3.68: Court options to deal with significant deficiencies

Case Summary

The Defendant Applicant, Truman Development Corporation (“Truman”), applied to strike portions the Plaintiff’s (“Mikkelsen”) Claim under Rule 3.68 and the Plaintiff cross-applied to amend its Claim. The Plaintiff initially commenced two Actions for declarations that the two Joint Venture Agreements (the “JVAs”) entered into with Truman were not binding legal agreements or, alternatively, that the JVAs had been breached and could be rescinded. The within Action commenced in 2012 (the “Chestermere Action”), and the second Action commenced in 2013 (the “Langdon Action”).

The Langdon Action went to Trial but counsel for the parties failed to discuss what influence the outcome of the Langdon Action might have on the Chestermere Action. Truman, who had ultimately lost the Langdon Action, nevertheless had a number of issues decided in its favour. Truman argued that those issues (the “Decided Issues”) were subject to “issue estoppel” and could not be re-litigated in the Chestermere Action. To prevent the re-litigation of the Decided Issues, Truman proposed striking those related parts of the Chestermere Action from Mikkelsen’s existing pleadings.

Master Prowse noted that the evidence of surrounding circumstances leading up to the Chestermere Action could be different than the evidence presented in the Langdon Action and that the Application in the Chestermere Action was not the time to argue that the two Actions should have been tried together. In other words, counsel could not now argue that the outcome of the Decided Issues in the Langdon Action should bind the result in the Chestermere Action. Accordingly, Master Prowse declined to strike portions from Mikkelsen’s existing pleadings relating to the Decided Issues and allowed the Plaintiff’s Application to amend the Statement of Claim in order to facilitate an orderly hearing of the Chestermere Action.

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