3.74: Adding, removing or substituting parties after close of pleadings

Case Summary

The Applicant applied to amend the Pleadings in this Action, including to add a party (the “Proposed Defendant”) to the lawsuit and to amend the Certification Order (as the matter had already been certified as a Class Action) accordingly. Eamon J. refused the amendments pertaining to the Proposed Defendant but allowed the other amendments, which did not relate to the Proposed Defendant.

Eamon J. commented that the Court has broad discretion to amend pleadings after certification of a Class Action. Generally, amendments should be allowed no matter how careless or late, subject to the following exceptions: (a) the amendment seeks to add a new party or a new cause of action after the expiry of the limitation period unless otherwise permitted by statute; (b) the amendment is hopeless, in that an amendment if it had been in the original pleadings would have been struck; (c) the amendment would cause serious prejudice to the opposing party that is not compensable in Costs; and (d) there is an element of bad faith associated with the failure to complete the amendment in the first instance.

Eamon J. cited Attila Dogan Construction and Installation Co. Inc v AMEC Americas Limited, 2014 ABCA 74 for the propositions that a party seeking substantive amendments must present some evidence in support of the Application to amend, and that the Judge may engage in some limited assessment of the evidence in determining if the threshold is met.

Citing Canadian Natural Resources Limited v Arcelormittal Tubular Products Roman SA, 2013 ABCA 87 and other caselaw, Eamon J. held that where fraud, highhandedness, or malicious conduct is alleged, the evidentiary test is “stiffer” and there must be “good ground” or “exceptional circumstances” with “significant evidence in support of the amendments”.

Eamon J. found that the Applicant did not satisfy the evidentiary threshold required to join the Proposed Defendant in respect of claims for knowing assistance in breach of fiduciary duty. There was no evidence to suggest that the Proposed Defendant knew of impropriety in the operations or the dishonest conduct asserted by the Applicant.

Eamon J. further found that the Proposed Defendant was not stonewalling the Applicant by not disclosing records, and that there was no evidence that the absence of records was a problem of the Proposed Defendant’s making. As such, there was no evidence meeting the low evidentiary standard to support the other categories of proposed amendments against the Proposed Defendant.

Eamon J. allowed the other amendments. Having noted that none of the Defendants objected to the other amendments, which were technical in nature, Eamon J. held that these amendments arose from facts already pled against the existing Defendants and did not change the substance of the case. In addition, these amendments were supported sufficiently by the exhibits to the Applicant’s Affidavit to the extent evidence was required.

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