2021 NLSC 62, 2021 NLSC 62

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Chipman v Party Unknown , 2021 NLSC 62 Date : May 10, 2021 Docket : 201201G5968 Between: Sherri Chipman (discontinued) First Plaintiff/INTENDED FIFTH DEFENDANT And: Ashley Chipman Second Plaintiff And: Zachery Chipman Third Plaintiff And: Doris Lewis ( discontinued ) Fourth Plaintiff And: Party Unknown First Defendant And: Becky Edwards Second Defendant And: Bingo Products Canada Third Defendant And: The Canadian Union Insurance Company Fourth Defendant

Before: Justice Donald H. Burrage Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: April 19, 2021 Appearances: No Appearance On behalf of the First Plaintiff F. Richard Gosse Appearing on behalf of the Second and Third Plaintiffs No Appearance On behalf of the Fourth Plaintiff No Appearance On behalf of the First Defendant Amy M. Crosbie Appearing on behalf of the Second and Third Defendants Barry Learmonth, Q.C. Appearing on behalf of the Fourth Defendant Authorities Cited: CASES CONSIDERED: Midnight Marine Ltd. v.

Aviva Insurance Co. of Canada, 2015 NLTD(G) 112; 10475 Newfoundland Ltd. v.Houston, 2012 NLCA 34; Tucker v. Unknown Person, 2012 NLTD(G) 132; Western Regional Integrated Health Authority v. MarineContractors Inc., 2016 NLTD(G) 41; Tobin v. Jon E. Williams Surveying Ltd., 2018 NLSC 137; Vardy v. Dufour, 2008 NLCA 22;Mandavia v. Central West Health Care Institutions Board; (2003), (NL SC), 222 Nfld. & P.E.I.R. 265, 2003CarswellNfld 13 (T.D.); Sparkes v. International Union of Operating Engineers, 2019 NLSC 92; Dobbin v. Tucker, 2021 NLSC 22 STATUTES CONSIDERED: Limitations Act, S.N.L 1995, c.

L-16.1 REASONS FOR JUDGMENT Burrage, J.: INTRODUCTION [1] This is an application by the Second and Third Plaintiffs to file an Amended Statement of Claim, adding the First Plaintiff as aFifth Defendant[1]. The application is brought in the first instance pursuant to Rule 15.01[2]. In the alternative, the Applicants rely on

Rule 7.04(2). The application is opposed by the Fourth Defendant, The Canadian Union Insurance Company. The Fourth Defendant is the First Plaintiff’s automobile insurance company. The remaining parties do not take a position. Background [ 2 ] On 27 November 2010 the Second, Third and Fourth Plaintiffs were passengers in a vehicle operated by the First Plaintiff, when it collided with a vehicle being driven by the Second Defendant and owned by the Third Defendant.

The First Plaintiff claims that just prior to the accident she was forced to navigate around a parked truck, owner and operator unknown, (the “Party Unknown”, First Defendant), which obstructed her vision. The First Plaintiff’s automobile insurer, was named as the Fourth Defendant in the event the claims against the Unknown Party were to proceed under

Section D of the First Plaintiff’s automobile coverage. [ 3 ] At the time of the accident the Second and Third Plaintiffs (the Applicants herein) were minors. The Second Plaintiff was born on 17 August 1998 and was therefore 12 years old at the time. She is now 22. The Third Plaintiff was born on 30 August 2000 and was therefore 11 years old at the time. He is now 20.

The First Plaintiff is their mother. [ 4 ] The Statement of Claim was issued on 26 November 2012. [3] [ 5 ] It is common ground that the limitation period for commencing a new action has expired, although in the case of the Applicants, as they were under age at the time, the limitation period did not begin to run until they reached the age of majority. [4] Analysis Rule 15.01 [ 6 ] Rule 15.01(1) provides, as follows: 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. [ 7 ] Rule 15 is intended to rectify a mistake in the original pleading, as opposed to the substantive addition of a new party. The latter is governed by Rule 7. [ 8 ]

Section 15 is to be liberally construed and given a wide scope, as the general objective of the rule is that substance is intended to prevail over form ( Midnight Marine Ltd. v. Aviva Insurance Co. of Canada , 2015 NLTD(G) 112 at para. 2) [ 9 ] The Applicants submit that the addition of the First Plaintiff as the Fifth Defendant amounts to no more than a “substitutional correction” or “capacital correction”, as the Statement of Claim demonstrates a clear intention from the outset that the First Plaintiff would also be named as a Fifth Defendant.

The failure to do so amounts to an oversight, which can be corrected with an amendment to the style of cause so that it is in accord with the body of the Statement of Claim. [ 10 ] The Applicants argue that notwithstanding the expiration of the limitation period, the amendment is permissible as the mistake was genuine and not misleading, or such as to cause any reasonable doubt as to the identity of the First Plaintiff as a defendant. [ 11 ] In support, the Applicants refer to the following paragraphs in the Statement of Claim: 6.

The Fourth Defendant at the material time of the accident, is an insurance company that provided an automobile insurance policy for the First Plaintiff, policy number AP8666365 (the Policy). This automobile insurance policy carries coverage under both

Section A and

Section D. 15. In the alternative the Accident was caused by a number of factors including the aforementioned as well as the Second Defendants operation of the Third Defendant’s motor vehicle and the First Plaintiff’s operation of the First Plaintiff’s motor vehicle. In this event the first Plaintiff would become a Fifth Defendant.

17. The Plaintiffs repeat the foregoing and state that the Defendants, and potentially the First Plaintiff, are jointly and severally liable for the material and relevant acts and omissions, such acts and omissions being particularized in this Statement of Claim. [ 12 ] The Applicants argue that if there was no intention to name the First Plaintiff as a defendant, there would be no need to reference

Section A of the First Plaintiff’s insurance. This

section responds only in the event of the policyholder’s liability. [ 13 ] In response, the Respondent argues that Rule 15.01 is inapplicable, as the First Plaintiff was never named as a defendant in any capacity. As such, the within circumstance does not involve the simple mis-identity of the correct party. The Respondent argues that the Applicants ought not hide behind a vague reference to the possibility of the First Plaintiff being a defendant.

They submit that what is being sought is not a mere capacital correction, but the substantive addition of a new party after the limitation period has expired. [ 14 ] With respect, I would not give effect to the Respondent’s position.

Rather, the Applicants have satisfied me on the balance of probabilities that the Statement of Claim demonstrates a clear intention from the outset to pursue the claim against the First Plaintiff as a defendant. [ 15 ] I reach this conclusion for the following reasons. [ 16 ] The First Plaintiff’s insurer, the Respondent on this application, was expressly named as a defendant and the contract of insurance was plead and relied upon. Not only did the Plaintiffs rely on

Section D (covering unknown defendants) but also

Section A, governing the First Plaintiff’s own negligence. Unless it were intended to pursue a claim against the First Plaintiff, the reference to

Section A would be unnecessary. [ 17 ] In paragraph 15 of the Statement of Claim the Plaintiffs plead, in the alternative, that the accident was caused by a “number of factors including … the First Plaintiff’s operation of the First Plaintiff’s motor vehicle.

In this event the First Plaintiff would become a Fifth Defendant.” We thus have an express reference to the First Plaintiff as a Fifth Defendant in the body of the pleading, following the assertion, in the alternative, that the First Plaintiff caused or contributed to the accident. [ 18 ] In paragraph 17 of the Statement of Claim the Plaintiffs plead that the Defendants “and potentially the First Plaintiff” are jointly and severally liable for the accident. [ 19 ] Viewed cumulatively, the foregoing averments in the Statement of Claim satisfy me of a clear intention to pursue a claim against the First Plaintiff, as Defendant, in the event the First Plaintiff were shown to be negligent. [ 20 ] Finally, I am satisfied that the cases referred to by the Applicants and Respondent support the use of Rule 15 in this instance. [ 21 ] In 1 0475 Newfoundland Ltd. v.

Houston , 2012 NLCA 34 our Court of Appeal allowed the addition of two defendants and the change in capacity of an existing defendant. Harrington, J. A. stated, at paragraph 56: 56 These cases are distinguishable from the case on appeal. The intended effect of the application in this case was to have the statement of claim amended to describe the capacity of the sole defendant Perennial as "property manager of all or part of the Premises" rather than being described as "owner and/or occupier of all or part of the Premises".

The additional defendants would replace Perennial in the capacity as "owners" of the abutting properties. What was actually taking place was what Green J. termed in Petten to be a "capacital correction" affecting Perennial occurring under rule 15.02(1)(

b) and a "substantive addition" of parties under rule 7.02(2)(b). [ 22 ] In Houston the Plaintiff had been the victim of a slip and fall. She initially sued one defendant, asserting that the defendant was both the owner and occupier of the premises upon which she fell.

Upon discovering that the named defendant was only the property manager and that the premises was owned by two corporations jointly, she sought to amend her Statement of Claim to correctly identify the named defendant and to add the corporate owners. [ 23 ] The amendment appears to have been granted pursuant to Rule 15 as a capacital correction, as it was the obvious intention of the plaintiff to sue all parties associated with ownership of the properties in question.

As such, the defendant would not suffer any prejudice as a result of the amendments. [ 24 ] In the original Statement of Claim the respondent claimed negligent maintenance by the “owners and/or occupiers” of the walkway where the slip and fall occurred. The amendment sought thus did not alter the basic tenant of the cause of action as pleaded. The same may be said for the amendment sought in this instance as the addition of the First Plaintiff as a defendant does not alter the cause of action as pleaded. [ 25 ] In Tucker v.

Unknown Person , 2012 NLTD(G) 132, Orsborn, C.J. undertook a detailed analysis of the distinction between Rule 15 and Rule 7. The Justice addressed an application by the Plaintiff to add his own insurance company as a defendant after the limitation period for doing so had expired. The Plaintiff had been struck by an unknown driver while crossing the road. The owner and operator of the vehicle were never identified. [ 26 ] The Statement of Claim was in negligence seeking damages against the unknown driver. However, neither the Plaintiff’s insurance company, nor the Plaintiff’s

Section D claim were referenced in the Statement of Claim. There was no reference to a contract of insurance, or even the Plaintiff as an owner of a motor vehicle. [ 27 ] In referencing the amendment Orsborn, J. observed that the claim was simply “a claim for damages by one person because of the alleged negligence of another person” (at paragraph 150). [ 28 ] Unlike Tucker , in the instant case the insurer was both named as a defendant and the contract of insurance relied upon and the negligence of the First Plaintiff alleged. [ 29 ] In Western Regional Integrated Health Authority v. Marine Contractors Inc. , 2016 NLTD(G) 41, Her Majesty the Queen in

Right of Newfoundland and Labrador sought to be added as a plaintiff after expiration of the limitation period, in an action for damages caused by flooding at Western Memorial Regional Hospital, in Corner Brook, NL. During discoveries it was learned that the Province was the owner of the hospital, not the Health Authority. [ 30 ] Fry, J. (as she then was) concluded that Rule 15 was inapplicable, as the addition of the Province as a party was not a substitution, or correction, since the existing Plaintiff would remain a party in order to claim damages with respect to its property (at paragraph 22).

The Province and Health Authority are separate legal entities and the amendment sought involved the addition of a party rather than a change in capacity. The Province would join the existing action and plead its own cause of action for damages it sustained as a result of the flood (at paragraph 15). [ 31 ] While the Health Authority argued that it was obvious that the owner of the building was intended to be part of the claim from the outset, no evidence was offered as to how the mistake or inadvertence occurred.

Fry, J. observed that in a written Consent exhibit the Province stated that it was not prepared to respond to an inquiry as to how the Statement of Claim was prepared without the province as a party (at paragraph 15). [ 32 ] Without more, arguing that something is “obvious” was not enough. However, in the present case, the intent is apparent from a reading of the Statement of Claim. [ 33 ] In Tobin v. Jon E. Williams Surveying Ltd . , 2018 NLSC 137 the Plaintiff hired the Defendant to complete certain preliminary surveying working for a residential neighbourhood.

Following completion of the work the Plaintiff commenced an action in negligence. After doing so, the Plaintiff transferred the project to a company. Six years after initiating the action the Plaintiff sought to add the company as a Second Plaintiff. [ 34 ] In refusing to add the company under Rule 15.01, Khaladkar, J. observed that the Plaintiff had not established on the balance of probabilities that he was acting for the proposed corporate Plaintiff when the claim was commenced. In fact, at the material time the company was not even involved with the project.

The company would thus be a new party, with new interests and the amendment sought not a clarification of the cause of action pleaded. Unlike the facts in Houston , the claim in Tobin demonstrated no prior intention to bring an action on behalf of the corporate plaintiff. [ 35 ] I am satisfied that of the cases relied upon, Houston comes the closest to the present circumstance.

The identification in the existing pleading of the First Plaintiff as a potential Fifth Defendant is such as to distinguish this case from that in Tucker , Western and Tobin , above. [ 36 ] It would be wrong to speculate as to why the First Plaintiff was not expressly named as a defendant when the claim was issued. I cannot help but observe, however, that the Applicants were then minors, not represented by a litigation guardian, and the First Plaintiff their mother.

Regardless of the reason, the intention to include the First Plaintiff as a defendant is clear from the body of the claim. [ 37 ] In light of my conclusion on the applicability of Rule 15.01, it is not necessary to resort to Rule 7.04(2). I do so, however, in the event I am wrong in the application of Rule 15.01, as the application of Rule 7.04(2) was pleaded in the alternative. Rule 7.04(2) [ 38 ] Rule 7.04 (2) provides, 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 any party 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. [ 39 ] There are two alternative grounds for adding a party, either of which must be met if the Court is to exercise its discretion and grant the relief sought.

Namely, that the person “ought to have been joined” as a party and/or “whose participation in the proceeding is necessary to ensure that all matters in the proceeding may be effectively adjudicated upon.” If either test is met, the Court has a discretion to decide on the relief sought, but not otherwise. [ 40 ] With respect to these requirements I adopt Orsborn, C.J’s

summary of the law in Tucker (at paragraph 88 ): 88 What follows is my

summary of that law: …

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. [ 41 ] I agree with the Respondent’s submission that the “ought to be added” component of the test has not been met in this instance.

While adding the First Plaintiff as a defendant may serve to provide the Applicants with a more successful route for recovery, the parties to the existing proceeding are all fully constituted, such that the addition of the First Plaintiff as a defendant is not required to render any of the parties complete. As such, the legal requirements for the “ought to be added” test are not met. [ 42 ] The question thus arises of whether the participation of the First Plaintiff as a defendant is “necessary” so that the matters

arising in the original proceeding, as pleaded, can be fully adjudicated upon. [43] In dismissing the claim under s. 7.04(2)(

b) in Tucker, Orsborn, C.J. concluded (at paragraphs 151-152): 151. To use the phrase from Houston, there is nothing in the nature of the cause of action that requires, as a matter of law, thatTucker's

Section D insurer be added as a defendant under the "ought to" branch of the case. 152. With respect to the necessity branch of the rule, the matter as pleaded requires an adjudication of the tort claim between theplaintiff and the defendant. The adjudication of the matter may be complicated by the fact that the defendant is unknown, but this doesnot render it necessary to add AXA as a defendant. The adjudication of the tort claim — for or against the plaintiff — can quitecomfortably stand on its own and does not require for its adjudication and determination the addition of AXA as a party.

Neither of thethreshold legal requirements having been established, it is not necessary to consider the issue of discretion. [emphasis added] [44] In Vardy v. Dufour, 2008 NLCA 22 our Court of Appeal had occasion to consider the addition of parties after expiration of thelimitation period. A patient, having undergone two surgeries, commenced an action in negligence against the doctors in St. John’s, butnot against the doctors in Clarenville.

On an application to add the Clarenville doctors, the limitation period having expired, the Court ofAppeal ruled that it was not necessary to add the Clarenville doctors for the Court to determine causation and damages as against theoriginal defendants. Unlike the present case, allegations of negligence were not made against the proposed new parties in the existingproceeding. [45] In Vardy, our Court of Appeal affirmed the narrow

interpretation of “necessary” (at paragraphs 24 – 25): 24. I am satisfied that the narrow

interpretation of a "necessary" party in rule 7.04(2) espoused inthe Mandavia and Clearwater decisions, and adopted by the Trial Division judge, is the correct

interpretation, and that it applies to bothparagraphs (

a) and (b). As noted by Orsborn J., the language of the rule clearly requires an assessment of necessity. This stands incontrast to the rule in some other jurisdictions that use language such as "just and convenient" (Mandavia v. Central West Health CareInstitutions Board, supra, at paragraph 17). Where the limitation period for adding a defendant has expired, the purpose of rule 7.04(2)(

b) is not to allow for the joining of a separate action to an existing one, even if the actions may be related. Rather, the rule is directed tothe adjudication of the original proceeding. These principles apply equally to an application to remove a party under paragraph (a). 25. The test, then, is whether the existing action as commenced, as between the original plaintiffs and defendants, can be effectuallyand completely adjudicated without the addition of the proposed party.

It is the matters and issues in the proceeding as framed beforeadding the proposed party that must be considered. [emphasis added] [46] Similarly, in Mandavia v. Central West Health Care Institutions Board (2003), (NL SC), 222 Nfld. &P.E.I.R. 265, 2003 CarswellNfld 13 (T.D.) Orsborn, J. declined to add the Plaintiff’s wife as a Plaintiff to the existing proceeding. Whilethe claim arose out of the same circumstances, the prospective Plaintiff was attempting to assert her own cause of action, and was not anecessary party for the adjudication of the husband’s action (at para. 40). [47] In Sparkes v.

International Union of Operating Engineers, 2019 NLSC 92 Murphy, J. granted an amendment under the “oughtto” and “necessity” branch of Rule 7.04(2) (at paragraph 42). In reaching this conclusion Murphy, J. observed that there was “no doubt”that the essence of Mr. Sparkes’ claim was against the parties legally responsible for the establishment, management and administrationof his pension plan (at para. 40). [48] Having concluded that the requirements of Rule 7.04 had been met, Murphy, J. exercised his discretion to allow theamendment.

The respondent’s argument based on undue and unreasonable delay was addressed thru an award of solicitor and clientcosts in their favour. [49] Most recently, in Dobbin v. Tucker, 2021 NLSC 22 Paquette, J. refused to grant an amendment under Rule 7.04(2), whichwould have added the towns of Portugal Cove-St. Philip’s and Paradise as defendants, as the addition did not meet either the “ought to”or “necessity” requirements of the Rule (at paragraph 21).

The Plaintiff asserted that based on events not known to him when hecommenced his action, he had a cause of action against both towns on the basis of negligent misrepresentation of authority to issuedevelopment permits and a failure to warn. Paquette, J. concluded that the proceedings as they presently stood could be adjudicatedwithout adding either town as a defendant. [50] The application of the necessity requirement thus brings to the fore a consideration of the relief requested in the existingproceeding.

As noted, in that proceeding the Applicants claim negligence against the First Plaintiff in the alternative, and that thedefendants, and potentially the First Plaintiff, are joint and severally liable for their damages. [51] The negligence of the First Plaintiff is pled in the alternative, but it is nevertheless pled in the existing proceeding. Damagesare claimed by the Applicants on a joint and several basis against all defendants, as well as the First Plaintiff, should the First Plaintiff beshown to have been negligent.

I am thus satisfied that an adjudication of the relief sought in the existing proceeding thus of necessityrequires a determination of the negligence, if any, of the First Plaintiff.

[ 52 ] Therefore, were I wrong in granting the Amendment under Rule 15.01, I would nevertheless grant the amendment under the necessity branch of Rule 7.04(2). [ 53 ] This raises the final question of whether or not I should use my discretion to permit the amendment. The Applicants were minors when the Statement of Claim was issued, and while the limitation period has since expired, it has been relatively recent. No prejudice has been alleged by the Respondent.

Under these circumstances I would use my discretion to permit the amendment. costs [ 54 ] Rule 15.10 and Rule 55.03(2) provide that the costs of an amendment are to be borne by the party applying, unless the court otherwise orders. In this case, as the Applicants were minors when the claim was first issued, I would exercise my discretion and order the costs be in the cause. _____________________________ Donald H. Burrage Justice