Court File and Parties
COURT FILE NO.: CV-11-436012
DATE: 20191204
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: TRILLIUM POWER WIND CORPORATION, Plaintiff
– and –
HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF ONTARIO, AS REPRESENTED BY THE MINISTRY OF NATURAL RESOURCES, THE MINISTRY OF THE ENVIRONMENT, AND THE MINISTRY OF ENERGY, Defendant
BEFORE: E.M. Morgan J.
COUNSEL: Morris Cooper and Michael Cohen, for the Plaintiff Christopher Wayland and Eric Wagner, for the Defendant
HEARD: November 28, 2019
Endorsement
motion for leave for leave
[1] This motion brings together two disparate parts of the Rules of Civil Procedure.
[2] The Defendant seeks leave under Rule 48.04 to bring a motion to seek leave to amend its pleading under Rule 26.02(c). Counsel for the Plaintiff see this as posing a doubly difficult hurdle, while counsel for the Defendant see it as doubling down on one overriding test.
[3] The Plaintiff’s action was commenced in 2011. In 2013, the Court of Appeal dismissed much of the claim, significantly paring down the remaining causes of action: Trillium v Ontario, 2013 ONCA 683. The parties then undertook substantive pleading amendments in 2015. They have exchanged affidavits of documents and conducted examinations for discovery; they have also litigated a further production Order which the Plaintiff obtained against the Defendant in April 2019.
[4] The action has been set down for trial. In case conferences, counsel for both parties have indicated to the case management judge that they are contemplating motions, or cross-motions, for summary judgment. Counsel for the Plaintiff have delivered a draft Notice of Motion to counsel for the Defendant setting out the grounds on which the Plaintiff proposes moving for judgment. They have not produced an actual motion record, and the Defendant has produced nothing in response. No date has been set for any summary judgment motion.
[5] As pleadings have long been closed, Rule 26.02(c) requires the Defendant to seek leave to amend the Statement of Defence. And as the matter has been set down for trial, Rule 48.04 requires the Defendant to seek leave to bring any motion, including one for leave to amend. Accordingly, the Defendant’s motion seeks an Order for double leave.
[6] The essence of the claim as it presently stands was explained with precision by the Court of Appeal. The central factual allegation that remains alive has more to do with the Plaintiff’s ability to pursue this claim than with the underlying business losses that the Plaintiff had alleged: Trillium, para 3: “[The Defendant] specifically targeted Trillium with a view to crippling it financially so that it would not be able to contest the Government’s actions.” This, in turn, is pleaded in respect of the Defendant’s February 11, 2011 press release announcing cancellation of wind power projects, including that of the Plaintiff.
[7] The date of the Defendant’s press release coincided with the closing date for the Plaintiff’s financing. As a result of the public announcement, the financing transaction did not close. In Trillium, para 21, the Court noted that the Plaintiff alleges that the Defendant hurried its decision so that it would undermine the financing. It is the press release that is being contested by the Plaintiff, claiming that the Defendant deprived it of the resources to litigate the termination of the wind power project.
[8] The Court of Appeal therefore left a narrow, but readily identifiable window in which the Plaintiff can press its claim. In doing so it set aside the motion judge’s dismissal of the claim for misfeasance in public office, but on rather circumspect grounds. Those remaining grounds are an echo, as it were, of the original claim:
Trillium Power states that the…bad faith Ministerial decisions specifically meant to injure Trillium Power and stop its offshore wind developments in order to deprive Trillium of the economic resources to challenge the alleged decisions and the Defendant’s conflicting public pronouncements…
We would…permit the action for misfeasance to continue based only upon the allegation that the Government’s decision to suspend or cancel the province’s wind power program was specifically targeted at Trillium in order to injure it by crippling its financial capacity.
[9] In view of this ruling, the Defendant seeks to amend its Statement of Defence. Defendant’s counsel states that the primary objective of the proposed amendments is to ensure that its pleading meets head-on the specific allegations levelled in the remaining part of the claim, as defined by the Court of Appeal. To accomplish this, the Defendant proposes amendments which fall into six categories:
a) Linguistic amendments to keep the terminology consistent throughout the pleading.
b) Amendments specifying that the announcement of the decision to cancel the Plaintiff’s wind power contract is the alleged wrongdoing in that it was intentionally timed to harm the Plaintiff. These references to the announcement of the cancellation replace the references to the cancellation itself, which the Defendant sees as no longer in issue.
c) Amendments adding the Crown immunity defence for direct liability pursuant to the Proceedings Against the Crown Act, RSO 1990, c P27 (now contained in the Crown Liability and Proceedings Act, 2029, SO 2019, c 7, sch 17). This doctrine has been given new life recently in Hinse v Canada (Attorney General), 2015 SCC 35, [2015] 2 SCR 621, para 92 and Canada (Attorney General) v Thouin, 2017 SCC 46, [2017] 2 SCR 184, para 1, which held that, “Crown immunity is deeply entrenched in our law.” Defendant’s counsel submits that the Statement of Defence needs to reflect Crown immunity from direct liability and that “a claim against the Crown in tort can only be based on an act or omission of a servant or agent of the Crown”: CR v Ontario, 2019 ONSC 2734, para 93.
d) Amendments elaborating on the causation defence composed of specific denials that put the Plaintiff to the strict proof of allegations made by the Plaintiff itself or that are implicit in its claim. Defendant’s counsel explains that these amendments refer to no new evidence or factual matters, but rather are helpful to the Plaintiff in that they give explicit notice of the way in which the Defendant’s causation position will unfold.
e) Amendments denying the Plaintiff’s spoliation claim as a matter of law, combined with factual denials going to what Defendant says a potential future tort of spoliation might have to prove. (e.g. denials that destruction of documents was undertaken for the purpose of preventing the Plaintiff from accessing evidence, or that it was done by a person in public office or within the scope of any public employee’s scope of duty).
f) Amendments relating to the damages claim and the particulars thereof. These relate to an allegation that comes from the Plaintiff’s productions that a third party (called TPW1 Offshore Wind Inc.), not Trillium, was to receive the aborted financing and pursue the project. Counsel for the Defendant submits that this leads to a potential defence against the Plaintiff’s claim that should be specifically pleaded.
[10] Plaintiff’s counsel object to the proposed amendments given how old the action is and how late the amendments have come. They point out that if the amendments are a reaction to the Court of Appeal’s decision defining and limiting the causes of action, they are an unjustifiably delayed reaction. After all, the Court of Appeal judgment was in 2013 and it is now late 2019.
[11] They make the same argument about delay in respect of the newly proposed defence to the spoliation claim. The Plaintiff’s amendment specifically adding that claim dates from 2015. Again, they point out that if the Defendant’s proposed amendments are put forward as a response to that ‘new’ claim, it is a rather tardy response.
[12] It is Plaintiff’s counsels’ view that, in effect, amendments delayed should lead to amendments denied. They point to 1588444 Ontario Ltd. v State Farm Fire and Casualty Co. (2017), 2017 ONCA 42, 135 OR (3d) 681, para 25 (Ont CA), where it was observed that, “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.”
[13] Plaintiff’s counsel embrace this application of presumed prejudice. They argue that prejudice ought to be presumed here given the passage of years and the fact that the amendments may prompt further discoveries after the matter has been set down for trial. Counsel for the Plaintiff put it as the Court of Appeal did: “In other words, after inordinate delay, the presumption in favour of granting leave shifts to a presumption that non-compensable prejudice will result if leave is granted”: Ibid., para 36.
[14] They are particularly concerned in light of the fact that a Trial Record has been served and the matter placed on the trial list. They state that absent the proposed amendments and what they say are some outstanding disclosure obligations by the Defendant, the parties would be ready for trial (or, presumably, summary judgement, if those motions are ultimately advanced).
[15] Counsel for the Plaintiff point out that Rule 48.04 provides that a consequence of the action having been set down for trial is that leave must be granted in order to even bring the motion for leave that the Defendant seeks. They submit that under Rule 48.04, the test for leave is whether a party in the Defendants’ position can show a substantial or unexpected change in circumstances: Denis v Lalonde, 2016 ONSC 5960. Given the number of years that have gone by since the last developments on the Plaintiff’s side, nothing at this point could have been unexpected by the Defendant.
[16] Counsel for the Defendant state that it is Rule 26.01 that defines the scope of the court’s discretion in granting or denying leave to amend a pleading. They submit that it is therefore the Rule 26.01 prejudice test, and not the Rule 48.04 unexpected change test, that governs this motion. While a Rule 48.04 motion is a necessity here, it is the Defendant’s view that it mirrors rather than adds to the Rule 26.01 test.
[17] That dual-purpose test, according to Defendant’s counsel, is based on actual prejudice. As it was put in Gloucester Organization Inc. v Canadian Newsletter Managers Inc. (1995), 1995 CanLII 7144 (ON SC), 21 OR (3d) 753 (Gen Div): “the court should take into consideration, together with any other relevant factors, whether the granting of leave to bring such a motion would result in prejudice that could not be compensated for by costs or an adjournment”:
[18] Defendant’s counsel further submit that none of the proposed amendments cause any prejudice to the Plaintiff – and certainly none that cannot be compensated in costs. Their view is that the proposed amendments are “integrally related to the existing claim” and that “[t]hese circumstances cannot give rise to any presumed prejudice”: Klassen v Beausoleil, 2019 ONCA 407, para 50.
[19] In making this point, they rely on State Farm, supra, para 37, for the proposition that even after a lengthy lapse of time, “The presumption of prejudice is rebuttable. Where the moving party provides an adequate explanation for the delay or tenders evidence that there is no non-compensable prejudice, the presumption will be rebutted.”
[20] While counsel for the Defendant put forward no real explanation for the delay, they make the point that their proposed amendments are for the most part legal, not factual. They go on to indicate that the only prejudice is the possibility that there will be a need for another examination for discovery.
[21] In order to ameliorate that inconvenience, Defendant’s counsel have indicated that they are simultaneously wrapping up an investigation to unearth any further documents that fall within their disclosure requirements, and that they will be making the results of their investigation known within 30 days. In addition, they advise that they will be producing for any upcoming examination the same knowledgeable government person who has been examined previously in this case, even though that person has now retired from government service. A fully informed deponent will, of course, go some way toward making any further discoveries as efficient as possible.
[22] It is the Defendant’s view that the amendments sought here are more innocuous than in cases where pleadings are amended late in the day to assert factual matters that had never been asserted before. That situation occurred on the eve of trial in Kings Gate Developments Inc v Colangelo (1994), 1994 CanLII 416 (ON CA), 17 OR (3d) 841, where the Court of Appeal stated that, “[T]he frustration of a judge, when faced with such a last-minute application, is understandable. Yet, Rule 26.01 requires that amendments be permitted unless the prejudice cannot be compensated for in costs.”
[23] Under the circumstances, the double leave mechanism ensures a double think on the part of the Motions Court – i.e. it causes the parties and the court to think twice about whether the proposed amendments advance the path to trial or impede it. The key to this question is the Rule 26.01 test of prejudice, and it has long been so: “[H]owever late the proposed amendment, the amendment should be allowed if it can be made without injustice to the other side”: Clarapede & Co. v Commercial Union Assn. (1883), 32 WR 262, 263 (CA).
[24] Judges may find themselves frustrated by the slow road to trial, but that does not change the test even where Rule 48.04 requires a motion for leave to bring a motion for leave to amend. As the Court of Appeal stated in Klassen, supra, para 25, the test for amending a pleading “is framed in mandatory terms: the court must allow the amendment, unless the responding party would suffer non-compensable prejudice, the proposed pleading is scandalous, frivolous or vexatious, or the proposed pleading fails to disclose a reasonable cause of action.” None of those disqualifying factors apply in this case.
[25] The mandatory language of Rule 26.02 applies here even though the Defendant has brought a motion for leave under Rule 48.04 for leave under Rule 26.02(c). The question for a pleading amendment is whether anything is prejudicial, not whether anything is surprising or new. In the context of this double motion, Rule 48.04 is not just a companion to Rule 26.02(c); it is its doppelgänger.
[26] The Court’s role is to ensure that the action stays in motion without the parties having to leave anything behind. There is no prejudice to the Plaintiff except for further discoveries, which not only can be compensated in costs but may have been necessary in any case since the Defendant is investigating lost documents and will be delivering further productions shortly.
[27] Leave to bring a motion to amend the Defendant’s pleading and leave to amend that pleading are hereby granted. The Defendant’s pleading shall be amended in the form proposed by its counsel and appended to Defendant’s factum in this motion.
[28] Counsel may make written submissions on costs. I would ask that they be no longer than 3 pages plus a Costs Outline.
[29] Counsel for the Defendant is requested to provide me with costs submissions within two weeks of today. Counsel for the Plaintiff is requested to provide me with their costs submissions within two weeks thereafter (unless the holidays intervene, in which case I have no objection to their taking an extra week).
Morgan J.
Date: December 4, 2019