2021 NLSC 22, 2021 NLSC 22

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Dobbin v. Tucker , 2021 NLSC 22 Date : February 12, 2 021 Docket : 201601G2528 Between: MICHAEL DOBBIN Plaintiff AND: DARCY TUCKER First Defendant / First Third Party / Fifth Third Party AND: WINNIE TUCKER First Defendant / First Third Party And: NATALIE SHEA Second Defendant / Second Third Party And: OLLERHEAD CAPITAL REALTY CORP. Third Defendant / Third Third Party And: BLAIR DOWNEY Fourth Defendant / Sixth Third Party And: BLAIR G. DOWNEY LAW OFFICE

Fifth Defendant / Seventh Third Party And: TOWN OF PARADISE PLAINTIFF BY Counterclaim / Ninth Third Party / fourth party And: COUNTRY GARDENS INC. FIRST DEFENDANT BY Counter​claim / Fourth Third Party And: THE TOWN OF PORTUGAL COVE-ST. PHILIPS SECOND DEFENDANT BY Counterclaim / Eighth Third Party Before: Justice Deborah J. Paquette Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: December 7, 2020 Appearances: J. Michael Collins and Jeremy D. Loeb Appearing on behalf of the Plaintiff No Appearance On behalf of the First Defendants / First Third Parties and Fifth Third Party Dana R.

Martin Appearing on behalf of the Second and Third Defendants / Second and Third Third Parties No Appearance On behalf of the Fourth Defendant / Sixth Third Party

No Appearance On behalf of the Fifth Defendant / Seventh Third Party Robert R. Bradbury Appearing on behalf of the Plaintiff by Counterclaim / Ninth Third Party / Fourth Party No Appearance On behalf of the First Defendant by Counterclaim / Fourth Third Party Caroline A. Molloy Appearing on behalf of the Second Defendant by Counterclaim / Eighth Third Party Authorities Cited: CASES CONSIDERED: Clearwater Fine Foods Inc. v. Day & Ross Inc., 2003 NLSCTD 106, aff’d 2004 NLCA 3; Tucker v. UnknownPerson, 2012 NLTD(G)132, rev’d 2015 NLCA 21; 10475 Newfoundland Ltd. v. Houston, 2012 NLCA 34; Vardy v.

Dufour, 2008 NLCA22; Mandavia v. Central West Health Care Institutions Board (2003), (NL SC), 222 Nfld. & P.E.I.R. 265, 663A.P.R. 265 (N.L. S.C.(T.D.)) STATUTES CONSIDERED: Limitations Act, S.N.L. 1995, c. L-16.1 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Paquette, J.: INTRODUCTION [1] The applicant, the plaintiff herein, seeks to add the Town of Portugal Cove-St.

Philip’s (“PCSP”) and the Town of Paradise(“Paradise”) as sixth and seventh defendants in order to advance negligent misrepresentation and failure to warn in relation to thedevelopment of a residential lot he purchased on 30 August 2013. Ollerhead Capital Realty Corp., the third defendant and third thirdparty commenced third party proceedings against PCSP in July 2017 for negligently misrepresenting that a single home could be built onthe property and in January 2018, PCSP filed a fourth party notice against Paradise asserting negligence and negligentmisrepresentation.

Paradise counterclaimed against the first defendant by counterclaim and fourth third party, Country Gardens Inc., andPCSP. BACKGROUND [2] The following facts were advanced in these proceedings. The municipal boundaries of both PCSP and Paradise intersect theapplicant’s property.

It is asserted that when this issue was raised with PCSP, it explained that the town had entered into an agreementwith Paradise which gave PCSP authority to issue development permits. [3] The applicant states that unbeknownst to him, a 30 October 2009 Memorandum from the Department of Municipal Affairssent to PCSP and Paradise had questioned the legality of this agreement as it affected land outside the respective municipality.

Anunrelated decision of the Eastern Regional Appeal Board (“Board”) in which PCSP was involved also questioned the legality of theagreement between the towns. [4] Following his purchase of the building lot, the applicant’s plans to build a home were challenged by a property owner becausethe Paradise portion of the lot was located in a conservation area. In a decision dated 29 April 2014, the Board upheld the challenge andvacated the applicant’s permit to build. [5] Both PCSP and Paradise advance that the applicant waited too long in deciding to add them as defendants.

The applicantcounters that the limitation of actions has not expired because he did not have knowledge of the Department of Municipal AffairsMemorandum until PCSP filed its list of documents in this litigation in 2019. He further submits that in a discovery proceedingconvened on 22 January 2019, PCSP acknowledged its authority to issue development permits for the property. [6] The applicant asserts that these events identified that he had a cause of action against both towns on the basis of negligentmisrepresentation of authority to issue development permits and failure to warn.

[ 7 ] At issue in these proceedings is whether PCSP and Paradise should be added as party defendants and if so, whether the plaintiff can amend his statement of claim to reflect the cause of action. THE LAW [ 8 ] Rule 7.04(2) (

b) of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D , governs the addition of parties to a proceeding: 7.04 …

(2) At any stage of a proceeding the Court may, on such terms as it thinks just and either of its own motion or on application of any party to the proceeding, … (

b) order any person, who ought to have been joined as a party or whose participation in the proceeding is necessary to ensure that all matters in the proceeding may be effectually adjudicated upon, be added as a party, but no person shall be added as a plaintiff without the plaintiff's consent signified in writing or in such other manner as the Court may order. [ 9 ] An application to join defendants pursuant to Rule 7 may be granted despite the expiration of a limitation period by operation of

section 11 of the Limitations Act , S.N.L. 1995, c. L-16.1 , provided that the requirements set out in Rule 7.04(2)(

b) are met. Subsections 11(1) and (2) of the Limitations Act provide: 11.

(1) Notwithstanding

section 17, where an action to which this or another Act applies has been commenced, the lapse of time limited for bringing an action is no bar to (

a) a counterclaim; (

b) a third party claim; (

c) a claim by way of set-off; or (

d) the addition of a new party under the Rules of the Supreme Court, 1986 respecting a claim relating to or connected with the subject matter of the original action. (2) Subsection (1) does not operate so as to interfere with a judicial discretion to refuse relief on grounds unrelated to the lapse of time for bringing an action. [ 10 ] Orsborn, J. (as he then was) in Clearwater Fine Foods Inc. v.

Day & Ross Inc. , 2003 NLSCTD 106 , aff’d 2004 NLCA 3 , explains the addition of a party after the expiration of a limitations defence at paragraph 16: 16 The decision to add a defendant to an existing proceeding after the expiry of the limitation period applicable to that defendant is not a decision to be taken lightly. The loss of a limitation defence is a significant detriment. The rule has been interpreted in a manner which recognizes the significant impact of the decision.

A defendant is not added simply to avoid a multiplicity of actions; there are avenues by which a separate action, if started in time, can be joined with another proceeding. Practically speaking, the addition of a defendant only becomes an issue when the plaintiff is otherwise out of time in which to start a separate proceeding. Thus an application to add a defendant is not treated simply as an application to amend the pleading.

The specific requirements of r. 7.04 are engaged, and those requirements are only met when the adjudication of the claims made and the relief requested in the existing proceeding can only be fully and effectually accomplished if the proposed party is added as a party .

In other words, it must be determined that, as a matter of law, there cannot be a final determination of the issues raised as between the plaintiff and the defendant unless the proposed party is added as a defendant and is subject to the final and binding effect of the court’s decision. [Emphasis in original.] [ 11 ] Rule 15.02 addresses the amendment of pleadings:

15.02.

(1) If an amendment does not include the addition, deletion, substitution or correction of the name of a party to a proceeding, a party may amend a pleading filed by that party other than an order: (

a) once without the leave of the Court if the amendment is made not later than 20 days from the date the pleadings are deemed to be closed or 5 days before the hearing under an originating document; (

b) at any time with the written consent of all of the parties filed with the Court; or (

c) at any time with leave of the Court on such terms as it thinks just.

(2) The Court may allow an amendment notwithstanding the effect of the amendment will be to add or substitute a new cause of action, if the new cause of action arises out of the same or substantially the same facts as the original cause of action. [ 12 ] Orsborn, C.J. in Tucker v. Unknown Person , 2012 NLTD(G)132, (reversed on the issue of application of a limitations defence in 2015 NLCA 21 ) considered the legal principles pertaining to the addition of a new party at paragraph 88: 88 What follows is my

summary of that law: 1. Adding a new party to an existing proceeding is achieved through the exercise of a jurisdiction found in the Rules of Court. Underlying the rule — and perhaps its genesis — is the need to ensure that the proceeding is fully constituted in the legal sense and that any remedy granted or order made by a court in a proceeding is not rendered ineffective or incapable of performance because it does not bind all persons whose legal interests are affected by the order. 2.

The fact that a limitation period may have intervened is no bar to the addition of a party in accordance with the applicable rule. The connection with the subject matter of the proceeding — subsec. 11(1) of the Limitations Act — is a necessary condition in such circumstances but not a sufficient one. 3. In this province, the rule governing the addition of a new party to an existing proceeding is r. 7.04(2) (b). Adding a new party to an existing proceeding (Rule 7) is qualitatively and analytically different from an amendment to a pleading or the change or substitution of a party. (Rule 15) 4.

To ground an entitlement to add a new party to an existing proceeding under r. 7.04(2(b), one of the following conditions must be satisfied: (

i) that the proposed party ought to have initially been joined as a party; this condition, derived from the common law courts, addresses the relationship between an existing party and the proposed party and considers whether or not the existing party — in a legal sense — is fully constituted in the absence of the proposed party, thus avoiding dismissal (abatement) of the proceeding and ensuring the enforceability of any potential remedy; or (ii) that the participation of the proposed party is necessary to enable the court to adjudicate the proceeding as it stands between the existing parties; this condition, developed by the courts of equity, primarily addresses the legal effectiveness of the remedies claimed in a proceeding and considers whether or not all those whose legal interests may be affected by any potential order are before the court.

It is the presence of all such persons — those with legal interests in the proceeding as framed — that enables proper adjudication or determination of the proceeding. 5. In each case, the need for the addition of the party is assessed against the existing proceeding — the pleadings — as it stands before the addition of a new party and before any consequential amendments. 6.

Factors such as timeliness, prejudice, costs, the intentions of counsel, the carelessness or otherwise of counsel, or the prospect of the plaintiff not succeeding on the merits of the claim against the existing party or parties are not factors that can ground or assist in grounding an entitlement to add a party. Such factors may inform the broader test of what is “just or

convenient”, as used, for example, in British Columbia, but they are not relevant to the legal determination necessitated by the “ought to” or “necessary” conditions of r. 7.04(2) (b). 7. Whether or not a party ought to be added or is necessary for the adjudication of the existing proceeding is a question of law not involving an exercise of discretion. 8.

Where the courts have allowed the addition of a new party, the requested remedies or orders that have informed the question of “necessary” have been in the nature of orders for specific performance, proprietary remedies or representative actions; in other cases involving particular relationships such as joint contractors, a party has been added under the “ought to” condition in order to ensure that a plaintiff or defendant (e.g. contracting party) is fully constituted for the purposes of the proceeding.

The authorities do not suggest that an action in which a plaintiff simply seeks damages from a defendant is such as to require the addition of another party to make any award of damages effective as a matter of law. The authorities also do not suggest that in such an action the pre-condition for adding a defendant is satisfied either by providing the plaintiff with an additional and perhaps more successful avenue of recovery or by simply establishing a connection to the subject matter of the proceeding. 9.

If one or other of the conditions is established, a party may be added of the court’s own motion or on application. Consent of any or all of the parties is not required, at least when contemplating the addition of a defendant. If necessary to protect the integrity of a proceeding, a defendant whom the plaintiff has chosen not to sue may be added as a party. 10. If either of the conditions is satisfied, and a prima facie entitlement to add a party is found, the decision is nonetheless discretionary.

However, the discretion is not such as to allow for the addition of a party if one or other of the pre- conditions is not met. No issue of discretion — consideration of factors such as delay, prejudice and the like — arises unless and until one or other of the legal requirements is established. Subsection 11(2) of the Limitations Act confirms that subs. 11(1) does not “interfere with a judicial discretion to refuse relief ...” thus recognizing, at least implicitly, that the decision to add a party is not grounded or based on an exercise of discretion in the positive sense. 11.

The avoidance of a multiplicity of proceedings and other factors extraneous to the existing pleadings are not factors properly considered in deciding whether either of the “ought to” or “necessary” conditions have been satisfied. The Rules of Court provide other mechanisms such as consolidation to join or make more efficient the conduct of properly- brought proceedings. [ 13 ] Orsborn, C.J. referred to the Newfoundland and Labrador Court of Appeal decision in 10475 Newfoundland Ltd. v. Houston , 2012 NLCA 34 , in response to submissions from counsel that Houston had modified the law in relation to adding parties.

He concluded that Houston has not changed the

interpretation of Rule 7, writing at paragraph 92 of Tucker : 92 At first glance it may appear — and indeed it was so argued in this case, that Houston has modified the procedure to be followed and the principles to be applied when application is brought to add a new party to an existing proceeding.

However, based on a careful reading of Houston and of the authorities referred to in the decision, and given that Houston affirms the decisions of the Court of Appeal in Vardy and Clearwater , it is my conclusion that this is not the case. [ 14 ] Tucker explains at paragraphs 138 to 144 , that Houston (at paragraph 67 ) endorses and restates the law set out in its earlier decision with respect to Rule 7, Vardy v. Dufour , 2008 NLCA 22 : 138 Much of para. 67 clearly endorses and restates the law set out in Vardy . Specifically: The underlying principle is a simple one.

The expiration of a limitation of actions period does not preclude the future participation of an unnamed party. Parties may be added whether they are plaintiffs or defendants, third parties or counter- claimants outside the relevant limitation period as long as their participation relates to or is connected with the subject matter of the original proceeding.

Their participation must be necessary so that the matters arising in the original proceeding as pleaded, can be fully adjudicated upon. 139 This is the necessity branch of r. 7.04(2) (b). 140 The passage refers to the original proceeding as pleaded and to the need to ensure that it is that proceeding that can be fully adjudicated or decided.

141 The paragraph continues: Parties ought to be added when the nature of the cause of action, makes it clear that they ought to have been joined at thecommencement of the proceeding. Consideration of factors such as necessity for the participation of previously unnamedparties along with the presence or absence of actual prejudice are relevant to the decision of an applications judge when dealing with similar requests for amendments. 142 This is the “ought to” branch of r. 7.04(2)(b).

The reference to the “nature of the cause of action” is, I believe, a reference to thecommon law principle set out in Amon and Vardy that the cause of action may be of a type that requires the addition of parties in order toensure that any resulting order will be effective. Earlier, at para. 47, the Court had said this of the “ought to” branch of the rule: While this first portion of Rule 7.04(2)(

b) has been narrowly construed to apply in rare cases such as those involving jointcontractors, following the reasoning of Lord Devlin in the Amon v.

Raphael Tuck & Sons Ltd., [1956] 1 Q.B. 357, [1956] 1 AllE.R. 273, I see no reason why, by analogy, this ratio could not also apply to an occupiers’ liability case where owners and occupiersat common law can be held to be jointly and generally liable for a breach of duty of care respecting dangerous premises. 143 I take this as an indication that, insofar as the decision in Houston rests on the “ought to” branch of r. 7.04(2)(b), it is simply anapplication of existing law to the circumstances of Houston and the particular relationship of the proposed defendants as betweenthemselves. 144 Finally on this point, my conclusion that Houston has not changed the law on the principles applicable to the addition of a newparty pursuant to the Rules of Court is informed by the fact that there is no explicit statement in Houston that the decision in Vardyshould no longer considered to be good law.

In view of the very clear statements in Vardy and in view of the longevity of the legalprinciples comprehensively reviewed and endorsed in Vardy and in other authorities, it would, in my view, require a clear statement hadthe Court intended that those principles were to be changed. [15] The Newfoundland Court of Appeal in Vardy had expressly approved Mandavia v. Central West Health Care InstitutionsBoard (2003), (NL SC), 222 Nfld. & P.E.I.R. 265, 663 A.P.R. 265 (N.L. S.C.(T.D.)), in which Orsborn, J. (as hethen was) interpreted Rule 7.04(2), at paragraph 24: 24 I am satisfied that the narrow

interpretation of a “necessary” party in rule 7.04(2) espoused in the Mandavia and Clearwaterdecisions, and adopted by the Trial Division judge, is the correct

interpretation, and that it applies to both paragraphs (

a) and (b). Asnoted by Orsborn J., the language of the rule clearly requires an assessment of necessity. This stands in contrast to the rule in some otherjurisdictions that use language such as “just and convenient” (Mandavia v. Central West Health Care Institutions Board, supra, atparagraph 17). Where the limitation period for adding a defendant has expired, the purpose of rule 7.04(2)(

b) is not to allow for thejoining of a separate action to an existing one, even if the actions may be related. Rather, the rule is directed to the adjudication of theoriginal proceeding. These principles apply equally to an application to remove a party under paragraph (a). ANALYSIS [16] I must determine whether PCSP and/or Paradise “ought to” have been added as defendants or are “necessary” to the carriage ofthe litigation. [17] PCSP submits that the limitation of actions commenced on 29 April 2014, the date of the Board’s decision.

Accordingly, itmaintains the position that not only is it not a party which “ought to” have been added or is “necessary” to the litigation pursuant to thetest in Rule 7, it will also experience prejudice in the elimination of a limitations defence. [18] Paradise also takes the position that the applicant cannot satisfy the requirements of Rule 7 in that Paradise is neither a partywhich “ought to” have been added nor “necessary” to the litigation.

It submits that the issues identified in the statement of claim can beadjudicated without PCSP or Paradise as defendants because all of the allegations against the existing parties can be addressed. Bothtowns assert that the law relating to Rule 7 underscores that the provision is non- discretionary in relation to the threshold tests. [19] Paradise echoes the position of PCSP that the cause of action should have been apparent in 2014 when the Board vacated thepermit, creating prejudice for the town in the removal of the limitations defence.

Further, Paradise submits that nowhere has theapplicant identified any representations made by Paradise. [20] The proposed defendants submit that the applicant should have issued a statement of claim against PCSP and Paradise,permissible without leave of the Court, and thereafter seek consolidation of the proceedings. The applicant acknowledges that if he issuccessful, the proposed defendants can no longer assert their limitations defence, but advances that their defence is weak becausediscoverability of the cause of action against PCSP and Paradise was delayed.

Nonetheless the applicant does not dispute theappropriateness of proceeding by way of a separate statement of claim followed by an application to consolidate and intends to do so ifunsuccessful in this application. This forum will enable PCSP and Paradise to raise the limitations defence. [21] The facts do not establish that PCSP or Paradise “ought to” have been added as defendants or are “necessary” to the litigation

within the meaning of Rule 7.04(2) . The proceedings as they presently stand can be adjudicated without adding PCSP or Paradise as defendants. It follows that it is not necessary to consider either the impact of the limitation of actions defence or the application to amend the statement of claim pursuant to Rule 15. COSTS [ 22 ] In the exercise of my discretion, taking into consideration the submissions of the parties and the nature of these multi-party proceedings, I consider an order for costs payable forthwith inappropriate. In the result I order that costs be reserved to the trial judge, that is, costs in the cause. _____________________________ Deborah J. Paquette Justice