Right time to strike – Courts less reticent to strike pleadings in Newfoundland and Labrador

John Samms, with the assistance of Olivia Bungay (summer student)

In a recent decision, S.D. v Eastern Regional Integrated Health Authority, 2021 NLSC 100, the Supreme Court of Newfoundland and Labrador denied the Plaintiff’s application to amend a Statement of Claim and issued a substantial costs award in doing so.

The case indicates that the law on applications to strike in Newfoundland and Labrador (“NL”) is loosening, as courts are following the culture shift described by the Supreme Court of Canada in order to increase the timeliness, affordability, and accessibility of the legal system.

The culture shift

In Hryniak v Mauldin¹, the Supreme Court stated that the Canadian Civil Justice System requires a culture shift in order to promote greater access to justice. Justice Brown later stated in Atlantic Lottery Corp. Inc. v Babstock², that the courts’ ability to strike pleadings that are bound to fail is an important mechanism to foster the culture shift.

Courts in NL are following suit. Earlier this year, in Kathirgamanathan v Western Regional Integrated Health Authority³, Justice Faour cited Justice Brown’s comments in Atlantic Lottery in his decision to strike the Plaintiff’s pleadings. Stewart McKelvey lawyers Twila Reid and Giles Ayers were counsel for the successful party in that case.

In the present case, in which Stewart McKelvey lawyer John Samms argued for the successful party, the NL Supreme Court again cited Justice Brown’s comments, this time to support denying an application to amend the Plaintiff’s Statement of Claim.

Background

The Plaintiff made various claims against Eastern Health and what was then the Department of Child, Youth and Family Services that ultimately boiled down to a private claim in which the Plaintiff sought the return of her children. The case involved an application by the Plaintiff to amend their Statement of Claim for the second time.

The remaining causes of action at this time, after protracted litigation in which the Court refused the Plaintiff’s first attempt to amend her Statement of Claim, were negligence, breach of fiduciary duty, misfeasance in public office, and /or abuse of authority.

The Defendants argued that the amended pleadings did not raise a triable issue, since child protection professionals cannot owe a duty to the parents of children in their care. The Defendants further argued that the amended pleadings were embarrassing and lacked sufficient particularity.

The legal test for setting aside pleadings in NL considers four principles set out in Butler v Kloster Cruise Ltd.⁴, in deciding whether to allow an amendment to a Statement of Claim. To be allowed, an amendment must:

(1) not cause injustice to the other side;

(2) raise a triable issue;

(3) not be embarrassing; and

(4) be pleaded with particularity.

The decision

Justice Chaytor denied the Plaintiff’s application to amend the Statement of Claim. On the first factor of the Butler test, she found that allowing the proposed amendments to the Statement of Claim would not bring injustice to the Defendants. However, she found that it did not raise a triable issue and further noted that it was embarrassing and lacked sufficient particularity.

The proposed Statement of Claim did not raise a triable issue

In order to raise a triable issue, the amended pleadings must disclose a reasonable cause of action. Courts apply the “plain and obvious” test, which is the same test used in an application to strike out a pleading where no cause of action is disclosed. The test, as set out in Hunt v T&N plc⁵, asks whether it was plain and obvious that the proposed pleadings disclosed no reasonable cause of action and were certain to fail.

Before applying the test, Justice Chaytor noted Justice Brown’s comments in Atlantic Lottery:

[T]he Supreme Court of Canada confirmed the importance of applications to strike as a tool in the promotion of timely and affordable access to the civil justice system. Brown J., writing for the majority stated at paragraph 18 that, where possible courts should resolve legal disputes promptly, rather than referring to a full trial. This includes resolving questions of law by striking claims that have no reasonable chance of success.

Justice Chaytor then determined whether there was a cause of action under negligence and under breach of fiduciary duty.

No cause of action in negligence

Justice Chaytor accepted the Defendants’ argument that the Supreme Court previously determined that there is no duty of care owed by child protection services to the parents of children in their care. Thus, there could not be a successful claim in negligence and no triable issue was raised.

No cause of action under fiduciary duty

Similarly, Justice Chaytor accepted the Defendants’ argument that it was already established by case law that child protection officials do not owe a fiduciary duty to parents of children in their care. As such, there was no triable issue in breach of fiduciary duty.

The proposed Statement of Claim was embarrassing and lacked particulars

Justice Chaytor accepted the Defendants’ argument that the proposed Amended Statement of Claim did not plead the elements of the causes of action and did not provide material facts on which the causes of action were based. As such, the Defendants were left to speculate as to the legal and factual basis for the claim or would have to take further steps such as serving a Demand for Particulars.

Justice Chaytor also noted that the first application to amend the Statement of Claim was more particularized than the second, despite the fact that the first application was denied on the basis that it lacked sufficient particularity.

Column 5 costs awarded

The Defendants sought solicitor-client costs to reflect the protracted nature of the litigation and the condemnable behaviour of the Plaintiff in submitting a second application to amend that contained the same problems as the first failed application.

Justice Chaytor acknowledged the legitimacy of the Defendants’ request, but noted that the second application raised a different key issue, i.e. whether there was a triable issue, that was not previously litigated.

Justice Chaytor stated that the circumstances merited a costs award above Column 3, which are the common scale at which costs are awarded, and instead awarded Column 5 costs.

Impact

This case is a useful authority for defending against a flawed application to amend a Statement of Claim or in arguing to strike a Statement of Claim.

Paired with the Kathirgamanathan decision, this case demonstrates that courts in NL are committing to the culture shift spoken of in Hryniak and Atlantic Lottery. It follows that while the Butler principles remain the same, the law on applications to strike pleadings is loosening in order to allow for more timely and affordable access to the civil justice system.

Finally, it is worth noting that elevated costs may be in order where a Statement of Claim is fundamentally flawed, or where repeated applications to amend a Statement of Claim are filed without significantly addressing the issues with the pleadings. Counsel should consider requesting elevated costs where such scenarios arise.

This article is provided for general information only. If you have any questions about the above, please contact a member of our Litigation & Alternative Dispute Resolution group.

Click here to subscribe to Stewart McKelvey Thought Leadership.

¹ Hryniak v Mauldin, 2014 SCC 7.
² Atlantic Lottery Corp. Inc. v Babstock, 2020 SCC 19.
³ Kathirgamanathan v Western Regional Integrated Health Authority, 2021 NLSC 89.
⁴ Butler v Kloster Cruise Ltd., [1992] CarswellNfld 205.
⁵ Hunt v T&N plc, 1993 CanLII 43 (SCC), [1993] 4 SCR 89.