Background: The dispute involved road construction work on the Alaska Highway, where Allied Paving Co. Ltd. hired Canadian Construction Materials Engineering & Testing Inc. (CCMET) for quality control and testing services. CCMET claimed that Allied owed approximately $413,000, while Allied counterclaimed for about $2 million.

Legal Arguments/Issues: Allied Paving Co. Ltd. sought to amend its counterclaim to include a claim of fraud against CCMET. Key allegations included CCMET knowingly providing non-conforming aggregate tests, failing to report these to Allied, and falsely completing daily reports. CCMET had previously been allowed to plead a limitation of liability clause, capping their liability at $50,000. The court needed to determine whether Allied's amendment to include fraud was justified and whether CCMET’s limitation defence could be argued at trial.

Court Decision: The court allowed Allied to amend its counterclaim to include fraud but preserved CCMET’s right to argue the limitation defence at trial. The court ordered additional examinations for discovery to address the new amendments.

Costs: The court awarded costs of the application in the cause on Scale B, meaning the final determination of costs would be decided based on the outcome of the entire case.