Heymanns’ Construction, 2012 MBCA 45

Citation: Heymanns’ Construction

(1998) Ltd. Date: 20120427 v. Sunrise School Division, 2012 MBCA 45 Docket: AI 11-30-07526 IN THE COURT OF APPEAL OF MANITOBA Coram: Mr. Justice Martin H. Freedman Mr. Justice Richard J. Chartier Mr. Justice Marc M. Monnin BETWEEN : HEYMANNS’ CONSTRUCTION (1998) ) R. S. Literovich and LTD., CREST CONSTRUCTION LTD. ) C. E. Howden and M H CONSTRUCTION

(2001) INC. ) for the Appellants ) (Plaintiffs) Appellants ) D. M. Skwark and ) J. C. Caithness - and - ) for the Respondent ) THE SUNRISE SCHOOL DIVISION ) Appeal heard: and M.C.M. ARCHITECTS INC. ) June 21, 2011 ) (Defendants) Respondents ) Judgment delivered: ) April 27, 2012 MONNIN J.A. 1 This is an appeal from a decision of a motions judge dismissing appeals from the master with respect to two orders; the first one granting

summary judgment dismissing the plaintiff Heymanns’ Construction

(1998) Ltd. (Heymanns’) action; the second one striking out the plaintiff Crest Construction Ltd. ’s (Crest) statement of claim with leave to move to amend its statement of claim in a previously filed action (the first action). The motions judge also dismissed the defendant The Sunrise School Division’s (Sunrise) appeal of the master’s direction that it could not raise a limitation argument on the motion by Crest to amend its statement of claim in the first action.

Background 2 The defendant Sunrise (formerly the Agassiz School Division No. 13) contracted with the plaintiff Crest, as general contractor, for the construction of a school. The parties entered into a stipulated price contract for that purpose. Crest is a subsidiary of Heymanns’ and was incorporated for the specific purpose of acting as the contractor for this project. 3 Heymanns’ entered into a subcontract to complete the masonry work required on the project. Included in that work was the installation of an air/vapour barrier (the vapour barrier) on the exterior walls of the school.

The vapour barrier was to be installed by the plaintiff M H Construction

(2001) Inc. pursuant to a subcontract with Heymanns’. 4 Before the vapour barrier installation was completed, but after a substantial portion of it had been approved as satisfactory, heavy rain occurred at the construction site. Shortly thereafter, Sunrise’s architects, M.C.M. Architects Inc. (M.C.M.), advised the plaintiffs that the vapour barrier no longer met the specifications of the contract.

M.C.M. expressed concern with the presence of moisture between the walls and the vapour barrier and an alleged loss of adhesion of the material. 5 A meeting occurred on August 16, 2001 to discuss a consultant’s report with respect to the vapour barrier. The parties have a marked difference of opinion as to what occurred at that meeting and the outcome of it.

The plaintiffs say that at that meeting, M.C.M., on behalf of Sunrise, agreed that, if an independent engineer retained by the plaintiffs would provide a report indicating that the vapour barrier would perform in accordance with the manufacturer ’ s specifications and met the specifications of the contract as well as the requirements of the building code, then the vapour barrier installation would be accepted. The plaintiffs say they accepted that offer and retained engineers to prepare the reports.

They refer to this as “the vapour barrier agreement.” They say the defendants, notwithstanding having been provided with reports, refused to accept the vapour barrier installation and refused to pay the invoices contrary to the agreement.

6 The defendant Sunrise says that what transpired at the meeting was a discussion as to the manner by which the vapour barrier dispute could be resolved within the terms of the contract, namely, that if the plaintiffs were able to obtain a report from an engineer confirming that the vapour barrier met the specifications of the contract, this may satisfy M.C.M.’ s concern. However, Sunrise says that this was in accordance with the terms of the contract and specifically its dispute mechanism provisions.

Sunrise says that it was not agreeing to a separate contract, nor did these discussions create one. 7 After that meeting, Heymanns’ retained the services of an engineer to prepare a report and Crest continued to request progress payments from Sunrise. Sunrise took the position that until the vapour barrier issue was resolved including the cost associated with remedial work to the vapour barrier, progress payments would not be approved. At a subsequent meeting in September 2001, the plaintiffs indicated that they would not complete the contract until payments were made.

Sunrise took the position that the plaintiffs were legally obligated to continue. The plaintiffs allege that it was agreed that, notwithstanding the vapour barrier dispute, Crest would be paid for all future work performed relating to the completion of the school (the completion agreement).

They say, in reliance upon that agreement, they continued to work on the school and did not seek legal redress against the school division. 8 Progress payments were in fact paid by Sunrise but, near the end of the work, Sunrise held back approximately $375,000 to reflect what its architect said was the potential remedial work required in order to correct the vapour barrier problem. 9 In August 2002, Crest commenced an action (which I have previously referred to as the first action) against the school division, its architects and the consultants who had provided the report citing the vapour barrier as defective.

By that statement of claim, as against Sunrise (or its predecessor, Agassiz), Crest demanded payment for the balance owed under the contract as well as a declaration that it was entitled to a lien. 10 Subsequently, in March 2004, a separate action (the action at issue on this appeal, which I will call the second action) was commenced with Heymanns’, Crest, as well as M H Construction

(2001) Inc. (the subcontractor who provided the vapour barrier) as plaintiffs, naming Sunrise and M.C.M. as defendants. In the second action, the plaintiffs claim that agreements were reached as a result of the August and September meetings, which the defendant Sunrise have breached. The plaintiffs also allege that the statements made by M.C.M., if not leading to agreements, amounted nevertheless to negligent misrepresentations separate and apart from the original contract with Sunrise.

As well, the plaintiffs Crest and Heymanns’ added a claim for consequential damages which they allege they suffered as a result of an inability to obtain bonding due to the financial situation created by the breaches of the vapour barrier and completion agreements. 11 As a result of motions to strike taken in both actions, the claims against M.C.M. were dismissed. 12 By a motion filed on July 6, 2007, Sunrise sought to strike the statement of claim in the second action, as it pertained to Crest, claiming that it advanced claims which should have been raised by Crest in the first action and constituted an abuse of process.

By the same motion it sought

summary judgment dismissing the claims of Heymanns’ and M H Construction. At the outset of the hearing before the master, the claim of M H Construction was dismissed without objection. 13 In a letter decision issued on November 6, 2009, the master concluded that Heymanns’ had not put forward evidence to satisfy the court of the existence of the two contracts and that there was no merit to the alleged claim of misrepresentation or consequential damages. He granted

summary judgment dismissing Heymanns ’ claims. 14 Relying upon Queen’s Bench Rule 25.06(7), he ruled that Crest should have added its claims in the second action to the original statement of claim in the first action, but granted leave to Crest to bring a motion to further amend the re-amended statement of claim in the first action, stipulating that Sunrise could not raise a limitation argument to oppose any amendments sought to the additional claims advanced by Crest. 15 Crest appealed the master’s decision striking its statement of claim and Heymanns’ appealed the dismissal of its actions.

Sunrise cross-appealed on the issue of whether it could be prohibited from raising a limitation defence on the motion to re- amend. 16 The motions judge was of the same mind as the master. He concluded that Sunrise had convinced him that Heymanns’ claim must fail as there was no evidence of separate agreements. In his view, the parties were only fulfilling their obligations pursuant to the existing contract. No new consideration for the alleged vapour barrier agreement existed.

He also found that the representations only amounted to requests by Sunrise for the contractor and subcontractor to fulfill their obligations. He concluded that no duty of care was owed by Sunrise to Heymanns’. He granted

summary judgment dismissing Heymanns’ claims. 17 As to Crest’s claim, he agreed that it had to be advanced by way of an amendment to the statement of claim in the first action. He struck its statement of claim in the second action as well. As to the stipulation not to raise a limitation argument, he concluded that the master’s wording could not be taken to be an order in the first action, but merely a direction to counsel on how the motion to amend could proceed. He dismissed Sunrise’s appeal. Issues 18 The appeal raises the following three issues: (

a) Did the motions judge err in granting

summary judgment with respect to the claims advanced by Heymanns’ :

i) by holding that no new agreements had been formed; and ii) by finding that no misrepresentations capable of creating a cause of action had been made.

(

b) Did the motions judge err in striking Crest’s statement of claim in the second action? (

c) Did the motions judge err in not setting aside that portion of the master’s order granting Crest leave to amend its original statementof claim but prohibiting Sunrise from raising a limitation argument? Standard of Review 19 The standards of review in this case, with respect to the decision on the

summary judgment motion as well as themotion to strike, are derived from the same principles. They are both dependent upon the nature of the decision under appeal. As thiscourt has stated on numerous occasions, it is as follows:

a) To the extent that the motions judge made decisions on pure questions of law, that decision is to be reviewed on a standardof correctness.

b) To the extent the decisions are questions of mixed fact and law, they are to be reviewed according to a standard of palpableand overriding error “unless an error of mixed fact and law involves an error relating to an extricable principle of law, in which case thestandard of correctness applies to that extricable legal question.” See Homestead Properties (Canada) Ltd. v. Sekhri et al., 2007 MBCA61 at para. 13, 214 Man.R. (2d) 148 and Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235.

c) To the extent that the judge’s decision was made involving the exercise of his or her discretion, then an appellate court willnot intervene unless the judge misdirected himself or the decision is so clearly wrong as to amount to an injustice. See Elsom v. Elsom, (SCC), [1989] 1 S.C.R. 1367, Chrysler Canada Inc. v. Eastwood Chrysler Dodge Ltd. et al., 2010 MBCA 75, 262Man.R. (2d) 1, a decision relating to a motion to strike for failure to disclose a reasonable cause of action, but also apt, and Towers Ltd. v.Quinton’s Cleaners Ltd. et al., 2009 MBCA 81 at paras. 24-28, 245 Man.R. (2d) 70. Analysis Issue I:

Summary Judgment Application 20 The test for

summary judgment is well established and has been set out in this court’s decision in Homestead. As statedin that decision (at para. 14): The test for

summary judgment is well established, and no further detailed explanation is needed. The test is to the same effectregardless of whether the moving party is the plaintiff or the defendant. When the defendant moves, as here, he must prove, on a primafacie basis, that the plaintiff’s action must fail. If he meets that burden, then the plaintiff has the burden to establish that there is agenuine issue for determination. He must show that his claim is “one with a real chance of success” (see Hercules Management Ltd. etal. v.

Ernst & Young et al., (SCC), [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R. (2d) 241; 139 W.A.C. 241, atpara. 15, see also Hydro Electric Board (Man.) v. Inglis (John) Co. et al. (1999), (MB CA), 142 Man.R.(2d) 1;212 W.A.C. 1 (C.A.)). If he fails to do so,

summary judgment dismissing the claim will follow. 21 This was further explained by this court in Fielding v. Bock et al., 2008 MBCA 1, 225 Man.R. (2d) 103, where ChartierJ.A., for the court, wrote (at para. 8): It is not, however, enough for a defendant to simply raise assertions that show there are questions about the viability of a plaintiff’s case. A defendant must do more. As Freedman J.A. wrote in Blanco et al. v.

Canada Trust Co. et al. (2003), 2003 MBCA 64 , 173Man.R.(2d) 247; 293 W.A.C. 247; 2003 MBCA 64 (at para. 28): ... [a defendant] must go further, and establish that if a judge was deciding this case at trial on the material, and on nothing more, nowbefore us, prima facie it would succeed in its defence. ... 22 While it appears that the motions judge may have done what is warned against in Blanco et al. v.

Canada Trust Co. etal., 2003 MBCA 64, 173 Man.R. (2d) 247, namely, compressed the two-step inquiry set out in Homestead into one step, for the reasonsthat follow, I am satisfied that in his conclusion respecting Heymanns’ claims, he reached the correct result. Having found that there wasa prima facie basis for concluding that Heymanns’ action would fail at trial, he then concluded that Heymanns’ did not establish thatthere was a genuine issue remaining for trial. 23 Heymanns’ submits that the motions judge erred with respect to whether there was a genuine issue for trial by

concluding:

a) that there was no evidence of new agreements and that there were in fact no new agreements;

b) that new consideration was required for the agreements, and that none was provided; and

c) that the agreements were nothing more than what was required by Crest and Heymanns’ to fulfill their obligations under the original contract, when Heymanns’, as a subcontractor, had no contractual obligation to rectify the deficiencies identified by M.C.M. 24 While the issues of the need for new consideration or whether Heymanns’ obligations as subcontractor required it to rectify the deficiencies may be questions of law, the balance of the issues are questions of fact or mixed fact and law requiring that the plaintiffs show a palpable and overriding error on the part of the motions judge.

The overall conclusion by the motions judge that there was no convincing evidence of either agreement such as to raise a genuine issue for trial is a discretionary finding which requires this court to give his decision deference.

a) New Agreements 25 Heymanns’ and Crest argue that the motions judge erred when he concluded that there was no evidence of the vapour barrier agreement or of the completion agreement.

As to the vapour barrier agreement, they point to the affidavit of William Sutherland, the job-site supervisor employed by Crest on the project, who was present at the August 16, 2001 meeting and who states in his affidavit: On or about August 16, 2001, M.C.M. and Sunrise and/or M.C.M. on behalf of Sunrise advised and represented to the plaintiffs that the vapour barrier installation would be accepted, provided an independent engineer retained by the plaintiffs would provide a report indicating that the vapour barrier would perform in accordance with the manufacturer’s specifications, met the intent of the contract and met the requirements of the Building Code.

The plaintiffs accepted the defendants’ offer (the “Vapour Barrier Agreement”) and in consideration thereof, and in reliance upon the representations made by MCM and/or Sunrise (the “Representations”) retained expert engineers to review the vapour barrier and prepare reports. Attached hereto and marked as Exhibit “K” to this my Affidavit are Minutes of a meeting dated August 16, 2001 at the Tyndall-Garson School confirming the Vapour Barrier Agreement and Representations. 26 That statement simply repeats the words of para. 16 of the statement of claim and is not further elaborated upon by Mr.

Sutherland. 27 The minutes of the meeting filed as an exhibit to that affidavit do not bear out the evidence of Mr. Sutherland. The following exchanges are noted in the minutes: …. Also, [Mike Fritschij, M.C.M.] asked if Joe Marlo [Crest] can provide information from an engineer that it is meeting requirements. Werner Heymann [Heymanns’] asked if the engineer agrees that it is fine what will happen. Mike Fritschij answered that he would like to see the report. ….

Mike Fritschij said that if Crest Construction believes everything to be acceptable then Crest should hire a third party engineer to examine the areas. …. Mike Fritschij noted then Crest Construction has to accept responsibility that it will meet all specifications. …. Joe Marlo confirmed that he will be contacting an engineer to come and examine the problem, and to find out if the air vapour barrier is acceptable if mechanically fastened.

Also that construction will continue upon advise [ sic ] from alternate inspector. 28 The minutes do not support the contention that an offer was made by M.C.M. on behalf of Sunrise to the effect that the retaining of an engineer and a favourable report would lead to an agreement that the vapour barrier would be accepted. 29 The plaintiffs argue that the evidence of Mr. Sutherland is to be preferred over that of Mr.

Hardman, the affiant for Sunrise and current secretary-treasurer, because the latter did not participate in the August 16, 2001 meeting or in the meetings during which the plaintiffs allege the completion agreement was reached. They argue that there is an issue of credibility which must be resolved at trial. 30 There is no merit to that argument. As to the vapour barrier agreement, there was ample evidence before the motions judge in the form of documents and on the basis of the cross-examination of Mr.

Sutherland and Heymanns’ which would allow the motions judge to reach his conclusions that the parties had a dispute with respect to whether the vapour barrier met the specifications of the contract and that the retention of the expert by Heymanns’ was in keeping with the dispute resolution provisions of the original contract.

As to the alleged completion agreement, exchange of correspondence between counsel surrounding the holdback of funds does not support the plaintiffs’ contention that there was an agreement that all payments would be made with no set off for the amounts under dispute. 31 The plaintiffs argue that the motions judge’s finding that no new consideration existed for the alleged vapour barrier agreement amounted to an error of mixed fact and law and if he concluded that consideration was required for such an agreement, it was an error of law. 32 While the motions judge did state that there was no new consideration for the new agreements, he made that comment in the context of and after stating that he was not satisfied that there were in fact new agreements.

He concluded that what the parties were discussing was simply the fulfillment of existing contractual obligations.

33 The plaintiffs take issue with that conclusion. It would be correct to say that there was no privity of contract between Heymanns’ and Sunrise. However, Heymanns’ did owe an obligation to Crest, which, in turn, owed it to Sunrise to correct any deficiencies with respect to the vapour barrier. On cross-examination, Crest’s project manager confirmed that Sunrise’s architect had a right to call for testing and inspection under a provision of the contract, and an engineer ’ s report, as discussed at the August 16, 2001 meeting, would have fit that description.

There was therefore, in my view, no palpable and overriding error with respect to the finding that there was no new vapour barrier agreement and that there was no consideration with respect to the alleged vapour barrier agreement. 34 Furthermore, I am also of the view that the motions judge was correct in that finding. Heymanns’ and Crest argue that there was no requirement under the contract for Heymanns’ to retain an independent engineer. They say they did so as consideration for an agreement whereby the dispute would be resolved by that engineer’s report.

As discussed previously, the evidence does not support the contention advanced by Heymanns’ that the report would resolve the dispute or that M.C.M., on behalf of Sunrise, agreed to such an outcome. 35 As to the alleged completion agreement, the plaintiffs argue that the consideration was their forbearance from suing and their agreement to continue to perform the work. That is simply what was contemplated under the provisions of the existing contract, namely that, as progress payments were made, work would be performed. The evidence indicates that at no time did M.C.M. indicate that work was to stop.

The plaintiffs therefore had a contractual obligation to continue the construction. There was evidence that the holdback of funds to deal with the vapour barrier issue was in accordance with the provisions of the contract between Crest and Sunrise.

There is therefore no error with respect to the question of whether there was consideration with respect to an alleged completion agreement. 36 The plaintiffs submit that recent authority recognizes that a post-contractual modification unsupported by consideration may be enforceable so long as it is established that the variation was not procured under economic duress. (They rely upon the case of Greater Fredericton Airport Authority Inc. v.

NAV Canada , 2008 NBCA 28 , 329 N.B.R. (2d) 238 .) However, I do not read the motions judge’s decision as indicating that the reason he found no agreement was due to a lack of consideration, but rather that he concluded that there was no new agreement on the facts of the case.

A finding of new consideration would have been inconsistent with that conclusion. 37 As to the completion agreement, there was evidence before the motions judge to enable him to find that the holdback of funds to deal with the vapour barrier issue was in accordance with the provisions of the contract between Crest and Sunrise. 38 For those reasons, I am of the view that there is no error of law in the motions judge’s reasons or any palpable and overriding error with respect to the question of whether there were new agreements reached.

b) Misrepresentation Claim 39 The plaintiffs allege, in the alternative, that Sunrise’s statements, if not contractual in nature, nevertheless constitute misrepresentations. They submit that the motions judge erred by holding that there were no misrepresentations and that, if they did occur, no duty of care was owed by Sunrise to Heymanns’. They also allege that, as a result of the misrepresentations, Heymanns’ and Crest have suffered economic loss, namely that they have been unable to obtain bonding for future projects.

They further allege that Sunrise was aware of the relationship between Crest and Heymanns’ such that Crest’s difficulties would have a negative impact on Heymanns’ ability to obtain bonding. 40 Heymanns’ argument raises two issues; namely, were there misrepresentations as alleged and, secondly, if so, was there a duty of care owed by Sunrise to Heymanns’. 41 As to the first issue, the motions judge concluded that there were no misrepresentations as to the vapour barrier agreement. That finding is supported by the evidence, particularly the minutes of the meeting.

At best, there was a discussion of how obtaining an expert’s report may assist in resolving the issue, but no commitment by M.C.M., on behalf of Sunrise, that it would be bound by any report obtained by Heymanns’. 42 The motions judge also found that there was no duty of care owed by an owner to a subcontractor, citing Design Services Ltd. v. Canada , 2008 SCC 22 , [2008] 1 S.C.R. 737 , in support of that position.

Given the motions judge’s determination that there were no statements which could amount to misrepresentation, which is supported by the evidence, there is no need to discuss whether, on the facts of this case, there was scope for a duty of care between Sunrise and Heymanns’. Of note is the fact that any representations were made by M.C.M., not Sunrise. On an earlier motion, the claim in tort brought by Crest against M.C.M. was struck on finding that M.C.M., by reason of the terms of the contract, owed no duty of care to Crest its contractor or to subcontractor (see Crest Construction Ltd. v.

Sunrise School Division et al. , 2006 MBQB 3 at para. 14 , 199 Man.R. (2d) 218 , Schulman J.). It would be strange if the architect who made the alleged misrepresentation owed no duty of care, but that the principal on whose behalf the statement was allegedly made, did. 43 As a result, the plaintiffs have not demonstrated any error in principle or any palpable and overriding error with respect to the facts or the application of the law to the facts.

Moreover, as many of the issues decided by the motions judge were discretionary in nature, I have not been convinced that the decisions were wrong, let alone so clearly wrong as to amount to an injustice. Issues II & III: Motion to Strike and Cross Appeal 44 Sunrise’s motions before the master and on appeal to the motions judge were two-fold. On the first facet, it sought

summary judgment against Heymanns’ claims. On the second facet, it sought to strike that portion of the statement of claim as advanced by Crest on the ground that it amounted to an abuse of process given that a previous claim with respect to the same contract was already before the courts in the first action. It sought to strike pursuant to Rule 25.11(

c) and relied upon Rule 25.06(7). Those two provisions are as follows:

25.06(7) An allegation that is inconsistent with an allegation made in a party’s previous pleading or that raises a new ground of claim shall not be made in a subsequent pleading but by way of amendment to the previous pleading. 25.11 The court may on motion strike out or expunge all or part of a pleading or other document, with or without leave to amend, on the ground that the pleading or other document, (

a) may prejudice or delay the fair trial of the action; (

b) is scandalous, frivolous or vexatious; (

c) is an abuse of the process of the court; or (

d) does not disclose a reasonable cause of action or defence. 45 The motions judge agreed with the conclusion of the master that Rule 25.06(7) was applicable to the additional claims brought by Crest against Sunrise as they appeared in the second statement of claim. 46 The master struck the second statement of claim, but gave leave to Crest to bring a motion to further amend the re- amended statement of claim in the first action. He stipulated that Sunrise could not advance a limitation argument to oppose the amendments.

The motions judge confirmed the striking of the second statement of claim as it pertained to Crest, but recognized that the stipulation was not “an order” in the first proceeding and categorized it as a direction made to advance the proceedings. He refused to remove that portion of the order of the master under appeal and dismissed Sunrise’s cross appeal. 47 On this appeal, Crest submits that the motions judge erred in law in holding that Crest’s additional claims against Sunrise could only be made by an amendment to the first statement of claim.

While acknowledging the need to guard against multiplicity of proceedings, Crest says it filed a joint statement of claim with Heymanns’ with a view of seeking consolidation of the matters before trial. It argues that the striking of the claim in this fashion is neither mandatory nor just. 48 Crest submits that it did not initially attempt to amend the statement of claim in the first action, but advanced its consequential loss claim in the second action for two reasons. Firstly, it says that the consequential loss claim was based on circumstances similar to Heymanns’, which was not a party in the first action.

Secondly, it argues that in a previous motion, the master had dismissed Crest’s claim against M.C.M. and refused an amendment against that defendant. Therefore, Crest could only proceed against M.C.M. in a new action. 49 Crest argues that Queen’s Bench Rule 2, dealing with the effect of non-compliance with the rules, recognizes that failure to comply is merely an irregularity and should not render a proceeding a nullity.

It argues that only where it is necessary in the interest of justice should the court set aside a proceeding. (See Queen’s Bench Rule 2.01(1).) 50 Crest also argues that under Rule 2.02, a motion to attack a proceeding should not be made: (

a) after the expiry of a reasonable time after the moving party knows or ought reasonably to have known of the irregularity; or (

b) if the moving party has taken any further step in the proceeding after obtaining knowledge of the irregularity, except with leave of the court. 51 Crest notes that Sunrise was served with the statement of claim on or about March 4, 2004, and filed its defence on May 10, 2004. The motion to strike out the claim was not brought until July 6, 2007. 52 Sunrise maintains that the motions judge was correct in applying Rule 25.06(7) and that the filing of the new statement of claim by Crest amounts to an abuse of process.

It argues that Queen’s Bench Rule 2, a rule of general application, should not take precedence over the rule of specific application (Rule 25.06(7)). It relies on Tymkin v. Ewatski et al. , 2003 MBQB 164 , 176 Man.R. (2d) 165 , where Beard J., as she then was, used the rule of

interpretation of the specific prevailing over the general in the

interpretation of the Queen’s Bench Rules. 53 Both the master and the motions judge relied exclusively on Rule 25.06(7) to strike that portion of the statement of claim relating to Crest and its claim against Sunrise on the basis of the two alleged new agreements. While Rule 2 was raised at both levels, neither of them made reference to it.

54 In my view, the motions judge misapplied the law by relying solely upon Rule 25.06(7), a rule of pleading, to strike thestatement of claim without giving consideration to the delay in bringing the motion to strike and the rationale for commencing theseparate action. 55 In the normal course, the breach of a rule of pleading does not amount to an abuse of process. The purpose of Rule25.06(7) is to prevent parties from raising relevant claims in subsequent proceedings in the same action when they should have done soin the original pleading.

Cases dealing with Rule 25.06(7) relate to claims brought in a reply instead of seeking an amendment to theoriginal statement of claim (see Ross v. Coseco Insurance Co. (2003), (ON SC), 67 O.R. (3d) 463 (S.C.J.); Shannon(Litigation guardian of) v. St. Catharines General Hospital (2009), 83 C.P.C. (6th) 99 (Ont. S.C.J.); Jones v. Friedman et al. (2006), (ON CA), 206 O.A.C. 214; and Leblanc v. MacMillan, [2008] O.J. No. 5169 (QL) (S.C.J.)).

I have found no casewhere a statement of claim was struck as an abuse of process because it breached Rule 25.06(7). 56 While there is scope to challenge the bringing of a subsequent action on the ground that it mirrors an action previouslyfiled that raises the same issues and involves the same parties, the determination of whether that amounts to an abuse of process is to bedone in accordance with Rule 25.11(c), which gives the court jurisdiction to strike a pleading that is an abuse of process. On such amotion, a court should properly consider s. 94 of The Court of Queen’s Bench Act, C.C.S.M., c.

C280, which prohibits multiplicity ofproceedings. 57 In this case, it was open to Heymanns’ to commence its own lawsuit naming Sunrise as a defendant as well as M.C.M. It was not unreasonable for Crest to assert its claims arising from the same allegations with respect to new agreements in that lawsuit. That did not offend the prohibition against multiplicity of proceedings given the rationale for commencing an action in which M.C.M.could be added as a defendant. 58 The fact that Heymanns’ claims have been dismissed on a

summary judgment application does not alter thereasonableness of the commencement of the second action and of Crest’s participation in it at the time it was commenced. 59 Having come to that conclusion, I am of the view that it would be inappropriate and unjust to strike Crest’s statement ofclaim on the ground that it was an abuse of process, as it was not such at the time that the proceedings were commenced. I am also of theview that the striking of the pleading at this juncture would be contrary to the clear statement in Queen’s Bench Rule 2 given:

a) the delay in filing and having the motion heard; and

b) that it is not necessary in the interest of justice to set aside the statement of claim. 60 This is not a situation where one rule is to be applied over the other.

As indicated previously, it is my view that Rule25.06(7) is not applicable to the facts of this case, namely, to the type of pleading involved, and that any decision under Rule 25.11(c)involving striking for an abuse of process, in the circumstances of this case, should consider the provisions of Rule 2. 61 As to preventing a multiplicity of proceedings, the solution at this time in this action is to have any party move to havethe two matters consolidated or to be heard together. 62 Having found that Crest’s statement of claim should not be struck, the issue of whether there should be stipulation ordirection from the master is moot.

For that reason, Sunrise’s cross appeal should be dismissed. Conclusion 63 I would dismiss the appeal of Heymanns’ from the

summary judgment dismissing its claims. I would allow the appealof Crest from the order striking its statement of claim and I would dismiss the cross appeal by Sunrise. 64 Given that success has been mixed, I would order costs in the cause. J.A. I agree: J.A. I agree: J.A.