Fiesta Barbeques Limited v Andros Enterprises Ltd., 2019 SKCA 114

Court of Appeal for Saskatchewan Docket: CACV3217 Citation: Fiesta Barbeques Limited v Andros Enterprises Ltd. , 2019 SKCA 114 Date: 2019-11-05 Between: Fiesta Barbeques Limited and Wolfedale Engineering Limited Appellants (Defendants) And Andros Enterprises Ltd., Astir Investments Ltd. and Diane Handley Respondents (Plaintiffs) And Benjamin Bennett Respondent (Defendant) And Vomar Industries Ltd. Third Party Respondent (Proposed Third Party) Before: Richards C.J.S., Caldwell and Schwann JJ.A. Disposition: Appeal allowed Written reasons by: The Honourable Chief Justice Richards In concurrence: The Honourable Mr.

Justice Caldwell The Honourable Madam Justice Schwann On Appeal From: 2018 SKQB 67 , Regina Appeal Heard: January 8, 2019 Counsel: Tristan Culham and Milad Alishahi for the Appellants Holli Kuski Bassett and William Lane for Vomar Industries Ltd. Richards C.J.S. I. Introduction [ 1 ] The appellants, Fiesta Barbeques Limited [Fiesta] and Wolfedale Engineering Limited [Wolfedale], were named as defendants in an action. Their application for leave to file a third party claim against the respondent, Vomar Industries Ltd. [Vomar], was dismissed by a Queen’s Bench Chambers judge.

Fiesta and Wolfedale contend the Chambers judge committed both errors of principle and of fact-finding in his consideration of their application. They seek to have his decision overturned. [ 2 ] I agree with Fiesta and Wolfedale. In my respectful view, the Chambers judge used a faulty framework of analysis in dealing with the application to commence the third party proceeding.

There are also problems with his assessment of some parts of the evidence. [ 3 ] As explained below, the decision of the Chambers judge must be set aside and Fiesta and Wolfedale must be granted leave to file a third party claim against Vomar. II. background [ 4 ] In order to put the issues concerning the third party claim in context, it is necessary to tell the procedural story leading up to Fiesta and Wolfedale’s application for leave to file that claim. [ 5 ] In the summer of 2012, Benjamin Bennett was using a propane gas barbeque on the balcony of his apartment.

The barbeque had been manufactured by Fiesta and distributed by Wolfedale. The barbeque caught fire and then the fire spread quickly. It ultimately caused significant damage to the apartment building and to the contents of Diane Handley’s neighbouring suite. The apartment building was owned by Andros Enterprises Ltd. [Andros] and Astir Investments Ltd. [Astir]. [ 6 ] Andros, Astir and Ms. Handley commenced an action against Mr. Bennett, Fiesta and Wolfedale in the Court of Queen’s Bench in July of 2014.

The action sought $2,080,476 in compensation for damage to the apartment building, lost rent and related expenses on behalf of Andros and Astir, and $41,918 for property damage and living expenses on behalf of Ms. Handley. [ 7 ] The claim against Fiesta and Wolfedale was framed in negligence and alleged they had: (

a) failed to properly design, manufacture or assemble the barbeque; (

b) failed to adequately test the design of the barbeque to ensure that it was not defective; (

c) failed to change the design, assembly or manufacture of the barbeque when it was known or ought to have been known that there was a risk of fire;

(

d) provided inaccurate or inadequate assembly instructions; and (

e) failed to notify or warn users about the risk of damage to the hose connecting the propane cylinder to the barbeque or otherrisks associated with the barbeque. [8] The claim also alleged negligence against Mr. Bennett, asserting that he had: (

a) used the barbeque in an unsafe manner; (

b) assembled the barbeque, or parts of it, or installed the propane cylinder, so that the gas hose came into contact with hotsurfaces, and therefore became subject to damage; (

c) assembled the barbeque, or parts of it, or the propane cylinder, in an unsafe manner which allowed the escape of gas; (

d) improperly connected the gas hose; (

e) misused the barbeque; (

f) used the barbeque when he knew or ought to have known it posed a fire risk; (

g) failed to keep the barbeque in a safe operating condition; and (

h) failed to inspect the barbeque before using it in order to make sure it was in good condition. [9] Mr. Bennett filed a statement of defence in October of 2014, denying responsibility for the fire and cross-claiming againstFiesta and Wolfedale. Fiesta and Wolfedale later filed a joint statement of defence, denying any negligence in the design, manufacture ordistribution of the barbeque. [10] Andros, Astir and Ms. Handley had proceeded on the theory that the likely cause of the fire had been the failure of the rubberhose connecting the barbeque to the propane cylinder it used as a fuel source.

However, in 2015, their counsel came across a reportprepared by a fire investigator who surmised the fire had resulted from the mechanical failure of the propane cylinder. The cylinder hadbeen requalified by Vomar. It operates a program whereby propane customers can exchange an empty cylinder for a filled one that hasbeen inspected and refurbished or requalified. [11] In October of 2015, Andros, Astir and Ms. Handley brought an application under Queen’s Bench Rules 3-72 and 3-84 to amendtheir statement of claim so as to add Vomar as a defendant.

They alleged Vomar had been negligent in its inspection and requalification ofthe cylinder and that its negligence had caused the fire. Andros, Astir and Ms. Handley argued the applicable limitation period had notexpired and, in the alternative, they sought leave to amend their statement of claim pursuant to s. 20 of The Limitations Act, SS 2004, c L-16.1.

Section 20 reads as follows: 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 originalclaim; and (

b) the judge is satisfied that no party will suffer actual prejudice as a result of the amendment. [12] The application to add Vomar as a defendant was dismissed by Chicoine J. [Amendment Decision]. See: 2017 SKQB 234. Hebegan by reasoning that the relevant limitation period had expired by the time the application to amend had been filed. In his view, thiswas because the fire investigator’s report would have been discoverable within a few months of when the fire had occurred.

He concludedthat, at the latest, the applicable two-year limitation period had begun to run as of that point and that it had therefore expired in 2014. [13] Justice Chicoine then went on to consider s. 20 of The Limitations Act. On this issue, he concluded, first, that the proposedamendment did not arise out of the same transaction or occurrence as the original claims.

In this regard, he wrote as follows: [37] In this case I agree with the submissions made by counsel for Vomar that the application for leave to amend the pleadings to asserta new claim against Vomar and to add Vomar as a defendant do not arise out of the “same transaction or occurrence”. The original claimagainst Fiesta and Wolfedale arises out of the alleged negligent design, manufacture, testing and assembly of the barbeque.

To succeedagainst these defendants, the plaintiffs will have to identify the design defect in the barbeque, establish that the defect created a substantiallikelihood of harm, and show that an alternative design exists that is safer and economically feasible to manufacture (Kreutner v WaterlooOxford Co-operative Inc. (2000), (ON CA), 50 OR (3d) 140, at para 8 (Ont CA)).

This will also involve a “risk utilityanalysis” as described in Tabrizi v Whallon Machine Inc., (BC SC), [1996] BCJ No 1212 (QL) (BCSC), at paras 33 to36, and consideration of industry standards in the manufacture of barbeques (Remedies in Tort at 20-12). In addition, the original claimagainst Mr. Bennett arises out of his alleged negligent use, assembly and maintenance of the barbeque. This will require an assessment ofthe liability in tort of a tenant of an apartment building in relation to his landlord and other tenants of the building.

Contractual issues mayalso come into play as between the tenant and his landlord. [38] As regards Vomar, there is not any suggestion that there was any involvement with Fiesta and/or Wolfedale in the design andmanufacture of the barbeque. Aside from the common “incident” that the fire occurred, there is little else that connects Vomar to Fiestaand Wolfedale.

As noted by counsel for Vomar in her brief, there is no legal connection to the plaintiffs’ claim for the negligentrefurbishment of the propane cylinder against Vomar with the claim for negligent design and manufacture of the barbeque against Fiestaand/or Wolfedale, nor with the claim of negligence relating to the use and maintenance of the barbeque against Mr. Bennett. Counsel forVomar also pointed out that the impugned action or omissions of Fiesta and/or Wolfedale and Mr. Bennett are separate and distinct fromthe impugned actions or omissions of the refurbisher/requalifier Vomar.

This leads to separate and distinct causes of action with very

different issues and defences to be evaluated. [ 14 ] Justice Chicoine next found that Vomar would be prejudiced as a result of the amendment. He explained his conclusion in these words: [40] Having determined that the plaintiffs have failed to meet the first threshold issue set out in ss. 20 (

a) of The Limitations Act , it is probably not necessary to determine whether the plaintiffs have established to my satisfaction that no party will suffer actual prejudice as a result of the amendment as delineated in ss. 20 (

b) of The Limitations Act . In this case I am not convinced that the “Peace and Repose” argument is applicable in a situation such as this one where the proposed new defendant was not aware that one of their refurbished/requalified propane cylinders was involved in a fire in July 2012 until they were advised of such in August 2015.

The “Peace and Repose” purpose of a limitation period theorizes that a defendant is entitled to peace of mind that when a limitation period has expired, a potential defendant should be able to assume that he is no longer at risk from a stale claim ( Josvanger v Folk , 2005 SKCA 138 , at para 20 , 275 Sask R 101).

I am inclined to believe, however, that Vomar would be prejudiced by the delay in informing it that one of its refurbished/requalified propane cylinders was involved in the fire more than three years previous in that it would make it more difficult to determine what intervening events may have occurred since the propane cylinder was last in its possession. There is also a possibility that the propane cylinder may have been tampered with since the fire. [ 15 ] In the end, therefore, Chicoine J. dismissed the application of Andros, Astir and Ms. Handley to amend their statement of claim.

III. the decision under appeal [ 16 ] In November of 2017, Fiesta and Wolfedale launched an application to file a third party claim against Vomar. In this regard, they invoked Queen’s Bench Rule 3-31 and s. 7 of The Contributory Negligence Act , RSS 1978, c C-31 . Rule 3 - 31 reads as follows: 3-31 A defendant or third party defendant may file a third party claim against another person not already a party to the action who: (

a) is or may be liable to the party filing the third party claim for all or part of the claim, including a claim for contribution or indemnity against that party; (

b) is or may be liable to the party filing the third party claim for an independent claim relating to or connected with the subject matter of the main action; or (

c) should be bound by a decision about an issue between the plaintiff and the defendant. [ 17 ] At least in relation to third party claims grounded in negligence, s. 7 of The Contributory Negligence Act requires a defendant to seek leave before the claim can proceed. See: B.(D.) SKCA at para 3.

It says this: 7 When it appears that a person not a party to an action is or may be wholly or partly responsible for the damages claimed, he may be added as a party defendant or may be made a third party to the action, upon such terms as are deemed just. [ 18 ] Fiesta and Wolfedale sought to allege that, if any damages suffered by Astir, Andros or Ms. Handley were determined to be the result of their actions, then such damages were caused or contributed to by the negligence of Vomar. The particulars of the negligence claim were explained in the proposed pleadings as being Vomar’s failure to: (

a) properly inspect, refurbish and/or qualify/certify the propane cylinder; (

b) supply safe and effective parts for the cylinder; (

c) properly test, and/or adequately inspect/certify, all aspects of the cylinder; (

d) ensure that the cylinder and all of its components were safe to be connected to and operated with a barbeque; and (

e) ensure that the cylinder and all of its components were otherwise safe and free from any defects that would cause or contribute to a fire. [ 19 ] The Chambers judge observed that, by virtue of The Limitations Act , it might well have been that the limitation period governing the third party claim had expired. Noting that the merits of any defence to the third party claim were not relevant at the stage of considering whether the claim should be allowed to proceed, the Chambers judge nonetheless referenced s. 20 of The Limitations Act and concluded that the considerations guiding his decision would be the same regardless of whether he proceeded under that

section or under Rule 3 - 31 and s. 7 of The Contributory Negligence Act . All of this led the Chambers judge to conclude that, in order to succeed in their application to commence a third party claim, Fiesta and Wolfedale had to establish: [29] … 1. The existence of a prima facie cause of action; 2. A connection to the main action, in the sense of a causal connection, or arising out of the same transaction or occurrence; and 3. Absence of undue prejudice to Vomar. [ 20 ] Having outlined his approach, the Chambers judge began by asking whether the third party notice established a prima facie claim against Vomar. He had little difficulty answering that question in the affirmative:

[33] In this case, each of the proposed third party claims sets out that Vomar is in the business of supplying and selling pre-filled propane cylinders, and operating a propane cylinder exchange program, and that Vomar is responsible for inspecting and certifying all propane cylinders prior to sale. Both proposed third party claims plead that the “Fiesta BBQ” described in the Claim was “connected to a propane cylinder which had last been inspected, refurbished and/or qualified or certified by Vomar”.

This is the barbecue that the Claim alleges was manufactured and distributed by Fiesta and Wolfedale, and used by Bennett.

Considering the threshold to be met at this stage, I am satisfied that the facts pled in that fashion form a basic foundation for the allegation that the relationship between Vomar and the defendants was one with sufficient proximity and quality to give rise to a duty of care. [34] I am also satisfied that the proposed third party claims clearly plead the ways in which it is alleged that Vomar breached its duty of care, the damages that Fiesta, Wolfedale and Bennett suffered as a result (in the context of a claim for contribution), and that their damages were suffered as a result of Vomar’s breach.

Sufficient material facts are set out in the pleadings to support the existence of each element. In short, I am satisfied that the proposed third party claims disclose a prima facie cause of action against Vomar. [ 21 ] Next, the Chambers judge addressed the issue of whether there was a “causal connection” between the cause of action pled in the Andros, Astir and Ms. Handley statement of claim and the cause of action pled in the third party notice. On this point, the Chambers judge considered himself bound to come to the same conclusion that Chicoine J. had arrived at in the Amendment Decision .

Accordingly, writing as follows, the Chambers judge found there was no such connection: [39] With the greatest of respect, I fail to see how I could come to a different conclusion, in light of Justice Chicoine’s decision. The negligence that Fiesta, Wolfedale and Bennett allege against Vomar is exactly the same as that which the plaintiffs alleged in their proposed amended claim.

Justice Chicoine concluded that there was no legal connection between the claim for negligent refurbishment of the propane cylinder and the claim for negligent design and manufacture of the barbecue, or the claim of negligence relating to the use and maintenance of the barbecue against Mr. Bennett. It is true that Justice Chicoine was considering the matter in light of an application to amend pleadings, and applying s. 20 of The Limitations Act in Andros.

However, as I stated earlier, the same considerations apply when determining an application under Rule 3 - 31 and the provisions of The Contributory Negligence Act . In my view, therefore, the issue has been determined. There is not a causal connection between the cause of action pled in the Claim and the causal connection in the third party notice. The application fails on this ground. (Emphasis added) [ 22 ] Finally, the Chambers judge considered the question of prejudice.

In this regard, he again deferred to the findings of Chicoine J. in the Amendment Decision and found that, if the third party application was allowed to proceed, Vomar would suffer extreme prejudice not capable of being cured by directions from the Court: [41] Once again, Justice Chicoine’s comments apply with equal force to an application under Rule 3-31 of The Queen’s Bench Rules and The Contributory Negligence Act as they do to an application engaging s. 20 of The Limitations Act . The defendants were all aware of the existence of the propane cylinder and its potential involvement in the fire long ago.

Both defendants could, at any time over the past three years, have sought leave to add Vomar as a third party. Instead, they chose to wait until the plaintiffs’ application to amend its claim was dismissed. I also take into account the fact that Vomar last had the propane cylinder in its possession more than a decade ago, and more than five years before the fire occurred. The tank is no longer available for inspection. That, and other circumstances related to the passage of time would put Vomar at a distinct disadvantage should they be required to defend an action at this stage.

Accordingly, I am satisfied that, even if the requisite causal connection had been established, Vomar would suffer extreme prejudice which could not be cured by directions given by the court. (Emphasis added) [ 23 ] As a result of this reasoning, the Chambers judge dismissed Fiesta and Wolfedale’s application for leave to serve a third party notice on Vomar. IV. analysis [ 24 ] A decision whether to grant leave to serve a third party notice is discretionary in nature. Before this Court will intervene in relation to such a decision, it must conclude the Chambers judge (

a) acted upon some wrong principle of law, (

b) took into consideration irrelevant factors, (

c) overlooked or misapprehended some material evidence, (

d) failed to act judicially, or (

e) was so clearly wrong that the decision will result in an injustice. See: B.(D.) v C.(M.) , 2001 SKCA 9 at para 5 , [2001] 5 WWR 617 [ B.(D.) SKCA ]. [ 25 ] Fiesta and Wolfedale submit the Chambers judge erred by proceeding on the basis that the considerations to be used in deciding whether to allow a third party claim to be filed pursuant to s. 7 of The Contributory Negligence Act are the same as those used in deciding whether to allow a defendant to be added after the expiration of a limitation period as per s. 20 of The Limitations Act .

They also submit the Chambers judge made errors of fact in relation to the prejudice that Vomar might suffer if the third party claim against it was allowed to proceed. I propose to consider those two arguments in turn. A. Did the Chambers judge take the wrong approach? [ 26 ] In order to assess the submission that the Chambers judge confused the analysis demanded in connection with s. 7 of The Contributory Negligence Act with that required under s. 20 of The Limitations Act , it is necessary to begin by reviewing the principles governing both the commencement of third party claims and the operation of s. 20. 1.

Third party claims [ 27 ] As noted above, Rule 3-31 of The Queen’s Bench Rules sets out a right to commence a claim against a person not already a party to the litigation. The policy rationale for the Rule is well understood. Third party proceedings promote efficiency by allowing

common findings of fact and law to be determined in a single trial. This saves time, effort and expense for litigants and the courts alike. Aswell, third party proceedings reduce the risk of inconsistent verdicts and findings of fact that is inherent in separate trials dealing with thesame subject matter. See: Husky Oil Operations Limited v Saskatchewan (Minister of Finance), 2010 SKQB 88 at para 14, 351 Sask R301 [Husky]. [28] Third party claims commenced as of right pursuant to Rule 3-31 are, of course, subject to applications to strike.

The essentialprinciples that have been developed in this context, i.e., in the context of applications to strike, are applied when deciding whether to grantleave to file a third party claim pursuant to s. 7 of The Contributory Negligent Act. See: B.(D.) SKCA at para 9. [29] I will not attempt to inventory all of the principles that govern applications such as the one that underpins this appeal. However,some of the most relevant ones warrant highlighting.

First, the third party notice must reveal a prima facie claim against the third party.See: B.(D.) v C.(M.), 2000 SKQB 64 at para 17, [2000] 7 WWR 186 [B.(D.) SKQB]. I note, parenthetically, that Vomar does not argueFiesta and Wolfedale have failed to clear this hurdle and does not contest the Chambers judge’s finding that they are seeking to advance aprima facie claim.

Relatedly, Vomar does not suggest that possible Limitations Act issues are relevant at this stage of the proceedings. [30] Second, there must be a sufficient connection between the third party claim and the original claim to warrant the third partyclaim being grafted onto the original claim. Some cases have used the term “causal” connection in describing this requirement. Indeed, theChambers judge used that word in his decision, presumably because that is what the parties had employed in their submissions.

The originof the idea of a “causal connection” requirement appears to be A.C. v H.I.S. (1994), (SK CA), 123 Sask R 241 (CA)[A.C.]. There, the plaintiff sued her grandfather for assault of a sexual nature. The defendant grandfather then alleged that anotherindividual, who stood in loco parentis to the plaintiff, had permitted him to perform the sexual acts in question. While denying he hadcommitted the acts, the defendant grandfather sought to add the other individual as a third party, claiming to be entitled to compensationfrom that individual for any damages awarded against him.

In very brief reasons, this Court set aside the third party claim, writing asfollows: [6] The cause of action disclosed on the face of the pleadings is based upon a breach of a fiduciary relationship owed not to therespondent but to the plaintiff. The plaintiff sued the defendant respondent, her maternal grandfather, for assault and battery of a sexualnature, which she alleges took place in circumstances where the respondent, who stood in loco parentes [sic] to her, breached a fiduciaryduty he owed her.

The respondent denied the allegations and claimed damages against the appellant by way of third party proceeding,arising out of a claim that the appellant permitted him to perform the sexual acts (which he denies having committed), with the result theappellant breached a fiduciary owed to the plaintiff. He therefore claims to be entitled to damages for any costs which may be awardedagainst him.

In my opinion, the third party claim, one in which the respondent asserts a cause of action against the appellant based not on afiduciary duty owed to him but to the plaintiff, discloses no cause of action as pleaded against the appellant. There is no causal connectionbetween the claim made by the respondent and the plaintiff. Even if the appellant had breached a fiduciary duty to the plaintiff, suchclaim has not been made by the plaintiff against the appellant. [7] In my opinion, the third party claim as pleaded by the respondent, discloses no cause of action against the appellant.

In myopinion, this is one of those rare occasions where the Court should interfere with the discretion of the chambers judge and strike out theclaim. (Emphasis added) [31] Following the decision in A.C., the notion of the need for a “causal connection” between the third party claim and the mainaction was picked up in some Queen’s Bench decisions. See, for example: B.(D.) SKQB; St.

Paul’s Roman Catholic Separate SchoolDivision No. 20 v Dunmac General Contractors Ltd., 2002 SKQB 404, 20 CLR (3d) 295. [32] In my respectful view, the causal connection concept should not be used in deciding whether to grant leave to file a third partyclaim or, for that matter, when considering whether to strike a third party claim commenced without leave. This is so for several reasons.To begin, it is unclear how the concept operates or what it means in practice. The cases that purport to employ it do not satisfactorilyexplain what must be said to cause what before a third party claim may proceed.

As well, A.C. is not a strong precedent. This Court foundin B.(D.) SKCA that A.C. must be confined to its own facts and pleadings and that it cannot stand for the proposition that a claim forcontribution or indemnity will lie only if the cause of action pleaded by the defendant against the third party is capable of being a claim onits own. Further, and relatedly, a causal connection requirement would seem to be both difficult to reconcile with the terms of Rule 3-31(a)and s. 7 of The Contributory Negligence Act and to deny the plain meaning of Rule 3-31(

b) and (c). Rule 3-31(

b) contemplates third partyclaims that are “independent” so long as they relate to or are connected with the subject matter of the main action. As well, Rule 3-31(c)provides for third party claims on any basis so long as the proposed third party defendant should be bound by a decision about an issue inthe main action. Finally, it appears that the majority of cases, both in the Court of Queen’s Bench and in this Court, have not used the ideaof a “causal” connection when deciding whether a third party claim should be allowed to proceed.

See, for example: Bank of Montreal vOugh (1985), (SK CA), 39 Sask R 181 (CA) [Ough]. [33] All of this said, there is no doubt that a third party claim must have some connection to the main action. The precise nature ordegree of that connection is difficult to state in the abstract. On this front, I doubt there is much to be gained by saying the connectionmust be, for example, “strong” or “substantial”. Rather, it is more helpful to approach this issue from a purposive perspective.

In otherwords, given that the goals of Rule 3-31 are to promote efficiency and minimize the possibility of inconsistent verdicts and findings offact, the issue of the adequacy of the connection should be evaluated through this lens. [34] When s. 7 of The Contributory Negligence Act is in play and is driving an application for leave to file a third party claim, therewill necessarily be an allegation that the proposed third party is wholly or partly responsible for the damages being claimed by theplaintiff. This is so because that is what s. 7 is all about.

At least in the situations that come readily to mind, the facts or alleged facts inthose sorts of circumstances will typically, and by definition, feature considerable overlap and interconnection between the main actioninvolving the plaintiff and the defendant and the proposed third party claim. [35] In any event, the “connection” question to be addressed in an application for leave to file a third party claim is whether there isa sufficient overlap or commonality between the proposed third party claim and the main action that hearing them together would, in some

meaningful way, realize the goals of Rule 3-31. This is a matter of informed judicial judgment to be resolved on a case-by-case basis inlight of all of the relevant facts and circumstances. Although the authorities do not explain themselves by expressly or openly using thisapproach, it is nonetheless apparent that, in effect, this is what judges have done in substance when they have considered the connectionbetween the main action and the proposed third party claim.

See, for example: Beveridge Holdings Ltd. v Ascent Financial Services Ltd.,2010 SKQB 353 at para 19, 361 Sask R 195; Ough at para 8. [36] A third and final relevant principle governing the consideration of applications to commence third party claims concerns thequestion of prejudice. Rule 3-41 speaks to this issue in the following terms: 3-41(1) A plaintiff must not be prejudiced or unnecessarily delayed by a third party claim.

(2) The Court shall give all directions on terms or otherwise that may be necessary to prevent prejudice or delay to the plaintiff if it can bedone without injustice to the defendant or third party. [37] There appears to be no particularly helpful case law on Rule 3-41. However, I note that the Queen’s Bench decisions withrespect to the predecessor rule, Rule 107I(3), were to the effect that the Rule did not rigidly preclude every third party claim involving ameasure of prejudice or delay but, rather, called on judges to make orders designed to alleviate prejudice and delay.

See: Morrow v Regina(City) (1989), (SK KB), 79 Sask R 98 (QB) at paras 19–22; Husky at para 38; Doepker Industries Ltd. v K.B.A.Consultants Inc., 2002 SKQB 480 at paras 19–21, 226 Sask R 122; Kakakaway v Canada (Attorney General), 2000 SKQB 344 at para 33,196 Sask R 146; Bucsis v Rocy Housing Ltd., 2009 SKQB 271 at para 20, 336 Sask R 1.

Section 20 of The Limitations Act [38]

Section 20 of The Limitations Act has a materially different purpose than Rule 3-31. It is designed to alleviate some of theharshness of limitation periods by allowing pleadings to be amended to assert a new claim, or to add or substitute parties, after the expiryof a limitation period. This was explained in The Insurance Company of the State of Pennsylvania v Cameco Corporation, 2008 SKCA 54,[2008] 6 WWR 626: [27]

Section 20 of The Limitations Act operates to provide exceptions to the normal consequences which flow from the expiration of alimitation period. Accordingly, in order to give it proper consideration, it is useful to underline the purposes of limitations legislation.LaForest J. described those purposes as follows in M. (K.) v. M. (H.), (SCC), [1992] 3 S.C.R. 6 at pp. 29-30: …In order to determine the time of accrual of the cause of action in a manner consistent with the purposes of the Limitations Act, Ibelieve it is helpful to first examine its underlying rationales.

There are three, and they may be described as the certainty, evidentiary, anddiligence rationales… Statutes of limitations have long been said to be statutes of repose; see Doe on the demise of Count Duroure v. Jones (1791), 4 T.R.301, 100 E.R. 1031, and A’Court v. Cross (1825), 3 Bing. 329, 130 E.R. 540. The reasoning is straightforward enough. There comes atime, it is said, when a potential defendant should be secure in his reasonable expectation that he will not be held to account for ancientobligations… The second rationale is evidentiary and concerns the desire to foreclose claims based on stale evidence.

Once the limitation periodhas lapsed, the potential defendant should no longer be concerned about the preservation of evidence relevant to the claim… Finally, plaintiffs are expected to act diligently and not “sleep on their rights”; statutes of limitation are an incentive for plaintiffsto bring suit in a timely fashion. [28] Notwithstanding these important objectives, the other side of the coin is that the operation of limitation periods can have harshconsequences for plaintiffs caught by them.

Section 20 of The Limitations Act is intended to ameliorate some of that harshness. But, asTallis J.A. suggested in Fillion v. Wolverine et al., 2001 SKCA 30, 203 Sask. R. 288 at para 13, provisions like s. 20 must nonetheless beread in context.

They provide for exceptions to limitation periods but should not be allowed to become a means for their wholesaleavoidance. [39] As per the plain wording of s. 20, a judge may allow pleadings to be amended after the expiry of a limitation period if the claimasserted by the amendment arises out of the same transaction or occurrence as the original claim and if no party will suffer actual prejudiceas a result of the amendment. 3.

The approach of the Chambers judge [40] In my respectful view, the Chambers judge erred by running together the approach that was used by Chicoine J. in decidingwhether Andros, Astir and Ms. Handley could add Vomar as a defendant pursuant to s. 20 of The Limitations Act and the approach he wasrequired to use in determining whether Fiesta and Wolfedale should be allowed to commence a third party claim against Vomar pursuantto s. 7 of The Contributory Negligence Act.

There are at least two key differences in the line of analysis demanded by s. 20 as compared tothat demanded in connection with proceedings pursuant to The Contributory Negligence Act. [41] The first difference concerns the question of the necessary connection between the claim being proposed and the main action.As will be recalled, the Chambers judge concluded there was no sufficient connection in this regard because, in the Amendment Decision,Chicoine J. had found this to be the case.

That line of thinking did not appreciate that the question in the Amendment Decision waswhether, as per s. 20 of The Limitations Act, the proposed claim by Andros, Astir and Ms. Handley against Vomar arose out of the “sametransaction or occurrence” as their claim against Fiesta and Wolfedale. Contrastingly, the question before the Chambers judge waswhether there was a sufficient connection between the third party claim proposed by Fiesta and Wolfedale against Vomar and the mainaction to warrant the third party claim being grafted onto the main action.

While these two inquiries obviously involve the consideration ofmatters that overlap or occupy the same space to some considerable degree, they ultimately involve distinct inquiries. Accordingly, theChambers judge should not have felt himself obliged to fall in line with what Chicoine J. had concluded in the Amendment Decision about

the sufficiency of the relationship between a claim against Vomar and the claims against Fiesta and Wolfedale. In short, he erred inprinciple. It is necessary, therefore, to look at this issue afresh. [42] In my opinion, this is a case where the goals of litigation efficiency and the avoidance of inconsistent verdicts suggest ratherclearly that the application to commence a third party claim should be granted. The question of what caused the fire on Mr. Bennett’sbalcony is the central issue raised in the main action, i.e., the action commenced by Andros, Astir and Ms. Handley against Fiesta,Wolfedale and Mr.

Bennett. Given how this case has unfolded, it is apparent that the key point in the trial of the main action will bewhether the fire was caused by (

a) Mr. Bennett’s negligence in the operation of the barbeque, (

b) Fiesta and Wolfedale’s negligence in thedesign, manufacturing and distribution of the barbeque, or (

c) Vomar’s negligence in qualifying the propane cylinder. I include point (c)concerning Vomar because the possible failure of the propane cylinder is now a live factual issue and it is difficult to see how a trial couldnow explore the cause of the fire without taking account of the role that the cylinder might have played in it. It would seem, therefore, thatthe trial of the main action will necessarily engage the question of the extent to which, if at all, the cause of the fire was a problem withthe propane cylinder.

As a result, there is much to recommend resolving any claim that Fiesta and Wolfedale might have against Vomar atthe same time, and in the same proceeding, as the one in which the claims against Fiesta and Wolfedale themselves are resolved.

This willavoid having to call a significant amount of the same evidence twice and will avoid the possibility of, for example, a judge in the trial ofthe main action concluding the propane cylinder was faulty and a judge in a subsequent proceeding by Fiesta and Wolfedale againstVomar concluding that it was not faulty. [43] My conclusion in this regard is supported by the fact that there are a number of cases where courts have found a sufficientconnection between the proposed third party proceeding and the main action in situations where, as here, the defendant was doing no morethan seeking contribution based on the theory that the third party was concurrently liable to the plaintiff for the injury for which theplaintiff was seeking damages in the main action.

B.(D.) SKCA is an example. There, the plaintiff, a student who had been sexuallyassaulted by a teacher, sued a school board for damages in negligence. The school board then sought leave to commence third partyproceedings against the plaintiff’s parents for contributory negligence. In finding that the third party proceeding was appropriate, JacksonJ.A., writing for the Court, explained as follows: [21] … While the Court [in Allan v Bushnell T.V.

Company Broadcast News Ltd. (1968), (ON CA), 1 OR 720 (CA)]stated that “the facts upon which the plaintiff relies against the defendant should issue out of the relations between the defendant and thethird party,” in our opinion, this does not mean that for a third party notice to issue the defendant must be able to sue the third partyindependent of the suit brought by the plaintiff. As Macfarlane J. stated in Godber v.

Mason (1953), (BC SC), 8 W.W.R.(N.S.) 410 at 411 “the court must be satisfied there is a question proper to be tried, and where there is a clear question between the partiesthat can be finally determined in the action, directions then can be given that the question of liability be determined in the action.” TheBoard does not seek contribution from the [B.]s on the basis that they acted in a common enterprise, but that they share a concurrentliability based on their respective roles as parents and teacher.

See also: Anderson v Braun, 2017 SKCA 93, [2018] 1 WWR 730. [44] The Chambers judge’s decision also reflects a second error of principle. He reasoned that, even if there was a sufficientconnection between the main action and the third party claim, the third party claim should not go ahead because of the prejudice thatVomar would suffer. In this regard, he again deferred to Chicoine J.’s findings and approach in the Amendment Decision. [45] However, Rule 3-41(1) provides that a plaintiff must not be prejudiced or unduly delayed by a third party claim.

It says nothingabout prejudice to the proposed third party defendant. This, of course, is different than under s. 20 of The Limitations Act where s. 20(b)requires the judge to be satisfied that no party shall suffer actual prejudice as a result of the amendment. Thus, while s. 20 put the questionof prejudice to Vomar front and centre in the Amendment Decision, the same could not be said for Rule 3-41(1) in the proceeding beforethe Chambers judge.

It was, therefore, an error for the Chambers judge to approach the question of prejudice in the same way that it hadbeen approached by Chicoine J. in the Amendment Decision. He should not have focused on the issue of prejudice to Vomar and ignoredthe question of prejudice to the plaintiffs, Andros, Astir and Ms. Handley. Significantly, I note that Andros, Astir and Ms.

Handley did notparticipate in this appeal and did not advance submissions to the effect that they would be prejudiced should the third party claim proceed.Thus, possible prejudice to them is not a basis on which to deny leave to file the third party claim. [46] In sum, I agree with Fiesta and Wolfedale that the Chambers judge made consequential errors of principle in his considerationof their application. B.

Did the Chambers judge make factual errors in relation to prejudice? [47] Even if there is a way in which prejudice suffered by Vomar might be properly taken into account when considering thequestion of whether the third party claim should be allowed to proceed, I agree with Fiesta and Wolfedale that the Chambers judge madereviewable errors in his consideration of the question of prejudice. [48] As will be recalled, the Chambers judge dealt with the issue of prejudice by saying that Chicoine J.’s comments in theAmendment Decision applied with equal force to the matter before him and by specifically referencing (

a) Fiesta’s and Wolfedale’sgeneral delay in bringing the third party application forward, (

b) the reality that Vomar had last been in possession of the propane cylinderover a decade ago, and (

c) the fact that the cylinder was no longer available for inspection. The Chambers judge concluded that, if thethird party claim was to proceed, Vomar would suffer extreme prejudice not curable by any directions he might give. [49] In my respectful view, there are problems with the Chambers judge’s approach. To begin, it is not apparent how he found thatthe propane cylinder was no longer available for testing. The only evidence in the record on this issue is to the contrary.

In his affidavit,Charles Sherbo avers that the barbeque and the cylinder “have been preserved and are available for inspection”. [50] As for the effect of the passage of time on Vomar’s ability to defend against the third party claim, Marcel Vouriot, thepresident of Vomar, provided some general information in his affidavit. However, Mr. Vouriot said very little, if anything, material aboutthe idea of prejudice. He averred that, based on the requalification mark on the cylinder, it was apparent Vomar had requalified and

refilled the cylinder in July of 2007. He also averred that a cylinder can be refilled an unlimited number of times by either businesses or individuals and that it is not possible to determine, from a cylinder itself, what retailer sold it or when. However, Mr. Vouriot did not suggest that the passage of time itself had had any effect on Vomar’s ability to track the cylinder in issue here or to defend against the claim that the cylinder had been improperly requalified.

Rather, the challenges in tracing the life of the cylinder were cast as being nothing more or less than a direct function of how the retail propane business is organized in general, i.e., of how propane cylinders are sold, filled and requalified. Significantly, Mr. Vouriot did not suggest relevant records had been destroyed or gone missing or that Vomar personnel who might have relevant information or expertise were no longer available.

In the result, there is really nothing in the record to substantiate the suggestion that the passage of time had itself prejudiced Vomar’s ability to defend against the third party claim. [ 51 ] In the end, therefore, I find that, even if prejudice to Vomar was a factor that could have informed the Chambers judge’s exercise of discretion, he made material errors in his assessment of the evidence relating to that prejudice. In my respectful assessment, those errors were palpable and overriding. V. conclusion [ 52 ] This appeal must be allowed and the decision of the Chambers judge set aside.

Fiesta and Wolfedale are given leave to file their proposed third party claim against Vomar. Fiesta and Wolfedale are jointly entitled to one set of costs payable by Vomar. “Richards C.J.S.” Richards C.J.S. I concur. “Caldwell J.A.” Caldwell J.A. I concur. “Schwann J.A.” Schwann J.A.