395545 Alberta Ltd., Carrying on Business As “ Appollo Drugs v. Herbs, 2012 ABQB 184

Court of Queen ’ s Bench of Alberta Citation: 395545 Alberta Ltd. (Appollo Drugs and Herbs) v. Telus Communications Inc., 2012 ABQB 184 Date: 20120319 Docket: 0403 13205 Registry: Edmonton Between: 395545 Alberta Ltd., Carrying on Business As “ Appollo Drugs and Herbs ” Plaintiff - and - Telus Communications Inc. Defendant Corrected judgment: A corrigendum was issued on March 21, 2012; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum of Decision of W.

Breitkreuz, Master in Chambers _______________________________________________________ [ 1 ] This is an application by the plaintiff to add another plaintiff as a claimant, and to increase the amount claimed for damages.

[ 2 ] The facts appear to be fairly straightforward, and in my opinion the rules and legislation applicable to this application are also relatively straightforward. [ 3 ] The plaintiff commenced an action on July 5, 2004 for damages caused to the plaintiff as a result of a faulty setup of a toll- free telephone number and a toll-free fax number, which was eventually resolved. [ 4 ] The proposed claimant, 1057035 Alberta Ltd. was incorporated a year before the statement of claim was issued for the purpose of assuming the international pharmaceutical business, and any income from the international pharmaceutical business was transferred from the existing plaintiff to the proposed plaintiff. [ 5 ] Both businesses were carried on under the trade name Appollo Drugs and Herbs, and the only shareholder and director of both companies is Andrew Wong.

He swears that because this was in effect an arrangement relating to the internal financing of his companies, that he did not believe it was important that the proposed plaintiff also be added as a plaintiff. [ 6 ] The main rule bearing on this application is Rule 3.73(1)(

c) which reads as follows: No claim or action fails solely because (

c) a party was incorrectly named as a party or was incorrectly omitted from being named as a party [ 7 ] The relevant legislation is section 6(3) (

c) of the Limitations Act , RSA 2000, c. L-12 which provides as follows:

(3) When the added claim adds or substitutes a claimant, or changes the capacity in which a claimant sues: (

c) the court must be satisfied that the added claim is necessary or desirable to ensure the effective enforcement of the claims originally asserted or intended to be asserted in the proceeding. [ 8 ] Subsection (5) of

section 6 of the Limitations Act provides that the claimant has the burden of proving that the requirement of subsection (3)(c), if in issue, has been satisfied. [ 9 ] Defence counsel conceded during the application that section 6(3) (

c) is the only issue the Court needs to deal with relating to this application. [ 10 ] The cases show that only a modest amount of evidence is needed to support an amendment. One of these cases is C.H.S. v. Alberta, 2006 ABQB 528 . [ 11 ] Both counsel agreed that the resolution of the issue facing the Court, in the context of section 6(3) (

c) is whether the proposed plaintiff is “ an other party ” or conversely, “ a stranger to the existing action ” . [ 12 ] The plaintiff relies on the analysis of Mr. Justice Macklin in Andritz Ltd. v. Quality Fabricating and Supply Limited , 2010 ABQB 101 , who in turn used the analysis in Wong v. Voong , 2004 ABCA 216 , in which the Court of Appeal referred to a report produced by the Alberta Law Reform Institute entitle Limitations, Report No. 55. In that report a true stranger is described as a non- diligent claimant attempting to slip an untimely claim into an action in which his defendant is already a party.

An “ other claimant ” is described as one who is necessary if the original claim asserted is to be enforced effectively.

[ 13 ] The defendant argues that the proposed claimant is a true stranger to the action and fits into the category of a completely separate entity trying to take advantage of an existing action to which he has no connection. [ 14 ] In the Andritz case Mr. Justice Macklin described the existing plaintiff and the proposed plaintiff as part of the wood processing division of the pulp and paper business of the Andritz Group, and as such may be characterized as “ sister companies ” . He says at paragraph 81: ... The allegations relating to the existence of a contract and a duty of care are precisely the same.

The same breaches are alleged. The identical damages are claimed. The two Andritz companies are related. This is not a situation where a different claimant who has a claim against the same defendant wishes to be added as a claimant with consequent amendments alleging different causes of action and other heads of damages. [ 15 ] In this case the damages claimed are not the same. The plaintiff alleges that within a week after the incorporation of the proposed claimant the damages incurred were by the proposed claimant and the damages allegedly incurred up to July 16, 2003 were incurred by the existing plaintiff.

I think a complete answer to that distinction is that if the existing plaintiff applied to increase the quantum of damages there could be no sustainable opposition to such an application. [ 16 ] It is clear to me that the individual Andrew Wong is the alter ego of both companies. He is the only shareholder and director of both companies, and the controlling mind of both companies.

Surely these companies fit squarely within any reasonable definition of sister companies. [ 17 ] The application is allowed, both in regard to the proposed claimant being added as a plaintiff, and in regard to the quantum of damages claimed. As is usual in these circumstances, the costs of the application must be borne by the plaintiffs, as well as any additional costs attributable to the amendments. Heard on the 5 th day of December, 2011. Dated at the City of Edmonton, Alberta this 19 th day of March, 2012. W. Breitkreuz M.C.C.Q.B.A. Appearances: Phyllis Van Campenhout Hall & Van Campenhout

for the Plaintiff Donald Cranston, Q.C. Bennett Jones LLP for the Defendant _______________________________________________________ Corrigendum of the Memorandum of Decision of W. Breitkreuz, Master in Chambers _______________________________________________________ The Citation line is corrected to read 395545 Alberta Ltd. (Appollo Drugs and Herbs) v. Telus Communications Inc., 2012 ABQB 184