The Defendant applied for leave to file a late Third Party Notice. The Plaintiff opposed the Application.

To support its Application, the Defendant relied on Rule 13.5, which allows the Court to extend time. Master Schlosser indicated that three factors: (1) length of delay, (2) explanation for the delay, and (3) relative prejudice to the parties, are to be considered under Rule 13.5. The Court noted that the test is flexible, and that the absence of an explanation for the delay may not, in and of itself, be fatal to the Application. The Court also pointed out that the most important factors are serious prejudice or inexcusable delay, and that if the delay is significant, evidence is required to explain it. Master Schlosser remarked that a late Third Party claim must have an “air of reality”, so that the Court does not act without purpose.

Master Schlosser indicated that the first hurdle for the Defendant was whether a statutory limitation had expired, since if it were plain and obvious that such limitation had expired, there would be no point in allowing the Third Party Notice to be filed, as it would just be struck out. On the other hand, if there was reasonable doubt that the limitation had expired, and all of the other elements were satisfied, the Third Party Claim could proceed while preserving the Third Party’s rights to raise a limitations defence. Master Schlosser noted that Rule 3.45 allows a Third Party Claim to be made for contribution even when the primary limitation has run against the Plaintiff; a limitation is but one of the factors to be considered in determining the relative prejudice to the parties. In addition, the Court stated, referring to existing case law, that the ability to start a new claim is apparently a reason for not allowing a Third Party Action; conversely, the loss of a right to start a new Action can weigh in favour of a late Third Party Notice.

The Court determined that it was plain and obvious that limitations had passed. The Master suggested that, even if he were wrong about this, the relative prejudice to the Plaintiff and the Third Party would be significant, since the original Action between the Plaintiff and Defendant had been settled, and many steps in that lawsuit would be unwound, contrary to the Foundational Rules, should the Third Party Claim proceed.