Court Confirms Test For Amendments Remains Same Under New Rules

In BRZ Holdings Inc. v. JER Envirotech International Corp., the Court confirmed that the test for amendments of pleadings remains the same under the new British Columbia Supreme Court Civil Rules, which became effective July 1, 2010, as under the previous Rules.

 

[5]             The plaintiff’s claim is currently set out in an amended statement of claim filed in August, 2010 (the “current pleading”).  That document is 18 pages long with 68 paragraphs.  The plaintiff now seeks to file a second amended statement of claim (the “proposed pleading”) that adds more that 30 new paragraphs (some of which include multiple subparagraphs) as well as amendments to some of the existing paragraphs.  Most, although not all of these, amendments are opposed.

 

[6]             Amendments to pleadings are now governed by Rule 6-1 of the Supreme Court Civil Rules, B.C. Reg. 168/ 2009 [Rules], which is similar to the former rule 24 in that amendments at this stage of the proceedings require leave of the court.  Cases decided under the former rule make clear that amendments will usually be allowed unless the opposite party can demonstrate actual, as opposed to potential, prejudice, or unless the amendments would be useless:  Langret Investments S.A. v. McDonnell (1996), 21 B.C.L.R. (3d) 145 (C.A.) at paras. 34 and 43.  The court’s discretion is “completely unfettered and subject only to the general rule that all such discretion is to be exercised judicially, in accordance with the evidence adduced and such guidelines as may appear from the authorities” [emphasis added]: Teal Cedar Products v. Dale Intermediaries Ltd. (1996), 19 B.C.L.R. (3d) 282 (C.A.) at para. 45.  Nothing in the new Rules suggests any change in the court’s approach.

 

[7]               The plaintiff says the proposed amendments allege facts that emerged through the discovery process and facts that have already been referred to in responses to demands for particulars.

 

[8]               The defendants object to some of the proposed amendments because they allege representations made to the plaintiff company before it existed or because they allege duties owed to Mr. Noshir Divecha, the principal of the plaintiff company, who is not a party to this action. The say the plaintiff company acquired no rights prior to the date of its incorporation and cannot allege reliance on representations made prior to that date.

 

[20]           The plaintiff does not plead its case as one based on professional negligence.  The “qualifications” are a defined term in the pleading and are not alleged to arise from any professional standards governing the preparation of financial statements.  The plaintiff apparently will not be calling any expert evidence.

 

[21]            Nevertheless, the proposed amendments allege that certain specific information should have been included in certain financial documents.  The plaintiff may not be alleging professional negligence, but if the defendants are able to adduce evidence that the documents were prepared in accordance with professional standards, that may go the question of whether they are a misrepresentation or to the reasonableness of the plaintiff’s reliance upon them.  If counsel for the plaintiff wishes this trial to proceed as scheduled, those paragraphs cannot be included in the second amended statement of claim.

 

[22]            I therefore allow the proposed amendments, with the exception of paragraphs 33, 82-85 and 88-89.

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