Prejudice: Taking a Hard Look at the Merits

Pleadings Motions

The term prejudice has regularly surfaced in pleadings motions. In
King’s Gate Developments Inc. v. Drake¹ the Ontario Court of
Appeal reversed the lower court’s decision not to allow amendments to a
statement of defence on the eve of trial because the amendments would have
necessitated productions and discovery and an adjournment of tire trial. The
Court of Appeal held that the amendments should have been allowed, but on
terms, as no “non-compensable” prejudice had been established. The
court offered examples of non-compensable prejudice, such as the death of a
material witness or the destruction of essential files. Accordingly, prejudice
may be compensable or non compensable. Although the death of a material
witness and the destruction of files do not make up an exhaustive list of non-compensable
prejudice, they are clear examples of the type of prejudice that must be
present to be considered non-compensable.

The primary obligation to establish non-compensable prejudice under r.
26.01 of the Ontario, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, is on
the party who alleges that it exists: Transamerica Life Insurance Co. of
Canada v. Canada Life Assurance Co.² That party should expect
that the court will scrutinize the allegation of prejudice to determine
whether the prejudice is apparent or real. A hard look at the merits of the
prejudice allegation is in order as aloose application of this concept can
prevent legitimate claims or defences from being advanced and may yield
serious injustice. Prejudice is a powerful tool that must be carefully
considered on a case by case basis to determine whether it is really non-compensable.

¹(1994), 23 CPC (3d) 137, (sub nom. Kings Gate Developments Inc.
v. Colangelo) 17 O.R. (3d) 841, 70 O.A.C. 140 (C.A.)

²(1995), 25 O.R, (3d) 106, 41 CPC (3d) 75 (Gen Div.), at p. 85 CPC

In MacDougall v. Royal Insurance Canada³ the court denied
a request by the defendant to amend its pleadings, having found non-compensable
prejudice. One of the parties had died and thus could not answer the substance
of the proposed amendments, which related specifically to her.

Another example of non-compensable prejudice is illustrated by Churly v.
Budnick.⁴ In this case the defendant moved to amend his
statement of defence. The court denied his request based on its finding that
if the amendment was allowed and the defence succeeded at trial because of the
proposed amendment, the plaintiff would suffer prejudice in that he would lose
a remedy. The lost remedy would be the right of the plaintiff to sue another
person to recover the loss he would suffer by virtue of the successful
proposed defence. The remedy would be lost as a result of the passage of a
six-year limitation period. In Kamei Sushi Japanese Restaurant Ltd. v.
Epstein⁵ the British Columbia Court of Appeal granted the
plaintiffs leave to amend their statement of claim, finding that the
defendants would not be prejudiced by the proposed amendments to the extent
that leave should not be granted. The court noted (at p. 391, 1 CPC (4th)):

… it appears that the evidence is available to the parties so that
the factual issue raised by the proposed amendment can be fairly and
properly litigated and determined at trial.

The amendment proposed raises a triable issue that ought to be tried
in the interest of justice…

The court took a hard look at the merits of the allegation of prejudice.

A case in which a hard look at the merits of the prejudice allegation was
seriously lacking in the first instance was in Hanlan v. Sernesky.⁶
In this case the court dismissed the motion for leave to amend the statement
of defence.

³(1996). 31 OR (3d) 109, 42 C.C.L.I. (2d) 4, 18 O.T.C. 224 (Gen.
Div.)

⁴(1997),34 OR (3d) 729 (Master)

⁵(1996), 25 B.C.L.R. (3d) 366, 1 C,P,C. (4th) 381 (S.C.)

⁶(1996), 37 C.C.L.I. (2d) 262, 1 CPC (4th) 1, 7 OTC 269 (Gen.
Div.), reversed (1996), 39 C.C.L.I. (2d) 107, 95 O.A.C. 297, 3 CPC (4th) 201
(C.A.)

The case was appealed to the Ontario Court of Appeal. The Ontario Court of
Appeal stated (at p. 202, 3 CPC (4th)):

The motions judge refused an amendment to the statement of defence to
plead the law of Minnesota which, as a result of the decision of the Supreme
Court of Canada in Tolofson v. Jenson, [1994] 3 S.C.R. 1022, might
apply to the case, rather than the law of Ontario, where the parties reside.
The motions judge based his decision on what he considered to be prejudice
to the plaintiffs resulting from the application of Minnesota law.

The Ontario Court of Appeal also stated ( at p. 202):

With respect, we see no prejudice resulting from the amendment. The only
prejudice is that which would be inevitable as a result of any successful
plea. Such prejudice is not the type referred to in Rule 26. If it were,
only unmeritorious amendments would be allowed – an obviously ludicrous
proposition.

The appeal is allowed…and leave is granted to amend the statement of
defence to plead Minnesota law.

In Mele v. Titorne Riddell⁷ the court allowed the
plaintiffs to amend their statement of claim after 44 days of trial relating
to negligent misrepresentations. The court noted that the factual situation
that gave rise to the allegations of negligent misrepresentations had always
been contained in the statement of claim. The court, however, disallowed the
plaintiffs’ request to make other amendments that would have given new life to
the claim and found that prejudice would result.

Construction Lien Cases

Prejudice has also surfaced in the construction lien context. In Atlas-Gest
Inc. v. Brownstones Building Corp.⁸ under the Construction
Lien Act, R.S.O. 1990. c. C.30, it was held that prejudice could be
inferred unless there was sufficient proof to the contrary. The appellant bank
had sought to amend its pleadings on the eve of trial before the case
management judge. The court noted that s. 67(2) of the Construction Lien
Act prohibits interlocutory motions without the court’s consent, unless
the interlocutory motion is necessary or will expedite the resolution of the
issues. The Divisional Court held that the case management judge did not err
in law or in principle in refusing the requested amendment in light of the
summary procedure under the Act and, in particular, the requirements of s.
67(2) of the Act.

⁷(1997), 32 OR (3d) 459, 26 OTC 99 (Gen. Div.)

⁸(1996), 46 CPC (3d) 366 (Ont. Div. Ct.)

The court stated (at p. 368, 46 CPC (3d)):

We rely upon s. 67(2) to illustrate the policy of the legislation that
prejudice for the purposes of Rule 26 is to be inferred unless there is
sufficient proof to the contrary

Accordingly, prejudice may be presumed to exist unless the contrary can be
proven. In one context, the person alleging prejudice may be forced to prove
it, before consequences will follow. In another, it is simply presumed to
exist and it must be disproved: the onus shifts. Regardless on whom the onus
lies, the court should take a hard look at the alleged prejudice before it.

Dismissal for Delay Motions

The term prejudice has also appeared in want of prosecution motions. In Sehdev
v. Moss, Lawson & Co.⁹ the Ontario Court of Appeal heard an
appeal from an order dismissing a proceeding for delay. The Court of Appeal
dismissed the appeal. The manifestly unacceptable delay was not explained to
the motions judge or the Court of Appeal. The court noted that the delay was
so lengthy that it gave rise to a presumption of prejudice. Accordingly,
prejudice can be presumed to be present depending on the context.

No reasonable justification for the delay in the Manitoba case of Ferencaba
(Next Friend of) v. Esau¹⁰ was offered. The plaintiff had been
injured in a motor vehicle accident in 1983. She unreasonably delayed the
prosecution of the action as there was virtually no litigation activity by her
during the first six years after the accident and she failed to provide
sufficient documents to support a settlement demand to allow the defendant to
respond. The plaintiff failed to respond to repeated demands from the adjuster
for information and the court found that the delay caused significant
prejudice to the defendant. This case depended on findings of credibility in
respect of an event that Occurred 13 years before the defendant’s motion to
strike out the statement of claim. Accordingly, the action was dismissed for
delay.

⁹(March 25, 1996), Doc. CA C18346, Osborne, Abella and Moldaver
JJ.A. (Ont. C.A.), 62 A.C.W.S. (3d) 261

¹⁰(1996), (sub nom. Ferencaba v. Esau) 112 Man. R. (2d) 202
(Master)

The plaintiff’s action in Bostrum v. Kumar Estate¹¹ was
not dismissed for want of prosecution even though the delay was inordinate.
Prejudice from the delay did not exist because adequate records and written
materials were available to try the case. The plaintiff’s action was, however,
dismissed on the ground that no evidence supported a triable issue regarding
whether the defendant had met the proper standard of care in this medical
malpractice action. The Ontario Court of Appeal dismissed the appeal from the
lower court’s decision.

In Specialty Underwriting Services Ltd. v. Lloyds Underwriters¹²
the plaintiff made a deliberate tactical decision not to commence proceedings
until several years after the cause of action arose. The delay gave rise to a
presumption of prejudice. The delay was inexcusable and inordinate, and the
action was dismissed for want of prosecution.

The nature of the allegations advanced in an action will be considered by
the court in want of prosecution motions to determine whether serious
prejudice has been caused by the delay. In Kern v. Watson¹³
the action was commenced in 1991 against former lawyers. The allegations
included the allegation of fraudulent misrepresentation. The court held that
the plaintiffs had a duty to proceed without inordinate and inexcusable delay,
and that the delay had caused serious prejudice.

Prejudice may be described as “non-compensable,”
“serious,” or ” significant,” and may be presumed to be
present. Regardless of what adjective is used to describe prejudice, care must
be taken not to forget the nature and the purpose of this concept. The concept
is supposed to be invoked to prevent procedural and substantive injustices,
not to create them. Thus, allegations of prejudice must be scrutinized, as
should the merits of the allegations.

In another case involving the issue of want of prosecution the court
reversed a master’s findings in the first instance of inherent prejudice. In Country
Lane Superett Ltd. v. Royal Insurance Co. of Canada¹⁴ the court
was faced with an appeal from a master’s dismissal of an insurance claim. The
master considered the defendant’s anxiousness to have the matter proceed to be
significant in dealing with the question of delay.

¹¹(December 29,1994), Doc. Kitchener 5404/82, Salhany J. (Ont.
Gen. Div.), 52 A.C.W.S. (3d) 521, 6 W.D.C.P. (2nd) 42, affirmed (April3,
1996), Doc. CA C20786, Carthy, Labrosse and Austin JJ.A. (Ont. C.A.), 61
A.C.W.S. (3d) 1071

¹²(March 6, 1996), Doc. Vancouver C900899, Baker J. (B.C.S.C.),
[1996] B.C.W.L.D. 862, 61 A.C.W.S. (3d) 651

¹³(1997), 32 B.C.L.R. (3d) 398 (S.C.)

¹⁴(1996), 50 C.P.C. (3d) 105, 108 Man. R. (2d) 315 (Q.B.)

The master held that the plaintiff’s failure to proceed in light of the
defendant’s requests made the delay unreasonable and the defendant suffered
inherent prejudice. The Manitoba Court of Queen’s Bench, however, disagreed
with the master’s finding. The court noted that witnesses of the defendant
insurance company were experienced investigators who had made notes, and that
they would be less affected by the delay than would “lay witnesses.”
The case was not one of non-compensable prejudice and was, arguably, one in
which the lower court could have examined more closely the merits of the
allegation of prejudice.

A successful appeal from a master’s order dismissing an action for want of
prosecution also occurred in Mortel Factory Sound Enterprises Ltd. v. Able
Bailiffs Ltd.¹⁵ The master had dismissed the action on the
bases of inordinate delay and findings of serious prejudice to the defendant.
The appellate court, however, disagreed, noting that the limitation period for
the claim was six years and that the plaintiff could have started proceedings
at any time before October 1995. If the action was not commenced until shortly
before the limitation period expired, the action would not be heard for at
least one or two years in any event. In this context the delay was not
inordinate. Moreover, it was likely that the main claim advanced would be
verified by documents and, accordingly, the defendant would not be seriously
prejudiced. The appellate court took a hard look at the merits of the
allegation of prejudice.

Neither did the court dismiss the plaintiff;’s action in Canada
(Attorney General) v. Boeing Co.¹⁶ in spite of a total delay of
almost 17 years. The court found that both parties had contributed to the
delay and that, although numerous witnesses had died or left the defendant’s
employ, no cogent evidence established real prejudice to the defendant because
of actions caused solely by the plaintiff. The court analyzed the merits of
the allegation of prejudice to the point of transcending the initial
appearance of non-compensable prejudice: the analysis did not stop with
knowledge that witnesses had died.

The existence of written documents in Monahan v. Jowsey¹⁷
was a significant factor in determining the extent to which a complaining
party has been prejudiced.

¹⁵(March 19, 1996), Doc. Victoria 90/0201, Hutchinson J. (B.C.S.C.),
[1996] B.C.W.L.D. 1332

¹⁶(1996), 30 O.T.C. 147 (Gen. Div.)

¹⁷(1995), 132 Sask. R. 201 (Q.B.)

Inaction on the part of plaintiff’s counsel resulted in the statement of
claim not being served within the time allowed by an order extending time in
accordance with the Saskatchewan, Queen’s Bench Rules. A second order
was obtained to extend further the time for service. The defendant physicians
claimed that, as a result of a 14-month delay, they could no longer remember
material details. Nevertheless, the court noted that because the defendants
had prepared written reports at the time of treatment, they would suffer
little prejudice. The defendants’ motion to set aside the order extending the
time for service was dismissed. The court saw through the appeal of the
defendants’ position on prejudice. The allegation of prejudice did not survive
a close examination.

Delay in and of itself should not automatically lead to a conclusion of
prejudice but significant delay can produce a presumption of prejudice.
Application of the concept of prejudice too broadly could lead to matters
being decided only on their procedural merits, which could pose a grave
substantive injustice. The reasons for a delay and the genuine, as opposed to
apparent, effect of the delay on the other party must be carefully scrutinized
before prejudice is invoked to bar an adjudication of claims on their merits.
But if a party is guilty of causing significant delay, he or she should be
prepared to explain the reasons for the delay. Otherwise, the presumption of
prejudice will be converted into a finding of prejudice, with the same
consequences as if the alleged prejudice was truly non-compensable. In the
end, the court should investigate the merits of an allegation by a party that
he or she has suffered prejudice.

The courts have inspected the merits of cases before finally disposing of
those cases in summary judgment proceedings. It is logical to apply the same
rigorous scrutiny to parties who are seeking to invoke prejudice to prevent
the adjudication of claims or defences on their substantive merits. The court
may invoke the term prejudice to achieve a particular result without an
adjudication on the substantive merits of the claims or defences. If courts
are expected to examine closely claims and defences on their merits before
summarily disposing of them in the context of a summary judgment, then the
same can be expected of the courts when prejudice is invoked to prevent an
adjudication of claims or defences on their substantive merits.

Limitation Periods

In relation to the concept of delay, a classic example of when prejudice
has been presumed is upon the passage of a limitation period. In Roscoe v.
Lewis¹⁸ the plaintiff applied to add a defendant to a personal
injury action after the limitation period expired. The court found that the
plaintiff was not able to offer a reasonable explanation of why the proposed
defendant had not initially been named in the claim; it also found the delay
inordinate. There was presumed prejudice after the expiration of the
limitation period that was not satisfactorily rebutted. Accordingly, the
plaintiff’s joinder motion was dismissed.

In Smallwood v. Hill,¹⁹ however, the Ontario Court of
Appeal upheld the lower court’s decision to extend the limitation period for
commencing an action arising from a boating accident. The two-year limitation
period prescribed by s. 572(l) of the Canada Shipping Act, R.S.C. 1985.
c. S-9, expired on August 4, 1992. The plaintiffs’ claim was not issued until
January 26, 1995, about 16 months after the defendants insurer notified
plaintiffs’ counsel that he had missed the two-year limitation period. ‘The
lower court considered the defendants’ argument of prejudice and found (at p.
772, 31 O.R. (3d)):

“.. the defendants will sustain no real prejudice in their ability
to defend the claim if an extension is granted. The defendants
received early notice of the claim and their insurers entered into
settlement negotiations with the plaintiffs’ lawyer and, indeed, made an
offer to settle. The insurers had, in my view, completed their investigation
at the time they closed their file in October, 1993. They have preserved the
results of their investigation and have offered no evidence that they have
been deprived of any evidence necessary to defend the claim.” [emphasis
in original]

The Court of Appeal held that there was no reason to interfere with the
conclusion that the defendants would sustain no real prejudice. In Smallwood
the word real is attached to the term prejudice. The court
investigated the merits of the defendants’ allegation of prejudice and found
that the prejudice was more apparent than real.

The British Columbia Supreme Court’s decision in Hnidan v. Auto Marine
Electric Ltd.²⁰ is another example of the court investigating
an allegation of a party being prejudiced. The plaintiff claimed that in
November 1991 he had injured his knee when he was struck by a door while
entering the defendant’s business premises.

¹⁸(1995), 40 C.P.C. (3d) 112 (B.C.S.C.)

¹⁹(1997), 96 O.A.C. 278 (sub nom. Smallwood (Litigation
Guardian of) v. Hill) 31 .O.R. (3d) 769 (C.A.), leave to appeal to S.C.C.
refused (1997), 104 O.A.C. 319 (note), 223 N.R. 223 (note)

²⁰(October 2, 1995), Doc. New Westminster S104427, Master Joyce
(B.C. Master), [1996] B.C.W.L.D. 174, 59 A.C.W.S. (3D) 589

The plaintiff spoke to the manager of the defendant’s business on at least
two occasions and issued a writ of summons in November 1993, before the
expiration of a two-year limitation period. The plaintiff, however, failed lo
serve the defendant with the writ until November 1994, by which time it had
expired. The plaintiff sought to renew his writ on the basis that he had
mistakenly believed that he had three years from the day of the accident to
have the writ issued and served. A mechanical response to this situation would
be that ignorance of the law is no excuse. The court, however, did not rule in
that manner. The court granted the plaintiff’s request to renew the writ
because the defendant knew of the incident and knew that the plaintiff was
seeking compensation. The court found that the defendant had not been
prejudiced by the delay. The prejudice was more apparent than real.

Undertaking Motions

The term prejudice has also made appearances in motions relating to
unanswered undertakings. In Landry v. Pollock²¹ the Ontario
Court of Appeal allowed the appeal by the plaintiff from the dismissal of his
action for failing to comply with undertakings given at his examination for
discovery. The court disagreed with the lower court’s finding that the
plaintiff was in contempt of earlier court orders, and held (at p. 143, 44 CPC
(3d)), in addition, that “there was no evidence of, or even the
appearance of, prejudice to the defendant.” The appeal court took a hard
look at the merits of the prejudice allegation.

Default Judgment Motions

Prejudice has also been referenced on motions to set aside default
judgments. In Andrew Paving & Engineering Ltd v. Folino²²
the court refused the defendant’s motion to set aside a default judgment. The
court found that the plaintiff would clearly have been prejudiced if the
default judgment was set aside. The plaintiff creditor had been trying lo
collect its overdue accounts for several years and the defendant had been
procrastinating and had chosen to ignore the default judgment.

²¹(1995), 44 CPC (3d) 140 (Ont. C.A.)

²²(1995), 37 CPC (3d) 99 (Ont. Gen. Div.)

Prejudice was also found in Nipissing Helicopters Inc. v. Eagle Copters
Maintenance Ltd.²³ The court dismissed the defendants’ motion
to set aside a default judgment on account of prejudice. The defendants had
refused to attorn to the jurisdiction of the Alberta court in 1990 but
litigated the jurisdiction of the Alberta court in enforcement proceedings
attempted in Ontario by the plaintiffs. The defendants waited until 1994 to
apply in Alberta to set aside the 1990 judgment against them. In this case the
defendants made a deliberate choice. Prejudice was assumed to be present after
the long delay.

Divided Discovery Motions

The concept of prejudice has also been invoked on motions to determine
whether there should be divided production and discovery. In this area,
however, prejudice has been dressed with the adjective serious. In Kinbauri
Gold Corp v. Iamgold International African Mining Gold Corp.²⁴
the court, on a motion by the defendant for an order for divided production
and discovery, held that if it found that the issues of liability and damages
could clearly be severed, then it also had to be satisfied that the moving
party would suffer “serious prejudice” if production and discovery
were not divided and delayed on the subsequent issue. The court accepted that
“‘the disclosure of secret processes, special advantages pertaining to a
particular competitor in the market, or know- how, that cannot commonly be
acquired and known by competitors generally through commercial
intelligence”‘ (from L.C.D.H. Audio Visual Ltd. v. I.S.T.S. Verbatim
Ltd. (1986), 8 CPC (2d) 141, 54 OR (2d) 425 (H.C.), at p. 156, 8 CPC (2d))
are factors that might lead to serious prejudice. The court made an order
granting leave to the defendant to withhold information relating to damages
until the issue of liability had been tried and determined.

Affidavit Evidence

Prejudice has also been discussed in cases involving judicial discretion as
to whether a party should be allowed to file affidavit material. In AB
Hassle v. Canada (Minister of National Health & Welfare²⁵
the Federal Court of Appeal considered an appeal of a decision of a trial
judge to permit a respondent to file affidavits.

²³(1996), 187 A.R. 29, 127 W.A.C. 29 (C.A.), leave to appeal to
S.C.C. refused (1997), 214 N.R. 320 (note), 212 AR 21 (note), 168 W.A.C. 21
(note)

²⁴(1995), 43 CPC (3d) 128 (Ont. Gen Div.)

²⁵(1995), 64 C.P.R. (3d) 78, 189 NR 394 (Fed.C.A.)

The appellate court dismissed the appeal, holding that the lower court
properly had regard for the requirements of justice and protected the
appellants from further prejudice by permitting them to deliver more evidence
in reply.

Accordingly, the court can invoke terms to ameliorate the effects of
prejudice or to protect a party from being prejudiced, to ensure that a case
is fully canvassed and heard on its substantive merits. A rigorous
investigation of the merits of an allegation of prejudice may lead a court to
the conclusion that, by the employment of creative terms, the allegation of
prejudice is not as serious as they appear.

Jury Notice Motions

The term prejudice has also been raised in jury notice cases. In Tsang
v. Vermerris.²⁶ an application was heard for the extension of
time to file a jury notice in an action for personal injury and economic loss.
The court dismissed the application, which, if granted, would have delayed the
trial. The court found no evidence that harm or prejudice would be suffered if
a jury trial was denied.

In Manuel v. Fernades,²⁷ a medical malpractice case, the
plaintiffs’ motion to extend the time for delivery of a jury notice was
dismissed. The motion was launched after the action had been set down for
trial. The defendants argued that they would be prejudiced by the imposition
of a jury trial. They submitted that a trial by jury would take substantially
longer than a trial by judge alone and that the plaintiffs were persons of
modest means from whom the defendants would be unable to collect the costs of
a jury trial. The court found those submissions persuasive in dismissing the
plaintiffs’ motion.

Extending Appeal Deadlines

The Ontario Court of Appeal has referred to the term prejudice in extension
of time to appeal motions. In Cody v. Armitag²⁸ the moving
party was granted an order extending the time for filing her notice of appeal
from two related orders.

²⁶(January 16, 1996), Doc. Vancouver B950691, Master Brandreth-Gibbs
(BC Master), [1996] B.C.W.L.D. 739

²⁷(1996), 2 CPC (4th) 72, 6 O.T.C. 1 (Gen. Div.)

²⁸ (November 3, 1995), Doc. CA M16596, Osborne J.A. (Ont. C.A.
[In Chambers]), 58 A.C.W.S. (3d) 1957

The court found that the moving party had an intention to appeal well
within 30 days of the second order. The court further noted that the
respondents were not prejudiced by the failure of the moving party to file her
notice of appeal in time. The moving party was given another 15 days to file
her notice of appeal on the condition that she pay the costs of the motion,
which were fixed at $1,000.

Arbitration Cases

Prejudice has also been considered in the arbitration context. In I.F.
Propco Holdings (BC) 3 Ltd. v. Discovery Parks Inc.²⁹ the
petitioner failed to appeal an arbitrator’s award under the Commercial
Arbitration Act, S.B.C. 1986, c. 3, within the 60-day limit set out under that
Act. The petitioner applied to extend the time limit to appeal. The court
found no prejudice to the respondent, who was well aware that the petitioner
had intended to appeal the award. The petitioner’s intention to appeal had
been formed and communicated within the appeal period and the appeal raised a
substantial ground. The alleged prejudice was more apparent than real.

Human Rights Cases

The concept of prejudice has also been referenced in human rights cases. In
McKinley v. BC Tel³⁰ the plaintiff was dismissed from his
employment by the defendant while on disability leave. The plaintiff sued for
Wrongful dismissal and also filed an information with the Canadian Human
Rights Commission based on the same allegations of fact as he raised in the
wrongful dismissal action. The defendant moved to stay the on action pending
the completion of the Human Rights Commission proceedings. The court found
that the situation did not warrant an automatic stay of proceedings. The
plaintiff was entitled to maintain both proceedings. The plaintiff had
undertaken not to pursue double recovery and the court found that there was no
possibility of prejudice.

Hard Look Criteria

Is there a useful test or criteria that could be applied by courts taking a
hard look at the merits of prejudice allegations to ensure that the
allegations are real as opposed to apparent?

²⁹(1996), 4 CPC (4th) 50 (B.C.S.C.)

³⁰(1996), 1 CPC (4th) 152 (B.C.S.C.), additional reasons at
(1996), 25 B.C.L.R. (3d) 255 (S.C. ), affirmed (1997, 31 C.C.E.L. (2d) 214 (B.C.C.A.)

To answer that question, reliance is placed on Henry J.’s decision in Pizza
Pizza Ltd.v. Gillespie.³¹ In that case, in the context of
summary judgment proceedings, the court summarized the principles to be
considered on a summary judgment motion. Those principles were as follows (at
pp. 238-239, 75 O.R. (2d)):

³¹(1990), 75 O.R. (2d) 225, 33 C.P.R. (3d) 515, 45 C.P.C. (2d)
168 (Gen.Div.)

A-hard-look-at-the-merits approach makes sense when assessing allegations
of prejudice, especially at the interlocutory stage. A loose application of
the concept of prejudice at this stage can lead to the disposition of claims
and defences before final adjudication on their substantive merits. A close
look at the allegations of prejudice is warranted. A party who cries prejudice
when it is not the type of prejudice that should prevent the adjudication of a
claim or defence on its substantive merits is akin to a hockey player or
soccer player who fakes a trip to draw a penalty to the other side. The court
is a referee who must carefully analyze and consider the allegations of
prejudice put forward to determine whether “a dive” was taken or
whether the prejudice is real and non-compensable Solicitor-and client-costs
orders payable forthwith should be made against the party who lightly makes
allegations of prejudice with a view to summarily dispose of claims and
defences without an adjudication of those matters on their substantive merits.

Suggested Factors and Principles

This writer suggests that the following factors and principles be
considered by the courts when assessing a party’s allegations of prejudice.
These principles and factors are not exhaustive and may be supplemented
depending on the facts and circumstances with which the court is faced,
including the statutory context in which the concept of prejudice surfaces:

Summary

The concept of prejudice is invoked in many areas of the law. Depending on
the legal context, it may be dressed with various adjectives, such as
“non-compensable,” “real,” or “serious.”
Regardless of the description, it is fundamental that all allegations of
prejudice be scrutinized to determine whether the prejudice is more apparent
than real. A failure to apply the hard look may create, rather than prevent,
injustice.