ST ALBERT (CITY) v MELCOR DEVELOPMENTS LTD

The Defendant, Melcor Developments Ltd (“Melcor”), applied to amend its Third Party Claim to add WSP Canada Inc. (“WSP”) as a Third Party Defendant, pursuant to Rule 3.74, or alternatively to extend the time to file and serve its Third Party Claim against WSP, pursuant to Rules 3.45 and 13.5.

The Plaintiff commenced the Action in 2017 alleging deficiencies in subdivision design and construction, based on an engineering report completed in October 2013. The contract between the Plaintiff and Melcor extended the normal limitation period by an additional four years. Melcor and WSP each defended and advanced claims of contribution and indemnity against one another through a Notice of Claim against Co-Defendant. Although WSP was initially named as a Defendant, the Plaintiff later discontinued its claim against WSP as limitation-barred. Melcor then sought to add WSP as a Third Party Defendant for contribution or indemnity.

Applications Judge Summers considered Rule 3.74 and the test for amending pleadings set out in Attila Dogan Construction & Installation Co Inc v AMEC Americas Limited, 2014 ABCA 74, which permits amendments where supported by some evidence, provided they are not hopeless, do not cause prejudice not compensable in costs, do not add a party or cause of Action after expiry of a limitation period, and are not tainted by bad faith.

Melcor relied on Section 6 of the Limitations Act, RSA 2000, c L-12, arguing that the Third Party Claim was an added claim that could proceed despite expiry of the limitation period. Applications Judge Summers rejected this argument, finding the proposed amendment was limitation-barred and therefore hopeless.

Applications Judge Summers held that WSP could not have had the requisite knowledge of the added claim within the limitation period, as the underlying Action had not yet been commenced. The Court found that Section 6 did not apply and that allowing the amendment would improperly defeat WSP’s limitation defence. Further, the Court found that, since WSP was not a party to the agreement between the Plaintiff and Melcor which extended limitation periods, Melcor bore the risk of the limitation period expiring. The alternative request to extend time pursuant to Rule 13.5 was dismissed as being academic.

Accordingly, the Court dismissed the Application with costs to WSP.