The plaintiff corporation brought a motion to amend its statement of claim to increase the damages sought from $40 million to $650 million and to clarify allegations of fraudulent misrepresentation arising from the purchase of a company under a share purchase agreement.
The defendants opposed the amendment, arguing it fundamentally changed the litigation, was legally untenable, highly prejudicial, and constituted an abuse of process because the agreement limited recovery to an escrow fund absent fraud by the shareholders.
The court applied Rule 26.01 of the Rules of Civil Procedure, holding that amendments must be granted unless the claim is untenable, causes non-compensable prejudice, or constitutes an abuse of process.
Although the amendment significantly expanded the claim and came late in the litigation, the court found the proposed claim was not clearly doomed to fail and that any prejudice could be addressed through procedural adjustments and costs.
Leave to amend the pleading was therefore granted.