IN THE PROVINCIAL COURT OF BRITISH COLUMBIA

[1]         On March 3, 2020, the claimant, the Executor of the Estate of Robert Patterson on behalf of the Estate (the “Estate”), filed a small claims action for debt in the amount of $15,000, plus interest. The Estate alleges that in or about February, 2018, the decedent, Robert Patterson, loaned the defendants the sum of $15,000 and, despite having demanded repayment, the defendants have “neglected, refused, or otherwise failed to pay the sum back.”

[2]         By way of reply, the defendants appended a document marked as Exhibit A to a Reply Form. Exhibit A is a letter previously sent to the Estate by the defendant Alistair Vigier responding is some detail to the claim. Within that letter, a legal reply of sorts can be gleaned, including that the claim is statute barred by virtue of the Limitation Act, [SBC 2012] c. 13, and that the monies advanced by the decedent were neither a litigation loan, nor a debt.

[3]         Before the court today is an application by the defendants for an order striking the claim on the grounds it cannot succeed because it is self-evidently time barred. The Estate opposes the application to strike; in turn, it seeks an order granting it leave to amend its pleading to include a claim for damages for negligent misrepresentation, breach of trust and/or unjust enrichment. Although these new claims are well outside the time limit for filing pursuant to the Limitation Act, the Estate submits it is in the interests of justice, and consistent with the purpose of Small Claims Act, to allow the amendments so that all of the issues in this matter can be fully and finally litigated.

[4]         These applications raise two issues. In respect of the defendants’ application, the question is whether the claim is time barred. In particular, it must be determined when the claim was discovered or discoverable for the purpose of s. 8 of the Limitation Act. A significant question in this regard is whether, as the Estate alleges, the defendants acknowledged liability in respect of the claim on or about March 4, 2018. If a finding in this regard is made in favour of the Estate, the claim would have been filed just inside the two year limitation period.

[5]         The Estate acknowledges that it requires leave to file an amended claim at this point in the litigation. The question on this leave application is whether the court should exercise its discretion to allow the proposed amendments given the purpose and intent of the Limitation Act.

[6]         As the defendants emphasize in their application to dismiss, the claim filed on March 3, 2020, refers to events that occurred in or around February, 2018. It is on that ground alone, the defendants submit, that the claim is clearly statute barred by the Limitation Act. The Estate does not deny that the claim had largely crystallized by February, 2018. It maintains that despite this, the defendants acknowledged liability on March 4, 2018. As such, pursuant to s. 24(1)(a) of the Limitation Act, the claim must not be considered to have been discovered before March 4, 2018. It would therefore follow that the claim was filed within the time limits for filing, albeit just in time.

[7]         These submissions raise the question of discoverability for the purpose of the Limitation Act. In determining this question, this court is asked to consider not only the pleadings, but also evidence introduced in affidavit and other form by both the Estate and the defendants. Although the defendants have not specified the Rule of this court under which this application is brought, such applications are generally brought pursuant to Rule 16(6)(o). Rule 16(6)(o) is a catch all provision that enables a judge hearing an application to make any order, other than that particularized elsewhere in Rule 16, that a judge has the power to make. It has long been held that Rule 16(6)(o) empowers this court to make an order dismissing a claim, which a judge may do pursuant to Rule 14(i) at a settlement conference: see for example, Belanger v. AT & T Canada Inc., [1994] B.C.J. No. 2792.

[8]         Under Rule 14(i), a judge in a settlement conference may consider an application to dismiss after discussing the matter with the parties and reviewing filed documents. In Maruniak v. Teamsters National Benefit Plan, 2015 BCPC 44, Janzen PCJ held the same test for dismissal under Rule 14(i) should apply under Rule 16(6)(o). I agree. In the result, in considering this application to strike, I find that it is open to this court to consider not just the pleadings, but also the evidence filed by each of the parties. Still, to paraphrase the court in Maruniak, dismissal before trial should be used with caution, and only in the clearest of cases.

[9]         Here the question is whether it is plain and obvious in the language of the claim itself that this matter was filed after the expiry period in the Limitation Act. While the claim does refer to events occurring in February, 2018, it is not, I find, entirely clear on the face of the pleading that the claim is confined to that time period. The claim alleges a loan granted in February, 2018. It then alleges that the Estate demanded the loan be repaid and that despite that demand the defendants neglected, refused or otherwise failed to pay back the debt, despite acknowledging their liability. There is no date attached to these latter allegations. On the face of it, the claim cannot be said to be clearly time barred.

[10]      In addition to their detailed reply, the defendants have filed a number of documents related to the alleged loan and demand. These documents are composed primarily of email correspondence between Mr. Vigier, the only non-corporate defendant, and other persons, including the decedent, Robert Patterson. The Estate has filed a similar package of documents, also containing a string of email correspondence relating to the alleged loan.

[11]      The documents particularly relevant to this litigation start with a letter from Mr. Vigier addressed to “Ryan”. All parties acknowledge this person is Ryan Patterson, now the Executor to the Estate of Robert Patterson, and the person bringing this claim. In the email note, which is undated, but which Mr. Vigier submits was sent on January 27, 2018, Mr. Vigier writes asking for a $15,000 contribution from “Ryan” for a lawsuit against Hart Legal. It is not in dispute that on that same day, “Ryan” re-directed the request to his father, Robert Patterson. After seeking some clarification on the request, Robert Patterson, who styled himself as “Bob Patterson” in the correspondence, had the funds transferred to Mr. Vigier’s account. The correspondence indicates Mr. Vigier was working with out-of-Province counsel on the file, and corresponding from time-to-time with Mr. Robert Patterson’s partner, Patrick Wood.

[12]      By email note dated February 19, 2018, Robert Patterson advised Mr. Vigier that he had just met with his partners, Mr. Wood and Ryan Patterson, and the three had decided not to move forward with the litigation. Mr. Robert Patterson asked Mr. Vigier to return the funds as soon as possible. He followed up the next day with a note asking Mr. Vigier to confirm receipt of his request, and confirmation as to when he could expect to receive his $15,000 back. On that same day Mr. Vigier replied saying that he was discussing the matter with lawyers, that it was complicated, and that Mr. Patterson’s request was not his top priority at the moment.

[13]      By email dated February 21, 2018, Mr. Vigier sent Mr. Patterson a lengthy note outlining his view of the request for the return of the monies, and the possible motives of some of the parties involved. Ultimately Mr. Vigier offered Mr. Patterson two options. The first, “Option 1”, was that he would return Mr. Patterson’s contribution, minus his proportional share of the cost of accountants and lawyers to date. Under “Option 2”, Mr. Vigier offered to reimburse Mr. Patterson (hopefully) in full once the litigation with Hart Legal settled. Each of those two options came with conditions.

[14]      By email dated February 22, 2018, Mr. Patterson made a demand for a full refund. Still, that correspondence was followed by another email dated February 23, 2018, in which Mr. Patterson sought clarification of Mr. Vigier’s two options. Mr. Vigier replied indicating he would obtain an account summary from both legal counsel and the accountant. Further correspondence passed between the parties with Mr. Vigier ultimately sending Mr. Roberson a handwritten breakdown of expenses on February 27, 2018. By email dated March 2, 2018, Mr. Patterson advised Mr. Vigier that he could not accept the handwritten numbers and accused Mr. Vigier of stalling. By email dated March 4, 2018, Mr. Vigier indicated he had asked the accountant and the lawyer to send the up-date to accounts.

[15]      The Estate relies entirely on this email, dated March 4, 2018, as an acknowledgement by Mr. Vigier of liability for the debt. Mr. Vigier denies it constitutes such an admission. He submits that the claim was discoverable by no later than February 22, 2018, the date of Mr. Patterson’s demand letter.

[16]      Section 8 of the Limitation Act sets out the general discovery rules necessary to determine when the time limit for bringing an action or a claim commences. For convenient reference, s. 8 provides as follows:

[17]      By February 22, 2018, the date the demand letter was sent, Mr. Robert Patterson knew that an alleged loss had occurred. This was because at that point Mr. Patterson believed that Mr. Vigier was obligated to refund his $15,000 contribution to the Hart Legal litigation fund. He knew as well, as evidenced by the demand letter, that Mr. Vigier was not readily going to return the monies to him, at least in whole, or, alternatively, at any time before the settlement of the litigation. These facts alone support Mr. Vigier’s submission that the claim was discoverable for the purpose of the Limitation Act on or before February 22, 2018.

[18]      While not conceding this point, the Estate maintains that in any event, Mr. Vigier caused the limitation period to extend to at least March 4, 2018, by acknowledging liability on that date in the March 4 email correspondence. The Estate relies on s. 24(1) of the Limitation Act which provides that:

[19]      I find that Mr. Vigier’s March 4, 2018 email to Mr. Patterson is not an admission of liability for the return of the whole of his $15,000 contribution to the litigation fund, but it is not so clear that the note is not an admission of liability for at least a part of that money – viz., Mr. Robertson’s contribution minus his prorated share of the litigation expenses to that date. Among other things, in the March 4 email letter, Mr. Vigier continues to offer the possibility of a partial refund under his “Option 1”. Of course, Mr. Vigier also offers Mr. Patterson the possibility of a return of the whole of his contribution once the litigation is settled (presumably in favour of the plaintiffs). This latter offer has no bearing on the limitation argument except only that it confirms Mr. Patterson has a right to a refund of his contribution at some point, in some amount.

[20]      Rule 16(6)(o) of the Small Claims Rules enables this court to strike out a claim where it is plain and obvious the claim cannot succeed. Among other things, the Rule applied in this manner is consistent with the purpose of the Small Claims Act, which is to allow claims in this court to be resolved in a just, speedy and inexpensive manner. In my view, it is not so clear that this claim cannot succeed, not because it could not have been discovered before March 3, 2018, but because it is not so plain and obvious that Mr. Vigier did not admit at least some liability for Mr. Patterson’s contribution on March 4, 2018. I find this is a matter that cannot be resolved at this stage; rather, it should proceed to trial. There, after hearing from Mr. Vigier, a trial judge will be in a better position to assess his meaning in the March 4 memo.

[21]      For these reasons the application to strike the claim is denied.

[22]      Having denied the defendants’ application to strike the claim, it is necessary to go on to consider whether to grant the Estate leave to amend its claim to add other causes of action.

[23]      The Estate seeks leave pursuant to Rule 8(1)(b) of the Small Claims Rules to amend its claim to add claims for damages for negligent misrepresentation, breach of trust, and unjust enrichment. There is no change to the damages claimed; the Estate still seeks $15,000, plus interest, and fees for filing and service.

[24]      These claims are in addition to the existing claim which alleges simply that Mr. Patterson loaned $15,000 to one or all of the defendants, that he demanded repayment and that the defendants refused or otherwise failed to pay the debt back.

[25]      In the proposed new claim, the Estate alleges that the defendant, Alistair Vigier, made various representations to Mr. Robert Patterson concerning the litigation which were “untrue, inaccurate and misleading.” The Estate alleges that Mr. Vigier had a special relationship with Mr. Patterson and as such knew Mr. Patterson would rely upon his representations. The Estate alleges further that Mr. Vigier held Mr. Patterson’s deposit in trust until Mr. Patterson authorized the use of the funds, which was never done. Finally, it alleges that Mr. Vigier or the other corporate defendants were unjustly enriched to the detriment of Mr. Patterson without juristic reason.

[26]      As the parties have now proceeded past the settlement conference stage, the Estate cannot amend its claim without leave of the court by virtue of Rule 8(1)(b) of the Small Claims Rules. More importantly, the proposed amendments contain three new causes of action which are now well outside the time limit for filing under the Limitation Act. On the face of it, the claims are statute barred. However, s. 22 (5) of the Limitation Act grants courts a discretion to allow an amendment of a pleading even despite the expiration of a limitation period. Pursuant to s. 22(5):

[27]      In support of its application to amend, the Estate relies on Pouliot v. University of British Columbia, [2017] B.C.J. No. 1894 largely (given the result in that case) to put before this court the various factors a court should consider in granting such an application. In Pouliot, the court is specifically considering an application pursuant to s. 4(4) of the Limitation Act, R.S.B.C. 1996, c. 266 – a provision described by Judge Gouge at para 5 of Shamrock Fencing v. Walker, 2015 BCPC 289 as being “substantially identical” to s. 22(5). At paras 55 and 56 of Pouliot, citing Teal Cedar Products (1997) Ltd. V. Dale Intermediaries Ltd. (1996) B.C.L.R. (3d) 382, Judge Giardini writes that “the fundamental principle to considered when a court decides whether to exercise its discretion under s. 4(4) of the 1996 Limitation Act is to balance the interests of justice and convenience in relation to all the parties…” The factors to consider, set out at para 56, include the extent of the delay, the reasons for delay, whether a limitation period has expired, and the degree of prejudice caused by the delay.

[28]      More importantly, as Judge Giardini notes at para 57 of Pouliot, the cases do draw a distinction between instances in which an amendment is proposed which does not include new factual allegations and “cases where a party not only seeks to add new causes of action but also bases them on new allegations.” In my view, this is one such case where the Estate seeks to add not only new causes of action, but causes based on new allegations.

[29]      As outlined above, the Estates’ current claim is one for debt. The factual allegations are straightforward: a loan was made; the Estate demanded its return; the loan was not repaid. The proposed amendments broaden the claim substantially to include allegations of misrepresentation. Notably, while the Estate characterizes the allegations as negligent misrepresentation, they border on something much more intentional. Moreover, these are alleged representations made to the decedent, Robert Patterson. The Estate also alleges a trust like relationship between Mr. Vigier and Mr. Robert Patterson. These allegations are clearly broader, and far more detailed than those made in the filed claim.

[30]      In Shamrock Fencing, Judge Gouge considered a similar application to amend such that the new claim, if allowed, would substantially broaden the factual matrix underlying the original claim. At para 17 of his reasons, and relying on the comments of Justice Burnyeat in Pootlass v. Pootlass, 1999 CanLII 6665 (BC SC), Judge Gouge writes “where, as in this case, the new cause of action arises from a factual matrix different from that alleged in the original pleading, the court must not allow an amendment which would have the effect of depriving a defendant of a limitations defence.” Judge Gouge writes further at para 18 that:

[31]      The Estate takes issue with the submission that the defendants are prejudiced in this case by the death of Robert Patterson, given the timing. That is to say that had the claim been brought within the limitation period, Mr. Patterson would still have been deceased. At the same time, the defendants are highly prejudiced by Mr. Patterson’s passing, particularly given the proposed new allegations concerning alleged representations relied on by Mr. Robert Patterson.

[32]      The proposed amendments in this case clearly raise new facts in addition to new causes of action. They cannot be said to flow from the filed claim. Rather, they are entirely new and of a different order. Given this, and my finding that it would be highly prejudicial and unfair to the defendants to allow these amendments at this time, I would deny the application to amend. The matter will proceed to trial on the filed claim.