Lester Sparkes Applicant And: International Union of Operating Engineers And: Benefit Plan Administrators (Atlantic) Limited RespondentS, 2019 NLSC 92

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Sparkes v. International Union of Operating Engineers , 2019 NLSC 92 Date : May 3, 2019 Docket : 201704G0237 Between: Lester Sparkes Applicant And: International Union of Operating Engineers And: Benefit Plan Administrators (Atlantic) Limited RespondentS Before: Justice George L. Murphy Place of Hearing: Corner Brook, Newfoundland and Labrador Dates of Hearing: November 1, 2018 and December 14, 2018

Summary: The Applicant applied to amend his Originating Application so as to add two Additional Respondents. The Applicant relied on Rule 15.01 of the Rules of the Supreme Court, 1986 . The Additional Respondents opposed the Application on a number of grounds, including that the applicable Rule was 7.04(2)(

b) and that the requirements of that Rule had not been established. The Additional Respondents further argued that even if the requirements of Rule 7.04(2)(

b) were established, a decision under this Rule was discretionary and in this case the Court should not exercise its discretion to add the Additional Respondents. The Court determined that the applicable Rule was

7.04(2)(

b) and that the requirements of the Rule had been established. The Court further determined that it should exercise its discretionto allow the amendment but that in the circumstances costs should be awarded against the Applicant. Appearances: T. James Bennett Appearing on behalf of Lester Sparkes Ronald A. Pink, Q.C. Appearing on behalf of International Union of Operating Engineers and Benefit Plan Administrators (Atlantic) Limited Authorities Cited: CASES CONSIDERED: U.F.C.W. Local 1252 v. Cashin, (1994) (NL CA), 124 Nfld. & P.E.I.R. 201, 52 A.C.W.S.(3d) 713 (Nfld. C.A.); Tucker v.

Unknown Person, 2012 NLTD(G) 132; 10475 Newfoundland Limited v. Houston, 2012 NLCA 34;Clearwater Fine Foods Inc. v. Day & Ross Inc., 2003 NLSCTD 106 , 2003 NLTD 106, aff’d 2004 NLCA 3; and Vardy v.Dufour, 2008 NLCA 22. 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 Murphy, J.: INTRODUCTION [1] Mr.

Sparkes has applied to amend his Originating Application to add Local 904 of the International Union of OperatingEngineers (“Local 904”) and the Board of Trustees of the Local 904 Pension Plan (the “Board of Trustees”) as additional Respondents(the “Additional Respondents”) in this proceeding. background [2] By way of background, Mr.

Sparkes commenced the Originating Application on October 30, 2017, naming the InternationalUnion of Operating Engineers and Benefit Plan Administrators (Atlantic) Limited (hereinafter “Benefit Plan Administrators”) as theRespondents (hereinafter collectively the “Original Respondents”). The primary relief claimed was a refund of certain pensioncontributions made by his employers in respect of his employment while a member of Local 904 pursuant to collective agreements towhich Local 904 and the employers were contractually bound. [3] The pension contributions which Mr.

Sparkes seeks to be refunded are those which were made by employers in respect of hisemployment by those employers in years subsequent to the year in which Mr. Sparkes ceased to be eligible to receive a benefit from theLocal 904 Pension Plan. [4] The Original Respondents commenced an Interlocutory Application (Inter-Partes) seeking an order setting aside theOriginating Application on a number of grounds, including that the Originating Application did not disclose a reasonable cause of actionas against them.

In an oral decision given on October 29, 2018, I granted the Interlocutory Application of the Original Respondentssetting aside the Originating Application. I made no order as to costs at that time but retained jurisdiction to deal with costs in the eventeither of the Original Respondents wished to make submissions on same. [5] Immediately after I gave my oral decision on October 29, 2018 granting the Interlocutory Application of the OriginalRespondents, counsel for Mr. Sparkes made an oral application to add the Additional Respondents as Respondents to the OriginatingApplication.

Counsel for the Original Respondents advised that he also represented the Additional Respondents and he agreed to waive

any requirement for written notice of the application to add the Additional Respondents. I then set the matter over to November 1, 2018for a hearing on the oral application. Subsequently, counsel for the Original Respondents and Additional Respondents filed an affidavitsworn to on October 30, 2018 setting forth certain facts on which he wished to rely on the oral application. When the matter was calledon November 1, 2018, counsel for Mr.

Sparkes objected to the filing of the affidavit, taking the position that it was improper for counselfor the Original Respondents and Additional Respondents to be filing the affidavit and that if he was relying on the affidavit he could nolonger act as counsel for the Respondents and Additional Respondents. As a result, the matter was postponed to deal with this objectionand the oral application to add the Additional Respondents. On December 14, 2018, counsel for Mr.

Sparkes withdrew his objection tothe filing of the affidavit by counsel for the Original Respondents and Additional Respondents and both counsel made their argumentson whether to grant the application to add the Additional Respondents. issue [6] Should the Court allow the amendment requested by the Applicant to add the Additional Respondents? Position of the parties [7] Counsel for Mr. Sparkes argues the proposed amendment is permitted under the Rules of the Supreme Court, 1986, S.N.L.1986, c. 42, Sch. D and, in particular, relies on Rule 15.01.

Factually, he argues that the Additional Respondents had notice of theproceeding brought by Mr. Sparkes as a result of the relationships between the Additional Respondents and the Original Respondents.The nature of the relationships is not disputed. He also points out that because counsel for the Original Respondents also represents theAdditional Respondents, they will suffer no prejudice by being added as Respondents in the proceeding. I note also that it is not disputedthat the Additional Respondents have known about the claim of Mr.

Sparkes from not long after its commencement. [8] Counsel for the Additional Respondents opposed the proposed amendment and in doing so made the following arguments: a. There is no proceeding to which the Additional Respondents can be added given my oral decision of October 29, 2018; b. The proposed claim against the Additional Respondents is statute barred by virtue of the Limitations Act, S.N.L. 1995 c. L-16.1; c. The applicable rule is Rule 7.04(2)(

b) and not Rule 15.01 and the requirements of Rule 7.04(2)(

b) are not met in this case; and d. If the Court finds that Rule 7.04(2)(

b) is applicable and the requirements of that Rule are met, the Court should not exercise itsdiscretion to add the Additional Respondents. analysis [9] The first issue I shall deal with is the argument that there can be no amendment because the Originating Application was setaside by my oral decision of October 29, 2018 and therefore there is no proceeding to which the Additional Respondents can be added. [10] Counsel for the Additional Respondents argued that the oral decision of October 29, 2018 was a final order and therefore noproceeding exists to which the Additional Respondents may be joined.

I was referred to the decision of the Newfoundland and LabradorCourt of Appeal in U.F.C.W. Local 1252 v. Cashin, (1994) (NL CA), 124 Nfld. & P.E.I.R. 201, 52 A.C.W.S. (3d) 713(Nfld. C.A.) as authority for the argument that my oral decision amounted to a final order. The Court of Appeal discussed in that case theissue of whether an order is to be treated as interlocutory or final and Marshall, J.A. said at paragraph 31: 31 In

summary, therefore, the issue whether an order or judgment is to be treated as interlocutory or final depends upon the nature andeffect of the disposition. If it brought the proceedings at first instance to an end, regardless of whether it actually disposes of the rightsbetween the parties, it is final.

However, if the disposition’s effect is such that the real matter in dispute between the parties remains tobe determined in the very proceeding from which it issued, the disposition is interlocutory. [11] I agree that my oral decision of October 29, 2018 was a final order because it brought to an end the claim of Mr. Sparkesagainst the Original Respondents. However, the fact it was a final order does not mean the proceeding ceased to exist for all purposes. Inthis case when I gave my oral decision on October 29, 2018, I specifically reserved jurisdiction to deal with the issue of costs as notedearlier.

The proceeding therefore remained in existence at least for that purpose and the fact my decision was a final order does not meanthe proceeding no longer existed for any purpose. [12] The fact my oral decision was a final order simply means that it brought the substantive claim between Mr. Sparkes and theOriginal Respondents to an end. It does not mean the proceeding ceased to exist for all purposes. It was clearly alive for the purpose ofdealing with costs and there is nothing which would prevent the Court from treating it as alive for the purpose of consideration of theapplication by Mr.

Sparkes to add the Additional Respondents. Even if that application is successful in this case, it does not change thefact that my oral decision was a final order vis a vis the claim of Mr. Sparkes against the Original Respondents. Instead, it would simplymean that Mr. Sparkes is now bringing his claim against the Additional Respondents.

Therefore, a proceeding does continue to exist towhich the Additional Respondents could be added if it is otherwise appropriate to do so. [13] The next issue I intend to deal with is whether the application to add the Additional Respondents is governed by Rule 7.04(2)or Rule 15.01 of the Rules of the Supreme Court, 1986. Those Rules provide as follows: 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 anyparty to the proceeding, (

a) order any party who is not a proper or necessary party, to cease to be a party; or

(

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. 15.01

(1) On such terms as it thinks just and in accordance with Rule 7, the Court may at any time, on application or on its own motion, grant an amendment which: (

a) adds, substitutes or corrects the name of a party to a proceeding; or (

b) alters the capacity of a party to a proceeding.

(2) A proceeding may be discontinued against a party in accordance with Rule 19.

(3) Notwithstanding the expiry of a relevant period of limitation, the Court may allow an amendment under paragraph (1) to rectify a mistake even if the effect of the amendment will be to add a new party if the Court is satisfied that the mistake was genuine and not misleading or such as to cause any reasonable doubt as to the identity of the party intending to bring or oppose the proceeding. [ 14 ] There has been a significant amount of discussion in case law from this province about the interaction between the different rules of civil procedure pertaining to the adding of a party to an existing cause of action.

In particular, there have been a number of cases which have examined the various situations in which Rule 7.04(2)(

b) and Rule 15.01 or the former Rule 15.02 apply to this issue. [ 15 ] Orsborn, J. in Tucker v. Unknown Person , 2012 NLTD(G) 132 commented on the amendment to Rule 15 replacing the former Rule 15.02 with the current Rule 15.01 and said at paragraph 24: 24 This amended rule does not make a substantive difference to the law to be applied when considering an application to add a new party. The amendment is directed at clarifying which amendments require an application and which do not. [ 16 ] I agree with Orsborn, J.’s comments.

Thus, the case law dealing with the former Rule 15.02 remains useful in analyzing the issue under consideration here. [ 17 ] In Tucker , Orsborn, J. conducted a thorough review of the case law in this province on the addition of new parties leading up to the decision of the Court of Appeal in 10475 Newfoundland Limited v. Houston , 2012 NLCA 34 . It was thought by some that Houston had changed the applicable law relating to the issue of adding parties to an existing proceeding. At paragraph 88 of Tucker , Orsborn, J. outlined his

summary of the law prior to Houston : 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. [ 18 ] Orsborn, J. then did an in-depth review of Houston and ultimately concluded that Houston had not changed the law.

Instead, he concluded that the Court of Appeal had considered the underlying application in that case as largely an application to amend pleadings rather than to add a new party. I refer to paragraphs 92, 93, 97, 98, 146, and 147 of his decision: 92 At 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.

93 For the reasons I will outline, the Houston decision, in my respectful opinion, does not change the long-standing principles of law endorsed in the line of authority culminating in Vardy ; to do so would, in my respectful view, require explicit language.

Houston refers to both Rule 7 and Rule 15, but my assessment is that the Court dealt with the matter primarily as a Rule 15 application to amend the pleadings and to change the name or capacity of the defendants. 97 Accordingly, I take from the references in para. 21 of Houston to r. 15.02(1) and to the amendment of pleadings that the application was considered largely as an application to amend the pleading. This view is fortified by the fact that at para. 22 the Court sets out, with emphasis, certain extracts from r. 15.02 (as it then stood): 15.02.

(1) The Court may grant an amendment under rule 15.01 at any time, in such manner, and on such terms as it thinks just. (2)Notwithstanding the expiry of any relevant period of limitation, the Court may allow an amendment under rule 15.02(1) (

a) to correct the name of a party, notwithstanding it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake was genuine and not misleading or such as to cause any reasonable doubt as to the identity of the party intending to bring or oppose the proceeding ; ...

(3) The Court may allow an amendment under rule 15.02(2) 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. ... (emphasis by Court of Appeal) 98 In my view, had the Court intended to treat the application as one to add a new defendant, it would have simply referred to r. 7.04(2) as set out in Vardy . 146 In

summary, my reading of Houston is that it considered the application to add defendants as an application pursuant to Rule 15 to amend the pleadings and change the name of a party from the company originally named and asserted to be the owner of the premises to the actual owner of the premises. These changes would thus be either a "substitutional" correction or "capacital correction" as referred to in Petten and Vardy .

The statement of claim showed a clear intention from the outset to sue the owner and occupier; the Court considered the reference to Perennial as a misnomer which was subject to correction. 147 But to the extent, if at all, the decision in Houston is based on the application of r. 7.04(2) (b) - on either or both branches of the rule, I do not see in the decision -- as previously noted -- any suggestion that the legal principles to be applied have been changed. For the reasons set out in Houston , the Court concluded that the applicant had satisfied both the common law and equitable branches of the rule, but the

interpretation of r. 7.04(2)(

b) and the principles appropriate to its application as set out in Vardy were left untouched. [ 19 ] Thus, the law post- Houston on the addition of new parties remained the same in the opinion of Orsborn, J. Therefore, if the application before the Court at its essence can be properly characterized as a request for an order to add a new party, then the applicable Rule is Rule 7.04(2)(

b) and one of the two conditions for the application of that Rule must be satisfied. These conditions are referred to as the “ought to have been” and “necessary” tests and arise from the wording of Rule 7.04(2) (b).

However, if the application before the Court at its essence is properly characterized as a request to amend pleadings or the change or substitution of a party, then the applicable Rule is Rule 15.01(1). [ 20 ] Therefore, in most cases it is going to be necessary to conduct a close examination of the nature of the initial action and how that initial action will be changed by the addition of the new party in order to determine which Rule applies. [ 21 ] In Tucker , Orsborn, J. ultimately determined that the applicable Rule was 7.04(2)(

b) and that neither of the two conditions for the applicability of the Rule had been established so he dismissed the application. [ 22 ] It is helpful in my view to examine how in Tucker the addition of a new defendant would have changed the nature of the initial action compared to in Houston in order to better understand how to determine whether a particular application to add a new party should

be assessed under Rule 7.04(2)(

b) or Rule 15.01(1). [23] In Tucker, the initial action was a negligence claim arising out of an injury suffered by Mr. Tucker when he was struck by amotor vehicle that had left the scene of the accident. Neither the driver, the vehicle, nor the owner of the vehicle had been identified. Mr.Tucker subsequently applied to add his own automobile insurer as a defendant in the same proceeding in order to try and access theSection D benefits under his own automobile insurance policy. [24] Thus, Mr. Tucker was attempting to add a contract action against his own insurer to his negligence action against the unknownperson.

Orsborn, J. felt that such an application to add a defendant was governed by Rule 7.04(2) as opposed to Rule 15.01(1). [25] In Houston, the factual situation was significantly different. The initial action brought by Ms. Houston arose out of a slip andfall accident. Ms. Houston initially sued only one defendant, Perennial Management Limited, asserting that this defendant was the owneror occupier of the premises where the slip and fall occurred. She later discovered that the defendant she had sued was actually theproperty manager and that the premises were in fact owned by two corporations. Ms.

Houston applied to amend her Statement of Claimto add these two corporations as defendants and to change her description of Perennial to property manager instead of owner or occupier.Her application was granted and the two additional defendant corporations appealed. I find it interesting that Harrington, J.A. for theCourt of Appeal in Houston in his review of the background said at paragraph 7: 7 . . . The amendment allowing the addition of parties did not alter the basic nature of the pleaded cause of action.

It was confined solelyto the proper identification of the owners and property manager of the two abutting strip malls and adjacent walkway. . . . [26] Later at paragraph 23, Harrington, J.A. said: 23 . . .

At the outset it is clear that the respondent's request was a simple matter arising from an honest and non-prejudicial error on hercounsel's part regarding the correct identification of the owners of the two abutting retail premises adjacent to the icy walkway where herslip and fall occurred. [27] From my reading of Houston, and with the greatest of respect, I am not as convinced as Orsborn, J. that the Court of Appealdealt with the application to add parties in that case as an application to amend under Rule 15. It appears to me that the focus of theapplications judge in Houston was Rule 7.04(2)(

b) and the Court of Appeal approved this approach. I refer to paragraph 46 ofHarrington, J.A.’s decision where in referring to the reasons of the applications judge for allowing the new defendant to be added, hesaid: 46 Ultimately, he also directed his mind to a portion of rule 7.04(2)(

b) which allows "the Court ... on its own motion ... to order anyperson who ought to have been joined as a party ... be added as a party". He found this to be a proper ground to add the defendants and hewas correct in that conclusion. [28] Harrington, J.A. went on to find that the “ought to have been joined” phrase in Rule 7.04(2)(

b) applied on the facts of the casebefore him. At paragraphs 47 and 48, he said: 47 While this first portion of Rule 7.04(2)(

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

Raphael Tuck & Sons Ltd., [1956] 1 Q.B. 357, [1956] 1 All E.R. 273, I see noreason why, by analogy, this ratio could not also apply to an occupiers' liability case where owners and occupiers at common law can beheld to be jointly and generally liable for a breach of duty of care respecting dangerous premises. 48 The applications judge was on the right footing in considering the matter of prejudice and obviously felt that in all of thecircumstances here the appellants ought to have been joined given the nature of this occupiers' liability claim where the genuineproblems of identification of the owners of the abutting properties were encountered by the respondent.

The need for the respondent as avisitor to the abutting strip malls to have the owners of the abutting properties joined in order for those responsible for the ownership,care and maintenance of these properties to be before the court was obvious from the description of the cause of action in the originalstatement of claim.

There can be no doubt that the status of the appellants as alleged owners of the abutting properties would lead one toconclude that they ought to have been added from the outset. [29] Harrington, J.A. was able to distinguish prior decisions of the Supreme Court of Newfoundland and Labrador in ClearwaterFine Foods Inc. v. Day & Ross Inc., 2003 NLSCTD 106 , 2003 NLTD 106, aff’d 2004 NLCA 3, and the Court of Appeal ofNewfoundland and Labrador in Vardy v. Dufour, 2008 NLCA 22 on the basis of the nature of the initial action compared to how addingthe proposed defendants would change the nature of the initial action.

At paragraphs 50 and 56, he said: 50 . . . However, these cases dealt solely with the issue of whether the applying parties had established that it was necessary to adddefendants to ongoing proceedings, which would have involved consideration of new causes of action not arising out of the sameoriginally pleaded fact scenario. 56 These cases are distinguishable from the case on appeal.

The intended effect of the application in this case was to have the statementof claim amended to describe the capacity of the sole defendant Perennial as "property manager of all or part of the Premises" rather thanbeing described as "owner and/or occupier of all or part of the Premises". The additional defendants would replace Perennial in thecapacity as "owners" of the abutting properties. What was actually taking place was what Green J. termed in Petten to be a "capacitalcorrection" affecting Perennial occurring under rule 15.02(1)(

b) and a "substantive addition" of parties under rule 7.02(2)(b). [30] Harrington, J.A. concluded that the applications judge got it right and paragraphs 58, 61, and 65 - 67 outline why he arrived atthat conclusion:

58 This appeal involves a simple issue as to whether the applications judge erred by permitting two additional defendants to be added to an owner/occupiers' liability claim after the expiry of the limitation period. The pleaded cause of action remained substantially unchanged. A party which was incorrectly alleged in the original statement of claim to be "the owner and/or occupier of the Premises" was named as a sole defendant. The obvious intention of the respondent was to sue all parties associated with ownership of two abutting properties. The cause of action, as reframed, continues to arise out of the originally pleaded fact scenario and in s. 11(1) (

d) of the Limitations Act is "related to or connected with the subject matter of the original action". Accordingly, the expiration of the limitation period is irrelevant. 61 The applications judge's decision to allow the addition of the appellants as defendants should have been based upon (

i) the nature of amendment to add defendants who ought to have been joined in the proceeding based on the nature of the cause of action; (ii) the necessity to have the property owners as parties to the litigation accepting that the plaintiff had justification for failing to identify them before the limitation period expired; (iii) the lack of prejudice to the additional defendants who had received prior timely notice of the claim in relation to the date of occurrence, which allowed them to investigate and defend their position on a timely basis; and (iv) the prejudice to be suffered by the respondent if the property owners were not before the court in order to be accountable for any proven negligence on their part. 65 However, I am satisfied that the defendants "ought to have been added" after the limitation period has expired given that (

i) the facts show that the plaintiff clearly intended to name all of the proper parties to the pleaded occupier's liability cause of action and (ii) the amendment was not so late in the litigation that it created actual prejudice to the original defendant. This factor was mentioned by the applications judge in one sentence of his reasons as being applicable. He did not elaborate on the application of the rule to the facts surrounding this application. Nevertheless, he was correct to consider that this ground under rule 7.04(2)(

b) as being applicable to the facts. 66 Additionally, I am also satisfied that the addition of the two defendants by the applications judge meets a purposive

interpretation of the words "necessary to ensure that matters in the proceeding may be effectually adjudicated upon ..." found in rule 7.04(2)(

b) of the Rules which is discussed in these reasons. 67 The fact that this application and this subsequent appeal were based on rather tenuous grounds raises concern that there is misunderstanding of how Rule 7.04(2)(

b) is intended to operate in the conjunction of s. 11(1) (

d) of the Limitations Act . 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.

Parties ought to be added when the nature of the cause of action, makes it clear that they ought to have been joined at the commencement of the proceeding. Consideration of factors such as necessity for the participation of previously unnamed parties 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. [ 31 ] When I analyze the facts of this case before me I see many similarities with the underlying factual scenario under consideration in Houston . While Mr.

Sparkes’ Originating Application was poorly drafted, it can be determined from a review of it that his claim was for the return of pension contributions made by various employers on his behalf after he reached 65 years of age. These pension contributions were remitted to Local 904 and ultimately became part of a pool of funds from which pensions were paid to union employees in accordance with the terms and conditions of a pension plan and the law applicable thereto. [ 32 ] The International Union of Operating Engineers is an international union made up of many local unions, one of which is Local 904. Mr.

Sparkes is, or at least was, at all material times a member of Local 904. It was Local 904 and certain other local unions (which were members of the International Union of Operating Engineers) which established a pension plan for their respective members. The International Union of Operating Engineers had nothing to do with establishing the pension plan and has nothing to do with the management and administration of it.

Instead, the local unions established a Board of Trustees which is responsible for the management and administration of the pool of funds used to fund the pension plan. [ 33 ] Benefit Plan Administrators is a third party company that provides pension plan administration services for various pension plans. The Board of Trustees of the pension plan at issue here has ultimate legal responsibility for management and administration of that plan. It merely contracted with Benefit Plan Administrators to assist with the day-to-day administration of the pension plan.

Benefit Plan Administrators did not establish the rules or terms and conditions of the pension plan. This was and is the responsibility of the Board of Trustees. [ 34 ] Mr. Sparkes’ complaint is with the fact he was ineligible to receive a benefit from pension plan contributions made by employers with whom he worked and in respect of hours he worked for those employers after he had reached a certain age. He should have brought his action against Local 904 which established the pension plan and the Board of Trustees which has legal responsibility for administering it.

He sued the wrong parties and that is why I granted the application of the Original Respondents dismissing the claim against them on the basis it disclosed no reasonable cause of action. [ 35 ] However, the addition of the Additional Respondents in this case does not change at all the underlying factual nature of the action. It merely changes the parties against whom the factual allegations are being made.

In the words of Harrington, J.A., the cause of action as reframed continues to arise out of the originally pleaded fact scenario. [ 36 ] It is obvious to me that the nature of the cause of action makes it abundantly clear that the Additional Respondents ought to have been joined at the commencement of the proceeding and further that their participation is necessary so that matters arising in the

original proceeding as pleaded can be fully adjudicated upon. [ 37 ] Counsel for the Additional Respondents argued that the existing action as commenced between Mr. Sparkes and the Original Respondents could be fully and completely adjudicated without the addition of the Additional Respondents. I do not agree. It is my view that counsel for the Additional Respondents is misinterpreting the phrase “existing action as commenced, as between the original plaintiffs and defendants”. [ 38 ] A similar argument was made in Houston . Counsel for the Appellants in that case argued that the claim of Ms.

Houston could be tried against the property manager without the participation of the actual owners (the Appellants) of the two properties where the slip and fall occurred. Harrington, J.A. aptly described this argument as specious. Undoubtedly, the claim against the property manager could have been tried and a decision made; however, that does not mean that the existing cause of action as between the original parties was fully and completely adjudicated upon.

It is a mistake to take a superficial view of this phrase and the argument of the Appellants in Houston and counsel for the Additional Respondents in this case is based on such a superficial view. The proper approach in my view is to delve deeper and examine the fundamental basis of the underlying claim. [ 39 ] In Houston , there is no doubt that Ms. Houston was attempting to bring a claim against the owner or occupier of the property where she slipped and fell. She improperly named the property manager as the owner or occupier and did not name the actual owners. It is possible that Ms.

Houston did have an action against the property manager and no doubt the action she brought could have been tried and a decision rendered; however, where it is obvious that the essence of her claim is a claim against the owner or occupier then it cannot be said that the existing action as between the parties can be effectually and completely adjudicated in a trial of a claim against only the property manager. Thus, the term “existing action” requires a close analysis in an attempt to determine not only what it purports to be on its face but what at its core it is about. [ 40 ] There is no doubt that Mr.

Sparkes is trying to bring a claim against the parties legally responsible for establishment of the pension plan and the management and administration of same. That is the essence of his claim. He commenced it against the Original Respondents but ought to have commenced it against the Additional Respondents. The claim Mr. Sparkes wants to bring against the Additional Respondents is exactly the same. All that he wants to change is the parties he is bringing it against.

Counsel for the Additional Respondents argued that the claim against the Original Respondents could be fully and effectually adjudicated upon and, in fact, had been. As noted earlier, the claim against the Original Respondents was dismissed because it disclosed no cause of action. In such circumstances, it cannot be said, in my view, that the original claim that Mr.

Sparkes was trying to bring has been fully and effectually adjudicated upon. [ 41 ] As a result, in terms of the “necessary” branch of Rule 7.04(2)(b), I do not agree with the submissions of counsel for the Additional Respondents that the necessity test has not been established. [ 42 ] Moving back to the question of whether the applicable Rule in this case is Rule 7.04(2)(

b) or Rule 15.01 , it is my determination, based on my

interpretation of Houston , that the appropriate Rule is 7.04(2)(

b) because we are dealing with the substantive addition of parties, namely the Additional Respondents. Under Rule 7.04(2)(b), there are two possible ways to ground the entitlement to add a new party. They were appropriately outlined by Orsborn, J. in his

summary of the law on the addition of a new party pre- Houston at point 4 of that

summary. They are often referred to as the “ought to” and “necessary” conditions. Based on Houston and my

interpretation of the Court of Appeal’s decision in that case, it is my determination that the facts of this case satisfy both of these conditions. The Additional Respondents ought to have initially been joined given the nature of the cause of action. It is obvious that Mr. Sparkes’ complaint was against those parties responsible for the establishment of and the management and administration of the pension plan to which contributions made by his employers in respect of hours he had worked were paid. These parties are the Additional Respondents and therefore they ought to have initially been joined as defendants.

Further, the addition of the Additional Respondents is also necessary in order to fully and effectually adjudicate the claim that Mr. Sparkes is attempting to bring. While it is only necessary to satisfy one of the two conditions for the application of Rule 7.04(2)(b), the facts of this case are such as to satisfy both branches of the test. [ 43 ] Simply because Rule 7.04(2)(

b) is applicable does not automatically mean that an application will be granted. That is because the Rule uses the word “may”. As Orsborn, J. said at point 10 of his

summary of the law pre- Houston referred to earlier, “If either of the conditions is satisfied and a prima facie entitlement to add a party is found, the decision is nonetheless discretionary”. Thus, the next issue is whether I should exercise my discretion in favour of allowing the Additional Respondents to be added. [ 44 ] In considering whether to exercise my discretion, there is no closed set of factors to be assessed. I would note, however, that the respective prejudice to Mr. Sparkes and the Additional Respondents is one factor which should be taken into consideration.

Other factors to be considered in my view include fairness, the goal of avoiding a multiplicity of actions, and the timeliness of seeking the order. [ 45 ] In this case, the Additional Respondents have not attempted to prove actual prejudice on their part but do argue that the applicable limitation period has expired and that this should be taken into consideration by the Court.

The implication of this argument would appear to be that the Additional Respondents will be prejudiced by the granting of the application because they will not be able to avail of a limitation defence they believe would be otherwise available to them if the Applicant had to commence a separate action against them. I note that counsel for the Applicant argued that the limitation period has not expired because the claim is one to which the applicable limitation period is 10 years. I do not find it necessary in this case to decide the applicable limitation period.

That is because even if counsel for the Additional Respondents is correct that the relevant limitation period has expired, it is my view that this does not amount to prejudice of the type which would justify the exercise of my discretion not to allow the addition of the Additional Respondents in light of section 11(1) (

d) of the Limitations Act which provides: 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

. . . (

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. [ 46 ] Counsel for the Additional Respondents raised other arguments as to why I should not exercise my discretion to allow the amendment requested. These were that counsel for the Additional Respondents in his role as counsel for the Original Respondents had notified counsel for Mr. Sparkes less than a month after the Originating Application had been commenced that he had sued the wrong parties.

As noted earlier, the Originating Application was commenced on October 30, 2017. On November 15, 2017, counsel for the Additional Respondents emailed counsel for Mr. Sparkes to outline why, in his view, the wrong parties had been sued and suggested that the proper party to be sued was one of the Additional Respondents, namely the Board of Trustees. There is no evidence that counsel for Mr. Sparkes did anything as a result of this email.

He certainly did not take any steps in this Court to amend his pleadings. [ 47 ] I note as well that counsel for the Original Respondents commenced the Interlocutory Application on March 16, 2018 to have the proceeding against the Original Respondents dismissed as disclosing no cause of action. This would have been before the expiry of the two year limitation period that counsel for the Original Respondents and Additional Respondents argued was applicable. I realize that counsel for Mr.

Sparkes claims that there is a 10 year limitation period applicable; however, while I do not intend to make any ruling on what the applicable limitation period is, I will say that it is less than clear that the position of counsel for Mr. Sparkes is correct. The prudent course of action for counsel for Mr.

Sparkes to have taken, prior to the expiry of the two year limitation period (if applicable), would have been to take steps to bring a proceeding against the parties he now wishes to add as Additional Respondents. [ 48 ] Thus, the primary argument of counsel for the Additional Respondents as to why I should not exercise my discretion is the undue and unreasonable delay in bringing the application to add the Additional Respondents. It was also pointed out that there was no explanation whatsoever offered for the delay and that counsel for Mr.

Sparkes was well aware of the issue within the two year limitation period but did nothing until after I rendered my oral decision on October 29, 2018 dismissing the claim of Mr. Sparkes. [ 49 ] The points raised by counsel for the Additional Respondents are valid ones; however, I have determined that the appropriate way to deal with them is by way of costs rather than disallowing the amendment which would deprive Mr. Sparkes of the opportunity to have his claim adjudicated on its merits.

summary and conclusion [ 50 ] In

summary, I have concluded as follows: a. There remains a proceeding for the purpose of an application to add further parties. b. The proposed claim against the Additional Respondents is not barred as it falls within section 11(1) (

d) of the Limitations Act . c. The application to add the Additional Respondents is governed by Rule 7.04.(2)(b). d. The application to add the Additional Respondents satisfies the requirements of Rule 7.04(2)(b). e. While the conduct of the Applicant was less than diligent, I have concluded it is still appropriate to exercise my discretion to add the Additional Respondents and deal with the lack of diligence by way of costs. costs [ 51 ] Costs are a matter in the discretion of the Court. In this case, while Mr.

Sparkes was ultimately successful in his application to add the Additional Respondents, given the way this matter has proceeded, it is appropriate in my determination to award costs in favour of the Additional Respondents. [ 52 ] There is no evidence before the Court as to what steps were taken prior to the commencement of the Originating Application to determine the proper Respondents and no reasonable explanation was provided by counsel as to why the wrong parties were initially named as Respondents.

Further, and more importantly, there is no evidence that any steps were taken after the email of November 15, 2017 from counsel for the Original Respondents to counsel for Mr. Sparkes to try and determine whether counsel for the Original Respondents was correct in his assertion that the wrong parties had been sued. By the end of 2017, the Additional Respondents could easily have been made parties to this proceeding and it could have been well on the way to conclusion if not already concluded.

There ought to have been no need whatsoever for the Original Respondents to have brought the Interlocutory Application to have the proceeding as against them dismissed on the basis it disclosed no reasonable cause of action.

Further, if the application to add the Additional Respondents had been brought within the two year limitation period then it is highly unlikely there would have been a contested application to add the Additional Respondents. [ 53 ] Given the foregoing, it is appropriate in my determination to award costs in favour of the Additional Respondents in respect of the application to have them added as parties. Further, given the facts, those costs shall be on a solicitor and client basis. _____________________________ George L. Murphy Justice