4.31: Application to deal with delay
7.3: Summary Judgment (Application and decision)

Case Summary

In advancing the underlying Action, the Plaintiffs sought to enforce an agreement in which the Defendant was to purchase shares of the corporate Plaintiff (the “Agreement”). Before Master Robertson, the Plaintiffs requested the addition of several parties, as well as addition of causes of action to include conspiracy and fraud. The proposed Defendants did not participate in the proceedings, but the existing Defendant opposed the addition of causes of action, and brought a Cross-Application to argue that the claim should be dismissed for delay, pursuant to Rule 4.31, or dismissed summarily on the merits, pursuant to Rule 7.3.

In addressing the various Applications, the Court’s analysis was first directed at dismissal for long delay pursuant to Rule 4.31. That Application was not successful, so it was also necessary to consider amendment of the claim, and then Summary Judgment subject to any successful amendments.

The allegation of fraud was of central importance for the Court’s determination of each Application. In large part, this was because one of the proposed Defendants had recently confessed to fraudulently manufacturing the Agreement, and moreover, that this proposed Defendant had ties to both the existing Defendant and the other proposed Defendants.

With respect to dismissal for long delay, no particular time period was identified as dilatory, and instead the focus was on the cumulative effect of delay. The possibility that evidence of fraud had been concealed weighed heavily in the Court’s reasoning, especially in the absence of strong evidence establishing inordinate and inexcusable delay.

With respect to amending the Claim, the main issue was whether amendment was statute-barred through expiration of the limitation period. The Court held that the confession of fraud by one proposed Defendant, and the potential involvement in that fraud by the other proposed Defendants, implied actual or potential fraudulent concealment, respectively. As such, the limitation period was suspended for the proposed Defendant who confessed to fraud, and determination of similar suspensions regarding the other proposed Defendants was deemed to be a matter fit for Trial. The existing Defendant’s potential involvement in the conspiracy and/or fraud invoked section 6 of the Limitations Act, RSA 2000, c L-12, allowing addition of those causes of action against the existing Defendant, regardless of fraudulent concealment.

With respect to Summary Judgment of the amended Claim, the new allegations created a circumstance where “a party asserts certain critical facts that are difficult if not impossible for the opposing party (who has the burden of proof) to disprove, but there is some identifiable, palpable reason to believe that the party making the assertion may not be telling the truth.” As such, the Court found it would be necessary to sort through the conflicting accounts by attaining viva voce evidence at Trial and weighing various parties’ credibility.

In the result, the proposed Defendants were added to the Action, and the matter was allowed to advance, albeit with the Master reserving jurisdiction to make procedural orders remedying delay (pursuant to Rule 4.31(1)(b)).


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