Alteen Brothers Limited Plaintiff/ DEFENDANT BY COUNTERCLAIM And: Rolex Canada Ltd. Defendant/ PLAINTIFF BY COUNTERCLAIM, 2022 NLSC 174

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Alteen Brothers Limited v. Rolex Canada Ltd. , 2022 NLSC 174 Date : December 12, 2022 Docket : 201704G0250 Between: Alteen Brothers Limited Plaintiff/ DEFENDANT BY COUNTERCLAIM And: Rolex Canada Ltd. Defendant/ PLAINTIFF BY COUNTERCLAIM Before: Justice Peter N. Browne Place of Hearing: Corner Brook, Newfoundland and Labrador Date of Hearing: November 1, 2022 Date of Oral Judgment: November 24, 2022

Summary: The Plaintiff, Alteen Brothers, applied to amend its Statement of Claim pursuant to Rule 15.02(1)(

c) following a Rule 14.24 application brought by the Defendant, Rolex Canada Ltd. Rolex Canada Ltd. opposed the application to amend on a number of grounds, the most significant of which was that Alteen Brothers had not addressed the previous deficiencies in its pleadings as noted by the Court in its decision under Rule 14.24.

The application to amend the Statement of Claim was allowed in part. The proposed amendments were allowed except for the pleadingsin relation to aggravated and exemplary damages. As the result was mixed, there was no order as to costs. Appearances: T. James Bennett Appearing on behalf of the Plaintiff/ Defendant by Counterclaim Robert R. Bradbury Appearing on behalf of the Defendant/ Plaintiff by Counterclaim Authorities Cited: CASES CONSIDERED: Butler v. Kloster Cruise Ltd. (1992), (NL SC), 98 Nfld. & P.E.I.R. 138, 33 A.C.W.S. (3d)695 (Nfld. S.C.(T.D.)); Bhashin v. Hrynew, 2014 SCC 71; Wastech Services Ltd. v.

Greater Vancouver Sewage and Drainage District,2021 SCC 7; Thomas Management Ltd. v. Alberta (Minister of Environmental Protection), 2006 ABCA 303; Fidler v. Sun LifeAssurance Co. of Canada, 2006 SCC 30; Atlantic Lottery Corp Inc. v. Babstock, 2020 SCC 19 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Browne, J.: INTRODUCTION [1] This is an application by Alteen Brothers Limited (“Alteen’s”) pursuant to Rule 15.02(1)(

c) of the Rules of the Supreme Court,1986, S.N.L. 1986, c. 42, Sch. D for leave to file an Amended Statement of Claim in the within proceeding. BACKGROUND [2] In my previous decision on Rolex Canada Ltd.’s (“Rolex”) application under Rule 14.24, I determined that the pleadingscontained in the original Statement of Claim, while alleging breach of contract were, instead, an attempt to plead the principle governingthe duty of honesty and good faith in contractual relations. [3] As a consequence of this finding, I ordered Alteen’s to amend their Statement of Claim and set out this issue in an intelligiblefashion.

Despite this direction, I nevertheless did find the pleadings met the threshold of “a reasonable prospect of success” (see paras. 18to 19 and 27), so I granted Alteen’s leave to apply under Rule 15.02(1)(

c) to set forth a proper factual and legal basis to support such aclaim. [4] Alteen’s now applies under Rule 15.02 for leave to file an Amended Statement of Claim. Rolex opposes this application forthe following reasons: 1. Alteen’s failed to comply with the Court’s previous Order to bring the Application within 60 days; 2. Alteen’s has failed to provide a proposed Amended Statement of Claim which complies with requirements of Rule 15.03(5); 3. The proposed amendments fail to address the deficiencies identified in the original Statement of Claim in any meaningful way; 4.

Neither the original Statement of Claim nor the proposed Amended Statement of Claim comply with the minimum standards ofpleading required by Rule 14; and 5. The proposed amendments do not satisfy the principles applicable to amendments and relevant to the exercise of the Court’sdiscretion in relation to Rule 15.02(1)(c). ISSUES

[5] Rolex submits that the following issues are relevant to the determination of this Rule 15.02(1)(

c) application: 1. What are the consequences, if any, of Alteen’s failure to comply with my previous Order to bring this Application within 60 days? 2. Has Alteen’s put forward an Amended Statement of Claim which complies with Rule 15.03(5) and, if not, what are theconsequences of its failure to do so? 3. Do the proposed amendments address the deficiencies in pleadings previously identified in my written decision dated April 13,2022? 4.

Do the proposed amendments otherwise satisfy the criteria applicable to the exercise of judicial discretion in relation to whether toallow an amendment pursuant to Rule 15.02(1)(c)? 5. Should the Court decline to exercise its discretion to allow the proposed amendments, what are the consequences of that outcome tothe future of Alteen’s action? 6. What are the appropriate cost consequences in the circumstances? THE LAW Amending the text of pleadings filed with the Court 15.02.

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

c) at any time with leave of the Court on such terms as it thinks just. [6] In Butler v. Kloster Cruise Ltd. (1992), (NL SC), 98 Nfld. & P.E.I.R. 138, 33 A.C.W.S. (3d) 695 (Nfld.S.C. (T.D.)), at paragraph 12 [which was decided pursuant to the former Rule 15.01(c)], it was stated that the decision to allow anamendment is a discretionary one.

However, the court identified four criteria as to whether that discretion ought to be exercised.Specifically, to be permitted, an amendment: 1. must not cause injustice to the other side; 2. must raise a triable issue; 3. must not be embarrassing; and 4. must be pleaded with particularity. [7] The onus is on Alteen’s to satisfy the Court that this is an appropriate case for the Court to exercise its discretion to allow theproposed amendments because the amendments: 1. rectify the deficiencies in pleadings previously identified by the Court; 2. comply with the rules of pleading; and 3. satisfy the principles applicable to Rule 15.02(1)(c). [8] In order for an amendment to be permitted pursuant to Rule 15.02(1)(c), the proposed amendment must come within theButler criteria.

The factual matrix as set out in the proposed Amended Statement of Claim [9] Alteen’s pleads it has operated a storefront jewelry business in the City of Corner Brook for over 60 years. For approximately50 of those years it has had a commercial relationship with Rolex. [10] In January 2004, both parties entered into a new contract (see para. 7). The 2004 contract provided Rolex retained certaincontrols over the sale of its merchandise.

These controls included the location of where Rolex merchandise could be sold, the nature ofhow sales were to occur, standards with respect to the interior and exterior of the storefront operation including guidelines for the displayof their merchandise and the right to inspect Alteen’s premises and inventory without notice (see para. 8, i-vi). [11] When it came to the purchase and sale of its merchandise, Rolex retained the right to bind Alteen’s to any future changes to itspayment terms through orders, invoices or price lists without notice, and the retention of title to its inventory until payment in full by wayof payment of the purchase price or sale of the inventory.

These rights included the ability to demand Alteen’s to provide first priority

security and, at regular intervals, provide Rolex with a current itemized inventory (see para. 8, vii-ix).

History of conduct prior to notice of the termination of the contract [ 12 ] At the heart of the proposed Amended Statement of Claim is the allegation that Rolex began performing its obligations under the 2004 contract in such a manner that it constituted bad faith and dishonesty. [ 13 ] The proposed Amended Statement of Claim describes a change in Rolex’s commercial behavior towards Alteen’s following an incident in which Robert Alteen allegedly did not quote the manufacturer’s suggested retail price to a customer.

This incident prompted a complaint to Rolex by another dealer and a subsequent reprimand from the President of Rolex, Victor Royce, to Robert Alteen that he was not to sell its watches for less than the manufacturer’s suggested retail price (paras. 13-17). [ 14 ] According to the proposed amended pleadings following the President’s reprimand, the nature of the contractual relationship changed beginning late 2013/early 2014 until the notice of termination in August 2016. [ 15 ] In late 2013/early 2014, Rolex began complaining about the adequacy of Alteen’s store located on Broadway in the City of Corner Brook and insisted they carry out renovations to create physical space for an exclusive area where their merchandise could be displayed within the store (“Store within a Store”) (see paras. 18-19).

The estimated cost was $250,000 (see para. 20). [ 16 ] Alteen’s then leased space adjacent to its store for this purpose using their line of credit (see para. 21), but after incurring costs Rolex reversed this requirement (see para. 22) and required Alteen’s to find a new location in the City of Corner Brook (see paras. 23- 24). [ 17 ] Alteen’s undertook to find an alternate location and sent an invitation to Rolex to inspect their suggested locations as well as the adjacent space they had leased (see paras. 25-26). [ 18 ] Representatives from Rolex visited unannounced in July 2016, reviewed all possible sites in a “cursory review”, left without comment and gave notice of termination of the contract on August 4, 2016 (see paras. 27-28).

History of the relationship post notice of termination of the contract [ 19 ] Following termination, Rolex then demanded repayment of a line of credit used to support inventory and refused to fulfill orders placed by Alteen’s (see paras. 29-33).

The specific pleading of a breach of the principle governing the duty of honesty and good faith in commercial relations [ 20 ] Without repeating the factual pleadings in paragraphs 13 to 33, paragraph 34 of the proposed Amended Statement of Claim sets out four instances that allegedly support that this behavior constituted a breach of the principle governing the duty of honesty and good faith in contractual relations: 1. Para. 34(

i) alleges Rolex was “attempting to coerce” … “into selling at MRSP” …“where there was no contractual requirement to do so”. 2. Para. 34(ii) “… attempting to induce breach of contract”. 3. Para. 34(iii) “Demanding relocation”. 4. Para. 34(iv) “Following the service of the notice of termination…”, Rolex demanded repayment of the “line of credit” and refused to fill orders from Alteen’s.

Rolex’s position on the proposed amendments to the Statement of Claim [ 21 ] Rolex argues that the Amended Statement of Claim is merely a mirror image of the original Statement of Claim insofar as it still does not set forth the material facts to support a claim for breach of the duty of honesty and good faith in contractual relations, specifically the material facts that allege that Rolex did not perform its contractual obligations in an honest, non-misleading and non- deceptive way. [ 22 ] In other words, Alteen’s has not plead the necessary material facts to suggest that Rolex exercised its discretion, with respect to the standards applied to the location or the termination of the agreement, in a manner unconnected to the purpose for which the contract granted Rolex such discretion. [ 23 ] For the reasons that follow, I allow the proposed Amended Statement of Claim to be issued with the exceptions noted below.

ANALYSIS What are the consequences, if any, of Alteen’s failure to comply with my previous Order to bring this Application within 60 days? [ 24 ] Rolex argues Alteen’s failed to comply with the terms of my decision that they bring their application under Rule 15.02(1) (

c) within 60 days of the Order. In reviewing the court file, I note that neither party filed a formal Order following the decision. [ 25 ] During oral submissions, Mr. Bennett indicated he misunderstood the meaning of my disposition and did not realize an application under Rule 15.02(1) was a necessary prerequisite before attempting to file an Amended Statement of Claim.

[ 26 ] This is an issue which can ordinarily be addressed by a costs order. Given that neither party filed a formal order following my decision to start the running of the 60 days, I am not prepared to order costs. Has Alteen’s put forward an Amended Statement of Claim which complies with Rule 15.03(5) and, if not, what are the consequences of its failure to do so? [ 27 ] Rule 15.03(5) states as follows: Form and service of the amended document 15.03.

(5) Any amendment shall be underlined or otherwise designated to distinguish it from the original wording of the document. [ 28 ] Rolex argues that Alteen’s has not complied with requirements of Rule 15.03(5) in that it was required to: (

a) place lines through the portions of the original Statement of Clam that were either struck or removed; and (

b) to underline the portions of the Amended Statement of Claim that were changed or added. [ 29 ] This is another issue which can also be addressed by way of a costs order. While I agree with Rolex that Alteen’s did not completely meet the requirements of the rule, there was substantial compliance prior to the hearing of the application, so I will exercise my discretion and not order costs.

Do the proposed amendments address the deficiencies previously identified in my written reasons dated April 13, 2022? [ 30 ] In paragraph 32 of my Rule 14.24 decision, I referred the parties to paragraph 65 of Cromwell, J.’s reasons in Bhashin v. Hrynew , 2014 SCC 71 where the Court distinguished between the organizing principle of good faith and the doctrine of utmost good faith. [ 31 ] At paragraphs 66 and 69 of Bhashin , Cromwell, J. then discussed the potential adaptability of the organizing principle to situations where the existing law may be found wanting.

In such situations, the principle should be applied in a fashion so as to develop the law incrementally in a way that is consistent with the structure of the common law of contract and gives due weight to the importance of private ordering and certainty in commercial affairs (see para. 66). Because the principle is overarching it may be invoked in widely varying contexts and applied with a highly context-specific understanding of what honesty and reasonableness in performance require.

For example, its implications would be different in the context of a long-term contractual relationship than it would be in a simple transactional exchange (see para. 69). [ 32 ] One of the elements that govern the organizing principle of good faith that emerged from Bhashin is the duty to exercise contractual discretion in good faith. This element was recently expounded by the Supreme Court of Canada in Wastech Services Ltd. v. Greater Vancouver Sewage and Drainage District , 2021 SCC 7 .

Justice Kasirer, speaking for the majority, explained that the duty applies in situations even when discretion is unfettered, and provides that a party cannot act “capriciously or arbitrarily” (para. 62). In other words, a party must “exercise their discretion in a manner consistent with the purposes for which it was granted in the contract … or in the terminology of the organizing in Bhashin , to exercise their discretion reasonably” (para. 63).

Effectively, the duty of good faith does not eliminate a party’s power to choose, but rather limits its discretion to the range of options that are consistent with the contract (para. 75). [ 33 ] In the present case, the parties had a 50 year commercial relationship and executed a new contract in 2004. Alteen’s alleges the relationship changed after Rolex received a complaint they were selling its merchandise at below manufacturer’s suggested retail price.

Following a reprimand from the President of Rolex Canada for doing so, Rolex began making a series of unreasonable demands of Alteen’s. [ 34 ] While notionally these demands were available to Rolex under the contract, Alteen’s alleges in its proposed Amended Statement of Claim they were made in bad faith and a harassing manner (see para. 34). [ 35 ] Based on my reading of the proposed amendments, I conclude Alteen’s has addressed the deficiencies identified in my decision under Rule14.24 and has met the threshold of a “reasonable prospect of success” by establishing a properly pleaded factual and legal basis to invoke the organizing principle of good faith and honesty in contractual obligations.

Do the proposed amendments otherwise satisfy the criteria applicable to the exercise of judicial discretion to allow an amendment pursuant to Rule 15.02(1) (c)? [ 36 ] Previously, I held that with further particularity, paragraphs 7 to 27 of the original Statement of Claim, when read in conjunction with paragraph 28 described material facts, which if proven, could establish a pattern of behavior by Rolex to punish Alteen’s for selling its merchandise at prices below the suggested manufacturer’s price. [ 37 ] Paragraphs 13 to 33 of the proposed Amended Statement of Claim create a similar fact pattern which could, if proven, raise a triable issue of a breach of the principle of good faith and fair dealing in contractual relations. [ 38 ] While not fully particularized in the proposed amendments, I interpret paragraph 34 to mean Alteen’s is pleading as the legal basis for the factual matrix set out in paragraphs 13 to 33, that Rolex engaged in bad faith and harassing conduct through coercion and attempts to induce breach of contract.

Specifically, by making unreasonable demands of Alteen’s to first renovate its store and, then later, relocate its store to another location in Corner Brook.

Amendments to paragraph 34 - Liability [39] In view of my comments above, I make the following findings regarding the proposed amendments to paragraph 34: 1. Paragraph 34(i): alleges Rolex was “Attempting to coerce” … “into selling at MRSP” … “where there was no contractualrequirement to do so”. I determine this relates to the factual allegations set out in paragraphs 9, 10 and 17 and is an appropriate pleadingregarding the breach of the principle governing the duty of honesty and good faith in contractual relations. 2.

Paragraph 34(ii): alleges Rolex was “Attempting to induce breach of contract by requiring … expensive and unnecessaryrenovations and then changing their position”. I determine this relates to the factual allegations as set out in paragraphs 19 to 24 and is anappropriate pleading regarding the breach of the principle governing the duty of honesty and good faith in contractual relations. 3. Paragraph 34(iii): “Demanding relocation”.

I determine this relates to the factual allegations set out in paragraphs 24 to 27 and is anappropriate pleading regarding the breach of the principle governing the duty of honesty and good faith in contractual relations. 4.

Paragraph 34(iv): Following the service of the notice of termination, Rolex demanded repayment of the “line of credit” and“refused to fill orders from Alteen’s” as set out in paragraphs 29 to 33, and is an appropriate pleading regarding the breach of theprinciple governing the duty of honesty and good faith in contractual relations. [40] Having found that the pleadings raise a triable issue, I also conclude that while paragraph 34 could have been pleaded in a morestructured fashion, it does not contravene the Butler criterion of particularity.

Lastly, I do not find the proposed amendments regardingliability are embarrassing or cause injustice to the other side. Amendments to paragraph 35 – Relief [41] Previously, I held that the pleading regarding a claim for punitive damages would follow the necessary amendments to supportthe cause of action. In the proposed Amended Statement of Claim, Alteen’s now pleads the following: i. Special damages for costs from leasing additional space and increases to their line of credit; ii. Special damages for loss of profits from August to December, 2016; iii. General damages for breach of contract; iv.

Aggravated damages v. Exemplary damages vi. Punitive Damages Special Damages (paragraph 35(

i) and (ii)) [42] The proposed pleadings for special damages meet the Butler criteria and are appropriate pleadings. Aggravated Damages (paragraph 35(iv)) [43] Rolex opposes the addition of a pleading for aggravated damages on the basis that there is no factual nor legal basis whichcould give rise to a potentially successful claim in aggravated damages.

Further, as a corporation, Alteen’s is precluded from beingawarded aggravated damages in any event and, therefore, this proposed amendment is embarrassing under the Butler criteria. [44] I accept the argument by Rolex that aggravated damages are not a separate head of damages.

Rather, they are the augmentationof general damages for an underlying wrongful act to compensate a plaintiff for aggravated injury arising from the actions of a defendantand the way that underlying wrongful act was committed. [45] An award of aggravated damages is compensatory in nature and takes into account intangible injuries such as distress andhumiliation arising from the manner in which the defendant conducted themselves.

Typically, aggravated damages may be awarded in anemployment law context for the mental distress resulting from the way an employer terminates an employee, or in the case ofaggravating circumstances related to a physical assault. [46] The insertion of the word “embarrassment” in the proposed Amended Statement of Claim is not a valid basis upon whichAlteen’s can advance a claim for aggravated damages.

While it is possible in certain circumstances for an award of aggravated damagesto arise from a breach of contract, Alteen’s cannot be awarded aggravated damages for an intangible injury such as embarrassmentbecause, as a corporation, it is incapable of suffering intangible injuries. [47] This issue was canvassed in detail by the Alberta Court of Appeal in Thomas Management Ltd. v. Alberta (Minister ofEnvironmental Protection), 2006 ABCA 303, where the court specifically referred to the Supreme Court of Canada’s decision in Fidlerv.

Sun Life Assurance Co. of Canada, 2006 SCC 30, stating at paragraphs 12 to 19 of Thomas, (in relevant part): 12 … That case clarified the meaning of "aggravated damages" and whether corporations were entitled to such awards.

McLachlinC.J.C. and Abella J., who wrote the unanimous decision, began by citing the definition of "aggravated damages" adopted in Vorvis v.Insurance Corp. of British Columbia, (SCC), [1989] 1 S.C.R. 1085 (S.C.C.), at 1099: Aggravated damages "describ[e]an award that aims at compensation, but takes full account of the intangible injuries, such as distress and humiliation, that may have beencaused by the defendant's insulting behaviour." They went on to describe two types of aggravated damages that courts have awarded for

mental anguish arising from a breach of contract. 13 The first type of aggravated damages were described as "true" aggravated damages. Those damages arise out of aggravatingcircumstances but "rest on a separate cause of action — usually in tort — like defamation, oppression or fraud" (see Fidler at para. 52).In other words, such damages do not arise out of the breach of contract itself. 14 The second type of aggravated damages were described as mental distress damages that arise out of a contractual breach. Thecourt found that those damages need not be described as "aggravated damages" at all.

Instead, they are awarded under the rule in Hadleyv. Baxendale (1854), 156 E.R. 145 (Eng. Ex. Div.). According to the Supreme Court: The Hadley test unites all forms of contractual damages under a single principle. [. . .] In all cases, these results are based on what was inthe reasonable contemplation of the parties at the time of the contract formation. They are not true aggravated damages awards.(see Fidler at para. 54) 15 In the absence of an "independent actionable wrong", the Hadley test must be met for damages to be awarded.

If the forseeabilitytest is met, then one must look at the loss suffered, and ask whether the loss is tangible or intangible. 16 What damages can a corporation be awarded? The law on this question is clear. A corporation suffers a tangible injury when itsuffers economic loss due to a breach of contract. However, because a corporation has no feelings, it cannot suffer an intangible injury,the type of injury aggravated damages seek to compensate. (See Pinewood Recording Studios Ltd. v. City Tower DevelopmentCorp. (1998), 40 C.L.R. (2d) 84 (B.C. C.A.), at 72; Lewis v.

Daily Telegraph Ltd., [1963] 2 All E.R. 151 (U.K. H.L.), at 156.) 17 In Walker v. CFTO Ltd. (1987), (ON CA), 59 O.R. (2d) 104 (Ont. C.A.), at 113, Robins J.A. considered thedamages suffered by a corporation in a defamation suit: A company whose business character or reputation (as distinct from the character or reputation of the persons who compose it) isinjuriously affected by a defamatory publication is entitled, without proof of damage, to a compensatory award representing the sumnecessary to publically vindicate the company's business reputation.

But a company has no feelings and, therefore, as Lord Reid notesin Lewis [supra, full citation removed] at 156, "[a] company cannot be injured in its feelings, it can only be injured in its pocket". Hence,unlike an individual, a company is not entitled to compensation for injury to hurt feelings or, it follows, to compensation by way ofaggravated damages for a loss of this nature. 18 This principle can be applied equally to an action for breach of contract.

If a corporation suffers a loss of reputation due to abreach of contract, and the Hadley test is met, the corporation can be awarded damages to redeem its business reputation. However, noaggravated damages can be awarded to the corporation because it is incapable of suffering intangible injuries such as embarrassment,hurt feelings or humiliation. 19 The damages stemming from mental anguish are obviously intangible.

It is thus clear that a corporation cannot be awardedaggravated damages for mental anguish arising from a breach of contract. (Emphasis added) [48] Consequently, I decline to exercise my discretion to allow the amendment to add the pleading for aggravated damages as itdoes not meet the Butler criteria of constituting a triable issue and is embarrassing.

Exemplary Damages (paragraph 35(v)) [49] I also accept Rolex’s submission that exemplary damages are synonymous with punitive damages and, therefore, it is anunnecessary or redundant pleading and there is factual or legal basis plead to support a claim for exemplary damages thereby making itfrivolous and vexatious. Therefore, I also decline to exercise my discretion to allow the amendment to add the pleading for exemplarydamages as it does not meet the criterion of constituting a triable issue.

Punitive Damages (paragraph 35(vi)) [50] Rolex argues that despite being provided with the opportunity to amend the Statement of Claim to provide a legal and factualbasis for its claim for punitive damages, none of the proposed amendments remedy the deficiencies in pleadings previously identified bythe Court. [51] I do not agree.

[ 52 ] Having found that Alteen’s has provided sufficient factual and legal pleadings regarding the breach of the principle governing the duty of honesty and good faith in contractual relations, I must now determine whether the organizing principle is sufficiently adaptable to allow for the pleading of punitive damages. [ 53 ] This issue was canvassed in Atlantic Lottery Corp Inc. v. Babstock , 2020 SCC 19 , at paragraph 65 : 65 As this Court explained in Bhasin v. Hrynew , 2014 SCC 71 , [2014] 3 S.C.R. 494, however, not every contract imposes actionable good faith obligations on contracting parties.

While good faith is an organizing principle of Canadian contract law, it manifests itself in specific circumstances. In particular, its application is generally confined to existing categories of contracts and obligations (para. 66). The alleged contract between ALC and the plaintiffs does not fit within any of the established good faith categories.

Nor did the plaintiffs advance any argument for expanding those recognized categories. [ 54 ] As referenced above, the Court in Bhashin recognized that the organizing principle is an overarching one that could be applied in highly context-specific situations such as a long-term contractual relationship.

In the present case, Alteen’s has plead that its relationship with Rolex occurred over 50 years even though the relevant contract in question was executed in 2004. [ 55 ] During oral argument, counsel for Alteen’s in response to a question from the Court regarding whether the contract with Rolex fit within any of the existing categories, argued that if the Court held it did not then consideration should be given to expanding those categories. I agree with this submission.

Whether Alteen’s will be able to establish a sufficient evidentiary basis to support the application of the principle to its contract with Rolex so as to attract punitive damages is not a consideration the Court must entertain at this time. If the Court declines to exercise its discretion to allow the proposed amendments, what are the consequences of that outcome to the future of Alteen’s action? [ 56 ] Given I have exercised my discretion in favour of the proposed amendments (for the most part), Alteen’s action may proceed with the limitations noted herein.

What are the appropriate cost consequences in the circumstances? [ 57 ] As the result is mixed, there will be no order as to costs. DISPOSITION [ 58 ] Alteen’s application to amend the Statement of Claim is allowed with the exception of the amendments regarding the addition of aggravated and exemplary damages. Given the results of the application are mixed there will be no order as to costs. _____________________________ PETER N. BROWNE Justice