Bombardier brought a motion for leave to amend its Statement of Defence and Counterclaim to expand the list of prior art and include a new ground of invalidity (ambiguity). There were three months left before trial, a pre-trial conference had been held and the parties had exchanged their expert reports in chief. The Court granted the motion with respect to the prior art, but not with respect to the new allegation. However, the Court also ordered solicitor and client costs not only on the motion, but for all costs reasonably incurred by Arctic Cat to consider and react to the amendments, in any event of the cause.
The proposed new prior art references were known to Bombardier, and disclosed to Arctic Cat in the context of US proceedings, however they were not part of this case until Bombardier delivered its expert report. The pre-trial conference was held the day before expert reports were due, but no mention was made of the new prior art or allegation.
The Court held that Bombardier's “conduct cannot be countenanced. It must be condemned in the strongest terms and any repetition must be dissuaded.” The Court also held that the amendments constituted a radical change, and that Arctic Cat had pursued a course of action that may be difficult to alter. Furthermore, the Court held that Bombardier's conduct in failing to disclose the new prior art and its expert's intention to raise ambiguity as soon as their relevance to the Canadian case was brought to its attention, and at the latest at the pre-trial conference, is inexcusable and unjustifiable. However, on the evidence, the Court concluded that allowing the proposed amendments with respect to prior art would not cause substantive prejudice that could not be compensated in costs.