Woodbridge Homes Inc v Randle, 2017 ABQB 24

Court of Queen’s Bench of Alberta Citation: Woodbridge Homes Inc v Randle, 2017 ABQB 24 Date: 20170113 Docket: 0903 10559 Registry: Edmonton Between: Woodbridge Homes Inc. Plaintiff (Applicant) - and - Leagh Randle, Village of Wabamun, Her Majesty the Queen In Right of Alberta, ABC Corporation, XYZ Corporation and John Doe Defendants (Respondents) _______________________________________________________ Memorandum of Reasons for Decision of the Associate Chief Justice J.D.

Rooke _______________________________________________________ [ 1 ] At the November 8, 2016 hearing, I dismissed (except for 2 paragraphs) the Plaintiff’s application under Rules 3.62 and 3.65 to amend its July 9, 2009 Statement of Claim to add claims related to negligent and fraudulent misrepresentations by the Defendant, Randle, on behalf of the Defendant, the Village of Wabamun. The original Statement of Claim alleged nuisance, trespass and negligence for water allegedly diverted by the Village or its agents onto the Plaintiff’s lands, purchased from a 3 rd party on July 10, 2007.

I gave brief oral reasons, referencing para. 72 of Dow Chemicals Canada Inc v Nova Chemicals Corp , 2010 ABQB 524 (Wittmann CJ), which, in turn, references DeSoto Resources Ltd v EnCana Corp , 2010 ABCA 110 , at para. 9 . I undertook to provide more fulsome written Reasons for that Decision, and these are those Reasons.

[ 2 ] The original Statement of Claim did not allege any representations or misrepresentations by the Respondents, and they therefore oppose the amendments on the basis of the provisions of ss. 3 and 6 of the Limitations Act , R.S.A. 2000, c. L-12 ( Act ), arguing that the proposed amendments include new and unrelated allegations and causes of action, causing the Respondents actual prejudice. [ 3 ] The facts, issues and arguments are set out in the parties’ briefs and, for the most part, I won’t re-articulate them.

Facts [ 4 ] Randle and the Village filed a Statement of Defence on April 27, 2010, and, on December 7, 2010, the Village filed an Affidavit of Records containing Document #15, a 1986 FYN Engineering Limited Storm Drainage Study. [ 5 ] The proposed new amendments to the Statement of Claim now include claims [1] for:

(1) Proposed paras 11-16 : Before July 10, 2007, the Village, through Randle, negligently, fraudulently or recklessly misrepresented that the Applicant’s lands were “ready for residential development, easily served by water, sewer and drainage of sufficient capacity for residential development and had excellent development potential”;

(2) Para 29 : The Village revoked an approval for a 13 lot residential subdivision and failed to execute a proper Subdivision Agreement;

(3) Para 29: On September 15, 2009 the Village in bad faith, damaged the Applicant’s development of its lands by changing the zoning from residential to urban reserve, without proper notice to the Applicant;

(4) Para 30-31 : The Village intentionally or negligently ignored the Applicant’s rights to services – including water, sewage and drainage; and

(5) Paras 11-30 : All of the amended claims allege that the Village’s conduct constitutes “deliberate bad faith conduct”. [ 6 ] These break down into two main areas:

(1) Paras 11-16 relate to negligent and fraudulent misrepresentations; and

(2) Paras 30-31 relate to a right to services. Law [ 7 ] Where the Court’s approval for an amendment is necessary, the Court has a broad discretion to allow amendment of pleadings, with four exceptions: (1) it causes the opposing party serious prejudice not compensable by an award of costs; (2) the amendment is hopeless; (3) unless permitted by statute, it adds a new cause of action . . . outside the statutory limitations period; or (4) the failure to amend earlier is indicative of bad faith.

See: Dow Chemical , at paras 20 - 21; Foda v Capital Health Region , 2007 ABCA 207 , at para 10 ; and 513320 Alberta Inc. v St. Jean , 2015 ABQB (Goss J), at para 25. [ 8 ] Absent uncertainty as to dates, the Court must determine whether a limitation period has expired: St. Jean , at para 16.

[ 9 ] Under s. 3 of the Act , a claim must be made within 2 years “after the date on which the claimant first knew, or in the circumstances ought to have known” about the claim: the Act ; and St. Jean , at paras 52 and 53. [ 10 ] Under s. 6 of the Act , a pleading may only be amended to include an otherwise limitation-barred cause of action if the new claim is related to the conduct, transaction or events in the original pleadings: the Act ; De Soto Resources, at para 10; and St. Jean , at paras 32 and 36. The proposed amendment need not be related to a previously plead cause of action: Dow , at para 69.

If a new set of facts needs to be shown, or if new witnesses or evidence needs to be called, then the proposed amendments are not sufficiently connected to the original pleadings to be allowed: DeSoto Resources at para 10; and St. Jean , at paras 37-39.

Whether an amendment arises from the same conduct, transaction or event is a question of degree and judgment, requiring specificity since an over-broad definition could give a plaintiff an almost “unlimited ability to add on statute-barred claims”: Dow Chemical , at para 70. [ 11 ] The burden on the Applicant is higher when fraud is alleged: Mikisew Cree First Nation v Canada , 2002 ABCA 110 , at para 61 ; Balm v 3512061 Canada Ltd , 2003 ABCA 98 , at para 63 ; and St. Jean , at para 28.

Findings [ 12 ] I find that the negligent and fraudulent misrepresentation claims in proposed paras 11-16, were discoverable on or about December 7, 2010, with the production of the FYN Engineering Limited Storm Drainage Study and are barred, after on or about December 7, 2012, by s. 3 of the Act . [ 13 ] As I find these claims are not related to, but are fundamentally different from, the previous claims, they are therefore barred by s. 6 of the Act . They are not simply an elaboration on the original allegations, nor do they merely broaden the original claim; they are of a totally different character.

All that is common is the land and the parties. [ 14 ] Furthermore, I find that these claims do not relate to, nor arise from, any “clarifications” of the Applicant exercise of “due diligence” referenced in para 3 of the original Statement of Claim. Any such due diligence was not an element or basis of any claim in the original Statement of Claim. It would not “be needed to prove ... the originally pleaded facts.” Indeed, it might be considered extraneous. It is also not clear that due diligence is an element of, or the basis for, the new proposed claims .

Evidence of due diligence would not “be needed to prove the ... new allegations [which] differ significantly from those in ... the originally pleaded facts”. [ 15 ] I also make other findings. First, the “proposed amendments [do not] simply elaborate on existing allegations”, but rather “broaden the scope of the Plaintiff’s claims beyond the parameters of the original pleadings”. At best this statement of due diligence has “only a cursory, superficial connection to the original pleadings”, not sufficient for an amendment.

Second, the “added claim[s] was [were] never expressly alleged in the original pleading and could not be inferred”. The claim now sought to be pleaded only arises from misrepresentations, the truth of which the Applicant had the ability to know by on or about December 7, 2010: see: St. Jean , paras 37- 39, 71, and 73. [ 16 ] Additionally, the proposed amendments dealing with the right to services (paras 28 and 30 - 31) are not allowed as that cause of action is hopeless.

On the record before me, there is no basis in evidence and no authority in law [2] , or mixed fact and law, to support such a claim. [ 17 ] Moreover, even if not hopeless, that claim and the claim relating to zoning (para. 29) are statute bared under s. 3 of the Act , because: (1) any claim based on rezoning expired on September 15, 2011; (2) the negotiations over a Development Agreement ended in or about 2009, meaning the limitation period ended in 2011; and (3) any provision of services representations were allegedly made before the purchase in July of 2007, for which the limitation under s.3 has long since expired. [ 18 ] Moreover, s. 6 of the Act also precludes any such claim as there is no reference to any services in the original Statement of Claim.

[ 19 ] With my findings, I need not address the arguments of actual prejudice. [ 20 ] As to paras 22-26 of the proposed amendments relating to alleged saturation of the Applicant’s land in 2009, these may not meet s.3 of the Act , but are conceptually allowable under s.6. Claims arising in 2015 due to lack of maintenance are not statute barred. Thus, as Counsel agreed, subject to some changes of wording, these amendments will be allowed.

These provisions were not the real issues between the parties. [ 21 ] Ultimately, this decision is about assessing whether the proposed “new claims are related to the conduct, transaction or events described in the original pleadings”. As noted in Dow Chemical (at paras 70 and 85), “ [w]hether an amendment arises out of the same events as the original pleading is a matter of degree and judgment”, and different assessments may be made in different cases.

I find that the new claims are not related to the conduct, transaction or events described in the original Statement of Claim, and thus, except for proposed paragraphs 22 - 26, the amendments are denied. Costs [ 22 ] As the Respondents were successful on the issues that were really in dispute, they get one set of costs as may be agreed or taxed, payable immediately, in any event of the cause, as noted in my oral reasons. Heard on the 8 th day of November 2016. Dated at the City of Edmonton, Alberta this 13 th day of January 2017. J.D. Rooke A.C.J.C.Q.B.A. Appearances: Mark M. Kirwin for the Plaintiff James F.

McGinnis, QC and Andrea M. Luft for Leagh Randle and the Village of Wabamun James Mallet for the Defendant HMQ