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Civil Litigation - CIVIL PROCEDURE - Pleadings - Amendment of - Statement of defence - Adding subsequent facts

Thursday, December 01, 2016 @ 7:00 PM  

Appeal by the plaintiff, D-Line Holdings, from a chambers judgment that permitted the defendant solicitors to amend their statement of defence. The defendants represented the plaintiff on the sale of its construction business to a third party purchaser. The December 2010 agreement contemplated payment of the $1.7 million purchase price over time, secured by a general security agreement. The security agreement was not registered until May 2011. During the ensuing period, other creditors filed security in priority to the plaintiff. In September 2011, the purchaser went into bankruptcy. The plaintiff alleged the non-registration of the security agreement in a timely manner failed to protect the balance of the unpaid purchase price. The plaintiff sought damages for negligence, breach of contract, and breach of professional duties. The defendants pled the plaintiff suffered no losses. Following discovery, the defendants sought to amend their defence to state that the plaintiff had overvalued their business by $1.3 million. A Master denied the proposed amendment. A chambers judge set aside the Master’s decision and allowed the amendment. The plaintiff appealed.

HELD: Appeal dismissed. The defendants’ evidence was sufficient to support the proposed amendments. Although the defendants’ evidence was hearsay, the plaintiff was not prejudiced by the amendments, as it was aware of the allegation of the overvaluation from another proceeding. The amendments were not caught by the exception to the general rule prohibiting hopeless amendments. To the extent that the amendment raised a defence that proved to be hopeless, such determination was best left for trial and was otherwise compensable via a costs award. There was no basis for appellate interference with the chambers judge’s discretionary decision to allow the amendment.