berger, martin and o'ferrall jja

3.65: Permission of Court to amendment before or after close of pleadings

Case Summary

The Plaintiff and the Defendant were joint owners of several oil and gas wells, some of which were the subject of a joint operating agreement. Various issues were in dispute including the parties’ respective ownership interests in the wells, the entitlement to operate the wells, and the amounts owed or payable to each party for well revenues and expenses. The Defendant applied to amend its pleadings on the eve of Trial (the “Amendment Application”). The Amendment Application was heard and denied on the first day of Trial. The Trial itself was also decided in the Plaintiff’s favor. The Defendant appealed both the Trial Decision and the Trial Judge’s Decision to deny the Amendment Application.

The Court of Appeal cited the applicable test for amendments pursuant to Rule 3.65, which gives the Court a broad discretion to permit the parties to amend pleadings unless: the amendment would cause non-compensable prejudice; the amendment is hopeless; unless permitted by statute, the amendment seeks to add a new party or new cause of action after the expiry of a limitation period; or, there is an element of bad faith.  The Trial Judge had found that the proposed amendments would result in non-compensable prejudice because: the litigation had been ongoing for some time; the amendments would shift the focus to matters occurring many years ago, possibly as far back as the 1980s; the amendments would fundamentally change the issues in the lawsuit; granting the Amendment Application would require the Trial to be adjourned; and, the Defendant could have raised the amendment issue as early as 2010 or 2013 but did not raise it until three weeks before Trial, which was heard in October 2014. The Court of Appeal saw no error with the Trial Judge’s identification and application of the test to amend pleadings or with the denial of the Amendment Application and thus dismissed the Appeal on this point. The Defendant’s appeal of the Trial Decision was also dismissed on all grounds.

View CanLII Details