Amendments to Statement of Claim May Be Allowed After Expiry of Limitation Period
The recent decision of McKenna v Stewart1 sheds light on how courts interpret the impact of amendments that are made outside of the limits provided by the Statute of Limitations2, and that potentially raise a new cause of action. On Prince Edward Island, there is a two year limitation period for a claim arising out of a motor vehicle accident. The judge in this case found that no new cause of action was raised by the amendments; however, in the alternative found that if a new cause of action did arise then she would have applied the doctrine of special circumstances to allow the amendment, notwithstanding the expiry of the limitation period. This finding is interesting because the doctrine of special circumstances has been declared no longer applicable in jurisdictions such as Ontario.
In McKenna v Stewart the original Statement of Claim alleged that the named Defendant was the driver. The day after the Statement of Defence was filed, an amended claim was issued alleging that the Defendant’s son was the driver and claiming vicarious liability. The Defendant brought a motion to strike the amended claim on the basis that it raised a new cause of action outside the limitation period.
Justice MacPherson held that the Amended Statement of Claim did not contain a new cause of action. She found the amendments could be viewed as clarifying an inconsistency in the original claim and providing additional information regarding a driver of the Defendant’s vehicle. The Court concluded that the amendments were best classified as pleading an alternative theory of liability.
The Court found that in the alternative, if a new cause of action did arise, then she would have permitted the amendments under the doctrine of special circumstances. Unfortunately, there is no clear review of a legal test or the factors to be taken into consideration by a Court applying the doctrine. It appears as though the decision whether to apply it is at the discretion of the motions judge.
In this particular case, the Court considered the following factors:
- the contents of all pleadings before the court;
- the lack of significant prejudice to the Defendant;
- the length of time between filing the Statement of Defence highlighting the deficiencies in the claim, and filing the Amended Statement of Claim (one day);
- The nature of the amendments; and
- The interest in having matters of dispute ultimately adjudicated on their merits.
Lessons for Insurers
Where amendments are made to a Plaintiff’s claim after the expiry of a limitation period, those amendments may be allowed even if they raise a new cause of action. The Court will consider a number of factors, but one important factor is apt to be evidence of actual prejudice.
1 2018 PESC 46
2 Statute of Limitations, PSPEI 1988, c S-7