Dundee Private Investors Inc v ATB Securities Inc (ATB Investors Services), 2016 ABQB 292

Court of Queen ’ s Bench of Alberta Citation: Dundee Private Investors Inc v ATB Securities Inc (ATB Investors Services), 2016 ABQB 292 Date: 20160520 Docket: 1203 14996 Registry: Edmonton Between: Dundee Private Investors Inc. Plaintiff - and - ATB Securities Inc., Operating Under the Trade Name ATB Investor Services Defendant _______________________________________________________ Reasons for Judgment of W. S. Schlosser , Master in Chambers _______________________________________________________ [ 1 ] This is a contested application to amend pleadings.

The objection is based on the Limitations Act , RSA 2000, c L-12. [ 2 ] Dundee Private Investors Inc. took an assignment of a cause of action from Genesis Building Corporation, and sued.

Section 20 of the Judicature Act , RSA 2000, c J-2 permits this. [ 3 ] Along the way the plaintiff apparently discovered it had a cause of action in its own right. It wants to amend its pleading to

make this claim. [ 4 ] The defendant objects on the basis of section 6(3) of the Limitations Act , which provides: 6(3) When the added claim adds or substitutes a claimant, or changes the capacity in which a claimant sues, (

a) the added claim must be related to the conduct, transaction or events described in the original pleading in the proceeding, (

b) the defendant must have received, within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledge of the added claim that the defendant will not be prejudiced in maintaining a defence to it on the merits, and (

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 [ 5 ] The defendant admits that subsections 6(3)(

a) and (

b) have been satisfied, but argues that 6(3)(

c) has not. There is no disagreement that an expired limitation period can act as a bar to amendment. There is also no disagreement about the test for amending pleadings with leave.

The defendant argues that this added claim is neither necessary nor desirable for the effective enforcement of the claims already asserted. [ 6 ] The gist of the plaintiff’s argument is that adding Dundee’s claim in its own right may be a ‘change in capacity’ for the purposes of section 6(3) of the Limitations Act but that it is essentially a distinction without a difference and that this type of change was not intended to be caught by section 6(3). Authorities Cited: 1. Limitations Act , RSA 2000, c. L-12, s. 6 By the Court: 1. ALRI Report No. 55 ‘Limitation’ ; 2.

Crawford and Falconbridge on Banking and Bills of Exchange , (8 th ed) vol. 2, pages 1386, 1387 By the Parties: 3. 3955 Alberta Ltd. v. Telus Communications Inc., 2012 ABQB 184 , per Breitkreuz M.; 4. Gerlitz v. Mawani , 2010 ABQB 249 , per Erb, J.; 5. Ahmed v Klym , 2003 ABQB 892 , per Kent, J.; 6. Kulusic v Carpan , 2016 ABQB 129 , per Smart, M.; 7. Stout (Estate of) v Golinowski (Estate of ) , 2002 ABCA 49 ; 8. Andritz Ltd., v Quality Fabricating and Supply Limited, 2010 ABQB 101 , per Macklin. J.; 9. Wong v Voong , 2004 ABCA 216 .

Facts [ 7 ] The lawsuit is about the transfer of investment funds belonging to Genesis Building Corporation from ATB to Dundee Private Investors Inc. Genesis notified ATB of the move. ATB made out a cheque to ‘Dundee Private’ and left the cheque for pickup. It was picked up by a rogue that had been operating under the trade name of ‘Dundee Private’. He was an employee of Dundee Private Investors Inc. and had facilitated the scam. He took the money and exited stage left. He is not a party.

Analysis [ 8 ] The ALRI, Report No. 55 “Limitations ”, describes at [p. 84] the basis for what is now section 6(3) of the Limitations Act : 18. Addition of true stranger as claimant . There are two types of cases in which a stranger may wish to add himself as a claimant in an action: “true stranger” and “other claimant”. Ss. [6(3)] permits the addition of a claimant who is necessary if the original claim asserted is to be enforced effectively. It does not deprive a defendant of a limitations defence to the untimely claim of an added claimant who is a “true stranger”. a. True Strangers.

In this type of case a nondiligent claimant will be attempting to slip his untimely claim into an action in which his defendant is already a party. For example, assume that the original claimant, Tom, brought a timely claim against the defendant, Alice, to recover for personal injuries suffered in an automobile accident, and that later a second claimant, Dave, a copassenger in the car driven by Tom, sought to add an untimely claim against Alice to recover for Dave’s personal injuries. Dave’s claim would probably satisfy the

relationship requirement and it might satisfy the knowledge to prevent prejudice requirement. However, Dave’s claim would be based on a different injury from that suffered by Tom and Dave’s added claim would not be necessary to ensure the effective enforcement of the original claim brought by Tom. b. Other claimants . In this type of case the added claimant will be necessary if the original claim asserted is to be enforced effectively. The claimant is unlikely to be a “true” stranger.

A common example is the case in which a married woman or a child requested damages in a personal injury action based on expenses for items which a husband or a parent was responsible for providing. If the married woman or child suffered no damage because of the expenses, only the husband or parent could suffer damage and recover damages. [ 9 ] The decided cases tell us that if the claims are the same the test is whether the new claimant is a ‘true stranger’.

If the claims are different the test is whether this added claims are necessary for the enforcement of the existing ones [ 10 ] The causes of action Dundee took assignment of are negligence and the tort of conversion of money . Dundee is not proposing to allege a duty in negligence owed to it too by the ATB. It proposes to claim for conversion of the negotiable instrument .

It is a handy way of making it right for your client and avoiding vicarious responsibility for the acts of your defalcating employee. [ 11 ] The distinction between conversion of the cheque, and conversion of the money it represents is subtle but important. [ 12 ] Dundee’s proposed claim in conversion is that it, as intended payee, was entitled to possession of the cheque. By dispossessing Dundee of that right the ATB is liable to Dundee for the face value of the cheque. [ 13 ] It is a potent remedy.

Falconbridge (above) indicates that the liability of the bank is strict if conversion takes place, and no regard is given to whether or not due care was taken. Presumably all Dundee would have to prove is that it was to be the payee of the cheque and the ATB made the proceeds available to someone else. In this case, the cheque was made to ‘Dundee Private’ rather than ‘Dundee Private Investors Inc.’ The payment was neither authorized by Genesis nor Dundee. [ 14 ] The long and the short of it is that this amounts to more than Dundee simply asserting Genesis’ claims in its own name.

The added claim is a free-standing and very potent remedy that is new to this action. In my view, it is really an attempt to slip an untimely claim into an action in which the defendant is already a party. It is not the same as an ‘alter ego’ or a sister corporation asserting the same claim: see Andritz at paras 78-81 and Voong. It is difficult to say that Dundee’s claim in its own right is in any way necessary for enforcement of the cause of action that was assigned to it. [ 15 ] As such it is barred by section 6(3) of the Limitations Act . The Applicant’s affidavit hints at late discovery but

section 3 of the Act was not argued and I make no comment about this. [ 16 ] The application to amend is dismissed. Heard on the 1st day of February, 2016. Dated at the City of Edmonton, Alberta this 20 th day of May, 2016. W. S. Schlosser M.C.C.Q.B.A. Appearances: Donald McGarvey, QC McLeannan Ross LLP for the Plaintiff Marco Poretti and Mikkel Arnston Reynolds Mirth Richards & Farmer LLP

for the Defendant