CLUB INDUSTRIAL TRAILERS v PARAMOUNT STRUCTURES, 2022 ABQB 34
3.65: Permission of Court to amendment before or after close of pleadings
3.68: Court options to deal with significant deficiencies
6.14: Appeal from master’s judgment or order
13.7: Pleadings: other requirements
The Defendant appealed a Master’s Order disallowing certain amendments to its Statement of Defence and certain aspects of a proposed Counterclaim.
Justice Feth began by discussing the Standard of Review on Appeal from a Master’s Order. The Court stated that such an Appeal is de novo, and that new evidence may be admissible pursuant to Rule 6.14(3) if the new evidence is relevant and material.
His Lordship then turned to the principles guiding amendments to Pleadings, observing that the Court may give permission to amend before or after the close of Pleadings pursuant to Rule 3.65. Justice Feth stated that the “classic rule” is that amendments are allowed no matter how careless or late, unless there is prejudice to the other side that cannot be repaired (by a Costs Award or otherwise). The result is that there is a “presumption in favor of allowing amendments.” The exceptions to this general rule are: (1) if the amendment seeks to add a new party or cause of action after the expiry of a limitation period; (2) if the amendment is hopeless; (3) if the amendment would cause serious prejudice to the opposing party, not compensable in Costs; and (4) if there is an element of bad faith associated with the failure to plead the amendment in the first instance.
Hopeless amendments are those which involve a proposed pleading that, if in the original pleading, would have been struck for suffering from one or more deficiencies under Rules 3.68(2) and (3).
Justice Feth then turned to an analysis of each of the proposed amendments in the context of the guiding principles described above.
His Lordship held that the Appeal, and thus the proposed amendments, should be allowed. The narrow exception to this was with regard to instances where the Defendant sought to plead that a certain misrepresentation by the Plaintiff was made “negligently or otherwise.” Justice Feth held that the phrase “or otherwise” ought not to be included in the amendment because it implied fraud, which must be specifically pleaded pursuant to Rule 13.7.
Justice Feth therefore allowed the Appeal, subject to the clarification regarding fraud.View CanLII Details