Attila Dogan Construction and Installation Co. v. AMEC Americas Ltd. et al., (2014) 569 A.R. 308

• Judge: Conrad, Berger and Slatter, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: January 13, 2014
• Citations: (2014), 569 A.R. 308;2014 ABCA 74

Attila Dogan Constr. v. AMEC Am. (2014), 569 A.R. 308; 606 W.A.C. 308 (CA)

MLB headnote and full text

Temp. Cite: [2014] A.R. TBEd. FE.105

Attila Dogan Construction and Installation Co. Inc. (appellant)

(plaintiff/defendant by counterclaim) v. AMEC Americas Limited, formerly AMEC E&C Services Limited and Agra Moneco Inc. (respondents)

(defendants/plaintiffs by counterclaim)

(1301-0273-AC; 2014 ABCA 74)

Indexed As: Attila Dogan Construction and Installation Co. v. AMEC Americas Ltd. et al.

Alberta Court of Appeal

Conrad, Berger and Slatter, JJ.A.

February 21, 2014.

Summary:

Attila Dogan Construction and Installation Co. (the plaintiff) was a company incorporated in Turkey and carried on business principally in the Middle East. The plaintiff had no offices in Alberta. AMEC Americas Ltd. (the defendant) was registered as an extra-provincial corporation in Alberta. The plaintiff and defendant participated in a joint venture to design and build a magnesium oxide plant in the Kingdom of Jordan for Jordan Magnesia Co. (JorMag). The project was plagued by problems. Arbitration proceedings ensued involving the joint venture and JorMag and ultimately a settlement was reached. The plaintiff then sued the defendant for damages arising out of the failure of the project. The defendant counterclaimed for 50% of the litigation costs pursuant to a claims agreement between the plaintiff and defendant. The plaintiff sought to amend the amended statement of claim to allege that the plaintiff entered into a joint venture amending agreement in circumstances of economic duress and/or undue influence (para. 25), to correct the date the plaintiff asserted its claim for damages against the defendant (para. 28), and to update its claims against the defendant (para. 60(e)) to track the proposed amendments to para. 25. The plaintiff also sought to amend its defence to counterclaim in paragraphs 4, 5 and 6, to add a claim that the defendant, as leader of the joint venture, owed the plaintiff a duty to retain independent legal counsel to act in the best interests of the joint venture, and a duty to disclose any conflict or potential conflict between the independent legal counsel and the plaintiff, and that the defendant breached that duty in retaining and continuing to obtain services from two named law firms. The plaintiff contended that the defendant's conduct constituted a breach of trust, breach of fiduciary duty and misrepresentation, rendering the claims agreement under which the defendant sought to recover litigation costs from the plaintiff invalid and unenforceable. Further, the plaintiff sought an amendment to add paragraph 11 to its defence to counterclaim to allege a failure of the defendant to provide copies of correspondence to the plaintiff.

The Alberta Court of Queen's Bench, in a decision reported (2013), 565 A.R. 1, allowed the proposed amendments to para. 28 of the amended statement of claim and the additions to paragraph 11 of the statement of defence to counterclaim. The court refused to allow the amendments to paragraphs 25 and 60(e) of the amended statement of claim or the addition of paragraphs 4, 5 and 6 to the statement of defence to counterclaim. The plaintiff appealed, arguing that the case management judge erred in setting too high an evidentiary standard for amending pleadings, misstated the law on economic duress and fiduciary duty, and failed to consider relevant evidence.

The Alberta Court of Appeal dismissed the appeal.

Practice - Topic 2101

Pleadings - Amendment of pleadings - General principles - The Alberta Court of Appeal reviewed the test for amending pleadings - The court stated that "Assuming some modest amount of evidence is provided in support, any pleading may be amended, no matter how careless or late the party seeking the amendment, subject to four major exceptions: (a) The amendment would cause serious prejudice to the opposing party, not compensable in costs; (b) The amendment requested is hopeless; (c) Unless permitted by statute, the amendment seeks to add a new party or new cause of action after the expiry of a limitation period; or (d) There is an element of bad faith associated with the failure to plead the amendment in the first instance" - See paragraphs 23 to 25.

Practice - Topic 2101

Pleadings - Amendment of pleadings - General principles - The Alberta Court of Appeal reviewed the test for amending pleadings - The court stated that "... the amount of evidence required to justify an amendment is low. It is not necessary for the amending party to show that the amended pleading can be proven at trial, nor that it meets the test for summary judgment. In Balm v 3512061 Canada Ltd., 2003 ABCA 98 at para. 29 ... it was said that 'a modest degree of evidence justifies an amendment to pleadings'. Evidence may be sufficient to support an amendment even if contradictory evidence is presented: Balm at para. 15. Even though the test is low, it is not necessarily met by producing 'one piece of evidence on each point'. However the test is formulated, the decision of the chambers judge as to whether the standard has been met is entitled to deference" - See paragraph 26.

Practice - Topic 2101

Pleadings - Amendment of pleadings - General principles - The Alberta Court of Appeal stated that any pleading could be amended, no matter how careless or late the party seeking the amendment, unless, inter alia, the amendment requested was hopeless - The court stated that "Several things might make a proposed amendment 'hopeless'. That category would include amendments that do not disclose a cause of action. There may be other circumstances where the proposed amendment is so inconsistent with the record that it could fairly be described as 'hopeless'. Here the case management judge used the expression to indicate that the appellant had not even brought forward enough evidence to meet the low evidentiary threshold required to support an amendment. The use of the term 'hopeless' in that context is not an error of law" - See paragraph 27.

Practice - Topic 2110

Pleadings - Amendment of pleadings - Adding new cause of action or "claim" - The plaintiff sued the defendant over a failed joint venture - The plaintiff sought to amend paragraph 25 of its amended statement of claim to allege that the plaintiff entered into the joint venture amending agreement in circumstances of economic duress - The case management judge refused to allow the amendment - The judge held that based upon the evidence, and in particular the undisputed fact that the plaintiff never previously attempted to avoid the amending agreement for duress, the proposed claim for duress was doomed to fail - The plaintiff appealed, arguing that the case management judge set too high a standard for the amount of evidence required to support the amendments - The Alberta Court of Appeal dismissed the appeal - The court stated that the evidentiary standard for amendments was low, but the test did not preclude all weighing of the tendered evidence by the judge - The assessment of the evidence on duress and the decision of the case management judge not to exercise his discretion to permit amendments were both entitled to deference on appeal - The plaintiff failed to demonstrate any reviewable error - See paragraphs 28 to 34.

Practice - Topic 2110

Pleadings - Amendment of pleadings - Adding new cause of action or "claim" - The plaintiff sued the defendant over a failed joint venture - The defendant filed a counterclaim for litigation costs pursuant to a claims agreement between the plaintiff and defendant - The plaintiff sought to amend its statement of defence to counterclaim to add paragraphs 4, 5 and 6, to make a new substantive allegation of a conflict of interest involving the defendant and two law firms rendering the claims agreement invalid - The defendant argued that the amendments should not be allowed because they were hopeless - The case management judge refused to allow the amendments - The plaintiff provided no evidence that would support the assertion that the defendant breached a duty by retaining and continuing to obtain services from the two law firms while those firms were in a conflict of interest - There was no evidence of misconduct on the part of either of those firms - The plaintiff appealed - The Alberta Court of Appeal dismissed the appeal - The plaintiff failed to show how this pleading could be successful - See paragraphs 35 to 39.

Practice - Topic 2143

Pleadings - Amendment of pleadings - Circumstances when amendment denied - [See both Practice - Topic 2110 ].

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 15].

Andrews v. Coxe (2003), 320 A.R. 258; 288 W.A.C. 258; 2003 ABCA 52, refd to. [para. 16].

Hua v. Optimum West Insurance Co. (2005), 209 B.C.A.C. 199; 345 W.A.C. 199; 37 B.C.L.R.(4th) 232; 2005 BCCA 123, refd to. [para. 16].

Balogun v. Pandher (2010), 474 A.R. 258; 479 W.A.C. 258; 2010 ABCA 40, refd to. [para. 17].

Indian Residential Schools, Re (2001), 286 A.R. 307; 253 W.A.C. 307; 96 Alta. L.R.(3d) 16; 2001 ABCA 216, refd to. [para. 17].

Mikisew Cree First Nation v. Canada et al. (2004), 354 A.R. 365; 329 W.A.C. 365; 33 Alta. L.R.(4th) 231; 2004 ABCA 279, refd to. [para. 17].

Burtch v. Barnes Estate et al. (2006), 209 O.A.C. 219; 80 O.R.(3d) 365; 27 C.P.C.(6th) 199 (C.A.), refd to. [para. 17].

Bodnar et al. v. Cash Store Inc. et al., [2008] B.C.A.C. Uned. 46; 2008 BCCA 192, refd to. [para. 17].

Foda v. Capital Health Region et al., [2007] A.R. Uned. 345; 2007 ABCA 207, refd to. [para. 17].

Castledowns Law Office Management Ltd. et al. v. FastTrack Technologies Inc. (2012), 533 A.R. 287; 557 W.A.C. 287; 75 Alta. L.R.(5th) 125; 2012 ABCA 219, refd to. [para. 17].

On, Pao v. Long, Lau Yiu, [1980] A.C. 614 (P.C.), refd to. [para. 18].

Progress Bulk Carriers Ltd. v. Tube City IMS L.L.C., [2012] E.W.H.C. 273; [2012] 1 Lloyd's Rep. 501 (Comm.), refd to. [para. 18].

Kolmar Group AG v. Traxpo Enterprises PVT Ltd., [2010] E.W.H.C. 113; [2010] 2 Lloyd's Rep. 653 (Comm.), refd to. [para. 18].

Ellis v. Friedland (2000), 273 A.R. 35; 88 Alta. L.R.(3d) 133; 2000 ABQB 657, refd to. [para. 20].

Mikisew Cree First Nation v. Canada et al. (2002), 303 A.R. 43; 273 W.A.C. 43; 2 Alta. L.R.(4th) 1; 2002 ABCA 110, refd to. [para. 23].

Dow Chemical Canada Inc. et al. v. Nova Chemicals Corp. (2010), 495 A.R. 338; 35 Alta. L.R.(5th) 51; 2010 ABQB 524, refd to. [para. 25].

Balm v. 3512061 Canada Ltd. et al. (2003), 327 A.R. 149; 296 W.A.C. 149; 14 Alta. L.R.(4th) 221; 2003 ABCA 98, refd to. [para. 26].

Attila Dogan Construction and Installation Co. v. AMEC Americas Ltd. et al. (2011), 530 A.R. 264; 64 Alta. L.R.(5th) 88; 2011 ABQB 794, refd to. [para. 37].

Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534; 131 N.R. 321; 6 B.C.A.C. 1; 13 W.A.C. 1, refd to. [para. 38].

O'Sullivan v. Management Agency Ltd., [1985] 1 Q.B. 428 (C.A.), refd to. [para. 38].

R. v. Neil (D.L.), [2002] 3 S.C.R. 631; 294 N.R. 201; 317 A.R. 73; 284 W.A.C. 73; 2002 SCC 70, refd to. [para. 39].

Target Holdings Ltd. v. Redferns et al., [1996] 1 A.C. 421; 187 N.R. 220 (H.L.), refd to. [para. 39].

Keneric Tractor Sales Ltd. v. Langille, [1987] 2 S.C.R. 440; 79 N.R. 241; 82 N.S.R.(2d) 361; 207 A.P.R. 361, refd to. [para. 39].

Bank of Boston Connecticut v. European Grain and Shipping Ltd., [1989] 2 W.L.R. (H.L.), refd to. [para. 39].

Counsel:

J.N. Craig, P.D. Banks and D.K. Docheva, for the appellant;

D.V. Tupper and C. Petrucci, for the respondents.

This appeal was heard January 13, 2014, before Conrad, Berger and Slatter, JJ.A., of the Alberta Court of Appeal. The following memorandum of judgment was delivered by the court on February 21, 2014.