Pomeroy Acquireco – Federal Court of Appeal indicates that amendments to pleadings need only assist (and not be prejudicial) to be allowed
The taxpayer opposed a proposed amendment by the Crown (raised before trial) to its pleadings to raise an argument that the subject transaction was a sham and that shares acquired as part of the transaction should have their value discounted to reflect the corporations’ latent tax liabilities. In reversing the decision below and allowing the amendments, Rennie JA disagreed with the trial judge (whom he reversed) that amendments must be “vital” to the case in order to be allowed, stating:
The controlling principle is that an amendment should be allowed at any stage of an action if it assists in determining the real questions in controversy between the parties, provided it would not result in an injustice not compensable in costs and that it would serve the interests of justice. A court should give significant consideration to amendments which further the ability of the trial court to determine the questions in controversy … .
Neal Armstrong. Summary of Canada v. Pomeroy Acquireco Ltd., 2021 FCA 187 under Rule 54.