[35] The plaintiffs sought to add the Way Family Trust as a
defendant that they allege knowingly received from Mr. Way and
Way entities money that ought to have gone to the plaintiffs.
The proposed amendments add the Trust into various existing
paragraphs of the statement of claim as one of a list of parties
that either received the plaintiffs’ funds or participated in the
plan to divert those funds. However, there are no particulars of
any of these allegations.
[36] The motion judge rejected a number of alleged defects
with the pleading and would have been ready to approve the
addition of the Way Family Trust had there been any evidence to
support the allegations against it.
[37] He rejected the submission that the pleading lacked
particularity. He found that it was sufficient for a claim for fraud
and breach of trust to allege knowing receipt of moneys that the
Trust knew or should have known were impressed with a trust
for the plaintiffs.
[38] He accepted the plaintiffs’ explanation that the reason the
Trust was not named as an original party to the action was that
they only discovered the payments out of some of the joint
venture profit proceeds to Way companies after the litigation
was commenced.
[39] He also rejected the submission made by counsel for the
trustees that the plaintiffs only sought to add the Way Family
Trust for strategic reasons, including to obtain discovery from it
and to apply pressure on the other defendants to settle. He reasoned that Mr. Way is one of the trustees and would be examined in his personal capacity in any event.
[40] Notwithstanding that he rejected those arguments, the
motion judge refused the amendment because, unlike the Wayco
beneficiaries that were added, there was no evidence in the record already developed and no evidence referred to by Roberts J.
that the Way Family Trust had received any of the diverted
funds. Also of significance for the motion judge was the fact that
the plaintiffs had commissioned a report from KPMG but had
not produced that report and had not suggested, based on that
report, that the accountants had found that the Way Family
Trust had received any of the disputed funds.
[41] The motion judge relied on the decision of C. Campbell J.
in Hilltop Group Ltd. v. Katana, [2001] O.J. No. 1564, 104
A.C.W.S. (3d) 845 (S.C.J.) for the proposition that it is appropriate when considering a motion to add parties for the court to
consider evidence advanced in support of the claim in order to
