master robertson

3.65: Permission of Court to amendment before or after close of pleadings
6.6: Response and reply to application
7.3: Summary Judgment (Application and decision)

Case Summary

The Parties, former business partners, decided to wind up their joint venture operations and enter into a separation agreement after a dispute arose. The Plaintiffs commenced an Action in 2013 seeking to enforce certain terms of the separation agreement while the balance of the transactions contemplated in the separation agreement were concluded. The transactions contemplated by the separation agreement closed in December, 2013, and the original Action filed by the Plaintiffs was dismissed via a Consent Order. On January 21, 2014, the Plaintiffs commenced a new Action which, in essence, sought to look behind the concluded separation agreement. The Defendants sought Summary Dismissal of the claim in its entirety on the basis that the new Action was simply the first Action in disguise. The Plaintiffs cross-applied to amend their Statement of Claim, compel Undertakings and to Question a Third Party.

Master Robertson noted that, normally, the Court would address an Application to amend Pleadings before considering an Application for Summary Dismissal. However, the defects in the Plaintiffs’ claim were fundamental and could not be rectified by the Amendment Application. Under the circumstances, it was appropriate to address the Application for Summary Dismissal first. If that Application were successful, the rest of the Applications would become moot.

The Application was originally heard in a half-day Special Chambers Hearing, but could not be concluded on the first day. When the Hearing was resumed some nine months later, the Plaintiffs presented new evidence by way of a “compendium” of documents and correspondence relating to what the Plaintiffs learned after consent was given to dismiss the first Action. Certain exhibits in the compendium were drawn from Affidavits sworn in the new Action; however, it also included correspondence not previously in evidence. The compendium was not presented to the Defendants until shortly after the Hearing began. Counsel for the Defendants objected to the compendium, arguing that it was not in evidence and, if it were, that it would have been late in violation of Rule 6.6. The Application was therefore adjourned so that the compendium could be placed in Affidavit form and the Defendants could have an opportunity to cross-examine and file a reply Affidavit. Costs of $10,000 were awarded to the Defendants.

The Plaintiffs had filed a Partial Discontinuance discontinuing their Claims against certain of the Defendants; however, in doing so, they had purportedly inadvertently discontinued their Action against parties who they wanted to keep in the litigation. After realizing their error, the Plaintiffs brought an Application to Amend their Statement of Claim to re-add a Defendant. Concurrently, the Plaintiffs sought to file an Amended Discontinuance which had the effect of adding the Defendant against whom they had accidentally discontinued. When the Clerks accepted the Amended Discontinuance, the Plaintiffs withdrew the Application to correct the error. The Defendants argued that the Plaintiff could not “undo” a Discontinuance, and acceptance by the Clerk of the Court did not make the amendment valid. For the purposes of the Summary Judgment Application, Master Robertson approached the Amended Discontinuance as valid without ruling that it was.

Master Robertson noted that an Application for Summary Judgment will only be successful where the moving parties’ position is “unassailable”, meaning that it is so compelling that the likelihood of success is very high. Procedurally, Summary Judgment can only be given if a disposition that is fair and just to both parties can be made on the existing record. In considering the Summary Judgment Application, Master Robertson was able to review the pleadings from both Actions, the separation agreement and correspondence leading up to the closing of the transactions described in the separation agreement. On the basis of this record, Master Robertson found that the new Action related to the same conduct, transaction and events as the original Action. Accordingly, the principles of res judicata and abuse of process operated to estop the Plaintiffs from proceeding with the new Action. The Action was summarily dismissed.


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