Manji v Prasad, 2016 ABQB 273

Court of Queen ’ s Bench of Alberta Citation: Manji v Prasad, 2016 ABQB 273 Date: 20160513 Docket: 0203 20469 Registry: Edmonton Between: Nashir Manji Respondent (Plaintiff/Defendant by Counterclaim) - and - Vijendra Prasad and Naaz Nisha Hassan Applicants (Defendants/Plaintiffs by Counterclaim) _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice Dawn Pentelechuk _______________________________________________________ I. Introduction [ 1 ] The parties seek advice and directions on whether the Defendant/Plaintiff by Counterclaim Vijendra Prasad (“Mr. Prasad”)

is required to amend his defence to plead resulting trust and relief from forfeiture and if so, whether leave to amend should be granted. II. Background and Litigation History [ 2 ] I was scheduled to hear the trial of this action in October 2015. Shortly before the start of trial, counsel for Mr. Prasad advised counsel for the plaintiff/defendant by counterclaim, Nashir Manji (“Mr. Manji”) that if an agreement existed between the parties, which he had denied throughout the course of the litigation, he would argue a resulting trust was created for Mr. Prasad’s benefit or alternatively, that Mr.

Prasad was entitled to relief from forfeiture. [ 3 ] The parties appeared before me to outline their positions and seek directions. [ 4 ] Mr. Manji argued an amendment to Mr. Prasad’s Amended Statement of Defence was required and leave to amend should be denied. Mr. Prasad argued no formal amendment was required, but if it was, leave to amend should be granted. [ 5 ] The trial was adjourned to allow for further argument and submissions on these issues. The defendant Naaz Nisha Hassan did not participate in this application. [ 6 ] The dispute between the parties dates back many years.

The following facts are largely taken from the Agreed Statement of Facts in evidence. [ 7 ] In 1997, Mr. Prasad agreed to purchase certain real property (“the lands” or “the property”) from Donald Jaskiw for $99,500 (“the agreement”). [ 8 ] Under the terms of the agreement, Mr. Prasad was to provide a deposit of $4,000, assume unpaid vendor’s equity of $15,500 plus interest, assume a CIBC mortgage and pay $2,998.58 upon execution of the agreement. [ 9 ] Mr. Prasad complied partially with the terms of the agreement. In November 2000, Mr. Prasad paid Mr.

Jaskiw the full amount of the unpaid vendor’s equity. [ 10 ] Shortly thereafter, Mr. Jaskiw executed an assignment of his rights under the agreement with the name of the Assignee left blank (“the assignment”). Mr. Manji alleges Mr. Jaskiw executed the assignment for his benefit. On December 8, 2000, Mr. Manji became and remains the registered owner of the lands. [ 11 ] Mr. Prasad has remained in possession of the lands since the assignment in 2000. It is unclear on the evidence whether Mr. Prasad ever held title to the lands. [ 12 ] Mr. Jaskiw is now deceased. [ 13 ] Following the assignment to Mr. Manji, Mr.

Prasad and the co-defendant Naaz Hassan made some payments toward the CIBC mortgage but made no further payments on the mortgage after November 2002. [ 14 ] In May 2004, Mr. Manji obtained a new mortgage with TD Canada Trust. The CIBC mortgage was discharged. The amount owing on the CIBC mortgage at the time of discharge was $53,112. [ 15 ] In October 2002, Mr. Manji filed an Amended Statement of Claim against Mr. Prasad and Ms. Hassan for amounts due under the assignment. The amount claimed was $15,982.51 as at November 17, 2000 plus mortgage and insurance premium arrears of $2,076.45 paid by Mr.

Manji, for a total of $18,059.96 plus interest. [ 16 ] In the Amended Statement of Claim, Mr. Manji claimed the following relief:

a) a declaration of the amount owing under the agreement;

b) judgment in the amount of $18,058.96 plus interest;

c) a vendor’s lien for the amount declared owing;

d) in default of payment of the said amount, sale of the lands;

e) in the event of a sale, forfeiture of monies paid and possession of the lands;

f) an appointment of a receiver;

g) possession of the lands;

h) an order granting a period of redemption of one day or such other period as the Court may direct. [ 17 ] In April 2003, Mr. Prasad, then self-represented, filed a Statement of Defence and Counterclaim alleging in part, that transfer of title to Mr. Manji was done fraudulently, that there was no agreement between him and Mr. Manji, that Mr. Manji paid Mr. Jaskiw, on his behalf, from monies Mr. Manji owed Mr. Prasad for renovation work performed by Mr. Prasad in November 2000, and that Mr. Manji still owed him money for these renovations. In his Counterclaim, Mr.

Prasad asked that title to the lands be restored to him. [ 18 ] In July 2003, Mr. Manji applied for an Order to terminate the agreement, to have any monies paid by Mr. Prasad under the agreement forfeited and to have Land Titles discharge a caveat that Mr. Prasad had registered against title to the lands (the “caveat”).

[ 19 ] The application came before Lee J who declined to order

summary judgment noting the “somewhat convoluted” nature of the matter ( 2003 ABQB 663 at para 10 ). He directed the parties to trial. [ 20 ] The action stalled until April 2010, when an Appointment for Questioning (then called Examination for Discovery) was filed by Mr. Manji. [ 21 ] In May 2013, Jones J ordered Mr. Prasad to pay monthly rent of $1,400 into Court. Mr. Prasad has complied with the terms of that Order. [ 22 ] In June 2013, Mr. Manji filed an Amended Amended Statement of Claim alleging fundamental breach of the agreement by Mr. Prasad and seeking a declaration that the agreement is terminated.

The same alternative relief was claimed as set out in his Amended Statement of Claim. [ 23 ] Mr. Prasad filed an Amended Statement of Defence and Amended Counterclaim in February 2014 denying any agreement between the parties and denying any breach of any agreement pertaining to the lands. In his Counterclaim, he requested transfer of title back to his name and judgment against Mr. Manji for $13,000 plus interest. III. Is an Amendment to the Pleadings Required? [ 24 ] Throughout the litigation, Mr. Prasad has denied any agreement exists between him and Mr. Manji and has alleged Mr.

Manji fraudulently obtained the assignment from Mr. Jaskiw. [ 25 ] He now seeks to argue that if an agreement is found to exist, Mr. Manji holds title to the property under a resulting trust for Mr. Prasad’s benefit or alternatively, that Mr. Prasad is entitled to relief from forfeiture. [ 26 ] Although he argues no amendment to his Amended Statement of Defence is required, Mr. Prasad did provide his proposed form of Amended Amended Statement of Defence. The paragraphs in issue are as follows: 13. If the Court finds that Mr. Manji did not obtain title to the Property by fraud (which is not admitted), Mr.

Prasad claims that the title to the Property was being held by Mr. Manji under a resulting trust for Mr. Prasad. 14. If there was an Agreement of Sale with respect to the Property enforceable by Mr. Manji, and if Mr. Prasad is in default of that Agreement (neither of which are admitted), then Mr. Prasad is entitled to relief from forfeiture at Common Law or, pursuant to

Section 38 of the Law of Property Act R.S.A 2000 Ch. L-7 or

Section 10 of the Judicature Act R.S.A 2000 Ch. J-2, or any or all of them. Alternatively, Mr. Prasad is entitled to redeem the property by paying all amounts due to Mr. Manji. Relief Sought: 15. The Defendant, Vijendra Prasad, seeks an Order: a. Dismissing the Plaintiff’s Claim; b. Directing that title to the Property be registered in name of the Defendant, Vijendra Prasad; c. Relief from forfeiture at Common Law or, pursuant to

Section 38 of the Law of Property Act R.S.A. 2000 Ch. L-7 or

Section 10 of the Judicature Act R.S.A. 2000 CH. J-2, or any or all of them; d. Directing that the Defendant, Mr. Prasad, is entitled to redeem the property by paying any amount found to be due and owing to the Plaintiff pursuant to the Agreement for Sale alleged in the Statement of Claim; e. Awarding the Defendant, Vijendra Prasad all costs of these proceedings; and f . Such other relief as the nature of this case may require and this Honourable Court may deem fit. [ 27 ] Mr. Prasad argues resulting trust and relief from forfeiture are merely defences raised in the alternative, not causes of actions or claims.

Further, the technical rules of the Alberta Rules of Court , AR 124/2010, do not require these defences be pleaded and none of the underlying facts have changed. For all of these reasons, he argues, an amendment is not required. [ 28 ] Mr. Prasad argues that his prior letter to opposing counsel advising that he would be raising relief from forfeiture and resulting trust at trial is sufficient notice. In support of his position, he relies on Balm v 3512061 Canada Ltd , 2003 ABCA 98 at para 11 : 11 Paragraph 37 in the amended statement of claim is new, and is clearly a new cause of action.

However, though the legal conclusion pleaded is new, the acts alleged in it are not new. It is trite law that a statement of claim need not name causes of action or draw legal conclusions. It need only plead facts.

So the plaintiff could merely have sent the original defendants' counsel a letter warning that he would argue at trial that proof of such and such facts already alleged in the statement of claim would constitute the cause of action of mutuality of obligations under law merchant... [ 29 ] A cause of action itself need not be pleaded, only the factual situation that discloses the cause of action: Tu v Huang , 2006 ABCA 263 at para 5 . Indeed, r 13.6 is consistent with that.

The Rules do not suggest that causes of action must be pleaded, only “the facts on which a party relies, but not the evidence by which the facts are to be proved”: r 13.6(2)(a). [ 30 ] I agree that none of the underlying facts have changed in the impugned pleadings and relief from forfeiture and resulting trust are not causes of action, but rather defences or forms of relief. Specifically, relief from forfeiture is a discretionary, equitable remedy.

[31] The content of pleadings is addressed in

Part 13: Technical Rules of the Rules of Court. Rule 13.6(2) states:

(2) A pleading must state any of the following matters that are relevant: ... (

b) a matter that defeats, or raises a defence to, a claim of another party; [32] On the plain reading of r 13.6(2), it appears that both resulting trust and relief from forfeiture should be pleaded as they bothare “a matter that defeats, or raises a defence to, a claim of another party”. Mr. Manji pleads Mr. Prasad has fundamentally breached theagreement and the caveat filed by Mr. Prasad should be discharged. In the alternative, he seeks judgment against Mr. Prasad for amountsallegedly owing under the agreement. If an agreement does exist, Mr. Manji’s claim could be defeated on either of these bases. [33] Rule 13.6(3) states:

(3) A pleading must also include a statement of any matter on which a party intends to rely that may take another party by surprise,including without limitation, any of the following matters: (

a) breach of trust; (

b) duress; (

c) estoppel; (

d) fraud; (

e) illegality or invalidity of a contract, including the grounds; (

f) malice or ill will; (

g) misrepresentation; (

h) payment; (

i) performance; (

j) release; (

k) undue influence; (

l) voluntary assumption of risk; (

m) waiver; (

n) lack of capacity or authority; (

o) wilful default; (

p) tender of payment; (

q) a limitation period; (

r) a provision of an enactment. [34] Mr. Manji argues that the proposed amendments are a “complete game changer” that take him by surprise given Mr. Prasad’scontinual denial of the existence of any agreement between the parties. Further, the relief is claimed under the provisions of twoenactments, the Judicature Act, RSA 2000, c C-31 and the Law of Property Act, 2000 c L-7. He argues r 13.6 requires an amendment inthese circumstances. [35] Mr.

Prasad argues that the notion of relief from forfeiture applies whenever a legal relationship exists and does not depend onthe existence of a contract: Kelvedon Holdings Ltd v Papandreou (1996), 190 AR 222, (Alta QB) at para 36.Although Mr. Prasad cites both s 38 of the Law of Property Act and s 10 of the Judicature Act, he argues relief from forfeiture arisesfrom privity of estate existing between the parties and this should not catch Mr.

Manji by surprise. [36] Rule 13.6(3) states that a pleading must include any matter on which a party intends to rely that may take another party bysurprise. [37] The matters listed in this Rule do not include either relief from forfeiture or resulting trust, but the list is not exhaustive.Under this section, the paramount factor that governs whether or not a matter must be pleaded is if the matter may take another party bysurprise. [38] There is scant judicial commentary on r 13.6(3). [39] In Paniccia Estate v Toal, 2012 ABCA 397, the Court of Appeal, at para 22, noted that r 13.6(3) is very similar to the oldRule 109 which required that a defendant:

... plead specifically any matter ... (

a) which he alleges makes any claim ... of the opposite party not maintainable, or (

b) which, if not specifically pleaded, might take the opposite party by surprise, or (

c) which raises issues of fact not arising out of the preceding pleading. [ 40 ] Paniccia Estate was a medical malpractice claim. The defendant physician appealed on the grounds there were two legal barriers to a finding of liability against him. The first was found in the Fatal Accidents Act which does not provide compensation for the shortening of life.

The second barrier was that the disbursements for American therapies claimed by the plaintiff were not caused by the tort found by the trial judge. [ 41 ] At trial, the plaintiff argued the defendant’s arguments were raised too late, after the close of evidence at trial.

The trial judge agreed and refused to consider these arguments. [ 42 ] In dismissing the appeal, the Court of Appeal concluded the defendant was required to amend his pleadings as these were not common defenses usually raised in medical malpractice cases. [ 43 ] Turning back to the present case, it is similarly difficult to argue that resulting trust and relief from forfeiture are so routine that they would be anticipated in any contractual dispute or legal relationship. On the particular facts of this case, I agree that Mr. Manji may be caught by surprise with these amendments, in part because Mr.

Prasad has always denied an agreement with Mr. Manji. [ 44 ] The purpose of r 13.6(3), in my view, is consistent with the approach to litigation long endorsed by the Courts. Trial by ambush is not tolerated. Parties are entitled to know the case they must meet. [ 45 ] Proper pleadings also assist the trier of fact and a judgment based on an issue not pleaded is improper: Paniccia Estate at para 32 . [ 46 ] More specifically, r 13.6(3)(

r) states that the provision of an enactment must be pleaded. The Rules of Court define an enactment as

an Act or Regulation or any portion of

an Act or Regulation of Alberta or Canada, but does not include the Rules of Court . [ 47 ] It is prudent practice to plead a provision of an enactment when the specific relief claimed is addressed in the Act. Counsel cannot be expected to know or anticipate provisions of all Acts and Regulations that possibly have application to the facts pleaded. [ 48 ] The impugned pleadings raise matters that could catch Mr.

Manji by surprise and the claim for relief from forfeiture is based, at least in part, on the authority found in the Law of Property Act and the Judicature Act . [ 49 ] I conclude the matters raised by Mr. Prasad must be pleaded. IV. Should leave be granted to Mr. Prasad to amend his pleading? [ 50 ] The general rule respecting amendments is that “an amendment should be allowed, no matter how careless or late”: Balm , at para 43 . [ 51 ] In Dow Chemical Canada Inc v Nova Chemicals Corp , 2010 ABQB 524 , Wittmann CJQB, at para 21, identified four exceptions to the general rule permitting amendments:

a) where the amendment would cause serious prejudice to the opposing party, not compensable in costs;

b) where the amendment requested is “hopeless”;

c) where the amendment is barred by the expiration of a limitation period;

d) where there is an element of bad faith associated with the failure to plead the amendment in the first instance. [ 52 ] Mr. Manji argues all four exceptions are relevant to the present application. I will address each in turn. Serious Prejudice [ 53 ] The onus is on the party opposing the amendments to establish serious prejudice that cannot be compensated for in costs. [ 54 ] Mr. Manji points to the inordinate delay that has elapsed since the commencement of the action and suggests the mere passage of time creates an inference of prejudice. He also says he has been prejudiced by the death of Mr.

Jaskiw. [ 55 ] In 42252 Alberta Ltd v Messenger , 2013 ABQB 399 at para 55 , Master Schlosser considered an application by the plaintiff to amend his pleadings 23 years after the impugned events and 13 years after the Statement of Claim was filed. In refusing leave to amend, except those amendments of a housekeeping nature, Master Schlosser acknowledged that the mere passage of time, if it is significant enough, renders most parties defenceless against claims that are old and stale. [ 56 ] Similarly, in 513320 Alberta Inc v Jean , 2015 ABQB 826 at para 33 , Goss J held that the passage of time, particularly where

the ultimate limitation period has passed, is serious prejudice that may lead the court to exercise its discretion to refuse to allow theamendment. [57] No doubt this action is long in the tooth. The agreement between Mr. Jaskiw and Mr. Prasad was signed over 20 years ago.The action was commenced over 13 years ago. Trial dates have been set three times. Yet, the significant delay does not rest solely at thefeet of Mr. Prasad. Mr. Manji failed to take any steps to prosecute his action between 2003 and 2010. No explanation or excuse wasprovided. [58] It is true that Mr.

Jaskiw, an important witness, is now deceased. However, there is no evidence as to when he died, so Icannot conclude this prejudice results from any delay caused by Mr. Prasad. [59] The crux of the alleged prejudice appears to be that the amendments “redefine” the issues. Mr. Manji argues the proposedamendments will necessitate re-opening production and possibly require further Questioning to determine the amounts Mr. Prasad paidto Mr. Jaskiw under the agreement and what amount is currently outstanding. Mr.

Manji argues this may be impossible to determine ifbanking records, as well as insurance premiums and tax payments, are no longer available. He further argues that he may be required toretain an expert to calculate the amount owing under the agreement. [60] This argument is not compelling. First, there is no evidence that any missing records are no longer available. [61] Second, the amounts allegedly owing by Mr. Prasad under the agreement, and the assignment, has always been at issue. In hisAmended Statement of Claim filed in October, 2002, Mr. Manji alleges Mr.

Prasad failed to pay amounts due under the agreement andthat he is entitled to terminate the agreement and obtain possession of the lands. [62] In his Amended Amended Statement of Claim filed in June, 2013, the alleged breaches of the agreement were particularizedto include Mr. Prasad failing to pay the mortgage, property tax and property insurance since at least 2004. [63] The amounts paid by Mr. Prasad to Mr. Jaskiw under the agreement, amounts paid by Mr. Manji since the assignment and theamount still owing under the agreement were placed in issue by Mr.

Manji in 2002 when he filed his Amended Statement of Claim.None of the relief claimed was abandoned by Mr. Manji when he filed his Amended Amended Statement of Claim in 2013. Mr. Manjihad ample opportunity to explore these issues through document production and Questioning. While Mr. Manji argues furtherQuestioning and document production will be required, no particulars are provided. [64] These issues are not triggered by Mr. Prasad’s proposed amendments and they do not, in my view, “redefine” the issues.

Mr.Manji argues that because of the way the pleadings were framed, the issue of how much the parties paid over the years was not “asrelevant”. But matters are either relevant or not. Simply put, they are relevant if they relate to an issue defined by the pleadings. [65] The amounts paid by the parties over the years have always been at issue. Indeed, Mr. Manji’s action hinges on his ability toprove that Mr. Prasad failed to pay the amounts set out in the agreement with Mr. Jaskiw. The relief he claims includes a declaration ofthe amounts owing under the agreement. The fact Mr.

Prasad denies the validity of the assignment from Mr. Jaskiw to Mr. Manji(thereby denying any agreement between the parties) does not change or “redefine” this. [66] Even if further document production and Questioning is warranted by the amendments, this can be compensated for by costsat the end of the day. [67] In short, Mr. Manji has failed to establish that he will suffer serious prejudice if the amendments are permitted. A. Hopeless Amendments [68] In the proposed amendments, Mr. Prasad pleads he is entitled to redeem the property by paying all amounts due to Mr. Manji.Mr.

Prasad claims relief from forfeiture on the basis of both s 38(1) of the Law of Property Act and s 10 of the Judicature Act. Law of Property Act [69]

Section 38 of the Law of Property Act provides the Court with discretion to grant relief in the case of non-payment by apurchaser if the purchaser pays all arrears due under the agreement for sale, any time before a judgment is recovered: 38(1) The Court has jurisdiction and shall grant relief from the consequences of the breach of a covenant or the non-payment ofprincipal or interest by a mortgagor or purchaser in any case in which the mortgagor or purchaser remedies the breach of covenant orpays all the arrears due under the mortgage or agreement for sale with lawful costs and charges in that behalf (

a) at any time before a judgment is recovered, or (

b) within a time that by the practice of the Court relief in it could be obtained. [70] Being ready, willing and able to remedy the breach or pay the arrears is not sufficient. The purchaser must actually remedythe breach or pay the arrears: World Land Ltd v Daon Development Corporation (1981), 20 Alta LR (2d) 33, , 1981CarswellAlta 131 at para 50 (Alta QB); Bjornson v Jolyn Consulting Services Ltd, 2014 ABQB 187 at para 26. [71] While there is no evidence that Mr. Prasad will be able to pay any amounts found owing, I have no evidence to the contraryeither.

Section 38(1) allows for redemption any time before a judgment is recovered and presumably, Mr. Prasad would request at trial,as part of his relief, a reasonable redemption period. [72] An amendment is hopeless if it is clear it cannot succeed. Based on the evidentiary record before me, I cannot conclude the

proposed amendment is hopeless. Judicature Act [ 73 ]

Section 10 of the Judicature Act provides the Court discretionary power to grant relief from forfeiture. The factors to be considered in the exercise of its discretion are the conduct of Mr. Prasad, the gravity of his breaches, and the disparity between the value of the property forfeited and the damage caused by the breach. [ 74 ] Mr. Manji also argues relief from forfeiture under the Judicature Act is hopeless because Mr. Prasad does not have clean hands, a requirement for equitable relief: 1563589 Alberta Inc v 7796528 Canada Inc , 2013 CarswellAlta 1693 at para 32 . [ 75 ] He points to the fact Mr.

Prasad resided on the property knowing Mr. Manji was paying amounts toward upkeep of the property and did not pay anything until ordered to do so by Jones J in 2013, thereby engaging in a decade of wilful, inequitable conduct. [ 76 ] Acceding to Mr. Manji’s argument necessitates factual findings that are not possible on the record before me. After all, the validity of the assignment to Mr. Manji, which is the foundation of any relief that may be granted, is at issue. [ 77 ] Since Lee J directed the matter to trial in 2003, the ensuing years have not served to simply the issues.

They must be determined through trial. [ 78 ] In the circumstances, I cannot conclude that these amendments are hopeless. B. The Requested Amendments are Limitation-Barred [ 79 ] Mr. Manji argues that the proposed amendment to plead relief from forfeiture is limitation barred. He argues the limitation period started running when Mr. Prasad knew or ought to have known that Mr. Manji was not going to transfer title. That would have been apparent when Mr. Manji made his unsuccessful application before Lee J in 2003 to terminate the agreement.

He argues both the two-year limitation and the ultimate 10-year limitation periods under the Limitations Act , RSA 2000, c L-12, have expired. [ 80 ] Mr. Prasad argues that the proposed amendments are not subject to limitation periods because they are not claims advanced, but rather are matters raised in defence to the claims advanced by Mr. Manji. Are the Proposed Amendments Subject to a Limitation Period? [ 81 ] The Limitations Act imposes a two year limitation period on claimants to seek a remedial order. Section 3(1) reads as follows: 3

(1) Subject to subsections (1.1) and (1.2) and

section 11, if a claimant does not seek a remedial order within (a) 2 years after the date on which the claimant first knew, or in the circumstances ought to have known, (

i) that the injury for which the claimant seeks a remedial order had occurred, (ii) that the injury was attributable to conduct of the defendant, and (iii) that the injury, assuming liability on the part of the defendant, warrants bringing a proceeding, or (b) 10 years after the claim arose, whichever period expires first, the defendant, on pleading this Act as a defence, is entitled to immunity from liability in respect of the claim. [ 82 ] “Claimant” is defined in the Limitations Act , as a person who seeks a remedial order (s 1(b)). “Remedial order” is defined as a judgment or order made by a court in a civil proceeding requiring a defendant to comply with a duty or to pay damages for the violation of a right, but excludes a declaration of rights and duties, legal obligation or personal status (s 1(i)). [ 83 ] In my view, neither resulting trust nor relief from forfeiture are remedial orders.

Rather, they are matters raised to defeat or provide answer to, the claims of the plaintiff. Mr. Prasad’s proposed Amended Amended Counterclaim does not raise new claims or seek new relief. Accordingly, the proposed amendments are not subject to a limitation period. [ 84 ] Mr. Prasad’s amendment also claims relief under s 38(1) of the Law of Property Act . Mr. Manji relies on Bjornson v Jolyn Consulting Services Ltd , 2014 ABQB 187 , as authority for the proposition that a claim under s 38(1) of the Law of Property Act is subject to the Limitations Act . [ 85 ] In Bjornson , the plaintiffs brought application for

summary judgment and specific performance requiring the defendants to convey title to the lands upon payment of the outstanding balance. Master Schulz concluded that the plaintiffs’ claim was barred by s 3(1) of the Limitations Act . The plaintiffs attempted to skirt the missed limitation by relying on the right of redemption provided for in s 38(1) of the Law of Property Act. [ 86 ] Master Schulz concluded that s 38(1) is not a limitation provision and does not conflict with the Limitations Act .

She noted that s 38(1) of the Law of Property Act mandates that the Court provide relief from the consequences of the breach for the purchase and sale of land, in essence permitting the purchaser to bring the contract back to good standing after default by paying arrears owing. This right of redemption must be exercised before the vendor recovers judgment or within the time provided for by the Court.

[ 87 ] In concluding that s 38(1) did not prevent the application of the Limitations Act to the plaintiffs’ claim, Master Schulz noted the absurdity that would result if s 38 created a right that outlasts the ability of a mortgagee or vendor to obtain a judgment. [ 88 ] The facts before me are very different. Mr. Manji’s application before Lee J in 2003 to cancel the agreement was dismissed and the parties were directed to trial. Mr. Manji has not obtained judgment against Mr. Prasad and his ability to pursue judgment is intact. Thus, the ability to redeem under s 38(1) is still available to Mr. Prasad.

Further, in Bjornson , the relief under s 38(1) was brought by the plaintiffs as part of their claim. Here, it is raised by one defendant in response to the plaintiff’s claim. [ 89 ] In the event I am mistaken, and the proposed amendments are subject to the Limitations Act , then I will undertake the analysis urged by Mr. Manji. As noted above, s 3(1) of the Limitations Act creates a bar to recovery if actions are brought outside of the designated time frames. This bar is not unlimited, however.

Section 6 permits added claims notwithstanding the expiry of a limitation period, if certain criteria are met. To illustrate, s 6(2) states:

(2) When the added claim (

a) is made by a defendant in the proceeding against a claimant in the proceeding, or (

b) does not add or substitute a claimant or a defendant, or change the capacity in which a claimant sues or a defendant is sued, the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding. [ 90 ] As long as an added claim is related to the conduct, transaction or events described in the original pleading, defendants are permitted to amend their pleadings, notwithstanding the expiry of an otherwise applicable limitation period. [ 91 ] In the present case, the proposed amendments are defences, not claims and as such, s 6(2) has no direct application.

Yet, I am of the view that the policy reasons behind this section, which I understand to include the determination of relevant matters, ought to apply equally to claims and defences. In other words, it makes sense that if a plaintiff is allowed to add claims outside of limitation periods in certain situations, a defendant should also be allowed to add defences in those situations. [ 92 ] I am satisfied the amendments relate to the same conduct, transaction or events as in the original pleading. Mr. Manji has alleged Mr.

Prasad committed fundamental breaches of the agreement and he is entitled to terminate the agreement and gain possession of the lands.

In the alternative, he seeks the following: - a declaration as to the amount owing under the agreement; - judgment for $18,058.96 plus interest; - a vendor’s lien for the amount declared owing; - sale of the lands in the event of default of payment; - forfeiture of monies paid and possession of the lands; - appointment of a receiver; - an Order granting a period of redemption of one day or such other period as the Court may direct [emphasis added]. [ 93 ] One is hard pressed to suggest relief not addressed by Mr.

Manji’s pleadings. [ 94 ] This is not a situation where the amendments rest on a foundation of new or additional facts. In that case, evidence to support the amendments would be required: Barker v Budget Rent-A-Car of Edmonton Ltd , 2012 ABCA 76 . [ 95 ] Nor is this a case where Mr. Prasad seeks to substitute one claim for another by advancing a new set of facts or a case where the claims have only “brief and fleeting relation” to the original pleading: Champagne v Sidorsky , 2015 ABQB 305 at para 171 . Mr. Prasad continues to deny the existence of any agreement between himself and Mr. Manji.

He seeks to plead in the alternative, that if an agreement does exist, a resulting trust also exists to his benefit or in the further alternative, if he did commit a fundamental breach, he is entitled to relief from forfeiture or the redemption remedy under s 38(1) of the Law of Property Act . [ 96 ] Accordingly, I am satisfied that the amendments are not subject to the Limitations Act , but even if they are, they should be permitted as they are sufficiently related to the conduct, transaction or events described in the original pleading. C. Are the Amendments Made in Bad Faith? [ 97 ] Mr.

Manji argues bad faith is demonstrated by the following:

a) Counsel for Mr. Prasad signed a Form 37 Certificate of Readiness certifying the matter was ready for trial; and

b) The amendments are a collateral attack on the Order of Browne J. [ 98 ] This action was originally set for trial to commence March 3, 2014 by the Order of Goss J on September 20, 2013. A Form 37 was signed by current counsel for Mr. Manji and former counsel for the Defendants and filed November 25, 2013. Counsel certified they would be ready for trial in March 2014 and that “all known amendments to pleadings have been filed and served”.

[ 99 ] Courts have refused amendments requested at or within days of the trial, relying in part, on signed Certificates of Readiness: Polar Ice Express Inc v Arctic Glacier Inc , 2009 ABCA 20 at para 20 ; Trojan Properties Ltd v Quilldrivers Books & Tea Room Ltd, 1982 CarswellAlta 722 (Alta QB) . But the fact a Form 37 has been signed does act as an absolute bar to amendments or other pre-trial steps. While litigants must not be cavalier about scheduling matters for trial unless they are ready, fairness and justice militates against hard and fast rules.

I might add that as trials are booked farther and farther in advance, there is an increased likelihood of further pre-trial steps after a Form 37 has been filed. [ 100 ] In these circumstances, particularly because there have been changes in counsel on both sides, the filed Form 37 would not be a bar to the amendments. [ 101 ] The second concern relates to the Order of Browne J dated October 29, 2013 which permitted Mr. Prasad to file an Amended Statement of Defence but only to the extent his pleadings were in response to Mr. Manji’s Amended Amended Statement of Claim. Mr.

Manji argues the amendments sought are a collateral attack on this Order. [ 102 ] Had the amendments been pleaded in Mr. Prasad’s Amended Statement of Defence, counsel for Mr. Manji was unable to point to any basis for objection. The amendments relate to matters raised in Mr. Prasad’s Amended Amended Statement of Claim and I do not consider this a collateral attack. In any event, missing amendments that could have been made earlier, does not constitute bad faith, but is merely a factor in the overall exercise of discretion to permit or refuse amendments. V. Conclusion [ 103 ] Mr.

Prasad is required to amend his Defence. The proposed amendments are allowed and must be filed and served within 10 days. Mr. Manji is permitted to file a Reply, if he wishes, in accordance with the timelines under the Rules of Court . [ 104 ] The costs of a contested application to amend a pleading are in the discretion of the Court: Rule 3.66(2). As there is mixed success on this application, each party will bear their own costs. Heard on the 18 th day of March, 2016. Dated at the City of Edmonton, Alberta this 13 th day of May, 2016 . Dawn Pentelechuk J.C.Q.B.A. Appearances: Murray L.

Engelking of Engelking Wood for the Applicant (Defendant/Plaintiff by Counterclaim) Vijendra Prasad Michele A. Wolowidnyk Weir Bowen for the Respondent (Plaintiff/Defendant by Counterclaim) Nashir Manji

No One Appearing for the Defendant (Plaintiff by Counterclaim) Naaz Nisha Hassan