Court File and Parties
COURT FILE NO.: CV-11-423077 MOTION HEARD: 2019-11-08 REASONS RELEASED: 2020-01-21
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN:
MARGARITA CAAL CAAL, ROSA ELBIRA COC ICH, OLIVIA ASIG XOL, AMALIA CAC TIUL, LUCIA CAAL CHUN, LUISA CAAL CHUN, CARMELINA CAAL ICAL, IRMA YOLANDA CHOC CAC, ELVIRA CHOC CHUB, ELENA CHOC QUIB and IRMA YOLANDA CHOC QUIB
Plaintiffs
- and-
HUDBAY MINERALS INC. and HMI NICKEL INC.
Defendants
BEFORE: MASTER M.P. McGRAW
COUNSEL: M. Klippenstein and W.C. Wanless E-mail: cwanless@wadellphillips.ca -for the Plaintiffs
R.S. Harrison and T.A. Pratt E-mail: tpratt@fasken.com -for the Defendants
REASONS RELEASED: January 21, 2020
Reasons For Endorsement
I. Introduction
1The Plaintiffs are members of a remote indigenous farming community in Guatemala. They allege that they were sexually assaulted by private security personnel and members of the Guatemalan police and military during forced evictions from disputed lands owned or controlled by the Defendants’ corporate predecessor, a Canadian mining company.
2On this motion, the Plaintiffs seek leave to amend their Amended Statement of Claim dated February 6, 2012 (the “Current Amended Claim”) with respect to the involvement of the police and the military in the alleged sexual assaults. At issue is whether the amendments are further particulars or additional facts related to the Plaintiffs’ claims in negligence against the Defendants for the alleged involvement of the police and the military already pleaded or a new cause of action which would result in actual or presumed prejudice.
II. The Parties, the Proceedings and the Disputed Amendments
The Parties and the Proceedings
3The Plaintiffs are 11 Mayan Q’eqchi’ women from the remote indigenous farming community of Lote Ocho located near El Estor in Eastern Guatemala. Lote Ocho is situated on and around land (the “Fenix Property”) at the proposed Fenix open pit nickel mine (the “Fenix Project”). At the time of the events giving rise to this action, the Fenix Project was owned and operated by a Guatemalan mining company, Compania Guatemalteca de Niguel S.A. (“CGN”), a subsidiary of Skye Resources Inc. (“Skye”), a Canadian mining company.
4In 2008, the Defendant Hudbay Minerals Inc. (“Hudbay”), also a Canadian mining company, acquired Skye and amalgamated it with a numbered company to form the Defendant HMI Nickel Inc. (“HMI”). Hudbay was later amalgamated with HMI and in August 2011, Hudbay sold its interest in CGN. Hudbay is deemed to have assumed any liability of Skye with respect to the Plaintiffs’ claims and is responsible for the defence of this action.
5The events at issue arise from a dispute over a small portion of the Fenix Property (the “Contested Lands”) between Skye and local indigenous communities. While Skye asserted exclusive possession over the Contested Lands, Mayan Q’eqchi’ communities claimed a legal right to the Contested Lands which they consider to be their ancestral homeland. Prior to the events in question, Lote Ocho families including some of the Plaintiffs, had been living and farming on the Contested Lands for decades. In September 2006, another group of Mayan Q’eqchi’ members who had been expelled from the El Estor area during the Guatemalan civil war moved onto the Contested Lands as part of a reclamation.
6The Plaintiffs allege that on January 8, 9 and 17, 2007, at the request of Skye, mine security personnel employed by CGN and third party security personnel retained by CGN (“Fenix Security”) together with members of the Guatemalan police and military, carried out forced evictions of Mayan Q’eqchi’ community members from the Contested Lands. During the first evictions on January 8-9, 2007, the Plaintiffs allege that members of the police and the military and Fenix Security burned dozens of houses to the ground, fired gunshots and stole goods. The Plaintiffs claim damages arising from the second round of evictions on January 17, 2007 during which they allege that they were sexually assaulted (described as “gang rapes”) by Fenix Security and members of the police and the military.
7Hudbay alleges that the evictions were lawfully conducted under court orders and the supervision of the Public Prosecutor. CGN claimed that the occupation of the Contested Lands was illegal and filed a complaint with the Public Prosecutor’s Office who obtained eviction orders granting it the authority to remove the occupying community members. Hudbay denies that Fenix Security was involved in the evictions or that the alleged sexual assaults occurred.
8As set out in their Statement of Claim issued March 28, 2011 (the “Original Claim”) and the Current Amended Claim, the Plaintiffs each claim general, aggravated and special damages of $1,000,000 and punitive and exemplary damages of $4,000,000 arising from the alleged sexual assaults. While the scope and legal basis of the Plaintiffs’ claims against Hudbay are in dispute on this motion, the Plaintiffs allege that Skye knew or should have known that its acts, omissions, decisions and directions would cause the kind of harm suffered by the Plaintiffs including catastrophic physical and psychological harm.
9On April 13, 2012, Hudbay brought motions in this action and two related actions arising from the evictions (the “Related Actions”) to stay all 3 actions on the basis that Ontario was not a convenient forum. Hudbay also brought motions to strike the 3 actions under Rule 21 (the “Rule 21 Motions”). In January 2013, Hudbay unconditionally abandoned its 3 forum motions, including the forum motion in this action (the “Forum Motion”). Pursuant to the Endorsement of C.J. Brown J. dated July 22, 2013 (Choc v. Hudbay Minerals Inc., 2013 ONSC 1414), the Rule 21 Motions were dismissed. By Endorsement dated October 9, 2014, Master Glustein (as he then was) granted a subsequent motion by the Plaintiffs to strike certain paragraphs of the Defendants’ Statement of Defence.
The Disputed Amendments
10The road to this motion began with an off the record discussion between counsel during examinations for discovery of Hudbay’s deponent in October 2017. Given the scope of questioning, Hudbay’s counsel inquired if the Plaintiffs were asserting claims against Hudbay related to the involvement of the police and the military in the alleged sexual assaults. Plaintiffs’ counsel confirmed that this was the case. Hudbay asserts that until then, it understood that the Plaintiffs’ claims against Hudbay were limited to negligence arising only from the alleged involvement of Fenix Security. By letters dated October 30, 2017 and December 7, 2017, Plaintiffs’ counsel confirmed the Plaintiffs’ position that their claims of negligence against Hudbay included all of the alleged sexual assaults whether committed by Fenix Security, the police or the military.
11The Plaintiffs’ proposed amendments (the “Proposed Amendments”) are set out in their Proposed Second Amended Statement of Claim dated March 9, 2018 (the “Proposed Second Amended Claim”). The Proposed Amendments require the addition or amendment of approximately 43 paragraphs. The Plaintiffs submit that the Proposed Amendments plead further particulars of claims already pleaded with respect to the overall reckless and negligent manner in which Skye requested, authorized and participated in the evictions without taking adequate and reasonable steps to prevent violence resulting in the alleged sexual assaults committed by members of the police and the military in addition to Fenix Security.
12Hudbay does not oppose the Proposed Amendments to the style of cause and paragraphs 5, 10, 15, 23-24, 24.1, 24.2, 25-27, 37, 57.1, 62, 63, 65, 73 and 103 (g) of the Proposed Second Amended Claim which it concedes are clarifications or arise from evidence obtained by the Plaintiffs on examinations for discovery. Hudbay opposes the balance of the Proposed Amendments to approximately 31 paragraphs (the “Disputed Amendments”). Hudbay submits that the Disputed Amendments advance a new cause of action or theory of liability not previously pleaded related to the involvement of the police and the military in the alleged sexual assaults. Hudbay argues that the Plaintiffs’ unexplained inordinate delay in seeking leave to amend gives rise to a presumption of prejudice which the Plaintiffs have not rebutted and that Hudbay would suffer actual prejudice. Hudbay also asserts that the Disputed Amendments are legally untenable.
13This motion was brought in May 2018 and originally scheduled to proceed before me on August 9, 2018. On a telephone case conference that day, the motion was adjourned sine die at the request of the parties as they were in advanced discussions to settle the action in its entirety. Counsel advised during another telephone case conference on June 14, 2019 that settlement discussions were unsuccessful and the motion was scheduled for September 17, 2019. After initial discussions with counsel on September 17, 2019, the motion was adjourned again at the request of the parties to provide additional time to determine if the motion could be resolved.
II. The Law and Analysis
Generally
14In determining whether leave should be granted to permit the Disputed Amendments there are 3 primary issues: i.) whether the Disputed Amendments constitute a new cause of action or if they plead further particulars or additional facts related to a cause of action already pleaded; ii.) whether the Disputed Amendments give rise to a presumption of prejudice or would cause actual prejudice to Hudbay; and iii.) whether the Disputed Amendments are legally tenable.
15Rule 26.01 states:
“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.”
16Amendments should be presumptively approved unless they would result in 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 (Andersen Consulting v. Canada (Attorney General), 2001 CarswellOnt 3139 (C.A.) at para. 37; Schembri v. Way, 2012 ONCA 620 at paras. 25 and 44).
17Master MacLeod (as he then was) summarized the test for leave to amend pleadings under Rule 26.01 at paragraph 21 of Plante v. Industrial Alliance Life Insurance Co.:
“(a) The amendments must not result in irremediable prejudice. The onus of proving prejudice is on the party alleging it unless a limitation period has expired. In the latter case, the onus shifts and the party seeking the amendment must lead evidence to explain the delay and to displace the presumption of prejudice: [citations omitted]
(b) The amended pleading must be legally tenable. It is not necessary to tender evidence to support the claims nor is it necessary for the court to consider whether the amending party is able to prove its amended claim. The court must assume that the facts pleaded in the proposed amendment (unless patently ridiculous or incapable of proof) are true, and the only question is whether they disclose a cause of action. Amendments are to be granted unless the claim is clearly impossible of success. For this purpose amendments are to be read generously with allowance for deficiencies in drafting: [citations omitted].
(c) The proposed amendments must otherwise comply with the rules of pleading. For example, the proposed amendments must contain a "concise statement of material facts" relied on "but not the evidence by which those facts are to be proved" (rule 25.06(1)), the proposed amendments are not "scandalous, frivolous or vexatious" (rule 25.11(b)), the proposed amendments are not "an abuse of the process of the court" (rule 25.11(c)), the proposed amendments contain sufficient particulars -- for example, of fraud and misrepresentation (rule 25.06(8)).”
18Since the Plaintiffs’ claims are based on allegations of sexual assault, no limitation period applies in the present case (Limitations Act, 2002 (Ontario), s.16(1)(h)).
19The Plaintiffs rely on Farmers Oil and Gas Inc. v. Ontario (Natural Resources), 2016 ONSC 6359 in which the Divisional Court held that proposed amendments should be permitted where they arise out of the same facts or factual matrix that was pleaded in the original statement of claim (Farmers Oil at para. 22). The Divisional Court concluded that the proposed amendments were integral to the dealings already pleaded, factually intertwined with the existing allegations and part of the same factual matrix:
“In the end result, the requirement to read a pleading generously, and the concomitant requirement to allow amendments unless they will inflict non-compensable prejudice, means that the presumption is that any amendment, that can reasonably be seen as falling within the four corners of the existing claim, ought to be permitted. In that regard, I agree with the sentiment expressed by Master Short in Brand Name Marketing Inc. v. Rogers Communications Inc., 2010 ONSC 2892, [2010] O.J. No. 5430 at para. 84:
I believe that equity dictates that if a defendant knows that the "finger of litigation" is pointing in its direction, and an action is commenced on a timely basis based on specific actions, this court ought to take appropriate steps to ensure that the true lis between the parties is addressed, rather than permitting one party to perhaps escape its possible liability by relying upon a technical Limitations Act defence.”(Farmers Oil at para. 31).
20The Court of Appeal explained what constitutes a cause of action in 1100997 Ontario Ltd. v. North Elgin Centre Inc., 2016 ONCA 848:
19 A cause of action is "a factual situation the existence of which entitles one person to obtain from the court a remedy against another person": Letang v. Cooper, [1965] 1 Q.B. 232 (C.A.), at pp. 242-43, as adopted by this court in July v. Neal (1986), 57 O.R. (2d) 129 (C.A.), at para. 23.
20 In Morden & Perell, The Law of Civil Procedure in Ontario, 2nd ed. (Markham: LexisNexis Canada Inc., 2014), at p. 142, the authors state:
A new cause of action is not asserted if the amendment pleads an alternative claim for relief 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.]
21In Dee Ferraro Ltd. v. Pellizzari, this court noted the distinction between pleading a new cause of action and pleading a new or alternative remedy based on the same facts originally pleaded. The appellants had commenced an an action against their lawyer claiming damages for breaches of contract, trust and fiduciary duty and for fraud and negligence. The appellants then sought to amend their pleading. This court, in overturning the motion judge's dismissal of the motion to amend, concluded that the proposed amendments, such as claims for a mandatory order and a constructive trust over shares, could be made because they flowed directly from facts previously pleaded.
22By contrast, a proposed amendment will not be permitted where it advances a "fundamentally different claim" after the expiry of a limitation period: Frohlick v. Pinkerton Canada Ltd. In that case, the court did not permit the plaintiff in a wrongful dismissal action to amend the statement of claim to assert a claim for damages for constructive dismissal on the basis that the limitation period had expired. This court dismissed the appeal. The amendment regarding constructive dismissal related to events that occurred prior to the events described in the original statement of claim that were unrelated to that claim. The defendant was unaware of the new allegations prior to the plaintiff seeking the amendments, and the events were not put in issue or encompassed within the original claim.
23Based on the foregoing, an amendment will be refused when it seeks to advance, after the expiry of a limitation period, a "fundamentally different claim" based on facts not originally pleaded.”
21The courts have adopted a broader, factually-oriented and less technical approach to determining if a new cause of action has been pleaded, consistent with the purposive approach to the interpretation of limitations provisions, in particular, a defendant’s basic entitlement to have notice of the factual matrix from which a claim arises (1309489 Ontario Inc. v. BMO Bank of Montreal, 2011 ONSC 5505 at paras. 18-24).
22Hudbay relies heavily on 1588444 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42:
“ [25] The law regarding leave to amend motions is well developed and the general principles may be summarized as follows:
The rule requires the court to grant leave to amend unless the responding party would suffer non-compensable prejudice; the amended pleadings are scandalous, frivolous, vexatious or an abuse of the court's process; or the pleading discloses no reasonable cause of action: Iroquois Falls Power Corp. v. Jacob Canada Inc., 2009 ONCA 517, 75 C.C.L.I. (4th) 1, at paras. 15-16, leave to appeal to S.C.C. refused [2009] S.C.C.A. No. 367, 2010 CarswellOnt 425; and Andersen Consulting Ltd. v. Canada (Attorney General), [2001] O.J. No. 3576, 150 O.A.C. 177 (C.A.), at para. 37.
The amendment may be permitted at any stage of the action: Whiten v. Pilot Insurance Co. (1996), 27 O.R. (3d) 479, [1996] O.J. No. 227 (Gen. Div.), vard (Whiten v. Pilot Insurance Co. (1999)), 42 O.R. (3d) 641, [1999] O.J. No. 237 (C.A.), revd Whiten v. Pilot Insurance Co., 2002 SCC 18.
There must be a causal connection between the non-compensable prejudice and the amendment. In other words, the prejudice must flow from the amendments and not from some other source: Iroquois, at paras. 20-21; and Mazzuca v. Silvercreek Pharmacy Ltd. (2001), 56 O.R. (3d) 768, [2001] O.J. No. 4567 (C.A.), at para. 65.
The non-compensable prejudice may be actual prejudice, i.e., evidence that the responding party has lost an opportunity in the litigation that cannot be compensated as a consequence of the amendment. Where such prejudice is alleged, specific details must be provided: King's Gate Developments Inc. v. Drake (1994), 17 O.R. (3d) 841, [1994] O.J. No. 633 (C.A.), at paras. 5-7; and Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1995), 25 O.R. (3d) 106, [1995] O.J. No. 2220 (Gen. Div.), at para. 9.
Non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial: Hanlan v. Sernesky, [1996] O.J. No. 4049, 95 O.A.C. 297 (C.A.), at para. 2; and Andersen Consulting, at paras. 36-37.
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: Family Delicatessen Ltd. v. London (City), at para. 6.
The onus to prove actual prejudice lies with the responding party: Haikola v. Arasenau (1996), 27 O.R. (3d) 576, [1996] O.J. No. 231 (C.A.), at paras. 3-4; and Plante v. Industrial Alliance Life Insurance Co. (2003), 66 O.R. (3d) 74, [2003] O.J. No. 3034 (Master), at para. 21.
The onus to rebut presumed prejudice lies with the moving party: Family Delicatessen, at para. 6.
36The seminal case in Ontario considering the concept of presumed prejudice in the context of a rule 26.01 motion is the Family Delicatessen decision. In that case, this court observed that at a certain point after an exceptional delay, non-compensable prejudice will be presumed absent evidence to the contrary. 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. This makes sense as a matter of fairness. It would be very difficult for a responding party to prove, for example, the generalized prejudice that witnesses' memories will be diminished after a lengthy passage of time.
37The 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.
38The court in Family Delicatessen did not elaborate on when the shift in onus takes place, i.e., the point at which the delay will be so lengthy that prejudice will be presumed. It also did not explain what evidence would need to be led by the moving party to rebut the onus.” (State Farm at paras. 25, 36-38)
23There is no hard and fast rule for what constitutes inordinate delay (State Farm at para. 44). The relevant period when assessing delay is the time between the commencement of the proceedings and the motion seeking leave (Klassen v. Beausoleil, 2019 ONCA 407 at para. 49; State Farm at para. 44). There is also no rigid test for determining whether a party seeking leave to amend has rebutted the presumption of prejudice however, the kinds of evidence that a party may adduce include an explanation for the delay; the absence of non-compensable prejudice to the responding party; and a nexus between newly discovered information and the proposed pleading (State Farm at paras. 39-42).
24The Court of Appeal has provided the following guidance regarding actual prejudice:
i.) there must be a causal connection between the non-compensable prejudice and the amendment such that the prejudice must flow from the amendments and not somewhere else;
ii.) the non-compensable prejudice must be actual prejudice, ie. evidence that the responding party has lost an opportunity in the litigation that cannot be compensated as a consequence of the amendment and specific details must be provided;
iii.) non-compensable prejudice does not include prejudice resulting from the potential success of the plea or the fact that the amended plea may increase the length or complexity of the trial (State Farm Fire at para. 25; Andersen at paras. 34 and 37).
25Proposed amendments must also be legally tenable. J.S. Fregeau J. summarized the approach for making this determination in Essa v. Panontin, 2010 ONSC 691 at para. 8:
“To be allowed, the amendments requested by the Plaintiffs must be tenable at law. On a motion to add a party and/or to amend the statement of claim against existing parties, the court may not consider the factual and evidentiary merits of the proposed new claims. A court is not to concern itself with the credibility of the case set forth by a party seeking an amendment. The court, in its analysis, is not to consider whether the amending party is able to prove the amended claim. The court must assume the facts pleaded in the proposed amendment (unless patently ridiculous or incapable of proof) are true, and the only question is whether they disclose a cause of action. Amendments are to be granted unless the claim is clearly impossible of success. For this purpose amendments are to be read generously with allowance for deficiencies in drafting.”
There Is No New Cause of Action
26Hudbay submits that State Farm is a complete answer to the Plaintiffs’ motion and that it is unnecessary to review the Proposed Second Amended Claim to determine if the Disputed Amendments are part of the existing factual matrix of the Current Amended Claim. Hudbay argues that Farmers Oil and similar cases are not applicable to this motion because there is no limitations period at issue. Therefore, Hudbay urges me to move directly to a consideration of actual and presumed prejudice due to the Plaintiffs’ unexplained inordinate delay in seeking leave to amend.
27In State Farm, the insurer pleaded in its original Statement of Defence that coverage for a restaurant fire was denied due to the plaintiffs’ failure to cooperate with the investigation. The insurer also initially pleaded that the fire was intentionally set but did not plead that the plaintiffs had set it. Eight years later, the insurer brought a motion for leave to amend its Statement of Defence to withdraw the allegation of non-cooperation and plead that the plaintiffs intentionally set the fire. Since the parties knew before the litigation that the cause of the fire was arson, the Court of Appeal concluded that the insurer could have pleaded that the plaintiffs intentionally started the fire at the outset of the litigation or soon after. The Court of Appeal held that the insurer’s delay in seeking leave was inordinate giving rise to a presumption of prejudice that it failed to rebut by providing an explanation for the delay or evidence that there would be no prejudice to the plaintiffs resulting from the proposed amendments.
28Hudbay also relies on Atomic Energy of Canada Ltd. v. Allianz Global Risks US Insurance Company, 2017 ONSC 4124. In applying State Farm, Akbarali J. held that while a delay of 16 years in seeking leave to amend was inordinate giving rise to a presumption of prejudice, the plaintiff had rebutted the presumption and any prejudice did not flow from the proposed amendments.
29At the same time, Hudbay submits that that the Disputed Amendments should be denied because they constitute a new cause of action or theory of liability not previously pleaded related to the involvement of the police and the military which was not previously pleaded. Hudbay argues that this additional cause of action was not sufficiently articulated with the required precision and clarity thereby confining the Plaintiffs’ claims to those arising from the alleged conduct of Fenix Security. In this regard, Hudbay relies on Cerqueira v. Ontario, 2010 ONSC 3954, a motion to strike, where Strathy J. (as he then was) stated the following:
“11 It may be of assistance to the parties, and particularly to Ms. Cerqueira who is not a lawyer, to state some general principles governing pleadings. I set out some of these principles in Cavarra v. Sterling Studio Lofts Inc., 2010 ONSC 3092, [2010] O.J. No. 2211, and I have added some additional principles:
“(a) the purpose of pleadings is to give notice of the case to be met, to define the matters in issue for the parties and for the court, and to provide a permanent record of the issues raised: 1597203 Ontario Limited v. Ontario, [2007] O.J. No. 2349; Aristocrat Restaurants v. Ontario, [2003] O.J. No. 5331 (S.C.J.) at para. 15; Somerleigh v. Lakehead Region Conservation Authority, [2005] O.J. No. 3401, 2005 CarswellOnt 3546 (S.C.J.) at para. 5;
(b) the causes of action must be clearly identifiable from the facts pleaded and must be supported by facts that are material: CIT Financial Ltd. v. Sharpless, [2006] O.J. No. 2170, 2006 CarswellOnt 3325;
(c) every pleading must contain a concise statement of the material facts on which the party relies but not the evidence by which those facts are to be proved: rule 25.06; this includes pleading the material facts necessary to support the causes of action alleged;
12 I accept the submission of Mr. Adair, on behalf of the Extendicare defendants, that while the plaintiffs are entitled to some leeway in the wording of their pleading, and a potentially meritorious claim should not be struck merely because of technical drafting deficiencies, the defendants are entitled to know the case they must meet. The court must be fair to the plaintiff, but it must also be fair to the defendants. In this regard, I respectfully adopt the observation of Cameron J. in Balanyk v. University of Toronto, [1999] O.J. No. 2162 (S.C.J.) at para. 46:
Neither the opposite party nor the court should be forced to nit-pick their way through a long, complex and sometimes redundant and split pleading, parsing each paragraph and each sentence with a view to extracting the claims and related material facts and redrafting them into a clear and precise pleading. It is the responsibility of the party pleading to plead in accordance with the requirements of our law and the purposes of pleading. Bearing in mind National Trust v. Frubacher, [1994] O.J. No. 2385, those purposes are:
(a) to give precise notice to the opposite party of the case which is to be met, sufficient to enable the opposite party to plead;
(b) to assist the court in understanding the material facts alleged and the factual and legal issues in dispute between the parties;
(c) to establish a benchmark against which the parties and the court may determine the relevance of evidence on discovery and at trial and the scope of the evidence which will be required to fairly and efficiently address the issues in dispute.
This requires the party pleading to understand the facts and the law as to what is required to support or defend a cause of action and to then state its position clearly and concisely.” (Cerqueira at paras. 11-12)
30Strathy J. held that the plaintiffs’ Statement of Claim was “a jumble of complaints, some of which are recognized by law and some of which are not”, “in many cases, not asserted as elements of proper causes of action supported by material facts going to either liability or damages” such that “it is almost impossible for the defendants to do anything other than guess about the nature of the plaintiffs' complaints against them” (Cerqueira at para. 14).
31Whether the Disputed Amendments should be characterized as a new cause of action or particulars or additional facts regarding claims already pleaded has been put squarely before this Court. Notwithstanding the fact that no limitations period applies, it is necessary to review the Current Amended Claim and the Proposed Second Amended Claim to make this characterization. In this respect, I adopt Akbarali J.’s comments in Atomic Energy that characterizing proposed amendments as new claims or particulars or additional facts is essential to assessing prejudice and whether amendments are legally tenable (Atomic Energy at para. 18). Akbarali J. also held that there was no limitations issue. Hudbay’s counsel advised that it relies on Atomic Energy because it follows State Farm in the context of a pleadings amendment where a limitations period was not at issue.
32On the current motion, the characterization of the Disputed Amendments is relevant to my determination below as to whether Hudbay has been on notice of the Plaintiffs’ claims against it with respect to the police and the military which in turn informs my analysis of delay and actual and presumed prejudice. Even in the absence of a limitations issue, cases such as Farmers Oil and North Elgin are instructive and relevant in characterizing the Disputed Amendments. Further, in Cerqueira, the court scrutinized the statement of claim to determine if, among other things, the defendants had notice of the claims against them.
33Having given the Proposed Second Amended Claim a generous reading and applied the relevant principles, I reject Hudbay’s characterization of the Disputed Amendments as a new cause of action not previously pleaded. In my view, the Disputed Amendments do not advance a fundamentally different claim but rather provide further particulars, additional facts and clarifications regarding the Plaintiffs’ claims against Hudbay in negligence with respect to the alleged sexual assaults committed by members of the police and the military in addition to Fenix Security. I am also satisfied that the Disputed Amendments arise from the same factual matrix pleaded in the Original Claim and the Current Amended Claim and are inextricably linked with the facts previously pleaded, namely that the police and the military were involved in the evictions and the sexual assaults giving rise to the Plaintiffs’ claims of negligence against Hudbay for all of the alleged sexual assaults. The Disputed Amendments relate to the same parties, the same dates and time period, are in support of the same damages claimed and are integral to the same dealings between the parties, as previously pleaded.
34Hudbay takes particular issue with paragraph 2 of the Current Amended Claim. Hudbay submits that the exclusion of any reference to the police and the military together with specific references to Fenix Security in the opening paragraphs of the Current Amended Claim demonstrates that the Plaintiffs did not plead or intend to claim negligence against Hudbay related to the involvement of the police and the military. Hudbay further argues that that the reference in paragraph 2 to “these rapes” is limited to the sexual assaults allegedly committed by Fenix Security referenced at the end of paragraph 1. Hudbay also highlights the failure of the Plaintiffs to make the Disputed Amendments when they amended their Original Claim in 2012.
35Applying the requisite generous reading and allowing for drafting deficiencies, I am satisfied that this reference is sufficient to refer to all of the alleged sexual assaults, including any committed by the police and the military. More importantly, this is only one reference in the introductory paragraphs. The Proposed Amended Second Claim must be read as a whole to determine if the factual and legal basis for the Plaintiffs’ claims against Hudbay related to the police and the military were already pleaded.
36When read as a whole, I conclude that the factual foundation for the Plaintiffs’ claims against Hudbay for the alleged participation of the police and the military in the sexual assaults can be found throughout the Current Amended Claim including at the following paragraphs:
i.) the Plaintiffs allege at paragraphs 62 and 63 that on January 17, 2017, hundreds of members of the police and the military and Fenix Security conducted a second eviction of Lote Ocho in which the women were trapped in and around their homes or seized as they tried to flee, followed by paragraph 64 which states: “All of the Plaintiffs were then each physically assaulted and gang-raped by groups of men consisting of members of the Fenix Security Personnel, members of the police and members of the military.” This is followed at paragraphs 65-75 by specific references to the alleged sexual and physical assaults of each Plaintiff by members of the police, the military and Fenix Security. Paragraph 76 refers to the forced evictions requested and authorized by Skye and quotes a public letter dated January 17, 2007 from Skye’s President and CEO which states: “The company did everything in its power to ensure that the evictions were carried out in the best possible manner while respecting human rights.”
ii.) at paragraphs 42(b)(d) and (e), it is alleged that Skye was directly involved in and exercised ultimate control over decisions and actions regarding Lote Ocho including whether, when and how to seek the forced removal of the communities including Lote Ocho;
iii.) at paragraphs 42(f) and (g) and 54, the Plaintiffs plead that Skye vigorously sought forced evictions and support for the enforcement of their assertion of exclusive possession over the Contested Lands from the President and government of Guatemala and the Canadian Ambassador and the Canadian Embassy, which it asked to lobby the Guatemalan government on Skye’s behalf;
iv.) paragraph 57 states that Skye requested the forced evictions on January 8-9, 2007 during which police, military and Fenix Security burned dozens of houses to the ground, fired gunshots and stole goods;
v.) at paragraphs 59-60, the Plaintiffs allege that Skye was aware of violence and the burning of houses during the forced evictions on January 8-9, 2007 but took no steps to reconsider or modify its strategy of seeking forced removals;
vi.) at paragraph 87, the Plaintiffs claim that Skye had knowledge of credible allegations that the police committed violence during another Fenix Project eviction in 2006 and at paragraphs 93 and 96, that Skye knew or should have known that the rape of women, particularly Mayan women, was a common, systemic practice in military operations during the Guatemalan civil war (which ended in 1996), with massive violations in rural areas and that rapes of women in Guatemala have continued at similar levels after the civil war such that Doctors Without Borders has referred to it as a humanitarian crisis;
vii.) at paragraph 97, the Plaintiffs allege that Skye knew that Guatemala’s justice system suffers from corruption and political interference, including deficient and corrupt police, prosecutorial and judicial systems and that the vast majority of violent crime is not investigated let alone tried in court.
37The facts as pleaded in these and other paragraphs go beyond the alleged involvement of Fenix Security. Specifically, they set out the Plaintiffs’ allegations of Skye’s efforts to secure the forced eviction of Lote Ocho including by asserting influence over Guatemalan government officials resulting in the involvement of the police and the military in the forced evictions and the alleged sexual assaults and coordinating, supporting and participating in the forced evictions with the knowledge of prior violence and without taking steps to prevent violence. Inherent in these allegations is that Skye attempted to influence government officials who were responsible for the police and the military in order to have them carry out the very evictions during which the alleged sexual assaults occurred in a country with a corrupt justice system where violence and sexual assault was prevalent.
38The Disputed Amendments as they relate to the factual basis for the Plaintiffs’ claims would add clarifying references to the police and the military together with additional facts and particulars regarding the alleged role and involvement of Skye and CGN in seeking the evictions and their control, decision making, logistical support, co-ordination and payments to the police and the military with respect to the forced evictions (Second Proposed Amended Claim at paras. 1, 2, 42(b.1-b.3), 54.1, 55.1-55.17, 57.1, 60, 61.1-61.2, 92 and 94). These Disputed Amendments arise from the existing factual matrix regarding the alleged involvement of the police and the military in the sexual assaults resulting from Skye’s conduct in seeking, supporting and participating in the forced evictions without taking steps to prevent violence. Read together with the Current Amended Claim, the Disputed Amendments provide additional facts, particulars and clarifications and do not advance a new cause of action or a fundamentally different claim.
39In addition to the factual foundation described above, the legal basis for the Plaintiffs’ claims against Hudbay related to the police and the military was also previously pleaded. This is set out at paragraphs 102-104 of the Current Amended Claim under the heading “Legal Claims”:
“102. As set out above, Skye Resources, through the acts, omissions, decisions and directions of its employees, agents, executives and directors, occurring both in Canada and in Guatemala, caused the harm suffered by the Plaintiffs.
- In making decisions and taking actions regarding the Fenix Project, Skye Resources owed the Plaintiffs a duty to act with reasonable care. With the knowledge particularized above, Skye breached that duty by:
(a) Authorizing and actively seeking forced evictions of communities from Contested Land, including Lote Ocho, in January 8, 9 and 17, 2007 without taking adequate steps to guard against the use of unjustified violence during these evictions;
(b) Negligently requesting and authorizing the second eviction of Lote Ocho that occurred on January 17, 2007 without taking adequate steps to guard against the use of violence during this eviction despite knowledge that credible allegations had been made regarding the use of violence by Fenix Security Personnel during the evictions of January 8 and 9;
(c) Negligently formulating, directing and implementing a corporate response toward Mayan Q’eqchi’ communities that escalated tensions and greatly increased the risk of violence, including by pursuing a strategy of clearing the Contested Land of inhabitants through the use of forced evictions and threats of violence;
- As a result of Skye Resources’ conduct and the resulting assaults and gang-rapes, the Plaintiffs suffered serious physical and psychological harm for which the Plaintiffs claim damages. In particular, the Plaintiffs claim damages for pain and suffering, serious emotional and mental distress, nervous shock and loss of amenity of life.”
40In my view, these paragraphs contain sufficient particulars of Skye’s alleged negligence for the forced evictions, the violence and the harm suffered by the Plaintiffs including the alleged sexual assaults whether they were committed by Fenix Security or members of the police and the military. The wording of these paragraphs does not, as Hudbay asserts, confine or limit the Plaintiffs’ claims to the alleged conduct of Fenix Security. The Disputed Amendments which relate to the legal basis for the Plaintiffs’ claims in turn provide further particulars and clarifications regarding the Plaintiffs’ existing claims in negligence against Hudbay related to the alleged role of the police and the military. This includes Skye’s breach of its duty by requesting, influencing, controlling, planning, participating in and coordinating the evictions with the police and the military including by providing funding and support and failing to take steps to prevent violence, particularly after the first evictions (Proposed Second Amended Claim at paras 100.1 and 103(c.1-c.4). Reading these Disputed Amendments together with the existing factual and legal foundations discussed above, I conclude that the Disputed Amendments do not constitute a new cause of action but rather are further particulars of claims already pleaded.
41As the Plaintiffs concede, the Current Amended Claim could have been drafted with more precision and additional particulars regarding their claims against Hudbay related to the involvement of the police and the military. The Plaintiffs also acknowledge that they have emphasized their claims against Hudbay as they relate to the alleged involvement of Fenix Security. However, there is a distinction between emphasizing their claims related to the involvement of Fenix Security and confining them to the exclusion of their claims with respect to the police and the military. On a generous reading allowing for drafting deficiencies, I cannot conclude that the Plaintiffs have limited their claims in negligence against Hudbay only as to the alleged conduct of Fenix Security.
42My conclusion that there is no new cause of action is also consistent with a purposive, less technical approach to pleadings, particularly Hudbay’s right to have notice of the case it must meet and to know the factual matrix from which the Plaintiffs’ claims arise. As a result of the Original Claim and the Current Amended Claim, I find that Hudbay has had notice of the factual and legal basis for the Plaintiffs’ claims in negligence against it for involvement of the police and the military in the alleged sexual assaults. In this regard, the pleadings at issue in State Farm are distinguishable from the present case. In State Farm, the insurer sought leave to withdraw its defence of non-cooperation and plead that the plaintiffs intentionally set the fire. The Plaintiffs here are not seeking to withdraw any claims or causes of action and are not advancing any new, fundamentally different claims or causes of action.
43The Current Amended Claim also does not contain significant deficiencies like the pleadings in Cerqueira. It does not advance claims which are not proper causes of action or not recognized by law and does not require Hudbay to guess as to the claims against it. Notwithstanding the deficiencies, the court in Cerqueira granted leave to amend many of the impugned paragraphs. Consistent with Strathy J’s directions in Cerqueira, the Plaintiffs’ claims with respect to the police and the military as pleaded in the Current Amended Claim give notice of the case to be met and plead clearly identifiable causes of action and a sufficiently concise statement of material facts.
44In support of their positions, the parties also rely on correspondence from opposing counsel and statements made or positions taken in motion materials from the Forum Motion and the Rule 21 Motions. In his affidavit sworn June 4, 2018, Patrick Donnelly, Vice-President and General Counsel of Hudbay, cites, among other things, correspondence and previous motion materials in support of his own and Hudbay’s understanding that the Plaintiffs’ claims against Hudbay were always limited to the involvement of Fenix Security in the alleged sexual assaults. I do not find this evidence of each party’s subjective understanding of the Plaintiffs’ claims to be particularly helpful and I give it little weight. In characterizing the Disputed Amendments as a new cause of action or further particulars related to claims previously pleaded, the court is required to focus its analysis on the Proposed Second Amended Claim (particularly the Disputed Amendments) and the Current Amended Claim. Neither party referred me to any cases where evidence of a party’s subjective understanding was a material consideration. Even giving this evidence full weight, I am unable to draw any conclusions that would alter my findings above particularly given the absence of any evidence that Hudbay has been misled with respect to the nature of the Plaintiffs’ claims. Similarly, I also find the parties’ respective characterizations of Brown J’s reasons on the Rule 21 Motions unhelpful for making the determinations on this pleadings motion. Having considered the parties’ submissions in this regard, I am unable to arrive at any conclusions that assist me.
45Hudbay further argues that the Plaintiffs are belatedly seeking leave to advance new causes of action regarding the police and the military because they have realized that their case related to Fenix Security is unsustainable. Hudbay alleges that some of the Plaintiffs changed their testimony on examinations for discovery held in November 2017 (after the pleadings dispute arose) and now identify their alleged perpetrators as the police and the military as opposed to Fenix Security (including by reference to uniform colour). It would be inappropriate to draw these conclusions and inferences regarding the Plaintiffs’ credibility and the facts on the record before me and on a pleadings motion. I decline to do so. Findings such as these are more properly left to the trial Judge. I also do not accept that the Plaintiffs’ motivation in bringing this motion is relevant to my determination of the disputed issues.
There Is No Actual Prejudice Or Presumption of Prejudice
46I also conclude that permitting the Disputed Amendments would not result in any actual prejudice to Hudbay, that no presumption of prejudice arises and even if it does, it has been rebutted by the Plaintiffs.
47Hudbay’s primary submission is that it would suffer actual prejudice because it has lost the opportunity to bring the Forum Motion. Hudbay submits that it abandoned the Forum Motion based on its understanding that the Plaintiffs’ claims were limited to the alleged involvement of Fenix Security. Mr. Donnelly’s uncontradicted evidence is that Hudbay concluded that the Plaintiffs’ evidence was “beyond belief” and was confident that it could effectively defend the Plaintiffs’ claims with respect to Fenix Security in this action and the Related Actions in Ontario. However, since substantially all of the relevant events took place in Guatemala, Hudbay submits that had it understood the Plaintiffs’ claims also related to the police and the military, it would not have abandoned the Forum Motion.
48The Plaintiffs contend that quotes attributed to a Hudbay executive in articles published in the Globe and Mail and the Toronto Star on February 25, 2013 contradict Mr. Donnelly’s evidence regarding Hudbay’s rationale for abandoning the Forum Motion. Hudbay objects to the admission of these articles on the basis that they were not put to Mr. Donnelly on cross-examination. Given my conclusions below, it is unnecessary for me to consider these articles and I decline to make any ruling as to admissibility. For the purposes of this motion, I accept Mr. Donnelly’s evidence.
49Contrary to Hudbay’s submissions, it has not lost the opportunity to bring the Forum Motion. There is nothing to prevent Hudbay from bringing the Forum Motion if leave is granted. Hudbay does not dispute this but claims that it is too late as a practical matter because of concerns the court would have regarding the delay in bringing the Forum Motion back on.
50Hudbay’s position, which is based on its own assessment of the merits of the Forum Motion, does not constitute actual prejudice. It is also not for this Court to speculate on the potential merits of the Forum Motion. Further, to the extent to which Hudbay’s abandonment of the Forum Motion has resulted in prejudice, it does not arise from the Disputed Amendments but from Hudbay’s strategic decision in the litigation to withdraw the Forum Motion together with the forum motions in the Related Actions. Hudbay’s decision to abandon the Forum Motion was based on its subjective understanding that the Plaintiffs’ claim was limited to Fenix Security and its assessment that this action and the Related Actions could be effectively defended in Ontario. However, as I concluded above, the cause of action with respect to the police and the military was sufficiently pleaded in the Current Amended Claim putting Hudbay on notice of the Plaintiffs’ claims with respect to the police and the military. Given that Hudbay abandoned the Forum Motion in the face of this notice, it cannot now use a tactical decision made on its subjective understanding of the Plaintiffs’ claims and assessment of the merits of this action and the Related Actions as the basis for claiming actual prejudice. This is particularly the case where the option to bring the Forum Motion still exists, the absence of evidence that the Defendants were misled as to the nature of the Plaintiffs’ claims and the fact that the decision to abandon was made together with the forum motions in the Related Actions.
51Hudbay also submits that it has lost the opportunity to comprehensively investigate the alleged involvement of the police and the military. Hudbay advises that it did not conduct a comprehensive investigation because of its perception that the Plaintiffs’ claims were limited to the alleged conduct of Fenix Security. As there was also no criminal investigation, Hudbay states that it does not know the identities, whereabouts, qualifications, employment history or alleged conduct of the relevant police and military personnel. In my view, any prejudice related to investigating the police and the military does not flow from the Disputed Amendments. The absence of a criminal investigation has always been the case and Hudbay’s election not to conduct its own comprehensive investigation is, like the abandonment of the Forum Motion, a choice Hudbay made in the litigation based on its subjective understanding with notice of claims related to the involvement of the police and the military and its assessment of the merits of the Plaintiffs’ claims. It is also not clear what investigations and inquiries Skye or Hudbay did undertake given Hudbay’s assertion that more “comprehensive” investigations are necessary and the fact that the involvement of the police and the military would seem to be relevant under any characterization of the Plaintiffs’ claims.
52I also reject Hudbay’s submission that it would suffer actual prejudice because the State Immunity Act (Canada) prohibits the commencement of a Third Party Claim against the Republic of Guatemala. This is due to the operation of the statute, and therefore, no prejudice arises from the Disputed Amendments. Together with Hudbay’s submissions regarding investigating the police and the military, this would seem to be a submission more appropriate for the Forum Motion.
53Hudbay also submits that it would suffer actual prejudice because the Plaintiffs are impecunious therefore, costs arising from the Disputed Amendments are unrecoverable. Hudbay has filed no evidence as to the estimated costs arising from the Disputed Amendments. The only evidence is the Plaintiffs’ advice that they do not intend to conduct any further examinations for discovery if leave is granted. In any event, it is open to Hudbay to bring a security for costs motion if it is concerned that it will be unable to enforce any costs award against the Plaintiffs.
54I also conclude that a presumption of prejudice does not arise in the present circumstances. Approximately 6.5-7 years elapsed after the issuance of the Original Claim until the delivery of the Second Proposed Amended Claim and the commencement of this motion. Hudbay submits that this constitutes extraordinary, unexplained and unjustified delay giving rise to a presumption of prejudice that the Plaintiffs have failed to rebut.
55My conclusion above that the Plaintiffs already pleaded a cause of action in negligence against Hudbay with respect to the police and the military is central to my finding that no presumption of prejudice arises. Hudbay has been on notice that the Plaintiffs were advancing claims against it for the alleged conduct of the police and the military. This is not like State Farm where the insurer sought to withdraw one cause of action (non-cooperation) to advance a new, fundamentally different one (intentional setting of the fire) eight years into the litigation which it could have pleaded from the outset. Here, I have concluded that the Plaintiffs did initially plead a cause of action against Hudbay for the involvement of the police and the military and are now seeking leave to provide further particulars and clarifications.
56Family Delicatessen is also distinguishable. The City in that case was a nominal defendant cooperating with the other parties for 6 years when the plaintiffs asserted new causes of action against it including misrepresentation. The Court of Appeal held that the motion for leave to amend could have been brought at any time and that the City’s litigation strategy may have been different given that the new causes of action were a “dramatic change” in the course of the litigation (Family Delicatessen at paras. 6-7). There has been no such dramatic change in the present case where Hudbay has always been the main defendant and the causes of action have been pleaded from the outset.
57Even if I had concluded that there was inordinate delay giving rise to a presumption of prejudice, the Plaintiffs have rebutted the presumption by providing an explanation for not seeking leave until May 2018. Consistent with my conclusions above, Plaintiffs’ counsel explained in their letters dated October 30, 2017 and December 7, 2017 that claims related to the police and the military were already pleaded in the Current Amended Claim. In the December 7 letter, counsel advised that they were considering whether amendments would be useful to better clarify and particularize these claims, delivered the Proposed Second Amended Claim on or about March 9, 2018, attempted to resolve the pleadings dispute and then ultimately brought this motion in May 2018. I am satisfied that this is a reasonable, satisfactory explanation in the circumstances.
The Disputed Amendments Are Legally Tenable
58I also conclude that the Disputed Amendments disclose a legally tenable cause of action.
59Hudbay submits that even accepting the Disputed Amendments as true, the Plaintiffs cannot establish that a party in Skye’s position in the context of a lawful, court-ordered eviction carried out by the Public Prosecutor could have reasonably foreseen that members of the police and the military would commit the alleged sexual assaults. Hudbay relies on Rankin (Rankin’s Garage & Sales) v. J.J., 2018 SCC 19 where the Supreme Court held that in determining reasonable foreseeability, the court must focus its analysis on whether foreseeability was present prior to the incident not clouded by the fact that the event in question actually occurred (Rankin’s at para. 53). Hudbay also cites Da Silva v. Gomes, 2018 ONCA 610 where the Court of Appeal held that “the law is clear that supervising authorities are not legally responsible for ‘a sudden unexpected event’ in the midst of an acceptable, safe activity.” (Da Silva at para. 15)
60On a generous reading allowing for drafting deficiencies, without considering the evidence or making findings of credibility, I cannot conclude that the Disputed Amendments are clearly impossible of success. Assuming the facts as pleaded are true, I am not persuaded that the Plaintiffs would be unable to establish that it was reasonably foreseeable to a party in Skye’s position that by requesting, influencing, funding, participating in and supporting the evictions in a country with a corrupt justice system and a history of sexual assaults during military operations and taking no steps to prevent violence, the alleged sexual assaults would occur. This is particularly so given that the alleged sexual assaults occurred days after the alleged violence during the first evictions. With respect to Da Silva, whether the police and the military were engaged in an “acceptable, safe activity” by participating in the forced evictions and whether the sexual assaults were a “sudden, unexplained event” are clearly in dispute. These are all issues for determination by the trial Judge.
Conclusion
61Having considered the relevant factors and circumstances, including the presumption that the Disputed Amendments should be permitted in the absence of prejudice, I conclude that the Plaintiffs should be granted leave to amend the Current Amended Claim in the form of the Proposed Second Amended Claim.
III. Disposition and Costs
62Order to go granting the Plaintiffs leave to amend the Current Amended Claim in the form of the Proposed Second Amended Claim with Hudbay granted leave to amend to plead additional and/or amended defences, as necessary.
63If the parties are unable to agree on costs, they may file written submissions (not to exceed 5 pages excluding Costs Outlines) pursuant to a timetable agreed upon by counsel. If counsel cannot agree on a timetable, they may schedule a telephone case conference.
Released: January 21, 2020
Master M.P. McGraw