Cupola Investments Inc. as general partner for v. on behalf of, 2021 SKCA 86

Court of Appeal for Saskatchewan Docket: CACV3722 Citation: Cupola Investments Inc. v Zakreski , 2021 SKCA 86 Date: 2021-05-31 Between: Cupola Investments Inc. as general partner for and on behalf of Cathedrale Retirement LP, Coxswain Investments Inc. as general partner and on behalf of Dunkirk Retirement LP and Grand Duke Investments Inc. as general partner and on behalf of Grand Retirement Ltd. Appellants (Plaintiffs/Applicants) And Terry Zakreski, Q.C.

Respondent (Respondent/Proposed Defendant) And Darrell Remai, Cathedrale Retirement Genpar Inc., Dunkirk Retirement Genpar Inc., Grand Retirement Genpar Inc., Sirous Tosh, Candace Remai, Caleb Management Ltd., Red Holdings Inc., Tosh Consulting Inc., Tosh Family Holdings Inc., Tosh (Sirous) Family Trust, Trustee of the Tosh (Sirous) Family Trust, F8 Investments Inc., F8 Investments LP, Caleb Construction Ltd., Adele Tosh and Celia-Ann Koturbash Respondents (Respondents/Defendants) Before: Richards C.J.S., Leurer and Kalmakoff JJ.A. Disposition: Appeal allowed Written reasons by: The Honourable Mr.

Justice Leurer In concurrence: The Honourable Chief Justice Richards The Honourable Mr. Justice Kalmakoff On appeal from: QBG 540 of 2016, Saskatoon Appeal heard: April 19, 2021 Counsel: Munaf Mohamed, Q.C., and Brynne Harding for Cupola Investments Inc. as general partner for and on behalf of Cathedrale Retirement LP, Coxswain Investments Inc. as general partner and on behalf of Dunkirk Retirement LP and Grand Duke Investments Inc. as general partner and on behalf of Grand Retirement Ltd. Karen Prisciak, Q.C., for Terry Zakreski, Q.C.

Adam Touet for Darrell Remai, Cathedrale Retirement Genpar Inc., Dunkirk Retirement Genpar Inc., Grand Retirement Genpar Inc., Sirous Tosh, Candace Remai, Caleb Management Ltd., Red Holdings Inc., Tosh Consulting Inc., Tosh Family Holdings Inc., Tosh (Sirous) Family Trust, Trustee of the Tosh (Sirous) Family Trust, F8 Investments Inc., F8 Investments LP, Caleb Construction Ltd., Adele Tosh and Celia-Ann Koturbash Leurer J.A. I. INTRODUCTION [ 1 ] The law gives plaintiffs a degree of discretion as to whom they sue, and for what causes of action, in a single lawsuit.

This reflects several principles, including that a multiplicity of proceedings is to be discouraged. This principle advances the policy objectives of avoiding inconsistent verdicts and promoting efficiencies. [ 2 ] In this case, Cupola Investments Inc. as general partner for and on behalf of Cathedrale Retirement LP, Coxswain Investments Inc. as general partner for and on behalf of Dunkirk Retirement LP and Grand Duke Investments Inc. as general partner for and on behalf of Grand Retirement LP [plaintiffs] made application to amend their statement of claim.

They were seeking to add their respective limited partnerships’ former lawyer, Terry Zakreski, Q.C., as a defendant to a lawsuit they had initiated several years previously. [ 3 ] A Court of Queen’s Bench judge sitting in Chambers dismissed the plaintiffs’ application: Cupola Investments Inc. v Remai (13 October 2020) Saskatoon, QBG 504 of 2016 [ Chambers Decision ]. [ 4 ] The plaintiffs appeal the Chambers Decision to this Court. In my respectful view, the Chambers judge misunderstood the nature of the discretion he had in relation to the plaintiffs’ request to add Mr.

Zakreski as a defendant to the existing action. The principles

at play should have led him to authorize the proposed amendments. I would therefore allow the plaintiffs’ appeal. My reasons follow. II. BACKGROUND A. The Limited Partnerships [ 5 ] The action relates to the management of the three limited partnerships, Cathedrale Retirement LP, Dunkirk Retirement LP and Grand Retirement LP [Limited Partnerships], by Cathedrale Retirement Genpar Inc., Dunkirk Retirement Genpar Inc. and Grand Retirement Genpar Inc. [Prior GPs], respectively. [ 6 ] The Limited Partnerships were formed to carry on the business of owning and operating retirement homes.

Pursuant to three agreements, the retirement homes that each Limited Partnership owned were managed by Caleb Management Ltd. [Caleb Management]. The directors of Caleb Management were Darrell Remai and Candace Remai. [ 7 ] The limited partners began to have questions about the management of their investments. In April 2015, they passed resolutions purporting to remove the Prior GPs from their positions as general partners of the Limited Partnerships.

The Prior GPs took the position that these resolutions were invalid. [ 8 ] In May 2015, proceedings were commenced in the Manitoba Court of Queen’s Bench with the objective of removing the Prior GPs. These proceedings culminated in a consent order that directed that meetings of the limited partners of each of the Limited Partnerships take place for that purpose. These meetings were held on October 19, 2015. In the result, the plaintiffs became the general partners of the Limited Partnerships. B. The action [ 9 ] The plaintiffs commenced this action on behalf of the Limited Partnerships on April 14, 2016.

The statement of claim names, as defendants, the Prior GPs and Caleb Management, as well as Mr. Remai, Ms.

Remai, Sirous Tosh, Adele Tosh and Celia-Ann Koturbash [Individual Defendants], and several corporations and trusts alleged to be controlled by the Individual Defendants, namely Caleb Construction Ltd., Red Holdings Inc., Tosh Consulting Inc., Tosh Family Holdings Inc., Tosh (Sirous) Family Trust, Trustee of the Tosh (Sirous) Trust, F8 Investments Inc. and F8 Investments LP. [ 10 ] At its heart, the statement of claim alleges that the Prior GPs wrongfully profited from self-dealing and mismanaged the Limited Partnerships.

The transactions that are said to constitute this wrongful conduct are many and therefore the statement of claim is lengthy. The statement of claim describes these transactions under headings titled “Securities Flip”, “Additional Fees and Secret Commissions”, “Execution of Extraordinary Resolutions”, “Private Aircraft Charters”, “Caleb Management Overhead Costs” and “Dervilia Designs”.

The Chambers judge summarized the allegations relating to the securities flip as follows: [ 11 ] In order to better understand the reasons that follow I will summarize the allegations regarding the Securities Flip and the parties involved. The Plaintiffs allege: (

a) Various offers were made to the owner of partnership units in Cathedrale Retirement LP and of two debentures issued by Grand Retirement LP and Dunkirk Retirement LP; (

b) The last offer made by the Proposed Defendant on behalf of Caleb Management Ltd. was accepted; (

c) The Prior GPs consented to or procured the necessary approvals for sale or assignment of these assets; (

d) Within a week Caleb Management Ltd. entered into an agreement to sell these same assets to F8 Investments LP, a limited partnership es tablished by the Defendants , Darrell Remai and Sirous Tosh, for a profit of $1,525,000. As a part of that transaction Caleb Management Ltd. and the two Prior GPs for Cathedrale Retirement LP and Grand Retirement LP agreed to capitalize the two debentures to include accrued interest and to secure the obligations with the property owned by those two LPs; (

e) Again, the Prior GPs consented to or procured the necessary approvals for the sale and assignment of the debentures to F8 Investments LP; (

f) F8 Investments LP funded the purchase of the assets from Caleb Management Ltd. by the issuance of partnership units to two arm’s length purchasers and to Caleb Management Ltd.; (

g) The funds generated from the sale of the partnership units in F8 Investments LP were paid to close the purchase of the assets from Caleb Management Ltd. who in turn used the proceeds to close its purchase of those same assets and to acquire the partnership units in F8 Investments LP. [ 12 ] When the alleged facts relating to the Securities Flip are fashioned into causes of action the Plaintiffs say that the Prior GPs have breached a management contract, various fiduciary duties and a duty of honesty in contractual performance.

They allege that many of the remaining defendants participated in and benefited from the Securities Flip. The conduct giving rise to the Securities Flip, according to the Plaintiffs, took place over the course of about a year ending in the spring of 2014. [11] The plaintiffs describe the securities flip as the central series of transactions at issue in their action. However, it is also clear that the scope of the action is not bounded by these events. [12] It was not disputed before the Chambers judge that, during the securities flip, Mr.

Zakreski represented the Limited Partnerships, the Prior GPs and the remaining defendant corporations that are controlled by the Individual Defendants.

C. The proposed claim against Mr. Zakreski [ 13 ] The plaintiffs’ notice of application is dated November 15, 2019. In addition to seeking an order adding Mr. Zakreski as a defendant, it requests leave to amend the statement of claim to particularize several causes of action against him arising from his involvement in these matters. The proposed allegations against Mr.

Zakreski were summarized by the Chambers judge as follows: [ 14 ] The Plaintiffs allege that the Proposed Defendant has breached his contractual, fiduciary and professional obligations to the LPs and was negligent in his representation of them when, among other things, he acted for other parties with conflicting interests, failed to advise the LPs that he was acting for the other parties with conflicting interests and failed to provide appropriate advice and protect the interests of the LPs. [ 15 ] At para 126 of the proposed statement of claim the Plaintiffs as well allege that the Proposed Defendant was negligent in identifying that the Defendants were acting unlawfully and in a breach of their fiduciary obligations to the LPs “in orchestrating the Securities Flip”.

In addition, they allege that the Proposed Defendant participated and assisted in the “fraudulent and dishonest conduct” of the Defendants “in orchestrating the Securities Flip” and that such conduct constituted “knowing assistance in breach of a fiduciary duty”. [ 16 ] When the scope of the allegations against the Proposed Defendant are translated into consequences the Plaintiffs allege that had they been properly represented by the Proposed Defendant that the Securities Flip would not have occurred or it would have occurred only after they would have had the opportunity to participate in the benefits. [ 17 ] In the draft statement of claim the Plaintiffs also: (

a) Allege in para 126 that the Proposed Defendant, because of the “knowing assistance in the breach of a fiduciary duty”, must disgorge all revenues and profits received through such knowing assistance including those revenues and profits received from the representation of the Defendants in connection with the Securities Flip; (

b) In para 127 seek damages against the Proposed Defendant for loss of opportunity and loss of property value as a result of the transactions that make up the Securities Flip along with “such further and other losses and damages as may be proven at trial”; and (

c) In para 138(

c) total their claim against the Proposed Defendant for breach of contract, breach of fiduciary duties, negligence and knowing assistance at, “at least”, $2,535,000. [14] The application was supported by two affidavits sworn by Timothy Krivoshen, the president of each of the plaintiffs. His first affidavit, sworn November 7, 2019, explains that because Mr. Zakreski represented the Limited Partnerships and the Prior GPs, production of Mr. Zakreski’s legal files became an issue in the action. These files were produced to the plaintiffs on December 6, 2017 and February 14, 2018. In May 2019, Mr.

Remai testified in questioning that Mr. Zakreski had acted not only for the Prior GPs but also for Caleb Construction Ltd., F8 Investments Inc., F8 Investments LP, Caleb Management Ltd., Red Holdings Inc. and Tosh Consulting Inc. Mr. Krivoshen’s evidence is that he had been “unaware of the extent of Mr. Zakreski’s involvement with and representation of [these] parties in a potential or actual conflict of interest, as detailed below, until the questioning of Mr. Remai in May, 2019”. The remainder of Mr. Krivoshen’s first affidavit provides evidentiary support for the allegations made against Mr. Zakreski. [15] Mr.

Krivoshen’s second affidavit, sworn March 13, 2020, explains that the plaintiffs had obtained additional disclosure of documents from two third parties in February of 2020. Mr. Krivoshen states that, as a result of his review of these records, he “became aware, for the first time, of additional details with respect to the Securities Flip … and specifically with respect to Mr. Zakreski’s involvement in the Securities Flip”, which he then explained. [16] Mr. Zakreski did not file any evidence in reply to the plaintiffs’ application. Instead, he relied on the record from the proceedings in the action.

The existing defendants took no position on the application. D. The Chambers Decision [17] The Chambers judge noted that “[t]here are five circumstances set out in Rule 3-78(2) [of The Queen’s Bench Rules ] which allow for the adding of a defendant. If any one of them are satisfied the court ‘may’ order that the Proposed Defendant be added as a defendant in this action” (at para 26).

He identified a two-step process to be followed in the exercise of this discretion, namely, to first determine “if the Rule is sufficiently wide to permit joining the new party and, if so, then determine on a balance of convenience test whether the court should exercise its discretion to add the party” (at para 27, emphasis added). [ 18 ] At the first step, he found that the requirements for joinder under Rule 3-78(2) of The Queen’s Bench Rules [ Rules ] had been met: [41] It is obvious that the Plaintiffs have satisfied a number of the criteria found in Rule 78-2(a)-(

d) which opens the door to add the Proposed Defendant as a party. It remains to be determined, following the two-step process set out in [ MFI Ag Services Ltd. v Sotkowy , 2013 SKQB 161 , 419 Sask R 256] and [ Nagy v Wu , 2012 SKQB 261 , 400 Sask R 183], whether under Rule 3-78(2)(

e) the “presence” of the Proposed Defendant in this proceeding will “promote the convenient administration of justice”. (Emphasis added) [ 19 ] Turning to the second step in his analysis – that is, the balance of convenience – the Chambers judge began by reviewing what impact the addition of Mr. Zakreski would have on the existing action. In this regard, he concluded that because Mr. Zakreski’s files had already been produced in the action, it was unlikely that additional document production would be necessary.

He also determined that, because questioning had not been completed, it was unlikely that the questioning of Mr. Zakreski would cause delay. His assessment was that the joinder of Mr. Zakreski might add “at least a few days of trial time”, but only because of the addition of experts, given that Mr. Zakreski would “no doubt be called to testify even if he is not added as a party” (at para 44).

[ 20 ] The Chambers judge noted that “[a]dding the Proposed Defendant may give rise to evidentiary issues particularly since he has acted for both the Plaintiffs and the Defendants”. However, he concluded that “those issues will be raised by the Plaintiffs and the Defendants as it is their privilege and confidentiality that will be at issue and are likely to arise even if the Proposed Defendant is not added as he will no doubt be called to testify in any event” (at para 45). [ 21 ] The Chambers judge noted that the “presence of the Proposed Defendant as a party to this litigation is not essential to it”.

Instead, it “can carry on and be tried with him as a witness” (at para 46). He stated that adding Mr. Zakreski “will change the nature of the litigation as issues arising in professional negligence cases are not currently found”. This, he said “will no doubt complicate an already complicated action” (at para 47). He then identified that the allegations involving Mr.

Zakreski dealt with the securities flip only, the events of which “spans little more than a year”, whereas the “evidence with respect to the remaining issues spans about six years” (at para 49) and “does not engage the Proposed Defendant” (at para 50).

However, the Chambers judge did not attempt to assess what significance this might have to the length of the trial, stating that the case was “at too early a stage to reliably estimate the length of the trial with or without the Proposed Defendant” (at para 51). [ 22 ] The Chambers judge said that, while he could not “estimate the time that the Proposed Defendant would be a spectator at the trial if he were added”, all that time would be “unnecessary time and expense to the Proposed Defendant” (at para 52).

He noted that a counterclaim raised issues “that do not involve the Proposed Defendant and would add to his time as a spectator” (at para 53). [ 23 ] The Chambers judge stated that while the case law “cannot be read to say that cases against professionals will not be joined with claims against others” or even that there is a presumption against doing so, “claims against professionals are unique, are not generally essential to being tried with the claims against others, complicate the claims against the others and add unnecessary expense to the Proposed Defendant and the remaining defendants”.

He said that it “is for these reasons that it may be rare to add claims against professionals together with claims against others” (at para 58). [ 24 ] Yet, he said “the balance of convenience test must consider convenience to the Plaintiffs”. In this regard, he indicated that he accepted “it is most likely accurate that there will be a saving of time and expense to the Plaintiffs if the actions against the Defendants and the Proposed Defendant are tried together rather than separately” (at para 59). He then noted that adding Mr.

Zakreski “will certainly add to the Proposed Defendant’s cost” and “will also add to the cost of the Defendants” and be inconvenient to them “as they too would be spectators for the portion of the trial dealing with the claim against the Proposed Defendant” (at para 61). [ 25 ] Finally, the Chambers judge stated that he had “also given consideration to the problems of inconsistent findings if the cases are tried separately and the possibility of having to allocate liability and damages to the Defendants and the Proposed Defendant” (at para 62).

However, he then qualified the extent to which this was a concern here: [63] I agree with cases like [ Robak Industries Ltd. v Gardner , 2006 BCSC 1628 ] where the court concluded at para 8 that there is not a great concern with the possibility of inconsistent verdicts when the case against the lawyers will turn largely on the evidence from or against them. [64] While it may be accurate to say that the Plaintiffs may succeed in proving liability against the Proposed Defendant and not the remaining defendants in relation to the Securities Flip, I do not see it as much of a possibility that the Plaintiffs can prove a damage claim (except for perhaps the disgorging of profits which is something the Proposed Defendant can only be liable) against the Proposed Defendant if none is found against the Defendants. [65] Similarly, it was not made clear to me, if liability for the Securities Flip is established against the Defendants and the Proposed Defendant, why a question of the apportionment of damages would arise. [ 26 ] The Chambers judge determined that while there were various factors that favour allowing or dismissing the application, “balancing those factors the application must be dismissed” (at para 66).

He continued his analysis as follows: [67] While delay is not a factor in dismissing the application, the added expense to the Proposed Defendant and the Defendants outweighs the benefit to the Plaintiffs as there is an insufficient overlap of the facts on all of the issues to be tried in the current action. In addition, adding the issue of solicitor’s liability to the existing action will complicate it unnecessarily. That issue can be tried in a separate action.

Finally, I have not been convinced that the presence of the Proposed Defendant as a party to this action is essential for any reason. [ 27 ] The Chambers judge concluded that the addition of Mr. Zakreski as a party to this action “will not promote the convenient administration of justice” (at para 68). III. ISSUES [ 28 ] The outcome of the plaintiffs’ appeal is determined by the answers to three questions: (

a) What is the source of the court’s discretion to authorize an amendment to a statement of claim to add a party ? (

b) What principles apply when a court considers whether to authorize an amendment to a statement of claim to add a party ? (

c) Should an order have been made naming Mr. Zakreski as a defendant? IV. ANALYSIS

A. What is the source of the court’s discretion to authorize an amendment to astatement of claim to add a party? [29] The plaintiffs’ notice of application invoked Rules 3-72(1)(c)(ii), 3-78(2) and 3-84(2). The Chambers judge approached hisdecision as if his authority to order the addition of Mr. Zakreski as a defendant was found in Rule 3-78(2). The first issue is whether theChambers judge correctly identified the source of his discretion to authorize this amendment to the statement of claim. 1. Principles of joinder [30] The rules relating to the joining and separating of claims and parties are found in

Part 3, Division 5, Subdivision 1 of the Rules,titled “Joining and Separating Claims and Parties”. Rule 3-77(1) states that a “party may join 2 or more claims in an action unless theCourt orders otherwise”. Rule 3-77(3) provides that, if there is more than one defendant, it is not necessary that each have an interest in allthe remedies claimed or sought or in each claim included in the action. [31] Rules 3-78 and 3-79 give further direction as to whom can be named as a party in a single action.

Rule 3-78 provides to aplaintiff a measure of discretion as to whom can be included as a co-claimant or as a defendant: Parties joining to bring an action 3-78(1) Persons may be joined as plaintiffs, petitioners or originating applicants in a proceeding if: (

a) they claim a remedy, whether jointly or severally or in the alternative, with respect to or arising out of the same transaction, occurrenceor series of transactions or occurrences; (

b) a common question of law or fact may arise in the proceeding; or (

c) their presence in the proceeding may promote the convenient administration of justice.

(2) Persons may be joined as defendants or respondents if: (

a) a remedy is claimed against them, whether jointly or severally or in the alternative, arising out of the same transaction, occurrence orseries of transactions or occurrences; (

b) a common question of law or fact may arise in the proceeding; (

c) there is doubt as to the person or persons from whom the plaintiff, petitioner or originating applicant is entitled to a remedy; (

d) damage or loss has been caused to the same plaintiff, petitioner or originating applicant by more than one person, whether or not: (

i) there is any factual connection between the several claims apart from the involvement of the plaintiff, petitioner or originatingapplicant; and (ii) there is doubt as to the respective amounts for which each may be liable; or (

e) their presence in the proceeding may promote the convenient administration of justice. [32] This rule is concerned with the permissive joinder of parties. It includes within its reach persons who are sometimes referred toas proper parties, because they are persons who may be made subject to the court’s determination, but whose presence is not absolutelyrequired for a court to decide the issues in the proceeding.

A proper party may, for some purposes, be distinguished from a necessary party– that is to say, a person who “should be bound by the result of the action” because the question before the court “cannot be effectuallyand completely settled unless he is a party” (Stevens v Canada (Commission of Inquiry), (FCA), [1998] 4 FC 125 (CA)at para 20, quoting Amon v Raphael Tuck & Sons Ltd., [1956] 1 QB 357 at 380, per Devlin J. (as he then was).

See also: Scharnagl(Litigation Guardian of) v Tomilin, 2005 SKCA 121 at para 24, 269 Sask R 259 [Scharnagl]; Canada (Fisheries and Oceans) vShubenacadie Indian Band, 2002 FCA 509 at para 8, 299 NR 241; and Ontario Federation of Anglers and Hunters v Ontario, 2015 ONSC7969 at para 10, 128 OR (3d) 501).

I will return to discuss the distinction between proper and necessary parties as it assists inunderstanding the interplay between Rule 3-72 and Rule 3-84. [33] Rule 3-79 identifies certain persons who must be named as a party, unless the court orders otherwise: Mandatory joining of parties 3-79(1) A plaintiff, petitioner or originating applicant who claims a remedy to which another person is jointly entitled with the plaintiff,petitioner or originating applicant shall join each person who is entitled as a party to the action.

(2) In an action by the assignee of a debt or other chose in action, whether or not The Choses in Action Act applies, the assignor must bejoined as a party unless the assignment is absolute.

(3) For the purposes of subrule (2), an assignment is absolute if it purports to assign the entire interest of the assignor, whether or not itpurports to be given by way of security or on certain trusts or otherwise.

(4) If a person ought to be joined as a plaintiff, petitioner or originating applicant but does not consent to be joined, the person must beadded as a defendant or respondent.

(5) The Court may relieve against the necessity for the joining of any person.

[34] There is no suggestion that the joinder of Mr. Zakreski is required by Rule 3-79 or otherwise. I mention Rule 3-79 only becauseit underscores that the discretion found in Rule 3-78 is that of the party initiating the legal proceeding. [35] Of course, where a claimant names a person as a defendant or respondent in a circumstance that does not fit within one of thecategories set out in Rule 3-78(2), the court may strike that party from the claim or sever the action against it.

As well, even a prima facieauthorized joinder is also subject to the court’s supervisory jurisdiction to ensure order in the prosecution and defence of claims byseparating claims or otherwise managing their conduct. Therefore, in the latter regard, while in first instance a plaintiff has broad controlover whom it sues and for what causes of action, the court may override the exercise of this discretion if the joinder of the claims or theparties, or both, may unduly complicate or delay the action or cause undue prejudice to a party.

This power is found in Rule 3-80, whichprovides as follows: Separating claims 3-80(1) The Court may make an order pursuant to this rule if: (a) 2 or more claims are made in an action or 2 or more parties join or are joined in an action; and (

b) the Court is satisfied that the joined claims or parties, or both, may: (

i) unduly complicate or delay the action; or (ii) cause undue prejudice to a party.

(2) The Court may make one or more of the following orders: (

a) an order for separate trials, hearings, applications or other proceedings; (

b) an order for one or more of the claims to be asserted in another action; (

c) an order for a party to be compensated by a costs award for having to attend part of a trial, hearing, application or proceeding in whichthe party has no interest; (

d) an order that excuses a party from having to attend all or part of a trial, hearing, application or proceeding in which the party has nointerest; (

e) an order that the action against a defendant or respondent be stayed pending the hearing against another defendant or respondent, oncondition that the party against whom the action is stayed is bound by the findings made at the hearing against the other defendant orrespondent; (

f) any other order that the Court considers just. [36] Standing behind all these Rules is s. 29 of The Queen’s Bench Act, 1998, SS 1998, c Q-1.01 [Act], which provides as follows: Multiplicity of proceedings avoided 29(1) The court shall grant to the parties to an action or matter all remedies to which the parties appear to be entitled with respect to anylegal or equitable claims that they have properly brought forward so that: (

a) all issues in controversy between the parties are determined as completely and finally as possible; and (

b) a multiplicity of legal proceedings concerning the issues is avoided.

(2) Relief pursuant to subsection (1) may be granted either absolutely or on any terms and conditions that a judge considers appropriate. [37] Together, s. 29 and the Rules I have mentioned embed the important policy objective that the multiplicity of legal proceedingsis to be avoided. The case law consistently identifies two principal reasons why this is the case – economy and justice. As for the first, aplaintiff is permitted to join multiple defendants to achieve a saving of time and costs for itself and the court. The second reason, however,has been said to be the more important one.

In a widely cited article, “Joinder of Defendants Sued in the Alternative: Solicitors as Co-Defendants” (1981) 2 Adv Q 365 at 372, Professor Garry D. Watson writes: The second policy is arguably the more important of the two because it involves a more significant value. It is concerned not merely withconvenience and economy, but with justice in terms of the ultimate outcome. … See also: Remai Financial Corp. v 568320 Saskatchewan Ltd. (1996), (SK KB), 150 Sask R 292 (QB) at paras 11–​15;and Oberhotlzer v Twedt, 2002 SKQB 78 at paras 13–14, 215 Sask R 292. 2.

The power to amend a pleading [38] Of course, pleadings are not always static. Changes to a statement of claim are sometimes necessary or considered by a claimantto be advisable. In that event, Rule 3-72(1) comes into play. It states 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. [39] In this case, because the action had been defended and the amendment to add Mr. Zakreski was not consented to, the plaintiffsrequired the court’s permission to amend the statement of claim pursuant to Rule 3-72(1)(c)(ii). [40] In addition to Rule 3-72, Rule 3-84, found within Subdivision 2 of

Part 3, Division 5, and titled “Changes to Parties”, must alsobe considered: Court may add necessary parties 3-84(1) At any stage of the action, the Court may order that any person be added as a party if: (

a) that person ought to have been joined as a party; or (

b) the person’s presence as a party is necessary to enable the Court to adjudicate effectively and completely on the issues in the action.

(2) At any stage of the action, the Court may grant leave to add, delete or substitute a party, or to correct the name of a party, and that leaveshall be given, on any terms that the Court considers just, unless prejudice will result that cannot be compensated for by costs or anadjournment.

(3) A person must not be added as a plaintiff, petitioner or originating applicant without the person’s consent in writing being filed.

(4) If a person ought to be joined as a plaintiff, petitioner or originating applicant but does not consent to be joined, the person may beadded as a defendant or respondent. [41] As I have mentioned, I will return later to discuss the interplay between Rules 3-72(1) and 3-84(2). For the moment, the pointthat I wish to make is that the court’s discretionary jurisdiction to authorize amendments to pleadings stands apart from the discretion that aplaintiff enjoys as to the choice of defendants it wishes to include in its lawsuit pursuant to Rule 3-78(2). 3.

Conclusion as to the source of the court’s discretion to authorize an amendment to a statement ofclaim to add a party to an existing action [42] It follows from this analysis that the Chambers judge misunderstood the source of his discretion whether to allow theamendments to the statement of claim. Rule 3-78(2), in which he grounded the exercise of his discretion, refers to the discretion that aplaintiff has as to whom it may name as defendants to its claim. It was not the source of the power to order an amendment to the statementof claim in this case.

As I will explain, this is not to suggest that Rule 3-78 was irrelevant; it was necessary for the plaintiffs to establishthat their amendments met the requirements of that Rule. However, in my respectful view, the Chambers judge erred in principle by notcentering his analysis in the considerations applicable to the amendment of pleadings found in the jurisprudence interpreting Rules 3-72and 3-84. [43] Of course, this error is inconsequential if the Chambers judge’s decision to center his analysis on Rule 3-78 nonetheless led himto apply the appropriate principles. I will next turn to consider this issue. B.

What principles apply when a court considers whether to authorize anamendment 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 tothe amendment 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 controversythat require 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 issuesbetween the parties. … [46] Similarly, Rule 3-72(3) requires that the parties “shall make all amendments to their pleadings that are necessary to determinethe real 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, and the other Rules I have mentioned, that a multiplicity of proceedings isgenerally to be avoided. Where a proposed amendment relates to a statement of claim, since the issues are in first instance those that are

defined by the plaintiff, this means that the analysis of an amendment request must be centered on the issues the plaintiff presents forresolution. [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, in which this Court upheld therefusal to allow an amendment to name additional defendants so that their discovery evidence could be read in evidence against them atthe trial.

Justice Richards (as he then was) held that the appeal could “be resolved on the basis that, in all of the circumstances, theplaintiff had a positive obligation to show why it was necessary to add the respondents as parties and that he failed to discharge thatobligation” (at para 20, emphasis added). He then noted that the “authorities make it clear that a person should not be named as adefendant in an action simply for purposes of obtaining rights of discovery”.

It therefore followed that, “having been examined 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 properpleading.

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 struckpursuant to Rule 173” (at para 14). The modern reference would be to Rule 7-9(2), which allows a pleading to be struck for reasons thatinclude that it: (

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

b) is scandalous, frivolous or vexatious; (

c) is immaterial, redundantor unnecessarily 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 than itwas susceptible to being struck under Rule 7-9 or which would be undone for other reasons.

For example, as I will discuss, if the joinder ofa party that is otherwise sanctioned by Rule 3-78 would nonetheless result in a pleading that would be immediately severed pursuant toRule 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 CullitonJ.A. was referring to when he said that the court’s practice is to “allow amendments to pleadings whenever it can be done without injusticeto the other 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,SS 2004, 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 toameliorate that 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, MartinJ. (as he then was) found the general rule to be as stated by Lord Esher in Steward v North Metropolitan Tramways Co. (1886), 16 QBD556 (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 no injusticeif the other side can be compensated by costs: but, if the amendment will put them into such a position that they must be injured, it oughtnot to be made.” … [51] Justice Martin also referred, to like effect, to the following passage from the judgment of Lord Justice Lindley in Steward (at559): … 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 would beoccasioned 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 throughthe grant of an adjournment. [53] The principles I have just reviewed are based on consideration of previous iterations to Rule 3-72. However, they remainaccepted as being 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 inthe context of a particular amendment application.

Nor do I intend to usurp the authority of the many decisions of this Court and the Courtof Queen’s Bench that have both established, and well-summarized, the principles that apply to applications to amend pleadings andapplied them in a nuanced way to specific cases. However, consideration of the purpose for the amendment, the propriety of the pleadingand potential 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. 2.

Interplay between Rules 3-72(1) and 3-84(2) [55] Rule 3-72(1) applies to amendments to pleadings, including those that involve the addition of a new party. It begins by statingthat a “party may amend the party’s pleading, including an amendment to add, remove, substitute or correct the name of a party”. As Ihave previously noted, Rule 3-84(2) also authorizes the court to “grant leave to add, delete or substitute a party, or to correct the name of aparty”. Both Rules, therefore, might seem to have application in a case like this, where a plaintiff is seeking to add a new defendant to astatement of claim.

It was with reference to this apparent overlap, and to Rule 3-78, that Richards C.J.S. commented that the “exact natureof the relationships between [these Rules] is not particularly clear and their interplay is the subject of ongoing consideration in the Court ofQueen’s Bench” (Arslan v Şekerbank T.A.Ş., 2018 SKCA 77 at para 81, 38 CPC (8th) 311) [Arslan].

[56] The fact that both Rule 3-72(1) and Rule 3-84(2) have possible application when a party seeks to add, remove, substitute orcorrect the name of a party would be of little consequence if the two Rules did not describe the court’s authority differently. In this regard,on its face, Rule 3-72(1)(c)(ii) confers to the court considerable discretion whether to allow an amendment by stating that a party may beadded “with the Court’s prior permission, in any manner and on any terms that the Court considers just”.

In contrast, Rule 3-84(2) suggestssomething in the nature of a mandatory duty, by stating that leave to add a party “shall be given, on any terms that the Court considers just,unless prejudice will result that cannot be compensated for by costs or an adjournment” (emphasis added). [57] Neva R.

McKeague and Christine Johnston in 2019-2020 Saskatchewan’s Queen’s Bench Rules Annotated (Regina: LawSociety of Saskatchewan Library, 2019) at 213 [Annotated Rules], suggest that “[s]ubrule 3-78(2) is applicable when a party seeks to addadditional persons as defendants whereas rule 3-84 outlines the powers of the court and principles and procedures for it to follow relatingto the joinder of parties and is primarily directed at circumstances where the court, of its own motion, concludes it is appropriate to addanother person as a party” (emphasis added).

They cite as authority Graham v Purdy, 2017 SKQB 42 [Graham]. [58] I do not accept that view. In Graham, the plaintiff asked the court to order the addition of a new defendant. Justice Labachnoted that Rule 3-84(2) “allows the Court to grant leave to add or substitute a party at any stage of the action unless prejudice will resultthat cannot be compensated for” (at para 47). I do not read that case as purporting to decide that Rule 3-84(2) only has application whenthe court acts of its own motion.

Moreover, the equivalents of Rule 3-84(2) have been interpreted to provide that a non-party may applyunder it: Friesen v Sawatsky, (SK KB), [1926] 1 WWR 484 (Sask KB) [Friesen]; and Coulson v Secure Holdings Ltd.(1976), 1 CPC 168 (Ont CA) [Coulson]. These cases rest on the idea that necessary parties should be added to an action.

Moreover, inthese decisions, the court acted on the basis of a motion brought to it. [59] The authors of the Annotated Rules may have drawn the idea that Rule 3-84 is concerned with, or principally directed towards,situations where the court acts of its own initiative because, in its introduction, Rule 3-84(1) states that “the Court may order” that anyperson may be added a party, and Rule 3-84(2) provides that “the Court may grant leave” to add, delete or substitute a party.

These phrasesstand in contrast to Rule 3-72(1)(c)(ii) which refers to a party’s entitlement to amend its pleadings with “the Court’s prior permission”.However, in many places, the Rules provide that “the Court may order” certain things in contexts where the accepted practice is that this isdone on the application of a party.

Moreover, in other places, such as Rules 6-54(1) and 11-24(2), the Rules expressly contemplate that theCourt may make an order on its own initiative. [60] Based on all of this, while I offer no comment on the court’s ability to act of its own initiative under Rule 3-84 or elsewhere inthe Rules, I find it difficult to limit Rule 3-84(2) to situations where the court acts of its own motion.

Instead, in my respectful view, theline demarking Rule 3-72 from Rule 3-84 is drawn by the distinction I have previously identified between proper parties and necessaryparties. [61] One difference between Rule 3-72 and Rule 3-84 is that the former only applies when a party seeks to amend its own pleading.In contrast, as Friesen and Coulson illustrate, even a non-party may apply under Rule 3-84.

This makes sense in the context of anamendment that relates to the joinder of a necessary party to the litigation. [62] The conclusion that Rule 3-84 is concerned with amendments relating to necessary parties is reinforced by reference to itshistory. Rule 3-84 replaced Rule 38, which provided as follows: Court may add necessary parties 38(1) The court may, at any stage of the action, order that any person who ought to have been joined as a party or whose presence as aparty is necessary to enable the court to adjudicate effectively and completely on the issues in an action be added as a party.

Misjoinder, non-joinder

(2) An action shall not be defeated by reason of the misjoinder or non-joinder of a person, and (

a) the court may decide issues or questions in dispute so far as they affect the rights and interests of the persons who are parties andpronounce judgment without prejudice to the rights of persons who are not parties, and (

b) at any stage the court may grant leave to add, delete or substitute a party, or to correct the name of a party and such leave shall begiven, on such terms as may be just, unless prejudice will result which cannot be compensated for by costs or an adjournment. Consent of added plaintiff

(3) A person shall not be added as a plaintiff without his consent in writing being filed. Nonconsenting plaintiff

(4) Where a person ought to be joined as a plaintiff but does not consent thereto he may be added as a defendant. [63] Rule 38(1) gave, like Rule 3-84(2) now gives, the court power to add necessary parties to an action. It applied where the courtdetermined that the person ought to have been joined as a party or the person’s presence as a party was necessary to enable the court toadjudicate effectively and completely on the issues in this action. As can be seen, the language now found in Rule 3-84(2) had previouslybeen embedded in Rule 38(2)(b).

Rule 38(2) concerned specifically situations where an action might otherwise be defeated by misjoinderor non-joinder of a person. Although the introductory language formerly found in Rule 38(2), that an “action shall not be defeated byreason of the misjoinder or non-joinder of a person”, has been removed from the text, Rule 3-84(2) sits nestled in the remainder of Rule 3-84, which remains focused on ensuring that the necessary parties are before the court. [64] I would reiterate Richards C.J.S.’s observation that the interplay between Rule 3-72 and Rule 3-84, and within Rule 3-84 itself,is not particularly clear.

However, there is a need to make sense of what appears otherwise to be unnecessary duplication between the twoRules. Given the overall history of Rule 3-84, the location of Rule 3-84(2) within the remainder of the Rule, and the need to read the Rule

harmoniously with Rule 3-72, I would reconcile Rule 3-84(2) with Rule 3-72 by limiting the former to situations involving misjoinder ornon-joinder of a necessary party. In other words, the original pleader can always move under Rule 3-72(1). However, Rule 3-84(2), whichmay be invoked not only by the original pleader but also other persons, applies when a request is made to add, delete or substitute anecessary party. In other contexts, such as where a person seeks to add, delete, substitute or correct the name of a mere proper party, thesole source of the power to make the amendment is found in Rule 3-72.

This understanding of the two Rules explains why the making ofan amendment is expressed in mandatory language in the former context but is stated to be a matter of discretion in the latter circumstance.That said, even where joinder is necessary under Rule 3-84(2), the court is to do so “on any terms that the Court considers just”. Withoutrestricting what those terms might be, in appropriate cases, it would seem to include the ability to make an order such as contemplated byRule 3-80. 3.

Summary of applicable principles [65] I would reiterate that the law gives plaintiffs a degree of discretion as to whom they sue, and for what causes of action, in asingle lawsuit. The law also broadly favours allowing amendments if the result is a pleading that would have been proper in first instanceunless the introduction of the amendment at a later stage of the litigation will cause undue non-compensable prejudice. [66] Reflecting these principles, where an application is required to add a defendant to an existing lawsuit, the process should unfoldas follows: (

a) If the person is a necessary party, that is to say, a person who ought to have been joined as a party or a person whose presenceas a party is necessary to enable the court to adjudicate effectively and completely on the issues in the action, the application may be madepursuant to Rule 3-84. In that case, and assuming the pleading is otherwise proper, “leave shall be given, on any terms that the Courtconsiders just, unless prejudice will result that cannot be compensated for by costs or an adjournment” (Rule 3-84(2)).

Where the test foran amendment under Rule 3-84 is otherwise met, but the court is satisfied that the joinder will unduly complicate or delay the action orcause undue prejudice to a party, the court may also make one or more of the orders referred to in Rule 3-80(2), short of actual severance,to manage the ongoing action. (

b) If the person is not a necessary party, the application must be made pursuant to Rule 3-72. The court should assess theproposed joinder through the lens of the usual test that is applied to any proposed pleading amendment. This will most often involveconsideration as to whether: (1) the proposed pleading is proper; and (2) any existing party or the proposed new party will suffer material prejudice that is not subject to amelioration – for example, byway of a grant of an order of costs or by an adjournment.

Part of deciding whether the proposed pleading is proper will involve a determination as to whether one or more of the circumstances thatare referred to in Rule 3-78 have been met – that is to say, the court must be satisfied that the person is a proper party. In this context, thecourt must also determine if the joinder, if made, would unduly complicate or delay the action or cause undue prejudice to a party. Also,from a practical perspective, the court should not make an order adding a party that would be immediately and completely undone by aseverance order pursuant to Rule 3-80(2).

Simply put, courts do not make pointless orders. That said, before dismissing a joinderapplication on this basis, the court should consider if the making of an order under Rule 3-80(2), other than severance, in conjunction withthe joinder order, would permit the joinder. I will return to discuss this further in the next

section of these reasons. If these preconditions are met, the amendment should be granted, unless there are other proper reasons for the court to refuse to exerciseits discretion to do so. 4. The test used by the Chambers judge [67] The Chambers judge did not approach the proposed joinder of Mr.

Zakreski in the way that I have described to be appropriate.Instead, he identified MFI Ag Services Ltd. v Sotkowy, 2013 SKQB 161, 419 Sask R 256 [MFI], leave to appeal dismissed, 2013 SKCA 67,414 Sask R 313, and Nagy v Wu, 2012 SKQB 261, 400 Sask R 183 [Nagy], as supplying the principles applicable to the exercise of hisdiscretion. He found the test to be as follows: [27] … These cases employed a two-step process in determining if a party should be added as a defendant.

They first determined if theRule is sufficiently wide to permit joining the new party and, if so, then determine on a balance of convenience test whether the courtshould exercise its discretion to add the party. (Emphasis added) [68] From paragraph 41 of the Chambers Decision (quoted previously), it is apparent that the Chambers judge found that the Rulesembedded a balance of convenience test in Rule 3-78(2)(e). According to this subrule, a person who does not fit one of the categories of aproper party described in subrules (a), (b), (

c) or (

d) may nonetheless be joined as a defendant if “their presence in the proceeding maypromote the convenient administration of justice”. In effect, what the Chambers judge did was to convert the final “catch-all” or generalprovision for identifying proper defendants into an additional requirement. I therefore agree with the limited partners when they argue thatthe Chambers judge proceeded based on an erroneous

interpretation of Rule 3-78(2). More importantly, and with respect, his decision alsomisinterpreted the case law suggesting that the addition of a party to an existing action is to be assessed based on a balancing ofconveniences. [69] The idea that a request for an amendment to add a party should be tested in this province based on a balancing of conveniencecan be traced back to Thames Steel Construction Ltd. v Portman (1980), (ON SC), 111 DLR (3d) 460 (Ont H Ct J (DivCt)) [Thames Steel]. Thames Steel has been widely cited in Ontario and in other provinces. In this province, Thames Steel was relied on by

Halvorson J. in Popescu v Adamache, (SK KB), [1979] 6 WWR 73 (Sask QB) [Popescu] and Goldenberg J. in PioneerTrust Co. (Liquidation) v Lebrosix Holdings Ltd. (1989), (SK KB), 78 Sask R 62 (QB) [Pioneer Trust], to justify thejoinder of parties. These cases have, themselves, been cited frequently.

In contrast to Popescu and Pioneer Trust, in Nagy and MFI, thetwo cases relied upon by the Chambers judge in this case, the courts relied on Thames Steel to deny joinder and, in so doing, spoke in moregeneral terms of a balancing of conveniences. [70] It is useful to an understanding of the so-called balance of convenience test to go back to Thames Steel. In that case, the plaintiffsued for alleged breaches of an agreement relating to the sale of a business. It sought an order adding as defendants law firms that hadacted for it and one of the defendants.

Justice Griffiths identified the “principal Rules which govern the application for the addition ofdefendants” (at 463–464) to be Rules 67, 68 and 136 of the Rules of Practice and Procedure of the Supreme Court of Ontario, RRO 1980,Reg 540. These Rules are, in large measure, equivalent to Rules 3-78, 3-77(3) and 3-84(2) of Saskatchewan’s current Rules.

After a reviewof case law, Griffiths J. summarized the principles that he found should be applied when deciding the application before him (at 467–468): On the authorities, the principles which should be considered in determining whether the joinder of defendants in one action is appropriateare these:

(1) Whether the claims of the plaintiff arise out of the same transaction or series of transactions as required by Rule 67.

(2) Whether or not there is a common issue of law or fact of sufficient importance to render it desirable that the claims against theproposed defendant be tried together.

(3) Whether the expense and delay that would be caused by compelling the plaintiff to bring separate actions against the proposeddefendant would be greatly out of proportion to the inconvenience, expense or embarrassment which that defendant would be put if theactions were tried together.

(4) On the basis of [Samuel v Klein, (ON SC), 14 OR (2d) 389 (SC (H Ct J)], if the liability of the proposed defendant iscontingent upon the plaintiff first establishing that he suffered a loss in respect of the transaction with the named defendant, then theapplication to join the proposed defendant may be considered premature.

In my view, where the alternative claims arise out of the same transaction or series of transactions and involve a common question of factor law, then the governing principle in determining whether joinder should be allowed is the third principle set out above, namely thebalance of convenience. The fact that the alternative claim against the defendants may be unnecessary, if the plaintiff succeeds against themain defendants, is only one consideration to be weighed and should not, by itself, be considered a conclusive reason for refusing thejoinder.

It must not be overlooked that by the concluding words of Rule 67 the Court is given a discretion where defendants have beenadded, to order separate trials, or make such other order as is deemed expedient if the joinder then appears oppressive or unfair. (Emphasis added) [71] As can be seen from this last passage, Griffiths J. referred to the balance of convenience as a shorthand description for aprinciple he expressed in greater detail earlier in his “third principle”, namely, “[w]hether the expense and delay that would be caused bycompelling the plaintiff to bring separate actions against the proposed defendant would be greatly out of proportion to the inconvenience,expense or embarrassment which that defendant would be put if the actions were tried together” (at 468, emphasis added).

In the end,although in his shorthand

summary Griffiths J. referred to a balancing of convenience, I do not read him as suggesting that it is an exercisethat is determined based on whether the two sides of the scale were level. Instead, joinder is to be allowed unless the tilt is strongly against(“greatly out of proportion to”) the proposed joinder. It is appropriate to note that Griffiths J. exercised his discretion by adding the partyto the claim, notwithstanding that the claim against that person was, in large measure, contingent only. [72] My understanding of Thames Steel is consistent with that offered by others.

For example, in Andy & Jean Grebely Holdings Ltd.v Commercial Union Assurance Co. of Canada, 2000 ABQB 604, 282 AR 296, Kent J. referred to Griffith J.’s balance of conveniencetest, which she then explained as follows: [5] In Thames, supra, the balance of convenience test is articulated at [468] as: whether the expense and delay that would be caused by compelling the Plaintiff to bring separate actions against the proposed Defendantwould be greatly out of proportion to the inconvenience, expense or embarrassment which that Defendant would be put if the actions weretried together. (Emphasis added) [73] Justices Morden and Perell, writing extra-judicially in The Law of Civil Procedure in Ontario, 4th ed (Toronto: LexisNexis,2020) at 554–555, take note that “for decades the trend of the jurisprudence on the joinder of causes of action and the joinder of parties toproceedings is to allow joinder and to avoid the multiplicity of proceedings if at all possible” (emphasis added).

The first of severalauthorities cited for this proposition is Thames Steel. [74] Importantly, the approach described in Thames Steel is consistent with the circumstances in which claims may be separated. Inthis regard, as I have explained, pursuant to Rule 3-80, a court may order separate trials, or make other similar management orders, only ifthe joined claims or parties, or both, may unduly complicate or delay the action or cause undue prejudice to a party. This also is not abalance that is set on level.

Instead, it is set much as described in Thames Steel and is weighted in favour of joinder, a bias that reflects thestrong judicial predilection against a multiplicity of proceedings. [75] The approach I have described for considering whether to allow a joinder has much in common with that taken when a courtconsiders whether to grant leave to issue a third party claim.

In that context, the court “considers such applications from a perspective ofbeing disposed to grant them subject to certain well-defined criteria and the need to protect the plaintiff in certain circumstances” (B. (D.) vC. (M.), 2001 SKCA 9 at para 9, [2001] 5 WWR 617).

[ 76 ] Based on all of this, in the context of Saskatchewan’s Rules , it will be less confusing if, rather than referring to “balance of convenience” when considering issues of joinder – whether in the context of an application to add a party or to sever a party from an existing claim – courts use the language of Rule 3-80. To reiterate, the question is whether the joinder will unduly complicate or delay the action or cause undue prejudice to a party . Moreover, the court must also be mindful of the broad power to manage an action in a way that is faithful to the objectives behind joinder.

In this regard, I would return to the guidance offered by Griffiths J. in Thames Steel , made with reference to then Ontario Rule 67: “the Court is given a discretion where defendants have been added, to order separate trials, or make such other order as is deemed expedient if the joinder then appears oppressive or unfair” (at 468).

I take from this the suggestion that, before rejecting joinder because of the inconvenience, expense or embarrassment associated with it, a court should examine if there are other trial management techniques that might still render it more desirable to allow the joinder – but with terms – than to reject it completely. This is the power embedded in Rule 3-80(2) of this province’s Rules .

In short, joinder should not be rejected too quickly. [ 77 ] In this case, the Chambers judge approached his analysis on the basis that if the balance of convenience tips even slightly against the proposed joinder it should be rejected. He failed to recognize the strong tilt in favour of permitting the plaintiffs to choose whom to sue and for what causes of action; a choice that will be displaced only if the court is satisfied that the proposed joiner will unduly complicate or delay the action or cause undue prejudice to a party.

In short, the Chambers judge applied the wrong test and set the bar for allowing the amendment too high. C. Should an order have been made naming Mr. Zakreski as a defendant? [ 78 ] Because the Chambers judge took an incorrect approach in his assessment of the application, it falls on this Court to determine if an order should have been made naming Mr. Zakreski as a defendant. [ 79 ] No party has argued that Mr. Zakreski is a necessary party to the existing action. The claims against the existing defendants can be adjudicated without Mr.

Zakreski being a party to the action. [ 80 ] On the other hand, the plaintiffs have met several, if not all, of the prerequisites for naming Mr. Zakreski as a proper defendant. This was acknowledged by the Chambers judge when he described it to be “obvious that the Plaintiffs have satisfied a number of the criteria found in Rule 78-2(a)-(d)” (at para 41). Mr. Zakreski did not argue otherwise. [ 81 ] Mr.

Zakreski’s counsel also conceded that, if he had been named as a defendant when the statement of claim had first issued, there would have been no basis on which the claim against him might be struck out or even severed from the claims made against the other defendants. I take from this that, notwithstanding the factors referred to by the Chambers judge in his weighing of conveniences, at the end of the day, it cannot be said that the joinder will unduly complicate or delay the action or unduly prejudice Mr.

Zakreski so as to compel the making of an order under Rule 3-80. [ 82 ] Even with this concession, it is useful to note that it is hard to see how the joining of the claim against Mr. Zakreski to the existing claims could be said to unduly complicate or delay the action or cause undue prejudice to the existing defendants. In this regard, the Chambers judge found that the joinder would not lengthen the time needed to complete questioning. He also found that the joinder might add only a few days of trial time. Moreover, unless Mr.

Zakreski agreed to be bound by the finding of the trial of the claim against the existing defendants (a concession he did not offer), there would be a significant duplication of evidence between the trial of the claim against the existing defendants and a second, separate, trial of the claim against Mr. Zakreski. [ 83 ] I am aware that the Chambers judge was of the view that the addition of a claim of professional negligence would complicate an already complicated action. However, it is hard to characterize this as an undue complication, given that the facts that would underpin the claim against Mr.

Zakreski are largely shared with the claims against the other defendants and, by the Chambers judge’s own assessment, the additional evidence that would be required is limited to that of experts. A good measure that the inclusion of the claims against Mr. Zakreski would not unduly complicate the existing action is that the existing defendants did not raise any concern that the joinder of Mr. Zakreski would have this effect or otherwise cause them prejudice. [ 84 ] Mr.

Zakreski can claim to be prejudiced by being included in the existing action only to the extent that he has no interest in part of the evidence relating to some of the allegations against the existing defendants or if some prejudice arises from the timing of the joinder. As to the first, even if Mr. Zakreski turns out to be a spectator at parts of the trial, it is unquestioned that he has a direct interest in the securities flip allegations. Moreover, since (as found by the Chambers judge) Mr.

Zakreski is likely to be a witness in the action against the existing defendants, one consequence of keeping the claims separate would be that he would be required to testify twice. Considering all of these matters together and given the centrality of the securities flip allegations to the claims against both the existing defendants and to the claim against Mr. Zakreski, it is hard to describe any prejudice that he might suffer as a result of the claim against him proceeding together with the claim against the existing defendants as being undue. [ 85 ] I have reached the conclusion that the joinder of Mr.

Zakreski to the existing action will not unduly complicate or delay it or cause any party undue prejudice with reference only to factors relating to economy or efficiencies. When consideration of the risk of inconsistent verdicts is put into the mix, the conclusion that Mr. Zakreski could not have sought severance if he had been joined from the outset seems irresistible. [ 86 ] This leaves the question of whether Mr.

Zakreski will experience any material adverse prejudice, associated with the timing of the introduction of the claim against him, that cannot be compensated for in some way, such as by an order of costs or adjournment. In this regard, Mr. Zakreski did not object to the amendment because of the expiration of a limitation period. He does, however, raise several other points. [ 87 ] Mr. Zakreski submits that, because he was not named as a defendant from the outset, he was not able to participate in the mandatory mediation that occurred at the close of pleadings pursuant to s. 42 of the Act .

However, even leaving aside the fact that it is always open to parties to explore settlement, Rules 4-11(1)(a)(ii) and 4-12(1) embed an obligation to do so before a pre-trial conference is held. Further, Rule 4-12(3) describes the “goals” of a pre-trial conference as including the exploration of settlement options. Based on all

of this, the fact Mr. Zakreski did not have the opportunity to participate in a previous mediation is too ethereal to serve as a foundation to deny his joinder at this stage. [ 88 ] Mr. Zakreski also says that, because he has not been a defendant from the outset, he has been denied the opportunity to watch the questioning of other parties as it occurred. However, questioning is ongoing and transcripts exist for the questioning that has occurred. There are many cases where amendments have been allowed at much later stages to a proceeding than this.

I therefore reject the fact that some questioning has occurred as a reason to deny the joinder. [ 89 ] I would add, for completeness, that Mr. Zakreski did not suggest that there was any other reason to deny the amendment naming him or the other associated amendments. In this regard, for example only, there is no suggestion that his joinder is being sought only to conduct discoveries of him, as was the case in Scharnagl . There is also no suggestion that there was any impropriety associated with the plaintiffs’ original decision not to name Mr.

Zakreski or that they had in any way improperly delayed in bringing their amendment application forward. The plaintiffs have also explained why Mr. Zakreski was not named as a defendant when the statement of claim was issued. In this regard, they say it was when they learned of the nature and extent of Mr. Zakreski’s involvement in the securities flip and the other transactions that they sought to add him to the action. [ 90 ] At the end of the day, considering the applicable principles, I would grant the plaintiffs’ application to add Mr. Zakreski as a defendant. As I have noted, Mr.

Zakreski conceded that if it was appropriate for him to be named as a defendant, there was no basis to oppose the remaining amendments the plaintiffs sought to make to their statement of claim. V. CONCLUSION [ 91 ] For all the reasons I have given, the plaintiffs’ appeal must be allowed. The plaintiffs requested costs in this Court and in the Court of Queen’s Bench. I would order that the costs of their application to the Court of Queen’s Bench be costs in the cause. I would grant them costs against Mr. Zakreski in relation to their appeal, to be payable in any event of the cause. “Leurer J.A.” Leurer J.A.

I concur. “Richards C.J.S.” Richards C.J.S. I concur. “Kalmakoff J.A.” Kalmakoff J.A.