Adding a Party to An Action Rule 6-2 (7)

The following excerpt on adding a party to an action is taken from Santos v Santos estate 2023 BCSC 1067

In Alexis v. Duncan, 2015 BCCA 135, the Court of Appeal discussed the scope and operation of R. 6-2(7):

[14] Rule 6-2(7) governs the addition and substitution of parties. A court may add a party if one of three circumstances exist. Two of the circumstances are set out in R. 6-2(7)(b). Rule 6-2(7)(c) sets out the third circumstance.

[15] Rule 6-2(7)(b) is concerned with remedying defects in the proceedings as they stood prior to the application to add a party. It has a narrow application. Under R. 6-2(7)(b) the court must decide if the person ought to have been joined as a party or the person’s participation in the proceeding is necessary to ensure that all matters may be effectually adjudicated: … The discretion to add a party under R. 6-2(7)(b) exists if one of the conditions in subsections (i) and (ii) is established:… However, “if neither of the prerequisite conditions is established then there is no discretion in the chambers Judge and he must refuse the application”…

ii. Rule 6-2(7)(b)

67 Rule 6-2(7)(b) is engaged if the proposed new party is deemed necessary to the proper conduct of the proceeding. It is not enough that their participation as witnesses is “merely convenient”: Kitimat (District) v. Alcan Inc., 2006 BCCA 562 at para. 29.

iii. Rule 6-2(7)(c)

68 In Madadi v. Nichols, 2021 BCCA 10 at paras. 22-24, Justice Fisher reviewed the principles underpinning the more expansive R. 6-2(7)(c):

[22] Rule 6-2(7)(c) is broader and therefore more commonly relied upon. A plaintiff applicant must establish that there is a question or issue between the plaintiff and the proposed defendant that relates to or is connected with the relief, remedy, or subject matter of the proceeding. This threshold is low. It is generally expressed as establishing a real issue between the parties that is not frivolous, or that the plaintiff has a possible cause of action against the proposed defendant: The Owners, Strata Plan No. VIS3578 v. John A. Neilson Architects Inc., 2010 BCCA 329 at para. 45 [Neilson Architects]; Strata Plan LMS 1816 v. Acastina Investments Ltd., 2004 BCCA 578 [Acastina]; and MacMillan Bloedel Ltd. v. Binstead et al. (1981), 1984 CanLII 351 (BC CA), 58 B.C.L.R. 173 (C.A.) [Binstead]…

o [23] This threshold requirement is usually met solely on the basis of the proposed pleadings, but the parties may provide affidavit evidence addressing it. If evidence is provided, the court is limited to examining it only to the extent necessary to determine if the required issue between the parties exists; it is not to weigh the evidence and assess whether the plaintiff could prove the allegations: Neilson Architects at para. 45, citing Acastina and Binstead. Whether or not evidence is provided, it is necessary for the court to examine the pleadings in order to determine whether the plaintiff has a possible cause of action against the Proposed Defendants…

o [24] If this requirement is met, the court must next determine whether it would be just and convenient to decide the issue between the parties in the proceeding. It is in relation to this issue that evidence is more commonly provided. This is a discretionary decision, which discretion must be exercised judicially, and in accordance with the evidence adduced and the guidelines established in the authorities. In Letvad, this court adopted a list of factors to be considered from Teal Cedar Products (1977) Ltd. v. Dale Intermediaries Ltd. (1996), 1996 CanLII 3033 (BC CA), 19 B.C.L.R. (3d) 282 (C.A), a decision that addressed the amendment of pleadings after the expiry of a limitation period. These factors include the extent of the delay, the reasons and any explanation for the delay, the expiry of a limitation period, the degree of prejudice caused by the delay, and the extent of the connection, if any, between the existing claims and the proposed new cause of action: Teal Cedar at para. 67; Letvad at para. 29; see also Chouinard v. O’Connor, 2011 BCCA 161 at para. 21. In the context of adding parties, the last Letvad factor may be more accurately described as the extent of the connection, if any, between the existing claim and the parties to be added.

o [25] The existence of a limitation defence is an important factor, as such a defence is extinguished if the proposed defendant is added: Limitation Act, R.S.B.C. 1996, c. 266, s. 4(1)(d), repealed and replaced with Limitation Act, S.B.C. 2012, c. 13, s. 22(1)(d); and Anonson v. North Vancouver (City), 2017 BCCA 205 at para. 13. However, this is not determinative…

iv. The Relevance of the Applicant’s Delay

69 The greater the applicant’s delay, the less likely the application to add will be granted. However, (1) the applicant can reduce the weight of any delay by offering an explanation, and (2) in terms of explaining the delay, the conduct of other parties may be relevant.

70 In Neilson Architects, Justice Neilson allowed an appeal and added parties to this construction defects litigation. At paras. 88-89, she noted that there was a reasonable explanation for the delay, in that although the Strata Corporation knew of the defects early on, it was assured that they would be remedied. The Strata Corporation eventually brought an action against certain defendants but was advised by its first lawyer to defer doing so against others. The court noted that this advice was erroneous. The court noted that there is a distinction between relying upon incorrect advice and purely dilatory behaviour on the part of the applicant:

o [86] Turning to the Letvad factors, there is no question there was a lengthy delay in bringing the application to join the respondents. Twelve years had passed since the Metropolitan was completed and the owners received the first report on problems with water penetration. Five-and-a-half years had passed since the writ was filed in the original action.

[87] However, delay is not the only governing factor. The chambers judge was also required to consider the owners’ explanation for the delay, and whether the respondents had established prejudice arising from the delay. There is nothing in his reasons to suggest he considered these factors. I am persuaded that his failure to do so led him to err in exercising his discretion to find that it was not just and convenient to join these respondents. I am also satisfied that if he had considered these matters, he would have reached a different conclusion.

[88] The record demonstrates a reasonable explanation for a large part of the owners’ delay in bringing the joinder application. While they had early knowledge of the Metropolitan’s water problems, between 1995 and 1999 the original defendants reassured them these would be repaired, and remediation efforts took place. The respondents N.A.P. and Plaza 88 were directly involved in these.

[92] In Teal Cedar Products (1977) Ltd. this Court commented on the role played by lawyers’ advice in providing an explanation for delay. The plaintiff had received advice from its counsel that its claim against a defendant insurer for coverage would not succeed. Subsequent events led the lawyer to revise that opinion and the plaintiff brought an unsuccessful application to add a claim for coverage against that defendant after the limitation period had expired. On appeal, Finch J.A., writing for the Court, reversed that decision and allowed the new claim. He held that fault or culpability in the sense of intentional but mistaken conduct was not a decisive factor, and the initial advice from the plaintiff’s counsel provided a satisfactory explanation for the delay in adding the claim. In deciding whether joinder was appropriate, a party should not be punished for having obtained mistaken advice.

The Question of Prejudice

71 When a plaintiff seeks to add a party outside of the limitation period applicable to the claim against the new party, there is a presumption of prejudice in favour of the party opposing the application. The onus then shifts to the plaintiff to lead evidence rebutting the presumption of prejudice: Med Finance Co. S.A. v. Bank of Montreal, 1993 CanLII 1428 (B.C.C.A). However, prejudice is presumed only with respect to the period which has passed since the limitation period expired, plus one year to allow for service of a claim: McIntosh v. Nilsson Bros. Inc., 2005 BCCA 297 at paras. 7-8; Thind v A.M. Fredericks Underwriting Management Ltd., 2020 BCSC 1733 at para. 29. In Tundra Helicopters Ltd. v. Allison Gas Turbine, 2002 BCCA 145, Justice Esson (as he then was) noted that the “presumption of prejudice” is not a presumption of law, but rather one of fact that is used in the absence of any other evidence. The whole context must be considered and prejudice measured by assessing whether there can be a fair trial. Given that prejudice to the defendants is most likely known by them, the failure to adduce evidence of it can be telling.

72 Actual prejudice may arise, for example, where the defendant has destroyed or discarded documents after the expiration of the limitation period which could have been important evidence in the defence of the proposed claim, or where there are faded memories or aging witnesses: Mountain-West Resources Ltd. v. Fitzgerald, 2005 BCCA 48 at para. 13; Nilsson Bros. Inc. at paras. 6-8.
73 The court in Eastern Platinum Limited v Cameron, 2020 BCSC 1353 summarized the proper approach to the question of prejudice as follows:

[85] The Court of Appeal has stated that an amendment must not be refused merely because it may be potentially prejudicial to the other party. Evidence of actual prejudice that could not be compensated by costs must be present: Langret Investments S.A. v. McDonnell, 1996 CanLII 1433 (BC CA), [1996] B.C.J. No. 550 (C.A.) at paras. 43 and 46.

[86] Regard must be had to both presumed and actual prejudice. With regard to presumed prejudice, Madam Justice Martinson in Weinlich v. Campbell, 2005 BCSC 1865 at paras. 54-55 explained that there must be a “balancing of prejudices”, although the prejudice to the plaintiff in refusing an amendment will generally be greater than the prejudice to the defendant in granting the amendment. She stated:

[54] … With respect to presumed prejudice, a plaintiff is prejudiced if a party is not added to an action when, by virtue of the expiry of a limitation period, the pursuit of a claim in a separate action is impossible. Conversely, prejudice to a proposed defendant is presumed if the addition is contemplated after the expiry of the limitation period, because any possible limitation defence is lost.

[55] As explained by Master Bolton in Takenaka v. Stanley, 91 B.C.L.R. (3d) 179, 4 C.P.C. (5th) 258, 2000 BCSC 242 at para. 41, the prejudice to a plaintiff in the former situation will usually be greater than the prejudice to a defendant in the latter. In the former situation the plaintiff loses the opportunity to ask a court to consider the claims that the defendant has done something the law of the land considers actionable. In the latter, the defendant loses a windfall opportunity to avoid entirely any potential liability. Their respective situations may be precisely balanced in financial terms, but not as a matter of justice. Master Bolton concludes: “[a] right to seek justice cannot be fairly equated with a right to cut short the search without an answer.”

[87] Counsel for the defendants rely heavily on the presumed prejudice argument in this case. As noted in Weinlich, on the level of principle this argument taken alone may not necessarily weigh in their favour. However, it is not necessary for me to decide the issue on the basis of presumed prejudice alone since in my view the defendants’ argument fails on the basis of actual prejudice.

[88] With respect to actual prejudice, the onus is on the party who opposes the amendment to demonstrate that the prejudice affects the party’s ability to respond to the amended claim: Weinlich at paras. 56-58; Yablonski v. Corp. of the City of Cranbrook, 2002 BCSC 1875 at para. 37. In meeting this onus, the respondent must adduce evidence that the alleged delay would prejudice their ability to bring or defend an action such as lost witnesses or evidence or destruction of documents: John A. Neilson Architects at paras. 96-102; Levy v. Petaquilla Minerals Ltd., 2012 BCSC 776 at para. 14.

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