The plaintiff bank brought a motion seeking leave to amend three consolidated statements of claim to add allegations of fraud and fraudulent misrepresentation against a lawyer and a property appraiser involved in mortgage transactions, and to assert that the claims survived bankruptcy under s. 178 of the Bankruptcy and Insolvency Act.
The defendants opposed the motion, arguing the amendments introduced a new cause of action after the expiry of the applicable limitation period.
The court held that the original pleadings alleged negligence only and did not contain the material facts necessary to support allegations of fraudulent misrepresentation, including knowledge of falsity or intention to deceive.
Because the proposed amendments introduced a fundamentally different cause of action, the limitation period created a presumption of non‑compensable prejudice.
The motion to amend was therefore dismissed.