SUPERIOR COURT OF JUSTICE - ONTARIO

CITATION: BNL ENTERTAINMENT INC. v. RICKETTS, 2015 ONSC 2689
COURT FILE NO.: CV-07-329375

HEARD: FEBRUARY 20, 2015 and APRIL 21, 2015

RE: BNL Entertainment Inc., BNL Touring Inc., Steven Page, Ed Robertson, Jim Creeggan, Kevin Hearn and Tyler Stewart

v.

Thomas Yorke Ricketts and 1102854 Ontario Limited o/a Action Bookkeeping and Accounting

BEFORE: MASTER R.A. MUIR

COUNSEL: Jeff Van Bakel, counsel to the lawyers for the plaintiffs Megan Marrie for the defendant Thomas Yorke Ricketts

SUPPLEMENTARY REASONS FOR DECISION

[1] This motion was originally returnable on February 20, 2015. It was brought pursuant to Rules 48.04(1) and 26.02(c) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”). The plaintiffs requested an order granting them leave to conduct an examination for discovery of the defendant Thomas Yorke Ricketts (“Ricketts”). The plaintiffs also sought leave to make a significant number of amendments to their statement of claim.

[2] I heard the portion of this motion dealing with leave to conduct a discovery on February 20, 2015. I released my reasons for decision in respect of that relief on March 18, 2015 and granted the relief requested by the plaintiffs.

[3] I adjourned the relief relating to the amendments to the statement of claim to April 21, 2015 in order to allow the parties an opportunity to deliver additional materials. These supplementary reasons for decision deal with the plaintiffs’ request for leave to amend their statement of claim.

[4] Ricketts is prepared to consent to many of the proposed amendments. However, he is opposed to certain amendments on the basis that they seek to advance new causes of action after the expiry of the applicable limitation period. Ricketts identifies those new causes of action as breach of contract and breach of fiduciary duty.[^1]

[5] Ricketts is also opposed to certain other amendments on the basis that they amount to a withdrawal of an admission with respect to the services provided to the plaintiffs by Ricketts in his personal capacity. He submits that leave is required under Rule 51.05.[^2]

[6] This action is brought by the plaintiffs against their former accountants. The individual plaintiffs are all members of the musical rock band Barenaked Ladies. The corporate plaintiffs are the band’s operating and touring companies. The plaintiffs’ current statement of claim alleges that the defendants provided negligent accounting and tax related advice to the plaintiffs between 1995 and 2005.

[7] Rule 26.01 provides as follows:

26.01 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.

[8] Rule 26.01 is mandatory unless a responding party can demonstrate non-compensable prejudice. No such prejudice is alleged here. However, the Court of Appeal has held that where an applicable limitation period has expired, a plaintiff cannot avoid the application of that limitation period by amending an existing claim to add a new party or to advance a new cause of action. The common law doctrine of special circumstances, which was previously used by the courts to extend limitation periods, no longer applies. See Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469 at paragraphs 16 and 25-27.

[9] The question of what constitutes a “new cause of action” in connection with a motion of this nature was summarized by Master Dash in Ascent Inc. v. Fox 40 International Inc., [2009] O.J. No. 2964 (SCJ – Master). At paragraph 3 of that decision, Master Dash states as follows:

A "cause of action" has been defined as a "factual situation the existence of which entitles one person to obtain from the court a remedy against another person." The key is whether substantially all of the material facts giving rise to the "new cause of action" have previously been pleaded or whether new facts are sought to be added that are relied upon to support a new cause of action. A new cause of action is not asserted if the amendments simply plead an alternative claim for relief arising out of the same facts previously pleaded and no new facts are relied upon, or amount simply to different legal conclusions drawn from the same set of facts, or simply provide particulars of an allegation already pled or additional facts upon which the original right of action is based.

[Footnotes omitted]

[10] I have reviewed the pleadings and the impugned “new cause of action” amendments with these principles in mind. I have come to the conclusion that these proposed amendments do not amount to new causes of action. In my view, they are properly viewed as providing particulars of allegations already pleaded and additional facts upon which the plaintiffs’ original right of action is based. A generous reading of the original statement of claim as a whole reveals that sufficient facts necessary to support a claim for breach of contract and breach of fiduciary duty have been pleaded already. The plaintiffs are musicians. They are not experts in tax and accounting. The original statement of claim includes references to the trust placed in Ricketts by the plaintiffs and his significant authority over the plaintiffs’ financial affairs and investments.[^3] It is clear from a reading of the allegations in the original statement of claim that the plaintiffs placed significant reliance on Ricketts to provide tax and accounting advice in relation to the plaintiffs’ complex financial affairs. In my view, these factual allegations are capable of supporting a claim for breach of fiduciary duty. See Hunt v. TD Securities Inc. (c.o.b. TD Evergreen), 2003 3649 (ON CA), [2003] O.J. No. 3245 (CA) at paragraphs 37-40; application for leave to appeal dismissed, [2003] S.C.C.A. No. 473.

[11] The allegations in the original statement of claim can also be read to support a claim for breach of contract. The statement of claim contains numerous references to the plaintiffs’ engagement of Ricketts, his responsibilities pursuant to those engagements and his alleged failure to perform those obligations.

[12] I have concluded that these proposed amendments do not amount to new causes of action. In my view, they simply provide particulars of allegations already pleaded and additional facts upon which the plaintiffs’ original right of action is based.

[13] I also agree with the plaintiffs that the proposed amendments do not amount to a withdrawal of an admission. Counsel were unable to provide the court with any authority where allegations in a statement of claim were found to constitute an admission. Some of the case law does leave open the possibility of such a finding in rare cases but only where there is an unambiguous deliberate concession and a meeting of the minds between the parties. See Hughes v. Toronto-Dominion Bank, [2002] O.J. No. 2145 (SCJ – Master) at paragraphs 9 and 10 and Petrasovic Estate v. 1496348 Ontario Ltd. (c.o.b. Honest Lawyer Restaurant), 2012 ONSC 4897 at paragraph 34. The alleged admissions in the plaintiffs’ original statement of claim are simply allegations regarding the nature and extent of the plaintiffs’ retainer of Ricketts and the corporate defendant. They were not made in response to allegations made by Ricketts. There is nothing improper about making alternative and inconsistent allegations in a statement of claim. I see no reason why such form of pleading should not be permitted by way of amendments to a pleading. See Canadian Premier Life Insurance Co. v. Sears Canada Inc., 2011 ONSC 1670 (SCJ) at paragraph 25. In my view, these proposed amendments do not amount to admissions within the meaning of Rule 51.05. Leave is therefore not required pursuant to that Rule.

[14] For these reasons, I am granting leave to the plaintiffs to amend their statement of claim as requested.

[15] I therefore order as follows:

(a) the plaintiffs are hereby granted leave to amend their statement of claim in the form of the draft fresh as amended statement of claim marked as exhibit M to the affidavit of Wendy Berman sworn January 20, 2015;

(b) the parties shall confer and attempt to agree on a timetable to govern the remaining steps in this action;

(c) any agreed upon timetable shall be provided to the court for approval by May 26, 2015;

(d) if the parties are unable to agree on a timetable, they shall provide the court with written submissions by May 26, 2015;

(e) if the parties are unable to resolve the issue of costs, including Ricketts’ costs thrown away as a result the amendments, they shall make submissions in writing, also by May 26, 2015; and,

(f) this action shall not be struck from the trial list without further order of the court.

April 23, 2015

 Master R.A. Muir

[^1]: Ricketts takes the position that paragraphs 1(a), 7, 8, 11, 13, 16, 20 and 60 of the draft fresh as amended statement of claim fall into this category.

[^2]: Ricketts takes the position that the fourth sentence of paragraph 5 and paragraphs 6, 9, 10, 12, 13(a-e), 14, 15 and 17 of the draft fresh as amended statement of claim fall into this category.

[^3]: These allegations can be found in paragraphs 5, 6, 21 and 24 of the original statement of claim.