Monday, 18 June 2012

Inconsistent Pleadings Within and Outside of an Action

Rule 3-7(6) provides that a party "must not plead an allegation of fact or a new ground or claim inconsistent with the party's previous pleading".  The question of what are "inconsistent" as opposed to merely "alternative" pleadings has sometimes vexed counsel and the courts, particularly in light of R. 3-7(6), which provides that:
(7)  Subrule (6) does not affect the right of a party to make allegations in the alternative or to amend or apply for leave to amend a pleading.
In Pepper’s Produce Ltd. v. Medallion Realty Ltd., 2012 BCCA 247, the court confirmed (albeit without referring to R. 3-7(6), the following principles with respect to inconsistent pleadings:
  1. a party must not plead inconsistent positions within the same action (by later amendment), as well as in different actions (in this case, in a Reply in a Small Claims action and a Notice of Civil Claim in the Supreme Court action); and
  2. a party is considered to take inconsistent positions when it first alleges that it entered into a contract with A and settles with A, but subsequently seeks to amend pleadings to allege that it in fact entered into a contract with B and has suffered damages as a result of B's conduct:
[28]            In this case, the appellant commenced and settled an action against the Corporation, claiming it entered into the Contract with the Corporation as the seller of the Terra Nova Market and suffered losses in connection with that transaction.  It then amended the statement of claim to allege that “Gao Tam Ent. Ltd.” was the Seller of the business.  In the application to add Gao and Tan as defendants and to further amend its claim, the appellant claims that they represented they were the owners of the business and thereby caused the appellant to suffer losses in the same transaction.  These positions are diametrically inconsistent within the same action, and the claims against Gao and Tan are diametrically inconsistent with the appellant’s response to the Small Claims action.  These proceedings cannot, as a matter of protecting the integrity of the court’s process, stand together.