PAUL RIBEN v. JUSTIN RIBEN, 2023 SKKB 217

KING’S BENCH FOR SASKATCHEWAN Citation: 2023 SKKB 217 Date: 2023 10 16 Docket: QBG-SA-00460-2021 Judicial Centre: Saskatoon BETWEEN: PAUL RIBEN AND JUSTIN RIBEN PLAINTIFFS - and – CARL RIBEN, MARIA RIBEN, AND JUDY RIBEN DEFENDANTS CORRECTED FIAT: The text of the original fiat has been changed per the corrigendum released January 10, 2024. (A copy of the corrigendum is appended to this corrected fiat.) Counsel: Curtis J. Onishenko, K.C. for the plaintiffs Glenn R. MacKay for the defendants ___________________________________________________________________________ FIAT MORRALL J.

October 16, 2023 ___________________________________________________________________________ Background [ 1 ] Paul Riben and Justin Riben, collectively the [Plaintiffs], issued a statement of claim on April 22, 2021 commencing an action against Carl Riben, Maria Riben, and Judy Riben, collectively the [Defendants], seeking damages, the return of some farmland and a declaration of ownership with respect to some farm equipment, amongst other relief. [ 2 ] Given everyone involved in this lawsuit has the same last name, I will refer to the various individuals by their first name, not out of disrespect, but for clarity. [ 3 ] The claim primarily involves a dispute between the parties over Carl and Maria’s (Carl’s spouse) purchase of some farmland from Paul (Carl’s brother) in April 2015. [ 4 ] The Plaintiffs’ claim states that the transfer of farmland from Paul to Carl was made at a sum below fair market value so that Carl would have inexpensive land to carry on his farming operations and Paul could finance and grow his distillery business.

Further, the claim also alleges that Paul retained an option to repurchase the land at a sum equal to the initial purchase price

plus 5 percent for each year Carl held the farmland with an automatic transfer back to Paul occurring after five years on certain terms. In breach of this contract and contrary to the resulting or constructive trust, along with the doctrine of unjust enrichment, the claim alleges this transfer never occurred. [ 5 ] On the other side of the coin, Paul and Justin (Paul’s son) deny that there was any agreement as a result of the purchase of the farmland that would mandate that Carl transfer the farmland back to Paul at any price at any time.

Further, they allege that the initial purchase price was fair and reasonable.

In their counterclaim, they claim that the Plaintiffs have wrongly disposed of Judy’s (Carl and Paul’s mother) tractor, contrary to an agreement made between among the parties, which caused damage and loss to the Defendants. [ 6 ] It should be noted that Judy is now deceased and her will was the subject of a court action (see Riben Estate (Re) , 2023 SKKB 72 ). [ 7 ] In response, the Plaintiffs, and Defendants by counterclaim, denied wrongfully disposing of the tractor in question as Paul indicated he had Judy’s consent to dispose of the tractor and also pled the provisions of The Limitations Act , SS 2004, c L-16.1 . [ 8 ] The agreement between the brothers was never reduced to writing.

A written contract at the outset may have prevented this initial legal sparring in the Court of King’s Bench. Pleadings and Proceedings [ 9 ] The pleadings and proceedings have reached the discovery phase of the litigation process. [ 10 ] After the issuance of the statement of claim, a statement of defence and counterclaim dated May 27, 2021 was filed May 31, 2021. The statement of defence to the counterclaim dated May 28, 2021 was filed May 28, 2021.

The requirements of mandatory mediation were satisfied on November 22, 2021. [ 11 ] A notice of application was filed by the Plaintiffs on December 5, 2022, requesting the following relief: 1. An interim injunction restraining the Respondent from selling the land located at SE 13-43-7-3 and SW 13-43-7-3 (the “Land”) until the trial or other final disposition of this action or until further order of this Court; 2. In the alternative, a preservation order preventing the Respondent from selling the Land until the trial or other final disposition of this action or until further order of this Court; 3.

An interim injunction restraining the Respondent from selling, trading or disposing of the equipment in the list attached as Exhibit “C” (the “Equipment”) to the affidavit of Paul Riben (“Paul”) until the trial or other final disposition of this action or until further order of this Court; 4. In the alternative, a preservation order preventing the Respondent from selling, trading or disposing of the Equipment until the trial or other final disposition of this action or under further order of this Court; 5.

Costs of this application. [ 12 ] This application was withdrawn on December 30, 2022, although I will consider the affidavits filed on the determination of these applications, as applicable. The appointment for Questioning issued on March 28, 2023 was filed by the Plaintiffs and the Defendants have advised that both parties have exchanged affidavits of documents and Paul Riben and both Defendants have been questioned. [ 13 ] This fiat concerns two applications that have been brought by the Plaintiffs.

Both are opposed in large measure by the Defendants. [ 14 ] The first application filed June 14, 2023 is a request that, pursuant to Rule 3-72(1)(c)(ii) of The Queen’s Bench Rules , the statement of claim be amended to add Irina Riben as a plaintiff to the action, along with many other amendments, some of which pertain to this requested addition. [ 15 ] The second application filed June 14, 2023 is a request that the Court grant a preservation order preventing the Defendants from disposing of certain agricultural equipment and any proceeds of any sale of such equipment until the final disposition of this action. [ 16 ] The evidence in relation to each application is distinct and I will refer to the background information relating to each application separately.

Issues [ 17 ] The issues are essentially as stated in the notice of applications and I frame them as follows: 1) Should an order pursuant to Rule 3-72(1)(c)(ii) be made to amend various paragraphs of the statement of claim and add Irina Riben as a plaintiff to this action? 2) Should a preservation order be granted against the Defendants preventing them from selling, trading or disposing of various agricultural equipment and disposing of the proceeds of any sale of such agricultural equipment that may occur or has already occurred until a final disposition of this action?

3) What quantum of costs are appropriate in this matter? Analysis Application to Amend [ 18 ] Irina, Paul, Maria and Carl all provided affidavit evidence with respect to this specific application. I will not repeat the evidence verbatim but simply relate some of the salient facts. [ 19 ] In Irina’s affidavit, she deposes that she married Paul on June 24, 2000 and moved into their family home on two quarter sections of land. Prior to the spring of 2015, Paul wanted to expand his distillery business but could not borrow a sufficient amount of money from any financial institution to do so.

Through conversations with Paul, she found out that Paul had agreed to transfer their two quarter sections of land for five years to Carl in exchange for $231,500 so that Paul would have investment money for his business. She understood that, at any point during the five years, Paul could buy back the land for a price equal to what Paul paid for it plus 5 percent for every year Carl retained the land.

At the end of five years, Carl was going to transfer the land back to Paul in exchange for what Carl paid for it plus 25 percent. [ 20 ] Irina says that she was not involved in the negotiation process and found out about the land transfer when it was completed as Information Services Corporation [ISC] sent a notification about the title change. Paul told her the agreement was at the lawyer’s office as it was “exceptionally important” to them and the lawyer’s office was the safest place for such a document.

After the land transfer, their family home was subdivided out of the land that was transferred but had previously sat on both quarter sections of land. From 2015 to 2020, Paul continued to work these transferred farmlands which provided Carl with some surplus income. [ 21 ] In 2019, she states that Paul told her that Carl approached Paul’s son, Jayden, and asked him to ask Paul whether Paul would agree to let Carl keep the land one more year. Paul agreed to this on the proviso that Carl would transfer the land back to Paul for the same price he would have paid had he not let him keep the land for another year.

In the fall of 2020, Paul asked Carl to transfer all the farmland back to him, but Carl only offered to sell Paul one of the quarter sections for double the agreed- upon price. [ 22 ] Irina and Paul then visited the office of Jay Watson and she discovered there was no written agreement between Carl and Paul for the transfer of the land. She had been previously assured that Jay Watson, who had done a lot of work for Paul in the past, had handled the transaction according to the agreement. [ 23 ] She asserts that the land transferred to Carl was her and Paul’s homestead and Carl knew this.

Further, she had only agreed to the transfer of this land on a short-term basis with her expectation that it would be returned. She did not receive any legal advice with respect to the transfer and would never have consented to an unconditional transfer.

She recently learned that she has rights to the land as it was her homestead. [ 24 ] In Paul’s affidavits, he reiterates the statements that Irina made about the land transfer and what they understood the terms to be in relation to the verbal agreement between himself and Carl. [ 25 ] He notes that the residence of himself and Irina sat on both quarters of land that were transferred and provides a surveyor’s certificate confirming that fact.

Paul also advises that when the land was subdivided in 2019 to remove the residence of himself and Irina from the two quarters of land that had been previously transferred, he returned $7,200 to Carl as the subdivision was approximately 8.5 acres larger than anticipated. He also asserts that Carl knew that he and Irina were transferring their homestead to him initially as the subdivision required Maria and Carl to transfer parts of both quarters of land back to Paul in 2019.

Given he has been married and living with Irina for 23 years and considering their regular interactions with Carl and Maria at family gatherings and other occasions over the years, he states Carl and Maria were well aware that the residence of Paul and Irina was their family home. [ 26 ] In Carl’s affidavits, he states that he denies Paul’s

interpretation of the land transfer but confines his responses to those necessary for this application. He provides a refutation of Paul’s version of events with respect to the land transfer in an affidavit that was initially prepared for the application that was previously withdrawn. He denies that Paul and Irina lived on both quarters of transferred land and asserts he had no knowledge that the lands described in the transfer could constitute a homestead or that Irina’s consent was not given or required.

He was aware that the land transfer specifically excluded Paul and Irina’s yard site and home as Paul and Irina retained ownership of the 12 acres around their residence. He was also aware that a lawyer facilitated both the sale agreement and the land transfer and believed all the legal requirements had been fulfilled. [ 27 ] At the time he did not see any homestead affidavits from Paul or Irina or know that such affidavits might be required. Further, he notes that after this application was brought by the Plaintiffs, he obtained a copy of the authorization and transfer

summary from ISC pertaining to the land transfer, which includes an affidavit signed by Paul indicating that he is the transferor of the lands in question and that he and his spouse, who would be Irina, did not occupy the land as their homestead [Paul’s Homestead Affidavit]. The following is a copy of that affidavit:

[28] While Carl states that he takes no issue with some of the proposed amendments but denies the accuracy of thosenew allegations, he opposes the amendments in relation to adding Irina as a new plaintiff on the grounds that they should not be allowedor are destined to fail. [29] In her affidavit, Maria indicates that she was unaware that the land involved in the transfer could constitute ahomestead or that Irina’s consent was required. Further, as a purchaser, she did not see any affidavits from Paul or Irina regardingcompliance with The Homesteads Act, 1989, SS 1989-90, c H-5.1.

She was aware that the land sale agreement would specificallyexclude 12 acres of land encompassing Paul and Irina’s yard site and home as they retained ownership of that land. Given their lawyerfacilitated the sale agreement and land transfer, she believed and understood all the legal requirements to have been fulfilled.

The Law [30] Rule 3-72(1) of The Queen’s Bench Rules sets out in broad terms the requirements for a party to amend itspleadings as follows: Amending a pleading 3-72(1) A party may amend the party’s pleading, including an amendment to add, remove, substitute or correct the name of a party, asfollows: (

a) before a statement of defence is filed, any number of times without the Court’s permission; (

b) subject to subrule (2), in the case of an action proposed as a class action, before a statement of defence is filed; (

c) after a statement of defence is filed: (

i) by agreement of the parties filed with the Court; or (ii) with the Court’s prior permission, in any manner and on any terms that the Court considers just. [31] The Saskatchewan Court of Appeal in Cupola Investments Inc. v Zakreski, 2021 SKCA 86, has provided adetailed analysis of the purpose behind the Rule and the legal framework guiding a determination of whether an amendment should bemade as follows: 43 … B. What principles apply when a court considers whether to authorize an amendment to a statement of claim to add a party? 1.

Key principles applicable to amendment applications 44 Because I have determined that the appropriate approach in this case was to center the analysis in the principles applicable to theamendment of pleadings pursuant to Rule 3-72, it is useful to summarize three such principles that inform that Rule. 45 The first principle relates to purpose. Amendments are allowed to enable the court to determine the true points of controversy thatrequire a judicial determination. In keeping with the overarching purpose for allowing amendments, they are liberally granted whenrequired for this reason.

In Frobisher Ltd. v Canadian Pipelines & Petroleums Ltd (1957), (SK CA), 10 DLR (2d) 338at 432 (Sask CA) [Frobisher], Culliton J.A. (as he then was), stated: While leave to amend is a discretionary right to be exercised by the Court, I think it can be said that the practice is for the Court to allowamendments to pleadings whenever it can be done without injustice to the other side and where it is necessary to determine the issues

between the parties. ... 46 Similarly, Rule 3-72(3) requires that the parties "shall make all amendments to their pleadings that are necessary to determine thereal questions in issue". Of course, there would be a bit of circularity if this provision alone were to be used to justify the addition of adefendant — since an issue cannot be said to exist between a plaintiff and a defendant until the defendant is before the court.

However,Rule 3-72(3) reflects the policies inherent in s. 29 of the Act [The Queen’s Bench Act, 1998, SS 1998, c Q-1.01], and the other Rules Ihave mentioned, that a multiplicity of proceedings is generally to be avoided.

Where a proposed amendment relates to a statement ofclaim, since the issues are in first instance those that are defined by the plaintiff, this means that the analysis of an amendment requestmust be centered on the issues the plaintiff presents for resolution. 47 The converse of the idea that amendments are allowed to enable the court to determine the true points in controversy is thatamendments designed to achieve a different purpose may be refused.

This was the case in Scharnagl [2005 SKCA 121, 269 Sask R 259],in which this Court upheld the refusal to allow an amendment to name additional defendants so that their discovery evidence could beread in evidence against them at the trial. Justice Richards (as he then was) held that the appeal could "be resolved on the basis that, inall of the circumstances, the plaintiff had a positive obligation to show why it was necessary to add the respondents as parties and that hefailed to discharge that obligation" (at para 20, emphasis added).

He then noted that the "authorities make it clear that a person shouldnot be named as a defendant in an action simply for purposes of obtaining rights of discovery". It therefore followed that, "having beenexamined as a non-party, an individual should not be added as a party merely to allow his or her discovery transcript to be read in at trial"(at para 25). 48 The second principle that I wish to emphasize is often taken for granted.

It is this: a proposed amendment must be a proper pleading.Speaking of an earlier generation of the Rules, in Roussy v Red Seal Vacations Inc., 2011 SKCA 116 at para 14, 342 DLR (4th) 395[Roussy], Richards J.A. stated that an amendment "should not be allowed if the result would be a pleading that could be struck pursuantto Rule 173" (at para 14). The modern reference would be to Rule 7-9(2), which allows a pleading to be struck for reasons that includethat it: (

a) discloses no reasonable cause of action or defence; (

b) is scandalous, frivolous or vexatious; (

c) is immaterial, redundant orunnecessarily lengthy; (

d) may prejudice or delay the fair trial or hearing of the proceeding; or (

e) is otherwise an abuse of the process ofthe court. I would understand the principle set out in Roussy to equally preclude an amendment that was improper for reasons other thanit was susceptible to being struck under Rule 7-9 or which would be undone for other reasons.

For example, as I will discuss, if thejoinder of a party that is otherwise sanctioned by Rule 3-78 would nonetheless result in a pleading that would be immediately severedpursuant to Rule 3-80(2), the court would be justified in refusing to grant an amendment to effect the joinder. 49 The third principle of importance here is also mentioned in Frobisher and relates to potential prejudice. This is what Culliton J.A. wasreferring to when he said that the court's practice is to "allow amendments to pleadings whenever it can be done without injustice to theother side" (Frobisher at 432, emphasis added).

This is most often the key point of controversy when an amendment application isconsidered. When considering an amendment request, the court is also concerned with the question of whether material prejudice will becaused by the change in the pleading.

For example, subject now to the legislative intervention on this issue, the expiration of a limitationperiod between the time of an initial pleading and an amendment may be a reason to deny an amendment (vis, The Limitations Act, SS2004, c L-16.1, s 20). 50 If a party will be materially prejudiced by the amendment, the subsidiary question that arises is whether there is a way to amelioratethat prejudice or to prevent the injustice that would otherwise be occasioned by allowing the amendment. If the prejudice can besufficiently ameliorated, then it will not generally stand in the way of allowing the amendment.

Beemer v Brownridge, (SK CA), [1934] 1 WWR 545 at para 62 (Sask CA) is a locus classicus on pleadings amendments in this province. In it,Martin J. (as he then was) found the general rule to be as stated by Lord Esher in Steward v North Metropolitan Tramways Co (1886), 16QBD 556 (CA) at 558 [Steward] (citing Clarapede & Co. v Commercial Union Association (1883), 32 WR 262 (CA)), as follows: ...

"The rule of conduct of the Court in such a case is that, however negligent or careless may have been the first omission, and howeverlate the proposed amendment, the amendment should be allowed, if it can be made without injustice to the other side. There is noinjustice if the other side can be compensated by costs: but, if the amendment will put them into such a position that they must beinjured, it ought not to be made." ... 51 Justice Martin also referred, to like effect, to the following passage from the judgment of Lord Justice Lindley in Steward [(1886),16 QBD 556 (CA)] (at 559): ...

I entirely agree with the terms in which the rule as to amendments has been laid down in the cases cited by the Master of the Rolls. Ithink an amendment ought always to be allowed except when the other party cannot be placed in the same position, but an injury wouldbe occasioned to him by the amendment which could not be compensated by costs. ... 52 In addition to costs, another way that prejudice associated with the grant of an amendment can often be ameliorated is through thegrant of an adjournment. 53 The principles I have just reviewed are based on consideration of previous iterations to Rule 3-72.

However, they remain accepted asbeing applicable to the exercise of discretion under the modern Rule. See, for example only, Harvey v Western Canada LotteryCorporation, 2015 SKQB 102 at paras 22-24, [2015] 9 WWR 391, per Schwann J. (as she then was), leave to appeal dismissed, 2015SKCA 75. 54 I would not wish this brief review of key concepts to be understood as an expression of every principle that may come to bear in thecontext of a particular amendment application.

Nor do I intend to usurp the authority of the many decisions of this Court and the Court ofQueen's Bench that have both established, and well-summarized, the principles that apply to applications to amend pleadings and appliedthem in a nuanced way to specific cases.

However, consideration of the purpose for the amendment, the propriety of the pleading andpotential prejudice caused by the amendment underpin the exercise of discretion in most amendment decisions, including those thatrelate to an amendment that results in the addition, removal, substitution or correction of the name of a party. [32] These concepts indicate that the threshold for amending pleadings generally is low and the Court is not

concerned with the negligence or carelessness of the omission in the initial pleadings so long as “it can be made without injustice to the other side”. [ 33 ] In Boisvert v Milton No. 292 (Rural Municipality) , 2015 SKQB 2 , 464 Sask R 28 , the Court concisely synthesized the salient principles in an application to amend pleadings as follows: 8 Existing case law has established that the following principles apply to applications to amend pleadings: i.) Leave to amend is a discretionary remedy, but the practice is to allow amendments where it is necessary to determine the issues between the parties and it can be done without injustice to the other side; ii.) There is no injustice to the other side if it can be compensated in costs; iii.) The court's discretion is wide and should be exercised so as to ensure the real issues are dealt with as expeditiously and inexpensively as possible; and iv.) If the amendments are opposed, the court must consider the proposed amendments as if the opposing party had applied to strike the pleadings under Rule 7-9(2).

Reasonable Cause of Action and Abuse of Process [ 34 ] Given many of the amendments are opposed, within the above framework the Court must next consider the proposed Rule amendments as if the Defendants had applied to strike the pleadings under Rule 7-9(2). [ 35 ]

Section 7-9 of The Queen’s Bench Rules states as follows: Striking out a pleading or other document, etc. in certain circumstances 7-9

(1) If the circumstances warrant and one or more conditions pursuant to subrule (2) apply, the Court may order one or more of the following: (

a) that all or any part of a pleading or other document be struck out; (

b) that a pleading or other document be amended or set aside; (

c) that a judgment or an order be entered; (

d) that the proceeding be stayed or dismissed.

(2) The conditions for an order pursuant to subrule (1) are that the pleading or other document: (

a) discloses no reasonable claim or defence, as the case may be; (

b) is scandalous, frivolous or vexatious; (

c) is immaterial, redundant or unnecessarily lengthy; (

d) may prejudice or delay the fair trial or hearing of the proceeding; or (

e) is otherwise an abuse of process of the Court.

(3) No evidence is admissible on an application pursuant to clause (2)(a). [ 36 ] As a result of the briefs of law and the argument in chambers, it is clear that Rule 7-9(2)(a), 7-9(2)(

b) and 7-9(2) (

e) are engaged in this application. [ 37 ] With respect to an application to strike under Rule 7-9(2)(a), the Saskatchewan Court of Appeal in Harsch v Saskatchewan Government Insurance , 2021 SKCA 159 , [2022] 2 WWR 675 , outlined the considerations a Court must take into account as follows: 17 The legal principles that govern applications to strike pleadings on the basis that they fail to disclose a reasonable cause of action are well-known. In Merchant, Ryan-Froslie J.A. summarized them in this way: [18] Chief Justice McLachlin, writing for the Supreme Court of Canada, in R v Imperial Tobacco Canada Ltd ., 2011 SCC 42 , [2011] 3 SCR 45 set out the principles governing such applications: (

a) it is incumbent on a plaintiff to clearly plead the facts upon which it relies in making its claim (para 22); (

b) such applications proceed on the basis that the facts pled are true, "unless they are manifestly incapable of being proven" (paras 22 and 23); (

c) a claim will only be struck if it is plain and obvious it discloses no reasonable cause of action, that is, it has no reasonable prospect of success (para 17); and (d) "[t]he law is not static and unchanging", thus, the approach taken in applications to strike "must be generous and err on the side of permitting a novel but arguable claim to proceed" (para 21).

See also Sagon v Royal Bank of Canada (1992), (SK CA), 105 Sask R 133 (CA) at para 16 [Sagon]; and Filson vCanada (Attorney General), 2015 SKCA 80 at para 19, 388 DLR (4th) 66 [Filson]. [19] In deciding an application to strike a claim on the basis it discloses no reasonable cause of action, a judge is limited to consideringonly the statement of claim, any document referred to therein, and any response to a request for particulars (Sagon at para 16; Filson atpara 20).

A judge is not permitted to consider affidavit or other extraneous evidence. 18 The requirement to accept the pleaded facts as true when considering an application to strike means that the plaintiff's claim is to beevaluated in its best light. The task for a reviewing judge in an application under Rule 7-9(2)(

a) is to determine, by considering the wholeof the statement of claim, whether sufficient facts have been pleaded to establish the essential legal elements of a cause of action(Harpold [2020 SKCA 98] at para 26; Reisinger [2017 SKCA 11, [2017] 8 WWR 532] at para 20). 19 It is also important to bear in mind two other things. First, in the context of an application under Rule 7-9(2)(a), the question iswhether the statement of claim pleads sufficient facts to establish a cause of action known at law; the plaintiff does not have to pleadfacts to negate defences the defendant may have to that cause of action.

Second, the refusal of a court to strike a claim does not mean thata plaintiff will succeed at trial. It simply means that the claim may proceed to trial, where the plaintiff will have to prove the claim in theusual way (Taheri [2021 SKCA 9, 456 DLR (4th) 306] at para 22). [38] With respect to an application to strike under Rule 7-9(2)(

b) and 7-9(2)(e), the decision of Siemens v Baker,2019 SKQB 99, [2019] 5 CTC 129 [Siemens], outlined the considerations a Court must take into account as follows: 22 Sagon v Royal Bank (1992), (SK CA), 105 Sask R 133 (Sask CA) is the seminal case relating to striking apleading. It is especially relevant for present purposes because it addressed an application alleging a statement of claim was deficient, inpart, because it was scandalous, frivolous, vexatious, and an abuse of process. Respecting arguments that the pleading ran afoul of whatare now Rules 7-9(2)(

b) and 7-9(2)(e), Sherstobitoff J.A. said this: [18] Striking out an entire claim on the ground that it is frivolous, vexatious or an abuse of process of the court is based on an entirelydifferent footing [than the ground of disclosing no reasonable cause of action]. Instead of considering merely the adequacy of thepleadings to support a reasonable cause of action, it may involve an assessment of the merits of the claim, and the motives of the plaintiffin bringing it. Evidence other than the pleadings is admissible.

Success on such an application will normally result in dismissal of theaction, with the result that the rule of res judicata will likely apply to any subsequent efforts to bring new actions based on the samefacts. Odgers on Pleadings and Practice, 20th Ed. says at pp. 153-154: "If, in all the circumstances of the case, it is obvious that the claim or defence is devoid of all merit or cannot possibly succeed, an ordermay be made. But it is a jurisdiction which ought to be very sparingly exercised, and only in very exceptional cases.

Its exercise wouldnot be justified merely because the story told in the pleadings is highly improbable, and one which it is difficult to believe could beproved." (footnotes omitted) [19] Finally, a separate mention should be made of the power of the court to prevent abuse of its process, a power which is inherent aswell as conferred under rule 173. Bullen and Leake [Precedents of Pleadings, 12th ed.] defines the power as follows at pp. 148-149: "The term 'abuse of the process of the court' is a term of great significance.

It connotes that the process of the court must be carried outproperly, honestly and in good faith; and it means that the court will not allow its function as a court of law to be misused but will in aproper case, prevent its machinery from being used as a means of vexation or oppression in the process of litigation. It follows that wherean abuse of process has taken place, the intervention of the court by the stay or even dismissal of proceedings, 'although it should not belightly done, yet it may often be required by the very essence of justice to be done'.

"The term 'abuse of process' is often used interchangeably with the terms 'frivolous' or 'vexatious' either separately or more usually inconjunction." (footnotes omitted) 23 Although these terms are often used interchangeably, it is helpful to differentiate among them. A pleading will qualify as"scandalous" if it levels degrading charges or baseless allegations of misconduct or bad faith against an opposite party. See: Paulsen v.Saskatchewan (Ministry of Environment), 2013 SKQB 119 at para 45, 418 Sask R 96 [Paulsen] and the authorities cited there.

Courts inBritish Columbia, for example, have described a scandalous pleading as "one that is so irrelevant that it will involve the parties in uselessexpense and prejudice the [pursuit] of the action by involving them in a dispute apart from the issues".

See: Turpel-Lafond v BritishColumbia, 2019 BCSC 51 at para 23, 429 DLR (4th) 131 [Turpel-Lafond] quoting from Woolsey v Dawson Creek (City), 2011 BCSC751 [In Chambers]) at para 28. 24 A pleading will qualify as "vexatious" if it was commenced for an ulterior motive (other than to enforce a true legal claim) ormaliciously for the purposes of delay or simply to annoy the defendants. See: Paulsen, at para 46. Put another way, it is vexatious if itdoes not assist in establishing a plaintiff's cause of action or fails to advance a claim known in law.

See: Turpel-Lafond, at para 23. 25 A pleading will qualify as "frivolous" if it is plain or obvious or beyond reasonable doubt the claim it advances is groundless andcannot succeed. See: Hunt v. T & N plc, (SCC), [1990] 2 S.C.R. 959 (S.C.C.) at 980; Paulsen at para 47; and WayneroyHoldings Ltd. v. Sideen, 2002 BCSC 1510 at para 17. 26 Finally, the concept of a pleading qualifying as an abuse of process is somewhat more expansive than the other categories identifiedabove.

In Bear v Merck Frosst Canada & Co., 2011 SKCA 152, 345 D.L.R. (4th) 152, for example, the Court of Appeal described it atpara. 36 as "a flexible concept not restricted by the requirements of issue estoppel" reflecting "the inherent power of a judge to prevent anabuse of his or her court's authority". Writing for the court, Richards J.A. (as he then was) elaborated at para. 38 as follows: [38] The need to maintain the integrity of the adjudicative process sits at the heart of the concept of abuse of process.

The Supreme Courtof Canada explained this point as follows in Toronto (City) v C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 SCR 77:

[51] Rather than focus on the motive or status of the parties, the doctrine of abuse of process concentrates on the integrity of theadjudicative process. Three preliminary observations are useful in that respect. First, there can be no assumption that relitigation willyield a more accurate result than the original proceeding. Second, if the same result is reached in the subsequent proceeding, therelitigation will prove to have been a waste of judicial resources as well as an unnecessary expense for the parties and possibly anadditional hardship for some witnesses.

Finally, if the result in the subsequent proceeding is different from the conclusion reached in thefirst on the very same issue, the inconsistency, in and of itself, will undermine the credibility of the entire judicial process, therebydiminishing its authority, its credibility and its aim of finality.

See also: Cameco Corp. v Insurance Co. of State of Pennsylvania, 2010 SKCA 95, [2010] 10 WWR 385 per Cameron J.A. at paras. 47-50. 27 More recently, the Court of Appeal explained in Canada (Attorney General) v Merchant Law Group LLP, 2017 SKCA 62, [2017] 10WWR 664 [Merchant Law Group (SKCA)] that there "is no set test for determining whether something amounts to an abuse of process".Rather, such a determination is discretionary. See: Merchant Law Group (SKCA) at para 100. 28 Finally, any applicant asserting that a statement of claim runs afoul of Rules 7-9(2)(

b) or (

e) bears the onus to establish that "thealleged cause of action is such that no reasonable person could treat it as bona fide and contend that [the plaintiff] was entitled toapproach the court with such a complaint". See, for example: Kichula v Farm Credit Corp. (1991), (SK KB), 95 SaskR 245 (Sask QB) at para 18; and Rubbert v Boxrud, 2014 SKQB 221 at para 38, 450 Sask R 147. [39] Of note, if a pleading is any of “scandalous, frivolous or vexatious”, it is an abuse of process of the Court andmay be struck out. (See Yashcheshen v Janssen Inc., 2022 SKCA 140 at para 23.) There appears to be some overlap in the legalrequirements between Rule 7-9(2)(

e) related to abuse of process and Rule 7-9(2)(

b) related to whether a pleading is scandalous, frivolousor vexatious. I will address this issue when examining the abuse of process argument. [40] In this matter, there was little argument by the Defendants that these proposed amendments were scandalous orvexatious.

Given the lack of evidence before the Court, I find it is clear that there is no basis to allege the claim is either scandalous orvexatious. [41] As noted in Siemens, for a claim to be “scandalous” there must be some basis to believe that the Plaintiffs arelevelling degrading charges or baseless allegations of misconduct or bad faith against the Defendants. There is no evidence of any suchscandalous allegations. [42] To prove that a claim is “vexatious”, the claimant has the onus of demonstrating it was commenced for anulterior motive or maliciously for the purposes of delay or simply to annoy the Defendants.

There is no evidence that the allegationswere vexatious either by inference or direct evidence. [43] With respect to the issue under Rule 7-9(2)(

a) pertaining to whether the pleadings disclosed a reasonable causeof action, and assuming all the allegations are presumed to be true without reference to affidavit material, I find there not to be anyjuristic reason preventing Paul from asserting Irina’s claims in the proposed claim. However, the claim only becomes a reasonable causeof action under this Rule as the Plaintiffs do not have to negate defences.

As the proposed claim is drafted, it would be apparent on theface of the claim that Irina’s homestead claim would have exceeded the limitation period because the facts, as pled, do not make anyreference to discoverability or date.

Otherwise, given the assertions pled with respect to Carl and Maria’s knowledge of the fact that theland in question was a homestead and that Irina had not provided her consent, I find that the claim is potentially viable. [44] In determining whether this matter is “frivolous” under the Rule, I am able to consider the affidavit evidenceproffered by the parties. [45] With this additional material, I must analyze the proposed claim in relation to the following relevant provisionsof The Homesteads Act, 1989: Form of consent 6(1) No disposition of a homestead shall be made without the consent of the non-owning spouse in the form prescribed in theregulations. … Proof of non-application of Act 8(1) Subject to sections 24, 25 and 26, where a disposition of land is to be made that does not comply with sections 6 and 7 and an orderof the court dispensing with consent has not been made: (

a) each signator of the disposition shall swear an affidavit in the form prescribed in the regulations stating that: (

i) the land described in the disposition is not his or her homestead; (ii) he or she has no spouse; (iii) he or she and his or her spouse have entered into an interspousal agreement pursuant to The Family Property Act [SS 1997, c F-6.3],whether before or after the coming into force of this section, in which his or her spouse has specifically released all of his or her rightsunder this Act with respect to the land which is the subject of the disposition; (iv) an order has been made by the court pursuant to The Family Property Act, whether before or after the coming into force of this

section, declaring that his or her spouse has no rights under this Act with respect to the land which is the subject of the disposition, and either that order has not been appealed and the time for making an appeal has expired or all appeals from the order have been disposed of or discontinued; or (

v) the disposition complies with

section 10; or (

b) one of the signators of the disposition shall swear an affidavit in the form prescribed in the regulations stating that his or her spouse is a registered owner of the land that is the subject of the disposition and that the spouse is a co-signator of the disposition.

(2) Notwithstanding subsection (1), where the disposition is executed: (

a) under a power of attorney; (

b) by the personal representative of a deceased owner; (

c) by the trustee in bankruptcy of the owner; or (

d) by another person who is legally authorized to execute the disposition on behalf of the owner; the person executing the disposition may swear the affidavit if he or she is acquainted with the facts. Consent binding according to tenor 9

(1) No person acquiring an interest under a disposition is bound to inquire into the truthfulness of the facts alleged in a consent, affidavit or certificate required pursuant to this Act.

(2) Subject to

section 12, a disposition which purports to be completed in accordance with this Act shall be valid and binding according to its tenor. … Fraud by transferee 12

(1) Knowledge on the part of a person who acquires a right, title or interest in a homestead pursuant to a disposition that does not comply with sections 6 and 7, that: (

a) the land described in the disposition is the homestead of the owner; and (

b) the owner has a non-owning spouse whose consent to the disposition, by the provisions of

section 5, is required but not given; is fraud.

(2) In an action by the non-owning spouse, a disposition mentioned in subsection (1) to any person affected by the fraud may be set aside and cancelled, and any title issued pursuant to the disposition may be dealt with in accordance with The Land Titles Act, 2000 [SS 2000, c L-5.1 ]. Liability of owning spouse 12.1 An owning spouse is liable to the non-owning spouse in an action for damages, if the owning spouse makes a disposition of a homestead to which a consent is required by this Act without obtaining: (

a) the consent of the non-owning spouse; or (

b) an order dispensing with the consent of the non-owning spouse. [ 46 ] During my examination under this Rule, it is important to note that I am simply determining whether some merit exists for the cause of action.

In other words, I am scrutinizing the evidence provided by the parties in addition to the pleadings to determine whether such evidence or lack thereof could give rise to a reasonable doubt that the claim is not groundless or has a chance of success or, on the other hand, demonstrably prove beyond a reasonable doubt that no cause of action exists. [ 47 ] In response to the arguments of the parties, I note that Paul’s photographic evidence in relation to the geographical location of the house provides some basis to ground a claim that both parcels of land that were sold to Carl constituted Paul and Irina’s “homestead” as it is defined in The Homesteads Act, 1989 .

While this may no doubt be disputed at the hearing or trial of the matter, I find that there is a legal basis to assert this aspect of the claim. [ 48 ] The next aspect of the claim to examine is what to make of Paul’s Homestead Affidavit, sworn pursuant to s. 8 of The Homesteads Act, 1989 , that avers that the land being transferred was not his homestead and that he has no spouse. While there appears to be a line in the photocopy of the affidavit on the court file near the averment that states “I have no spouse”, it is impossible to discern whether or not it was to alter or delete any line.

Further, if the line was meant to cross off the line with respect to the averment

relating to having no spouse, it would have needed to be initialed pursuant to Rule 13-32, which was not done. In addition, Paul’sHomestead Affidavit commissioned by his lawyer, Mr.

Jay Watson, has been contradicted by Paul and Irina’s affidavit evidence in thisapplication that demonstrates Paul is and was in a spousal relationship with Irina at the time of the transfer, and that arguably the landtransferred was his homestead. [49] While the Plaintiffs submit that this impugned affidavit does not constitute a proper affidavit under s. 8 of TheHomesteads Act, 1989, I do not agree for two reasons. [50] Firstly, Paul’s Homestead Affidavit, as drafted, provides two grounds of compliance with the necessarypreconditions of The Homesteads Act, 1989 rather than the required one ground of compliance.

This matter was not a situation where nogrounds were given. Had that been the case, I would have found that the affidavit would not be compliant.

However, in a situation wheremore than one ground was given, I find that the excess ground was mere surplusage and did not affect the validity of the affidavit. [51] Secondly, I note the effect of Rules 13-28 and 13-38(2) which indicate that documents are not invalidated wherethere is a deviation from the form that does not adversely affect the substance of the information provided, and that the Court mayreceive such form for the purpose used notwithstanding such defect.

Given that either averment complies with the requirements of s. 8, Ifind the substance of the information is not adversely affected by not delineating which ground is sworn pursuant to the affidavit. Thefact that the affidavit may be false does not affect its validity as an affidavit. [52] However, the issue that arises from this potentially false affidavit is the legal effect it could have on theownership rights of Carl and Maria as a result of Irina’s proposed claim. Under s. 9 of The Homesteads Act, 1989, Carl and Maria are notbound to inquire into the truthfulness of the affidavit.

Further, s. 9(2) notes that the disposition is binding according to its tenor. Theaffidavit provided two valid but likely false reasons to vitiate Irina’s consent so that the transfer would be binding subject to s. 12 of TheHomesteads Act, 1989. Under s. 12, if fraud is committed on Carl and Maria’s behalf, in an action by Irina against Carl and Maria thedisposition of land may be set aside and cancelled.

However, fraud is only proven on Carl and Maria’s behalf if there is evidence ofknowledge on the part of Carl and Maria that they knew the land was Paul and Irina’s homestead and Paul had a non-owning spousewhose consent was required but not given. [53] The evidence provided clearly establishes that Paul and Irina were in a spousal relationship and that Carl andMaria knew this existed at the time of the transfer of land.

While the Plaintiffs have pled in their proposed claim that Carl knew that theland transfer involved Irina’s homestead and that she had not provided her consent to transfer, they have provided no evidence thatwould justify this pleading in that regard. Both Carl and Maria have specifically denied knowing anything about the requirements of TheHomesteads Act, 1989 and that the land involved a transfer of Irina’s homestead. They have also denied knowing anything about Paul’spotentially false homestead affidavit.

Further, and more importantly, Paul and Irina have not provided any evidence on which areasonable inference could potentially be drawn in that regard. Given that this action began without Irina’s claim, it can be clearlyinferred that none of the parties had contemplated the requirements of The Homesteads Act, 1989 until recently. As well, given thelitigation stage at which Paul’s Homestead Affidavit was tendered by the Defendants, it is also clear that no one had contemplated thishomestead affidavit until quite recently either.

I also note the averment of Carl and Maria in their affidavits that they had never seen thisaffidavit before their lawyer obtained the document from ISC in the present proceedings. [54] In response to the affidavits of Carl and Maria, which plead ignorance to knowledge of Paul’s HomesteadAffidavit and the requirements of The Homesteads Act, 1989, the Plaintiffs rely on the decision of Nielsen v Jenewein, (SK CA), [1924] 3 DLR 508 (WL) (Sask CA), a case that involved the application of an earlier version of The Homesteads Act, RSS,1920, c 69 (rep), which repeated the maxim that “all the King's subjects must be taken to know the statute law” [27 Hals., p. 114, para.192].

The Court further went on to state: 7 The other question is: Was it intended that a purchaser should have the right to repudiate the agreement if the vendor omitted to getthe signature thereto of his wife?

The defendant is presumed to know the law and to have known that the signature of the plaintiff's wifewas necessary to the agreement. … [55] The Plaintiffs rely on the above propositions and the maxim that ignorance of the law is no defence to argue thatthe Defendants were bound by the law, whether they knew about it or not. [56] However, it is questionable whether these propositions apply to the situation in the case at bar.

It is important tonote that even in criminal law, s. 19 of the Criminal Code, RSC 1985, c C-46, which states the “Ignorance of the law by a person whocommits an offence is not an excuse for committing that offence” is not an all-encompassing legal principle.

For example, certainoffences, such as theft, by their definition allow for a colour of right defence which would include at least a mistake as to the civil law(see R v Dorosh, 2003 SKCA 134, 241 Sask R 180). [57] In these circumstances, I find that the following statements by the Court in R v Walker, (ONCA), [1938] 3 DLR 516 (WL) (Ont CA), are more apposite as they pertain to the applicability of civil law: 7 In regard to the supposed principle that every man is supposed to know the law, I may mention the language used by Maule J.in Martindale v.

Falkner (1846), 2 C.B. 706, at p. 720, as characterized by Blackburn J., in R. v. Mayor, etc. of Tewkesbury (1868), L.R.3 Q.B. 629, at p. 635, as clear and common sense: There is no presumption in this country that every person knows the law; it would be contrary to common sense and reason if it were so. 8 Lord Blackburn further quoted the statement of Lord Mansfield in Jones v.

Randall (1774), 1 Cowp. 37, at p. 40: As to the certainty of the law mentioned [by counsel], it would be very hard upon the profession, if the law was so certain, that everybody knew it: the misfortune is that it is so uncertain that it costs much money to know what it is, even in the last resort. [58] The issue that arises from a consideration of these various presumptions and maxims is whether, despite the

evidence of Carl and Maria as to their lack of knowledge with respect to Paul’s Homestead Affidavit and the law pertaining to homesteadrequirements, an arguable claim on behalf of Irina against Carl and Maria still exists. [59] Therefore, in light of this evidence, in order to determine whether a potentially valid claim exists as a result ofthe proposed claim, I must review analogous decisions to see the range of possible outcomes that may result from this factual scenario. [60] In Voolstra v Duvall, 2012 SKQB 20, 10 RFL (7th) 185 [Voolstra], the Court dismissed a Homesteads Act, 1989claim because the purchaser relied on an inaccurate affidavit proffered by the seller.

While the purchaser had knowledge that the vendorhad a spouse, when the vendor’s lawyer provided an affidavit stating that the vendor had no spouse, the Court concluded as follows: 23 Ms. Duvall had her lawyer represent her in the transaction, and in the course of that representation her lawyer received fromMr. Voolstra's lawyer a land titles transfer of the property, accompanied by Mr. Voolstra's homestead affidavit saying that he had nowife. In light of the information that Mr. Voolstra had provided to her, Ms.

Duvall — directly or through her own lawyer — reasonablywould have understood the affidavit to mean that Mr. Voolstra indeed had settled the matrimonial matter. 24 In these circumstances I find that Ms. Duvall reasonably concluded that Mr. Voolstra no longer had a spouse with a homesteadinterest in the property. As was the case with the purchaser in Vogelaar v. Traub (1998), (SK KB), 178 Sask. R.35 (Sask. Q.B.), Ms. Duvall reasonably believed the statements made by Mr. Voolstra and she had no reason to doubt them. … 27 Ms. Duvall did not have the knowledge described in s. 12 of the Act.

She did not have knowledge contrary to Mr. Voolstra'sstatement, in his s. 8 affidavit, that he had no spouse. Consequently, s. 12 does not apply. The transfer was in purported compliance withthe Act in light of the affidavit, and so s. 9 applies. Ms. Duvall was entitled to rely on the purported compliance, and the transfer of theproperty to Ms. Duvall remains valid and binding. [61] However, the Court in Voolstra also stated as follows: 6 Sometimes land being disposed of is not a homestead, or is being disposed of by a person who has no spouse.

In such a situationthe owner of the land may swear an affidavit that the land is not a homestead, or that the owner has no spouse. The Act provides that aperson who acquires an interest in the land by the disposition, such as a purchaser, may take such an affidavit at face value unless thatperson has knowledge otherwise.

If the person has knowledge otherwise, such knowledge constitutes fraud and the non-owning spousemay ask the court to set aside the disposition. [62] The issue that the Court determined in Voolstra was whether the purchaser reasonably believed or relied on theaffidavit pertaining to a certain set of circumstances or whether the purchasers had knowledge that a different state of affairs existed. [63] In Vogelaar v Traub (1998), (SK KB), 178 Sask R 35 (QB) (affirmed on appeal at (1999), (SK CA), 180 Sask R 119 (CA)), the Court found that the purchaser knew the vendor was married and that theseindividuals lived on the subject land as a homestead but dismissed the claim because the purchaser believed the vendor’smisrepresentation and relied on their incorrect affidavit.

The Court stated as follows: 51 It is not denied that Traub knew that the Vogelaars were married and that they had occupied this quarter as their home, facts thatwould have made the land the Vogelaars' homestead within the meaning of the Act. He also knew that Jean Vogelaar's consent to thesale was not obtained.

It is nonetheless my conclusion, in light of the factual findings set out above, that he did not, within the meaning ofs. 12(1)(b), know that the land continued to be a homestead, and that her consent was "required", for he believed Larry Vogelaar'smisrepresentation and relied upon his affidavit to the effect that she had relinquished her rights.

Section 3(

e) of the Act [The HomesteadsAct, 1989, SS 1989-90, c H-5.1] provides that land ceases to be a homestead when "the owning spouse and non-owning spouse enter intoan interspousal contract pursuant to The Matrimonial Property Act [SS 1979, c M-6.1 (now The Matrimonial Property Act, 1997, SS1997, c M-6.11) providing otherwise." That is exactly what Vogelaar's affidavit represented. Traub was not specifically aware of theprovisions of The Homesteads Act, 1989 or of The Matrimonial Property Act.

What he did know, however, is that Larry Vogelaarrepresented to him and to their solicitor that Jean Vogelaar had signed away any rights she had. [64] Had I needed to decide a claim based on the affidavit evidence before me, I would have found that, while therewas no reliance by Carl and Maria on the improper affidavit, it is clear that they believed that Paul and Irina’s residence was not going toform part of the transaction.

Even if they knew the legal civil requirements, they would have no reason to question the transfer given thefactual circumstances which would include Irina’s, perhaps, mistaken consent. [65] Further, it appears that Irina may have a claim against Paul, should she wish to pursue the matter, given his“statements” about the existence of the land transfer documents and the averments in his homestead affidavit. [66] However, I am not making a final determination but simply reviewing the matter as I would an application tostrike. [67] Given that a court at a trial must make a determination on the evidence about what is reasonable to conclude inthe circumstances, I cannot say that there is no chance of success with respect to Irina’s proposed claim in these circumstances.

There aredifferences between the case law previously related and the case at bar as there appears to be no reliance on Paul’s Homestead Affidavitby anyone involved and the evidence also clearly demonstrates that Carl and Maria knew that Paul and Irina were married. The extent ofIrina’s lack of knowledge as to the initial land transaction will also have to be examined.

I cannot find beyond a reasonable doubt that acourt would never determine that Carl and Maria should have known that the transferred land was a homestead and that Irina shouldhave been more involved in the transfer process. [68] However, that does not end the discussion with respect to whether the cause of action is frivolous.

[69] The Defendants argue based on limitation period issues that the claim is an abuse of process under Rule 7-9(2)(

e) and, as authority for that proposition, cite the decision in GHC Swift Current Realty Inc. v BACZ Engineering

(2004) Ltd., 2022SKCA 38, 29 CLR (5th) 294 [GHC], where the Court stated the following: 24 Rule 7-9(2)(

e) of The Queen's Bench Rules permits a judge to strike out all or any part of a pleading where the pleading is"otherwise an abuse of process of the Court". Abuse of process is a flexible doctrine that concentrates on the integrity of the adjudicationprocess. It "employs the inherent power of the court to prevent misuse of its procedure in a way that would bring the administration ofjustice into disrepute" (Walker v Mitchell, 2020 SKCA 127 at para 18, [2021] 4 WWR 555 [Walker]; see also Toronto v C.U.P.E., Local79, 2003 SCC 63 at paras 37 and 51, [2003] 3 SCR 77).

Where it is clear that a plaintiff has commenced a claim knowing that it isstatute-barred, the claim may properly be struck under Rule 7-9(2)(

e) as an abuse of process (Walker at paras 18-23; Campbell v Cooper,2017 SKCA 55 at para 11). [70] However, in determining the necessary evidentiary foundation to support an allegation of abuse of process, theCourt in Qaisar v SGI Canada, 2019 SKQB 68 [Qaisar], stated as follows: 39 The doctrine of abuse of process engages the inherent power of the court to prevent misuses of its procedure that would bemanifestly unfair to a party to litigation, or would in some other way bring the administration of justice into disrepute: CanamEnterprises Inc. v Coles (2000), (ON CA), 194 DLR (4th) 648 (Ont CA), dissenting but approved at 2002 SCC 63,[2002] 3 SCR 307; Bear v Merck Frosst Canada & Co., 2011 SKCA 152 at para 48, 345 DLR (4th) 152; Saskatchewan Beach (ResortVillage) v Collins, 2013 SKCA 12, 409 Sask R 57.

"Abuse of process of the court" is a term of great significance. It connotes that theprocess of the court must be carried out properly, honestly and in good faith. It means that the court can, and in fact must, prevent itsmachinery from being used as a means of vexation or oppression in the course of litigation: Sagon v Royal Bank (1992), (SK CA), 105 Sask R 133 (CA) [Sagon]. 40 A defence which is undertaken for an improper motive may be seen as an abuse of process. However, striking a statement ofdefence as an abuse of process is a serious matter, and requires serious evidence to justify such a remedy.

A defendant should not lightlybe deprived of a defence to a claim. To establish an abuse of process, it is insufficient for one party to merely assert a belief that the otherparty's position is motivated by malice, or a desire to delay the proceedings: Eecol Electric (Saskatchewan) Inc. v Lewko, 2005 SKQB 6. [71] While it is clear that there are some limitation period issues as a result of this proposed claim by Irina, it must beremembered that the Court requires evidence of an improper motive to find an abuse of process, not the absence of good faith.

In thismatter, there is a complete absence of any evidence suggesting any improper motive on the Plaintiff’s behalf or that they knew that thisproposed claim was obviously statute barred. Given the complexity of the law of discoverability, it would be quite a high bar to suggestthat any of the Plaintiffs knew at the outset that there was clear statutory authority that would prevent Irina from being added to thisclaim.

In any event, I do not need to make any positive findings in that regard as there is simply no “serious evidence” establishing anyabuse of process on the Plaintiff’s part. [72] It is clear that the examination of the limitation period issue should be made as part of the determination underRule 7-2(b).

The Court in GHC stated as follows: 29 … Because the "plain and obvious" test applies to applications to strike a claim under Rule 7-9(2), all the plaintiff need do at thisstage is raise an arguable issue with respect to any one of the discoverability criteria in s. 6(1). [73] As noted in the arguments by the Defendants, there are concerns that the amendments in most of the proposedparagraphs amount to a new cause of action, and a limitation period has intervened. [74] The Court in Qaisar provides a roadmap with respect to the required analysis that must be undertaken by theCourt and some applicable general principles in such cases as follows: 72 In most instances, s. 5 of The Limitations Act imposes a two year limit, from the date a claim is discovered, to commence an action.Section 6 of that Act defines when a claim is "discovered", for the purpose of determining when the limitation period starts to run.

Itreads as follows: 6(1) Unless otherwise provided in this Act and subject to subsection (2), a claim is discovered on the day on which the claimant firstknew or in the circumstances ought to have known: (

a) that the injury, loss or damage had occurred; (

b) that the injury, loss or damage appeared to have been caused by or contributed to by

an act or omission that is the subject of theclaim; (

c) that the act or omission that is the subject of the claim appeared to be that of the person against whom the claim is made; and (

d) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it.

(2) A claimant is presumed to have known of the matters mentioned in clauses (1)(

a) to (

d) on the day on which the act or omission onwhich the claim is based took place, unless the contrary is proved. 73 Occasionally, a proposed amendment to a statement of claim may assert a new claim or seek to add a new party. Where a plaintiffseeks to make such an amendment after the expiry of the relevant limitation period, s. 20 of The Limitations Act applies. It reads asfollows: 20 Notwithstanding the expiry of a limitation period after the commencement of a proceeding, a judge may allow an amendment to thepleadings that asserts a new claim or adds or substitutes parties if:

(

a) the claim asserted by the amendment, or by or against the new party, arises out of the same transaction or occurrence as the original claim; and (

b) the judge is satisfied that no party will suffer actual prejudice as a result of the amendment. 74 Where a proposed amendment adds a new cause of action after the expiration of an applicable limitation period, the court is powerless to grant the amendment unless the criteria of s. 20 are met: Bourgault Industries Ltd. v Canada (Attorney General) , 2011 SKCA 29 , 366 Sask R 312 [In Chambers] ) [ Bourgault ]. 75

Section 20 is an exception to limitations legislation. It is intended to apply only in certain circumstances, including where a plaintiff having commenced a claim against a defendant realizes, after the expiration of a limitation period, that he or she should have pleaded an additional cause or causes of action.

Section 20 confers a discretion, which much be exercised judicially. While this permits the judge to allow amendments to pleadings, it does not mandate judges to do so, even where the criteria in ss. 20(

a) and (

b) are met. 76 As it clearly states, s. 20 permits amendments to pleadings. In Cameco Corp. v Insurance Co. of State of Pennsylvania , 2008 SKCA 54 , [2008] 6 WWR 626 [ Cameco ] , Richards J.A (as he then was) said that the notion of an amendment carries with it the idea that the proposed changes to the original pleadings must not be so dramatic as to effectively create a wholly new proceeding. 77 A "new claim", within the meaning of s. 20 means a cause of action not pled in the original claim.

Adding a new type of damages, such as aggravated or punitive damages, not originally claimed, amounts to asserting a new claim, and brings s. 20 of The Limitations Act into play: Brown v Standard Life Assurance Co ., 2006 SKQB 247 , 282 Sask R 297 . 78 As set out in ss. 20 (a), in order to open the door to a post-limitation period amendment, the new claim must arise "out of the same transaction or occurrence as the original claim". 79 The requirement that the newly asserted cause of action in an amended claim "arise out of the same transaction or occurrence" has generally been given a broad

interpretation by the courts. The term does not limit the claim to the exact occurrence relied on in the original claim, it merely requires there to be some temporal and factual relationship between the occurrences: Duke v Vervaeck , 2000 SKQB 414 , [2001] 5 WWR 380 ; Kidd v Flad , 2007 SKQB 372 . "Same transaction or occurrence" has been equated with the phrase "same precipitating event" in Bourgault .

In Stomp Pork Farm Ltd. v Lombard General Insurance Co. of Canada , 2008 SKQB 405 , [2009] 4 WWR 483 [ Stomp Pork ] , Justice Ottenbreit (as he then was) described "same transaction or occurrence" as a precipitating event that allows a court to step back and take a view of what is reasonable in the circumstances.

Section 20 (

a) allows for situations where an event happens which results in varying injury, loss or damage as a result of varying acts or omissions, resulting in varying claims which may, or should be, tried together. 80 The second pre-condition to permitting a post-limitation period amendment which adds a new claim is that the judge must be satisfied that no party will suffer actual prejudice as a result of the amendment.

"Actual prejudice" means prejudice associated with the delay itself which affects the ability of the opposing party to respond to the amended claim: Cameco; Stomp Pork; Pollock v Sasktech Inspection Ltd ., 2013 SKQB 409 , 432 Sask R 227 . [ 75 ] In the case at bar, s. 5 of The Limitations Act provides a two-year period after the date of discovery to commence a claim. Therefore, I must determine when Irina first ought to have known about the required circumstances in s. 6 of The Limitations Act .

However, I must remember that I am conducting an examination only to determine whether there are arguable issues on the issue of discoverability that could be raised by the Plaintiffs and I am not making a final determination on the matter. [ 76 ] Given s. 6(2) of The Limitations Act , I must start with the presumption that Irina knew of the claim in 2015 as that was when the land transfer that excluded her consent occurred. [ 77 ] The decision in GHC provides a thorough examination of the principles I need to consider in relation to discoverability as follows: 28

Section 6 is a codification of the common law principle of discoverability, which provides that the date on which a claim is discovered is determined by reference to when the claimant first knew or, through the exercise of reasonable diligence ought to have known, all the material facts on which the claim is based ( Nadeau v Nadeau , 2021 SKCA 69 at paras 34-36 ).

In Grant Thornton LLP v New Brunswick , 2021 SCC 31 at para 42 [ Grant Thornton ] , the Supreme Court of Canada described this as being the date when a plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the part of the defendant can be drawn. 29 As set out in s. 6(2) of the Act [ The Limitations Act , SS 2004, c L-16.1 ] , a claim is presumed to be discovered on the day "on which the act or omission on which the claim is based took place, unless the contrary is proved".

Where a limitation period is raised as a defence, s. 18 of the Act places the burden of proving that the limitation period has not expired on the plaintiff. The four factors enumerated in ss. 6(1)(

a) to (

d) are cumulative, meaning that, in a case such as this one, where the action must be commenced within two years of the date of discovery of the claim, a plaintiff can discharge this burden by establishing that any one of the four factors has not been satisfied ( Venture [2020 SKCA 39 , 447 DLR (4th) 316 ] at para 55).

Because the "plain and obvious" test applies to applications to strike a claim under Rule 7-9(2) , all the plaintiff need do at this stage is raise an arguable issue with respect to any one of the discoverability criteria in s. 6(1). 30 In the case of tort claims, once a plaintiff knows that some injury, loss or damage of a non-trivial nature has occurred, knows that it appears to have resulted from

an act or omission on the part of the defendant, and knows that a proceeding would be an appropriate means to seek a remedy, the cause of action has accrued. This is so even if there is a chance that the damage may be remedied subsequent to the act or omission that gives rise to the cause of action. For discoverability purposes, the mere possibility of remediation outside litigation does not negate the plaintiff's knowledge of the other material facts necessary to ground a civil claim ( Venture at para 42). Nor is certainty of a defendant's potential responsibility for the act that caused the loss required.

What is required are grounds for a plausible inference of liability on the part of the defendant ( Grant Thornton at paras 46-48 ). The discoverability principle also applies to

breach of contract claims, meaning that the cause of action will accrue once the plaintiff knows that some injury, loss or damage wascaused by or contributed to by the act or omission that constitutes the breach of contract (Venture at paras 44-46; Apotex Inc. v Nordion(Canada) Inc., 2019 ONCA 23 at para 87, 431 DLR (4th) 262). 31 Neither the full extent nor the precise type of loss or damage need to be known in order for a cause of action to be discoverable(Venture at para 42; see also: Peixeiro v Haberman, [1997] 3 SCR 439 at para 18 [Peixeiro]; and Grant Thornton at para 46).

However,since discoverability depends in large measure on the nature of the claim and the circumstances that give rise to it, different causes ofaction, even within the same statement of claim, may engage different start dates for the running of limitation periods (Venture at para41). Moreover, the fact that there is a single cause of action does not automatically mean that all loss or damage arising from it engages asingle discoverability date.

Separate limitation periods may arise in circumstances where some of the loss or damage is not reasonablydiscoverable at the same time, for example, because it takes the form of distinct latent defects (see, for example: Grey CondominiumCorporation No. 27 v Blue Mountain Resorts Limited, 2008 ONCA 384 at paras 70-73, 238 OAC 183; and Viscount Gort Motor HotelLtd. v Pre-Con Builders Ltd. et al, 2021 MBCA 5 at paras 28-29). 32 The fourth criterion for discoverability, set out in s. 6(1)(d), is that the plaintiff knows or ought to have known that a legal actionwould be an appropriate means to seek a remedy.

Because the criteria in s. 6(1) are cumulative, the effect of this provision is that, incertain circumstances, even where the other three elements of discoverability are fulfilled, the start date of a limitation period may bepostponed where there is a legally appropriate reason for delaying bringing a claim. This concept was discussed in Venture: [64] One of the purposes underlying provisions like s. 6(1)(

d) is to encourage parties to discuss and negotiate claims rather than rush intoneedless litigation: Novak [ (SCC), [1999], 1 SCR 808] at para 40; Markel [2012 ONCA 218, 109 OR (3d) 652] at para34; see also 407 ETR Concession Company Limited v Day, 2016 ONCA 709 at para 48, 403 DLR (4th) 485 [407 ETR]. For that reason, itmay, in some circumstances, be appropriate for a plaintiff to delay bringing a claim when there is a chance the dispute can be resolvedwithout resort to litigation: see, for example, Presidential MSH Corporation v Marr Foster & Co.

LLP, 2017 ONCA 325 at paras 26-27,135 OR (3d) 321 [Presidential]. [65] In Sosnowski v MacEwen Petroleum Inc., 2019 ONCA 1005, 441 DLR (4th) 393 [Sosnowski], the Ontario Court of Appealsummarized the principles to be applied in assessing when a party knows or ought to know that it is appropriate to commence a legalproceeding. In that regard, Hourigan J.A. wrote: [16] First, the determination of whether a proceeding is an appropriate means to seek to remedy an injury, loss, or damage depends uponthe specific factual and/or statutory setting of each case: Nasr Hospitality Services Inc. v.

Intact Insurance, 2018 ONCA 725, 142 O.R.(3d) 561, at para. 46. [17] Second, this court has observed that two circumstances most often delay the date on which a claim is discovered under thissubsection. The first is when the plaintiff relied on the defendant's superior knowledge and expertise, especially where the defendanttook steps to ameliorate the loss. The other situation is where an alternative dispute resolution process offers an adequate remedy, and ithas not been completed: Nasr, at para. 50. [18] Third, Sharpe J.A. in Markel Insurance Company of Canada v.

ING Insurance Company of Canada, 2012 ONCA 218, 109 O.R.(3d) 652, at para. 34, provided ... guidance concerning the meaning of the term appropriate: [text omitted] [19] ... appropriate means whether it is legally appropriate to bring an action. Appropriate does not include an evaluation of whether acivil proceeding will succeed. [78] There are differing arguments that could be made as a result of the case law relating to discoverability indetermining when Irina ought to have discovered this proposed claim.

It could be argued that she ought to have known about her claimrelating to the homestead requirements in 2015 as a result of a presumption that individuals should be aware of the law and, therefore,she should have reasonably made inquiries into the details of the land transfer process at the time it was completed.

It could also beargued that she ought to have been aware of the proposed claim in the “fall of 2020” or “early October 2020”, using the dates providedfor in her affidavit material, with respect to the issues involving homestead requirements because she indicated that was when she firstbecame aware of a dispute involving the land transfer and therefore no legal proceeding would have been appropriate prior to theexistence of that known dispute. [79] There were no arguments proffered by the Plaintiffs to the effect that Irina’s period of discoverabilitycommenced when she discovered she had a legal entitlement pursuant to The Homesteads Act, 1989 to consent or not to a transfer of landwhich appeared to have occurred close to the time of this application.

I would agree with this position. It is without argument thatreasonable diligence must require that, by the date of issuance of the Plaintiff’s statement of claim, there would have been anexamination of relevant documents related to the initial land transfer which would have included an examination of Paul’s HomesteadAffidavit and legal scrutiny of the relationship between the land transfer and Irina’s homestead rights. [80] Therefore, I find that there is an arguable basis to conclude that Irina’s claim would not have been discovereduntil October 2020.

I must now determine whether the proposed amendments would amount to a new cause of action so that resort needbe made to s. 20 of The Limitations Act in order to implement these changes. [81] In reviewing the proposed amendments, I find it is clear that the proposed additions to the claim clearly involveasserting a new cause of action so that s. 20 of The Limitations Act is engaged.

Given the Court’s adoption in Qaisar of the ratio in thedecision of Brown v Standard Life Assurance Co., 2006 SKQB 247, 282 Sask R 297, amending a claim to include Irina’s action pursuantto The Homesteads Act, 1989 clearly asserts a new cause of action that goes far beyond simply clarifying and particularizing Paul’s trustand damage claims. [82] Therefore, I find that s. 20 of The Limitations Act applies to the remaining proposed paragraphs as they relate toIrina’s proposed action.

[ 83 ] As noted in Qaisar , even if the criteria set out in s. 20 of The Limitations Act is met, I still have the discretion to disallow the amendment. The case law noted in Qaisar suggests that the Court should not allow amendments where the proposed claim creates wholly new proceedings rather than missing an additional cause of action in an existing claim. To determine where the proposed amendments in the case at bar are positioned in relation to this case law, I must analyze whether this amendment meets the criteria under s. 20 (

a) of The Limitations Act and determine whether Irina’s claim arises out of the same transaction or occurrence as the original claim. [ 84 ] To begin with, I note that the subject matter pertaining to both Paul and Irina’s proposed claim is the land transfer to Carl and Maria which tends to demonstrate that the proposed claim arises out of the same transaction. [ 85 ] However, despite the similarity in subject matter, I find that the requested relief of both claims is substantially different. In Paul’s claim, he seeks to enforce his version of the land agreement.

However, pursuant to Irina’s claim, she seeks to render the land agreement void as a result of the non-compliance with The Homesteads Act, 1989 . [ 86 ] The Defendants rely on The Insurance Company of the State of Pennsylvania v Cameco Corporation , 2008 SKCA 54 , 310 Sask R 89 [ Cameco ] , a decision cited in Qaisar , and submit that the proposed changes in this matter are analogous.

However, in Cameco the changes involved one party substituting itself for another party, deleting other parties to the action and making “wholesale changes to the body of the statement of claim by dramatically striking, adding and amending paragraphs in order to convert that pleading into a claim by Global Aerospace Inc. [Global] for contribution by Insurance Company of the State of Pennsylvania (ICSOP) and American Home toward Global's cost of defending and indemnifying Cameco. Fourth, Global sought to extend the scope of the claim to include not only the Saskatchewan Action but the B.C.

Action as well” ( Cameco , para 18 ). [ 87 ] I find that the amendments in the Cameco decision are distinguishable from those in the case at bar. [ 88 ] While the claims are contradictory as the requested relief would lead to two different outcomes, there is nothing particularly dramatic about alternative grounds of relief arising out of one fact scenario in civil practice. In the case at bar, no one is proposing to delete parties or make amendments that would convert the claim as it stands to a completely different claim about a different factual scenario.

Both claims involve actions against the same Defendants arising out of the same land transfer. There is a significant factual and temporal connection between the claim as it is and the addition of the proposed amendments. Both claims involve an issue about the understanding the parties/party had/have with the terms of the land transfer.

While the separate misunderstandings claimed lead to different potential outcomes, it is the circumstances involving the land transfer between Paul and Carl which are at the root of the issue. [ 89 ] Therefore, I find that there is no complete “cannibalization” of the claim as a result of the proposed amendments and, in these circumstances, I find that the proposed claim arises out of the same transaction as the extant claim pursuant to s. 20 (

a) of The Limitations Act . [ 90 ] In determining whether the Defendants have suffered actual prejudice under s. 20 (

b) of The Limitations Act , I follow the reasoning in the decision of Arslan v Sekerbank T.A.S. , 2018 SKCA 77 , 38 CPC (8th) 311 , as follows: 76 A court can infer that the passage of time will normally have some negative effect on the memories of witnesses. See: International Capital Corp. v. Schafer , 2010 SKCA 48 at para 45 , (2010

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