Fiell v Integral Wealth Securities Limited, 2016 ABQB 69

Court of Queen ’ s Bench of Alberta Citation: Fiell v Integral Wealth Securities Limited, 2016 ABQB 69 Date: 20160202 Docket: 1301 10329 Registry: Calgary Between: Jeffrey Fiell Plaintiff - and - Integral Wealth Securities Limited Defendant _______________________________________________________ Reasons for Judgment of J.T. Prowse , Master in Chambers _______________________________________________________ [ 1 ] The plaintiff Jeffrey Fiell (“Fiell”) was employed as an equity research analyst by the defendant Integral Wealth Securities Limited (“Integral”).

His employment was terminated on April 15, 2013 and he commenced these proceedings for damages for wrongful dismissal on August 29, 2013. [ 2 ] Integral defended the action on September 30, 2013. It did not assert that there was just cause for dismissal but rather asserted that Fiell had already been provided pay in lieu of notice which was in excess of what was legally required. It also pleaded failure to mitigate. [ 3 ] Integral now applies for permission to issue a counterclaim against Fiell. Permission is required because Rule 3.57(

c) states that the counterclaim must be filed at the time that Integral is required to file a statement of defence, and that time has passed. As well,

since Integral has already filed its statement of defence, it must obtain a court order to now file a counterclaim: Crystal Ridge Fuels Limited v. McIntosh , 2013 ABQB 618 at para.17. [ 4 ] This Court has the ability to extend the time for filing a counterclaim pursuant to Rule 13.5. The question is whether it should exercise its discretion to do so. [ 5 ] Fiell states that an extension of time should not be granted because: (

i) The evidence submitted by Integral in support of the extension of time does not meet the required evidentiary threshold. (ii) The claim set forth in the proposed counterclaim is barred by the provisions of the Limitations Act . [ 6 ] The gist of the proposed counterclaim is an allegation that Fiell, upon being notified of the termination of his employment, caused the destruction of data stored on his work computer. Fiell denies under oath that this occurred.

Does the evidence submitted by Integral meet the threshold test? [ 7 ] Fiell submits that, while the threshold test to obtain permission to issue a late counterclaim is typically very low, the nature of the allegation being made against Fiell imposes a higher threshold. [ 8 ] In support of his submission that a higher threshold must be met, Fiell cites Canadian Natural Resources Ltd. v.

Arcelormittal Tubular Products Roman S.A. , 2012 ABQB 679 , 2012 CarswellAlta 2257, at para 78 : In Balm at para 63, Côté JA stated that an amendment adding an allegation of fraud "likely requires evidence which will pass a stiffer test than that set out in

Part C of the body of these reasons.". See also Condominium Corp. No. 0321365 v. 970365 Alberta Ltd. ., 2011 ABQB 325 , 518 A.R. 1 (Alta. Q.B.); Gendreau v. Alberta (Department of Justice) , 2010 ABQB 781 (Alta. Master) at para 25 , where the Master states that the same higher standard of evidence for fraud ought to be met where the amendments assert high-handed and malicious conduct; and Milne v. Columbia Health Centre Inc. , 2005 ABQB 594 (Alta. Q.B.) at paras 11-13 , (2005), 383 A.R. 252 (Alta.

Q.B.) wherein Rowbotham J, as she then was, held that particulars of fraud include dates, names and descriptions of the alleged misrepresentation or fraud. [ 9 ] The party who was prevented from making the requested amendment due to the ‘stiffer test’ unsuccessfully appealed that ruling. Here are the reason from the decision dismissing that appeal found at 2013 ABCA 87 : 11. The evidentiary threshold to amend pleadings is generally low. However, as was noted by this Court in Mikisew Cree First Nation v. Canada , 2002 ABCA 110 , 303 A.R. 43 (Alta.

C.A.), the threshold is significantly elevated when the proposed amendment raises allegations of fraud, high handedness or malicious conduct. The Court in Mikisew held that the appellant must show "good ground" or "exceptional circumstances" for such amendments and that "good ground" cannot be shown without "significant evidence". The case management judge was alive to the test, correctly stated it, and applied it. 12. In our view, neither iteration of the test set out in Mikisew can be met without significant evidence.

We do not read the cases from this Court as establishing an alternate test, with a different evidentiary threshold, where "exceptional circumstances" exist, as the appellants suggest. In any event, there are no exceptional circumstances apparent here that would relieve the appellants of the usual burden of adducing evidence to support proposed amendments that amount to allegations of fraud, high handedness, or malicious conduct. [ 10 ] Given the ruling just quoted from, I turn now to the contents of the affidavit from Integral in support of its application for an extension of time to file a counterclaim: 5.

The day [Fiell] was notified of his dismissal his company computer was accessed and work product [Fiell] had generated which was stored on that computer was destroyed. 6. At the time the work product was destroyed, [Fiell] was the only individual with access to his company computer. 7. As a result of the destruction of the work product, over the course of several months other employees of [Integral] were intermittently required to take time away from their regular duties to re-create the work product that had been destroyed. 8.

The extent of the work product that had been destroyed and the cost to re-create same was not fully known until in or around December, 2013. [ 11 ] Fiell filed a responding affidavit denying that this occurred. Neither parties deponent was cross-examined. [ 12 ] In my view, the affidavit quoted from contains sufficient evidence to meet the ‘stiffer’ threshold test required where an allegation of wrongdoing is contained in proposed amended pleadings. The truth of what happened is a triable issue which cannot be determined on this chambers application.

Is the counterclaim proposed by Integral barred by the Limitations Act ? [ 13 ] Where a proposed amendment or counterclaim is resisted on the basis that the new claim is barred by the Limitations Act then the Court has three choices: (

i) determine the limitation has not expired and allow the amendment; (ii) rule the limitation has expired and then consider

section 6 of the Limitations Act ;

(iii) find that the amendments should be allowed subject to the determination of issues (

i) and (ii) at trial. See Hill v. Hill , 2003 ABCA 293 at para.10; Goldhart v. Westlake Developments Inc. , 2015 ABQB 543 , 2015 CarswellAlta 1584 at para’s 30 to 37. [ 14 ] The evidence with respect to the limitations issue is incomplete. [ 15 ] We know that Fiell’s employment was terminated on April 15, 2013 and that Integral’s application to allow the proposed amendment was filed on December 2, 2015, more than 2 years later. [ 16 ] However, we do not know when Integral found out, or could reasonably have found out, that the data on Fiell’s computer had been destroyed.

While Integral’s deponent says that data was destroyed on the day that Fiell’s employment was terminated, he does not say when Integral discovered the destruction. He only asserts that “the extent of the work product that had been destroyed and the cost to re-create same was not fully known until in or around December, 2013”. This is insufficient evidence on which to make a final determination of the limitations issue. [ 17 ] Since the evidence is unclear, it is appropriate to allow the counterclaim without prejudice to the defendant by counterclaim asserting a limitations defence: Poff v.

Great Northern Data Supplies (AB) Ltd. , 2015 ABQB 173 , 2015 CarswellAlta 440 at para. 95 . [ 18 ] As a result, I will allow the late filing of the counterclaim on the basis that Fiell may defend on the basis of, amongst other things, the Limitations Act. Conclusion [ 19 ] For the reasons given I grant Integral’s application for an extension of time to file its proposed counterclaim. Costs may be spoken to. Heard on the 18 th day of January, 2016. Dated at the City of Calgary, Alberta this 2 nd day of February, 2016. J.T. Prowse M.C.C.Q.B.A. Appearances: Bobby S.

Randhawa Stones Carbert Waite LLP for the plaintiff/respondent Norman D. Anderson Shea Nerland Calnan LLP for the defendant/applicant