mr. Spiegel forwarded to Mr. Sheahan, solicitor of record for the defendant, a draft fresh as amended statement of claim and asked for his client’s consent to filing the said amended statement of claim. Otherwise, a motion would be brought.
17Although there was some correspondence exchanged between Mr. Sheahan and Mr. Speigel, it was not until November 1, 2011, that the issue of the proposed amendments was addressed directly.
18It was not until November 11, 2011, that Mr. Sheahan formally notified Mr. Speigel that he would not be consenting to the proposed amendments of the statement of claim. The motion was returnable in Brampton on December 1, 2011.
19On November 15, 2011, Mr. Speigel forwarded a defence to the Carillion counterclaim in which he incorporates many of the allegations contained in the proposed fresh as amended statement of claim.
20On December 1, 2011, the matter was transferred to Sudbury.
21This motion commenced on December 20, 2011, and continued on January 11, 2012.
Position of the parties
22Counsel for the plaintiff submits that the amendment should be granted since there is no prejudice to the defendant. The amendments are to clarify and particularize the initial statement of claim so that all further steps in this action will be focussed and thus save time and expense to the parties. The proposed amendments are not establishing new causes of action and there are no admissions that are being withdrawn.
23Counsel for the defendant, however, submits that new causes of action are being raised in the proposed amendments. The plaintiff is alleging oral agreements between representatives of the respective companies which contradict the explicit contracts executed by the parties on November 14, 2008, and December 15, 2008.
24Further, counsel for the defendant submits that by permitting the allegations in the amendments, the defendant is prejudiced since limitation periods may have expired and the withdrawal of the admissions creates new causes of action.
Discussion
25Counsel for the defendant relies on a number of decisions to support his contention, in particular Tarkalas v. Zographos, 2008 CanLII 46158 (ON SCDC), [2008] O.J. No. 1047 (S.C.), a decision of Kiteley J. where she upheld the decision of Master Haberman in denying the amendment.
26In that decision, the plaintiff was seeking to amend the statement of claim to assert that the funds advanced were not a loan but an equity investment in a new business. The plaintiff also sought to add a new defendant after the expiry of the limitation period.
27Kiteley J. adopted the reasoning of Farley J. in National Trust Co. v. Furbacher, [1994] O.J. No. 2385 (Gen. Div.), at para. 6:
Notwithstanding the use of “shall” in rule 26.01, the Court may consider whether the proposed amendments:
a) constitute an abuse of process;
b) conform with the rules of pleading or are otherwise unintelligible; and
c) are, on their face, tenable at law.
28Kiteley J. also cited, at para. 25 of her decision, Andersen Consulting Ltd. v. Canada (Attorney General), 2001 CanLII 8587 (ON CA), [2001] O.J. No. 3576, where the Court of Appeal held that,
amendments like those sought 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. It is clear that “abuse of process” is a factor that encompasses more than tactical reasons.
29The facts of the present case are different in that, in my view, the proposed amendments are an expansion and a clarification of what had been pleaded in the original statement of claim. Unlike Tarkalas, the pleadings are not inconsistent or incompatible with each other. The proposed amendments expand on what was originally pleaded as “a joint venture” (para. 8 of the Statement of Claim) as a result of the alleged contracts dated November 14, 2008, and December 15, 2008.
30I do not accept that by pleading an allegation of oral agreements between the parties a new cause of action is created. It is clear from the original statement of claim that the work on this project commenced in August of 2008 and that, prior to that date, discussions between the plaintiff and the defendant had taken place so that a tender price could be submitted.
31It is also clear that the written contract was not signed by the plaintiff until November 14, 2008, and again amended on December 15, 2008. It is not clear if the defendant ever signed this contract since the one attached to the motion materials is only signed by the plaintiff. Obviously, evidence of how those contracts came about would have to be led at trial whether or not the amendments are permitted.
32Whether those discussions are sufficient to usurp the terms of the alleged written contracts is a matter for the trial judge to determine. It would not in my view constitute a new cause of action nor would the fact that the plaintiff is attempting to introduce parole evidence be regarded as a withdrawal of an admission that the project was to be governed by the alleged contracts of November and December of 2008.
33The position of the defendant is paradoxical. On the one hand, it submits that the plaintiff is attempting to withdraw an admission that the project was governed by the contracts of November and December 2008. On the other hand, the defendant has denied in his statement of defence that there was ever a written contract between the parties. Further, as previously stated, the copy of the supposed contracts included in the motion material is executed only by the plaintiff. With such a denial and an unexecuted contract, how can the defendant claim that there is a withdrawal of an admission and a new cause of action being advanced?
34The defendant also alleges that the limitation period has expired. The Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, prescribes two years for the bringing of an action. The claim for lien alleges that the work was conducted between September 1, 2008, and November 10, 2009.
35This motion was brought on November 8, 2011, still within the limitation period. Should the allegations fall outside this time frame, then the defendant may plead the Limitations Act. There is no prejudice to the defendant since the plaintiff must satisfy the trial judge, on the balance of probabilities, of each and every allegation.
36Accordingly, the present case can be distinguished from the Tarkalas decision. In that case an additional party was sought to be introduced after the expiration of the limitation period. Further, the plaintiff was attempting to introduce evidence that was totally inconsistent with a position held by the plaintiff for numerous years. None of these facts are present in this case.
37Applying the test enunciated in National Trust Company, the amendments sought by the plaintiff in the present matter do not constitute an abuse of process. They conform to the rules of pleading and are tenable in law.
38In addition, rule 26.01 of the Rules of Civil Procedure states that 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”.
39The defendant is not prejudiced in any fashion. What must be remembered is that, in this action, there has never been a demand for particulars. There have been no discoveries. No affidavits of documents have been exchanged. It is still relatively early in the litigation process even though some two years may have elapsed since the issuance of the statement of claim. The defendant may seek further disclosure and demand particulars if necessary.
40There is no duplication of work required other than to file an amended statement of defence and counterclaim if it is deemed necessary.
41These amendments will permit a much more orderly discovery since they clarify and amplify the issues between the parties.
42Accordingly, leave is granted to amend the pleadings and the plaintiff may file the fresh as amended statement of claim. Having ruled that the plaintiff may file a fresh as amended statement of claim, the relief sought in the defendant’s cross motion is dismissed.
43The defendant is permitted 45 days from the issuance of this order to file an amended defence if deemed necessary.
44Should it be necessary to address the issues of costs, the parties may make arrangements through the trial co-ordinator’s office within the next 30 days.
45Order to issue as per reasons.
The Hon. Mr. Justice R.G.S. Del Frate
Released: April 5, 2012
Corrections made April 5, 2012: Citation corrected and File Number added
BRAMPTON COURT FILE NO.: CV-10-164-00
SUDBURY COURT FILE NO.: 1675-11
DATE: 20120405
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
HUGOMARK SERVICES INC.
Plaintiff
- and –
HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AND CARILLION CANADA
Defendants
REASONS FOR JUDGMENT
Del Frate J.
Released: April 5, 2012